FEDERAL COURT OF AUSTRALIA Douglass v Administrative Appeals Tribunal [2017] FCA 1105 Application for extension of time to appeal from: Administrative Appeals Tribunal (oral decision, Ms G Lazanas, 12 May 2017) File number: NSD 1069 of 2017 Judge: GRIFFITHS J Date of judgment: 18 September 2017 Catchwords: TAXATION – interlocutory application for an extension of time from a decision of the Administrative Appeals Tribunal to commence an appeal – whether a decision to decline to require documents under s 37(2)of the AAT Act is a final decision or an interlocutory decision – whether proposed appeal would be incompetent under s 44(1) of the AAT Act Held: interlocutory application dismissed, with costs Legislation: Administrative Appeals Tribunal Act 1975 (Cth) ss 37, 44, 36D Administrative Decisions (Judicial Review) Act 1977 (Cth) Income Tax Assessment Act 1997 (Cth) s 87.18 Judiciary Act 1903 (Cth) s 39B Taxation Administration Act 1953 (Cth) s 14ZZF Cases cited: APRA v VBN [2005] FCA 1868 Daniels Corporation International Pty Ltd v Australian Competition and Consumer Commission [2002] HCA 49; 213 CLR 543 Director-General of Society Services v Chaney [1980] FCA 108; 47 FLR 80 Director-General of Social Services v Hales [1983] FCA 81; 47 ALR 281 Kennedy v Administrative Appeals Tribunal [2008] FCAFC 124; 168 FCR 566 Kowalski v Repatriation Commission [2009] FCAFC 107; 259 ALR 444 Mahaffy v Administrative Appeals Tribunal [2015] FCA 251 Yao v Secretary, Department of Education, Employment and Workplace Relations [2010] FCA 18 Date of hearing: 18 September 2017 Registry: New South Wales Division: General Division National Practice Area: Taxation Category: Catchwords Number of paragraphs: 28 Counsel for the Applicant: Mr R Niemann Solicitor for the Applicant: Christopher Levingston and Associates Counsel for the Second Respondent: Mr M O'Meara Solicitor for the Second Respondent: Australian Government Solicitor ORDERS NSD 1069 of 2017 BETWEEN: RODERICK GERRARD DOUGLASS Applicant AND: ADMINISTRATIVE APPEALS TRIBUNAL First Respondent COMMISSIONER OF TAXATION Second Respondent JUDGE: GRIFFITHS J DATE OF ORDER: 18 SEPTEMBER 2017 THE COURT ORDERS THAT: 1. The application for an extension of time dated 28 June 2017 is dismissed. 2. The applicant pay the second respondent's costs, as agreed or assessed. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. REASONS FOR JUDGMENT GRIFFITHS J: 1 The applicant seeks an extension of time to commence an appeal under s 44 of the Administrative Appeals Tribunal Act 1975 (Cth) (the AAT Act). 2 For the following reasons time will not be extended. The applicant's proposed appeal is misconceived and is beyond the scope of s 44 of the AAT Act. Summary of background matters 3 The decision the subject of the application for an extension of time is a decision of the Administrative Appeals Tribunal (AAT) declining the applicant's application for an order which would have required the Commissioner of Taxation (the Commissioner) to produce documents under s 37(2) of the AAT Act. The applicant had sought to compel the Commissioner to provide to the Tribunal any documents held by him concerning the following matters: (a) whether there was a relevant custom or practice in the matters identified in the three paragraphs in s 87.18(4) of the Income Tax Assessment Act 1997 (Cth) (the ITA Act); and (b) if there was such a custom or practice, what it was. 4 The application under s 37(2) was made in the context of review proceedings in the AAT concerning the applicant's challenge to amended assessments of his liability to pay taxation and penalties. 5 The application was refused by the AAT on 12 May 2017. The terms of the Tribunal's decision were simply that: For the reasons given orally at the conclusion of the interlocutory hearing on 12 May 2017 the Applicant's application made under section 37(2) of the Administrative Appeals Tribunal Act 1975 is refused. 6 A copy of the transcript dated 12 May 2017 was annexed to the applicant's outline of submissions in this Court. The AAT's reasons for rejecting the application under s 37(2) may be summarised as follows. First, although s 37(2) provides a safeguard against a decision-maker who does not lodge all relevant documents as required by s 37(1), the applicant had failed to identify particular documents or a particular class of documents which may be relevant to the AAT's review of the objection decision. 7 Secondly, the statutory provision required the Tribunal to be satisfied on the basis of the matters advanced by the applicant that there are particular documents or documents in a particular class of documents that may be relevant. Section 37(2) was not a general discovery provision nor did it provide a basis for a fishing expedition, citing Kennedy v Administrative Appeals Tribunal [2008] FCAFC 124; 168 FCR 566 (Kennedy). 8 Thirdly, the AAT accepted that it was sufficient that the documents "may be relevant" in the sense that they may shed light on the issues that will be reviewed in the substantive proceedings, but s 37(2) operates by reference to particular documents or to a particular class of documents. The application for an extension of time 9 The applicant requires an extension of time in circumstances where he contends that he initially sought to review the AAT's decision by an online application before the 28 days expired. He said that the online application required him to pay a filing fee but that he was unable to do so because he is impecunious. A successful application for a waiver of the filing fee was made to the Federal Court Registrar, however, the delay in determining that application meant that the 28 day period had expired. 10 The applicant relied on an affidavit by his solicitor, John Findley in explaining the delay in filing a notice of appeal. Mr Findley deposed that the applicant is impecunious and has relocated to rural Colombia to live with his wife and to lead an inexpensive life. He deposed to the difficulties of communicating with the applicant by email because of international time differences. Mr Findley also explained some logistical problems with the waiver of the filing fee application. He said that he was advised by email on 16 June 2017 that a fee waiver had been granted. 11 The applicant contends that the AAT's decision is wrong in several respects. In particular, he challenges the AAT's conclusion that it was not satisfied that he had proven that the documents exist and are relevant. The applicant contends that the AAT's reliance on Kennedy is in error. In particular, he contends that Kennedy is distinguishable because it was directed to whether there was any relevance in an identified document as opposed to the question here, which is whether the documents sought by the applicant can be identified and how they must be identified. In addition, he says that the applicant in Kennedy was "fishing" and that was not the case here. He submits that there are reasonable grounds in his case to expect that the material sought does exist and that a custom or practice exists, which does not involve fishing on his part. 12 The applicant submits that it was wrong of the AAT to consider that it did not have power under s 37(2) of the AAT Act and s 87.18(4) of the ITA Act to make an order seeking production of documents of a particular character if it could not name them or name the class into which they fell. This was unreasonable, the applicant submitted, because it requires knowledge of the internal filing and office systems of the Commissioner, which ought to be irrelevant to the operation of these legislative provisions. 13 As noted above, the Commissioner submitted that a decision to decline to require production of documents under s 37(2) of the AAT Act is not a "final" decision but is an interlocutory decision (citing inter alia Director General of Society Services v Chaney [1980] FCA 108; 47 FLR 80 (Chaney) at 102-104 per Deane J, with whom Fisher J agreed). The Commissioner also relied upon Perram J's decision in Yao v Secretary, Department of Education, Employment and Workplace Relations [2010] FCA 18 at [18], where his Honour held that a decision of the AAT declining to issue a summons to a witness was an interlocutory decision which was not amenable to an appeal under s 44. The Commissioner submitted that Kennedy was distinguishable because it related to proceedings under s 39B of the Judiciary Act 1903 (Cth) and not under the AAT Act. 14 In addition, the Commissioner submitted that the proposed appeal lacks any merit in any event, given the significance of the relevant terms of s 37(2) which emphasise that an order made under that provision relates to "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…" (emphasis added). Accordingly, the Commissioner submitted that the extension of time would be futile. 15 As to the Commissioner's primary contention that the entire proposed appeal is misconceived because an appeal is available under s 44(1) of the AAT Act only in respect of a "final" decision or determination, the applicant submitted that the decision here was a final decision. He submitted it was "a decision on a legal question, the capacity of the Tribunal to order the Respondent to provide documents, in respect of which the Applicant claims an error was made". He submitted that the decision of the AAT not to apply s 37(2) was a decision of such finality as to fit within s 44. Disposition of the application 16 It is desirable to set out the relevant parts of ss 37 and 44 of the AAT Act: 37 Tribunal may require other documents to be lodged … Decision-maker must lodge material documents (1) Subject to this section, a person who has made a decision that is the subject of an application for review (other than second review) by the Tribunal must, within 28 days after receiving notice of the application (or within such further period as the Tribunal allows), lodge with the Tribunal a copy of: (a) a statement setting out the findings on material questions of fact, referring to the evidence or other material on which those findings were based and giving the reasons for the decision; and (b) subject to any directions given under section 18B, every other document that is in the person's possession or under the person's control and is relevant to the review of the decision by the Tribunal. … Tribunal must require other documents to be lodged (2) 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 cause to be given to the person a notice in writing stating that the Tribunal is of that opinion and requiring the person to lodge with the Tribunal, within a time specified in the notice, the specified number of copies of each of those other documents that is in his or her possession or under his or her control, and a person to whom such a notice is given shall comply with the notice. … 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. Note 1 This Part does not apply to certain migration proceedings (see section 43C). Note 2: A party to a child support first review may in some instances appeal instead to the Federal Circuit Court (see section 44AAA). … When and how appeal instituted (2A) An appeal by a person under subsection (1) or (2) shall be instituted: (a) not later than the twenty-eighth day after the day on which a document setting out the terms of the decision of the Tribunal is given to the person or within such further time as the Federal Court of Australia (whether before or after the expiration of that day) allows; and (b) in such manner as is prescribed by rules of court made under the Federal Court of Australia Act 1976. … 17 Section 37 of the AAT Act has been modified by s 14ZZF(1) of the Taxation Administration Act 1953 (Cth) (TA Act): Modification of section 37 of the AAT Act (1) Section 37 of the AAT Act applies in relation to an application for review of a reviewable objection decision as if: (a) the requirement in subsection (1) of that section to lodge with the Tribunal a copy of: (i) a statement giving the reasons for the decision; and (ii) the notice of the taxation decision concerned; and (iii) the taxation objection concerned; and (iv) the notice of the objection decision; and (v) 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; and (vi) a list of the documents (if any) being lodged under subparagraph (v); and (b) the power of the Tribunal under subsection (2) of that section 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. 18 The terms of s 87.18(1) to (4) of the ITA Act should also be noted: The results test for a personal services business (1) An individual meets the results test in an income year if, in relation to at least 75% of the individual's *personal services income (not including income referred to in subsection (2)) during the income year: (a) the income is for producing a result; and (b) the individual is required to supply the *plant and equipment, or tools of trade, needed to perform the work from which the individual produces the result; and (c) the individual is, or would be, liable for the cost of rectifying any defect in the work performed. (2) Paragraph (1)(a) does not apply to income: (a) that the individual receives as an employee; or (b) that the individual receives as an individual referred to in paragraph 12-45(1)(a), (b), (c), (d) or (e) (payments to office holders) in Schedule 1 to the Taxation Administration Act 1953 ; or (c) to the extent that it is a payment referred to in section 12-47 (payments to *religious practitioners) in that Schedule. (3) A *personal services entity meets the results test in an income year if, in relation to at least 75% of the *personal services income of one or more individuals that is included in the personal services entity's *ordinary income or *statutory income during the income year: (a) the income is for producing a result; and (b) the personal services entity is required to supply the *plant and equipment, or tools of trade, needed to perform the work from which the personal services entity produces the result; and (c) the personal services entity is, or would be, liable for the cost of rectifying any defect in the work performed. (4) For the purposes of paragraph (1)(a), (b) or (c) or (3)(a), (b) or (c), regard is to be had to whether it is the custom or practice, when work of the kind in question is performed by an entity other than an employee: (a) for the *personal services income from the work to be for producing a result; and (b) for the entity to be required to supply the *plant and equipment, or tools of trade, needed to perform the work; and (c) for the entity to be liable for the cost of rectifying any defect in the work performed; as the case requires. 19 The applicant's proposed appeal, for which he requires an extension of time, is plainly misconceived having regard to the now well settled view that the word "decision" in s 44 of the AAT Act refers to decisions which constitute the effective decision or determination of an application for review in the AAT. This view has been repeatedly applied in the Court, including in other Full Court decisions, such as Kowalski v Repatriation Commission [2009] FCAFC 107; 259 ALR 444 at [18]-[23] per Spender, Graham and Gilmour JJ and Director-General of Social Services v Hales [1983] FCA 81; 47 ALR 281 at 305 per Lockhart J and at 325 per Sheppard J). This view was also adopted and applied by Perram J in Yao in which his Honour highlighted the differences between an appeal under s 44 and judicial review proceedings under either s 39B of the Judiciary Act 1903 (Cth) or the Administrative Decisions (Judicial Review) Act 1977 (Cth). (See also Mahaffy v Administrative Appeals Tribunal [2015] FCA 251). 20 There are evidently four exceptions to the general principle established in cases such as Chaney. First, an appeal lies under s 44(2) from a decision holding that the interests of a person are not affected by a particular decision. Secondly, where the proceedings before the AAT can be divided in two or more separate parts involving the giving of independent decisions (see Chaney at 103). Thirdly, s 36D of the AAT Act makes specific provision for specified interim decisions to be a decision for the purposes of s 44, including decisions under ss 36(3), 36B(3), 36A(2)(b) and 36C(2)(b). Fourthly, Ryan J found in APRA v VBN [2005] FCA 1868 at [39] that a decision of the AAT which required the primary decision-maker to lodge documents under s 37(2) of the AAT Act was "final or operative and determinative in a practical sense" where the order "impinges on the decision-maker's right to preserve undisclosed documents to which legal professional privilege attaches". This is because such a requirement has a final impact on legal professional privilege, which the High Court identified in Daniels Corporation International Pty Ltd v Australian Competition and Consumer Commission [2002] HCA 49; 213 CLR 543 at [11] as a substantive common law right or immunity. This exception has no relevance here, in circumstances where the AAT has declined to make the order sought by the applicant and, in any event, there is no suggestion that legal professional privilege is involved. 21 The Tribunal's decision to refuse to exercise its powers under s 37(2) (as modified by s 14ZZF) is not a "decision" for the purposes of s 44 of the AAT Act. Rather, it is an intermediate decision which has been made by the Tribunal in the course of the broader review proceeding relating to the Commissioner's decision concerning the applicant's objection to certain amended assessments and penalties. 22 As noted above, both parties made submissions in respect of the Full Court's decision in Kennedy. The applicant submitted that the AAT erred in relying upon Kennedy and that the case was distinguishable. It is unnecessary to resolve this dispute because, irrespective of whether the substantive part of Kennedy is distinguishable, the applicant's proposed appeal is incompetent. 23 There is, however, one curious aspect of Kennedy. It relates to the question whether the proceedings in the Full Court there involved an appeal or were in the nature of an application for judicial review. The Full Court's reasons for judgment refer several times to the proceeding being an "appeal". The primary decision was a decision of a Deputy President of the AAT. Accordingly, unless the Full Court was using the word "appeal" in a very general sense as meaning a challenge, the references to an "appeal" could only be references to s 44 of the AAT Act. The Commissioner has provided a copy of the originating application which led to the Full Court's decision in Kennedy. The originating application is expressly stated to be one made pursuant to s 39B of the Judiciary Act 1903, which is reaffirmed by the nature of the relief sought by the applicant in that proceeding, which included declaratory orders. Accordingly, the references in the reasons for judgment to an "appeal" appear either to involve a broad meaning of that term or are in error and do not reflect the true nature of the proceeding. 24 These matters are reinforced by the contents of the statement of claim and defence which were filed in Kennedy. There is an express reference in [4] of the statement of claim to the application being one made under s 39B of the Judiciary Act. In [19], it is pleaded that the AAT made several errors of law. The statement of claim includes a statement that the applicant claimed the relief specified in the application which, as noted above, included declaratory relief. 25 In his formal defence in Kennedy, the Commissioner admitted the allegation made in [4] of the statement of claim, i.e. that the application was one made in reliance upon s 39B of the Judiciary Act. Nor does the Full Court refer to s 44 of the AAT Act. 26 The pleadings provide no support for the applicant's contention that Kennedy involved an appeal under s 44 of the AAT Act. There is no reference in the originating application, the statement of claim or the defence in Kennedy to the proceeding being one under s 44 of the AAT Act. 27 Having regard to all these matters, I do not view Kennedy as authority for the proposition that a decision under s 37(2) of the AAT Act is capable of being challenged in a s 44 appeal in advance of the AAT making an ultimate or final decision in the substantive proceeding. Conclusion 28 For these reasons, the application for an extension of time will be dismissed, with costs. I certify that the preceding twenty-eight (28) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Griffiths. Associate: Dated: 18 September 2017