Bosanac v Commissioner of Taxation

MCKERRACHER J: 1 This is the applicant's second application to vacate the trial dates in which the applicant appeals against an objection decision of the Commissioner under s 14ZZ of the Taxation Administration Act 1953 (Cth). Each of those applications has been opposed by the Commissioner. In this application, which was filed shortly before commencement of the proposed hearing on 8 May 2017, detailed affidavits and submissions have been filed by each party and each party has adopted its written submissions. 2 The applicant says that due to an officer of the Commissioner issuing a Garnishee Notice on 8 February 2017 to the applicant's employer, the trial preparation was delayed for several weeks. It was necessary to contest the Garnishee Notice which, he says, consumed valuable trial preparation time. The applicant notes that this was a factor that resulted in the trial dates originally being vacated by this Court in February 2017. 3 In early April 2017, further extensive financial records were received by the applicant from an overseas entity. Following a review of those financial records, the applicant submits that the evidence is 'extremely probative' in explaining the disputed transactions that are specifically under consideration in this appeal. Furthermore, the applicant submits that the new material 'transforms the case' and that his legal representatives do not believe the case can be run without properly synthesising that information and amending the originating application. Consequently, the applicant seeks a vacation of the trial dates in order for that to be achieved. 4 The Commissioner opposes the application to vacate the trial dates. The Commissioner submits that there is no reasonable explanation for the delay in obtaining the further financial records and applying to vacate the hearing dates. The Commissioner argues that the applicant has had a considerable period of time to prepare his evidence in support of the application, with orders as to the filing of evidence being first made in September 2016. The Commissioner further submits that he would be prejudiced by a further delay because, amongst other things, he is prevented from taking any steps to recover part of the applicant's tax debt (for which judgment has been obtained) by reason of the operation of a stay of execution in related proceedings. 5 As set out in s 37M of the Federal Court of Australia Act 1976 (Cth) (the FCA Act), the overarching purpose of the civil practice and procedure provisions is to facilitate the just resolution of disputes according to law and as quickly, inexpensively and efficiently as possible. Pursuant to s 37M(2) of the FCA Act, the Court is obliged to exercise its powers and discharge its duties under those provisions in the way that best promotes that purpose (Luck v University of Southern Queensland [2016] FCAFC 167 per Collier, Jessup and Katzmann JJ (at [37])). Furthermore, pursuant to s 37N of the FCA Act, the parties are obliged to conduct the litigation in a way that is consistent with the overarching purpose of those provisions (Luck at [37]). The importance of case management principles in determining applications affecting the progress of litigation was considered in Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175. As discussed by French CJ in that decision, when applying these principles it must be remembered that, amongst other things: (a) the time of the court is a publicly funded resource and that the vacation or adjournment of trials wastes that resource (at [5], [30]); and (b) there is a potential for loss of public confidence in the legal system which arises where a court is seen to accede to applications made without adequate explanation or justification, whether they be for adjournment, for amendments giving rise to adjournment, or for vacation of fixed trial dates resulting in the resetting of interlocutory processes (at [30]). 6 I have read the materials closely before hearing the argument today. In my view, the explanation for the delay given by the applicant is wholly inadequate. There is no proper explanation other than reference to the garnishee proceedings, but, in my view, that is only applicable, if at all, to the vacation of the first trial dates in February 2017. I do not accept that the garnishee proceedings have caused delay to the current listing of the matter. My firm impression is that the applicant is well behind in proper preparation for the case as it presently stands and has been so for some time. 7 Generally, in this application, the standard of evidence and argument falls well short of what would be expected for a second adjournment application of an imminent hearing listed for several days. Furthermore, the inconvenience to the Court, the public and the parties cannot be overstated. 8 All of that said, and despite the lack of merit on the application and the force of the Commissioner's argument against the application, it does appear to me on the material that has been filed that the nature of the substantive application will have very significantly changed, and as such, I would be loath to shut the applicant out from running the case he wishes to run. It is well established that case management principles should not supplant the objective of doing justice between the parties according to law (Aon (at [30])). I am also mindful that the Commissioner has the benefit of freezing orders in respect of the applicant's assets. That is not to say, by any means, that I accept at this stage that the material on which the applicant seeks to rely meets the evidentiary standards required in a matter such as this. Furthermore, nothing else I have said should be treated as suggesting that the material on which the applicant hopes to rely will necessarily be admitted. I have not turned my mind to those finer points of evidentiary admissibility. 9 I do consider, however, that it is in the interest of the justice overall to allow the applicant one last chance and it will, indeed, be a last chance, at least at first-instance level. Broadly speaking, I favour the Commissioner's proposed timetable provided as an alternative position to its fundamental opposition to the vacation of the trial dates. It may be that the applicant will have to work a bit faster at this stage, but as I am unable to allocate trial dates in July or August, a hearing will have to be in September, albeit at the beginning of September. 10 There are two ancillary matters. First, I should also make clear that, in any event, the applicant will be required to pay the Commissioner's costs thrown away by reason of the application. Second, I accept the Commissioner's opposed submissions that a springing order is justified. Therefore, I will adopt the Commissioner's minute which incorporates springing orders for the dismissal of the application if there is non-compliance by the applicant with any milestone in the programming orders. I certify that the preceding ten (10) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice McKerracher.