Borcherdt v Commissioner of Taxation

REASONS FOR JUDGMENT 1 On 11 February 2014 I delivered the primary judgment in these proceedings (Borcherdt v Commissioner of Taxation [2014] FCA 56), and in so doing dismissed the applicants' appeal from the decision of the Administrative Appeals Tribunal. After judgment was delivered the Commissioner of Taxation sought the opportunity to make submissions as to costs, and I made timetabling orders to that effect. 2 In summary, the Commissioner claims that costs ought follow the event. Mr Borcherdt however submits that as the applicants were partially successful in seeking allowance of their claim of $11,105.30, the Commissioner should pay their costs. 3 Section 43(2) of the Federal Court of Australia Act 1976 (Cth) provides that the award of costs is in the discretion of the Court. Such an exercise of discretion must be exercised judicially. 4 In Hughes v Western Australian Cricket Association (Inc.) (1986) ATPR 40-748 the Court observed that, as a general rule, costs should follow the event in the absence of special circumstances warranting a departure from that rule. In my view this statement is correct. 5 In this case the only special circumstance warranting any departure from that general rule relates to the Commissioner's concession concerning the applicants' claim for $11,105.30. It is clear that the Commissioner conceded before the Administrative Appeals Tribunal that the applicants' claim in that amount ought be allowed, however somehow this concession was overlooked in the final determination before the Tribunal. 6 Mr Borcherdt claims that he was required to take his appeal to the Federal Court to ensure that the Commissioner's concession concerning the applicants' claim for $11,105.30 was enforced. To the extent that any costs were incurred by the applicants in relation to prosecuting that claim, I consider that the Commissioner should be liable for those costs. All other costs, however, incurred by the Commissioner of and incidental to the proceedings should be paid by the applicants, to be taxed if not agreed. I certify that the preceding six (6) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Collier.