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The ATO has issued a Decision Impact Statement in relation to the decision of the Full Federal Court in LVR (WA) Pty Ltd and Anor v AAT and FCT [2012] FCAFC 90.

The case concerned the dismissal of applications for the taxpayer's failure to comply with directions; AAT's failure to take into account a relevant consideration; copying of submissions without attribution; and model litigant obligations.

Specifically, the question was whether the AAT had, in dismissing the applications, taken into account an affidavit the taxpayers had filed in the AAT proceedings several days before the dismissal hearing.

At first instance in the Federal Court - see LVR (WA) Pty Ltd v AAT [2011] FCA 1146 - Gilmour J dismissed the judicial review application on the basis that the AAT had in fact taken into account the affidavit in question.

It was common ground in the Full Federal Court that approximately 95% of the AAT's reasons had been copied from the written submissions of the Commissioner, without attribution. For the AAT decision, go here

The Full Federal Court held that the AAT had failed to take into account a relevant consideration, namely, the affidavit lodged on behalf of the taxpayers, in coming to its decision to dismiss the applications.

As there had been a failure to take into account a relevant consideration by the AAT, the Full Federal Court expressly did not decide whether the copying without attribution amounted to a constructive failure by the AAT to exercise jurisdiction. The Full Federal Court, however, was critical of the extensive unattributed copying by the AAT and also critical of the parties and their counsel in not drawing the extent and context of the copying to the judge's attention.

The Full Federal Court noted that, if counsel for the taxpayers failed to fully explain the position to Gilmour J, counsel for the Commissioner should have done so to make sure that the judge understood the full circumstances surrounding the AAT's reasons for decision.

The Full Federal Court discussed the nature of the model litigant obligation and the obligations of counsel representing federal government agencies.

The Decision Impact Statement states:

"The Full Federal Court did not find that the Commissioner breached his model litigant obligation. The Court, however, referred at length to the nature and extent of the model litigant obligation, which is binding on federal government agencies and their counsel. The Commissioner will continue to strive to meet every aspect of the model litigant obligation in all matters, and before all courts and tribunals. In particular, he will consider what action should be taken in any matters where verbatim copying issues arise. The Commissioner has reviewed all current appeals to the Federal Court from decisions of the AAT in light of the Full Federal Court judgment."


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