Quirky Mama Productions Pty Ltd (Subject to Deed of Company Arrangement) and Screen Australia (Taxation)

[2024] AATA 173

Quirky Mama Productions Pty Ltd (Subject to Deed of Company Arrangement) and Screen Australia (Taxation) [2024] AATA 173 (8 February 2024)

Division:TAXATION AND COMMERCIAL DIVISION

File Number(s):      2021/9123

Re:Quirky Mama Productions Pty Ltd (Subject to Deed of Company Arrangement)

APPLICANT

AndScreen Australia

RESPONDENT

DECISION

Tribunal:Deputy President Bernard J McCabe

Date:8 February 2024

Place:Sydney

1.Pursuant to s 43AA the text of the decision dated 29 September 2023 be altered to say:

The Tribunal varies the decision under review so that the amount of qualifying Australian production expenditure (QAPE) is $9,920,738.

..............................SGD..........................................

Deputy President Bernard J McCabe

Catchwords

PRACTICE AND PROCEDURE – Slip Rule – s 43AA – Where an inconsistency exists between the decision and written reasons – Discretion

Legislation

Administrative Appeals Tribunal Act 1975

Income Tax Assessment Act 1997

Cases

Re Dillon and Department of Trade and Ors (No 2) (1986) 9 ALD 187

REASONS FOR DECISION

Deputy President Bernard J McCabe

8 February 2024

1. l delivered a decision accompanied by a statement of reasons in these proceedings on

   
   

   29 September 2023. Screen Australia, the respondent, has asked the Tribunal to make an alteration to the text of the decision pursuant to s 43AA of the Administrative Appeals Tribunal Act 1975 (the AAT Act) because it says the there is an inconsistency between the text of that decision and the statement of reasons. I received written submissions and then had a brief oral hearing to identify whether there was an inconsistency and (if there was) consider if I could or should use the so-called ‘slip’ rule in s 43AA to amend the text of the decision.

2. I am satisfied there is an inconsistency between the reasons and the text of the decision, and that it is appropriate to use s 43AA to make an amendment. I explain my reasons below.

   What happened?

3. The proceedings related to the decision of Screen Australia dated 1 October 2021 to issue a final certificate under s 376-75(1) of the Income Tax Assessment Act 1997. Screen Australia had determined the applicant, a film producer, had incurred qualifying Australian production expenditure (QAPE) in the amount of $10,127,187 when producing a feature film. The amount referred to in the certificate entitled the producer to a tax offset. The applicant challenged the certificate: it said it was entitled to a much larger amount in respect of QAPE.

4. At the hearing, the evidence focused on several large amounts that were claimed by the applicant which Screen Australia had declined to accept. The parties conferred following the hearing after all the evidence had been provided. In an email communication dated 14 June 2023, the respondent’s solicitor wrote to the Tribunal with the consent of the applicant. The email explained:

   …the parties have agreed on the attached calculations, which set out the alternative outcomes if either the applicant’s or respondent’s contentions are wholly accepted. If there is a mixed outcome on the issues at hand, the parties may need to be heard further.

5. The attached schedule of calculations confirmed what had become apparent during the hearing: namely, that Screen Australia had come to accept the applicant was entitled to QAPE of $9,299,070 which related to items of expenditure that were not in dispute. There remained a live dispute over the QAPE allowable in respect of the following items:

   Claimed by applicant             Allowed by respondent

   Green Smoke Digital             $20,291,065  $254,168

   Producer fees  $700,00  $260,000

   Director/writer fees                $825,000  $100,000

6. In that document, it was confirmed both parties agreed an additional audit fee in the amount of $7500 was properly claimed as QAPE.

7. The email dated 14 June confirmed the position Screen Australia had taken in the proceedings was less favourable to the applicant than in the reviewable decision where Screen Australia had found the QAPE was $10,127,187.

8. In the reasons for decision, I reviewed the evidence and submissions and made findings of fact. In substance, I accepted the respondent’s case. Under the heading ‘Conclusion’, I summarised those findings as follows:

   126.     Screen Australia has conceded that:

   ·an amount of $9,299,070 that was originally claimed as QAPE is not in dispute in these proceedings;

   ·an audit fee in the amount of $7500 that was not included in the original claim should now be included.

   127.In addition, I am satisfied the following amounts were incurred in the relevant sense so they form part of QAPE:

   ·$254,168 paid to Green Smoke as the production proceeded;

   ·$260,000 in producers’ fees paid to Ms Imrie and Ms Sparke; and

   ·$100,000 in director’s fees that were paid to Mr Sparke.

   128.     The reviewable decision should be varied in accordance with these findings.

9. The evidence that supported those conclusions and the reasoning was set out earlier in the reasons. The reasons were published with the decision on 29 September 2023.

10. Screen Australia wrote to the Tribunal after the decision and reasons were published. It noted the decision read:

    Pursuant to ss 43(1) of the Administrative Appeals Tribunal Act 1975 the decision of the Respondent made on 1 October 2021 is varied so that the following additional amounts form part of QAPE:

    ·     $254,168 paid to Green Smoke as the production proceeded;

    ·     $260,000 in producers’ fees paid to Ms Imrie and Ms Sparke; and

    ·     $100,000 in director’s fees that were paid to Mr Sparke.

    The decision is otherwise affirmed.

11. Screen Australia pointed out the reviewable decision provides for QAPE of $10,127,187, which was no longer the respondent’s position at the hearing. That evolved position was apparent at the hearing and confirmed in the email of 14 June 2023. Screen Australia argues it was clear from the reasons for decision that I had acknowledged and accepted that was the respondent’s position, and that I had made findings consistent with that case. But Screen Australia says the text of the decision does not accurately capture what is said in the statement of reasons.

12. As it happens, I am satisfied there is an inconsistency between what I hoped was a clear statement of reasons (summarised in paras [126]-[128]) and the text of the decision. That is regrettable. The question now becomes: what, if anything, can be done to address the problem?

    Correcting the record

13. Screen Australia says I should use the power in s 43AA(1) of the AAT Act to correct the text of the decision so it conforms to what is said in the statement of reasons. Specifically, Screen Australia says the Tribunal’s decision on review should vary the reviewable decision so that it determines the total amount of QAPE to be $9,920,738 on the assumption that amount is comprised of:

    ·$9,299,070 paid for items that were not in dispute at the hearing;

    ·$7500 in respect of the audit fee which the parties agreed on; and

    ·the amounts of $254,168 for Green Smoke Digital, $260,000 for producers’ fees and $100,000 for writer/director’s fees.

14. The applicant disagreed, saying a change of that nature fell outside the purpose of the slip rule which was available to correct minor errors: see Re Dillon and Department of Trade and Ors (No 2) (1986) 9 ALD 187.

15. I am conscious the power in s 43AA must be exercised with care. It is meant to cover accidental errors that are properly characterised as ‘slips’. The provision does not provide a licence to revisit and remake the decision. That said, it is important to have careful regard to the text of the provision. In her oral submissions, Ms Winnett (counsel for Screen Australia) pointed to s 43AA(3)(b) which provided an example of an obvious error that might be correctable using the power. The sub-section reads:

    (3)  Examples of obvious errors in the text of a decision or statement of reasons are where:

    …

    (b)  there is an inconsistency between the decision and the statement of reasons.

16. Ms Winnett argued the example referred to in the statute is directly applicable in this case. The statement of reasons articulates a clear outcome and the text of the decision recorded on the cover is inconsistent with what the Tribunal plainly intended.

17. The power is a discretionary one, even so. Screen Australia says it would be wasteful to require it to file an appeal to bring about a change in circumstances where (a) the slip rule in s 43AA provided a satisfactory remedy, and (b) the applicant had already decided against appealing the substance of the decision.

18. The applicant points out the decision not to appeal was made when the company was subject to a deed of company arrangement last year. Mr Barber, who appeared for the applicant, said the company was now back in the hands of its directors who might take a different view on whether to appeal – but he also argued the company might be disadvantaged should I make a change because the appeal period has passed.

19. Ms Winnett pointed out s 44(2A) of the AAT Act permitted the Court to extend time for an appeal, and s 44(2B)(b) provides:

    (2B)  In the interest of justice, the grounds on which the Federal Court of Australia may allow further time under paragraph (2A)(a) include, but are not limited to, the following grounds:

    …

    (b)  the text of the decision or a statement of reasons for the decision has been altered under section 43AA.

20. While the Court is not obliged to allow an extension in those circumstances, it can certainly do so. (Indeed, making a correction pursuant to s 43AA might advantage the applicant if it were minded to revisit the question of an appeal now it is back in the hands of its directors.)

    Conclusion

21. I am satisfied it would be proper to exercise the power in s 43AA of the AAT Act to direct the Registrar to alter the text of the decision to resolve an inconsistency with the statement of reasons so that the decision reads:

    The Tribunal varies the decision under review so that the amount of qualifying Australian production expenditure (QAPE) is $9,920,738.

I certify that the preceding 21 (twenty-one) paragraphs are a true copy of the reasons for the decision herein of Deputy President Bernard J McCabe

.................................SGD.......................................

Associate

Dated: 8 February 2024

Date(s) of hearing:	5 February 2024
Solicitors for the Applicant:	Samuel Barber, Nicole Muscat
Counsel for the Respondent:	Celia Winnett
Solicitors for the Respondent:	Sebastian Tonkin, Esther Ting