Re Toohey v Tax Agents' Board

75 ATR 460
[2009] AATA 142

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(Decision by: S A Forgie , Deputy President)

Re Toohey
vTax Agents' Board

Tribunal:

Member:
S A Forgie , Deputy President

Legislative References:
Income Tax Assessment Act 1936 - s 251BC(3)
Administrative Appeals Tribunal Act 1975 (Cth) - s 44(4); s 44(5); s 44(6)
Administrative Decisions (Judicial Review) Act 1977 - s 16(1)(b)
Migration Act 1958 - s 421(1); s 421(2); s 475; s 481; s 481(1)(b); s 481(1)(d)
Judiciary Act 1903 - s 39B

Case References:
Australian Broadcasting Tribunal v Bond - (1990) 170 CLR 321
Versatile Carpets Pty Ltd v Collector of Customs - (unreported, Federal Court of Australia, Sweeney, Woodward and Davies JJ, 21 February 1985)
Minister for Immigration and Multicultural Affairs v Wang - [2003] HCA 11; (2003) 77 ALJR 786; [16] 215 CLR 518; [16] 196 ALR 385
Johnson v Johnson - (2000) 74 ALJR 1380
Ebner v Official Trustee in Bankruptcy - (2000) 75 ALJR 277
Helljay Investments Pty Ltd v Deputy Commissioner of Taxation - (1999) 74 ALJR 68
Wang v Minister for Immigration and Multicultural Affairs (No 2) - (2001) 108 FCR 167
Drake v Minister for Immigration and Ethnic Affairs - (1979) 46 FLR 409

Hearing date:
Decision date: 6 March 2009

Melbourne

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Decision by:
S A Forgie , Deputy President

[1] On 27 November 2008, Middleton J allowed an appeal from my decision in Re Toohey and Tax Agents' Board of Victoria. ^[1] I had affirmed a decision of the Tax Agents' Board of Victoria (the board) refusing Mr Toohey's application to be re-registered as a tax agent. The board had done so on the basis that it was not satisfied that he was a fit and proper person to prepare income tax returns and to transact business on behalf of taxpayers in income tax matters. The review required ^[2] primary issues to be considered. The first was whether, because of special circumstances, I could disregard Mr Toohey's omissions to lodge a number of tax returns over the years. I considered that issue under s 251BC(3) of the Income Tax Assessment Act 1936 (Cth) (the ITAA 1936) and decided that I could not disregard them. The second primary issue was whether Mr Toohey was a fit and proper person as required by s 251JC(1)(a) if he were to be re-registered as a tax agent. I decided that he was not.

[2] On appeal, (Toohey v Tax Agents' Board of Victoria (No 2) 2 ), Middleton J found no error of law in the way in which I had approached the first issue relating to special circumstances. He did find such an error in relation to the way in which I had approached the second. The relevant passage from his judgment is this:

"[16] ... In determining whether a person is a fit and proper person the inquiry is directed not only to whether improper conduct has occurred, but whether it is likely to occur again, and whether the community will have confidence that it will not occur. This will involve an evaluation of character and reputation: see Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321 at 380 per Toohey and Gaudron JJ. The tribunal should have considered and, more importantly, evaluated all the material which was raised as to "special circumstances' in the context of a separate and ultimate inquiry of whether the appellant, at the time of the tribunal's decision, was the prescribed fit and proper person.

[17] In my view, the tribunal did not undertake this task in the passages referred to above where it purported to consider the ultimate issue. To say, for example, as the tribunal did, the appellant's explanations "showed a lack of understanding of the reason for lodgement' of tax returns may be accepted, but this needs to be placed in the context of the evidence as to his health and general circumstances at the time, and in the context of the evaluation referred to in Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321. While the tribunal had previously accepted the appellant's medical condition proved debilitating over the years, the required evaluation necessarily involves looking at both past conduct and likelihood of future conduct, and this evaluation was simply missing from the tribunal's analysis. The general references back to the evidence and principles of law did not equate to an evaluation of the evidence in this context of the ultimate issue.

[18] While the main criticism of the reasoning of the tribunal is the lack of evaluation, there are references made in the reasoning that indicate a failure to focus on all the relevant circumstances up to the tribunal hearing date. The tribunal specifically referred to matters which occurred many years ago. There was a reference to the lodgement rate (at least in the 2002 year (at ATR 989 [156]; ATC 2138 [156] of the tribunal's decision)), correspondence on 7 July 2004 (at ATR 989 [159]; ATC 2139 [159]), and conduct in 2003 (at ATR 989 [159]; ATC 2139 [159]). No attempt was made to put these events in context, nor to consider them in the context of later events and circumstances. ^[3] "

[3] It is undoubtedly the case that I must accept Middleton J's judgment. I do and would not want to be thought that I do not or that I am in any way criticising his Honour or his judgment. Accepting his judgment is one thing and allowing myself to be reconstituted to hear the matter on remittal is quite another. For the reasons I give below, I have disqualified myself. It is not a decision that I have come to lightly and it is the first time in over 20 years as a member of the tribunal that I have had to do so. I am aware that it may increase the costs of the parties and am humbled by the fact that they consented to my re-hearing the matter on remittal. Unfortunately, these matters cannot influence me from making a decision that I consider is not only the decision that it is honourable to make but that is the decision that I am bound by law to make. ^[4]

Middleton J's direction

[4] Middleton J directed that:

"The matter be remitted to a differently constituted tribunal or, if the parties so agree, to the tribunal constituted by Deputy President Forgie to determine according to law the application of the appellant for re-registration as a registered tax agent under the Income Tax Assessment Act 1936 (Cth)."

Authorities considering the exercise of power under s 44 of the AAT Act

[5] In making this direction, his Honour did not refer to any legislative provisions or to previous authorities. His approach is the same as that adopted on numerous other occasions by judges who have given directions regarding the constitution of the tribunal on remittal of a matter. I will refer to only one example. It is the case of Industry Research & Development Board v IMT Ltd. ^[5] His Honour heard a motion that the matter be remitted to the tribunal as originally constituted, subject to the availability of the relevant members, to be determined according to law without the hearing of further evidence other than as determined by the tribunal. In 17 paragraphs, R D Nicholson J gave extensive consideration to whether the matter should be remitted to the same or to a differently constituted tribunal. He did not question whether he had the power to do so.

[6] Middleton and R D Nicholson J would appear to have had in mind s 44(4), (5) and (6) of the Administrative Appeals Tribunal Act 1975 (Cth) (the AAT Act). Section 44(4) provides, in part, that the Federal Court "... may make such order as it thinks appropriate by reason of its decision." Without limiting the generality of s 44(4), s 44(5) provides that the orders that the court may make include "... 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." Section 44(6) provides:

"If the Federal Court 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 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."

[7] Middleton J referred neither to these provisions nor to ss 20B(1), 23 ^[6] or s 23A ^[7] of the AAT Act. These are 3 of the provisions set out in Div 3 of Pt III of the AAT Act relating to the President's powers to constitute the tribunal. Section 20B is the only section that would appear relevant in this context. It provides that:

"(1) The President may give directions as to the persons who are to constitute the Tribunal for the purposes of a particular proceeding.

(2) If the President gives a direction as to the persons who are to constitute the Tribunal for the purposes of a particular proceeding, he or she may at any time after the giving of the direction and before the commencement of the hearing of the proceeding:

(a)

revoke the direction; and

(b)

give a further direction under subsection (1) as to the persons who are to constitute the Tribunal for the purposes of the proceeding."

[8] While Middleton J did not refer to the President's powers to constitute the tribunal or to the source of his power to make the direction he did, Moore J referred to both in White v Repatriation Commission. ^[8] In that case, the respondent had submitted that his Honour could not direct that the matter be remitted to a differently constituted tribunal for constitution is a matter for the President. Moore J set out s 44(4), (5) and (6) ^[9] and noted that the discretionary power in s 44(5) appears, in substance, to be the same as that in s 16(1)(b) of the Administrative Decisions (Judicial Review) Act 1977 (the ADJR Act). Section 16(1)(b) provides:

"... the Court may, in its discretion, make all or any of the following orders ...

(a)

...

(b)

an order referring the matter to which the decision relates to the person who made the decision for further consideration, subject to such directions as the court thinks fit;

(c)

-(d) ..."

[9] Of s 16(1)(b) of the ADJR Act, Davies and Foster JJ had said in Northern NSW FM Pty Ltd v Australian Broadcasting Tribunal: ^[10]

"If a decision has been set aside for error and remitted for re-hearing, it will generally seem fairer to the parties that the matter be heard and decided again by a differently constituted tribunal. This is because the member constituting the tribunal in the original inquiry or hearing will already have expressed a view upon facts which will have to be determined in the re-hearing. The aggrieved party may think that a re-hearing before the tribunal as originally constituted could be worthless, for a member's views have been stated. ^[11] "

[10] In a passage not referred to by Moore J, Davies and Foster JJ continued:

"... Thus, if a decision of the Administrative Appeals Tribunal has been set aside and the matter remitted for re-hearing, the President of that tribunal ordinarily allocates to the re-hearing a different member of the tribunal. There are, of course, cases where it is convenient for the tribunal as previously constituted to deal with the matter. And occasionally the court itself expresses such a view, so as to make it clear that it would not be improper for the tribunal as previously constituted to consider the matter again: see, for example, Versatile Carpets Pty Ltd v Collector of Customs (unreported, Federal Court of Australia, Sweeney, Woodward and Davies JJ, 21 February 1985) in which the court remarked, "... subject to questions to availability of members, it would be helpful if the matter were heard by the tribunal as it has so far been constituted.' ^[12] "

[11] Together with Burchett J, Davies and Foster JJ dismissed an appeal from a single judge that the member of the Australian Broadcasting Tribunal who had conducted the initial hearing should not conduct the re-hearing. The decision under consideration in Northern NSW FM Pty Ltd v Australian Broadcasting Tribunal was a decision of the Australian Broadcasting Tribunal and not of this tribunal. Despite that, Moore J applied its principles in relation to an appeal from a decision in the tribunal saying:

"The discretionary power in s 44(5) of the AAT Act appears, in substance, to be the same as that in s 16(1)(b) of the ADJR Act. However s 44(6) deals with the composition of the tribunal and in this respect it differs from s 16 of the ADJR Act which is silent on the issue of whether the matter can, when remitted, be dealt with by the same or a different decision-maker. However the existence of s 44(6) does not, in my opinion, limit the exercise of the discretionary power in s 44(5) and it should be exercised in accordance with the principles determined by the full bench in Northern NSW FM. ^[13] "

[12] Moore J did not refer to s 20(1), which then equated with the current s 20B(1) of the AAT Act, and did not consider whether it qualified the general direction-making power given in s 44(5). Furthermore, his Honour did not consider whether s 44(6)(a) is a provision directed to the President in exercising his power to constitute under Div 3 of Pt III rather than as a provision directed to qualifying or elucidating the directions-making power given to the Federal Court under s 44(6). Arguably, a reading of it as a provision directed to the President would be more consistent with s 44(6)(b). Section 44(6)(b) is a provision clearly directed to the tribunal. It does not seek to qualify or elucidate the court's power to make directions but rather, instead, it assumes that there is a power to make directions that may affect the material to which the tribunal may have regard in hearing a matter on remittal. It tells the tribunal that it may have regard to any record of the proceeding in the tribunal prior to the appeal so long as doing so is not inconsistent with the directions of the court. As s 44(6)(b) is so clearly directed to the tribunal hearing the matter on remittal, it would seem that s 44(6)(a) is intended to be read as directed to the person having power to constitute the tribunal, that is, the President.

Authorities considering the exercise of power under the Migration Act

[13] I am unaware of any authority since White v Repatriation Commission that has considered the directions-making power of the court on appeal from this tribunal. A directions-making power has been considered by the High Court and the full court of the Federal Court in relation to the Refugee Review Tribunal. In remitting a matter to be re-heard by the Refugee Review Tribunal, The Federal Court had directed that it be heard by the member who had made the decision it had reviewed.

[14] The Refugee Review Tribunal is established under the Migration Act 1958 (Cth). Section 421(1) provides that, for "... the purpose of a particular review, the tribunal is to be constituted, in accordance with a direction under subs (2), by a single member." Section 421(2) provides that: "The Principal Member may give a written direction about who is to constitute the Tribunal for the purposes of a particular review." At the time the High Court heard Minister for Immigration and Multicultural Affairs v Wang, ^[14] s 481(1) relevantly provided:

"On an application for review of a judicially-reviewable decision, the Federal Court may, in its discretion, make all or any of the following orders:

(a)

an order affirming, quashing or setting aside the decision, or part of the decision, with effect from the date of the order or such earlier date as the Court specifies;

(b)

an order referring the matter to which the decision relates to the person who made the decision for further consideration, subject to such directions as the Court thinks fit;

(c)

...

(d)

an order directing any of the parties to do, or to refrain from doing, any act or thing the doing, or the refraining from the doing, of which the Federal Court considers necessary to do justice between the parties."

[15] McHugh J observed that it was the tribunal, and not the member constituting it, who "made the decision" to which reference is made in s 481(1)(b). Section 475 of the Migration Act 1958 (Cth) defined a "judicially reviewable decision" as a decision of the Refugee Review Tribunal, among others, and not of individual members. ^[15]

[16] McHugh J's reasoning is partially applicable to the tribunal. The "Tribunal" is defined in s 3(1) of the AAT Act to mean:

"(a)

means the Administrative Appeals Tribunal established by this Act;

(b)

in relation to a proceeding, means the Administrative Appeals Tribunal so established as constituted for the purposes of the proceeding; and

(c)

includes a member, or an officer of the Tribunal, exercising powers of the Tribunal."

Therefore, when s 44(1) provides that: "A party to a proceeding before the tribunal may appeal ... from any decision of the tribunal in that proceeding," the reference to the "tribunal" is to be read as a reference to the tribunal as constituted for the purposes of the proceeding, that is, in accordance with para (b) of the definition. The same could be true when the word "tribunal" is used in s 44(5) in so far as it is used to identify the decision in relation to which the Federal Court may make certain orders. Section 44(5) also uses the word on a second occasion when conferring power on the Federal Court to remit the case to be heard and decided again by the tribunal. That is a use of the word "tribunal" without reference to a "proceeding" as that term is defined in s 3(1). On its face, it would seem that it should be understood as a general reference to the Administrative Appeals Tribunal established by the AAT Act, that is, in accordance with para (a) of the definition. I am strengthened in that view by the specific reference in s 44(6)(a) that, on remittal, the "tribunal" need not be constituted by the same persons who made the decision.

[17] As to the Federal Court's power to give directions as to the constitution of the Refugee Review Tribunal on remittal, there were 4 views expressed by the members of the High Court. Each acknowledged that power to decide the constitution of the Refugee Review Tribunal for the purpose of a particular review proceeding was vested in its principal member and each referred to the powers given in s 481 of the Migration Act 1958 (Cth).

[18] Gleeson CJ did not distinguish between s 481(1)(a) and (b) in saying:

"... The power to give directions included, in a proper case, a power to direct that, on a further hearing, the tribunal should be differently constituted from the original tribunal whose decision was under review. ... To that extent, at least, the powers of the principal member were subject to those of the Federal Court. Once it is accepted that it was within the power of the Federal Court, under s 481, in some circumstances to give a direction as to the constitution of the tribunal on a further hearing, it is difficult to see a basis, as a matter of statutory construction, for limiting the power to any particular circumstances, or any particular kind of direction. Accordingly, I am prepared to accept that there was a power in the Federal Court to direct that a matter be remitted to the member who constituted the original tribunal. ... ^[16] "

Gleeson CJ went on to make several observations regarding the propriety of exercising that power as a matter of judicial discretion and comity.

[19] McHugh J also referred to principles of statutory construction and came to a different conclusion. He distinguished between the general direction-making power given by s 481(1)(b) and the further power given in s 481(1)(d) of the Migration Act 1958 (Cth). His Honour noted that the:

"... power to give directions under s 481(1)(b) is wide. It should be read literally and widely, so far as it is possible to do so. But wide as a power is, it is not possible to read it as conferring a power to give a direction that is inconsistent with an express provision of the Act. It is an elementary rule of statutory construction that powers conferred by general words are not intended to over-rule or supersede powers conferred in specific terms .... This is particularly so, where the specific power is conferred subject to limitations and qualifications ....

This Act contains a specific power concerning directions about the constitution of the tribunal, and it is a power that contains qualifications or limitations in the sense that it must be exercised by a particular person and in writing. Section 421(2) of the Migration Act 1958 (Cth) authorises the principal member of the tribunal to "give a written direction about who is to constitute the tribunal for the purpose of a particular review.'

In accordance with the rule of construction to which I have referred, the power to give directions in s 481(1)(b) cannot be read as conferring power on the Federal Court to order the tribunal to be constituted by a particular person. That power is to be exercised "as the Court thinks fit.' It is a general power that is not directed to any specific end. Its general language cannot be construed as authorising a direction that would conflict with the specific power that s 421(2) confers on the principal member.

That it is the tribunal to whom the directions may be given reinforces this conclusion. The direction is given to the entity known as the tribunal. ... ^[17] "

[20] McHugh J went on to consider the power in s 481(1)(d):

"Section 481(1)(d) is a more specific power than s 481(1)(b). It authorises an order that is "necessary to do justice between the parties.' The order must be directed to a party. The tribunal is ordinarily, and in all cases ought to be, a party to the proceedings in the Federal Court. ... To the extent that a direction under s 481(1)(d) would conflict with a direction under the specific power conferred by s 421(2), the meanings of the 2 provisions must be adjusted "to achieve the result which will best give effect to the purpose and language of those provisions while maintaining the unity of all of the statutory provisons. ...' The purpose of s 421(2) is to give the power of assignment to the principal member. The express purpose of s 481(1)(d) is to enable the Federal Court to do justice between the parties. The power to ensure that justice is done must trump the power to assign who shall constitute the tribunal on a particular occasion. Where the 2 provisions conflict, s 481(1)(d) is the leading provision to which s 421(2) as the subordinate provision must give way .... ^[18] "

[21] Gummow and Hayne JJ wrote a joint judgment noting that the:

"... court's power to refer the matter for further consideration was a power to refer it to the tribunal.

That does not conclude the question of power. Account must be taken of, and meaning given to, the further provision of s 481(1)(b) that an order referring the matter for further consideration, in this case by the tribunal, may be made "subject to such directions as the court thinks fit.' The amplitude of that power should not be unnecessarily confined .... It is a power that includes directing that the matter be heard by the tribunal constituted differently from its constitution for a decision that was set aside. On its face there seems, therefore, no reason to think that it would not extend to confer power on the court to direct the converse - that the tribunal be constituted in a particular way rather than not be constituted in a particular way. ^[19] "

[22] Having expressed that view, Gummow and Hayne JJ found it:

"... not necessary to reach a final conclusion about that question. For the reasons that follow, if the court had the power to direct that the tribunal be constituted by the member who constituted it in making the decision that was set aside, it should not have exercised it in this case. ^[20] "

[23] Kirby J was in dissent on the issue of whether the full court had correctly exercised its discretion and so on the disposition of the appeal but, on the question whether the Federal Court had power to make a direction regarding constitution, he was not. His Honour was in agreement on that point with Gleeson CJ and, had they decided the point, Gummow and Hayne JJ. His Honour gave 7 bases for concluding that s 481(1)(b) conferred discretionary power on the Federal Court to give directions regarding the constitution of the Refugee Review Tribunal on remittal. In relation to the power given to the principal member to constitute the Refugee Review Tribunal, Kirby J said:

"Fourthly, an order of such a kind under s 481(1)(b) was not incompatible with the general powers of the principal member to constitute or reconstitute the tribunal in accordance with the Act. The principal member retains his general powers. But where, in special circumstances, a decision of the tribunal has been subject to review in the Federal Court and has been quashed or set aside by that court (which, in its discretion, makes, additionally, an order under s 48(1)(b)) the specificity of the Federal Court's consequential powers over-rides the generality of the principal member's powers. The successive provisions of the Act must be read so as to work together harmoniously .... The exercise by the Federal Court of its powers is not an interference with the exercise by the principal member of his. In the case where the court's order includes a direction with respect to the constitution of the tribunal, any exercise of the power by the principal member must conform to that order. ^[21] "

[24] In summary, Gleeson CJ and Kirby J considered that the Federal Court did have power to make a direction regarding the constitution of the Refugee Review Tribunal when remitting a matter to it. Kirby J considered that the power was given under s 481(1)(b) but Gleeson CJ relied on s 481 generally. Gummow and Hayne JJ tended to that view that s 481(1)(b) supported the making of a direction but did not feel the need to decide it. McHugh J decided that s 481(1)(d) was the repository of the power but not s 481(1)(b).

[25] By the time that the full court of the Federal Court considered SZEPZ v Minister for Immigration and Multicultural Affairs, ^[22] the review regime in the Migration Act 1958 (Cth) had been changed. Section 481 had been repealed and, in its place, was a regime whose centrepiece was s 474. It is lengthy and I will set out only s 474(1), on which the full court focused:

"A privative clause decision:

(a)

is final and conclusive;

(b)

must not be challenged, appealed against, reviewed, quashed or called in question in any court; and

(c)

is not subject to any prohibition, mandamus, injunction, declaration or certiorari in any court on any account."

With limited exceptions, a "privative clause decision" meant "... a decision of an administrative character made, proposed to be made, or required to be made, as the case may be, under this Act or under a regulation or other instrument made under this Act (whether in the exercise of a discretion or not). ..." ^[23]

[26] In respect of an earlier decision of the Refugee Review Tribunal, SZEPZ had claimed relief under s 39B of the Judiciary Act 1903 (Cth). With the consent of the parties, the Federal Magistrates' Court had allowed the application and remitted the matter to the Refugee Review Tribunal differently constituted for reconsideration according to law. The minister had consented to the order on the basis that procedural fairness had not been accorded to SZEPZ in relation to independent country information concerning Bangladesh. The question on appeal before the full Federal Court from the Refugee Review Tribunal's second decision centred on whether giving notice under s 424A of the Migration Act 1958 (Cth) for the purposes of the first hearing, amounted to compliance with that section for the purposes of the second hearing. That led the full court to examine the constitution powers of the principal member and the effect of s 474. If notice had not properly been given under s 424A at the second hearing, the decision of the reconstituted Refugee Review Tribunal would be affected by jurisdictional error. A decision affected by jurisdictional error could not be regarded as a decision made under the Act and so did not come within the purview of the privative provisions in s 474. Section 39B of the Judiciary Act 1901 (Cth) would not be ousted.

[27] The full court contrasted s 474 with s 481 as it had been previously enacted and considered by the High Court in Minister for Immigration and Multicultural Affairs v Wang. They said:

"The power, on referring a matter to the tribunal, to give such directions as the court thinks fit, did not include a power to give a direction as to how the tribunal should be constituted. To the extent that the court had such a power, it arose under the rubric of directing the parties to do what the court considered necessary to do justice between the parties. Thus, for example, where a particular member exhibited bias, it would be necessary to give a direction that the tribunal not be constituted by that member, in order to do justice between the parties. Under the former regime, when a decision of the tribunal was quashed or set aside, the tribunal was obliged to undertake a further review of the delegate's decision. The tribunal's decision, upon that review, was to be made on the basis of the facts as they appeared in the course of that further review: see Minister for Immigration and Multicultural Affairs v Wang [2003] HCA 11;Minister for Immigration and Multicultural Affairs v Wang (2003) 77 ALJR 786 at 790 [16]; 215 CLR 518 at 525 [16]; 196 ALR 385 at 390 [16]. ...

Under the present regime, however, there must be real doubt as to whether the Federal Magistrates Court could direct how the tribunal be constituted having regard to the express power conferred upon the principal member by s 420. Even an express statutory power to give directions might not over-ride the provisions of s 420: see Minister for Immigration and Multicultural Affairs v Wang [2003] HCA 11;Minister for Immigration and Multicultural Affairs v Wang (2003) 77 ALJR 786 at 792-793 [32]-[34]; 215 CLR 518 at 529-530 [32]-[34]; 196 ALR 385 at 393-394 [32]-[34]). ... ^[24] "

[28] I note that para [16] ^[25] of the decision in Minister for Immigration and Multicultural Affairs v Wang comes from the judgment of Gleeson CJ. I would respectfully venture to suggest that his Honour was considering "the propriety of the exercise of such a power" by the full court of the Federal Court when it made a direction as to who was to constitute the Refugee Review Tribunal on remittal. He was not considering whether the full court had the power. That he had already done of his judgment. ^[26]

[29] The passage (at CLR 529-530 [32]-[42]; ALJR 792-793 [32]-[34]; ALR 393-394 [32]-[34]) of the decision in Minister for Immigration and Multicultural Affairs v Wang, to which the full court of the Federal Court referred in SZEPZ v Minister for Immigration and Multicultural Affairs, is a passage from the judgment of McHugh J. McHugh J considered both s 481(1)(b) and (d) in those paragraphs. In so far as s 481(1)(b) was concerned, he decided that an express statutory power to give directions did over-ride the power to give directions but he reached the opposite conclusion in relation to s 481(1)(d).

[30] Both Minister for Immigration and Multicultural Affairs v Wang and SZEPZ v Minister for Immigration and Multicultural Affairs consider the powers of the Federal Court or the Federal Magistrates' Court to give a direction as to the constitution of the Refugee Review Tribunal when remitting a matter to that tribunal. They do so under the Migration Act 1958 (Cth). By the time they were considered in SZEPZ v Minister for Immigration and Multicultural Affairs, they bore no similarity to the provisions in the AAT Act. Earlier when they were in the form considered in Minister for Immigration and Multicultural Affairs v Wang, s 481(1)(b) was in a form that was more closely aligned to the direction-making power in s 44(4) of the AAT Act. At all times, specific powers to constitute had been given to the principal member of the Refugee Review Tribunal and to the President of the AAT. Even so, the Migration Act 1958 (Cth) did not have a provision equivalent to that in s 44(6)(a) of the AAT Act. If the general argument adopted by Gleeson CJ and the particular argument relating to s 481(1)(b) favoured by Gummow and Hayne JJ and adopted by Kirby J were adopted in relation to this tribunal, it would follow that the general directions-making power in s 44(4) would be read as extending to a power to make a direction regarding constitution on remittal. If the approach adopted by McHugh J were adopted, it is arguable that the directions-making power would be more narrowly construed and not empower the court to make a direction regarding the constitution of the tribunal. Until the issue is raised squarely in the context of s 44 of the AAT Act, the High Court's approach must remain one of speculation in so far as the constitution of this tribunal is concerned. In the meantime, the judgment of Moore J in White v Repatriation Commission appears to be the only case in which the Federal Court's powers to make a direction regarding the tribunal's constitution on remittal has been decided.

The tribunal's processes on remittal

[31] In accordance with the President's policy, I was advised by staff of the principal registry that the President would be assisted by my views whether there was anything about the case that made it inappropriate to remit it to me in accordance with his normal policy. I was also advised that the President would like to know if I would prefer not to deal with the case on remittal. As the request was made of me before the appeal period had expired, I advised that I thought it preferable to wait until it had expired. Unfortunately, when the period had expired, the staff did not contact me first but instead approached the parties asking whether they consented to my hearing the matter on remittal. When the parties consented, I was asked to provide my views regarding the constitution of the tribunal. It seems to me that it would have been more efficient for the tribunal and save the parties consideration, and so costs, to reverse these steps but there may be reasons for the order that I am not privy to.

[32] I advised the staff that:

"I realise that Middleton J allowed the appeal and recommended that I re-hear it if the parties consented.

I accept his Honour's judgment, of course, but accepting his judgment is one thing and deciding whether or not I should hear the matter on remittal is quite another.

In my view, I have pre-judged the matter. Furthermore, it is my assessment that fair-minded people reading my reasons for decision might reasonably apprehend or suspect that I have pre-judged the case were I to hear it on remittal. Therefore, as a matter of law, I must disqualify myself from hearing the matter on remittal. The fact that the parties consent to my hearing the matter is irrelevant."

My reasons for giving written reasons

[33] My having disqualified myself seems to have caused some consternation and misunderstanding in the tribunal. I did not intend that and certainly would not want it to continue. Some have expressed concern that listing the matter before a tribunal constituted by someone other than me would appear to fly in the face of the direction made by Middleton J now that the parties had agreed to my hearing it. I would not want his Honour to think that or to entertain any possibility that I would consider doing so. What I would want people to think is that I am aware of a duty that surpasses the duty I have to comply with his Honour's direction. That is my duty to disqualify myself in circumstances in which I believe I have pre-judged the matter or in which I believe that fair-minded people might reasonably apprehend or suspect that I have. As the High Court said in R v Watson; Ex parte Armstrong: ^[27]

"It is of fundamental importance that the public should have confidence in the administration of justice. If fair-minded people reasonably apprehend or suspect that the tribunal pre-judged the case, they cannot have confidence in the decision. To repeat the words of Lord Denning MR which have already been cited: "Justice must be rooted in confidence: and confidence is destroyed when right-minded people go away thinking: "The judge was biased."' ^[28] "

[34] This is a case which goes beyond matters of perception. It is a case in which I know from my earlier consideration that I will be able to reach no decision other than the decision that I did if I were to hear the matter again. I am of the view that fair-minded people reading my reasons may reasonably apprehend that would be the case. I will explain my reasons for holding that view in a moment. Before doing that, I want to make an observation.

[35] When I read Middleton J's judgment and particularly his direction, I knew that circumstances required me to choose which of 2 paths I would take. One path would have permitted me to accept, as I do, his Honour's judgment, re-write my reasons so that I removed the error he had found and, because I had no choice on my view of the evidence, come to the same conclusion and affirm the decision. It would have the appearance of being correctly done. Only I would have known, even if others speculated, that there was no possibility that I would make a different decision. Having regard to the ground on which the appeal had been allowed and the direction, all would have appeared proper on the face of things. If taken on appeal, it is unlikely that the Federal Court would have inquired into my state of mind. There is nothing in the AAT Act that enables the tribunal's decision to be set aside for pre-judgment or for actual bias. In this regard, the AAT Act is to be contrasted with s 476(1) of the Migration Act 1958 (Cth), which permits a decision to be set aside for actual bias. ^[29] The issue would be considered under the general law. In that context and more particularly in the context of bias, the full court of the Federal Court in Re Maurice; Ex parte Attorney-General (Northern Territory) ^[30] considered whether it was appropriate for the Attorney-General of the Northern Territory to take it upon himself to make public statements about his confidence in the Aboriginal Land Commissioner's ability to proceed. That question had arisen in the context of suggestions of bias by the Commissioner and the role that the Attorney-General was said to have in maintaining public respect for the integrity of the judiciary and of defending it from unjustified attacks. The full court said:

"... In Armstrong's case [R v Watson; Ex parte Armstrong] ... the majority of the High Court said (CLR 258; ALJR 783; ALR 561) that, in stating that there was actual bias, the wife in that case had gone further than she needed to go, "and as some would say, further than it was her right to go'. In J M Evans, de Smith's Judicial Review of Administrative Action (1980) 4th ed at 261, it is said that courts are not concerned with the question whether an adjudicator was in fact biased. The current editor goes on to say that the reason for this attitude is presumably that it would be unseemly for a court to purport to pry into the state of mind of any judicial officer. However, it is said that there is probably no rule of law which absolutely precludes a court from holding that an adjudicator was in fact biased. The matter is left in that way. ^[31] "

[36] Even knowing that there would be every appearance of propriety, I could not contemplate stepping onto the path towards re-hearing the matter knowing in my heart that I had pre-judged the matter. That would deny Mr Toohey the proper re-hearing that should follow the success of his appeal to the Federal Court. It would be an act inconsistent with the fundamental principle that a decision-maker charged with making decisions, be they administrative or judicial, must bring to the matter a mind unfettered by preconceived views on aspects of the matter or, as in this case, on the whole.

[37] The suggestion has been made to me within the tribunal that I should hold a telephone directions hearing with the parties, make my views known to them and adjourn the matter so that another member could be constituted. I have thought about the suggestion of holding a telephone directions hearing but I think it preferable to give written reasons for my disqualifying myself. Not only can the parties read and consider them at their leisure, the public can have access to them. Permitting the public to have access to my reasons is consistent with the expectation that it has that matters will be heard by those who are neither biased nor, as I feel I have, pre-judged the case.

[38] It is a fundamental principle that it is desirable that hearings of proceedings before the tribunal should be held in public. Directions hearings, even telephone directions hearings are caught up in that principle expressed in s 35(3) of the AAT Act. ^[32] Directions hearings are, by their very nature, transitory events. They are frequently not recorded and transcripts ordered even less so. Written reasons for decisions made at those directions hearings are, however, not unknown. Giving them is quite consistent with the fact that the proceeding is conducted in public or at least in circumstances accessible to the public in accordance with s 35(1A) of the AAT Act. Given that it is appropriate to make the proceedings public, it is equally appropriate to make the reasons available. There may be a stronger case for making them public in this case for they will provide an explanation why I do not conduct the re-hearing.

[39] Making my reasons public is also consistent with parliament's choice to make public the matters to which the President must have regard in constituting a tribunal for the purposes of a particular proceeding. It has done so in s 23B of the AAT Act in relation to the powers given to the President in ss 20B, ^[33] 23 ^[34] or s 23A. ^[35] Those sections are complemented by other provisions also found in Div 3 of Pt III of the AAT Act.

[40] One of the factors to which s 23B requires the President to have regard is that found in s 23B(h) "such other matters (if any) as the President considers relevant." Those other matters would include, in this case, the fact that I have disqualified myself. My reasons for doing so should be as available to the public as are the other matters to which s 23B directs the President's regard. The knowledge, expertise and experience of the tribunal's members is, to some extent at least, available in its annual reports and on it website. Unless there is a confidentiality order under s 35 of the AAT Act, and there is not, so too is the status of the position or office held by the person who made the decision under review and the purpose or object underlying the enactment under which the decision was made. Perhaps to a more limited extent, so too are matters such as the importance and complexity of the matters to which the proceeding relates and the degree of financial importance of the matters to which the proceeding relates.

The inter-relationship between a member's duty and the President's role in re-constitution of the tribunal on remittal from the Federal Court

[41] The circumstances in which I find myself led me to asking myself whether I should simply raise my views and leave it to the President to constitute in whatever way he saw consistent with his power. That would seem to be inherent in the advice I was given that the President would like to know if I would prefer not to deal with the case on remittal. When I look to the authorities, I think that I cannot take that course. It is my duty to disqualify myself and not leave it to the President to decide the matter for me. As the High Court said in Livesey v NSW Bar Association: ^[36]

"If a judge at first instance considers that there is any real possibility that his participation in a case might lead to a reasonable apprehension of pre-judgment or bias, he should, of course, refrain from sitting. ... ^[37] "

My reasons for disqualifying myself from hearing the matter on remittal

[42] In Southern Equities Corporation Ltd v Arthur Andersen, ^[38] Debelle J disqualified himself from hearing a matter on the ground of pre-judgment. He had heard an earlier case with different parties but a case in which issues relevant in the first case would be re-litigated. They would be re-litigated even though Debelle J's judgment had been upheld by the full court of the Supreme Court of South Australia and by the High Court. Issue estoppel and res judicata were not available to prevent re-litigation because the parties in the second case were different from those in the first.

[43] His Honour referred to his understanding that:

"... recent decisions of the High Court of Australia require me to disqualify myself. It is now well-established hat the test is whether a fair-minded, lay observer might reasonably apprehend that the judge might not bring an impartial and unprejudiced mind to the resolution of the question of the judge is required to decide: Johnson v Johnson (2000) 74 ALJR 1380 at 1382 [11]; Ebner v Official Trustee in Bankruptcy (2000) 75 ALJR 277 at 279 [6]. ^[39] "

[44] Debelle J considered that the test did not sit easily with the remarks of Mason J in Re JRL; Ex parte CJL. ^[40] Mason J had referred to there having been an increase in the frequency of applications by litigants that judicial officers should disqualify themselves on the basis of their having sat on other proceedings involving the litigant or on account of account during the litigation. That increase had occurred since the High Court had decided in R v Watson; Ex parte Armstrong and Livesey v NSW Bar Association. Mason J said:

"... There may be many situations in which previous decisions of a judicial officer on issues of fact and law may generate an expectation that he is likely to decide issues in a particular case adversely to one of the parties. But this does not mean either that he will approach the issues in that case otherwise than with an impartial and unprejudiced mind in the sense in which that expression is used in the authorities or that his previous decisions provide an acceptable basis for inferring that there is a reasonable apprehension that he will approach the issues in this way. In cases of this kind, disqualification is only made out by showing that there is a reasonable apprehension of bias by reason of pre-judgment and this must be "firmly established': R v Commonwealth Conciliation and Arbitration Commission; Ex parte Angliss Group; Watson; Re Lusink; Ex parte Shaw. Although it is important that justice must be seen to be done, it is equally important that judicial officers discharge their duty to sit and do not, by acceding too readily to suggestions of appearance of bias, encourage parties to believe that by seeking the disqualification of a judge, they will have their case tried by someone thought to be more likely to decide the case in their favour. ^[41] "

[45] Debelle J observed that:

"... In those remarks, Mason J is implicitly acknowledging the attributes of a judge, namely, that he or she will decide an action only according to the evidence and the law and, in doing so, will be able to put to one side evidence or findings in another action. That is a not uncommon aspect of judicial experience. Thus, as Hayne J noted in Helljay Investments Pty Ltd v Deputy Commissioner of Taxation (1999) 74 ALJR 68 at [12], the bare fact that a judicial officer has earlier expressed an opinion on questions of law will therefore seldom, if ever, warrant a conclusion of appearance of bias. A finding of fact in an earlier action does not necessarily mean that the same finding of fact will be made in a later action, where it is likely that there will be other evidence to be considered. The remarks of Mason J were echoed by Meagher JA in Spedley [Australian National Industries Ltd v Spedley Securities Ltd (In Liq) (1992) 26 NSWLR 411] in the passage already mentioned. ^[42] There is also particular force in the last sentence of Mason J's remarks.

Furthermore, Mason J held that it must be firmly established that a reasonable apprehension of bias by reason of pre-judgment exists. That view is shared by Wilson J (at 359-360) and Dawson J (at 371-372). ... As was noted in para 7 of the majority decision in Ebner, the question in Australia is not of probability that the judge might not bring an impartial mind to the resolution of the issues but of the possibility of that occurring. That is apparent also in the fact that the test as enunciated in Johnson twice uses the word "might.' The test in Johnson substantially qualifies the need for pre-judgment to be firmly established. I am bound to apply these principles. ^[43] "

[46] The principles guiding Debelle J's decision to disqualify himself bring back to mind the passage to which I have already referred from the judgment of Davies and Foster JJ in Northern NSW FM Pty Ltd v Australian Broadcasting Tribunal. ^[44] The essence is that "... it will generally seem fairer to the parties that the matter be heard and decided again by a differently constituted tribunal. ..." ^[45]

[47] It is not always the case that the tribunal expressed a view of the facts in the decision from which a successful appeal was made. That was so in Re Clare Strang and Siddha Yoga Foundation and Department of Immigration and Ethnic Affairs. ^[46] Jenkinson J had remitted a circumscribed point to be re-heard. Senior Member Dwyer, who had heard the matter initially observed that: "... the issue to be determined on remittal is an issue which was not fully argued and as to which there was no evidence as to one aspect at the hearing. The tribunal will not, on the further hearing, be called on to determine facts on which it has already expressed a concluded view." ^[47]

[48] I have also had regard to the task that the re-hearing of the particular matter remitted by Middleton J would involve. Middleton J ordered that: "The matter be remitted ... to determine according to law the application of the appellant for re-registration as a registered tax agent under the ..." ITAA 1936. A full court of the Federal Court considered the obligation imposed by an order expressed in substantively the same terms in Peacock v Repatriation Commission. ^[48] The full court said:

"[14] Appeals from decisions of the Administrative Appeals Tribunal must be "on a question of law': s 44(1) of the AAT Act. It is accordingly not surprising that the issue discussed in the appeal was limited. However, it does not follow that what was remitted was confined to the issues relating to that question of law. ...

[16] A similar order was made when this court made a remittal order to the Refugee Review Tribunal in Wang v Minister for Immigration and Multicultural Affairs (No 2) (2001) 108 FCR 167. On appeal from that decision, Gleeson CJ, in the majority, said this (Minister for Immigration and Multicultural Affairs v Wang (2003) 215 CLR 518 at 522):

"The full court ordered that the decision of the tribunal be set aside, and the matter be remitted to the tribunal to be determined in accordance with law.

The consequence of that order was that the tribunal, in dealing with the remitted matter would be obliged to determine, in the light of the circumstances existing at the date of such new determination, and of the information before the tribunal at that time, all questions of fact and law relevant to the respondent's claim to refugee status.'

The Chief Justice read the order as a remittal of the whole matter to be heard and decided again."

[49] The obligation to determine afresh the findings of fact on a re-hearing was underlined by the earlier case of Blackman v Commissioner of Taxation. ^[49] A differently constituted full court of the Federal Court decided that, as Sweeny J expressed it:

"... the second tribunal was free to decide the case upon the material put before it in accordance with law including, of course, the propositions of law in the reasons for judgment of Jenkinson J. ^[50] "

Jenkinson J had allowed the appeal and order the matter be remitted to the tribunal. The principles underpinning the court's conclusion and that in Peacock v Repatriation Commission was set out in the judgment of Gray J, who said:

"... The tribunal stands in the place of the original decision-maker, to make the "correct or preferable decision' on the material before the tribunal: see Drake v Minister for Immigration and Ethnic Affairs (1979) 46 FLR 409 at 419 per Bowen CJ and Deane J. The tribunal has the responsibility of ascertaining the facts necessary for the making of the decision. By s 33(1)(c) of the AAT Act, the tribunal is bound by the rules of evidence but may inform itself on any matter in such manner as it thinks appropriate.

The obligation of the tribunal to find facts is not diminished where there has been a successful appeal to the Federal Court of Australia under s 44 of the AAT Act. If the court allows the appeal, sets aside the decision of the tribunal, and remits the case to be heard and decided again, the tribunal retains responsibility to find the facts. If, as is usually the case, the remitted matter is heard and decided by a tribunal differently constituted from the tribunal whose decision was the subject of the successful appeal, the differently constituted tribunal will have to find facts. In the exercise of its powers, and subject to the submissions of the parties, the tribunal may decide to act on the findings of fact made by the earlier tribunal, or some of them. It may decide, as the learned senior member did in the present case, to rely upon evidence which was before the earlier tribunal. It may decide that the proper course is to receive all or some of the evidence afresh. The parties might agree that some or all of the findings of fact previously made are to be treated as findings of fact by the tribunal. The order of the court may limit the ambit of the issues with which the tribunal is to deal upon a case being remitted. The order of Jenkinson J in the present case cannot be construed as containing such a limitation. The course which the tribunal takes in relation to any case will depend on the circumstances of that case, but it will be the responsibility of the tribunal which ultimately decides the case to determine for itself the facts. ^[51] "

[50] It is in light of these principles that I have considered my reasons for decision in Re Toohey and Tax Agents' Board of Victoria. In that decision, I first analysed the evidence in light of the first primary issue relating to special circumstances. That primary issue required consideration of a number of consequential issues relating to his personal and professional circumstances. I analysed the evidence in light of those consequential issues and made findings of fact in relation to them. Having made those findings of fact, I then considered whether they amounted to special circumstances of the sort referred to in s 251BC(3) of the ITAA 1936. If they did, they would enable me to disregard Mr Toohey's previous omissions to lodge taxation returns. I expressed a view on that matter. It was not a tentative view of the sort referred to in Johnson v Johnson ^[52] in the course of hearing the matter.

[51] The findings that I made were determined by the consequential issues raised by the first primary issue. I referred to them at [137]-[141]. The findings of fact were determined by the evidence. They are found at [24]-[53] and at [142]-[149] of my reasons for decision. In the following paragraphs, [150]-[152], I considered whether the facts that I found amounted to special circumstances. The issue relating to special circumstances concerned matters that occurred in the past. Given that there have now been 2 hearings, it is difficult to envisage that there could be fresh evidence relating to it. I have already expressed a concluded view of the facts on the basis of the evidence that has already been given.

[52] The second primary issue concerned whether or not Mr Toohey is a fit and proper person to be a tax agent. That primary issue also raised secondary or consequential issues. I referred to those at [125]-[136] of my reasons. They required me to make findings of fact but the findings of fact that they required me to make were, for the most part, the same findings of fact that I had already made in relation to the first primary issue. The findings of fact I had found in relation to the first primary issue formed the foundation of my further findings of fact set out at [156]-[160]. The findings of fact made in relation to the first primary issue are determined by the evidence. That was the same evidence that I had to consider in relation to the second primary issue. I could not change the findings of fact because I had moved to consider them in relation to the second primary issue and not in relation to the first. It follows that I have already expressed a concluded view on the very matters that I would have to consider on a re-hearing.

[53] Clearly, I have not persuaded Middleton J that I have considered and evaluated all of the material which was raised in the context of a separate and ultimate inquiry of whether Mr Toohey was a fit and proper person to be a tax agent. That is my shortcoming. While I naturally accept the criticism, I know that, even if I were to divorce myself from the concluded views that I have expressed, I would be able to make no other findings than the findings that I made in relation to all of the consequential issues. The findings of fact that I made on them led me to make further findings about the choices that Mr Toohey makes in balancing his professional interests and his personal interests when he faces difficulties. They were choices that he had made more than once and that I found reflected on his not understanding his personal obligations or the relationship of trust that existed between him as a tax agent and the Commissioner of Taxation. They were choices that he had made during his period of depression but that he repeated in 2003, 2004 and 2006 when I had found, on the basis of Mr Toohey's evidence, that he had recovered. I have expressed a view on those matters and with the best will in the world, I would not be able to say that I could look at fresh evidence relating to Mr Toohey's reliability in the period from December 2007 without having in my mind that his reliability could simply be part of the pattern of behaviour he has exhibited in the past. I know that I would not think that sufficient time has passed.

[54] I referred also to my assessment that fair-minded people reading my reasons for decision might reasonably apprehend or suspect that I have pre-judged the case were I to hear it on remittal. That does not mean that every fair-minded person will come to that view but, it is my assessment that a considerable number would do so. Therefore, as a matter of law, I must disqualify myself from hearing the matter on remittal. The fact that the parties consent to my hearing the matter cannot alter my doing so because the law must prevail. For the same reason, I did not seek submissions from the parties on the matters. Their submissions could not prevail in the face of my duty to disqualify myself.

DIANE WALTON