Phillip Ryan and Deputy Registrar, Administrative Appeals Tribunal

[2012] AATA 302

[2012] AATA 302  

Division	GENERAL ADMINISTRATIVE DIVISION
File Number(s)	2012/0577
Re	Phillip Ryan
APPLICANT
And	Deputy Registrar, Administrative Appeals Tribunal
RESPONDENT

DECISION

Tribunal	Senior Member J F Toohey
Date	18 May 2012
Place	Sydney

The decision is set aside and substituted by a decision that the applicant is eligible to pay a reduced fee.

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

Senior Member J F Toohey

CATCHWORDS

PRACTICE AND PROCEDURE - FEE REDUCTION - application for review of decision - whether payment of application fee would cause financial hardship - no income - few assets - debt - decision under review set aside

LEGISLATION

Administrative Appeals Tribunal Act 1975, s 29

Administrative Appeals Tribunal Regulations 1976, reg 19

CASES

Bailey and Commonwealth Tertiary Education Commission (1986) 12 ALD 165

Re Kabalan (1993) 113 ALR 330
Robert Paterson and Department of Arts, Heritage and Environment (Formerly Department of Home Affairs and Environment) (No 2) (1985) 8 ALD 227

REASONS FOR DECISION

Senior Member J F Toohey

18 May 2012

BACKGROUND

1. In February 2012, Mr Phillip Ryan lodged an application with the Tribunal for review of a decision of the Commissioner for Taxation concerning his taxation assessment.

2. Ordinarily, a fee of $777 is payable for an application of the kind lodged by Mr Ryan: regulation 19 of the Administrative Appeals Tribunal Regulations1976 (the Regulations). An application is not taken to be made until the fee is paid: s 29A(1) of the Administrative Appeals Tribunal Act1975 (the Act).

3. In his application to the Tribunal, Mr Ryan asked that the fee ordinarily payable for such application be reduced on the ground of financial hardship.  The Deputy Registrar of the Tribunal was not satisfied that payment of the full fee would cause Mr Ryan financial hardship and declined to reduce it.

4. The regulations provide for the application fee to be reduced or waived in some cases.  Relevant to Mr Ryan’s case is sub-regulation 19(6) which provides:

   If the Registrar, a District Registrar or a Deputy Registrar, having regard to the income, day-to-day living expenses, liabilities and assets of a person liable to pay an application fee, considers that payment of the fee would cause financial hardship to the person, the Registrar, District Registrar or Deputy Registrar may order that a fee of $100 is payable instead of the application fee.

   The issue

5. I have to decide whether the fee that would otherwise be payable by Mr Ryan should be reduced to $100 on the ground of financial hardship. 

   Mr Ryan’s financial circumstances

6. When he lodged his application in February 2012, Mr Ryan provided the following information about his financial circumstances:

   (i)he had no income from any source;

   (ii)his day-to-day living expenses amounted to $879 a fortnight;          

   (iii)his assets comprised $50 in cash; household goods worth $500; an interest in a business valued at $9; and balances totalling $11,401 in two bank accounts;

   (iv)he had liabilities of $36,062 comprising $23,279 owing on three credit cards; $3000 owing on another (unspecified) loan; $6,783 owing to the Australian Taxation Office (the subject of the substantive application for review); $1,500 owing to the Child Support Agency; and $1,500 owing to his accountant.

7. At a hearing of the Tribunal, Mr Ryan gave evidence that he has no income.  Since early December 2011, he has been in Canada trying to generate revenue for a form of pre-commitment gaming technology that he is developing.  He says he is eligible for disability support pension in Australia following an aneurism and stroke, and will be eligible in June when he intends returning to Australia.  There is no evidence before the Tribunal about his eligibility for the pension but I accept that, in the meantime, he has no income.

8. Following the hearing, the Tribunal asked Mr Ryan for further information about his financial position, including credit card and bank account statements for the previous three months.  From that information, it appears that from around January to late March 2012:

   (v)his total bank balances decreased by around $6,000, including $1,500 toward the $3,000 unspecified loan; his miscellaneous day-to-day expenses were being paid from his cash reserves and he had no regular source of income;

   (vi)his total credit card debt decreased overall but over the month between his fee reduction application to the end of March it had increased by around $900; he was managing the debt and making the minimum repayments on each card.

   (vii)his liabilities decreased slightly to $35,393 comprising $24,110 owing on four credit cards; $1,500 owing on the unspecified loan; $6,783 owing to the Australian Tax Office; $1,500 owing to the Child Support Agency; and $1,500 owing to his accountant.

   WOULD PAYMENT OF THE APPLICATION FEE CAUSE MR RYAN FINANCIAL HARDSHIP?

9. The Regulations do not define the term financial hardship or outline the factors to be considered when examining the circumstances of an applicant seeking a fee reduction. However, the Tribunal has considered the meaning of financial hardship in the analogous context of s 66(2)(a) of the Freedom of Information Act 1982 and whether the payment of costs, or any part thereof, would cause financial hardship to an applicant.

10. In Robert Paterson and Department of Arts, Heritage and Environment (Formerly Department of Home Affairs and Environment) (No 2) (1985) 8 ALD 227 [at 238], Deputy President A N Hall said that financial hardship “means hardship caused to the applicant by reason of the financial burden of being obliged to meet the costs of the application from its own resources”. He went on to say that the depletion of funds otherwise available to the applicant, in itself, does not constitute financial hardship as “[e]very successful applicant, no matter how wealthy, would suffer financial hardship on that basis” [at 238].

11. A similar point was made in Bailey and Commonwealth Tertiary Education Commission (1986) 12 ALD 165 where it was observed that “financial hardship surely amounts to more than that a person, irrespective of his financial situation, has to meet a charge from his own resources” [at 167]. See also: Sullivan and Department of Industry, Science and Technology Australian Technology Group Pty Ltd (Party Joined) B [1998] AATA 313 [at 19]; Van De Wiel and Civil Aviation Safety Authority (2006) 93 ALD 163 at [168] and “WAJ” and Commonwealth Ombudsman; Brown (Party Joined) [1999] AATA 13 [at 21].

12. In the context of a similar fee reduction/waiver provision in Regulation 183 of the Bankruptcy Rules, Gummow J observed that “[a]ny condition which presses with particular asperity upon a person may be described as a hardship”: Re Kabalan (1993) 113 ALR 330 [at 332].

    CONSIDERATION

13. The information provided by Mr Ryan is consistent with that disclosed on his fee reduction application form. With living expenses of around $440 per week, one would expect his assets to be reduced by approximately $5,720 over 13 weeks. This is consistent with the reduction in his bank balance over January to March 2012. At this rate of expenditure, one would expect his cash reserves to be completely depleted by around August or September 2012.

14. The bank statements do not reveal a regular source of income and Mr Ryan’s day-to-day living expenses are not extravagant. He apparently has no assets other than the money in his bank accounts. Added to this, he has significant liabilities and is only meeting the minimum obligations in respect to repaying his debts.  His is not a case in which payment of the $777 application fee would merely deplete his resources or available funds.  He apparently has no current means of replenishing this money or supporting an increased debt, meaning that payment of the full fee would hasten the exhaustion of his limited funds.

    CONCLUSION

15. I am satisfied, on the additional evidence that Mr Ryan has now provided, that he is experiencing straightened financial circumstances and that the payment of the $777 application fee will cause financial hardship.

16. The decision of the Deputy Registrar dated 10 February 2012 is set aside and substituted by a decision that Mr Ryan is eligible to pay a reduced fee of $100 due to financial hardship.

I certify that the preceding 16 (sixteen) paragraphs are a true copy of the reasons for the decision herein of Senior Member J F Toohey.

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

Associate

Dated  18 May 2012

Date(s) of hearing

9 March 2012

Date final submissions received

4 April 2012

Applicant

Respondent

In person

In person