Simons v R & D Accounting[2022] QCATA 131

QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL

REASONS FOR DECISION

1. [1]
   Mr Simons, together with his sister, is trustee of a special disability trust established by his mother in 2014 for the benefit of his disabled brother. Mr Simon’s mother passed away in 2015.
2. [2]
   In August 2017 the trustees received advice from Centrelink that the trust was approved and that the trustees were required to provide financial statements. There were also provided with information concerning the requirement or otherwise to lodge a tax return.
3. [3]
   In February 2018 Mr Simons received further information from Centrelink stating that the trust’s first annual review would be the 2017/2018 financial year with a reporting deadline of 31 March 2019.
4. [4]
   R & D had performed other accounting work for Mr Simons. On 16 February 2019 he contacted them about the disability trust. He advised that no income tax returns had been filed for the disability trust or another separate testamentary trust in respect of the disabled brother.
5. [5]
   Mr Simons asked R & D to advise what was required of the trustees to respond to the correspondence from Centrelink, which was in turn provided to R & D.
6. [6]
   R & D advised income tax returns for the year ended 30 June 2018 as well as those from 2014 on were required.
7. [7]
   R & D prepared all those income tax returns for the trusts and billed Mr Simons, acting on behalf of the disability trust, $3057.66.
8. [8]
   Mr Simons refused to pay, claiming the only tax return necessary had been for the 2017/2018 financial year.
9. [9]
   R & D commenced minor debt proceedings in the Tribunal claiming $3057.66 for the work done plus interest and costs which brought the total claim to $3416.80.
10. [10]
    The matter was heard before a Member of the Tribunal on 30 October 2020 at Townsville. The Member awarded R & D $1,650 for its claim and interest of $74.19.
11. [11]
    Mr Simons disputes that decision and has filed the within application for leave to appeal in the Appeal Tribunal.
12. [12]
    Given this is an appeal from a decision made in the Tribunal’s minor civil dispute jurisdiction, leave to appeal must first be obtained before any appeal proceeds.^[1] 
13. [13]
    Leave to appeal will usually only be granted where an appeal is necessary to correct a substantial injustice to the appellant and where there is a reasonable argument that there is an error to be corrected.^[2]

Grounds of appeal

14. [14]
    The grounds of appeal are broad brush and the identification of the error made by the member is in the broadest of terms. In his application for leave to appeal he describes the grounds of appeal as follows:

Member was errant in reasons when agreed with the applicant that establishment of a bank account was requirement for ATO tax returns to be completed, against tax law advice

– see further attached

15. [15]
    The attachment to the application for leave to appeal simply repeats the argument made by Mr Simons at the hearing below.
16. [16]
    In broad terms, as best understood, Mr Simons argues R & D gave him poor advice that tax returns were required for the disability trust from commencement of the trust in 2014. He had relied on R & D to clarify conflicting advice Mr Simons had received from Centrelink staff about this, and the correct advice should have been that only the tax return for 2017/2018 and a statutory declaration to Centrelink was necessary.
17. [17]
    Further he argues, the award made by the member in favour of R & D was excessive and should have been $200.

Fresh evidence

18. [18]
    Mr Simons seeks leave to adduce fresh evidence. He refers to an email dated 31 October 2018. This was an email in a trail of emails there were otherwise placed before the Member below at hearing. Claims it was not available prior to his application for leave to adduce fresh evidence because it had only recently been discovered in a file and a hard drive in the file was recovered whilst looking for some other business information.
19. [19]
    Fresh evidence will generally only be permitted in appeals in circumstances where the evidence could not, by reasonable diligence, have been obtained for the original hearing, and it might have produced an opposite result and is apparently credible.^[3]
20. [20]
    In responding to that application R & D in turn seek to reduce further evidence about the reasonableness of their charges claimed below.
21. [21]
    Mr Simons then responds in turn with further fresh evidence to refute the reasonableness of the charges.
22. [22]
    All the material, including the letter of 31 October 2018, was in existence and available to the parties had they acted with diligence and preparation of the action before the member below.
23. [23]
    None of it, for the reasons that follow, offers to produce a contrary result to the decision made by the Member below.
24. [24]
    Leave to adduce fresh evidence is refused both parties.

Application for leave to appeal

25. [25]
    It is clear that Mr Simons authorised R & D to prepare all returns from 2014 by his emails giving those instructions on 10 March 2019.
26. [26]
    Mr Simons argues he received the wrong advice from R & D about that however. They should have advised that only the 2014 tax return was necessary. That may be the case. He may well have a cause of action against that company about that even now, but it can only be pursued in the Magistrates Court, not the Tribunal. Any such claim would require the assessment of damages and cannot be the subject of separate minor debt proceedings in the Tribunal.
27. [27]
    Despite his claim that he was given poor advice, he has never challenged the claim by R & D to some payment for work done. He suggested a value of $200.
28. [28]
    The Member permitted Mr Simons a set-off in respect of the reasonableness of the charges of R & D for what work was done, which was all the tax returns. That course was open to the Member.
29. [29]
    But as stated, in so far as his complaint extended to what was effectively a counter application based on negligence, that was something that could not be litigated in the Tribunal before the Member.
30. [30]
    There can be no counter applications brought in minor debt proceedings in the Tribunal. Rule 48(3) of the Queensland Civil and Administrative Tribunal Rules 2009 (Qld) provides:

48 Respondent may make counter-application except for minor debt claim

…

1. (3)
   A counter-application can not be made in response to an application for a minor debt claim.

31. [31]
    The difference between set-off and counter application was explained by Member Paratz in Auspex Property Research Pty Ltd v Morris [2019] QCATA 009 where he referred to the commentary by Cairns in the latter’s well-regarded text Australian Civil Procedure:

Quite apart from matters that are a direct answer to the plaintiff’s claim, the defendant may have a cross-claim against the plaintiff that will either extinguish or reduce the plaintiff’s claim. The cross-claim may be such that it is justifiable for the defendant not to pay the plaintiff until the court makes a decision on the defendant’s claim. The cross-claim may be either a set-off or a counterclaim. In either event the cross-claim may be pleaded against the plaintiff in the original proceeding, but a set-off differs in nature from a counter-claim.

A set-off is a defence which precludes the plaintiff enforcing the claim, either in full or in part. A counter-claim is a separate proceeding in its own right. Where a counter-claim is pleaded it proceeds against the plaintiff in the same way as if the plaintiff had been sued by the defendant in a proceeding. If the plaintiff discontinues the proceeding a set-off comes to an end. If the defendants cross-claim is a counterclaim the matter proceeds on the defendant’s claim, irrespective of the fate of the plaintiffs proceeding.^[4]

32. [32]
    The member did not fall into error in making an award in favour of R & D in these circumstances.
33. [33]
    The learned member assessed the value of the work done by R & D in preparing all the tax returns. She  reduced the value of the claim made by R & D by approximately half.
34. [34]
    In so far as Mr Simons argues that the reduced award was still excessive, that is based in large part on the claim concerning negligent advice and that there should only ever have been one tax return necessary, that of 2017/2018. The member’s estimate of the value of work done was, necessarily, a matter involving exercise of discretion on her part. She had limited assistance from the parties in calculating the figure finally awarded. The award is not so obviously excessive as to be an unreasonable estimate of the value of the work done.
35. [35]
    Mr Simonds does not persuade me that he would be successful on appeal. In the circumstances leave to appeal is refused.