HFTS and Commissioner of Taxation (Taxation)

[2024] AATA 2707

HFTS and Commissioner of Taxation (Taxation) [2024] AATA 2707 (2 August 2024)

Division:TAXATION AND COMMERCIAL DIVISION

File Number(s):      2017/6337

Re:HFTS       

APPLICANT

AndCommissioner of Taxation

RESPONDENT

DECISION

Tribunal:Deputy President Bernard J McCabe

Date:2 August 2024

Place:Sydney

The third-party access request is denied.

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Deputy President Bernard J McCabe

Catchwords

PRATICE AND PROCEDURES – Third-party access request – decision published and anonymised – third-party access denied. 

Legislation

Administrative Appeals Tribunal Act 1975 (Cth)

Taxation Administration Act 1953 (Cth)

REASONS FOR DECISION

Deputy President Bernard J McCabe

2 August 2024

1. These reasons relate to a request by a third-party to access the contents of a Tribunal file. The file contains records of submissions and a transcript generated in connection with a private tax hearing. The hearing was held in 2019. A decision was delivered and published in an anonymised form in accordance with the requirements imposed under s 14ZZJ of the Taxation Administration Act 1953 (the Administration Act).

2. An officer of a law enforcement agency has now asked for access to the file. One assumes the officer wishes to see the material on the file because it is somehow relevant to an investigation or other proceeding. Whatever his purpose, the material sought necessarily includes information which identifies the applicant and details their affairs.

3. The Tribunal attempted to contact the parties to the earlier proceedings to inform them of the access request and ascertain their views. The Tribunal was unable to contact the applicants, but it did receive submissions from the Commissioner of Taxation. A copy of those submissions was provided to the third-party requesting access so they would have an opportunity to comment. The third-party has not replied to that invitation, so I will proceed to decide the access question without further reference to them.

4. The Commissioner’s submissions helpfully explained the relevant law and noted provisions in the Administration Act which impose confidentiality obligations on individuals dealing with tax information. The Commissioner is expected to jealously protect the confidentiality of information provided to him. He takes that approach out of a concern for individual privacy, but also because the integrity of the revenue depends on individuals providing honest and accurate information. Taxpayers might not be frank with the Commissioner if they have reason to believe the Commissioner freely shared the information provided. The Tribunal ought to be similarly careful with such information given it steps into the Commissioner’s shoes when the Tribunal conducts its review. Nice questions arise over whether exceptions to those provisions (and exceptions to the Privacy Act principles) might be available in a particular case, but they are just that: exceptions.

5. I acknowledge the applicant for third-party access in this case is a public official who believes the information they seek will be relevant to their discharge of a public function. But the taxpayer in this case asked for, and was given, a private hearing, and s 14ZZJ of the Administration Act effectively extends the protection afforded by the public hearing to the publication of reasons.

6. There are some limits to the protection afforded to litigants in a private hearing. The Tribunal is generally obliged to conduct its proceedings in public: see s 35(5) of the Administrative Appeals Tribunal Act 1975 (the AAT Act). The operation of the so-called ‘openness’ principle is attenuated in taxation reviews by the private hearing provisions in the Administration Act - but only to the extent contemplated by that legislation. The openness principle does not give way altogether in taxation reviews. It follows the Tribunal should not confer additional protection beyond that provided for in a private hearing unless there is good reason to do so under s 35 of the AAT Act. One must also be clear that a private hearing does not inevitably make any and all information gathered in the course of the proceedings non-disclosable: the private hearing concept in tax reviews is focused on protecting identity, not information per se. The third-party applicant in this case apparently knows (or thinks they know) the identity of the taxpayer in this case. The third-party applicant wants access to the information they suppose will be available in the files. Yet providing that information will incidentally disclose or confirm the identity of the taxpayer.

7. The provisions of the Administration Act make clear the Tribunal must take all practicable steps to avoid disclosing identifying information in reasons for decision that are published following a private hearing. That requirement is there to reassure taxpayers that their confidential information will not be disclosed (and certainly not disclosed in such a way that the information can be attributed to them). The Tribunal members who decided the case kept that obligation in mind when they drafted the reasons. It would be surprising if a member of the public could negate those protections by simply making a non-party access request.

8. There is no reason to suppose the legislation intended the Tribunal to waive the protections when approached by a third-party seeking access to the underlying file just because that individual has an important job to do.

9. The third-party may be able to rely on other powers that would give them access to the information held by the Tribunal and the Commissioner. Those evidence-gathering powers, when properly authorised, may prevail over the private hearing protections. Without wanting to needlessly complicate the important function of the third-party, they should look to their other formal powers. The private hearing provisions suggest the third-party’s request for access using the Tribunal’s generic non-party access procedure should be denied.

10.     I certify that the preceding 9 (nine) paragraphs are a true copy of the reasons for the decision herein of Deputy President Bernard J McCabe

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Associate

Dated:  2 August 2024