Deputy Commission of Taxation v Diskoros

Judgment ex tempore - on application to re-open case against Mary Diskoros 1In the course of the defendant's closing submissions the Deputy Commissioner made an application to re-open his case, to read a further affidavit of David Halliburton sworn 21 November 2012, and to tender an instrument of authorisation. The defendant, Mrs Diskoros, objects to the re-opening on the basis that it is too late, causes prejudice and will delay the proceedings. I do not accept those bases and propose to grant leave to allow the Deputy Commissioner to re-open. 2According to the decision in Urban Transport Authority of New South Wales v Nweiser (1992) 28 NSWLR 471 at 478D, the fundamental principle to be applied in determining whether to grant an application for leave to re-open is whether the interests of justice are better served by allowing or rejecting the application. Generally, if leave to re-open is sought prior to the commencement of the other party's case, leave is granted. (See Henning v Lynch [1974] 2 NSWLR 254 at 259B, Brown v Petranker (1991) 22 NSWLR 717 at 728G.) 3In this case the application was made after the evidence was concluded, in the course of the defendant's closing submissions. But there is authority for the same rule to apply if the application to re-open is made before the hearing is concluded, so long as there is no previous deliberate decision not to adduce the evidence, and there is no embarrassment or prejudice to the other party (see Smith v New South Wales Bar Association (No 2) (1992) 176 CLR 256 at 266-267). 4Among the matters which are relevant to the assessment of the interests of justice is whether the evidence was not called earlier because of a deliberate tactical decision (see Smith at 266). In Australian Securities and Investments Commission (ASIC) v Rich [2006] NSWSC 826 at paragraph 18 Austen J set out a list of factors relevant to the exercise of the discretion to permit the plaintiff, in a civil penalty case, to re-open. 5The present case involves a claim for unpaid tax assessments with interest and a penalty assessment. Both parties accepted that the matters listed by Austen J in the Rich decision were relevant to the present application. In general terms those matters are: (a) the nature of the proceedings (b) the foreseeability of the need for the further evidence (c) fairness to the defendant that they may know of the evidence against them in making decisions about cross-examination and the adduction of evidence (d) extent of the plaintiff's evidence on the issue (e) the importance of the issue (f) the relevance and probative value of the further evidence and its potential to involve an undue waste of time (g) prejudice to the defendant in terms of delay in completing the proceeding (h) public interest in the timely conclusion of litigation (i) any explanation for the delay. 6I have considered these matters. Some of these considerations are similar to those involved in an assessment of amendments and adjournments such as those explored by the High Court in Aon Risk Services Australia Ltd v Australian National University [2009] HCA 27. Those applications and the one in this case each have the effect of interrupting the normal course of the proceedings continuing to a concluded judgment. 7In the present case the new evidence sought to be adduced comprises an instrument of authorisation and certified copies of the relevant notices of assessment. Copies of the notices of assessment, without the certifying stamp, are already in evidence. It seems to be common ground that the admission of this new evidence will, in all but one of the relevant notices of assessment, conclusively establish the issue of the notices of assessment and the truth of the particulars in those notices. 8However, the facts evidenced by the notices of assessment were not, to my mind, genuinely in issue. It is true that the defence denies the issue of the assessments and Mr Raphael, counsel for Mrs Diskoros, refrained from expressly conceding the absence of such an issue in the course of submissions on this application. But no objection was taken to the tender of the various notices of assessment, nor to the paragraphs in the earlier affidavits of Mr Halliburton, which described them as notices of assessment. Further, there was no cross-examination of Mr Halliburton and perhaps most significantly, no evidence was called that was at all directed to the issue of the notices of assessment and their contents. 9This failure is particularly significant given the evidence in the proceedings which comprises a running balance of the taxpayer's account, certificates under the Taxation Administration Act 1953 and the statement of claim itself, each of which constitutes prima facie evidence of the assertions in them pursuant to the provisions of the Taxation Administration Act 1953. The earlier affidavits of Mr Halliburton with the uncertified notices of assessment annexed evidence the issue of the notices of assessment. 10In that event, it is difficult to see how, without any evidence to the contrary (that is, to the effect that the notices of assessment were not issued), that the issue of the notices of assessment remained a matter of controversy between the parties. It was argued by Mr Raphael that the Court must still draw the inference rather than be compelled by the conclusive effect of the certified notices of assessment. But in the circumstances of this case that distinction has no practical significance. Where the Deputy Commissioner has prima facie evidence on that issue, and there is no contrary evidence, there is no real scope for the Court to find against the Deputy Commissioner. 11Mr Raphael submitted that the new evidence should entitle him to an adjournment to take instructions in relation to other issues and to cross-examine on them. I should say that any need for adjournment was opposed until immediately before I proposed to give this judgment, when that opposition by the Deputy Commissioner was withdrawn. I do not think that the mere admission of evidence on one issue should entitle further evidence on another. 12Of course, it may be that in some circumstances a forensic decision may be made not to contest an issue because of the perceived strength of that party on another issue. In the event that further evidence was allowed on the contested issue, it may be appropriate to cure the prejudice arising from a forensic decision not to contest the other matters because that decision would or might not have been made had the further evidence been adduced earlier. It was not suggested that this is the case here. 13The evidence as it presently stands would have allowed Mrs Diskoros to adduce evidence on the issue of notices of assessment, cross-examine Mr Halliburton, perhaps even to object to the annexed copies of the notices. No such steps were taken. A forensic decision was made not to contest that matter. Clearer or more conclusive proof of the very issue not contested - the issue of the certificates - does not cause any prejudice. 14The decision of Smith v New South Wales Bar Association (No 2) cited earlier indicates that the issue of prejudice is perhaps the most important in an application such as this. 15There is no suggestion in this case that the certified copies were not part of the evidence because of a deliberate decision. It seems to be an obvious oversight by the plaintiff on a technical matter of proof. Nor, on the view I have reached, should there be any significant delay in respect of the matter as I have found that there is no occasion for adjournment, further cross-examination or further evidence from the defendant by reason of the admission of the new material. 16There is one factor in favour of the defendant. It is that the evidence does not seem to me to be crucial to the Deputy Commissioner's case. However, in circumstances where there is no prejudice to the defendant, no deliberate forensic decision not to adduce the evidence and no substantial delay to the conclusion of the trial, I do not think that this factor is sufficient to refuse leave. 17I have also considered whether the nature of this evidence - which operates to conclusively prove a fact - should cause it to be by its exceptional nature subject to a different rule than would ordinarily apply to the re-opening and calling of further evidence. I do not think it does. Parliament has created this category of evidence and I see no basis to conclude that it warrants any different treatment. 18Accordingly, for the reasons I have given, I grant leave to the Deputy Commissioner to read the further affidavit and tender the instrument of authority. However, I do not think the opposition to the further material was unreasonable and for that reason I am minded to require the plaintiff to pay the costs of the application to re-open, given that additional time has been spent on the matter which would not otherwise have been required, and the application was in the nature of an indulgence being sought by the Deputy Commissioner for an omission to adduce this evidence earlier. Given that the time is approximately 2.40pm now, those costs would include two thirds of the costs of today.