New Access Investment Group Pty Ltd and Commissioner of Taxation (Taxation)
[2017] AATA 63
•25 January 2017
New Access Investment Group Pty Ltd and Commissioner of Taxation (Taxation) [2017] AATA 63 (25 January 2017)
Division:TAXATION AND COMMERCIAL DIVISION
File Number(s): 2016/5182
Re:New Access Investment Group Pty Ltd
APPLICANT
AndCommissioner of Taxation
RESPONDENT
DECISION
Tribunal:Deputy President J W Constance
Date:25 January 2017
Place:Sydney
The time for applying for a review of the objection decision will be extended to close of business 15 February 2017.
................................[sgd]........................................
Deputy President J W Constance
CATCHWORDS
PRACTICE AND PROCEDURE – application for an extension of time – reason for delay – prejudice to the respondent – reasonable prospects of success – extension granted
LEGISLATION
Administrative Appeals Tribunal Act 1975 (Cth) ss 29(7), 29(8)
Income Tax Assessment Act 1936 (Cth) s 175A
REASONS FOR DECISION
Deputy President J W Constance
25 January 2017
INTRODUCTION
In March 2015 the tax representatives of the Applicant Company, New Access Investment Group Pty Ltd, lodged an objection on behalf of the Company to assessments of Goods and Services Tax and administrative penalties made by the Commissioner.
On 21 September 2015 the Commissioner forwarded to the Company, care of its tax representatives, a notice of the Commission’s objection decision and a document setting out the reasons for that decision.
Section 175A of the Income Tax Assessment Act 1936 (Cth) provides that a taxpayer who is dissatisfied with the objection decision may apply to this Tribunal for a review. The application for review is to be made within 60 days after the taxpayer is served with the notice of the objection decision or within such further time as the Tribunal allows. In this case the time for applying for a review expired at about the end of November 2015.
On 22 September 2016 the Company applied to the Tribunal for an extension of time in which to review the objection decision. The Commissioner opposes the granting of the extension of time sought by the Company.
For the reasons which follow the time for applying for a review of the objection decision will be extended to close of business on the 21st day after the publication of these reasons.
BACKGROUND
Mr Yang is a director of two companies – the Applicant Company and a second company, E-Young Investments Pty Ltd.
On 6 May 2016 Mr Yang instructed Waterhouse Lawyers to act for both companies in relation to their dealings with the Commissioner.
The Company’s application for an extension of time was lodged by Waterhouse Lawyers. The reasons for the application were stated to be:
The Applicant did not apply for an application for review of the decision within the prescribed time because he was unaware of what steps to take.
He has now been advised by his lawyers that he has a sound case and wishes to apply to the AAT for a review of the original decision.
The individual being referred to was Mr Yang.
EVIDENCE OF MR YANG
Mr Yang said that when the objection decision was received by the Company’s previous tax representatives, the Company was unable to continue to engage that firm as it did not have the financial resources to do so. He approached Waterhouse Lawyers on behalf of the Applicant as he was “looking for someone to help me”.
Mr Yang has no recollection of having seen previously the Notice of intended legal action dated 26 July 2016 and addressed to the Applicant[1] or the Creditor’s Statutory Demand for Payment of Debt dated 24 August 2016 addressed to the Applicant[2]. He said also that he did not recall seeing a document headed “Fact sheet – Review rights”. He denied having seen a document headed “Fact sheet – Paying your tax liability”. Both of these documents were attached to the objection decision.
[1] Exhibit A2.
[2] Exhibit A3.
EVIDENCE OF MS WATERHOUSE
Ms Waterhouse verified a document produced by her which sets out a chronology of events relating to the objection decision.[3] Based on this document, I am satisfied of the following relevant events:
·6 May 2016: Waterhouse Lawyers instructed by Mr Yang to act for the Applicant and E-Young Investments Pty Ltd;
·12 May 2016: Waterhouse Lawyers sent an email to the Commissioner requesting a meeting with Tax Office staff to discuss liabilities of both companies pending the outcome of the application by an associated company;
·15 May 2016: Waterhouse Lawyers sent an email to the Commissioner stating, in part:
“New Access – We will not be taking any further action at this stage unless the ATO commences debt recovery proceedings. If this occurs, we will then commence proceedings at the AAT. We would then seek agreement to adjourn the matter until judgment in [another matter before the Tribunal]”.
In this other matter that she refers to in her email, Ms Waterhouse also acts for the applicant. The Commissioner is the respondent in that application.
·16 May 2016: a discussion took place between Ms Waterhouse and Mr Morris of the Australian Government Solicitor’s Office concerning the possibility of a meeting to discuss the affairs of the Applicant and the other two companies;
·22 May 2016: Waterhouse Lawyers recommended to Mr Yang that the Applicant make an application to the Administrative Appeals Tribunal “if the company has any assets”;
·19 September 2016: Waterhouse Lawyers requested the Commissioner to provide information as to the value of assets of the Applicant and which had been “frozen/garnisheed” by the Commissioner.
[3] Exhibit A1.
Ms Waterhouse said that on receiving instructions she advised Mr Yang that the Applicant had a “good case” and that there were “tactical and cost/time efficient reasons” for the Applicant not to have filed the application for an extension prior to 22 September 2016. She was unaware of the advice, if any, given to Mr Yang by the Company’s previous tax representatives concerning the advisability of seeking a review of the objection decision in the Tribunal.
LEGISLATION
Subsections 29(7) and 29(8) of the Administrative Appeals Tribunal Act 1975 (Cth) provide:
(7) The Tribunal may, upon application in writing by a person, extend the time for the making by that person of an application to the Tribunal for a review of a decision (including a decision made before the commencement of this section) if the Tribunal is satisfied that it is reasonable in all the circumstances to do so.
(8) The time for making an application to the Tribunal for a review of a decision may be extended under subsection (7) although that time has expired.
ISSUES FOR DETERMINATION
The Tribunal is given a broad discretion to decide whether an extension of time should be granted. The factors which may be considered are not restricted by the Act which requires a consideration of “all the circumstances”.
The following issues arise in this application.
(a)Is there an acceptable explanation for the delay in making the application for review?
(b)Is there any prejudice to the Commissioner occasioned by the delay?
(c)Does the Company have reasonable prospects of success in an application for review should an extension of time be granted?
DISCUSSION
Issue 1: Is there an acceptable explanation for the delay in making the application for review?
In the application for an extension of time filed by the Company’s solicitors it was stated that the delay was caused by Mr Yang’s ignorance of the steps necessary to seek the review. However this is only a part explanation. The application for an extension of time was lodged more than four months after Waterhouse Lawyers had been instructed to act for the Company. It is clear from the correspondence with the Australian Tax Office that a decision was taken to delay applying to this Tribunal as early as 15 May 2016. This decision accounted for at least four months of the delay in applying.
I accept the evidence of Ms Waterhouse that she believed upon the Tax Office having been made aware of the Company’s intention to apply if necessary, no further steps were needed at that stage. However it is unwise to assume that the Australian Tax Office, or any other proposed respondent, will automatically consent to an extension of time. It is equally unwise to assume that this Tribunal will grant an extension, even if the proposed respondent is aware that an application may be made at some future time.
In this matter I am satisfied that initially an application for review was not made within the prescribed time by reason of Mr Yang’s lack of understanding of the requirements of the legislation combined with the Company’s financial situation which made it difficult for it to obtain representation.
I have taken into account that attached to the notice of objection decision was a Fact Sheet setting out in some detail the review rights of people dissatisfied with the outcome of an objection. This document clearly set out that a person wishing to seek a review should lodge an application within 60 days of having been served with a notice of objection decision. However, I accept Mr Yang’s evidence that he does not recall seeing this document. I note that the notice of objection decision was sent to him as a director of the Company care of the Company’s former tax representatives. This is not to suggest that the Commissioner did not take all reasonable steps to notify Mr Yang, as a director of the Company, of his rights of review.
I am further satisfied that from mid-May 2016 the delay in making an application for an extension of time was caused by Ms Waterhouse’s belief that the Tax Office would consent to an application if necessary.
Although the delay is lengthy I am satisfied that there is a reasonable explanation for it and that, for at least some of the time, the Commissioner was aware that the Company wished to challenge the objection decision.
Issue 2: Is there any prejudice to the Commissioner occasioned by the delay?
It was fairly conceded on behalf of the Commissioner that there was no prejudice to the Commissioner caused by the delay.
Issue 3: Does the Company have reasonable prospects of success in an application for review should an extension of time be granted?
It is apparent from reading the objection decision and the evidence of Ms Waterhouse that the issues which would require determination should an extension of time be granted, may be complex. Whilst it is necessary to consider the Company’s prospects of success, it is not my role at this stage to try to identify and determine those issues, even on a preliminary basis.
It is not essential that an applicant for an extension of time satisfy the Tribunal that it necessarily has reasonable prospects of success. The requirement of the Act is that the Tribunal be satisfied “that it is reasonable in all the circumstances” to extend the time for making an application for review.
Ms Waterhouse is an experienced solicitor who has had experience working in the Tax Office. In these circumstances I accept her evidence that there are issues between the parties as to the amount of tax which is properly payable. I accept also her evidence that the determination of the other matter presently before the Tribunal may lead to a resolution of the dispute between the Company and the Commissioner.
CONCLUSION
In all the circumstances I am satisfied that it is reasonable that the Company be granted an extension of time in which to make an application for a review of the objection decision.
The time in which the Company may apply to the Tribunal for a review of the objection decision made by the Commissioner of Taxation on 21 September 2015 will be extended to close of business on 15 February 2017.
I certify that the preceding 27 (twenty-seven) paragraphs are a true copy of the reasons for the decision herein of Deputy President J W Constance
..................................[sgd]......................................
Associate
Dated: 25 January 2017
Date(s) of hearing: 4 November 2016 Solicitors for the Applicant: Waterhouse Lawyers Solicitors for the Respondent: Australian Government Solicitor
Key Legal Topics
Areas of Law
-
Tax Law
-
Administrative Law
Legal Concepts
-
Judicial Review
-
Procedural Fairness
0
0
0