Binetter v Commissioner of Taxation

Introduction 1 On 17 June 2015 I granted the applicant leave to discontinue this proceeding and ordered the respondent ("Commissioner") to pay the applicant's costs, including costs of that day, as agreed or taxed. The Commissioner requested that I provide reasons for the order as to costs. What follows are those reasons. 2 By originating application for judicial review filed 5 June 2015, the applicant sought mandamus, or an injunction, or an order under s 16(3) of the Administrative Decisions (Judicial Review) Act 1977 (Cth) ("ADJR Act") requiring the Commissioner to make decisions under ss 14T(1), 14T(2) and 14U(1) of the Taxation Administration Act 1953 (Cth) ("TAA"). The requested decisions concern, first, the revocation of a Departure Prohibition Order ("DPO") (under s 14T(1) and/or (2)) and, secondly, the issuing of a Departure Authorisation Certificate ("DAC") (under s 14U(1)).

Background 3 On 10 June 2014, a delegate of the Commissioner made a DPO with respect to the applicant, pursuant to s 14S of the TAA. That DPO was varied on 8 December 2014 and again on 17 February 2015. 4 On 29 January 2015, this Court made orders in respect of the fifth to tenth respondents in NSD 69/2015 freezing $45,230,237.00 from the sale of the Nudie Juice business and related assets. These orders were extended on 2 February 2015 and varied on 12 February 2012. 5 By letter dated 24 March 2015, the applicant's solicitor ("Mr Ardagna") sought, by close of business that day, the revocation of the DPO pursuant to s 14T(1) of the TAA. 6 On 7 April 2015, the Commissioner replied to Mr Ardagna's request of 24 March 2015. The Commissioner sought comment upon a number of matters arising from Mr Ardagna's request and sought a response within 14 days. 7 On 18 May 2015, Mr Ardagna responded to the Commissioner's letter dated 7 April 2015. As well as seeking revocation of the DPO, Mr Ardagna also sought the issue of a DAC pursuant to s 14U(1) of the TAA and indicated the applicant's intention to travel to the United States in June 2015. 8 By letter dated 26 May 2015, the Australian Government Solicitor ("AGS"), on behalf of the Commissioner, responded to Mr Ardagna's letter of 18 May 2015. A number of issues were put. Some related to the DPO, being questions previously put but allegedly not answered, or further matters arising from the answers given. Other issues put related to the request for a DAC. A response was requested within 14 days. 9 On 29 May 2015, Mr Ardagna responded. He wrote: 5.1 Mr Binetter intends to depart for the United States on 21 June 2015 and to return to Australia before 24 July 2015. Mr Binetter intends to undertake the following activities while overseas: 5.1.1. Attend the wedding of his nephew, Mr Steven Binetter. The wedding is to be held on 28 June 2015 in Calistoga, California. A copy of the wedding invitation is attached as Appendix A to this letter. Mr Binetter is very close to his nephew, who is also the godfather of Mr Binetter's eldest son Robert. As your client is aware, Mr Binetter has travelled extensively to the United States in previous years, and on each occasion Mr Binetter has visited Steven, who lives in New York. 5.1.2. Attend the wedding of his business associate and close friend Mr Nathan Barker. A copy of the wedding invitation is attached as Appendix B. The wedding is to be held on 5 July 2015 in Orangevale, California. Mr Binetter has known Mr Barker for over ten years and considers him to be one of his closest friends. Mr Barker is also the founder of the "Nate's Fine Foods" (NFF) business, for which Mr Binetter holds (since February 2013) the position of Chief Executive Officer (CEO). 5.1.3. Attending to Mr Binetter's employment responsibilities as CEO of NFF (previously known as Binnetti Gourmet Foods (BGF), which is based in Roseville, California. NFF deals in fast moving consumer goods, and specifically, the preparation and distribution of freshly cooked pasta and pasta meals. It is registered and licenced by the Food and Drug Administration, State of California Department of Health and the United States Department of Agriculture as a food processing and packaging company. Further on, Mr Ardagna wrote: We note that Mr Binetter's three children (who are aged 15, 14 and 10 years) will not be travelling with him to the United States for this visit. Mr Binetter intends to return to Australia as he is a committed father and has every intention of continuing to play a significant role in his children's upbringing and development. We also note that Mr Binetter's two eldest children reside with him full time. As your client is already aware, Mr Binetter's children all attend the same school in Sydney and their mother resides in Sydney. Mr Binetter has shared parental responsibility for his three children. Any changes to the children's living and schooling arrangements would in reality require Mr Binetter to advise his ex-wife and obtain her consent to the change. You are also aware that Mr Binetter is involved in significant litigation with your client and BCI Finances Pty Limited (In Liq.). Mr Binetter plays a significant role in the conduct of this litigation, meeting with various lawyers on a regular (at least three times per week) basis to discuss the management of the litigation. Mr Binetter is committed to achieving successful outcomes in relation to these matters and does not consider that he can do so unless he is physically present in Australia. 10 By letter dated 3 June 2015, the AGS on behalf of the Commissioner, informed the applicant that the proposed decision-maker - … has other commitments this week and will be overseas all of next week on official business. The earliest that he will be able to finalise consideration of the matter and make a decision is likely to be 18 June 2015. However, if his circumstances change such that he is able to finalise the matter earlier, then, he will make a decision as soon as he is able. (Emphasis added.) 11 The AGS letter of 3 June 2015 went on: We note that your client proposed to fly out of Australia on 21 June 2015. Meanwhile, your client should not assume that either decision will be one way or the other. Any travel plans that he makes are at his own risk. From your letter of 29 May 2015, it appears to my client that you do not wish provide [sic] any further evidence or make any further submission with respect to the application. If this is incorrect please provide any further material by way of evidence and/or submission by no later than 12 June 2015. (Emphasis added.) 12 As indicated in [2] above, two days later the applicant commenced this proceeding, which was set down for hearing on 17 June 2015. 13 On the evening of 16 June 2015, the night before this proceeding was listed for hearing, the Commissioner made decisions not to revoke the DPO, nor to issue a DAC, and, by letter of the same date, wrote to the applicant in the following terms: We refer to your request that the Commissioner revoke the Departure Prohibition Order (DPO) made on 11 June 2014 or alternatively issue a Departure Authorisation Certificate (DSC). … You are advised that the conditions of ss14T(1) and (2) have not been met for the following reasons: • Your taxation liabilities have not been wholly discharged nor have you proposed an arrangement that is satisfactory to the Commissioner which would wholly discharge the debt in accordance with section 14T(1) of the TAA. • You have not provided nor offered a security for your taxation liabilities to the satisfaction of the Commissioner. • The Commissioner is not satisfied, based on your conduct to date, that liabilities that you may become subject to will be wholly discharged. • There is no indication that you are bankrupt. • The Commissioner is satisfied that your tax liabilities are completely recoverable. … You are advised that the conditions of subsections 14U(1)(a) & (b) of the TAA have not been met for the following reasons: • You have not settled nor discharged your taxation liabilities, nor have you made arrangements to do so. • You have not provided nor offered a security for your taxation liabilities in a form acceptable to the Commissioner. If you are dissatisfied with this decision you may make an application to the Administrative Appeals Tribunal (AAT) under section 14Y of the TAA for a review of decisions made by the Commissioner. … 14 When the proceeding came before the Court for hearing on the morning of 17 June 2015, unsurprisingly the Court was informed by senior counsel for the applicant that he sought leave to discontinue the proceeding as it was no longer utile, but wished to be heard on the issue of costs. Senior counsel for the applicant further informed the Court that his client had already that day filed an application with the Administrative Appeals Tribunal under s 14Y of the TAA seeking merits review of the Commissioner's decisions on an urgent basis.