Leahy and Tax Practitioners Board

[2023] AATA 632

Leahy and Tax Practitioners Board [2023] AATA 632 (31 March 2023)

Division:TAXATION AND COMMERCIAL DIVISION

File Number:          2020/0236

Re:Jeffrey   Leahy

APPLICANT

AndTax Practitioners Board

RESPONDENT

DECISION

Tribunal:Senior Member K James

Date:31 March 2023

Place:Melbourne

The Tribunal grants the application for Senior Member K James to be recused.

.............................[sgd]...........................................

Senior Member K James 

Catchwords

PRACTICE AND PROCEDURE – application for recusal on grounds of apprehended bias (extraneous information)– application granted

Legislation

Administrative Appeals Tribunal Act 1975 (Cth)

REASONS FOR DECISION

K James, Senior Member

31 March 2023

1. The Tax Practitioners Board (Respondent), has made an application before me that pursuant to section 19D(1) of the Administrative Appeals Tribunal Act 1975 (Cth) (AAT), I should recuse myself on the ground of apprehended bias (extraneous information).

2. The background to the application is that in preparation for a directions hearing in this matter, I was advised by Tribunal administrative staff that directions were being sought to access a Tribunal file in respect of a matter where Mr Leahy (Applicant) had acted as an advocate for a taxpayer. The Applicants’ actions as the tax agent for that taxpayer were held by the Respondent to be in breach of the statutory Code of Conduct and the subject of the referral to the Tribunal in this matter.

3. At a stay hearing before me, the Applicant submitted that the Respondent had reached their breach decision whilst the above matter was awaiting a written decision from the Tribunal. This was acknowledged in the Respondents breach decision.

4. The Respondent informed the Tribunal at the stay hearing that following closing submissions in the above matter that the Applicant was awaiting a written decision from the Tribunal, that the liquidator had written to the Tribunal and withdrawn their application in that matter. This was news to the Applicant in this matter and contrary to his understanding of what a subsequently appointed liquidator had agreed.

5. At subsequent directions hearings the Applicant advised he was seeking access to the evidence in the earlier matter before preparing his Statement of Facts, Issues and Contentions in this matter.

6. In this context, the file was located by Tribunal staff and placed on my desk before a directions hearing.

7. Before the directions hearing it became apparent that the Tribunal was unable to make the file available to the parties in this matter.

8. In the meantime, I had opened the boxes (2) and observed that the file did not contain any material of what transpired at the hearing. I informed the parties that was my observation.

9. I also read the filed document which confirmed that the liquidator had lodged a notice of withdrawal sometime after the hearing had concluded, and again informed the parties of that.

10. The Respondents’ recusal application is foundered on the established ground of ‘apprehended bias, of extraneous information… where the judge [here a Tribunal member] has knowledge of some prejudicial but inadmissible fact or circumstance giving rise to the apprehended bias’.

11. In their application for recusal, the Respondent submitted:

    [47] As noted at [1] above, the Respondent seeks a direction under s19D(1) of the AAT Act for the Tribunal to reconstitute itself in the present proceeding. Further or alternatively, the Respondent applies for SM James to recuse himself on the ground of apprehended bias (extraneous information).

    [48] In the present case, SM James looked at or read two boxes of Tribunal files on related proceedings that, as the Respondent understands it, the parties will not be able to access. Other than the transcript, the boxes ‘contain all of the documents’.

    [49] The fair-minded lay observer might reasonably apprehend that SM James has read the files (cf. merely identify what documents are in the boxes) because SM James:

    a) discussed what the files ‘reveal’, including the contents of a letter from the liquidator to the Tribunal;

    b) was able to assess that he ‘would be surprised if [the Applicant] had a need to make extensive copies of them;

    c) was able to conclude there was ‘zero, zilch’ in the boxes that was relevant to the present case.

    [50] Regarding [49.c] above, as the Respondent does not have access to the boxes, it is not in a position to make submissions regarding the relevance of the documents in them. However, it is submitted that the fair-minded lay observer might reasonably apprehend bias in the present circumstances, where:

    a) the Applicant is familiar with 888 Refining and VIB as he represented the taxpayers in those proceedings. He relies heavily on the documents in the boxes;

    b) SM James has looked at/read the documents in the box. The Applicant’s repeated references to the documents could, among other things, affect SM James’ subconscious recollection in respect of the documents in the boxes; and

    c) the Respondent (and the Applicant) cannot access the boxes.

12. It was further submitted at paragraphs 56 and 57:

    [56] a conclusion of apprehended bias ‘is not to be reached lightly’. However, in a case of real doubt, it will often be prudent for a Tribunal member to decide not to sit in order to avoid the inconvenience that could result if the Federal Court were to take a different view on appeal. It is submitted that there is ‘real doubt’ in the present case.

    [57] Unless all parties are provided with full access to the two boxes that SM James has looked at/read, it seems that the present circumstances are likely to give rise to an appeal point to the unsuccessful party in the present proceeding, whether or not the appeal point might ultimately be successfully

13. Giving regard to these submissions, and in light of these circumstances, I recuse myself.

I certify that the preceding thirteen (13) paragraphs are a true copy of the reasons for the decision herein of Senior Member K James

…………[sgd]………………………….
Associate

Dated:  31 March 2023

Date of hearing:	17 November 2022
Applicant:	Mr Jeffrey Leahy
Counsel for the Respondent:	Ms Angela Lee
Solicitors for the Respondent:	Tax Practitioners Board