MARSHALL Applicant And COMMISSIONER OF TAXATION

[2010] AATA 293

Administrative Appeals Tribunal

DECISION AND REASONS FOR DECISION [2010] AATA 293

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No 2009/3068

TAXATION APPEALS  DIVISION		)
Re		TRACY MARSHALL

Applicant

And COMMISSIONER OF TAXATION

Respondent

DECISION

Tribunal M D Allen, Senior Member

Date23 April 2010

PlaceSydney

Decision The decision under review is AFFIRMED.

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

M D Allen, Senior Member.  

CATCHWORDS

TAXATION:  Assessment of GST. Claim by Applicant that business name and bank account operated without her knowledge or authority and that she was the victim of fraud.  Onus of proof.  Decision affirmed.

LEGISLATION

Taxation Administration Act 1953, s 14ZZK

REASONS FOR DECISION

23 April 2010 M D Allen, Senior Member            

1.      By Application made 6 July 2009 the Applicant sought review of an objection decision that determined inter alia that she was liable for a total GST amount in the sum of $8,952.00.  (Note the actual amount in dispute is $4,160.00).

2.      Essentially the resolution of this matter devolves into a question of whether the Applicant adduced sufficient evidence to satisfy the Tribunal that the sum assessed for GST purposes was excessive.

3. Section 14ZZK of the Taxation Administration Act 1953 reads:

Grounds of objection and burden of proof

On an application for review of a reviewable objection decision:
(a)  the applicant is, unless the Tribunal orders otherwise, limited to the grounds stated in the taxation objection to which the decision relates; and
(b)  the applicant has the burden of proving that:

(i)  if the taxation decision concerned is an assessment (other than a franking assessment)--the assessment is excessive; or
(ii)  if the taxation decision concerned is a franking assessment--the assessment is incorrect; or
(iii)  in any other case--the taxation decision concerned should not have been made or should have been made differently.

4.      According to the Applicant in 2003 she made the acquaintance of one Vincent Gonzaga, originally from Brazil but residing in Sydney.  It was agreed between the Applicant and Gonzaga, who was described as a “builder”, that they would go into partnership in the business of home renovations.  Apparently the arrangement was that the Applicant would take care of the bookwork, while the actual renovation work was carried out by Gonzaga.  There was no evidence that Gonzaga had any form of licence to carry out this type of work.

5.      The Applicant registered a business name “Renovation Masters” and on 14 September 2004 opened a bank account with the Kogarah branch of the St George Bank.  The sole signatory to that account was the Applicant.

6.      No separate Australian Business Number (“ABN”) was applied for by the partnership business, instead the Applicant used the ABN she already had for other business ventures carried out by her.  Nor was there any formal partnership agreement.

7.      The Applicant explained that she did not want to expend too much money on the joint venture but if work was obtained then more funds would be applied.

8.      The Applicant’s evidence was that at no time did she conduct any business under the name Renovation Masters.  Although the full details were not canvassed in these proceedings, some time in 2005 the Applicant separated from her long term partner and Vincent Gonzaga moved in to live with the Applicant’s ex partner.

9.      Upon separating from her former partner the Applicant lived at addresses in the suburbs of Camperdown and Alexandria.

10.     In June 2006 the Applicant was contacted by her former partner who informed her that Gonzaga had been using the Renovation Masters business name and bank account.  She was also informed that Gonzaga had defrauded a named person by taking money from her and then not performing the required work.  That person had reported Gonzaga and Renovation Masters to the NSW Department of Fair Trading.

11.     Later the Applicant was informed by her former partner that Gonzaga had returned to Brazil and that she had bank statements and invoices for work Gonzaga had carried out.

12.     When the Applicant became aware of these events she contacted her accountant and arrangements were made to clarify and attend to her taxation liabilities.  The St George bank account in the name of Renovation Masters was closed.  The Applicant also approached the NSW Police who told her that as Gonzaga was no longer in the country they would not investigate the matter.

13.     In these proceedings the Applicant maintained that at no time did she know that Gonzaga was operating using the name Renovation Masters and the St George bank account in the name of that firm.  She stated that so far as she was concerned the bank account and business name were not being used.

14.     No evidence was before me from the person whom Gonzaga defrauded by not carrying out the work paid for.  I note however that the cheques written out by that person were originally made payable to Gonzaga but amended to read Renovation Masters.  The inference I draw from this is that Gonzaga himself did not have a bank account but was using the Renovation Masters account for his own purposes as well as the purposes of the business.

15. The Applicant was the sole signatory on the Renovation Masters bank account. Included in the documents prepared for the Tribunal, pursuant to section 37 of the Administrative Appeals Tribunal Act 1975, are copies of cheques drawn on that account and purportedly signed by the Applicant.

16.     Unfortunately the Applicant did not adduce any evidence from a handwriting expert.  Thus, whilst some of the signatures on the cheques are apparently identical with the signature of the Applicant given when she opened the bank account, other signatures are more questionable.

17.     If the Applicant did not sign the cheques the question arises as to how the cheque book and also the Automatic Teller Machine (“ATM”) card linked to the Renovation Masters bank account came to be in the possession of Gonzaga?  The Applicant states that she left the cheque book and ATM card at her original premises when she separated from her partner and Gonzaga commenced living with her former partner.

18.     I can quite understand that at times of emotional crises people do not always make sensible or rational decisions, but to leave a cheque book and ATM card when a relationship is terminated defies logic.  Particularly as the Applicant had said that she had previously given details of the account to Gonzaga.  It would seem that these details must have included the Personal Identification Number (“PIN”) used to operate the ATM card.

19.     Another matter not satisfactorily explained was the St George Bank regularly issued bank statements pertaining to the account.  These statements are addressed to two separate addresses where the Applicant said that she had resided at the relevant time.

20.     Questioned regarding these bank statements the Applicant said that she had not received them.  Whereas I can accept that mail does go astray I find it difficult to believe that four separate bank statements to two different addresses were all lost in the course of the post.

21.     I have found this matter very difficult as I accept that the Applicant has attempted to cooperate with the Respondent and meet what she regards as her true liabilities but I am not convinced that she was as ignorant of the operation of the St George bank account as she now claims.  At the end of the hearing of this matter I find that the Applicant has not satisfied me that the assessment of GST attributed to her is excessive, therefore the decision under review is AFFIRMED.

I certify that the 21 preceding paragraphs are a true copy of the reasons for the decision herein of M D Allen, Senior Member.

Signed:         .............. [sgd]...................................
  K. Lynch, Associate

Date of Hearing                   19 April 2010
Date of Decision                   23 April 2010
Representative for the Applicant               P Stamatelatos Chartered Accountant
Representative for the Respondent          J Burne, ATO Legal Services Branch