Way v Deputy Commissioner of Taxation (No 2)
[2004] FMCA 373
•11 June 2004
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| WAY v DEPUTY COMMISSIONER OF TAXATION (No 2) | [2004] FMCA 373 |
| ADMINISTRATIVE LAW – Appeal from Administrative Appeals Tribunal – whether error of law – unrepresented applicant – voluminous material – whether bias – whether familiarity with tribunal officers ground for bias – procedural fairness – requirement to give evidence. |
Sales Tax Assessment Act 1992, ss.16, 61, 61(2), 63, 99,100, 101(1), 107
Administrative Appeals Tribunal Act 1975, s.44
Taxation Administration Act 1953, s.14ZZ
Bushell v Repatriation Commission (1992) 175 CLR 408
Tuite v Administrative Appeals Tribunal (1993) 40 FCR 483
Clements v Independent Indigenous Advisory Committee (2003) FCAFC 143
Re Refugee Review Tribunal ex parte H (2001) 179 ALR 425
R v Commonwealth Conciliation and Arbitration Commission; ex parte Angliss Group (1969) 122 CLR 546
Re Minister for Immigration and Multicultural Affairs; ex parte Lam (2003) 195 ALR 502
Darrell Lea Chocolate Shops v FCT (1996) 72 FCR 175
Revlon Manufacturing Ltd v FCT (1995) 31 ATR 48
Commissioner of Taxation v Dalco (1990) 168 CLR 614
Waterford v Commonwealth of Australia [1987] 163 CLR 54
| Applicant: | WAY |
| Respondent: | DEPUTY COMMISSIONER OF TAXATION |
| File No: | WZ 155 of 2003 |
| Delivered on: | 11 June 2004 |
| Delivered at: | Melbourne |
| Hearing Date: | 3 May 2004 |
| Judgment of: | McInnis FM |
REPRESENTATION
| Applicant: | In person |
| Counsel for the Respondent: | Mr J.D. Allanson |
| Solicitors for the Respondent: | Australian Government Solicitor |
ORDERS
The application be dismissed with costs.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT PERTH |
WZ 155 of 2003
| WAY |
Applicant
and
| DEPUTY COMMISSIONER OF TAXATION |
Respondent
REASONS FOR JUDGMENT
The applicant by notice of appeal filed in the Federal Court of Australia appealed from a decision of the Administrative Appeals Tribunal (the AAT) delivered on 30 July 2003. The Federal Court by order made on 19 September 2003 transferred the appeal to the Federal Magistrates Court.
The applicant relies upon the grounds of appeal set out in the notice of appeal together with further and better particulars of the appeal filed pursuant to an order by the Federal Court made on 20 August 2003.
The court made a preliminary ruling in this matter whereby it refused an application to adduce further evidence for the hearing by the applicant. The revised reasons for that extempore ruling are published separately.
The applicant appeals from a decision of the AAT which had affirmed a decision of the respondent dated 27 February 2001 to disallow the applicant's objections to two notices of assessment issued to him under the Sales Tax Assessment Act 1992 (the STAA). The notices were issued to the applicant on 9 October 2000 and they were assessments raised under s.101 of the STAA for outstanding amounts of sales tax of $3618.97 and $1672.80 in respect of taxable value of industrial tools and supplies sold by wholesale during the period 1 May 1998 to 31 July 1998 and 1 November 1998 to 31 January 1999 respectively. In both notices the penalty amounts assessed under s.99 of the STAA were entirely remitted under s.100 of the STAA.
Hence, in brief terms it is clear that the issue before the AAT was whether the assessments by the respondent for the relevant periods were excessive. The total amount of the assessments is $5,291.77.
Perhaps somewhat surprisingly this court was confronted with three volumes of appeal books totalling 743 pages. Included in that material are the undated applicant's statement of facts and issues comprising approximately 70 pages of material, the respondent's facts and contentions dated 10 September 2002, undated copy of respondent's submissions (being exhibit R8 at the AAT hearing), the applicant's further submissions dated 9 May 2003 and a copy of the respondent's closing submissions filed 26 May 2003. It is noted that the hearing before the AAT occurred on 6 May 2003 and that, accordingly, some of the submissions to which reference has been made postdated the hearing date.
It should be observed from the outset that this application could properly be described as a litigation saga involving voluminous documents, including the submissions to which I have referred and the other material set out in the appeal books. Although the hearing itself only occupied one day, it is clear from the correspondence that this dispute has had a prolonged and chequered history. The applicant throughout the proceedings has been unrepresented. Yet again the court is confronted with a further example of the increased cost to the community in relation to court resources where parties are not adequately represented. I have no doubt that if the applicant had been represented, then many of the submissions made and the large volume of the material now sought to be relied upon would not have been pursued before this court. Nevertheless, I have endeavoured in the circumstances to make due allowance for the fact that the applicant is both unrepresented and has little knowledge of the law.
Before this court the applicant relied upon an outline of submissions filed 5 April 2004 and the respondent an outline of submissions filed 19 April 2004. Both parties adopted those submissions.
The Appeal
The applicant relies upon four grounds:-
(1)the members and staff of the AAT were biased;
(2)the applicant was denied procedural fairness and natural justice;
(3)the applicant was held to a higher burden of proof than was predicated;
(4)the members misapplied the relevant law and legislation.
Relevant Legislation
In its decision the AAT set out the quite legislative context which conveniently includes reference to what I regard as the relevant sections of the STAA, and for convenience I set out the following passages from the AAT decision:-
“6. The relevant legislation in this matter was the Sales Tax Assessment Act 1992, ("the STAA"), in particular sections 16, 51, 61, 99, 100, 101, 103, 111, 113, 116 and the Taxation Administration Act 1953 ("TAA"), in particular section 14ZZK.
7. Pursuant to section 107 of the STAA, a taxpayer who was dissatisfied with an assessment made in relation to the taxpayer was able to object against it in the manner set out in Part IVC of the TAA.
"Taxpayer may object against assessment
107. A taxpayer who is dissatisfied with an assessment made in relation to the taxpayer may object against it in the manner set out in Part IVC of the Taxation Administration Act 1953."
8. Section 14ZZ of the TAA provided that if the person was dissatisfied with the Commissioner's objection decision, the person could apply to the Tribunal for review of the decision.
"14ZZK Grounds of objection and burden of proof
On an application for review of a reviewable objection decision:
(a) the applicant is, unless the Tribunal orders otherwise, limited to the grounds stated in the taxation objection to which the decision relates; and
(b) the applicant has the burden of proving that:
(i) if the taxation decision concerned is an assessment (other than a franking assessment)--the assessment is excessive; or
(ii) if the taxation decision concerned is a franking assessment--the assessment is incorrect; or
(iii) in any other case--the taxation decision concerned should not have been made or should have been made differently."
9. According to section 116(1) of the STAA, the production of a notice of assessment in such review proceedings was not conclusive evidence that the assessment was duly made, and that other particulars in the assessment were correct. Section 116(1) provided:
"The production of:
(a) a notice of assessment; or
(b) a document that is signed by the Commissioner and appears to be a copy of a notice of assessment;
is conclusive evidence that the assessment was duly made and that the amounts and other particulars in the assessment are correct. This subsection does not apply in proceedings under Part IVC of the Taxation Administration Act 1953 on a review or appeal relating to the assessment."
10. Section 14ZZK of the TAA, limited the Applicant to the grounds stated in the taxation objection to which the decision related, unless the Tribunal ordered otherwise, and provided that the Applicant had the burden of proving that the assessment was excessive. The combined effect of section 116(1) of the STAA, and Section 14ZZK of the TAA was that the Applicant had to persuade the Tribunal on the balance of probabilities that the assessments were excessive.
11. The general rules for taxing assessable dealings were at the relevant time, in section 16(1) of the Act. The rules have been drafted by reference to Table 1 of Schedule 1 of the Act. Table 1 set out the assessable dealings that could be subject to sales tax, the person liable for the tax, the time of the dealing and its normal taxable value.
"General rules for taxing assessable dealings
16. (1) Table 1 sets out all the assessable dealings that can be subject to sales tax."
12. Subsection 16(3) of the STAA provided that the amount of any sales tax liability in relation to an assessable dealing was calculated by applying the rate of sales tax under the Sales Tax (Exemptions and Classifications) Act 1992 to the taxable value of the dealing less an exempt part of the taxable value.
"16. (3) To calculate the amount of the tax:
(a) determine the taxable value of the dealing under Division 3 of this Part;
(b) deduct any exempt part of the taxable value that applies under Division 4 of this Part;
(c) multiply the result by the rate that applies under the Exemptions and Classifications Act."
13. Pursuant to subsections 16(2)(c)(d) and 61(1) and (2) of the STAA, the tax became payable at the time of the dealing, and was due for payment 21 days after the end of the month or quarter in which the liability arose, depending on whether the taxpayer was a monthly or quarterly remitter.
"16. (2) If the time of an assessable dealing (as specified in column 4 of the Table) is on or after the first taxing day, and no exemption applies under Division 2 of this Part, then:
....
(c) the tax becomes payable at the time of the dealing, as specified in column 4;
(d) the tax is due for payment at the time that applies under Division 2 of Part 5.
Requirement to lodge returns
61. (1) A person who is a monthly remitter for a month during which the person becomes liable to tax must lodge a return within 21 days after the end of the month.
(2) A person who is a quarterly remitter for a sales tax quarter during which the person becomes liable to tax must, within 21 days after the end of the quarter, lodge either:
(a) a return for the quarter; or
(b) a separate monthly return for each month in the quarter."
14. Persons liable for sales tax were required by section 61 of the STAA to lodge monthly or quarterly returns within 21 days after the month or quarter in question. The Act did not define "return" for these purposes. Section 113 of the STAA however, provided that any return must be in a form approved by the Commissioner; it must contain such information as the form required, and such further information as the Commissioner required, and it must be lodged at the place and in the manner that the Commissioner required. Liability for sales tax arose independently of an assessment which could issue in respect of such sales tax liability. (Revlon Manufacturing Ltd v FCT (1995) 32 ATR 48 and sections 16, 61, 63 and 103 of the STAA).
"Formal requirements for returns, notifications etc.
113. Any return, application, notification or other document that a person is required or permitted to give to the Commissioner under this Act:
(a) must be in a form approved by the Commissioner; and
(b) must contain such information as the form requires, and such further information as the Commissioner requires; and
(c) must be lodged at the place and in the manner that the Commissioner requires."
15. Section 51 of the STAA related to credit entitlements which arose in the situations set out in Tables 3 and 3A of Schedule 1 of the STAA. Subsection 51(3) provided that entitlement to a credit was lost if the credit was not claimed within 3 years after the time when it arose. Subsection 51(4) provided that a claim for a credit had to be made in the form and manner approved by the Commissioner and be accompanied by such supporting evidence as the Commissioner required.
"Credit entitlements
51(1) Tables 3 and 3A set out the situations in which a claimant is entitled to a credit.
(2) A claimant is not entitled to a credit for an amount of tax for which a credit entitlement has previously arisen (whether for the claimant or another person).
(3) A claimant is not entitled to a credit unless the claim for the credit is lodged within 3 years after the time when the credit arises.
(4) A claim for a credit must be made in the form and manner approved by the Commissioner, and must be accompanied by such supporting evidence as the Commissioner requires."
16. Section 101(1) of the STAA conferred an unfettered discretion on the Commissioner to make an assessment of tax payable by a person on an assessable dealing or assessable dealings at any time. Section 101(1) was to be read with section 103(1) which provided:
"A taxpayer's liability to tax on an assessable dealing, and the due date for payment of that tax, are not dependent on, or in any affected by, the making of an assessment in respect of that dealing."
This appeal pursuant to s.44 of the Administrative Appeals Tribunal Act 1975 (the AAT Act) must be on a question of law from the AAT decision. There are a number of decisions which deal with the issue of what is a "question of law" and for the present purposes I am prepared to accept authorities referred to by the respondent which include Bushell v Repatriation Commission (1992) 175 CLR 408 per Brennan J at 424-425 where His Honour states the following:-
“… Proceedings before the AAT may sometimes appear to be adversarial when the Commission chooses to appear to defend its decision or to test a claimant’s case but in substance the review is inquisitorial. Each of the Commission, the Board and the AAT is an administrative decision-maker, under a duty to arrive at the correct or preferable decision in the case before it according to the material before it. If the material is inadequate, the Commission, the Board or the AAT may request or itself compel the production of further material. The notion of onus of proof, which plays so important a part in fact-finding in adversarial proceedings before judicial tribunals, has no part to play in these administrative proceedings …”
It is also useful to note the decision of Davies J in Tuite v Administrative Appeals Tribunal (1993) 40 FCR 483 at 484 where the court states the following:-
“ … The words "question of law" encompass grounds enunciated in s.5 of the ADJR Act such as the failure to take into account a material consideration, the taking into account of an irrelevant consideration, the making of a decision that no reasonable decision maker would have made, the exercise of a decision making power for a purpose other than for the purpose for which the power was conferred and the failure to provide natural justice”.
The respondent has conceded that for the purpose of the present application a denial of natural justice may involve an error of law. The court was referred to and applies the decision of the Full Court of the Federal Court in Clements v Independent Indigenous Advisory Committee (2003) FCAFC 143 where Gray ACJ and North J held at paragraph 8 the following:-
“8 Given the state of the authorities, this Court should accept the principle that a denial of procedural fairness is an error of law and that, therefore, an appeal from a decision of the Tribunal on the ground of such a denial raises a question of law. For this purpose, it is undesirable to attempt to distinguish between a denial of procedural fairness resulting from a course of action chosen by the Tribunal in conducting the case before it and a denial that is unintended and results from an error of fact made by the Tribunal. In the circumstances, the proceeding has been commenced properly and amendment is unnecessary. It goes without saying that, if an amendment were necessary, leave to make it should have been given, for the purpose of enabling the applicant to put his case.”
Ground 1 - Bias
The applicant in his further and better particulars refers to a number of matters claimed to support the allegation of bias. The particulars relating to bias are set out in paragraph 1(a) to (j) (both inclusive). It is convenient to set out the particulars as summarised by the respondent in the outline of submissions and to deal with each and every allegation in order.
(1) The respondent was favoured in procedural orders (particulars 1(a) and (c)).
The applicant claims that the respondent had been granted adjournments and unnecessary extended periods of time to prepare for relevant directions hearings and ultimate hearing date. All were claimed to be to the detriment of the applicant and having the effect of delaying the matter for 18 months. The applicant claims that the AAT members of the hearing ‘proper’ had made orders that he could make written closing submissions with the respondent replying seven days after. He claims that ultimately the respondent was given an extension of time so that 17 days and not seven days was taken for the submissions and further claimed that he should have had a final right of reply rather than the respondent.
(2) That the members of the tribunal were overly familiar on a first‑name basis with the respondent's officers (particular 1(b)).
The applicant claims that AAT members continually referred to the respondent's officers on a first‑name basis and were overly familiar with each other whilst always referring to the applicant in formal terms.
(3) That the applicant was not allowed to call witnesses he wished to call (particular 1(d)).
The applicant claims that the AAT allowed the respondent to call any witnesses they require but disallowed the applicant certain witnesses and limited him from presenting his best defence.
(4) The AAT relied on antiquated case law referred to by the respondent (particular 1(e)).
The applicant was unable to provide specific details in relation to this ground though claims that he relied upon the knowledge of the members of the AAT of the relevant case law and during oral submissions seemed to suggest that there was an obligation on the AAT to advance the applicant's interests and/or advise him in relation to case law.
(5) The AAT ignored or glossed over the applicant's claims of perjury and inconsistency by the respondent's witnesses (particulars 1(f) and (g)).
The applicant claimed that during the course of the hearing and in written submissions after the hearing he made claims of perjury by witnesses of the respondent and that these claims were ignored by the tribunal. It is claimed that the tribunal demonstrated bias in its decision and in particular the way in which it dealt with written evidence of one witness and ignored allegations by the applicant of perjury. This, it is claimed by the applicant, clearly showed the members' bias towards the respondent's argument.
(6) The tribunal inferred fraud by the applicant (particular 1(h)).
The applicant referred to paragraph 66 of the AAT decision to support this particular. It is perhaps convenient to set out that paragraph as follows:-
“66. The Tribunal was mindful of the evidence given that the Applicant's business was conducted somewhat chaotically at the time, and that the Applicant often dispatched facsimile messages late at night. Accordingly, the Tribunal was satisfied that even though he may have written the letter of 23 August 1999, it is more likely that not, that the Applicant overlooked the transmission. Further, if one reviews the letter of the Applicant of 16 August 1999 (T36), in which he conveyed a message about "developments", and discussed finalisation of matters with Ms Hogan, then it appears more likely than not that the letter of 23 August 1999 was not written on that date.”
Arising out of this paragraph the applicant claims, as I understand it, strong bias in the finding in that paragraph which he interprets as being an inference of fraud in breach of the Criminal Code.
(7) That bias in the finding of the applicant's claims that relevant sales tax exemption forms were unsubstantiated (particular 1(i)).
The applicant refers to paragraph 77 of the AAT decision and claims this finding was unsubstantiated. It is convenient to set out the paragraph as follows:-
“77. In that regard the Applicant did not provide further records with regard to his sales tax liabilities, and the only evidence before the Tribunal that his liability was less than that stated in the assessments was the unsubstantiated statement of the Applicant in his letter of 23 August 1999 that the sales tax liability was covered by periodic sales tax exemption forms. Consequently the Tribunal concluded that the Applicant had not discharged the onus of proving that the assessments were excessive, and affirmed the decision under review.”
(8) Deception by the tribunal in its reference to the applicant's business difficulties (particular 1(j)).
Reference was made to paragraph 78 of the AAT decision where the tribunal states the following:-
“78. The Tribunal places on record its appreciation of the preparation the parties accorded this matter. The Tribunal was particularly mindful of the difficulties the Applicant has encountered in business life.”
The applicant interprets this as being condescending and deliberately deceptive. He further claims the statement in relation to difficulties in business life "is not only irrelevant but a deliberate attempt to cover up their own ineptitude and misfeasance in the handling of this matter".
Respondent’s submissions
The respondent submitted that there is no basis for any finding of actual or apparent bias in procedural orders made by the tribunal.
Reference was made to well‑known authorities in relation to the issue of bias. It is noted that the applicant does not make any claim of an interest on the part of the members but rather seeks to rely upon conduct of members particularly by reference to procedural rulings.
The court referred to and accepts as an appropriate authority the test for apprehended bias by an administrative decision‑maker as set out by the High Court in Re Refugee Review Tribunal ex parte H (2001) 179 ALR 425 at 434-5 as follows:-
“27.The test for apprehended bias in relation to curial proceedings is whether a fair-minded lay observer might reasonably apprehend that the judge might not bring an impartial mind to the resolution of the question to be decided. That formulation owes much to the fact that court proceedings are held in public. There is some incongruity in formulating a test in terms of "a fair-minded lay observer" when, as is the case with the Tribunal, proceedings are held in private.
28.Perhaps it would be better, in the case of administrative proceedings held in private, to formulate the test for apprehended bias by reference to a hypothetical fair-minded lay person who is properly informed as to the nature of the proceedings, the matters in issue and the conduct which is said to give rise to an apprehension of bias. Whether or not that be the appropriate formulation, there is, in our view, no reason to depart from the objective test of possibility, as distinct from probability, as to what will be done or what might have been done. To do otherwise, would be to risk confusion of apprehended bias with actual bias by requiring substantially the same proof.
29.Though the test in administrative proceedings, as in curial proceedings, is, in our view, one of objective possibility, the non-curial nature of the body or tribunal in question and the different character of the proceedings must, as already indicated, be taken into account. In the present case, a significant difference between curial proceedings and the proceedings of the Tribunal is that the former are adversarial and the parties are usually legally represented, whereas the latter are inquisitorial in nature and the parties are not represented.”
Reference was also made to the authority which I also accept is applicable of the High Court in R v Commonwealth Conciliation and Arbitration Commission; ex parte Angliss Group (1969) 122 CLR 546 where at 553-554 the court states:-
“Those requirements of natural justice are not infringed by a mere lack of nicety but only when it is firmly established that a suspicion may reasonably be engendered in the minds of those who come before the tribunal or in the minds of the public that the tribunal or members of it may not bring to the resolution of the question arising before the tribunal fear and unprejudiced minds.”
It was submitted on behalf of the respondent that the procedure of the tribunal is subject to the AAT Act and the regulations. The tribunal is required to conduct proceedings “with as little formality and technicality and with as much expedition as the requirements of this Act and of every other relevant enactment and a proper consideration of the matters before the tribunal permit” (AAT Act s.39).
It was submitted that the granting of an adjournment or extensions of time for filing of documents, the taking of evidence and the interposing of witnesses are procedural matters within the power of the tribunal under s.40 of the AAT Act.
It was further submitted that the AAT is required by s.39 of the AAT Act to balance expedition with the requirements of the Act and of every other relevant enactment and with a proper consideration of the matters before the tribunal. It was submitted there is nothing in the applicant's particulars nor in the material in the appeal book which might give rise to any apprehension of bias from the procedural orders made by the tribunal in balancing those things in the course of this matter.
Reference was made to the transcript of the proceedings which form part of the appeal book. It was submitted there is no evidence of overfamiliarity with the officers of the respondent or any difference in the way in which the applicant and the respondent were treated by the tribunal.
In relation to the issue of witnesses, reference was made to the transcript where the following exchange occurs (appeal book 446, line 40):-
“MS KELLY: Just, ma’am, in relation to Mr Lambe, obviously he has been the instructing case officer in this, so therefore I consider that I would need him with me, especially in relation to sales tax issues. He is a lot more knowledgable than I can ever profess to be, so in that instance I would ask if there could be some leeway granted in taking the evidence of Mr Lambe first if necessary, so that he is able to stay in and assist.
MS ETTINGER: I guess we could accommodate that. Normally we would always have the applicant first.
MS KELLY: Yes.
WAY: I’m in agreeance with that. I think that seems to be the appropriate thing to do, so, yes.
MS ETTINGER: All right. You don’t have a problem with that?
ASSOC PROF BARTON: No, I don’t have a problem with that.
MS ETTINGER: Right. That isn’t the usual course but I don’t think that is a problem in this matter.”
It was submitted that at no stage during the hearing did the applicant make a complaint that he had been prevented from calling evidence, nor did he request the opportunity to call further evidence. This was clear both at the tribunal and in the written submissions made after the hearing (appeal book 146).
Any claim relating to reliance upon "antiquated" case law would not, according to the respondent's submissions in any event, support an allegation of bias even if substantiated.
It was submitted by the respondent that there is no evidence before the tribunal to support allegations of perjury and particulars 1(f) and (g) have no foundation.
The matters raised in 1(h), (i) and (j) it was submitted arise out of a misunderstanding on the part of the applicant as to the findings of the tribunal and in any event are not capable of supporting an allegation of bias.
Reasoning
In my view, the allegation of bias is misconceived. The misconception may well arise out of the lack of knowledge by the unrepresented applicant of the proper principles which apply in relation to matters of this kind. As indicated, I accept the appropriate High Court authorities to which reference has already been made as representing the relevant law. Applying that law to the allegations set out in the particulars filed by the applicant, I do not accept that a fair‑minded lay‑observer would reasonably apprehend that the tribunal in this case has not brought an impartial mind to the resolution of the question to be decided. A proper reading of the transcript and the reasons in my view demonstrates the opposite. A great deal of time was devoted to the applicant's claim and the decision itself demonstrates what I regard as a reasoned and comprehensive assessment of the applicant's claim in circumstances where clearly the applicant has very strong views about the matter and indeed has strong personal issues in relation to officers of the respondent.
The making of procedural orders is an integral part of the case management for a tribunal. The granting of an extension of time to any parties for a matter of seven or fourteen days in the circumstances of the present case could not possibly support an allegation of bias. Instead, it is merely a procedural indulgence perhaps granted on this occasion to the respondent but does not of itself support a suggestion of bias. It is a common and regular feature of courts and tribunals that parties are granted extensions of time within which to file documents. The usual result is the quality of the documents is better and provides greater assistance to the tribunal in the ultimate consideration of the issues before it.
The issue of the overfamiliarity with officers of the respondent seems to have arisen more in relation to the pre‑hearing dealings between the parties and registry or registry officers. It is inevitable that officers of respondents who regularly appear before courts or tribunals develop a degree of familiarity with the officers of those courts or tribunals. That does not support any allegation of bias directed at the presiding member hearing the application just as it would not support an allegation of bias against a judge presiding at a court hearing. That allegation has no substance.
It is clear from a proper reading of the transcript that the applicant was permitted to call witnesses he wished to call but rather chose not to do so. I am satisfied he had ample opportunity to call witnesses, and again that ground relied upon does not support the allegation of bias.
Whilst it might be understandable that unrepresented applicants are suspicious when courts or tribunals rely upon case law, that of itself cannot possibly form the basis of an allegation of bias whether or not a claim is substantiated that the case law was "antiquated". This shows a complete lack of understanding of court and tribunal responsibility to have regard to relevant authorities. It is yet again another clear demonstration of a ground being relied upon which I have no doubt would not be relied upon if the applicant had been legally represented.
The allegations of perjury are not in any way supported by the material in this application. It is clear that the applicant is dissatisfied with the fact‑finding of the tribunal and seeks to assert serious allegations of perjury. Those allegations demonstrate, in my view, that the applicant in this matter and indeed other allegations raised throughout the hearing concerning bias has what might ironically be described as a lack of objectivity.
The matters raised in particulars 1(h), (i) and (j) clearly demonstrate a misunderstanding by the applicant of the tribunal's findings and reasoning. The paragraphs to which reference has already been made do no more than reveal findings of fact. To find that the applicant overlooked a transmission does not and cannot amount to fraud. The criticism of the finding of the tribunal set out in paragraph 77 likewise misconceives that finding and the tribunal was simply making an observation open to it on the material that the applicant had not provided further records. It can be noted in passing that the applicant now asserts that records are available, although the applicant concedes the material was not available at the time of the hearing and even after the date of delivery of the decision. Likewise, the inference drawn by the applicant in relation to paragraph 78 demonstrates a complete lack of insight into the tribunal's reasoning and the applicant has, in my view, completely misinterpreted the meaning of that paragraph, particularly the reference by the tribunal to it being "particularly mindful of the difficulties the applicant had encountered in business life".
Applying the relevant authorities to which I have been referred, I can see no basis upon which the applicant's claim of bias has been established.
Ground 2 - Denial of Procedural Fairness
Applicant’s submissions
The applicant claims that the witnesses were taken out of order and that a respondent witness was called as first witness. He further complained that he was forced to give evidence himself. He further claims that the respondent's representative coached witnesses and interjected during the course of evidence. He was concerned about the respondent's representative speaking to witnesses yet to be called during scheduled intervals. He further claimed that the tribunal should have obtained transcripts rather than rely upon memory of the hearing.
Before this court it seemed clear that the applicant's major complaint was that the hearing did not take the form that he would expect. He further complained that there should be some guidance to self‑represented litigants as to the practice and procedure to be followed at a hearing before the AAT.
The applicant also complained that he should have been advised that an adverse finding was going to be made. Had he been advised, then he may have called other evidence and approached the task differently.
Respondent’s submissions
The respondent submitted that any allegation by the applicant that he was not advised that an adverse finding was possible is not capable of amounting to a denial of procedural fairness in the context of a contested hearing before the tribunal under the Taxation Administration Act or under the AAT Act. In any event, it was submitted the applicant on a number of occasions was advised that the onus was on him to prove the assessments were excessive and that the tribunal could affirm the decision of the respondent under review. Reference was made to the following extracts of the transcript:-
“ASSOC PROF BARTON: Way, just one question I wanted to put to you. I got the impression from your affidavit that you were under the impression that the ATO, the Tax Office, has to prove that the sales tax is owing? --- Yes. Well I believe that the – I believe that have proved – or, alternatively – I think the Act says, if I am to be committed to the Act – prove that the assessment was excessive or unfair and unreasonable or whatever, I think. Yes. I mean - - -
That onus rests on your shoulders to prove - - - ? --- Prove. That is why I - - -
- - - that the assessment is excessive? --- Or incorrect.
- Yes? --- Yes.
Are you aware of that? --- Yes, I am aware of that.
…..
And then the other thing I wanted to ask you is, are you familiar with the process by which an assessment would be raised for sales tax, in other words the actual – I know you were obviously involved in audit, because what I wanted you to do was have a look at page 79. Now, this is the letter written by “Way” which, as I understand it, first mentions the amounts of 3618.97 and 1672.80. Now, if that is all the information that was available to the Department, the Tax Office, in your experience would that have been sufficient on which to raise an assessment, given that it is a self-assessing system? --- Being a self assessing system, yes,
I think - - -“
(Appeal Book p.446 to 447)
Reference was also made to the written submissions of the applicant himself dated 9 May 2003 where he states the following:-
“The ATO along with the standard utterings of the presiding AAT members of the tribunal have gone on record as saying that the burden of proof is upon me to prove the assessment was excessive.” (Appeal book 151)
I note further that during the course of submissions the applicant's attention was drawn to the respondent's statements of facts and contentions filed with the tribunal dated 10 September 2002. In that document the respondent contends the following:-
“The applicant has not, and is unable to satisfy the tribunal that the assessment objected to by the applicant is excessive, or that any taxation decision should have been made differently.”
In the same facts and contentions the respondent further states the following:-
“Pursuant to section 14ZZK of the TAA 53, the applicant has the burden of proving the assessment is excessive and that any taxation decision made should not have been made or should have been made differently.”
Whilst the reference to the statement of facts and contentions relates obviously to the issue of burden of proof, it is also in my view relevant to the submissions made by the respondent in relation to the issue of procedural fairness.
In any event, the respondent submitted that although the calling of the respondent's witness was not the usual course, it had been done with the agreement of the applicant. Again reference is made to the extract of transcript referred to in paragraph 49 of this judgment.
It was submitted by the respondent that there is no practical injustice in the procedure followed. The court was referred to the High Court decision of Re Minister for Immigration and Multicultural Affairs; ex parte Lam (2003) 195 ALR 502 per Gleeson CJ at paragraphs 37 and 38 as follows:-
“37.A common form of detriment suffered where a decision-maker has failed to take a procedural step is loss of an opportunity to make representations. Attorney-General (Hong Kong) v Ng Yuen Shiu was such a case. So, according to the majority, was Haoucher v Minister for Immigration and Ethnic Affairs. A particular example of such detriment is a case where the statement of intention has been relied upon and, acting on the faith of it, a person has refrained from putting material before a decision-maker. In a case of that particular kind, it is the existence of a subjective expectation, and reliance, that results in unfairness. Fairness is not an abstract concept. It is essentially practical. Whether one talks in terms of procedural fairness or natural justice, the concern of the law is to avoid practical injustice.
38.No practical injustice has been shown. The applicant lost no opportunity to advance his case. He did not rely to his disadvantage on the statement of intention. It has not been shown that there was procedural unfairness. And, as I have already indicated, there is no warrant for a conclusion that there was a failure properly to take into account the interests of the applicant's children.”
It was submitted by the respondent that the claim that the applicant was forced to give evidence personally is not supported by the transcript. Whilst the applicant, it was conceded, did state that he had not intended to give evidence, this led to an exchange with the presiding member where the applicant stated his only concern was "the presence of other people who are going to give evidence". That issue was resolved and when the applicant gave evidence his primary evidence was the affidavit which he had filed. The tribunal told the applicant that he would be free to let the tribunal know if he thought of anything else later in the proceeding and he would be free to raise that with the tribunal (appeal book 482). The respondent noted that in fact there was a short adjournment taken to permit the applicant to gather his thoughts about giving evidence (appeal book 486).
The respondent submitted it was necessary for the applicant to give evidence having regard to the burden of proof and his reliance upon an affidavit which he had filed.
Otherwise the respondent submitted that there has been no denial of natural justice and/or procedural fairness.
Reasoning
In my view, it is clear that the applicant may have felt uncomfortable with the procedure followed by the tribunal in relation to the order of witnesses and may have genuinely not expected to have been called to give evidence in support of his application. However, the perception of the applicant and his apparent unpreparedness for the procedure which followed does not of itself constitute a denial of procedural fairness. The fact is that he had relied upon an affidavit and had the onus of proof in this application. Accordingly, I can see no basis upon which it could be claimed that there has been a denial of procedural fairness simply by the tribunal encouraging the applicant to give evidence in his own case. It may have been unexpected for the applicant, and in the circumstances I further accept that the tribunal has accommodated the apparent lack of preparation by providing the applicant with an opportunity to make further comments on the material and to take time to consider his position.
The order of witnesses before the tribunal was unusual and to that extent may have created further uncertainty in the mind of the applicant. However, in the context of this application I do not accept that that constitutes a denial of procedural fairness. In any event, applying the principles of law to which I have been referred in Lam's case, I cannot see any evidence before me that there is any practical injustice as I am satisfied the applicant lost no opportunity to advance his case. It is clear he had the opportunity to raise other matters if he chose to do so and certainly in very detailed written submissions after the hearing raised a number of issues which he regarded as relevant to his case.
Accordingly, I find that there has been no denial of procedural fairness.
Ground 3 - Burden of Proof
The Applicant had claimed that he was held to a higher burden of proof than should be required. He referred to paragraph 76 of the tribunal decision which provides as follows:-
“76. In the present matter it was necessary for the Applicant to satisfy the Tribunal, on the balance of probabilities, that the amount of his sales tax liability for the quarters covered by the assessments was actually less than that stated in the assessments.”
The Respondent submitted that the tribunal had correctly stated the standard of proof upon which it was obliged to act. Further it was submitted that the whole of the decision does not disclose any departure from the standard.
In my view this ground of appeal must clearly fail. I can see no evidence that the tribunal misdirected itself as to the appropriate standard of proof. Yet again the clear statement by the tribunal and the contents of its reasoning would not have attracted this criticism had the Applicant received the benefit of legal advice.
Ground 4 - Misapplication of relevant law and legislation
Applicant’s submissions
The Applicant submitted that the members had erred in their interpretation of the STAA in not giving full regard to the uncontrovertible fact that “sales tax is and always was a self assessing regime”. It is perhaps useful to set out the particulars relied upon in relation to this issue in full as follows:-
“The members erred in their interpretation of the Sales Tax Administration Act in not giving full regard to the incontrovertible fact that, ‘Sales tax is and always was a self assessing regime’. It is not argued by the respondent that the only evidence they had to raise the respective debts against me was my letter dated 28th April 99 advising of such. Given that there is nothing in the Act that says a Tax Payer can not re-self asses that respective debt at a later date, then my countervailing letter of the 23rd August 99 amending the erroneous advice of the original debt contained in the letter of 28th April 99, should expunge such earlier advice?”
Respondent’s submissions
The Respondent submitted that this ground shows a misunderstanding of the assessment regime under the STAA. It was submitted the Applicant had objected to the assessment under s.107 of the STAA and now appealed that assessment under s.14ZZ of the Taxation Administration Act 1953. The tribunal had correctly stated the issue before it namely whether the Applicant’s sales tax liability for the relevant periods was excessive.
It was submitted that liability to sales tax arises by operation of the Act where there is taxable dealing. Reliance was placed upon s.103 of the STAA set out earlier in this judgment.
The Respondent relied upon the decision of Darrell Lea Chocolate Shops v FCT (1996) 72 FCR 175 and Revlon Manufacturing Ltd v FCT (1995) 31 ATR 48. The Applicant’s sales tax liability it was submitted arose under s.16 and Schedule 1 of the STAA and by ss.61 and 63 of that Act was due to payment within 21 days after the end of the month or quarter in which the liability arose. The Applicant was required by s.61(2) of the STAA to lodge a return.
It was submitted the tribunal properly found that the letter of the applicant to the respondent dated 28 April 1999 even though it did not comply with the formal requirements for a return under s.103 of the STAA served as notice of the Applicant’s liability. The Respondent was not required to make an assessment but could do so at any time pursuant to s.101(1) of the STAA which provides:-
“The Commissioner may at any time make an assessment of tax payable by a person on an assessable dealing or assessable dealings (whether or not the Commissioner has previously made an assessment in relation to that dealing or any of those dealings).”
It was submitted by the Respondent that it had made an assessment and issued notices of assessment on 9 October 2000. An objection to the assessment was lodged on 18 October 2000. On 27 February 2001 the objection was disallowed. Notice of that decision was sent to the Applicant. The Applicant’s letter of 28 April 1999 was treated in that decision as a voluntary disclosure of taxable sales.
Pursuant to s.14ZZK of the Taxation Administration Act on the application for review of the assessment (a reviewable objection decision) the Applicant had the burden of proving that the assessment was excessive. Section 14ZZK provides as follows:-
"14ZZK Grounds of objection and burden of proof
On an application for review of a reviewable objection decision:
(a) the applicant is, unless the Tribunal orders otherwise, limited to the grounds stated in the taxation objection to which the decision relates; and
(b) the applicant has the burden of proving that:
(i) if the taxation decision concerned is an assessment (other than a franking assessment)--the assessment is excessive; or
(ii)if the taxation decision concerned is a franking assessment--the assessment is incorrect; or
(iii)in any other case--the taxation decision concerned should not have been made or should have been made differently.
...."
Reliance was placed by the Respondent on the decision of Brennan J in Commissioner of Taxation v Dalco (1990) 168 CLR 614 at 625:-
“Unless the amount of the assessment is found to be excessive in the sense of being greater than the taxable income on which tax ought to have been levied, the taxpayer fails on his appeal.”
It was submitted in the present case that although this is dealing with sales tax as opposed to an income tax assessment the same principles apply. The Applicant had to show, according to the Respondent’s submissions that the amount of the assessment was excessive. The Applicant’s case was that he had corrected the notice he had given (the letter of 28 April 1999) by a later letter dated 23 August 1999 (the receipt of which the Respondent disputed). The substance of the correction was that the sales were covered by periodic sales tax exemption forms. That is, to show the assessments were excessive, the Applicant sought to show that exemptions applied in relation to the sales giving rise to the sales tax liabilities for the relevant periods.
It was submitted the Applicant did not put forward any evidence before the tribunal in relation to the sales or alleged exemptions for the relevant periods. Hence the conclusion of the tribunal as set out in paragraph 77 of its reasoning, as set out earlier in this judgment, was inevitable.
It was submitted therefore by the Respondent that there is no error of law and misapplication of the relevant law in the present case.
Reasoning
In my view the submissions of the Respondent in relation to this issue are clearly correct. I cannot see any error of law on the part of the tribunal in its analysis and/or application of the relevant legislation in this matter. The tribunal was entitled to reach the conclusion it did reach in paragraph 77 of its decision. It otherwise correctly applied the relevant legislation as described in the Respondent’s submissions. It is clear to me that the tribunal embarked upon its task in a careful and methodical manner having due regard to the appropriate law.
In my view the Applicant has misconceived the grounds of appeal and effectively has sought to again agitate and seek to argue the issue of his interpretation of the correspondence and conclusions which he believes should have been reached arising out of his interpretation. That would appear to be a matter more directed towards facts than law. It is clear the Applicant is dissatisfied with the tribunal’s findings on the facts but this of itself is matter of principle cannot constitute an error of law of a kind which would attract the operation of s.44 of the AAT Act (See Waterford v Commonwealth of Australia [1987] 163 CLR 54 at p.70 per Brennan J) as follows:-
“A finding by the AAT on a matter of fact cannot be reviewed on appeal unless the finding is vitiated by an error of law. Section 44 of the AAT Act confers on a party to a proceeding before the AAT a right of appeal to the Federal Court of Australia from any decision of the tribunal in that proceeding but only ‘on a question of law’. The error of law which an appellant must rely on to succeed must arise on the facts as the AAT has found them to be or it must vitiate the findings made or it must have led the AAT to omit to make a finding it was legally required to make. There is no error of law simply in making a wrong finding of fact.”
Conclusion
For the reasons given in this decision the application should be dismissed with costs.
I certify that the preceding seventy-eight (78) paragraphs are a true copy of the reasons for judgment of McInnis FM
Associate:
Date: 11 June 2004
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