Croker v Commissioner of Taxation

REASONS FOR JUDGMENT 1 This is a notice of motion filed on 19 March 2009 in which the applicant, Mr Croker, seeks an order granting leave to appeal against the orders of Moore J of 12 March 2009 dismissing Mr Croker's application (Croker v Commissioner of Taxation for the Commonwealth of Australia [2009] FCA 275). The background to the matter is that the Commissioner of Taxation (the Commissioner) has in his favour certain costs orders. As those costs orders have remained unsatisfied, the Commissioner has issued bankruptcy notices against Mr Croker. Those bankruptcy notices, as Moore J observed in [1] of his reasons for judgment, have generated a considerable body of litigation in this Court. 2 Mr Croker, in his application, alleged that the Commissioner had committed the tort of misfeasance in public office. This, as Moore J described at [1], was "pleaded in a number of ways in the statement of claim." Moore J observed that Cowdroy J had heard and dismissed a similar application in the matter of Croker v Commissioner of Taxation [2006] FCA 372. Cowdroy J held that this Court did not have jurisdiction to hear a claim with respect to the tort of misfeasance in public office in the manner alleged by Mr Croker. Mr Croker sought leave to appeal against the decision of Cowdroy J. Leave was refused by Edmonds J in the matter of Croker v Commissioner of Taxation (2006) 62 ATR 519; [2006] FCA 720. Moore J concluded (at [2]) that Cowdroy J's decision and determination "at the very least" raised an issue estoppel against Mr Croker. That is, the Court had already determined that it did not have jurisdiction to hear and determine a claim in tort for misfeasance in public office in broadly the same set of circumstances relied upon by Mr Croker in the present case. 3 In consequence, Moore J held that Mr Croker was estopped from arguing that the Court does have jurisdiction. Further, Moore J observed that irrespective of an estoppel, the principle of judicial comity meant that he would be bound to follow Cowdroy J's decision unless he thought it was plainly wrong. However, he was not of the view that Cowdroy J's decision was plainly wrong, with the consequence that Moore J dismissed the application on those two grounds. 4 Mr Croker has come before the Court today seeking leave to appeal essentially referring to the following considerations. First, Mr Croker says that the Court does have jurisdiction to hear his claim, referring to s 56 of the Judiciary Act 1903 (Cth) and other cases in which the Court has heard and determined suits against the Commonwealth in tort. Second, Mr Croker says, and the Commissioner accepts, that the Commissioner has an obligation to act as a model litigant in accordance with the Legal Services Directions (2005) which is enforceable in accordance with ss 55ZF and 55ZG of the Judiciary Act. According to Mr Croker the Commissioner has not acted in accordance with his model litigant obligations. Third, Mr Croker says that the Court should have allowed his statement of claim to be amended if a pleading correction could have sustained a reasonable cause of action. Fourth, Mr Croker says that this Court, even if it did not have jurisdiction, could and should make an order transferring his proceedings to a court of competent jurisdiction such as a State Supreme Court. Finally, Mr Croker says that there has been a gross miscarriage of justice and that his constitutional rights have been contravened, with the result that he should be granted leave to appeal. 5 The Commissioner submits that the relevant principles with respect to whether leave to appeal is to be granted are those established in Décor Corporation Pty Ltd v Dart Industries Inc (1991) 33 FCR 397, namely, first, whether in all the circumstances the decision of Moore J is attended with sufficient doubt to warrant it being reconsidered by the Full Court and, second, whether substantial injustice would result if leave were refused supposing the decision to be wrong. According to the Commissioner, neither limb of this test is satisfied in the present case. 6 Essentially the Commissioner relies upon the reasons of Moore J. With respect to the Legal Services Directions the Commissioner says that it is of no assistance to Mr Croker. In short, it does not in any way undermine Moore J's conclusions about issue estoppel. Nor, says the Commissioner, is s 56 of the Judiciary Act relevant. Finally and in any event, the Court should be satisfied that there would not be any substantial injustice because no reasonable cause of action was disclosed in Mr Croker's proceeding. 7 The Commissioner said where the Court does not have jurisdiction it would not, or could not, make any order transferring the proceeding and, in any event, this was an application for leave to appeal. Finally, with respect to the other cases relied upon by Mr Croker, the Commissioner says that in those cases the circumstances were very different in the sense that the tortious claims arose in the context of federal law in respect of which this Court does have jurisdiction or by reference to related facts in the Court's accrued or associated jurisdiction. 8 It is necessary in this application for leave to appeal for me to consider the factors referred to in Décor Corp. It seems to me to be clear that Moore J's decision is not attended by any real doubt. The circumstances of the present application which Moore J dismissed are broadly the same as, and arise from the same circumstances as, the matters considered by Cowdroy J. Cowdroy J considered the application for damages for the tort of misfeasance in public office in proceedings between the same parties in 2006. He held that this Court did not have jurisdiction. There is no basis put before me today, nor which otherwise arises on consideration of Moore J's decision, which in any way indicates that His Honour's conclusions are attended with any real doubt. At the very least an issue estoppel arises as against Mr Croker in relation to the present application. Moore J's conclusion in this regard appears plainly correct. 9 As to the second limb of the principles established in Décor Corp, it is obvious from the facts which underlie the present application that substantial injustice would not be occasioned if leave were refused supposing the decision of Moore J to be wrong. Again, Edmonds J considered very similar circumstances and reached the same conclusion having regard to the history of the proceedings between Mr Croker and the Commissioner. Nothing has been put before me today which, in my view, supports any meaningful submission that there would be any injustice by declining the grant of leave to appeal supposing the decision of Moore J were wrong. 10 As to the additional submissions of Mr Croker in support of his application, I accept what the Commissioner has said about other cases concerning tortious conduct turning on their own facts. They do not provide support for Mr Croker's position in this matter. I also accept what the Commissioner has said about the immateriality of Mr Croker's submissions by reference to s 56 of the Judiciary Act and the Legal Services Directions. It is no answer to suggest, as Mr Croker has done, that Moore J should have allowed the statement of claim to be amended. There does not seem to be any reference in the decision of Moore J to any application to amend the statement of claim. Be that as it may, the basis of Moore J's decision was, in effect, that Mr Croker had already argued and lost this jurisdictional point in relation to similar circumstances against the same respondent in 2006. If any different claim were to be made, then it could have been made at the time the proceedings were commenced. 11 I also accept what the Commissioner has said about the suggestion that I might make orders transferring the application to a court of competent jurisdiction. The short answer to that is that the claim has already been dismissed. This is an application for leave to appeal. Applying the conventional principles to the determination of the application, leave should be refused. The idea that proceedings may be commenced in one court which has no jurisdiction to determine the matter in order to enliven some power to transfer proceedings to another court seems to me to be misconceived, or certainly inapplicable in the particular circumstances of this case where I propose to decline leave. 12 For these reasons the application for leave to appeal by way of notice of motion filed on 19 March 2009 is dismissed. 13 The Commissioner has asked that, in the particular circumstances of this case, there should not only be the usual order as to costs, but in fact Mr Croker should be ordered to pay the Commissioner's costs on an indemnity basis consistent with the approach taken by Moore J. In [4] of his decision, Moore J observed that this was one of the "rare cases" where an indemnity costs order should be made. Moore J concluded that because the proceedings were in substance proceedings of the same character that were heard and dismissed by Cowdroy J, Mr Croker should have appreciated that these proceedings were likely to be dismissed. This possibility had been adverted to at a directions hearing, as was the issue of Mr Croker being potentially liable to pay not only the Commissioner's costs but they be paid on an indemnity basis. Moore J concluded that it should have been apparent to Mr Croker that his case was, in effect, hopeless. In those circumstances, Moore J decided that costs on an indemnity basis should be ordered. 14 Mr Croker says that because the Commissioner has not acted in accordance with the Legal Services Directions, there should be no order as to costs. It does seem to me that the circumstances of these proceedings are unusual. Mr Croker instituted proceedings in similar circumstances in 2006. He was unsuccessful on the basis that the Court said it had no jurisdiction. He sought leave to appeal against that decision and leave was refused. In the judgment of the Court at that time, Edmonds J (at [3]) observed that the draft notice of appeal contained "no arguable ground of appeal" which should not be surprising because Edmonds J was unable to identify any error in the judgment below. Accordingly, at that stage, two judges of this Court had determined that there was no jurisdiction to hear Mr Croker's application for damages for the tort of misfeasance in public office against the Commissioner. 15 Moore J then dealt with the second application. His Honour referred to the earlier decisions, determined that there was an issue estoppel against Mr Croker, and observed that nothing had been put to him which would indicate that Cowdroy J's decision was plainly wrong. Accordingly, Moore J concluded that there was no course open other than to dismiss the application, a decision which seems to me to be plainly correct. As I have said, Moore J ordered Mr Croker to pay indemnity costs because the application was, in effect, hopeless. The Commissioner has now been brought to Court again by Mr Croker on an application for leave. The submissions of Mr Croker in support of the leave application do not seem to me in any way to address the real principles applicable on a leave application, to which I have already referred. In the context and background of this matter, it must have been known to Mr Croker that this application for leave was hopeless and doomed to fail. 16 In these unusual circumstances, I concur with the approach taken by Moore J on the issue of costs. This is a case where the proceeding should never have been brought. Accordingly, the second order I make is that the applicant is to pay the respondent's costs on an indemnity basis. I certify that the preceding sixteen (16) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Jagot.