VNBM and Commissioner of Taxation (Taxation)
[2021] AATA 3579
•7 October 2021
VNBM and Commissioner of Taxation (Taxation) [2021] AATA 3579 (7 October 2021)
Division:SMALL BUSINESS TAXATION DIVISION
File Number: 2020/7690
Re:VNBM
APPLICANT
AndCommissioner of Taxation
RESPONDENT
DECISION
Tribunal:Senior Member R Olding
Date:7 October 2021
Place:Sydney
The interim confidentiality order made under s 35 of the Administrative Appeals Tribunal Act 1975 on 8 July 2021 is revoked.
.............[SGD]...........................................................
Senior Member R Olding
Catchwords
PRACTICE AND PROCEDURE – CONFIDENTIALTY ORDERS – where application for review heard in private – where applicant sought further confidentiality orders – where orders might frustrate regulators in carrying out their duties – where applicant withdrew request – whether limited confidentiality order should be made - interim order revoked
Legislation
Administrative Appeals Tribunal Act 1975, ss 35, 43
Taxation Administration Act 1953, ss 14ZZE, 14ZZJCases
A Taxpayer and Federal Commissioner of Taxation (2004) 55 ATR 1112
Brown v Commissioner of Taxation [2001] FCA 276
HSJW and Commissioner of Taxation [2017] AATA 1906
Investrix Pty Ltd v Federal Commissioner of Taxation [2015] FCA 1427
VNBM and Commissioner of Taxation [2021] AATA 1626REASONS FOR DECISION
Senior Member R Olding
7 October 2021
The applicant requested a confidentiality order under s 35 of the Administrative Appeals Tribunal Act 1975 (‘AAT Act’) in relation to a matter decided by the Tribunal on
7 June 2021.[1] Pending consideration of that request, I made an interim confidentiality order on 8 July 2021. The Commissioner opposed the making of a confidentiality order and submitted that the interim order should be revoked.[1] VNBM and Commissioner of Taxation [2020] AATA 1626.
A short hearing was conducted in relation to these matters on 21 September 2021. At the end of the hearing, I reserved my decision. However, on 5 October 2021 the applicant wrote to the Tribunal withdrawing its request for confidentiality orders, conceding that a confidentiality order would not be appropriate in the circumstances.
However, that is not the end of the matter. The interim order remains in place. A decision of the Tribunal is required regarding whether the interim order should be revoked. I have also considered whether a limited confidentiality order is appropriate in circumstances where the applicant exercised its right to a private hearing.
BACKGROUND
In accordance with principles of open justice and transparency in public administration, hearings of this Tribunal are generally conducted in public, and evidence and documents filed in the Tribunal are publicly available unless, exceptionally, the Tribunal orders that a hearing be conducted in private. However, an applicant for review of a ‘reviewable objection decision’ under Commonwealth taxation laws is entitled, upon request under s 14ZZE of the Taxation Administration Act 1953 (‘TAA’), to a private hearing.
When applying for review of the Commissioner of Taxation’s decision disallowing the applicant’s objection against the Commissioner’s decision that the applicant was not entitled to a Cash Flow Boost (‘CFB’),[2] the applicant requested a private hearing.
[2] One of the economic response measures to the COVID-19 pandemic, outlined in VNBM and Commissioner of Taxation [2020] AATA 1626.
Two consequences followed:
(a)The hearing was duly conducted in private which, in the context of a hearing conducted on the Microsoft Teams platform, meant only the parties’ representatives were admitted to the virtual hearing.
(b)The Tribunal endeavoured to ensure, as far as practicable, that the reasons for its decision affirming the objection decision were, in accordance s 43 of the AAT Act as modified by s 14ZZJ of the TAA, framed so as not to be likely to enable the identification of the applicant company. This was achieved by the Tribunal’s usual practice of allocating a randomly-generated pseudonym for the applicant and the use of the expression ‘the Director’ in place of the name of the applicant company’s director.
The applicant was entitled, as of right, to the benefit of those two protections. It was not entitled to any further confidentiality or restrictions on publication or disclosure of information or evidence relating to the review. However, the Tribunal may make orders of that kind.
WITHDRAWAL OF THE APPLICANT’S REQUEST FOR A CONFIDENTIALITY ORDER
Because of the applicant’s late concession, there is no longer any controversy between the parties regarding whether a confidentiality order should be made. In that regard, and since the applicant is not legally represented, I note that I am satisfied the concession was appropriate in the circumstances.
One, but certainly not the only, relevant consideration is that a blanket confidentiality order could frustrate the Commissioner in carrying out his statutory duties.[3] In that regard, the Commissioner indicated that he had provided certain information regarding the hearing of the review of the CFB decision to the Tax Practitioners’ Board and wished to provide further information to the Board.[4]
[3] Re A Taxpayer and Federal Commissioner of Taxation (2004) 55 ATR 1112, [34].
[4] The Commissioner in written and oral submissions noted that the interim order was made ‘without consultation’. Although the making of an order ‘without being required to seek the views of the parties’ is expressly contemplated by s 35(5), I acknowledge that the interim order disrupted the Commissioner’s planned provision of further material to the Tax Practitioner’s Board. However, the applicant was entitled to have its submissions considered, which would have had little utility if the Commissioner had already provided the information to the Board. It was, of course, open to the Commissioner, upon receipt of the interim order, to approach the Tribunal to seek an early opportunity to make submissions as to why the order should be revoked or modified.
I considered whether a limited confidentiality order should be made that would allow the Commissioner to disclose information arising out of the review to the Tax Practitioners’ Board or otherwise in furtherance of his statutory duties, but prohibit public access to or other disclosure of information on the Tribunal’s file. Since this issue was ventilated at the hearing it is appropriate that I make some brief remarks in that regard. Before doing so, it will be helpful to set out the statutory framework.
Statutory framework
Section 35 of the AAT Act relevantly states:
35 Public hearings and orders for private hearings, non publication and non disclosure
Public hearing
(1)Subject to this section, the hearing of a proceeding before the Tribunal must be in public.
Private hearing
(2) The Tribunal may, by order:
(a)direct that a hearing or part of a hearing is to take place in private; and
(b) give directions in relation to the persons who may be present.
Orders for non publication or non disclosure
(3)The Tribunal may, by order, give directions prohibiting or restricting the publication or other disclosure of:
(a) information tending to reveal the identity of:
(i)a party to or witness in a proceeding before the Tribunal; or
(ii)any person related to or otherwise associated with any party to or witness in a proceeding before the Tribunal; or
(b)information otherwise concerning a person referred to in paragraph (a).
(4)The Tribunal may, by order, give directions prohibiting or restricting the publication or other disclosure, including to some or all of the parties, of information that:
(a) relates to a proceeding; and
(b) is any of the following:
(i)information that comprises evidence or information about evidence;
(ii)information lodged with or otherwise given to the Tribunal.
(5)In considering whether to give directions under subsection (2), (3) or (4), the Tribunal is to take as the basis of its consideration the principle that it is desirable:
(a)that hearings of proceedings before the Tribunal should be held in public; and
(b)that evidence given before the Tribunal and the contents of documents received in evidence by the Tribunal should be made available to the public and to all the parties; and
(c)that the contents of documents lodged with the Tribunal should be made available to all the parties.
However (and without being required to seek the views of the parties), the Tribunal is to pay due regard to any reasons in favour of giving such a direction, including, for the purposes of subsection (3) or (4), the confidential nature (if applicable) of the information.
As already noted, the position under s 35 is modified for reviews of taxation objection decisions by the opportunity for a private hearing which, if taken up, is accompanied by the requirement for the Tribunal’s reasons to be framed in a way that prevents identification of the applicant.
In that context, deciding whether to make orders conferring a greater degree of confidentiality requires a balancing process.[5] This involves applying the mandatory requirements of s 35(5) AAT Act, but having regard to the applicant’s exercise of its right to a private hearing and all other relevant circumstances.
[5] HSJW and Commissioner of Taxation [2017] AATA 1906, [17].
In Investrix Pty Ltd v Federal Commissioner of Taxation, Robertson J found no error in the Tribunal’s formulation of the required exercise, which his Honour summarised as follows:
Whether there were to be any further restrictions [beyond those provided for under the TAA] depended upon a weighing of the principle that it is desirable that there should be openness and public access to the hearing and all information before the Tribunal (a principle that the Tribunal must take as the basis of its consideration) and the reasons, if any, in favour of the restrictions sought (to which the Tribunal was to pay due regard).[6]
[6] [2015] FCA 1427, [17].
Should a limited confidentiality order be made?
Consideration of whether to make a limited order of the kind mentioned arose out of a concern that the benefits of a private hearing would be largely illusory without orders preventing media or other public access to the Tribunal’s file, including the transcript of the private hearing.
It may be such concerns that prompted Emmet J in Brown v Commissioner of Taxation to observe that:
having regard to the terms of s 14ZZE [of the TAA], it would be a most unusual case where the Tribunal, if asked, did not give the directions that are contemplated by s 35(2) [of the AAT Act] in a proceeding to which s 14ZZE applies. The Tribunal is empowered to give such directions for any reason, where it is satisfied that it is desirable to do so. Where a party exercised the right, under s 14ZZE, to have a hearing in private, that would be a very cogent reason for the Tribunal for the Tribunal to make an order under s 35(2)(b).[7]
[7] [2001] FCA 276, [10].
Those observations refer to s 35(2) of the AAT Act. Section 35 was subsequently amended but so far as relevant to the current matter is not materially different. His Honour’s observations are dicta and, as such, do not bind the Tribunal. Nevertheless, I do, of course, give them great respect.
Indeed, I confess I was initially inclined to the view that a limited order of the kind mentioned should be made to protect the practical utility of the applicant’s choice of a private hearing. However, the Commissioner opposed that course and I have been persuaded against it for the following reasons.
The Tribunal’s practices prevent third party access to material on the Tribunal’s file for matters where the hearing is conducted in private. Under those practices, any person seeking access to the Tribunal’s file must make a request in writing. That request is then considered by a member of the Tribunal and usually the parties will be given an opportunity to make submissions regarding whether access should be granted.
I considered whether that position – that access should not be granted without a decision of a member of the Tribunal – should be formalised by way of an order under s 35. While there is some force in the view that it should, such an approach would have little or no practical effect. The position would be the same as under the Tribunal’s current procedures – access would not be granted without a decision of the Tribunal. I expect it is for that reason that no case was identified in which a limited, confirmatory order of that kind has been made in a taxation review heard in private.
Parliament has prescribed the benefits to be enjoyed by a taxpayer exercising the right to a private hearing in a review of a taxation decision. The Tribunal has put in place processes to protect those benefits. The applicant’s request was directed towards much broader protection and in any case has been withdrawn. Against that background, I am persuaded that I need not depart from the usual course by making an order of the limited kind mentioned.
REVOCATION OF THE INTERIM CONFIDENTIALITY ORDER
It is implicit in the applicant’s concession that the applicant also concedes there is no occasion for maintaining the interim order. I am satisfied that implicit concession was also appropriate in the circumstances.
CONCLUSION
For the reasons outlined above, I am satisfied the interim order should be revoked and no further confidentiality order made.
I certify that the preceding 23 (twenty three) paragraphs are a true copy of the reasons for the decision herein of Senior Member R Olding..[SGD].........................................................
Associate
Dated: 7 October 2021
Date of hearing 21 September 2021 Advocate for the Applicant: The applicant’s director. Counsel for the Respondent: K Josifoski Solicitors for the Respondent: ATO Review & Dispute Resolution
1
4
0