Practice Direction Review of Taxation and Commercial Decisions

Practice Direction
Review of Taxation and Commercial

Decisions
This Direction is given under section 18B of the Administrative Appeals Tribunal Act 1975
(AAT Act).
1. About this Direction

Application
1.1 This Direction sets out the procedures of the Administrative Appeals Tribunal (AAT) in
relation to:
(a) applications in the Taxation and Commercial Division;1 and
(b) applications relating to decisions made under the:
(i) Airports Act 1996 and legislative instruments made under that Act;
(ii) Civil Aviation Act 1988 and legislative instruments made under that Act;
(iii) National Health Act 1953 in relation to pharmacies; and
(iv) Quality Agency Principles 2013.
1.2 This Direction has effect from 1 July 2015.
1.3 The procedures set out in this Direction may be altered to suit individual cases but
only by a specific direction of the AAT.
1.4 If another Direction is inconsistent with this Direction, this Direction applies.
Interpretation
1.5 In this Direction:
decision-maker means:
(a) the agency or other entity that made the decision under review and any
representative; or
(b) if another agency or entity is a party and is the contradictor in the review – that
agency or other entity and any representative;
1
The applications that are allocated to the Taxation and Commercial Division are set out in the
Allocation of Business to Divisions of the AAT President’s Direction.
Administrative Appeals Tribunal / Practice Direction / Review of Taxation and Commercial Decisions
Page 2 of 13
we or us refers to the AAT;

you refers to the Applicant and any representative.
2. General principles
2.1 In general, an AAT member will be allocated to manage each case from lodgement to
resolution (the Managing Member), assisted by the AAT’s Conference Registrars
who will usually conduct any alternative dispute resolution (ADR) processes.
2.2 In carrying out our functions, we must pursue the objective of providing a mechanism
of review that:
(a) is accessible;
(b) is fair, just, economical, informal and quick;
(c) is proportionate to the importance and complexity of the matter; and
(d) promotes public trust and confidence in the decision-making of the AAT.2
2.3 You and the decision-maker must use your best endeavours to assist us to fulfil this
objective.3 The decision-maker must also use its best endeavours to assist us to
make our decision in relation to the application.4
2.4 We expect you and the decision-maker to cooperate with us and with each other to:
(a) identify the real issues in dispute early; and
(b) deal with those issues efficiently and effectively.
We expect you and the decision-maker to think about the best way to run the case
and to engage in a dialogue with us to achieve our statutory objective. These
expectations apply regardless of the nature or complexity of the matter.
2.5 We aim to reduce cost and delay by:

(a) narrowing the issues in dispute;
(b) limiting factual investigation to what is required in relation to the issues;
(c) holding as few additional case events as possible.
We recognise that the particular steps to be taken in moving each application towards
resolution will vary. We will adopt a case management approach that best meets the
needs of each application. Flexibility is the key to our approach.
3. Initial procedures
3.1 Shortly after an application is lodged, we will allocate it to a Managing Member. In
general, the Managing Member will manage the application and, if the application
proceeds to hearing, preside at the hearing.
3.2 In most cases, the first case event will be a case management directions hearing
conducted by the Managing Member. However, some applications may be referred to
the conference process and managed initially by an AAT Conference Registrar.
2
Section 2A of the AAT Act.
3
Subsection 33(1AB) of the AAT Act.
4
Subsection 33(1AA) of the AAT Act.
For further information about the AAT, please call us on 1800 228 333 or go to www.aat.gov.au.
Page 3 of 13
3.3 We will send you and the decision-maker a listing notice setting out the date, time and
location of the first case event.
3.4 The decision-maker must, within 28 days after receiving notice of an application,
lodge with the AAT and give to you and any other party the documents required under
subsection 37(1) of the AAT Act. These documents are referred to as the ‘Section 37
documents’. We have the power to shorten or extend the 28 day period if an
application is made to us.5 For more information about the requirements relating to
the Section 37 documents, see the Lodgement of Documents under Sections 37 and
38AA of the AAT Act Practice Direction.
3.5 If you believe your application needs to be dealt with urgently, you can request an
expedited review in accordance with the procedure set out in our General Practice
Direction. We will actively facilitate the expedited review of a decision if we are
satisfied it requires an urgent determination.
4. Case management directions hearing

4.1 Generally, the Managing Member will hold a first directions hearing to discuss the
management of the application before the Section 37 documents are lodged. The
Managing Member may hold the directions hearing after the Section 37 documents
have been lodged if you or the decision-maker request this.
4.2 The case management directions hearing may be held in person or by telephone.
4.3 At the case management directions hearing, the Managing Member will discuss with
you and the decision-maker the case management strategy that will be most effective
to achieve early resolution of the application by way of agreement between the
parties or by the AAT making a decision. The strategy must be proportionate to the
nature and complexity of the application.
4.4 Consideration will be given, in particular, to the following:
(a) whether any orders ought to be made about the Section 37 documents;
(b) in the case of multiple applications or multiple applicants, whether particular
procedural directions should be made;
(c) whether there is a related proceeding elsewhere, such as:
(i) a debt recovery proceeding in a court; or
(ii) a proceeding under Part IVC of the Taxation Administration Act 1953 in
the Federal Court of Australia; and
if so, what impact this may have on the application;
(d) whether an early ADR process should be arranged or the parties be allowed a
period for private negotiation;
(e) how evidence is to be presented at any hearing, including:
(i) whether the hearing should proceed on evidence in the form of witness
statements or oral evidence with outlines of the evidence anticipated to be
given by each witness;
5
See subsections 37(1) and (1A) of the AAT Act.
Page 4 of 13
(ii) if any experts are to give evidence, whether the evidence will be given
other than by way of the concurrent evidence procedure.6
(f) making directions about lodging with us and giving to the other party evidence
and Statements of Issues, Facts and Contentions; and
(g) the scheduling of hearing dates.
4.5 We expect you and the decision-maker to communicate with each other in a
meaningful way about matters to be raised at the case management directions
hearing before it takes place, with a view to agreeing about directions in advance of
the hearing. If you are representing yourself, we expect the decision-maker to take
the initiative in this communication. If agreement can be reached about appropriate
directions, you and the decision-maker may ask that the Managing Member make the
directions by agreement.
4.6 For the assistance of parties, a template for directions that may be made at the case
management directions hearing is at Attachment A. A template of a Statement of
Issues, Facts and Contentions is at Attachment B.
5. Alternative Dispute Resolution

5.1 We will work actively with you and the decision-maker at all times to encourage the
exploration of an early resolution to the dispute through use of ADR.
5.2 In general, the ADR process that will be used in applications relating to taxation and
commercial decisions will be:
(a) conferencing;
(b) conciliation; or
(c) mediation.
5.3 You and the decision-maker are required to act in good faith in relation to the conduct
of an ADR process.7
5.4 More information about ADR processes at the AAT, including about confidentiality in
ADR processes, is available on our website.
Conferences
5.5 If your application is referred to a conference, we will usually hold the first conference
within 6 to 10 weeks after your application has been lodged. The conference may be
held in person or by telephone. A further conference may be held if necessary.
5.6 The purpose of the conference process is to:
(a) identify and narrow the issues in dispute;
(b) identify further evidence that may be gathered;
(c) discuss this evidence when it has been received, as well as the merits of the
case;
(d) explore whether an agreed outcome can be reached; and
(e) discuss the future conduct of the application.
6
See our Use of Concurrent Evidence in the AAT Guideline.
7
Subsection 34A(3) of the AAT Act.
Page 5 of 13
5.7 Conferences are conducted by AAT Conference Registrars who may make directions
during the conference process.
Conciliation or Mediation
5.8 A conciliation or mediation will usually be included in the directions made by a
Managing Member.
5.9 A person with authority to make decisions on proposed settlement options must
attend the conciliation or mediation, or be contactable by telephone.
5.10 At least 3 working days before a conciliation or mediation, you and the decision-
maker must:
(a) give the AAT and each other a list of the people who will attend the ADR process;
(b) give a Confidential Issues Statement to the AAT only.
5.11 The Confidential Issues Statements will be viewed only by the Conciliator or Mediator
for the purpose of the conciliation or mediation and will not be provided to the other
party. It should contain:
(a) a summary of the issues in dispute;

(b) what the party hopes to achieve from the ADR process;
(c) a list of outcomes, from best to worst, if the application is not settled;
(d) an assessment of the legal, commercial, business and reputation risks of
continuing litigation;
(e) what offers of settlement have been made, if any;
(f) costs incurred to date;
(g) for taxation applications, the amount in dispute, including the primary tax,
penalties and general interest charge, as well as the amounts that have been paid
and the amounts that are outstanding; and
(h) in the event the application proceeds to hearing, how long you estimate the
hearing may take and a proposed list of witnesses.
5.12 The Confidential Issues Statement should be no more than 3 pages.
5.13 For the assistance of parties, a template of a Confidential Issues Statement is at
Attachment C.
5.14 Conciliations and mediations are generally conducted by AAT Conference Registrars
who may make case management directions at the conclusion of the ADR process if
agreement has not been reached.
6. Other matters
Additional directions hearings
6.1 A directions hearing may be listed at any time if required, including if you or the
decision-maker has not complied with this Direction or with a specific direction made
by the AAT. Either you or the decision-maker may make a request for a directions
hearing. The request must be:
Page 6 of 13
(a) in writing;
(b) given to the other party; and
(c) set out what orders or directions are sought and the basis on which they are
sought.
6.2 The Managing Member will usually hold any directions hearing.
Conduct and communication

6.3 At all times, you and the decision-maker are expected to communicate courteously
with each other and with us.
6.4 In general, if you send a document or other communication to the AAT, you or the
decision-maker are expected to send a copy to each other and make it clear that the
communication has been copied to the other party.
6.5 Any request made to us (for example, to vary a direction) must be in writing and be
accompanied by reasons. You must seek the view of the other party in relation to the
request before sending it to the AAT and include any views in your request.
Justice Duncan Kerr

President
30 June 2015
Page 7 of 13
ATTACHMENT A
EXAMPLE DIRECTIONS
File Number(s) 20____/______
[name of applicant]
Applicant
[name of respondent]
Respondent
Before: [name of Managing Member]
Date:
[Multiple applications]
… This application and application(s) with file number(s) [file numbers] be heard
together and that evidence in one application be evidence in all applications.
… All documents that are lodged in the applications are to be lodged for inclusion on the
file with file number 20____/______.
[Section 37 documents]
… The Respondent must lodge with the Tribunal and give to the Applicant any further
Section 37 documents by [date].
[Evidence and Statement of Issues, Facts and Contentions]
… The Applicant must lodge with the Tribunal and give to the Respondent:
(a) any witness statements8 and other evidence on which the Applicant intends to
rely at the hearing; and
(b) a Statement of Issues, Facts and Contentions;

by [date].
8
A witness statement is a written statement setting out all of the evidence intended to be given by a
witness on which you propose to rely. It will operate as the only evidence of that witness unless the
Tribunal allows additional evidence to be given by that witness.
Page 8 of 13
… The Applicant must lodge with the Tribunal and give to the Respondent:
(a) any outlines of evidence9 and other evidence on which the Applicant intends to
by [date].
… The Respondent must lodge with the Tribunal and give to the Applicant:
(a) any witness statements and other evidence on which the Respondent intends to
within [number of days] of receiving the Applicant’s material.

… The Respondent must lodge with the Tribunal and give to the Applicant:
(a) any outlines of evidence and other evidence on which the Respondent intends to
within [number of days] of receiving the Applicant’s material.

… The Applicant must lodge with the Tribunal and give to the Respondent any evidence
in reply or a letter indicating that the Applicant does not intend to do so within [number
of days] of receiving the Respondent’s material.
[ADR process and hearing]

… The matter be listed for a Conference/Conciliation/Mediation (… day) in the week
commencing [date].
… No later than 10 working days prior to the start of the hearing, each party must lodge
with the Tribunal and give to the other party a list of witnesses intended to be called at
the hearing.
… The matter be listed for hearing (…days) on [date(s)].
Instructions for completing Directions

[Note: These instructions do not form part of the Directions and MUST BE DELETED
before the Directions are provided to the AAT for consideration]
At the first case management directions hearing, the Managing Member will discuss with the
parties the case management strategy that will be most effective to achieve early resolution
of the application by way of agreement between the parties or by the AAT making a decision.
The AAT expects parties to communicate with each other in a meaningful way about matters
to be raised at the case management directions hearing before it takes place, with a view to
agreeing about directions in advance of the hearing.
9
An outline of evidence is a document that sets out the evidence that it is anticipated a witness will
give orally at the hearing. The Tribunal expects that the evidence of the witness will not go beyond
what is set out in the outline unless the Tribunal allows additional evidence to be given by that witness.
Page 9 of 13
If the Applicant is self-represented, we expect the decision-maker to take the initiative in this
communication. If agreement can be reached about appropriate directions, the parties may
ask that the Managing Member make the directions by agreement.
The directions included in this template are intended to guide parties only, and are not
complete or exhaustive. Parties should amend the template as required.
Page 10 of 13
ATTACHMENT B
STATEMENT OF ISSUES, FACTS AND CONTENTIONS
File Number(s) 20____/______
[name of applicant]
Applicant
Respondent
Issues
[Applicant/Respondent] considers that the issues for the Tribunal to determine are as follows:
1. [Explain what the problem is with the decision: what questions do you want the
Tribunal to answer? For example, is the deduction properly allowed under the Income
Tax Assessment Act? Was the penalty correctly imposed?]
2.
Facts
The following are the relevant facts as the [Applicant/Respondent] perceives them:
1. [Briefly explain what happened. Do not include opinions. Do not include evidence,
but footnote Section 37 documents, statements or other documents if relevant]
2.
Contentions
[Applicant/Respondent] contends as follows:
1. [Explain the conclusions you want the Tribunal to make and why these conclusions
should be made].
2.
Decision sought
3. [Applicant/Respondent] seeks an order [affirming] / [varying] / [setting aside] /
[remitting] / [other] the decision.
Page 11 of 13
Instructions for completing Statement of Issues, Facts and Contentions
These instructions do not form part of the Statement and MUST BE DELETED before
the Statement is lodged with the AAT
The purpose of a Statement of Issues, Facts and Contentions is to inform the AAT and the
parties of each other party’s case so that, when read together, they should present a clear
picture of the issues in dispute and the respective positions of the parties.
A Statement of Issues, Facts and Contentions must set out:
 the issues that the party considers fall for determination;

 the essential facts relied on, or understood, by that party (but not the evidence relied
on to demonstrate those facts);
 the contentions that the party will advance at hearing; and

 the decision or decisions that the party will seek at hearing.
The facts must be stated succinctly and, where necessary, cross-reference the Section 37
documents.
A party may amend a Statement of Issues, Facts and Contentions provided adequate notice
is given of any proposed change.
In a taxation application, the AAT generally expects that an Applicant who is represented will
lodge with the Tribunal and give the Respondent a Statement of Issues, Facts and
Contentions first, followed by the Commissioner of Taxation. However where an Applicant is
self-represented, that process will generally be varied such that the Commissioner of
Taxation lodges a Statement of Issues, Facts and Contentions first.
In an application for review of a decision by a regulatory body, the AAT expects that the
regulatory body will usually lodge with the Tribunal and give the Applicant a Statement of
Issues, Facts and Contentions first, followed by the Applicant.
It should be possible to identify the evidence required to be presented at the hearing from the
factual issues remaining in dispute between the parties.
Page 12 of 13
ATTACHMENT C
CONFIDENTIAL ISSUES STATEMENT
File Number(s) 20____/______
[name of applicant]
Applicant
Respondent
PROVIDE THIS STATEMENT TO THE AAT ONLY

IT WILL BE READ BY THE CONCILIATOR/MEDIATOR ONLY
Are you the Applicant or Respondent?

 [Insert which party you are]
What are the issues in dispute?
 [Explain what the problem is with the original decision: what questions do you want the
Tribunal to answer? For example, is the deduction properly allowed under the Income
Tax Assessment Act?]
What do you want to achieve from the ADR process?
 [Explain what you want to negotiate through this ADR process. For example, a payment
plan; a conditional licence]
What is the best to worst outcome if you don’t settle?
 [Explain what will happen if you win at a hearing. Explain what will happen if you lose]
What are the risks of not settling?
 [Explain what the legal, commercial, business and reputation risks are for you if you don’t
settle but continue on to a hearing]
What offers of settlement have been made?
 [Explain what offers and counter-offers have been made to settle this matter, if any]
How much has this application cost?
 [Explain how much money you have spent so far on this application. For example, the
costs for lawyers or accountants and lost wages]
Page 13 of 13
[For taxation applications only] How much is in dispute?

 [Explain the amount in dispute, including the primary tax, penalties and general interest
charge, as well as the amounts that have been paid and the amounts that are
outstanding]
How long will the hearing be?
 [Explain how many days you think the hearing will go for]
What witnesses will you call?
 [Insert the names of the people you want to give evidence to support your application and
what their relationship is to you]

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Practice Direction

Review of Taxation and Commercial

1. About this Direction

we or us refers to the AAT;

2.5 We aim to reduce cost and delay by:

4. Case management directions hearing

5. Alternative Dispute Resolution

(a) a summary of the issues in dispute;

Conduct and communication

Justice Duncan Kerr

File Number(s) 20____/______

Before: [name of Managing Member]

(b) a Statement of Issues, Facts and Contentions;

within [number of days] of receiving the Applicant’s material.

within [number of days] of receiving the Applicant’s material.

[ADR process and hearing]

… The matter be listed for hearing (…days) on [date(s)].

Instructions for completing Directions

STATEMENT OF ISSUES, FACTS AND CONTENTIONS

File Number(s) 20____/______

Instructions for completing Statement of Issues, Facts and Contentions

 the issues that the party considers fall for determination;

 the contentions that the party will advance at hearing; and

CONFIDENTIAL ISSUES STATEMENT

File Number(s) 20____/______

PROVIDE THIS STATEMENT TO THE AAT ONLY

Are you the Applicant or Respondent?

[For taxation applications only] How much is in dispute?

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