Borcherdt v Commissioner of Taxation

Counsel for the Respondent: Mr VG Brennan

Solicitor for the Respondent: McInnes Wilson Lawyers

IN THE FEDERAL COURT OF AUSTRALIA QUEENSLAND DISTRICT REGISTRY GENERAL DIVISION QUD 90 of 2012

BETWEEN: RJ BORCHERDT & GP SCOTT TRADING AS NYMBOIDA NATIVE TIMBERS

JUDGE: COLLIER J DATE OF ORDER: 11 FEBRUARY 2014 WHERE MADE: BRISBANE

1. The matter be remitted to the respondent to allow a claim for $11,105.30, in accordance with the respondent's concession before the Administrative Appeals Tribunal.
2. Otherwise the application be dismissed. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

IN THE FEDERAL COURT OF AUSTRALIA QUEENSLAND DISTRICT REGISTRY GENERAL DIVISION QUD 90 of 2012

BETWEEN: RJ BORCHERDT & GP SCOTT TRADING AS NYMBOIDA NATIVE TIMBERS

JUDGE: COLLIER J DATE: 11 FEBRUARY 2014 PLACE: BRISBANE

REASONS FOR JUDGMENT 1 The parties in this appeal from a decision of the Administrative Appeals Tribunal ("the Tribunal") have agreed on one order which should be made. Both accept that the appeal be allowed to the extent of the matter being remitted to the respondent to allow a claim for $11,105.30 relating to fuel purchased by Mr Borcherdt from BP Coutts, in accordance with the Commissioner's concession before the Tribunal in this respect. Otherwise, however, the applicants continue to press for orders that the decision of the Tribunal be set aside, and the Commissioner submits that the application be dismissed. 2 I am prepared to make the order agreed by the parties. Remaining, however, is the determination of other issues raised by the applicants in their application. 3 Appeals from decisions of the Tribunal are heard by this Court in its original jurisdiction, and only on questions of law: s 44(1) Administrative Appeals Tribunal Act 1975 (Cth). 4 At the hearing before me Mr Borcherdt represented both applicants - that is, himself and a partnership of which he was a member. The applicants sought to appeal from a decision of the Tribunal wherein the Tribunal affirmed the refusal of the Commissioner to allow the applicants diesel fuel credits and diesel tax credits available under the Energy Grants (Credits) Scheme Act 2003 (Cth) and the Fuel Tax Act 2006 (Cth). In my view, other than to the extent to which the appeal should be allowed by agreement of the parties, the application should be dismissed. 5 The background facts to this appeal are set out in some detail in the reasons for decision of the Tribunal, to which I now turn.

Background facts 6 Mr Borcherdt and his business partner, Mr Glen Scott, conducted a sawmilling business in northern New South Wales trading under the business name "Nymboida Native Timbers" from around 2004 until 2008. During the life of the partnership Mr Borcherdt acted as managing partner, including managing financial and administrative matters as well as all the relationships with suppliers. 7 Mr Borcherdt also conducted a separate sawmilling business and a farming business on his own property in northern New South Wales under the names Arbee Timbers and Arbee Agriculture. 8 The businesses of Mr Borcherdt and the partnership used heavy machinery, generators, vehicles, pumps, chain-saws and other machinery, all of which required fuel. Mr Borcherdt gave evidence before the Tribunal that he had obtained fuel to operate this plant and equipment from a local fuel distributor in Coutts Crossing (ie BP Coutts), and from an entity called "Action Fuels". 9 In respect of this fuel Mr Borcherdt and the partnership claimed diesel fuel credits and diesel tax credits available under the Energy Grants (Credits) Scheme Act 2003 (Cth) and the Fuel Tax Act 2006 (Cth). The taxation period under review for Nymboida Native Timbers was 1 October 2004 - 31 March 2008 while the period under review for Mr Borcherdt's businesses was 1 January 2006 - 31 March 2008. 10 The Commissioner conducted an audit in relation to the claims of the businesses for fuel tax credits and grants. In the final analysis the Commissioner took no issue with the fuel obtained from BP Coutts, however in relation to the fuel obtained from Action Fuels the Commissioner concluded (in summary) that: there was a serious question as to whether Action Fuels actually existed; and in any event, no reliable record had been kept by the applicants of how much fuel was used for eligible uses by the partnership or Mr Borcherdt's own businesses. 11 The Commissioner did not accept the applicants' claims for diesel fuel credits and diesel tax credits in respect of fuel sourced from Action Fuels. Accordingly, the Commissioner issued amended notices of assessment which identified significant tax shortfalls, and imposed penalties on the applicants. 12 The applicants sought review by the Tribunal of the objection decisions of the Commissioner.

Proceedings in the Tribunal 13 The Tribunal noted that Mr Scott was not familiar with events associated with the management of Nymboida Native Timbers. It also observed that "Action Fuels" was "a shadowy outfit" in that no one appeared to be able to produce evidence of its existence. 14 It appears that Mr Borcherdt became aware of Action Fuels when one day on his property he met two men, Mr Greg McArdle and Mr Paul Collins, whose interests included a fuel supply business known as Action Fuels. In relation to Mr Borcherdt's evidence the Tribunal noted further that after discussions between Messrs Borcherdt, McArdle and Collins: [10] … They reached an agreement that Action Fuels would commence supplying fuel from its depot (which Mr Borcherdt thought might have been located in Tamworth) that would be paid for in a contra deal through the supply of logs by the Partnership and Mr Borcherdt. Mr Borcherdt said there was nothing unusual in a contra deal; he said that sort of thing happened all of the time "in the bush". It was agreed that the price of cut logs would be $250 per cubic metre for the purposes of the agreement. He said that was his understanding of the going rate for cut timber, although it is unclear what research he did before arriving at that figure. It was further agreed that fuel price would not be any higher than the price charged by the BP distributor at Cootes Crossing. [11] At the hearing, Mr Borcherdt claimed the substance of the deal was recorded in a facsimile letter received from Action Fuels on its letterhead, but that letter has never been produced. Indeed, it seems the existence of the letter had not even been disclosed prior to the hearing. That is surprising. In any event, I have no evidence before me recording the terms of the arrangement. I only have the word of Mr Borcherdt. [12] Mr Borcherdt was supplied with a mobile telephone number for Action Fuels but he says he never used it during the life of the agreement. When the agreement concluded, it was suggested to him that the number was disconnected, or had never been connected. When he finally did try to contact Action Fuels on that number in March or April 2009, he was unsuccessful. [13] The circumstances in which the arrangement with Action Fuels came to be established do not ring true. Mr Borcherdt did not seem to know anything else about two strangers with whom he had entered into business without extensive negotiations. It seems most of the discussions in relation to the deal, such as it was, were concluded on the day the men met Mr Borcherdt while they were trespassing on his property. He accepted in cross-examination that he had never heard of the men or their business before, and he was unaware of them having any other customers in the area. Yet he says he was happy to deal with them from that point and told them where the keys to the gate on the property were located so they could commence making deliveries. When challenged on the improbability of all of this, he insisted "that was the way business is done in the bush". [14] The relationship effectively commenced in March 2006 when a delivery truck began making regular stops by the property to drop off large drums of oil at fuel dumps on the property adjacent to the mobile sawmills. It was unclear from the evidence how many fuel dumps were in existence. Mr Borcherdt initially referred to a fuel dump (in the singular) but as his evidence progressed he came to refer to dumps in the plural. It may be that one explanation for this was that there were several different sites on his property over time because the sites moved. Interestingly, Mr Borcherdt said the delivery trucks never had any trouble finding the sites to make deliveries even though they were not signposted because "people in the bush" were able to read the land and identify where operations were located some distance from the entrance to the property. [15] I have noted Mr Borcherdt's evidence that he did not have regular contact with anyone from Action Fuels. The delivery vehicles would arrive on a regular basis and drop off barrels of fuel to replenish stocks at the fuel dumps, and they would take the cut logs as payment. They would leave behind any documentation, like delivery notes or invoices, in a receptacle located at the fuel dump. The receptacle also held an exercise book into which the driver would enter the details of the fuel delivery and the amount of logs removed. I note the exercise book has never been produced. Mr Borcherdt surmises that it was removed from the site by Mr McArdle or Mr Collins or someone else from Action Fuels when they came to remove their property (and other evidence of their existence) after they learned the Commissioner was inquiring into the supply arrangement. 15 Later the Tribunal noted: [18] Not all of the fuel from Action Fuel was used by Mr Borcherdt and the various businesses on his own property. He had some of the fuel transferred by truck to the Coalmine Rd property where Mr Scott tended to work. But Mr Borcherdt insisted all of the fuel in respect of which claims were made was actually delivered, and it was all used in the businesses. He produced spread-sheets that purported to show how all of the fuel would have been used in the course of those businesses. He added he did not keep more detailed records in relation to usage, such as log books, on advice from the ATO business line. He also pointed out that other crucial records, like the exercise book that was kept in receptacle at the fuel dump, had mysteriously disappeared. [19] Mr Borcherdt was not a very convincing witness. He was evasive in the witness box. He also referred at the hearing to a number of documents that supported his case which had not previously been disclosed (although he says at least some of those documents were mentioned in the course of discussions with the ATO auditor who was not called to give evidence). Whenever challenged about the probability of his account, he would refer to the way in which business was done "in the bush" - although that explanation conveniently ignores the fact that he and Messrs McArdle and Collins were not from the local area. His account of the details of the arrangement - the number of dumps, the way in which deliveries occurred, who made the deliveries and the way fuel was stored and accounted for in the dump, for example, appeared to change as he gave evidence. His references to the machines operated by the various businesses also appeared to change as he went along. (It was ultimately unclear how many bulldozers were operated by the various businesses, for example, or who owned them.) I say appeared to change because Mr Borcherdt's discursive style of answering questions meant he was difficult to pin down on matters of detail. 16 In addition to evidence of Mr Borcherdt, the Tribunal considered evidence of Mr Scott, as well as other witnesses. Those other witnesses were: Mr Gelfe, a security liaison officer with Telstra who had been asked to investigate whether the mobile telephone number Mr Borcherdt said he had obtained from Action Fuels was registered. The Tribunal considered Mr Gelfe's evidence to be inconclusive. Mr O'Brien, an employee of Forests NSW called as an expert who could testify about the price of felled timber, and in particular whether the arrangement allegedly negotiated between Mr Borcherdt and Action Fuels was inherently unlikely. The Tribunal concluded that if the arrangement had been negotiated as Mr Borcherdt alleged, it was very generous. The Tribunal also concluded that on that basis Mr Borcherdt had been paying a very generous price for fuel, including a significant premium over the prevailing market price. Ms Novotny, a forensic document analyst who provided a report concerning the delivery slips and invoices provided by Mr Borcherdt. The Tribunal concluded that Ms Novotny's evidence did not establish that documents produced by Mr Borcherdt were falsified, but it did raise questions about what had occurred. 17 After consideration of this evidence the Tribunal concluded as follows: [34] On balance, I am unable to confidently conclude Mr Borcherdt simply made up the whole arrangement with Action Fuels. I accept that he may have obtained fuel from someone other than his local BP distributor. That other supplier may have been an entity trading as Action Fuels which has since vanished, perhaps because its principals were up to no good. He may have obtained the fuel under a contra agreement and logs may have been sold at the price identified. He may have obtained the quantities of fuel he claims, and he may have used all of the fuel for eligible uses. But the whole arrangement is murky, and it is impossible for me to be confident that it proceeded as Mr Borcherdt claimed. I have already raised questions over his performance as a witness; in the absence of appropriate corroborating documentary evidence apart from questionable invoices and delivery slips, I am not persuaded the Commissioner's decision was excessive or should have been made differently. In those circumstances, s14ZZK (b) of the Taxation Administration Act 1953 means the objection decision would stand. [35] Even if I accepted there was an arrangement with Action Fuels in the terms described by Mr Borcherdt, there is simply insufficient evidence to confirm how much fuel was obtained, and what it was used for. I note Mr Borcherdt says there is no specific requirement that an applicant keep log-books. I accept that is so, and note the claims in respect of fuel derived from the BP distributor have been allowed without log-book evidence. The obligation to keep records is not there to trip up businesses and deny them access to benefits that are otherwise available. But an applicant under these schemes is ultimately obliged to keep records that are capable of satisfying the Commissioner that fuel was obtained and applied to eligible uses. The amount of documentation required may vary with the situation. In some cases, minimal documents may be required because the fuel was clearly acquired and the end-use of the fuel is patently obvious. But where there is more doubt about the acquisition and use of the fuel, more evidence might legitimately be expected before the Commissioner (or the Tribunal upon review) could be satisfied. [36] In this case, we do not know for sure how much fuel was acquired. The loss of the exercise book which recorded all of these details is a particular blow to the applicants' case: if that document were still available, the Commissioner might be more comfortable with Mr Borcherdt's story. We also do not know for sure how the fuel was used. That is an issue where the amount of fuel that was supposedly acquired appears to be large relative to the expected needs of the business. Mr Borcherdt did attempt to demonstrate the business could and did use a large amount of fuel, but there must be some doubt about his figures, not least because they were extrapolated from labour records and plainly at odds with Mr Scott's estimates. It follows that the claim for grants and credits in the period under review was properly disallowed. 18 Finally, the Tribunal also affirmed the imposition of an administrative penalty at the rate of 75%.

Second further amended notice of appeal and additional ground of appeal 19 At the hearing before me Mr Borcherdt sought leave to file in Court a second further amended notice of appeal from the decision of the Tribunal. I subsequently granted leave to Mr Borcherdt to further amend the second further amended notice of appeal to include a new ground of appeal that the Tribunal applied an incorrect standard of proof in its deliberations. This ground of appeal became ground of appeal 14. 20 The second further amended notice of appeal (as further amended) was lengthy and detailed. 21 The applicants raised fourteen questions of law which can be summarised as follows: Whether the Tribunal, in determining the review of the objection decisions by the Commissioner to disallow some of the applicants' claims, was bound to take into account the conduct of the Commissioner in regard to its obligation to act as a model litigant (Question 1). Whether the Tribunal was bound to take into account (inter alia) specific legislation, material filed by the Commissioner, his reasons for disallowance, material published by the Commissioner (including determinations and booklets), a speech by the Commissioner, rights and protections available to the applicants under the rules of natural justice, oral advice given by Australian Taxation Office employees to the applicants and compliance by the applicants with relevant legislative requirements (Questions 2, 3, 4, 5 and 6). Whether the Tribunal was bound not to take into account allegations of wrong-doing and non-disclosure by the applicants in light of admissions by the Commissioner during pre-trial conferences and directions hearings that there were no allegations of wrong-doing or criminality, and in light of the absence of evidence available to the Tribunal (Questions 7 and 8). Whether the Tribunal was bound to take into account the unrelenting process of allegation and intimidation by the Commissioner that Mr Borcherdt was subjected to during the audit and the proceedings in the Tribunal (Question 9). Whether the Tribunal was bound to take into account the failure of the Commissioner to present audit staff, files and records for examination by the applicants (Question 10). Whether the Tribunal was bound to take into account all the evidence and submissions put before it (Question 11). Whether the Tribunal was bound to take into account the allowances and concessions made by the Commissioner (Question 12). Whether in applying an administrative penalty of 75% of the alleged taxation shortfall, the Tribunal was bound to take into account (inter alia) specific legislation, material filed by the Commissioner, his reasons for disallowance, material published by the Commissioner (including rulings and booklets), oral advice given by Australian Taxation Office employees to the applicants, the absence of evidence that a false or misleading statement had been made, and the circumstances in which the administrative penalty may be remitted in full or in part (Question 13). Whether the Tribunal was bound not to adopt the approach and standards of proof applicable to civil litigation and in particular the civil standard of the balance of probabilities (Question 14). 22 The applicants' grounds of appeal broadly reflect the questions of law raised in the notice of appeal, and can be summarised as follows: The Tribunal failed to take into account the fact that the Commissioner had not acted as a model litigant, when the Commissioner was required to do so (Ground 1). In finding against the applicants in respect of their objection to the Commissioner's determination, the Tribunal failed to take into account relevant considerations. Grounds 2, 3, 4, 5, 6, 7, 9, 10, 11 and 12 list thirty-two such considerations, being general factors (such as certain statutes, the submissions of the parties, the rules of natural justice, "all the evidence and submissions put before it", "the allowances and concessions made by the respondent") and specific considerations (including specific legislative requirements such as s 25 to s 27 of the Products Grants and Benefits Administration Act 2000 (Cth), ATO publications, oral advice by the ATO Businessline and pre-trial admissions by the Commissioner, "the unrelenting process of allegation and intimidation by the Commissioner on the performance of Mr Borcherdt as a witness", and the failure of the Commissioner to present audit staff, files and records). In finding against the applicants in respect of their objection to the Commissioner's determination, the Tribunal took into account considerations it was bound not to take into account, namely allegations by the Commissioner of wrong-doing and non-disclosure by the applicants and inferences and/or findings by the Tribunal adverse to the applicants for which there was no evidence or for which more robust, reasonable and uncontested rebuttal evidence was available. Ground 8 lists nineteen such inferences and/or findings. In finding that the applicants were liable to pay a 75% administrative penalty, the Tribunal failed to take into account ten considerations it was required to take into account, many of which the applicants had identified as similarly relevant to the primary determination of the Tribunal, and which were as follows: a. The Taxation Administration Act 1953 - Schedule 1 ("the TAA-S1"), and Division 284B of the TAA-S1. b. The ATO Practice Statement Law Administration PS LA 2003/3 ("the PSLA2003/3"). c. The ATO Practice Statement Law Administration PS LA 2005/2 ("the PSLA2005/2"). d. The ATO Practice Statement Law Administration PS LA 2006/2 ("the PSLA2006/2"). e. The Miscellaneous Taxation Ruling MT 2008/1 ("MTR2008/1"). f. The ATO booklets provided by the Commissioner to the Applicants. g. The evidence of oral advice from the ATO Businessline to the Applicants. h. The Applicants' compliance with the legislative requirements, s 25 to s 27 of the Products Grants and Benefits Administration Act 2000 (Cth) and s 382-5 of the TAA, and with oral advice from the ATO Businessline and with published determinations and with ATO booklets. i. The absence of evidence that established that a false or misleading statement in a material particular was made, that this statement resulted in a shortfall, that the Applicants acted with intentional disregard of a taxation law, that the Applicants did not rely upon advice or a statement by the Commissioner, that the treatment by the Applicants does not agree with a general administrative practice. At the first test of these considerations the Tribunal failed to identify a statement that was false or misleading in a material particular that resulted in a shortfall. j. The circumstances in which the administrative penalty may be remitted in full or in part. (Ground 13). The Tribunal improperly adopted the approach and standards applicable to civil litigation and in particular determined the review on the basis of the balance of probabilities (Ground 14).

Consideration 23 As the High Court explained in Minister for Immigration and Ethnic Affairs v Wu Shan Liang (1996) 185 CLR 259 at 272 the reasons for decision of an administrative decision-maker are not to be scrutinised upon over-zealous review by seeking to discern whether some inadequacy may be gleaned from the way in which the reasons are expressed. In my view, as a general observation, the broad-ranging, sometimes repetitive and lengthy notice of appeal the Court is required to consider in this case invites precisely that - namely a minute meticulous examination of the reasons of the Tribunal with an eye keenly attuned to the perception of any error in the Tribunal's decision. While it is clear that the decision of the Tribunal should quite properly be set aside in the event that the Court determines that the Tribunal's decision is attended by error of law, I endorse earlier comments of this Court that decisions of the Tribunal should be construed in a sensible and balanced way (cf Politis v Federal Commissioner of Taxation (1988) 16 ALD 707 at 708, Blackwood Hodge (Aust) Pty Ltd v Collector of Customs (NSW) (No 2) (1980) 3 ALD 38 at 49). 24 At the hearing, Mr Borcherdt relied on his written submissions, and in his oral submissions only minimally expanded upon the questions of law and grounds of appeal in the notice of appeal. In substance, the applicants' primary complaints in the written outline concerning the Tribunal's decision appeared to be: The inadequacy of the Tribunal's reasons, including the absence of reference to the relevant law, tax rulings, other material put before the Tribunal or evidence before the Tribunal. The failure of the Tribunal to accept Mr Borcherdt's evidence when there was no evidence to rebut it, and the inference which should follow that the Tribunal found his evidence "prima facie unacceptable" contrary to observations of Barwick CJ in Gauci v Federal Commissioner of Taxation (1975) 135 CLR 81. Notwithstanding the applicants' burden of proof under s 14ZZK of the Taxation Administration Act 1953 (Cth), if there is no evidence upon which a negative finding can be made, and there is evidence in support of a positive finding, the discharge of the burden of proof is complete and the taxpayer must be successful. 25 In my view, approaching the decision of the Tribunal in accordance with principles articulated in cases including Wu Shan Liang and Politis to which I have already referred, it is clear that the decision should stand and the application to set it aside be dismissed (other than to the limited extent agreed by the parties). I have reached this view for the following reasons. 26 First, the original decision of the Commissioner, and the subsequent decision of the Tribunal, rested on one key issue. Did the applicants substantiate or explain all transactions in relation to the acquisition and use of fuel for which Mr Borcherdt and the second applicant claimed credits under the Energy Grants (Credits) Scheme Act 2003 (Cth) and the Fuel Tax Act 2006 (Cth)? Certainly it is clear that before the Tribunal the applicants bore the onus of proof under s 14ZZK of the Taxation Administration Act 1953 (Cth) to establish that the decision of the Commissioner to disallow the applicants' fuel claims was incorrect. In my view the Tribunal properly and adequately considered this issue. The Tribunal member assessed the evidence before him, in particular that of Mr Borcherdt, and concluded that, even on an approach to the evidence most favourable to Mr Borcherdt, there was simply insufficient material before the Tribunal to support the position contended by the applicants. This conclusion is one of fact. I can identify no error of law in the approach of the Tribunal, which in my view was the outcome of a thoughtful and reasonable approach by the Tribunal to the material before it. 27 Second, Mr Borcherdt takes issue with the omission from the Tribunal's reasons of reference to statutory and other materials he submits were relevant, and which he claims should have been taken into account by the Tribunal. A claim by an applicant of inadequacy of reasons clearly goes to the reasoning process of the Tribunal. However the absence of specific reference by the Tribunal to a particular statute or a particular piece of evidence does not necessarily mean that the Tribunal has failed to take it into account, or that the reasons of the Tribunal are inadequate. The reasons of the Tribunal must be considered as a whole to ascertain whether the Tribunal has properly addressed relevant issues. 28 Further, as Heerey J commented in Comcare v Forbutt [2000] FCA 837: [58] However the Tribunal was not obliged to deal with every argument raised and every possibility that could be adverted to: Dornan v Riordan (1990) 24 FCR 564 at 567. It is not the duty of a judge to decide every matter which is raised in argument: Housing Commission of New South Wales v Tatmar Pastoral Co Pty Ltd [1983] 3 NSWLR 378 at 385-386. It will ordinarily be sufficient if a judge "apprises the parties of the broad outline and constituent facts of the reasoning on which he has acted": Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247 at 273 per Mahony JA. The obligation in this regard on a judge is higher than that on an administrative decision-maker: Soulemezis at 261 per Kirby P, Public Service Board of New South Wales v Osmond (1986) 159 CLR 656 at 666-667 per Gibbs CJ. [59] Moreover, the duty to give reasons is related "to the function to be served by the giving of reasons": Tatmar at 386, Soulemezis at 280. The appeal from the AAT to this Court is only on a question of law. For that purpose there needs to be findings of material fact and reference to the evidence or other material on which those findings are based. Findings of material fact will enable the Court on appeal to ascertain whether the law was correctly applied to those facts and whether there was evidence on which such findings could (not should) have been made. This is a fundamentally different exercise from that engaged in by an appellate court hearing an appeal from a judge: Warren v Coombes (1979) 142 CLR 531, State Rail Authority of New South Wales v Earthline Constructions Pty Ltd (in liquidation) (1999) 160 CLR 588. [60] … [61] It might be added that there are logical constraints on the extent to which failure of the Tribunal to deal with arguments can avail an appellant. If the argument went to matters of fact then, as already mentioned, the Tribunal need do no more than state its findings of material fact and refer to the evidence or material on which those findings were based. If there is no defect in failing to refer to contrary evidence, it is hard to see how there can be error in failing to discuss contrary argument. [62] If the argument was one of law, and the Court finds it to be correct (say, for example, the Tribunal has overlooked a relevant statutory provision advanced in argument) then the Court will set aside the decision because it was wrong in law - regardless of whether or not the argument was discussed in the Tribunal's reasons. If however the legal argument is incorrect (say a Full Court decision has held that the omitted statutory provision does not have the effect suggested) then the Court could hardly set aside a decision which was not wrong in law. 29 In this case it is not in dispute that the applicants were statutorily required to keep relevant records of fuel acquisition and use. The Tribunal found as a matter of fact that they did not do so. On the facts of this case the Tribunal simply did not accept the applicants' claims in respect of fuel allegedly obtained from Action Fuels, or how much fuel was allegedly obtained or the applicants' use of such fuel. This conclusion of the Tribunal was open on the material before it. It is difficult to see that the decision of the Tribunal would have been improved by exhaustive reference to peripheral material as submitted by the applicants. The applicants have not established that the Tribunal applied incorrect or irrelevant principles or legislation, or that it took an approach which was not consistent with the relevant law in this case. 30 The applicants rely on comments of Madgwick J in Military Rehabilitation & Compensation Commission v SRGGGG (2005) 215 ALR 459; [2005] FCA 342, where his Honour at [82] referred to the well-settled principle that reasons should assist parties to understand the result and enable a disappointed party to consider whether to take advantage of any right to appeal or of judicial review. In my view these comments of his Honour do not assist the applicants - the reasons of the Tribunal in this case satisfy both objectives. 31 Third, Mr Borcherdt takes issue with the view taken by the Tribunal of his credibility and weight given to evidence in this case. However: I do not accept Mr Borcherdt's submission that the Tribunal was required to accept his evidence in the absence of evidence to the contrary. The applicants bore the onus of proof on the review of the decision of the Commissioner: Mason J in Gauci at 89. I agree with the Commissioner that the view of the Tribunal that it could not confidently conclude that Mr Borcherdt had "made up" the arrangement with Action Fuels did not automatically lead to the conclusion that the applicants had made out their case. The weight given by the Tribunal to the evidence before it was a matter of fact for the Tribunal: Re Minister for Immigration and Multicultural Affairs; ex parte Durairajasingham (2000) 168 ALR 407; [2000] HCA 1 at 423, Wu Shan Liang at [52]. In the circumstances of this case, where the applicants produced what could be described as, at best, extremely minimal documentary evidence to support their claims, it was open to the Tribunal to doubt the plausibility of Mr Borcherdt's evidence and give appropriate credit to that evidence. 32 Fourth, I am not persuaded by ground of appeal 10 that the Tribunal ought properly to have drawn an inference in accordance with the principles explained in Jones v Dunkel (1959) 101 CLR 298 by reason of the failure of the Commissioner to present as a witness Ms Thanh Bui, who was the relevant ATO auditor in respect of the applicants' diesel fuel credit claims. I agree with the submissions of the Commissioner that: The decision of the Tribunal was directed to the Commissioner's decision rejecting the objection of the applicants, not the audit. The Tribunal was not invited by the applicants to draw a Jones v Dunkel inference from the absence of Ms Thanh Bui. The decision of the Tribunal followed extensive consideration by the Tribunal of evidence presented by all parties, in particular that of Mr Borcherdt. Further, the Tribunal identified that Mr Borcherdt had raised matters the subject of the applicants' claims with the Commissioner's audit staff. I am not persuaded that the oral evidence of the auditor would have affected the decision of the Tribunal, and certainly not to the detriment of the Commissioner's case as submitted by the applicants. 33 Fifth, I am not persuaded of the relevance of the role of the Commissioner as a model litigant in these proceedings, as submitted by the applicants. That the Commissioner is required to conduct litigation as a model litigant in accordance with the Legal Services Directions issued through the Office of Legal Services Coordination is not in dispute. However even if this raises a question of law which could properly form the subject of appeal in this case - which I strongly doubt - I am not persuaded that the Commissioner has acted otherwise than in accordance with his obligations. The applicants' claims in this regard smack of dissatisfaction with the decision of the Commissioner and his disallowance of the applicants' claims, rather than any breach of obligation by the Commissioner. I take a similar view to other claims of the applicants concerning the denial of natural justice to which they have allegedly been subject, and which have not been substantiated. 34 Sixth, I do not accept that the Tribunal applied an incorrect standard of proof in its assessment of the applicants' claims. The short answer to the applicants' claims raised by ground of appeal 14 is that the High Court in Wu Shan Liang dealt with the decision of a Ministerial delegate under the Migration Act 1958 (Cth), whereas the matter before me involves a determination of the Tribunal pursuant to the Administrative Appeals Tribunal Act 1975 (Cth). As Mr Brennan for the Commissioner correctly submitted, in the absence of legislative modification to the position the Tribunal is required to adopt in determining a matter before it in any particular case: The Tribunal deals with civil proceedings (s 33(1) Administrative Appeals Tribunal Act 1975 (Cth)). The standard of proof in civil proceedings is the civil standard, being on the balance of probabilities (s 140(1) Evidence Act 1995 (Cth)). 35 I do not accept that the Tribunal was required to consider the evidence before it on any standard other than the balance of probabilities. 36 Finally I am not persuaded that the Tribunal erred in respect of administrative penalties to be imposed on the applicants in this case. I do not consider that any of the matters to which the applicants refer in ground of appeal 13 either constitute questions of law upon which the Court can rule or are substantiated on the material before the Court.

Conclusion 37 Other than to the extent of the order agreed between the parties varying the decision of the Tribunal, the application should be dismissed. I certify that the preceding thirty-seven (37) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Collier.