Duong and Commissioner of Taxation (Taxation)

[2021] AATA 5681

Duong and Commissioner of Taxation (Taxation) [2021] AATA 5681 (31 May 2021)

Division:TAXATION AND COMMERCIAL DIVISION

File Number(s):2020/0037; 2020/0038; 2020/0039; 2020/0040      

Re:Lyly Duong  

APPLICANT

AndCommissioner of Taxation

RESPONDENT

DECISION

Tribunal:Deputy President Bernard J McCabe

Date:31 May 2021

Date of written reasons:        11 October 2022

Place:Sydney

The application for reinstatement is refused.

..................................[SGD]......................................

Deputy President Bernard J McCabe

CATCHWORDS

PRACTICE AND PROCEDURE – question of jurisdiction – administrative penalties – question as to applicant’s standing – matter to be heard on the papers – deregistered company – no jurisdiction – application dismissed.

LEGISLATION

Administrative Appeals Tribunal Act 1975 (Cth)

Corporations Act 2001 (Cth)
Income Tax Assessment Act 1936 (Cth)

Taxation Administration Act 1953 (Cth)

CASES

Commissioner of Taxation v Tomaras (2018) 265 CLR

McCallum v Commissioner of Taxation [1997] FCA 533; (1997) 75 FCR 458

REASONS FOR DECISION

1. The Tribunal refused the application for reinstatement and gave oral reasons for its decision at the reinstatement hearing. The reasons that follow are distilled from the oral decision and reasons which are recorded in the transcript of the reinstatement hearing.

2. This is an application for reinstatement of a matter that was dismissed pursuant to section 42A(2) of the Administrative Appeals Tribunal Act 1975.  The matter was dismissed when the applicant did not appear at the hearing which was listed on 24 March 2021.

3. The Tribunal has the power to reinstate an application under section 42A(9) where the application was dismissed pursuant to section 42A(2) for non-appearance. In the event of non-appearance, the discretionary power to reinstate is available and may be exercised where the Tribunal is satisfied it is appropriate to do so.

4. The Tribunal has received two sets of written submissions from the applicant in connection with the application for reinstatement, as well as submissions from the respondent.  When I consider the applicant’s application for reinstatement, I am conscious she is self-represented.  I accept she is not a commercially sophisticated person. I also note she has expressed the desire to obtain legal representation, but she says she cannot afford it.  The applicant thinks this unfair, although it is not uncommon for applicants in the Tribunal to be unrepresented.  

5. I am also acutely aware the applicant does not speak English, and she therefore has difficulty participating in proceedings and dealing with any documents which might be sent to her.  I acknowledge she relies upon interpreters or family members.  I am also conscious the applicant appears to be suffering from some ill-health and experiences some anxiety about participating in the proceedings in the circumstances. 

6. That said, I must consider whether there was some defect in the exercise of the power to dismiss in the first place. Was there anything wrong with the decision that was made to dismiss the proceedings on 24 March 2021?   

7. As it happens, there is no doubt the applicant was informed of the hearing date on 24 March 2021.  She was provided with a listing notice and acknowledged the date when an adjournment was sought.  It follows there is no question arising as to whether the exercise of the discretion to dismiss was valid.  The question for me today is whether it is appropriate to reinstate the matter.  

8. When I consider what sort of things might be relevant to whether it is appropriate to reinstate, the reasons for the applicant’s non-attendance on 24 March 2021 is obviously going to be an important part of that consideration, but other matters might be relevant as well.  The applicant has referred, by way of explanation, to at least three things which might have explained her non-appearance.  Medical conditions were referred to, but no documentary evidence was provided by the applicant despite being asked to do so.

9. The applicant also referred to technical difficulties in attempting to participate in the hearing but did not really explain what those were. She referred to family business, without explaining what she meant.  It was at this point in the reinstatement hearing that the applicant sought the opportunity to speak with her family so she could identify reasons that might assist in her case. This is not a compelling submission as it is not clear how the family would be able to assist at this point, since the applicant should know what the reasons are for her non-appearance.  

10. In any event, the applicant had the chance to discuss the reasons with her family prior to the reinstatement hearing, and she did not take it.  I might say that the reasons given are also at odds with an additional explanation which was offered during the hearing: that the applicant wasn’t aware of the earlier hearing, even though she says she is careful about these things.  I do not think a proper explanation was given for the applicant’s failure to attend on that previous occasion.   

11. As for other reasons that might be considered, the respondent has pointed to the way in which the applicant has conducted herself in the proceedings to date, and the fact that there has been non-compliance with directions on several occasions.  That non-compliance does not give me much confidence that if the matter was reinstated, we would be able to progress to a hearing at the earliest opportunity.  

12. The danger is that reinstating the matter would just lead to further delay.  That is a real issue in this case, as there is prejudice to the Commissioner. The Commissioner has held off recovery proceedings while these proceedings are on foot.  The Commissioner has done that pursuant to a policy which is designed to allow applicants to litigate these proceedings without the threat of imminent debt recovery hanging over their heads.   

13. That is entirely appropriate, but there is a public interest in making sure these proceedings progress quickly, so that if there is to be debt recovery, it can be done in a timely way.  The Commissioner has also asked me to consider the merits of the substantive case the applicant wishes to run.  Counsel for the Commissioner, Ms McGovern, has said this matter arises out of assessments for the 2016 and 2017 years of income.  

14. Ms McGovern points out that under the provisions of the Taxation Administration Act1953, a taxpayer is required to show the assessments were excessive, and they do that by showing what the correct position was with respect to their income.  Now in this case, the applicant was assessed for having unexplained income, and submits those amounts are properly explained by loans and gambling winnings. 

15. That creates a heavy evidentiary burden on the applicant. I am reluctant to engage in a mini-trial.  It would not be appropriate to do that at this hearing.  As the Commissioner points out, there does not appear to be a great deal of evidence being called in support of the argument about the loans in particular.  I am conscious there might well be different arguments in relation to the penalties issue. 

16. Putting to one side the applicant’s argument as to the loans in particular, the applicant still faces a heavy evidentiary burden in establishing the penalties were wrongly assessed.  And there are question marks about whether there is much in the way of evidence on that question, either.  I’m conscious the applicant is unhappy and distressed. I also take note of the applicant’s argument that she is an honest citizen, and takes the obligation to tell the truth seriously.  

17. But at the end of the day, I have to decide what is the appropriate thing to do.  Unfortunately, in this case it seems to me it is not appropriate to reinstate the proceedings, in circumstances where there has been no adequate explanation for the delay.  While I think the absence of an adequate explanation is determinative, or decisive, and is reason enough not reinstate the proceedings, I’m concerned about the delay leading to prejudice and I lack confidence that we will be able to proceed without additional delay, given past behaviour.  

18. And so on that basis, I cannot accept the application to reinstate. 

I certify that the preceding 18 (eighteen) paragraphs are a true copy of the reasons for the decision herein of Deputy President Bernard J McCabe

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Associate

Dated: 14 November 2022

Date(s) of hearing:	31 May 2021
Applicant:	By video
Counsel for the Respondent:	Ms L McGovern