Lewis; Secretary, Department of Social Services and (Social services second review) - [2019] AATA 427

Lewis; Secretary, Department of Social Services and (Social services second review) [2019] AATA 427 (19 March 2019)
Division:GENERAL DIVISION
File Number(s): 2017/7192
Re:Secretary, Department of Social Services
APPLICANT

AndTyan Lewis
RESPONDENT

DECISION
Tribunal:Senior Member Dr M Evans
Date:19 March 2019
Place:Perth

The Reviewable Decision is set aside and substituted with a new decision that the Respondent (Mrs Lewis) did not satisfy the reconciliation conditions to qualify to receive the FTB supplement and top-up for the 2015/2016 financial year.
...............................[sgd].........................................
Senior Member Dr M Evans
Catchwords
SOCIAL SECURITY – family tax benefit (FTB) – timing of lodgement of husband’s tax return – conflicting electronic lodgement dates provided by ATO and husband’s accountants – whether special circumstances prevented Applicant from lodging 2015/2016 tax return – whether difficulties contacting Centrelink constitute special circumstances – whether delay by accountant constitutes special circumstances – reviewable decision set aside and substituted
Legislation
A New Tax System (Family Assistance) (Administration) Act 1999 (Cth), s 5(1), s 7(1),
s 7(2), s 16, s 32A, s 32B, s 32C, s 32D, s 32D(1)(c)(ii), s 32D(2)(a), s 32D(2)(b), s 32J,
s 158
Administrative Appeals Tribunal Act 1975 (Cth), s 40(1)(b)
Cases
Afghani and Secretary, Department of Social Services [2017] AATA 410
Angelakos v Secretary, Department of Employment and Workplace Relations [2007] FCA 25
Beadle v Director-General of Social Security (1984) 6 ALD 1
Bondzulic and Secretary, Department of Social Services [2017] AATA 455
Boscolo v Secretary, Department of Social Security [1999] FCA 106
Dranichnikov v Centrelink [2003] FCAFC 133
Fedigan and Secretary, Department of Social Services [2016] AATA 211
Groth v Secretary, Department of Social Security [1995] 40 ALD 541
Hooker and Secretary, Department of Social Services [2015] AATA 732
Secretary, Department of Social Services and Cannon [2015] AATA 1028
Secretary, Department of Social Services and Hollis [2015] AATA 941
Secretary, Department of Social Services and Johnson [2016] AATA 304
Secretary, Department of Social Services and Rech [2016] AATA 543
Shanhun and Secretary, Department of Social Services [2016] AATA 675
Secondary Materials
Guides to Social Policy Law, Family Assistance Guide (version 1.209 – Released

4 February 2019), 6.4.1.30
The Concise Oxford Dictionary of Current English (5^th Edition, 1972 print)
REASONS FOR DECISION
Senior Member Dr M Evans
19 March 2019
BACKGROUND TO THE SECRETARY’S APPLICATION

Mrs Lewis is married to Mr Lewis and has three eligible Family Tax Benefit (FTB) children (Exhibit A3, paragraph [5]).
She received amounts of FTB by instalment during the 2015/2016 financial year

(Exhibit A3, paragraph [5]).
In a letter dated 24 March 2017 (Exhibit A1, T16 pages 82-83) from Centrelink, which is part of the Department of Human Services (Department), Mrs Lewis was advised that she and her partner needed to lodge a 2015/2016 income taxation return with the Australian Taxation Office (ATO) by 30 June 2017, or to tell the Department if either of them were not required to lodge an income taxation return, in order to receive her full FTB entitlement for 2015/2016.
Mrs Lewis was not required to lodge an income taxation return with the ATO for the 2015/2016 financial year (Exhibit R3, paragraph [5]).
In basic terms, the ATO has an electronic lodgement service (ELS) whereby information is electronically transmitted by tax agents to the ATO.
Generally, the process is, a tax agent submits a client’s income taxation return electronically to the ATO and a transmission report is generated. When the ATO receives the transmission, a corresponding validation report is generated (Exhibit A5, paragraph [5]).
A validation report from the ATO indicated that Mrs Lewis’ husband’s income taxation return for the 2015/2016 financial year was lodged with the ATO on 4 July 2017

(Exhibit A2, ST1, page 149).
However, Mr Lewis’ accountants, H & R Block Limited Baldivis (H & R Block), provided him with a transmission report which showed that his income taxation return was lodged with the ATO on 30 June 2017 (Exhibit A1, T27, page 114; Exhibit R3). This transmission report was sent to Mr Lewis in an email dated 26 July 2017 which was signed off by “Derek” from a generic “H & R Block Baldivis” email address (Exhibit A1, T27 page 114; Exhibit R3).
In a letter dated 6 July 2017 from Centrelink (Exhibit A1, pages 104-105), Mrs Lewis was advised, under the heading, “Important Information”, that, “We are unable to pay your full Family Tax Benefit entitlement, including the Family Tax Benefit supplement because your partner did not confirm their income for the 2015-16 financial year by 30 June 2017” (Exhibit A1, page 104).
On 26 July 2017, Mr Lewis requested an internal Departmental review

(Exhibit A3, paragraph [12]) and provided a copy of the email from H & R Block attaching the transmission report (in Exhibit R3) referred to in paragraph [8] above, and a copy of his income taxation notice of assessment from the Commissioner of Taxation for the year ending 30 June 2016 (Exhibit A1, T27 page 115).
On 28 July 2017, an authorised review officer of Centrelink found the decision in the letter of 6 July 2017 to be correct (Exhibit A1, T28 pages 116-119).
Mrs Lewis lodged an application for review of the authorised review officer’s decision in the
Social Services and Child Support Division (AAT Tier 1) of the Administrative Appeals Tribunal (Tribunal) on 3 August 2017 (Exhibit A1, T29 page 123). In support of the application, Mr Lewis produced a copy of the validation report showing the date of lodgement of his 2015/2016 income taxation return to be 30 June 2017

(Exhibit A1, T30 pages 125-126).
On 2 November 2017, Mr Lewis received an email from H & R Block which stated, “Hi John, Please see attached, Regards” which attached a copy of a validation report which again showed the date when Mr Lewis’ income taxation return was lodged with the ATO to be 30 June 2017 (Exhibit A1, T30 pages 125-126).
The conflicting transmission and validation reports referred to above at paragraphs [7]-[8] and [13] are explained and discussed below at paragraphs [57]-[71].
On 3 November 2017, the AAT Tier 1 set aside the decision of the authorised review officer and in substitution decided that Mrs Lewis met the reconciliation requirements on the basis of the validation report produced by Mr Lewis, that showed the date of lodgement of his income tax return as 30 June 2017 (Exhibit A1, T2 pages 9-12) (Reviewable Decision).
On 6 December 2017, the Secretary applied to the General Division of the Tribunal

(AAT Tier 2), seeking a review of the AAT Tier 1 decision (Exhibit A1, T1 pages 1-3).
On 1 March 2018, the Secretary issued a notice to the Proper Officer, H & R Block under s 158 of the A New Tax System (Family Assistance) (Administration) Act 1999 (Cth) (Administration Act) requesting him or her to provide information and relevant documents (see Exhibit A4). A written response was provided by Mr Derek Robinson of
H & R Block who confirmed that he was instructed to prepare Mr Lewis’ taxation return on 28 and 29 June 2017 (Exhibit A4, pages 1-2), and that Mr Lewis paid his invoice for the preparation of the income taxation return on 29 June 2017 (Exhibit A4, page 2), and that it was lodged with the ATO on 4 July 2017 (Exhibit A4, page 1). A transmission report showing a lodgement date of 4 July 2017 was attached (Exhibit A4, page 3).
ISSUES
The issue that the Tribunal must determine in this AAT Tier 2 review is whether Mrs Lewis (being the claimant of FTB) complied with the reconciliation requirements set out in the Administration Act for the 2015/2016 financial year?
This requires the Tribunal to consider:
(a)
Whether Mrs Lewis’ husband, Mr Lewis, lodged his income tax return by

30 June 2017?
(b)If not, whether special circumstances existed which prevented the lodgement of Mr Lewis’ income tax return by 30 June 2017? If so, the Tribunal has the discretion to extend the reconciliation time by up to 12 months (to 30 June 2018).
MATERIAL BEFORE THE TRIBUNAL
This application was part heard on 8 October 2018. It was adjourned until
14 December 2018 when the hearing was resumed. The adjournment was to allow the Tribunal to hear evidence from the accountant, Mr Robinson from H & R Block who prepared and lodged Mr Lewis’ tax return for the 2015/2016 financial year.
The Secretary was represented by Mr Burgess.
Mrs Lewis was not present, but was represented by her husband, Mr John Lewis.
The Tribunal was able to proceed in the absence of Mrs Lewis (s 40(1)(b) of the Administrative Appeals Tribunal Act 1975 (Cth)) because the main issues for determination by the Tribunal related to the timing of the lodgement of Mr Lewis’ income taxation return for the 2015/2016 financial year.
Mr Lewis gave evidence at the Tribunal hearing, and was cross-examined by Mr Burgess. The Tribunal found Mr Lewis to be a credible witness who gave evidence to the best of his recollection.
As referred to above, at the resumed hearing on 14 December 2018, the Tribunal heard evidence from Mr Robinson from H & R Block, as well as Ms Sandra Drummond from the ATO in Canberra, who gave evidence by telephone.
The Tribunal admitted the following material into evidence:
(a)
Secretary’s Section 37 Documents (T-documents) numbered T1 to T32

(Exhibit A1);
(b)Secretary’s Supplementary T document, numbered ST1 (Exhibit A2);
(c)Secretary’s Statement of Issues, Facts and Contentions dated 10 August 2018 (Exhibit A3);
(d)Information and documents produced by H & R Block in Baldivis comprising
3 pages and marked “Annexure A SDSS and Lewis” (Exhibit A4);
(e)Witness statement of Ms Drummond of the ATO dated 3 October 2018
(Exhibit A5);
(f)Email from Mr Lewis dated 16 August 2018 (Exhibit R1);
(g)
An internet news article regarding Centrelink issues handed up at the hearing on

8 October 2018 (Exhibit R2);
(h)Email trail between Mr Lewis and H & R Block Baldivis dated 26 July 2018 handed up at hearing on 8 October 2018 (Exhibit R3);
(i)Bank transaction history showing payment to H & R Block on 29 June 2018 handed up at hearing on 8 October 2018 (Exhibit R4).
The Tribunal is satisfied that both parties had an adequate opportunity to be heard, and that all of the relevant information was before the Tribunal to enable it to reach the correct and preferable decision.
LEGISLATIVE FRAMEWORK
Legislation
The applicable legislation is the Administration Act.
Subsection 5(1) of the Administration Act provides that, “The only way that a person can become entitled to be paid family tax benefit is to make a claim in accordance with this Subdivision.”
Further, s 7(1) of the Administration Act provides that:
(1) An individual or approved care organisation (a claimant ) may make a claim:
(a)for payment of family tax benefit by instalment;…
Subsection 7(2) of the Administration Act continues on to state the form of the claim in order for it to be effective.
After a claim is made, the Secretary must make a determination about the person’s eligibility. Specifically, s 16 of the Administration Act provides, in part, that:
(1) This section applies if the claim is one for payment of family tax benefit by instalment.
(2) If the Secretary is satisfied that the claimant is, at the time the Secretary makes the determination on the claim, eligible for family tax benefit in accordance with Subdivision A or C of Division 1 of Part 3 of the Family Assistance Act, the Secretary must determine that the claimant is entitled to be paid family tax benefit for each day on which the determination is in force at the daily rate at which the Secretary considers the claimant to be eligible.
Section 32A of the Administration Act provides, in part, that when making a determination under s 16, FTB supplements are to be disregarded “unless and until” the person making the claim “has satisfied the FTB reconciliation conditions” for the relevant income year.
The reconciliation conditions to be satisfied are set out in s 32B of the Administration Act, which provides that if only one of the provisions in ss 32C to 32J of the Administration Act applies to a person, the person satisfies the FTB reconciliation conditions at the relevant reconciliation time specified in the relevant provision.
The relevant provision is s 32D of the Administration Act which provides that:
(1) This section applies to the first individual for a same-rate benefit period if:
(a) the first individual was a member of a couple throughout that period; and
(b) the other member of the couple (the partner ) is or was required to lodge an income tax return for the relevant income year; and
(c) the first individual continues to be a member of the couple until the end of:
(i) the first income year after the relevant income year; or
(ii) such further period (if any) as the Secretary allows, if the Secretary is satisfied that there are special circumstances that prevented the partner from lodging the return before the end of that first income year.
(2) The relevant reconciliation time is the time when an assessment is made under the Income Tax Assessment Act 1936 of the partner's taxable income for the relevant income year, so long as the partner's income tax return for the relevant income year was lodged before the end of:
(a) the first income year after the relevant income year; or
(b) such further period (if any) as the Secretary allows under subparagraph (1)(c)(ii).
(3)The further period under subparagraph (1)(c)(ii) must end no later than the end of the second income year after the relevant income year.
In summary, ss 32D(2)(a) of the Administration Act requires the recipient’s partner to lodge their income tax return before the end of the first income year after the relevant income year, which in the case of the 2015/2016 financial year was by 30 June 2017.
However, as provided for in ss 32D(1)(c)(ii) and 32D(2)(b) of the Administration Act, the Secretary has a discretion to extend the reconciliation time for a period no longer than the end of the second income year after the relevant financial year (that is, to 30 June 2018 at the latest) if the Secretary is “satisfied that there are special circumstances that prevented the… individual from lodging the return before the end of that first income year”.
(Emphasis added.)
Special circumstances
With respect to special circumstances, neither the Act nor the Administration Act defines “special circumstances”, however, the meaning has been considered by the Federal Court and the Tribunal in numerous decisions.
In Beadle v Director-General of Social Security (1984) 6 ALD 1 at 3, the Tribunal stated:
An expression such as ‘special circumstances’ is by its very nature incapable of precise or exhaustive definition. The qualifying adjective looks to circumstances that are unusual, uncommon or exceptional. Whether circumstances answer any of these descriptions must depend upon the context in which they occur. For it is the context which allows one to say that the circumstances in one case are markedly different from the usual run of cases. This is not to say that the circumstances must be unique but they must have a particular quality of unusualness that permits them to be described as special.
Kiefel J, in Groth v Secretary, Department of Social Security [1995] 40 ALD 541, 545:
The phrase ‘special circumstances’, it has been said, although imprecise is sufficiently understood not to require judicial gloss: Beadle’s case... and for present purposes it is sufficient to observe that it would require something to distinguish Mr Groth's case from others, to take it out of the usual or ordinary case. That was, I consider, the only enquiry to be undertaken in this case. It would of course follow that if one were to conclude that something unfair, unintended or unjust had occurred that there must be some feature out of the ordinary…
French J, in Boscolo v Secretary, Department of Social Security [1999] FCA 106 stated at [18] that:
The core of the requirement for "special circumstances" or "special reasons" is that there be something unusual or different to take the matter the subject of the discretion out of the ordinary course… But that does not require that the case be extremely unusual, uncommon or exceptional…
(Citations omitted.)
In the Full Court of the Federal Court decision of Dranichnikov v Centrelink [2003] FCAFC 133, Hill J said the following about what will constitute “special circumstances” at [66]:
…what is required will be circumstances which distinguish the case in consideration from the usual case. There will be a requirement that the circumstances are such that takes the case out of the ordinary…
In Angelakos v Secretary, Department of Employment and Workplace Relations [2007] FCA 25, at [33] Besanko J stated, after reviewing the case law on the definition of “special circumstances”:
I also note that the authorities have emphasised time and again the importance of maintaining flexibility in determining what constitutes special circumstances. The danger is that the test will be overstated if the word ‘exceptional’ is emphasised. It was not the intention of Parliament to confine the exercise of the discretion to an exceptional case. There is less risk of overstatement if the words ‘unusual’ or ‘uncommon’ are emphasised. Those words indicate, correctly in my view, the fact that there must be something that distinguishes the case from the ordinary or usual case. It may not be easy to postulate the ordinary or usual case other than in quite general terms and, in doing so, close attention must be given to the particular statutory context.
The concept of “special circumstances” was also summarised in Hooker and Secretary, Department of Social Services [2015] AATA 732 (Hooker) by Senior Member Toohey at [15]:
The meaning of special circumstances for the purposes of social security law has been considered by the Tribunal and the courts on many occasions. It is an expression “by its very nature incapable of precise or exhaustive definition” and its meaning will depend on the context in which the circumstances occur. The circumstances need not be unique “but they must have a particular quality of unusualness that permits them to be described as special”: Re Beadle and Director-General of Social Security (1984) 6 ALD 1 at 3; see also, for example, Groth v Secretary, Department of Social Security [1995] FCA 1708; (1995) 40 ALD 541.
In summary, the Tribunal must be satisfied that the circumstances are so unusual, uncommon or exceptional that Mrs Lewis’ circumstances qualify as giving rise to special circumstances which would justify the exercise of discretion in her favour.
In Exhibit A3, paragraph [43], the Secretary correctly notes that delays caused by accountants have generally not been regarded by the Tribunal as being sufficiently out of the ordinary, unusual, uncommon, or exceptional so as to constitute special circumstances. The decisions referred to by the Secretary included:
(a)Secretary, Department of Social Services and Cannon [2015] AATA 1028 (Cannon) in which the Applicant’s partner’s income taxation return was lodged late by his accountants due to a filing error. Deputy President Constance found that the mistake could not properly be regarded as a special circumstance, notwithstanding that the accountants took full responsibility for their error (Cannon, at [23]);
(b)Fedigan and Secretary, Department of Social Services [2016] AATA 211 (Fedigan) in which the accountant was experiencing a number of personal issues which prevented him from lodging the income taxation return of the Applicant’s partner on time. However, Member Ermert did not accept that this was sufficiently unusual, uncommon or out of the ordinary to constitute special circumstances (Fedigan, at paragraph [29]); and
(c)In Secretary, Department of Social Services and Johnson [2016] AATA 304 Deputy President McCabe considered the circumstance where an accountant walked out of his office and disappeared before the end of June 2014, having failed to lodge the Applicant’s income taxation return. Although there was no fault on the part of the Applicant who did not become aware of this until after the end of the financial year, Deputy President McCabe found (see paragraph [11]) that the circumstances were not sufficiently unusual or extraordinary and therefore were not special circumstances.
(d)Similarly, in Secretary, Department of Social Services and Rech [2016] AATA 543 despite the Applicant instructing the accountant to prepare their tax return well before the end of the financial year, the death of the accountant’s wife resulted in the accountant failing to lodge the Applicant’s income taxation return on time, which the accountant admitted fault for. However, Deputy President Constance found, at [18], that the delay by the accountant did not amount to special circumstances, and noted that there was no explanation as to why other accountants in the firm could not have managed his work during that time. Deputy President Constance noted that it was ultimately the individual’s responsibility to lodge their income taxation return on time. Deputy President Constance stated, at [21]:
As was the situation in Secretary, Department of Social Services and Cannon, the accountant has admitted responsibility for his error and Ms Rech may have a means of redress against the firm. It was not the personal circumstances of Mr Willingale which prevented Mr and Ms Rech from lodging their returns. Rather it was the failure of the firm instructed by them to act in accordance with their clear instructions and to lodge the returns which were signed prior to 30 June 2014. Mr and Mrs Rech could have lodged their returns themselves once they had been signed. Nothing prevented their doing this. Understandably, but unfortunately for Ms Rech, they relied on their Accountants to do this on their behalf.
(Citation omitted.)

Additionally, the Secretary referred to (Exhibit A3, paragraph [45]) relevant government policy, the Guides to Social Policy Law, Family Assistance Guide (version 1.209 – Released 4 February 2019) (Policy). At 6.4.1.30 the Policy provides:
Note: Lodgement of tax returns are the responsibility of the individual, including those who lodge via a tax agent. Providing financial statements to a tax agent or accountant prior to 30 June of the relevant lodgement year does not constitute lodgement of tax returns. Extensions to the tax lodgement period may be granted if there are special circumstances that prevent an individual from lodging their tax return before the end of the lodgement year. Special circumstances are circumstances that are unusual, uncommon or exceptional. Failure by an accountant or tax agent to lodge a tax return within the lodgement period (e.g. forgetting to lodge in time or delay due to high workloads) will not ordinarily constitute special circumstances.
Prevented from lodging tax return
The Tribunal must consider two separate questions. Firstly, whether there were special circumstances, and secondly, whether those special circumstances prevented the recipient of the benefit (in this case FTB) from lodging their tax return in the required time.
As with special circumstances, neither the Act nor the Administration Act defines “prevented”.
In Shanhun and Secretary, Department of Social Services [2016] AATA 675, Member Morris explained, at [37]-[38]:
…the two essential ingredients to be satisfied, to my mind, must be that (1) the special circumstances exist; and (2) that these special circumstances acted to prevent the individual – the taxpayer claiming the benefit – from lodging his or her return on time.
38. In looking at the meaning of this complete clause in the Administration Act, in the absence of a statutory definition, the Tribunal must look at the ordinary, everyday meaning of the word “prevent”. The Oxford English Dictionary definition of “prevent” is: ‘stop [someone] from doing something. The Macquarie Dictionary defines “prevent” as: “to keep from occurring; to hinder (a person, etc.) from doing something”.
As noted by Member Morris, the Tribunal must be satisfied firstly that there were special circumstances, and secondly that those special circumstances prevented the person from lodging their tax return by the due date. In Hooker, Senior Member Toohey stated, at [14], that:
14. In order for the time for making a claim to be extended, the Secretary (and so the Tribunal) must be satisfied, firstly, that circumstances existed that were special and, secondly, that those special circumstances prevented the claimant from making his or her claim within time.
In Hooker, Senior Member Toohey continued on to say that, at [19]:
In the case of a late claim for FTB, the special circumstances must prevent a person from making a claim on time. That is a more stringent, two-part test.
(Emphasis in original.)
This paragraph from Senior Member Toohey’s decision in Hooker was cited with approval by Deputy President Humphries in Secretary, Department of Social Services and Hollis [2015] AATA 941 at [30]-[31].
The two step process was also explained by Senior Member Cotter in Bondzulic and Secretary, Department of Social Services [2017] AATA 455 who stated at [38]:
However, where ss 32C (3)(b) and 32D (1)(c)(ii) of the Administration Act differ is in the deliberate inclusion of language that imposes an additional requirement about which the Secretary (or in this case, the Tribunal) has to be satisfied before the relevant period can be extended: special circumstances need not only exist, they must also have prevented the FTB recipient from lodging the tax returns before the end of the first income year following the financial year in question. As SM Toohey observed in Hooker, that two-part test is a stringent one.
(Emphasis in original.)
In Afghani and Secretary, Department of Social Services [2017] AATA 410, Member Morris, at [61]-[62] applied the “ordinary dictionary meaning” of prevented. Member Morris stated, at [62] that, “The Concise Oxford Dictionary of Current English (5^th Edition, 1972 print) defines ‘prevent’ as to “hinder, or stop”.”
The Tribunal will now apply this two-part test to the circumstances of the current application.
CONSIDERATION
Did Mr Lewis lodge his income taxation return by 30 June 2017?
There is conflicting evidence before the Tribunal as to when Mrs Lewis’ husband’s income taxation return was lodged with the ATO by H & R Block.
As noted above at paragraphs [8] and [13] the transmission and validation reports from the ATO indicated Mr Lewis’ income taxation return for the 2015/2016 financial year was lodged with the ATO on 4 July 2017 (Exhibit A2, ST1, page 149) via the ELS.
Ms Drummond from the ATO in Canberra gave evidence that she has been working directly with the ELS at the ATO for approximately 18 years (14 December 2018 transcript, page 67). Ms Drummond confirmed that part of her role was to manage the initial receipt of electronic data sent to the ATO through the ELS

(Exhibit A5, paragraph [3]).
Ms Drummond attached a copy of the validation report, numbered 525, to her witness statement showing the lodgement date as 4 July 2017 at 12:37:49 pm

(14 December 2018 transcript, page 71; Exhibit A5, paragraph [16] and attachment SFD-3). In her oral evidence she confirmed that this was the correct and actual date and time of the lodgement of Mr Lewis’ income taxation return with the ATO (14 December 2018 transcript, page 71).
Ms Drummond’s evidence to the Tribunal was that there were no known ELS outages between 30 June and 4 July 2017 (14 December 2018 transcript, page 67), and that transmission through the ELS occurs in a matter of seconds. Thus, it would not be possible for a tax agent to transmit the data on 30 June, and for it to arrive on

4 July (14 December 2018 transcript, pages 67 and 69).
Ms Drummond also confirmed that each transaction has a unique number. As noted above, the number on Mr Lewis’ validation report was 525. The following exchange with Mr Burgess is relevant (14 December 2018 transcript, page 68):
MR BURGESS:        Ms Drummond, can you explain the significance of the transmission number on the top of SFD3?
MS DRUMMOND:     Yes. So the transmission number which actually forms part of the validation report number - so if you're looking at the validation report number, the transmission number in this case is 525 and what that represents is basically saying for this tax agent, this is the 525th transmission made so - and that number is a consecutive number. The numbers cannot be reused. So for example, if the agent was to lodge 1,000 transmissions, obviously there is only three digits there. What would happen is the 1,000th one would be 0001.2. So that increments up. So this is saying that for this agent, this is the 525th that has been received.
MR BURGESS:        Okay. Is it possible for those transmission numbers to be duplicated?
MS DRUMMOND:     No. The system will not allow it.
MR BURGESS:        Now, at paragraph 12 of your statement you state the last transmission on 30 June was number 511?
MS DRUMMOND:     Correct.
MR BURGESS:        The next transmission was 512 and was made on 1 July. Having regard to SFD2 which is the transmission report that Mr Lewis has provided this tribunal, can you comment on whether that is a - whether that could occur that a 525th transmission was receipted on 30 June?
MS DRUMMOND:     I would not see how that is possible at all.
The Tribunal accepts the evidence of Ms Drummond that Mr Lewis’ income taxation return was lodged on 4 July 2017, and that it was numbered 525. The Tribunal also accepts her evidence that there were no outages and that it was not possible for a four day delay to occur in between the electronic submission by H & R Block and the generation of the validation report on 4 July 2017. The Tribunal also accepts Ms Drummond’s evidence that the last transaction on 30 June 2018 was numbered 511, and that the next transmission of 512 was made on 1 July 2017. The Tribunal therefore finds that it was not possible for a validation report generated on 30 June 2017 to be numbered 525. The evidence of

Ms Drummond indicates that the transmission and validation reports provided to Mr Lewis by H & R Block on 26 July 2017 and 2 November 2017 respectively, which both show a lodgement date of 30 June 2017, and are both numbered 525, were incorrect. This suggests that they may have been altered to change the date from 4 July 2017 to

30 June 2017.
The written response from Mr Robinson from H & R Block made in response to the
s 158 notice, confirmed that Mr Lewis’ income taxation return was lodged by H & R Block with the ATO on 4 July 2017, and an ATO validation notice was attached which showed a lodgement date of 4 July 2017 (see paragraph [17]). This was also confirmed in
Mr Robinson’s oral evidence to the Tribunal.
However, as noted in paragraphs [8] and [13] above, the transmission report dated

26 July 2017, and the validation report dated 2 November 2017 emailed to Mr Lewis by his accountants, H & R Block, both had a lodgement date of 30 June 2017 and were numbered 525. The original copies of both emails on Mr Lewis’ laptop were sighted by the Senior Member and Mr Burgess at the resumed Tribunal hearing on 14 December 2018. Mr Lewis opened his email account in front of Mr Burgess and Senior Member Evans, he searched and located the original emails while they observed, and both Mr Burgess and the Senior Member viewed the original emails. Accordingly, the Tribunal finds the transmission and validation reports in the emails from H & R Block of 26 July 2017 and

2 November 2017 produced by Mr Lewis were not altered by Mr Lewis and finds them to be true copies of the reports he actually received by email from H & R Block.
The Tribunal also notes that, following the initial hearing on 8 October 2018, the Tribunal issued a summons to H & R Block on 11 October 2018 to obtain the original copy of the emails dated 26 July 2017 and 2 November 2017, together with any attachments (that is, the transmission and validation reports). Mr Robinson from H & R Block gave evidence at the resumed hearing that these emails could not be located. His evidence was that: “we don't keep anything on file and our emails get deleted every … six months” (transcript, page 58); and that “I asked my IT department if they can find it and they can't, they don't have records that far back” (transcript, page 58).
The following exchange during the resumed hearing regarding whether Mr Lewis’ income taxation return was lodged on 30 June 2017 (as per the transmission and validation reports emailed to Mr Lewis by H & R Block) or 4 July 2017 (as per the transmission record provided to the Secretary by the ATO) is relevant (transcript, pages 58-59):
MR BURGESS:        Now, in completing these transactions, are you bound by any ethical codes?
MR ROBINSON:       I would be, yes.
MR BURGESS:        Now, the assertion that we've heard from Mr Lewis is that - sorry, I'll withdraw that. You would be aware that Mr Lewis claims that this transaction report was actually generated on 30 June 2017?
MR ROBINSON:       Okay.
MR BURGESS:         Were you aware of that?
MR ROBINSON:      Like without looking at the emails, I cannot recall what was in the emails and what was done and what was said, unfortunately.
MR BURGESS:         Yes. Well, Mr Lewis has provided a copy of this transmission report with all of the same details, including the transaction number, other than the date and time of the transaction on the copy that he's provided says 30 June 2017. So that's clearly different to the copy that you have and it was put to Mr Lewis in cross-examination that he had fraudulently altered the document that you'd sent him and then provided that document to this tribunal and his assertion was that the document that he had provided to the tribunal was an exact copy of the document that you had provided to him and that if there had been any altering of the document it was at your end prior to sending it to him?
MR ROBINSON:      What - sorry, what date was the email sent, allegedly from us, to him?
MR BURGESS:         There's two emails. So, the first email was in July.
SENIOR MEMBER: 26 July.
MR BURGESS:        26 July 2017. And that email has what appears to be a cut and paste of this transmission report but with a different date, 30 June 2017?
MR ROBINSON:       Okay.
MR BURGESS:         And that's pasted into an email allegedly from you that says:
Hi John, I did have a note to call you back. I'm sorry I haven't yet but it's been crazy for the last few weeks. This is a report from software in regards to your return. I hope this helps.
MR ROBINSON:      Okay. Now, that email address, though, is a generic one for the office. So, even if my name's on it, I can't remember sending it, unfortunately, because it's not specific - it's not my specific email address. We don't - we have an office one only.
MR BURGESS:         Yes?
MR ROBINSON:      So, it could have been sent from someone else whose put my name on it and think - I said I do not 100 per cent know, unfortunately.
MR BURGESS:        There was another email on 2 November 2017 that just says:
Hi John, Please see attached. Regards.
MR BURGESS:        It doesn't have a name who it is from and then it attaches that same report with, again, 30 June date. Now, my question is, acknowledging that you don't have copies of those emails, so you can't see what was actually attached, you have reviewed the records that you hold in relation to Mr Lewis, or that your office holds in relation to Mr Lewis?
MR ROBINSON:       That's correct. Correct, yes.
MR BURGESS:        And is it true that the only transmission report from the ATO that you hold is the one that you provided in response to the request from Centrelink, which states 4 July 2017?
MR ROBINSON:      That would be correct, yes, because that's the one - I can pull that up…
Further, when it was put to him by Mr Burgess, Mr Robinson denied altering the transmission report emailed to Mr Lewis on 26 July 2017 and the validation report emailed on 2 November 2017, to show different dates (transcript, page 60).
At the resumed hearing the Senior Member also questioned Mr Robinson about his failure to produce the emails of 26 July 2017 and 2 November 2017 and the attachments requested by the Tribunal under summons. The following exchange is relevant (transcript, pages 61-62):
SENIOR MEMBER:     Mr Robinson, while I've got you on the phone, I did find it a little bit difficult to believe that you couldn't find this email correspondence, given that there are some statutory duties on accountants whereby they have to keep accurate records?
MR ROBINSON:       Yes.
SENIOR MEMBER: Can you just explain to me the sorts of records that you are required to keep in line with those statutory duties and why you wouldn't keep copies of any emails?
MR ROBINSON:      It's - unfortunately, it's a policy of the company I work for, it's not mine. I would agree that - we used to keep correspondence where I used to work. We used to keep emails and records, and all that sort of stuff, on file with the client. With the size of the company, they just don't have the room, from my understanding, of keeping emails and records on file and that's why they actually do delete the records and unable to trace them back. Like I said, I did speak to my IT department on it and find out if we could or not and he just, yes, they just don't keep backups that far back anymore, or at all actually.
SENIOR MEMBER:   So, what about hardcopy files, like if there are files that - - -?
MR ROBINSON:      We don't - we don't - printed anything out. We've got hardly any room in the back for storage, so we don't print anything out. We don't save anything unless, of course, it's just for the tax returns now we start saving stuff but back then we just print the tax returns out and then that was it. We don't keep any records or anything on file.
SENIOR MEMBER:   So, there's no physical file but what about an electronic file?
MR ROBINSON:      Not in the system we used to use. There was no way to store files, or anything like that, in the old system, old accounting software we used to use. The new one we use now we can actually save documents, pdf emails now, for future references but back then there was just - the system just didn't allow it.
SENIOR MEMBER: So, if you look on your electronic file - because one of the issues that I'm having is that I've got an email here, this is an email that Mr Burgess referred to which is dated 26 July 2017, and Mr Burgess read a little bit of that out to you. It says:
Hi John, I did have a note to call you back. I'm sorry - - -
Et cetera. And then it says:
This is a report from the software in regards to your return. I hope this helps.
And then there's a sort of pasted transmission report and I think Mr Lewis will find that for us in his electronic documents. So that actual electronic transmission had 30 June 2017 on it and it says at the bottom:
Regards, Derrick. [sic]
MR ROBINSON:       Yes.
SENIOR MEMBER: So, I'm just having a little bit of difficulty reconciling that with the other evidence that you've given about the date being 4 July?
MR ROBINSON:      Yes. Well, you know, in the email - like I said, the emails are a generic email web address was for the old office. So, the receptionist could do it and put my name on it. One of the colleagues could do it and just put my name because it's my client. So, not having any emails anymore in our system it's hard for me to check, or even remember, the email being sent out. I remember - because I get - the notes that refer to that is the receptionist take a message and then put a note on my desk to remind me. So, it wouldn't be like an email to remind me - a reminder, it's just a sticky note, I guess, put on my desk after I've finished with a client to call people back.
SENIOR MEMBER: Yes. So, is there a possibility then that someone else in your office might have pasted this in incorrectly, because I note that there's - - -?
MR ROBINSON:      I don't know. We've had - we've had - like we have two main staff aren't here all the time and then we've had two different receptionists. We've got about - we've had 10 or so different staff members during the tax season itself, so it's hard to say.
SENIOR MEMBER: Yes, because I'm just sort of noting that the first email in this email trail is one from Mr Lewis basically, you know, emphasising the importance of having claimed by 30 June, so I wonder whether someone's had a panic and, I don't know, pasted in that information when it wasn't quite correct?---
MR ROBINSON:      I don't - like I said, I can't - don't know, I can't remember. You know, I've had to deal with over a thousand tax returns this year alone and people coming in, and especially with all the ATO scams now happening, they're coming in all the time to - or ringing us up, and all that, so all the conversations I've had I just can't remember them all and no emails to help me, it's a bit hard to refresh my memory with everything I've got on.
SENIOR MEMBER:   Yes?
MR ROBINSON:      Because I was also - that was when I - that was when I was Uni student too, sorry, so I had the Uni on as well, so I wasn't in the office for, what, four days a week.
The deficiencies in record keeping which include not keeping diaries (transcript, page 58), not keeping emails for more than six months, not keeping hard copy files, and not keeping electronic files (resulting in a failure to produce relevant documents under summons) are, in the Tribunal’s opinion, unsatisfactory.
The evidence supports a finding that the transmission report provided to Mr Lewis by H & R Block on 26 July 2017, and the validation report provided to him on 2 November 2017 do not reflect the actual date of lodgement of Mr Lewis’ income taxation return with the ATO, which the Tribunal finds on the balance of probabilities to be 4 July 2017. This finding is based on the evidence of Ms Drummond from the ATO, the validation report from the ATO, the information provided by Mr Robinson in his s 158 response and the oral evidence of Mr Robinson confirming the date of lodgement to be 4 July 2017.
Did special circumstances exist which prevented the lodgement of Mr Lewis’ tax return by 30 June 2017?

The Tribunal notes that Mr Lewis instructed his accountant to prepare his income taxation return on 28 or 29 June 2017 (Exhibit A4). As noted above, the Tribunal has found that Mr Lewis’ income taxation return was lodged by his accountants with the ATO on
4 July 2017. However, the Tribunal has a discretion to extend the reconciliation time if special circumstances existed which prevented the lodgement of Mr Lewis’ income tax return by 30 June 2017.
As noted above in the section outlining the interpretation of “special circumstances” by the Tribunal and the Federal Court, delays in lodgement of income taxation returns due to delay or fault by accountants are not sufficient to constitute special circumstances. Further, paragraph 6.4.1.30 of the Policy confirms that:
Lodgement of tax returns are the responsibility of the individual, including those who lodge via a tax agent. Providing financial statements to a tax agent or accountant prior to 30 June of the relevant lodgement year does not constitute lodgement of tax returns…
Mr Lewis also submitted that he could not instruct his accountants to prepare his income taxation return earlier than 28 or 29 June 2017 because when he tried to telephone Centrelink to ascertain the information he needed to lodge his income taxation return, he could not get through to them by telephone or online (8 October 2018 transcript, page 21-22; 14 December 2018 transcript, page 83). Mr Lewis gave the following evidence:
Well it's impossible to get through to like tick things off the list that I need to do and in order to get it all processed because I'm trying to ring Centrelink was impossible - I just couldn't get through - couldn't get through on the internet, couldn't get through over the phone. So how are we supposed to get through it all to be able to fill out the forms correctly because they say if it's not filled in correctly it will bounce - you have to have it all correct and just - I don't know - just generally speaking of trying to - the whole system even on their behalf is - was failing - it wasn't working. Like their systems was down because of the overload of problems they were having.
So even if we did get through generally, which would take say anywhere from half an hour to an hour to - for them to answer, then they would say, "Oh, we'll just put you on hold" and then you'd be on hold until the phone went blank, you know, they just weren't allowing things to process - nothing was getting - able to process. You think that they'd go all right, that's a special circumstance but "No, that's not a special circumstance" you know, - well what is a special circumstance, you know?
And further (14 December 2018, transcript, page 22):
MR LEWIS: Well, we struggled to get through the operation of it all, in the end I thought I did get through in time - but it's out of my control once I've given it to my accountant as well - that's out of my control.
SENIOR MEMBER: I am just trying to just get clear in my mind about - because we're really talking about the date of the lodgement of the - like what were you trying to get through to Centrelink about?
MR LEWIS:             To say that my wife - like to find out if my wife needed to do a tax lodgement or not.
SENIOR MEMBER: Yes.
MR LEWIS:              How do we fill out these forms correctly because I don't want to fill it out incorrectly, but prior to all of that I had to get my name down on a bit of paper processed so I can fill out forms on her behalf or talk on the phone on her behalf, but just to even get that processed was hard, you know. Everything was going against the flow to try to speed up the process in time.
SENIOR MEMBER: So there was extra - you're saying there was extra information that they needed so that you could make enquiries on behalf of your wife?
MR LEWIS:             Yes, and also the forms - we could not make sense of it and if we went on line we couldn't get through with it and then when we tried to go on line to get them to explain, you know, so they can help us to go through each section on the website, they couldn't help us because their system was down.
SENIOR MEM           BER: And when was this?
MR LEWIS:             Prior to the end of June, probably - I don't know, the last month of June - during the whole month of June maybe.
In support of these submissions, Mr Lewis submitted an internet news article dated

29 March 2017 regarding errors by Centrelink, particularly with respect to robo-debts (Exhibit R2). The article noted (on the second page) difficulties that persons issued with robo-debts were experiencing with navigating the MyGov website, or getting through on Centrelink’s phone lines. Whilst the Tribunal appreciates that Mr Lewis may have experienced difficulties in contacting Centrelink to have his queries regarding FTB and the completion of his income taxation return answered, the Tribunal finds that these difficulties are not unusual, unique or uncommon. Indeed, if the claims in Exhibit R2 are to be accepted, many persons were experiencing delays and difficulties contacting Centrelink for advice.
In summary, the Tribunal finds that any delay by Mr Lewis’ accountant in lodging his income taxation return, and delays he experienced in contacting Centrelink do not constitute special circumstances.
CONCLUSION
The Tribunal finds that Mrs Lewis did not comply with the reconciliation requirements set out in the Administration Act for the 2015/2016 financial year, and specifically that:
(a)Mr Lewis’ income taxation return was lodged with the ATO on 4 July 2017; and
(b)
there are no special circumstances that existed to prevent the lodgement of

Mr Lewis’ taxation return by 30 June 2017. Accordingly, the Tribunal cannot exercise discretion to extend the reconciliation time.
DECISION
The Reviewable Decision is set aside and substituted with a new decision that the Respondent (Mrs Lewis) did not satisfy the reconciliation conditions to qualify to receive the FTB supplement and top-up for the 2015/2016 financial year.

79. I certify that the preceding 78 (seventy - eight) paragraphs are a true copy of the reasons for the decision herein of Senior Member Dr M Evans

.........................[sgd]..............................................
Administrative Assistant Legal
Dated: 19 March 2019

Date of hearing:

8 November 2018 and 12 December 2018

Counsel for the Applicant:

Solicitors for the Applicant:

Mr Ashley Burgess

Sparke Helmore Lawyers

Advocate for the Respondent:

Mr John Lewis