Confidential and Commissioner of Taxation

[2012] AATA 938

[2012] AATA 938

Division	GENERAL ADMINISTRATIVE DIVISION
File Number(s)	2012/1393-1400
Re	Confidential
APPLICANT
And	Commissioner of Taxation
RESPONDENT

DECISION

Tribunal	Mr John Handley, Senior Member
Date	17 December 2012
Date of written reasons	22 February 2013
Place	Melbourne

For reasons given orally at the conclusion of the interlocutory hearing, the Tribunal dismisses the applications for review in accordance with s 42A(5)(b) of the Administrative Appeals Tribunal Act 1975.

(sgd) John Handley

Senior Member

PRACTICE AND PROCEDURE – dismissal for failure to comply with directions– applications filed in April 2012 – five Directions issued by Tribunal over a period of 6 months  – three interlocutory hearings convened to address applicant's non-compliance – notice to the applicant on 3 occasions warning of risk of failure to comply – applications dismissed.

LEGISLATION

Administrative Appeals Tribunal Act 1975 s 2A and 42A(5)

CASES

Guse v Comcare (1997) 49 ALD 288

Colpitts v Australian Telecommunications Commission and Others (1986) 70 ALR 554

REASONS FOR DECISION

Mr John Handley, Senior Member

22 February 2013

1. On 5 April 2012, the applicant applied to the Tribunal for review of decisions made by the Commissioner of Taxation (the respondent) who a) disallowed his objections against notices of amended assessments for the income years ending 2003 to 2008; b) disallowed his objections against notices of assessment for the income years ending 2009 and 2010 and c) disallowed his objections against notices of assessment and liability to pay penalty for the income years 2003 to 2010.

2. The applicant was initially legally represented, however his solicitors did not attend the first prehearing conference on 29 June2012 and ceased acting for him on 19 September 2012.  The applicant thereafter pursued these applications without legal representation. 

3. These applications were dismissed, pursuant to s 42A(5) of the Administrative Appeals Tribunal Act 1975 (the Act), by reason of the applicant failing to comply with Tribunal directions, following a Directions Hearing on 17 December 2012. Oral reasons for the decision to dismiss were then given. The published decision of the Tribunal, recording the dismissal (made on 17 December 2012) is incorrectly described as a Direction.

4. Additionally, the Direction records that the applications was dismissed pursuant to s 42A(5)(a) – failing to proceed – and (b) – failing to comply with a direction. However, s 42A(5) contains the disjunctive or indicating that dismissal is permitted by one of the stated reasons only, not both.  The reason orally given for dismissal was failure to comply with directions.

5. On 24 January 2013, the applicant telephoned the Tribunal and requested written reasons for the decision of 17 December 2012.  The directions hearing was not recorded or transcribed.  The reasons which commence at paragraph 15 are compiled from handwritten notes made during the hearing, typed notes I made immediately following the hearing and from the contents of the Tribunal file.

   Summary of directions and listing events

6. The following is a summary of the directions made and other relevant events:

   (a)On 29 June 2012, the applicant was directed to file and serve a Statement of Facts, Issues and Contentions and any witness statements or other material that he intended to rely on by 7 September 2012.  Notes appended to the Direction set out the Tribunal’s powers to dismiss an application if an applicant fails to comply with a direction.

   (b)On 28 August 2012, the respondent sought leave to file additional documents in the respondent’s possession.  In response, the applicant’s solicitors sought a two week extension to comply with the direction made on 29 June 2012.

   (c)On 3 September 2012, the Tribunal issued an amended direction requiring the applicant to file and serve, on or before 21 September 2012:

   (i)A statement of the evidence to be given by the applicant;

   (ii)A statement of the evidence to be given by each witness intended to be called at the hearing;

   (iii)All reports records and other documents sought to be relied on; and

   (iv)A Statement of Facts, Issues and Contentions.

   In the event that the applicant did not intend to call any witnesses or rely on any other material, he was directed to advise the Tribunal accordingly by 21 September 2012. 

   (d)A telephone directions hearing was listed on 19 September 2012 to discuss matters relating to a confidentiality order over the contents of some documents lodged by the respondent.  This directions hearing was adjourned because of the unavailability of the applicant’s solicitor.  From this time, the applicant proceeded without legal representatives.

   (e)On 21 September 2012, the applicant advised the Tribunal in writing, in response to a hearing certificate issued to both parties, that he intended to call one witness, CK.  He also lodged a box of bank statements.  Except for these documents, which were deposited with the Registrar without explanation, none of the documents specified in the amended direction made on 3 September 2012 were filed with the Tribunal.  

   (f)On 4 October 2012, a directions hearing concerning the applicant’s non-compliance was convened.  The directions of 3 September 2012 were amended and the time for compliance with those directions was extended to 26 October 2012.

   (g)On 29 October 2012, the applicant filed a Statement of Facts, Issues and Contentions.  He also lodged a bundle of documents, each having a heading of Analysis of Attachment, with a cover sheet entitled Index.  The attachments were not produced, nor were statements lodged.

   (h)On 30 October 2012, the respondent advised the Tribunal that it was satisfied the applicant had complied with the directions of 4 October 2012 except for the filing of statements from him and his witness CK.  It was understood the applicant did intend to lodge those documents and the respondent indicated its preparedness to extend the time for compliance until 9 November 2012.   

   (i)Directions were issued on 2 November 2012 allowing the applicant to file the witness statement of CK on or before 9 November 2012. 

   (j)On 22 November 2012 a directions hearing was convened because the applicant did not lodge the statements.  He was allowed a further extension to lodge this material and directed to do so on or before 30 November 2012.  He was advised in the directions hearing that if he failed to provide the material by 30 November 2012, he risked having his applications dismissed. 

   (k)The directions issued on 2 and 22 November 2012 and sent to him, each had a note appended that failing to comply could result in dismissal pursuant to s 42A(5) of the Act.

   (l)On 30 November 2012, the applicant provided 13 bundles of photocopied documents, occupying 2 large boxes, which appear to be material arising out of proceedings before the Supreme Court of Victoria being affidavits (with exhibits), counsel’s submissions, transcripts of those proceedings and other material of a financial character.  Statements from CK and the applicant, as directed, were not lodged.

   (m)On Friday 7 December 2012, during a telephone conversation with an officer of the Tribunal, the applicant assured the officer that the statement will be in on Monday (10 December 2012) (Tribunal file note at folio 73).

   (n)On 11 December 2012 the applicant had not filed the material as directed.  The Tribunal listed the applications for an Interlocutory hearing – Dismissal application on 17 December 2012.  The notice of that hearing was posted and emailed to the applicant (and the respondent’s solicitors) on 11 December 2012.

   (o)On Thursday, 13 December at 5.21pm and on Friday 14 December 2012 at 2pm, the applicant lodged, at the office of the respondent’s solicitors and the Tribunal respectively, witness statements of himself and CK.  Neither of the statements were signed or dated.  They are in typed in 16 point Arial font and entirely in capital letters.  In the applicant’s statement, he made significant allegations about the respondent’s conduct in the Supreme Court proceedings and describes the respondent’s assessment (of undeclared income) as flawed.  The statement of CK, which appears to have been prepared by the applicant (or the person who prepared both statements) records that CK will provide documentation supporting the various transactions which relate to his investments in Australia.  It does not contain details about his proposed evidence, save that each paragraph commences with the words C will confirm…  The last 3 paragraphs commence with the words C will be able to prove or C will be able to satisfy the Tribunal….

   (p)The respondent was not satisfied that either document constituted a statement of the evidence of the applicant or a witness and requested that the interlocutory hearing scheduled for 17 December 2012 proceed.  It did proceed and on that occasion, submissions were made by the applicant personally and Ms Curnow on behalf of the respondent.

   Submissions

7. The applicant argued that his applications should not be dismissed because he had lodged witness statements as he was directed.  He acknowledged the respondent would contend that the proposed evidence was incomplete, and it was a matter for the presiding member at a hearing to decide if not enough information has been provided.

8. The applicant said that CK is a relative who lives in Greece and has all the documents in support of the allegations that he made in his statement.  He said he went to great lengths to obtain a statement from him.  He said the only way to obtain and lodge those documents would be either to travel to Greece (which he said he could not afford) and bring them back or wait until CK comes to Australia immediately before he gives his evidence at the hearing and then lodge them.  He acknowledged that the presiding member might reject the documents because they had not previously been provided.

9. In response to some questions from me, the applicant dismissed the possibility of obtaining documents electronically or through facsimile or at least having CK sign his statement.  He said CK is a fisherman, who speaks limited English and lives in a village. He said he would have to travel to the house of his father, a 2 or 3 hour drive, to have the statement returned by fax.

10. He said the respondent contended that relevant transactions were made by him, not CK, who the respondent also contended, did not exist.  He said CK would give evidence that he did make relevant transactions and that is all he (CK) can say.  He said if the Tribunal member is not happy, he can dismiss it and if it is doomed to fail they [the respondent] shouldn’t worry.  If the respondent alleged at a hearing that it is ambushed by documents it had not seen and the Tribunal refuses to consider (them) that’s fine.

11. The applicant submitted that this matter started 18 months ago after the respondent had undertaken a covert assessment and obtained freezing orders.  He said the respondent’s actions had made it difficult for him to continue trading and by freezing his accounts, he has not had the financial means to engage legal representation.

12. Ms Curnow on behalf of the respondent relied on the Federal Court decision in Guse v Comcare (1997) 49 ALD 288 where at 291, Burchett J decided that in an application pursuant to s 42A(5)(b) of the Act, consideration should be given to whether a reasonable time had elapsed since commencement of an application; whether the proper remedy is dismissal; whether a proceeding should be adjourned or whether another order should be made to secure compliance.  She submitted that the applicant had been given considerable indulgence by the Tribunal and the applications should be dismissed.

13. Ms Curnow pointed to the statement of CK and submitted it did not comply with the previous directions and was not acceptable because it is unsigned; it is recorded in the third person; it records that further documents will be provided (but does not record when); it does not indicate what those documents will reveal or their connection with this review and it alleges a number of the respondent’s contentions are false and will be disproved but without giving any particulars.  The statement also refers to a power of attorney which has never been produced or seen by the respondent. 

14. Ms Curnow submitted that the documents lodged by the applicant and on behalf of CK are not statements of their evidence, as they were directed, but are broad allegations and proposals of the case they will reveal at the hearing. She submitted that the applications should be dismissed under s 42A(5) of the Act because the applicant has failed to proceed with the applications and to comply with the Tribunal’s directions.

    REASONS FOR DECISION

15. The Tribunal must pursue the objective of a review process which will ensure that applications proceed in a manner that is fair, just, economical, informal and quick (s 2A of the Act).  Those aspirations will avoid unnecessary delay and cost.  The case management strategy of the Tribunal also aims to fulfil these objectives by directing parties to exchange information during the prehearing process so that each understands the case that the other will advance and have an adequate opportunity to investigate and prepare for it.

16. The Tribunal must also ensure that parties are afforded procedural fairness.  Where necessary, the Tribunal will allow applications to extend time to comply with directions or defer listing an application if there is a reasonable basis to do, having also considered the rights of the other party.  All of those issues were to the forefront of my decision when oral reasons were delivered on 17 December 2012.

17. The frustration of the respondent in responding to these applications was evident by the submission concerning the number of occasions the applications had been listed for directions and the applicant being on notice of his obligations.  Specifically, between 29 June and 17 December 2012:

    (a)the Tribunal convened on 6 occasions and directed the applicant to lodge witness statements and other material upon which he intended to rely;

    (b)on 3 occasions, the directions issued had a notice appended which warned of the consequences pursuant to s42A(5)(b) of failing to comply; and

    (c)on 2 occasions a listing notice recorded that the listing was a Directions Hearing-non-compliance and on 1 occasion was an Interlocutory hearing-dismissal application. 

18. I acknowledge that the applicant was, for a considerable period, not represented by lawyers who would have had the professional experience to prepare witness statements, lodge other materials and be aware of the consequences of failing to comply with Tribunal directions.  It would also appear that the applicant did not instruct other lawyers to act for him. 

19. The directions that were issued were in very clear and unambiguous terms.  No adequate explanation was given by the applicant on 17 December 2012 for his failure to provide a witness statement from him or from CK or other documents he intended to rely upon at the hearing as he was directed, on 5 previous occasions, over a period of 5 months.  I dismissed the reasons given for the failure of CK to have lodged a statement and to lodge his documents in support.

20. As recorded above, the Tribunal will respond to applications for an extension of time to comply with directions if reasonably based and if it is procedurally fair to all parties to do so.  There comes a time however, where the repeated listing of applications will cause the scales to tip in favour of dismissal, when there has been continuing failure by an applicant to comply with directions, without any adequate explanation or reason.

21. I would think that it is rare in the experience of this Tribunal for directions to be issued on 5 occasions in favour of an applicant  Particularly noteworthy in this case is that  on the third occasion that the matter was listed specifically to consider dismissal and the applicant was aware of that possibility, he continued to be non-compliant.  Even if the documents lodged by the applicant on the 13th and 14th of December constituted statements – and I think there is a substantial argument against such a finding – there was continuing failure to lodge documents in support of the applications.  There can be no misunderstanding about that omission.  The so-called statements specifically recorded that documents will be lodged at a later time.  He made similar submissions on 17 December 2012.  Such a cavalier attitude does the applicant no credit and gave me no confidence that any further extension of a period for compliance would achieve that objective. 

22. Exercising the discretion under s 42A(5) of the Act will determine whether an application is dismissed without proceeding to review. Implicit in the exercise of that discretion is the obligation to ensure that the duty of procedural fairness has been owed to an applicant, the other party and to the integrity of the institution of administration or review (Colpitts v Australian Telecommunications Commission and Others (1986) 70 ALR 554 at 573).

23. On 17 December 2012 I was satisfied that more than an adequate opportunity had been given to the applicant to comply with directions and advance his applications.  I was also satisfied that he understood what he was directed to do by the directions and the consequences he faced by failing to comply.  

24. The interests of the respondent are to be considered in an application of this type.  It is entitled to know the case that it has to meet.  It will achieve that objective when an applicant has complied with directions.  Until there is compliance, the respondent will suffer the consequences of delay and unnecessarily incur costs. 

25. The institution of administrative review will be offended if there is no sanction imposed against a party who consistently fails to meet obligations as directed.  Administrative review is not confined only to the opportunity of a citizen to challenge a decision of government or one of its agencies.  It is concerned also with government or its agencies responding to those challenges either by defending, explaining or conceding its decision.  Those outcomes can only be achieved when the nature of the challenge and the evidence and other materials in support are known. 

26. The provisions in s 42A(5) of the Act are a clear indication by Parliament that the Tribunal is obliged to conduct and administer applications efficiently. The power to dismiss in s 42A(5) is discretionary and can be exercised in a manner favourable to an applicant if they provide a satisfactory explanation for their delay or non-compliance. Having regard to the history of the applications, the applicant’s continued non‑compliance and the absence of satisfactory explanations for his delay, I was not satisfied that the discretion should be exercised in his favour.

27. If not evident from the above, the discretionary criteria decided by Burchett J in Guse (refer paragraph 12 earlier) is satisfied.  More than a reasonable time had been given to the applicant to comply with directions and the proper remedy was dismissal.  I could not have any confidence that adjourning the application and issuing another direction to secure compliance would have achieved that objective.

28. I am mindful of the consequences of dismissing an application and perhaps if the applicant attended the interlocutory hearing on 17 December 2012 with the relevant material, the outcome may have been different.  However, that was not the case despite numerous warnings about the consequences of non-compliance.  In the circumstances, it would not have been appropriate to issue further directions and in the absence of a satisfactory explanation, I dismissed the applications for review in accordance with s 42A(5)(b) of the Act.

I certify that the preceding 28 (twenty -eight) paragraphs are a true copy of the reasons for the decision herein of Mr John Handley, Senior Member

..............................[sgd]..........................................

Associate

Dated 22 February 2013

Date(s) of hearing	17 December 2012
Applicant	In person
Advocate for the Respondent	Ms R. Curnow
Solicitors for the Respondent	Australian Government Solicitor