Sage v Commissioner of Taxation

Federal Court of Australia|2023-10-19|Before: Mr P, Colvin J

The application for review is dismissed.
The applicant pay the first respondents' costs of and incidental to the application to be taxed if not agreed. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

COLVIN J: 1 In 2016, after conducting an audit, the Commissioner of Taxation issued notices of assessment and penalties in respect of alleged income tax liabilities of Mr Antony Sage for the income years 2006 to 2013. Mr Sage objected to the assessments. His objection was disallowed. In July 2020, Mr Sage commenced proceedings in the Administrative Appeals Tribunal seeking a review of the objection decision. 2 Before the Tribunal, Mr Sage sought production by the Commissioner to the Tribunal of two categories of documents: (a) external legal advice that had been provided to the Commissioner when consideration was being given to whether to issue the assessments (legal advice); and (b) information provided to the Commissioner by the members of the Criminal Asset Confiscation Taskforce (as well as any documents recording the authorisation of the provision of those documents to the Commissioner) (CACT documents). 3 The Tribunal declined to require the production of the legal advice or the CACT documents. As to category (a), the Tribunal was not satisfied that the legal advice documents may be relevant to the review. As to category (b), the Tribunal was of the view that the CACT documents 'may be relevant' but that 'more is required' before they can be produced and accessed by Mr Sage. 4 Mr Sage now seeks review of the Tribunal's decision concerning the documents. As to category (a), he says that the Tribunal erred by proceeding on the basis of an erroneous view of the law as to what is relevant for the purposes of the Tribunal's power to produce documents. Mr Sage contends that by reason of the decision in Australian Prudential Regulatory Authority v VBN [2005] FCA 1868 (VBN), the Tribunal was bound to have approached the application on the basis that external legal advice received by the Commissioner in making the decision under review was relevant to the review. The error is said to have been a failure to apply VBN in deciding whether the legal advice was relevant. The error is said to be jurisdictional, alternatively an error of law in the making of a decision that was reviewable under the Administrative Decisions (Judicial Review) Act 1977 (Cth). 5 As to category (b), Mr Sage says that the same error was made. Although the documents are not said to contain external legal advice provided to the Commissioner, they are said to contain information that might be relevant to whether privilege from production to Mr Sage might be able to be maintained. On that basis, the reasoning in VBN is said to apply. Mr Sage also says that the Tribunal erred in law in failing to consider the category (b) documents as a class. He says that the Tribunal having concluded that individual documents 'might be useful, for sure' gave effect to a legally erroneous view that the exercise of the power to require the documents to be produced required him to demonstrate that each individual document in a class is relevant. 6 Taking account of the way in which the submissions for Mr Sage were advanced orally, the Tribunal's power to require the Commissioner to produce relevant documents is said by him to extend to relevance in a particular sense. Significantly, the external legal advice is not said to be relevant in the sense that it is material which might form part of the evidentiary foundation for a factual finding by the Tribunal concerning the 'taxable facts' that may bear upon whether Mr Sage is liable to pay the income tax and penalties for which he has been assessed by the Commissioner. Rather, the legal advice is said to be relevant in the same way that it was relevant for the Commissioner when making the decision to assess Mr Sage for income tax and penalties and the decision to disallow Mr Sage's objections to the income tax assessments; namely, it is relevant because it contains external legal advice as to legal issues that affect whether Mr Sage is liable to pay income tax and penalties. It is said that it is relevant for the Tribunal as an administrative decision-maker exercising jurisdiction within an administrative continuum to have before it the same legal advice that was available to the Commissioner when it made the assessments and refused to allow the objection. 7 In effect, the contention advanced is that the advice as to matters of law, though not binding in any way, was 'relevant' for the purposes of the Tribunal's power to require documents to be produced by the Tribunal as the person making the decision under review because it concerned legal matters that the Tribunal would be called upon to decide. In consequence, so the submission went, the category (b) documents that might bear upon whether privilege in the documents could be maintained as a basis for the advice not being produced to Mr Sage were also 'relevant'. 8 As has been noted, there is an additional point advanced by Mr Sage as to category (b) which concerns whether the Tribunal misunderstood the nature of its power to require a class of documents to be produced. 9 The application for review in this Court was advanced as a claim of alleged jurisdictional error and in the alternative under the Administrative Decisions (Judicial Review) Act. However, it was accepted in oral submissions for Mr Sage that if the claim based upon alleged jurisdictional error was rejected then the same logic would mean that the statutory review claim must fail.

Outcome 10 For the following reasons, the claim of jurisdictional error must be rejected. There was no error by the Tribunal as to the extent or nature of its power to require the Commissioner to produce documents. There was also no reviewable error concerning the class of documents point. In consequence, the application must be dismissed.

Issues 11 The following issues arise for determination: (1) Precisely what was the nature of the power to produce documents that the Tribunal was invited by Mr Sage to exercise? (2) What view as to relevance was applied by the Tribunal in deciding not to require the Commissioner to produce the documents? (3) Did the Tribunal misconceive the extent of its power to require the Commissioner to produce external legal advice in deciding not to require the Commissioner to produce the documents in categories (a) and (b)? (4) Did the Tribunal misconceive the nature of its power to require the Commissioner to produce documents in deciding not to require the Commissioner to produce the documents in category (b) despite finding some individual documents 'might be useful, for sure'?

Issue (1): Precisely what was the nature of the power to produce documents that the Tribunal was invited by Mr Sage to exercise?

The relevant provisions of the Administrative Appeals Tribunal Act 12 The Tribunal is established as an independent statutory tribunal by the Administrative Appeals Tribunal Act 1975 (Cth) (AAT Act). It exercises an administrative review jurisdiction: s 25. Except where altered by some other statute, the Tribunal's jurisdiction is to 'stand in the shoes of the decision-maker whose decision is under review so as to determine for itself on the material before it the decision which can, and which it considers should, be made' (emphasis added): Frugtniet v Australian Securities and Investments Commission [2019] HCA 16; (2019) 266 CLR 250 at [51]. In doing so, the Tribunal exercises the same power or powers as the person who made the decision under review and must address the same question as was addressed by that person. However, it makes its own decision in place of the original decision. The Tribunal is not concerned with identifying whether there was error in any aspect of the way the original decision was made. 13 In carrying out its functions, the Tribunal must pursue the overall objective of providing a mechanism of review that: (a) is accessible; and (b) is fair, just, economical, informal and quick; and (c) is proportionate to the importance and complexity of the matter; and (d) promotes public trust and confidence in the decision-making of the Tribunal. (s 2A) 14 Those appointed to the Tribunal must be judges, legal practitioners or have special knowledge or skills relevant to the duties of being a member of the Tribunal: s 7. The Tribunal sits in divisions, one of which is the 'Taxation and Commercial Division': s 17A(f)). Before assigning a member to that division, the Minister must consult the Treasurer: s 17H. Therefore, Tribunal members exercising the review jurisdiction conferred by the AAT Act may be expected to have the competence to themselves understand the relevant legal issues. Of course, the Tribunal may receive submissions as to relevant law. However, unlike a primary decision-maker who may obtain external advice, the Tribunal itself ascertains and applies the law. It does not instruct external lawyers to provide advice as to the law which it is to apply in making its decisions nor as to the extent of its own authority to make a decision in a particular case. 15 Subject to the AAT Act and any applicable regulations, the procedure of the Tribunal is within the discretion of the Tribunal: s 33(1)(a). The procedure is to be conducted with as little formality and technicality, and with as much expedition, as the relevant legislation and a proper consideration of the matters before the Tribunal permits: s 33(1)(b). In the proceeding before the Tribunal, the person who made the decision must assist the Tribunal to achieve the overall objective of the AAT Act: s 33(1AA). 16 In the usual case, the person who made the decision under review by the Tribunal must lodge with the Tribunal: (a) a statement setting out the material factual findings or other material on which those findings were based; (b) reasons for decision; and (c) every other document 'relevant to the review of the decision by the Tribunal': s 37(1). It may be noted that the requirement is not expressed in terms of every other document relevant to the decision under review nor to every other document that was before the person who made the decision under review. Rather, the provision refers to relevance to the review of the decision to be carried out by the Tribunal. That is to say, the focus is upon what is relevant to the task to be undertaken by the Tribunal in making its own decision standing in the shoes of the person who made the decision under review. 17 In addition to the above requirement, where the Tribunal is of the opinion that 'particular other documents or that other documents included in a particular class of documents may be relevant to the review of the decision by the Tribunal', the Tribunal may give a notice in writing to that effect to the person who made the decision to produce those documents to the Tribunal (and the person is required to comply with the notice): s 37(2). Again, it may be noted that the relevance requirement is expressed in terms of relevance to the review to be undertaken by the Tribunal. 18 The provisions in s 37 concerning the production of factual findings, reasons for decision and documents have effect 'notwithstanding any rule of law relating to privilege or the public interest in relation to the production of documents': s 37(3). Of course, it is an entirely separate question as to whether by reason of privilege or the public interest, access by interested persons to documents produced to the Tribunal may be restricted or refused. 19 The requirements expressed in s 37 are ongoing over the course of the proceedings in the Tribunal: s 38AA. 20 The Tribunal also has a power to summons a person to produce any document or other thing specified in the summons: s 40A(1)(b). There is no express test as to relevance in relation to a summons. Before the Tribunal, Mr Sage also relied upon the power to summons.

The modifying provisions of the Taxation Administration Act 21 In the case of objections to taxation assessments by the Commissioner, the AAT Act applies in the manner modified by Division 4 of Part IVC of the Taxation Administration Act 1953 (Cth). 22 Relevantly for present purposes, the Taxation Administration Act modifies the power of the Tribunal under s 37(1) of the AAT Act. First, it provides that the Commissioner is to produce to the Tribunal 'every other document that is in the Commissioner's possession or under the Commissioner's control and is considered by the Commissioner to be necessary to the review of the objection decision concerned': s 14ZZF(1)(v) (emphasis added). A list of those documents must also be provided: s 14ZZF(1)(vi). It may be noted that these provisions entrust to the Commissioner the task of forming the view as to which documents are necessary to the review of the objection decision. I note that there seems to be some infelicity in the opening words of s 14ZZF(1)(a). Read literally it incorrectly describes the terms of the requirement in s 37(1) of the AAT Act. I read the provision as articulating an adjustment to the requirement expressed in s 37 of the AAT Act as to what must be lodged. The provision would not make sense otherwise. Plainly, it is modifying the requirement in s 37(1) of the AAT Act as to what is to be lodged. 23 Further, the Explanatory Memorandum for the Taxation Laws Amendment Act (No 3) 1991 (Cth) shows that there was a deliberate change to the requirement from one of relevance to one of necessity. 24 Second, s 14ZZF(1)(b) provides that the power under s 37(2) of the AAT Act 'to cause a notice to be served containing a statement and imposing a requirement on a person were instead': (i) a power to make such a statement and impose such a requirement orally at a conference held in accordance with subsection 34(1) of the AAT Act; and (ii) a power, by such a notice, to make such a statement and impose a requirement that the person lodge with the Tribunal, within the time specified in the notice, a copy of each of those other documents that is in the person's possession or under the person's control; and (iii) a power, by such a notice, to make such a statement and impose a requirement that the person lodge with the Tribunal, within the time specified in the notice, a copy of a list of the documents in the person's possession or under the person's control considered by the person to be relevant to the review of the objection decision concerned. 25 The 'statement' that may be contained in a notice under s 37(2) of the AAT Act is a statement that the Tribunal is of the opinion 'that particular other documents or that other documents included in a particular class of documents may be relevant to the review decision by the Tribunal'. As has been observed above, if a notice is given by the Tribunal with a statement of that opinion then the person to whom the notice is given shall comply with the notice. 26 Turning then to the terms of s 14ZZF(1)(b) (as quoted above). 27 As to (i), the reference to s 34(1) of the AAT Act appears to be an error and seems to have been intended to refer to an instance where a direction is made under s 34A(1) that a matter before the Tribunal be referred to an alternative dispute resolution process. In that case, where the Tribunal has itself formed an opinion that a document (or class of documents) may be relevant to the review of the decision by the Tribunal then it can impose a requirement to produce and may do so orally. 28 As to (ii), it appears to simply restate the power under s 37(2) of the AAT Act. Significantly, it is expressed in terms of relevance in the opinion of the Tribunal. 29 As to (iii), it appears to contemplate a requirement to provide a list of documents that the person who made the decision that is under review (the Commissioner) considers to be relevant. This seem to be a power to require compliance with the obligation under s 14ZZF(1)(vi) in respect of particular documents or a class of documents but to do so by reference to a standard of relevance rather than necessity. 30 It may be noted that s 14ZZF(3) states: The imposition of a requirement covered by subparagraph (1)(b)(iii) does not prevent the subsequent imposition of a requirement covered by subparagraph (1)(b)(ii). 31 The precise ambit of s 14ZZF(1) was not addressed by the parties. They approached the matter on the basis that it imposed the same obligation as s 37(2) of the AAT Act. As that approach appears to be supported by the terms of s 14ZZF(1)(b)(ii), I will proceed on that basis. 32 Finally, s 14ZZF(2) provides that s 14ZZF(1)(b) does not affect any powers that the Tribunal has apart from that paragraph. Therefore, the power to summons also applied to an application to the Tribunal to review a decision by the Commissioner to disallow an objection to an assessment.

Conclusion as to the precise nature of the power 33 Mr Sage advanced his application before the Tribunal on the basis of s 37(2) (a notice requiring production) and alternatively upon s 40A (a summons to produce documents). The grounds of the review application to this Court referred to both provisions. However, it was accepted in oral argument that s 40A was not broader than s 37(2) and that if the application failed insofar as it concerned the power under s 37(2) then it also failed insofar as it concerned s 40A. Accordingly, it is not necessary to say anything more about s 40A of the AAT Act. 34 For present purposes, it is sufficient to conclude that the power the Tribunal was asked by Mr Sage to exercise was a power that arose if the Tribunal was of the opinion that particular other documents or other documents included in a particular class may be relevant to the review of the decision by the Tribunal. 35 It may be accepted that the power was conditioned by a requirement of reasonableness. Therefore, any opinion formed by the Tribunal had to be one that was within the bounds of reasonableness. However, the parties approached the matter on the basis that the opinion also needed to be formed on a correct legal understanding of what may be 'relevant to the review of the decision'. They both dealt with the matter on the basis that an error by the Tribunal as to what was meant by those words that affected the way it dealt with the application by Mr Sage concerning the production of documents by the Commissioner would be a form of jurisdictional error, at least if its consequence was that the Tribunal misunderstood the extent of its power. 36 It seems to me that, on its proper construction, s 37(2) of the AAT Act (as modified to apply to an application to review a decision on a taxation objection by s 14ZZF(1)(b)(ii)) may entrust to the Tribunal a power that depends only upon the existence of an opinion on the part of the Tribunal as to what was relevant to the review of the decision that was formed reasonably, genuinely and for a proper purpose. If that is so, then there could be no jurisdictional error of the kind alleged by Mr Sage in the present case. 37 However, in a number of decisions, the Court has entertained judicial review in respect of the exercise of the Tribunal's power to require documents to be produced on the basis of arguments to the effect that the Tribunal misapprehended the nature of its power or otherwise made a decision that was reviewable for jurisdictional error for reasons other than a claim that the required opinion was not formed: see, for example, VBN; Commissioner of Taxation v ACN 154 520 199 Pty Ltd (in liq) (formerly EBS & Associates Pty Ltd) [2018] FCA 1140 (EBS); and Hawkins v Commissioner of Taxation [2017] FCA 1247. It also appears to have been the basis upon which the Full Court proceeded in Kennedy v Administrative Appeals Tribunal [2008] FCAFC 124; (2008) 168 FCR 566 at [28]-[29] (noting the explanation of the nature of those proceedings by Griffiths J in Douglass v Administrative Appeals Tribunal [2017] FCA 1105 at [23]-[27]). I will proceed accordingly.

Issue (2): What view as to relevance was applied by the Tribunal in deciding not to require the Commissioner to produce the documents? 38 Before the Tribunal, the competing submissions of the parties focussed upon the decisions in VBN and EBS. It will be necessary to refer to those authorities in dealing with the way Mr Sage puts his present application. However, it is not the correctness of the reasoning pathway of the Tribunal as to those authorities that matters. Rather, the issue before the Court concerns whether the Tribunal was correct in its understanding of the nature and extent of its power to require the Commissioner to produce documents, it is the view of the Tribunal as to those matters that is of significance for present purposes. 39 The learned Deputy President of the Tribunal correctly identified relevance as the 'touchstone' in deciding whether to require the documents to be produced by the Commissioner and expressed the question for determination as being whether the Tribunal was satisfied that the documents may be relevant to the review by the Tribunal (para 22, Tribunal's emphasis). The Deputy President went on to describe that as relevance 'in the sense [that] the documents may shed light on any question or issue the Tribunal must address in the course of its review'. 40 The Deputy President found that the opinions of external counsel (sought by category (a)) could not be relevant to the objective nature of the enquiry task that he was required to undertake (para 45). He reasoned (correctly) that it was for Mr Sage to establish the taxable facts and opinions as to the interpretation of the law were not relevant to the making of findings as to those facts. Section 14ZZK provides that the applicant for review of an objection decision has the burden of proving that the assessment is excessive or otherwise incorrect and what the assessment should have been. 41 As to category (a), the Tribunal concluded that the Tribunal's review was to be undertaken de novo having regard to the material properly before the Tribunal and the opinions of counsel are properly introduced by way of submissions at the appropriate time (para 46). 42 As to category (b), the Tribunal began in the following way (para 48): The applicant argued that the … documents might be relevant because they may throw light on whether the legal opinions are privileged, or whether that privilege can be maintained or has been waived. As I understand it, that submission rests in part on the possibility the … documents were mishandled in defiance of the statutory regime governing the dissemination of confidential materials. It seems to me that question is (for now, at least) moot given I have decided against making a direction under s 37(2) and the request to issue a summons in respect of the opinions has been refused. 43 Therefore, that part of the reasons as to category (b) flows from the view as to relevance applied to category (a). 44 The Tribunal then dealt with what it described as a 'further basis' on which the category (b) documents 'might be disclosable' (para 49). It concerned the way the CACT documents were said by Mr Sage to have been deployed by the Commissioner in the conduct of the audit, in the determination of fraud or evasion on which the assessments were based and in the objection decision. This was said by Mr Sage to demonstrate that the documents were relevant to the review by the Tribunal. As to this submission, the Tribunal concluded (para 51): The applicant has not satisfied me the documents referred to in paragraph [3.3] [being some of the other documents] may be relevant in the sense explained earlier [that is, relevant to objective task of finding taxable facts]. While I accept those documents formed part of the Commissioner's deliberations because they related to matters discussed in the audit report, it is not clear those matters in particular are relevant to the current dispute even allowing for the fact the applicant is being put to proof. At this stage, it has not been explained (even allowing for the more relaxed standard that applies at this early stage in the proceedings) how those documents might shed light on matters before me. 45 The above analysis is a within jurisdiction assessment of relevance that is not said to have been infected by any erroneous view of the nature of the power to require the Commissioner to produce documents. 46 The Tribunal then referred to two other references to documents which Mr Sage sought to have produced which it said 'are also problematic' (para 52). It said that the categories are broad. It then said: A direction in those terms would require the Commissioner to produce all of the documents received from [CACT] without establishing how they might shed light on the matters before me. Individual documents might be useful, for sure, but it seems to me the request is too broad and speculative. (emphasis added) 47 The Tribunal then went on to deal with other documents sought as part of category (b). 48 The application to this Court focussed upon the documents the subject of the finding quoted above at [46]. For Mr Sage the following written submission was advanced concerning the Tribunal's approach to those documents (para 55): Having concluded that individual documents in the class of … documents referenced in rows 1 and 2 of the table at [6] of the Final Audit Report … 'might be useful for sure', the Deputy President erred by refusing production because the request for those documents was 'too broad and speculative' … That conclusion underscores the Deputy President's misconstruction, and failure to have regard to, the text of s 37(2). The text of s 37(2) expressly refers to 'other documents included in a particular class of documents'. There is no onus to prove that each document in the class is relevant. In the present matter, the 'particular class of documents' are the disseminations concerning the Applicant. The 'other documents' included in that particular class are the disseminations received by the Commissioner from the CACT … The Commissioner has adduced no evidence that production would be oppressive. (original emphasis) 49 The above submission raises a separate complaint. It concerns whether the Tribunal made a finding that some of the documents in a particular class were relevant. On the basis of a submission that such a finding was made, it is said that there was legal error in not recognising that was a sufficient basis to require the class of documents to be produced. 50 It can be seen that the Tribunal did not apply the view of relevance that is advanced by Mr Sage. Instead, it approached the application for production on the basis that the power to require production concerned documents that might be material that would bear upon the factual determinations that the Tribunal would have to make in deciding, for itself, whether Mr Sage's objection should be upheld.

Issue (3): Did the Tribunal misconceive the extent of its power to require the Commissioner to produce external legal advice in deciding not to require the Commissioner to produce the documents in categories (a) and (b)? 51 The case for Mr Sage relied upon the reasoning of Ryan J in VBN. It was said to be directly on point. VBN was advanced as the basis for the submission that external legal advice provided to the original decision maker 'may be relevant to the decision by the Tribunal' for the purposes of s 37(2) as applied to the review of a decision by the Commissioner disallowing an objection. 52 In VBN, the Tribunal had required external legal advices that were before the original decision maker (the Australian Prudential Regulation Authority or APRA) to be produced to the Tribunal. It did so on the basis that the advices were relevant to the decision and were required to be produced to the Tribunal by the terms of s 37(1)(b) of the AAT Act (which provides for the documents to be lodged with the Tribunal by the original decision-maker in the event of an application to the Tribunal for review). It made a direction to produce the legal advices as a means of requiring compliance with what it considered to be the extent of the obligation under s 37(1)(b). Therefore, strictly speaking, VBN did not concern an order for production under s 37(2). 53 In reasons for making the direction requiring APRA to produce the external legal advices, the Tribunal had reasoned that if they are relevant to the interpretation of the applicable law then they are relevant to the review of the decision to be made by the Tribunal under that applicable law: see VBN at [11]. However, it determined that it could not order that the advices be provided to other parties to the Tribunal proceedings unless legal professional privilege had been waived: see VBN at [12]. It contemplated a separate consideration of that question. 54 APRA sought review of the Tribunal's decision on the basis that the Tribunal had exceeded its power under s 37 of the AAT Act: see VBN at [18]. It advanced a construction of s 37(1)(b) to the effect that it 'requires a decision-maker to produce to the Tribunal and the other parties to the proceeding documents which contain factual or other material to which the Tribunal could properly have regard in arriving at the correct or preferable decision'. It submitted that 'expressions of opinion on questions of law are as irrelevant and inadmissible before the tribunal as oral opinion or expert evidence by lawyers, however eminent': VBN at [20]. 55 As to the point of construction of the words 'relevant to the review' as found in s 37(1)(b) of the AAT Act, Ryan J reasoned as follows at [32]: I am prepared to assume that a document of this kind which bears on one of the issues which the original decision-maker had to resolve in arriving at the decision and which was considered by the decision-maker is relevant in this sense. That is so, whether the original decision-maker acted on, or adopted, the advice or opinion or rejected it. However, the reach of the subsection does not extend to expressions of legal opinion or advice which may have been available to the decision-maker but were not considered in the course of arriving at the impugned decision. To hold otherwise would be to oblige the decision-maker to search out and lodge with the tribunal and supply to the other parties copies of every document containing a pertinent expression of legal opinion in the decision-maker's possession or power, even if the existence of the document had not been present to the mind of the decision-maker when making the decision under review. That obligation would extend to legal texts or journals which had been available to the decision-maker but not consulted by him or her. 56 The reference to 'a document of this kind' appears to be a reference to all documents containing expressions of legal advice or opinion that were in APRA's possession or power when it lodged all relevant documents with the Tribunal: see [31]. The reference to 'relevant in this sense' appears to be a reference to the sense in which 'relevance' is used in s 37(1)(b). 57 Respectfully, it does not appear that his Honour dealt with the submission presented by APRA as to the proper construction of s 37(1)(b). The submission advanced for APRA concerned the ambit of the concept of relevance, particularly relevance to the review of the decision by the Tribunal. APRA's contention was to the effect that it was probative relevance to the factual matters in issue before the Tribunal that was the meaning of relevance in s 37(1)(b). The answer to that contention is assumed rather than reasoned. 58 His Honour then found that s 37(1)(b) was not a source of power to make the direction that the Tribunal had purported to make. Rather, his Honour found that it was s 37(2) that remained 'the sole relevant source of power whereby the tribunal can compel a decision-maker to lodge with the tribunal' documents that may be relevant: at [35]-[36]. On that basis, the direction was found to be beyond power. 59 His Honour went on to find that the Tribunal would retain a discretion in respect of legal advice produced to the Tribunal to consider whether any and what documents lodged with it should be provided to the applicant and parties joined in the proceedings before the Tribunal: at [46]. This engaged with the focus in the case which was upon whether APRA's privilege might be abrogated: see [8]-[12], [40], [45]. 60 In the conclusion to the reasons at [58], Ryan J said: As noted earlier in these reasons, the tribunal retains the facility, pursuant to s 37(2), to require APRA to lodge with the tribunal copies of legal advices which may be relevant to the review. In case any difficulty arises in the application of these reasons to the framing of any such a requirement, I shall reserve liberty to apply. 61 Therefore, the language of the overall conclusion in VBN supports the case advanced by Mr Sage. However, strictly speaking, the case was not concerned with s 37(2) and the reasoning in that case did not address the contention advanced by APRA (which is substantially the same contention advanced by the Commissioner in the present case). The ratio decidendi of VBN is confined to the point that there was no power to require production on the basis of a finding of a failure to comply with s 37(1)(b). 62 The Commissioner relies on the subsequent decision by Bromwich J in EBS. In that case, the Commissioner sought judicial review of a decision by the Tribunal to direct the production by the Commissioner to the Tribunal of any internal legal advice produced by the Australian Taxation Office in relation to a contention that GST does not apply to supplies of gold bullion by EBS. 63 In EBS there was a concession that 'legal professional privilege would attach to any external legal advice, and thus that the Tribunal would not order its disclosure': see EBS at [23]. The case focussed upon internal legal advice by officers of the Australian Taxation Office. 64 One of the contentions advanced for the Commissioner in EBS was that internal legal advice cannot be relevant. The submission to that effect was recorded by Bromwich J at [29] as follows: The Commissioner submits that, given that the Tribunal stands in the shoes of the Commissioner for the purposes of a s 14ZZK(b)(ii) merits review of the decision not to remit the penalties imposed, and must, when considering that decision, determine the questions of fact and law for itself, the historical legal opinions of ATO officers are and must be irrelevant. On that argument, any such view expressed cannot be of any moment to the Tribunal's decision. Accordingly, the Commissioner submits, it was not open to the Tribunal to form the opinion that any internal legal advices on this topic may be relevant. 65 This is the same point advanced by APRA in VBN. Though directed to internal legal advice, the substance of the submission is that legal advice must be irrelevant to the decision to be made by the Tribunal because it must forms its own view on the law. 66 As to the contention advanced by the Commissioner in EBS, Bromwich J reasoned as follows: (1) The 'live question' was whether the Tribunal's opinion that the legal advices sought to be produced may be relevant was an opinion that 'was capable of being, and was, in fact, formed, by reference to a correct understanding of the law applicable to the merits review process' (at [46]). (2) Given the nature of the particular issue to be determined by the Tribunal (which required an objective test) it was to be resolved on the basis of the individual facts and circumstances and not by reference to the subjective views expressed in the advices of others, 'even if those advices were written by ATO officers' (at [47]-[49]). (3) The purported opinion as to what was relevant 'was formed by reference to an incorrect understanding of the meaning of the law in question' (at [52]). (4) 'As such, it was not an opinion that was open to be formed, and at law cannot exist so as to have triggered the power to give a direction under s 37(2). The decision to give the direction was made without jurisdiction being engaged and therefore constituted a jurisdictional error' (at [52]). 67 On that basis, the direction by the Tribunal under s 37(2) was set aside. 68 It was submitted for Mr Sage that the reasoning in EBS was to be distinguished on the basis that it concerned internal legal advice (in circumstances where a direction as to external legal advice was not sought). However, as I have explained, the reasoning did not depend upon the fact that the advice was internal advice. Rather, it depended upon the fact that the Tribunal had formed a legally erroneous view as to what was relevant for the purposes of s 37(2). It determined that what is required by s 37(2) is a focus upon those documents that are relevant to the decision to be made by the Tribunal in the sense that the documents contain material that might be the foundation for evidentiary findings as to matters that may provide the foundation for the Tribunal's own independent decision as to how the statutory decision-making power should be exercised. 69 For the following reasons, the approach in EBS is to be preferred to that in VBN. 70 The reasoning in VBN failed to address the contention that was advanced by APRA in that case as to the meaning of the terminology used in s 37. In EBS, in substance, the same contention was advanced and was considered and accepted. 71 Section 37 refers to relevance to the review of the decision by the original decision-maker that is to be undertaken by the Tribunal. That terminology requires particular regard to the nature of that review and the materials that may be relevant to undertaking that task as well as the manner in which that task is to be undertaken and by whom. Regard to the specialist and independent nature of the Tribunal together with the fact that it is required to make its own decision afresh inform what is relevant to the review that it is required to conduct. The Tribunal does not obtain legal advice from others nor could it undertake its statutory task by simply giving effect to such advice. It must form its own view. Indeed, there would be problems for its independence and the fairness of its procedure if it was to adopt or be guided by the contents of undisclosed legal advice that had been obtained by the original decision maker as to matters of law bearing upon the decision to be made by the Tribunal. 72 These matters provide strong contextual support for the conclusion that documents that contain legal advice provided to the original decision-maker as to the relevant law to be applied or the scope of the power to be exercised are not relevant to the review for the purposes of s 37(2) (which is applied in the same terms to an objection decision by s 14ZZF(1)(b)(ii) of the Taxation Administration Act). To be relevant for such purposes, documents must contain material which bears upon the material findings to be made by the Tribunal as to the foundation for its decision. The precise ambit of that material will depend upon the nature of the statutory decision-making power in the particular case. However, legal advice provided to, available to or acted upon by the original decision-maker as to the law to be applied in making the decision or as to the scope of the decision-making power will not be relevant to undertaking that task. 73 It follows that the Tribunal did not misconceive the extent of its power to require the Commissioner to produce its legal advice. There was no error as to category (a) or (b) in that regard.

Issue (4): Did the Tribunal misconceive the nature of its power to require the Commissioner to produce documents in deciding not to require the Commissioner to produce the documents in category (b) despite finding some individual documents 'might be useful, for sure'? 74 The remaining point is a narrow one. It turns upon whether the Tribunal found that some of the documents in one of the classes of documents sought as part of category (b) were relevant. 75 On my reading of the relevant passage from the Tribunal's reasons (para 52, as quoted above), it made no such finding. The Deputy President found expressly that the categories of certain of the CACT documents were too broad to be able to say 'how they might shed light on the matters before me'. When the Deputy President went on to say that individual documents might be useful, that was simply to acknowledge that possibility which remained no more than that in the eyes of the Tribunal. The statement to that effect did not detract from the express finding that it had not been shown how they might shed light. This reading of the Tribunal's reasons is reinforced by the fact that the Tribunal did not foreclose the possibility that certain of the CACT documents 'may yet be relevant to a direction under s 37(2) relating to the handful of primary documents that may be relevant to the review' (para 56). In effect, it left upon the possibility of making such an order if the way in which limited documents may be relevant is demonstrated by Mr Sage. 76 Therefore, the foundation for the contention has not been established. The Tribunal did not find that some of the documents in the class may be relevant. Rather it found that the request was too broad and speculative to able to conclude, at that time, that any of them may be relevant.

Final orders and costs 77 For the reasons that have been given, the grounds of review have not been established and the application for review for alleged jurisdictional error must be dismissed. 78 By reason of the concession by Mr Sage, it follows from the above reasoning that the application for review under the Administrative Decisions (Judicial Review) Act must also be dismissed. 79 However, as to whether the decision by the Tribunal not to require production of documents was a decision that might be reviewed under the Administrative Decisions (Judicial Review) Act, it was only to the extent that the Tribunal made a decision that would impinge upon the right to preserve privilege that it could be reviewable under that legislation: see the analysis by Griffiths J in Douglass v Administrative Appeals Tribunal at [19]-[21]; and the reasoning of Banks-Smith J in Hutchison v Australian Securities and Investments Commission [2018] FCA 1002. See also, Yao v Secretary, Department of Education, Employment and Workplace Relations [2010] FCA 18 at [18]-[19] (Perram J). The Tribunal's decision did not so impinge. 80 Mr Sage relied upon the fact that in Hawkins v Commissioner of Taxation [2019] FCA 627 Logan J had dealt with an application for review of a decision by the Tribunal concerning the production of documents that sought to invoke the Court's jurisdiction under the Administrative Decisions (Judicial Review) Act. However, in reasons dismissing the application, his Honour did not give any imprimatur to that aspect of the application which also sought review for alleged jurisdictional error. The case provided no foundation for the submission that was advanced. 81 For these additional reasons, it is clear that the application under the Administrative Decisions (Judicial Review) Act was misconceived because the Tribunal's decision was not reviewable under that Act. 82 The Commissioner advanced submissions to the effect that if the claims by Mr Sage were upheld then it would be appropriate to refuse relief on discretionary grounds. As the application has been unsuccessful it is not necessary to consider those submissions. 83 It was accepted that costs should follow the event. There should be an order for costs in favour of the Commissioner. I certify that the preceding eighty-three (83) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Colvin.

Tax Administration Act 1953(Cth)

Administrative Appeals Tribunal Act 1975(Cth)ss 2A, 7, 17A, 17H, 25, 33, 34, 34A, 37, 38AA, 40A

Taxation Administration Act 1953(Cth)ss 14ZZF, 14ZZK, Division

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Judgment (12 paragraphs)

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Legislation Cited (4)

Cases Cited (11)