Parr and Commissioner of Taxation (Taxation)
[2021] AATA 2038
•21 January 2021
Parr and Commissioner of Taxation (Taxation) [2021] AATA 2038 (21 January 2021)
Division:TAXATION AND COMMERCIAL DIVISION
File Number(s): 2019/8423; 2019/8728; 2020/0734 – 37;
Re:Ronald Parr
APPLICANT
AndCommissioner of Taxation
RESPONDENT
DECISION
Tribunal:Deputy President Bernard J McCabe
Date:21 January 2021
Place:Perth
The Tribunal will not dismiss the application pursuant to s 42A(5) of the Administrative Appeals Tribunal Act 1975 (Cth).
The applicant must file a statement of facts, issues and contentions and all material on which it intends to relay at a hearing, by 6 March 2021.
.................................SGD.......................................
Deputy President Bernard J McCabe
Catchwords
PRACTICE AND PROCEDURE – application for dismissal under section 42A(5) of the Administrative Appeals Tribunal Act 1975 – whether the applicant has failed to proceed with his application – whether the applicant has failed to comply with Tribunal directions – discretion to dismiss an application is enlivened – whether dismissal is appropriate – extension to comply with directions granted
Legislation
Administrative Appeals Tribunal Act1975 (Cth) s 42A(5)
Taxation Administration Act 1953 (Cth) s 14ZZKIncome Tax Assessment Act 1936 (Cth) s 167
Cases
Guse v Comcare (1997) 49 ALD 288; 25 AAR 477
Re Taylor and Comcare [2020] AATA 430REASONS FOR DECISION
Deputy President Bernard J McCabe
21 January 2021
Ronald Parr is in gaol. He is also trying to prosecute a multi-faceted argument over his taxation affairs with the Commissioner of Taxation. At the end of 2019, Mr Parr commenced proceedings in the Tribunal to challenge objection decisions made in relation to assessments issued with respect to the 2009 to 2014 years of income.
There has been substantial delay in the conduct of those proceedings. Mr Parr has repeatedly failed to comply with directions to file his statement of facts, issues and contentions and the material he intends to rely upon at a hearing. I must now decide whether the proceedings should be dismissed pursuant to s 42A(5) of the Administrative Appeals Tribunal Act 1975 (Cth) (the AAT Act) in light of the way the proceedings have been conducted.
The Commissioner did not make the application for dismissal but agreed in submissions that the proceedings should be dismissed. After considering submissions and all the circumstances, I have decided it is appropriate to provide the applicant with one further opportunity to progress the case by providing the material in question. I explain my reason below. I will start by discussing Mr Parr’s circumstances (including the wider context, which includes Federal Court proceedings commenced by the Commissioner) before discussing the power to dismiss under s 42A(5) of the AAT Act and the particular facts which are said to enliven the discretion. I will then discuss how I have exercised the discretion.
BACKGROUND
Mr Parr did not have legal representation when he commenced proceedings in the Tribunal in December 2019. He was (and is) serving a term of imprisonment at a gaol located outside Perth. He does not have ready access to books and papers that might be relevant to these proceedings. It stands to reason he is likely to have difficulty preparing his case. With those difficulties in mind, the Tribunal referred Mr Parr to a free taxation advice clinic conducted by Curtin University so he might obtain assistance. Students at the clinic and their supervisors have been able to provide some help, and I understand some lawyers have acted for Mr Parr on a pro bono basis in the process. More recently, Mr Parr has been represented by a firm of solicitors that is also acting in other proceedings on behalf of Mr Parr and members of his family. As a practical matter, I was told Mr Parr continued to rely on assistance provided by the Curtin University clinic to assemble evidence and prepare an argument in his case before the Tribunal.
The matter came on for a case management directions’ hearing on 15 May 2020. I made directions on that occasion requiring the Commissioner to file any supplementary T documents by 29 May 2020. While the applicant bears the onus of proof in this application, I was satisfied it would assist the applicant (and ultimately the Tribunal) if the Commissioner took the lead in the case. In those circumstances, I directed the Commissioner to file and serve a statement of facts, issues and contentions by 12 June 2020. I also directed Mr Parr to file his statement of facts, issues and contentions and the evidentiary material he proposed relying upon by 17 July 2020. That gave Mr Parr some extra time to prepare his case with the assistance he was being provided on a pro bono basis.
The Commissioner did as he was required under the direction but neither the applicant’s statement of facts, issues and contentions or the evidentiary material were filed by 17 July 2020. I conducted a further directions’ hearing on 24 July 2020 to discuss the way forward. I made revised directions giving the applicant until 2 October 2020 to file and serve (a) his statement of facts, issues and contentions and (b) the evidentiary material he intended to rely upon at the hearing. I noted at the directions hearing that any further request for extensions of time would need to be supported by an affidavit explaining the circumstances. I also indicated I expected the matter should be ready for hearing at the end of 2020.
Mr Parr failed to file the material as required by 2 October 2020. It follows he failed to comply with the directions made on 27 July 2020. On 12 October 2020, I held a further directions’ hearing to discuss the non-compliance. Notwithstanding the applicant’s failure to provide an affidavit explaining what had happened, I agreed to allow him yet another opportunity to file a statement of facts, issues and contentions and his evidentiary material. The new deadline was 26 October 2020.
Mr Parr failed to comply with that direction as well. On 2 November 2020, I held a further directions hearing. Mr Walt, who appeared for the applicant on that occasion, asked for a two-week adjournment to seek instructions from his client. I was told it was expected it would take six to nine months to review the applicant’s affairs and prepare his case. Mr Walt mentioned at the directions hearing that one of the key staff at the Curtin clinic was on leave. She had been assisting with the case was and her likely contribution was said to be important. I declined the adjournment and instructed the parties to prepare for a dismissal hearing in light of the non-compliance. That dismissal hearing was subsequently listed for 15 January which provided Mr Parr and his representatives with an opportunity to prepare submissions and, presumably, to file as much of the outstanding material as possible.
Mr Walt appeared at the dismissal hearing on 15 January. I was not provided with submissions from the applicant in relation to dismissal under s 42A(5) of the AAT Act as I had requested, and there was no affidavit in support that might explain the circumstances leading to the delay. The applicant had not taken the opportunity (such as it was) to file any of the outstanding evidentiary material. There was a letter from Mr Walt’s firm dated 18 December 2020 provided along with a document titled ‘Preliminary statement of facts, issues and contentions – dismissal hearing’. The letter repeated the request that the matter be adjourned for up to nine months to permit the applicant to re-lodge tax returns for the years in question and to avoid costly litigation. The letter explained the request was reasonable because of the practical difficulties the applicant experienced as a result of his incarceration, and because:
1Incorrect information was previously provided to the Australian Taxation Office ("ATO") by Ronald's previous accountant, Mr Cyril Luc, acting without Ronald's instruction. Mr Luc has since been de-registered and is no longer practicing as an accountant.
2Although the formal assessment objection with the ATO was being undertaken by Ronald's previous lawyer, at that time Annette Morgan ("Annette") of the Curtin Tax Clinic was not assisting with the accounting aspects of the matter. As such, various issues had not been identified as to the information provided and the previous lawyers were unknowingly acting on incorrect information.
3 Following Annette's involvement, Annette has identified various issues and errors relating to Ronald's past tax returns.
4In order to clarify amounts owed and to gain a clear understanding of the matter, we need to revisit the base documentation and correct any incorrect information. This will allow the parties to move forward to a settlement with clarity and surety of any outstanding amounts.
5All parties will benefit from an extension of time and the ATO will not suffer any detriment in granting a further extension.
6The parties will be prevented from expending further time and money on costly litigation.
7The ATO's interest will be protected under the proposed settlement offer set out below at paragraph 4.
The ‘preliminary statement of facts, issues and contentions’ contained some more detail about the specific errors and mischaracterisations of transactions alleged by the applicant. The document was essentially a draft that would not pass muster as a statement of facts, issues and contentions in the ordinary course. The document noted some material that was relevant to the proceedings had been seized by the police and not returned despite repeated requests. The document also pointed out Mr Parr had been held in isolation in gaol for an extended period, which presumably made it even more difficult for him to access legal and accounting advice. It would have been helpful to have more evidence about the period during which the applicant was held in isolation, as distinct – I assume – from the general prison population. I note the document suggests the applicant was held (and is being held) in prison farms, which are presumably ‘minimum security’ facilities.
Mr Walt pressed his request for an adjournment. He conceded the discretion to dismiss the proceedings under s 42A(5) had been enlivened in circumstances where the applicant had failed to comply with directions.
I should say at once the discretion to dismiss in s 42A(5) is not automatically available simply because an applicant fails to comply with a direction. The discretion to dismiss referred to in s 42A(5) is only enlivened if the Tribunal is satisfied the applicant failed within a reasonable time:
(a)to proceed with the application; or
(b)comply with a direction.
It follows the Tribunal must assess the length of any delay in all the circumstances of the case. A brief period of delay may be unreasonable in some circumstances, whereas lengthy delays might not be unreasonable in different circumstances.
The circumstances that are relevant to the assessment of the delay in this case include:
(a)The fact the applicant has been hitherto unable to engage legal representation but is being assisted by external bodies on a pro bono basis. An absence of legal representation is not in itself unusual but part of the delay since November last year has been associated with the unavailability of his pro bono assistance.
(b)The applicant is in gaol and the gaol is in a remote location. His confinement means he is unable to access and assemble evidence himself or readily provide instructions to those acting on his behalf. The process appears to be especially restrictive in circumstances where I am told the applicant’s mail is inordinately delayed by the prison and he has limited telephone access. There is also a suggestion – although no evidence as such – he has been subject to more restrictive confinement that one might expect in a prison farm. I note there was no suggestion at the dismissal hearing that access to the applicant has been more restricted than usual because of restrictions associated with the Covid-19 pandemic. It is a matter of public record that Western Australia has remained relatively Covid-free although it is also a matter of public record that prisons around Australia have imposed restrictions on the interface between inmates and members of the community who might act as conduits for infection.
(c)The applicant is involved in other proceedings.
(d)The evidence which is likely to be required to make out the case includes detailed financial information and other documents that may take some time to assemble in the best of circumstances, let alone where the applicant’s relationship with former advisers appears to have broken down.
These proceedings must also be understood in a wider context. That context includes debt recovery proceedings were commenced in relation to the assessed amounts some time ago. As part of that debt recovery process, the Commissioner approached the Federal Court in 2018 seeking orders in relation to property that Mr Parr had allegedly transferred to family members. I was told Mr Parr disputed the underlying assessments. That dispute over the assessments prompted the current application to the Tribunal at the end of 2019. It was obviously important for the Tribunal to deal expeditiously with the application for review in those circumstances.
I was told Mr Parr has also had difficulty completing steps in the Federal Court litigation. I note his lawyers have made a similar request for an adjournment of those proceedings. I was told the Federal Court has agreed to give the applicant until 6 March 2021 to file any further evidence he wishes to rely upon in a hearing that is expected to be listed in the latter part of that month. It follows the applicant has had some limited success in convincing the Federal Court to allow him more time. Given that timetable and all that has occurred – and not occurred – in these proceedings, it will be impossible for the Tribunal to complete its review before the Federal Court proceeds to deal with the Commissioner’s application with respect to the transferred property. That is unfortunate, not least for Mr Parr.
Mr Scovell, who appears for the Commissioner in both sets of proceedings, explained to me it was hoped the Tribunal would have been able to finalise its review of the objection decisions since that would impact on the quantum of the applicant’s debt to the Commissioner. Indeed, I was told the Federal Court proceedings might already have been delayed in the hope the Tribunal would have completed its review. It follows there is a danger the delay in the Tribunal has caused (or might even be used to bring about) delay in the other proceedings, and the pressure of other proceedings may have caused delay in the Tribunal’s review.
There is no doubt Mr Parr has repeatedly failed to comply with directions made by the Tribunal.
SHOULD THE TRIBUNAL EXERCISE THE DISCRETION TO DISMISS?
When I have regard to all the circumstances, I now accept Mr Parr’s repeated failure to comply with the directions – in particular the directions of 27 July and 12 October 2020 – has not yet reached the point where that failure is unreasonable. I do so in light of the formidable obstacles to his participation in these proceedings, although I note he has also been provided with extra opportunities and assistance to advance his case in response to those challenges. It is a close run thing in my mind – perhaps more finely balanced than I originally anticipated when I set the matter down for a dismissal hearing – but I am ultimately persuaded to resist exercising the discretion to dismiss in light of Mr Walt’s assurance the case would soon be in order once the staffer from the Curtin clinic was available. I should stress I am not acceding to Mr Walt’s request for a lengthy period to prepare the case: a lengthy delay would be unreasonable. I note that approach appears to be consistent with that of the Federal Court which has allowed the applicant a further limited period in which to complete steps before those proceedings go to a hearing.
I have decided to allow Mr Parr a further opportunity to provide a statement of facts, issues and contentions and the material he intends relying upon at a hearing. He must provide all that by 6 March 2021. It almost goes without saying that further extensions are unlikely and that, in the event of further non-compliance, the Tribunal might revisit the question of dismissal or simply list the matter for hearing, whether the applicant is ready or not.
I certify that the preceding 20 (twenty) paragraphs are a true copy of the reasons for the decision herein of Deputy President Bernard J McCabe
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Associate
Dated: 21 January 2021
Date(s) of hearing: 15 January 2021 Applicant’s Representative: Mr Frederick Walt Solicitors for the Applicant: Cooper Web Lawyers Counsel for the Respondent: Mr James Scovell Solicitors for the Respondent: Australian Government Solicitor
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