An email withdrew his Tribunal case. Twelve months and seven listings later, it was the missing medical evidence that ended it.
Did one email withdraw his tax case? Was his case lost because he was not literate? Or was it because his bookkeeper wrote it for him? (She had apparently admitted failing to lodge his tax return).
He says the email was not what he told her to send and that he did not know, because he cannot read. He also claims, without evidence, that she was on a “frolic of her own” to protect herself [5, 18].
The Federal Court’s view: by the time reinstatement was refused, whether the email was sent on his instructions was “hardly to the point” [8].
The email was not the end. Missing evidence was [7, 20].
Watson v Commissioner of Taxation (No 2) [2026] FCA 1341.
What happened
The ATO issued Mr Watson a default and penalty assessment for the 2017 income year and disallowed his objection. He applied twice to the AAT.
With effect from 25 November 2022, the date of the email, the Tribunal dismissed his applications.
Under s 42A(10) of the AAT Act, reinstatement turned on whether they had been dismissed in error. He had seven listings in almost 12 months.
The Tribunal asked for a treating specialist’s view on whether his medical conditions could have made him prone to outbursts affecting his judgment around November 2022.
That evidence never came. On 8 November 2023 reinstatement was refused [7, 20].
Raised too late, no question of law
His account of the email was never raised at any reinstatement hearing. In any event, his illiteracy had no bearing on the procedural fairness the Tribunal gave him [19, 20].
The missing evidence was “not [his] fault”, he said, because he could not force the doctors to provide their opinions. Sarah C Derrington J: “That may be so, but that did not absolve him of the need to produce evidence to support whatever assertion on which he wished to rely” [20].
Appeals from the Tribunal lie only on questions of law. His complaints were matters for the Tribunal: the weight of a medical certificate and whether to allow cross-examination [26].
Even the Commissioner, as model litigant, suggested reformulated questions of law [10].
Leave to appeal from the strike-out of his notice of appeal was refused, with costs.
The practical takeaway
First, withdrawal is nearly a one-way door. Under today’s Administrative Review Tribunal Act 2024, a taxpayer who withdraws can seek reinstatement only on the grounds of error, generally within 28 days of notice of the dismissal (s 102). A late fresh Tribunal application is no escape (s 19(4)).
Second, a dispute about instructions is easier to prevent than to win. Before anything goes to the ATO or the Tribunal in a client’s name, confirm the instruction in writing. If the client cannot read, read them what is being sent. Where your own omission is part of the dispute, let someone independent run it.
General information only. This note was accurate when written. The law may have changed since and the note is not updated. It is not legal or tax advice, does not take account of your circumstances and must not be relied upon as a substitute for advice on your own matter. If the issue is live for you or your client, email arda@nortonquaytaxlaw.com.au for advice on the current position.