Parker v Parker

BACKGROUND 5 The applicant is the director, public officer and shareholder of the company Ivyside Pty Ltd (Ivyside). Ivyside claimed GST input tax credits with respect to various purchases in relation to the company. On 22 May 2007, the respondent advised the applicant that the claims at 'label G11' on his activity statement for the period July to September 2006 would be disallowed because valid tax invoices were not produced to substantiate the amount of GST credits claimed. The ATO subsequently issued the applicant notices pursuant to s 264 of the Income Tax Assessment Act 1936 (Cth) (ITAA 1936) and s 353-10 of the Taxation Administration Act 1953 (Cth) (TAA). On or around 3 October 2007, the ATO issued the applicant an amended assessment and penalties for the July to September quarter of 2006.

COMPLAINT 6 In this matter, the complaint raised is as to the disallowance of the GST entitlements for the July-September quarter of 2006 'such entitlements being bona fide ones that should be allowed'. 7 The applicant asserts that the decision of the respondent included 'purposeful mental and emotional pain and suffering the respondent is inflicting on the applicant; the applicant seeks relief from this harassment; oppression; and unlawful activities of the respondent'. 8 However, in the affidavit in support of the application, the applicant clarifies that the decision of which he is seeking review was the decision by the respondent to deny and refuse him the right to an informal review of a GST issue relating to Ivyside. He stresses in his affidavit that it is not the original decision made by the respondent to disallow the GST entitlements but rather the decision to deny and refuse him an informal review. In support of that claim he annexes a document entitled 'Having your GST issue reviewed'. That document under the heading 'Informal Reviews' reads: You can request an informal review of the GST decision we made or GST advice we provided, including private rulings. Generally, an informal review is conducted by an officer who is not involved in the original decision. We will advise you of the outcome of the review, which could include changing the decision or advice, or confirming it. If you'd like to request an informal review, you should contact the person handling your case or the office where the decision was made. 9 The applicant also annexes a document apparently comprising a notification on behalf of Ivyside that it is seeking an order for review of the joint decision of the respondent and other officers of the ATO not to provide the company with an informal review of the audit which had been conducted. This communication was apparently sent by email on 2 January 2008. The applicant also annexes a much earlier letter from the ATO (23 August 1999) in which an apology is extended for distress and inconvenience which had been caused to the applicant and his wife in previous dealings. 10 Assuming that the basis on which review is sought in this matter is a refusal to grant an informal review, the respondent complains that there is no evidence of a request for an informal review and there had been no agreement to conduct an informal review. More importantly, even if there had been such an agreement, a failure to do so would not constitute a decision as defined in s 3(1) and s 3(2) of the ADJR Act as no substantive rights would be affected by such a decision. The annexure appears to relate to refusal to provide an informal review of 'the audit … conducted', again of which there is no evidence.

APPROACH TO COMPETENCY CHALLENGE 11 The Court has jurisdiction to determine that it has no jurisdiction in respect of a proceeding instituted in the Court and to dismiss the proceeding accordingly (Residual Assco Group Ltd v Spalvins (2000) 202 CLR 629 at [14]). As observed in Mirvac Homes (NSW) Pty Limited v Airservices Australia (No 1) [2004] FCA 109 by Branson J, the provision in the Federal Court Rules for the filing and service of a notice of objection to competency is intended to encourage a respondent to inform the applicant promptly that the jurisdiction of the Court is in issue. The filing of a notice of objection to competency also places the Court on notice that its jurisdiction to make the orders sought by the applicant in the proceeding is challenged. The Court must then decide, before it makes the orders sought by the applicant or any substantive orders, whether it has jurisdiction to proceed (R v Federal Court of Australia; Ex parte WA National Football League (1979) 143 CLR 190). 12 In Bray v F Hoffman-La Roche Ltd (2003) 130 FCR 317, Finkelstein J at [239] expressed the view that, where an issue which is properly characterised as jurisdictional is raised, it should be dealt with at the outset although a different approach was taken in Khatri v Price (1999) 95 FCR 287 per Katz J at [14]). 13 Whether or not it is necessary to resolve the jurisdictional issue at the outset, it appears to me that the current jurisdictional argument is succinct and independent in the sense that it can be resolved without any other evidentiary enquiry. If the argument is correct, there seems no obvious reason in this case why consideration of the jurisdictional challenge should be further deferred. Deferral has not been sought by the applicant. (As distinct from raising opposition to the objection). 14 The applicant complains that for a period of 9 years between 1990 and 1999 the Commissioner of Taxation (the Commissioner) caused distress to him and his wife by failing to meet the requirements of the ATO Taxpayer's Charter. 15 The applicant relied upon a written apology from the Commissioner dated 23 August 1999. That communication thanks the applicant for taking the time to contact the 'Problem Resolution Service' about legal action being taken against the applicant and his wife. It continues: I am satisfied that the ATO failed to meet this requirement and I sincerely apologise for the distress and inconvenience this has caused you and your wife. Details relating to specific ATO officers have been referred to their manager for appropriate action. In addition, I have recommended the ATO procedures that brought about the legal action in your case be reviewed to ensure this type of problem does not occur again in the future. 16 The applicant complains that had the respondent acted pursuant to the Taxpayers' Charter towards him and in accordance with the assurance given in the Commissioner's written apology that he would not be aggrieved by the oppressive actions of the respondent continuing to act in breach of the Charter and abusing his power.

STATUTORY FRAMEWORK 17 Section 5 of the ADJR Act relevantly provides as follows: 5 Applications for review of decisions (1) A person who is aggrieved by a decision to which this Act applies that is made after the commencement of this Act may apply to the Federal Court or the Federal Magistrates Court for an order of review in respect of the decision on any one or more of the following grounds: (a) that a breach of the rules of natural justice occurred in connection with the making of the decision; (b) that procedures that were required by law to be observed in connection with the making of the decision were not observed; (c) that the person who purported to make the decision did not have jurisdiction to make the decision; (d) that the decision was not authorized by the enactment in pursuance of which it was purported to be made; (e) that the making of the decision was an improper exercise of the power conferred by the enactment in pursuance of which it was purported to be made; (f) that the decision involved an error of law, whether or not the error appears on the record of the decision; (g) that the decision was induced or affected by fraud; (h) that there was no evidence or other material to justify the making of the decision; (j) that the decision was otherwise contrary to law. (2) The reference in paragraph (1)(e) to an improper exercise of a power shall be construed as including a reference to: (a) taking an irrelevant consideration into account in the exercise of a power; (b) failing to take a relevant consideration into account in the exercise of a power; (c) an exercise of a power for a purpose other than a purpose for which the power is conferred; (d) an exercise of a discretionary power in bad faith; (e) an exercise of a personal discretionary power at the direction or behest of another person; (f) an exercise of a discretionary power in accordance with a rule or policy without regard to the merits of the particular case; (g) an exercise of a power that is so unreasonable that no reasonable person could have so exercised the power; (h) an exercise of a power in such a way that the result of the exercise of the power is uncertain; and (j) any other exercise of a power in a way that constitutes abuse of the power. (3) The ground specified in paragraph (1)(h) shall not be taken to be made out unless: (a) the person who made the decision was required by law to reach that decision only if a particular matter was established, and there was no evidence or other material (including facts of which he or she was entitled to take notice) from which he or she could reasonably be satisfied that the matter was established; or (b) the person who made the decision based the decision on the existence of a particular fact, and that fact did not exist. 18 Relevantly, s 3 of the ADJR Act identifies the decisions to which the Act applies as a 'decision of an administrative character made, proposed to be made, or required to be made (whether in the exercise of a discretion or not and whether before or after the commencement of this definition)': (a) under an enactment referred to in paragraph (a), (b), (c) or (d) of the definition of enactment; or (b) by a Commonwealth authority or an officer of the Commonwealth under an enactment referred to in paragraph (ca) or (cb) of the definition of enactment; other than: (c) a decision by the Governor-General; or (d) a decision included in any of the classes of decisions set out in Schedule 1. 19 By s 3(d) the definition of 'decision to which this Act applies' is narrowed by the exclusion of decisions included in any of the class of decisions set out in Sch 1. Schedule 1 of the ADJR Act relevantly provides: Schedule 1 - Classes of decisions that are not decisions to which this Act applies … (e) decisions making, or forming part of the process of making, or leading up to the making of, assessments or calculations of tax, charge or duty, or decisions disallowing objections to assessments or calculations of tax, charge or duty, or decisions amending, or refusing to amend, assessments or calculations of tax, charge or duty, under any of the following Acts: A New Tax System (Goods and Services Tax) Act 1999 A New Tax System (Luxury Car Tax) Act 1999 A New Tax System (Wine Equalisation Tax) Act 1999 Customs Act 1901 Customs Tariff Act 1995 Excise Act 1901 Fringe Benefits Tax Assessment Act 1986 Fuel Tax Act 2006 Income Tax Assessment Act 1936 Income Tax Assessment Act 1997 Petroleum Resource Rent Tax Assessment Act 1987 Superannuation Guarantee (Administration) Act 1992 Taxation Administration Act 1953, but only so far as the decisions are made under Part 3-10 in Schedule 1 to that Act Training Guarantee (Administration) Act 1990 Trust Recoupment Tax Assessment Act 1985; … Note: Subdivision B deals with the making, reduction and revocation of estimates of certain liabilities. (f) decisions of the Commissioner of Taxation under subsection 3E(1), 3G(1) or 3H(1) of the Taxation Administration Act 1953; (g) decisions under Part IV of the Taxation Administration Act 1953; (ga) decisions under section 14ZY of the Taxation Administration Act 1953 disallowing objections to assessments or calculations of tax, charge or duty; …

The Respondent 20 The respondent originally contended that the decision complained of by the applicant formed part of the process of making, or refusing to amend a calculation of tax under the GST Act. Therefore, the decision by the Commissioner to disallow GST input credits claimed by Ivyside would be excluded pursuant to Sch 1(e) of the ADJR Act. Accordingly the substituted ground of the alleged refusal to conduct an informal review would not be a 'decision' at all.

The Applicant 21 The applicant asserts that the Court does have jurisdiction to hear the matter. He contends that the respondent's decision or conduct is reviewable in this Court and it falls within the class of decisions to which the ADJR Act applies.

RELEVANT PRINCIPLES 22 Pursuant to s 8 of the ADJR Act, the Court has jurisdiction to hear and determine applications made under the ADJR Act. Section 5 of the ADJR Act provides that a person aggrieved by a decision to which the Act applies may apply to the Court for an order of review on certain grounds. Section 6 of the ADJR Act provides for review of conduct, engaged in, being engaged in or proposed to be engaged in for the purpose of making a decision to which the ADJR Act applies. 23 It is apparent from the definition of 'decision to which this Act applies' in s 3 of the ADJR Act that the Act only applies where there is a making of, proposal to make or requirement to make a decision, the decision is of an administrative character, and the decision is made under an enactment. In Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321 (at 335), Mason CJ discussed the meaning of 'decision' under s 3 of the ADJR Act and held (relevantly) (citations omitted): (1) Meaning of "Decision" The definition in s.3(1) does not elucidate significantly the meaning of the word "decision" as it is used in the A.D.(J.R.) Act. It is clear that a "decision to which this Act applies" must be a decision of an administrative character, that it may be made in the exercise of a discretion, and that it must be made under an enactment. But these characteristics provide little guidance as to the meaning of the word "decision" upon which the definition in s.3(1) is based. … Nonetheless other considerations point to the word having a relatively limited field of operation. First, the reference in the definition in s.3(1) to "a decision of an administrative character made ... under an enactment" indicates that a reviewable decision is a decision which a statute requires or authorizes rather than merely a step taken in the course of reasoning on the way to the making of the ultimate decision. Secondly, the examples of decision listed in the extended definition contained in s.3(2) are also indicative of a decision having the character or quality of finality, an outcome reflecting something in the nature of a determination of an application, inquiry or dispute or, in the words of Deane J., "a determination effectively resolving an actual substantive issue". Thirdly, s.3(3), in extending the concept of "decision" to include "the making of a report or recommendation before a decision is made in the exercise of a power", to that extent qualifies the characteristic of finality. Such a provision would have been unnecessary had the Parliament intended that "decision" comprehend every decision, or every substantive decision, made in the course of reaching a conclusive determination. Finally, s.3(5) suggests that acts done preparatory to the making of a "decision" are not to be regarded as constituting "decisions" for, if they were, there would be little, if any, point in providing for judicial review of "conduct" as well as of a "decision". The relevant policy considerations are competing. On the one hand, the purposes of the A.D.(J.R.) Act are to allow persons aggrieved by the administrative decision-making processes of government a convenient and effective means of redress and to enhance those processes. On the other hand, in so far as the ambit of the concept of "decision" is extended, there is a greater risk that the efficient administration of government will be impaired. Although Bowen C.J. and Lockhart J. appeared to emphasize the first of these considerations in Australian National University v. Burns, there comes a point when the second must prevail, as their Honours implicitly acknowledged. To interpret "decision" in a way that would involve a departure from the quality of finality would lead to a fragmentation of the processes of administrative decision-making and set at risk the efficiency of the administrative process. … Another essential quality of a reviewable decision is that it be a substantive determination. With the exception of s.3(2)(g), the instances of decision mentioned in s.3(2) are all substantive in character. Moreover, the provisions in sub-ss.(1), (2), (3) and (5) of s.3 point to a substantive determination. In this context the reference in s.3(2)(g) to "doing or refusing to do any other act or thing" (emphasis added) should be read as referring to the exercise or refusal to exercise a substantive power. I do not perceive in s.16(1)(b) or in par.(e) of Sched.1 or par.(a) of Sched.2 to the A.D.(J.R.) Act any contrary implication. These exclusions from the A.D.(J.R.) Act or from s.13 appear to have been introduced for more abundant caution and it would be unwise to take too much from them. (emphasis added) 24 Despite the clarity of the passage from the learned Chief Justice, application of the principles has not been without difficulty. Views on whether or not particular decisions or conduct constitutes a reviewable decision have not always been unanimous (for example, Guss v Federal Commissioner of Taxation (2006) 152 FCR 88). 25 Not only are there questions as to whether conduct constitutes a decision but also whether it is a decision taken under an enactment. For a decision to be reviewable it must be one 'for which provision is made by or under a statute', the provision should be more specific than general (for example, Hutchins v Commissioner of Taxationn (1996) 65 FCR 269 and Electricity Supply Assn of Australia Ltd v Australian Competition & Consumer Commission (2001) 113 FCR 230). A general authorisation for a body to act in a certain way is not usually regarded as being sufficient to qualify a decision as being one made under an enactment: Salerno v National Crime Authority (1997) 75 FCR 133. 26 Dealing with the enactment aspect, the majority of the High Court in Griffith University v Tang (2005) 221 CLR 99 held (at [89]) that: The determination of whether a decision is "made … under an enactment" involves two criteria: first, the decision must be expressly or impliedly required or authorised by the enactment; and, secondly, the decision must itself confer, alter or otherwise affect legal rights or obligations, and in that sense the decision must derive from the enactment. A decision will only be "made ... under an enactment" if both these criteria are met. It should be emphasised that this construction of the statutory definition does not require the relevant decision to affect or alter existing rights or obligations, and it will be sufficient that the enactment requires or authorises decisions from which new rights or obligations arise. Similarly, it is not necessary that the relevantly affected legal rights owe their existence to the enactment in question. Affection of rights or obligations derived from the general law or statute will suffice. 27 Indeed the High Court went on to observe that even though a decision taken may have a critical effect for the operation of the federal statute, if it is a decision made 'dehors' the federal statute, it would be un-reviewable.

CONSIDERATION 28 In the present circumstances, although the decision of which complaint was originally made was carried out pursuant to statutory power, it does not constitute, in my view, a decision in the sense contemplated in s 3 of the ADJR Act or as explained by the Chief Justice in Bond 170 CLR 321. Nor does the alleged refusal to informally review. 29 In the language of Fox ACJ in Evans v Friemann (1981) 35 ALR 428 at 431 the relevant decision or conduct did not constitute a decision which was final and conclusive for immediate purposes at least. It was not the ultimate or operative determination of an issue as distinct from the determination of issues arising in the course of making such an ultimate decision (Social Services, Director-General of v Chaney (1980) 31 ALR 571). 30 The best guidance for this is the clear language of Mason CJ in Bond 170 CLR 321 that the decision will generally but not always entail a decision which is final or operative and determinative, at least in a practical sense and a conclusion reached that is a step along the way in the course of reasoning leading to an ultimate decision would not ordinarily amount to a reviewable decision unless the statute provided for the making of a finding or ruling on that point so that the decision, though an indeterminate decision, might accurately be described as a decision under an enactment. 31 When it comes to the consideration of policy, the competing policies on the one hand of permitting aggrieved persons to challenge administrative decisions and on the other, enabling efficient administration of government processes provides some guidance. If the legislation has provided other means of challenging decisions rather than judicial review under the ADJR Act, at least insofar as policy is concerned, availability of a right of challenge is not withheld. 32 In Century Yuasa Batteries Pty Ltd v Commissioner of Taxation (1997) 73 FCR 528 it was held that the Commissioner's decision to seek to recover an amount equal to withholding tax and penalty for late payment due by the applicant and the demand for payment of those sums was not reviewable because it did not constitute a substantive determination. This was because it lacked the necessary element of finality as liability for payment of those sums arose from the operation of the ITAA 1936 and not in consequence of any reviewable decision of the Commissioner. His Honour said (at 540-541): Section 221YR(1) (the Commissioner's power to sue for the money as a debt due to the Commonwealth) and s 8 (the Commissioner's power of general administration of the ITAA) do not of themselves give force or effect to the decision to demand payment of a sum of money which the Commissioner claims is payable under the ITAA and as such it is not a decision made under an enactment (Hutchins v Commissioner of Taxation (1996) 65 FCR 269 at 273 per Black CJ and at 278-279 per Spender J). Even if the view of Lockhart J in Hutchins v Commissioner of Taxation is adopted, namely that the power of the Commissioner to sue for the recovery of the amount due as a debt to the Commonwealth authorises the Commissioner to do all things reasonably necessary to recover the amount and thereby characterises the demand as a decision of an administrative character made under an enactment (at 276-277), that does not of itself make the demand a reviewable decision. The decision to seek to recover an amount equal to the withholding tax and penalty for late payment from the applicant, and the demand for payment of the same within 14 days, is not a substantive determination. It determines nothing. As such the decision lacks a necessary characteristic of a reviewable decision (Bond at 337; Hutchins at 274, 277). Nor does the demand have any practical effect on the applicant. If the demand is not met by the applicant because of an erroneous view that it is not liable to make the payment, any liability for additional tax for late payment arises from the operation of the ITAA and not in consequence of any reviewable decision of the Commissioner. 33 And as held in Ruddy v Commissioner of Taxation (1998) 82 FCR 337, the decision to sue for recovery was not a decision on an important substantive issue which was the essence of an ultimate decision which would have far-reaching consequences. It is not final or determinative because it does not remove a benefit or expose an applicant to detriment to which it is not already subject. Equally, Cooper J held in Golden City Car & Truck Centre Pty Ltd v Deputy Federal Commissioner of Taxation (1999) 56 ALD 177, a decision to commence proceedings for recovery of tax due under the ITAA 1936 is not a reviewable decision. See also Madera v Commissioner of Taxation (2004) 141 FCR 95 at [21] per Stone J (at [18]-[22]). 34 In relation to the alternative ground advanced for the respondent, it is contended that what is sought is a review of the decision which formed part of the process of making or refusing to amend the calculation of tax under the GST Act and as such, it is a decision not capable of review under the ADJR Act being excluded by the provisions of Sch 1(e). The respondent contends that to the extent reliance is placed on the decision of the disallowance of claimed GST input credits, any decision taken in that regard (by the Commissioner rather than the respondent) would fall within the exclusion provisions due to the course of dealings between the parties) (Bennett Honda Pty Ltd v Deputy Commissioner of Taxation (1984) 4 FCR 99 per Morling J). 35 The respondent stresses that Ivyside (as distinct from the applicant) has appellate procedures available to it in respect of the decision made by or on behalf of the Commissioner to disallow GST input tax credits claimed. It is for that reason that all components of the decisions by the officers of the ATO charged with making that decision are not susceptible to review under the ADJR Act as they fall within the parameters of par e to Sch 1.

CONCLUSION 36 The original complaint was the purported infliction of pain on the applicant by disallowing GST entitlements. The revised complaint is as to the refusal of the internal review to discuss the issue. 37 In my view, the alleged actions or conduct of which complaint has been raised by the applicant did not constitute a decision of a reviewable nature within the meaning of the ADJR Act and the authorities. There was no substantive determination. There was no decision having the character or quality of finality and the actions taken, even accepting for purposes that they had the quality asserted by the applicant, simply formed part of a process of leading up to the making of a decision by the Commissioner to disallow the claimed GST input credits claimed by Ivyside. It was not a decision which affected in any way or in any direct sense the applicant's legal rights and obligations. 38 Further and as a distinct ground, even if there were an appropriate basis for review, it could be advanced only by the company, Ivyside not by the applicant. However, if this were the only issue standing in the way of the competency of this application, I may have granted any application to amend the identity of the applicant, or for that matter, the respondent. The difficulty with the competency of the application however, in my view, is much more fundamental, going to jurisdiction. 39 The respondent's jurisdictional objection to competency must be upheld and the claim dismissed. The applicant is to pay the costs of the respondent to be taxed if not agreed. I certify that the preceding thirty-nine (39) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice McKerracher.

Associate: Dated: 25 August 2009 The Applicant represented himself.

Solicitor for the Respondent: Australian Government Solicitor