Garrett v Commissioner of Taxation

REASONS FOR JUDGMENT 1 Mr Garrett seeks to appeal from a decision which was made by the Administrative Appeals Tribunal on 28 August 2014, but the Commissioner of Taxation has objected to the competency of the appeal on the basis that the notice of appeal, the questions identified in the notice of appeal, and the grounds relied upon in the notice of appeal, do not raise any question of law as required by s 44(1) of the Administrative Appeals Tribunal Act 1975 (Cth) ("AAT Act"). The Commissioner's objection to competency was listed for hearing before the appeal and was heard on 19 December 2014. 2 The decision of the Tribunal which Mr Garrett seeks to appeal was made in two proceedings involving him. The first was numbered 2012/5901 and was an application by Mr Garrett and OenoViva (Australia and New Zealand) Pty Ltd ("OenoViva") which was expressed to be made in their capacity as joint trustees of the OenoViva (Australia and New Zealand) Plant and Equipment Trust. This application had been lodged in respect of an objection decision which had been made by the Commissioner of Taxation on 13 November 2012 disallowing a claim for input tax credit for creditable acquisitions in the amount of $3,150,000 for the tax period 1 March 2012 to 31 March 2012. The second proceeding was numbered 2014/1300 and had been lodged with the Tribunal on 19 March 2014. That application was made by Mr Garrett and was expressed to have been made by him in his capacity as trustee of the OenoViva (Australia and New Zealand) Plant and Equipment Trust and as trustee of the Andrew Garrett Family Trust No 4 in respect of which the application described Mr Garrett "as an Interested Person, the sole unit holder of the Trust". Mr Garrett appears to have delivered the second application to the Tribunal on 11 March 2014 but it was formally received on 19 March 2014 by order of Senior Member Handley made on 31 March 2014 pursuant to s 29(7) of the AAT Act extending the time for the application to be made to 19 March 2014. The second application was lodged against an objection decision made by the Commissioner on 7 May 2013 in respect of an administrative penalty assessment made by the Commissioner on 9 January 2013 in connection with the first application. The Commissioner had assessed the trustee to an administrative penalty in the amount of $1,575,000. It may also usefully be mentioned at this point that on 22 January 2014 an order was made that OenoViva be wound up under the provisions of the Corporations Act 2001 (Cth). 3 The Tribunal's decisions dismissed the applications in the two proceedings upon hearing and determining specific questions which disposed of both applications. On 12 February 2014 Deputy President Forgie had directed a preliminary hearing in relation to the first proceeding (at which time the second proceeding had not yet been issued by Mr Garrett) to determine: (a) whether the (first) application should be dismissed under s 42A(5)(b) of the AAT Act because the applicant had failed within a reasonable time to comply with a direction which the Tribunal had made on 8 November 2013; (b) whether (if the application was not to be dismissed under s 42A(5)(b)) Mr Garrett was a joint trustee of the Plant and Equipment trust and by reason of his appointment as such had a right to bring both applications on behalf of the trust; and (c) whether (if the application was not to be dismissed under s 42A(5)(b)) the appointment of Mr Garrett as a controller of OenoViva conferred upon him any rights in relation to the proceedings. Those issues were initially set down to be heard on 14 April 2014 but came to be heard some months later. On 11 March 2014, during the course of a directions hearing, Mr Garrett maintained that he was also entitled to be joined as a party to the (first) proceeding pursuant to s 14ZZD of the Taxation Administration Act 1953 (Cth). The basis of the submission was a claim that he was a person affected by the decisions made by the Commissioner. On 11 March 2014 Senior Member Fice vacated the 14 April 2014 hearing date and made directions for the preliminary issues to be heard on a date then to be fixed and for Mr Garrett's application to be joined as a party under s 14ZZD to be heard at the same time as the hearing of the questions in the first proceeding. The second proceeding, as mentioned, was then formally issued by order made on 31 March 2013 with effect from 19 March 2013 and the determination of the preliminary issues disposed also the second proceeding. 4 The matters identified for preliminary decision were heard by Senior Member Fice on 12 and 13 May 2014 with the benefit of written submissions filed by Mr Garrett on 24 March 2014 and 12 May 2014. Senior Member Fice also conducted a telephone directions hearing on 26 July 2014. On 28 August 2014 the Tribunal decided that Mr Garrett did not have standing to pursue the two applications in the Tribunal on behalf of OenoViva and that he could not be joined as party pursuant to s 14ZZD of the Taxation Administration Act 1953 (Cth). The Tribunal also decided that it was appropriate to dismiss the applications pursuant to s 42A(5)(b) of the AAT Act. 5 Mr Garrett now seeks to appeal to this Court from those decisions by the Tribunal. Section 44 of the AAT Act relevantly provides two potential avenues of appeal to this Court. First, s 44(1) permits an appeal on a question of law and, secondly, s 44(2) allows an appeal about standing where the Tribunal decides that the interests of a "person are not affected by the decision" of the Tribunal. The second possible basis of appeal may conveniently be dealt with first because it can be dealt with quickly. Mr Garrett's appeal to this Court does not come within the meaning of s 44(2) because the Tribunal made no decision about whether Mr Garrett's interests were affected by the decision. The Tribunal, rather, rejected at [60]-[61] Mr Garrett's application to be joined to the proceeding on behalf of the trust as a party, or as a person, to whom consent had been given by the existing applicant, namely the trustee, to be joined to the proceedings, since Mr Garrett had not been given, and could not be given, the consent needed to enliven the provision by the existing applicant, that is, by the trustee. Section 30(1A) of the AAT Act permits the joinder of parties to proceedings whose interests are affected by a decision but that provision is modified by s 14ZZD of the Taxation Administration Act 1953 (Cth) which adds the additional requirement that there be the consent of the existing applicant to the joinder of the person seeking to be joined to the application. The Tribunal found that there was no person able to consent to Mr Garrett's joinder and, therefore, that his application to be joined as a party under s 14ZZD could not succeed. The Tribunal found at [61] that Mr Garrett was not a trustee of the Plant and Equipment Trust and that the liquidator of OenoViva had stated that he did not intend to proceed with the application. In those circumstances Mr Garrett lacked the consent of the existing applicant which he needed to enliven the power for the Tribunal to permit him to be joined as a party. The issue decided by the Tribunal was not whether Mr Garrett's interests were affected and, therefore, his appeal to this Court is not under s 44(2) of the AAT Act. 6 The other potential basis of appeal is under s 44(1) of the AAT Act. It is essential for an appeal to this Court under s 44(1) that the appeal be "on a question of law". Section 44(1) provides: Appeal on question of law (1) A party to a proceeding before the Tribunal may appeal to the Federal Court of Australia, on a question of law, from any decision of the Tribunal in that proceeding. This court, as was explained to Mr Garrett during the course of the hearing, is not permitted to hear a matter if it is not authorised to do so by law. Parliament has decided that disputes coming within the jurisdiction of the Tribunal are for the Tribunal to determine and that the role of the court is limited to ensuring that the decisions of the Tribunal are within its lawful limits: see Minister for Aboriginal Affairs v Peko-Wallsend Ltd (1986) 162 CLR 24, 40. An unsuccessful party to a decision by the Tribunal is not given an unrestricted right of appeal to this Court. The policy in provisions like s 44(1) is in part to ensure that litigation comes to end by a decision of the Tribunal made within its jurisdiction. The need for there to be a question of law to invoke the jurisdiction of the court makes it necessary for the question to be identified precisely. In Osland v Secretary to the Department of Justice (2010) 241 CLR 320 French CJ, Gummow and Bell JJ emphasised the need for precision in definition of the question of law in appeals such as these, citing with approval what was said by Gummow J in TNT Skypack International (Aust) Pty Ltd v F.C.T (1988) 82 ALR 175 at 178: The existence of a question of law is…not merely a qualifying condition to ground the appeal, but also the subject matter of the appeal itself. The jurisdiction of this court to hear an appeal under s 44(1) therefore depends upon there being articulated a question of law and its articulation provides the means by which the jurisdiction of the court under the section is lawfully engaged, defined and circumscribed. The articulation of a question of law may sometimes be difficult but the fact that it may be difficult does not remove the requirement: P v Child Support Registrar [2014] FCAFC 98, [28]; Ogden v Commissioner of Taxation [2014] FCA 1111, [20]. When considering whether the court's jurisdiction has been engaged by a question of law it is appropriate to take into account the fact that the person seeking to appeal may be self-represented and, therefore, to approach an analysis of the questions said to be raised by looking to the substance of the issues raised without excessive criticism, but giving allowance to an unrepresented litigant in that respect "does not detract from the fundamental point that the court's jurisdiction is only enlivened where a question of law is raised for determination": Ogden [20]; see also Hoe v Manningham City Council [2011] VSC 37, [5]-[7]. 7 The notice of appeal in this case purports to identify seven questions of law which the Commissioner contends do not enliven the court's jurisdiction. The first of the questions is expressed as being: Whether the Tribunal exercised the discretion vested in it by s 29(7) of the AAT Act without taking into account considerations that it was bound to take into account. A question expressed in those terms reveals no question of law capable of engaging the jurisdiction conferred by s 44(1). The failure by a Tribunal to take into account something which it is required by law to take into account may raise a question of law but the generalised statement in this case, as it appears in the notice of appeal, does no more than state a broad proposition without relevant content raising a question of law. The question as formulated does not identify, for example, any matter that the Tribunal was obliged by law to consider and which the Tribunal did not consider. Furthermore, and equally fatal, any such question as might be reformulated is not one which could arise on the decision by the Tribunal. The question presupposes that there was a rejection of an application for an extension of time but that was not the case. Section 29(7) of the AAT Act confers upon the Tribunal a power "upon application in writing by a person" to extend the time for that person to make an application for a review of a decision if the Tribunal is satisfied that it is reasonable in all the circumstances to do so. There was in this case, however, no such application before the Tribunal and the decision made by the Tribunal on 28 August 2014 was not a decision refusing an extension of time. The only application that had been made for an extension of time under s 29(7) was one made by Mr Garrett dated 19 March 2014 to permit the second proceeding to be commenced on that date which the Tribunal granted on 31 March 2014 in Mr Garrett's favour. 8 Similar considerations apply to the third question of law in the notice of appeal, which was stated as follows: Whether the Senior Member was unreasonable as a question of law in failing to consider the principles set out in Hunter Valley Developments Pty Ltd v Cohen (1984) 3 FCR 344, 438-349 relating to extension of time principles in respect to matter 1300. This ground is comparable to ground 1 in seeking to challenge a decision relating to extensions of time but in the case of question 3 that is done by reference to the concept of "unreasonableness" rather than by claiming an alleged failure to take into account relevant considerations (as was raised by question 1). Question 3, however, does not raise a question of law for the same reasons that applied to question 1: question 3 is not expressed in a form capable of raising a question of law in the proceeding and is also based upon an apparent misapprehension that the decision to be challenged was one refusing an extension of time. A generalised claim of unreasonableness (without identification of the basis of the alleged unreasonableness) will rarely be sufficient to enliven the court's jurisdiction. The jurisdiction under s 44(1) does not provide for merits review and to enliven judicial review on the basis that the Tribunal's decision was unreasonable in the requisite sense requires the appellant to show that degree of unreasonableness in the Tribunal's decision that no reasonable Tribunal could have decided as it did. It will not be enough, therefore, merely to assert that the decision was unreasonable without identification of the basis of the claim of unreasonableness, or without pointing to material upon which a Tribunal acting reasonably would have reached a different conclusion. The unreasonableness ground of judicial review does not provide a basis to challenge a decision on its merits but to ensure that decisions, even decisions that may be wrong, are made within the bounds of reasoning and probative material. What enlivens the ground of "unreasonableness" as the basis of judicial review is not a claim of error but, rather, that the decision (albeit erroneous) lacked any foundation in reasoning or probative material. The ground in question 3, however, does no more than make a generalised statement that the Tribunal was unreasonable and fails to identify any basis on which judicial review on that ground could be enlivened. 9 It may next be convenient to deal with questions 5 and 7 before considering questions 2 and 4. Question 5 was stated as follows: Whether the Senior Member was unreasonable as a question of law in failing to add the Applicant in this proceeding as the Applicant in matters 5901 & 1300 pursuant to as; a. Public Officer of OVPET [the Plant and Equipment Trust] as set out on the Australian Business Register and person empowered under section 14ZZD(1A)(b) to consent, and b. Trustee of OVPET appointed on the 15th March 201[3] and person empowered under section 14ZZD(1A)(b) to consent, and c. Managing Controller of the Prior Trustee of OVPET and seized of the right of subrogation to the lien over the assets of OVPET held by the Applicant as sole Trustee of OVPET including this chose in action as Property of the Prior Trustee being OenoViva (Australia & New Zealand) Pty Ltd (In Liquidation)(Controller Appointed) (now known as ACN 133 861 579 Pty Ltd) ("OVANZPL") d. Managing Controller of the Prior Trustee of the Andrew Garrett Family Trust No 4 ("AGFT 4") as the sole Unit Holder and seized of the lien over the assets of AGFT 4 including this chose in action as Property of the Prior Trustee being Sanctuary Australasia Pty Ltd (In Liquidation)(Controller Appointed) ("Sanctuary") e. Sole unit Holder by virtue of taking possession of the units previously held by Sanctuary as Managing Controller. f. Sole Unit Holder by virtue of his appointment as sole Trustee of the Andrew Garrett Family Trust No 4 on the 14th [May 2014]. The principal difficulty with question 5 is that rather than raising a question of law it seeks an impermissible review of the Tribunal's decision on its merits. In Minister for Aboriginal Affairs v Peko-Wallsend Ltd (1986) 162 CLR 24 Mason J said at 40-41: The limited role of a court reviewing the exercise of an administrative discretion must constantly be borne in mind. It is not the function of the court to substitute its own decision for that of the administrator by exercising a discretion which the legislature has vested in the administrator. Its role is to set limits on the exercise of that discretion, and a decision made within those boundaries cannot be impugned: Wednesbury Corporation. An error of fact within jurisdiction is not an error law. In Collector of Customs v Pozzolanic Enterprises Pty Ltd (1993) 43 FCR 280 the Full Court said at 286-7: A question of law or fact? The jurisdiction invoked by the respondents in the proceedings before his Honour was that conferred by s 44(1) of the Administrative Appeals Tribunal Act 1975 (Cth) which provides: "A party to a proceeding before the Tribunal may appeal to the Federal Court of Australia, on a question of law, from any decision of the Tribunal in that proceeding." The limitation of the jurisdiction to the resolution of questions of law imposes a significant constraint upon the role of the Court in reviewing decisions of the Tribunal. The appealable error of law must arise on the facts found by the Tribunal or must vitiate the findings made or must have led the Tribunal to omit to make a finding it was legally required to make. A wrong finding of fact is not sufficient to demonstrate error of law: Waterford v Commonwealth (1987) 163 CLR 54 at 77-78. Where the decision of the Tribunal involves matters of fact and degree, then provided it applies correct principles of law, no appeal will lie: Commissioner of Taxation v Brixius (1987) 16 FCR 359 at 365. The limits within which the jurisdiction is conferred require that it be exercised with restraint. Only in exceptional circumstances should the decision of the Tribunal not be the final decision: Blackwood Hodge (Australia) Pty Ltd v Collector of Customs (NSW) (1980) 47 FLR 131 at 145 (Fisher J); Commissioner of Taxation (Cth) v Cainero (1988) 88 ATC 4,427 (Foster J). As the Full Court said in Repatriation Commission v Thompson (1988) 9 AAR 199 at 204: "... the nature of the task of this Court is clear. It is to leave to the tribunal of fact decisions as to the facts and to interfere only when the identified error is one of law." This translates to a practical as well as principled restraint. The Court will not be concerned with looseness in the language of the Tribunal nor with unhappy phrasing of the Tribunal's thoughts: Lennell v Repatriation Commission (1982) 4 ALN N 54 (Northrop and Sheppard JJ); Freeman v Defence Force Retirement and Death Benefits Authority (1985) 5 AAR 156 at 164 (Sheppard J); Repatriation Commission v Bushell (1991) 13 AAR 176 at 183 (Morling and Neaves JJ). The reasons for the decision under review are not to be construed minutely and finely with an eye keenly attuned to the perception of error: Politis v Commissioner of Taxation (Cth) (1988) 16 ALD 707 at 708 (Lockhart J). Question 5, rather than seeking to appeal "on a question of law", seeks to have the court review the factual findings made by the Tribunal that Mr Garrett was never validly appointed as trustee of the trust or appointed as managing controller of the trustee. Question 5 also impermissibly seeks to raise matters that were not before the Tribunal. In Glennan v Commissioner of Taxation (1999) 90 FCR 538 the Full Court said that it is not an error of law for the Tribunal not to address arguments which had not been put before it. At [82]-[83] the Full Court said: 82 As a matter of general administrative law, it has long been accepted that it is no part of the duty of the decision-maker to make out a case for the applicant: Prasad v Minister for Immigration and Ethnic Affairs (1985) 6 FCR 155 at 170, per Wilcox J. In a statutory context in which a taxpayer seeking to challenge an assessment is required to specify the grounds of his objection, and bears the burden of proving that it is excessive, as a general rule it cannot be said that the AAT is bound to make findings of fact and rulings on issues not relied upon by the taxpayer in the proceedings before it. It follows that, as a general rule, there is no error of law if the AAT fails to address issues of fact and law not the subject of argument by the taxpayer. 83 It follows from what we have said that we do not see the problem facing the taxpayer as simply being that he has sought in this Court to raise fresh arguments not put to the AAT. It is not simply a matter of whether the AAT would have found in favour of the taxpayer had the arguments been put and whether raising those arguments before the Court creates "prejudice" to the Commissioner. The issue in the present case is, in the context of the relevant provisions of the TAA, whether the AAT erred in law by not addressing the arguments now sought to be raised: cf Australian Fisheries Management Authority v P W Adams Pty Ltd (No 2) (1996) 66 FCR 349 (FC). In our view, it did not. The only matter which had been claimed by Mr Garrett before the Tribunal was that he had standing as "managing controller" of the trust or the trustee. He did not contend before the Tribunal that he was the public officer of the trust (ground 5(a)) or provide evidence of ever having been appointed to such a position (assuming that such an appointment were possible with respect to the GST affairs of a trust). Nor did Mr Garrett contend to the Tribunal that he had the role of "managing controller" of the trustee which had been the predecessor to the trustee (namely "Sanctuary") of the trust (grounds 5(c) and (d) and (e)). Nor did Mr Garrett tender in evidence before the Tribunal a deed purportedly executed on 14 May 2014 (ground 5(f)). Question 5 is, therefore, in form and substance a complaint that the decision of the Tribunal is wrong on its merits and raises no question of law sufficient to invoke the jurisdiction under s 44(1). 10 Question 7 is to the same effect. It states: Whether there was no evidence for the Senior Member to make the findings of fact set out in the decision. A claim that a decision was based on no evidence can, if properly framed, support a claim of error of law: see Skiwing Pty Ltd v Trust Company of Australia [2006] NSWCA 276, [52]. The ground, however, is not a means of providing merits review or for challenging factual findings made by the Tribunal and is not established by showing error in the facts found by the Tribunal charged with the authority to find facts: Minister for Immigration and Multicultural Affairs v Al-Miahi (2001) 65 ALD 141, [34]; L & B Linings Pty Ltd v Work Cover Authority of New South Wales [2012] NSWCA 15, [34]. In Hussain v Minister for Foreign Affairs (2008) 169 FCR 241 the Full Court said that a mixed question of fact and law is not a question of law within the meaning of s 44(1). At [32] the Court said: A mixed question of fact and law is not a question of law within the meaning of s 44(1) of the AAT Act. In Birdseye v Australian Securities and Investments Commission (2003) 38 AAR 55, Branson and Stone JJ observed at [18]: In our view, O 53 r 3(2) discloses an intention that a question of law to be raised on an appeal from the Tribunal should be stated with precision as a pure question of law. It is in the specification of the grounds relied upon in support of the orders sought that, in our view, one should expect to find the links between the question of law, the circumstances of the particular case and the orders sought on the appeal. Question 7, as formulated, is a generalised attempt to challenge the merits of the decision of the Tribunal. The question does not identify any finding made by the Tribunal upon which the Tribunal had no evidence to support the finding that was made. 11 To the extent, however, that it is possible to discern which of the Tribunal's findings are sought to be challenged from the notice of appeal, it is clear that the Tribunal made its findings on evidence upon which those findings could be made. The Tribunal relevantly stated at [32]-[52]: The plant and equipment trust deed 32. The Plant and Equipment Trust was established by a Deed dated 30 March 2012. The settlor of that Deed is said to be Mr Garrett and the First Trustee is said to be Two Tribes Wine Company (Australia & New Zealand) Pty Ltd ACN 133 861 579 which was subsequently renamed as OANZPL. I had in evidence before me three copies of the Trust Deed, each containing significant differences. 33. The first Trust Deed (see: volume 7(A) of the applicant's documents, document 5) is signed by Mr Garrett in his capacity as settlor and also as the Sole Director & Secretary of OANZPL. Although there is a signature line for a witness to Mr Garrett's signature, no signature appears on that document. The second Trust Deed (see: Supplementary Tribunal document 1) is signed by Mr Garrett in his capacity as settlor and as the Sole Director/Secretary of OANZPL. Mr Garrett's signature appears to have been witnessed by a person signing as K Rosewall. The third Trust Deed (see: Supplementary Tribunal document 2) is again signed by Mr Garrett as settlor and the signature is witnessed by an unknown person but the signature is clearly not that of K Rosewall as in the second Trust Deed. Mr Garrett suggested that the signature was that of Mr Nicholas Garrett, his son. Mr Garrett has also signed as Sole Director/Secretary. 34. The fact that there are three significantly different documents all purporting to be the Trust Deed executed on 30 March 2012 in respect of the Plant and Equipment Trust is cause for concern. Mr Garrett did not offer an explanation for the three different documents all purporting to be the same Trust Deed although, when this was pointed out to him in the course of the hearing, he said he took exception to the suggestion that there were alternative versions of the Trust Deed. In addition to that, at the time Mr Garrett purported to sign as the Sole Director & Secretary or the Sole Director/Secretary, he had ceased to be a director or Secretary of OANZPL by the operation of s. 206A(2) of the Corporations Act. As Ms Baker submitted, despite Mr Garrett contending that he had signed the Unit Trust Deed pursuant to section 127 of the Corporations Act, which allows a company to execute a Deed where the document is signed by two directors of the company; a director and a secretary of the company; or for a proprietary company which has a sole director who is also the sole company secretary, Mr Garrett held neither position. In fact, on 30 March 2012 OANZPL did not have a secretary at all. 35. I agree with Ms Baker's submission that the Trust Deed is likely to be held to be an invalid document. 36. While it is true to say that a document duly executed in accordance with s. 127(1) may be relied upon by persons dealing with the company, that does not, in my opinion, validate the document other than to outsiders who have relied upon the document, in good faith, presumably to their detriment. This is frequently referred to as the indoor management rule. The operation of the rule was described in some detail by the High Court of Australia (Mason CJ, Brennan, Dawson, Toohey and Gaudron JJ) in Northside Developments Pty Ltd v Registrar-General and Others (1990) 170 CLR 146. Mason CJ said, at 154 - 155: According to the rule in Turquand's Case, persons dealing with a company in good faith may assume that acts within its constitution and powers have been duly performed and are not bound to inquire whether acts of internal management have been regular: Morris v. Kanssen. There Lord Simons observed: "It is a rule designed for the protection of those who are entitled to assume, just because they cannot know, that the person with whom they deal has the authority which he claims. This is clearly shown by the fact that the rule cannot be invoked if the condition is no longer satisfied, that is, if he who would invoke it is put upon his inquiry. He cannot presume in his own favour that things are rightly done if inquiry had he ought to make would tell him that they were wrongly done." 37. In the circumstances of these applications, where it is only an insider, in this case Mr Garrett, who was aware or should have been aware at the time that he had ceased to be a director of all companies of which he was a director prior to his disqualification, and who seeks to rely on the Trust Deed, it cannot be held to be valid. Furthermore, there is a serious question regarding which of those documents is in fact the Trust Deed, two of them having been witnessed by different persons and one not witnessed at all. The invalidity of the Trust Deed, as far as Mr Garrett is concerned, has a knock-on effect regarding other documents he purportedly executed when not authorised to do so. 38. The most significant knock-on effect is the Deed made on 23 November 2012 or 15 March 2013, depending on which document is relied upon, purporting to make Mr Garrett a joint trustee of the Plant and Equipment Trust. Deed purporting to appoint Mr Garrett as joint trustee 39. The document dated 23 November 2012 is said to be a Deed made by OANZPL; Sanctuary Australasia Pty Ltd (ACN 148 150 716) (Sanctuary Australasia) in its capacity as joint trustee of the Andrew Garrett Family Trust No 4 and as the sole unit holder of the Plant and Equipment Trust; and Mr Garrett as the New Trustee. For the purposes of this analysis, I assume that the Plant and Equipment Trust was validly established. 40. Clause 21 of the Plant and Equipment Trust Deed (see: Supplementary Tribunal document 1) provides for the removal and appointment of trustees. That clause provides that the trustee (at that time OANZPL) will be removed as trustee if it is liquidated or a provisional liquidator, receiver or receiver and manager, official manager or administrator is appointed or if it enters into any arrangement, compromise or composition with its creditors or is otherwise subject of any order, arrangement or administration made or entered into under any law of Australia or any of its States or Territories relating to insolvency. Clause 21 (b) provides that unit holders have the power to remove any trustee and to appoint a new trustee or new trustees in place of a trustee or in addition to the trustee. Subclause (c) provides the unit holders must exercise the powers vested in them under clause 21 (b) in the same manner as their consent is to be obtained under clause 24. 41. Clause 24 provides that the unit holders or a particular group or class of them will have consented to any particular matter if they execute a formal consent in writing; or pass a resolution that they consent at a meeting of unit holders by majority of at least 75% of those present at that meeting. The problem, according to Ms Baker, is that the appointment of Mr Garrett as a new trustee of the Plant and Equipment Trust did not occur in accordance with those clauses I have referred to above. 42. The first Schedule to the Plant and Equipment Trust states that Sanctuary Australasia in its capacity as joint trustee of the Andrew Garrett Family Trust No 4 is the holder of 100 units in that trust. The second Schedule is a unit certificate purporting to certify that Sanctuary Australasia is a registered holder of units numbered 1 - 100. That position remained for the tax period in question, which ended on 31 March 2012. 43. Ms Baker pointed out that Mr Garrett resigned as a joint trustee of the Plant and Equipment Trust on 14 March 2013. An email from Mr Garrett dated 12 February 2014 to the Australian Government Solicitor, acting on behalf of the Respondent, refers to his resignation in an attached document. Mr Garrett also stated that he was reappointed a day later, on 15 March 2013, which was after concerns raised by the Australian Taxation Office (ATO). In fact the recital to the 15 March 2013 Deed states Mr Garrett previously resigned on 14 March 2013 as a consequence of the actions of the ATO. Ms Baker pointed out that the ACN number for OANZPL was incorrect in both the 23 November 2012 and 15 March 2013 Deeds. In fact, as Mr Garrett pointed out, he inadvertently entered the ACN of Sanctuary Australasia against OANZPL. In addition, Ms Baker submitted that there was no evidence before the Tribunal as to whether formal consent in writing was obtained from the unit holder (Sanctuary Australasia) or whether there was a resolution passed at a meeting of unit holders. In my opinion, that is plainly correct and it raises serious questions about the validity of Mr Garrett's appointment as a joint trustee of the Plant and Equipment Trust. 44. In any event, Ms Baker submitted that there was a more significant issue and that was whether Sanctuary Australasia was ever the joint trustee of the Andrew Garrett Family Trust No 4. The Andrew Garrett Family Trust No 4 is a discretionary trust. It appears to have been settled by Deed made on 1 August 2008. Mr Garrett is said to be both the Appointor and the Trustee and Mr Christopher McCarthy the settlor. The General Beneficiaries are defined as the primary beneficiaries (Mr Garrett's two sons) and their issue living from time to time and includes any parent of the primary beneficiaries, presumably including Mr Garrett. Clause 11 of the discretionary trust Deed deals with the appointment of a new trustee. 45. Effectively, the trustee at any time may resign and by instrument in writing appoint a new trustee or trustees. Clause 11.2 provides that the office of the trustee will be vacated if the trustee becomes incapable of discharging his or her duties and, if the trustee is a Corporation, an order is made or a resolution passed which will have the effect of winding up the Corporation. Furthermore, clause 11.3 provides that the Appointor has the power from time to time by Deed or Will to remove a trustee from office and appoint any person other than an Appointor to act alone or jointly with any other person as trustee. 46. The document upon which Mr Garrett relies to support the appointment of Sanctuary Australasia as trustee of the Andrew Garrett Family Trust No 4 is a document described as Memorandum of Appointment of New Trustees which is dated 15 September 2009. This was attached to Mr Garrett's outline of submissions dated 28 February 2014 in the First Application. The problem with the Memorandum of Appointment is that while it refers to the appointment of Sanctuary Australasia as a new trustee, that document has not been executed by any party. In his outline of submissions, Mr Garrett expressly stated that he was not able to locate a copy of the executed Deed of Appointment of Sanctuary Australasia as trustee of the Andrew Garrett Family Trust No 4. In addition, Ms Baker submitted there were no minutes from Sanctuary Australasia evidencing that the company agreed at any point in time to become the trustee of the Andrew Garrett Family Trust No 4. I accept that submission given that I have not seen any such document amongst the voluminous documents before me in this matter. 47. Ms Baker also directed my attention to the historical company extract obtained from ASIC on 26 March 2014 in respect of Sanctuary Australasia. The company was placed into external administration on 22 January 2014. Mr Michael Basedow of Pitcher Partners was appointed liquidator. Mr Robert Nowak is listed as a director of Sanctuary Australasia between 23 October 2012 and 29 November 2013. Mr Garrett was a director between 12 August 2009 and 22 October 2010, following which he was disqualified. There was also a third director, Mr Wayne McCarthy, who was appointed a director on 12 August 2009 and he ceased to act on 2 September 2009. He was reappointed on 11 September 2009, remaining until 20 May 2010. Therefore, as Ms Baker submitted, Mr McCarthy was a director of Sanctuary Australasia at the time the memorandum of appointment of new Trustees was said to have been made (15 September 2009). However, I had no evidence from Mr McCarthy regarding the purported appointment of Sanctuary Australasia as a trustee of the Andrew Garrett Family Trust No 4. 48. Ms Baker then directed my attention to an annexure to Mr Garrett's outline of submissions dated 28 February 2014 which is in fact a Deed made on 30 September 2009 (annexure 4). That Deed is said to have been made between Mr Garrett as the retiring trustee, OANZPL (then known as Two Tribes Wine Company) as the new trustee and Mr Garrett as the Appointor. The first recital in that document states: WHEREAS the Retiring Trustee is the present Trustee of the Andrew Garrett Family Trust No 4 (the Trust) constituted by a Deed of Settlement made on the 1st August 20108 (sic) between Christopher McCarthy as settlor and the Retiring Trustee as trustee. 49. Had Sanctuary Australasia in fact been appointed as trustee of the Andrew Garrett Family Trust No 4 on 15 September 2009 as claimed by Mr Garrett, logically, one would have expected its name to appear on that Deed. It does not. The document purports to replace Mr Garrett as trustee with OANZPL. Mr Garrett executed that document as Sole Director/Sole company secretary of OANZPL, as the retiring trustee in his own right and as the Appointor in his own right. 50. On 5 July 2011 Mr Garrett, Sanctuary Australasia and OANZPL executed a Deed purporting to appoint Holy Grail Hospitality Pty Ltd (ACN 151 929 681) (Holy Grail) as an additional trustee to the Andrew Garrett Family Trust No 4. The first obvious anomaly is that Mr Garrett purportedly retired as trustee under the Deed made on 30 September 2009. Without explanation, he now again reappears as trustee of the Andrew Garrett Family Trust No 4. Also, the Deed refers to Sanctuary Australasia as trustee despite the fact that its name did not appear as trustee on the 30 September 2009 Deed. In his outline of submissions dated 28 February 2014 Mr Garrett said, at paragraph 16, that he could not locate a copy of his reappointment as a joint trustee of the Andrew Garrett Family Trust No 4 but that nevertheless, since 5 July 2011 he has held himself out to be a joint trustee of that trust on a continuous basis. With respect to Mr Garrett, holding oneself out to be a trustee of a trust may have consequences where the trust is dealing with outsiders, however, that does not convert ostensible authority to act as trustee into actual authority. Actual authority in this case remains absent. It follows I must agree with Ms Baker's submission that the 5 July 2011 Deed purporting to appoint Holy Grail as a further joint trustee of the Andrew Garrett Family Trust No 4 cannot be valid. 51. According to Ms Baker, because it cannot be established on the documents that Sanctuary Australasia ever held the position of a trustee of the Andrew Garrett Family Trust No 4, although it purported to be the holder of 100 units in the Plant and Equipment Trust in that capacity, because it never held that position, there is a serious question about whether it was in fact entitled to hold itself out as the legal owner of the units on behalf of the Andrew Garrett Family Trust No 4. 52. With respect to Mr Garrett, on the evidence before me on this application, that must be correct. It follows, as Ms Baker submitted, that because Sanctuary Australasia was never validly appointed as trustee of the Andrew Garrett Family trust No 4, and Holy Grail was never validly appointed as a new trustee because Mr Garrett had resigned, considerable doubt is cast over who in fact holds the units in the Plant and Equipment trust at present. The authority of Sanctuary Australasia to validly execute the Deeds made on 23 November 2012 and 15 March 2013 purportedly appointing Mr Garrett as a joint trustee of the Plant and Equipment Trust is equally questionable. It could not have been the entity which held the power to appoint trustees to the Plant and Equipment Trust absent the legal right to hold units in that trust. I find that those purported appointments of Mr Garrett as trustee are invalid. [Emphasis in original.] It is clear from these passages from the Tribunal's reasons that its findings were based upon evidence that was probative to the decisions it made. It cannot be said that there was no evidence upon which its findings could be made. 12 Questions 2 and 4 in the amended notice of appeal seek to raise matters which were dealt with by the Tribunal in the alternative and, therefore, were not strictly necessary for the Tribunal to have dealt with in light of its other conclusions. Those questions are: 2 Whether the Senior Member was unreasonable as a question of law in failing to apply the principles of "reasonable time" under section 42A (5)(b) of the AAT Act when the orders of Deputy President made on the 8th November 2013 in matter 5901 were complied with on the 5th February 2014 being 5 days out of time in circumstances where a liquidator had been appointed to the Trustee of the OenoViva (Australia & New Zealand) Plant & Equipment Trust ("OVPET") on the 22nd January 2014 and the Applicant in this proceeding had been appointed as Managing Controller to the Prior Trustee on the 23rd January 2014. […] 4 Whether it was reasonably open to the Senior Member to find that there was no taxable supply in the March Quarter 2012 with respect to the question of consideration when at least $516,000 in money was paid to the supplier in December 2011 and that subsequently the balance of the purchase price of the Oenotecas was set off in August 2012 as a matter of operation of law and equity. Each of these questions is posed as a challenge to the decision of the Tribunal on grounds of unreasonableness but each seeks, rather, to challenge the correctness of the decision on its merits. Question 2, although couched as a complaint about the "unreasonableness" of the decision, seeks rather to challenge the Tribunal's finding that Mr Garrett had been given ample opportunity to rectify matters of concern in the time he had since after the applications had been lodged in the Tribunal. At paragraph [65] the Tribunal said: 65. However, this matter is significantly different to that of Guse. Not only was Mr Garrett given ample opportunity to rectify matters of concern since these applications were lodged in the Tribunal, there have also been a number of directions hearings at which his failure to do so was discussed in some detail. In addition to that, on the hearing of these interlocutory matters, Mr Garrett has had ample opportunity to explain his failure to comply with directions and why this matter should be allowed to proceed to a full merits hearing. I have set out the significant events below. • 31 December 2012 - First Application lodged with Tribunal. • 14 February 2013 - Commissioner informs Mr Garrett that the only issues for determination before the Tribunal whether the applicant was entitled to an input tax credit of $3,150,000 for the period ended 31 March 2012; and whether the assessment of the GST net amount of $0 for the period 31 March 2012 was excessive. • 8 April 2013 - Tribunal made directions requiring the applicant to lodge with the Tribunal and serve on the respondent on or before 13 May 2013 a summary of evidence of witnesses proposed to be called at the hearing; any other documents upon which the applicant intended to rely at the hearing; and a Statement of Facts, Issues and Contentions. • 28 April 2013 - Mr Garrett requested an extension of time until 17 May 2012 (sic - 2013) to file his Statement and supporting materials. The respondent did not object to this extension. • 6 May 2013 - the Tribunal directed that the time to comply with the original Direction was extended to 20 May 2013. • 21 May 2013 - Mr Garrett advised the Tribunal there was a delay, expecting to lodge the Statement of Facts, Issues and Contentions by the following day and witness statements by 24 May 2013. Later that day a Statement of Facts, Issues and Contentions was lodged by Mr Garrett. One witness statement was lodged and Mr Garrett informed the Tribunal that a further 23 witness statements were to come. • 22 May 2013 - Mr Garrett writes to the ATO requesting 11 witness statements be provided by offices of the Commissioner. • 23 May 2013 - Mr Garrett writes to the ATO and the Tribunal and attached what is described as a list of evidence which appears to simply be an index of documents. • 24 May 2013 - Mr Garrett lodged five witness statements indicating more will be available shortly. • 27 May 2013 - Mr Garrett lodged what he described as a final evidence list indicating all available witness statements and documents would be available 29 May 2013. • 28 May 2013 - Commissioner requests an urgent telephone directions hearing in order to clarify the issues which need to be determined by the Tribunal. The Commissioner's representative said she had spoken with Mr Garrett explaining what evidence was relevant to the transaction in question. As Mr Garrett had previously explained he was about to lodge some 20 folders of documents. The Commissioner expressed concern about the relevance of those documents. Mr Nicholas Garrett's witness statement lodged and served. • 2 June 2013 - 10 books of materials lodged with Tribunal and served on respondent. Updated chronology and evidence list served on respondent. Mr Garrett said he was still waiting on nine further witness statements. • 7 June 2013 - Deputy President Forgie made amended directions extending the applicant's time for compliance to 7 June 2013. • 27 June 2013 - Commissioner writes to Mr Garrett and copies the Tribunal indicating the documents which have been received and those which have not. The Commissioner requests that any further documents be provided on or before 19 July 2013. • 5 July 2013 - the Commissioner lodges with the Tribunal his Statement of Facts, Issues and Contentions and a copy of Supplementary T-documents. • 19 July 2013 - Commissioner requests that the Tribunal convene another telephone conference in order to establish whether any additional steps needed to be taken prior to setting the matter down for hearing. • 8 August 2013 - further Directions Hearing by Deputy President Forgie where directions were made directing the applicant to lodge with the Tribunal and serve on the respondent on or before 1 November 2013 a further amended Statement of Facts, Issues and Contentions and any witness statements and any other material on which it intends to rely. • 1 November 2013 - no further material lodged with the Tribunal. • 6 November 2013 - applicant's lawyers informed Tribunal that they cease to act. • 8 November 2013 - Deputy President Forgie makes amended directions so that applicant is required to comply with previous direction on or before 31 January 2014. • 31 January 2014 - no further materials lodged with Tribunal. • 3 February 2014 - Mr Garrett advises registry and ATO that he intended to lodge a further witness statement by 5 February 2014 and that a liquidator had been appointed to the applicant company. Mr Garrett also informed the Tribunal that he had been appointed as Managing Controller of the applicant company. • 12 February 2014 - Deputy President Forgie makes directions regarding whether this application should be dismissed s. 42A(5)(b) of the AAT Act and, if not, whether Mr Garrett was a joint trustee of the Plant and Equipment Trust; if he is not a joint trustee, whether the liquidator intended to continue this application; and whether Mr Garrett's claimed appointment as controller of the applicant company gave him any rights in relation to this proceeding. The conclusion reached by the Tribunal about whether orders had been complied with within "a reasonable time" was, therefore, based upon the probative material to which the Tribunal referred and which is set out above. The Tribunal found, on material upon which a finding could be made, that the applicant had had reasonable time to comply with the Tribunal's orders. It also found that Mr Garrett had failed to comply within a reasonable time with directions in the first proceeding on 6 May 2013, 7 July 2013 and 8 August 2013. The Tribunal gave Mr Garrett an opportunity to address the reasons for the continued failure to comply with the directions (cf Guse v Comcare (1997) 49 ALD 288, 291; (1997) 47 ALD 495) and found at [68] that "he did not do so in any coherent way" despite having had his attention "expressly directed to [the] issue on more than one occasion". Question 4, in contrast, is posed directly as a challenge to the facts found by the Tribunal and poses no question of law. Question 4, in addition, seeks to rely upon assertions of fact that were not before the Tribunal. 13 Question 6 similarly raises no question of law. It is also not clear how question 6 related to the Tribunal's operative decision sought to be reviewed under s 44. Question 6 is: Whether the Senior Member was unreasonable in failing to consider the lawful effect of the resolutions set out in evidence of; a. The sole Director of OVANZPL dated 23rd October 2012 (Book 11 Document 13) ratifying all documents executed by me on behalf of OVANZPL. b. The Sole Director of Sanctuary dated 23rd October 2012 (Book 11 Document 15) ratifying all documents executed by me on behalf of Sanctuary. The Tribunal's decisions were that Mr Garrett did not have standing to pursue the two applications on behalf of OenoViva and the Trust, that he could not be joined as a party pursuant to s 14ZZD and that it was appropriate to dismiss the application pursuant to s 42A(5)(b) on the basis of a failure to comply with a direction by the Tribunal in relation to the application. It is not clear, therefore, how question 6 raises matters affecting those decisions. The complaint in question 6 is about a failure to make particular findings, but the failure to make the findings does not appear to have an impact upon the decisions made by the Tribunal. Mr Garrett's reliance upon the two resolutions dated 23 October 2012 were, at best, peripheral to the matters upon which the Tribunal made its decisions. The Tribunal had positively concluded at [85] that Mr Garrett could not lawfully act under a power of attorney purportedly granted on 23 November 2012 and the existence of two other resolutions to the same effect adds nothing that was not considered by the Tribunal and decided adversely to Mr Garrett. Mr Garrett had filed written submissions in the Tribunal dated 28 February 2014 in which he had contended that the 23 October resolutions had the effect of affirming and acknowledging the binding effect of his actions on behalf of the entities concerned, but the Tribunal rejected the submission that Mr Garrett had the authority which the resolutions were also said to affirm and acknowledge. Further, the fact that the sole director of OenoViva or of Sanctuary had ratified the documents executed by Mr Garrett on their respective behalves does not reveal an error of law bearing upon the Tribunal's decisions that Mr Garrett did not have standing to pursue the applications before the Tribunal or that there had been a lack of relevant consent for him to be joined as a party pursuant to s 14ZZD or that it was appropriate to dismiss the applications pursuant to s 42A(5)(b). Furthermore, the matters upon which Mr Garrett seeks to rely were not in evidence before the Tribunal. His written submissions to the Tribunal dated 28 February 2014 had referred to the resolutions and submitted that their effect was to affirm and acknowledge the binding effect of his actions on behalf of the entities concerned but neither the resolutions nor the constituent documents upon which their effectiveness could be established were put in evidence: see Glennan v Commissioner of Taxation (1999) 90 FCR 538, [82]-[83]. Mr Garrett's submissions to this Court confirmed that the material had not been in evidence to the extent that he sought to adduce copies of the constitution of the prior trustee and of Sanctuary as new evidence, or "as further probative evidence", in support of his contentions. 14 Accordingly, the proceeding will be dismissed as incompetent. I certify that the preceding fourteen (14) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Pagone.