GREGORY JOHN DUNN and COMMISSIONER OF TAXATION

[2010] AATA 394

Administrative Appeals Tribunal

DECISION AND REASONS FOR DECISION [2010] AATA 394

ADMINISTRATIVE APPEALS TRIBUNAL      )

)       No WT200400135

TAXATION APPEALS DIVISION		)
Re		GREGORY JOHN DUNN

Applicant

And COMMISSIONER OF TAXATION

Respondent

DECISION

Tribunal Mr A Sweidan, Senior Member

Date26 May 2010

PlacePerth

Decision The Tribunal declines the applicant’s request to refer the proposed question of law to the Federal Court of Australia under s 45(1) of the Administrative Appeals Tribunal Act 1975.

........(sgd) Mr A Sweidan...............

Senior Member

CATCHWORDS

Practice and Procedure – application to refer proposed question of law to Federal Court – application refused for reasons stated

Legislation

Administrative Appeals Tribunal Act 1975 s 45(1)

Taxation Administration Act 1953 s 14ZY

Cases

Director-General of Social Services v Rosemary Chaney (1980) 47 FLR 80

Dunn v Department of Defence (2004) 39 AAR 322

Meilak v Commissioner for Superannuation (1991) 28 FCR 315

REASONS FOR DECISION

26 May 2010 Mr A Sweidan, Senior Member    

Background

Tribunal’s decision dated 1 February 2010

1       The applicant contended that the Tribunal has no jurisdiction in relation to his application for the reasons set out below. On 1 February 2010, after receiving written submissions from the parties the Tribunal delivered oral reasons for its decision dismissing the applicant’s objection to its jurisdiction.

2       The applicant had contended that:

2.1      the letter from the respondent to the applicant dated 12 March 2004 giving notice of the decision on the objection refers to “your objection dated 25 July 2000 against your Assessment that issued on 27 July 2000 for the year ended 30 June 1995”;

2.2      the applicant’s objection to the notice of assessment issued on 27 July 200 of the year ended 30 June 1995 (T7) was actually dated 25 September 2000;

2.3 because the respondent’s letter of 12 March 2004 referred to an incorrect date for the objection, it cannot be a valid notice of objection decision under s 14ZY(3) of the Taxation Administration Act 1953;

2.4      as the respondent’s letter of 12 March 2004 contained “no objection decision” in relation to his objection dated 25 September 2000, there is nothing which the Tribunal is able to review and the Tribunal therefore has no jurisdiction to deal with the present application.

3       After correspondence between the solicitors for the parties in which the Full Federal Court decision of Director-General of Social Services v Rosemary Chaney (1980) 47 FLR 80 (“Chaney’s case”) was raised, the applicant conceded that there was no right of appeal under s 44(1) of the Administrative Appeals Tribunal Act 1975 (“Act”) against the Tribunal’s decision of 1 February 2010.

4 The applicant now seeks referral of a question of law to the Federal Court for decision under s 45(1) of the Administrative Appeals Tribunal Act 1975 (“the Act”). The proposed question of law for referral is annexed to the applicant’s submissions in support of the application for referral.

5 The respondent opposes any proposed referral under s 45(1) of the Act on three grounds:

5.1 the relevant issue having already been decided by the Tribunal, there is no power under s 45(1) to refer this to the Federal Court for decision; and

5.2      the proposed question of law is not a proper question of law for referral;

5.3 the circumstances of this case do not warrant the exercise of the Tribunal’s discretion to make a referral under s 45(1)

Applicant’s Contentions

Operation of sections 44 and 45 of the Act

6In Chaney’s case, Fisher J observed (at page 107):

“Under the Act the statutory process is complete when the Tribunal either decides to refuse to review the decision of the administrator or makes a decision in writing affirming, varying or setting aside the decision (s 43(1)). In my opinion, it is such a decision as aforementioned which the legislature has in mind in conferring on this Court by s 44(1) a right to hear an appeal on a question of law “from any decision of the Tribunal in that proceeding”.

If a question of law arises in the proceedings before the Tribunal which the parties or a party see as fundamental to the determination of the review, the procedure in the Act (s 45(1)) for reference of that question of law by the Tribunal to this Court is available. In this way the jurisdiction issue in this matter could, if the Tribunal considered it appropriate, have been determined as a preliminary issue “so that many hours are not spent preparing a case that might not be accepted by the Tribunal”

7 The procedures in relation to an appeal under s 44 of the Act (which proceeds in accordance with Order 53 of the Federal Court of Australia Rules) and a reference of a question of law under s 45 of the Act (which proceeds in accordance with Order 50 of the Federal Court of Australia Rules) are similar, and s 46 of the Act contains provisions of a procedural nature with respect to both appeals and references (see the orbiter statements of Northrop J in Chaney’s case (at pages 91 and 92), which statements applicant contends accurately set out the law, notwithstanding that his Honour dissented.

8 Applicant contends that the power granted to the Tribunal by s 45 of the Act to refer to the Federal Court a question of law arising in a proceedings before the Tribunal is a power which stands alone from the right of appeal on a question of law granted to a party by s 44 of the Act. Applicant says that while the procedures are similar, the right of appeal granted to a party is a right which, as decided in Chaney’s case, does not arise in relation to a preliminary ruling, whereas the very purpose of the power granted to the Tribunal to refer a question of law to the Federal Court is to enable the Tribunal to have a question of law determined as a preliminary issue during the course of a proceeding, prior to a final decision being made on the substantive application. According to the applicant this is the distinction made by Fisher J in Chaney’s case in the passage set out above.

9 Applicant asserts that it is not correct to describe (as does the solicitor for the respondent in his letter of 18 February 2010) s 45 as “an alternative process” to s 44.

10 Applicant contends that s 44 and 45 deal with entirely different processes and that they are not “alternative processes” and that there is nothing in Chaney’s case (or any other authority) which suggests otherwise. Applicant says that there is nothing in Chaney’s case to suggest that the Tribunal is precluded from exercising the power conferred by s 45 in circumstances where a member has already made a decision. Applicant also contends the fact that a member may have made a decision on a question of law in a particular matter does not prevent the Tribunal (of it’s own motion or at the request of a party) from referring that particular question of law, or a related question of law, to the Court and that:

10.1     The question of law raised by the applicant is one of general importance.

10.2 In circumstances where there is no authority on the question of law raised by the applicant, and the answer in one which is relevant to all s 14ZY notices issued by the respondent to taxpayers, it is in the interests of the parties to have the question of law decided by the Court.

10.3     Although the solicitor for the respondent (in his letter of 18 February 2010) contends that the absence of authority on the point is “likely to be the result of the rarity of an applicant seeking to invalidate his own application” applicant asserts that he was obliged to lodge his substantive application with the Tribunal, rather than simply ignore the respondent’s purported s 14ZY Notice because there is no authority on the point, and it would not have been sensible to fail to lodge the application in those circumstances. Applicant asserts that if the proposed question of law is decided by the Court, every taxpayer who receives a s 14ZY notice from the respondent will know the effect of any defect that may be contained in any such notice, and may take appropriate steps.

Tribunal’s Findings

11 S 45(1) of the Act provides that the Tribunal may “refer a question of law arising in a proceeding before the Tribunal to the Federal Court of Australia for decision”. It is clear that the section works on the basis that it will be the Federal Court, not the Tribunal, which makes the decision on the referred question of law. In the Tribunal’s opinion it follows from the wording used in the section that where the Tribunal has already made its decision on the question of law, the power to make a referral under s 45(1) cannot arise.

12 Furthermore the power to refer a question of law under s 45(10) of the Act is clearly not a provision of an appellate nature. The Full Court sits at first instance and must be provided with a proper factual basis upon which to make its decision: Meilak v Commissioner for Superannuation (1991) 28 FCR 315 at paragraph [28].

13 If s 45(1) permitted referral of a question of law to the Federal Court after the Tribunal had already decided the same question of law, it would allow the section in effect to operate as a quasi appeal, in alternative to the restricted right to appeal from a decision of the Tribunal in s 44 of the AAT Act. It would be both contrary to the wording of s 45(1) and the scheme of Part IVA of the Act to allow s 45(1) to operate as an alternative avenue of appeal from a decision of the Tribunal in these circumstances.

14     Nothing in the obiter comments made by Justice Fisher in Chaney suggests that s 45(10) is capable of being invoked where the Tribunal has already made its decision on the relevant question of law. Fisher J’s comments do no more than point out that it would have been open to the Tribunal in that case to have considered the alternative course of referral to the Court under s 45(1), instead of the Tribunal deciding the question of jurisdiction as it did. In the opinion of the Tribunal it is clear that Fisher J should not be taken as suggesting that this was an alternative which still remained open in that case. The present case, where the Tribunal has already determined that is has jurisdiction to hear the application, is no different.

15     This is consistent with the approach of the Tribunal (Deputy President Forgie and Mr Emert) in Dunn v Department of Defence (2004) 39 AAR 322 at paragraph [09] where, in discussing the possible formulation of a question of law for referral under s 45(10) it was said:

Once we have exercised our discretion, there may be further question of law if it is thought that we come to a decision in the Wednesbury sense i.e. to a decision that no reasonable decision-maker could have come to. That question of law, however, would only arise after we have made a decision and so is not a question that is relevant to consider in the context of section 45 of the AAT Act. (emphasis added).

Not a Proper Question of Law

16 At the conclusion of his submissions the applicant has formulated the proposed question of law for which he seeks referral under s 45(1) of the Act. The Tribunal agrees with the respondent that the way in which the proposed question has been formulated merely underlines its inappropriateness as a question of law for referral.

17     In the Tribunal’s view it is clear that the only relevant question of law is whether or not the Tribunal had jurisdiction to review the respondent’s objection decision of 12 March 2004. This is the question which the Tribunal has already determined by its decision of 1 February 2010.

18 The applicant does not however formulate his question of law by reference to the Tribunal’s jurisdiction. Instead he attempts to circumvent the fact that the Tribunal has already decided the issue. His question seeks a ruling on “the legal effect” of a notice issued under s 14ZY of the Taxation Administration Act in certain stated factual alternatives. Formulating the proposed question in this way highlights that the issue the applicant seeks to have resolved is largely a factual one or, at best, a question of mixed fact and law. In either case, it is inappropriate for referral to the Federal Court for decision on a question of law. This is particularly so as the applicant’s proposed question selectively includes some factual matters but excludes others which would clearly be relevant. The lack of an agreed factual basis to support the proposed question of law is an additional reason why the proposed question of law is inappropriate: Meilak supra paragraph [28].

19 Further, the Tribunal agrees with the respondent that the proposed question of law fails to address a relevant issue in connection with the question of the Tribunal’s jurisdiction. The Tribunal’s jurisdiction does not depend upon the “legal effect” of a notice under s 14ZY(3). It turns upon the existence of a valid objection decision which the Tribunal is able to review under s 14ZZ of the Act.

The Tribunal’s Discretion to Refer

20 The power in s 45(1) to refer a question of law to the Federal Court is a discretionary one.

21     In Dunn supra at paragraphs [105]-[108] the Tribunal reviewed the authorities relating to relevant matters to be taken into account in considering whether to make reference under s 45 of the Act. The relevant matters were said to include:

21.1     whether the question is of general importance and involves a substantial argument fit for consideration by the Court;

21.2     whether the answers to the question will determine or ought to determine the issue between the parties;

21.3     whether the course of stating the case is preferable on grounds of expense or otherwise to deciding the question of law and disposing of the case in the ordinary way; and

21.4     whether the question of law is free from ambiguity and is a question which the Tribunal needs to ask itself in reviewing the decision.

22     In the Tribunal’s opinion the applicant’s proposed question meets none of the required criteria. The proposed question is not one of general importance. It turns on the existence of particular facts in this case. Further it arises in the highly unusual circumstance where the applicant is, for reasons of his own, in effect, seeking to invalidate his own application to the Tribunal. In those circumstances, the absence of any authority on the point he seeks to raise is hardly surprising.

23 The Tribunal is furthermore of the view that the circumstances of this case would in any event not justify the expense and delay of referral of the proposed question of law to the Federal Court. The applicant acknowledged in his earlier submissions of 13 November 2009 that, even were he to succeed with his argument as to the validity of the s 14ZY(3) notice with the consequence that the Tribunal had no jurisdiction to deal with present application, the respondent could issue a fresh s 14ZY(3) notice of his decision on the objection. In those circumstances the applicant could make a fresh application for review to the Tribunal. As asserted by the respondent nothing would therefore be achieved by the application’s attempt to invalidate the present application, save for additional delay and expense to the parties and the Tribunal. In the circumstances it is clearly preferable for the Tribunal to decide the issue of jurisdiction in the usual way (as, in fact, it has already done) and progress towards a hearing of the substantive issues involved in the application.

Decision

24 The Tribunal declines the applicant’s request to refer the proposed question of law to the Federal Court of Australia under s 45(1) of the Administrative Appeals Tribunal Act 1975.

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 L Huynh..................................................
  Associate

Date/s of Hearing  Decided on the Papers
Date of Decision  26 May 2010 
Counsel for the Applicant         Mr D Shaw  
  DLA Phillips Fox
Counsel for the Respondent     Mr T Burrows
  Australian Government Solicitor