Kouieder and Commissioner of Taxation
[2000] AATA 342
•18 February 2000
DECISION AND REASONS FOR DECISION [2000] AATA 342
ADMINISTRATIVE APPEALS TRIBUNAL )
) No. NT1999/940
TAXATION APPEALS DIVISION )
Re FAROUK KOUIEDER
Applicant
And COMMISSIONER OF TAXATION
Respondent
DECISION
Tribunal J. Block, Senior Member
Date18 February 2000
PlaceSydney
Decision The application for an extension of time within which to lodge objections in respect of the years ending 30 June 1995 and 30 June 1996, having been dismissed pursuant to section 42A(2)(a) of the Administrative Appeals Tribunal Act 1975, is reinstated in accordance with section 42A(10) of the Administrative Appeals Tribunal Act 1975.
..............................................
Senior Member
CATCHWORDS
PRACTISE AND PROCEDURE – extension of time application - non appearance by Applicant – no arguable case on merits – dismissed pursuant to section 42A(2)(a) of Administrative Appeals Tribunal Act 1975 – reinstated pursuant to section 42A(10)
Administrative Appeals Tribunal Act 1975; sections 42A(2)(a), 42A(8), 42A(10) and 43(2A)
Brown v Federal Commissioner of Taxation 99 ATC 4516
Federal Commissioner of Taxation v Brown 99 ATC 4852
Zizza v Federal Commissioner of Taxation 99 ATC 4166
Case 8/98, 98 ATC 155
Case 7/98, 98 ATC 139
Colpitts v Australian Telecommunications Commission (1986) 9 FCR 52
Guse v Comcare, Federal Court, 5 June 1997, NG626 of 1995
REASONS FOR DECISION
18 February 2000 J. Block, Senior Member
The objection decision under review in this matter is the refusal by the Respondent to grant to the Applicant an extension of time within which to lodge objections dated 23 December 1998 against notices of amended assessment issued on 31 July 1997 in respect of the years ending 30 June 1995 and 30 June 1996 (collectively referred to as the "relevant years" and each a "relevant year").
The Applicant was represented by Mr J. Xenos of Xenos Jordan Solicitors while the Respondent was represented by Ms R.M. Henderson of counsel instructed by Ms Barbara Zakos, an officer of the Respondent. A lengthy and detailed statement by Ms Zakos dated 17 February 2000, and including annexures thereto, was filed in the Tribunal on 17 February 2000.
(a) This matter came before me on 18 February 2000 and at which time Mr Xenos applied for a postponement of one month. After hearing Mr Xenos and Ms Henderson, I refused to grant a postponement and dismissed the application under section 42A(2)(a) of the Administrative Appeals Tribunal Act 1975 (the "AAT Act").
(b) Section 42A(2)(a) of the AAT Act reads as follows:"(2) If a party to a proceeding before the Tribunal in respect of an application for the review of a decision (not being the person who made the decision) fails either to appear in person or to appear by a representative at a directions hearing, a conference mentioned in Section 34, or a mediation under Section 34A held in relation to the application, or at the hearing of the proceeding, the Tribunal may:
(a) if the person who failed to appear is the applicant--dismiss the application without proceeding to review the decision; or
(b) ..."
(c) Subsequently, and by letter dated 6 March 2000, the Applicant called for written reasons for the decision. In that letter the Applicant's solicitors required the "immediate" delivery of written reasons.
(d) The letter referred to in subclause (c) did not specify any statutory provision pursuant to which written reasons were sought, and indeed it is doubtful whether the Applicant is entitled to require written reasons either immediately or otherwise. This is so because the Tribunal dismissed the application without proceeding to review the decision. Under section 43(2A) of the AAT Act a party is entitled to require reasons in writing for its decision where reasons were not given in writing. It is relevant to note though that the section applies where there was in fact a decision, but not where the Tribunal dismissed the application without proceeding to review the decision.
(e) Although, and as I have indicated, the Applicant is not in my view entitled to require written reasons, I decided to furnish reasons, in particular because the Tribunal sent the notice of dismissal under section 42A(2)(a) of the AAT Act under cover of a letter which indicated that the Applicant could, if he so desired, require written reasons. Although section 43(2A) of the AAT Act is clear in its terms, and so that a careful consideration of its terms would indicate that written reasons may be sought only in respect of a decision, the Applicant may have been misled by the covering letter to which I have referred.
(f) At the conclusion of the hearing on 18 February 2000, and after notifying the parties of my dismissal of the extension application under section 42A(2)(a) of the AAT Act, I informed Mr Xenos (after recording had ceased) that the Applicant could, if so advised, seek the reinstatement of his extension application; I pointed out to Mr Xenos that it would be necessary for the Applicant for this purpose to prepare and file an application and setting out the grounds upon which it was made; I drew his attention in particular to the fact that the extension application did not specify any grounds. The Applicant has not in fact made an application for reinstatement and whether under section 42A(8) or section 42A(10) of the AAT Act; the statutory time period of 28 days prescribed by section 42A(8) has expired and so that it is no longer possible for the Applicant to make such an application under that section.
I propose at this early juncture, to deal in general terms with the law in respect of extension applications and for this purpose to set out a comparatively lengthy quotation from the judgment (in my view authoritative) of Hill J in Brown v FC of T 99 ATC 4516 (it overturned my decision refusing an extension of time in Case 7/98 98 ATC 139.) Clauses 41 to 59 both inclusive of the judgment of Hill J read as follows (at 4524 to 4527):
"41. In the comments which follow I propose to examine the matters raised by Wilcox J and their relevance to taxation objections generally and to the present case in particular. In doing so I would repeat that I should not be taken to be suggesting that in the present case the Tribunal erred in law in approaching the matter by reference to Hunter Valley Developments for this was the approach which the parties suggested to the Tribunal. And it must be said that at least some of the factors enunciated as guide lines in Hunter Valley may have relevance, notwithstanding the differing context in which they were formulated Nor should I be seen to be criticising the comments which the Tribunal made in considering the Hunter Valley guidelines, other than the approach it took to the merits of Mr Brown's case. The Tribunal's comments, however, do serve to demonstrate that a number of the Hunter Valley Developments "guidelines will often have no relevance to an inquiry such as the present for they are framed by reference to a quite different context. Too slavish an adherence to them should, in my view, be avoided.
42. The first matter raised by Wilcox J in Hunter Valley Developments was what his Honour referred to as the prima facie position, that Parliament has laid down time limits to be observed so that, absent a satisfactory explanation for the failure to comply with those time limits, an extension of time should not be allowed. Those time limits provide a legislative indication that there is to be some finality in the decision making process.
43. Within this first proposition lies implicitly the necessity for the applicant for an extension of time to provide an explanation for the failure to lodge an application in time, and, at least in the ordinary case, an acceptable explanation for that failure. This is explicitly the second matter which his Honour saw as relevant. Indeed the first three matters to which Wilcox J adverts are connected with each other.
44. It is true in the context of income tax, just as it is in the context of judicial review of administrative decisions, that the fact that the statute prescribes a time limit and that the applicant seeks an indulgence in extending that time limit, brings about the result that there will be a need to consider the circumstances which led to the time limit not being complied with.
45. It may be, as I suggested in Kim Hyun Tai, that the need to give an acceptable explanation in seeking an extension of time for the making of an application under the Administrative Decisions (Judicial Review) Act, requires reconsideration in the light of the decision of the full court of this Court in Comcare v A'Hearn (1993) 119 ALR 85.
46. In the context of an application to extend the time for lodging an objection it is clear enough that the circumstances which resulted in the objection not being lodged in time require consideration. Indeed the taxpayer's explanation for the delay, while not the sole factor, must clearly be an important factor. If there were no explanation it would be unusual for an extension of time to be granted. In some cases the explanation for the delay may be so compelling that it will almost require an extension of time to be granted. For example, where the assessment did not reach the taxpayer at all within the 60 days from being put into the post it would be rare for an extension of time not to be granted. Even where there is no particular explanation given for the delay, other than the belief that an objection would be futile, but subsequent to the expiration of time Court interpretations changed so that the possibility of the objection being successful arose, an extension of time would likely be granted.
47. While, therefore, the explanation for delay in lodging the objection will be an important factor, it is necessary to bear in mind that the decision maker should take into account all the circumstances of the particular case against the background that Parliament has enacted a procedure to permit extensions of time being granted. An extension should be granted where the justice of the case requires, cf Wedesweiller v Cole (1983) 47 ALR 528 at 531 per Sheppard J, cited with approval in the present context by Sweeney J in Fardon v FC Of T 92 ATC 4339 at 4348. Neither the Commissioner nor the Tribunal on review should approach the question of determining whether an extension of time should be granted on the basis that it will only be in an exceptional case that an extension is granted.
48. The second factor raised by Wilcox J, as already noted, overlaps with the first. It involves, as well, the question whether an applicant for an extension of time has so rested on his rights as to lead the decision maker to believe that the matter has finally been concluded. His Honour refers in this context to the possibility that the passing of time may make it difficult for the decision maker to recall all the circumstances surrounding the making of the decision. That is no doubt important where what is being challenged is the making of an administrative decision. It has much less relevance where the substance of the challenge which a taxpayer wishes to make is the excessiveness of an assessment of the taxpayer's taxable income, a question which requires an investigation of the taxpayer's assessable income and the allowable deductions to be put against that assessable income. It is not as if the Commissioner has made a decision based on facts known to him at the time of decision where those facts may fade from the Commissioner's recollection if subsequently required to be recalled in the light of a court challenge to the making of that decision. Almost always the facts surrounding a particular transaction said to give rise to assessable income or to generate allowable deductions will be peculiarly within the knowledge of the taxpayer rather than the Commissioner. True it is that other witnesses may with the effluxion of time be unavailable to give evidence or become forgetful. But where the onus of proof is on the taxpayer to show that an assessment is excessive, delay in instituting the objection and appeal procedure may well more often prejudice the taxpayer than the Commissioner. In weighing up whether the delay may operate to the prejudice of the Commissioner because evidence available to him and which may support the assessment may become unavailable (and this would be a matter upon which evidence should ordinarily be advanced by the Commissioner) it will be necessary to consider the time which has elapsed between the event which is said to give rise to the assessable income and the making of the assessment itself.
49. In summary it is clear that in considering an extension of time the Commissioner (or Tribunal) must take into account the circumstances surrounding the failure to object in time and any explanation for delay which is given. The length of delay will likewise be relevant. But these are factors to be weighed against other matters, particularly the fact that to deny a taxpayer the right to have the assessment reconsidered by the Commissioner, or ultimately by the Tribunal or the Court, may be conducive to injustice.
50. In the present case the Tribunal determined that there was an explanation for the delay, although rightly observed that the decision not to object at the time was a conscious one. It pointed out that the prime motivation of Mr Brown was the possibility or even probability of bankruptcy. The Tribunal's reasons do not suggest that for this reason alone the extension of time should be refused.
51. The third matter discussed by Wilcox J is prejudice to the Respondent. As we have already seen this overlaps with the second matter discussed above. As I have already noted it may be a much more critical matter in applications for judicial review than in proceedings for extending the time in which a taxpayer may object. Except where the effluxion of time may affect adversely the ability of the Commissioner to defend an assessment, it is hard to see what prejudice there could be to the Commissioner in a case such as the present, or indeed in like cases, other than administrative inconvenience. The Commissioner is entitled to collect tax due under an assessment whether or not there is an objection. He is obliged to collect tax in accordance with a correct assessment, that is to say, to collect the correct amount of tax, no more and no less. If an assessment is excessive it would be improper for the Commissioner to seek to collect tax payable under it. In saying this I should not be understood as suggesting in the light of ss 175 and 177 of the Income Tax Act that a Court should go into the merits of an assessment outside the objection and appeal process.
52. It is true that if the taxpayer is not allowed to object the Commissioner in the result will not be required to repay tax which has perhaps been incorrectly assessed. But that is not prejudice to the Commissioner.
53. In matters of judicial review on the other hand there is more often the possibility that reopening a decision may cause prejudice because of a lapse of time. The context of public law will more readily give rise to prejudice than private tax disputes. In Fardon v FC of T at 4348 Sweeney J referred to what was said by Bray CJ in Lovatt v Le Gall (1975) 10 SASR 479 at 485 as apposite. With respect I am of the view that it should be repeated:'... 'If the defendant has suffered no prejudice, as when ... he cannot show that he has lost anything by reason of the delay, it may well be that the court will not find it difficult to come to the conclusion that it is fair and equitable in the circumstances to grant extension'.'
54. The Tribunal properly regarded prejudice to the Commissioner as being irrelevant in the present case.
55. The fourth matter, related to the third, is stated by Wilcox J to be that the mere absence of prejudice will not be enough to justify an extension. That may be generally accepted, particularly in the context of judicial review. But the defining difference between judicial review and the ordinary taxation objection is that the former will often involve matters of public policy and interest. That is not ordinarily the case with income tax assessments. It would be more desirable if, under this head, the Commissioner or the Tribunal took into account against the absence of prejudice to the Commissioner, the considerable prejudice to a taxpayer who is otherwise denied a right of independent review of an assessment which he or she claims to be excessive.
56. The fifth matter is, as has already been noted, the merits. Given that the income tax legislation proceeds on the basis that there will first be an objection lodged and thereafter a consideration of that objection by the Commissioner, there is much to be said for the view that the merits of the objection are of less concern when an application for an extension of time to object is under consideration than would be the case where judicial review of an administrative decision is sought. For it is only after the objection is lodged within the time which is extended that the Commissioner is placed under a duty to consider the objection and allow or disallow it or allow it in part. I do not wish to be taken as saying that the merits of the objection are totally irrelevant. For present purposes I am prepared to accept the view of von Doussa J in Windshuttle that an applicant should show that he or she has an arguable case. No doubt if the objection on the face of it is one which is frivolous or bound to fail as a matter of law it would be a futility to permit an extension of time to enable it to be considered. But this points to quite a low threshold. What is involved is whether the objection on its face discloses a case which is arguable, not whether having regard to other matters, including evidence which may not even be known to the taxpayer at the time of making the application, the case is one that the taxpayer will or will probably lose.
57. The sixth matter raised by Wilcox J concerns considerations of fairness as between the applicants and other persons in like position. That is clearly a relevant matter when a public law issue is involved. It will seldom have any significance in the context of income tax assessments. In the present case the Tribunal appears to have considered that it should take into account persons who decided not to object to assessments. But there can here be no question of fairness arising so far as other taxpayers are concerned. They are entitled to lodge objections and if out of time to seek an extension of time in which to lodge their objections, just as Mr Brown is. If the tax is collected at the time it becomes due Mr Brown gains no advantage over other taxpayers. If it has not been collected, that is not a matter which is within Mr Brown's control.
58. In summary when a taxpayer seeks an extension of time in which to lodge an objection the following matters will require consideration:
1. The taxpayer's explanation of the delay in lodging an objection against the assessment within the time stipulated by Parliament.
2. The circumstances attendant upon that delay.
3. Whether the objection is one which, on its face, is frivolous or which in law must fail, or, to the extent that this is indeed a different test, is one in which the taxpayer has no arguable case. This matter will be considered by reference to the objection itself and such other material as the taxpayer puts before the Commissioner. It will seldom, if ever, require the decision maker to consider matters such as credit or endeavour to reconcile the evidence which the taxpayer choses to rely upon with other factual material in the possession of the Commissioner. No doubt the stronger the case the more likely that the discretion would be exercised in favour of a taxpayer even where the explanation for delay was thought not to be strong. Whether the converse is also the case need not here be considered.
4. Such other matters as the circumstances of the particular case make relevant, including, if prejudice to the Commissioner be asserted, such prejudice as is shown to arise.
59. What is required is the balancing of the delay; the explanation for it; the circumstances which gave rise to it and such prejudice if any as may be shown to exist to the Commissioner against the prejudice which may arise to a taxpayer who has by reason of the failure to object in time lost the right to a review of the assessment. In this balancing process the Commissioner or the Tribunal on a review will be guided by what the justice of the case requires. The balancing process should be approached on the basis that while Parliament has stipulated a time in which objections are required to be lodged it has entrusted to the Commissioner a power to extend that time in appropriate circumstances. The decision maker should not lose sight of the fact that s14ZW is an ameliorating provision designed to avoid injustice."
It is convenient at this point to outline the circumstances in which the present application came before me:
(a) This matter was listed for hearing on 18 February 2000; the listing notice notifying the parties of the date, time and place of the hearing was despatched on 13 January 2000.
(b) On 8 February 2000, at the request of the Applicant's solicitors, the Tribunal (at the Tribunal's expense) engaged the services of an Arabic interpreter to assist the Applicant at the hearing.
(c) One week prior to the hearing, my associate contacted Mr James Jordan, a partner in Xenos Jordan (the Applicant's solicitors) in order to check that he would be ready to proceed with the extension application. He said that the matter was uncomplicated, that he did not think that he would need to call any evidence, and that he would be ready to proceed with the extension application on 18 February 2000. My associate drew Mr Jordan's attention in particular to (inter alia) the decision in Brown's case (see: Brown v Federal Commissioner of Taxation 99 ATC 4516 (per Hill J) and Federal Commissioner of Taxation v Brown 99 ATC 4852 (Full Federal Court)), as to applications for extensions of time within which to lodge objection decisions.
(d) As to why Mr Jordan might have thought that he would not need to call any evidence is unclear to me. In order to obtain an extension of time the cases (and see in particular clause 4 above) indicate that evidence is required, inter alia, as to the merits; and the Applicant must demonstrate that he has at least an arguable case. Moreover, the Applicant is generally obliged to furnish an explanation for his delay, even though such an explanation is not a precondition for the grant of an extension. Specifically as to the question of merits, Hill J in Brown's case indicated that the stronger the merits, the more likely it is that the application will be granted. Merits are, as set out previously, one of the aspects which are relevant in respect of an application of this nature. Mr Jordan could not himself have given evidence as to the merits since he was the Applicant's solicitor and mere hearsay evidence as to what the Applicant might have said to him would not have sufficed. Direct evidence (although not necessarily inevitably or only by the Applicant) would have been required. The very fact that an interpreter in the Arabic language was engaged would appear to indicate that the Applicant and his advisers appreciated that the evidence of the Applicant would be needed.
(e) (1) On the day prior to the hearing date the Tribunal received a facsimile dated 17 February 2000 from Xenos Jordan which reads, inter alia, as follows:
"We request that the extension of time hearing set down for tomorrow be vacated.
The reason for the request for vacation is that the writer (who was to run the hearing) has been today advised that he is required in the Supreme Court for sentencing submissions for another client convicted of triple murder and attempted murder.
The murder trial had originally been set down for hearing at 2.00pm tomorrow but the judge today moved the trial up to commence at 10.00am.
Accordingly, the writer will not be available to attend upon the AAT for the Koueider trial.
The respondent's office has been contacted and advised and Ms Zakos of that office indicated that she has no view on the application for vacation and will abide by any decision the tribunal makes."
The facsimile concluded by apologising to the Tribunal for the late notice on the basis that the writer was only informed of the change in time in the Supreme Court matter "today". That facsimile was signed by Mr Jordan.
(2) The fax dated 17 February 2000 was received by me and my associate on 18 February 2000. I instructed my associate to contact Mr Jordan in order to point out to him that I could not of my own accord accede to his request for a vacation of the hearing date, and that either he or another member of his firm should attend at the Tribunal on 18 February 2000.
(3) It is relevant in this context to note that contact was made with Mr Jordan at his offices in Kogarah at approximately 9.30am on 18 February 2000. The distance between Kogarah and the Supreme Court is such that it might have been difficult for him to have arrived at the Supreme Court by 10.00am. I was given to understand also that the Supreme Court matter in question was a legal aid matter in respect of which counsel had been engaged although Mr Xenos did mention that he personally did not know what precisely had been arranged in this connection. It was noted also that the Supreme Court matter related to sentencing only; as to why then Mr Jordan's presence, together with counsel was required, and at the amended time, was not clear. Nor was there any information before me as to why the presiding judge would have rescheduled the sentencing time, if he had been made aware of the fact that Mr Jordan was already engaged at the rescheduled time to appear in this matter.
(4) Mr Xenos did not appear before the Tribunal at the scheduled time of 10.00am; however, I decided to hold the matter over for a period to allow him to appear, and he did arrive at the Tribunal some while later.
(f) Mr Xenos said that he had been asked by Mr Jordan to appear but that he had no personal knowledge of the matter. He informed the Tribunal that the Applicant was not in attendance at the Tribunal and that he had no knowledge of the Applicant's whereabouts. In these circumstances there did not seem to be any point in requiring the continued presence of the interpreter at that time and he was accordingly excused.
(a) The Applicant's record of attendances before this Tribunal has been somewhat unsatisfactory.
(b) Matter NT1998/384, in which the Applicant was also the applicant, was set down for hearing before Deputy President McMahon of this Tribunal on 17 June 1999. The Applicant had sought a review of a departure prohibition order and pursuant to which the Applicant had been refused a departure authorisation certificate allowing him to visit his family in Lebanon. The departure prohibition order had been issued by the Respondent in consequence of the Applicant's involvement in a tobacco excise scheme (which yielded very large amounts of money), the proceeds of which, so it is alleged, had not been reflected in his tax returns for the relevant years. At the hearing on 17 June 1999, Deputy President McMahon dismissed the application pursuant to section 42A(2)(a) of the AAT Act. The Tribunal file includes a memo prepared by Deputy President McMahon's associate and dated 16 June 1999. That memo reads as follows:"James Jordan of Xenos called. He said that he has no instructions and no money from the applicant. Therefore he will not be appearing at tomorrow's hearing. He said that he has no idea of the whereabouts of the applicant." (Emphasis added by the Tribunal)
At the hearing the following day, Deputy President McMahon handed down his decision giving oral reasons; a handwritten entry was made in the Tribunal file recording those reasons. The entry reads, inter alia, as follows:
"It is clear that this application has been abandoned. The evidence is not sufficient to hear the matter in the Applicant's absence and then affirm the decision under review. The Application is dismissed under section 42A."
(c) It is relevant to note that an Arabic interpreter was engaged (at the expense of the Tribunal) for this hearing also.
(a) As was noted in clause 1 of these Reasons, this matter came before the Tribunal by way of an application for an extension of time within which to lodge objections against assessments for the relevant years. The extension application was filed on 10 December 1999. Clause 4 of the extension application requires the Applicant to set out his reasons for his extension application; it reads as follows:
"Although notice of ATO's decision was received in July by Messrs Xenos Jordan (being the address for service shown on the Notices of Objection) the Applicant was out of contact with the solicitors. The Applicant has still not personally seen a copy of the decision. He did not come into contact with the solicitors until some time later. Thereafter counsel's advice was sought as to the form of appeal."
It is to be noted that the extension application does not specify when exactly counsel's advice was either sought or obtained; the Tribunal does not consider that clause 4 of the extension application can be treated as a proper explanation of the delay.
(b) By a letter dated 23 December 1998 (but which letter appears to have been received by the Respondent on 22 February 1999), Messrs Xenos Jordan enclosed the Applicant's notices of objection. The covering letter to those notices of objection requests additional detail as to the basis on which the assessments in respect of the relevant years were amended; the covering letter notes that the attached objections are "of necessity ... somewhat general in their terms as our client does not know how amended taxable income were [sic] calculated." The covering letter concludes as follows: "It will no doubt be appreciated that once the above has been supplied it may be necessary to ask [for] further particulars and, perhaps, to lodge amended objections." The notices of objection for both of the relevant years are nearly identical. I refer to the notice of objection for the 1995 relevant year which reads as follows:
"1. The assessment is excessive.
2. The true taxable income of the taxpayer was less than the amount notified in the assessment ...
3. In arriving at the taxable income of the taxpayer notified in the assessment of the Commissioner should have allowed the taxpayer greater amounts by way of deductions under section 51(1) and other sections of the Act than the Commissioner apparently did.
4. The taxpayer was not properly liable to additional tax for incorrect return.
5. If the taxpayer was properly liable to additional tax the amount of the additional tax should have been remitted in whole.
6. Alternatively the amount of additional tax should have been remitted to some lesser figure than that notified in the assessment.
7. The amount of the medicare levy notified on the notice of assessment is excessive."
(c) The Respondent replied by letter dated 22 February 1999 advising the Applicant that all relevant details requested on his behalf had previously been provided and referred the Applicant to the correspondence which contained that information.
(d) By letter dated 24 February 1999 the Respondent again wrote to Xenos Jordan on behalf of the Applicant. That letter advised the Applicant that, in view of the fact that all relevant information had previously been provided to him, he was being afforded an opportunity to expand his grounds of objection. On 16 March 1999, the Respondent yet again wrote to Xenos Jordan on behalf of the Applicant and again afforded him an opportunity to expand his grounds of objection. The Applicant was advised that:
"... in the absence of any further grounds, your objections will be decided on the basis of those contained in the original letters of objection. If any subsequent review is required of those objection decisions, you will be limited to those grounds in terms of section 14ZZK and 14ZZO of the Taxation Administration Act 1953."
(e) Xenos Jordan on behalf of the Applicant replied by letter dated 31 March 1999; the letter indicated that Mr Jordan was to be overseas until early May and, given the "complicated" nature of the matter, requested that additional time be provided within which to furnish the Respondent with expanded grounds of objection. There does not appear to have been any further correspondence as regards the objections; however, the objection decision in question was made on 12 July 1999, which would tend to indicate that the Respondent did in fact allow further time to the Applicant within which to expand his grounds, an opportunity which the Applicant did not accept.
(f) The assessments in this matter relate to the Applicant's share of the very large proceeds of a tobacco excise scheme. The objections lodged by the Applicant do not indicate the grounds on which he objected; on the contrary, and as set out previously, they are cast in general and non-specific terms which give no indication whatever of the basis on which the Applicant alleges that the assessments are incorrect, either in whole or in part.
(g) I have previously referred to the fact that the case authorities require an Applicant seeking an extension of time to, inter alia, set out at least a prima facie case on the merits; moreover and again as set out previously the Applicant is required to furnish an explanation for the delay.
(a) As set out previously in these Reasons the Applicant was not present at the hearing of this matter on 18 February 2000 and Mr Xenos said that he knew nothing of his whereabouts. Indeed, Mr Xenos indicated to the Tribunal that the Applicant's own representatives had found it extremely difficult to deal with the Applicant and to obtain instructions from him. In particular, Mr Xenos noted that:
"... when a number of requests for particulars were made of the client it was always the situation that he would indicate that his accountants or people who were doing some books for him or something or other were [sic] being organised. Again, we never got the information to be able to properly particularise the nature of the objections."
(b) A fear was expressed on behalf of the Respondent that the Applicant may have left this jurisdiction in contravention of the departure prohibition order. In view of the fact that the Applicant yet again failed to appear before this Tribunal, the Respondent's concerns may perhaps be justified. However, the Applicant's whereabouts are material to the matter presently before me only insofar as he was not present to give evidence in support of his application. There was in other words no evidence before me as to whether he is now in or out of Australia.
(a) I have previously in these Reasons set out a lengthy quote from the decision of Hill J in Brown's case.
(b) I think it relevant also to have regard to the second last sentence of point 3 of clause 58 of the decision of Hill J in Brown (at 4527). Merit is, of course, a relevant factor; see in this context Zizza v Federal Commissioner of Taxation 99 ATC 4166 (per Katz J) in which his Honour considered the question of the weight to be attributed to various factors. That decision affirmed my decision in Case 8/98, 98 ATC 155 refusing an extension of time. See also the decision of the Full Federal Court in Brown and in particular to clause 28, the first sentence of which reads as follows (at 4860):"We wish to make it clear, however, that the AAT is not precluded from taking into account the apparent strength or weakness of taxpayer's case, when determining whether an extension of time should be granted, if the overall circumstances are such that the apparent strength or weakness of that case is properly to be regarded as a material consideration."
(a) In dealing with an application for an extension of time, various factors require consideration. One of those factors is of course (as set out previously) the merits of the Applicant's case. In the light of Hill J's comments in Brown, the Applicant is not required to show that he will or will probably succeed in his application. Nevertheless, the Applicant is required to demonstrate that he has a prima facie case on the merits.
(b) As set out previously in these Reasons, the Applicant's extension application is entirely silent as to merit; as to whether it constitutes a proper extension application at all is doubtful. It is clear that the Applicant could not have pursued his application without evidence. Mr Jordan could not have given evidence of this nature for the Applicant. Yet the Applicant failed to appear at the hearing, just as he had previously failed to appear at the hearing referred to in clause 5 of these Reasons.
The following aspects of this matter appear to me to be deserving of particular attention:
(a) The extension application did not deal with any of the relevant criteria referred to by Hill J in Brown's case; in particular and as set out previously it contained no acceptable explanation of the delay; moreover it specified nothing whatever as to merits, and in particular did not demonstrate any prima facie (or for that matter any) case on the merits.
(b) As had occurred previously and although an interpreter had been engaged, the Applicant did not appear at the hearing.
(c) Mr Jordan at the last moment indicated that he could not appear at the hearing. His explanation for his inability to appear was, in the absence of concrete evidence, not altogether satisfactory. I have previously noted that my associate contacted him at Kogarah at 9.30am.
(d) I am prepared to accept that Mr Xenos came into the matter at very short notice. However if the Applicant had been present, Mr Xenos would have been able to obtain instructions as to relevant aspects. If necessary a brief adjournment for this purpose could and would have been granted.
(e) Mr Xenos applied for a postponement of one month. When asked why he needed so lengthy a period, he did not reply. The Tribunal suggested an adjournment, until that afternoon, having regard to the strong likelihood that the sentencing hearing in the Supreme Court would not have taken more than the morning, and so that Mr Jordan would have been available in the afternoon. Mr Xenos was not prepared to agree.
(f) The extension application was not as indicated previously, properly characterisable as such.
(g) The attention of Mr Xenos was drawn to the fact that a reinstatement application could be brought, but on the basis that any such application would require that proper grounds be demonstrated.
(h) Section 42A(2)(a) of the AAT Act entitles the Tribunal to dismiss where the Applicant or his representative fails to appear. That the Applicant had failed to appear is clear; it is also clear that his representative, Mr Jordan, also failed to appear. Of course, Mr Xenos did appear but he did not consider that he could deal with the matter, and there must be doubt as to whether he could in fact, have been characterised as the Applicant's representative. An offer to adjourn until the afternoon when Mr Jordan might have been available was refused. There was no basis upon which in all the circumstances a postponement of one month could be granted unless reasons why so long a period was required could be demonstrated. No reasons were given; Mr Xenos said merely that he was only applying for a postponement of one month.
(i) The Applicant's overall attitude towards this Tribunal is best characterised as cavalier. His objection notices did not specify any grounds; his extension application was similarly groundless. On two separate occasions, interpreters having been engaged, the Applicant failed to appear before the Tribunal. On each such occasion Mr Jordan also did not appear; on the first occasion he did not do so because he had not been furnished with funds or instructions. On the second occasion he sent a fax at the last minute specifying an inability to appear because of a very late change in time in respect of a sentencing application.
(j) I express some concern as to the latter excuse, both because of the fact that counsel had been engaged (although Mr Xenos was not totally clear as to counsel's availability) and the fact that Mr Jordan could not in all probability have reached court by 10.00am. One cannot help but wonder whether the presiding judge would have changed the sentencing time, at the last minute, if he had been made aware of the fact that Mr Jordan's presence was required at this Tribunal at 10.00am on 18 February 2000. There was no evidence before the Tribunal as to any of these aspects.
(a) In these circumstances, I dismissed the extension application under section 42A(2)(a) of the AAT Act. As set out previously, a notice to this effect was sent under cover of a letter indicating that written reasons could be sought. The Applicant has indeed made such a request.
(b) I have decided in all the circumstances that natural justice would best be served by my exercising my powers under section 42A(10) of the AAT Act, on my own initiative, to reinstate the extension application. It is conceivable, as set out previously, that the Applicant may have been misled by the covering letter referred to earlier in these Reasons, and that he may have thought that pending receipt of written reasons he need not take any further action. It is possible also (although there was no evidence whatever before me to this effect) that the Applicant was informed by Mr Jordan that he need not attend the Tribunal on 18 February 2000 on the basis that the matter would not proceed on that day. It is conceivable also that the dismissal was made in error, on the basis that, however reluctant and however unaware of the issues involved, Mr Xenos might perhaps (although this is stretching matters somewhat) have been regarded as the Applicant's representative. It is also possible (although again I have no evidence other than Mr Jordan's statement to this effect before me) that Mr Jordan's presence was required, as he stated, in the Supreme Court. Even though the Applicant has so far not addressed any of the relevant criteria referred to by Hill J in Brown's case, and even though his objection notices disclose no case on the merits, there must be a possibility that given an opportunity to do so, he will rectify all of the various omissions. The prior conduct of the Applicant is such that it is hard to be optimistic as to the likelihood that this will in fact occur. I am of course aware of the fact that in reinstating on my own initiative under section 42A(10), I am perhaps arguably treating the Applicant with more consideration than is warranted and perhaps more than he deserves. But to deprive the Applicant of his right to be heard is not something which should be done lightly. There is superior court case authority to the effect that natural justice and fairness is necessary in particular in relation to an applicant in respect of whose position one has doubts. I note in particular the judgement of Burchett J in Colpitts v Australian Telecommunications Commission (1986) 9 FCR 52 at 71 as follows:"There was undoubtedly, upon the face of the material before the Tribunal, much to be said against Mr. Colpitts. But it would be a complete misunderstanding of the principles of natural justice to regard that fact as in any way weakening the case for their application. The principles of natural justice are designed to ensure that the voice of the defence is heard, which is never more necessary than when the Tribunal is in danger of feeling that defence would be useless."
(See also Burchett J in Guse v Comcare, Federal Court, 5 June 1997, NG626 of 1995.)
Accordingly, the extension application is reinstated and the Registrar of this Tribunal is directed to set the matter down for hearing as soon as possible. The Applicant and his advisers should, of course, note that on the date of the hearing the Applicant must appear before this Tribunal; furthermore, the Applicant and his representatives must be ready and able to address all of the issues and criteria referred to in these Reasons, and as to which I have expressed concerns. A further failure by the Applicant and his representatives to appear before this Tribunal will, in the absence of altogether adequate and acceptable reasons, result in the dismissal of this application.
I certify that the 12 preceding paragraphs are a true copy of the reasons for the decision herein of J. Block, Senior Member
Signed: .....................................................................................
AssociateDate/s of Hearing 18 February 2000
Date of Decision 18 February 2000
Solicitor for the Applicant Mr J. Xenos
Counsel for the Respondent Ms B.M. Henderson
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