Dolliver and Ors and Commissioner of Taxation

[2008] AATA 387

Administrative Appeals Tribunal

DECISION AND REASONS FOR DECISION [2008] AATA 387

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          Nos WT200600137; 93-94; TAXATION APPEALS DIVISION  )          96-98;109-111;112-114;        123-125; 126-128; 131-133;   134;136; 138-140; 908-910;   930;1020-1022; T20070005-  6; 2007/0953

Re RONALD DOLLIVER & ORS

Applicant

And COMMISSIONER OF TAXATION

Respondent

DECISION

Tribunal Mr A Sweidan, Senior Member

Date13 May 2008

PlacePerth

Decision

The Tribunal:

1.      Re-instates the applicants’ applications.

2.      Directs that these applications be listed for Directions Hearings as soon as practicable.

.........[Sgd Mr A Sweidan].............

Senior Member

CATCHWORDS

Practice and procedure – applications for review dismissed on grounds of non-compliance with Tribunal directions – application for re-instatement – whether applications dismissed in error – re-instatement granted

LEGISLATION

Administrative Appeals Tribunal Act 1975 s.42A(10)

CASES

Goldie v Minister for Immigration and Multicultural and Indigenous Affairs [2002] 121 FCR 383

Colpitts v Australian Telecommunications Commission (1986) 9 FCR 52 at 71

Commissioner of Taxation v Brown (1999) 42 ATR 672

REASONS FOR DECISION

13 May 2008	Mr A Sweidan, Senior Member
BACKGROUND

1.These applications were dismissed on 24 September 2007 under s 42A(5) of the Administrative Appeals Tribunal Act 1975 (“the Act”).

2.On 25 October 2007 an application for reinstatement under s 42A(10) of the Act was made on the grounds that the applications were dismissed in error.

3.A precondition to the exercise of the power of reinstatement under s 42A(10) of the Act is that the act of dismissal of the application must be attended with error. The error need not be the error of the Tribunal, nor is the error restricted to an administrative error: Goldie v Minister for Immigration and Multicultural and Indigenous Affairs [2002] 121 FCR 383 per Wilcox and Downes JJ at paragraphs 28 and 32-35 and per Carr J at paragraph 73 and 77-78.

History

4.Despite repeated directions by the Tribunal (on 13 October 2006, 8 March 2007 and 18 June 2007) requiring the applicants to file Statements of Facts and Contentions, no such documents have ever been filed by the applicants, other than a document filed on 5 April 2007 which did not in the Tribunal’s view suffice as a Statement of Facts and Contentions.

5.At all material times, the applicants have been represented in these proceedings.  At the time of the directions made on 13 October 2006 the applicants were represented by the law firm of Wilson & Atkinson.  At the time of the directions of 8 March 2007 and 18 June 2007 they were represented by Mr Michael Ward of The NDK Group Australia Pty Ltd.  It is unclear what qualifications, if any, he holds.  The applicants have also been represented by Mr Ray Osborne.  In Mr Osborne’s affidavit sworn 15 January 2008 in support of the re-instatement applications he states that he has been the accountant and consultant for the applicants for a number of years and, since early 2006 has, on the instructions of the applicants, been involved in the AAT proceedings.  Mr Osborne has been in attendance at every conference and directions hearing which has taken place in the applications, including the hearing on 24 September 2007 when the applications were dismissed. 

Applicants’ Contentions

6.The applicants’ submissions claim that the following matters were errors attendant upon the dismissal of the applications:

6.1the listing by the Tribunal of an “interlocutory hearing - dismissal application” on 24 September 2007 instead of a directions hearing.  This is said to have denied the applicants the opportunity to explain their failure to comply with the Tribunal’s directions;

6.2the alleged failure of the Tribunal to consider the two applications for an extension of time made by Mr Osborne on behalf of the applicants by fax on 3 August 2007 and 24 September 2007;

6.3the alleged failure of the Tribunal to consider that there was no evidence as to any prejudice to the respondent if the applicants were granted an extension of time; and

6.4the alleged failure of the Tribunal to consider that there was no evidence as to any wider prejudice to the general public if the applicants were granted an extension of time. 

7.In the Tribunal’s view, other than the first ground, none of the matters put forward by the applicants provide any support for the contention that the applications were dismissed in error, which is the precondition to the exercise of the reinstatement power in s 42A(10) of the AAT Act.

8.With regard to the first ground it is in the Tribunal’s opinion doubtful whether the listing of an “interlocutory hearing - dismissal application”, rather than as a “directions hearing”, can be said to have denied the applicants the opportunity to attend, explain or provide reasons to the Tribunal for their failure to comply with the Tribunal’s earlier directions. The listing put the applicants on notice that the Tribunal would be considering the Respondent’s request for dismissal of their applications under s 42A(5) of the AAT Act and that the applicants would need to provide a satisfactory explanation for their failure to comply with the earlier directions. Mr Osborne appeared on behalf of the applicants at the hearing on 24 September 2007 and had the opportunity to make submissions to the Tribunal as to the reasons for the failure of the applicants to comply with the Tribunal’s directions. In the view of the Tribunal no satisfactory explanation as to the applicants’ failure to comply with the directions was provided. This notwithstanding however, the Tribunal has further considered this issue as set out in paragraph 14 and subsequent paragraphs below.

9.Contrary to the applicant’s assertions, the Tribunal did consider the two applications faxed to the Tribunal by Mr Osborne seeking an extension of time on 3 August 2007 and 24 September 2007 respectively.  The applications for extensions of time were discussed at the interlocutory hearing on 24 September 2007 (as Mr Osborne concedes in paragraph 18 of his affidavit of 15 January 2008) and Mr Osborne on behalf of the applicants had the opportunity to make submissions in support of the applications for an extension of time. The reasons put forward in the faxes of 3 August 2007 and 24 September 2007 (which effectively superseded the fax of 3 August 2007) in support of the requested extensions were minimal and the Tribunal was entitled to form the view that they were unsatisfactory. Nothing was put forward by the applicants to indicate that any steps at all had been taken by the applicants towards compliance with the directions of 18 June 2007 either in the period between 18 June 2007 when the directions were made and 3 August 2007 when the applicants were required to comply with the directions or in the period between 3 August 2007 and 24 September 2007 when the interlocutory hearing was listed. Further, it was clear that neither of the firms of solicitors mentioned in Mr Osborne’s faxes of 3 August 2007 and 24 September 2007 respectively had at those respective dates actually been instructed to act for the applicants.

10.It is clearly not a requirement for the exercise of the discretion under s 42A(5) of the Act to dismiss an application for failure to comply with the directions of the Tribunal that there be demonstrated some prejudice either to the respondent or to the general public. The alleged failures of the Tribunal to consider the absence of evidence of prejudice either to the respondent or to the general public cannot therefore constitute an error on the part of the Tribunal in the exercise of its discretion to dismiss the applications under s 42A(5) of the AAT Act.

11.Further, the applicants, through their representatives Mr Ward and Mr Osborne, who both attended the directions hearing on 18 June 2007 when the directions of that date were made, were clearly put on notice by the Tribunal on that date that, as a consequence of the repeated failure by the applicants to comply with earlier directions made by the Tribunal, if the applicants failed to comply with the requirements of the directions made on 18 June 2007 then no further extensions of time would be granted by the Tribunal and, in those circumstances, the applications would be liable to be dismissed for failure to comply.  The timeframes fixed in the directions made on 18 June 2007 were set in the light of the Tribunal’s view that no further extensions should be granted and the assurance from Mr Ward on behalf of the applicants that those timeframes could be met.

12.The applicants, through their representatives, having already been put on notice by the Tribunal at the directions hearing on 18 June 2007 of the likely consequences of any failure to comply with the directions made on that day, were again put on notice that dismissal of the applications for failure to comply with the directions was under consideration both by the letter from the Australian Government Solicitor to the Tribunal of 7 August 2007 and by the Tribunal’s letter of 15 August 2007 advising of the listing of the interlocutory hearing.  In those circumstances it was incumbent upon the applicants and their representatives to take the necessary steps to provide a full explanation to the Tribunal of the reasons for the applicants’ failure to comply with the directions of 18 June 2007.  Notwithstanding this and that as noted above the applicants’ representative Mr Osborne attended the interlocutory hearing on 24 September 2007 and was given the opportunity to provide any explanation, no satisfactory explanation of the applicants’ failure to comply with the directions of 18 June 2007 was provided. 

13.In the absence of any satisfactory explanation from the applicants as to their failure to comply with the directions of 18 June 2007, combined with the failure of the applicants to make any progress whatsoever with their applications before the Tribunal over a prolonged period and the applicants’ previous failures to comply with the Tribunal’s earlier directions, the Tribunal was entitled to form a view that the applications should be dismissed under s 42A(5) of the AAT Act.

14.The Tribunal in considering the applications for re-instatement is however mindful of the fact that the applicants were at that stage not legally represented and that:

14.1The Tribunal Registry may well have erred in listing the applications for an “Interlocutory hearing” and not for a “Direction hearing” after the applicants failed to comply with the Tribunal’s Direction dated 18 June 2007.  This was not consistent with the Tribunal’s practice direction/s and procedure/s and arguably may have resulted in denial of procedural fairness to the applicants.  Note 1 provided by the Tribunal at the end of the relevant Direction states:

“1.       Failure by a party to comply with this direction is likely to result in this matter being listed for a direction hearing at which the party will be required to explain the failure to comply”.

14.2 Section 33 of the Act provides for the “Procedure of Tribunal” in a proceeding and reads as follows:

“33  Procedure of Tribunal

(1)       In a proceeding before the Tribunal:

(a)       the procedure of the Tribunal is, subject to this Act and the regulations and to any other enactment, within the discretion of the Tribunal;

(b)       the proceeding shall be conducted with as little formality and technicality, and with as much expedition, as the requirements of this Act and of every other relevant enactment and a proper consideration of the matters before the Tribunal permit; and

(c)       the Tribunal is not bound by the rules of evidence but may inform itself on any matter in such manner as it thinks appropriate.

Decision‑maker must assist Tribunal

(1AA)   In a proceeding before the Tribunal for a review of a decision, the person who made the decision must use his or her best endeavours to assist the Tribunal to make its decision in relation to the proceeding.

Direction hearing

(1A) The President or an authorised member may hold a Direction hearing in relation to a proceeding.

Who may give Direction

(2) For the purposes of subsection (1), Direction as to the procedure to be followed at or in connection with the hearing of a proceeding before the Tribunal may be given:

(a)       where the hearing of the proceeding has not commenced—by a person holding a Direction hearing in relation to the proceeding, by the President, by an authorised member or by an authorised Conference Registrar; and

(b)       where the hearing of the proceeding has commenced—by the member presiding at the hearing or by any other member authorized by the member presiding to give such Direction.

Types of Direction     

(2A) Without limiting the operation of this section, a direction as to the procedure to be followed at or in connection with the hearing of a proceeding before the Tribunal may:

(a)       require any person who is a party to the proceeding to provide further information in relation to the proceeding; or

(b)       require the person who made the decision to provide a statement of the grounds on which the application will be resisted at the hearing; or

(c)       require any person who is a party to the proceeding to provide a statement of matters or contentions upon which reliance is intended to be placed at the hearing.

Direction may be varied or revoked

(3)       A direction as to the procedure to be followed at or in connection with the hearing of a proceeding before the Tribunal may be varied or revoked at any time by any member or Conference Registrar empowered in accordance with this section to give such a direction in relation to the proceeding at that time”.

14.3The applicants also contend that Direction hearings are conducted by the Tribunal to deal with procedural matters and in this regard the Tribunal “has issued a number of documents called Practice Directions which set out the requirements the Tribunal places on parties. These documents are directed at solicitors, not people who represent themselves”.

14.4It is also contended that the Tribunal in relation to the “Interlocutory hearing” held on 24 September 2007 did not provide the applicants’ with sufficient notice and or information. The notice simply referred to a “Interlocutory hearing – Dismissal application”. The applicants contend that the level of information provided in the Tribunal’s notice to the applicants’ lay representative/s was “not sufficient to inform or make them understand how to attend to an interlocutory proceeding before the Tribunal and that it was not consistent with the procedural spirit enshrined in section 33 of the Act” that “requires that proceedings of the Tribunal be conducted with as little formality and technicality, and with as much expedition, as the requirements of the Act and a proper consideration of the matters before the Tribunal permit. The Tribunal is not bound by the rules of evidence and can inform itself in any manner it considers appropriate”.

14.5The Tribunal accepts, without making any finding as to the applicants’ contentions set out in paras 14.3 and 14.4 above, that procedurally and in practice the purpose and scope of a “Direction Hearing” and an “Interlocutory Hearing” conducted by the Tribunal are different. One clear distinction is the “Notes” listed at the end of the Direction made by the Tribunal and in particular the “Note 1” referred in paragraph 6 above.

15.Accordingly, the Tribunal is of the view that there is some force in the applicants’ submission that the Tribunal “before taking up any dismissal application and listing the matter for an ‘Interlocutory hearing’, should have listed their applications for a Direction hearing as stated in Note 1 of the Direction and not for an ‘Interlocutory hearing’. “

16.Further the Tribunal has had regard to the case of Kouieder and Commissioner of Taxation [2000] AATA 342, where Senior Member (now Deputy President) Block in reinstating the extension application noted:

“12) In these circumstances, I dismissed the extension application under section 42A(2)(a) of the AAT Act. As set out previously, a notice to this effect was sent under cover of a letter indicating that written reasons could be sought. The Applicant has indeed made such a request.

(b) I have decided in all the circumstances that natural justice would best be served by my exercising my powers under section 42A(10) of the AAT Act, on my own initiative, to reinstate the extension application. It is conceivable, as set out previously, that the Applicant may have been misled by the covering letter referred to earlier in these Reasons, and that he may have thought that pending receipt of written reasons he need not take any further action. It is possible also (although there was no evidence whatever before me to this effect) that the Applicant was informed by Mr Jordan that he need not attend the Tribunal on 18 February 2000 on the basis that the matter would not proceed on that day. It is conceivable also that the dismissal was made in error, on the basis that, however reluctant and however unaware of the issues involved, Mr Xenos might perhaps (although this is stretching matters somewhat) have been regarded as the Applicant's representative. It is also possible (although again I have no evidence other than Mr Jordan's statement to this effect before me) that Mr Jordan's presence was required, as he stated, in the Supreme Court. Even though the Applicant has so far not addressed any of the relevant criteria referred to by Hill J in Brown's case, and even though his objection notices disclose no case on the merits, there must be a possibility that given an opportunity to do so, he will rectify all of the various omissions.

The prior conduct of the Applicant is such that it is hard to be optimistic as to the likelihood that this will in fact occur. I am of course aware of the fact that in reinstating on my own initiative under section 42A(10), I am perhaps arguably treating the Applicant with more consideration than is warranted and perhaps more than he deserves. But to deprive the Applicant of his right to be heard is not something which should be done lightly. There is superior court case authority to the effect that natural justice and fairness is necessary in particular in relation to an applicant in respect of whose position one has doubts. I note in particular the judgement of Burchett J in Colpitts v Australian Telecommunications Commission (1986) 9 FCR 52 at 71 as follows:

"There was undoubtedly, upon the face of the material before the Tribunal, much to be said against Mr. Colpitts. But it would be a complete misunderstanding of the principles of natural justice to regard that fact as in any way weakening the case for their application. The principles of natural justice are designed to ensure that the voice of the defence is heard, which is never more necessary than when the Tribunal is in danger of feeling that defence would be useless."

17.It is clear that the Tribunal is not required to undertake a detailed consideration of the merits of the application itself in considering the exercise of the discretion to reinstate an application under s 42A(10) of the AAT Act. The Tribunal only needs to consider whether, taken at its highest, an applicant’s case is arguable: Commissioner of Taxation v Brown (1999) 42 ATR 672. In this matter it appears, prima facie, that the applicants may have an arguable case based on the materials currently before the Tribunal.

DECISION

18.The Tribunal in all the circumstances has decided to re-instate the applications.  These matters should now be listed for a Directions Hearing as soon as possible.

I certify that the 24 preceding paragraphs are a true copy of the reasons for the decision herein of Mr A Sweidan, Senior Member

Signed: ................[Sgd Ms C Skinner].................................
  Associate

Date/s of Hearing  22 February 2008
Date of Decision  13 May 2008
Counsel for the Applicant         Mr S Shakur
Solicitor for the Applicant          Shahid Shakur
Counsel for the Respondent     Mr T Burrows
Solicitor for the Respondent     Australian Government Solicitor