It is safe to say that the Federal Court were disappointed with the AATs decision to allow individuals facing massive tax liabilities to give evidence via video link from Mauritius, after they had fled the country before court proceedings commenced due to a fear of being convicted of a crime.
Quotes from the judgement are telling.
I see no objective basis at all for a conclusion by the AAT that cross-examination by the Commissioner would not be impeded. It was inevitable that the Commissioner’s ability to cross-examine (about matters in issue, credit and more generally) would be impeded, perhaps seriously. That is one of the things which it was necessary to assess. I accept the Commissioner’s submission that this was a necessary matter to take into account. I shall return to it also. (p 81)
For example, had it been apparent that a refusal to return to Australia was based on a desire to avoid arrest on an outstanding warrant for some crime of violence, it is unthinkable that the AAT would regard it as appropriate to assist in that endeavour or to give it any weight. No different position could be taken in relation to a “white collar crime”. Nor, in my view, could a taxpayer be assisted to avoid arrest for a criminal offence arising out of alleged participation in a tax fraud. I do not see that it could make a difference that an arrest was merely a real possibility which a taxpayer wished to avoid. (p 93)
Different considerations might arise if a party needed to obtain the evidence of an overseas witness who would not come to Australia – possibly. But where a party to proceedings in the AAT puts a request to give video evidence on the basis that the party wishes to avoid any possibility of legitimate action by taxation, regulatory or prosecuting authorities in Australia, I do not see how such a matter (which remains the declared position of the taxpayers regardless of the position of the Commissioner about DPOs) could normally be relied upon as relevant, much less decisive, by the AAT. (p 99)
The consequence of the AAT’s reasoning upon the rights of the Commissioner to crossexamine was, in my view, profound. The AAT could not expect to exert more than the most basic procedural influence over the conduct of a party giving evidence from Mauritius. The possibility of effective cross-examination on documents, for example, must be regarded as effectively illusory. The ability to cross-examine on credit would be no more effective. Although there can be no suggestion that jurisdictional error is fairly or safely to be deduced only from a preference for a different procedural course, in my view, the restraint upon the ability of the Commissioner to answer the taxpayers’ case, and present his own, was so fundamentally affected that the Commissioner was denied procedural fairness. (p 102)
In my view, therefore, the AAT took into account an irrelevant matter, and failed to take into account a relevant matter, as well as failing to give procedural fairness to the Commissioner. (p 106)
Additionally, and in any event, any conclusion that the Commissioner’s position was forensically unaffected by the decision to allow the taxpayers to give effectively noncompellable, unsupervised, evidence from Mauritius at their ongoing discretion was unsustainable. That would, in the circumstances of the present case at least, deny the Commissioner any fair opportunity of cross-examination on matters potentially critical to an assessment of the taxpayers’ cases. In my view, that was a denial of procedural fairness and a breach of s 39(1) of the AAT Act. It went well beyond a legitimate exercise of discretion in the taxpayers’ favour. As in Hayes, the prejudice would be incurable. (p 111)
Case
[2015] FCA 320
Commissioner of Taxation vs John Seymour, Jeanette Seymour and Administrative Appeals Tribunal
http://www.austlii.edu.au/au/cases/cth/FCA/2015/320.html
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