The Applicant and Commissioner of Taxation

[2004] AATA 281

Administrative

Appeals

Tribunal

 

DECISION AND REASONS FOR DECISION [2004] AATA 281

ADMINISTRATIVE APPEALS TRIBUNAL

TAXATION APPEALS DIVISION  NT 2002/283-5

Re: The Applicant

Applicant

And: Commissioner of Taxation

Respondent

DECISION

Tribunal:       P.J. Lindsay, Senior Member

Date:             16 March 2004

Place:            Sydney

Decision:The Administrative Appeals Tribunal does not allow the claim that the applicant, at whose request a summons to produce documents was issued, pay costs and expenses in complying with the summons that were incurred by a person who is not a party to the proceeding.

. . . . . . . . . . . . . . . . . . . . . . . .

P. J. Lindsay, Senior Member

©        Commonwealth of Australia          (2004)

Administrative

Appeals

Tribunal

 

ADMINISTRATIVE APPEALS TRIBUNAL      )

)NT2002/283-5

TAXATION APPEALS  DIVISION		)
Re		The Applicant

Applicant

And Commissioner of Taxation

Respondent

CORRECTION

Tribunal P.J. Lindsay, Senior Member

Date25 March 2004

PlaceSydney

1)    The interlocutory decision in the above matter handed down on 16 March 2004 is amended as follows:

a)The file number N2002/283-5 is changed to NT2002/283-5;

b)At page 5 paragraph 9 line 2 the word ‘not’ is changed to ‘nor’;

c)At page 9 paragraph 20 line 7 ‘Order 27 rule 4A of the Federal Court Rules’ is changed to ‘Order 27 rule 11 of the Federal Court Rules’.

(sgd) P.J. Lindsay, Senior Member

CATCHWORDS Taxation – practice and procedure – summons to produce documents issued at request of applicant – organisations summoned request order that applicant pay reasonable costs and expenses in complying with summons – tribunal has no power to make order sought

Administrative Appeals Tribunal Act 1975 ss.33, 40, 61, 67

Acts Interpretation Act 1901 s.33(3B)

Administrative Appeals Tribunal Regulations 1976 reg. 16, schedule 2

Case 19 96 ATC 248

Bank of New South Wales v Withers (1981) 35 ALR 21

Re Legal and General Life Australia Limited and the Minister for Territories and Local Government (1983) 5 ALD 476

Re John Dee (Export) Pty Limited (1990) ATPR 51,092

REASONS FOR DECISION

P.J. Lindsay, Senior Member

1.      At the request of the applicant in this matter, on 8 December 2003 a Deputy Registrar of the Administrative Appeals Tribunal issued a summons to produce documents.  The summons was addressed to three related financial organisations.  Production was required of documents described as “all books, documents or things” relating to a specified joint venture research and development syndicate.  The summons was returnable on 22 January 2004.

2.      Solicitors acting for the summoned organisations (collectively referred to as ‘the bank’) wrote to the applicant on 19 December 2003.  They objected to the width of the summons, which referred to documents extending over a nine year period, and asked for particulars so that their clients could undertake a fair review of the documents they held. The letter requested the applicant tender conduct money of $5,900.00, being the estimated cost of retrieval, review and copying of the documents.  By letter dated 23 December 2003 the applicant provided information about the background to the transactions and tendered $30.00 conduct money which was noted as being an amount recommended by the tribunal.

3.      The solicitors wrote back on 31 December 2003 informing the applicant that their clients expected to receive their reasonable expenses in complying with the summons.  They put the applicant on notice that they would request the tribunal to order payment of their clients’ reasonable costs and expenses in complying with the summons.

4.      The bank produced five folders of documents on the return of summons hearing on 22 January 2004.  At their solicitors’ request the summons hearing was stood over for four weeks to enable them to complete a review of their records and to take advice about various confidential documents including documents that may be confidential as between them and the Commissioner of Taxation. The solicitors wrote to the tribunal on 25 February 2004 to advise that, as the applicant had paid only $30.00 in conduct money, they would be seeking an order on the next return date that the applicant pay $4,190.00 calculated as follows:

Retrieval of documents
Position	Hours	Rate p/hr	Cost
Personal Assistant	11.5	$140	$1,610
Copying of documents
Assistant Accountant	5.0	$140	$700
Assistant Accountant	2.5	$140	$350
Total hours	19.0	$2,660
Photocopying Costs	1,800 pages @ $0.85	$1,530
Total:	$4,190

5.      At the resumed summons hearing on 26 February 2004, written submissions were invited from the solicitors for the bank, the applicant and the respondent. Submissions were received from the bank and the applicant.

applicable legislation

6. Section 40 of the Administrative Appeals Tribunal Act 1975 (the Act) gives the tribunal various powers in relation to undertaking review of administrative decisions and s.40(1A) is of particular relevance to this matter; it reads:

(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.

Section 40(1B) provides that the summons may require the person to appear or produce documents at a directions hearing instead of at the hearing. Section 40(1E) deals with the manner in which a person may comply with a summons to produce documents and states:

(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 of the hearing or directions hearing, as the case may be, and, unless the Tribunal otherwise directs, is not required to attend that hearing unless the person is also required to give evidence at that hearing.

7.      Failure to comply with a summons is covered by s.61 of the Act.  For present purposes s.61(2) in particular is relevant.  The subsection provides that a person who, without a reasonable excuse, fails to comply with a summons to produce documents, can be liable to a penalty of $1,000.00 or imprisonment for three months.

8.      Section 67 of the Act provides for the payment of fees and expenses of witnesses as follows:

(1) A person summoned to appear as a witness before the Tribunal is entitled to be paid fees, and allowances for expenses, fixed by or in accordance with the regulations in respect of his or her attendance.

(2) Subject to subsection (3), the fees and allowance shall be paid:

(a) in a case where the witness was summoned at the request of a party other than the person who made the decision subject to review—by that party; and

(b) in any other case—by the Commonwealth.

(3) The Tribunal may, in its discretion, order that the fees and allowances of a witness referred to in paragraph (2)(a) shall be paid, in whole or in part, by the Commonwealth.

Regulation 16 of the Administrative Appeals Tribunal Regulations 1976 (the Regulations) is concerned with witness expenses and states:

A person summoned to appear as a witness before the Tribunal shall be paid such fees, and allowances for expenses, in respect of his attendance, in accordance with Schedule 2, as determined by the Tribunal or by a presidential member.

Schedule 2 stipulates the amounts that are to be paid to witnesses who attend a hearing to give evidence.

consideration

9.      Submissions by counsel representing the bank, Mr A. Justice, acknowledged that neither the Act not the Regulations makes provision for the payment of a person’s expenses incurred in complying with a summons to produce documents.  I agree that s.67 deals with the entitlement to fees and allowances for expenses of persons who are summoned to appear as a witness at a hearing. The person may give evidence only or give evidence and produce documents. There is nothing in the provision, however, concerning a person who is summoned to produce documents only without attending a hearing. Such a person does not appear as a witness.  Section 67 is silent as to that person’s entitlement to fees and allowances to cover their opportunity cost in complying with a summons to produce documents.  In addition I note that paragraphs (1) and (2) of Schedule 2 in the regulations refer to “a person summoned to appear as a witness”.

10.     It was submitted that this gap in the Act is analogous to the absence of statutory provision for setting aside or varying a summons.  In Case 19 96 ATC 248 Deputy President Barnett decided that, although the Act makes no express provision for revocation or variation of a summons, the power to issue a summons included as well a power to revoke or vary the summons. That conclusion was reached after consideration of s.33(3) in the Acts Interpretation Act 1901(the Interpretation Act)

Where an Act confers a power to make, grant or issue any instrument (including rules, regulations or by-laws) the power shall, unless the contrary intention appears, be construed as including a power exercisable in the like manner and subject to the like conditions (if any) to repeal, rescind, revoke, amend, or vary any such instrument.

and being satisfied that the Act did not evince a contrary intention. 

11.     Counsel then referred to s.33(3B) of the Interpretation Act which states:

Where an Act confers a power to make, grant or issue any instrument (including rules, regulations or by-laws), the power shall not be taken, by implication, not to include the power to make provision for or in relation to a particular aspect of a matter by reason only that provision is made by the Act in relation to another aspect of that matter or in relation to another matter.

It was submitted that s.33(3B) permits the tribunal to make provision for a particular aspect of a summons as an inherent power of issuing a summons.  As a witness summoned to appear is entitled to their fees and expenses under s.67 of the Act, it was submitted that s.33(3B) of the Interpretation Act extends the tribunal’s power to order costs to cover those associated with producing documents under a summons despite the Act being silent on the matter.  It was further submitted that Deputy President Barnett’s comments in Case 19 that the power to vary or revoke a summons “ … presumably exists under s.33 of the AAT Act (which is the power of the AAT to regulate its own proceedings)” (at 250) lend support to the submission, given that production of documents to the tribunal is a necessary part of the conduct of the hearing of the proceeding.

12.     Mr Justice referred also to Re John Dee (Export) Pty Limited (1990) ATPR 51,092 where Lockhart J, sitting as the Trade Practices Tribunal, held that the Trade Practices Tribunal’s power to issue a summons contained an implied power to order payment of the expenses incurred by a person in complying with a summons to produce documents.

13.     The Federal Court decision in Bank of New South Wales v Withers (1981) 35 ALR 21 sets out a number of principles that have been developed by the courts in relation to the payment of witness expenses. Withers concerned a subpoena to produce documents that was addressed to a bank, which was not a party to the principal proceedings.  Conduct money of $2.00 was tendered with the subpoena.  The bank sought an order from the court that the party in the proceedings who caused the subpoena to be issued, pay the bank’s costs and expenses of complying with the subpoena.  It was agreed that the $2.00 conduct money was paid to enable the bank to come to the court with the documents, but that amount was not in respect of the bank’s expenses in complying with the subpoena.  In passing, I am satisfied that the $30.00 conduct money paid to the bank in this proceeding, covers only the cost of bringing the documents to the tribunal in response to the summons.

14.     In Withers, the claim by the bank for loss of time and copying documents occurring prior to producing the documents was refused.  The common law did not entitle a stranger to litigation to recover for loss of time and copying documents and moreover, the rules of court made no provision for such an entitlement.  The Federal Court held:

4.  Professional witnesses, especially doctors and attorneys, and seafaring witnesses were also entitled at common law to recover an amount to indemnify them for loss of time whilst they were detained at court as a result of the service of a subpoena. No other person was so entitled.

…

5.  That position changed in England and Australia from about the time of the passing of the Common Law Procedure Act 1852, pursuant to which scales of fees for witnesses were promulgated. Thereafter witnesses have been entitled, according to the appropriate scale, to payment for loss of time as well as for payment of expenses of travelling to and from, and remaining at court. Whether the right to recover is based upon an implied contract or upon a statutory entitlement arising by reason of the provisions of the rules, it is unnecessary to decide.

6.  But it should be emphasised that unless the payment is provided for in the rules there can be no recovery. Collins v. Godefroy remains the law. The citizen's duty to aid the administration of the law by attending remains paramount and is the reason why there can be no recovery for loss of time as distinct from out of pocket expenses in the absence of specific provisions in rules of Court. (per Sheppard J at 37-8)

15.     In Re Legal and General Life Australia Limited and the Minister for Territories and Local Government (1983) 5 ALD 476 the Administrative Appeals Tribunal (Deputy President Hall, Members Horrigan and Woodley) decided that witness expenses cannot be recovered unless there is provision in the Act for payment of the claimed expenses. The tribunal applied the decision in Withers and found that a claim for expenses incurred in collating material in answer to a summons to produce documents was not allowable. 

16.     I am not assisted by the decision in Re John Dee because, unlike the legislation governing the relevant powers of the Trade Practices Tribunal, the Act and Regulations make provision for the payment of fees and allowances to persons summoned to appear as witnesses.  Lockhart J noted that Re Legal and General was distinguishable for that reason. 

17.     Furthermore, Re Legal and General was a decision of a three member tribunal that included a Deputy President.  I should follow the decision as a matter of comity and to maintain consistency in decision-making in an area of the tribunal’s administration that has been settled. 

18. As for s.33(3B) of the Interpretation Act, I am of the view that it is concerned with the tribunal’s power, found in s.40(1A) of the Act, to issue a summons. The Act makes provision in s.67 and reg.16 for a particular aspect of a matter associated with that power, being the entitlement of a person summoned to appear as a witness, to be paid allowances such as an allowance for wages forgone through their appearance at the tribunal.

19.     Relying on s.33(3B) Mr Justice submitted that because the Act and Regulations provide for those witness allowances, it should not be implied that the tribunal’s power does not include providing for payment of costs and expenses to a stranger to the litigation who has been summoned to produce documents but not to appear as a witness.  Section 33(3B) dictates that such an implication should not be made “by reason only” of the omission from s.67 and reg.16 of provision for the costs and expenses of a stranger’s complying with such a summons. 

20.     In my view not to imply a lack of power does not mean that the power therefore exists.  Here, for two reasons I find that the bank is not entitled to its claim for costs and expenses in complying with the summons to produce.  First, the common law does not entitle the bank to recover them. Secondly, the Act and Regulations make no provision for such entitlement.  By contrast, the Federal Court has the power in the like situation to order payment of the person’s of costs and expenses (Order 27 rule 4A of the Federal Court Rules).  But that power was conferred by amendment to the court’s rules after the deficiency was identified in Withers (see Re John Dee at 51,095). Similar action has not been taken to amend the Act or Regulations. I consider this relevant in concluding that there is no intention on the part of the legislature to make provision for the tribunal to have similar power. In these circumstances, I find that it does not follow that s.33(3B) could imply that the power in s.40(1A) to make provision for the issue of a summons, could be extended to ordering payment of the bank's costs and expenses "by reason only" that s.67 and reg.16 deal with some other aspect of that power.

21.     Accordingly I do not accept the submission by counsel for the bank.  The claim by the bank that the applicant pay the bank’s costs and expenses in complying with the summons to produce documents is disallowed.

I certify that the 21 preceding paragraphs are a true copy of the reasons for the decision herein of P.J. Lindsay, Senior Member

Signed:         .....................................................................................
  Associate

Dates of Hearing  15 March 2004
Date of Decision  16 March 2004
Applicant  Self-represented        

Counsel for Respondent                R. Quinn

Counsel for summoned persons    A. Justice