Tax & ATO News Australia

MedAid Pty Ltd and Commissioner of Taxation [2018] AATA 170

In the recent decision of MedAid and Commissioner of Taxation, the Administrative Appeals Tribunal examines a joinder application brought by an individual purporting to be a creditor and member of a taxpayer, being deregistered company.

MedAid Pty Ltd (‘MedAid’), the taxpayer, commenced two separate proceedings seeking review of objection decisions made by the Commissioner of Taxation (‘Commissioner’). MedAid was subsequently deregistered on 2 August 2015.
 

Accordingly, the Commissioner requested that the proceedings be dismissed, as the taxpayer ceased to exist. Deputy President McCabe was satisfied with the Commissioner’s request, but agreed to consider whether Mr Arnold, a purported representative of MedAid should be joined to the proceedings, on the basis his interests were affected by the decision under review within the meaning of s 30 the Administrative Appeals Tribunal Act 1975 (‘AAT Act’).
 

By operation of section 14ZZD of the Taxation Administration Act 1953, section 30(1A) AAT Act is modified to be read as:
 

If an application has been made by a person to the Tribunal for the review of a reviewable decision or an extension of time refusal decision:


(a) any other person whose interest are affected by the decision may apply, in writing, to the Tribunal to be made a party to the proceeding; and
(b) the Tribunal may, in its discretion, by order, if it is satisfied that the person making the application consents to the order, make that person a party to the proceeding.

 

The Commissioner contended that Mr Arnold’s application for joinder would fail because:


(1) his interests are not affected by the decision in the sense intended by the legislation;
(2) the applicant cannot obtain the consent from MedAid required by s30(1A)(b) AAT Act; and
(3) the Tribunal should not exercise the discretion in Mr Arnold’s favour.


Are the interest of a creditor and a member sufficient to be joined?
 

Mr Arnold sought to claim an economic interest, arising from his position as both a creditor and member of MedAid.
 

The Commissioner doubted whether the debts were real and submitted that the invoices provided by Mr Arnold were self-serving evidence that the Tribunal should disregard. McCabe DP found that even if the debts were accepted as real, the Tribunal was not satisfied the economic interest of a creditor was sufficiently distinguishable from the interests of other individuals for the purposes of section 30(1A)(a) AAT Act.
 

Further, McCabe DP found that the interest flowing from membership in a company in the present circumstances would rise to the level where an order could be made under section 30(1A).
 

Who consents to the joinder? Can a deregistered company consent?

McCabe DP found that reference to a ‘person’ in section 30(1A)(b) refers to the taxpayer and as the taxpayer no longer exists, as it is ‘legally dead’, it cannot give consent to the joinder.
 

Accordingly, the Tribunal dismissed the application made by Mr Arnold to be joined as a party to review proceedings.

Co-authored with Ben Caratti
 

Posted in: Tax & ATO News Australia at 27 February 18

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Author: David Hughes

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