Confidential A Confidential B and Commissioner of Taxation
[2013] AATA 24
•21 January 2013
[2013] AATA 24
Division TAXATION APPEALS DIVISION File Number(s)
2012/4587-4590
2012/4591-4592
Re
Confidential A
Confidential B
APPLICANT
And
Commissioner of Taxation
RESPONDENT
DECISION
Tribunal Professor R Deutsch, Deputy President
Date 21 January 2013 Place Sydney (a)The proceedings are to be held in private, pursuant to s 14ZZE of the Taxation Administration Act 1953.
(b)Until further order, the Respondent and the Tribunal are not to disclose or publish any of the evidence given before the Tribunal, or of matters contained in documents lodged with the Tribunal, or received in evidence by the Tribunal.
(c)Until further order, the names of the Applicants and any of the witnesses of the Applicants are not to be published by the Tribunal when giving reasons for its decision.
................................[sgd]........................................
Professor R Deutsch, Deputy President
CATCHWORDS
INTERLOCUTORY DECISION - Confidentiality order sought by Applicants under s 35 of the Administrative Appeals Tribunal Act 1975.
LEGISLATION
Administrative Appeals Tribunal Act 1975, s 35
Taxation Administration Act 1953, s 14ZZE
CASES
Pochi v Minister for Immigration and Ethnic Affairs (1979) 26 ALR 247
Re A Taxpayer and Commissioner of Taxation [2004] AATA 398
VBW and Australian Prudential Regulation Authority and Anor [2005] AATA 1294
Brown v Commissioner of Taxation [2001] FCA 276REASONS FOR DECISION
Professor R Deutsch, Deputy President
21 January 2013
These proceedings relate to a number of objection decisions made by the Commissioner of Taxation in respect of the Applicants.
The Applicants sought confidentiality orders under s 35 of the Administrative Appeals Tribunal Act 1975 (the AAT Act). The orders sought deal with the manner in which the hearing of the matters before the Administrative Appeals Tribunal (AAT) will be conducted and the extent to which certain information and evidence pertaining to and arising from the hearing may be published.
The orders sought by the Applicants are as follows:
·an order pursuant to s 35(2)(a) of the AAT Act that the hearing is to take place in private;
·an order pursuant to s 35(2)(b) of the AAT Act that the Respondent and the Tribunal are not to publish any of the evidence given before the Tribunal, or of matters contained in documents lodged with the Tribunal, or received in evidence by the Tribunal;
·an order pursuant to s 35(2)(aa) of the AAT Act that the names of the Applicants or any witnesses of the Applicants are not to be published by the Tribunal when giving reasons for its decision.
It should be noted that the Applicants are facing a number of serious criminal charges which arise out of the same facts that are relevant to the AAT proceedings.
Orders seeking that the hearing of the matters take place in private
Section 35 of the AAT Act is qualified by section 14ZZE of the Taxation Administration Act 1953. Under s 14ZZE the Applicants are automatically entitled to a private hearing of their applications. The Applicants were alerted to their entitlement under s 14ZZE but nevertheless sought an order under s 35(2) of the AAT Act that the hearing is to take place in private.
I am of the view that he Applicants’ request that the hearing take place in private is dealt with most appropriately under s 14ZZE of the Taxation Administration Act 1953.
Orders seeking that evidence, matters disclosed in documents and the Applicants’ and their witnesses names not be published by the Tribunal
In respect of orders sought under these sub-sections, what is clear from the overall content and construction of s 35 of the AAT Act is that it is for the Applicants to demonstrate why publication of the relevant evidence should be prohibited or restricted. This particular construction is made abundantly clear by subs (3) which directs the Tribunal to take as the basis of its consideration the principle that ‘evidence given before the Tribunal and the contents of documents lodged with the Tribunal or received in evidence by the Tribunal should be made available to the public and all the parties, but shall pay due regard to any reasons given to the Tribunal why … publication or disclosure of the evidence of the matter contained in the document should be prohibited or restricted.’
In other words, publication is allowed unless the Applicants provide cogent reasons as to why that should not be the case.
In these proceedings the Applicants have provided the following reasons for seeking the additional confidentiality orders: –
·the Applicants are being relentlessly pursued by the Australian Taxation Office in the recovery of the tax;
·if the Applicants are not given an opportunity to run the case, they may be made bankrupt without their review ever being heard;
·the Applicant’s defence is simple and reasonable and is a full answer to the assessments if the onus of proof is able to be discharged;
·the onus of proof is only capable of being discharged if the Applicants are able to give evidence in the proceedings; and
·the Applicants are not able to give evidence if to do so would effectively negate their right to silence in respect of their criminal proceedings.
I fail to understand the relevance of the fact that the Applicants are being relentlessly pursued by the Australian Taxation Office, or the fact that the Applicants may be made bankrupt as a result of these proceedings.
Of greater relevance are the final three bullet points referred to above which all seem to largely amount to the same issue – namely if a prohibition or restriction on the publication of evidence in particular is not given in respect of the AAT proceedings, any advantage which the Applicants might gain from claiming the right to remain silent in their criminal proceedings, on the basis that the information which they might disclose in what they say might incriminate themselves, would be negated as that information would be available to be provided by the Respondent to the prosecutors in the criminal proceedings.
In my view this is the central issue, which calls for a balancing exercise in which the Tribunal is required to weigh up the public interest in transparency against the prejudice that will result in particular, in this case, to the Applicant in the event that the requested confidentiality orders are not made.
Looking at the history of such cases I note that there have been a number of conflicting decisions both at the AAT and in the courts (see, for example, Case V34 88 ATC 293, Re A Taxpayer and Commissioner of Taxation [2004] AATA 398, VBW and Australian Prudential Regulation Authority and Anor [2005] AATA 1294 and Brown v Commissioner of Taxation [2001] FCA 276).
The decision in Re A Taxpayer is relevant in as much as it is a matter where the Tribunal declined to make an order under s 35(2) of the AAT Act that would have allowed the applicant in that matter to call a witness who would give incriminating evidence but not permit the respondent in that case to use the evidence in the performance of its statutory duties. The refusal to so make the order meant that the evidence was not given – in my view a regrettable outcome that does not accommodate the objective of giving an applicant a full and fair opportunity to have the matter reviewed by the Tribunal.
That this was a particularly harsh outcome for the applicant in that matter was a point which was noted by the presiding member. It was justified because of “the potential difficulties the Commissioner would face in preparing his case and the way in which a s 35(2) order might be taken to reflect on the quality of justice before the Tribunal”.
Further, Brennan J in Pochi v Ministry for Immigration and Ethnic Affairs (1979) 26 ALR 247 emphasised that the power to make orders under s 35(2) was to be exercised sparingly, and that it was only available in exceptional cases: at 273.
However, in Brown v the Commissioner of Taxation Emmett J commented at paragraph 10:
Parliament has conferred an express right on parties to certain taxation matters before the Tribunal to have the hearing in private. It does not confer any express right for a party to have the publication of evidence before the Tribunal prohibited or restricted. On the other hand, having regard to the terms of s 14ZZE, it would be a most unusual case where the Tribunal, if asked, did not give the directions that are contemplated by s 35(2) in a proceeding to which s 14ZZE applies. The Tribunal is empowered to give such directions for any reason, where it is satisfied that it is desirable to do so. Where a party exercises the right, under s 14ZZE, to have a hearing in private, that would be a very cogent reason for the Tribunal to make an order under s 35(2)(b).
There seems to be some difference of opinion as to the approach to be taken - Brennan J appears to take the view that confidentiality orders should only be made in exceptional circumstances, whereas Emmett J is of the view that if a privacy request is made pursuant to s 14ZZE of the Taxation Administration Act 1953 it would be a most unusual case where confidentiality orders, if requested, were denied.
It may well be that the consequence of s 14ZZE of the Taxation Administration Act 1953 is to create a stronger bias towards granting confidentiality orders in the taxation context, as compared to other contexts such as immigration law, and this may explain the apparent difference of opinion between the judges.
The views of Emmett J were expressed in the context of taxation cases and for that reason they are more relevant in the current context. However, I am not convinced that section 14ZZE so clearly demonstrates Parliament’s intention to protect the interests of taxpayers in any manner other than by ensuring that if requested a hearing will be held in private. Nothing more than that is discernible from the content and construction of s 14ZZE.
Nonetheless in assessing whether orders should be made under s 35(2) of the AAT Act there is a careful balancing of competing interests to be undertaken.
On the one hand we are presented with an Applicant who is facing very serious criminal charges at the same time as being involved in civil proceedings for recovery of tax alleged to be due. The Applicant needs to be afforded sufficient protection to enable him to conduct both proceedings in a reasonable manner and with the normal protection that members of the public can expect under the law. This includes the right to remain silent in criminal proceedings in order not to incriminate oneself without having that right effectively removed through disclosures that might be made in the civil proceedings
On the other hand there is an important point of public administration in that the Regulator should be in a position to do its job properly and without unnecessary constraints being imposed on it.
In the current circumstances I accept that the Applicants are potentially in a difficult situation in having a matter heard by the Tribunal in which information disclosed could be used against them in other proceedings. While I accept that there is a competing interest of having transparency in public administration, ensuring a fair criminal trial and a reasonable basis for pursuing their civil litigation in this Tribunal is in my view a more important public policy consideration. I acknowledge that this might cause the Respondent difficulties but in my view the difficulties faced by the Applicant if these orders are not granted are greater as he will be prevented from properly pursuing his civil action unless he compromises aspects of his defence of the criminal proceedings. From a public policy perspective I would suggest that this would be an unacceptable outcome.
DECISION
The proceedings are to be held in private, pursuant to s 14ZZE of the Taxation Administration Act 1953.
Until further order, the Respondent and the Tribunal are not to publish any of the evidence given before the Tribunal, or of matters contained in documents lodged with the Tribunal, or received in evidence by the Tribunal.
Until further order, the names of the Applicants and any of the witnesses of the Applicants are not to be published by the Tribunal when giving its reasons for decision.
I certify that the preceding 27 (twenty seven) paragraphs are a true copy of the reasons for the decision herein of Professor R Deutsch, Deputy President.
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Associate
Dated 21 January 2013
Date(s) of hearing 21 December 2012 Counsel for the Applicant Mr Tony O'Brien Solicitors for the Applicant Streeton Lawyers Counsel for the Respondent Mr Michael Wigney Solicitors for the Respondent ATO Legal Services
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