Rigoli v Commissioner of Taxation

Federal Court of Australia (Full Court)|2014-03-18|Before: Pagone J, McKerracher JJ

The appeal be dismissed with costs.
The orders made by Pagone J on 7 August 2013 be supplemented by the addition of the following order:
In the Administrative Appeals Tribunal, subject to any order of the Tribunal for proper cause, the remitted proceeding be heard and determined on the evidence which was before the Tribunal in the proceeding which resulted in its decision of 1 November 2012.
Otherwise, the cross-appeal be dismissed.
There be no order as to the costs of the cross-appeal. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY GENERAL DIVISION VID 891 of 2013

JUDGES: EDMONDS, JESSUP AND MCKERRACHER JJ DATE: 18 MARCH 2014 PLACE: MELBOURNE

INTRODUCTION 1 The appellant (Mr Rigoli) appeals from a decision of a judge of this Court (Commissioner of Taxation v Rigoli [2013] FCA 784) in which the primary judge allowed an appeal by the respondent (Commissioner) from a decision of the Administrative Appeals Tribunal (AAT) (Rigoli and Commissioner of Taxation [2012] AATA 757). The Commissioner cross-appeals in relation to consequential orders made by the primary judge. For the following reasons, but for a slight addition to those orders, both the appeal and cross-appeal will be dismissed. 2 The proceeding before the AAT was a review, pursuant to s 14ZZ(1)(a)(i) of the Taxation Administration Act 1953 (Cth) (Administration Act), of decisions made by the Commissioner on 19 December 2008 to disallow Mr Rigoli's objections to the Commissioner's assessments of income tax with respect to the fiscal years ending on 30 June 1994 to 30 June 2001. In that review, the AAT upheld the deductibility of certain depreciation items which had been disallowed by the Commissioner. In the Commissioner's appeal from the AAT to this Court, it was contended that the AAT had erred in point of law by not holding that Mr Rigoli had not discharged his burden of proving the Commissioner's assessments to be excessive, as required by s 14ZZK(b)(i) of the Administration Act. That contention was upheld by the primary judge. Whether his Honour was correct in this respect is the central issue in the present appeal.

BACKGROUND 3 Although Mr Rigoli carried on business in a partnership for several years, he failed to lodge personal or partnership income tax returns. This failure led the Commissioner to issue assessments to Mr Rigoli under s 167 of the Income Tax Assessment Act 1936 (Cth) (1936 Act). Mr Rigoli, who did not keep any accounting or financial records in relation to the business, objected against the assessments on the ground that he had "no taxable income". The objections were disallowed for the assessments with respect to the fiscal years ending on 30 June 1994 to 30 June 2001. 4 At the commencement of the hearing in the AAT, counsel for Mr Rigoli stated that the amounts which had been identified by the Commissioner as Mr Rigoli's assessable income were no longer challenged by Mr Rigoli. However, he maintained that he was entitled to claim deductions by way of depreciation allowance for a variety of items which the Commissioner had not allowed. In response, counsel for the Commissioner made it clear in the AAT and before the primary judge that a default assessment under s 167 was only "excessive" where the taxpayer had established what was the amount upon which income tax ought to be levied and that amount was less than the assessment. It was not open to Mr Rigoli to concede the Commissioner's estimate of his assessable income and to confine the AAT review to the realm of deductions. The AAT upheld Mr Rigoli's position on this point.

KEY STATUTORY PROVISIONS 5 It is convenient to examine the relevant statutory provisions which arise on the appeal. 6 Section 14ZZK of the Administration Act provides: 14ZZK Grounds of objection and burden of proof On an application for review of a reviewable objection decision: (a) the applicant is, unless the Tribunal orders otherwise, limited to the grounds stated in the taxation objection to which the decision relates; and (b) the applicant has the burden of proving that: (i) if the taxation decision concerned is an assessment (other than a franking assessment or a starting base assessment) - the assessment is excessive; or (ii) if the taxation decision concerned is a franking assessment or a starting base assessment - the assessment is incorrect; or (iii) in any other case - the taxation decision concerned should not have been made or should have been made differently. 7 The relevant sections of the 1936 Act provide: 166 Assessment From the returns, and from any other information in his possession, or from any one or more of these sources, the Commissioner shall make an assessment of the amount of the taxable income of any taxpayer, and of the tax payable thereon. 167 Default assessment If: (a) any person makes default in furnishing a return; or (b) the Commissioner is not satisfied with the return furnished by any person; or (c) the Commissioner has reason to believe that any person who has not furnished a return has derived taxable income; the Commissioner may make an assessment of the amount upon which in his judgment income tax ought to be levied, and that amount shall be the taxable income of that person for the purpose of section 166. (emphasis added) 8 There are also two key provisions of the Administrative Appeals Tribunal Act 1975 (Cth) (AAT Act) falling for consideration on the appeal and the cross-appeal. Relevantly, they provide: 43 Tribunal's decision on review (1A) This section has effect subject to section 43AAA and to subsection 65(3) of the Australian Security Intelligence Organisation Act 1979. Tribunal's decision on review (1) For the purpose of reviewing a decision, the Tribunal may exercise all the powers and discretions that are conferred by any relevant enactment on the person who made the decision and shall make a decision in writing: (a) affirming the decision under review; (b) varying the decision under review; or (c) setting aside the decision under review and: (i) making a decision in substitution for the decision so set aside; or (ii) remitting the matter for reconsideration in accordance with any directions or recommendations of the Tribunal. (emphasis added) … 44 Appeals to Federal Court of Australia from decisions of the Tribunal Appeal on question of law (1) A party to a proceeding before the Tribunal may appeal to the Federal Court of Australia, on a question of law, from any decision of the Tribunal in that proceeding. … Powers of Federal Court (4) The Federal Court of Australia shall hear and determine the appeal and may make such order as it thinks appropriate by reason of its decision. (5) Without limiting by implication the generality of subsection (4), the orders that may be made by the Federal Court of Australia on an appeal include an order affirming or setting aside the decision of the Tribunal and an order remitting the case to be heard and decided again, either with or without the hearing of further evidence, by the Tribunal in accordance with the directions of the Court. (emphasis added)

THE REASONING OF the PRIMARY JUDGE 9 The primary judge in his reasons (R) (at [6]) referred to the AAT's reasons (A) (at [7]) in which the Member had said: In his opening submissions on the first day of hearing this matter, … counsel, who appeared on behalf Mr Rigoli, informed me that the questions regarding Mr Rigoli's gross income for the years in question was no longer in issue. Mr Rigoli had accepted the Commissioner's estimate of his income in the relevant income years. The only issues remaining were the depreciation expenses which ought to have been taken into account in assessing Mr Rigoli's taxable income in the relevant years and the assessment of a capital gain by the Commissioner following the disposal of a capital item of equipment. On the fourth day of the hearing, 17 April 2012, [counsel] informed the [AAT] that Mr Rigoli was no longer proceeding with the capital gains claim. 10 The primary judge referred to Gashi v Commissioner of Taxation (2013) 209 FCR 301 in which the Full Court (Bennett, Edmonds and Gordon JJ) held that a taxpayer wanting to challenge an assessment made under s 167 of the 1936 Act upon the "asset betterment" method of a calculation could only do so by establishing the actual taxable income for the period in dispute. In Gashi (at [63]), the Court said: A taxpayer who seeks to establish that a s 167 assessment based on the asset betterment method of calculation is excessive must positively prove his or her "actual taxable income" and, in doing so, must show that the amount of money for which tax is levied by the assessment exceeds the actual substantive liability of the taxpayer: Dalco a[t] CLR 623-5; ALR 345-7 and Trautwein at CLR 88; ALR 428. The taxpayer must show that the unexplained accumulated wealth was from non-income sources. The manner in which a taxpayer discharges that burden is not defined or specified - it varies with the circumstances: Dalco at CLR 624; ALR 346. 11 The Court referred to the explanation given at [53]-[55] of that decision as follows: [53] The s 167 power is necessarily different to that in s 166. Under s 166, the power is to "make an assessment of the amount of the taxable income". The phrase "taxable income" is defined to mean "assessable income" minus "deductions": s 4-15 of the 1997 Act and s 6(1) of the 1936 Act. Under s 167, that process of calculating taxable income as assessable income minus deductions is not possible (in whole or in part) because of one of the preconditions to the exercise of the power in subparas (a)-(c) of s 167 - a failure by a person to lodge a tax return, the tax return is deficient or the commissioner has reason to believe that a person who has not lodged a return has derived taxable income. It is for those reasons that the balance of s 167 empowers the commissioner to make an assessment of the amount upon which income tax ought to be levied and for that amount to be deemed to be the taxpayer's taxable income for the purposes of s 166. [54] The third part of the section - the deeming provision - would be futile if it was necessary for the commissioner to undertake a process of the kind referred to in s 166. As the commissioner submitted, the assessment of the "amount" in s 167 is not constrained by a process of subtracting "deductions" from "assessable income". Instead, in making his judgment of the "amount" that becomes taxable, the commissioner may use what is known as the "asset betterment" method: Trautwein at CLR 87, 99-100 and 105; ALR 428, 433-4 and 436. [55] The asset betterment method, and the resulting assessment, is necessarily a guess to some extent and "almost certainly inaccurate in fact": Trautwein at CLR 87; ALR 428. It is therefore "no part of the duty of the commissioner to establish affirmatively what judgment he formed [under s 167 of the 1936 Act], much less the grounds of it, and even less still the truth of the facts affording the grounds": George v Federal Commissioner of Taxation (1952) 86 CLR 183 at 204; [1952] ALR 961 at 966 (George). (emphasis added) 12 While the Commissioner's assessment for Mr Rigoli under s 167 was not made on the basis of asset betterment, the primary judge noted (at R[8]) that the reasoning in Gashi was not confined to an assessment on asset betterment. Rather, it was on the basis that under s 167 the "process of calculating taxable income as assessable income minus deductions is not possible (in whole or in part)". Even if the process under which the Commissioner reached a figure under s 167 was similar to the process for the purpose of s 166 in circumstances where the taxpayer had actually furnished a return, an assessment under s 167 was fundamentally different from one under s 166. A taxpayer seeking to establish that an assessment under s 167 is excessive must establish not that some element in the assessment is wrong but that "the amount upon which [in the Commissioner's judgment] income tax ought to be levied" was the taxpayer's actual taxable income. In short, the primary obligation of a taxpayer is to furnish a return of income under s 166 and an assessment under s 167 does not provide a means by which taxpayers may be relieved of their obligation to establish their actual taxable income. It is, rather, a means by which the Commissioner may impose a liability where the taxpayer has failed to furnish a return. 13 The primary judge considered (at R[9]) that the case was similar to Commissioner of Taxation v Dalco (1990) 168 CLR 614 in which the Court decided that the taxpayer does not discharge the burden of proving a s 167 assessment is excessive where he does not prove his taxable income but simply shows that the Commissioner had formed a judgment as to the amount of his taxable income on a wrong basis. 14 It is only in circumstances where the Commissioner has agreed to a process such as that adopted by Mr Rigoli that this would be permissible. As Brennan J noted in Dalco (at 624-626), absent an agreement confining the issues for the determination the Commissioner is entitled to rely upon any deficiency in proof of the excessiveness of the amount assessed. The taxpayer must establish not that the Commissioner's assessment was wrong but, rather, what the actual amount should be. Although the means of doing so will vary from case to case, it cannot be done, the primary judge said, by the AAT proceeding by way of a concession as to a critical part of the Commissioner's assessment. The primary judge also noted the observation in Ma v Federal Commissioner of Taxation (1992) 37 FCR 225 that the task for the taxpayer on objection is not to prove that the Commissioner erred but to prove, on the balance of probabilities, the correct amount upon which tax should be levied. 15 His Honour expressed the view (at R[15]) that the AAT had not treated the "concession" for Mr Rigoli as to the Commissioner's assessment of income to be an evidentiary matter about which he was giving the AAT a probative foundation on which factual conclusions could be based. Rather, the concession was understood as being the abandonment of that part of his objection against the Commissioner's assessment.

THE APPEAL 16 Some subsidiary issues aside, Mr Rigoli pursues the same substantive argument on this appeal. Mr Rigoli relies on the following grounds of appeal: 1. The learned trial Judge erred in holding, in respect of years of income ended 30 June 1994 to 30 June 2001, that [Mr Rigoli] failed to discharge his burden of proof that the assessments to him under s 167 of the [1936 Act] were excessive. 2. The learned trial Judge erred in holding that [Mr Rigoli] did not seek to prove that the amounts which had been assessed against him under s 167 as his taxable income "in fact" exceeded his actual taxable income by attempting to establish that the [Commissioner] had failed to make appropriate allowance for depreciation. 3. The learned trial Judge erred by failing to find that the review before the [AAT] was confined to specific points of law or fact on which the amounts of the assessments depended by: (a) the Commissioner's decisions disallowing [Mr Rigoli's] objection against him; and (b) evidence led before the [AAT] by the Commissioner in support of the amount of the assessments. 4. The learned trial Judge erred by failing to find that the [AAT] "stood in the shoes" of the [Commissioner] in its review of the [Commissioner's] judgment under s 167 as to the taxable income. 5. The learned trial Judge should have found that [Mr Rigoli] discharged his burden of proof before the [AAT] to establish that the assessments were excessive. 17 The central argument advanced for Mr Rigoli is that the primary judge mischaracterised both the substance and the effect of the "concession" made before the AAT. The decision of the AAT to accept the concession, it is said, engaged the power and authority conferred upon it by s 43(1) of the AAT Act. At the heart of this submission is that the AAT was exercising a merits review as distinct from judicial power. It was required to "step into the shoes" of the Commissioner in relation to the issue before it. Mr Rigoli argues that the decisions relied upon by the primary judge, particularly Gashi and Dalco, were confined to the process of judicial review by courts, whereas, in the AAT, Mr Rigoli's appeal involved a "merits review" of the Commissioner's decision. In exercising that role, the AAT had conferred upon it by s 43(1) of the AAT Act all the powers and discretions of the Commissioner (Shi v Migration Agents Registration Authority (2008) 235 CLR 286 per Kiefel J (at [134])). 18 This argument invites close examination of precisely what the AAT did and whether it did exercise any judgment in relation to proof by Mr Rigoli of his income, or whether it simply adopted the concession as an abandonment by Mr Rigoli of his challenge to the income component. 19 In this regard, Mr Rigoli contends that although the Commissioner was not obliged to call any evidence, he did go into evidence and that, properly understood, what the AAT was doing was accepting that evidence called by the Commissioner and adopted by Mr Rigoli in part. Mr Rigoli argues that the AAT knew what it was doing as it expressly referred to s 14ZZK. Properly understood therefore, he says, the concession was no more and no less than an adoption by Mr Rigoli as part of his case before the AAT of evidence led by the Commissioner. 20 This submission and those on which it rests highlight the very vice indicated in the cases relied upon by the primary judge (Gashi and Dalco). The onus was squarely on Mr Rigoli to prove the elements of his challenge in the AAT. The elements are identified by s 14ZZK and s 167. That burden was not discharged by the concession that was made. The process of making a partial concession was opposed by the Commissioner. The concession was not understood by the AAT to be Mr Rigoli adducing evidence. The AAT squarely concluded (at A[82]) that it understood counsel for Mr Rigoli to be saying that "… the assessable income element was no longer in dispute". Similarly (at A[83]), the AAT concluded that "Mr Rigoli's assessable income no longer [formed] part of the objection decision made by the Commissioner", "it was no longer an element of Mr Rigoli's proceeding under Pt IVC" and "the Commissioner's assessment of that particular must be taken to be correct irrespective of the basis upon which the Commissioner arrived at the amount of assessable income". To cite those paragraphs in full, the AAT said: [82] A review by this Tribunal, and an appeal to the Federal Court for that matter, is only concerned with an objection decision (leaving aside review of extension of time refusal decisions and Administrative Appeals Tribunal extension applications). Furthermore, as is set out in s. 14ZZK of the Administration Act, unless otherwise ordered by the Tribunal, an applicant is limited to the grounds stated in the taxation objection to which the decision relates. Although Mr Rigoli's objection was taken to be an objection against the Commissioner's default determination of his assessable income and deductions, at the commencement of this hearing, [counsel for Mr Rigoli] clearly submitted that the assessable income element was no longer in dispute. By that statement, I understood [counsel for Mr Rigoli] to be saying that Mr Rigoli no longer objected to that element of the Commissioner's assessment, or that the objection was withdrawn. [83] Therefore, not only did Mr Rigoli's assessable income no longer form part of the objection decision made by the Commissioner, but, because it formed one of the particulars of the assessment made by the Commissioner, and it was no longer an element of Mr Rigoli's proceeding under Part IVC of the Administration Act, the Commissioner's assessment of that particular must be taken to be correct irrespective of the basis upon which the Commissioner arrived at the amount of assessable income. It follows, in my opinion, that if Mr Rigoli is able to prove on the balance of probabilities that one or more of the deductions which he claimed and which were disallowed by the Commissioner, should have been allowed, he will necessarily prove that the amount of the Commissioner's assessment was excessive. 21 Otherwise, in its extensive reasons, the AAT dealt with a considerable volume of evidence and argument adduced over several days in relation to the claims for depreciation. 22 No finding was reached at any time by the AAT on the income component and no evidence was adduced on it by Mr Rigoli. It follows that the AAT did not form, and did not purport to form, "a judgment of an amount for the purposes of s 167" of the 1936 Act as Mr Rigoli contends. 23 That is sufficient to dispose of the appeal, but it is also clear that the evidence which was adduced for the Commissioner - which Mr Rigoli ultimately sought to embrace - did not purport to provide, and did not provide, the AAT with a probative foundation upon which factual conclusions could be reached. This is for the simple reason that it was expressly acknowledged that the methodology adopted by the expert engaged for the Commissioner was necessarily incomplete. It was inherently inaccurate because the partnership did not keep basic business records. As a typical example of this, in the expert's affidavit (at [58]) payments totalling over $2.5 million were identified as cash payments, but with no better description of the nature of the payments or to whom the cash payments were made. Notwithstanding this, the expert included the cash payments as "Payments" in his estimates of the partnership expenses. Mr Rigoli threw no light on the bare description of "cash payments" and did not attempt to give the AAT a probative foundation upon which factual conclusions could be based. 24 The reality is that it was, and remains, impossible for Mr Rigoli to do so. His own accountant whose report was found by the AAT to be unhelpful (A[107]) acknowledged the complete inadequacy of records in this evidentiary exchange extracted by the AAT (at A[105]): To your knowledge, for any of the years covered in this report, did Mr Rigoli or any of the other persons involved in the business maintain a cash receipts book?... For those periods, no. To your knowledge, did they maintain a cash payments book?... No. A complete set of invoices?... No. A complete set of receipts?... No. A complete set of bank statements?... No. A listing of assets acquired and disposed of from time to time?... I was not given any of that information. A listing of capital works undertaken from time to time?... For that period, no. To your knowledge for any of those years, did Mr Rigoli or any other person involved with the business prepare balance sheets?... No. Profit and loss statements?... No. Depreciation schedules?... No. And to your knowledge, for any of those years, did the partnership lodge - did Mr Rigoli or any other persons involved with the business lodge income tax returns in respect of the business?... For that period, no. So would you agree with me that the state of the business records do not reflect what normally happens in a business environment?... Yes, I agree. There was in fact, would you say, a complete lack of information?... It was a mess, yes. What would you say was missing?... Just basic business records. 25 The task Mr Rigoli sought to carry out was to simply identify some errors in the Commissioner's approach so that the matter might be remitted on the basis of those errors for reconsideration by the Commissioner. This is the very picking and choosing which the authorities make clear is impermissible. The taxpayer's choice is to pay tax according to the Commissioner's assessment under s 167 or to establish, as a matter of evidence, what was "the amount upon which … income tax ought to be levied". An intermediate course, which involves elements of the Commissioner's calculations and facts which the taxpayer chooses to lead in evidence, is not an available option. 26 The contention that the authorities should not apply to a merits review by the AAT as distinct from judicial review cannot be accepted. It is an argument which ignores or gives no effect to the fundamental provisions of s 14ZZK of the Administration Act. This issue was considered recently by the Full Court (Jessup, Jagot and Nicholas JJ) in Rawson Finances Pty Ltd v Federal Commissioner of Taxation (2013) 296 ALR 307. Jagot J, (with whom Nicholas J agreed), observed (at [89]-[90]) that s 14ZZK is a modification of the AAT Act because, but for s 14ZZK, a taxpayer would not have the burden of proving that an assessment is excessive. However, where s 14ZZK applies, the only state of satisfaction that the AAT is required to reach is whether, on the facts as found by the AAT, the taxpayer has proved that the assessment is excessive. If that state of satisfaction cannot be reached, the application for review must be dismissed. Her Honour went on to note that, as the authorities made clear, the taxpayer does not discharge this burden of proving that the assessment is excessive by demonstrating some error in the Commissioner's judgment under s 167 of the amount upon which income tax ought be levied (see Dalco per Brennan J (at 625) and Toohey J (at 634) and Gashi (at [66]-[67])). 27 The reasoning and conclusions of the primary judge were entirely correct. 28 For those reasons, the appeal will be dismissed.

CROSS-APPEAL 29 The point of the cross-appeal was succinct. Having upheld the Commissioner's appeal, the primary judge set aside the decision of the AAT and made an order remitting the proceeding to the AAT. The Commissioner contends that, having reached the correct conclusion on the appeal from the AAT, the primary judge should have ordered that the Commissioner's objection decisions be affirmed. As noted, given that during the years ended 30 June 1994 to 30 June 2001 neither Mr Rigoli nor the partnership kept business records, and Mr Rigoli did not lodge income tax returns until some years later, the Commissioner's assessments were issued in respect of the amount on which in his judgment income tax ought be levied pursuant to s 167 of the 1936 Act. Mr Rigoli demonstrated no capacity to discharge the burden under s 14ZZK. Accordingly, submits the Commissioner, the remittal of the proceeding to the AAT was futile. 30 The Commissioner contends that, although the provisions of s 44(4) and (5) of the AAT Act empower the Court to make such orders as it thinks appropriate by reason of its decision, the powers are not at large. The Commissioner relies on the following passage from Minister for Immigration and Ethnic Affairs v Gungor (1982) 42 ALR 209 per Sheppard J (at 220.7), (a passage subsequently approved of by Gleeson CJ, McHugh, Gummow and Hayne JJ in Minister for Immigration and Multicultural Affairs v Thiyagarajah (2000) 1999 CLR 343) where Sheppard J had said of s 44(4) and (5): It is, in my opinion, not correct to say that this court is by these provisions given wide powers to make such order as it thinks fit. Implicit in its powers are a number of restrictions. The appeal is expressly limited to error of law, which alleged error is the sole matter before this court and is the only subject matter of any order made consequent on the appeal. The order which this court can make after hearing the appeal is also similarly restricted to an order which is appropriate by reason of its decision. It follows that the only order which can be properly made is one the propriety of which is circumscribed by and necessary to reflect this court's view on the alleged or found error of law. To go further I would see as amounting to exceeding the jurisdiction of this court under this section. (emphasis added) 31 The point for the Commissioner is that in this case it was and remains impossible for the AAT to make, in relation to any year, findings about the amount of Mr Rigoli's taxable income because he has not proven his actual taxable income for any year or provided the AAT with any probative foundation on which factual conclusions could be based. Had the AAT decided the questions of law as they were determined by the primary judge, it would have affirmed the decisions under review because Mr Rigoli had failed to discharge the burden of proof that the assessments were excessive. By reason of s 14ZZK(b) of the Administration Act, no other course was open to the AAT. It would be manifestly futile, the Commissioner argues, for this matter to be remitted to the AAT. 32 For this argument to succeed, the Commissioner would have to satisfy this Court that the primary judge erred in the exercise of his discretion to remit the matter to the AAT. 33 Remitting the matter back to the AAT was expressly within the statutory discretion under s 44(5) of the AAT Act (see [8]). It appears that no submissions were made to the primary judge to the effect that doing so would be futile and that his Honour should simply uphold the Commissioner's assessment. In the absence of express submissions that the matter ought not be remitted for that reason, it is difficult to identify any error in the exercise of the discretion in the sense of House v The King (1936) 55 CLR 499 as explained by the plurality (at 504 - 505). 34 Doubtless because the question of remittal was not raised before the primary judge, his Honour did not consider the practicalities of the course which he ordered. Now that the question has been raised, and debated, on the cross-appeal, and while we would not interfere with the exercise of his Honour's discretion, we do propose to introduce a limitation on the nature of the proceeding which the AAT will then conduct. As noted by the Full Court in Repatriation Commission v Nation (1995) 57 FCR 25 (at 34), in circumstances where no condition is imposed as provided for in s 44(4) and s 44(5) of the AAT Act (to the effect that the AAT should not receive further evidence), the whole of the matter would be remitted to the AAT without limitation as to the presentation of further evidence or as to the scope of the matter to be dealt with. In Peacock v Repatriation Commission (2007) 161 FCR 256 it was also made clear (by Downes, Lander and Buchanan JJ) that an unqualified remittal, even for a matter to be determined according to law, would require the whole of the matter to be heard and decided again, and all questions of law and fact relevant to the claim to be considered and determined. As the Full Court noted in Peacock it would be a rare case in which a limitation on the remittal could be inferred simply from the reasons for judgment, when the terms of the remittal were unqualified. Thus the Full Court recommended that it may be appropriate, in any case in which ambiguity may arise, for the Court to specify whether it is remitting the whole case or only part, and, if the latter, which part. As the Court noted, parties should routinely put submissions on the topic. 35 In our view, it is desirable, consistent with the observations in Peacock (see the discussion from [14] to [24]), to impose a condition in the present case that, upon the return of the proceeding to the AAT, and unless proper cause is shown, no further evidence be adduced.

CONCLUSION 36 Accordingly, the following orders will be made: 1. The appeal be dismissed with costs. 2. The orders made by Pagone J on 7 August 2013 be supplemented by the addition of the following order: 4. In the Administrative Appeals Tribunal, subject to any order of the Tribunal for proper cause, the remitted proceeding be heard and determined on the evidence which was before the Tribunal in the proceeding which resulted in its decision of 1 November 2012. 3. Otherwise, the cross-appeal be dismissed. 4. There be no order as to the costs of the cross-appeal. I certify that the preceding thirty-six (36) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justices Edmonds, Jessup and McKerracher.

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