TDWF and Commissioner of Taxation (Taxation)

[2022] AATA 3610

TDWF and Commissioner of Taxation (Taxation) [2022] AATA 3610 (24 October 2022)

Division:TAXATION AND COMMERCIAL DIVISION

File Number(s):2018/3919, 2018/3920, 2018/3921, 2018/3922, 2018/3923, 2018/3924 & 2018/3925      

Re:TDWF

APPLICANT

AndCommissioner of Taxation

RESPONDENT

Decision

Tribunal: Deputy President Bernard J McCabe

Date:24 October 2022

Place:Sydney

The Tribunal refuses the applicant’s request for directions requiring the Commissioner of Taxation to prepare and provide a schedule of documents he will rely upon during the cross-examination of witnesses.

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Deputy President Bernard J McCabe

Catchwords

PROCEDURAL FAIRNESS – rules of evidence – cross-examination – costs – cards on the table

Legislation

Administrative Appeals Act 1975 (Cth)

Cases:

Eldridge v Commissioner of Taxation [1990] FCA 369

TDWF and Commissioner of Taxation [2022] AATA 2549

REASONS FOR DECISION

Deputy President Bernard J McCabe

24 October 2022

1. The applicant has asked for directions that, amongst other things, require the respondent to identify the documents, or passages from documents, which the respondent may refer to and rely upon when cross-examining the applicant or other witnesses at the substantive hearing. The parties are also disagreeing about other steps to be taken to prepare the matter for the hearing.

2. The request for directions was considered at case management directions hearing but that hearing was adjourned before I could reach a conclusion. These reasons deal with one aspect of the applicant’s request – the request for a schedule of documents – while the balance of the matters can be dealt with at the resumed case management directions hearing.

3. The documents the applicant refers to are contained in a tranche of material that was filed in the Tribunal by the Commissioner pursuant to directions. Those documents were not initially provided to the applicant: the Commissioner asked for orders under s 35 of the Administrative Appeals Tribunal Act 1975 (“AAT Act”) that would prevent the applicant or any other witness from seeing the materials.

4. DP Rayment heard the interlocutory application for s 35 orders. He declined to make the orders. The reasons for that decision are found in TDWF and Commissioner of Taxation [2022] AATA 2549. In the reasons, DP Rayment explored the authorities and the relevant statutory provisions, pointing out the preferred view was parties should generally adopt a ‘cards on the table’ approach in Tribunal proceedings. That approach facilitates the early resolution of disputes. It is also likely to be necessary as a matter of procedural fairness. I would add that approach comports with the model litigant rules which apply to the decision-maker, who is also under a statutory duty to assist the Tribunal to reach the correct or preferable decision (s 33(1AA) of the AAT Act), and with the statutory duty that is imposed on each party to use their best endeavours to assist the Tribunal to achieve its objective in s 2A (see s 33(1AB)). ‘Cards on the table’ is the general rule. I need not consider exceptional cases, like those which arise in the Security Division, where different considerations or legislative requirements might apply.

5. The documents were released to the applicant following DP Rayment’s decision on the interlocutory application, although disclosure was limited to the applicant herself and her legal representatives. As it stands, the documents cannot be shown to other witnesses. The applicant may wish to make an application for the orders to be varied so that relevant documents can be shown to those witnesses. In any event, I have not reviewed the documents at this stage of the proceedings. I was told the bulk of the documents are comprised of transcripts of examinations of the applicant and other proposed witnesses who appeared before the Australian Crime Commission. It follows the documents or their contents are not new to the witnesses, and they are on notice they might be asked about prior inconsistent statements.

6. Mr Cleary, who appeared for the applicant, says there are more than 1200 pages of material. He said the applicant’s solicitor had started going through the material. Mr Cleary said the task was onerous because it was necessary to carefully compare and cross-reference material in the transcripts with other evidence. That was likely to be a time-consuming – and thus expensive – task which placed an unfair burden on the applicant. Mr Cleary says, in effect, the material which is disclosed is so voluminous that the applicant and her other witnesses might still be ambushed with material that is effectively in plain sight.

7. Mr Cleary said the Commissioner’s counsel presumably knows what questions they wanted to ask in cross-examination. In those circumstances, the applicant says the Commissioner should file a schedule indicating which parts of the disclosed documents he relies upon. That would streamline the hearing, I was told, and reduce costs for the applicant. It would also be fair to the witnesses, and ultimately the applicant, and it would be (I interpolate) consistent with the ‘cards on the table’ approach to Tribunal litigation I have already discussed.

8. Mr Kasep, who appeared for the Commissioner, pointed out the Commissioner was not seeking to ‘rely’ on the documents as such. The Commissioner was only proposing to use individual documents in cross-examination to test the credit of individual witnesses – most obviously by asking them to explain prior inconsistent statements they had made, or which had been made by other witnesses. One assumes the Commissioner may already have a reasonable idea of which documents are likely to be put to each witness in light of the witness’s written statements. But Mr Kasep points out even detailed plans for cross-examination necessarily leave scope for counsel to make a forensic decision as the cross-examination unfolds as to whether they will introduce a particular document. Much depends on the answers that witnesses give.

9. In effect, the applicant is asking for – if not a blue-print, then a clearer guide – as to the Commissioner’s cross-examination. I accept Mr Cleary’s explanation that he is concerned to manage the cost associated with preparing the applicant and her witnesses for hearing. That aim is consistent with the objective in s 2A of the AAT Act which refers to informality and economy.

10. The Commissioner says he should not be required to disclose the topics (and certainly not the detail) of cross-examination. Mr Kasep argued that would be procedurally unfair to the respondent. It might also have the effect of limiting the efficacy of cross-examination as a technique for testing evidence and credit. That is an issue for the Tribunal as it goes about the core function of fact-finding. On the Commissioner’s case, there could be no suggestion of an unfair ambush in circumstances where the documents that may be used have already been provided. To put it more bluntly than Mr Kasep did, the Commissioner argues the applicant cannot be heard to complain about the costs incurred in getting her story (and the stories of her witnesses) straight.

11. The Tribunal is part of the executive, to be sure, but – at least in its General and Taxation & Commercial Divisions – the Tribunal operates on a court-like model with a well-understood suite of forensic tools and procedures that are adapted to assist the Tribunal to make findings of fact. Most of those tools are wielded by the parties, much as they would in a court. As Foster J explained in Eldridge v Commissioner of Taxation [1990] FCA 369 (at [41]), the Tribunal’s “functions partake far more of the Court than of the office desk”. There are some differences between proceedings in court and those in the Tribunal, to be sure. Section 33(1)(c) of the AAT Act makes clear the rules of evidence are not binding in the Tribunal, and s 43 requires the Tribunal to refer to evidence or other material on which it bases its findings of fact. The differences between the two forums are not always apparent in practice. For example, the rules of evidence are often a reliable guide to the underlying challenge of identifying, testing and evaluating relevant and probative material in a way that is procedurally fair. It follows the Tribunal generally goes about its task in way that is functionally the same as the court.

12. Cross examination is an important forensic tool in this context. It is a practical means of affording procedural fairness to the parties. It also assists the Tribunal to evaluate evidence. The right to cross-examine is never unlimited. Section 33(1) of the AAT Act makes clear the Tribunal has wide discretion in the way it conducts its own proceedings. That power would extend to regulating cross-examination. But the Tribunal should keep in mind the value of effective cross-examination before taking steps that might compromise or attenuate the process. For the same reason, a Tribunal member may think twice before interrupting the flow of cross-examination during a hearing lest the Tribunal frustrate the questioner in executing a legitimate and helpful plan for dealing with a witness.

13. The Commissioner argues that requiring him to identify in advance particular documents that counsel proposes using in cross-examination goes beyond ‘laying cards on the table’. Mr Kasep says a direction requiring the Commissioner to further particularise the documents and signal questions that might be asked in cross-examination would compromise the efficacy of that process and deny the Commissioner procedural fairness. I agree.

14. While I am conscious of the cost implications to the applicant if her representatives must engage with each witness in relation to every document in the tranche of material that was disclosed, that is probably unavoidable. I am not prepared to make the direction sought by the applicant requiring the Commissioner to prepare and provide a schedule of documents. While conscious of the scale of the task facing the applicant, acceding to her request would be unfair to the Commissioner. It might also make the cross-examination less useful to the Tribunal.

15. The parties proposed other directions which were not agreed by the time the case management directions hearing was adjourned. I have listed a resumed directions hearing but it may be the parties can agree on additional directions in light of these reasons.

I certify that the preceding 15 (fifteen) paragraphs are a true copy of the reasons for the decision herein of

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Associate

Dated: 24 October 2022

Date(s) of hearing:	19 October 2022
Counsel for the Applicant:	Mr T Cleary
Counsel for the Respondent:	Mr B Kasep
Solicitor for the Respondent	Ms Z Kezelos