The Trustee of the Mladenis Family Trust T/A Affinity Consulting Services v Commissioner of Taxation
[2006] FCA 1406
•31 OCTOBER 2006
FEDERAL COURT OF AUSTRALIA
The Trustee of the Mladenis Family Trust T/A Affinity Consulting Services v Commissioner of Taxation [2006] FCA 1406
PRACTICE AND PROCEDURE – appeal from decision of the Administrative Appeals Tribunal to refuse an application for reinstatement of proceedings – application for reinstatement based on substantive case having ‘strong merits and a good chance of success’ and the appellant having not received the notice of listing for the hearing of the substantive application – whether Tribunal erred in refusing an application by the appellant for an adjournment to explain the circumstances of its non-appearance before the Tribunal in light of evidence of an email indicating service of the notice of listing – whether given reasonable opportunity to present case – whether Wednesbury unreasonableness in the exercise of the reinstatement discretion by the Tribunal member
Held: The appeal be dismissed. Appellant not denied procedural fairness in the circumstances where the appellants’ non-appearance at the hearing was so evidently a live issue that the appropriate investigations as to this issue should have been undertaken and Counsel for the appellant should have been briefed on this matter. No Wednesbury unreasonableness in the Tribunals finding not to accept the appellants excuse for non-attendance or in the Tribunal’s assessment of the merits of the case.
Administrative Appeals Tribunal Act 1975 (Cth) ss 42A, 68AA
Applicant VEAL of 2002 v MIMIA (2005) 222 ALR 411 cited
Associated Provincial Picture Houses Ltd v Wednesbury Corporation [1947] 2 All ER 680 applied
FAI Insurances Ltd v Winneke (1982) 151 CLR 342 cited
Kioa v West (1985) 159 CLR 550 considered
Kruger v Commonwealth (1997) 190 CLR 1 cited
Lenijamar Pty Ltd v AGC (Advances) Ltd (1990) 27 FCR 388 cited
Manoli v Secretary to the Department of Social Security (1994) 35 ALD 133 cited
NARV v MIMIA (2003) 133 FCR 89 cited
Sheikholeslami v Brungs [2006] FCA 933 cited
State of Queensland v JL Holdings Pty Ltd (1997) 189 CLR 146 cited
Sullivan v Department of Transport (1978) 20 ALR 323 appliedM Aronson, B Dyer and M Groves, Judicial Review of Administrative Action, 3rd edn, Lawbook Co, 2004
D Pearce, Administrative Appeals Tribunal, LexisNexis, Butterworths, 2003
S Hill, ‘Flogging a Dead Horse – The Postal Acceptance Rule and Email’ (2001) 17 Journal of Contract Law 151THE TRUSTEE OF THE MLADENIS FAMILY TRUST T/A AFFINITY CONSULTING SERVICES v COMMISSIONER OF TAXATION
QUD524 OF 2005COLLIER J
31 OCTOBER 2006
BRISBANE
IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY
QUD524 OF 2005
ON APPEAL FROM THE ADMINISTRATIVE APPEALS TRIBUNAL CONSTITUTED BY SENIOR MEMBER MCCABE
BETWEEN:
THE TRUSTEE OF THE MLADENIS FAMILY TRUST T/A AFFINITY CONSULTING SERVICES
AppellantAND:
COMMISSIONER OF TAXATION
Respondent
JUDGE:
COLLIER J
DATE OF ORDER:
31 OCTOBER 2006
WHERE MADE:
BRISBANE
THE COURT ORDERS THAT:
1.The appeal be dismissed with costs.
Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY
QUD524 OF 2005
ON APPEAL FROM THE ADMINISTRATIVE APPEALS TRIBUNAL CONSTITUTED BY SENIOR MEMBER MCCABE
BETWEEN:
THE TRUSTEE OF THE MLADENIS FAMILY TRUST T/A AFFINITY CONSULTING SERVICES
AppellantAND:
COMMISSIONER OF TAXATION
Respondent
JUDGE:
COLLIER J
DATE:
31 OCTOBER 2006
PLACE:
BRISBANE
REASONS FOR JUDGMENT
This is an appeal from a decision of the Administrative Appeals Tribunal (‘Tribunal’) of 27 October 2005. In that case pursuant to s 42A of the Administrative Appeals Tribunal Act 1975 (Cth) (‘AAT Act’), Senior Member McCabe refused an application for reinstatement of proceedings dismissed on 2 September 2005.
The orders sought by the appellant before this Court are as follows:
1. The appeal be allowed.
2. That the application for reinstatement filed 5 October 2005 be remitted to the Tribunal for further consideration.
3. The respondent pay the appellant’s costs of and incidental to the appeal to be taxed.
BACKGROUND
This matter arises as a result of the imposition of tax penalties on the appellant by the respondent in 2004. The sequence of events appears to be as follows:
1. The respondent imposed an administrative penalty of $47 178 on the appellant pursuant to s 3 A New Tax System (Goods and Services Tax Administration Act) 1999 (Cth) as a result of the appellant having a tax shortfall amount for the period 1 January 2002 to 31 December 2002. The notice of assessment of such penalty was issued to the appellant on 11 February 2004.
2. Bourne & Romeo Accountants, of Fitzroy North in Victoria was the representative of the appellant.
3. By objection dated 10 April 2004 Bourne & Romeo objected to the decision of the respondent on behalf of the appellant.
4. By letter dated 7 September 2004 addressed to ‘The Trustee of Mladenis Family Trust trading as Affinity Consulting Services C/- Bourne & Romeo’, the respondent disallowed the appellant’s objection.
5. By facsimile transmission dated 8 November 2004 Bourne & Romeo Accountants filed with the Tribunal an Application for Review of the decision of the respondent. The Application (since it was faxed on 8 November 2004, curiously dated 10 November 2004) provided as the address of the appellant ‘c/- Bourne & Romeo PO Box 1142 Fitzroy North Vic 3068 ph 03 9482 2855 Attention Doug Bourne’.
6. On 9 February 2005 the first hearing before the Tribunal in relation to the Application for Review took place by way of telephone conference. For unknown reasons, the appellant did not attend this telephone conference. In the appellant’s absence it was ordered to file and serve by 9 April 2005:
·a copy of the trust deed of the Mladenis Family Trust
·a witness statement of Helen Dimitrijevski, who was an officer of the appellant
·any other witness statements
·the schedule of repayments
·financial documents and
·a Statement of Facts and Contentions.
7. The appellant failed to file and serve those documents by 9 April 2005.
8. On 21 April 2005 (or 26 April 2005 – there is some inconsistency between the date in the Chronology of Events submitted by the respondent before me and the date in the reasons for decision of the Tribunal, however the inconsistency is not material) the second hearing before the Tribunal took place by way of a telephone conference. It is unclear whether an officer of the appellant attended this conference or whether the attendance was by its representative, however it does not appear to be in dispute that there was attendance by the appellant. The appellant was directed to file and serve by 31 May 2005 the documents the subject of the 9 February 2005 directions.
9. The appellant failed to file and serve the relevant documents by 31 May 2005.
10. On 2 June 2005 the appellant provided some documents but did not file a statement of facts and contentions or any witness statements.
11. On or about 12 July 2005 it appears that Thiel Partners on the Gold Coast was appointed the new representative of the appellant. The responsible staff member at Thiel Partners was Mr Ashley Summerville.
12. Because of the change in representative, a directions hearing before the Tribunal in relation to the Application for Review which had been scheduled for 12 July 2005 did not proceed.
13. On 2 August 2005 the Tribunal issued a notice of listing of telephone directions for 2 September 2005. Evidence subsequently produced to the Tribunal indicates that the notice of listing was addressed as follows ‘T’ee Mladenis F Tr T/A Affinity Consult. C/- Thiel Partners, Accountants, PO Box 2202, SOUTHPORT QLD 4215, Attn: H. Dimitrijevski’.
14. On 2 September 2005 the appellant did not appear at the telephone directions hearing. Senior Member McCabe dismissed the Application for Review pursuant to s 42A(2) of the AAT Act as a result of the appellant’s failure to attend that hearing.
15. Tanya Cirkovic & Associates, Solicitors, commenced acting on behalf of the appellant on or about 5 October 2005.
16. On 5 October 2005 Tanya Cirkovic & Associates filed an Application for Reinstatement pursuant to s 42A(8) of the AAT Act. The grounds of the application prepared by the appellants’ solicitors were, in summary, that the appellant was unaware of the hearing to be held by the Tribunal on 2 September 2005 and that the case had strong merits and a good chance of success.
17. The hearing of the Application for Reinstatement was listed for 27 October 2005 before Senior Member McCabe. Both the appellant and the respondent were represented by counsel at that hearing before the Tribunal.
18. At the hearing, evidence emerged that an officer of the respondent had contacted Mr Summerville the previous day in relation to whether Mr Summerville had received the listing notice for the 2 September 2005 Tribunal hearing and whether Mr Summerville had forwarded the notice of listing to the appellant. A copy of an email from Mr Summerville to Ms Dimitrijevski dated 4 August 2005 forwarding the notification of listing as a pdf file attached to an email to Ms Dimitrijevski was produced by the respondent. The email read as follows:
‘Helen
Attached is a letter received to day (sic) from the AAT regarding a hearing set for 2nd September 2005.
I will send the original today.’19. There was no dispute that contacting Ms Dimitrijevski equated to contacting the appellant.
20. Counsel for the appellant indicated that he was unaware of this information, and requested an adjournment. This adjournment was refused by the Tribunal.
21. The Application for Reinstatement brought by the appellant was dismissed by the Tribunal.
22. Reasons were given orally by the Tribunal and not recorded at the time.
23. A notice of appeal was filed in this Court on 30 November 2005.
24. On or about 3 April 2006 the appellant wrote to the Tribunal requesting written reasons for the decision of Senior Member McCabe given 27 October 2005. Written reasons for decision were made available on 13 April 2006.
REASONS OF THE TRIBUNAL
Senior Member McCabe indicated in par 6 of his Reasons for Decision that the principles which should be applied in respect of an application for reinstatement pursuant to s 42A(8) and (9) are those suggested by Manoli v Secretary to the Department of Social Security (1994) 35 ALD 133. In summary, the Tribunal must consider:
· the conduct of the appellant
· any prejudice (most obviously prejudice to the respondent)
· the merits of the substantive case and
· in considering these matters, the overriding obligation to do what is fair in the circumstances.
Applying that approach, the Tribunal:
1. Did not accept that the appellant and Thiel Partners had not received notice of the hearing listed for 2 September 2005.
2. Did not accept that the appellant had a good excuse for failing to attend the original hearing on 2 September 2005 at which the case was dismissed.
3. Found that the interests of the respondent were not prejudiced by the delay attending the review, however some prejudice to the interests of the respondent could accrue if the appellant’s claim was not prosecuted expeditiously.
4. Found that the appellant’s interests would be prejudiced if the Tribunal did not allow reinstatement because it would be unable to continue its challenge to the decision under review.
5. Was of the view that the merits of the case had not been substantiated beyond an assertion by the appellant that it had good prospects of success.
6. Found that the failure of counsel appearing for the appellant at the hearing to explain the discrepancy between the contentions in the outline and the facts as they emerged at the hearing ‘must count against the appellant’ and that the appellant was treating the Tribunal with ‘indifference’.
7. Found that ‘the excuse [the appellant] offered for its earlier failure to attend turned out to be untrue’.
8. Was not minded to grant an adjournment to allow the appellant to provide material given the delays that had already occurred.
In conclusion, the Tribunal held at par 12:
‘The original application was dismissed after the appellant or its representative failed to attend a directions hearing. Its reinstatement application did not address one of the important issues before the Tribunal at the hearing (the merits of the case) and the excuse it offered for its earlier failure to attend turned out to be untrue. It is fair to all the parties in all the circumstances that the application for reinstatement be refused.’
APPEAL
A party to a proceeding before the Tribunal may appeal to the Federal Court from a decision of the Tribunal only on questions of law: s 44 AAT Act.
The grounds of appeal in this case are:
1. Whether the Tribunal erred in law in refusing an application by the appellant for an adjournment to place further affidavit material before the Tribunal and therefore denying the appellant opportunity to properly prosecute the application for reinstatement:
a.by not giving the appellant the opportunity to explain the circumstances of its non-appearance at a hearing held 2 September 2005 at which the Tribunal directed that the application be dismissed pursuant to s 42A(2) of the AAT Act
b.by failing to consider the prejudice to the appellant in the circumstances and that any prejudice to the respondent could be remedied by the operation of the Taxation Administration Act 1953 (Cth).
2. Whether the Tribunal erred in law in respect of the order made 27 October 2005, and the dismissal of the appellant’s application to reinstate the application for review:
a.by not giving the appellant the opportunity to explain the circumstances of its non-appearance at a hearing held 2 September 2005 at which the Tribunal directed that the application be dismissed pursuant to s 42A(2) of the AAT Act
b.by failing to consider the prejudice to the appellant in the circumstances and that any prejudice to the respondent could be remedied by the operation of the Taxation Administration Act 1953 (Cth).
3. Whether the Tribunal erred in law in respect to the orders made 27 October 2005, in that the Tribunal has made a decision that is unreasonable.
SUBMISSIONS OF THE APPELLANT
The appellant submits that the crucial error of the Tribunal appears at pars 7, 8, 9, 10, 11, 12 of the Written Reasons for Oral Decision of the Tribunal. In summary the appellant submits that:
· The Tribunal failed to give the appellant a reasonable opportunity to be heard in relation to the email from Mr Summerville. The appellant relied on s 39 AAT Act which provides that a Tribunal shall ensure that every party to a proceeding before the Tribunal is given a reasonable opportunity to present his or her case.
· The Tribunal has the power to grant an adjournment at any time and that the efficient running of the court should not prevail over the injustice of preventing the appellant from responding to an adverse inference.
· The email that was presented to the appellant at the application for reinstatement was information that was adverse to the interests of the appellant, and was used by the Tribunal to make very serious findings against the appellant going to its credit and integrity.
· There may be several reasonable explanations that the appellant can offer in respect of the email.
· Although the Tribunal has a duty to discharge its obligations in an expeditious manner (s 33(1) AAT Act), the needs of case management do not derogate from the requirements of procedural fairness: State of Queensland v JL Holdings Pty Ltd (1997) 189 CLR 146.
· Refusal to grant an adjournment can constitute a failure to give a party to proceedings the opportunity of adequately presenting its case: Sullivan v Department of Transport (1978) 20 ALR 323.
· The Tribunal wrongly denied the appellant the opportunity to fully present its case, and denied the appellant procedural fairness.
· The decision of 27 October 2005 and the reasons given on 13 April 2006 in relation to reinstatement were unreasonable in that the reference to the adjournment was in relation to material supporting the merits of the case, and not in response to the email evidence that related to the conduct of the appellant. While the Tribunal must be minded to delays and prejudice caused by delay, it must not subordinate that interest to the need for procedural fairness.
· The Tribunal acted in error by reaching conclusions which were not open to it, and without any reasonable or logical basis, and committed manifest Wednesbury unreasonableness.
RESPONDENT’S SUBMISSIONS
In summary, the respondent submits that:
· Procedural fairness only requires that a party be given a reasonable opportunity to present its case, not that a Tribunal ensure that a party takes the best advantage of the opportunity to which it is entitled: Sullivan v Department of Transport (1978) 20 ALR 323.
· It is relevant to enquire whether the party or its legal representative should have reasonably apprehended that the issue was or might become a live issue (Re Building Workers’ Industrial Union (Aust); Ex parte Gallagher (1988) 76 ALR 353 at 357) and in this matter the appellant did not file any material with the Tribunal in support of its application for reinstatement.
· It was clear that the appellant was aware of the issue of its non-appearance at the directions hearing on 2 September 2005, that this was a live issue, and that a reasonable explanation and evidence of the reasonable explanation for this non-attendance would be required to be put before the Tribunal.
· The only evidence before the Tribunal at the reinstatement hearing was the email from Mr Summerville to Ms Dimitrijevski. Although, as the appellant submits, there may be several reasonable explanations that the appellant could offer in respect of the document, the appropriate time to provide any explanation was at the reinstatement hearing.
· There was no denial of procedural fairness by the Tribunal.
· In this case it was open on the material before it for the Tribunal to make the findings of fact that it made, and the decision of the Tribunal was not unreasonable in the Wednesbury sense and therefore no error of law was made out.
ISSUES BEFORE THIS COURT
There are essentially two issues of law which arise in respect of the appellant’s notice of appeal, namely whether the appellant has been denied procedural fairness by the Tribunal and whether the decision of the Tribunal was unreasonable in the Wednesbury sense.
The application by the Tribunal of the principles articulated in Manoli was not in dispute.
I propose to deal with each issue in turn.
WAS THE APPELLANT DENIED PROCEDURAL FAIRNESS BY THE TRIBUNAL?
The appellant has strongly urged the Court, both in written and oral submissions, to allow the appeal on the basis that it was denied procedural fairness by the Tribunal, both in relation to the Tribunal refusing an adjournment to allow Counsel for the appellant to take instructions in relation to the email produced at the Tribunal hearing, and in relation to the decision of the Tribunal to refuse to reinstate the matter under s 42A AAT Act.
The appellant in this case is subject to a significant administrative penalty. It is entitled to dispute that penalty, and to receive a fair hearing in so doing.
There is no question that, as explained by Mason J in Kioa v West (1985) 159 CLR 550 at 584, there is a common law duty to act fairly, in the sense of according procedural fairness, in the making of administrative decisions which affect rights, interests and legitimate expectations. In the context of decisions for which provision is made by statute, his Honour went on at 585:
‘In this respect the expression “procedural fairness” more aptly conveys the notion of a flexible obligation to adopt fair procedures which are appropriate and adapted to the circumstances of the particular case. The statutory power must be exercised fairly, ie in accordance with procedures that are fair to the individual considered in the light of the statutory requirements, the interests of the individual and the interests and purposes, whether public or private, which the statute seeks to advance or protect or permits to be taken into account as legitimate considerations…’
Brennan J in Kioa discussed the principles concerning a party having an opportunity to deal with matters relevant to its case as follows:
(at 628) ‘A person whose interests are likely to be affected by an interest of power must be given an opportunity to deal with relevant matters adverse to his interests which the repository of the power proposes to take into account in deciding upon its exercise …. The person whose interests are likely to be affected does not have to be given an opportunity to comment on every adverse piece of information, irrespective of its credibility, relevance or significance…. (629) Nevertheless in the ordinary case where no problem of confidentiality arises an opportunity should be given to deal with adverse information that is credible, relevant and significant to the decision to be made…’
These principles were affirmed recently in different contexts by the High Court in Applicant VEAL of 2002 v MIMIA (2005) 222 ALR 411 and by the Full Court of the Federal Court in NARV v MIMIA (2003) 133 FCR 89.
In this case the reason that the appellant’s substantive application before the Tribunal was dismissed under s 42A(2) AAT Act on 2 September 2005 was that the appellant did not appear at the hearing on that day. Section 42A(2) provides:
‘(2) If a party to a proceeding before the Tribunal in respect of an application for the review of a decision (not being the person who made the decision) fails either to appear in person or to appear by a representative at a directions hearing, or an alternative dispute resolution process under Division 3, held in relation to the application, or at the hearing of the proceeding, the Tribunal may:
(a) if the person who failed to appear is the applicant—dismiss the application without proceeding to review the decision; or
(b) in any other case—direct that the person who failed to appear shall cease to be a party to the proceeding.’There does not appear to be any dispute that the Tribunal was empowered to dismiss the appellant’s application on 2 September 2005 in view of the appellant’s non-appearance at that hearing.
It therefore follows that it was obvious that issues and evidence relevant to the non-appearance of the appellant on that day would have been critical at the reinstatement hearing of 27 October 2005, and that ensuring that all appropriate inquiries had been made by the appellant, and that their Counsel was properly briefed as to this issue, would be important in the conduct of that hearing.
As stated by Mason J in Kioa, it is important to consider the issues of procedural fairness as appropriate and adapted to the circumstances of the particular case.
Here, the Tribunal on 27 October 2005 had before it a case where, notwithstanding that the case was being prosecuted by the appellant:
1. Over the course of eight months, the appellant had a history of failing to attend hearings. Indeed out of four hearings listed, the appellant attended only one, and another was vacated at its request.
2. The appellant failed to comply with deadlines, including those which it had requested.
3. The notice of the hearing of the substantive matter was sent by the Tribunal to Mr Summerville, the nominated representative of the appellant, in accordance with the AAT Act. Section 68AA(1) provides, so far as relevant:
‘For the purposes of this Act:
(a) a document, statement, notice or other notification is taken to be given to a person if it is sent by post to whichever of the following addresses is applicable:
(i) if the document, statement, notice or other notification relates to a proceeding and the person has provided an address to which documents in relation the proceeding may be sent – that address
…
…(b) a document, statement, notice or other notification so sent by post is taken to have been given, unless the contrary is proved, at the time when the document, statement, notice or other notification would have been delivered in the ordinary course of post.’
4. There does not appear to be any dispute that, at the time, Mr Summerville was properly served with the relevant notice of listing by the Tribunal, or that, as a result for the purposes of s 68AA(1), the appellant was properly served with that notice.
5. It is very clear that critical issues for the appellant in the reinstatement proceedings on 27 October 2005 were the merits of the substantive application which had been dismissed on 2 September 2005, and why the appellant had not appeared at the hearing of 2 September 2005.
6. In relation to the merits of the substantive case the appellant submitted before the Senior Member at the hearing on 27 October 2005 that:
·its case had ‘strong merits and a good chance of success’
·it intended to show that, on a proper consideration of all the facts, it was not liable for the GST in respect of which it had been assessed
·it would show that it was not liable for the GST and penalties imposed by the respondent by means of substantial documentary evidence
·it would show that the monies received by it in respect of which GST and penalties had been levied had been refunded in total.
7. Other than those assertions, no material was provided to substantiate the claim of the appellant that its case had ‘strong merits and a good chance of success’.
8. In relation to its failure to appear at the hearing of 2 September 2005, the appellant submitted in writing before the Senior Member at the hearing of 27 October 2005 that:
·the appellant, and, to the best of the appellant’s knowledge, Mr Summerville, did not receive any listing for the hearing held by the Tribunal on 2 September 2005
·in the event that Mr Summerville did receive the listing for 2 September 2005, the appellant was not informed of the listing by Mr Summerville
·the appellant believed that the reason that neither it nor, to the best of its belief, Mr Summerville, did not receive any listing for the hearing arose from the change of representation in the matter
·as the appellant had not received a listing for the hearing, the appellant was unable to arrange for itself or a representative of itself to attend the hearing
·if the appellant had received a listing of the 2 September 2005 hearing, the appellant would have attended or arranged for a representative to attend the hearing, or otherwise have informed the Tribunal.
9. However, notwithstanding these submissions, the respondent was able, seemingly without difficulty, having inquired of Mr Summerville, to produce evidence that Mr Summerville had forwarded the notice of listing of 2 September 2005 to the appellant, and had indicated that he intended send on the original notice.
In view of the history of this matter, that Counsel for the appellant was taken by surprise by the email was extraordinary. It was particularly astonishing in light of the facts that:
· presumably, in advance of the hearing of 27 October 2005 the appellant could have asked Mr Summerville whether he had received the notice of listing, as the respondent did
· although the issue of the appellant’s non-attendance on 2 September 2005 was decisive in the dismissal of their application on that date, it appeared that the appellant had not taken that elementary step as its Counsel was unprepared for that evidence to be produced
· the appellant – for unknown reasons – was prepared to make submissions that to the best of its knowledge neither it nor Mr Summerville had received the notice of listing, without apparently ascertaining from Mr Summerville whether that was the case.
As Deane J observed in Sullivan at 343:
‘(I)t is important to remember that the relevant duty of the Tribunal is to ensure that a party is given a reasonable opportunity to present his case. Neither the Act nor the common law imposes upon the Tribunal the impossible task of ensuring that a party takes the best advantage of the opportunity to which he is entitled.’
In my view, the Tribunal was entitled to take into consideration not only the approach the appellant had taken to the case as a whole, but also what appeared to be the approach of the appellant to the case before it on 27 October 2005. While as a general rule it may be appropriate, on the production of new evidence which surprises one of the parties, for the Tribunal to permit an adjournment for the party to have the opportunity take instructions or consider its position, in the circumstances it is difficult to find otherwise than that the appellant had been provided with a reasonable opportunity to present its case.
It also follows that the manner in which the litigation had been conducted by the appellant, including being taken by surprise at such a fundamental piece of evidence, was a factor which the Tribunal could reasonably take into account in finding that the appellant had treated the Tribunal with indifference (cf Lenijamar Pty Ltd v AGC (Advances) Ltd (1990) 27 FCR 388 at 396 per Wilcox and Gummow JJ and Sheikholeslami v Brungs [2006] FCA 933 per Tamberlin J at [15]-[17]). The Tribunal was, in my view, entitled to take this history into account in considering whether it was ‘appropriate’ to reinstate the application within the meaning of s 42A(9) AAT Act. In this respect I note comments of Professor D Pearce in his book, Administrative Appeals Tribunal, LexisNexis, Butterworths, 2003, p 122, cited by the Tribunal in its reasons for decision.
Accordingly, the finding of the Tribunal at par 12 of its Reasons for Decision that the excuse the appellant offered for its failure to attend on 2 September 2005 was untrue was, in my judgment, a finding of fact open to the Tribunal, and not open to review by this Court.
Notwithstanding submissions of the appellant that the Tribunal allowed principles of case-management to prevail over principles of natural justice, in my view the reasons for decision given by the Tribunal do not evince such priority. This was not a case where, for example, the Tribunal was unprepared to permit a delay in proceedings in order to maintain a timetable. Indeed, the Tribunal made it clear that it did not accept that the respondent’s interests were prejudiced by the delay attending orderly conduct of a review, although it considered that some prejudice could accrue if the appellant’s claim was not prosecuted expeditiously [par 10]. Rather, in the view of the Tribunal, this was a case where the history of the litigation indicated what the Tribunal considered to be, overall, an indifferent approach of the appellant to attendance at Tribunal hearings and to deadlines, and to the need to either appear or ensure that legal representatives were properly prepared as to key issues in the litigation before the Tribunal which the appellant was prosecuting.
It was open to the Tribunal to find, as it did, that in the absence of evidence to support its case the merits of the substantive case had not been properly substantiated by the appellant.
Contrary to submissions of the appellant, the Tribunal did give consideration to the possible prejudice to the appellant of its decision not to reinstate the application [par 10]. However at par 12, the Tribunal emphasised that the appellant’s reinstatement application did not address one of the important issues at the hearing, namely the merits of the case. Accordingly, the Tribunal was not prepared to find in favour of the appellant.
I also note that the appellant has filed with this Court an affidavit of Ms Dimitrijevski, and a Statutory Declaration of Mr Summerville. Ms Dimitrijevski’s affidavit of 26 October 2005 pre-dates the Tribunal hearing of 27 October 2005, and deposes that the appellant did not appear at the hearing of 2 September 2005 as, to the best of her recollection, she did not receive the listing and she was not aware of the need for herself or the appellant to appear. Mr Summerville states in his Statutory Declaration signed and declared 27 April 2006, inter alia:
‘Our firm was not engaged to directly advise the client in the matter currently before the AAT. Letters received by our firm in relation to the matter are forwarded to the client for their attention. We confirm that the AAT correspondence was forwarded to the client via e-mail and the original followed via Australia Post. We did not receive a message saying the e-mail was undeliverable and the mail sent via Australia Post was not returned. As we have not been involved in this matter we had no need to follow up the client.’
In my view this evidence takes the matter no further than the case which was before the Senior Member, and does not assist the appellant’s case before me.
In my view there was no lack of procedural fairness in the conduct of the hearing on 27 October 2005 by the Tribunal. No errors of law in this respect are demonstrated either by the refusal of the Tribunal to adjourn the hearing on 27 October 2005 following production of Mr Summerville’s email, or in the dismissal of the application to reinstate the original substantive application.
WEDNESBURY UNREASONABLENESS
I note that the appellant has claimed that the decision of the Tribunal is so unreasonable that no reasonable person could have reached it. The term ‘Wednesbury unreasonableness’ is a reference to the decision of the Court of Appeal in Associated Provincial Picture Houses Ltd v Wednesbury Corporation [1947] 2 All ER 680, in particular comments of Lord Greene MR as follows:
‘Theoretically it is true to say - and in practice it may operate in some cases - that if a decision on a competent matter is so unreasonable that no reasonable authority could ever have come to it, then the courts can interfere. That, I think, is right, but that would require overwhelming proof, and in this case the facts do not come anywhere near such a thing.’ (at 683)
While sending correspondence or documents by email does not of itself necessarily equate to receipt of that correspondence or those documents by the addressee (this issue was not the subject of submissions before me, however I note an interesting discussion of the issue in S Hill, ‘Flogging a Dead Horse – The Postal Acceptance Rule and Email’ (2001) 17 Journal of Contract Law 151, the Tribunal had evidence before it that the notice of listing of 2 September 2005 was not only emailed to the appellant by Mr Summerville, but that ‘the original’ was also sent by another means. I have already noted that it appears that Thiel Partners was the nominated representative of the appellant. There is also no dispute that the address of Thiel Partners was the address nominated by the appellant for service of documents within the meaning of the AAT Act, or that it was appropriate for Mr Summerville, in his communications with the appellant, to forward correspondence to Ms Dimitrijevski. There was evidence before the Tribunal that the notice of listing for the hearing of 2 September 2005 had been communicated in multiple ways to the appellant and that the appellant was not only claiming lack of awareness of the notice of listing, but apparently – as indicated by the fact that its counsel was taken by surprise by this fact – was unaware that its representative had forwarded the notice. I note once again that the failure of the appellant to attend the hearing of 2 September 2005 and reasons for its failure to attend that hearing were clearly likely to be key issues at the hearing of its reinstatement application. On this basis, it was in my view open to Senior Member McCabe to draw adverse inferences concerning the conduct of the appellant, it preparedness for the hearing, and its approach to the litigation as a whole, and to take those findings into account in exercising his discretion to dismiss the reinstatement application.
Further, on the case before me it appears that the only evidence before the Tribunal as to the merits of the substantive application were submissions by the appellant that its application had strong merits and a good chance of success, and would be supported by documentary evidence. The lack of more substantial evidence before the Tribunal is surprising, as the appellant had clearly anticipated that the merits of the substantive application would be a key issue, but had chosen not to substantiate its case with supporting evidence. In my view the Tribunal was entitled to make its findings concerning the merits of the substantive case and the scanty nature of the evidence in support of those claimed merits, and to cite this as a ground for exercising the discretion to dismiss the reinstatement application.
I note again that the Tribunal is vested with a discretion in s 42A(9) to reinstate applications ‘if it considers it appropriate to do so’. That discretion is not unfettered, but must be exercised reasonably (Brennan CJ in Kruger v Commonwealth (1997) 190 CLR 1 at 36, cf Lord Greene in Wednesbury, Mason J in FAI Insurances Ltd v Winneke (1982) 151 CLR 342 at 368, and, for an historical perspective to this issue, the cases discussed in M Aronson, B Dyer and M Groves, Judicial Review of Administrative Action, 3rd edn, Lawbook Co, 2004, pp 88-93. However in this case it is difficult to form any view other than that, in finding that:
· the appellant had provided explanations as to its non-appearance which were without foundation (par 8), and which had turned out to be untrue (par 12)
· the appellant appeared to be treating the AAT with indifference (par 8)
· the reinstatement application did not address the merits of the case, which was one of the important issues before the Tribunal at the hearing (par 12)
the Tribunal made findings which were open on the case before it. Certainly, the decision of the Tribunal to dismiss the application for reinstatement could not be described as so unreasonable that no reasonable authority could ever have come to it.
Accordingly, the decision of the Tribunal is not unreasonable in the Wednesbury sense. In my view, the Tribunal in this case has not acted in a manner which gives rise to an error of law, either in refusing to allow an adjournment in relation to the production of Mr Summerville’s email, or in dismissing the application for reinstatement.
ORDER:
1.The appeal be dismissed with costs.
I certify that the preceding thirty-nine (39) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Collier. Associate:
Dated: 31 October 2006
Counsel for the Appellant: M Plunkett and K Williams Solicitor for the Appellant: Tanya Cirkovic & Associates Solicitor for the Respondent: Australian Government Solicitor Date of Hearing: 16 June 2006 Date of Judgment: 31 October 2006
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