Kyriacou and Tax Practitioners Board (Taxation)

[2021] AATA 3998

Kyriacou and Tax Practitioners Board (Taxation) [2021] AATA 3998 (9 September 2021)

Division:TAXATION AND COMMERCIAL DIVISION

File Number(s):      2020/1853

Re:Filomina Kyriacou

APPLICANT

Tax Practitioners BoardAnd  

RESPONDENT

DECISION

Tribunal:Deputy President Bernard J McCabe

Date:9 September 2021  

Place:Sydney

1. The Tribunal DIRECTS, pursuant to section 35(4) of the Administrative Appeals Tribunal Act 1975 (Cth) (AAT Act), that:

   (a)Subject to (b) and until further order, the following information must not be published:

   (i)all documents provided to the Tribunal pursuant to s 37 of the AAT Act in the proceedings;

   (ii)any transcript created as a result of interlocutory proceedings;

   (iii)any applications, affidavits, submissions, or any other documents filed with the Tribunal in interlocutory proceedings; and

   (iv)(iv) any orders (other than final orders) or directions (other than these directions).

   (b)The information specified in paragraph (a) must not be disclosed to any person other than:

   (i)the parties, their representatives and any other person directly involved with the preparation and conduct of a party’s case; and

   (ii)members and staff of the Tribunal, and any person performing services for the Tribunal, acting in the course of their duties.

   (c)For the avoidance of doubt, these directions do not prevent publication of the Tribunal’s statement of reasons accompanying these directions.

   .........................SGD..........................

   Deputy President Bernard J McCabe

   Catchwords

   PRACTICE AND PROCEDURE – application for confidentiality orders over material filed with the Tribunal – whereas the applicant’s registration as a tax agent was terminated – whereas the application involves the examination of sensitive materials – tax material subject to confidentiality provisions in separate legislation – medical information deemed to be sensitive – extensive reference made to sensitive materials during interlocutory proceedings - confidentiality orders made.

   Legislation

   Administrative Appeals Tribunal Act 1975 (Cth)

   Cases

   Harman v Secretary of State for the Home Department[1983] 1 AC 280

   Hearne v Street (2008) 235 CLR 125

   REASONS FOR DECISION

   Deputy President Bernard J McCabe

2. The applicant in these proceedings was a registered tax practitioner. Her registration was cancelled by the Board on 20 February 2021. The Board also decided the applicant should not be permitted to apply for (re)registration for five years. The applicant subsequently asked the Tribunal to review the Board’s decision.

3. The applicant applied for a stay under s 41(2) of the AAT Act. She also sought non-publication and non-disclosure orders under s 35 of the AAT Act. The Tribunal held a stay hearing to deal with both applications on 1 May 2020.

4. The applicant filed written submissions and a medical report in connection with the stay hearing. The submissions also referred to other matters that the applicant says are sensitive. The Board provided written submissions and a ‘tender bundle’ which included key documents drawn from the ‘T-documents’ (the documents filed by the Board pursuant to s 37 of the AAT Act). Some of the material provided in the tender bundle was discussed during the course of the hearing, and that discussion was recorded and transcribed. The applicant says some of the material in the tender bundle is also sensitive. Notwithstanding the outcome of the application for stay and non-publication and non-disclosure orders, the applicant has made a further request that targeted non-publication orders be made in relation to the contents of the affidavits, the written submissions of both parties, and the transcript of the interlocutory hearing. She accepts the reasons for the interlocutory decision have been appropriately published, and she has not at this stage made any request for orders in relation to evidence given or documents tendered at the final hearing.

5. The Board has consented to the Tribunal making the targeted non-publication orders sought by the applicant. That does not mean the Tribunal automatically accedes to the request, of course. I must be satisfied the orders are appropriate. I will discuss all that below. But I should note the Board has a further concern. It relates to the T-documents and other documents which are on the Tribunal’s file. The Board says many of those documents were provided by the Australian Taxation Office for use in connection with the Board’s proceedings and the work of the Tribunal, but they were subject to confidentiality provisions in legislation which prohibits their public disclosure.

6. The applicant’s nervousness about disclosure may have something to do with media interest in the proceedings. The Board’s reviewable decision and the outcome of the stay hearing was reported in the Financial Review newspaper. A journalist from that organisation has asked for third party access to documents. I have not dealt with that request yet; it was thought preferable to deal with the applicant’s further request for non-publication orders under s 35 before addressing the third-party access request on a later occasion when the third party is represented. I should say the applicant and the Board have both foreshadowed their opposition to unrestricted third-party access orders. Their views on that question should be dealt with more fully when I hear from the third party.

   Confidentiality and transparency in executive decision-making

7. Primary decision-making processes are not ordinarily carried on in the open. Individuals dealing with the Commonwealth bureaucracy are usually entitled to the benefit of well-established privacy rules. There are exceptions to those rules such as those contained in the Freedom of Information Act 1982 (Cth) which creates windows into the bureaucracy. But even the FOI laws provide for exemptions that can be claimed to prevent the unreasonable disclosure of personal information.

8. Privacy and transparency are both important values of good government. They are often in tension. Other values and imperatives might also need to be considered. A balance needs to be struck between all of the relevant considerations. The balance will vary between decision-making processes having regard to the legislation under which the decision is made, and (relevantly for present purposes) it may be struck differently at different stages of the same decision-making process.

9. The Tribunal’s review process is part of a continuum of executive decision-making. The continuum originates in each case with the primary decision-maker and (assuming the applicant wishes to contest the decision) concludes in the Tribunal’s review and reasons for decision following the hearing. There may be a number of steps occurring in between the primary decision and the outcome of the review. Some decision-making processes require the decision-maker to conduct an internal review before further steps can be taken. The objection process in tax cases is a good example of a structured internal review. The Tribunal’s review often involves several intermediate steps, including conferencing and interlocutory hearings.

10. Many individuals are startled to learn the balance between privacy and transparency may be struck differently once a matter reaches the Tribunal. (The balance is not always different. Some proceedings in the Tribunal are held in private. But I am referring to the bulk of review proceedings in the General and Other Divisions.) Some applicants assume their affairs would enjoy the same privacy protections that prevailed below. They might prefer the review to continue behind closed doors, particularly where the media or busy-bodies might take an unwelcome interest. Section 35(1) of the AAT Act challenges that assumption. It requires parties to assume the hearing of most cases in the Tribunal will occur in public. Sub-sections 35(2), (3) and (4) then set out the Tribunal’s power to make a range of non-disclosure and non-publication orders in appropriate cases, but s 35(5) sets out the guiding principle which inform the exercise of that power in each case. Section 35(5) provides:

    In considering whether to give directions under subsection (2), (3) or (4), the Tribunal is to take as the basis of its consideration the principle that it is desirable:

    (a)  that hearings of proceedings before the Tribunal should be held in public; and

    (b)  that evidence given before the Tribunal and the contents of documents received in evidence by the Tribunal should be made available to the public and to all the parties; and

    (c)  that the contents of documents lodged with the Tribunal should be made available to all the parties.

    However (and without being required to seek the views of the parties), the Tribunal is to pay due regard to any reasons in favour of giving such a direction, including, for the purposes of subsection (3) or (4), the confidential nature (if applicable) of the information.

11. The ‘openness’ principle in s 35(5) is directed to two important ends. First, it helps to promote confidence in both the Tribunal’s decision-making and, ideally if incidentally, in the processes of the primary decision-maker which are exposed during the course of the review. Second, the openness principle helps the Tribunal to perform its normative role. The Tribunal is, first and foremost, a tool of good government. It is not simply concerned with resolving disputes between a citizen and the state. It models good decision-making behaviour in the matters that come before it so the bureaucracy and the community know how decisions like the one under review should be made in future. That normative role becomes more difficult if the Tribunal’s proceedings must occur in private.

12. While the Tribunal is a tool of good government, it is also a creature of statute. Any discussion of confidentiality questions is defined by the relevant provisions of the AAT Act and any other relevant legislation.

13. The text of s 35(5) of the AAT Act repays careful reading. To begin with, it is apparent the openness principle articulated in the sub-section is mostly concerned with what happens at hearings. That is no accident: the hearing is the heart of the review process. The sub-section expressly assumes hearings of proceedings will be held in public – which means the hearing is advertised in the press list, and anybody can attend. That remains true in these days of remote hearings where proceedings are conducted by web-based audio-visual applications. There is also an implicit assumption that transcripts of the proceedings will be available in the ordinary way. Yet there still are well-understood limits to the openness principle. Documents tendered at a hearing might be affected by confidentiality regimes contained in other legislation, and material produced for the purposes of a hearing is subject to an implied undertaking that it will not be used for any other purpose before being admitted into evidence – the so-called Harman principle.[1]

    [1] See Harman v Secretary of State for the Home Department [1983] 1 AC 280. The application of the rule in Australia was discussed by the High Court in Hearne v Street (2008) 235 CLR 125.

14. Quite apart from those limits, the sub-section does not suggest every document coming into the possession of the Tribunal will be accessible to the public; nor does it assume everything said by a party or witness at some point in the hearing will inevitably be disclosable to the world at large. The application of the openness principle to other parts of the review process is less clear-cut. For example, the Tribunal’s alternative dispute resolution processes are usually conducted on a ‘without prejudice’ basis to facilitate full and frank discussions aimed at achieving early resolution. To that end, s 34E of the AAT Act says evidence of what was said by the parties at an ADR process is not admissible in the proceedings of any court or tribunal except in limited circumstances.  As a practical matter, notes taken by one of the Tribunal’s expert conference registrars and any material produced during an ADR process will not even be available to the member conducting the hearing, let alone a member of the public.

15. In those circumstances, I do not need to consider yet whether I should make a non-publication order in relation to documents on the Tribunal file which have not been tendered in evidence or referred to in a hearing. Those documents are not disclosable to anybody outside the process in the absence of an application for third party access. While an application for third party access has been made in this case, it would be premature to deal with the subject matter of the request except insofar as that material was dealt with at the hearing.

    The material over which the applicant has requested confidentiality

16. The material which is properly under consideration here includes:

    ·The transcript of the interlocutory hearing;

    ·The submissions provided by the parties in connection with that hearing;

    ·The evidence filed by the applicant in support of the interlocutory application; and

    ·The contents of the tender bundle that was provided at the hearing.

17. I will deal firstly with the contents of the tender bundle which includes documents sourced from the T documents. The T documents were not themselves before the Tribunal at the interlocutory hearing. They may yet be tendered at the final hearing, but that remains to be seen. The contents of the tender bundle – a selection of documents provided for the reference of the Tribunal and the parties at the interlocutory hearing - includes documents that might be subject to the confidentiality regime in the tax legislation. I would say at once that it would be wrong to release those documents now to the extent they may disclose information that is protected under other legislation. While it is possible the material might be released following a careful process of redaction, that would be awkward and time consuming, particularly at this stage of the proceedings. While orders are not strictly speaking required where the documents in question are already protected under other legislation, it is convenient to make s 35 orders restricting publication of the entire contents of the tender bundle until further notice. The resources required to carry out a redaction process are certainly a relevant factor that weighs in favour of making orders at this stage of the proceedings.

18. I turn next to the material that was provided by the parties in connection with the application. The material goes to the applicant’s personal circumstances. Some of that material – most obviously the discussion of medical history – is inherently confidential. Some of the material was canvassed in a general way in the reasons for my decision but I did not disclose extensive detail. The confidential nature of that material is certainly relevant to the exercise of my discretion. The applicant says there is a further consideration that weighs in favour of a confidentiality order. The applicant points out it has been acknowledged that exposing sensitive material produced in an application might have the perverse effect of discouraging individuals from seeking review in the Tribunal. I accept that is a legitimate consideration, although the argument needs to be scrutinised carefully in each case where it is advanced. I am satisfied the matters discussed in the material before me would, if further disclosed, discourage the applicant from proceeding. That could frustrate the review.

    Conclusion

19. I am satisfied it is appropriate to make non-publication and non-disclosure orders with respect to the material provided by both parties, including affidavits and submissions. On the same basis, I would make non-publication orders over the transcript. Those orders can be revisited at the time of the final hearing.

20. I acknowledge it would be possible to require the parties to apply their minds to possible redactions of documents and the transcript but that would be expensive and time-consuming, as I have already explained. It would be inappropriate for the Tribunal to impose that burden on the parties, especially in light of the Tribunal’s objective in s 2A of the AAT Act, and at this comparatively early stage of the proceedings.

21. It would also be appropriate for me to make non-publication orders with respect to the materials and transcript generated in connection with the present application for fresh orders.

I certify that the preceding 20 (twenty) paragraphs are a true copy of the reasons for the decision herein of Deputy President Bernard J McCabe

.......................SGD.............................

Associate

Dated: 9 September 2021

Date(s) of hearing:	15 July 2021
Advocate for the Applicant:	Mr Khoder Dandachli
Solicitors for the Applicant:	KDA Legal
Counsel for the Respondent:	Mr Thomas Arnold
Solicitors for the Respondent:	Self-represented