FEDERAL COURT OF AUSTRALIA

Tey v Commissioner of Taxation [2007] FCA 920

APPEAL – PROCEDURE – application for extension of time to file and serve notice of appeal – unsatisfactory explanation for delay – proposed appeal without merit.

APPEAL – COSTS – costs follow event - discretion

Taxation Administration Act 1953 (Cth), s 298-20   

Hughes v Western Australian Cricket Assn Inc (1986) ATPR 40-748

Hunter Valley Developments Pty Ltd v Cohen (1984) 3 FCR 344

Jess v Scott (1986) 12 FCR 187

Parker v The Queen [2002] FCAFC 133   

KOK YONG TEY v COMMISSIONER OF TAXATION

WAD24 OF 2007

GILMOUR J

18 JUNE 2007

PERTH

REASONS FOR JUDGMENT

1                     The applicant, Kok Yong Tey, seeks an extension of time to file and serve a notice of appeal, pursuant to O 52 r 15(2) of the Federal Court Rules.  The proposed appeal is from a judgment of Lander J made on 4 September 2006.  The application for leave is dated 31 January 2007.  Accordingly, the applicant is in delay in a period of a little more than four months.  The application is supported by an affidavit sworn by the applicant on 31 January 2007.  The applicant deposes that she has been, and is still acting in person, has no legal training, qualification or skills and is unable to afford the cost of instructing solicitors and a barrister to act for her in relation to the appeal.  The explanation for the lengthy delay is that she was engaged in seeking to resolve the issue of costs ordered against her in her unsuccessful appeal before Lander J.  She states that the respondent’s solicitor wrote to her by letter dated 1 November 2006 asking her to pay the costs and in respect of which she sought advice from a barrister regarding the amount of such costs.  She then deposes that she received a letter from this Court dated 24 November 2006 informing her about the amount of costs to be allowed, as to which she sought and obtained advice.  As a result of the advice given to her she decided not to seek review of the amount of costs awarded.  Beyond that there is no further explanation for the delay. 

2                     Her affidavit contains a draft Notice of Appeal to which I refer in detail later in these reasons.

3                     The application is opposed by the respondent and supported by an affidavit sworn by Fiona Anne Humphries on 16 February 2007. 

PENALTY DECISION BY THE RESPONDENT

4                     The present application has lengthy antecedents in relation to the taxation affairs of the applicant.  She failed to lodge by the required dates income tax returns for the tax years ending 30 June 1999-2003, inclusive.  This resulted in the respondent making a determination under s 298-20 of Schedule 1 of the Taxation Administration Act 1953 (Cth) (the Act) that a penalty amount of $550 for each of the 2001 and 2003 income years (“the income years”) be imposed on the applicant for failing to lodge income tax returns for the income years on time.  The total penalty of $1,100 was payable by 29 December 2004.  On 23 December 2004 the applicant wrote to the respondent requesting remission of the penalties.  On 24 February 2005 the respondent advised the applicant of its decision not to remit the penalty amount on the basis that the applicant had still not lodged the income tax returns for the income years (“the penalty decision”). 

PENALTY REMISSION DECISION BY THE RESPONDENT

5                     On 22 April 2005 the applicant lodged a Notice of Objection against the penalty decision and sought further time to forward grounds of objection, but on 31 May 2005 this was disallowed by the respondent on the basis that the applicant had still not lodged returns for the income years.  The respondent then gave the applicant until 27 June 2005 to lodge the returns.  However, they were not lodged by that date and on 28 June 2005 the respondent disallowed the applicant’s objection against the penalty decision. 

DECISION OF ADMINISTRATIVE APPEALS TRIBUNAL

6                     The applicant then made an application to the Administrative Appeals Tribunal (the Tribunal) for review of the penalty remission decision under Pt IVC of the Act.  Following a hearing on 18 January 2006 the Tribunal, on 13 February 2006, affirmed the penalty remission decision.  The Tribunal, having considered the applicant’s evidence, concluded that the decision of the respondent was justified and that the applicant had not advanced any grounds which would justify any remission of the penalties imposed by the respondent. 

APPEAL AGAINST TRIBUNAL DECISION

7                     On 15 February 2006 the applicant filed a notice of appeal in this Court against the whole of the decision of the Tribunal. 

8                     The appeal was heard before Lander J in this Court on 4 September 2006 and his Honour handed down an ex tempore judgment by which he dismissed the appeal and ordered that the applicant pay the respondent’s costs to be taxed. 

9                     The questions of law raised for consideration before his Honour were:

‘(a)      The application of s 286 of the Taxation Administration Act Schedule 1; and

(b)               the application under s 298-20 of the Taxation Administration Act Schedule;

(c)               see enclosed decision.’

10                  The grounds in support were stated to be:

‘(a)      The Administrative Appeals Tribunal’s admitted information supplied by the Respondent as evidence objected by the Applicant.  Evidence that were (sic) not relevant.

(b)               The Tribunal erred and mislead (sic) by information/evidence provided by the Respondent.

(c)        The decision of the Tribunal was SUBJECTIVE AND UNJUST

(d)       The decision of the Tribunal made no mention of substantial evidence provided by the Applicant.

(e)        There was no tax payable by the Applicant for years 2001 & 2003.’

11                  His Honour found that the notice of appeal and the particulars to it disclosed no question of law and held that the appeal was incompetent for that reason [18].  As his Honour had earlier correctly stated, an appeal to this Court lies only on a question of law under s 44 of the Administrative Appeals Tribunal Act 1975 (Cth). [1].

THE PARTIES SUBMISSIONS

12                  The applicant sought to introduce a new ground of appeal, which she did not articulate with any clarity.  However it concerned an allegation by Mrs Tey that certain documents which were before the Tribunal did not find themselves before his Honour below. 

13                  It is not apparent whether this was a ground raised before his Honour Justice Lander.  Consideration of his reasons would suggest that it was not.  However I am prepared to assume, for present purposes, that it was raised before his Honour below, because the grounds before his Honour were so broadly stated.  In any event, no objection was taken to this new ground by counsel for the respondent.   

14                  The applicant filed a further affidavit sworn 20 March 2007 in support of this new ground.  It raised the question of a brochure which as was later explained to me, was an Australian Taxation Office TAXPACK 2001 (“TAXPACK 2001”).  It had formed part of the material in respect of which she gave evidence before the AAT on 18 January 2006.  She deposed that she had returned this to Mr Maloney, an officer employed within the Australian Taxation Office (“ATO”).  He had cross-examined Mrs Tey in the Tribunal and in particular concerning the TAXPACK 2001.  The applicant says she did not keep a copy of the TAXPACK 2001 and despite her best efforts she has not been able to obtain another copy having, she said, approached both the ATO and the State Library without success. 

15                  On 11 April 2007 I adjourned the motion to 9 May in order to enable the applicant to make further enquiries in order to obtain a copy of the TAXPACK 2001, to which she had referred in her affidavit.   

16                  The respondent filed a further affidavit sworn by Fiona Ann Humphries on 1 May 2007.  It is to the following effect.  Ms Humphries is a solicitor employed in the Perth office of the Australian Government Solicitor (“AGS”) and has the care and conduct of this matter on behalf of the respondent.  She deposes to correspondence concerning the applicant’s attempts to obtain the brochure to which I have referred.  On 12 April 2007 the applicant wrote to the AGS requesting the original of TAXPACK 2001 which, according to the applicant, was the only “brochure” in her possession at the time of the entire hearing on 18 January 2006 before the Tribunal.  She stated that to the best of her memory the TAXPACK 2001 was packaged with additional extra pages on top of it.  The applicant’s request was forwarded to Mr Frank Maloney on 13 April 2007.  Mr Maloney forwarded to Ms Humphries by letter dated 23 April 2007 a computer print-out of the TAXPACK 2001.  Mr Maloney advised that this was clearly the Tax Pack that the applicant was shown in Tribunal.  On 24 April 2007 Ms Humphries contacted the applicant by telephone to advise her that the AGS had received this TAXPACK 2001 from Mr Maloney and advised her that, contrary to the claim in her letter dated 12 April 2007, there were no additional pages on top of the TAXPACK 2001.  She advised the applicant that this copy of the TAXPACK 2001 was available for her collection and that an original of the TAXPACK 2001 which was shown to her during the Tribunal proceedings would be available for her inspection at the AGS’s offices.  The applicant replied that this was not the correct version of the TAXPACK 2001 and requested that she be supplied with the correct version with the extra pages.  She also advised that she would not collect the TAXPACK 2001 from the AGS’s offices.  On 26 April 2007 Ms Humphries sent the computer print-out of the TAXPACK 2001 to the applicant under cover of a letter.  

17                  The matter came on before me again on 9 May 2007 at which time I gave consideration to further affidavits filed and served by the applicant.  The first, sworn by the applicant on 7 May 2007, duplicates some of the correspondence contained in the affidavit of Ms Humphries sworn 1 May 2007.  In addition it contains correspondence from the applicant addressed to the AGS being a letter dated 23 April 2007 and two letters dated 27 April 2007.  The substance of these letters is to raise matters concerning the TAXPACK 2001 and her communications in relation to it with Ms Humphries.  The correspondence provides no assistance to the resolution of the matter before me.  Her affidavit also sets out under [6] in response to para 6 of the affidavit of Ms Humphries sworn 1 May 2007 her version of the relevant part of the conversation which she had with Ms Humphries on 24 April 2007, explaining in effect why she did not attend at Ms Humphries office to collect a copy of the TAXPACK 2001.

18                  I have also considered an affidavit filed by the applicant and sworn by Claire J Hielkeme sworn 3 May 2007.  Ms Hielkeme is a certified practising accountant and deposes that in the course of her “doing Tax Help at the Citizens Advice Bureau in Fremantle she became aware of the 2001 TAXPACK”.  She deposes that additional literature was supplied with that pack and annexes a copy document headed “Update TAXPACK 2001 – A Message from the Commissioner of Taxation”.  This indeed contains a message from the Commissioner of Taxation advising as to important tax changes which were announced in the 2001 Federal Budget affecting senior Australians, Commonwealth taxable pension, allowance or payment recipients and former prisoners of war and their spouses.  The message advised that if any person was affected by these changes and needed to complete a tax return then they should use TAXPACK 2001 with the “Update” as a result of which they would be covered by the Commissioner’s TAXPACK 2001 guarantee and that they could be assured of receiving the benefits to which they are entitled.  The applicant, in the course of her submissions, did not explain why this document is relevant nor is it obvious from reading it as to why it is relevant to any possible error of law made by the Tribunal or any appealable error made by his Honour Justice Lander.  

19                  During the course of the hearing I received into evidence an actual copy of the TAXPACK 2001.  The applicant having considered this document acknowledged that she had been shown this during the Tribunal hearing and also at the offices of the respondent in Northbridge Perth shortly after the first directions hearing in this matter.  She maintained before me, however, that there were additional pages accompanying the TAXPACK 2001 which were not put before Lander J.  

20                  Ms Humphries affidavit sworn 1 May 2007 [5] encloses a letter to her from Mr Frank Maloney who questioned the applicant in the course of the Tribunal hearing.  In the letter to Ms Humphries from him dated 23 April 2007 he attached a copy of the TAXPACK 2001 which he said had been referred to the applicant in her cross-examination in the Tribunal and which was the subject of evidence at pp 104-105 of the transcript from the Tribunal hearing forming part of the appeal papers before Lander J.  He stated that this was the TAXPACK that Mrs Tey was shown.  It is a copy of the original TAXPACK 2001 which I received into evidence. 

21                  At p 104 of the transcript to which I have referred the following exchange occurred:

‘MR MALONEY:       Can I just show you the 2001 TAXPACK?  I would like to refer to something on page 2.  Can you turn to page 2, firstly, of the 2001 TAXPACK?  And there under the – where I’ve highlighted, it says:

            Other reasons.  You need to lodge if any of the following applied to you.  You carried on a business. 

Now, it doesn’t say anything about whether the Tax Office owes you money or not, does it? –

MRS TEY:       Mr Maloney, reason 1, you pay tax during 2000 and 2001, there was no tax payable by me during that, so you …

MR SWEIDAN (the Tribunal Member)  Please answer the question, Mrs Tey, please answer Mr Maloney’s question? ---

MRS TEY:       Yes.

MR MALONEY:         So you carried on a business, didn’t you?

MRS TEY:       Yes, I carried – which – which – which – who do you refer to “carry on the business”?

MR MALONEY:         It says – haven’t I highlighted:

            You need to lodge if any of the following apply to you.  You carried on a business.

See the highlighted part?

MRS TEY:       Yes.

MR MALONEY:         And in the 2003 TAXPACK, on page 2 as well.  The same things are highlighted.  You need to lodge if any of the following apply to you? ---

MRS TEY:       Yes.

MR MALONEY:         So you did carry on a business.  Is that right?  In both of those years?

MRS TEY:       Yes.  In a way.  But the business in 2001 was – it was closed.  There was – on – in May 2001 the Travel Compensation Fund actually terminated Skyline Travel Service.

MR MALONEY:         But during the year ended 30 June 2001, you did carry on a business? 

MRS TEY:       Yes.  But ---

Mr MALONEY:          Yes, thankyou.

22                  Mrs Tey was given a right of reply by Member Sweidan in relation to the questions put to her by Mr Maloney.  These are dealt with relevantly at pp 114 and 115 of the transcript.  It is evident from a consideration of those pages that when, in effect, Member Sweidan reiterated the questions which Mr Maloney had put to the applicant these culminated once more in her acknowledging that she had carried on a business during, relevantly, the year ended June 2001.  The relevant page (p 2) from the TAXPACK 2001 which was put to the applicant was admitted into evidence as Exhibit R3 and this was before his Honour Lander J in the appeal papers before him at p 90.  Importantly, nowhere in the transcript can I discern that any other pages were put to the applicant. 

23                  Nonetheless I invited the applicant to advise me as to what was the substance of the content of the “missing pages” to which she persistently referred and in what way this was relevant to her application for an extension of time.  She informed me that the substance was to be found in the third paragraph of a letter dated 12 April 2007 from her addressed to the respondent and copied to my associate.   The relevant paragraph is as follows:

‘I request the original of the above TAXPACK2001 which was the only brochure in my possession at the time of the entire hearing on 18 January 2006.  To the best of my memory, the TAXPACK2001 was packaged with additional extra pages on top of it.  It appears that these were extra information to the tax payer ‘Do you have to lodge a tax return’ before opening up a page of the TAXPACK 2001 brochure.  As much as I could remember the colouring and the setup of the pages were different from that of page 2 of the 2001 TAXPACK shown as R3 as page 90 of the Appeal Papers.  Reason 1 was repeated on the extra page, but appears to be in bigger letterings.  However, there was one page of the extra pages mentioned as above which I could remember very clearly, titled ‘Carry on business’ or ‘Carrying on business’ not ‘you carried on a business’.  The title was written in a print which instantly caught one’s eyes.  These were as much as I could remember of the brochure.’

THE APPLICABLE LEGAL PRINCIPLES

24                  Order 52 r 15(2) provides that the Court or a Judge may, at any time, for special reasons, give leave to file and serve a notice of appeal.  In Jess v Scott (1986) 12 FCR 187 at 195 the Full Court stated:

What is needed to justify an extension of time is indicated in r 15(2) by the words “for special reasons”.  It is that there be shown a special reason why the appeal should be permitted to proceed, though filed after the expiry of 21 days.  In that context, the expression “special reasons” is intended to distinguish the case from the usual course according to which the time is 21 days.  But it may be so distinguished (not necessarily will, for the rule gives a discretion) wherever the Court sees a ground which does justify departure from the general rule in the particular case.  Such a ground is a special reason because it takes the case out of the ordinary.  We do not think the use of the expression “for special reasons” implies something narrower than this.

25                  The relevant criteria in considering such an application were as set out by the Full Court of this Court in Parker v The Queen [2002] FCAFC 133, at [6], adopting what had been set out in Hunter Valley Developments Pty Ltd v Cohen (1984) 3 FCR 344 at 348-9, as follows:

(a)        Applications for an extension of time are not to be granted unless it is proper to do so; the legislated time limits are not to be ignored;

(b)       There must be some acceptable explanation for the delay;

(c)        Any prejudice to the respondent in defending proceedings caused by the delay is a material factor militating against the grant of an extension;

(d)       The mere absence of prejudice to the respondent is not enough to justify the grant of an extension; and

(e)        The merits of the substantial application have to be taken into account in considering whether an extension is to be granted.

Even where special reasons are made out, there is an overriding discretion in the Court whether to grant or refuse the extension of time sought. 

REASONING

26                  There is no prejudice to the respondent were an extension to be granted and indeed none was contended for.  However, as I have referred to above, the mere absence of prejudice to the respondent is not enough to justify the grant of an extension. 

27                  I do not regard the applicant’s explanation concerning the lengthy delay as acceptable.  As the respondent has submitted, there is no foundation to the applicant’s core explanation which was that her time had been taken up with resolving the costs issue in relation to the appeal before Lander J as a result of which the time for lodging a notice of appeal had elapsed.  According to the applicant’s affidavit the issue of payment of costs in respect of which she sought advice from a barrister emerged when she received a letter from the respondent’s solicitor dated 1 November 2006 asking her to pay the costs ordered by Lander J on 4 September 2006.  The last date for the filing of a notice of appeal, pursuant to O 52 r 15(1)(a), was 25 September 2006.  Accordingly by the time the respondent’s solicitor wrote to the applicant by letter dated 1 November 2006 the period for filing the notice of appeal had expired and the applicant was, even at that time, some five weeks in delay.  No explanation was proffered for this period of delay.  Accordingly I am not satisfied as to the applicant’s explanation as to the delay.  In any event I find that there is no prospect of success in her proposed appeal.

28                  I have considered the merits of the proposed appeal.  The grounds are set out in the draft notice of appeal annexed to the affidavit of the applicant to which I have referred.  The grounds are as follows:

(a)        His Honour did not weight (sic) or sufficient weight to the knowledge of the Respondent about my taxation liability.

(b)       His Honour ought to have ruled that my appeal ought to have been upheld because I held the reasonably formed belief that I was not liable to file a taxation return for the years in dispute having regard to my total income and tax credits.  The facts were that there were tax refunds due to me.

(c)        His Honour ought to have considered my difficult financial situation before exercising his discretion to award costs against me.

(d)       His Honour, further was in error in awarding costs against me because to do so stifles the opportunity of citizens, on their own, to challenge the decisions of government.

(e)        The financial resources of the respondent are such that it suffers no loss by not receiving costs.

29                  As I have indicated, Lander J dismissed the appeal before him on the grounds that no error of law was disclosed in the grounds of appeal and the particulars of these. 

30                  Grounds (a) and (b) do not disclose any appealable error of law on his Honour’s part in so finding. 

31                  Grounds (c)-(e) relate to the question of costs.  His Honour awarded costs against the present applicant who was the appellant before him.  In the absence of special circumstances costs follow the event and any costs order should reflect the degree of success attained: Hughes v Western Australian Cricket Assn Inc (1986) ATPR 40-748 at 48,136.  In the appeal the present applicant was wholly unsuccessful and in my opinion there were no special circumstances to justify departure from the general rule that costs follow the event: none of these grounds disclose a basis upon which it could be demonstrated that his Honour’s discretion on the question of costs miscarried.  

32                  Finally, as to the new ground raised, the applicant has not satisfied me that there are any missing pages from or relating to the Tax Pack as deposed to her in affidavit.  As I have pointed out there is no reference to additional pages in the transcript of the Tribunal hearing or in the reasons of Lander J.  Furthermore, and in any event, although invited to do so, the applicant has not been able to identify any error of law to which the content of these alleged missing pages might go.  The passage extracted above from the applicant’s letter of 12 April 2007 and relied upon by her does not disclose any relevant error on the part of the Tribunal even if I were to accept, which I do not, that there were such missing pages, or that their alleged content was relevantly before the Tribunal.

33                  Accordingly, I am of the opinion that the applicant’s proposed appeal has no prospect of success.  She has not established that special reasons exist for the grant of an extension of time within which to appeal.

34                  For those reasons I am not prepared to exercise my discretion to extend the time for the applicant to file and serve a notice of appeal.  Her application will be dismissed.  I will hear the parties on the question of costs.  

Associate:

Dated:         18 June 2007