World Brand Importers Pty Ltd and Commissioner of Taxation (Practice and procedure)
[2025] ARTA 95
•11 February 2025
World Brand Importers Pty Ltd and Commissioner of Taxation (Practice and procedure) [2025] ARTA 95 (11 February 2025)
Applicant/s: World Brand Importers Pty Ltd; Gastevski
Respondent: Commissioner of Taxation
Summonsed parties: Phillip Bonvino; Creative Holdings (Aust) Pty Ltd; Creative Brands Pty Ltd
Tribunal Number: 2022/3774; 2022/3686
Tribunal:Deputy President Thompson SC
Place:Perth
Date:11 February 2025
Decision:The summonses issued on 25 September 2024 are amended in accordance with the Tribunal’s direction dated 5 February 2025. The summonsed parties’ application to set aside the summons is otherwise dismissed.
........................[sgd]................................
Deputy President
CATCHWORDS
PRACTICE AND PROCEDURE – TAXATION – summons – objection to produce summonsed documents – summonsed parties subject of audit – legal professional privilege – documents in summonsed party’s possession, custody or control – documents do not exist – Commissioner’s model litigant obligations
LEGISLATION
Acts Interpretation Act 1901 (Cth) – s 33(3)
Administrative Appeals Tribunal Act 1975 (Cth) – ss 40A, 61
Administrative Review Tribunal Act 2024 (Cth) – ss 74, 116
Excise Act – s 60
Income Tax Assessment Act 1936 (Cth) – ss 8, 167, 170
Judiciary Act 1903 (Cth) – s 55ZG(3)
Taxation Administration Act 1953 (Cth) – Part IVC
CASES
AEC v Comcare and McKenzie [2022] AATA 138
Commissioner of Taxation v Donoghue [2015] FCAFC 183
Cosco Holdings Pty Ltd v Commissioner of Taxation [1997] FCA 1504
Deputy Commissioner of Taxation v Rennie Produce (Aust) Pty Ltd (in liq) [2018] FCAFC 38
Federal Commissioner of Taxation v Wade (1951) 84 CLR 107
Harman v Secretary of State for Home Department [1983] 1 AC 280
La Mancha Africa S.A.R.L. v Commissioner of Taxation [2021] FCA 1564
Re BLBS and Minister for Foreign Affairs and Trade [2012] AATA 464; (2012) 129 ALD 380
Re General Merchandise and Apparel Group Pty Ltd and CEO, Customs [2009] AATA 988; (2009) 114 ALD 289
Re Perpetual Trustee Co (Canberra) Ltd and Commissioner for ACT Revenue (1993) 29 ALD 817
Re Taxation Appeal WT95/13-14 (1996) AAR 505
Secretary of the Department of Planning, Industry and Environment v Blacktown City Council [2021] NSWCA 145
SECONDARY MATERIALS
‘Taxpayers’ Charter’, ATO (Web Page, 10 February 2025) <
Statement of Reasons
INTRODUCTION
On 5 February 2025 I heard an application by the summonsed parties to set aside summonses issued to them. Following argument, I made orders amending the summons’ and otherwise dismissing the application. These are my reasons for doing so.
The substantive matter is listed for hearing before me for 5 days commencing on 23 September 2025. It concerns a demand for payment dated 2 September 2021 issued by the Commissioner under section 60 of the Excise Act. The payment apparently relates to supplies of vodka acquired by the Applicants in the period 1 September 2017 to 21 April 2021. The Applicants seek to overturn the demand.
On 6 September 2024, upon the Applicants’ request, three summons to produce documents were issued to:
· Mr Phillip Bonvino;
· Creative Holdings (Aust) Pty Ltd; and
· Creative Brands Pty Ltd, collectively 2024 Summons.
The 2024 summons were returnable by 9.30 am on 25 September 2024.
The summonsed parties were apparently the supplier of the vodka which the Applicant acquired, and for which the demand issued under the Excise Act was made.
The 2024 Summons were issued against the background of earlier summons. In May of 2023, the Tribunal, following a request from the Applicant, had issued summons to each of Brands and Mr Bonvino (2023 Summons). Each of the 2023 Summons had been met with a response to the Tribunal by the summonsed party that “we wish to advise that we don’t have any of the documents specified in the summons”.
On 24 September 2024, the Tribunal received correspondence from the solicitors for Mr Bonvino and Holdings, advising their clients could not comply with the summons as they were subject to an audit by the Respondent. The Tribunal advised the solicitors the summonses should be complied with, and the summonsed parties would be heard on any application for access to the documents which were returned. On 25 September 2024, the Tribunal received an email from the solicitors advising that their clients objected to complying with the summons on the basis that they are subject to an ongoing taxation audit.
A directions hearing was held on 3 October 2024 at which time directions were made programming the objection to a hearing. Amongst the orders made was one giving leave for the summonsed parties to amend their application, and I specifically drew attention to the fact that Brands had not responded to the summons and could be added as a party to the objection, at the time of filing any amended application.
On 28 October 2024, the summons parties filed an affidavit of Phillip Bonvino, a director of both Holdings and Brands, on behalf of each of those two companies and himself. This affidavit became Exhibit S1 at the hearing. Written submissions were also filed. Whilst an amended application was not filed, both the affidavit and the submissions proceeded on the basis that Brands joined in the application.
The Applicant and the Respondent each filed submissions. Those parties each sought the upholding of the 2024 Summons.
SUMMONS LAW
A summons could be issued by the former Administrative Appeals Tribunal pursuant to section 40A of the Administrative Appeals Tribunal Act. That Act also contained section 61 which provided that it was an offence to fail to comply with a summons. Those provisions are now found in sections 74 and 116 respectively of the Administrative Review Tribunal Act, which came into effect on 14 October 2024.
The leading decisions on the powers of the Tribunal regarding summonses are Cosco Holdings Pty Ltd v Commissioner of Taxation [1997] FCA 1504; Re General Merchandise and Apparel Group Pty Ltd and CEO, Customs [2009] AATA 988; (2009) 114 ALD 289 at [203]ff and Re BLBS and Minister for Foreign Affairs and Trade [2012] AATA 464; (2012) 129 ALD 380.
As is explained in the cases, the Tribunal has always considered matters arising in respect to a summons issued, or sought to be issued, under its statutory power, in light of the principles enunciated by Courts as applicable to subpoenas. There is no reason to suggest that the move from the Administrative Appeals Tribunal to the Administrative Review Tribunal impacts that proposition, other than to the extent that there are any relevant textual differences between the legislation.
The power to set aside a summons is not explicitly set out in the Tribunal’s governing legislation. In respect to the former Tribunal’s powers, it was held that section 33(3) of the Acts Interpretation Act 1901 gave the Tribunal the power to set aside or vary a summons once issued.[1] There is no reason I should depart from this precedent in the present case.
[1] Re Taxation Appeal WT95/13-14 (1996) AAR 505; Re Perpetual Trustee Co (Canberra) Ltd and Commissioner for ACT Revenue (1993) 29 ALD 817.
Once a summons is issued three steps may follow. These are the production of documents, the inspection of documents, and the admission of documents into evidence at a substantive hearing. This application arises in the context of the first step only, being the production of documents.
A person who has been issued with a summons may object to it and seek to have it set aside or amended. Applying the well-known legal principles, there are a range of reasons why the Tribunal may set aside or amend a summons including, but not limited to:
·Relevance
·Abuse of process
·Compliance would be oppressive
·The summons is unclear
·Legal professional privilege
·Improper purpose
In this matter, four bases for objecting to the summons were raised in the application, Exhibit S1, and submissions.
·The documents are relevant to an audit by the Commissioner of Taxation which the summonsed party is subject to;
·Documents not being in the summonsed party’s possession, power or control;
·Legal professional privilege; and
·Confidential communications.
Exhibit S1 fails to descend to particulars in a manner that permits any proper assessment of the claims asserted. Furthermore, I am mindful of the correspondence sent to the Tribunal in response to the 2023 summons, which appears to be in direct contradiction to the evidence the summonsed parties now rely on, in which they admit that they have documents but seek to avoid the summons on other grounds. This aspect of the evidence is concerning.
CONSIDERATION
Relevance
The 2024 summonses were issued following an application to the Tribunal, supported by the witness statement of Mr Adrian Gasteveski in which the foundation for issuing the 2024 summons was set out, against the background of the 2023 summons having returned no documents. A member other than myself considered the request and supporting materials and issued the 2024 summons. No challenge was brought to the relevance of the documents sought to these proceedings on the application or the submissions. However, during his oral submissions, the summonsed parties’ Counsel raised the question of relevance in terms of the breadth of some of the categories of documents sought in the summons issued to each of Brands and Holdings.
The summonses issued to Brands and Holdings both seek documents ”with respect to the delivery of goods to [the Applicants] . . . during the period 1 September 2017 to 21 April 2021.” Further categories of documents were sought, each category being limited to the same timeframe, and being limited to documents relating to the relationship between these Applicants and the summonsed parties. The timeframe identified in the summonses was the same as that in issue in the substantive dispute between the Applicant and the Commissioner.[2] In my view, the summonses were appropriately narrow in scope.
[2] See [2] above.
A summons can be issued for documents when there is a legitimate forensic purpose in doing so.[3] That purpose does not necessarily have to mean that the documents will find their way into evidence in the proceedings. In this case the Applicants issued the summonses because they seek to impugn the Commissioner’s demand by way of an argument centred on the course of dealings between the Applicants and the summonsed parties. Presumably that argument will seek to show that these Applicants do not owe any excise duty to the Commissioner. In my view, they are entitled to seek to run that case.
[3] Secretary of the Department of Planning, Industry and Environment v Blacktown City Council [2021] NSWCA 145.
I therefore find that the summonses have been issued for a legitimate forensic purpose and the material sought is apparently relevant to the issues for determination in these proceedings: see for example AEC v Comcare and McKenzie [2022] AATA 138 at [10] – [11].
Audit
The primary question raised on the application was whether a summons may be set aside because it seeks documents which are relevant to an audit being undertaken by the Commissioner. Both the Commissioner and the Applicant say that this is not a valid reason for setting aside a summons. At the hearing, the summonsed parties advised that the audit into their affairs had concluded and ultimately did not press the ground.
The ground was bound to fail if it had been pressed, for the reasons which I explain below.
No authority is relied upon by the summonsed parties to ground their submission that an audit of their taxation affairs by the Commissioner is a proper basis for objecting to a summons. This is hardly surprising given the overriding obligation that taxpayers have to be frank in respect to their taxation affairs,[4] and the fact that the Commissioner is undertaking his statutory duties in conducting an audit.
[4] ‘Taxpayers’ Charter’, ATO (Web Page, 10 February 2025) <>
The summonsed parties’ argument against producing the documents sought by the 2024 Summons was that, in effect, their position in respect to the audit may be prejudiced. This is not a proposition that sits particularly well with the obligation of a taxpayer to be frank with the Commissioner. An audit does not have any substantive effect and, irrespective of the outcome, it can be revisited. No estoppel applies.[5]
[5] Federal Commissioner of Taxation v Wade (1951) 84 CLR 107, 117.
For example, in the context of revisiting assessments, section 167 of the Income Tax Assessment Act 1936 (ITAA 36) gives the Commissioner power to amend an assessment, which includes going back beyond the usual statutory timeframe for amendments, in cases where the Commissioner concludes there has been fraud or evasion, pursuant to his powers under section 170. Implicit in this is the ability of the Commissioner to undertake an audit, prior to the issuing of an amended assessment.
The operative act by the Commissioner is generally the issuing of an amended assessment, which gives rise to the taxpayer being able to exercise rights under Part IVC Taxation Administration Act 1953. The Commissioner’s activities leading up to the issuing of an assessment or amended assessment, including undertaking an audit, are essentially administrative. They are generally carried out under section 8 of the ITAA 36. An audit is not the end of the processes, but merely an administrative tool at the Commissioner’s disposal along the way.
In these circumstances the mere fact that a summonsed party is the subject of an ongoing taxation audit would be insufficient to set aside a summons.
Finally, it should be noted that the Harman obligation has been found to not apply to documents sought by the Commissioner in the Federal Court.[6] Given the Tribunal’s reliance on the procedure of the Courts in dealing with objections to summons, I accept that it would not arise to protect documents returned to the Tribunal under summons in a matter like the present, that is, where the Commissioner is a party to the substantive matter.
[6] La Mancha Africa S.A.R.L. v Commissioner of Taxation [2021] FCA 1564; Deputy Commissioner of Taxation v Rennie Produce (Aust) Pty Ltd (in liq) [2018] FCAFC 38; Commissioner of Taxation v Donoghue [2015] FCAFC 183.
Legal professional privilege
The existence of legal professional privilege is, as a general proposition of law, a legitimate basis on which to object to a summons. Typically a claim for the privilege is made on a document-by-document basis by identifying the document over which privilege is claimed and the basis for the privilege.
The evidence in support of this claim is found in paragraph 17 of Mr Bovino’s affidavit. That evidence is:
Specifically, I have formed the opinion that documents which fall within the scope of the following requests may be protected by legal professional privilege and / or are considered confidential communications:
(a)In regard to the Summons where I am the recipient:
(i) Item 2 - copies of all file notes, diary entries or other written notes or records crated by Phillip Bonvino and/or Philip Bonvino with respect to meetings or discussions with the ATO regarding World Brand Importer Pty Ltd;
(ii) Item 3 - copies of all correspondence received by Phillip Bonvino and/or Philip Bonvino from the ATO regarding World Brand Importers Pty Ltd, including letters and emails communications;
(b)In regard to the Summons where Creative Holdings is the recipient;
(i) Item 8 - copies of all file notes, diary entries or other written notes or records created by Phillip Bonvino and/or Philip Bonvino and/or any other employee or representative of Creative Holdings (Aust) Pty Ltd with respect to meetings or discussions with the ATO regarding World Brand Importers Pty Ltd;
(ii) Item 9 - copies of all correspondence received by Creative Holdings (Aust) Pty Ltd from the ATO regarding World Brand Importers pty Ltd, including letters and email communications.
(c)In regard to the Summons where Creative Brands is the recipient:
(i) Item 8 - copies of all file notes, diary entries or other written notes or records created by Phillip Bonvino and/or Philip Bonvino and/or any other employee or representative of Creative Brands Pty Ltd with respect to meetings or discussions with the ATO regarding World Brand Importers Pty Ltd;
(ii) Item 9 - copies of all correspondence received by Creative Brands Pty Ltd from the ATO regarding World Brand Importers Pty Ltd, including letters and email communications.
On the face of it, none of the matters identified in any part of paragraph 17 are legitimately the subject of legal professional privilege. The documents all identified in these paragraphs appear to describe documents created for the purposes of the audit, which is not subject to legal professional privilege, involving as it does, interactions between one or more of the subjects of the audit and the Commissioner’s staff.
Furthermore, the assertions in the chapeaux to paragraph 17 are not in any way probative. Any cursory familiarity with the law of privilege as it applies in litigation, and before the Tribunal, would make the requirements clear. The Commissioner quite helpfully set out the requirements in his submissions at [18], and the Applicants supported those submissions. Despite this, the summonsed parties did not file any further affidavit seeking to make good the claim.
The blanket claim in this application, coupled with the use of “and/or”, effectively admitting that at the least some of the documents over which the claim is made do not in fact give rise to the privilege, is in my view fatal to reliance on the privilege ground. The oral submissions properly sought to limit the claim of privilege to documents that are more likely privileged documents, for example, a file note taken by a lawyer during the course of a meeting with the Commissioner. However, given that there is simply no evidence on which I can determine what is and what is not privileged, it is not appropriate to exempt those documents at the first step, being production of documents in response to the summons.
No authority or proper evidentiary basis for grounding a claim that documents should not be returned because of confidentiality is, likewise, fatal to the application.
I accept that the summonsed parties should be given the opportunity to make good their claims for privilege and confidentiality prior to the documents being made available for inspection.
Possession, custody or control
I accept, as suggested by the Commissioner, that the summons should be limited to documents within the possession, custody or control of the summonsed party.
Affidavit
The Applicants submitted that the response to the summons should be supported on oath by the summonsed parties. This was said in respect to the submission from the bar table that the summonsed parties did not have documents in certain categories sought because their business was not required to keep these types of records.
Given that this was not something that was said in Exhibit S1, and in light of my concerns regarding both Exhibit S1’s content and the apparent contradictions between it and the responses received to the 2023 Summons, I accept that the summonsed parties should verify their responses when documents are lodged.
Model litigant obligations
The Applicant made written submissions regarding a perceived failure by the Commissioner to act as a model litigant. I was informed by the Applicants that this matter had been resolved and the submissions were withdrawn. In any event, the Commissioner drew my attention to section 55ZG(3) of the Judiciary Act which precludes anyone other than the Commonwealth raising the model litigant rules before this Tribunal.
ORDERS
For these reasons, I made the orders set out below.
1.On the Summons issued to Mr Bonvino dated 25 September 2024, insert the words ", in your possession, custody or control,":
(a)In par 1, after the word "correspondence"
(b)In par 2, after the word "records"
(c)In par 3, after the word "correspondence”
2.On the summons issued to The Proper Officer Creative Holdings (Aust) Pty Ltd dated 25 September 2024, insert the words ", in your possession, custody or control,":
(a)In par 1, after the word "documentation"
(b)In par 2, after the word "correspondence"
(c)In par 3, after the word "records"
(d)In par 4, after the word "register"
(e)In par 5, after the word "requests"
(f)In par 6, after the word "records"
(g)In par 7, after the word "documentation"
(h)In par 8, after the word "records"
(i)In par 9, after the word "correspondence"
3.On the summons issued to The Proper Officer, Creative Brands Pty Ltd dated 25 September 2024, insert the words ", in your possession, custody or control,":
(a)In par 1, after the word "documentation"
(b)In par 2, after the word "correspondence"
(c)In par 3, after the word "records"
(d)In par 4, after the word "register"
(e)In par 5, after the word "requests"
(f)In par 6, after the word "records"
(g)In par 7, after the word "documentation"
(h)In par 8, after the word "records"
(i)In par 9, after the word "correspondence"
4.The date for compliance with the summons be extended to Wednesday 26 February 2025.
5.At the time of filing the documents with the Tribunal, each summonsed party is to file with the Tribunal and serve on the Applicant and the Respondent each of the following.
(a)An affidavit of Mr Bonvino:
i.verifying the searches that have been undertaken in complying with the summons;
ii.in respect to any categories of documents sought which have never existed, verifying that fact and why they have never existed;
iii.in respect to any documents in any category sought which the summonsed party says existed once but no longer exists, verification of:
1. the date the document was last in the party’s possession, custody or control;
2. what happened to the document; and
3. to the extent the document is in the possession, custody or control of another person, who that person is.
(b)A tabulated index setting out:
i.The date of the document;
ii.The type of document it is, eg, email, fax etc;
iii.A short description of the document eg. letter to ATO, email from Mr X accountant etc;
iv.Any claim for privilege which is made in respect to the document, including the basis of the privilege eg without prejudice, privilege LPP etc; and
v.Whether any claim is made for redaction of part of the document, and if so on what basis that claim is made.
(c)Any submissions it may seek to make objecting to the Applicant and the Respondent being granted general inspection orders, including identifying in tabular form any redactions the summonsed party proposes.
6.The application is otherwise dismissed.
DECISION
The summonses issued on 25 September 2024 are amended in accordance with the Tribunal’s direction dated 5 February 2025. The summonsed parties’ application to set aside the summons is otherwise dismissed.
I certify that the preceding 42 (forty-two) paragraphs are a true copy of the reasons for the decision herein of Deputy President Clare Thompson SC
..............................[sgd]..........................................
Associate
Dated: 11 February 2025
Date of hearing: 5 February 2025 Counsel for the Applicant: Mr M Gollan Solicitors for the Applicant: Rigby Cooke Lawyers Counsel for the Respondent: Mr J Slack-Smith Solicitors for the Respondent: Australian Taxation Office, Litigation and Legal Services Counsel for the Summonsed Parties: Mr S Moore Solicitors for the Summonsed Parties: Condello Legal
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