Payroll Tax Act 2011

Taxation Administration Act 1999

Cases: Bread Manufacturers of New South Wales v Evans [1981] HCA 69; (1981) 56 ALJR 89

Giusida P/L v Commissioner for ACT Revenue (Appeal) [2014] ACAT 50

Highrise Concrete Contractors (Aust) P/L v Commissioner for ACT Revenue [2014] ACAT 31

Idoport Pty Limited v National Australia Bank Ltd [2001] NSWSC 1081

Minister for Immigration and Citizenship v Li [2013] HCA 18.

Re Minister for Immigration and Multicultural Affairs; Ex parte Lam (2003) 214 CLR 1

Watson v Commissioner of Taxation [1999] FCA 1796

Appeal Tribunal: Mr W.G Stefaniak AM - Appeal President

COMMISSIONER FOR ACT REVENUE

APPEAL TRIBUNAL: Mr W.G. Stefaniak AM - Appeal President

..........................................................

1. In this matter the Appellant appeals against the decision of the original Tribunal in Highrise Concrete Contractors (Aust) P/L v Commissioner for ACT Revenue [2014] ACAT 31, delivered on 23 May 2014.
2. The case concerned the Appellant's liability for payroll tax and penalty tax for its group of building related companies, levied by the Commissioner under the Payroll Tax Act 1987 (repealed), Payroll Tax Act 2011 and the Taxation Administration Act 1999 for the financial years commencing July 2005 and thereafter.
3. The history of the matter, the relevant legislative provisions, the relevant source data and the precise sums of taxes (and penalties) involved are set out in detail in the reasons given by the original tribunal. For the purposes of this appeal it is not necessary to repeat all of this material.
4. The Commissioner was of the view that he had insufficient data from the Appellant to perform a proper assessment of tax liability. The Commissioner unsuccessfully sought that data from the Appellant over several years. In the absence of data the Commissioner estimated the payroll tax liability based on certain sampling of the Appellant's wage records.
5. The original Tribunal also came to the view that there was insufficient data to perform an assessment and confirmed the Commissioner's estimate of payroll tax and penalty tax; however, the original Tribunal reduced the level of penalty tax from the 90% level imposed by the Commissioner, to 50%.
6. The present appeal is directed only to two procedural issues that are said to constitute errors of law on the part of the original Tribunal. The Appellant did not raise any challenge to factual issues determined by the original Tribunal, save in so far as the procedural issues necessarily involved some issues of fact.

1. The two procedural issues concern allegations that:
   • (a) The original Tribunal denied the Appellant procedural fairness in refusing an application made on 21 June 2013 to vacate the scheduled hearing date of 25 June 2013. The request for an adjournment was based on the alleged unfairness arising from the service of an unsolicited statement by Ms Evelyn McCarthy on 18 June 2013. The Appellant sought the adjournment to produce evidence in reply;
   • (b) The original Tribunal 'acted under (the) dictation' of the Commissioner in adopting practices and procedures of the Commissioner when determining whether the data provided by the Appellant was sufficient for a proper assessment of payroll tax for the relevant years. The Appellant alleges that the original Tribunal should determine that matter for itself and points to paragraph 43 of the reasons for decision.
2. The Appellant seeks orders that the decision of the original Tribunal be set aside and that either the matter be remitted for rehearing, or the present Appeal Tribunal rehear the whole of the case for itself, including making any proper assessment of payroll tax that was available on the data.
3. The Commissioner has filed a Notice of Contention in which the Commissioner seeks to overturn the original Tribunal's reduction of the penalty tax rate from 90% to 50%.
4. This appeal was filed in the Appeal Tribunal on 19 June 2014. The Commissioner filed the Appeal Book on 20 August 2014. The Appeal Book contained the evidence before the original Tribunal including the financial data provided by the Appellant, the Commissioner's decision, the Statement of Facts and Contentions of the parties, the statements of witnesses, the transcript and the parties' written submissions.
5. In the present proceedings the Appellant filed an Outline of Submissions (19 August 2014), a further Statement of Facts and Contentions (19 August 2014) and a Submission in Reply (16 September 2014). The Respondent filed an Outline of Submissions (8 September 2014).

1. The Appellant set out the relevant chronology of events in its Statement of Facts and Contentions:

3/12/12 The application for review by the original Tribunal was lodged

23/1/13 The original Tribunal made directions for the filing of Statements of Facts and Contentions and witness statements. The Appellant was to file and serve by 28 February 2013; the Respondent by 16 April 2014 and the Appellant in reply by 3 May 2013. Both parties complied

23/4/13 The Commissioner made enquires of the ATO concerning the Appellant

10-16/5/13 Correspondence occurred between the parties concerning further information the Commissioner sort for assessment purposes

17/5/13 A directions hearing in the Tribunal occurred

21/5/13 The Tribunal adjourned the scheduled hearing date of 23 May 2013 at the Appellant's request to facilitate representation

21/5/13 The Commissioner made further enquires of the ATO concerning the Appellant

28/5/13 The Tribunal listed the matter for hearing on 25-26 June 2013

18/6/13 The Commissioner served the statement of Ms McCarthy on the Appellant

21/6/13 The Appellant sought an adjournment of the hearing date by reason of the late and unexpected service of the McCarthy statement. On the same day the Tribunal declined the adjournment and advised that the Appellant had until 24 June 2013 to file and serve any reply to the McCarthy statement

1. In its Contentions at [3] the Appellant asserted a denial of procedural fairness in not granting the adjournment of the hearing. In paragraph [4] the Appellant pointed to paragraphs 43 of the original Tribunal's reasons as evidence of it acting under dictation from the Commissioner. In its Outline of Submission, the Appellant repeated the above two grounds of appeal and repeated the above chronology.
2. The Appellant contended that by 16 May 2013 it had supplied the Commissioner with sufficient information for the Commissioner to conduct a proper assessment of the tax liability in lieu of the previous estimate.
3. The Appellant took issue with the right of the Commissioner to:
   • (a) make inquiries with the ATO after commencement of the proceedings in the Tribunal without a direction from the Tribunal to that effect; and
   • (b) file and serve the statement from Ms McCarthy.
4. The statement of Ms McCarthy [AB 799]:
   • (a) recited the history of the Commissioner's investigations;
   • (b) in paragraphs 70-74 recited the new wage data provided by the Appellant from May 2012 to 16 May 2013;
   • (c) in paragraphs 75 and 79 expressed the view that it was still not possible to make a proper payroll tax assessment even with the new data;
   • (d) in paragraphs 76 and 78 deals with issues of alleged inconsistency in the data provided at different times by the Appellant;
   • (e) in paragraph 76(e) deals with the information provided by the ATO concerning the non-lodgement by the Appellant of PAYG returns and questions the validity of the purported copy of such returns that the Appellant tendered before the original Tribunal; and
   • (f) contains annexures A, B & C which contain the ATO records supplied to the Commissioner.
5. The Appellant contended that the information from the ATO was highly prejudicial to the Appellant in that it cast doubt on the veracity of copies of PAYG or other tax returns the Appellant claimed to have lodged with the ATO.
6. The Appellant contended that the original Tribunal had placed considerable weight on the McCarthy statement in coming to a finding that the data provided by the Appellant (and its general manager, Mr Bassil) was unreliable and contained inconsistencies.
7. The Appellant relied upon the decision of the NSW Supreme Court in Idoport P/L and Anor v National Bank Limited and 8 Ors [2001] NSWSC 1081 to the effect that a denial of procedural fairness will occur where an adjournment is refused in circumstances that cause 'serious injustice' to the party being denied the adjournment. The Appellant submitted that the serious injustice arose in the present case because of the weight the original Tribunal attached to the McCarthy statement, its short service, its length, the short time in which Mr Bassil had to prepare an affidavit in reply and the fact that it was not served pursuant to any direction of the Tribunal.
8. The Appellant argued that the original Tribunal should have exercised its own judgment not to accept the McCarthy statement notwithstanding that no such application was actually made by the Appellant to the original Tribunal.
9. The Appellant argued that the original Tribunal did not consider for itself whether it was possible to carry out a proper assessment of payroll tax on the data before it, but rather simply deferred to the Commissioner's view that it was not possible to carry out that task. The Appellant relies upon Bread Manufacturers of NSW v Evans [1981] HCA 69; (1981) 56 ALJR 89 at page 99 to the effect that it was open to the original Tribunal to take into account the Commissioner's view, but in the end, it was for the Tribunal to come to its own decision as to whether the data available permitted a proper payroll assessment.

1. The Commissioner's Outline of Arguments in relation to the denial of procedural fairness starts from the proposition that any alleged denial must result in some 'practical injustice' (Re Minister for Immigration and Multicultural Affairs: Ex parte Lam (2003) 214 CLR 1 at 14). The Commissioner denied that there had been any practical injustice in the present case.
2. The Commissioner noted correspondence with the Appellant before the mediation on 9 May 2013 and shortly after, in which the Commissioner expressly queried whether the Appellant had further data that may enable the Commissioner to make a proper payroll assessment. No response was forthcoming from the Appellant.
3. On 16 May 2013 the Appellant filed about 205 pages of financial data. The Appellant then sought an adjournment of the scheduled hearing on the basis, inter alia, that it had now provided data sufficient for a proper payroll tax assessment by the Commissioner. It seems the Appellant anticipated that the Commissioner would examine the data and determine whether a proper assessment could now be made.
4. The Commissioner pointed out that the additional data was supplied by the Appellant on 16 May 2013, which was after the timetable for filing and serving evidence, and was not in accordance with any direction of the Tribunal.
5. The Commissioner was required to review the new data and to determine whether it is was sufficient for a proper assessment. If this was not the case, then the Commissioner needed to be in a position to indicate its position to the Tribunal. Each approach required the data to be subject to an assessment and this was the purpose of the McCarthy statement.
6. The Commissioner argued that the McCarthy statement did not raise new issues. It was confined to a review of the history of the matter to date and an analysis of whether the new data permitted a proper payroll assessment. The only new documents were those of the ATO which showed that the Appellant had failed to lodge PAYG payment summaries for some years.
7. The Commissioner noted that:
   • (a) Ms McCarthy had been subject to 2 days of cross examination before the original Tribunal;
   • (b) Mr Bassil's affidavit in reply had been filed and served on the morning of the first day of the hearing together with a further 132 pages of financial records;
   • (c) the Applicant had not raised any objection with the original Tribunal to Ms McCarthy's statement and had not expressed any wish to lead further evidence during the hearing.
8. The Commissioner denied that there was any basis at law that prohibited a party making further inquiries of an evidential nature of its own volition. There was no basis at law for requiring the consent or direction of the Tribunal to approach the ATO, or to carry out an analysis of the new financial data provided by the Appellant on 16 May 2013. An issue may arise concerning the admission of new material into evidence at a later point in time, but this was a matter for the original Tribunal to weigh in terms of any practical injustice.
9. The Commissioner argued that the decision of the original Tribunal to refuse the adjournment was a reasonable decision that was open to it on the facts, and the present Appeal Tribunal should not lightly disturb this conclusion (Giusida P/L v Commissioner for ACT Revenue (Appeal) [2014] ACAT 50).
10. The Commissioner denied that the original Tribunal abdicated its decision-making role by simply adopting the Commissioner's view that the totality of the data available before it did not permit a proper assessment of payroll tax. The pivotal paragraph of the original Tribunal's reasons is said to be [43]. The Commissioner argued that there is nothing in the decision of the original Tribunal that points to the Tribunal not forming its own opinion on the proper assessability of the payroll tax. In the alternative, the original Tribunal was entitled to accept the evidence of Ms McCarthy that no proper assessment could be made. Accepting the evidence of a witness is not the same as abdicating decision-making responsibility to that witness.
11. The Commissioner supported the Notice of Contention on the basis of his argument that Mr Bassil gave false and misleading responses to questionnaires concerning the total wages of the Group over a number of years. The Commissioner's argument is that Mr Bassil did so knowing, or not caring whether, the information was false.

1. The Appellant filed an Outline of Submissions in reply. In that document the Appellant maintained its argument that the Commissioner had no right to obtain further information in response to the data filed on 16 May 2014 by the Appellant and no right to file and serve the statement of Ms McCarthy without an express direction of the Tribunal.
2. The Appellant argued that the information from the ATO must have had some impact on the original Tribunal's thinking, even if that information did not directly relate to matters in issue. In particular, it was put that the ATO information would have cast some shadow over the credibility of Mr Bassil.
3. The Appellant repeated earlier submissions and emphasised that part of paragraph [43] of the original Tribunal's reasons in which the Tribunal said that the 'Commissioner was entitled to require source documents to make an accurate assessment'. The Appellant argued that the reference to the 'Commissioner' was not a mere clerical error on the part of the original Tribunal but rather showed that the original Tribunal was in fact thinking of the Commissioner carrying out the assessment rather than the Tribunal carrying out that process.
4. In relation to the Notice of Contention, the Appellant supported the reduction of the tax penalty rate to 50%. The Appellant pointed to the findings of fact by the original Tribunal that Mr Bassil was out of his depth as the General Manager but was not a dishonest man seeking to avoid tax. The Appellant contended that the present Appeal Tribunal should defer to the findings of the original Tribunal on the point as it had the opportunity to see Mr Bassil in cross examination.

1. The hearing before the Appeal Tribunal occurred on 25 September 2014. Mr O'Brien of counsel appeared for the Appellant without instructing solicitor. Mr McCarthy of counsel appeared for the Commissioner instructed by the ACT Government Solicitors Office and Mr Stroud from the Commissioner's Office.
2. No evidence was given and the parties confined themselves to oral submissions based on the evidence and processes before the original Tribunal.

1. Mr O'Brien affirmed that the appeal was limited to the two purported errors of law identified above and that there was no attack on other factual findings[1].
2. Mr O'Brien conceded that the Appellant had failed over an 'extended period of time' to provide the data requested by the Commissioner and that left the Commissioner with no prospect of performing a proper payroll tax assessment, hence the estimate[2]. He did not assert that any proper assessment became possible until after the filing of the bundle of new evidence by the Appellant on 16 May 2013.
3. Throughout his oral submissions Mr O'Brien emphasised the alleged unlawful conduct of the Commissioner in:
   • (a) approaching the ATO without the knowledge of the Appellant or direction from the Tribunal[3];
   • (b) preparing and serving the statement of Ms McCarthy relating to the analysis of the additional material received on 16 May 2013 without direction from the Tribunal[4];
   • (c) the prejudice caused by the late service of that statement including its mode of electronic service[5].
4. The other core arguments advanced by Mr O'Brien were to the effect that:
   • (a) the statement of Ms McCarthy purported to be, or at least was received by the Tribunal as, the report of an expert witness[6];
   • (b) the views of the Commissioner on the adequacy of the new material for a proper payroll tax assessment were irrelevant and therefore, so were the opinions of Ms McCarthy on that point. The issue was solely one for the original Tribunal to determine the adequacy of the totality of the data before it. This argument was expressed by Mr O'Brien in variants of the form 'who cares what the Commissioner thinks...'[7];
5. In relation to his criticisms of the Commissioner approaching the ATO of its own motion, Mr O'Brien relied upon the judgment of J. Heerey Hill J in Watson v Commissioner of Taxation [1999] FCA 1796. Apart from denying the power of the Commissioner to do so, Mr O'Brien went so far as to describe it as a 'contempt of court'[8].
6. The material from the ATO was said to be deficient in that it had the date of the letters and their authors redacted[9]. It addressed the tax reporting status of 15 companies said to form the Appellant's group of companies and advised that certain PAYG and other returns had not been lodged for various years[10].
7. The ATO letters cast doubt on the validity of a copy of the PAYG returns provided by Mr Bassil to the Commissioner, which the Appellant alleged had been lodged with the ATO[11]. For that reason the ATO letters were said to be very prejudicial to the Appellant[12] to the point of being 'poisonous'[13]. Mr O'Brien conceded that nowhere did the original Tribunal express such a view and, in fact, it declined to make adverse credit findings against Mr Bassil. Notwithstanding, it was submitted that the ATO letters 'must have borne very heavily on [the Tribunal]'[14].
8. Mr O'Brien admitted that the bundle of documents provided by the Appellant on 16 May 2013 was large ('great bundle') and was unsolicited i.e. not in accordance with any direction of the Tribunal[15]. There were 180 pages of annexures[16]. Mr O'Brien conceded that the bulk of the documents provided on 16 May 2013 would have taken 'quite a bit of time' for the Commissioner to analyse and form some view on[17]; but then[18] Mr O'Brien asserts that there was no explanation 'as to why it took between 21 May 2013 and 18 June for this affidavit to be prepared...'.
9. Ultimately, Mr O'Brien justified the late tender of the Appellant's bundle and distinguished it from the late service of the McCarthy statement, on the grounds that the Commissioner did not object to the service of the Appellant's bundle or its production before the Tribunal[19]. He then offered the observation that the Commissioner should have either approached the Tribunal for further directions, or objected to the new bundle[20].
10. The new bundle represented the work of new accountants Gerard Quin Accounting Services[21]. It attempted to deal with some of the errors in the original material provided to the Commissioner. This new material then gave rise to inconsistencies between the two sets of data provided by the Appellant[22]. Mr O'Brien sought to justify the inconsistencies on the basis of the original Tribunal's finding that Mr Bassil was out of his depth when he prepared his contributions to the original materials[23] and the work of the former accountants was unhelpful. He submitted that the original Tribunal should have disregarded any inconsistencies arising from Mr Bassil's contributions[24].
11. It seems that even with the new data, there was no wages information for the 2007, 2010, 2011 and 2012 years which all fell within the period under consideration[25].
12. Mr O'Brien argued that the period between 21 May 2013, when the original Tribunal declined an adjournment request, and the commencement of the hearing on 25 May did not provide sufficient time for Mr Bassil and Mr Bobb (the accountant who appeared for the Appellant at the original hearing) to confer and draw up an adequate statement in reply to the McCarthy statement[26] . It was said that both men were busy and 4 days was not sufficient.
13. There was dialogue between the Appeal President and counsel for the Appellant[27] and between the Senior Member and counsel for the Appellant[28] in relation to the submission that the statement of Ms McCarthy was tendered and received by the original Tribunal as the report of an expert. Mr O'Brien was asked why it was not open to the Commissioner to lead evidence before the original Tribunal of the Commissioner's view that the totality of the data before the Tribunal did not permit it to arrive at a proper assessment. It was put by the Appeal Tribunal that whether a proper assessment could be made on that data was an issue before the original Tribunal, and both parties, including the Commissioner, had the right to seek to persuade the Tribunal to their view. In doing so, each party was entitled to lead relevant and probative evidence in support of their contentions. Mr O'Brien replied that the report of Ms McCarthy was tendered as a report of an 'independent' expert rather than simply as a witness of the Commissioner[29].
14. There followed a dialogue between the Senior Member and counsel for the Appellant concerning the proper role and function of the tribunal. It was put by the Senior Member that in a merits review process such as the present, it was the task of the tribunal to search for the truth, sometimes expressed as the 'correct or preferable decision'. In this quest, the tribunal was entitled to ask the parties to file further evidence where the existing evidence on a relevant issue appeared inadequate[30]. Mr O'Brien expressed the view that when the evidence before the tribunal on the appointed day of hearing is inadequate, the appropriate course is to find against the party that bore the onus of proof[31]. The Senior Member queried whether administrative review proceedings of the present kind were intended to be conducted in such an adversarial manner[32] to which Mr O'Brien responded that there must be finality to all litigation[33].
15. Mr O'Brien argued the 'acting under dictation' ground by reference to paragraphs [41] and [43] of the original Tribunal's decision. In particular, he focussed on the passage from paragraph [43] which read:

The nature and scale of discrepancies between the financial statements and other additional material provided by the Applicant and that provided by the Applicant prior to the objection decision being made is such that the Commissioner is entitled to require source documents to make an accurate assessment of the group's payroll tax liabilities.

1. The reference to the 'Commissioner' instead of to the 'Tribunal' is said to evidence the error into which the original Tribunal had fallen in failing to recognise that the role of calculating the proper tax was now one for itself.

1. Counsel for the Commissioner, Mr McCarthy (who is unrelated to the witness, Ms McCarthy) took the Tribunal through a range of the authorities set out in his List of Authorities. With no disrespect intended and with one possible exception, the final propositions of law for which Mr McCarthy contended were not controversial, namely:
   • (a) whether a denial of procedural fairness has occurred depends upon all of the circumstances of the case and the issues in question;
   • (b) a denial of procedural fairness requires a practical injustice (or prejudice) to be demonstrated;
   • (c) a court of tribunal is not obliged to grant an adjournment simply because it is sought. Considerations of fairness to the other parties, resource implications for all the stakeholders involved and proportionality issues arise;
   • (d) an adjournment would not normally be granted for further evidence unless there were grounds to believe that the new evidence was obtainable, relevant and sufficiently weighty that it might affect the outcome of the case.
2. The more controversial possible exception referred to above concerns the overlap of a ground of denial of procedural fairness with that of unreasonableness at law. Mr McCarthy appears to cite various authorities for the proposition that a denial of procedural fairness cannot occur unless the procedural ruling in question is also 'unreasonable' at law. He relies in part upon the decision of the High Court in Minister for Immigration and Citizenship v Li [2013] HCA 18.
3. This point has importance to the Commissioner's argument, in that it is argued that:
   • (a) it is first necessary for the Appellant to show that the refusal of the adjournment by the original Tribunal was unreasonable at law[34];
   • (b) it is then argued that the refusal cannot be 'unreasonable' at law if it was a decision 'reasonably open' to the Tribunal in the circumstances of the case. This form of argument simply highlights the internal logical circularity in the traditional 'Wednesbury' formulation of unreasonableness which the High Court sought to address in Li;
   • (c) it is then argued that an appeal tribunal should not lightly overturn a discretionary decision of a original tribunal that had the benefit of hearing from the parties[35].
4. The present Tribunal does not accept that the errors of law encompassed by the rubrics 'denial of procedural fairness' and 'unreasonableness' are co-extensive. In the circumstances of a case, an unreasonable refusal to grant an adjournment may also constitute a denial of procedural fairness; but a denial of procedural fairness can arise in the absence of a decision that is characterised as 'unreasonable' at law. It may be that the Tribunal is being unfair to Mr McCarthy in that some of the authorities cited by Mr McCarthy actually make the above distinction drawn by the Tribunal[36].
5. Mr McCarthy argued that the Appellant had every chance to supply the Commissioner with the accurate source data for some years and had refused or failed to do so without any apparent good cause. The Appellant only produced the data sought, and then only part of it, at the last moment in the hearing process. Even then, there were discrepancies in the data produced and inconsistencies in the copies of PAYG returns said to have been filed with the ATO. Any difficulties or prejudices that the Appellant found itself in were entirely of its own making[37].
6. Once the data of 28 February and 16 May 2013 were produced the Commissioner had a duty to respond to it for two purposes:
   • (a) in order to determine whether a proper payroll tax assessment could then be made, and thus obviate the need for further litigation; and
   • (b) in the alternative, for the purpose of determining its position and presenting its case before the original Tribunal.
7. In the course of Mr McCarthy's submissions there was a discourse with the Senior Member in which Mr McCarthy appears to assert that the statement of Ms McCarthy did not in fact contain comment on the inconsistencies in the data supplied by the Appellant and did not comment on the advice from the ATO concerning the non-lodgement of past PAYG returns by the Appellant[38]. The Senior Member queried this assertion[39]. It is sufficiently clear from a reading of the statement of Ms McCarthy [AB 799] that she did comment on both the inconsistencies and ATO Advice.
8. It may be that the Tribunal has misunderstood the response by Mr McCarthy. It may be that he is saying no more than that the inconsistencies and ATO issues pre-existed the statement of Ms McCarthy, were already in issue independently of that statement and hence would have been the subject of cross examination even if the statement of Ms McCarthy did not exist. This appears to be the Commissioner's later position at 58-10 of the transcript. There would appear to be some substance in this position, but it is not the same thing as asserting that the statement of Ms McCarthy did not address the issue.
9. A further ambiguity or lack of clarity arose in the submissions of Mr McCarthy at 56-25 of the transcript and following. Mr McCarthy says:

"With the procedural fairness issue we say, is that as per ground 1 we say ground 1 is not made out for two reasons. Firstly, because the issue, the subject of the complaint in ground 1 was never the subject of Ms McCarthy's statement which was the basis upon which the vacating was sought or if you like to put it another way, the reason advanced in ground 1 for why it is said we want an adjournment was never the reason for why they asked to vacate in the first palace because it was never put..."

1. Ms McCarthy's statement never dealt with the ground and secondly, the issue that is said to be the basis upon which [they] sought to vacate was not the basis upon it was sought.
2. The Appeal President queried the accuracy of this statement[40]. There is perhaps a deeper profundity in what Mr McCarthy says that has escaped the present Tribunal. More simplistically, it seems to the present Tribunal that the Appellant sought the adjournment of the hearing because of the existence of the McCarthy statement and its contents described above. The statement was itself the grounds for the adjournment sought. The content of the refinement on this argument that Mr McCarthy urges is not obvious.
3. Mr O'Brien for the Appellant did concede that there may have been some movement in his position away from reliance on the attention drawn to the inconsistencies per se, with the focus more on the unfairness of the statement and the short notice to respond[41]. With no disrespect intended to Mr O'Brien the logical content of this concession is again not obvious to the Tribunal. The statement of Ms McCarthy can only found an allegation of unfairness if there is material in the statement that has that effect. Obviously, the mere recitation of the history of the matter is not such content. The statement contained three other kinds of comment:
   • (a) the historical existence of the inconsistencies in the data provided by the Appellants;
   • (b) the ATO advice on the PAYG non-lodgements and Ms McCarthy's queries concerning the authenticity of the copies provided by the Appellant;
   • (c) the views expressed by Ms McCarthy concerning the impossibility of making any proper payroll tax assessment on the totality of the data as it stood.
4. It may be that Mr O'Brien is in fact now only relying on ground (c) immediately above and this may be the refinement to which Mr McCarthy alludes.
5. Mr McCarthy pointed out that the Appellant did not object to the McCarthy statement even when asked whether there were any objections[42]. If the Appellant considered that this affidavit was so damaging then the appropriate course was to object to its late service and admission into evidence, which the Appellant did not do[43]. It was pointed out that the Appellant actually concurred in the process to be adopted before the original Tribunal involving the evidence of Ms McCarthy and Mr Bassil[44].
6. Mr McCarthy submitted that there was nothing improper or unlawful in the Commissioner undertaking further inquiries in the light of the new evidence served upon him[45].
7. For the Commissioner it was put that Ms McCarthy was not advanced as an 'independent expert witness'. She was only ever advanced as a relevantly experienced decision maker with the Commissioner's office whose role was to articulate the Commissioner's views as the Commissioner's witness[46].
8. It appears that it was agreed between the parties that the original Tribunal would determine whether the totality of the evidence before it was adequate to allow a proper payroll tax assessment. If so, then the actual calculation would be remitted to the Commissioner to perform[47]. Mr McCarthy submitted that these dialogues are inconsistent with any concept that the original Tribunal did not understand its role in determining for itself the adequacy of the totality of the new data.
9. This agreement may also account for the original Tribunal's reference to the 'Commissioner' in paragraph [43] of its decision.
10. In relation to the Notice of Contention, Mr McCarthy accepted that the Commissioner carried a heavy onus in seeking to disturb the findings made by the original Tribunal in relation to the motivation and character of Mr Bassil[48]. There followed a lengthy discourse between the Appeal President and counsel for the Commissioner on the issue of whether that finding should be disturbed.

1. Mr O'Brien affirmed his central contention, that the original Tribunal did not truly direct its mind to whether the totality of the data before it permitted a proper payroll assessment, but simply accepted the contrary view of Ms McCarthy. It was said that the original Tribunal had taken a global view of no particularity in accepting that the inconsistencies in the data, summarised in the annexure to Ms McCarthy's statement and elsewhere, prevented any proper payroll assessment without actually closely examining the data for itself[49].
2. When challenged by the present Tribunal as to where the original Tribunal espoused this view, Mr O'Brien said 'we certainly don't find it explicitly'[50]. Mr O'Brien relies on the lack of particularity in the original Tribunal's reasons as evidence of the lack of interest the original Tribunal had in the details of the data before it[51].
3. The present Tribunal pursued this line with Mr O'Brien and enquired:
   • (a) whether the details of the data and their adequacy was ever the subject of close attention and testing before the original Tribunal. Apparently it was not[52];
   • (b) whether the Appellant has ever provided the Commissioner with the original source material that the Commissioner has been asking for[53]. It seems that the answer is essentially 'no' but the financial statements provided should have been sufficient in their own right. Mr O'Brien said 'it was just too late in the piece at the end of the day'[54];
   • (c) whether the original source material was ever filed in the proceedings before the original Tribunal. Again the answer was a qualified 'no' in the sense that the financial statements should have been sufficient[55].

1. The present Tribunal does not accept that any principle of law or good practice prohibits the Commissioner from:
   • (a) making further inquiries concerning the Appellant's affairs after the commencement of the proceedings without the authority of a direction from the Tribunal; or
   • (b) carrying out an assessment of the new wage data provided by the Appellants during the course of the proceedings.
2. The present Tribunal is of the view that it is both lawful and appropriate for the Commissioner to take the actions referred to immediately above for the purpose of:
   • (a) attempting a non-litigious resolution of the dispute; or
   • (b) forming its position to advance to the Tribunal.
3. The Appellant deferred for years in providing the wage details the Commissioner persistently sought from it. This information was only provided on 16 May 2013. The Commissioner had a duty to respond to this new information. The new information was voluminous and it was reasonable that it took the Commissioner until 18 June 2013 to draft and serve the statement of Ms McCarthy on that point.
4. The Tribunal does not accept that Ms McCarthy was advanced as an expert independent witness. She was advanced as a relevant decision maker within the Commissioner's office who was charged with putting the Commissioner's case.
5. The Commissioner's view on the adequacy of the new data was entirely relevant to the proceedings before the original Tribunal on two grounds:
   • (a) the Commissioner was a party to the proceedings who was entitled to put his case via his witnesses;
   • (b) the parties had arrived at an agreement that if the Tribunal found the totality of data before it to be adequate for a proper assessment, then it would be the Commissioner that carried out the mechanics of the assessment.
6. The Tribunal does not accept that the four days given to the Appellant to prepare any response to the statement of Ms McCarthy was unreasonable in the circumstances. Both Mr Bobb and Mr Bassil may have been busy men but the situation had been brought about by the Appellant's own delay in filing the data and their failure to make follow up enquiries with the Commissioner. In the conduct of litigation it is not uncommon for people and their advisers to suffer some time stress and be forced to respond urgently to unexpected developments.
7. The Tribunal does not accept the Appellant's submission that:
   • (a) it was entitled to file and serve its late data because the Commissioner did not object to that course of action;
   • (b) but that the Commissioner had no right to file and serve its late report notwithstanding that the Appellant also did not object to that course of action.
8. There is an obvious lack of consistency and reciprocity in this argument.
9. Had the Commissioner taken a successful objection to the late data from the Appellant then, on the Appellant's own concessions, its appeal was bound to have failed. The Commissioner cannot be criticised or prejudiced for the tolerance shown in not taking such an objection.
10. The present Tribunal does not accept the Appellant's argument that:
    • (a) the original Tribunal lacked the power to permit new late evidence in administrative review proceedings; or

(b) in the alternative, should only have sparingly permitted new late evidence in administrative review proceedings.

1. Administrative review proceedings are not adversarial in nature and the focus is on the pursuit of the truth (or the correct or preferable decision). This does not mean that any and all late new evidence will be allowed. It is a matter of judgment and degree in the circumstances of each case.
2. In the present case it was appropriate for the original Tribunal to admit the Appellant's new data; it was appropriate to admit the Commissioner's response to the new data in the form of Ms McCarthy's statement; and it was appropriate to permit the Appellant to reply to the Commissioner's response as late as the first day of the hearing.
3. The issue is whether the Appellant suffered prejudice because the scheduled hearing of 25 June 2013 was not adjourned to permit more time for it to reply to the statement of Ms McCarthy.
4. Ms McCarthy's statement contained the information set out at paragraph 17 above. The Appellant does not now contend that the historical recitation of the history of the matter, or the collation of the inconsistencies said to exist in the data, are either new or constitute a prejudice.
5. It seems that the prejudice is now said to reside in:
   • (a) the expert opinion Ms McCarthy expressed in relation to the adequacy of the totality of the data provided to the Commissioner and to the Tribunal; and
   • (b) the disclosure of the aspersions the ATO had apparently cast on the validity of the Appellant's PAYG returns that had been tendered in the Tribunal.
6. The Appeal Tribunal has already indicated above that it does not accept the premise that Ms McCarthy was advanced as an expert witness, or an independent witness of any kind. It was always open to the Appellant to advance its own critique of the totality of the data, which in fact it partly did in the Statement of Facts and Contentions before the original Tribunal. It was open to the Appellant to lead other expert evidence on the issue if it wished.
7. The fact appears to be that the Appellant did not at any time up to and including the date of the hearing of this appeal on 25 September 2014, provide the Commissioner with the source wage data sought by the Commissioner. The Appellant did not provide this level of detail to the original Tribunal for analysis. When faced with the statement from Ms McCarthy to the effect that the new data was not adequate to perform the proper payroll tax assessment, the Appellant should have been on notice of the importance of providing the source wage data, but it did not do so.
8. When the original Tribunal denied the adjournment, it did not follow that the hearing necessarily had to be finalised within the two allocated days. If an issue arose during the hearing it was open to either party to seek to adduce further evidence on the new issue on a later date. It was open to the Appellant to turn up with the original source data on the first day of the hearing as an annexure to the statement of Mr Bassil that was only filed at the start of the first day of the hearing. At no point did the Appellant offer the data. At no point did the Appellant indicate that there was other evidence that it wished to call that was not presently available.
9. The Appellant makes much of the imputed negative impact arising from the aspersion cast by the ATO that forms part of the annexures to Ms McCarthy's statement. There is nothing in the reasons of the original Tribunal that supports this inference. In fact, the original Tribunal expressly declined to make adverse findings on Mr Bassil's character and actions.
10. It is also noted that the Appellant does not seem to have denied the accuracy of the ATO statements. If in fact the Appellant had lodged the PAYG statements for the relevant years and companies with the ATO, then it would have been a simple matter to have produced evidence of that to the Tribunal. The Appellant at least knew on 18 June 2013, that the issue existed. It could have contacted the ATO or even sought the issue of a summons requiring the ATO to appear at the hearing and explain the situation. On the other hand, if the ATO statements were correct, it is hardly open to the Appellant to complain that it is prejudiced by being caught leading false evidence before the Tribunal. In any event, nothing seems to have turned on the issue in the original Tribunal's decision.
11. Other than the opinion expressed by Ms McCarthy that the totality of the evidence after 16 May 2013 was still inadequate for a proper assessment, it is hard to see what there was in her statement anything that was new or could have taken the Appellant by surprise. The only prejudice to the Appellant was the opinion expressed by Ms McCarthy and even this position must have been obvious to the Appellant following the directions hearing of 17 May 2013.
12. Before the Appellant provided the data on 16 May 2013, the Appellant was well and truly aware that the Commissioner considered the data inadequate for a proper payroll assessment. After the Appellant provided the new data on 16 May 2013 it had no basis for any reasonable expectation that the data provided would necessarily satisfy the Commissioner, and nothing occurred at the directions hearing of 17 May that could create such an expectation. For this reason, the Appellant had no reasonable basis for assuming that the issue of the adequacy of the data had gone away and that it was therefore not necessary for the Appellant to continue its preparation for hearing on the point. It was open to the Appellant to have contacted the Commissioner in the period 16 May - 18 June 2013 to obtain feedback on the adequacy of the new data. It did not do so. Rather the Appellant appears to have taken the view that because it was satisfied with the adequacy of the new data provided, then both the Commissioner and the Tribunal must, or would, also be so satisfied. There is an obvious naivety and narcissistic element in this proposition.
13. The present Tribunal can see no lack of procedural fairness to the Appellant in the proceedings of the original Tribunal.
14. The Appellant's ground of 'acting under dictation' lacks any explicit support in the reasons for the decision of the original Tribunal or the transcript of its proceedings. The Appellant's case is constructed on an inference to be drawn from paragraph [43] of the Tribunal's reasons referred to above.
15. The reference to the 'Commissioner' in that paragraph is explicable on:
    • (a) the historical fact that the appeal was from the Commissioner's finding that the data was inadequate; and
    • (b) the agreement between the parties that if the Tribunal found for the Appellant, then it would be the Commissioner who carried out the actual assessment.
16. The original Tribunal may not have delved into the source data in detail for itself to arrive at the conclusion that it was inadequate. At least in part, that is due to the fact that the Appellant had never produced the data at that level of particularity. But even if the original Tribunal did not look at the new data provided by the Appellant in detail, it does not follow that the original Tribunal could not have been persuaded one way or the other by the evidence of the witnesses it heard and the arguments of parties on the point, at whatever level of generality that evidence was given.
17. If the evidence on the adequacy of the new data was only being addressed in an overview manner in the original Tribunal, then it was always open to the Appellant in those proceedings to take the original Tribunal into greater particularity. It is hard to see the logic in a proposition whereby the Appellant complains of the lack of attention to detail by the original Tribunal when it did not take the opportunity to bring that level of detail to the Tribunal's attention.
18. It is one thing to infer that a tribunal has not addressed its mind to a matter where the reasons given by the tribunal make no reference to the matter. It is quite another to find that a tribunal had not in fact addressed its mind to a matter that it expressly deals with in its reasons.
19. The Appeal Tribunal does not accept that the original Tribunal refused or failed to turn its own mind to the issue of the adequacy of the data. It addressed the issues at the level of generality in which the issues and evidence were put before it.
20. Having found that both the Appellant's grounds of appeal are not made out, it follows that the appeal must be dismissed.

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[2] Transcript of proceedings, 6-25; 12-5.

[3] Transcript of proceedings, 8-10; 9-10; 9-20; 12-30; 13-10; 13-35, 17-5.

[4] Transcript of proceedings, 13-10; 17-10; 17-25.

[5] Transcript of proceedings, 13-25; 14-35; 17-35.

[6] Transcript of proceedings, 17-25; 18-10; 20-15; 22-5.

[7] Transcript of proceedings, 17-35; 17-40; 24-5.

[9] Transcript of proceedings, 8-25; 16-30.

[10] Transcript of proceedings, 8-35; 8-40.

[11] Transcript of proceedings, 9-5; 14-5; 15-5.

[14] Transcript of proceedings, 19-20; 19-25.

[22] Transcript of proceedings, 11-30; 18-35.

[26] Transcript of proceedings, 16-30; 18-15.

[30] Transcript of proceedings, 26-5; 26-35.

[33] Transcript of proceedings, 26-30; 26-40.

[34] Transcript of proceedings, 42-20; 42-30.

[37] Transcript of proceedings, 42-35; 43-15; 88-40.

[38] Transcript of proceedings, 51-30; 52-15; 53-20.

[39] Transcript of proceedings, 51-40; 52-5.

[47] Transcript of proceedings, 63-30; 64-40; 65-20; 66-25; 67-5.

[49] Transcript of proceedings, 84-10; 85-10.