Trustee for B & J Chung Trust and Commissioner of Taxation
[2022] AATA 383
•3 February 2022
Trustee for B & J Chung Trust and Commissioner of Taxation [2022] AATA 383 (3 February 2022)
Division:SMALL BUSINESS TAXATION DIVISION
File Number(s): 2020/2519, 2020/2520
Re:Trustee for B & J Chung Trust
APPLICANT
AndCommissioner of Taxation
RESPONDENT
DECISION
Tribunal:Deputy President Bernard J McCabe
Date:3 February 2022
Place:Sydney
The application for review is dismissed.
....................................SGD.................................
Deputy President Bernard J McCabe
CATCHWORDS
PRACTICE AND PROCEDURE – question of jurisdiction – administrative penalties – question as to applicant’s standing – matter to be heard on the papers – deregistered company – no jurisdiction – application dismissed.
LEGISLATION
Administrative Appeals Tribunal Act 1975 (Cth)
Corporations Act 2001 (Cth)
Income Tax Assessment Act 1936 (Cth)Taxation Administration Act 1953 (Cth)
CASES
Commissioner of Taxation v Tomaras (2018) 265 CLR
McCallum v Commissioner of Taxation [1997] FCA 533; (1997) 75 FCR 458
REASONS FOR DECISION
Deputy President Bernard J McCabe
XX
This application for review relates to the Commissioner’s decision to impose administrative penalties on the Trustee for the B & J Chung Trust for the quarterly periods ending 30 September 2014 to 30 June 2015. The trustee of the B & J Chung Trust was B & J Chung Pty Ltd until the company was deregistered on 11 April 2020. The application for review was filed by Mr Hyujin Kim who was appointed a director of the trustee company in 2016. Mr Kim represents the trustee company in the review.
The first Case Management Telephone Directions hearing was held on 28 May 2021. A question arose in relation to the applicant’s standing. It turns out the trustee company was deregistered by the Australian Securities and Investments Commission (ASIC) in 2020. The Commissioner argued the application for review filed by the trustee company was therefore invalid and neither the deregistered company nor Mr Kim could agitate the matter on behalf of the trust. I made directions requiring submissions from Mr Kim on the question of standing. None were forthcoming. At a subsequent directions hearing, I made amended directions in light of the non-compliance. Mr Kim again failed to provide submissions. I decided to deal with the matter on the papers.
BACKGROUND
The trustee company was incorporated on 26 November 2013, and the B & J Chung Trust was settled on 3 December of the same year. The trust deed settling the B & J Chung Trust appointed the company as the trustee of the Trust. Mr Kim was appointed a director of the Company on 1 January 2016.
The objection decision giving rise to this application was issued by the Commissioner on 30 November 2018. It provided that the applicant was liable for penalties under section 284-75 of Schedule 1 of the Taxation Administration Act 1953 (Cth) (the TAA) in the amount of $38,018.40. The trustee company objected to the assessment of penalties falling within the 2014 and 2015 income years on 29 March 2019. (The decision to impose penalties in later income years was not the subject of objection.) The Commissioner disallowed the objection on 7 March 2020. The application for review of the objection decision under Part IVC of the TAA was lodged on 29 April 2020.
STANDING
Section 27 of the Administrative Appeals Tribunal Act 1975 (Cth) (AAT Act) contains the general rules as to standing. Where those rules are applicable, “any person or persons whose interests are affected by the decision” may apply to the Tribunal for a review. However, this provision does not apply in relation to a reviewable objection decision made by the Commissioner. Reviews conducted under Part IVC of the TAA have special standing requirements. As Gordon J explained in Commissioner of Taxation v Tomaras (2018) 265 CLR 434 (at [85]):
The objection, review and appeal rights under Pt IVC of the TAA in respect of assessments are limited. Although s 14ZL(1) of the TAA relevantly states that Pt IVC applies if a provision of an Act provides that a “person” who is dissatisfied with an assessment may object against it, the “person” is relevantly the person or persons who may, because of a provision of the taxation law, lodge an objection against the assessment.
Lehane J made essentially the same point in McCallum v Commissioner of Taxation [1997] FCA 533; (1997) 75 FCR 458. In McCallum, the applicant taxpayer had been declared bankrupt. The Tribunal concluded the applicant lost his standing. Lehane J referred to s 175A of the Income Tax Assessment Act 1936 (Cth) and the provisions of Part IVC of the TAA and concluded the reference in s 14ZZ to “the person” was limited by reference to those other provisions. His Honour explained (at 473):
When one turns to Part IVC of the Administration Act, one finds that s 14ZU describes the way in which "a person making a taxation objection" must go about it; s 14ZW then tells us within what time "the person" must lodge the objection; under s 14ZX the Commissioner is to give notice of his decision to "the person"; if the Commissioner delays, s 14ZYA provides that "the person" may give the Commissioner a notice requiring him to make an objection decision; and, finally, s 14zz provides that if "the person" is dissatisfied with the objection decision, "the person" may, in the circumstances specified, apply to the AAT for a review or appeal to the Court. There can, I think, be no doubt that "the person" referred to in s 14ZZ and the other sections following s 14ZU is the same person as the one referred to in s 14zu itself and, in turn, in s 14ZL(1); and s 14ZL(1) makes it clear that the "person" concerned is the taxpayer referred to in s 175A of the Assessment Act who is dissatisfied with an assessment "made in relation to the taxpayer".
The Commissioner relies on McCallum to argue “the person” referred to in section 14ZZ is the person who makes the relevant taxation objection, and to whom the objection decision is issued. In this case, that is the trustee – or, more precisely, the trustee company. I agree. A director of the company does not have standing in his or her own right to commence proceedings in the Tribunal notwithstanding s 27 of the AAT Act. It is no answer to say the interests of the director (or anybody else) are affected by the decision under review. The director can only represent the company in Part IVC proceedings. But in this case, the company has been deregistered.
Section 601AD(1) of the Corporations Act 2001 (Cth) provides that a company ceases to exist once it is deregistered. Deregistration is the corporate equivalent of death. If the company is the only person able to commence proceedings and the company ceases to exist as a person, the Tribunal cannot deal with the application for review.
CONCLUSION
The Tribunal does not have jurisdiction. The application for review must be dismissed pursuant to s 42A(4) of the AAT Act.
I certify that the preceding 9 (nine) paragraphs are a true copy of the reasons for the decision herein of Deputy President Bernard J McCabe
..........................................SGD...........................
Associate
Dated: 3 February 2022
Date(s) of hearing: Heard on the papers
Applicant: Self represented Respondent: Self represented
0
2
0