Fortunatow and Commissioner of Taxation (Taxation)
[2018] AATA 1453
•4 May 2018
Fortunatow and Commissioner of Taxation (Taxation) [2018] AATA 1453 (4 May 2018)
Division:TAXATION & COMMERCIAL DIVISION
File Number(s): 2017/3954
2017/3955
Re:Peter Fortunatow
APPLICANT
AndCommissioner of Taxation
RESPONDENT
DECISION
Tribunal:Senior Member R W Dunne
Date:4 May 2018
Date of written reasons: 25 May 2018
Place:Adelaide
The Tribunal sets aside the Summons issued on 11 April 2018.
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Senior Member R W Dunne
CATCHWORDS
PRACTICE AND PROCEEDURE – objection to summons to produce documents – grounds on which Summons may be set aside – adjectival relevance – parameters of abuse of process – whether oppressive – summons set aside.
LEGISLATION
Administrative Appeals Tribunal Act 1975, s 40A
Income Assessment Act 1936, s 170(1)
Judiciary Act 1903, s 39BAdministrative Decisions (Judicial Review) Act 1977
CASES
Cosco Holdings Pty Ltd v Commissioner of Taxation, [1997] FCA 1504; (1997) 37 ATR 432
Re General Merchandise and Apparel Group Pty Ltd v Chief Executive Officer of Customs [2009] AATA 988
Re Marnotta Pty Ltd and Secretary, Department of Health and Ageing [2004] AATA 800Re Phillips and Inspector‑General in Bankruptcy [2011] AATA 25
REASONS FOR DECISION
Senior Member R W Dunne
25 May 2018
INTRODUCTION
A summons to produce documents (the “Summons”) was issued by the Tribunal on 11 April 2018 at the request of the applicant. The Summons was issued to the Proper Person at the Australian Taxation Office.
The recipient objected to the Summons and requested an interlocutory hearing by telephone.
At the interlocutory hearing, having reviewed the submissions received from the applicant’s representative and the respondent’s representative, I decided to set aside the Summons and gave an oral decision.
The applicant’s representative has requested written reasons, which I now provide.
THE SUMMONS
The Summons called for the production of the documents listed in the annexure to the Summons. The date range expressed in the annexure required documents created between 1 July 2013 and 31 December 2017.[1]
[1] Annexure to Summons attached to decision.
CONSIDERATION
Under s 40A of the Administrative Appeals Tribunal 1975 (“the AAT Act”), the Tribunal has the power to summons a person to produce books, documents or things in their possession. Although the AAT Act does not expressly provide for a mechanism to set aside a summons that has already been issued under s 40A, there are numerous decisions in which an implied power to set aside a summons has been assumed (see Re General Merchandise and Apparel Group Pty Ltd and CEO of Customs [2009] AATA 988).
The general principles relating to the issue of subpoenas by a Court are also applicable to the issue of a summons by the Tribunal (see Cosco Holdings Pty Ltd v Commissioner of Taxation [1997] FCA 1504; (1997) 37 ATR 432; Re General Merchandise and Apparel Group Pty Ltd and CEO of Customs [2007] AATA 1138).
In the present case, the applicant’s representative indicated that there had been a previous matter in which the respondent had admitted to altering documents, although the matter settled. The response from the respondent in the present case, pursuant to s 37 of the AAT Act, did not include a fraud or evasion submissions and opinion. The applicant sought these documents through an FOI request, but was told by the FOI officer that the documents did not exist. The applicant advised the respondent of this and later a fraud or evasion opinion arrived in WORD form. When the metadata dates were checked, they did not accord with the data that related to the provision of the amended assessments in 2011/2012 and 2012/2013. It was because of this, and the applicant’s previous history, that there was concern about the time on which the fraud and evasion documents had originated. The applicant then sought metadata from Siebel for the dates of the documents and the dates of the alterations to them.
In the objection, although there were submissions from the respondent relating to oppression, a possible fishing expedition and relevance, the issue was whether or not a fraud or an evasion opinion had been issued by the authorised officer prior to the amendment of the assessments. The applicant’s representative submitted that there were 13 documents in the annexure which met the Summons criteria, but although the s 37 response that had been provided contained all the relevant material, the applicant did not accept this.
I note that on 29 January 2018, a communication was sent to the Tribunal and also to the applicant’s representative. The communication was a copy of the Supplementary T‑Documents and contained a fraud or evasion opinion and submissions. But these documents had not been included in the s 37 response. Ms Smith, representing the respondent, indicated that this particular issue had been covered by the parties and that it was understood that the fraud or evasion opinion had been left out of the T‑Documents. Ms Smith indicated that a copy of the opinion had been copied, saved and sent to the applicant’s representative. She said she had sent screen shots of the fraud or evasion opinion, and the relevant dates in them had pre‑dated the amended assessments. Ms Smith further indicated that if the applicant’s concern related to the dates on which the fraud or evasion opinion had been made, she would swear an affidavit to cover all of the matters that she had outlined in the discussion.
Having heard what Ms Smith said, the applicant’s representative, Mr Findley, indicated that, if what she had said was in fact correct and he was able to review the screen shots, it may be that the matter would be resolved.
When the applicant’s application for review was considered, Mr Findley submitted that when the applicant received the s 37 response and discovered the absence of the fraud or evasion opinion and submissions, the opinion was necessary to enliven the Commissioner’s power to amend the 2011/2012 assessment because that assessment was outside the two‑year period in s 170(1) of the Income Tax Assessment Act 1936 which would enable the Commissioner to amend that assessment.
Although Mr Findley indicated that his consideration of the screen shots may well resolve the issue, he said that it may be appropriate for the matter to be adjourned for a further hearing. Given everything Ms Smith had said, I was not prepared to do this. I understood that the Commissioner needed to form an opinion that there was fraud or evasion involved to enable him to issue an amended assessment for the 2011/2012 year and that when the T‑Documents were received with no opinion in them, this initiated the applicant’s request for review.
In my view, the Commissioner has explained the reasons why the error occurred and the fraud and evasion opinion was omitted. An electronic copy has been provided to the applicant and the fraud and evasion opinion is now filed in the Supplementary Documents, and the dates of the opinion and submissions are there and pre‑date the amended assessments. This should be the end of the matter. If the applicant asserts that the Commissioner does not have the power to validly act and issue the amended assessment, the issue is outside the jurisdiction of the Tribunal and the applicant should make an application under s 39B of the Judiciary Act 1903 or pursuant to the Administrative Decisions (Judicial Review) Act 1977. I have perused the respondent’s submissions and those that have been submitted for the applicant. I am satisfied that the submissions are sufficient to enable me to set aside the Summons.
DECISION
The Tribunal sets aside the Summons issued on 11 April 2018.
I certify that the preceding 15 (fifteen) paragraphs are a true copy of the reasons for the decision herein of Senior Member R W Dunne
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Administrative Assistant
Dated: 25 May 2018
Date(s) of hearing: 4 May 2018 Advocate for the Applicant: Mr J Findley Solicitors for the Applicant: Lawyer Up Pty Ltd Respondent: In person Advocate for the Respondent: Ms R Smith ANNEXURE
DATE RANGE:
The summonses requires documents created between 1 July 2013 and 31 December 2017.
DESCRIPTION OF THE DOCUMENTS.
The documents required are specified as those relating to the matters:
Siebel Case ID:
1-5M44JJ3 (Peter Fortunatow)
1 5M44JH3 (Fortunatow Pty Ltd)
The specific documents and the description of how they are to be provided is as follows:
THE SUMMARY DOCUMENT TO BE PROVIDED
The full table of Siebel entries for the matters, including the summary information of date created, by whom created, and listing annexures to the entry.
The table is to be provided in hard copy, in a format such that all entries may be identified.
DETAILED DOCUMENTS TO BE PROVIDED.
All documents created by Australian Taxation Office officials, in the date range and relating to the Siebel Cases specified.
However, documents excluded from the summons are those created by or provided by:
·Peter Fortunatow,
·Fortunatow Pty Ltd, (including work contracts and offers of contracts)
·Andrew Sinclair, solicitor of Cowell Clarke,
·Matthew Holland of KJ Holland and Associates, accountants
For the matter Case Reference Number 1-5M44JJ3 (Peter Fortunatow) and 1-5M44JH3 (Fortunatow Pty Ltd), for each entry into the Seibel system, provide:
·Screenshot of the entry.
·Screen shot of the entry audit data record (sometimes referred to as the metadata), showing
odate created
oby whom created
odate modified (each occasion of modification)
oby whom modified (each occasion of modification)
For the matter Case Reference Number 1-5M44JJ3 (Peter Fortunatow) and 1-5M44JH3 (Fortunatow Pty Ltd), for each electronic document (not being an email), provide:
·Copy of the document.
·Screen shot of the document audit data record (sometimes referred to as the metadata), showing
odate created
oby whom created
odate modified (each occasion of modification)
oby whom modified (each occasion of modification)
For the matter Case Reference Number 1-5M44JJ3 (Peter Fortunatow) and 1-5M44JH3 (Fortunatow Pty Ltd), for each email, provide:
·Copy of the document.
·Screen shot of the entry audit data record (sometimes referred to as the metadata), showing
odate created
oby whom created
odate modified (each occasion of modification)
oby whom modified (each occasion of modification)
·A list of the documents attached to each email.
·Copy of each attachment to each email.
For the matter Case Reference Number 1-5M44JJ3 (Peter Fortunatow) and 1-5M44JH3 (Fortunatow Pty Ltd), from the diaries of the person summoned, provide for each entry:
·Copy or screen shot of the entry.
·Screen shot of the entry record audit data (sometimes referred to as the metadata), showing
odate created
oby whom created
odate modified (each occasion of modification)
oby whom modified (each occasion of modification)
0
3
0