Shaheed and Tax Practitioners' Board

[2011] AATA 641

Administrative Appeals Tribunal

DECISION AND REASONS FOR DECISION [2011] AATA 641

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No 2011/1434

GENERAL ADMINISTRATIVE DIVISION		)
Re		MOHAMMED SHAHEED

Applicant

And TAX PRACTITIONERS' BOARD

Respondent

DECISION

Tribunal Ms N Isenberg, Senior Member

Date13 September 2011

PlaceSydney

Decision The Tribunal sets aside the summons issued on 8 August 2011.

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

Ms N Isenberg
  Senior Member

CATCHWORDS

PRACTICE AND PROCEDURE - summons for produce of documents - grounds on which a summons may be set aside - adjectival relevance - parameters of abuse of process - whether oppressive - summons set aside.

Administrative Appeals Tribunal Act 1975

Tax Agent (Transitional Provisions and Consequential Amendments) Act 2009

Tax Agent Services Act 2009

Cosco Holdings Pty Ltd v Federal Commissioner of Taxation [1997] FCA 1504; (1997) 37 ATR 432
General Merchandise and Apparel Group Pty Ltd and CEO of Customs [2009] AATA 988; (2009) 114 ALD 289

Otter Gold Mines Ltd v McDonald (1997) 76 FCR 467

Phillips and Inspector-General in Bankruptcy [2011] AATA 432
Shaheed and Tax Agents’ Board of New South Wales [2006] AATA 880; (2006) 92 ALD 758
Shaheed v Tax Agents’ Board of New South Wales [2008] FCA 703; (2008) 72 ATR 1

Shi v Migration Agents Registration Authority [2008] HCA 31; (2008) 235 CLR 286

Trade Practices Commission v Arnotts Ltd (No 2) (1989) 88 ALR 90

VHAU of 2002 v Minister for Immigration and Multicultural Affairs [2003] FCA 376

REASONS FOR DECISION

13 September 2011	Ms N Isenberg, Senior Member
ISSUE

1.On 8 August 2011 the Tribunal, through its standard registry procedures, issued a summons to produce documents at the request of the Applicant.  The party to which the summons was addressed, the Australian Government Solicitor, is the representative of the Respondent in the substantive matter before the Tribunal, and requests that the summons be set aside.

BACKGROUND

2.In the substantive matter before the Tribunal, the Applicant seeks review of a decision of the Tax Practitioners’ Board (the Board) to reject his application for transitional registration as a tax agent under section 20-25(1) of the Tax Agent Services Act 2009 (the TAS Act) and item 13 of schedule 2 to the Tax Agent (Transitional Provisions and Consequential Amendments) Act 2009.

3.The application was rejected, in part, because the Board was not satisfied that the Applicant was a "fit and proper" person (within the meaning of the TAS Act).  The Board was not satisfied that the information provided by the Applicant was sufficient to demonstrate that he is of "good fame, integrity and character" having regard to the previous adverse findings made against him by the Tribunal in Shaheed and Tax Agents’ Board of New South Wales [2006] AATA 880; (2006) 92 ALD 758, in which the Tribunal affirmed the decision not to renew his registration as a tax agent. That decision was upheld by the Federal Court in Shaheed v Tax Agents' Board of New South Wales [2008] FCA 703; (2008) 72 ATR 1.

4.The Board also expressed concern that Mr Shaheed may have been providing tax agent services while unregistered, which is conduct which may affect his good fame, integrity and character; and that he may not have provided independent verification which demonstrated that he was providing a tax agent service in a particular area of taxation laws to a competent standard for a reasonable period before making his application.

5.The application for review was lodged on 13 April 2011.  There the Applicant asserted, relevantly, that errors of fact were made by the Tribunal in its previous decision.

6.On 7 August 2011 the Applicant's solicitor wrote to the Tribunal requesting that the Tribunal issue the summons. As is the Tribunal‘s usual practice, the summons was issued by the (Deputy) District Registrar without it being referred to me or any other member for consideration as to whether or not a direction under section 40(1C) might be appropriate.

7.The summons is directed to the lawyer from the Australian Government Solicitor (AGS) with carriage of this matter on behalf of the Board.  The summons seeks:

(a)the Australian Government Solicitor’s file relating to AAT matter N2005/0166; and

(b)the Tax Agents’ Board’s file relating to AAT matter N2005/0166.

8.A letter accompanying the request for the summons to be issued explained the request for the summons as follows:

The matters embraced by the “T Documents” raise a number of very serious procedural issues with respect to the manner in which this case first proceeded when it was referred to as AAT Reference N2005/0166.  These matters are expected to be pivotal in the instant case.

LEGISLATION

9.Section 40 of the Administrative Appeals TribunalAct 1975 (the AAT Act) relevantly states:

40 Powers of Tribunal etc.

Summons

(1A) Subject to subsection (1B), for the purposes of the hearing of a proceeding before the Tribunal, the member presiding at the hearing, the Registrar, a District Registrar or a Deputy Registrar may summon a person to appear before the Tribunal at that hearing:

(a) to give evidence; or

(b) to give evidence and produce any books, documents or things in the possession, custody or control of the person or persons named in the summons that are mentioned in the summons; or

(c) to produce any books, documents or things in the possession, custody or control of the person or persons named in the summons that are mentioned in the summons.

(1B) A summons under subsection (1A) may require a person to appear at a directions hearing to produce books, documents or thing instead of at the hearing before the Tribunal.

(1C) A person (other than a presidential member, a senior member or an authorised member) who, under subsection (1A), may summon a person to appear before the Tribunal must not refuse a request to do so unless the refusal is authorised by a presidential member, a senior member or an authorised member.

(1D) A presidential member, a senior member or an authorised member may give a party to a proceeding leave to inspect a document produced under a summons.

(1E) A person named in a summons for production of a book, document or thing may produce the book, document or thing at the Registry where the summons was issued before the date specified in the summons and, unless the Tribunal otherwise directs, is not required to attend the hearing concerned unless the person is also required to give evidence at the hearing concerned.

10.Failure to comply with the summons without reasonable excuse is an offence: s 61(3) and s 63(5): Otter Gold Mines Ltd v McDonald (1997) 76 FCR 467 at 472 (per Sundberg J).

DISCUSSION

Does the Tribunal have a power to set aside a summons?

11.There did not appear to be any dispute that the Tribunal has power to set aside a summons.

12.Although the AAT Act does not expressly provide for a mechanism to set aside a summons that has already been issued under s 40(1A), there are numerous decisions in which an implied power to set aside a summons has been assumed. See General Merchandise and Apparel Group Pty Ltd and CEO of Customs [2009] AATA 988; (2009) 114 ALD 289 at [224] and [233].

In what circumstances will a summons be set aside?

13.Generally the documents sought in a subpoena or summons are to serve a legitimate forensic purpose or else the subpoena/summons constitutes an abuse of process and will either not be issued, or if already issued, will be set aside: Trade Practices Commission v Arnotts Ltd (No 2) (1989) 88 ALR 90. At [102] Beaumont J said:

The general test for present purposes is well settled. The issue of a subpoena will be an abuse of process if it is not used for a legitimate forensic purpose: see Botany Bay Instrumentation & Control Pty Ltd v Stewart [1984] 3 NSWLR 98 at 100–1. But, as Deane and Gaudron JJ observed in Hamilton v Oades (1989) 166 CLR 486 at 497; 85 ALR 1 at 11, the court’s general powers in this area have a dual aspect: “The inherent power of a court to control and supervise proceedings includes the power to take appropriate action to prevent injustice … [This] power … is not restricted to defined and closed categories…In this context injustice is not simply a question of the purpose or motive for which the relevant proceedings were instituted but includes a consideration of the consequences of the proceedings for the person invoking the power …

14.In respect of the circumstances in which the Tribunal will set aside a summons, I was referred to the decision by Forgie DP in General Merchandise and Apparel Group Pty Ltd and CEO of Customs [2009] AATA 988; (2009) 114 ALD 289 at [204]-[245] (General Merchandise) . At [232] Forgie DP, citing Cosco Holdings Pty Ltd v Federal Commissioner of Taxation [1997] FCA 1504; (1997) 37 ATR 432, said:

… If the documents, books or things it seeks “could reasonably be expected to throw light on some of the issues in the principal proceedings” then the relevance of the summons for the purposes of the hearing of the proceeding will be established. “It is not a question of looking at the documents to see if the documents might permit a case to be made”. It is clear from the authorities that the relevance of the documents sought in the summons requested does not have to be established on the balance of probabilities. As Bennett J said in Comcare v Maganga:

[37] … the test of relevance is whether the documents relate to the proceedings such that there is a real possibility that they may assist in the resolution of issues in the proceedings…

15.A summons based on mere speculation (i.e. a "fishing expedition") will be set aside, per General Merchandise at [233] – [235]:

[233] If the summons is essentially based on mere speculation that the person named in it has relevant material, its being seen as for the purposes of the hearing of a proceeding becomes more tenuous. Principles developed by the courts in relation to “fishing expeditions” when considering subpoenas will raise themselves for consideration. They are part of a wider group of principles developed by the courts to determine whether a subpoena is oppressive. Given that the person answering the subpoena is a stranger to the proceedings, the principles can be seen as tools to determine the proper balance between obtaining evidence and material to the issues between the parties in a matter and the burden imposed upon the recipient of the subpoena. Precisely the same balance must be achieved in deciding whether a request for a summons should be refused or, if issued, a summons should be set aside.

[234] A fishing expedition has been described by Owen J in Associated Dominions Assurance Society Pty Ltd v John Fairfax & Sons Pty Ltd in this way:

A “fishing expedition”, in the sense in which the phrase has been used in the law, means, as I understand it, that a person who has no evidence that fish of a particular kind are in a pool desires to be at liberty to drag it for the purpose of finding out whether there are any there or not.

As King CJ, with whom both White and Millhouse JJ concurred, said in Hunt v Wark: “There must be some reason to suppose that the documents sought will be capable of being used”

[235] Expressing this principle in terms of s 40(1A) of the AAT Act, a request to issue a summons for a purpose of this sort will have grave difficulty in meeting the test that it be issued for the purposes of the hearing of the proceeding.

Is there a legitimate forensic purpose?

16.The Applicant contended that the documents sought in the summons would serve a legitimate forensic purpose because it is alleged that the Tribunal, in its earlier decision, made factual errors.

17.The Applicant’s representative referred to Phillips and Inspector-General in Bankruptcy [2011] AATA 432. Mr Powrie contended that this decision, also heard by DP Forgie, “expanded” the General Merchandise decision. He referred in particular to [45] noting that section 40(1A) limits the power to issue a summons to “the purposes of the hearing of a proceeding before the Tribunal”. I do not think this is particularly helpful, merely recording that the power of the Tribunal to issue summonses is not at large. I was further referred to VHAU of 2002 v Minister for Immigration and Multicultural and Indigenous Affairs [2003] FCA 376, which DP Forgie referred to at [48]. It was submitted that that case was authority for the proposition that the Tribunal is to be guided by the case a party chooses to put before it. This was cited by DP Forgie in the context of procedural fairness, although she said this was a relevant matter when considering whether to set aside a summons. She considered the first question to ask is that asked by Beaumont J in Arnotts:

[50] The matters to which I have referred in this section of my reasons are all relevant matters when considering whether to set aside a summons. In light of the judgment in Cosco, it must also be examined in light of the principles developed by the common law in relation to subpoenas and touched upon in the previous section. Therefore, the first question to ask is that asked first by Beaumont J in Arnotts i.e. whether the documents, books or things a summons seeks “...could reasonably be expected to throw light on some of the issues in the principal proceedings”. The answer to that question determines whether the documents have adjectival or apparent relevance or sufficient relevance to the issues raised by the review of the decision that is the subject of the application for review. “It is not a question of looking at the documents to see if the documents might permit a case to be made.” It is clear from the authorities that the relevance of the documents sought in the summons requested does not have to be established on the balance of probabilities.

As Bennett J said in Comcare v Maganga:

“…the test of relevance is whether the documents relate to the proceedings such that there is a real possibility that they may assist in the resolution of issues in the proceedings ...

Further, the test of relevance for the purpose of inspection is not confined to whether the documents in question will or may establish an inconsistent statement by a witness giving evidence in the proceedings or whether the documents themselves will prove a fact in issue. The Court may allow documents to be inspected if they are apparently relevant or are on the subject matter of the litigation ... or if they might be used for a legitimate forensic purpose in cross-examination…”

18.Mr Powrie was asked to indicate at least “the flavour” of the documents sought, and then was pressed for some detail.  He responded that he had been advised “by people” that there was correspondence between the AGS and people who were to be called as witnesses in the previous matter and that those documents, he submitted, were “probative and relevant” and would not be the subject of a claim for privilege.  When asked for an example of such material he responded that there was likely to be information about travel arrangements made during the previous matter for a witness to travel from Fiji to Australia.  He also said he believed there were matters which could reasonably be expected to be on the files which would assist the Applicant in establishing in the present matter that the findings of fact in the earlier matter were untenable.

19.The Respondent contended that it is not open to the Applicant to attempt to re-agitate facts and issues previously determined by the Tribunal and by the Federal Court.  The Applicant had argued in the Federal Court that the Tribunal had misconstrued the meaning and effect of the phrase “fit and proper person” (at [37]); had made an error about the time to determine fitness to practice (at [40]); failed to have regard to Briginshaw (at [42]); took into account matters that were irrelevant (at [44]); failed to afford procedural fairness (at [47]); drew inferences that were not reasonably open (at [49]); and had made findings that were so unreasonable as to amount to legal error (at [54]).  In dismissing all grounds argued by the Applicant, the Federal Court held that the Tribunal had not misdirected itself as to the law and had made findings which were open to it on the facts.  In these circumstances, especially where the findings of the Tribunal had been appealed and upheld, it is inappropriate to re-agitate those facts and issues.

20.Counsel for the Respondent submitted that, in any event, the AGS file was likely to contain material, the majority of which was subject to a claim for legal professional privilege.  The Applicant’s representative was asked to articulate what, in those circumstances, he anticipated locating in the AGS file which would not be the subject of such a claim.  He said he understood there was correspondence between himself and the solicitor at AGS who had the conduct of the earlier matter.  It seemed to me that to the extent the material sought may have consisted of evidence before the Tribunal in the earlier proceeding that material should already be in the possession of the Applicant (and his solicitor, who represented him in the earlier proceeding).  To assist, the Tribunal has made its file from the previous proceedings available to the Applicant’s representative for inspection.  Mr Powrie said that he considered the file to be a reconstruction of the original file and was of the view that there was material which was missing, such as correspondence, submissions and witness statements.  Counsel for the Respondent offered to supplement the Tribunal file, if necessary, if the Applicant’s representative were able to identify what documents were said to be missing.  This offer is apparently not acceptable.

21.It is relevant to ask, as per Cosco at [42] explaining the reference by Beaumont J in Arnotts at 103, whether the material had an apparent relevance to the issues in the principal proceedings and so an adjectival, as distinct from substantive, relevance. Beaumont J had said: “The test of adjectival relevance is satisfied if the material has apparent relevance. In my opinion, the documentation called for here could possibly throw light on the issues in the main case…” Spender J in Cosco goes on to say that the use of the word “possibly” is not used in any speculative sense, rather, as “acquiescence to the correctness of the submission that the material sought could reasonably be expected to throw light on some of the issues in the principal proceedings”.  Further, his Honour said that “it is not a question of looking at the documents to see if the documents might permit a case to be made”.

22.It is difficult to see how the documents sought in the summons will assist the Applicant in his contention that the findings of fact previously made by the Tribunal were erroneous.

23.More importantly, it was difficult to see how the material referred to by the Applicant’s representative would address the issue at hand in the present substantive matter.  That issue is whether, up to the date of the decision being made by the Tribunal (see Shi v Migration Agents Registration Authority [2008] HCA 31; (2008) 235 CLR 286), the Applicant was a “fit and proper person” to be granted transitional registration by the Tax Practitioners’ Board. The issue in the previous proceedings looked at whether, at that time, the Applicant was a “fit and proper person” and should be re-registered as a tax agent.

24.Mr Powrie’s letter also alleged there were "very serious procedural issues" with the manner in which the earlier proceedings were conducted.  It was entirely unclear to me to what this very serious allegation referred.  In particular it was unclear if this referred to the assertion that the earlier Tribunal had made factual errors.  It seemed to me that the allegation is entirely speculative and the summons is properly characterised as a fishing expedition.  Any "procedural issues" and alleged errors were matters which could only have been dealt with in the Applicant's appeal to the Federal Court, especially having regard to the wide-ranging grounds of appeal.  If he were alleging ‘sharp practice’ then his complaint could also have been addressed elsewhere.

25.In summary, I do not consider there to have been adequate material before me such that I could be satisfied as to a legitimate forensic purpose to the summons and therefore that it is nothing more than a fishing expedition.

26.As regards to the Board file, I am informed that the solicitor for the Respondent does not hold that file and this would constitute a simple response to the summons.  I might anticipate that a similar summons would be sought, in those circumstances, addressed to the Board itself.  I also note that in a direction made on 29 August 2011, I directed that any further summonses requested by the parties in this matter must be approved by me before being issued. The foregoing comments would, no doubt, be relevant to my consideration were there to be such an application.

DECISION

27.The Tribunal sets aside the summons issued on 8 August 2011.

I certify that the 27 preceding paragraphs are a true copy of the reasons for the decision herein of Ms N Isenberg, Senior Member

Signed:         .............[sgd]...............................................................
           C. Taylor, Associate

Date/s of Hearing  25 August 2011
Date of Decision  13 September 2011
Counsel for the Applicant              Mr Alan Powrie, Alan Powrie & Co              
Counsel for the Respondent          Mr Craig Lenehan

Solicitor for the Respondent          Mr Nick Gouliatidis, Australian Government Solicitor