VT93/581-591 and Commissioner of Taxation [1994] AATA 529; (1994) 28 ATR 1208; 94 ATC 289 (3 June 1994)

TAXATION - Extension of Time - respondent disallowed applicant’s objection to income adjustments and additional taxes - respondent notified applicant by mail with notice of its decision - applicant alleged letter was not received - whether applicant caused delay and frustrated respondent - applicant a qualified tax agent and chartered accountant - principles that apply in the exercise of the discretion to extend time.

ADMINISTRATIVE APPEALS TRIBUNAL )
) Nos. VT93/

581

-591
TAXATION APPEALS DIVISION )

Decision: The Tribunal decides that the applications to extend time in the above proceedings shall be refused.

ADMINISTRATIVE APPEALS TRIBUNAL )
) Nos. VT93/

581

-591
TAXATION APPEALS DIVISION )

The applicant (“A”) applied to extend the time to lodge an application for review with this Tribunal pursuant to s.29(7) of the Administrative Appeals Tribunal Act 1975 (“the Act”).

The decision sought to be reviewed was a decision of the respondent of 28 April 1993 disallowing a number of objections by the applicant to income tax assessments for the years ending 30 June 1981 to 30 June 1991 inclusive.

The notice of disallowance was posted to the applicant on 28 April 1993. A said this letter was never received by him and that he only became aware that his objections had been disallowed on 13 October 1993 when he was served with a Writ (Plaint No. 8042 of 1993) issued by the Supreme Court of Victoria.

The respondent alleged that A received the notice of disallowance at or about 28 April 1993, when it was posted to him.

Under s.29 of the Act, an application for review must be lodged with the Tribunal by the 28th day after the applicant is notified of the decision. Section 14ZZC of the Taxation Administration Act 1953 extends this period of time to 60 days.

The application for review and the application to extend time were both lodged with the Tribunal on 17 November 1993.

The applicant’s credit and the merits of his application for review were substantially challenged by the respondent. Likewise the respondent objected to an extension of time to commence the proceedings.

It is necessary therefore to summarize the evidence heard in a relatively lengthy hearing. A transcript of the proceedings and comprehensive written submissions prepared by Counsel for the parties has been taken into account in the preparation of these Reasons.

In preparing the ultimate conclusions it has been impossible not to be mindful that A has been a tax agent since 1956 and a chartered accountant for many years. I have been unable to ignore these qualifications when considering his delay.

The decision under review
The respondent disallowed in full the objections of A to its income adjustments and additional taxes as follows-

Year 30/6	Taxable Income per s.167	Additional tax - late lodgement	Victorian Farm Income	N.S.W. Farm	Director’s Fees	Carry Forward Losses	Additional tax - incorrect return
1981	39,888
1982	44,320
1983	49,245
1984	54,717	23,549.00
1985			15,623		11,000		18,083.03
1986			15,311		15,000		15,873.65
1987				32,138	16,000		24,321.61
1988		23,005.54		263,404	19,000		14,560.47
1989				263,405	21,500		27,978.86
1990		19,649.76		436,915	5,500	410,400	26,197.46
1991		11,863.86		593,969		602,628	31,220.70
TOTAL	188,170	78,068.16	30,934	1,589,831	88,000	1,013,028	158,235.78

A, so far as it may be gleaned from this application, and which he sought to substantiate by his evidence, challenged the above adjustments and additions principally because (i) the NSW farm income, as assessed by the respondent was in fact losses and should be categorised as deductions; (ii) losses in 1981-84 years were recorded in his returns, details of which he does have; (iii) the income as Director’s fees was the income of a partnership of which he was a member and was not personal income; and (iv) the taxable income, as assessed, was calculated upon the basis that returns were not lodged in these years, which A disputes (as to failure to lodge) and says that the returns as lodged, accurately record his assessable income and allowable deductions.

The Victorian Farm
The applicant said he and his (now deceased) brother in law (“C”) operated this farm in partnership. It comprises approximately 450 acres and involved Hereford cattle breeding. The enterprise was described as an unregistered business. Some real estate was owned by the applicant and other land was owned by the applicant and his sister jointly. The livestock was owned jointly between the applicant and C.

A and C jointly met expenses although C did not account for any rent. A said all books and journals concerning this farm were maintained by C. A said C died in 1992 and he did not know where the books or any records concerning this farm were. He said his sister, the wife of C, was unable to locate any of the records.

He said the farm ran at a loss and said C would inform him of his share of the losses. He said he never saw the books of account, indeed he never needed to see these books, and he trusted C.

The NSW Farm
This farm comprises approximately 11,300 acres and is therefore much larger than the Victorian Farm. It produces cereal crops, wool and lambs. Cattle breeding is also conducted. A partnership comprising A, his wife, his sister, the deceased brother in law and a niece operated the farm. The real estate is owned by a trustee company of which A and his sister are directors.

In respect of this farm A said all books and records were maintained by his deceased brother in law. He also said that a number of tax returns for the years 1987-1991, copies of which were produced during the hearing of these proceedings, were completed by his brother in law and located by his sister in mid 1993. In November 1993, he gave copies of the returns to his solicitors. The applicant said he did not know the tax file number of these returns - they were partnership returns in relation to the partnership income of this farm - and did not ever know that number. He said the tax file number “had not mattered to us over the period because we had no requirement for it”. He said his sister had advised that the returns had been lodged with the respondent’s Sydney office.

In cross-examination A re-affirmed that he relied on either his brother in law or his sister to provide the relevant figures to include in his returns. He said that a discrepancy between the sum of $263,404, claimed as a loss in his 1988 return, and the sum of $93,347, shown as a loss in the books of account held in relation to the NSW farm in the same year had resulted from either confusion or a misunderstanding as to the year in which the loss was suffered.

“Q-Did not this concern you at all, that you were making these claims for huge deductions on the basis of telephone conversations?

A-Well, I knew that I was having to put cash in, and I knew that we were running at losses, and I knew that the wool was bad, and I knew that we had had to shoot a whole host of sheep. You know that the amounts are large.

A-Of course it did, and it still does. It’s a big - farming in the rural community is very, very difficult.”

A said he did not bring any records of the NSW farm to the hearing because most of it was computerized and because he wasn’t asked to bring any of that information, in any event.

He denied duplicate income tax returns for the years 1987 to 1991, tendered earlier in these proceedings by his Counsel, were all prepared at the same time. He was unable to explain why none of the returns had tax file numbers and he did not, in any event, know that number. He said he gave these returns to his solicitors some two months prior to the hearing of these proceedings. However “it did not occur (to him)” to provide copies to the respondent. When pressed on this issue the following passage occurs in the transcript at p.23-

“Q-You could have contacted the tax office and forwarded them those copies of the returns, could you not?

A-Yes, I could have done, but it hadn’t - you know, I hadn’t really sort of pursued the matter”.

In relation to the tax file number, A said he hand wrote a letter to the respondent approximately one month prior to the hearing of these proceedings but did not keep a copy of the letter. Three days prior to the hearing, A arranged to have a typed letter sent to the respondent requesting his tax file number because “I hadn’t received a response to my letters of early December, and I was anxious to obtain them” (p.23 transcript).

Director’s Fees from JW
For all income years relevant to these proceedings the applicant was a partner of the accountancy firm DHS to 30 June 1989 and thereafter a partner in the accountancy firm DU.

The dispute in relation to director’s fees from JW was whether the fees paid were the personal income of A, as a director, or whether it was income of the partnership of either DHS or DU.

The respondent had assessed the income received as director’s fees from JW as being personal income of A.

A said that all fees earned as a director of JW was income of the partnerships and banked by the respective partnerships. He said it was the policy of each of DHS and DU that all income earned as directors was income of the respective partnerships and was never received or banked personally. He said that in these circumstances he never declared the income received as director’s fees because he did not regard it as his income.

A said that DU had received a letter from the respondent in September 1989 advising that it was prepared to regard the income earned by the partners to be partnership income. However, he said that his solicitors had misplaced that letter and he was therefore unable to produce it. He was also unable to explain a duplicate group certificate issued by JW for the 1989 income year citing him as an “employee” and recording a sum of income less than the amount in dispute in this financial year.

In cross examination two letters were produced from DHS and DU each, it was alleged, had been sent to the respondent.

In a letter of 19 January 1994 DHS wrote to the respondent in the following edited terms-

“We are informed that Directors Fees for services rendered by A to the JW Group of companies in respect of the following years:

have been incorrectly added back to A’s personal income for income tax purposes.

It is the partnership’s policy that all income derived by a partner in the course of his professional capacity forms part of the income of the firm, then known as DHS.

The cheques received from the JW Group of companies were banked directly into DHS’ bank account and were not in any way received by A and are not part of his personal income”.

In a letter of 18 January 1994, DU wrote to the respondent in the following edited terms-

“We are informed that Directors Fees for services rendered by A to the JW Group of companies in respect of the year ended 30th June 1990 for $5,000 have been incorrectly added back to A’s personal income.

It is the policy of this organisation that all income derived in a professional capacity by employees and directors of this company form part of the income of DU.

The cheques received from the JW Group in respect of Directors Fees were banked directly in the firm’s bank account and were not in any way received by A and are not part of his personal income.”

Both letters were dated in the week prior to this hearing. A agreed that he could have obtained these letters earlier, “if it had been necessary”, despite the fact that he had been audited and had been advised by the respondents’ auditor that the records of JW recorded the cheques had been drawn in favour of A. (Transcript p.27-28).

A said DHS had received a similar letter from the respondent to that which was sent to DU in relation to income of the partnerships as earned by the partners. As is recorded above, the letter to DU was said by A to have been misplaced by his solicitors. He said DHS was unable to locate the letter sent to it. Whilst A did not have access to the files of DHS, he had asked DHS in the month prior to the hearing for it.

Income Tax Returns 1981-1984
In the financial years 1981-1984 the respondent issued assessments on the basis that no returns had been lodged. The applicant said he believed the returns for these years had been lodged. He said he doubted if there was any taxable income earned in those years and whilst he always prepared his own returns he did not have copies of them because they had either been destroyed by him, believing that the respondent would no longer be interested in these years, or they were misplaced by his wife in the course of housekeeping.

The applicant said he did not recall ever being prosecuted for failing to lodge returns in the years 1981 to 1983.

In cross examination A said that he told the auditor that he would endeavour to provide copies of returns for the years 1981 to 1984. He said he had been unable to complete any reconstruction of his financial affairs because he had been unable to “lay (his) hands on enough papers to do so”. Although he was a member of DHS in these years he did not approach that firm to obtain details of the income paid to him.

Address
A said he moved from Number 4 M Road to Number 15 M Road in September 1992. He said he did not complete a re-direction notice with the post office but believed his wife did, although he was unsure when. He did not know whether the re-direction request was ever renewed or if it was still current. Although he said the letter of 28 April 1993 was never received, he said he continued to receive mail at No. 15 M Road which was addressed to him at Number 4 M Road.

Prosecution
A agreed that in September or October 1993 he was prosecuted for failing to lodge his 1992 income tax return. He had also been prosecuted and convicted of failing to lodge returns in 1981, 1982, 1983 and 1985. A certificate of summary conviction dated 15 June 1981 was tendered which demonstrated that A was convicted of also failing to lodge his 1980 return.

A had earlier given evidence that upon a conviction for failing to lodge a return he had undertaken to forthwith lodge returns. The respondent argued that not only had A not lodged returns, despite being convicted of same, he had also failed, and continued to fail, to comply with notices served upon him pursuant to s.8G of the Taxation Administration Act 1953.

Ian Hodge
Mr Hodge is a Senior Case Officer in the Appeals and Review Branch of the Australian Taxation Office at Dandenong. He said that he had kept a diary record of a number of letters that had been sent to the applicant and of phone calls he had made to the applicant’s office all of which were not returned. Specifically, he said, the letter containing the decision of the respondent of 28 April 1993 was not returned. The letter of 28 April 1993 was sent to the applicant’s address at Number 4, M Road which was the address for service of notices at that time.

He said that when he had been unable to locate the applicant by telephone he left a message with A’s secretary who subsequently confirmed that on occasions she had passed his messages to A. He did say, however, that by reason of the provisions of the Privacy Act he did not ever disclose to the secretary the purpose of the call.

Justin Murray
Mr Murray is a postman employed by Australia Post at the Malvern Post Office. He has been employed for three and a half years.

For the last three years his postal delivery round included M Street. He said he was familiar with A and his wife. He said he knew their current address and he knew that A and his wife had moved.

He said that he was approached by Mrs A prior to moving, during the course of delivering mail one day, when she asked if he would arrange to have the mail redirected from Number 4 to Number 15. He said he told her the procedure of completing re-direction notices with the post office, but it was his practice, without waiting for advice of a re-direction notice being completed, to re-direct mail.

He said that upon A moving from Number 4 to Number 15 he arranged for all mail which was addressed to A at Number 4 to be delivered to him at Number 15. He acknowledged that he was not supposed to undertake this practice but said that he was friendly with residents in the district and did it of his own accord. He said, by way of example, that it was his practice also to re-direct the mail of A’s sister who had moved and occupied premises, which, as the evidence ultimately disclosed, was in a house next door to where A presently lives.

He said that a search had been undertaken by him at the Malvern Post Office and no record was located of any re-direction notice being completed by A or his wife between June and December 1992 being within the period that Mrs A had approached him to re-direct the mail.

He said that on the occasions where he would be on leave, which he acknowledged was “around April”, a postal slip which is kept current by him, is used by the relieving postman. That slip would have recorded that A resided at Number 15, although he did acknowledge that the slip would not state that the person A at Number 15 is the same person who was at Number 4.

Carol Zagar
Ms Zagar is an appeals and review officer at the Dandenong Office of the Australian Taxation Office.

She said that on the morning of the hearing she had had a discussion with a person within the tax file number section of the ATO who advised that copies of the 1987-1991 partnership returns, concerning the NSW Farm, were lodged (as evidenced by a date stamp) in the week ending 26 November 1993. This date is relevant to the pattern of delay occasioned by A because he had said earlier in these proceedings that these returns were lodged by his sister in mid 1993 (T-10). If this was so, why didn’t A file these returns earlier instead of waiting until November, that is in the month after the Writ was served and at about the time these proceedings commenced.

Geffrey Legge
Mr Legge is an auditor with the Australian Taxation Office based at Dandenong and has conducted an investigation into the tax affairs of A.

He said that he commenced to investigate A and his related companies in early 1992 and the investigation continued until April 1992. He said the investigation commenced by him contacting A on 24 February 1992 to chase up returns which had not been lodged in respect of the years for which A had been prosecuted for failing to lodge returns. He noticed also in the course of his investigations, that there were substantial claims made by A for primary production losses. Specifically he was interested in having returns filed and documents to support certain claims for deductions for the years 1981 to 1984, 1988 and 1990.

Mr Legge also sought supportive evidence of the claim for primary production losses. He was also then curious as to A’s financial affairs because in the returns that had been lodged A had claimed company losses in his own individual returns.

He said that he initially offered A one month to file returns and provide suitable evidence. At the expiry of that month nothing had been heard from the applicant. He said thereafter he made a number of approaches to the applicant personally and by telephone.

On 14 April Mr Legge was provided with copies of returns for the years 1988, 1989 and 1990 but still no evidence was provided to substantiate the primary production losses. When the returns were collected Mr Legge left a note for the applicant requesting proof of primary production losses within the next 10 days. That “proof” has still not been provided.

Findings and Conclusion
The respondent said that its letter disallowing the objections of A was posted by it to the address provided by A on 28 April 1993. A admitted that he had left that address in September 1992 and had not notified the respondent of his change of address.

Quite apart however from what is deemed by the above provisions, I am satisfied that the relevant notice of disallowance was actually delivered to A’s new address. In so doing, I accept, without reservation, the evidence of Mr Murray the postman. I found him a most credible and honest witness. Classically, he is “the” independent witness. In accepting his evidence I am satisfied that Mr Murray did deliver to No. 15 M Street the letter of the respondent of 28 April 1993 which was addressed to A at No. 4 M Street. In making this finding I accept also the evidence of Mr Hodge who said that the letter of 28 April was not returned. Although Mr Murray said that he would take his leave “around April” there was no evidence that he was on leave in the period of two or three days after 28 April when it would be expected that the letter would have been delivered.

The exercise of the discretion therefore to extend time could otherwise be influenced by a finding that a relevant notice or document was not actually received despite legislation and regulations deeming an (earlier) date of service.

In this case, I have decided that the letter of 28 April was actually received by A within two or three days of 28 April 1993. The applicant issued these proceedings on 17 November 1993. I do not accept his evidence that he first learnt of the disallowance when he was served with the Supreme Court Writ on 13 October 1993.

That period of time may seem trivial and, when compared to other cases, insignificant.

This application and the history of A’s relationship with the respondent is, however almost beyond comparison. The history of A’s relationship with the respondent and the period of delay in the lodgement of these proceedings is far from trivial.

Should time therefore be extended to permit A the opportunity to lodge his application and challenge the decision made by the respondent?

The principles to be applied when exercising the discretion available to the Tribunal have been recorded elsewhere (particularly refer Hunter Valley Developments Pty Ltd v Cohen [1984] FCA 176; (1984) 3 FCR 344). Significantly however, following the decision of Dix v Crimes Compensation Tribunal (1993) VLR 297 and Comcare v A’Hearn (1993) 119 ALR 851, an acceptable explanation for delay is not a precondition, but a relevant factor, in the exercise of the discretion.

(i) Was there any acceptable explanation for the delay and would it be fair and equitable to extend time?

(ii) Any action or indication by the applicant that would indicate that she/he informed or notified the respondent that she/he would or did contest the decision;

(iii) Any prejudice to the respondent and whether the delay could unsettle others or established practices;

(v) Consideration of fairness between the applicant and others in a similar position.

i) Explanation for delay
I have decided that A did receive the letter of objection of 28 April 1993 within two or three days of it being posted. I do not accept his evidence that he did not receive it. There was no explanation offered by him of the delay. The delay was unacceptable, more so his qualifications as a tax agent and accountant would reasonably allow the inference to be drawn that he would know the mechanism of appeal and the time limitations.

A said that he learnt that his objections were disallowed when the Supreme Court Writ was served on him on 13 October 1993. He said he took the Writ immediately to his solicitors. However, even if that was true, another month elapsed before the application was lodged.

If A was genuinely concerned to bring himself within time he would have responded to the letter of 28 April. Whilst he was clearly out of time at 13 October when the writ was served there is nothing that may be inferred that he sought to reduce the delay by allowing another month to expire before the application was lodged. This inactivity is, as may be gleaned from the following, a characteristic of A.

A had, in my opinion, embarked on a deliberate course of delay intended to frustrate the attempts of the respondent to identify his taxable income from at least 1981, as may be evidenced by his failure to lodge returns (even to the extent of multiple convictions for the failure); an inability or unwillingness to obtain relevant information from time to time, even when pressed; deliberate avoidance of compliance with requests of the respondent and its officers - indeed avoidance of the officers personally (in addition to the attempts of Mr Hodge and Mr Legge to speak with and obtain information from A and the failure by A to meet agreed deadlines to provide that information, the Affidavits of Service of the Supreme Court Writ, tendered in evidence, record 18 attempts at service).

These features of the background to this application are strongly indicative of A’s motivation to cause delay wherever the opportunity existed. Ignoring the letter of 28 April 1993 as he did, for many months, was another example of a previously well orchestrated pattern of delay, scarcely acceptable or excusable. On the one hand, an acceptable explanation for delay is not a precondition in the exercise of the discretion to extend time. However, a deliberate avoidance of the obligations under the Income Tax Act and its Regulations hardly permits the discretionary pendulum to swing towards A.

As Deputy President Todd (as he then was) recorded in Case V58 1988 ATC 423 at p. 424-

It would not be fair or equitable to extend time to lodge these proceeding, more so having regard to A’s professional qualifications.

Put simply, I do not believe that A ever did intend to notify or indicate to the respondent that the decision would be contested. In my opinion A probably caused the respondent to assume that he would continue to either procrastinate or cause delay.

I am not satisfied that the respondent has suffered prejudice. There is nothing to indicate that any of its files or records have been lost, misplaced or destroyed. Likewise there is no evidence of the death or disappearance or failed memory of any witness. Its capacity to defend the decision under review does not appear affected by the delay of A. There probably has been some administrative inconvenience occasioned by the attempts to locate A and serve the Supreme Court Writ upon him, which, as A himself would acknowledge was the catalyst, at least for him in bringing these proceedings.

Little weight attaches to these issues in this case when considering whether time should be extended, although I acknowledge an argument sometimes put in taxation proceedings that the Commissioner should forthwith be entitled to recover any outstanding income tax and penalties assessed.

Historically Duff v Freijah [1982] FCA 159; (1982) 62 FLR 280 and Lucic v Nolan (1982) 45 ALR 411 took differing views as to the weight or relevance of merit of the case of an applicant who applies to extend time.

More recently in Windshuttle v Deputy Federal Commissioner of Taxation 1993 ATC 4992, Von Doussa J at 4999 said-

“The issue which the AAT was required to consider was whether, for the purposes of the exercise of the discretion under s. 188A, the applicant’s case had prospects of success, and what those prospects were. It is sufficient for that purpose, if the parties chose to so argue their case, to merely identify the factual assertions which the applicant made in the objection, and then to consider whether the application of the law to those assertions would bring about the result for which the applicant contends. In other words the assertions can, if the parties so choose, be treated as pleadings are treated where an application is made to strike out an action on the ground that the pleadings disclose no cause of action. On an application of that kind the true existence of the facts alleged in the pleadings is not explored by evidence. That is left for the trial if there is an arguable case on the pleadings. It would, of course, have been open before the AAT for the Commissioner to attach the history of the transaction asserted by the applicant. If it could have been demonstrated that an essential part of that history was wrong, that would go directly to the prospects of success to the objection. However the Commissioner chose not to attach the veracity of the facts alleged by the applicant, and this is understandable having regard to judicial pronouncements to the effect that where the issue is whether leave should be given to extend time it is inappropriate for the tribunal concerned to embark on a full scale trial of the merits of the underlying question which will be agitated only if time is extended. See Barrett v Minister for Immigration, Local Government and Ethnic Affairs [1989] FCA 269; (1989) 18 ALD 129 at 130, Repatriation Commission v Tuite [1992] FCA 415; (1992) 37 FCR 571 at 577. It would not be appropriate on an application to extend time to seek to attach the facts alleged on the ground that the credit of the applicant, or that of supporting witnesses, should not be accepted. Arguments of that kind are best left for later consideration if and when an extension of time is granted. Only where there is some obvious and easily demonstrated flaw in the applicant’s case would it be appropriate to challenge the factual basis for the asserted claim on an application to extend time.”

“Although it is clear that any assessment of the merits of a case based on less than complete evidence is to be undertaken with caution, it is a factor the Tribunal was entitled to take into account although its assessment did not require a definitive finding.”

In Windshuttle, (supra) the Court decided, on appeal from the AAT, that an error of law had been found in the Tribunal’s interpretation of s.26AAA of the Income Tax Assessment Act 1936. In turn that error, it was said, influenced the conclusions of the Tribunal in the weight to be attached to whether the application had merit.

In the present case, I am unable to find evidence of any persuasion that would permit me to find that the applicant’s objections have merit.

Although an Extension of Time hearing is not the forum to embark on a full scale enquiry of the factual and legal basis upon which A was expected to satisfy the Tribunal that his claim had merit, nonetheless, the absence of evidence to support his objections was overwhelming.

A objected to the assessment made by the respondent of his income from the New South Wales farm, yet the only evidence put up was the tender of tax returns for the partnership of the NSW farm for the years 1987 to 1991 and which I accept were lodged in November 1993 - 2 months before the hearing. A said he was unable to locate any books or journals to support the claims made by the returns, had relied on the advice of his (now deceased) brother-in-law - previously also an accountant - and was thereby unable to personally corroborate or explain the figures. He said he had also sought advice from his sister - the wife of the deceased brother in law. She is A’s next door neighbour, she was not called to give evidence and there was no evidence that she was unavailable.

A also objected to the assessment of income in the years 1981-1984. He alleged that in these years he suffered losses, and also alleged that returns had been filed for these years. I am satisfied that at least for these years - being years in which A was prosecuted and convicted of failing to lodge returns - that returns were not then nor ever since filed. I do not accept that those returns were misplaced or unable to be located. I am satisfied that those returns were never prepared. I cannot conclude, so far as this part of A’s objections are concerned, that his claim has merit. A has had more than 10 years to file these returns. He continued to assert that records were not able to be located but eventually would be. Because of the number of years which he has had to file these returns, he can hardly be heard now to complain of the assessments made against him.

Insofar as he objected to the assessment of income against him for fees received from JW, which he argued was the income of the partnership that he from time to time was a member, I note his claim that he received certain letters from the respondent which allegedly supported this proposition were either lost or misplaced or unable to be located. I note that he was unable to explain a duplicate group certificate in the T-documents issued by JW which recorded him as an employee (of JW) and to whom a sum of money was recorded as income. I note also that letters from DHS and DU were tendered to support the proposition of the income earned from JW was fee income of the partnership. I note with some curiosity that the letters bear a striking similarity in language and construction, were dated 3 or 4 days prior to the hearing of the application and the authors of those letters were not called as witnesses. If the letters were so readily available for the purpose of an extension of time hearing at the AAT, it is hard to imagine why they could not have been made available to the respondent at a much earlier point in time.

In summary therefore if there is any merit in the applicant’s objections I have been unable to find it, having regard to the background to the application and the material before the Tribunal at the hearing.

This was an issue not addressed at any length by Counsel, the relevant considerations probably being consumed by the criteria at i) - iv) in these conclusions.

The Australian community has been denied the income from taxation assessed against A for many years and for which he has shown scant regard. The respondent has been put to expense in the attempts to recover this taxation and defend these proceedings. It ought not be put to greater expense in a hearing which, as A’s Counsel submitted, would be the forum “to introduce collateral evidence to convince the Tribunal that losses were of the magnitude claimed”. That evidence has not been forthcoming and on A’s own evidence, he has not been able to “locate” it. He certainly has had plenty of time to date to “locate” that evidence. Nothing was heard or submitted that allows me to conclude that that evidence will ever be “located”.

On balance and having regard to the conclusions and findings as above I am unable to exercise the discretion to permit A to have time extended to lodge these proceedings. The applications to extend time are therefore refused.

Administrative Appeals Tribunal of Australia

VT93/ 581 -591 and Commissioner of Taxation [1994] AATA 529; (1994) 28 ATR 1208; 94 ATC 289 (3 June 1994)