Paper to Paper International Pty Ltd and Anor and Commissioner of Taxation

[2008] AATA 837

Administrative Appeals Tribunal

INTERLOCUTORY DECISION AND REASONS FOR DECISION [2008] AATA 837

ADMINISTRATIVE APPEALS TRIBUNAL      )    No 2007/5929 to 5933

)    And:

GENERAL ADMINISTRATIVE DIVISION        )    No 2008/4112 to 4116

RePaper to Paper International Pty Ltd

Applicant

And    Commissioner of Taxation

Respondent

And:

ReGraeme Alan HOLLAND

Applicant

And    Commissioner of Taxation

Respondent

INTERLOCUTORY DECISION

TribunalProfessor GD Walker, Deputy President

Date19 September 2008

PlaceSydney

DecisionThe interlocutory decision is that:

(1)the hearing dates of 29 and 30 September 2008 are vacated; and

(2)the matters are to be heard together on a date to be fixed.

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

Professor GD Walker
  Deputy President

CATCHWORDS – Practice and procedure – hearing matters concurrently – tribunal must pursue the objective of providing a mechanism of review that is fair, just, economical, informal and quick – matters are to be heard together on a date to be fixed.

…

RELEVANT ACT/S:

Administrative Appeals Tribunal Act 1975 (Cth) (the AAT Act): ss 2A, 33,

Taxation Administration Act 1953 (Cth) (the TAA): ss 14ZYA

…

REASONS FOR INTERLOCUTORY DECISION

19 September 2008	Professor GD Walker, Deputy President
Basic facts

1. The applicants have applied for a direction under s 33 of the Administrative Appeals Tribunal Act 1975 (Cth) (the AAT Act) that the above matters be heard concurrently on the ground that the evidence will be substantially the same in all the applications and hearing them separately would cause the applicants to incur substantial expense.

2.      The substantive applications arise out of a 10-year personal and business relationship between Mr Graeme Alan Holland and his former de-facto spouse, who formed a two-person company, Paper to Paper International Pty Ltd (originally called Tredex).  Mr Holland’s former de-facto spouse, who has a separate application pending in the tribunal, was the financial controller of the company while Mr Holland was the salesman.

3.      The relationship underwent a difficult separation, in the course of which Mr Holland's accountant allegedly discovered certain financial irregularities in the company’s accounts and made disclosure to the respondent about those matters on 21 August 2006.  As a result of those disclosures, the respondent issued amended assessments to the company on 2 August 2007 and to Mr Holland on 7 August 2007.  Penalties were assessed against both.  At that stage, the matters were running together.

4.      Both the company and Mr Holland lodged objections on 10 September 2007, and on 6 November 2007 the respondent disallowed the company’s objections but made no determination in relation to Mr Holland's.

5. The applicants wished the matters to proceed in parallel, but that became impossible because the respondent had not determined the objections against Mr Holland. The applicant therefore applied to this tribunal for review of the commissioner’s deemed disallowance of the objections under s 14ZYA of the Taxation Administration Act 1953 (Cth) (the TAA). By those means, it was argued, the applicant had brought both matters before the tribunal at the same time, but if the hearing of the company’s matters on 29 and 30 September 2008 were to proceed in isolation, it would be necessary to call identical evidence later, which would be inefficient and inequitable. Hearing the matters together would be preferable to merely relying on the transcript of the earlier proceedings. It would also be more in accordance with the tribunal’s obligations under s 2A of the AAT Act and with the respondent’s obligations under the Legal Services Directions 2005.

6.      The respondent submitted that the applicant was seeking to vacate hearing dates to which he had agreed.  The penalties imposed on the company related to seven wrongly claimed deductions, of which four were made by the company and did not overlap with any matters relevant to Mr Holland.  In relation to the other three deductions, there could be an overlap but it was premature to reach a conclusion on that point.

7.      The application in relation to the company raised only a single issue, whether the penalties imposed in relation to the seven deductions should be further remitted.  The original imposition of the penalties before reduction was not disputed.

8.      Mr Holland's objections, on the other hand, related not merely to the remission of penalties but to the questions of assessment, penalties and remission.  Some aspects related to transactions different from those engaged in by the company.  The controversy in relation to Mr Holland's application implied a substantially longer case.

9.      The company’s case was ready to proceed on dates agreed to by the applicant, and hearing dates are precious.  There was insufficient coalescence between the two sets of cases to justify running them together and the applicant would suffer no prejudice by proceeding as previously arranged.  There could even be a saving in dealing with the matters separately.

10.     To some extent the respondent was still not clear on what the company was alleging and whether it intended to raise other issues.  Nor was it clear whether it planned to rely on the second affidavit of Mr Holland, which raised a wide range of other matters.

11. In reply Mr Richards submitted that the company’s matter was set down for hearing on the basis that the present application for hearing the matters together would be made. It had not been possible to seek to join them earlier because, as the time allowed by s 14ZYA had not expired, Mr Holland's objections were not before the tribunal. Both the tribunal and the respondent’s solicitors were aware of the applicant’s position in that regard.

12.     While some of the seven deductions did not overlap with Mr Holland's objections, they related only to minor side issues involving small penalties.

Consideration

13. Under s 33(1)(b) of the AAT Act, tribunal proceedings are to be conducted with as little formality and technicality as legislative requirements and a proper consideration of the issues permit. At the same time, the tribunal’s Listing and Adjournment Practice Direction of 19 April 2005 states that adjournment applications are not to be granted unless there is good reason.

14. In this case the commonality between the issues in the two sets of applications, while not complete, does appear to be substantial or at least significant. It would be possible if the proceedings were kept separate for the later hearing to have regard to the transcript of the earlier proceedings as the tribunal could make a direction under section 33 of the AAT Act, but that process can itself be time-consuming, especially if material matters or qualifications have not been raised in the earlier proceedings.

15.     Further, it may be slightly overstating the position to say that the applicant agreed to the company’s matters being set down for hearing in September.  According to my note of the 30 June 2008 telephone directions hearing, the applicant argued strongly that the matters should be heard together, and could be once the respondent determined Mr Holland's objections.  At that time the applicant was urging that the matters go to mediation in the first instance rather than be set down for hearing.

16. At that stage Mr Holland could not apply to this tribunal for review because the time allowed to the respondent before deemed disallowance under s 14ZYA did not expire until 3 September 2008.

17.     While there is likely to be some waste of resources incurred by vacating hearing dates for a matter that was ready to proceed, it is likely to be outweighed by the greater efficiency of hearing the matters together and, notably, being able to cross-examine on all related issues at the same time.  Allowing further time for preparation will also permit some issues that are not yet clear to be elucidated.

18.     I therefore direct that the hearing dates of 29 and 30 September 2008 be vacated and that the matters be set down for hearing together at a date to be fixed.

I certify that the 18 preceding paragraphs are a true copy of the reasons for the decision herein of Professor GD Walker, Deputy President

Signed:   ......................[sgd]........................................................
               Renee Wallace, Associate

Date/s of Interlocutory Hearing:    17 September 2008
Date of Interlocutory Decision:     19 September 2008
Solicitor for the Applicant:             Mr Robert Richards, Robert Richards & Assoc
Solicitor for the Respondent:        Mr Stephen Vorreiter, AGS
Counsel for the Respondent:        Mr James Sheller