Case: Sullivan v Department of Transport (1978) 20 ALR 323
Outcome: applied
On or about 3 April 2006 the appellant wrote to the Tribunal requesting written reasons for the decision of Senior Member McCabe given 27 October 2005. Written reasons for decision were made available on 13 April 2006. REASONS OF THE TRIBUNAL 4 Senior Member McCabe indicated in par 6 of his Reasons for Decision that the principles which should be applied in respect of an application for reinstatement pursuant to s 42A(8) and (9) are those suggested by Manoli v Secretary to the Department of Social Security (1994) 35 ALD 133. In summary, the Tribunal must consider: &#8226; the conduct of the appellant &#8226; any prejudice (most obviously prejudice to the respondent) &#8226; the merits of the substantive case and &#8226; in considering these matters, the overriding obligation to do what is fair in the circumstances. 5 Applying that approach, the Tribunal: 1. Did not accept that the appellant and Thiel Partners had not received notice of the hearing listed for 2 September 2005. 2. Did not accept that the appellant had a good excuse for failing to attend the original hearing on 2 September 2005 at which the case was dismissed. 3. Found that the interests of the respondent were not prejudiced by the delay attending the review, however some prejudice to the interests of the respondent could accrue if the appellant's claim was not prosecuted expeditiously. 4. Found that the appellant's interests would be prejudiced if the Tribunal did not allow reinstatement because it would be unable to continue its challenge to the decision under review. 5. Was of the view that the merits of the case had not been substantiated beyond an assertion by the appellant that it had good prospects of success. 6. Found that the failure of counsel appearing for the appellant at the hearing to explain the discrepancy between the contentions in the outline and the facts as they emerged at the hearing 'must count against the appellant' and that the appellant was treating the Tribunal with 'indifference'. 7. Found that 'the excuse [the appellant] offered for its earlier failure to attend turned out to be untrue'. 8. Was not minded to grant an adjournment to allow the appellant to provide material given the delays that had already occurred. 6 In conclusion, the Tribunal held at par 12: 'The original application was dismissed after the appellant or its representative failed to attend a directions hearing. Its reinstatement application did not address one of the important issues before the Tribunal at the hearing (the merits of the case) and the excuse it offered for its earlier failure to attend turned out to be untrue. It is fair to all the parties in all the circumstances that the application for reinstatement be refused.' APPEAL 7 A party to a proceeding before the Tribunal may appeal to the Federal Court from a decision of the Tribunal only on questions of law: s 44 AAT Act. 8 The grounds of appeal in this case are: 1. Whether the Tribunal erred in law in refusing an application by the appellant for an adjournment to place further affidavit material before the Tribunal and therefore denying the appellant opportunity to properly prosecute the application for reinstatement: a. by not giving the appellant the opportunity to explain the circumstances of its non-appearance at a hearing held 2 September 2005 at which the Tribunal directed that the application be dismissed pursuant to s 42A(2) of the AAT Act b. by failing to consider the prejudice to the appellant in the circumstances and that any prejudice to the respondent could be remedied by the operation of the Taxation Administration Act 1953 (Cth). 2. Whether the Tribunal erred in law in respect of the order made 27 October 2005, and the dismissal of the appellant's application to reinstate the application for review: a. by not giving the appellant the opportunity to explain the circumstances of its non-appearance at a hearing held 2 September 2005 at which the Tribunal directed that the application be dismissed pursuant to s 42A(2) of the AAT Act b. by failing to consider the prejudice to the appellant in the circumstances and that any prejudice to the respondent could be remedied by the operation of the Taxation Administration Act 1953 (Cth). 3. Whether the Tribunal erred in law in respect to the orders made 27 October 2005, in that the Tribunal has made a decision that is unreasonable. SUBMISSIONS OF THE APPELLANT 9 The appellant submits that the crucial error of the Tribunal appears at pars 7, 8, 9, 10, 11, 12 of the Written Reasons for Oral Decision of the Tribunal. In summary the appellant submits that: &#8226; The Tribunal failed to give the appellant a reasonable opportunity to be heard in relation to the email from Mr Summerville. The appellant relied on s 39 AAT Act which provides that a Tribunal shall ensure that every party to a proceeding before the Tribunal is given a reasonable opportunity to present his or her case. &#8226; The Tribunal has the power to grant an adjournment at any time and that the efficient running of the court should not prevail over the injustice of preventing the appellant from responding to an adverse inference. &#8226; The email that was presented to the appellant at the application for reinstatement was information that was adverse to the interests of the appellant, and was used by the Tribunal to make very serious findings against the appellant going to its credit and integrity. &#8226; There may be several reasonable explanations that the appellant can offer in respect of the email. &#8226; Although the Tribunal has a duty to discharge its obligations in an expeditious manner (s 33(1) AAT Act), the needs of case management do not derogate from the requirements of procedural fairness: State of Queensland v JL Holdings Pty Ltd [1997] HCA 1 ; (1997) 189 CLR 146. &#8226; Refusal to grant an adjournment can constitute a failure to give a party to proceedings the opportunity of adequately presenting its case: Sullivan v Department of Transport (1978) 20 ALR 323. &#8226; The Tribunal wrongly denied the appellant the opportunity to fully present its case, and denied the appellant procedural fairness. &#8226; The decision of 27 October 2005 and the reasons given on 13 April 2006 in relation to reinstatement were unreasonable in that the reference to the adjournment was in relation to material supporting the merits of the case, and not in response to the email evidence that related to the conduct of the appellant. While the Tribunal must be minded to delays and prejudice caused by delay, it must not subordinate that interest to the need for procedural fairness. &#8226; The Tribunal acted in error by reaching conclusions which were not open to it, and without any reasonable or logical basis, and committed manifest Wednesbury unreasonableness. RESPONDENT'S SUBMISSIONS 10 In summary, the respondent submits that: &#8226; Procedural fairness only requires that a party be given a reasonable opportunity to present its case, not that a Tribunal ensure that a party takes the best advantage of the opportunity to which it is entitled: Sullivan v Department of Transport (1978) 20 ALR 323. &#8226; It is relevant to enquire whether the party or its legal representative should have reasonably apprehended that the issue was or might become a live issue ( Re Building Workers' Industrial Union (Aust); Ex parte Gallagher [1988] HCA 4 ; (1988) 76 ALR 353 at 357) and in this matter the appellant did not file any material with the Tribunal in support of its application for reinstatement. &#8226; It was clear that the appellant was aware of the issue of its non-appearance at the directions hearing on 2 September 2005, that this was a live issue, and that a reasonable explanation and evidence of the reasonable explanation for this non-attendance would be required to be put before the Tribunal. &#8226; The only evidence before the Tribunal at the reinstatement hearing was the email from Mr Summerville to Ms Dimitrijevski. Although, as the appellant submits, there may be several reasonable explanations that the appellant could offer in respect of the document, the appropriate time to provide any explanation was at the reinstatement hearing. &#8226; There was no denial of procedural fairness by the Tribunal. &#8226; In this case it was open on the material before it for the Tribunal to make the findings of fact that it made, and the decision of the Tribunal was not unreasonable in the Wednesbury sense and therefore no error of law was made out. ISSUES BEFORE THIS COURT 11 There are essentially two issues of law which arise in respect of the appellant's notice of appeal, namely whether the appellant has been denied procedural fairness by the Tribunal and whether the decision of the Tribunal was unreasonable in the Wednesbury sense. 12 The application by the Tribunal of the principles articulated in Manoli was not in dispute. 13 I propose to deal with each issue in turn. WAS THE APPELLANT DENIED PROCEDURAL FAIRNESS BY THE TRIBUNAL? 14 The appellant has strongly urged the Court, both in written and oral submissions, to allow the appeal on the basis that it was denied procedural fairness by the Tribunal, both in relation to the Tribunal refusing an adjournment to allow Counsel for the appellant to take instructions in relation to the email produced at the Tribunal hearing, and in relation to the decision of the Tribunal to refuse to reinstate the matter under s 42A AAT Act. 15 The appellant in this case is subject to a significant administrative penalty. It is entitled to dispute that penalty, and to receive a fair hearing in so doing. 16 There is no question that, as explained by Mason J in Kioa v West [1985] HCA 81 ; (1985) 159 CLR 550 at 584, there is a common law duty to act fairly, in the sense of according procedural fairness, in the making of administrative decisions which affect rights, interests and legitimate expectations. In the context of decisions for which provision is made by statute, his Honour went on at 585: 'In this respect the expression "procedural fairness" more aptly conveys the notion of a flexible obligation to adopt fair procedures which are appropriate and adapted to the circumstances of the particular case. The statutory power must be exercised fairly, ie in accordance with procedures that are fair to the individual considered in the light of the statutory requirements, the interests of the individual and the interests and purposes, whether public or private, which the statute seeks to advance or protect or permits to be taken into account as legitimate considerations...' 17 Brennan J in Kioa discussed the principles concerning a party having an opportunity to deal with matters relevant to its case as follows: (at 628) 'A person whose interests are likely to be affected by an interest of power must be given an opportunity to deal with relevant matters adverse to his interests which the repository of the power proposes to take into account in deciding upon its exercise .... The person whose interests are likely to be affected does not have to be given an opportunity to comment on every adverse piece of information, irrespective of its credibility, relevance or significance.... (629) Nevertheless in the ordinary case where no problem of confidentiality arises an opportunity should be given to deal with adverse information that is credible, relevant and significant to the decision to be made...' 18 These principles were affirmed recently in different contexts by the High Court in Applicant VEAL of 2002 v MIMIA [2005] HCA 72 ; (2005) 222 ALR 411 and by the Full Court of the Federal Court in NARV v MIMIA [2003] FCAFC 262 ; (2003) 133 FCR 89. 19 In this case the reason that the appellant's substantive application before the Tribunal was dismissed under s 42A(2) AAT Act on 2 September 2005 was that the appellant did not appear at the hearing on that day. Section 42A(2) provides: '(2) If a party to a proceeding before the Tribunal in respect of an application for the review of a decision (not being the person who made the decision) fails either to appear in person or to appear by a representative at a directions hearing, or an alternative dispute resolution process under Division 3, held in relation to the application, or at the hearing of the proceeding, the Tribunal may: (a) if the person who failed to appear is the applicant--dismiss the application without proceeding to review the decision; or (b) in any other case--direct that the person who failed to appear shall cease to be a party to the proceeding.' 20 There does not appear to be any dispute that the Tribunal was empowered to dismiss the appellant's application on 2 September 2005 in view of the appellant's non-appearance at that hearing. 21 It therefore follows that it was obvious that issues and evidence relevant to the non-appearance of the appellant on that day would have been critical at the reinstatement hearing of 27 October 2005, and that ensuring that all appropriate inquiries had been made by the appellant, and that their Counsel was properly briefed as to this issue, would be important in the conduct of that hearing. 22 As stated by Mason J in Kioa , it is important to consider the issues of procedural fairness as appropriate and adapted to the circumstances of the particular case. 23 Here, the Tribunal on 27 October 2005 had before it a case where, notwithstanding that the case was being prosecuted by the appellant: 1. Over the course of eight months, the appellant had a history of failing to attend hearings. Indeed out of four hearings listed, the appellant attended only one, and another was vacated at its request. 2. The appellant failed to comply with deadlines, including those which it had requested. 3. The notice of the hearing of the substantive matter was sent by the Tribunal to Mr Summerville, the nominated representative of the appellant, in accordance with the AAT Act. Section 68AA(1) provides, so far as relevant: 'For the purposes of this Act: (a) a document, statement, notice or other notification is taken to be given to a person if it is sent by post to whichever of the following addresses is applicable: (i) if the document, statement, notice or other notification relates to a proceeding and the person has provided an address to which documents in relation the proceeding may be sent that address ... ... (b) a document, statement, notice or other notification so sent by post is taken to have been given, unless the contrary is proved, at the time when the document, statement, notice or other notification would have been delivered in the ordinary course of post.' 4. There does not appear to be any dispute that, at the time, Mr Summerville was properly served with the relevant notice of listing by the Tribunal, or that, as a result for the purposes of s 68AA(1), the appellant was properly served with that notice. 5. It is very clear that critical issues for the appellant in the reinstatement proceedings on 27 October 2005 were the merits of the substantive application which had been dismissed on 2 September 2005, and why the appellant had not appeared at the hearing of 2 September 2005. 6. In relation to the merits of the substantive case the appellant submitted before the Senior Member at the hearing on 27 October 2005 that: &#8226; its case had 'strong merits and a good chance of success' &#8226; it intended to show that, on a proper consideration of all the facts, it was not liable for the GST in respect of which it had been assessed &#8226; it would show that it was not liable for the GST and penalties imposed by the respondent by means of substantial documentary evidence &#8226; it would show that the monies received by it in respect of which GST and penalties had been levied had been refunded in total. 7. Other than those assertions, no material was provided to substantiate the claim of the appellant that its case had 'strong merits and a good chance of success'. 8. In relation to its failure to appear at the hearing of 2 September 2005, the appellant submitted in writing before the Senior Member at the hearing of 27 October 2005 that: &#8226; the appellant, and, to the best of the appellant's knowledge, Mr Summerville, did not receive any listing for the hearing held by the Tribunal on 2 September 2005 &#8226; in the event that Mr Summerville did receive the listing for 2 September 2005, the appellant was not informed of the listing by Mr Summerville &#8226; the appellant believed that the reason that neither it nor, to the best of its belief, Mr Summerville, did not receive any listing for the hearing arose from the change of representation in the matter &#8226; as the appellant had not received a listing for the hearing, the appellant was unable to arrange for itself or a representative of itself to attend the hearing &#8226; if the appellant had received a listing of the 2 September 2005 hearing, the appellant would have attended or arranged for a representative to attend the hearing, or otherwise have informed the Tribunal. 9. However, notwithstanding these submissions, the respondent was able, seemingly without difficulty, having inquired of Mr Summerville, to produce evidence that Mr Summerville had forwarded the notice of listing of 2 September 2005 to the appellant, and had indicated that he intended send on the original notice. 24 In view of the history of this matter, that Counsel for the appellant was taken by surprise by the email was extraordinary. It was particularly astonishing in light of the facts that: &#8226; presumably, in advance of the hearing of 27 October 2005 the appellant could have asked Mr Summerville whether he had received the notice of listing, as the respondent did &#8226; although the issue of the appellant's non-attendance on 2 September 2005 was decisive in the dismissal of their application on that date, it appeared that the appellant had not taken that elementary step as its Counsel was unprepared for that evidence to be produced &#8226; the appellant for unknown reasons was prepared to make submissions that to the best of its knowledge neither it nor Mr Summerville had received the notice of listing, without apparently ascertaining from Mr Summerville whether that was the case. 25 As Deane J observed in Sullivan at 343: '(I)t is important to remember that the relevant duty of the Tribunal is to ensure that a party is given a reasonable opportunity to present his case. Neither the Act nor the common law imposes upon the Tribunal the impossible task of ensuring that a party takes the best advantage of the opportunity to which he is entitled.' 26 In my view, the Tribunal was entitled to take into consideration not only the approach the appellant had taken to the case as a whole, but also what appeared to be the approach of the appellant to the case before it on 27 October 2005. While as a general rule it may be appropriate, on the production of new evidence which surprises one of the parties, for the Tribunal to permit an adjournment for the party to have the opportunity take instructions or consider its position, in the circumstances it is difficult to find otherwise than that the appellant had been provided with a reasonable opportunity to present its case.