CITATION: JRS Pty Ltd and Associates v Chief Commissioner of State Revenue [2008] NSWADT 192 DIVISION: Revenue Division APPLICANT JRS Pty Ltd and Associates PARTIES: RESPONDENT Chief Commissioner of State Revenue FILE NUMBER: 076119 HEARING DATES: 2 July 2008 SUBMISSIONS CLOSED: 2 July 2008 DATE OF DECISION: 7 July 2008 BEFORE: Needham J SC - Deputy President CATCHWORDS: Adequate compliance of Summons MATTER FOR DECISION: Preliminary matter LEGISLATION CITED : Administrative Decisions Tribunal Act 1997 CASES CITED: N/A APPLICANT No appearance REPRESENTATION: RESPONDENT P Patterson, solicitor THIRD PARTY No appearance 1. Direct Registrar: ORDERS: (a) To issue Summons to The Proper Officer, Jamieson Louttit, Chartered Accountants, to appear to give evidence on 18 July 2008 at 10.00 am pursuant to section 84(1)(a) and section 84(3)(a) of the Administrative Decisions Tribunal Act 1997 (b) To write to Jamieson Louttit, Chartered Accountant, to inform him that it is an offence to fail to comply with a Summons without reasonable excuse (see paragraph 8 of Practice Note 7 - Summonses) 2. Adjourn matter to 10.00 am on 18 July 2008 before Judicial Member Handley for consideration by Judicial Member whether summons has been adequately complied with. REASONS FOR DECISION 1 The main proceedings are brought by JRS Pty Ltd and three other companies by way of review of decisions by the Respondent, the Chief Commissioner of State Revenue, in relation to Payroll Tax. There is no need to go into the facts or allegations in the proceedings in any greater detail except where those facts are set out below. 2 The matter came before me in the Directions List on 18 June 2008, when Mr Screnci, a director of the applicants, appeared for them. Mr Patterson of the Crown Solicitor's Office appeared for the respondent. 3 On that occasion Mr Paterson raised the issue of whether a summons issued by the Chief Commissioner to Jamieson Louttit, chartered accountants, had been properly complied with. Mr Screnci indicated that he had no interest in that aspect of the matter and was excused from attending in relation to the Summons issue. Mr Paterson raised the issue of a reference to the Supreme Court for proceedings in contempt. As there was no evidence at that point as to any failure of production, I stood the matter over for that to be done. 4 I made the following directions on 18 June 2008: a) Adjourn matter to allow Respondent to identify to Jamieson Louttit, accountants, categories of documents which in the opinion of the Respondent were not produced under Summons. b) Note: on the next occasion the exercise of powers under section 83(2)(a) or (b) of the Administrative Decisions Tribunal Act 1997 will be considered. c) Matter adjourned to 11 am on 2 July 2008 for further directions. 5 The relevant Summons was a Summons to Produce Documents dated 29 April 2008 and addressed to the liquidator of a company associated with the applicants. The relevance of the documents goes to the question of the review of the payroll tax assessments. The Summons provided (relevantly): "Name of Witness: Jamieson Louttit, Chartered Accountants YOU ARE ORDERED to produce the document or things specified in the schedule and this summons or a copy of it to the Tribunal – see section B of this form. Failure to comply with this summons without reasonable excuse is an offence (maximum penalty $11,000) and may be dealt with as contempt of the Tribunal. The last day for service of this summons is 29 April 2008. ... The documents or things you must produce are as follows: i. All files, records, correspondence, documents and materials relating to the administration of PAI Business Management Pty Ltd (deregistered) (ACN 003 686 315). ii. Memorandum, Articles of Association, minute books of PAI Business Management Pty Ltd (deregistered) (ACN 003 686 315) relating to directors meetings, general meetings and extraordinary general meetings. iii. All files, records, correspondence, file notes, documents and materials relating to the liquidation of PAI Business Management Pty Ltd (deregistered) (ACN 003 686 315), including, but not limited to, minute books of PAI Business Management Pty Ltd (deregistered) (ACN 003 686 315) relating to directors meetings, general meetings, extraordinary general meetings and liquidators meetings in respect of the liquidation of PAI Business Management Pty Ltd (deregistered) (ACN 003 686 315). iv. All financial business records of PAI Business Management Pty Ltd (deregistered) (ACN 003 686 315), including but not limited to, wage records, income tax returns, notices of assessment and adjustment, full trading business statements, financial budgets and estimates, partnership reports, bank or other financial institution loans, and profit and loss statements for the period 2002 to 2007 inclusive. 6 The notes to the Summons put the recipient on notice, inter alia, of rights to apply to the Tribunal "for an order setting aside the summons (or a part of it) or for relief in respect of the summons ...". 7 No order for such relief was sought in the Summons. 8 On 19 June 2008 Mr Patterson wrote to Jamieson Louttit and Associates, attention Mr Louttit, the principal of the firm, setting out categories of documents which Mr Patterson, relying on a report of a forensic accountant, took the view had not been produced. That letter is Exhibit A to this application. The report of Furzer Crestani Services, forensic accountants, upon which the letter Exhibit A is partly based, is Exhibit B. Both exhibits will remain on the file until no longer needed. 9 The letter Exhibit A summarised the deficiencies identified in the report Exhibit B as follows: - PAYG Summary Statements (that is, employee group certificates) - Summary of annual payroll for all employees - Detailed financial statements, including profit and loss statements and balance sheets (prepared both by the Company, and by the Company's external accountant) as were created prior to the liquidation; - All computerised software and records of the company, including: - Application/Source/Program Software files; - All software data files for internal accounting systems including payroll data; - All software data files of the Company, including all Excel, Word or any other software files held and retained by the Company; and - All usernames and passwords, to operate the above. ... - All personnel records for the Company; - All correspondence records for the Company; - All liquidator's files, including working papers in respect of the liquidation. 10 The letter Exhibit A concluded: "As to any documents not so produced by you, you are requested to appear before Deputy President Needham at the next directions hearing to be held in relation to this matter on Wednesday 2 July 2008 at 11.00 am." 11 Mr Patterson received some documents in response to that letter, although he is of the view that the documents received do not answer the deficiencies identified in Exhibits A and B. 12 The matter came before me once more on 2 July 2008 at 11.00 am. Mr Louttit did not appear despite Mr Patterson's request that he do so. Mr Patterson requested that the matter be referred to a Judicial Member for consideration of the issue of enforcement of production of documents sought in the Summons. 13 Practice Note 7 of the Tribunal ("Summonses – Information about issuing Summonses) dated 8 May 2001 provides: "Non-compliance without any explanation. If there is non-compliance with the Summons, the Registrar will advise the person that it is an offence to fail to comply with the requirements of a summons without reasonable excuse. The matter may then be referred to a judicial member of the Tribunal". 14 I took the view, after hearing short submissions by Mr Patterson, that there was, prima facie, non-compliance with the summons, at least to the level of satisfaction required to refer the matter to a Judicial Member for consideration of whether there is sufficient non-compliance with the Summons for further action to be taken. I have not seen the documents produced either on the original return of the summons nor by letter to Mr Patterson prior to 2 July 2008, nor have I seen a summary of the contents of the documents produced, but based on the request in the letter Exhibit A and the identified deficiencies in Exhibit B it appears to me that there are areas which have not been addressed by the party summonsed. Such a decision on a final basis is, of course, a question for the Judicial Member to consider. 15 As the submissions were made during a directions list at which there was no monitor or recording of the proceedings, I have given these short reasons to enable my reasoning to be published. 16 Accordingly, I made the following orders: 1. Direct Registrar: (a) to issue Summons to The Proper Officer, Jamieson Louttit, Chartered Accountants, to appear to give evidence on 18 July 2008 at 10.00 am pursuant to section 84(1)(a) and section 84(3)(a) of the Administrative Decisions Tribunal Act 1997 (b) to write to Jamieson Louttit, Chartered Accountant, to inform him that it is an offence to fail to comply with a Summons without reasonable excuse (see paragraph 8 of Practice Note 7 - Summonses) 2. Adjourn matter to 10.00 am on 18 July 2008 before Judicial Member Handley for consideration by Judicial Member whether summons has been adequately complied with. 17 I direct, further, that a copy of these reasons be served by the solicitors for the respondent upon Mr Louttit, principal of Jamieson Louttit, chartered accountants by 11 July 2008. DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.