Judgment summary
This judgment concerns an interlocutory application by Mr and Mrs Lewis to amend their Notice of Appeal following an earlier ruling that most of their original appeal grounds were incompetent because they did not raise questions of law. The applicants sought leave to reformulate three grounds (relating to renovation cost base evidence, the Tribunal's conclusion on assessed amounts, and the administrative penalty for intentional disregard) as questions of law.
Downes J dismissed the application, holding that none of the proposed reformulated questions (Questions 2, 5 and 8) raised a question of law within the meaning of s 172(1) of the Administrative Review Tribunal Act 2024 (Cth), and that the amendments were futile or had no reasonable prospect of success.
Background
On 14 January 2026, Mr and Mrs Lewis filed a Notice of Appeal from a decision of the Administrative Review Tribunal dated 9 December 2025, containing eight grounds of appeal concerning, among other things, evaluation of evidence, procedural fairness, default assessment methodology, and administrative penalties for intentional disregard.
On 2 February 2026, the Commissioner filed a Notice of objection to competency, contending that most grounds did not raise a question of law for the purposes of s 172(1) of the Administrative Review Tribunal Act 2024 (Cth). On 21 July 2026, the appeal was dismissed as incompetent except for Question 1, 2 (as it related to paragraph 2.5) and Question 6. The applicants, who are self-represented, were given until 4:00 pm on 29 July 2026 to apply to amend and reformulate the incompetent questions as questions of law.
By interlocutory application dated 29 July 2026, the applicants sought leave to amend their Notice of Appeal to include reformulated Questions 2, 5 and 8 (a proposed Question 4 was not pressed).
Core dispute
The dispute was whether the applicants' proposed reformulated Questions 2, 5 and 8 raised questions of law for the purposes of s 172(1) of the Administrative Review Tribunal Act 2024 (Cth), or whether they were, in substance, impermissible attempts to re-litigate the merits and the Tribunal's evaluation of the evidence.
Question 2 concerned the Tribunal's treatment of sworn and photographic evidence of renovation costs on the Mikado Street property, said to affect the statutory cost base for capital gains purposes. Question 5 concerned whether the Tribunal's reasoning at [153] and [246]-[253] of its Reasons was legally capable of supporting its conclusion at [256] that the adjusted amounts were the amounts that should have been assessed. Question 8 concerned whether the Tribunal, in finding intentional disregard for penalty purposes, actually applied the legal test it had stated at [278]-[279] of its Reasons.
Court findings
On Question 2, the Court found that the Tribunal's Reasons identified and analysed the applicants' sworn and photographic evidence (Reasons at [35], [160]-[163]), including the lack of receipts and lack of evidence of house price movements. The Court held that the proposed question, despite using legal formulary such as "evident and intelligible justification", was in truth a challenge to the merits and weight given to the evidence, and that the particulars mischaracterised the Tribunal's reasons because the Tribunal did not treat the absence of historical receipts as determinative.
On Question 5, the Court held that although the Tribunal accepted the applicants had proved their incomes did not exceed the adjusted amounts, they bore the onus under s 14ZZK(b) of the Taxation Administration Act 1953 (Cth) of proving the correct amount that should have been assessed. The Reasons at [255] made clear that proving a flaw in the Commissioner's calculation was insufficient without also proving the correct amount. The Court held the proposed question was directed to the weight and sufficiency of the evidence, not a question of law.
On Question 8, the Court held that the Tribunal correctly set out the legal test for intentional disregard at [278]-[279] and applied it at [280]-[284], first considering the accountants and then the applicants, before weighing contextual matters from earlier in the Reasons. The complaint about reliance on the absence of independent evidence from the accountants was a complaint about the Tribunal's evaluation of evidence, not a question of law, and had no reasonable prospect of success.
Outcome
The Court dismissed the applicants' interlocutory application filed on 29 July 2026 and ordered the applicants to pay the respondent's costs of that application.
The final hearing of the appeal was listed for 9:30 am (AEST) on 12 October 2026 for one day. The applicants were ordered to file and serve, within 7 days, an amended notice of appeal containing only appeal grounds 1, 2.5 and 6. Directions were made for the filing of outlines of submissions and a joint list of authorities ahead of the final hearing, with page limits and formatting requirements specified.
Major issues / areas of contention
- Whether proposed Question 2, concerning the Tribunal's treatment of sworn and photographic evidence of renovation costs on the Mikado Street property, raised a question of law or was a challenge to the merits and weight of the evidence.
- Whether proposed Question 5, concerning the Tribunal's conclusion at [256] that the adjusted amounts were the amounts that should have been assessed, raised a question of law, having regard to the onus under s 14ZZK(b) of the Taxation Administration Act 1953 (Cth).
- Whether proposed Question 8, concerning the Tribunal's finding of intentional disregard for penalty purposes under s 284-75(1) and item 1 of the table in s 284-90(1) of Schedule 1 to the Taxation Administration Act 1953 (Cth), raised a question of law as to whether the Tribunal applied the correct statutory test.
- Whether the proposed amendments were futile or had no reasonable prospect of success.