Overseas taxpayers permitted to give evidence to AAT via video link - Overseas Applicants
28 Oct 2014
The AAT has granted an application by taxpayers living in Mauritius to give oral evidence by video link in proceedings brought by them seeking a review of the Commissioner's objection decisions in relation to a number of amended assessments. The application was opposed by the Commissioner.
The taxpayers (referred to by the AAT as Mr and Mrs Jones) did not wish to come to Australia to give oral evidence because, amongst other concerns, they feared that if they did so they may then be prohibited from leaving Australia if the Commissioner decided to issue departure prohibition orders (DPOs) pursuant to s 14S of the Taxation Administration Act 1953. The Commissioner declined to give any undertakings to them that he would not issue DPOs.
At para 14, the AAT summarised the evidence of Mr Jones as follows:
"Mr Jones based his belief that the Commissioner would prohibit him from leaving Australia with a DPO on a number of factors, including the following, which I have extracted from his affidavit:
(a) the Commissioner stated in the audit papers that he 'engaged in "fraud or evasion" throughout the period 2000-2010, and that is what gave rise to the asserted tax liabilities';
(b) the Commissioner stated that he 'had undisclosed personal income of approximately $7 million, on which [he] did not pay tax' – which Mr Jones considered to be 'very alarming' and 'plainly a serious allegation of a criminal nature';
(c) '[t]he accountant, Vanda Gould, was closely involved in the management of [his] tax affairs in the period 2000-2010' and he had heard that 'Mr Gould had been arrested and charged with defrauding the Commonwealth'. He explained his views of Vanda Gould and then said he did not know all the things that might be alleged against him as a person for whom Vanda Gould had acted in the past;
(d) he saw in the media that Paul Hogan had been prevented from leaving Australia because of a civil tax dispute and that he was later found to have no tax liability. His perception was that Paul Hogan was only permitted to leave because he took his case to the media; and
(e) he had been told that 'Peter Borgas, who had a connection to Vanda Gould, visited Australia for the purpose of giving evidence in a tax appeal. Mr Borgas was arrested at the airport on criminal charges connected to the very matters that were at issue in the tax appeal...' He stated that he was concerned that a similar thing could happen to him."
Mrs Jones' evidence was said to be of similar effect.
The AAT said, at para 28:
"I have taken into account in reaching my decision that the only basis relied upon by Mr and Mrs Jones for seeking to give their evidence by video link or overseas is because they fear, amongst the possible consequences of them coming to Australia, the Commissioner may issue them with DPOs prohibiting them from leaving Australia. This consideration is similar to that referred to by Flick J at  in Pirovic, namely, “an inability to freely travel to and depart from Australia”. It is similar because Mr and Mrs Jones fear that they will be in that situation. But their fears are, in my view, real and rational, for the reasons explained in their affidavits (see  and  above), as well as because the Commissioner did not proffer any undertaking not to issue DPOs. Their fear of being issued with DPOs is a very significant consideration for the exercise of the discretion because DPOs represent “a serious intrusion on a person’s freedom of movement”: Pattenden v Commissioner of Taxation  FCA 1590, per Logan J. These fears are in my view well founded, unlike in Re Murray and Commissioner of Taxation  AATA 837 where Deputy President Hack was not satisfied of Mr Murray’s beliefs (see –)."
The Overseas Applicants and FCT  AATA 788 (AAT, Lazanas SM, 27 October 2014).