Narbey v Commission of Taxation

BACKGROUND 1 On 14 November 2008 judgment was delivered in relation to these jointly heard applications under s 44 of the Administrative Appeals Tribunal Act 1975 (Cth) (the AAT Act) (Narbey v Commissioner of Taxation [2008] FCA 1699 (the primary reasons)). Shortly put, the applications enjoyed only limited success. 2 The primary complaint by the applicants was that the Administrative Appeals Tribunal (the Tribunal) had been in error in affirming the decisions of the Commissioner to disallow the applicants' objections to amended assessments of income tax that were issued to them. 3 By far the bulk of the reserved decision dealt with the applicants' contentions as to why the Tribunal was at fault in that regard. The applications were dismissed insofar as that primary element was concerned. 4 The Tribunal had also affirmed the Commissioner's decisions to impose penalties on the applicants. That aspect of the 'appeals' which consumed a much smaller portion of the oral and written argument and reasons was successful. 5 In addition to the primary complaint failing, the manner in which it was presented was not particularly helpful (see [34]-[36] of the primary reasons). 6 The main argument was on the question of whether or not the Tribunal had failed to adequately explain why it affirmed the decisions of the Commissioner. The applicants failed on that ground. The question of penalty was quite discreet. Although the question of penalty would have fallen away had the applicants succeeded on the main ground of appeal, their failure on the main ground of appeal meant that the question of penalty still had to be resolved. 7 The applicants contend that costs should follow the event and the Commissioner should pay the costs of the applicants as they have had success in one aspect of the appeals and the matters had been remitted to the Tribunal. The applicants have argued that while they are not successful on all of their grounds of appeal, they are ultimately successful in appealing a decision and in obtaining orders for the matter to be remitted to the Tribunal for determination according to law. In my view this is not an accurate summary of the outcome of the appeals. 8 As against the applicants' claim for costs, the Commissioner has sought an order that the applicants pay 75% of its costs. 9 The actual orders made on 14 November 2008 were as follows: 1. The application be allowed only as to the limited issue of the ruling on penalty. 2. The application otherwise be dismissed. 3. The parties are to: (a) file consequential consent orders, alternatively (b) file written submissions within 21 days, not exceeding 10 pages, on the making of appropriate consequential orders including costs. 10 On 10 December 2008 Siopis J made the following orders by consent: 1. For each applicant, that part of the decision of the Administrative Appeals Tribunal (the Tribunal) given on 30 April 2007 at Perth by which the Tribunal affirmed the decision of the respondent that the applicant was liable to pay the amount of penalty and additional tax included in the applicant's amended assessment by reason of s 226L of the Income Tax Assessment Act 1936 be set aside. 2. The matters be remitted to the Tribunal to hear and determine the question whether each applicant was liable to pay the amount of penalty and additional tax included in the applicant's amended assessment according to law. 3. The parties file written submissions, not exceeding ten pages, on the issue of costs by 19 December 2008.