Ground of appeal
28 The Applicant's amended supplementary draft notice of appeal proposes a single ground of appeal - a denial of procedural fairness in connection with the making of the decision because the reconstituted Tribunal did not provide the Applicant with an oral hearing before making the decision.
29 Paragraph [14] of the Tribunal Reasons record:
After a discussion with the parties' representatives at a directions hearing earlier this year, it was determined that the applications should be decided by a reconstituted Tribunal by reference to the transcript and recording of the oral hearing and the witness statements and documentary evidence, and the parties' written submissions. Neither party submitted that any further oral hearing should be conducted.
(citations omitted.)
30 It was not disputed that the Applicant had not consented to the reconstituted Tribunal determining the matter "on the papers". There was some factual dispute as to what occurred at a directions hearing convened by Deputy President Forgie on 15 March 2019 at which proposals for the determination of the proceedings were discussed.
31 I make the following findings.
32 On 31 July 2018 a person from the Tribunal registry contacted Mr Swanwick and informed him that the Deputy President who had heard the proceedings had ceased to be a member and had not finalised a decision. Mr Swanwick was asked to consider whether the Applicant would have any objection to another Tribunal member determining the matter based on a review of the papers and transcript. Mr Swanwick expressed "complete and utter dismay" about the amount of time that had elapsed and concern about decision-makers resorting to the transcript without seeing witnesses. Having expressed incredulity to the Tribunal registry representative that members could cease their commission without finalising their reserved decisions, Mr Swanwick sought instructions from the Applicant who at that time was in France.
33 There is no evidence before the Court of what occurred between August and October 2018. At some point prior to 23 October 2018 Mr Swanwick informed the Applicant that the Deputy President who had heard the proceedings had ceased to be a member and had not finalised a decision. On 23 October 2018, the Applicant contacted Mr Swanwick by email seeking an update "regarding the AAT and their problem".
34 The Tribunal registry representative attempted to follow up with Mr Swanwick and left voicemail messages on 5 November 2018 and in January 2019. In the meantime, the Applicant had sought to arrange a call with Mr Swanwick to "further progress the AAT matter" but as at 19 November 2018 had received no response from Mr Swanwick. The Applicant emailed Mr Swanwick on that day seeking confirmation that Mr Swanwick continued to represent him. It appears that the Applicant's correspondence was not received by Mr Swanwick.
35 The associate to Deputy President Forgie notified Mr Swanwick on 26 February 2019 that a telephone directions hearing would be held on 5 March 2019 to discuss how to progress the matter. Mr Swanwick advised by email sent on 3 March 2019 that he was unavailable and could not confirm that he still held instructions from the Applicant to act in the matter. On that same day, Mr Swanwick emailed the Applicant stating that he had "been calling and emailing [the Applicant] on all known contact numbers, without success. This is the final attempt" and informing the Applicant of the upcoming directions hearing. Mr Swanwick records in that email that he had had "no instructions from [the Applicant] since the end of the hearing" and that he did not know "what [the Applicant's] attitude is". Mr Swanwick stated that he would "not be in a position to act for [the Applicant] in the matter in the near future…[as he was] retiring from practice on 30th June" and that between March and June he would be travelling.
36 Mr Swanwick made contact with the Applicant on 3 March 2019 via email and telephone. Mr Swanwick emailed the Tribunal again on 3 March 2019 confirming that the Applicant was not in Australia. In that email Mr Swanwick recorded the Applicant's "attitude" to be:
a. It is utterly extraordinary that such a thing can have been allowed to happen unless it was precipitated by (eg) serious health issues or something analogous.
b. The fact that it has happened is inescapably prejudicial to [the Applicant], because neither of the (realistic) options is really acceptable. Either the entire matter is to be relitigated before a new Member; or some other person must examine the record and reach a decision without any of the advantages of having seen the witnesses.
c. The former option has been rendered impracticable by issues of costs, as well as the effluxion of time now having meant that some key witnesses are no longer available. It could only seriously be considered if someone (meaning, the AAT as the entity which has created the problem) met the costs thereof including costs of retaining and briefing new counsel because [Mr Swanwick] will be retired from practice by that time.
d. The latter option has the disadvantage already mentioned. The written word never has the same impact as seeing witnesses; and that is heightened by the fact that [the Applicant] is not even really aware what "the record" would consist of, since he was not in a position to obtain a transcript of the hearing.
37 After receiving a copy of Mr Swanwick's email to the Tribunal the Applicant emailed Mr Swanwick stating:
This entire problem is at the feet of the AAT / ATO -
The most equitable way forward of the two suggestions, in my opinion, is to start again but in order for that to happen I would need the AAT to pay my new costs plus an undertaking from the ATO not to stop me coming and going AND not to further abuse process via the Supreme Court hearing and either withdraw that or make it subordinate to the outcome of the AAT process including any appeals therefrom.
38 The Tribunal directions hearing was rescheduled and took place on 15 March 2019. The file note of a representative of the ATO records Mr Swanwick as arguing against the matter being reheard and:
suggesting the matter should be adjourned sine die. He details how the Applicant has now moved overseas, that one of the key witnesses (who was not a witness at the hearing is dead) and that many of the documents were wrapped up in the Family Court proceedings that the Applicant had against his wife…
39 The author of the note was cross-examined. I accept that the note records the author's views of what he considered to be the important aspects of the hearing. The note is not and does not purport to be an objective transcript of what was said at the directions hearing. I do not accept the note to be a complete record of everything that Mr Swanwick said to the Tribunal.
40 By email sent on 16 March 2019, Mr Swanwick gave the Applicant the following summary of what transpired at the directions hearing:
I expressed incredulity at the situation which had arisen - AAT agreed and was very embarrassed…only choices are convene for rehearing or assign to a member to decide it on the papers including transcript and recording of hearing - I suggested another option was just adjourn sine die - ATO not prepared to leave it undecided - AAT believes no power to effectively just walk away - lengthy discussion about practicalities of trying to rehear with huge document problems, witnesses unavailable or hard to contact - need to brief new counsel when I retire - cost etc - AAT [ruled] it had to be done on the papers - they'll let us know when a member is assigned, and try to give us a time estimate then.
41 Mr Swanwick in cross-examination said that he put a hierarchy of options to the Tribunal, the second last of which was a rehearing (without requiring the Tribunal or the respondent to bear the cost) and the last of which was a determination on the papers. Mr Swanwick conceded that he could not recall the precise detail of what happened in what sequence at the directions hearing. Mr Swanwick testified that his summary to the Applicant was not intended to be a complete record.
42 I find on the balance of probabilities that Mr Swanwick did not make an unqualified request to the Tribunal for a further hearing. He had not received instructions to put such an option to the Tribunal. Indeed, in his email correspondence, and as reflected in the email he sent to the Applicant, he had raised with the Tribunal reasons why a rehearing was not feasible. Mr Swanwick's oral testimony is not preferred over the contemporaneous (or near contemporaneous) emails he authored to both the Tribunal and to the Applicant. I find that the Applicant (through Mr Swanwick) requested that the matter be adjourned sine die and having had that request denied, requested that any rehearing be at the expense of the Tribunal.
43 Furthermore, even if the Applicant had made an unqualified request to the Tribunal for a rehearing, a refusal of that request would not amount to a denial of procedural fairness.
44 As Steward J stated in Frugtniet at [28]-[29] (affirmed by the Full Court in Frugtniet v Tax Practitioners Board [2019] FCAFC 193 at [43]):
[28] In my view, the statutory scheme for reconstituting the Tribunal does not require, in every case, a fresh oral hearing. The power to continue proceedings is broadly conferred by s 19D(4) of the Act and leaves it largely to the Tribunal to determine how it is to be informed: Murray v Repatriation Commission No 2 [2016] FCA 1216. In some cases, the Tribunal might form the view that a further hearing is needed. That might arise if the credit of a witness is sought to be impugned because of his or her performance in the witness box. In other cases, consideration of the transcript of evidence, witness statements and tendered documents might suffice. In Ahmed v Minister for Immigration and Multicultural Affairs (2001) 184 ALR 343, Hely J considered s 422 of the Migration Act 1958 (Cth), which at the relevant time provided:
(1) If the member who constitutes the Tribunal for the purposes of a particular review:
(a) stops being a member; or
(b) for any reason, is not available for the purpose of the review at the place where the review is being conducted;
the Principal Member must direct another member to constitute the Tribunal for the purpose of finishing the review.
(2) If a direction is given, the Tribunal as constituted in accordance with the direction is to continue to finish the review and may, for that purpose, have regard to any record of the proceedings of the review made by the Tribunal as previously constituted.
(3) In exercising powers under this section, the Principal Member must have regard to the objective set out in subsection 420(1).
The applicant in that case had argued that he should have been given a further oral hearing upon the reconstitution of a hearing of the Refugee Review Tribunal. Hely J rejected that contention. His Honour said at par [24]:
In my view, the applicant's contention fails. RRT, as originally constituted, complied with s 425. As Wilcox J observed in Liu, if Parliament had intended to require the substituted member to hold a fresh oral hearing, the appropriate course would have been to insert a requirement to that effect in s 422 and s 422A. But Parliament did not do this. Instead, it commanded the substituted member merely to "finish the review" with an express provision that, for that purpose, the substituted member was entitled to have regard to any record of the proceedings of the review made by the Tribunal as previously constituted.
In my view, the foregoing passage applies with equal force to s 19D(4) of the Act, which requires the member to "continue the proceeding".
[29] This is a case where, to use the language of Ryan J in Abujoudeh v Minister for Immigration and Multicultural Affairs (2001) 115 FCR 179, "the approach which led the Tribunal to characterise certain parts of the applicant's claims as implausible, was based on a dispassionate analysis of the content of the applicant's evidence, not the manner in which it was given" (at par [32]). It was thus proper for the Tribunal to reject explanations and answers given by the applicant, and even make findings that he had misled the first Tribunal, without the need for any further hearing. Whilst I accept that the finding that the applicant has misled the Tribunal was serious, it was open to the Tribunal so to conclude on the material before it without the need for a further oral hearing. As will be seen, in 2016 the applicant was given a full opportunity to meet this contention (see par [31] below).
45 The Applicant submitted that "the complexity of the evidence and submissions provided by the Applicant" created a real and substantial risk that the Tribunal could not competently evaluate the matter without an oral hearing. There is an air of unreality about the Applicant's submissions contending a denial of procedural fairness, given the nature of the evidence before the Tribunal in this case. The nature of the evidence was such that it was largely not adduced through oral testimony. The material before the Tribunal, in essence, took the form of three spreadsheets which had not been created contemporaneously with the transactions they were purporting to explain. The spreadsheets comprised many entries but few were the subject of specific explanation. The oral evidence was heard within two-and-a-half days. The parties were directed at the end of the original Tribunal hearing to provide closing written submissions. The parties were given the opportunity to make detailed submissions on the nature and content of the documentary evidence, including the spreadsheets.
46 The reconstituted Tribunal did not need to make findings about the credit of the witnesses based upon their demeanour in the witness box. The reconstituted Tribunal had access to and viewed the video recording and transcript of the hearing. Its findings were reached largely based upon a dispassionate analysis of the chronology of events and an assessment of the content of the documentary evidence before it. The conclusions of the Tribunal were not reached based on an evaluation of the manner in which oral evidence was given.
47 There is no substance to the Applicant's complaint now that he was denied an opportunity to answer questions that the Tribunal may have raised with him at an oral hearing. At the conclusion of the Tribunal hearing, the Tribunal had made directions for the filing of written closing submissions and made it abundantly clear that the parties were not returning for any further hearing. The Applicant's representative did not at that time submit to the Tribunal as originally constituted that oral closing submissions were necessary.
48 The Applicant's example of how he may have been able to address a concern of the Tribunal about an inability to reconcile two differing treatments for the same transaction if he had been accorded a further oral hearing does not demonstrate a denial of procedural fairness. The Applicant's example relied upon paragraphs [85] to [87] of the Tribunal Reasons where the Tribunal found:
[85] As noted, [The Applicant] presented the AJL Analysis as a running account between himself and Mr Reason and his associated entities. It was, in effect, a loan account.
[86] [The Applicant] also prepared a 'GST Transaction Guide' for this proceeding. Examination of that document reveals entries for a series of receipts from customers in the quarter ended 30 June 2008. These include five amounts of $10,000 from Laundry Assets Pty Ltd (one of Mr Reason's entities) on which GST of $909.09 is indicated for each transaction, and a similar entry for $1,500 from the same company also showing GST payable by [The Applicant]. As those six entries also appear in the AJL Analysis, in that document they purport to be simply part of the running balance arrangement.
[87] These two alleged treatments are entirely inconsistent. The same payments cannot be both payment of consideration for services as the GST Transaction Guide indicates and merely an entry in a loan account in repayment of a debt as their inclusion in the AJL Analysis indicates. They may conceivably be one or the other, but they cannot be both.
49 Before the Court, the Applicant submitted that:
For example, the reconstituted Tribunal could not reconcile how payments received by the Applicant could be both payment of consideration for services and also a repayment of a debt. The reconstituted Tribunal considered that they must be one or the other, but not both. Had the Applicant had an opportunity to make a submission to the reconstituted Tribunal directed at this issue, the Applicant could have explained that such a situation would occur where he had provided services to Mr Reason's entities at an earlier point in time without being paid, resulting in an account receivable (or debt) from Mr Reason's entity. The subsequent payment of that account receivable would be both the repayment of a debt and the payment of consideration for GST purposes, where the Applicant had accounted for GST on a cash basis. Because no hearing was held, the Applicant was denied the opportunity to advance his case by moulding his submissions 'to the issues that the decision maker appears to regard as important'. It is difficult to see how the reconstituted Tribunal merely reviewing an audio-visual recording of the original hearing was able to provide the Applicant same opportunity [sic] or advantage, as the Commissioner asserts.
(citations omitted.)
50 That explanation is not based on any facts found by the Tribunal. There was no finding of the Applicant providing services to Mr Reason for which the Applicant was renumerated for or for which he rendered invoices. Furthermore, the running balance account to which the Tribunal referred was not a ledger account based on invoices rendered or accounts due for payment by Mr Reason to the Applicant. It was supposedly a reconciliation of payment inflows and outflows. As the Tribunal observed (at Tribunal Reasons [76], [85] and [94]):
[76] The 'reconciliation' spreadsheet [the Applicant] produced for this proceeding, called the 'AJL Analysis', demonstrates, so the submission goes, that this was the net effect of what he called an ongoing 'running balance' account.
…
[85] As noted [the Applicant] presented the AJL Analysis as a running account between himself and Mr Reason and his associated entities. It was, in effect, a loan account.
…
[94] Finally in this regard, we note some of the amounts that [the Applicant] received but said belonged to Mr Reason were invested in higher interest earning accounts, without any accounting to Mr Reason for the interest earned. That seems to be inconsistent with the accounts being, as [the Applicant] termed them, merely a 'conduit' for Mr Reason's money.
(citations omitted.)
51 The Applicant submitted that a Tribunal decision on the papers would have been prejudicial because the "papers" were incomplete. According to the Applicant, from a review of the Tribunal file by the Applicant's former solicitor, as lodged with the Tribunal by the Applicant, the file "appeared to be missing Documents 19 and 24 in the 'Light Blue Folder'". In these circumstances, the Applicant submits that a further hearing was required as it would have provided "an opportunity to check with the applicant [that the Tribunal had] all the papers". According to the affidavit of the Applicant, the "Blue Folder" was lodged with the Tribunal on 22 July 2016 as a "consolidation and condensation of the documents that had previously been provided to the Tribunal".
52 The Applicant has provided no evidence as to the content of Documents 19 and 24 or whether there were documents behind these tabs at the time the Applicant provided them to the Tribunal. The extract of the transcript provided to this Court of the Tribunal hearing does not reference a folder having been tendered in its entirety. The Exhibit List set out in that part of the transcript provided to the Court refers to specific tabs of a folder lodged by the Applicant on 6 October 2014. The Applicant has not proven that on the balance of probabilities the materials behind tabs 19 or 24 were tendered before the Tribunal. There is no evidentiary basis for a conclusion that the reconstituted Tribunal did not have a copy of all documents tendered in evidence.
53 Whether a further hearing was required was a matter for the Tribunal to determine. If the reconstituted Tribunal had matters it considered would be assisted by further address from the parties, it was open to the Tribunal to ask the parties. Having been informed of the composition of the reconstituted Tribunal, it was also open to the Applicant to ask for a further opportunity to make additional submissions. The Applicant did not do so.
54 The Applicant sought to rely upon the cases of Nais v Minister for Immigration and Multicultural and Indigenous Affairs [2005] HCA 77; (2005) 228 CLR 470 and Mount Lawley Pty Ltd v Western Australian Planning Commission (2004) 29 WAR 273 to support the proposition that delay between hearing and final decision could amount to unfairness.
55 To the extent that the Applicant sought to rely upon delay between the hearing before the Tribunal and the Tribunal's decision, that submission is rejected. The issue is whether delay by the Tribunal created a real and substantial risk that its own capacity for competent evaluation was diminished (Nais at [10]). Here the delay by the original Tribunal could not have diminished the capacity of the reconstituted Tribunal for competent evaluation. Either the reconstituted Tribunal had the capacity to competently evaluate the material on the papers and by recourse to the audio-visual recording or it did not. Any delay by the original Tribunal member who first heard the matter is irrelevant to that capacity. The capacity of the reconstituted Tribunal for competent evaluation was not diminished by reason of an effluxion of time between oral hearing of evidence and the making of the decision. Whilst unfortunate and highly regrettable, the delay between hearing and decision is irrelevant to the issue of procedural fairness in this case.
56 The ground of appeal relates to the failure by the reconstituted Tribunal to accord procedural fairness by making a decision without affording the Applicant a further oral hearing. The prejudice that was said to be suffered was the loss of an opportunity to convince through an oral hearing the newly constituted Tribunal. Any such prejudice is not a function of delay in decision-making by the reconstituted Tribunal but a function of the previous presiding member ceasing to be a member.
57 In written submissions, the Applicant also referred to the fact that one of the reconstituted Tribunal members was appointed just 15 working days before the Tribunal decision. The implicit contention appeared to be that the member could not have properly evaluated all of the Applicant's evidence and information within that "short time". If such a contention is sought to be made, it does not relate to the ground of appeal and is no more than an unsupported assertion that 15 working days must be inadequate.
58 The Court does not consider that the proposed ground of appeal based on a denial procedural fairness has sufficient merit to warrant an extension of time being granted in the circumstances of this case.
59 The application for an extension of time is dismissed with costs.
I certify that the preceding fifty-nine (59) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Hespe.