Decleah Investments Pty Ltd and Prince Removal and Storage Pty Ltd as Trustees for the PRS Unit Trust v Commissioner of Taxation (No 2) [2018] FCA 929

FEDERAL COURT OF AUSTRALIA

Decleah Investments Pty Ltd and Prince Removal and Storage Pty Ltd as Trustees for the PRS Unit Trust v Commissioner of Taxation (No 2) [2018] FCA 929 Appeal from: Decleah Investments Pty Ltd and Anor as Trustee for the PRS Unit Trust and Commissioner of Taxation [2017] AATA 2418

File number: VID 1409 of 2017

Judge: STEWARD J

Date of judgment: 19 June 2018

Catchwords: PRACTICE AND PROCEDURE – remittal to Administrative Appeals Tribunal – whether there should be order for remittal simpliciter – whether further evidence required on remittal

Legislation: Administrative Appeals Tribunal Act 1975 (Cth) ss 19A, 44

Cases cited: Civil Aviation Safety Authority v Central Aviation Pty Ltd (2009) 179 FCR 554

Date of hearing: Determined on the papers

Date of last submissions: 6 June 2018

Registry: Victoria

Division: General Division

National Practice Area: Taxation

Category: Catchwords

Number of paragraphs: 8

Counsel for the Applicant: Mr J Korman

Solicitor for the Applicant: Belleli King & Associates

Counsel for the Respondent: Mr C Sievers

Solicitor for the Respondent: ATO Dispute Resolution

ORDERS VID 1409 of 2017

BETWEEN: DECLEAH INVESTMENTS PTY LTD AND PRINCE REMOVAL AND STORAGE PTY LTD AS TRUSTEES FOR THE PRS UNIT TRUST Applicant

AND: COMMISSIONER OF TAXATION Respondent

JUDGE: STEWARD J DATE OF ORDER: 19 JUNE 2018

THE COURT ORDERS THAT:

1. The proceeding be remitted to the Administrative Appeals Tribunal to be heard and determined in accordance with law on the evidence which was before the Administrative Appeals Tribunal, and with such further evidence as the Administrative Appeals Tribunal directs be adduced, but limited to the witnesses who had given evidence before the Administrative Appeals Tribunal below. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011

REASONS FOR JUDGMENT

STEWARD J: 1 On 22 May 2018 I published reasons for decision in this matter and made the following orders: 1. The appeal be allowed with costs. 2. The decision of the Administrative Appeals Tribunal dated 1 December 2017 be set aside. 3. The parties file, within 14 days, the orders that they agree ought to be made to reflect the reasons for decision published this day, or, if agreement cannot be reached, written submissions limited to eight pages, concerning the orders for final disposition of this appeal. These reasons should be read with my earlier reasons for judgment. 2 The parties filed written submissions in response to the third order. Each party agreed that the following two orders should be made: (1) the appeal be allowed with costs; and (2) the decision of the Administrative Appeals Tribunal (the "Tribunal") dated 1 December 2017 be set aside. 3 These orders had already been made on 22 May 2018. The parties disagreed, however, as to the order that should be made remitting the appeal to the Tribunal. The applicant sought an order for this matter to be reheard "on the evidence which was before the Tribunal". The respondent (the "Commissioner") sought an order for remittal, simpliciter, leaving it to the Tribunal to decide what orders should be made pursuant to s 19A of the Administrative Appeals Tribunal Act 1975 (Cth) (the "AAT Act"), as to the use to be made of the existing evidence and for the calling of further evidence. Significantly, the Court notes that the member who had heard the tax appeal below is no longer a member of the Tribunal. 4 Section 44(4)-(6) of the AAT Act relevantly states: Powers of Federal Court (4) The Federal Court of Australia shall hear and determine the appeal and may make such order as it thinks appropriate by reason of its decision. (5) Without limiting by implication the generality of subsection (4), the orders that may be made by the Federal Court of Australia on an appeal include an order affirming or setting aside the decision of the Tribunal and an order remitting the case to be heard and decided again, either with or without the hearing of further evidence, by the Tribunal in accordance with the directions of the Court. Constitution of Tribunal if Federal Court remits case etc. (6) If the Federal Court of Australia makes an order remitting a case to be heard and decided again by the Tribunal: (a) the Tribunal need not be constituted for the hearing by the person or persons who made the decision to which the appeal relates; and (b) whether or not the Tribunal is reconstituted for the hearing--the Tribunal may, for the purposes of the proceeding, have regard to any record of the proceeding before the Tribunal prior to the appeal (including a record of any evidence taken in the proceeding), so long as doing so is not inconsistent with the directions of the Court. 5 In Civil Aviation Safety Authority v Central Aviation Pty Ltd (2009) 179 FCR 554, the Full Court of this Court said at [55]: The appropriate order to be made pursuant to s 44 will depend upon the facts and circumstances of each individual case and the exercise of the discretion thereby conferred. 6 In my view, there is much to be said for the applicant's submission that the matter be remitted for a rehearing confined to the evidence led below. To my mind, that would have been the most efficient way to secure final disposition of this dispute. However, in my reasons for judgment I observed that there appeared to be a conflict in some of the evidence given by the applicant's valuer. As this matter cannot be reheard by the same original member, the new member rehearing this tax appeal may wish to hear further evidence from the current witnesses to resolve this possible conflict, if it can be resolved. It would thus be wrong to limit that member's consideration of the evidence in the way suggested by the applicant. 7 I am also not disposed to make the order suggested by the Commissioner. In my view, any rehearing, including the consideration of further evidence, should be limited to the witnesses who had appeared below, being each valuer called by the applicant and the Commissioner. There has been a tendency in recent times in some cases for opposing parties to resolve conflicts in the opinions given by their respective expert witnesses by the calling of yet more expert witnesses. That is a regrettable development. It does not assist this Court; it will not assist the Tribunal. 8 It follows that I will make a further order in these terms: (1) The proceeding be remitted to the Tribunal to be heard and determined in accordance with law on the evidence which was before the Tribunal, and with such further evidence as the Tribunal directs be adduced, but limited to the witnesses who had given evidence before the Tribunal below. I certify that the preceding eight (8) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Steward.

Associate: Dated: 19 June 2018