VDRZ and Innovation Australia

The Administrative Appeals Tribunal (AAT) considered a dispute between VDRZ (the applicant) and Innovation Australia. The Commissioner of Taxation was also involved in negotiations with VDRZ, leading to a situation where settlement discussions were, in substance, tripartite. Despite the parties informing the Tribunal that they expected the matter to settle and the Tribunal issuing consent directions to facilitate these discussions, the matter had not settled. VDRZ subsequently sought an alternative dispute resolution (ADR) process, requesting that a non-party, who was likely to be helpful in that regard, be authorised to attend.

The central legal issue before the Tribunal was whether it was permissible to authorise a non-party to attend an ADR process in these circumstances, and whether there would be utility in directing the proceedings be referred to conciliation. This question arose in the context of ongoing, albeit unsuccessful, settlement negotiations involving the applicant and the Commissioner, with Innovation Australia also participating in the broader discussions.

Justice Duncan Kerr, President, reasoned that the Tribunal had the power to direct parties to participate in ADR processes, including conciliation, and to make directions to facilitate such processes. The Tribunal considered the potential utility of involving a non-party who could assist in resolving the dispute, noting that the negotiations had been ongoing and had not yet yielded a settlement. The Tribunal's approach was to facilitate a resolution, and the involvement of an external party was considered as a means to that end, provided it was permissible and likely to be beneficial.

The Tribunal ultimately made directions for the proceedings to be referred to conciliation, indicating a willingness to explore further ADR mechanisms to achieve a resolution of the dispute.