Watson and Commissioner of Taxation (Taxation)
[2023] AATA 3751
•8 November 2023
Watson and Commissioner of Taxation (Taxation) [2023] AATA 3751 (8 November 2023)
Division:TAXATION AND COMMERCIAL DIVISION
File Number(s): 2021/7221; 2022/3888
Re:Adam Watson
APPLICANT
AndCommissioner of Taxation
RESPONDENT
DECISION
Tribunal:Deputy President Bernard J McCabe
Date:8 November 2023
Place:Sydney
The application for reinstatement is refused.
................................SGD........................................
Deputy President Bernard J McCabe
Catchwords
REINSTATEMENT – withdrawal – the power to reinstate – dismissed in error – evidence of impairment – dismissal attended by error
Legislation
Administrative Appeals Tribunal Act 1975 (Cth)
Cases
DFYN and Commissioner of Taxation [2022] AATA 3991
Goldie v Minister for Immigration and Multicultural Affairs [2002] FCAFC 367YZYJ and Commissioner of Taxation [2018] AATA 672
REASONS FOR DECISION
Deputy President Bernard J McCabe
8 November 2023
Mr Adam Watson has asked the Tribunal to reinstate review proceedings that were withdrawn in the wake of a pre-hearing conferencing event. Mr Watson was unhappy with the way a conference proceeded on 22 November 2022. He was self-represented at the conference. On 25 November 2022, the Tribunal received an email from Mr Watson’s email address (and copied to the Commissioner’s representative) which began: “I would like to advise the Tribunal I want to withdraw my application”. In the paragraphs that followed, Mr Watson complained he had been accused of fraud at the conference even as he was urged to consider a settlement. The email continued:
They [the conference facilitator and the Commissioner’s representative] keep referring back to a deal which made me feel very uncomfortable and I feel that the ATO was very prejudiced against me. I feel that there will not be a fair trial with this matter.
After elaborating on the complaint, Mr Watson added: “This is why I am withdrawing today as I now know what the outcome is going to be.”
The email was actually written at Mr Watson’s request by his bookkeeper, Ms Helen Preketes, who was not present at the conference in question. Ms Preketes told the Tribunal on 26 October 2023 that she counselled Mr Watson against sending such an email, but she said he insisted. Indeed, she told me at the interlocutory hearing that Mr Watson was in a rage when she spoke with him and she felt intimidated. She indicated his angry demand that she write the withdrawal email was out of character for him.
Mr Watson subsequently changed his mind about the decision to withdraw. On 29 November 2022, he emailed the registry, saying:
Hello to the Registrar
Can you please re instate my matter 2021/7221
The reason why it was discontinued is that we didn’t agree with what the mediator said and we felt we would not get a fair hearing.
But we would like to re instate please
The reinstatement process got off to a rocky start. Mr Watson did not appear at the reinstatement hearing on 28 February 2023. The hearing was relisted. I note there have been multiple events and adjournments over the course of 2023 as the process dragged on.
The delays have been occasioned by attempts to grapple with a complicated technical question which simply cannot be ignored. Does the Tribunal have jurisdiction to reinstate the proceedings under s 42A of the Administrative Appeals Tribunal Act 1975 (Cth) (the AAT Act) given the circumstances in which they were withdrawn?
The question is important – and unavoidable - because the Tribunal is a creature of statute. It can only do that which it is authorised to do under an enactment. Those limits apply to all the Tribunal’s powers, including the power to reinstate. Whatever personal sympathy one has for the predicament of an individual, the Tribunal can only do what the AAT Act permits it to do.
The AAT Act makes clear that, as a general rule, an applicant is required to exercise his or her right of review, or they will lose it. A person who voluntarily withdraws from proceedings might not be able to take up the review where they left off simply because they changed their mind about the wisdom of withdrawing. If proceedings are withdrawn and dismissed, they can only be resumed in the limited circumstances defined in s 42A of the AAT Act.
As I will explain, the only power of reinstatement that may be relevant in this case is found in s 42A(10) of the AAT Act. That power is available where the earlier proceedings were dismissed in error. That expression has been interpreted broadly, and it is probably dangerous to attempt an exhaustive definition of every situation in which an error might be found to have occurred. I have expressed the view elsewhere that the concept of error does not ordinarily extend to mere errors in judgment – most obviously where an applicant makes an unwise decision to withdraw which they later come to regret.[1] If that were all there was to Mr Watson’s case, I would have little hesitation in refusing the application. But there is more to this application.
[1] YZYJ and Commissioner of Taxation [2018] AATA 672, [6]; see also: DFYN and Commissioner of Taxation [2022] AATA 3991, [18]-[21].
Mr Watson suffers from diabetes which is poorly controlled. He has regularly engaged with medical specialists and his general practitioner, and he has been hospitalised on occasions in the recent past on account of this condition. Mr Watson also experiences mental health challenges. I am generally aware that spikes in blood sugar can cause aggressive and impulsive behaviour.
If the Tribunal was satisfied Mr Watson’s medical or mental health challenges impaired his judgment at the time he made the decision to withdraw, that might provide a basis for finding the proceedings were withdrawn in error. With that possibility in mind, Mr Watson was asked to obtain some medical evidence from his treating medical practitioner(s). On 6 April 2023, at the relisted reinstatement hearing, Mr Watson was directed to file a detailed medical report by 20 April that discussed his illness. Mr Watson had an upcoming medical appointment, and he said he was confident the evidence could be obtained. He subsequently filed some medical records in response to that direction but he did not file a medical report within the time contemplated.
Medical records, including records of hospital admission, do not take us very far. I can readily accept from those documents that Mr Watson has serious health issues. But I am not a medical expert. I need to hear from a medical practitioner familiar with Mr Watson’s situation who can shed light on the question before me – namely, whether Mr Watson’s medical and/or mental health conditions may have impaired his judgment at the time he decided to withdraw.
At the resumed reinstatement hearing on 19 May, we again discussed the absence of this important evidence. Mr Watson asked for a further adjournment because he said he had a fresh appointment with a treating specialist in the following days. He said he expected the doctor would be able to provide the report that was requested. I agreed to a further adjournment until after that appointment. To help Mr Watson explain to the doctor what I needed to know, my associate wrote to Mr Watson on 19 May 2023 in the following terms:
I refer to the above matter and confirm that today’s interlocutory hearing on reinstatement has been adjourned, resuming at 9.00am on Friday, 26 May 2023. …
It was noted during today’s event that you are attending an appointment with [the treating specialist] to obtain a report on the circumstances of your medical condition, and to get an indication of when that report will be available.
The Deputy President has also asked me to remind you that the question [the treating specialist] needs to answer, or that need be addressed by the report, is whether your medical conditions were capable of making you prone to outbursts that affected your judgment around November 2022. …
The treating specialist did not provide a report as anticipated in that communication, and he was unavailable to give evidence. A further adjournment was given on 10 August to give Mr Watson yet more time. A resumed hearing had to be vacated on 26 September because Mr Watson was in distress and unable to attend.
On 19 October, at yet another resumed hearing that was convened to consider the medical evidence, Mr Watson asked for a further extension so he could see his treating general practitioner. In an email to the Tribunal in advance of the resumed hearing that day, he said:
I provided a copy of Doctors certificate, Blood Test and Sugar levels to prove that I have a problem with my sugar.
I know it is not exactly what you are after, but I have done the best I can under the circumstances, as I have no where to live and I am fighting my diabetes really badly. If the ATO want to check the ATO can call [the treating general practitioner] directly to get this information.
Mr Watson also referred to ongoing mental health challenges in that email. The medical certificate which accompanied the email from the treating general practitioner confirmed the applicant was suffering from diabetes that is “very poorly controlled”, and that he “is also under the care of an endocrinologist”.
Again, I have no difficulty accepting Mr Watson faces serious health issues. I accept there is direct evidence from his treating medical practitioner that he has suffered (and continues to suffer) regular and significant spikes in his blood sugar, although the evidence does not say he was experiencing spikes on the day or days when he made the decision to withdraw. I am conscious Mr Watson is frustrated by the length of time that this process has taken, and I acknowledge the delay may be exacerbating his obvious anxiety. I also acknowledge he experiences challenges in securing appointments with medical practitioners that might assist. But the repeated adjournments have been given so he would have the opportunity to consult his doctors so they might assist the Tribunal. I do not expect a lengthy report from his doctor; an oral assessment would do. I have difficulty seeing how I can answer the question I need to address under s 42A(10) in the absence of some medical evidence about the impact of those conditions on his judgment at the time the withdrawal email was sent. I cannot substitute my own judgment for that of an expert when answering a question about the impact of a health condition.
On 19 October, I agreed Mr Watson might have one last adjournment on the strength of his assurance that he expected to see the treating general practitioner on Thursday 26 October in the afternoon. It was agreed we would adjourn until the time of his appointment and that we would speak via a videolink with Mr Watson and his doctor from the doctor’s rooms. Alas, on the morning of 26 October, Mr Watson wrote to the Tribunal asking for another adjournment because the doctor had unexpectedly brought forward the appointment and would therefore be unable to speak with the Tribunal that afternoon. As I understand it, the doctor was not willing (or felt unable) to provide evidence in these proceedings. I was told he preferred to refer Mr Watson back to a specialist for further review. I note the applicant had asked his bookkeeper, Ms Preketes, to contact the doctor and explain the situation with Mr Watson’s permission. She was unsuccessful.
Mr Watson asked for yet another adjournment so he could see his treating specialist. I was told he has secured an appointment in mid-November. But it is unclear whether that specialist was willing to provide a report or give evidence. If we adjourned again, there is no guarantee that we would have access to an expert opinion in the foreseeable future. Given all the time that has passed – the reinstatement proceedings have been on foot for close to a year – I feel constrained to proceed on the basis of the material before me rather than allowing another adjournment. The time has come to deal with the application for reinstatement as best I can.
I shall begin by discussing the effect of the withdrawal notice and the limitations on the reinstatement power before discussing the evidence before me.
The effect of the email dated 25 November 2022 asking to withdraw the proceedings
The registry received the email and regarded it as notice of Mr Watson’s wish to withdraw the proceedings. The registry officer who actioned the email did not need to check with the applicant or question whether Mr Watson really meant what he said, and there was no need for a member of the Tribunal to become involved and make an order. An applicant is entitled to withdraw, and the registry gave effect to the applicant’s written wishes according to their terms. In doing so, the registry was acting in accordance with s 42A(1A) of the AAT Act, which provides:
(1A) A person who has made an application to the Tribunal for a review of a decision may, in writing lodged with the Tribunal, at any time notify the Tribunal to the effect that the application is discontinued or withdrawn.
The immediate consequence of withdrawing or discontinuing proceedings under this sub-section is spelled out in s 42A(1B). Section 42A(1B) says once the notification is given, “the Tribunal is taken to have dismissed the application without proceeding to review the decision.”
The power to reinstate proceedings that have been dismissed
Section 42A of the AAT Act deals with dismissals, withdrawals and reinstatements. The power to reinstate proceedings that have been dismissed or withdrawn is actually quite narrow. Where proceedings have been dismissed pursuant to s 42A(2) because the applicant did not appear at a listed event, the applicant may seek reinstatement within 28 days pursuant to ss 42A(8A) and (9). The power to dismiss for non-appearance is an important tool for managing caseloads efficiently, but there are good reasons for giving an applicant the opportunity to revisit a dismissal for non-appearance precisely because they were not present and could not be heard when the dismissal decision was made. The applicant may have a good excuse for their non-appearance, and there might be other reasons for allowing them to continue in the Tribunal. But the proceedings involving Mr Watson were not dismissed under s 42A(2). They were dismissed under s 42A(1B) in light of the request he made pursuant to s 42A(1A).
A party other than the applicant may ask for proceedings that were dismissed pursuant to s 42A(1B) to be reinstated under s 42A(8A) and (9) – but that provision does not assist Mr Watson, because he was the applicant. It follows the Tribunal does not have the power to order reinstatement under ss 42A(8A) and (9) in the circumstances of this case.
The only other power to reinstate is found in s 42A(10) of the AAT Act. That sub-section says:
(10) If it appears to the Tribunal that an application has been dismissed in error, the Tribunal may, on the application of a party to the proceeding made within the period referred to in subsection (11) or on its own initiative, reinstate the application and give such directions as appear to it to be appropriate in the circumstances. [Emphasis added]
To be clear, that power is only available where the application was dismissed in error. I have already mentioned the expression has been interpreted liberally, and that it would be undesirable to attempt an exhaustive definition of the expression that might deprive it of its intended flexibility. As the Full Court made clear in Goldie v Minister for Immigration and Multicultural Affairs [2002] FCAFC 367, the error in question was not confined to administrative errors. All that was required was that there was a dismissal and that the dismissal was attended by some error: at [28]-[30] per Wilcox and Downes JJ. But the Full Court emphasised there must be some evidence of an actual error that attended the dismissal: at [42].
I am not satisfied that proceedings could be said to be dismissed in error if the applicant, upon reflection, merely changed his mind about the wisdom of the decision to withdraw. There would be no evidence of error attending the dismissal in that event. That approach to the power in s 42A(10) makes sense in the context of s 42A as a whole which contemplates individuals pressing on with their review, consistent with the object set out in s 2A of the AAT Act.[2] However I am satisfied that evidence of impairment attending the decision to withdraw might qualify as an error, depending on the medical evidence about the existence and extent of that impairment at the relevant time.
[2] Section 2A sets out the object of the Tribunal – which is to provide “a mechanism of review that:
That brings me back to the evidence in this case. I have already indicated I accept there is evidence the applicant suffers from, amongst other things, spikes in blood sugar as a consequence of his diabetes. I accept he also experiences mental health challenges and other difficult personal circumstances that make a review process particularly difficult to manage. We do have some evidence from Ms Preketes at the hearing on 26 October 2023 to the effect that Mr Watson was behaving aggressively when she received his instructions to draft and despatch the notice of withdrawal notwithstanding her advice. (I should add there is no suggestion Ms Preketes misunderstood Mr Watson’s instructions on that occasion.) Yet I have not been provided with evidence from a medical practitioner confirming Mr Watson’s combination of health circumstances might cause impairment at the time he made his decision to withdraw on 25 November.
I accept there is evidence before me which made it appropriate to ask the question about impairment. That is why I allowed repeated opportunities for the applicant to obtain the medical evidence that would provide an evidentiary basis for finding there was impairment, and thus (at least potentially) an error that attended dismissal. But in the absence of any expert medical evidence, it would be inappropriate for me to speculate as a lay-person about the impact of Mr Watson’s various health conditions on his competence at the relevant time.
Conclusion
I have every sympathy for Mr Watson’s situation. He is obviously struggling with health conditions and other complicated personal circumstances. I have attempted to accommodate the challenges he faces in getting the evidence that is required. That is why the reinstatement application has dragged on for so long. But I cannot delay the review indefinitely. I must apply the law while having regard to the Tribunal’s object in s 2A of the AAT Act. We have reached the point where further extensions and adjournments would be inappropriate. I have to make a decision on the basis of the material before me. The law requires that I point to evidence of error attending the dismissal which is capable of sustaining the conclusions I reach. I cannot simply waive Mr Watson’s case through without proper medical evidence out of sympathy for his predicament.
There is insufficient evidence of the proceedings being dismissed in error within the meaning of s 42A(10) of the AAT Act notwithstanding the repeated attempts to obtain such evidence. Given there is no other basis upon which I could reinstate the proceedings, I have no choice but to decline reinstatement.
I certify that the preceding 30 (thirty) paragraphs are a true copy of the reasons for the decision herein of Deputy President Bernard J McCabe
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Associate
Dated: 8 November 2023
Date(s) of hearing: 28 February 2023; 6 April 2023; 19 May 2023; 10 August 2023; 26 September 2023; 19 October 2023; 26 October 2023. Applicant:
In person
Solicitors for the Respondent:
Ms Tiffany Koutrouzas
a)is accessible; and
b)is fair, just, economical, informal and quick; and
c)is proportionate to the importance and complexity of the matter; and
d)promotes public trust and confidence in the decision-making of the Tribunal.”
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