Federal Court of Australia Nugawela v Commissioner of Taxation [2022] FCA 1474 Appeal from: Nugawela and Commissioner of Taxation [2021] AATA 1636 File number: WAD 164 of 2021 Judgment of: COLVIN J Date of judgment: 8 December 2022 Catchwords: TAXATION - appeal from a decision of the Administrative Appeals Tribunal under s 44 of the Administrative Appeals Tribunal Act 1975 (Cth) - where applicant sought review in the Tribunal of six income tax assessments and was made bankrupt following commencement of review application - where Commissioner sought dismissal of those review applications in circumstances where bankruptcy trustee did not seek to pursue applications - where on remittal Tribunal required to determine whether Commissioner's dismissal application should be held in abeyance pending the outcome of applicant's proceedings in the Federal Court challenging the trustee's decision to abandon review applications - whether the appeal raises a question of law - application dismissed Legislation: Administrative Appeals Tribunal Act 1975 (Cth) s 44 Cases cited: Haritos v Commissioner of Taxation [2015] FCAFC 92; (2015) 233 FCR 315 Minister for Immigration and Citizenship v Li [2013] HCA 18; (2013) 249 CLR 332 Nugawela v Commissioner of Taxation (No 4) [2020] FCA 1128 Division: General Division Registry: Western Australia National Practice Area: Taxation Number of paragraphs: 29 Date of hearing: 6 December 2022 Counsel for the Applicant: The Applicant appeared in person Counsel for the First Respondent: Mr CM Slater Solicitor for the First Respondent: Australian Government Solicitor Counsel for the Second Respondent: The Second Respondent submitted as to the outcome ORDERS WAD 164 of 2021 BETWEEN: PATRICK ALLEN NUGAWELA Applicant AND: COMMISSIONER OF TAXATION First Respondent GREGORY BRUCE DUDLEY AS TRUSTEE FOR THE ESTATE OF PATRICK NUGAWELA NO. WA267 OF 2017 0 Second Respondent order made by: COLVIN J DATE OF ORDER: 8 december 2022 THE COURT ORDERS THAT: 1. The appeal is dismissed. 2. The applicant do pay the respondent's costs of the appeal to be assessed on a lump sum basis by a registrar if not agreed. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. REASONS FOR JUDGMENT COLVIN J: 1 Dr Patrick Nugawela sought review in the Administrative Appeals Tribunal of six income tax assessments issued by the Commissioner of Taxation. After the commencement of those proceedings he was made a bankrupt. His trustee in bankruptcy did not wish to proceed with the review applications. The Commissioner sought dismissal of the review applications. Dr Nugawela opposed their dismissal. He also claimed that they should be adjourned pending a challenge that had been made by Dr Nugawela to the decision by his trustee not to pursue the review applications. The challenge had been brought in action WAD 528/2017 in this Court. 2 The Tribunal determined that the six review applications should be dismissed. The decision was made on the basis that the trustee did not seek to pursue the applications and that by reason of his bankruptcy Dr Nugawela had no standing himself to pursue the applications. Dr Nugawela brought an appeal by way of review under s 44 of the Administrative Appeals Tribunal Act 1975 (Cth). I upheld the appeal on the limited basis that the Tribunal had not addressed the question whether it was appropriate to adjourn the six review applications pending the outcome of the challenge in action WAD 528/2017 to the trustee's decision not to pursue those applications. In reaching that conclusion I determined that there was otherwise no error in the Tribunal's reasoning to the effect that it was appropriate for the proceedings to be dismissed. In short, I was satisfied that unless Dr Nugawela was successful in his challenge to the decision by the trustee (with the consequence that the trustee ought to pursue the six review applications), no error had been demonstrated in the Tribunal's decision to dismiss them. The matter was remitted to the Tribunal 'for consideration of the limited question whether a determination of the application by the Commissioner [for dismissal] should be held in abeyance pending the outcome of Dr Nugawela's challenge to the approach by his trustee': Nugawela v Commissioner of Taxation (No 4) [2020] FCA 1128 at [45]. 3 On the remittal, the Tribunal determined that it was inappropriate to adjourn the review applications pending the determination of WAD 528/2017 (para 36). It followed from that conclusion that the applications should be dismissed (para 45). 4 Dr Nugawela now brings an appeal by way of review of that further decision. He says that the six review applications should be held in abeyance pending the outcome of WAD 528/2017 and seeks an order to that effect to be made by this Court on review. Statutory right of appeal by way of review 5 Section 44 of the Administrative Appeals Tribunal Act confers a right of appeal 'on a question of law'. The nature of an appeal on a question of law was summarised in Haritos v Commissioner of Taxation [2015] FCAFC 92; (2015) 233 FCR 315 at [194] (Allsop CJ, Kenny, Besanko, Robertson and Mortimer JJ). On such an appeal, the Court does not deal with the merits of the case (save in the case where error on a question of law has been found and the Court has been persuaded to exercise its discretionary authority to make its own decision rather than remit the matter to the Tribunal for further decision, as to which see s 44(4) and s 44(7)). The Court also does not evaluate the correctness of the Tribunal's fact-finding but it may scrutinise the fact-finding for the purpose of determining whether it conforms in character to the nature of the fact-finding task that has been entrusted to the Tribunal. An applicant bringing such an appeal must identify and establish a question of law as well as establish that the question should be determined in favour of the applicant. Grounds of appeal 6 Dr Nugawela brings his appeal without legal assistance. He has set out certain matters in his application and has made oral submissions. He did not take up the opportunity to provide written submissions. Based upon the content of his application and his oral submissions, the points he seeks to raise are as follows: (1) the Tribunal should have clarified the status of Dr Nugawela for the purposes of the dismissal application brought by the Commissioner before it conducted the hearing on the remitter; (2) Dr Nugawela should have been asked to provide input on the status of WAD 528/2017 before the Tribunal made its decision on the remitter and it was procedurally unfair for the Tribunal to proceed without doing so; (3) the Tribunal exceeded its jurisdiction in seeking to assess the basis upon which WAD 528/2017 was advanced when that was a matter for determination by this Court in the exercise of its jurisdiction; (4) the Tribunal itself had delayed the hearing of the six applications until Dr Nugawela became bankrupt with the result that he was denied standing in his own right to have the six applications reviewed; (5) Dr Nugawela had explanations that he could provide for his failure to advance WAD 528/2017 which matters had been proceeding 'in the background'; and (6) there could be no prejudice to the Commissioner arising from an adjournment and the delay that would result. Outcome 7 For the following reasons, none of those points give rise to a question of law that should be determined in favour of Dr Nugawela. It follows that his appeal must be dismissed. There is no reason why costs should not follow the event. Therefore, the application should be dismissed with costs. Point (1): The status of Dr Nugawela 8 The position adopted by Dr Nugawela before the Tribunal was that he was entitled to know the nature of his status in the Tribunal proceedings before the Tribunal conducted the hearing on remitter. 9 The Tribunal adopted the course of making directions for the parties and the trustee to file evidence and submissions. It also ordered the trustee to file an affidavit as to the current status of WAD 528/2017. Dr Nugawela filed submissions but did not file any evidence. He also did not appear at the hearing. 10 In submissions in support of the appeal, Dr Nugawela appeared to maintain that there was a time when he was the applicant and then a time when the applicant in the Tribunal was described as 'Patrick Allan Nugawela, a bankrupt'. He says he was told that the 'entity' so described was the trustee. He seemed to be seeking to claim that there was uncertainty as to his status before the Tribunal. It appears that he asked the Tribunal to have the question of his status determined separately and in advance of the question whether the proceedings should be adjourned but the Tribunal directed that matter to be determined at the same time as the question of the adjournment. 11 In his oral submissions, Dr Nugawela did not dispute that the Tribunal had indicated to him that any issue as to his status would be determined at the hearing when consideration would be given to whether there should be an adjournment. The course followed by the Tribunal was eminently sensible in circumstances where the only person objecting to the adjournment was Dr Nugawela. If he had no status to object then the Tribunal would make its decision on that basis. If he did have sufficient status to do so then, as the Tribunal had indicated, Dr Nugawela could make submissions and provide evidence. 12 Assuming that a question of law arises as to the procedure followed by the Tribunal, no error has been demonstrated as to the procedure. In the face of the directions that had been made, Dr Nugawela chose to file submissions that concerned the issue of his status and otherwise not to attend or provide evidence. Having afforded Dr Nugawela the opportunity to be heard, there was no error in the Tribunal proceeding to determine the dismissal applications on remittal. 13 Dr Nugawela said that he needed to be able to deal with the status question in advance because he could not obtain legal advice in the course of the hearing. Any such concern was misconceived. In circumstances where it had been determined that Dr Nugawela had no standing to advance the six review applications (see Nugawela v Commissioner of Taxation (No 4)), Dr Nugawela's only possible basis for involvement was to obtain an adjournment so that he could proceed with a challenge to the trustee's decision not to pursue the six review applications. He needed to maintain some status before the Tribunal to be able to seek an adjournment. Further, the only person raising an issue as to his standing to do so was him. The matter had been remitted on the basis that he had a sufficient interest to pursue the question of adjournment. Point (2): Input on the status of WAD 528/2017 14 As has been noted, Dr Nugawela was afforded an opportunity to provide evidence but he chose not do so. The trustee, as directed by the Tribunal, did provide evidence as to the current status of WAD 528/2017. It was not suggested that the evidence provided to the Tribunal by the trustee was incorrect in any way. 15 The evidence before the Tribunal included the fact that Dr Nugawela had been ordered to file an affidavit on WAD 528/2017 setting out the facts on which his prayer for relief in that action was based. He had not done so. It also showed that in 2020 he had brought an unsuccessful interlocutory application in those proceedings to restrain the trustee from selling a property. Otherwise, Dr Nugawela had not advanced the proceedings. 16 Dr Nugawela sought to explain in submissions in support of the appeal (without any evidence) that 'a lot is happening in other jurisdictions' and that as the conduct of the administration of his affairs by the trustee in bankruptcy is proceeding there are other complaints that he wishes to raise as part of WAD 528/2017. 17 These very general assertions were not the subject of any evidence before the Tribunal. The fact that Dr Nugawela may have other complaints that he wishes to raise was no explanation as to why he had not advanced his complaints concerning the trustee's actions about the six review applications for a number of years. The fact is that he was given an opportunity by the Tribunal to file evidence and he did not take up that opportunity. Also, he does not question the evidence that was before the Tribunal. Nor does he suggest that there is some reason why the Tribunal should have made some inquiry beyond receiving the trustee's affidavit. 18 No question of law arises as to this point. Point (3): The basis for WAD 528/2017 was a matter for this Court 19 The Tribunal reasoned that it was clear from the evidence before the Tribunal that nothing had been done to advance WAD 528/2017 for over three years and that Dr Nugawela had provided no explanation for not proceeding. Further, he had provided no advice to the Tribunal as to the basis on which he made the claims in WAD 528/2017 or when the claim was likely to be finalised. It concluded that it was 'clear to the Tribunal that [Dr Nugawela] has either no intention or, for some reason, no ability to proceed with WAD 528/2017'. 20 It was not the case that the Tribunal, in considering such matters, exceeded its jurisdiction. In circumstances where the only basis advanced for the adjournment was the need to challenge the trustee's decision not to proceed with the six review applications, it was within the authority of the Tribunal to consider whether anything had happened in those proceedings and whether there was any basis upon which to conclude that the proceedings were relevant in some way. Point (4): The Tribunal itself had delayed 21 Dr Nugawela sought to raise complaints about the way the proceedings before the Tribunal had been delayed. In effect, he submitted that if there had not been delay then he could have pressed the six review applications in his own right. Whatever the history, Dr Nugawela's status as a bankrupt had consequences for his ability to pursue the six review applications. His arguments as to the effect of that status were the subject of his previous appeal by way of review. It was determined that he had no standing to pursue the applications himself. The only issue on remitter was whether there should be an adjournment to allow the challenge to the trustee's decision. The approach by the Tribunal to the dismissal application was not otherwise in issue. 22 The point is without merit. Point (5): Dr Nugawela had explanations for delay in WAD 528/2017 23 As has been noted, in the course of oral submissions Dr Nugawela sought to provide very general explanations for his delay in prosecuting WAD 528/2017. There was no evidence as to those matters and no adequate explanation as to why any such evidence was not put before the Tribunal. In at least one respect the matters that Dr Nugawela raised concerned events since the decision by the Tribunal. 24 There could be no question of law arising from the failure by the Tribunal to consider evidence that Dr Nugawela failed to put before the Tribunal especially in circumstances where the Tribunal took steps to obtain from the trustee evidence concerning WAD 528/2017 and there was no claim made that the evidence provided was inaccurate. Rather, the submission made on appeal was that the information provided by the trustee was that which was available 'based on public knowledge' (that is by searching the record) and Dr Nugawela sought to rely on the fact that he wanted to expand WAD 528/2017 to complain about other actions of the trustee. Point (6): Allegedly no prejudice to the Commissioner arising from an adjournment 25 The final submission made orally by Dr Nugawela was to the effect that no prejudice had been claimed by the Commissioner and there could be no costs arising from the matter remaining dormant. The submission fails to engage with the fact that the Commissioner was seeking to have the six applications in the Tribunal dismissed. If they were not dismissed then they would have to be dealt with even though the trustee did not seek to proceed with them and it had been determined that Dr Nugawela had no standing himself to pursue the applications. 26 There was prejudice and inefficiency in matters remaining dormant with the possibility that they may be raised at some later time, presumably a time to be chosen by Dr Nugawela. 27 It was a matter for the Tribunal to evaluate whether there should be an adjournment. It was not for this Court on review to undertake its own evaluation. It has not been demonstrated that there was any basis for a claim of legal unreasonableness of the kind identified in Minister for Immigration and Citizenship v Li [2013] HCA 18; (2013) 249 CLR 332 at [68] (Hayne, Kiefel and Bell JJ). 28 Therefore no basis for a question of law has been demonstrated by this final point. Conclusion 29 For those reasons, the application must be dismissed with costs. I certify that the preceding twenty-nine (29) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Colvin. Associate: Dated: 8 December 2022