Re Coshott and Commissioner of Taxation
[2013] AATA 822
[2013] AATA 822
Division TAXATION APPEALS DIVISION File Number(s)
2013/3778
Re
Ljiljana Coshott
APPLICANT
And
Commissioner of Taxation
RESPONDENT
DECISION
Tribunal The Hon. Brian Tamberlin, QC, Deputy President Date 20 November 2013 Place Sydney The Tribunal does not have the power to grant a stay of the reviewable objection decision.
....................[sgd]....................................................
The Hon. Brian Tamberlin, QC, Deputy President
CATCHWORDS
PRACTICE AND PROCEDURE – stay application – substantive proceedings seek review of an objection decision made by the Commissioner of Taxation – whether Tribunal has the power to grant a stay – modification of the Administrative Appeals Tribunal Act 1975 by the Taxation Administration Act 1953 – Tribunal has no power to grant stay
LEGISLATION
Acts Interpretation Act 1901 s 2B
Administrative Appeals Tribunal Act 1975 ss 25, 41
Taxation Administration Act 1953 ss 14ZZA, 14ZZB
CASES
Re The Trustee for the Confidential Trust and Commissioner of Taxation [2013] AATA 682
SECONDARY MATERIALS
Taxation Laws Amendment Bill (No. 3) 1991 (Cth), Explanatory Memorandum
REASONS FOR DECISION
The Hon. Brian Tamberlin, QC, Deputy President
20 November 2013
Mrs Coshott seeks review of a decision of the Respondent made on 21 June 2013 that she had made a capital gain of $175,000 in respect of the income tax year ended 30 June 2008. This gain arose from a Deed of Release made in September 2007 by way of a settlement payment. That review application is presently pending in this Tribunal. Mrs Coshott seeks a stay of the Respondent’s decision pending the hearing of the substantive review application on the ground that her objection should have been allowed, and that enforcement of the assessment would defeat the utility of the appeal.
The application for a stay is made pursuant to s 41 of the Administrative Appeals Tribunal Act 1975 (the AAT Act), which relevantly provides:
41 Operation and implementation of a decision that is subject to review
(1)Subject to this section, the making of an application to the Tribunal for a review of a decision does not affect the operation of the decision or prevent the taking of action to implement the decision.
(2)The Tribunal may, on request being made, as prescribed, by a party to a proceeding before the Tribunal (in this section referred to as the relevant proceeding), if the Tribunal is of the opinion that it is desirable to do so after taking into account the interests of any persons who may be affected by the review, make such order or orders staying or otherwise affecting the operation or implementation of the decision to which the relevant proceeding relates or a part of that decision as the Tribunal considers appropriate for the purpose of securing the effectiveness of the hearing and determination of the application for review.
…
The Respondent opposes the application on the ground that the Tribunal has no power to grant a stay pursuant to the above provisions. The Commissioner relies on s 14ZZB of the Taxation Administration Act 1953 (the TAA) which provides:
14ZZB Sections 27, 28, 41 and 44A of the AAT Act not to apply to certain decisions
(1) Sections 27 and 41 of the AAT Act do not apply in relation to:
(a) a reviewable objection decision; or
(b) an extension of time refusal decision.
…
Section 14ZZA of the TAA provides that the AAT Act applies in relation to the review of reviewable objection decisions subject to the “modifications” set out in the Division, which includes s 14ZZB.
The substance of the Respondent’s submission is that the Tribunal has no power to grant a stay in respect of a reviewable objection decision, and the substantive application by Mrs Coshott is an application in respect of a reviewable objection decision. There is no dispute that the substantive application is in respect of a “reviewable decision”.
The Applicant submits that s 14ZZB is not properly characterised as a “modification” of the AAT Act, but on its proper characterisation it is an exclusion. Therefore, because it is not a “modification”, then by reason of s 14ZZA it cannot have any application. This is said to be because the AAT Act does not apply subject to “exclusions”, but only to “modifications”. The notion of a “modification” involves the continued operation of at least part of that which has been modified whereas “exclusions” does not. The submission, in effect, is that the language of s 14ZZA controls the interpretation of s 14ZZB.
The Applicant refers to and relies upon s 2B of the Acts Interpretation Act 1901 (the Interpretation Act) which provides that the expression “modifications” in relation to a law includes additions, omissions and substitutions. The definition applies to all Commonwealth legislation. The Applicant submits that because s 14ZZB amounts to a total “exclusion” of s 41 then it cannot be properly characterised as an “addition”, “omission” or “substitution” within the meaning of the definition in the Interpretation Act. It should be noted that s 2B is an “inclusive” and not an exhaustive definition of the expression “modifications”.
Another relevant provision is s 25(6) of the AAT Act, which provides:
25 Tribunal may review certain decisions
…
Enactment may add to, exclude or modify operation of certain provisions
(6)If an enactment provides for applications to the Tribunal:
(a) that enactment may also include provisions adding to, excluding or modifying the operation of any of the provisions of sections 27, 29, 32, 33 and 35 or of subsection 41(1) or 43(1) or (2) in relation to such applications; and
(b) those sections and subsections have effect subject to any provisions so included.
The Applicant submits that s 25(6) of the AAT Act lends further support to the argument that an “exclusion” is different to a “modification” because there is express and separate reference to the terms “excluding” or “modifying” in relation to s 41(1). Because different terms are used it is said the two expressions cannot overlap.
REASONING ON APPLICATION FOR STAY
There are a number of substantial difficulties in the submissions advanced on behalf of the Applicant and these are as follows.
Firstly, the language of s 14ZZB is clear and unequivocal and expressly provides that s 41 of the AAT Act does not apply in relation to a reviewable objection decision. There is no ambiguity in this language.
Secondly, s 14ZZB is not expressed to be subject to the provisions of s 14ZZA. The latter section applies the AAT Act subject to the “modifications” set out in’ the Division. It does not say that the Division only applies in relation to “modifications”. Moreover, since s 14ZZB is not expressed to be subject to s 14ZZA, it therefore applies of its own independent force and in its own specific terms and is not constrained by the expression “modifications” in s 14ZZA.
Thirdly, s 14ZZA is concerned with modifications to the AAT Act and it is not a direction in terms to modifications to specific provisions of the AAT Act. Exclusion of the power to grant a stay under s 41 of the AAT Act, in my opinion, can properly be described as a “modification” of the AAT Act in that it provides that a particular section of the AAT Act is not to apply.
Fourthly, the total exclusion of the power to grant a stay in respect of a reviewable objection decision can properly be described as an “omission” from the application of the AAT Act within the meaning of s 2B of Interpretation Act because as a consequence the AAT Act applies with the “omission” of s 41.
Fifthly, insofar as there may be any ambiguity arising from the expression “modifications” and the definition in s 2B of the Interpretation Act the Explanatory Memorandum for the 1991 Bill, amending the TAA, makes it quite clear in paragraph 26.25 that it is intended to totally exclude the application of s 41 of the AAT Act in respect to applications for review of reviewable objection decisions.
Sixthly, s 25(6) of the AAT Act is an empowering provision and not a restricting provision and operates to enable enactments such as the TAA to include provisions “adding to”, “excluding” or “modifying” the operation of s 41(1) and therefore this provision does not in any way assist the Applicant’s submissions.
Finally, the ordinary English meaning of the word “modifying” is sufficiently broad to include an “exclusion” of the operation of s 41.
I note that the same conclusion, namely that s 14ZZB operates to prevent a stay of a reviewable objection decision was reached by Deputy President Forgie in Re The Trustee for the Confidential Trust and Commissioner of Taxation [2013] AATA 682. The gravamen of that decision is that notwithstanding that s 25(6) might be thought to suggest that only limited modifications may be made to the operation of the AAT Act, Parliament has clearly intended to change aspects of that framework in respect of the TAA provisions. It is clear that the express provisions of s 14ZZB must prevail over the dubious and generalised implications sought to be drawn by the Applicant from the wording of s 25(6) of the AAT Act and/or s 14ZZA of the TAA.
CONCLUSION
The above considerations lead me to the conclusion that s 14ZZB of the TAA applies in this case according to its express terms and operates to exclude any power in the Tribunal to stay the operation of the reviewable decision.
The decision of the Tribunal therefore is that the Tribunal has no power to entertain the application for a stay on behalf of Mrs Coshott and the application for a stay is therefore dismissed.
I certify that the preceding 20 (twenty) paragraphs are a true copy of the reasons for the decision herein of The Hon. Brian Tamberlin, QC, Deputy President ........[sgd]................................................................
Associate
Dated 20 November 2013
Date of hearing 27 August 2013 Date final submissions received 3 September 2013 Advocate for the Applicant R G Coshott Advocate for the Respondent Ms K Lajara, Australian Taxation Office
3
1
0