Mitchell and Dean and Commissioner of Taxation - [2001] AATA 689

DECISION AND REASONS FOR DECISION [2001] AATA 689

ADMINISTRATIVE APPEALS TRIBUNAL )

)No. VT1999/420-421

TAXATION APPEALS DIVISION )
           Re      BARRY MITCHELL
  Applicant
-          And    COMMISSIONER OF TAXATION
  Respondent
  No. VT1999/419

Re PETER DEAN

Applicant

And COMMISSIONER OF TAXATION

Respondent

DECISION

Tribunal Mr J. Handley, Senior Member

Date13 July 2001
PlaceMelbourne

Decision      The applications be reinstated and be listed for hearing on a date to be fixed in August or September, subject to compliance with the Directions recorded at paragraph 39.
  ............Sgd. Mr J. Handley....................
  Senior Member
CATCHWORDS
Practice & Procedure - Application to reinstate - applicants & solicitor failed to appear at Directions Hearing - application to reinstate out of time - whether 'error' in dismissal - whether applicants personally should have been put on notice - applications reinstated.
Administrative Appeals Tribunal Act 1975
Oates & Secretary, Department of Social Security (1994) 37 ALD 241
Re Booth & Secretary, Department of Social Security unreported - 10/1/98 AAT No. 12602

REASONS FOR DECISION

13 July 2001 Mr J. Handley, Senior Member

The applicants applied to re-instate the above applications, which were dismissed on 22 March 2001 pursuant to s.42A(2) of the Administrative Appeals Tribunal Act 1975.
Mr Dean sought review of a decision of the respondent with respect to a notice of assessment for the income year ending 30 June 1995. Mr Mitchell sought review of a decision of the respondent with respect to the income years ending 30 June 1994 and 30 June 1995. The applications were similar in nature to an application issued by Stephen Oliver in Tribunal proceedings VT1999/375-377 which related to assessments issued for the year of income ending 30 June 1993, 1994 and 1995. All three applicants were professional Australian Rules Footballers and members of the Carlton Football Club Ltd, in the relevant years of income. The disputes in all applications concerned the imposition of fringe benefits tax.
The same solicitors were acting for Mitchell, Dean and Oliver. Decisions had been made by the Tribunal and (with the consent of the parties) during the pre-hearing stages that the application of Oliver would be the "lead case". It proceeded to hearing in December 2000 and on 19 February 2001 a decision was delivered. It was decided that the payments made to Oliver in the above three financial years were salary and wages and were not fringe benefits. An appeal has not been lodged with respect to that decision (2001 AATA 155).
The applications of Mitchell and Dean were listed for Directions Hearing on 22 March 2001. It was then intended to receive submissions from the parties with respect to the listing of these applications, having regard to the decision made in Oliver. Alternatively it was intended to seek submissions as to the relevance of the findings made in the Oliver decision upon the applications by Mitchell and Dean.
A listing notice was issued by the Registrar on 7 March and posted to the applicant's solicitors.
On 22 March there was no appearance by the applicants or their solicitors. Mr Vitale appeared on behalf of the respondent. Shortly after the time listed for the Directions Hearing, my Associate rang the solicitors office advising that the matter was then listed, no one had appeared and enquired whether there would be an appearance on behalf of the applicants.
At 10.05am and there being no appearance on behalf of the applicants or by a representative, being 35 minutes after the time listed for the Directions Hearing, I dismissed the applications pursuant to s.42A(2) of the Act.
On 26 March 2001 the decision was converted to writing and forwarded under cover of letter by the Registrar to the applicant's solicitors by Australian Document Exchange facilities on 28 March.
On 26 April 2001, the Registrar received a facsimile letter from the solicitors for the applicants which omitting irrelevant parts reads as follows-
"We refer to our letter of 22 March 2001 addressed to Senior Member Handley seeking a copy of the notice of Directions Hearing scheduled for 9.30am on 22 March 2001 as our office had never received that document.
As we have not had a response from this letter could you please forward a copy of this notice as a matter of urgency".
On 27 April 2001 the Registrar of the Tribunal forwarded a letter by facsimile transmission to the solicitors for the applicants which (omitting irrelevant parts) reads as follows-
"I refer to your facsimile message dated 26 April 2001 requesting a response to correspondence of 22 March. The Tribunal has no record of receiving this correspondence. A search of our fax register for that day and the files failed to disclose the letter referred to.
Attached are copies of the relevant listing notices as requested. Both notices were generated on 7 March and forwarded to your office on or around that date".
On 11 May 2001 the solicitors for the applicants wrote a letter to the Registrar which (omitting irrelevant parts) reads as follows-
"….
Both of these matters were dismissed by Senior Member Handley due to our failure to appear at a Directions Hearing on 22 March 2001. We did not appear at the Directions Hearing because we did not receive any notice of the Directions Hearing.
We first became aware that the Directions Hearing had been scheduled, when we received a phone call from the Administrative Appeals Tribunal ("the Tribunal") on the morning of 22 March 2001, informing us that the Directions Hearing had been scheduled for that morning. However, when we arrived both matters had already been dismissed.
We immediately sent a letter dated 22 March 2001 to Senior Member Handley informing him that we had not received notice of the Directions Hearing and requesting a copy of the same. We did not receive a reply to this letter and on 26 April 2001 we sent a facsimile to Mr A Gawne, the District Registrar of the Tribunal, again requesting a copy of the notices, as a matter of urgency.
In a facsimile dated 27 April 2001, Mr Gawne attached the relevant notices regarding the Directions Hearing and also noted that the Tribunal had no record of receiving a letter from us dated 22 March 2001.
We now request that the matter be reinstated. We note that the time period for reinstating a matter under Section 42A(8) of the Administrative Appeals Tribunal Act 1975 ("the Act') has lapsed. However, we request that the matter be reinstated pursuant to Section 42A(9) of the Act.
The reasons why the matters should be reinstated are as follows:-
1. We did not receive any notice from the Tribunal that the Directions Hearing had been scheduled for 22 March 2001.
2. As soon as we became aware that the Directions Hearing had been scheduled on 22 March 2001, we sent a letter to Senior Member Handley informing him that we had not received the relevant notices. However, he still proceeded to dismiss the matter in a decision dated 26 March 2001.
3. We did not actually receive the notices of a Directions Hearing from the Tribunal until 27 April 2001.
4. If the matter is reinstated there will be no prejudice to the Respondent even though the time for a reinstatement has lapsed. We draw your attention to the case of A'hern v ComCare (1993) 18 AAR 22 in which Justice Hill concluded that an omission or oversight of a solicitor should not be visited upon the solicitor's client and that this was capable of constituting an acceptable explanation for a delay.
In relation to this point, our failure to attend the Directions Hearing was because we did not receive the notices from the Tribunal informing us of the date and time for which the Directions Hearing had been scheduled. This unfortunate situation should not be visited upon our client.
In the circumstances, we believe that it is proper for the Tribunal to reinstate the matter pursuant to Section 42A(9) of the Act."
On 17 May 2001 a listing notice was forwarded to the solicitors for the applicants notifying of the listing of a hearing of a re-instatement application for 19 June at 10am.
On 1 June 2001 a solicitor from the firm representing the applicants, rang the Tribunal advising that a listing notice for the re-instatement application had not been received and requesting that a copy be forwarded by facsimile transmission. A copy of the listing notice was forwarded by facsimile transmission on the same day, with a request to notify the Tribunal if the "contact details" on the listing notice were incorrect. (It is noted that the address on the listing notice for the re-instatement application was the same address that appeared on the listing notice for the Directions Hearing of 22 March.)
Upon the hearing of the re-instatement application on 19 June 2001, Mr Baring appeared on behalf of the applicants and Mr Vitale appeared on behalf of the respondent. Mr Baring also appeared in the Oliver application.
Mr Baring indicated that he would apply for re-instatement either pursuant to s.42A(9) of the Administrative Appeals Tribunal Act or pursuant to s.42A(10) of the Act.
The Legislation
Section 42A of the Administrative Appeals Tribunal Act 1975 ("the Act") relevantly provides-
"42A.(1) …..
(1A) …..
(1B) …..
(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) in any other case – direct that the person who failed to appear shall cease to be a party to the proceeding.
…..
…..
…..
(6)If, under this Act, the Tribunal dismisses an application or an application is dismissed on its behalf, the proceeding to which the application relates, unless it is reinstated under subsection (9) or (10), is taken to be concluded.
(7)Before exercising its powers under subsection (2), the Tribunal must be satisfied that appropriate notice was given to the person who failed to appear of the time and place of the directions hearing, conference, mediation or hearing, as the case may be.
(8)If the Tribunal, under subsection (2), has dismissed an application (other than an application in respect of a proceeding in which an order has been made under subsection 41(2)), the person who made the application may, within 28 days after receiving notification that the application has been dismissed, apply to the Tribunal for reinstatement of the application.
(9)If it considers it appropriate to do so, the Tribunal may reinstate the application and give such directions as appear to it to be appropriate in the circumstances.
(10)If it appears to the Tribunal that an application has been dismissed in error, the Tribunal may, on the application of a party to the proceeding or on its own initiative, reinstate the application and give such directions as appear to it to be appropriate in the circumstances."

Submissions

Mr Baring submitted that because a notice was not "given", the application should not have been dismissed. Additionally it was said that the Tribunal had committed an "error" by dismissing the application without first notifying the applicants (as opposed to the representatives) that it was intended to dismiss the applications for failure (by the representatives) to appear. It was also submitted that although the application to re-instate was "out of time", the Tribunal should exercise its discretion pursuant to s.29 of the Administrative Appeals Tribunal Act 1975 to extend the time to permit the making of the re-instatement application. It was also submitted that the applications of Mitchell and Dean did have merit and whilst they were similar to Oliver they were substantially different. In conclusion it was also submitted that the failure to notify the applicant's personally of the intention to dismiss the applications breached the principles of natural justice.
Mr Vitale submitted that the applications of Dean and Mitchell were substantially similar to that of Oliver and that the applicant's representatives had agreed that the Oliver decision be the "lead case". He said that it had been at all times understood that the applications of Mitchell and Dean would rise or fall depending on the outcome of the Oliver application. The request for re-instatement was opposed, and it was submitted that considerable cost and expense would be wasted by the parties and the Tribunal in hearing the applications of Mitchell and Dean should they be re-instated. Mr Vitale pointed to the application for re-instatement being made out of time and submitted also that no reason had been advanced by the applicants applying for re-instatement beyond the 28 days prescribed under sub-section (8). Additionally it was submitted that no reason had been given to permit the discretion to re-instate being exercised in favour of the applicants.
I then discussed with Mr Baring some of the submissions that he had raised.
With respect to the notice of the Directions Hearing of 22 March I asked him to confirm that the address recorded on the notice namely, 140 William Street, Melbourne was the address of his office. He indicated that it was, but that the notice did not record his office being located on "Level 7". I drew to his attention that the address given by him when the application was lodged did not refer to 'Level 7' and subsequently upon perusal of various letters which have been received from his office the words "Level 7" do not appear in the letterhead.
I also drew to his attention the admission on the part of Mr Donovan, a solicitor apparently in the employ of the applicant's solicitors who in his affidavit of 19 June 2001 attested that he "arrived at the Tribunal at approximately 9.55am ….". This was important because my Associate had memorialised the Directions Hearing of 22 March and recorded that the Directions Hearing concluded at 10.05am. Mr Baring acknowledged that this would indicate that Mr Donovan was in the precinct of the Tribunal but did not appear before the decision was made to dismiss the applications.
Additionally, Mr Baring conceded whilst making his submissions that he had been telephoned on the evening prior to 22 March by Mr Vitale where they both discussed the Directions Hearing scheduled for the next day. Mr Baring indicated that he notified Mr Vitale that he had not received a listing notice, but did acknowledge that Mr Vitale notified him that these matters were listed for Directions Hearing on the following day. Mr Baring indicated that in those circumstances he had failed to arrange for another person to attend the Directions Hearing at 9.30am. (He said he was committed to another matter at the same time).
I indicated to Mr Baring that I had satisfied myself on 22 March that a listing notice was properly addressed and recorded the time and place of the Directions Hearing. I also arranged to have his office contacted to enquire whether any person would appear. Having subsequently learnt that a representative of his office did attend the Tribunal prior to the Directions Hearing concluding, but had failed to appear, and having subsequently also learnt that Mr Baring himself knew of the Directions Hearing on the evening prior to 22 March, but failed to arrange for any other person to appear in his stead, I could not comprehend his submission as to whether there was an "error". He submitted in those circumstances that the "error" was the failure to notify his clients directly of the intention to make the dismissal Orders and that an opportunity should have been given to them to be heard. In the alternative it was put that his failure to appear and the possible consequences should not be visited upon his clients.
Conclusion & Reasons For Decision
These applications were dismissed on 22 March because the applicants failed to appear in person or by their representative at the Directions Hearing. I remain satisfied that the listing notice was properly addressed and recorded the time and place of the Directions Hearing. I am subsequently satisfied that the applicant's solicitor knew in advance of 22 March that the matters were listed for Directions Hearing, but he failed to appear or arrange for another person to appear. I am satisfied that a solicitor in his office did attend the Tribunal, having been rung by my Associate, but failed to appear in the hearing room where the Directions Hearing was being convened prior to the making of the dismissal Orders. I am not satisfied, given those circumstances, that the applications were dismissed "in error". Whether the applicants themselves should have been given the opportunity to make submissions before the dismissal order was made is a matter that I will return to later in this decision.
With respect to the application to extend time to lodge the re-instatement application, I am satisfied that this has no merit.
Section 42A(8) provides that where applications are dismissed under ss(2), application may be made with 28 days after receiving notification of the dismissal to apply for re-instatement. Mr Baring acknowledged that whilst he did not have a date recorded on the letter of the Registrar of 28 March to which the dismissal decision was attached, it was conceded that the decision to dismiss would have been received in the ordinary post on 29 March. Mr Baring in fact did acknowledge that he had that document on his file.
The request to re-instate the applications was made on 11 May. This is more than 28 days after 29 March.
The submission to extend time to lodge the re-instatement application was made on the basis of s.29 of the Administrative Appeals Tribunal Act 1975 where a discretion is given to the Tribunal to extend the time to make applications. This submission, in my view, is without merit because s.29(7) provides that the Tribunal may extend time to make an application for review of a decision. The application to which time is sought to be extended in the present circumstance is an application to re-instate an application which has been dismissed, an application totally different in character to that which is specified by s.29(7). I can find no other provision within the Act or within s.42A(8), which permits time to be extended where the request for re-instatement is not lodged within 28 days after receipt of notification. It follows that the application to re-instate made on 11 May was out of time.
To the extent that reliance was made upon s.42A(9) where it was submitted that the application should be re-instated - because I should be satisfied that it is 'appropriate to do so' - I am of the view that this sub-section does not exist in isolation, but exists by force of the operation of ss(8). That is to say, 'the application' referred to in ss(9) is the application for which time is sought to be extended under ss(8).
Despite all of the foregoing, I am inclined to allow these applications to be reinstated pursuant to s.42A(10).
It is difficult to imagine any greater duty than that of a solicitor to his client. The client expects the lawyer to act responsibly and diligently to prosecute or defend a cause, to offer timely and sound advice, to minimise costs and achieve the best possible outcome.
Unlike the circumstances giving rise to the present application, the client would expect-

His solicitor to appear when he knew a matter was listed;
Arrange for someone else to appear, as opposed to "attending" the Court or Tribunal, if he is aware of the listing but is unable to appear;

Apply to reinstate a dismissed application when he knew the application was dismissed, within applicable time limits.

The client would not expect his solicitor to argue that there was a deficiency in the notice of a hearing when the address recorded on the notice is identical to that which is recorded on the solicitors own letterhead.
The applicant's solicitor has now submitted, despite representations prior to the Oliver application, that these applications are different, that they involve different factual circumstances, that they are not affected by the Oliver decision and that they have merit. If this is so, I am concerned that these applications were not listed much earlier because the representatives successfully established that Oliver was the "lead" case.
The applicant's themselves have not been responsible for the above tardiness or omissions. There is nothing to indicate that they have abandoned their applications. Case management considerations alone dictate that the applications should not be reinstated but case management and the objective of expediency is not a substitute for justice or fairness. Additionally, I can find nothing, which would indicate prejudice to the respondent upon these applications being reinstated.
Reinstatement was extensively discussed by Deputy President Forgie in Re Oates and Secretary, Department of Social Security (1994) 37 ALD 241. The application then however was unsuccessful because it was found that the claim had no merit. (Refer also, Re Booth & Secretary, Department of Social Security - unreported decision of Senior Member Lewis delivered 10 January 1998: AAT No. 12602).
If Mr Baring's submissions are accurate, and these applications can be distinguished from Oliver, I could not find that they had no merit. In fact, I do not now know what is being pursued. Maybe if there is compliance with Directions which will be issued, more will be learnt. In reaching these conclusions I have been mindful of the analysis published in Re Oates.
On balance, particularly now that more is known about the pre-hearing preparation (or absence of it) by the representatives, it probably was an error to dismiss the applications without giving the applicants an opportunity to be heard.
For all of the above reasons, IT IS DIRECTED-
(i)A copy of these reasons for decisions be delivered to the applicants personally and to the representatives of the parties.
(ii)The applicants or their representatives lodge and exchange a Statement of Facts and Contentions, proofs of evidence of witnesses and all other documents upon which reliance will be sought at the hearing within 21 days of the date of this decision.
(iii)Subject to compliance with paragraph (ii), the application be listed for hearing, on a date to be fixed in August or September.
(iv)The respondent shall lodge a Statement of Facts and Contentions, proofs of evidence of witnesses, and all other documents upon which reliance is sought within 21 days of receipt of the documents referred to in paragraph (ii) above.
I certify that the 39 preceding paragraphs are a true copy of the reasons for the decision herein of Mr J. Handley, Senior Member.
Signed:         .....Carolyn Irons..................................................
  Secretary
Date/s of Hearing  19 June 2001
Date of Decision  13 July 2001
Counsel for the Applicant        Mr L. Baring
Solicitor for the Applicant
Counsel for the Respondent    Mr F. Vitale, Australian Government Solicitor
Solicitor for the Respondent