The Administrative Appeals Tribunal (AAT) has refused to grant a taxpayer's application for an extension of time to lodge a review application. The taxpayer wished to apply for a review of the Commissioner's decision disallowing his objections to amended assessments (which involved a liability of some $2.7 million). Significantly, the taxpayer had previously made the same application, refused by the AAT in Re Benjamin and FCT [2015] AATA 923 and dismissed on appeal by the Federal Court in Benjamin v FCT [2016] FCA 1157. Accordingly, the latest matter involved not only the substantive issue of whether the taxpayer's application should be allowed in the light of his new arguments in this case, but also the procedural issues of whether the AAT had the jurisdiction to hear a second application regarding an application it had previously dismissed.

Procedural issues

On the issues of whether the AAT had the jurisdiction to consider the second application, whether the AAT had the power to dismiss such an application and whether the AAT could adopt the decision and its reasoning of the original decision, the AAT came to the following conclusions:

  1. The AAT had the jurisdiction to hear the matter, in terms of a taxpayer's right to apply to the AAT for review of a decision under s 25 of the Administrative Appeals Tribunal Act 1975 (AAT Act), and in terms of the particular decision regarding which review is sought. Specifically, the AAT found that because the Commissioner's reviewable objection decision had not been reviewed by the AAT, the Tribunal had not exhausted its powers in relation to the merits of the decision. Therefore, it had the relevant jurisdiction. The AAT also noted that the application for an extension involved new arguments.
  2. An entirely separate decision could be made on a separate application regarding a matter that had reviewed at an earlier time. This was because, while the AAT should not generally allow re-litigation of issues already decided, the doctrines of res judicata and issue estoppel do not apply to AAT proceedings. 
  3. The AAT did not have power under s 42B of the AAT Act to dismiss an application for a time extension to lodge a decision review application. Instead, the AAT found that the power under s 42B was limited to the dismissal of applications for review.
  4. Where the AAT has jurisdiction to hear a matter in relation to a decision on the same terms as it had previously reviewed, it could adopt the decision (and reasoning) previously made. The Tribunal found this in view of the fact that the AAT is not bound by the rules of evidence and may inform itself on any matter it thinks appropriate when ruling on the issue.

Substantive issues

Before the AAT, the taxpayer made a new argument that his seven-year delay in seeking a review of the disallowed objections were related to his mental health. He said he had struggled with depression and grief from the time of the onset of his late wife's illness until after her death in August 2013. During the time of her illness, he said, they had made many trips to the United States for treatment as well as seeking ongoing treatment in Australia.

However, the AAT found that, despite these new arguments, it was not appropriate to exercise its discretion to grant the extension, for the following reasons:

  • It said "that the dictates of fairness" should mean that it "should not reach a conclusion different from that reached" originally by the AAT – especially as the only matter different from that decision was the taxpayer's claim that the delay in lodging the application was due to his state of mind and the effect it had on his ability to manage his taxation affairs, but that otherwise he had not raised any fresh ground and had relied on his previous submissions.
  • The health reasons given for his seven-year delay in lodging an application for review of the objection decision were not supported by professional medical evidence of any sort. The taxpayer had been appointed as a director or secretary of at least five companies in that period, with all the accompanying responsibilities, which spoke something of his ability to attend to professional and business matters despite his ill health. The fact that the application for an extension was lodged some two years after his wife's death was also significant. 
  • The taxpayer provided inadequate evidence of the "merits" of the application, especially as the "mere" assertions and opinions he put before the AAT were not sufficient to conclude that he would have a reasonable prospects of success. 
  • In terms of the prejudice that would be suffered by the parties if the application was allowed, the AAT noted that after more than seven years the ATO had been unable to locate relevant third-party documents that might be relevant. It also noted that the Commissioner would be able to continue to take bankruptcy action against the taxpayer to recover the debt arising from his objection decision, which was not unfair to him – he had an opportunity to seek review of the objection decision when it was made.

In short, the AAT found that there were insufficient grounds to extend the period in which the taxpayer could apply for a review of the Commissioner's objection decisions.

Re Benjamin and FCT [2017] AATA 39, AAT, File Number 2016/5897–5902, Forgie DP, 19 January 2017,