Haines and Commissioner of Taxation (Practice and procedure) - [2025] ARTA 461

Haines and Commissioner of Taxation (Practice and procedure) [2025] ARTA 461 (24 April 2025)
Applicant:Joshua Haines
Respondent: Commissioner of Taxation
Tribunal Number: 2024/9050

Tribunal:General Member C Willis
Place:Melbourne
Date:24 April 2025

Decision:The application for reinstatement is granted.

...............................[SGD].........................................
General Member C Willis
Catchwords
PRACTICE AND PROCEDURE – reinstatement of application for review by Tribunal of objection decision – application for review previously dismissed when applicant withdrew – whether appropriate to reinstate – factors to be considered - reinstatement application made more than 28 days after dismissal – whether special circumstances exist – application for reinstatement granted
Legislation
Administrative Review Tribunal Act 2024 (Cth) subsections 95(2), 102(7), 102(8)
Cases
Re Clinnick and Australian Securities and Investments Commission [2021] AATA 71
Hunter Valley Developments Pty Ltd v Cohen, Minister for Home Affairs and Environment [1984] FCA 176
Serpinli v Secretary, Department of Social Services [2019] FCA 2029
Somba and Minister for Home Affairs (Migration) [2020] AATA 425
Statement of Reasons
BACKGROUND

Mr Haines (the Applicant) applied to the Tribunal on 6 November 2024 for a review of an objection decision (Objection Decision) made by the Commissioner of Taxation (Respondent) on the same day.
The Applicant had objected to the Respondent’s inclusion of additional amounts in his assessable income and denial of certain income tax deductions he had claimed for the year ended 30 June 2024. The Applicant owns and operates a perfume business and broadly the dispute between the parties related to whether the amounts of income and deductions related to the business or the Applicant in his personal capacity. The Respondent also imposed administrative penalties on the Applicant.
The Respondent had allowed the Applicant’s objection in relation to his amended income tax assessment in part, but had disallowed his objection to the administrative penalties.
Also on 6 November 2024 the Applicant wrote to the Tribunal requesting an urgent hearing of his application as he was in financial hardship and facing major economic loss.
On 13 December 2024 the Applicant filed a number of documents with the Tribunal describing the reasons why he believed the audit findings and subsequent Objection Decision of the Respondent were incorrect, as well as outlining grievances with the processes of the Respondent. This included issues relating to his engagement with the Respondent on freedom of information (FOI) and Compensation for Detriment caused by Defective Administration (CDDA) matters.
The matter was listed for a conference with the Tribunal on 16 December 2024.
On 6 January 2025 the Tribunal made directions for the filing of materials and evidence by the parties, as well as requiring the parties to provide hearing certificates indicating their availability for a final hearing of the proceeding.
On 15 January 2025 the Applicant wrote to the Tribunal advising that he had lodged an online withdrawal form in relation to his application. He also said that:
‘In light of having filed proceedings in the Federal Court of Australia, I respectfully request that this application be withdrawn. My understanding is that the substantive issues in dispute fall outside the jurisdiction of the Administrative Review Tribunal and will be determined by the Federal Court.’
On 6 February 2025 the Applicant contacted the Tribunal to enquire whether his case remained open or had been formally dismissed. He said the reason for his enquiry was that the Respondent had raised procedural objections regarding his ability to proceed in the Federal Court, and asked the Tribunal to advise on ‘any necessary steps required to protect my ability to contest the matter.’
The Tribunal wrote to each party on 11 February 2025 in separate letters:
·To the Applicant, confirming that the Tribunal had dismissed his application under subsection 95(2) of the Administrative Review Tribunal Act 2024 (Cth) (ART Act) such that the Tribunal would not continue with the review and had closed its file.
·To the Respondent, confirming that the Applicant had withdrawn his application and the application had been dismissed with an effective date of 15 January 2025. The Respondent was advised that if they believed the application had been dismissed in error or there were other reasons why they thought it should be reinstated, they could apply to have the application reinstated.
The Applicant requested a refund of his Tribunal application fee on 13 February 2025 and this was processed by the Tribunal.
In relation to the Federal Court proceedings, the parties advised the Tribunal that there was a directions hearing before a Federal Court judge. Although the parties’ recollections differ as to what was said at the directions hearing, it is generally agreed that an issue had been raised in relation to whether it was appropriate for the Federal Court to hear the matters relating to the amended income tax assessment and administrative penalty at this time.
The Respondent wrote to the Tribunal on 25 March 2025 advising that it would be willing to seek reinstatement of the application to assist the Applicant in accessing an avenue for review of his income tax assessment and administrative penalty. The Respondent said that if the Tribunal agreed that it was able to make an application for reinstatement, the matter might be listed for an interlocutory hearing for the Tribunal to consider reinstatement.
The matter was listed by the Tribunal for an interlocutory hearing.
CAN THE RESPONDENT APPLY TO THE TRIBUNAL FOR REINSTATEMENT OF THE APPLICATION?
Tribunal records confirm that the Applicant’s application was dismissed under subsection 95(2) of the ART Act after the Applicant notified the Tribunal in writing that he was withdrawing his application.[1]
[1] See the Applicant’s email to the Tribunal dated 15 January 2025 and the Withdrawal of application for review form lodged online on the same date.
Section 102 of the ART Act sets out the circumstances in which the Tribunal may reinstate an application. If an application is dismissed under section 95 ‘a party to the proceeding in relation to the application’ may apply to the Tribunal for reinstatement: see paragraph (a) of subsection 102(7). However, the applicant cannot apply for reinstatement if the application is dismissed under section 95: subsection 102(8). The Respondent, as a party to the proceeding in relation to the application who is not the applicant, may therefore apply for reinstatement under subsection 102(7).[2]
[2] This is consistent with the letter sent to the Respondent by the Tribunal on 11 February 2025 which noted that the Respondent could apply for reinstatement if it believed the proceeding had been dismissed in error or there were other reasons for reinstatement.
The application was dismissed with effect from 15 January 2025 and notification confirming the dismissal was sent to the parties on 11 February 2025. The Respondent wrote to the Tribunal about an application for reinstatement on 25 March 2025. Under subsection 102(7) a party may apply to the Tribunal for reinstatement within 28 days after the party receives notice that the application is dismissed ‘or such longer period as the Tribunal, in special circumstances, allows.’
Therefore in this case the Tribunal must be satisfied that there are ‘special circumstances’ to warrant the Tribunal considering reinstatement more than 28 days after the parties were notified of the dismissal. It is a relevant consideration that the ART Act sets down a statutory time limit which indicates Parliament’s intention as to the appropriate time a party should be given to make a reinstatement application.
However, the Tribunal notes the following matters:
·At the time of making his application to the Tribunal, subsequently withdrawing that application and then applying to the Federal Court the Applicant said that he did not have legal representation due to financial constraints. He was unable to access pro bono legal assistance (such as that offered by the university based tax clinics) at that time of year. The Applicant said that he tried to undertake his own research on legal matters and he misunderstood the jurisdictional issues.
·Previous communications with the Tribunal may have contributed to the Applicant’s (mistaken) belief that he was able to pursue proceedings in the Federal Court which incorporated a review of the Objection Decision.
·Although by operation of subsection 95(2) the dismissal of proceedings took effect from 15 January 2025, written confirmation of the dismissal was not sent by the Tribunal until 11 February 2025.
·At a directions hearing in the Federal Court on 21 March 2025 the Applicant confirmed that he still disputed the Respondent’s objection decision and the underlying assessments of income tax and administrative penalties.
·Although the detail of what was said at the directions hearing is not certain, the Tribunal accepts that an issue has been raised as to whether the Federal Court should hear matters relating to the assessments at this time, or whether the Tribunal is the appropriate forum.
·The Respondent contacted the Tribunal in relation to potential reinstatement promptly after that directions hearing.
·The amount of time that has elapsed since the application was previously withdrawn is not significantly greater than the 28 days.
·Absent an application for reinstatement by the Respondent, the Applicant may lose his avenue for review of the Objection Decision due to the operation of subsection 102(8) in circumstances where the Applicant withdrew his application based on a misunderstanding of law.
·Although the Respondent did not make submissions in support of the reinstatement, it did not make submissions objecting to reinstatement and was willing to request reinstatement in the Tribunal to facilitate the Applicant’s right of review.
Based on the above the Tribunal is satisfied that ‘special circumstances’ exist such that the Respondent may apply for reinstatement beyond the 28 days set out in subsection 102(7).
SHOULD THE TRIBUNAL REINSTATE THE APPLICATION?
The Respondent’s email dated 25 March 2025 proposed the listing of an interlocutory hearing for reinstatement, subject to the Tribunal agreeing that the Respondent was able to make a reinstatement application. As set out above the Tribunal is of the view that the Respondent can make that application. There is no requirement in section 102 for an application for reinstatement to be in a particular written form. At the interlocutory hearing it was agreed to proceed on the basis that the Respondent was making the application through its email correspondence to the Tribunal and further submissions at the hearing, and no further or separate application was required.
Under subsection 102(9) of the ART Act:
If a party applies under subsection (7) and the Tribunal considers it appropriate to reinstate the application, the Tribunal may reinstate the application and make such orders as appear to the Tribunal to be appropriate in the circumstances.
The Tribunal must consider that it is ‘appropriate’ to reinstate the application. In Serpinli v Secretary, Department of Social Services (‘Serpinli’) O’Callaghan J said:[3]
In considering whether to reinstate an application, the Tribunal can have regard to a range of factors in determining whether it is “appropriate” to reinstate an application. These factors may vary from case to case, but include a consideration of the merits of the substantive application...
[3] Serpinli v Secretary, Department of Social Services (‘Serpinli’) [2019] FCA 2029 per O’Callaghan J at [26].
A range of factors may therefore be considered by the Tribunal. Some of the considerations identified as relevant to applications for an extension of time may also be provide general guidance as to whether it is ‘appropriate’ to grant an application for reinstatement. However, regard must be had to whether the context and purpose are comparable.[4]
[4] Somba and Minister for Home Affairs (Migration) [2020] AATA 425 (‘Somba’) at [27] to [29], in particular discussing the factors described in Hunter Valley Developments Pty Ltd v Cohen, Minister for Home Affairs and Environment [1984] FCA 176 (‘Hunter Valley’) relating to extensions of time for review.
Explanation for withdrawal and dismissal
The Applicant acknowledges that the dismissal of his original application resulted from his withdrawal of that application, however he said that this withdrawal was based on a misunderstanding of the respective jurisdictions of the Tribunal and the Federal Court. His application encompassed a number of issues in addition to those covered by the Objection Decision, including FOI and CDDA matters. In early communications with the Tribunal there may have been confusion around what issues the Tribunal was able to address in relation to his application.
The Applicant described facing circumstances of bereavement, financial hardship and homelessness at the time he was trying to manage his taxation dispute. He did not have professional representation and undertook his own research in relation to the legal questions.
The Tribunal was not provided with a transcript of the directions hearing in the Federal Court, and although the recollections of the parties differ as to exactly what was said by judge at that hearing, there is agreement that a question has been raised as to the Federal Court’s jurisdiction.
The Respondent’s position was that by the withdrawal and consequential dismissal of the original application, the Applicant’s review rights under Part IVC of the Taxation Administration Act 1953 (Cth) (TAA 1953) were exhausted. Paragraph 14ZZ(1)(a) of the TAA 1953 provides that where a person is dissatisfied with a reviewable objection decision made by the Respondent, the person may apply to the Tribunal for a review of the decision ‘or’ appeal to the Federal Court against that decision. The Respondent referred to the decision in Punin v Deputy Commissioner of Taxation and Another in support of the proposition that once a person has decided to pursue a review in the Tribunal ‘it was no longer open to raise the merits of the Commissioner’s assessments before the court by way of appeal from the objection decisions.’[5]
[5] Punin v Deputy Commissioner of Taxation and Another (2000) 44 ATR 233 at [65] per Emmett J. Where the Tribunal has made a decision in relation to a reviewable decision, a party to the proceeding may ‘appeal’ to the Federal Court on a question of law from the Tribunal decision under section 172 of the ART Act, but in the present circumstances no decision has been made by the Tribunal.
It is a matter for the Federal Court to determine whether it has the jurisdiction to hear the Applicant’s case in relation to his dispute with the Respondent. However it is relevant to this reinstatement application to note the jurisdictional question raised by the Respondent, and this provides the context for the Respondent seeking reinstatement.
The Tribunal accepts it was likely that the Applicant misunderstood his review rights as they related to jurisdiction, and that a genuine issue has been raised in the Federal Court. This tends in favour of granting the application for reinstatement.
Merits of the substantive application
The factors which the Tribunal should consider include the merits of the underlying application for review,[6] although the purpose of an interlocutory hearing is not to conduct a hearing of the substantive matters. An assessment of the merits or prospects of success of an Applicant’s case in the context of an application for reinstatement may of necessity be superficial.[7]
[6] See Serplini at [26].
[7] Re Clinnick and Australian Securities and Investments Commission [2021] AATA 7 per Deputy President McCabe at [26].
The Applicant was able to articulate to the Tribunal a number of grounds upon which he believed the Objection Decision was incorrect including a failure by the Respondent to have regard to certain information he had provided, a misunderstanding in relation to formatting of a document, a failure by the Respondent to validate information with his bank and the role of his previous tax agent in submitting incorrect material. The Applicant also stated that he had obtained further documents under FOI processes which he believed would assist his case.
The Objection Decision indicated that the Applicant’s objection against the Respondent’s audit findings had been allowed in part. The underlying assessments arise from numerous separate items of income and deduction, and the Applicant had previously filed material with the Tribunal seeking to explain his position on these items. The imposition of administrative penalties relates to the accuracy or otherwise of the Applicant’s position. The Tribunal might be persuaded that there was merit in the Applicant’s position in relation to one or more of these items. Although it is not possible to determine whether the Applicant’s case is particularly meritorious, it would be difficult to conclude that the Applicant’s case is ‘hopeless’.[8] This also tends in favour of granting the application.
[8] Ibid.
Fairness and the public interest
The Tribunal invited the Respondent to identify any matters which might relate to fairness being accorded to them should the application be reinstated. The Respondent’s representative said that they could not identify any particular elements of unfairness, but believed it was important to recognise that if the application proceeded it should be on the basis of a merits review of the Objection Decision. The Applicant confirmed that he understands that the current application could not provide an avenue for review or decisions in relation to the CDDA and FOI issues that he has previously identified.
As mentioned above, the amount of time that has elapsed between withdrawal of the application and the Respondent’s approach to the Tribunal for reinstatement is not substantial. This would potentially lessen any disadvantage to the Respondent.
The Applicant outlined his concern that should his application not be reinstated he will potentially be left without any forum to challenge the Objection Decision. He does not believe that it would be in the interests of justice for this to occur as a result of his prior misunderstanding of the scope of the jurisdiction of the Tribunal and the Federal Court.
Section 9 of the ART Act sets out the objective of the Tribunal in providing an independent mechanism of review the Tribunal that (amongst other things):
·Is fair and just.
·Improves the transparency and quality of government decision-making.
Reinstating the application for review of the Objection Decision in circumstances where the Applicant strongly disputes that decision and the Respondent has agreed to facilitate his right of review is consistent with this objective.
Other matters
Section 9 also requires the Tribunal to have regard to the need to ensure that applications are resolved as quickly and with as little expense as a proper consideration of the matters permits.
If the application were to be reinstated, the Applicant would be expected to progress the proceeding in accordance with the requirements of the ART Act, including complying with directions of the Tribunal relating to the filing of relevant documents and evidence and attending scheduled case events. At the interlocutory hearing the Applicant confirmed to the Tribunal that he understood these obligations and was committed to progressing his application.
CONCLUSION
For the reasons set out above the Tribunal considers that it is appropriate to reinstate the application.

I certify that the preceding 40 (forty) paragraphs are a true copy of the reasons for the interlocutory decision herein of General Member C. Willis

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Associate
Dated: 24 April 2025

Date of Interlocutory Hearing: 15 April 2025

Applicant:
Self-represented

Solicitors for the Respondent:
Australian Taxation Office

Date of Interlocutory Hearing:	15 April 2025
Applicant:	Self-represented
Solicitors for the Respondent:	Australian Taxation Office