O'Sullivan v Repatriation Commission

background facts 9 Presumably because the AAT's reasons were delivered ex tempore and were not subsequently revised, they do not set out the background to the applicant's claim for a special rate of pension. It is convenient nonetheless to set out some key events. 10 The applicant was born on 9 May 1923. He was on operational service from 27 April 1942 to 18 November 1946. 11 After a career in the public service, including a period as an officer of the Australian Tax Office ("ATO"), the applicant commenced practice as a barrister, with chambers in Sydney and Canberra. In later years, he carried on practice only in Canberra, although he travelled on circuit in nearby areas. 12 I was not provided with a complete history of the applicant's claims to a pension under the VE Act or its legislative predecessors. It appears, however, that he may have been first assessed as having war-related disabilities as long ago as 1951. Over time, a large number of conditions suffered by the applicant have been accepted as war-caused. These include anxiety state with migrainous headaches, cardiac arrhythmia and, more recently, atherosclerotic peripheral vascular disease and renal artery atherosclerotic disease. 13 In February 1992, the applicant applied for an age service pension (VE Act, s 36(1)). In consequence of that application he appears to have received a pension at 100% of the general rate. Some further applications were made for an increase in the rate of pension, but these are not relevant for present purposes. 14 On 30 June 2000, the applicant retired from practise as a barrister. There was an issue before the AAT as to the precise extent of the applicant's earnings prior to his retirement, but there was no dispute that for several years prior to his retirement his gross earnings from practice were modest. 15 On 12 October 2000, the applicant applied for an increase in the rate of pension. In his application he stated that his disabilities had been causing difficulties for some years and that the "combination of physical and morale factors have prevented me from continuing my long life of work and prevent me from seeking other employment". It would seem that this application was treated as one for a special rate of pension (s 24(2A)) and for an intermediate rate of pension (s 23(3A)). 16 On 2 December 2000, the respondent's delegate rejected the claim for a special rate of pension on the ground that a variety of factors, other than his war-caused disabilities, contributed to his decision to retire from practice as a barrister. The delegate also rejected the claim for an intermediate rate of pension. 17 On 15 June 2001, the Veterans' Review Board affirmed the delegate's decision. The applicant then sought review in the AAT. 18 The AAT conducted a hearing on 21 November 2002. The applicant appeared at that hearing and gave evidence but was not legally represented. The AAT gave its reasons orally at the conclusion of the hearing. 19 After service upon the applicant of the decision made by the AAT, the applicant requested that the AAT, pursuant to s 43(2A) of the AAT Act, furnish a statement in writing of its reasons for the decision. In response to this request, the AAT furnished to the applicant the transcript of the oral reasons, unedited and unamended.

the tax return question 20 The applicant's principal contention was that he had been denied procedural fairness by reason of what was said to be a misleading cross-examination based on an incomplete document, namely a copy of the applicant's tax return for the 1997-1998 taxation year. There was some evidence directed to the circumstances in which this occurred, although it was incomplete in certain respects. The evidence included an affidavit of the applicant which was read without objection. The following account is based on the evidence adduced in this Court, together with the transcript of proceedings before the AAT. 21 A teleconference directions hearing was conducted by the AAT on 6 June 2002 in relation to the applicant's matter. It was agreed at that hearing that the respondent would advise when it had obtained what was described in a letter from the applicant as "Income Tax Department papers". I infer that the documents that were to be obtained by the respondent included copy tax returns filed by the applicant. The respondent was to obtain them from the ATO pursuant to s 16(4)(d) of the Income Tax Assessment Act 1936 (Cth), which authorises the ATO to disclose certain information to the respondent for the purpose of the administration of any law relating to pensions. 22 Another teleconference directions hearing took place on 14 August 2002. On 26 August 2002, the respondent filed its Statement of Facts and Contentions. While this document was neither part of the Appeal Book nor tendered, the correspondence shows that the respondent identified as an issue in the proceedings whether the applicant had worked as a barrister for a continuous period of ten years prior to turning 65 (s 24(2A)(g)). The applicant requested by letter that the respondent obtain his tax returns for the period 1978 to 1988 (he having turned 65 in 1988). 23 It is not clear how many tax returns were obtained by the respondent from the ATO, although it may well have been only the one. In any event, it was common ground in this Court that the respondent obtained from the ATO the applicant's tax return for the 1997-1998 taxation year. It was also common ground that a complete copy of that return was received by the respondent shortly before the hearing of 21 November 2002. 24 The applicant's understanding prior to and at the hearing was that the respondent would obtain copies of any tax returns on which it wished to rely. For that reason (according to the applicant's unchallenged evidence) the applicant himself did not seek to retrieve copies of his own returns. Certainly it is clear from his evidence at the AAT and his affidavit evidence in this Court that he had not been provided with or seen a copy of the tax return in connection with the proceedings until after he commenced giving his evidence at the hearing on 21 November 2002. 25 At the hearing, the applicant was cross-examined in some detail on his 1997-1998 return. In the course of that cross-examination, counsel for the respondent incorrectly described the return as relating to the 1998-1999 year, a misconception that was carried over to the AAT's reasons. More importantly, the copy of the return shown to the witness and tendered (it became Exhibit R3) omitted page 8. There was no evidence as to how page 8 came to be omitted from the complete tax return received by the respondent's representatives, but there was no suggestion that the omission was otherwise than inadvertent. The missing page showed that the applicant had made a net loss from his business or profession of $8,041. That loss represented the excess of the expenses incurred in his practice as a barrister over the gross receipts from that practice, although the return as lodged apparently did not include a schedule separately recording the gross income and expenses. 26 The tax return admitted into evidence as Exhibit R3 recorded a "total supplement loss" for the year of $4,564. It also revealed net rental income of $2,778 and net capital gains of $699. The missing page, which recorded the loss of $8,041 from the applicant's practice as a barrister, would have explained to a reader how the "total supplement loss" was arrived at (that is, $2,778 + $699 - $8,041 = a loss of $4,564). The return showed on page 3 a taxable income for the year of $1,292. Pages 2 and 3 indicated that this was made up of a taxable pension of $6,147, less the concessional deduction of $295 and the "total supplement loss" of $4,564. 27 The cross-examination of the applicant proceeded on the basis of two misconceptions, shared by the cross-examiner and the AAT itself. The first was that the tax return was in respect of the 1998-1999 year, when in fact it related to the 1997-1998 year. The second misconception was that the applicant had failed to disclose in his return any profit or loss from his practice as a barrister and thus had not recorded the receipt of any income whatsoever from that practice. 28 It must be said that it is somewhat surprising that neither counsel for the respondent nor the AAT appreciated at any stage that there must have been a page missing from Exhibit R3. The figures included in the return literally add up only if the return includes a loss equivalent to that which in fact appears on the missing page 8. Moreover, the pages of the return are numbered consecutively and page 8 was missing in Exhibit R3. 29 Be that as it may, a significant portion of the cross-examination of the applicant before the AAT was directed to securing his agreement to the proposition that he had received no income whatsoever from his practice as a barrister in what the cross-examiner wrongly assumed was the 1998-1999 year. Perhaps not surprisingly, the applicant (who was then aged 79) became somewhat confused and, as his uncontradicted evidence in this Court suggests, distressed at what appeared to be a failure on his part to include in the tax return any income or expenses referable to his practice as a barrister. This led the applicant to request an opportunity to examine his own records in Canberra in order to explain the apparent omission to rebut the suggestion that he had not acted as a barrister in the relevant year. 30 The relevant portions of the transcript include the following: "[MS HENDERSON] But, in fact, you didn't receive any income from the bar in the '98/'99 tax year, did you? No income from your bar practice?---No, that is not true. Would you please have a look at this document?---Not only not true in some places I said I had expenses up to the $10,000 level. I am not asking about expenses, sir, I am asking you about income from your bar practice?---Yes. Income. Do you recognise this as a copy of a tax return which you filed?---Yes. … Now, please turn over the page. Do you see at the top of the page a heading: Total Business Income?---Yes. Do you agree there is no figure appearing beside that?---Yes, there isn't anything shown on it besides that. What I am looking for is where the net income arises in this form. Can you direct me to that? Well, sir, there is net income or loss from business about two-thirds of the way down?---Yes, where is that? On page - number - question 18. Where is it? Under question 18. There is rent of $8400. I have got a loss of $4564. You are reading from question 18 in the bulk of the form which is on page 9 of the document, I think, is that right?---Question 18. Under question 18, $4564 item - loss. I am looking for where the income is on which that is based. … As you know there is section 16 of the Income Tax Assessment Act which makes all our tax affairs private, it was only as a result of a very particular request which was made to the Tax Office that we gained this document and only very lately and that is why you have not seen it?---Well, I didn't know you had it, firstly, so it is a surprise. Yes, it has just arrived?---Secondly--- We had to wait upon Tax's pleasure?---I am completely caught because the papers - to answer your question, the papers are back in Canberra. Now, the point there is this does not prove I didn't have a loss income as a barrister…. … [MS HENDERSON] I mean, as is put to you there is nothing in this tax return to indicate that you received any income whatsoever or at all from practising as a barrister?---That is right and that is the reason why. I put in a return purely for the purposes of the capital gains tax which we will one day get when we sell the property. I did not include other capital - other losses in that return due to practice as a barrister. You have my word for it that I was earning money but the main point is I was paying money in that year as a - your staff are able to find out, I am sure, your instructing solicitor staff will be able to find out that in that year I was paying money for the insurance quite apart from rent--- … You know what you earned and what you paid in this year?---I don't know the figure at the moment. What I am putting to you is that there is nothing in your tax return to say that you earned even a cent?---Yes, I know. At the bar in that year?---That is right and that is because it wasn't required that I put it in. It was a loss--- Well, let me stop you there. You are a former officer of the Australian Taxation Office, aren't you?---Yes. You know that if you return any income - sorry, if you have any income at all you must return it even if it is outweighed by losses?---Any taxable income. Taxable income. Even---?---Not any income. People can get income from a wide variety of purposes which they don't have to report because it isn't taxable. You know that if you earn income you must return it even if it is outweighed by losses?---No, that is not correct. That is quite an incorrect law. You actually--- MR ALLEN: Well, put it this way. I sit in the tax jurisdiction of this Tribunal and that is quite news to me?---Well, sir--- MS HENDERSON: The proposition that I am putting, sir? MR ALLEN: No, the proposition that the witness is putting. MS HENDERSON: Thank you. I was going to withdraw it if I was offending. MR ALLEN: No, it is quite news to me. THE WITNESS: Sir, my point was that if I am earning non-taxable income I am not required to put in a return regarding that non-taxable income and as you know there is a minimum level they go to on that, nowadays, so where there was a loss in a year that would be far below the level - the minimum level which is allowable now below which you don't have to put in a return at all. That is good law. [MS HENDERSON]: Mr O'Sullivan, it is not the case that you have dug up returns and actually given them to my instructing solicitor, is it?---I haven't got any returns I could give her. What I have got is the papers on which those returns are based…. I've got to say, I would like to feel that I would be given the opportunity to add further when I look at my papers about this return. There may be something that I can add to it but, off the cuff, the suggestion that this proves that I was not acting as a barrister is wrong." (Emphasis added.) … RE EXAMINATION THE WITNESS: I would like to give an undertaking regarding when I get back to Canberra on the weekend, getting that bundle of papers for that year. MR ALLEN: Well, I don't think that will be necessary, Mr O'Sullivan?---I see, okay. Because with any luck I will be able to give a decision on this matter today---Yes. You will?" 31 It will be seen from these extracts, among other things, that the AAT Senior Member expressed scepticism at the explanation the applicant gave for the apparent omission from his returns of any reference to his practice as a barrister. Clearly enough, the applicant was driven to give that explanation because he accepted what the cross-examiner put to him, namely "that there is nothing in your tax return to say that you earned even a cent". The applicant repeated the explanation in his final submissions and met with a similar response from the Senior Member.

Editing 32 As I have indicated, the AAT did not revise the oral reasons for its decision given at the conclusion of the hearing but simply had them transcribed. It is not clear whether the AAT took the view that it could not edit or amend the reasons, or whether it decided that no editing or amendment was required. 33 Section 43(2) of the AAT Act provides that the AAT is to give "reasons either orally or in writing for its decision". Section 43(2A) provides that where the AAT does not give reasons in writing for its decision, a party may request a written statement of reasons and the AAT is obliged to furnish such a statement. In Commissioner of Taxation v Osborne (1990) 26 FCR 63, Pincus J, with whom Spender and French JJ agreed, said (at 65) that "reasons are given in writing within the meaning of s 43(2) if and when they are issued by the Tribunal in written form, whether or not they have been delivered orally in the first place. Of course, if very informal reasons are delivered orally, and a request is then made under s 43(2A), the Tribunal will be unlikely to comply with subs (2B) unless more elaborate, written reasons are then produced. The result is that these reasons, although described as having been given 'orally at the hearing', later became reasons in writing, when they were reduced to writing and delivered to the parties, certified (as they were) as a 'true and correct copy of the reasons for decision herein'." See, too, Ma v Commissioner of Taxation (1992) 37 FCR 225, at 228, 231, per Burchett J. 34 In this case, the AAT was not bound to leave its reasons in an unedited form. Had the AAT edited the reasons before publishing them in written form, the reasons may have stated the issues and reasoning process a little more fully and clearly than they do. It is perhaps worth remembering that while some famous judicial names have been associated with the practice of delivering unreserved oral judgments, few ex tempore judgments or statements of reasons do not benefit from careful editing: cf Hadid v Redpath [2001] NSWCA 416, at [45] ff, per Heydon JA. As Burchett J remarked in Ma, at 231, it would be unfortunate if any misunderstanding of the position "were to deprive courts, upon appeals, of the benefits of proper and helpful editing".

The Reasons for Affirming the Delegate's Decision 35 The AAT first found that the applicant satisfied s 24(1)(a) and (b) of the VE Act as he was receiving pension in excess of 70% of the general rate and he was regarded as totally and permanently incapacitated. 36 The AAT then found that the applicant met the criterion specified in s 24(2A)(g), as he had been in actual practice as a barrister since 1967. It observed that in considering the remunerative work that the applicant might reasonably undertake there was only one calling to consider, namely that of a barrister in actual practice. 37 The AAT noted that the applicant had ceased practice on 30 June 2000. He had claimed that his war-caused disabilities had made it impossible for him to carry out work in country courts. The applicant had, however, acknowledged that he could still do opinion work and could attend Canberra courts. 38 The applicant had also claimed to have a "loner status" and that as a result of his commitment to civil liberties and unpopular causes, some solicitors had declined to brief him. He suggested that this may have been connected with his anxiety state, but the AAT rejected this as "fanciful". 39 The AAT recorded that in April 1997, the applicant had written to the Department of Veterans' Affairs stating that he had received no new briefs for four months and had announced that he was no longer practising law. Nonetheless, the applicant had given evidence that he continued to practice until June 2000. The AAT continued: "What does appear apparent is that over his last few years at the bar the applicant suffered a diminution of income. He applied for and was granted a service pension on the grounds of old age in 1992; we note at that time he was aged some 69 years. … Exhibit R3 is a copy of a tax return for the tax year 1998/1999, there is no income shown in that tax return as being income from practice of the law. We draw the inference and we understand the applicant to have conceded as much that during that particular year of income any receipt of moneys from his practice as a barrister were less than his outgoings, the outgoings being the rent of his chambers, profession indemnity insurance, practising certificate. It is true to say the applicant submitted that the Full Court of the Federal Court in Counsel v Repatriation Commission [2002] FCAFC 201 pointed out that when the Tribunal is looking at remunerative work, the remuneration referred to is gross remuneration and not net, so that he was in receipt of remuneration even though his outgoings were in excess of the income received. At page 59 of the section 37 documents there is a copy of a document presented by the applicant to the Veterans' Review Board in which he states that in the 1999/2000 tax year, he earned the sum of $4810 from his work as a barrister." 40 The AAT then referred to the so-called "alone test" discussed in Forbes v Repatriation Commission and adverted to the standard of proof provisions set out in s 120(4) and (6) of the VE Act. 41 The AAT concluded as follows: "It seems at the outset that the applicant conceded that he could have continued in practice giving advices, writing opinions. In other words carrying out chamber work. He also conceded that it was still possible for him, albeit with difficulty to attend to the Courts in Canberra. It is clear from his letter dated 28 April 1997 referred to earlier and from what he said in evidence today, that he had reached a stage where solicitors for various reasons no doubt, were declining to offer him briefs. That it seems to us, is a natural progression as barristers like any other professional have used by dates. It would appear that he found the practice of the law without going to Court and being on his feet to be something which did not altogether appeal to him albeit he could still do chamber work. He had continued his practice for some time because he felt he had an obligation to the other member of his chambers, but it is clear that for the last few years at least, indeed we would say since 1992, his income from his practice as a barrister was steadily declining as evidenced by his reliance upon a service pension. In Starcevich v Repatriation Commission [(1987)] 18 FCR 221 Fox J referred to the applicant for a Special Rate Pension as having to show that he suffered a substantial loss of remuneration. His honour added [at 225]: '[t]he loss must be real, in the sense that the applicant cannot rely upon any remunerative work that he has undertaken in the past…'. In this case at the time he applied for pension the applicant was a brief-less barrister who had abandoned his practice because he was no longer receiving work from solicitors. It seems to us therefore, that we cannot in these circumstances be reasonably satisfied that it was the applicant's incapacity from war-caused incapacity alone which led to him giving up practice but it was a combination of circumstances including the fact that his practice was no longer a viable practice and his outgoings were exceeding his income. That his practice was no longer viable was not solely due to war caused incapacity. For these reasons therefore the decision under review is affirmed."

Was There Procedural Unfairness? 42 The applicant's counsel, Mr Ryan, submitted that the applicant had been denied procedural fairness in the conduct of the proceedings before the AAT. He contended that the applicant had been subjected to the "cruel farce" of being subjected to cross-examination on an incomplete document with the consequence that the applicant had been misled and his credit had wrongly been impugned. Mr Ryan argued that the AAT should have acceded to the applicant's request that he have an opportunity to examine his own papers to meet the apparent omissions from his tax return. 43 Mr Ryan also invoked s 39(1) of the AAT Act, which provides as follows: "39(1) [Subject to presently immaterial exceptions] the Tribunal shall ensure that every party to a proceeding before the Tribunal is given a reasonable opportunity to present his or her case and, in particular, to inspect any documents to which the Tribunal proposes to have regard in reaching a decision in the proceeding and to make submissions in relation to those documents." He submitted that, in the circumstances, the applicant had not been given a reasonable opportunity to present his case and had not been given an opportunity to inspect a document, namely the copy tax return for 1997-1998, to which the AAT had regard in reaching its decision. 44 A breach by the AAT of the principles of procedural fairness constitutes an error of law: Kioa v West (1985) 159 CLR 550, at 582-584, per Mason J; Australian Postal Commission v Hayes (1989) 23 FCR 320, at 326, per Wilcox J. If, for example, the AAT refuses to grant an adjournment in circumstances where this would deny the applicant a fair opportunity to present his or her case, the refusal constitutes an error of law: Sullivan v Department of Transport (1978) 20 ALR 323, at 342, per Deane J; Opitz v Repatriation Commission (1991) 29 FCR 50, at 58-59, per Hill J. 45 The first part of s 39(1) of the AAT Act has been said to be a statutory recognition of an obligation which the law would imply in any event: Sullivan v Department of Transport, at 342. The second part (relating to the AAT's obligation to ensure that a party has an opportunity to inspect documents to which regard might be had), depending on the circumstances, might go further. In any event, it reflects a clear statutory policy that a party should have an opportunity of inspecting documents that may play a part in the AAT reaching a decision and should also have the opportunity to make submissions on those documents. 46 It is difficult to resist the conclusion that the applicant was unfairly treated by the manner in which his cross-examination was conducted. He was confronted in the witness box with what he was told was his tax return. The document was presented to him as a complete copy of the return. It was not. He was then cross-examined on a false basis, namely that he had failed to disclose in that return any income derived or losses incurred in the conduct of his practice. 47 While a younger and perhaps more alert person, or one who was legally represented, might have detected the source of the problem, the applicant, not surprisingly in the face of scepticism from counsel and the AAT itself, was not able to explain the apparent anomaly satisfactorily. It is true that the applicant had originally prepared the tax return, but an arrangement had been made following a directions hearing that the respondent would obtain copies of tax returns directly from the ATO. It is clear from the applicant's evidence before the AAT that whether or not he still retained a copy of the return in Canberra, he had not looked at the document for a considerable period. Nor was the applicant given the opportunity, as he requested, to examine his own records in order to resolve the difficulty that puzzled and distressed him and to establish that he had never been in default of his taxation obligations. Since the AAT gave its decision immediately after the hearing concluded, the applicant never saw the complete tax return (which was, of course, for the 1997-1998 year) and thus never had any realistic opportunity to make submissions on the basis of the correct version. Had he seen the complete tax return, doubtless he would have been able to answer the criticisms made of his apparent conduct by the cross-examiner and the AAT: cf Re Minister for Immigration and Multicultural Affairs; Ex parte Lam (2003) 195 ALR 502. 48 Ms Ford, who appeared for the respondent, as I understood her, did not strongly resist the proposition that the applicant had been unfairly treated at the hearing because he had been cross-examined on a false basis. But, so she argued, there could be no denial of procedural fairness so as to constitute an error of law where the AAT had not been responsible for the unfairness. 49 It is true that in the typical case of a denial of procedural fairness, the decision-maker is responsible for the breach. That does not mean, however, that the decision-maker must be personally at fault before there can be a denial of procedural fairness. In Hot Holdings Pty Ltd v Creasy (2002) 193 ALR 90, for example, Gleeson CJ expressly stated (at 95) that procedural unfairness can occur without personal fault on the part of the decision-maker. 50 One of the cases cited by Gleeson CJ for this proposition was R v Criminal Injuries Compensation Board; Ex parte A [1999] 2 AC 330. In that case, the applicant applied to the Board for compensation claiming that in the course of a burglary at her home she had been assaulted and buggered. She had first complained of the buggery some days after the event. An investigating police officer gave evidence to the Board that a doctor who examined the applicant had said that the only trauma in the applicant's rectum was due to haemorrhoids. In fact there was a report from the police doctor, which the Board did not see, recording that the anal findings were consistent with buggery. 51 The House of Lords quashed the Board's decision on the ground that the applicant had been denied natural justice. Lord Slynn, with whom the other Law Lords agreed, said this (at 345): "It does not seem to me to be necessary to find that anyone was at fault in order to arrive at this result. It is sufficient if objectively there is unfairness. Thus I would accept that it is in the ordinary way for the applicant to produce the necessary evidence. There is no onus on the board to go out to look for evidence, nor does the board have a duty to adjourn the case for further inquiries if the applicant does not ask for one. … Nor is it necessarily the duty of the police to go out to look for evidence on particular matters. But the police do have a special position in these cases…. [T]here is no doubt that in the 10,000 or so decision hearings a year, the board is very dependent on the assistance of and the co-operation of the police who have investigated these alleged crimes of violence." Lord Slynn went on to say that the police and the Board knew that the applicant had been taken by the police to see the police doctor. It was not sufficient for the police officer to give her oral statement without further inquiry when it was obvious that the doctor was likely to have made notes and probably a written report. Accordingly, his Lordship considered (at 347) that "on the special facts of this case and in the light of the importance of the role of the police in co-operating with the board in the obtaining of evidence there was unfairness in the failure to put the doctor's evidence before the board and if necessary to grant an adjournment for that purpose. I do not think it possible to say here that justice was done or seen to be done." 52 It is fair to say that the High Court has not greeted Ex parte A with unalloyed enthusiasm. In Re Minister for Immigration and Multicultural and Indigenous Affairs; Ex parte S134/2002 (2003) 195 ALR 1, the joint judgment of five members of the High Court (at 10) distinguished Ex parte A and expressed the view that it was "unnecessary to decide the particular questions that were examined" in that case. Nevertheless, their Honours went on to express doubts as to whether the case would be decided on procedural fairness grounds in Australia. After observing that the Board was a body set up, not under statute, but by the executive acting under the prerogative, their Honours said this (at 11): "There appears to have been no denial by the board itself of procedural fairness but it would have been obvious to the police authorities that the police doctor was likely to have made (as was the case) a written report. The board had been entitled to rely upon the police to obtain relevant evidence. Seen in the light of the provisions of s 5 of the ADJR Act respecting applications for judicial review, the English case may perhaps best be characterised as one where, in the terms of para (b) of s 5(1), 'procedures that were required by law to be observed in connection with the making of the decision were not observed'." 53 In my view, the present is a stronger case of want of procedural fairness than Ex parte A. One critical additional element is that the AAT was under a statutory duty to "ensure" that the applicant was given a reasonable opportunity to inspect documents to which the AAT proposed to have regard in reaching its decision. In Ex parte A, the Board owed no specific obligation to the applicant in relation to the medical report prepared by the police doctor. In the present case, the AAT, assuming it proposed to have regard to the tax return in reaching its decision, was under a statutory obligation to ensure that the applicant had a reasonable opportunity to inspect the tax return and to make submissions in respect of it. The applicant was not given an opportunity to inspect the tax return on which he was cross-examined. It is, of course, true that the applicant was given an opportunity, albeit belated and under pressure, to inspect the incomplete copy of his 1997-1998 tax return while he was in the witness box. But the significance of the document depended on it being a complete tax return for the relevant year (which was incorrectly taken by all concerned to be 1998-1999). In these circumstances, I think that s 39(1) of the AAT Act requires that the applicant have a reasonable opportunity to inspect the complete document. Otherwise, the statutory safeguard would be empty of content in circumstances where it is most needed. 54 What I have said in the previous paragraph assumes that the AAT proposed to have regard to Exhibit R3. I think it clearly did. The tax return was the subject of detailed cross-examination and submissions and prompted comments and questions from the Senior Member. The AAT's reasons specifically refer to Exhibit R3 and draw inferences from the apparent absence from the return of any reference to income derived from the appellant's practice as a barrister. Thus the pre-condition for the application of s 39(1) of the AAT Act was satisfied. 55 I accept that the members of the AAT cannot be said to be personally at fault for the unfairness sustained by the applicant. Like the applicant, they were misled by the mistake of the respondent or its representatives even though, as I have noted, it seems somewhat surprising that no-one picked up the error at the hearing. But it is trite law that, where a decision-maker is bound to accord procedural fairness, the content of procedural fairness will be influenced by the terms of the applicable statute. Thus in National Companies & Securities Commission v News Corporation Ltd (1984) 156 CLR 296, Brennan J said (at 326): "The terms of the statute which creates the function, the nature of the function and the administrative framework in which the statute requires the function to be performed are material factors in determining what must be done to satisfy the requirements of natural justice…". See also Mobil Oil Australia Pty Ltd v Federal Commissioner of Taxation (1963) 113 CLR 475, at 503-504, per Kitto J; M Aronson and B Dyer, Judicial Review of Administrative Action (2nd ed, 2000), at 395-396. 56 In determining the content of the AAT's obligation to accord procedural fairness to the applicant, it is necessary to take account of the unequivocal terms of s 39(1) of the AAT Act. This provision imposed an obligation on the AAT, if it proposed to have regard to the tax return, to ensure that the applicant had a reasonable opportunity to inspect the document and make submissions on it. For reasons I have given, that obligation extended to the complete tax return. The applicant was denied that opportunity. He was treated unfairly as a consequence, by being cross-examined on the false assumption that Exhibit R3 was a complete copy of the tax return. I should add that, in my view, having regard to the circumstances of the applicant, including his age, the fact that he had not been shown the tax return prior to giving evidence and his obvious confusion in the witness box, the applicant cannot be said to have been responsible for what occurred: cf R v Secretary of State for the Home Department; Ex parte Al-Mehdawi [1990] 1 AC 876 (a litigant deprived of the opportunity to have a case heard because of the default of his or her own advisers cannot complain of a denial of procedural fairness). Indeed, the applicant specifically requested an opportunity to consult his own papers to formulate a measured response to the allegations. 57 A second element in the present case that makes it stronger than Ex parte A is that the applicant specifically requested the AAT to give him an opportunity to consult his own papers to respond to the allegation that his claim to have earned income as a barrister was incompatible with the contents of his tax return. The AAT refused the applicant that opportunity. Accordingly, this is not a case where the AAT could have done nothing to address or ameliorate the procedural unfairness suffered by the applicant. The AAT could have ascertained that the return was missing a critical page had it scrutinised the document carefully. In any event, the AAT could have acceded to the applicant's request, in effect, for an adjournment of the proceedings. Had it done so, the applicant would have been given a reasonable opportunity to inspect the complete tax return (since the likelihood is that he would have been able, given time, to identify the source of the problem) and to make submissions in respect of it. 58 In my opinion, the applicant was denied procedural fairness before the AAT because he was cross-examined unfairly on a tax return that had been obtained by the respondent pursuant to statutory authority and that the applicant had not had a proper opportunity to inspect. The unfairness arose because the respondent, although receiving a complete copy of the tax returns from the ATO, presented to the AAT and cross-examined on a materially incomplete version of that return. Although the mistake was innocent, it led to the applicant being cross-examined, to his disadvantage, on a false basis. 59 It is true that the AAT members were not personally at fault in creating or allowing the unfairness to occur. But in determining the content of procedural fairness in the circumstances of the present case, it is necessary to have account of the AAT's statutory duty to ensure that the applicant had a reasonable opportunity to inspect the tax returns and to make submissions in relation thereto. The AAT did not comply with that duty. It could have complied, either by detecting at the hearing the fact that the tax return had a missing page, or by acceding to the applicant's request for an adjournment. It did neither. Accordingly, the denial of procedural fairness constitutes an error of law. 60 An alternative way of looking at the present case is to characterise what occurred simply as a contravention of s 39(1) of the AAT Act, albeit one that occurred without personal fault on the part of the AAT members. Accordingly, the AAT failed to comply with its statutory duty. In other words, to use the language of s 5(1)(b) of the Administrative Decisions (Judicial Review) Act 1977 (Cth), referred to by the High Court in Ex parte S134/2002, procedures required by law to be observed in connection with the making of the decision were not observed. Of course, the present is not an application under that Act. Nonetheless I see no reason why a failure to observe procedures mandated by legislation, at least when the failure might have affected the outcome of the proceedings, cannot be an error of law.

immaterial error? 61 Ms Ford argued that even if there had been a failure to accord procedural fairness to the applicant, he was not entitled to relief because the failure could not have led to a different outcome. She submitted that even if the applicant had been able to demonstrate that he had declared a net loss from his practice as a barrister in the 1997-1998 year and demonstrated that he had completed his tax return correctly, the AAT still would have concluded that a combination of factors, not merely his war-related disabilities, had contributed to his retirement. 62 In Re Refugee Review Tribunal; Ex parte Aala (2000) 204 CLR 82, the various judgments used slightly different language to express the relevant test. In Wu v Minister for Immigration & Multicultural & Indigenous Affairs [2002] FCA 1242, I expressed the view that Kirby J's approach was similar to that of McHugh and Callinan JJ and did not differ materially from that of Gaudron and Gummow JJ with whom Hayne J agreed. Gleeson CJ's approach was also similar to that of Kirby J. The latter said this (at 130-131): "Once the applicable breach is proved, the victim of the breach is ordinarily entitled to relief. It is only where an affirmative conclusion is reached, that compliance with the requirements of procedural fairness 'could have made no difference' [Stead v State Government Insurance Commission (1986) 161 CLR 141, at 145] to the result, that relief will be withheld. This Court has emphasised that such an outcome will be a rarity. It will be 'no easy task' to convince a court to adopt it [Stead, at 145]. This will especially be so where, as here, 'the issue concerns the acceptance or rejection of the testimony of a witness at the trial' [Stead, at 146]." The question, therefore, is whether I can be affirmatively satisfied that compliance with the requirements of procedural fairness could have made no difference to the outcome. 63 Ms Ford's submission is not without force. It is true, as she pointed out, that the AAT's reasons, although referring to Exhibit R3, do not include a finding that the applicant had no income whatsoever in 1998-1999, or in any other year. Rather, the AAT, acting on the incorrect assumption that Exhibit R3 related to the 1998-1999 year, inferred that in that year the applicant's expenses exceeded his receipts. The AAT also appears to have accepted that in 1999-2000, the applicant, as he claimed in a letter to the Veteran's Review Board, had earned gross income as a barrister of $4,810. It is also true that the AAT relied on certain concessions made by the applicant to support its finding that it was not his war-caused disabilities alone which led to him retiring from his practice as a barrister, but a range of matters including the fact that his practice was no longer viable. 64 I accept that, if the matter is remitted to the AAT, the applicant may well have a formidable task if he is to persuade the AAT that his retirement from practice was due solely to his war-related disabilities. Certainly he will have substantial evidentiary obstacles to overcome. Nevertheless, I cannot say that, if the applicant had been given the opportunity to examine the complete tax return and to give evidence on the basis of that document, it could have made no difference to the result. It is not implausible, for example, that when the AAT described the applicant as a "brief-less barrister who had abandoned his practice because he was no longer receiving work from solicitors", it may have been influenced by the view that he had derived no income whatsoever in the 1998-1999 year. Further, although the AAT did not make any explicit finding adverse to the applicant's credit, I cannot be satisfied that the unfavourable view it expressed at the hearing as to the applicant's conduct in relation to the tax return played no role in the factual findings it ultimately made. For example, the AAT found that the applicant regarded the practice of law without going to court as "something which did not altogether appeal to him". His evidence on that issue was to the effect that he had a "conviction" that he should not do chamber work if he was physically unable to take other briefs. The AAT appears to have rejected the applicant's explanation as to his actions and attributed the cessation of his practice to the lack of appeal of chamber work. The AAT also seems to have regarded the applicant's anxiety state as having little to do with his difficulties in attracting work and his ultimate decision to retire. The AAT may have taken a more sympathetic view if the applicant's evidence had not been affected by his cross-examination on Exhibit R3. 65 Although this case perhaps comes close to the borderline, I do not think it is one of the rare cases in which a breach of procedural fairness can be regarded as incapable of making any difference to the outcome of the proceedings.

other issues 66 In view of the conclusion I have reached, there is no need to deal with the other attacks made by the applicant on the AAT's decision. It is enough to say that, in my opinion, none of them is of any substance.

conclusion 67 The decision of the AAT should be set aside. The matter should be remitted to the AAT, differently constituted, for determination according to law. Unless either party makes submissions to the contrary within seven days of the date of this judgment, the respondent should pay the applicant's costs. I certify that the preceding sixty-seven (67) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Sackville J.

Associate: Dated: 1 May 2003 Counsel for the Applicant: Mr C Ryan

Solicitor for the Respondent: Australian Government Solicitor