Stark and Commissioner of Taxation (Taxation)

[2020] AATA 656

Stark and Commissioner of Taxation (Taxation) [2020] AATA 656 (25 March 2020)

Division:GENERAL DIVISION

File Number:          2019/0757

Re:David Stark

APPLICANT

AndCommissioner of Taxation

RESPONDENT

DECISION

Tribunal:Senior Member R Olding

Date:25 March 2020

Place:Brisbane

The Tribunal decides:

1. The Tribunal does not have jurisdiction to consider any claim by the applicant for compensation or reimbursement of legal fees or other expenses.

2.The issue to be considered in the application for review is confined to whether the applicant has discharged the burden of proving that the assessment the subject of the objection decision under review is excessive and what the amount of the assessment should have been.

..................................[SGD]......................................

Senior Member R Olding

Catchwords

PRACTICE AND PROCEDURE - TAXATION – jurisdiction of the Tribunal – no jurisdiction to hear claims against Commissioner of Taxation for compensation or reimbursement of expenses, even if raised in objection or application for review

Legislation

Administrative Appeals Tribunal Act 1975 (Cth), ss 2A, 18A, 25

Taxation Administration Act 1953 (Cth) s 14ZZ

Cases

Commissioner of Taxation v Administrative Appeals Tribunal and Others (2011) 276 ALR 231

Secondary Materials

Administrative Appeals Tribunal, Prof D Pearce, 4^th Ed, LexisNexis Butterworths 2015

REASONS FOR DECISION

Senior Member R Olding

25 March 2020

BACKGROUND

1. The applicant (“Mr Stark”) is dissatisfied with the Commissioner of Taxation’s (“the Commissioner”) assessment of his income tax liability for the year ended 30 June 2009. He objected against the assessment, the Commissioner disallowed the objection and Mr Stark has applied for review of the objection decision.

2. The matter has an unfortunate history, which it is not necessary or appropriate for me to detail here. Suffice to say, Mr Stark considers that the Australian Taxation Office (“ATO”) should reimburse or compensate him for legal fees incurred and other costs associated with the matter, which I shall refer to as the “reimbursement claims”. He has pursued his grievances in that regard with the ATO and through the Inspector-General of Taxation and a Minister of the Crown. He also seeks to pursue the reimbursement claims through this Tribunal.

3. I convened a Directions Hearing on 9 March 2020.  There had been previous such hearings and an unsuccessful attempt to conduct alternative dispute resolution to resolve the matter. I attempted to explain to Mr Stark that the Tribunal does not have jurisdiction to review or make any orders in relation to his reimbursement claims, that it was only empowered to review the objection decision relating to the substantive tax liability. I then made Directions, consistent with what I understood to be the desire of the parties, for a conciliation conference to be conducted.

   WHAT ARE THESE REASONS ABOUT?

4. Mr Stark again wrote to the Tribunal’s registry on 10 March 2020.  His email includes:

   Yesterday Senior Member Olding refused to allow me to discuss my wasted legal expenses, stating that the AAT could only consider matters that were the subject of my 6 February 2019 Application [that is, the application for review of the objection decision]. It seems he was unaware that this application included my claim (then $38,073), for reimbursement of my wasted legal expenses – stated in two places, and by letter of demand emailed to the ATO also on 6 February 2019.

   
   
   

   (Mr Stark’s emphasis)

5. The email goes on to make this request:

   Please advise me how I can have my wasted legal expenses considered by the AAT.

   Maybe one of the following would satisfy Senior Member Olding:

   1.    recognition that my wasted legal expenses already forms part of my current AAT application, and thus should be part of the . . . conciliation, or

   2.    I lodge a further application to review the ATO’s refusal to fully compensate me for my wasted legal expenses, which also be part of the . . . conciliation.

   (Mr Stark’s emphasis)

6. It is apparent that Mr Stark continues to consider that he is entitled to have the Tribunal review the reimbursement claims. There is no obligation under the Administrative Appeals Tribunal Act 1975 (Cth) (“the AAT Act”) for the Tribunal to provide written reasons for directions of the kind made at the recent Directions Hearing.  Nor is it the usual practice of the Tribunal to do so.  However, to assist Mr Stark and facilitate the expeditious and efficient conduct of this matter I have decided to make explicit formal determinations regarding the jurisdiction of the Tribunal and the scope of the application for review, and provide written reasons for doing so.

   THE LEGAL FRAMEWORK

7. In the Fourth Edition of Administrative Appeals Tribunal, Professor Pearce states:

   It is fundamental of the AAT’s jurisdiction that it must be conferred by an enactment. It has no general jurisdiction. The AAT cannot hear common law claims for damages even though they may be based on government action that the Tribunal is authorised to review. [1]

   [1] LexisNexis Butterworths 2015, page 20, 32.

8. The same principle is expressed in this way on the Tribunal’s website:

   We do not have a general power to review decisions. We can only review a decision if an Act, regulation or other legislative instrument states that the decision can be reviewed by the AAT.

9. This reflects section 25 of the AAT Act which relevantly provides:

   (1)  An enactment may provide that applications may be made to the Tribunal:

   (a)  for review of decisions made in the exercise of powers conferred by that    enactment; or

   (b)  for the review of decisions made in the exercise of powers conferred, or that may be conferred, by another enactment having effect under that enactment.

   . . .

   (3)  Where an enactment makes provision in accordance with subsection (1) or (2), that enactment:

   (a)  shall specify the person or persons to whose decisions the provision applies;

   (b)  may be expressed to apply to all decisions of a person, or to a class of such decisions; and

   (c)  may specify conditions subject to which applications may be made.

   . . .

10. The enactment which specifies decisions of the Commissioner that may be reviewed by the Tribunal is the Taxation Administration Act 1953 (Cth) (“the TAA”). Section 14ZZ of the TAA provides that a person who is dissatisfied with an “objection decision” on a “reviewable objection decision” may apply to the Tribunal for review of the objection decision. As a majority of the Full Federal Court in Commissioner of Taxation v Administrative Appeals Tribunal and Others noted:[2]

    The AAT has jurisdiction to review decisions only where an enactment authorises it to do so: s 25(1) of the Administrative Appeals Tribunal Act 1975 (Cth) (the AAT Act). Part IVC of the TAA provides that a person may make taxation objection and apply to the AAT for review of a “reviewable objection decision”. The AAT has jurisdiction to review only decisions that are reviewable objection decisions.

    [2] (2011) 276 ALR 231, 234 [14]

11. It is uncontroversial that an assessment made or taken to be made by the Commissioner is a reviewable objection decision and a decision by the Commissioner on an objection against a reviewable objection decision is an objection decision.  Thus, Mr Stark is, subject to specified time limits, entitled to apply to the Tribunal for review of the Commissioner’s decision to disallow his objection.

12. A decision by the ATO to refuse to pay the reimbursement claims[3] is not an objection decision. Therefore, power to review such a decision is not vested in the Tribunal by section 14ZZ of the TAA. Since there is no other enactment that vests power in the Tribunal to review such a decision, the Tribunal has no power to do so.

    [3] I make no finding on whether any such decision was made.

13. An applicant cannot, by including in an objection to a taxation assessment or application for review of the Commissioner’s objection decision a matter for which the law does not provide a right of review, give to the Tribunal power that the Parliament has not.  Hence, that Mr Stark may have referred to his reimbursement claims in his objection or application for review does not empower the Tribunal to review any decision on those claims.  This is not a matter of discretion for the Tribunal; it is simply not empowered to review such decisions.

    FUTURE CONDUCT OF THIS MATTER

14. The Tribunal is required to discharge its duties expeditiously and efficiently.[4] It would be neither expeditious nor efficient, nor an appropriate use of its limited publicly-funded resources, for the Tribunal to continue to expend time dealing with submissions or other communications regarding the reimbursement claims nor to further delay deciding Mr Stark’s application for review, which has been in the Tribunal since February 2019, while he pursues those claims.[5]

    [4] Administrative Appeals Tribunal Act 1975 (Cth), ss 2a, 18A.

    [5] If Mr Stark wishes to pursue those claims he must do so through whatever other avenues he perceives to be available to him. It is not for the Tribunal or its staff to advise Mr Stark in that regard.

15. Accordingly, I will make a formal determination for the purpose of ensuring that the future conduct of this matter is limited to matters relevant to review of the objection decision.[6]  If Mr Stark disagrees with that course, it will be open to him to apply to the Federal Court for leave to appeal that decision.

    [6] Administrative Appeals Tribunal Act 1975 (Cth), s 25(4A).

16. If he does not, the application for review of the objection decision must either proceed as expeditiously and efficiently as reasonably possible or be withdrawn or struck out. If the scheduled conciliation is not successful or does not proceed, the next steps must be to directed to facilitating the hearing of the matter.

I certify that the preceding 16 (sixteen) paragraphs are a true copy of the reasons for the decision herein of Senior Member R Olding

..................................[SGD]......................................

Associate

Dated: 25 March 2020

Date of hearing:	9 March 2020
Counsel for the Respondent:	M Ballans
Solicitors for the Respondent:	ATO Review & Dispute Resolution