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The Federal Court has set aside an order made by the Administrative Appeals Tribunal which would have allowed taxpayers to give evidence by video link from Mauritius in a Tribunal hearing of their tax cases.

The taxpayers had objected to assessments, their objections had been disallowed and the matters had been referred to the Tribunal. The taxpayers were living in Mauritius. They applied to the Tribunal for leave to give evidence at the hearing by video link from Mauritius. They gave evidence that they believed that, if they were to return to Australia for the hearing, the Commissioner might issue Departure Prohibition Orders (DPOs) against them, and that they might be arrested in connection with alleged taxation offences. Their position amounted to an ultimatum that the taxpayers would not come to Australia, whatever the consequence for the proceedings they had initiated before the Tribunal, unless at least two stipulations were satisfied: a binding assurance of no restraint on departure and a binding assurance of no arrest. The Commissioner indicated that he was not prepared to give such undertakings.

The Tribunal made an order granting leave to allow the taxpayers to give evidence by video link. The Commissioner applied to the Federal Court under s 39B of the Judiciary Act 1903 (Cth) for prerogative relief against the Tribunal, on the grounds that the Tribunal had committed jurisdictional error.

The court held that the Tribunal had put aside as not relevant, or at least had failed altogether to address, a vital ingredient in the declared position of the taxpayers. Their position was not confined to, or by, the attitude of the Commissioner to DPOs. The Commissioner’s refusal to give an undertaking, either to the AAT or to the taxpayers, did not alter their preparedness to come to Australia or affect or exhaust their reason to do so. Further, the Tribunal’s decision had denied procedural fairness to the Commissioner, in that it would deny the Commissioner any fair opportunity of cross-examination on matters potentially critical to an assessment of the taxpayers’ cases.

The court held that this was one of those rare, or exceptional, cases where the court should intervene at an interlocutory stage to correct jurisdictional error and address injustice between the parties. In the circumstances, it was appropriate to issue a writ of certiorari quashing the Tribunal’s order.

FCT v Seymour [2015] FCA 320 (Buchanan J, 7 April 2015).

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