TEY and TRAVEL COMPENSATION FUND
[2005] WASAT 176
•18 JULY 2005
JURISDICTION : STATE ADMINISTRATIVE TRIBUNAL
STREAM: VOCATIONAL REGULATION
ACT: TRAVEL AGENTS ACT 1985 (WA)
CITATION: TEY and TRAVEL COMPENSATION FUND [2005] WASAT 176
MEMBER: MR C RAYMOND (SENIOR MEMBER)
DR B DE VILLIERS (MEMBER)
MS M ELGAR (SESSIONAL MEMBER)
HEARD: 20 APRIL 2005
DELIVERED : 18 JULY 2005
FILE NO/S: VR 200 of 2005
BETWEEN: KOK YONG TEY
Applicant
AND
TRAVEL COMPENSATION FUND
Respondent
Catchwords:
Travel Agent's Act 1985 WA - Licensee required to be participant in prescribed compensation scheme - Trust Deed establishing compensation scheme - Trustee terminating membership - Application for stay granted - Whether correct and preferable decision to terminate
Legislation:
State Administrative Tribunal Act 2004 (WA), s 27, s 29, s 87(3)
Travel Agents Act 1985 (WA), s 13, s 15, s 23, s 59(2)(h)
Travel Agents Regulations 1986 (WA)
Result:
The decision under review varied
Category: B
Representation:
Counsel:
Applicant: Self-represented
Respondent: CB Thornley
Solicitors:
Applicant: Self-represented
Respondent: Downings Legal
Case(s) referred to in decision(s):
Nil
Case(s) also cited:
Nil
REASONS FOR DECISION OF THE TRIBUNAL:
Summary of Tribunal's decision
In these proceedings, Koh Yong Tey ("the applicant") seeks to review the decision of the Trust known as the Travel Compensation Fund ("TCF") to terminate her participation in that fund with effect from 3 March 2005.
The Tribunal has varied the decision only in respect of the date on which the termination is to take effect.
The Tribunal did not accept the applicant's evidence as to the date on which she received particular documents. Although the TCF reduced the penalty payable following representations by the applicant, she failed to make payment of that amount, and later of the re‑imposed full penalty and ignored communications from the TCF.
Application
The applicant seeks to set aside a decision made on behalf of the TCF to terminate the applicant's continuation as a participant of the TCF. The decision is reviewable under s 23 of the Travel Agents Act 1985 (WA) ("the TAA")
The parties
The applicant holds a Bachelor of Business Degree and was trained as an accountant during her employment over a number of years with two major accounting firms. In 1987 she became a licensed travel agent under the TAA and in accordance with s 13 of that Act that licence has at all times been conditional upon the applicant remaining a participant in the compensation scheme prescribed under that legislation. She is also known as, and is referred to in a number of the communications which have been put into evidence, as Doreen Tey.
The respondent is the Trust established by the Governments of New South Wales, Victoria, South Australia and Western Australia under a Participation Agreement dated 19 September 1986, and a Trust Deed set out in Sch 2 to the Travel Agents Regulations 1986 (WA). That Trust Deed constitutes the Compensation Scheme prescribed by s 15 and s 59(2)(h) of the TAA.
Background
The following background is common cause.
The applicant's financial year ends on 30 June in each year. Participants in the TCF whose financial year end on 30 June must lodge a completed Annual Financial Review ("AFR") form duly signed together with an "Application for Renewal of Participation" in the TCF by no later than 30 September of the same year.
Since 1987 the applicant has followed this process.
In 2003 there was a change in the procedure with the TCF providing an option for its members to download the AFR form electronically over the Internet. In 2004 participants were required to download the form although they were advised that a limited number of printed forms were available and upon request could be provided to members through the post.
In 2003 the applicant received her AFR form by post.
An unusual feature of the procedure is that the annual renewal fee in each year is payable before the end of June notwithstanding that the application for continued participation in the TCF is due only by 30 September.
The applicant paid the renewal premium of $235 on 25 June 2004.
During the financial year ending 30 June 2004 the TCF requested the Department of Consumer and Employment Protection ("DOCEP") to monitor whether the applicant was trading. This was on the basis that the applicant's TCF participation would continue subject to the applicant giving the TCF 90 days notice in writing of any intention to resume active trading. That condition was imposed by a letter from the TCF to the applicant dated 23 March 2004 and the applicant was advised that if she objected to the imposition of the condition, she was entitled to appeal to the District Court of Western Australia. The applicant asserted that she had never received this letter.
In due course a compliance officer from DOCEP held a series of meetings with the applicant on 6 August 2004, 16 August 2004 and 17 August 2004. On this last date, Ms Bembridge of DOCEP reported to the Chief Executive Officer of the TCF by letter conveying that the applicant disputed that she had ever ceased trading and disputed the imposition of the above clause. There is also a reference made to an earlier appeal to the District Court by the applicant to which the TCF had filed a Notice of Intention to Appear in June 2002.
In any event, the TCF by letter of 14 October 2004 advised DOCEP that as the applicant had lodged audited accounts for 2003‑2004 and appeared to comply with TCF financial criteria for continued TCF participation, the TCF would not take the issue of any failure to comply with the above condition any further. The TCF considered that the applicant had in effect resumed normal trading and that the condition on her continued participation had therefore lapsed.
The applicant did not submit a signed AFR form to the TCF, prior to 30 September 2004.
On Friday 8 October 2004 the applicant attended at her accountant's offices and signed the AFR form. She provided her accountants with an Australia Post pre‑paid express envelope addressed to the TCF and understood that it would be received by the TCF by Monday 11October 2004.
The applicant also states that she was advised by a Ms Kramer, an employee of her accountants that she had emailed the TCF regarding the lodgement.
On 14 October 2004, the same day the TCF wrote to DOCEP, a letter was sent by the TCF to the applicant confirming receipt of the annual financial review and audited accounts for 2003‑2004 and stating that they appeared to comply with the TCF financial criteria for continued TCF participation and that the conditions imposed by the TCF on continued participation had lapsed. The applicant was advised the TCF did not intend to pursue the current outstanding appeal (obviously a reference to the District Court proceedings) or the penalty originally imposed. However the applicant was advised that should she fail to comply with the provisions of the TCF Trust Deed in future, including by failure to pay any applicable penalty, the TCF participation might be terminated. The applicant was advised that she would in due course receive confirmation concerning compliance with the TCF financial criteria.
On 23 November 2004 the TCF addressed a letter to the proprietor of Skyland Travel Service, the style under which the applicant traded, confirming that continued participation in the TCF for 2004‑2005 had been approved on the basis of the audited financial statements and certified information provided in the Annual Financial Review.
On 30 November 2004 the TCF addressed a letter to the applicant imposing a late lodgement penalty because the completed printed copy of the 2004 AFR had not been received until 13 October 2004 whereas it was due on 30 September 2004. An invoice was enclosed and the applicant was advised that payment was due by 14 December 2004 and if payment was not made that would be reported to the next meeting of the Management Committee of Trustees, ("the management committee") which would consider termination of participation for failure to pay a penalty in breach of cl 12 of the TCF Trust Deed. The penalty imposed was for an amount of $880.
The applicant did not respond.
On 23 December 2004 the TCF sent a facsimile to the applicant advising that if the penalty was not paid by the 14 January 2005, the matter would be reviewed at the next management committee meeting on 20 January 2005 with a view to the possible termination of the applicant's participation in the fund. The letter was also posted to the applicant.
On 11 January 2005 the applicant responded to the letters of 14 October and 23 December 2004. In the first paragraph of the letter the applicant also mentioned that she had received the letter of 30 November 2004 with an attached invoice.
In this letter, and as already set out above the applicant set out her account of how she had signed the renewal application and AFR documents at her auditor's office at 2 pm on Friday 8 August 2004, that she had provided the Australia Post pre‑paid express envelope to her auditors and she understood that delivery was guaranteed the next working day, that is Monday 11October 2004. She set out her understanding that Ms Kramer, an employee of her auditors, had emailed the TCF regarding the lodgement. She stated that she forwarded the late lodgement penalty notice (the letter of 30 November 2004) to Ms Kramer on 3 December 2004 and that Ms Kramer had responded that she had already "emailed TCF before sending out the signed documents".
The applicant went on in the letter to say that in early September 2004, Mr Ian Newman of the TCF had telephoned to enquire whether she had received the 2004‑2005 renewal application and AFR documents. The applicant stated that she had not received those documents nor a "Certificate of TCF Licensed Member to 30 June 2005" which is taken to be as a reference to the certificate that the applicant was a participant of the TCF. She stated that Mr Newman had explained that the forms had to be down loaded but that a week later he sent a TCF letter providing a password to access the TCF website to down load the forms and that accompanying the letter was a recent "Licensed Member form".
At a meeting of the management committee held on 20 January 2005, it was resolved that the penalty in respect of the applicant should be reduced to $330. On 21 January 2005, the TCF sent the applicant a letter to that effect and advising that payment must be made by 3 February 2005. Failing which, the Trustees would consider re‑imposing the full $880 penalty and would review her agency's continued participation in the TCF.
No response was received from the applicant and on 10 February 2005 the TCF wrote re‑imposing the original late penalty fee of $880. The applicant was advised that if the fee was not paid by 24 February 2005 it would result in termination of participation in the fund.
There being no further response from the applicant, on 28 February 2005 the TCF forwarded a letter of "Notice of Termination" of her participation in the fund. The letter stated that the effective date of termination would be 3 March 2005. The letter concluded advising that a fee for immediate re‑instatement was $2200 inclusive of GST while an application beyond two months required the new application premium of $8893.50 inclusive of GST to be paid.
A consequence of receipt of the above "Notice of Termination" was that the applicant would also have her licence as a travel agent suspended. The applicant immediately initiated appeal proceedings in the District Court, and upon finding that jurisdiction had been transferred to the State Administrative Tribunal, ("SAT") an application for review of the decision was made to SAT on 14 March 2005. An interim application was also lodged seeking an order that the "Notice of Termination" be stayed.
None of the above matters are in dispute.
In dispute, is whether as the TCF contends, a letter was sent on 21 July 2004 to the applicant. The letter was addressed to all participants but the applicant denied receiving it until a much later date. Included with the letter was the TCF Participation Certificate for the year ending 30 June 2005 together with an information sheet about the annual renewal of TCF participation, a login number and a password for access to the TCF e‑AFR website. The letter explained that if the participant wished to have a third party act in relation to the AFR completion, the third party should be requested to register as a third party delegate on the TCF website. While the e‑AFR form could be printed and submitted electronically, participants were advised that there were limited number of printed copies of the 2004 AFR available and that contact should be made with the TCF if the participant required a printed copy. In any event, a signed e‑AFR form had to be posted with the audited accounts to the TCF by the due date. Much of this information was repeated in the attached information sheet.
Jurisdiction
SAT's jurisdiction to review the decision of the TCF is provided for under s 23 of the TAA which expressly provides that a person aggrieved by a reviewable decision may apply to SAT for a review of the decision. The definition of "reviewable decisions" includes a decision that prevents a person from participating in the compensation scheme.
The proceedings before SAT
The application for interim relief was set down for hearing on 18 March 2005. The TCF consented to a stay of the decision to terminate the applicant's participation of the TCF as communicated in the letter of 28 February 2005. Directions were also issued programming the substantive application for hearing. The program was agreed with the parties and concluded on the basis that the substantive application was adjourned to a date to be set for hearing subsequent to 14 April 2005.
The directions required that the respondent provide a statement of the reasons for the decision and any other document and material in its possession or control relevant to the review of the decision on or before 7 April 2005.
The TCF complied with that direction by filing and serving specified documents on 6 April 2005. The TCF had filed and served a brief "Response Statement" on 31 March asserting that the penalties imposed were in accordance with the TCF's "Current Schedule of Contributions, Fees, Penalties and Charges" and that cl 12B 2 of the Trust Deed permitted termination for non‑payment of a penalty or fee. A "Supplementary Response Statement" was filed and served on 6 April 2004 setting out more fully the facts asserted by the TCF.
The authority of the TCF to act as it did under the Trust Deed was not put in issue at any stage of the proceedings. Nevertheless the Tribunal has considered the Deed and satisfied itself that the Trust Deed empowers the TCF to take the type of action it has taken, subject to establishment the facts pre‑conditioning that action.
On 7 April 2005 the Tribunal issued a Notice of Hearing to take place on 20 April 2005.
On 12 April 2005 the applicant applied for an adjournment of the hearing on 20 April. While it would not normally be necessary to deal with this application and to include herein the reasons for the rulings made, the Tribunal does so because the applicant has raised natural justice considerations in her closing submissions. The basis for the application for an adjournment was that the firstly, the documents served on her were voluminous, and although she had not yet read them, she might require further documents from the TCF to enable her to prepare. As she was self-represented, she considered she was disadvantaged. Secondly, to prepare she would have to drop all her present work. Thirdly, she stated that within one month from 12 April, if she received no answer from the respondent for further documentary evidence (the need for which was not established) or found that she needed to subpoena a third party for evidence, she would write to SAT and request a further directions hearing.
The TCF through its solicitors advised that while they would not oppose the matter being adjourned, it did not consent to the adjournment. It was pointed out that the respondent is based in Sydney, as are its officers, and employees and witnesses had to travel from Sydney to Perth for a hearing at considerable expense.
The Tribunal issued a notice for a directions hearing on 18 April 2005 to consider the request for an adjournment.
After hearing submissions, the application for an adjournment was refused.
The applicant had stressed the urgency of determining the matter at the outset, she agreed to the time‑table which contemplated a hearing at any time after 14 April 2005 and had the documents for six days in her possession without reading them notwithstanding the circumstances.
Although the applicant then raised the desire to cross‑examine one of the TCF witnesses Mr Newman, a senior employee of the TCF, it emerged that the only area of contention related to whether he had forwarded a copy of the letter of 21 July 2004 with an enclosed information sheet, and password and participation certificate to the applicant in September. The applicant contended that she had not received the letter with its enclosures prior to September 2004.
As Mr Thornley, who appeared for the TCF, explained the position, this did not appear to be a material issue because even if that was the case the applicant could have filed the documentation in time, but had not done so, nor had she applied for any extension of time. Further, while Mr Newman would be able to provide an affidavit he would be in New Zealand on the day of the hearing. It emerged that the further documents which the applicant wished to obtain from the respondent related to identifying those persons or entities to whom the fact of termination of participation had been communicated, with a view to a claim for damages being made. It was pointed out to the applicant that the only way in which such compensation could be awarded was under s 87(3) of the State Administrative Tribunal 2004 ("SAT Act") and that any entitlement to costs, including compensation, would be dependent on the Tribunal first concluding that the termination was not justified. If that conclusion was reached, orders could be made at that stage for any appropriate further discovery. This had also been explained during the earlier directions hearing.
Prior to the directions hearing the applicant filed a "Minute of Proposed Orders" supported by a short affidavit. The orders sought, (in abbreviated form) were that:
1.Mr Gary Dellar, Legal and Policy Advisor of the TCF, file an affidavit relating to whether he received an Australia Post express post envelope on 13 October 2004, which was addressed to him by the applicant;
2That the TCF provide a list of the names of all participants of the TCF notified of the termination and a list of the participants advised of the grant of a stay of termination pending the outcome of an appeal (sic – this application);
3.That an officer of the TCF, Mr Ian Newman, be subpoenaed for cross‑examination at the hearing.
The respondent also filed a "Minute of Proposed Orders" requesting leave to enter evidence by way of affidavit at the hearing and requiring the respondent to provide no less than 14 days prior to the hearing the affidavits on which the respondent intended to rely. The Tribunal understood that the orders would be sought if the Tribunal was minded to grant an adjournment given the advice by letter on 14 April 2005 that while the TCF did not oppose the matter being adjourned, the respondent did not consent to the adjournment.
The Tribunal saw no need for the matter to be adjourned. It did not consider that the issues raised were complex, any conflict on the evidence was likely to be narrow and in an area which was not essential to the determination of the application. The documents were not that exhaustive – most of the volume consisted of the copy of the Trust Deed, and the applicant was a party to most of the correspondence. Mr Thornley conceded that the respondent could not exclude the possibility that the applicant was correct in asserting that she was provided with a copy of the letter of 21 July 2004 only in early September. Mr Newman's evidence would be that the system would have required the letter to be sent out with its annexures on or about the 21 July 2004 but that he had no recollection of any later discussion with the applicant, in which she asserted that he had arranged to send the letter to her.
Mr Thornley, the respondent's solicitor, stated in an affidavit that the costs would be prohibitive to have witnesses appear for cross‑examination on issues which could not be contested by the applicant and that evidence would be given of the TCF's internal procedures. The TCF further agreed to notify all persons who had been advised of the termination of the applicant's participation in the TCF that the decision had been stayed by the Tribunal.
The Tribunal was of the view that it was not reasonably practicable to require Mr Newman to attend the hearing, or any adjourned hearing. Further the TCF could determine the most appropriate person to testify whether by affidavit or in person at the hearing. As it transpired, Mr Dellar, the TCF's Legal and Policy advisor, was called and gave evidence.
In the circumstances the orders made by the Tribunal on 18 April 2005 were that:
"1.The applicant's application for an adjournment is refused;
2.The respondent's application for leave to file affidavit evidence is granted;
3.In the event that the applicant requires to cross‑examine any of the deponents to the said affidavits, there shall be liberty to apply during the hearing."
During the hearing the role of the applicant's auditors was again referred to by the applicant. The Tribunal reiterated the need to obtain copies of all relevant emails.
The substantive hearing
In accordance with the Tribunal's usual practice requiring a decision maker to give evidence first and endeavour to justify its decision, the respondent opened its case. During the course of the opening the respondent tendered the affidavit of Ian Fred Ross Newman (Exhibit R1) and a letter dated 10 February 2004 addressed to Mr Gary Dellar (Exhibit R2). The bundle of documents previously provided by the respondent was tendered as Exhibit R3.
Mr Newman's affidavit sets out in some detail the procedures followed by the TCF in relation to the lodgement of the annual financial review and the practice in relation to applications for an extension of time. This process has been outlined above and is not an issue.
Mr Newman went on to say that on 21 July 2004, a letter notifying the participants of their AFR commitments ("the AFR letter") was dispatched to all participants with a 30 June financial year end and 30 September lodgement date (for the AFR), including the applicant. An information sheet was attached to the AFR letter. A copy of these documents is within the bundle Exhibit R3.
Also included with the AFR letter was the new TCF Certificate of Participation valid to 30 June 2005. He stated this was only included for participants who had paid the $258.50 renewal fee, which the applicant had paid in June 2004. Annexed to the affidavit marked "A" was a duplicate of the certificate and marked "B" was a print‑out showing the applicant's payment of the renewal fee on 25 June 2005.
Mr Newman further testified as follows.
At par 11
"The TCF worked on the basis that the AFR letter had been received by each participant. If the letter to a participant is returned to TCF as undelivered, then the TCF's procedure is that that the envelope and letter are stapled together and placed on the participants assessing file. I have examined the applicant's assessing file, and there are no undelivered letters or envelopes on it."
At par 12
"The participant only receives one certificate per year per location, unless it is lost or destroyed. If the applicant has the TCF certificate of participation, as I understand she has, then she must have received the AFR letter as no duplicate certificate was issued for the applicant. Due to the volume of certificates printed, a copy was not placed on the participant's assessing file. However, if a "one off" certificate was printed after July 2004 and sent to (a sic) participant who had applied for one, a copy of the certificate was placed on the assessing file, together with a copy of any requests. The applicant's assessing file contains no copy certificate or request for one."
At par 13
"I do not recall any telephone discussion with the applicant in September 2004. I would have had no reason to make a telephone call to her or any other participant enquiring whether the AFR letter had been received."
Mr Newman went on to state that in August and September 2004, TCF assessors were receiving telephone enquiries from participants and auditors regarding the forthcoming lodgement of the 2004 AFR and asking about downloading the 2004 AFR from the TCF website. He stated that his practice, and that of the assessors, was to give the participants their password over the telephone and to send to that participant a copy of the 2004 AFR letter that had been posted on 21 July 2004. The copy of the letter would include the information sheet but not a duplicate certificate of participation. Accordingly, Mr Newman could not exclude the possibility that the applicant had a telephone conversation with him in August or September 2004 of that kind, but in that event, the applicant would have initiated the call.
Mr Newman further testified that the applicant's original AFR documents were first received by the TCF on 13 October 2004 and that they were dated and signed by the applicant on 8 October 2004. He stated that it was the practice for all letters and documents to be opened by TCF staff on the date they are received and they are then immediately date stamped.
At par 19 of his affidavit Mr Newman continued to explain that the AFR documents could be lodged electronically. The TCF data‑base tracks all electronic lodgements and he stated there was no electronic lodgement of the applicant's AFR documentation at all, although the TCF system report showed that a 2004 AFR form was downloaded by the applicant's auditor, MacLeod Partners. He further stated that the TCF's internal policy in 2004 was to provide participants a grace period until 5 October 2004 to lodge their AFR documentation before the lodgement was regarded as being late for penalty purposes. This was strictly an internal procedure and was not publicised generally.
Mr Newman then went on to recount the process which had been followed in relation to the imposition of a penalty, due to the late lodgement and to refer to the correspondence with the applicant on the issue, as summarised above. Mr Newman stated that he attempted to telephone the applicant after the initial reduced policy was imposed with a view to encouraging her to pay it and to avoid termination, but it was not possible to make contact as her telephone was continually engaged. He stated that he managed to leave one message on her answering machine.
Mr Gary Dellar, the Legal and Policy advisor of the TCF, was then called to give evidence. He canvassed the same procedures as set out by Mr Newman in his affidavit. He also dealt with the TCF's policy in relation to the imposition of penalties, as set out in the document at page 1 of the bundle, Exhibit R3. The initial penalty of $880 levied was in accordance with the published list of fees and penalties.
Mr Dellar also explained the process by which the penalty was reduced from $880 to $330 after receipt of the applicant's letter 11 January 2005. The $880 penalty had two components to it. Firstly an amount of $330 termed a "lodgement time extension request fee" and $550 being the actual late lodgement penalty where the AFR was lodged within one month of the due date. In effect by reducing the penalty to $330 the applicant was being penalised for lodging the application late without having applied for an extension of time but the actual late lodgement penalty was waived.
Mr Dellar also referred to three print‑outs from the TCF records. The document Exhibit R4(a) demonstrated that Janelle, an accountant from MacLeod Partners had downloaded the eAFR form. The print‑out was dated 13 April 2005 being the date on which it was printed. It did not reflect the date on which the eAFR form had been downloaded by the applicant's solicitors.
The print‑out being Exhibit R4(b) confirmed the download of material but also recorded that nothing had been uploaded, that is, no documents had been received by the TCF electronically.
Finally the print‑out form Exhibit R4(c) recorded that the AFR form had been received on the 13 October 2004.
Mr Dellar was subjected to a lengthy and detailed cross‑examination by the applicant. He confirmed that he had never personally received the AFR forms, that it would have been received at the reception and would have been forwarded for assessment by the appropriate person. If there had been a covering letter he would have received that but otherwise he would have not anything to do with the process.
He confirmed that it was possible to have a penalty remitted in its entirety if submissions were made that the penalty was too harsh.
The TCF then closed its case and the applicant gave evidence in support of her application.
The applicant testified that after she had sent the letter of 10 February 2004 to the TCF (Exhibit R2) she had no further correspondence from the TCF.
The DOCEP thereafter commenced an enquiry into her trading activities. The enquiry, which took the form of a number of interviews, came to an end on or about the 17 August 2004. It was after that when Mr Newman telephoned her about the AFR documents. Her evidence was that Mr Newman informed her that she did not receive the AFR forms and participation certificate and that he said he would send them to her.
The applicant saw the steps taken through DOCEP as an attempt by the TCF to ensure she lost her licence. She considered that the TCF was trying to set up a situation to stop her trading.
The applicant testified initially that she received the letter of 21 July 2004 together with the participation certificate after 17 August 2004. She said that she read it and put it away and did not notice that it was dated 21 July 2004.
When asked to clarify when after 17 August 2004 she received these documents she stated "very close to the end of September".
The Tribunal enquired of the applicant as to when she had commenced preparing her accounts because it would have obviously taken some time for her accountants to audit the accounts and complete the AFR documents (a copy of which is at pages 16 – 28 of the bundle of documents Exhibit R3.
The applicant responded that she had only started preparing her accounts when she received the AFR letter. The Tribunal pressed her to give an estimate of the amount of time it would have taken her to prepare her accounts prior to the documentation being handed over to her accountants. At first the applicants said it would take a week. Later she said more than two weeks or 2 – 3 weeks.
No explanation was offered as to why, as an accountant, the applicant would have not commenced preparation of her accounts at an earlier date.
The applicant referred to a telephone discussion with Ms Gael Lebeder, an employee of the TCF, on 3 December 2004. The applicant said she advised Ms Lebeder that the lodgement had been in time. Ms Lebeder told her that the documentation had to have been received by the 8 October; this was a general arrangement, to give a period of grace.
The applicant testified that she had not thought of requesting an extension of time. She said that she gave the AFR letter to her accountant, retaining only the certificate that she was a participant of the TCF.
The applicant testified that she had passed on the correspondence from the TCF, referred to in her letter of 11 January 2005, namely the letters of 14 October 2004, the late lodgement penalty notice with tax invoice (letter of 30 November 2004) and the Notice of Determination dated 23 December 2004 to her accountant. She said that her accountants had never advised her of the need to apply for any extension of time.
When the applicant received the letter from the TCF dated 21 January 2005, she felt that there should be no penalty. She did nothing about it because she felt that the TCF just wanted to "catch her out" – they were unreasonable. She thought they were trying to trap her. She re‑iterated that her accountant had said that the documents had been lodged within the time limit.
Under cross‑examination the applicant conceded that she had applied for an extension of time to lodge the AFR documentation in 2001.
In explaining the non‑receipt of the AFR letter in July, she asserted that she "did not go to her PO box" prior to January 2005. The AFR letter was addressed to her PO box. This was in accordance with a notification by the applicant to the TCF by email dated 6 August 2002 in which both the PO box address and the physical street address of the applicant were given. When taken back to the need to apply for an extension of time the applicant advised that if she had known she would have paid for an extension. She did not think it was necessary to do so because the auditors told her she was in time and she trusted them.
At the conclusion of her evidence she tendered a report from Dr Kevin Franklin, a clinical psychologist, dated 18 March 2005. Although the TCF initially objected to the receipt of the report that objection was withdrawn on the basis that the Tribunal would determine what weight to be given to it. The report was admitted on that basis as Exhibit A4.
The report of Dr Franklin says very little about any medical condition being suffered by the applicant. It contains general statements on cultural differences and is extremely critical of the manner in which the TCF communicated with the applicant.
After the close of the applicant's case the Tribunal invited closing submissions.
The respondent was extremely brief in its submissions, in effect, submitting that the Tribunal was in a position to determine the factual issues, but even if the AFR letter was received by the applicant at a later date than 21 July 2004, the applicant had done nothing to comply with the procedures applying in relation to participants in the TCF. The TCF had responded to the one occasion on which she put in submissions by reducing the penalty and the applicant had simply ignored the issue. The TCF had accordingly little alternative but to act as it had done.
The respondent commenced her closing submissions and proceeded with a detailed re‑statement of much of the evidence. Eventually, at 5.30 pm, the applicant in a response to an enquiry from the Tribunal indicated that she had considerably more submissions to make. In addition she contended that there was other evidence she wished to have admitted, but which she did not have with her. In the circumstances, the Tribunal issued directions for the applicant to file any supplementary written submissions by 26 April 2005 and to make any application for admission of further evidence by serving those documents together with a submission justifying their relevance. In the event that the Tribunal considered the documents might be relevant, the respondent was to be notified and an opportunity provided to either consent to the admission of the documents, or any of them, or to file submissions in opposition.
The decision on the substantive application was reserved.
The respondent's written submissions
The additional documents tendered by the respondent comprised the following.
1.A copy of a letter dated 23 November 2004 written by the TCF to the applicant advising of the renewal approval for the 2004‑2005 year.
2.A copy of a print‑out of two email communications between the parties dated 24 February 2005 and 1 March 2005. The first confirmed that the TCF records had been amended, in accordance with a request from the applicant, to change the mailing address for the applicant to reflect only the physical street address, 9 Barclay Road, Kardinya, WA. The later email was in response to the message left by Mr Newman, and referred to in his affidavit.
3.A copy of a series of email communications between the parties printed on one page and concluding with an email on 2 March 2005 from Mr Newman to the applicant. Mr Newman advised that he had telephoned the applicant on 24 February 2005 to remind her that it was the final day for payment of the late lodgement fee, but as there was no reply, a message was left on her answer phone message system to contact him urgently. The email response from the applicant on 1 March 2005 is part of the previous document.
4.A copy of the letter of 24 March 2005 from the TCF to the applicant confirming her re-instatement as a consequence of the stay order made by the Tribunal.
5.A document headed "Orders sought at the hearing on 20 April 2005" together with a supporting affidavit which is in substantially the same terms as that filed on 18 April 2005 to which reference has already been made. The status of this document is not clear. It may be intended to confirm orders said to have been sought by the applicant at the final hearing on 20 April 2005. Similar documents had not been filed and were not before the Tribunal on that day.
6.Although not referred to in the application document prepared by the applicant and lodged on 26 April 2005, which referred to the above documents, there was also attached a document marked "Exhibit 1 page 1 – 4". This contained a series of emails relating to difficulties which the applicant was experiencing in conducting her business as a result of the earlier termination of her participation in the TCF.
7.Also attached, but not mentioned in the application, was a document marked Exhibit 2 (page 1 – 3). The first page is a copy of an email from the applicant to Mr Glen Wells, Chief Executive Officer of the TCF, requesting a change of address to be notified for correspondence purposes and also raising other questions not directly relevant to these proceedings. Pages 2 and 3 of that document comprised a series of emails concerning an enquiry by the applicant as to whether any of the Trustees of the TCF had an interest in a particular business. Mr Dellar responded on behalf of the TCF advising that the TCF was not aware of any such interest and the applicant then widened the enquiry to relate to any staff member or a spouse, de facto partner, or relative of a TCF Trustee or TCF Management Committee member. Mr Dellar responded advising that the applicant had provided absolutely no reason at any stage for the TCF to undertake an enquiry into any possible conflict of interest of the kind suggested might exist. The applicant was advised that any suspicion or curiosity by TCF participants is not a sufficient basis for such an enquiry and that if she had any relevant information then it should be provided.
A further document was attached as Exhibit 3 being a copy of the TCF participation certificate, which was already in evidence through the affidavit of Mr Newman.
The Tribunal enquired of the respondent's solicitors whether it had any objection to the documents being admitted and advised the solicitors that subject to any submissions which they might wish to make the Tribunal was inclined to admit the documents, although some were already in evidence, save for:
(a)the facsimile marked by the respondent as Exhibit 1 dated 23 March 2005 and comprising four pages;
(b)pages 2 and 3 of the document identified as Exhibit 2, being a copy of an email dated 2 March 2005.
The respondents' solicitors advised that the respondents had no objection to the tender of the further documents.
The Tribunal remains of the view that the documents identified above are not relevant and should be excluded from evidence. This is on the basis that the document Exhibit 1 dated 23 March 2005 comprising four pages has no probative value in relation to the matters in issue at this stage. As previously ruled, if the applicant succeeded, she would be entitled under s 87 of the SAT Act to seek compensation and in that event a broader discovery of documents would be required. The applicant attempted on numerous occasions during the hearing to introduce evidence concerning this issue and the Tribunal repeatedly declined to permit her to do so on the same basis.
In relation to the documents comprising pages 2 and 3 of Exhibit 2 they again have no probative value in relation to the matters in issue. The question of any conflict of interest was not raised with Mr Dellar when he was available for cross‑examination and the documents introduce a new issue. No connection with the matters germane to the review proceedings has been established. The documents may have been intended to imply some motive for the TCF to act unreasonably against the applicant but yet again in the absence of any evidence concerning the subject matter of the emails in question, no basis has been established for any such inference.
The written submissions are lengthy and comprise just over five pages of very condensed type. The relevant submissions are summarised as follows:
(1)The applicant recorded her protest that she had not been afforded an opportunity to cross‑examine Mr Newman.
(2)The applicant protested the time limit within which she was required to provide closing submissions.
(3)The applicant protested that any suggestion that in seeking the adjournment that she sought to delay the proceedings.
(4)That there were a number of weaknesses in the respondent's email and software systems which receive, generate and dispatch documents common to participants for lodgement of the AFR documents.
(5)That on receipt of the letter from the TCF dated 23 November 2004 advising of the renewal approval, the applicant took it that "everything was OK", yet on 30 November 2004 she received advice of the imposition of a penalty without any prior notice.
(6)It was submitted that the terms of the letter of 30 November 2004 were not negotiable and unreasonable as well as intimidating. The applicant stated that she was very unhappy. She stated: "I admit that I was defiant, because I felt that the respondent was unreasonable". The subsequent correspondence from the TCF was similarly criticised.
(7)The respondent had taken no notice of the explanation provided by the applicant on 11 January 2005.
(8)She submitted that no reliance should be placed on the documents referred to by Mr Dellar (Exhibits 4(a), (b) and (c)) because they showed an activation date of 13 April 2005 which was not the true date when the applicant's auditor downloaded the AFR form.
(8)That Mr Newman was at fault for not forwarding a printed version of the AFR documents on time to the applicant.
(9)That the applicant had written to the respondent on 10 February 2004 advising that she would lodge the 2004 AFR as normal before 30 September 2004 provided that the TCF sent her the AFR documents on time.
(10)It was submitted that the applicant had asked for the AFR documents to be sent by Mr Newman to her 9 Barclay Road, Kardinya address, that is, not the PO box address to which it was sent.
(11)The respondent's solicitor had not disputed that it was possible "that Mr Newman did telephone me for the above discussion". It was submitted that the applicant had given evidence that this telephone conversation was made some time towards the third or last week of August 2004, not September 2004 to which Mr Newman referred in his affidavit.
(12)In all the circumstances the respondents action was not justified, was unreasonable, prejudicial and the participation of the applicant's membership of the TCF should be re‑instated.
Considerations
The Tribunal has already dealt above with the reasons for refusing the adjournment and not requiring Mr Newman to attend for cross‑examination. The time limit for closing submissions was reasonable and should have been completed in good time at the hearing. As to the third submission, it is indisputable that an adjournment would have delayed the proceedings. The issue was whether an adjournment was legitimately required. The applicant had taken no steps to prepare for some six days, after receipt of the respondent's documents.
We accordingly turn to the merits of the application. The discussion covers the substance of the applicant's remaining submissions.
On the evidence of Mr Dellar and Mr Newman, the respondent's solicitor was correct to concede that he could not exclude the possibility that a telephone conversation occurred as alleged by the applicant and that Mr Newman arranged to send out a further copy of the AFR letter. It is however, necessary for us to determine that issue on a balance of probability and in any event the concession is not entirely clear in the context of Mr Newman's evidence. Mr Newman may have had a conversation and sent a second copy of the AFR letter, but he contended the applicant must have received the first AFR letter if she had a participation certificate.
During the period from July through to January, mail was sent to the applicant at both her physical street address and the post office box number. The AFR letter was sent to the post office box address and the applicant says it was not received. The inference from her submission is that the AFR letter was sent to her physical address, notwithstanding being addressed to the post office box number, because she had asked Mr Newman to do so. This was not reflected in her evidence. She said that she did not go to the post office box, as she did not get any mail prior to January 2005 from the post office box.
It is inconsistent with this evidence that the applicant should have tendered after the hearing a copy of a letter dated 23 November 2004 which was addressed to the post office box address. The applicant's submissions reflect this letter was received before the correspondence imposing a penalty as discussed further below.
Contrary to the applicant's submission, we do not consider that on the evidence and the cross‑examination of Mr Dellar that it was established that the TCF's email and mail systems were flawed. We consider that the record keeping by the TCF appears good. We were impressed by the ability of the TCF to produce reports and to trace whether or not documents were received by it electronically.
In her submissions, the applicant made it clear that her auditors had lodged the AFR electronically. The applicant's letter to the TCF dated 11 January 2005 was ambiguously worded but Mr Newman's affidavit shows he understood the applicant's contention that the documents had been lodged electronically. Reference was made in the letter to "Ms Kramer also emailed your TCF regarding the lodgement…The very first thing Ms Kramer said to me was that she had already emailed TCF before sending out the signed documents". The TCF records established that the AFR documents had not been lodged electronically. No documentary evidence was provided from the applicant's accountants to support the applicant's version.
There is no reason to doubt the evidence of Mr Dellar as to the procedures followed by the TCF in relation to the posting of the AFR letter. He was subjected to cross‑examination. His evidence was given fairly and objectively. That evidence is corroborated by Mr Newman although we take into account that he was not available to be cross‑examined.
Against that, we were not impressed with the applicant as a witness. While most of her evidence was accurate, in the areas of controversy, she was evasive and calculating in her response to questions The applicant is an intelligent person and appreciated very quickly when evidence might be regarded as damaging. For instance, when she was questioned about how long it would have taken her to prepare her books of account to the stage necessary to enable the accountants to prepare the AFR document, she appreciated the improbability of her earlier evidence that she had received the documents very close to the end of September. Her immediate response was that she could not say how long it would take to prepare her accounts. Later she amended that to say that she could do it within a week or perhaps two to three weeks. We found her evidence to be contrived in this area. We note that in the letter of 11 January 2005 the applicant said that the discussion with Mr Newman occurred in early September 2004 and that a week later he provided the AFR letter.
The applicant's business, as reflected in the AFR documents has a very low annual turnover and generated fees of only $786. We note that the applicant applied for a waiver of the $26.25 fee payable on the filing of this application and produced a Centrelink Health Care Card to support the application.
The applicant paid the renewal premium for participation in the TCF for the 2004 – 2005 year on 25 June 2004. The applicant has been a member of the TCF for a considerable period of time. We consider it unlikely that the applicant would have paid that amount of money and not followed up on the matter if she had not received the participation certificate attached to the AFR letter within a reasonable time thereafter. The applicant's submission that she had been left off the TCF's mailing list as an explanation for allegedly not receiving the AFR letter in July is belied by her receipt of the renewal invoice prior to payment in June 2004. In her evidence, the applicant stated that she had not gone to clear the postal box until January 2005. But in her submissions and additional documents tendered she referred to receipt of a letter from the TFC dated 23 November 2004 advising her of the Renewal Approval for 2004 – 2005. She submitted that as a result of receipt of that letter she thought everything was all right. She was obviously referring to that at a time prior to receipt of the subsequent correspondence imposing the penalty, not to a time after January 2005 when she cleared the postal box. The 23 November letter was addressed to her postal box address, which therefore contradicts her earlier evidence.
Having regard to all of the evidence we consider that it is probable that the AFR letter was sent to and received by the applicant during July 2005.
Even on the applicant's version of events, she received the AFR documentation prior to the 30 September 2004 deadline. It was a deadline of which she was well aware. She had applied for extensions of time previously and knew that course was available; yet she did nothing about it.
The applicant's explanation for doing nothing was that she had left it with her accountants and that her accountants had assured her on 8 October 2004, when she attended to sign the hard copy document that "at that time that the documents were completed and lodged within time limits". It is noted that in the letter addressed to the Tribunal dated 20 April 2005, (Exhibit A2) it is stated that "she (the accountant Janelle) did the email and the lodgement the next day, that is, 9 October 2004". If so, the original advice to the applicant was misleading. On any basis the information provided by the accountants or as related by the applicant is not reliable.
In any event, the applicant had left it far too late to receive any assurance about the question, because the deadline had already passed. Secondly, she had abdicated all responsibility to her accountants. No doubt people expect to be able to rely on their professional advisors but the fault for the delay in lodgement without applying for an extension lies with the applicant and her accountants. We note that the applicant never produced any emails from her auditors to corroborate her evidence despite the Tribunal raising the need to do so at the earlier directions hearings and during the hearing on the merits.
The letter dated 20 April 2005 addressed by the applicant to the Tribunal contained an explanation that Miss Janelle Kramer, the accountant concerned, had left the employ of her auditors and all the email records had been erased. We find this most unconvincing. It warrants comment that nothing was obtained even on the letterhead of her auditors which would have given some authenticity to the explanation. The applicant had since the 18 March 2004 to procure acceptable evidence on this matter.
We accept that as a result of the prior history between the TFC and the applicant, that the applicant had a fixation about the TCF "trying to get her". That explains in some way the applicant's failure to deal with the matter. We find that the applicant knew that she could put forward representations to have the penalty waived. She did so, in effect, by way of her letter of 11 January 2004. As a result of that the penalty was reduced to $330 which was the penalty applicable for a late lodgement when an application had been made for an extension of time. The late lodgement penalty of $550 had however been waived having regard to the submissions made by the applicant.
Instead of putting forward further submissions as to why she considered that the imposition of even $330 as a penalty was unfair, the applicant did nothing.
We have reviewed the correspondence between the TCF and the applicant. While the correspondence is short and to the point we considered it was sufficiently clear and there was no room for misunderstanding. Further, we consider that the correspondence reflects an attempt by the TCF to deal fairly with the applicant. Ultimately, in relation to the AFR lodgement it made a concession based on the explanation provided. Even on that explanation it was appropriate that a penalty be imposed because of the failure to request an extension of time.
During the hearing, the applicant criticised the TCF on the basis that the penalties were imposed uniformly without consideration of the circumstances of each agent. There are many circumstances in which it is not practicable to take into account an individual's personal circumstances. An example of that would be the way in which traffic fines are imposed without any regard to the wrongdoer's income. The TCF, on the evidence of Mr Newman, has some 3200 members. While in an ideal world it might be better if there was not a fixed tariff of penalties, we cannot criticise the TCF having prescribed a fixed tariff. That is particularly so, in circumstances in which the applicant knew that it was open to her to make representations to have a penalty reduced. That occurred in 2002 as reflected in a letter to her from the TCF dated 9 August 2004 (part of Exhibit A1). It may well have been that the TCF would have reduced the $330 penalty if she pleaded her financial circumstances, but she chose not to do so, because on her own admission "she was defiant".
In our view, the applicant is the architect of her own misfortune. In coming to this conclusion we have had the benefit of hearing both parties. We reject as inappropriate the criticisms made by Dr Franklin of the TCF based on a one sided version of events. We place little weight on the opinion he expresses concerning cultural differences (which are no doubt generally true) having had the benefit of observing the applicant and her demonstrated understanding of the English language and the issues in these proceedings. While culture may have played a part in the applicant's view of the TCF and might therefore bear on her motivation, she fully understood her rights and obligations in relation to the TCF. The applicant is a capable person with a good understanding of the commercial world within which she has practised for many years.
In our view, the applicant developed a mental block in her dealings with the TCF, which we find was not justified, but whatever the reason might have been, she seemed to have a difficulty in dealing with the TCF. A good example is her failure to respond for some six days to the urgent telephone message which Mr Newman left for her, and when she did, it was by email rather than telephone. The failure to respond to mail and her referral of the matter to her auditors to deal with, also reflect this.
The Tribunal has some concerns about the full penalty of $880 being re‑instated. But, it is clear that the applicant was aware if she did not pay the reduced penalty of $330 that the management committee would not only consider re‑imposing the full penalty but would review her participation. At the commencement of the hearing, she was asked by the Tribunal whether she would pay the $330 if the TCF would accept that amount and thereby avoid the risk of having to pay a re‑instatement fee or a new application fee. The applicant was not willing to do so. It is therefore plain that no matter at what level the penalty was set, the applicant would not have paid. In a sense re‑imposing the full penalty gave the applicant a further period of time to avoid termination, but for which termination would have occurred by reason of the failure to pay the reduced penalty.
In any event, the conduct of the TFC was based on what was described to us as a compromise. For the sake of compromise, it acted upon the information in the letter from the applicant dated 11 January 2005. On our findings, the applicant was more culpable than reflected therein. The applicant made no representations based on an inability to pay. While the applicant's business trades at a marginal profit she has a sufficient asset backing to meet the TCF's financial criteria to participate in the TCF.
Conclusion and orders
For the above reasons, we conclude that the correct and preferable decision was to terminate the applicant's participation but the decision to do so requires to be varied because we are unable to confirm the decision without qualification.
The decision as set out in the letter of 28 February 2005 was expressed to take effect on 3 March 2005. That decision was stayed by order of the Tribunal made on 18 March 2005. As a result the applicant's participation in the TCF has continued and she has continued to trade as a travel agent. Accordingly, any termination should be prospective in effect.
In addition, under the Trust Deed cl 12C, the Board of the Trust has a discretion to require payment of part or all of the relevant fee, levy, contribution or penalty. The TCF through these proceedings has more information than was previously before it. While the applicant has acted unwisely in her dealings with the TCF, and her fears about the TCF have not been justified, they have arisen because of a troubled history. Further, no representations were made based on ability to pay. In these proceedings that issue has been raised indirectly by the submission that the TCF had unlimited power to impose any sum of fees (penalty) unchallenged which "was most unreasonable to any participant".
In all the circumstances, the applicant should be given an opportunity to make representation to the TCF to reduce the re‑instatement fee of $2200 referred to in the letter of 28 February 2005. Further there seems to be nothing to prevent the parties reaching an agreement that reliance should not be placed on the orders made below to some extent or at all and that the applicant's participation may continue without the termination coming into effect. Such an outcome would obviously be least disruptive to the applicant's business. The applicant was not significantly late in lodging the AFR documentation and the consequences once these orders take effect will be severe, although the situation arises due to the fault of the applicant.
The parties made no reference during the proceedings to an intent to apply for costs, although there was some discussion of the applicant applying for costs and seeking compensation, in the event that the application succeeded. The respondent gave no indication of its position. In the circumstances, it is appropriate that there should be liberty to apply for costs. However, having regard to the applicant's financial circumstances and the presumption under s 87(1) of the SAT Act that at least as a starting point, each party should bear their own costs, the Tribunal would need to be persuaded that it is appropriate to make any costs award.
The Tribunal therefore orders as follows:
1.The decision under review is varied so that the applicant's participation in the Travel Compensation Fund is terminated with effect from 31 August 2005 at 5 pm.
2The stay order made on 18 March 2005 be revoked with effect from 31 August 2005 at 5 pm.
3.The parties have liberty to apply in respect of costs.
I certify that this and the preceding [127] paragraphs comprise the reasons for decision of the State Administrative Tribunal.
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MR C RAYMOND, SENIOR MEMBER
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