Commissioner of Taxation v Bosanac

MCKERRACHER J: 1 On 29 April 2016, I gave summary judgment in favour of the Commissioner of Taxation against the first and second respondents: Commissioner of Taxation v Bosanac [2016] FCA 448 (Bosanac (No 1)). The judgments were for approximately $9.3 million and $5.7 million respectively. 2 On 12 August 2016, I granted a stay of execution of judgment of Bosanac (No 1): Commissioner of Taxation v Bosanac (No 2) [2016] FCA 945. The basis for the making of the stay order in Bosanac (No 2) was that the first respondent had exercised his rights under Pt IVC of the Taxation Administration Act 1953 (Cth) to appeal against the objection decisions in relation to the assessments which were the subject of the judgment in Bosanac (No 1). 3 The first respondent's Pt IVC appeals were dismissed at first instance on 22 June 2018 by Steward J: Bosanac v Commissioner of Taxation [2018] FCA 946. This decision was upheld on appeal by a Full Court (Greenwood, Burley and Colvin JJ) on 15 July 2019: Bosanac v Commissioner of Taxation [2019] FCAFC 116. 4 On 18 July 2019, I directed my associate to email the parties, noting the delivery of judgment by the Full Court and requesting that the parties advise of their positions in relation to programming forward this proceeding. Specifically, the parties were requested to advise of their positions regarding listing this matter for a case management hearing. 5 The first respondent's solicitors advised that they had recent instructions to prepare an application for special leave to appeal to the High Court of Australia and that they saw little utility in listing this proceeding until the special leave avenue had closed. 6 The Commissioner opposed this course and confirmed that he sought the matter to be listed for a case management hearing. 7 The Commissioner considered that in light of the Full Court's decision, there was no reason why the balance of this proceeding, relating to relief sought by order 3 of the Commissioner's Amended Originating Application, by which the Commissioner seeks a declaration that the first respondent has an equitable interest to the extent of 50% of the available equity in a property located in Dalkeith, Western Australia. The Commissioner also advised that in light of the Full Court's decision, there was no longer a basis for the continuation of the stay order made in Bosanac (No 2). The Commissioner provided a minute of proposed orders which would program this matter forward to a final hearing of the Amended Originating Application in December 2019. 8 I considered it appropriate, in light of the significant time which had elapsed, for the matter to be listed for a case management hearing. 9 Shortly prior to the case management hearing on 15 August 2019, the first respondent's solicitors advised that an application had been filed with the High Court and that on the basis that the orders in Bosanac (No 2) were that judgment be stayed 'until further order of the Court', it was not considered any further orders were necessary. 10 At the case management hearing convened before me, the Commissioner maintained his position that it was appropriate to press on with this proceeding. The Commissioner also pointed out that the application filed in the High Court was not an application for special leave, but rather an application for a constitutional writ directed both at the Commissioner and the judges of this Court. The Commissioner's submission was that it is no longer the Pt IVC rights being exercised and the nature of the application before the High Court is fundamentally different. The assertion was that the High Court application does not create a basis for the continued operation of the stay. 11 The Commissioner pressed that it was appropriate for orders to be made in terms of his minute provided as amended and as dated 14 August 2019: 1. Unless the first respondent files an application in accordance with order 2 below, the order made on 12 August 2016 staying execution of the judgment against the first respondent be discharged on 23 August 2019. 2. The first respondent file and serve by no later than 4.00 pm on 22 August 2019: 2.1. any application to continue the order staying execution of the judgment made on 12 August 2016; 2.2. any affidavit evidence in support of the application; and 2.3. an outline of submissions in support of the application. 3. In the event that the first respondent files and serves an application under order 2 above the applicant file and serve any affidavit evidence and any submissions in opposition to the application by 5 September 2019. 4. Any application filed under order 2 above be listed for hearing at the earliest available date after 5 September 2019. 5. The Applicant file and serve any further affidavit evidence on which he seeks to rely in support of the relief sought in paragraph 3 of the Amended Originating Application by 6 September 2019. 6. The Respondents file and serve any affidavit(s) upon which they seek to rely in opposition to the relief sought in paragraph 3 of the Amended Originating Application by 11 October 2019. 7. The Applicant file and serve his submissions in support of the relief sought in paragraph 3 of the Amended Originating Application by 1 November 2019. 8. The Respondents file and serve their submissions in opposition to the relief sought in paragraph 3 of the Amended Originating Application by 22 November 2019. 9. The Applicant file and serve his submissions in reply by 6 December 2019. 10. The Amended Originating Application be listed for hearing on the first available date convenient to the Court after 6 December 2019. 11. Costs be in the cause. 12 I queried with the Commissioner's solicitor the length of time that should be allowed for the hearing. The difficulty identified at this stage is that, by order 5, the Commissioner has sought time to file further affidavit evidence in light of the time that has elapsed which may require further material, particularly as an Australian Taxation Office (ATO) officer who has deposed an affidavit in this matter is no longer employed with the ATO. 13 The first respondent's counsel took issue with the Commissioner's proposed course, particularly in the absence of a formal application to vacate the stay. 14 For present purposes, I am satisfied that until any significant changes in the position emerges, either as a result of the proceeding instituted by the first respondent in the High Court or otherwise, that further delays in this matter should be avoided. 15 I am further satisfied that the best means between the parties of achieving that imperative is to make orders in accordance with the minute. 16 The first respondent has expressed concerns that it may be resource-intensive and that consultation may achieve a greater saving of time and costs. I commend this objective, although in the scheme of things, against the backdrop of this litigation, it has not emerged as a compelling ambition. Nonetheless, I have no doubt that the Commissioner will most certainly co-operate with the respondents in discussing and attempting to achieve savings of time and cost in relation to any aspect of the minute. If there is any difficulty in that regard from the perspective of either party, I will entertain any application for specific orders. At present I do not regard them as being necessary. 17 For those reasons, I intend to make orders substantially in terms of the minute of proposed orders of the Commissioner dated 14 August 2019. I will make a further order providing seven days for the parties to communicate to my associate their availabilities in respect of the hearings contemplated by orders 4 and 10. I certify that the preceding seventeen (17) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice McKerracher.