Deputy Commissioner of Taxation v Chemical Trustee Limited

REASONS FOR JUDGMENT 1 Proceeding VID 887 of 2010 is one of a number of complicated tax proceedings presently residing in my docket. The proceedings are divided into two kinds. There are proceedings to enforce various judgments obtained by the Commissioner against certain taxpayers, which judgments arise from the issue by him of notices of assessment. The second group of proceedings relate to proceedings under Part IVC of the Taxation Administration Act 1953 (Cth) in which the taxpayers seek to challenge the correctness of the underlying assessments themselves. In ways not presently relevant to relate, the dichotomy between those two sets of proceedings is not as complete as it might appear. 2 An aspect of the enforcement proceedings included, at an early stage, the making of freezing orders over certain parcels of marketable securities held by some of the taxpayers. One such set of freezing orders relate to the position of the taxpayer known as Chemical Trustee Limited. On 27 August 2012, following a number of interlocutory steps having been taken between the parties, Chemical Trustee Limited paid the amount of tax which was in dispute. The effect of having satisfied the judgments against it which resulted from the issue of the original notices of assessment is that the enforcement proceedings, at least insofar as they concern Chemical Trustee Limited, have run their course. As a corollary, the freezing orders which were obtained as an aspect of those enforcement proceedings have also outlived their utility. 3 Notwithstanding those events, the Commissioner, it appears, had issued further notices of assessment to Chemical Trustee on 9 July 2012, and these notices themselves are now the subject of review by way of objection. Thus was the state of play when VID 887 of 2010 and a large number of other related matters came before me for directions this morning. At that time, Mr Morris, who appeared for the Deputy Commissioner, proffered to me two sets of short minutes of order. The first of these, in substance, provided for the release of the freezing orders which had originally been made on 15 September 2010, and for the dismissal of certain charging summonses issued as another aspect of the enforcement proceedings. 4 His position was not that he consented, however, to the making of those orders. He was content for them to be made if, at the same time, I made other orders in proceedings which were, as I understand it, either filed last night or this morning in this Court under which the Deputy Commissioner sought freezing orders against the same taxpayer, but this time arising out of the fresh notices of assessment which had been issued. The point that Mr Morris endeavoured to make was that the present freezing order should be maintained so that an application for a fresh freezing order could be made in the new proceeding. Because of the complexity of the debate, the length of my directions list this morning and the fact that a trial was due to recommence at 10:15 am, I stood the matters down to 1 pm. 5 At that time, Mr Hyde Page, who appeared for the taxpayer, submitted that the course sought by Mr Morris should not be taken. This was because the tax liability which underpinned the enforcement proceedings was now gone and there was nothing to which the current freezing order could properly be seen as appurtenant. He submitted that it would not be proper to use the freezing order which was presently in place and which related to one debt as, effectively, some form of interim relief in respect of other proceedings and another debt. For that reason, he submitted that I should simply proceed to discharge the freezing order which had been made, and to leave the Deputy Commissioner to his remedies before the Duty Judge insofar as a fresh freezing order could be obtained. 6 In the ordinary course, I would have dealt with both of these applications myself. Although the fresh matter filed last night or this morning has not yet been docketed to me, it is inevitable that those proceedings will in due course be docketed to me, and there is no doubt that VID 887 of 2010 is before me today. I have, perhaps not always willingly, obtained a considerable familiarity with these proceedings and it would be wasteful for another judge to have to become acquainted with them on an urgent basis. The reality, however, is that I am presently in the middle of a five-day intellectual property trial which recommences at 2:15 pm. 7 Mr Morris sought to have me entertain his interlocutory application in the fresh proceeding for a freezing order, but the complexity of that application and the infelicity of me having to conduct another trial mean that I cannot hear that application. This creates something of a quandary. Mr Morris wishes to preserve the subject matter of his litigation in the new proceedings and seeks remedies which would bring about that preservation, but the judge from whom he would seek them is not able to accede them. This leads him to submit that I ought to, in one form or another, give some continued life to the old freezing order so that he may - possibly from me, possibly from another judge - obtain the interim relief which he seeks. 8 One aspect of the procedural landscape which emerged during the course of the hearing was that there had not, up until today, been an application by the taxpayer to discharge the freezing order itself. This is not surprising. As I understood it from the bar table, such an application had been foreshadowed between the parties and it was obvious this morning that when the parties were formulating their competing short minutes of order that the question of whether the freezing order should be suspended was very much at the forefront of their attentions. There is, of course, a complexity about this because, substantively, there is little to be said against the proposition, leaving aside the present issues, that the freezing order no longer rests on any kind of secure foundation, the underlying judgment having been satisfied. 9 Be that as it may, the taxpayer, to complete the picture as a matter of formality, did apply for me to release the freezing order. In a sense, this was necessary, otherwise there was nothing before me. This led Mr Morris for the Commissioner to suggest an alternate route to extending the freezing order, setting it aside or suspending the operation of that setting aside for some short period of time. Instead, he submitted that I could adjourn Mr Hyde Page's application for some period of time to allow Mr Morris to pursue his application for a freezing order from the Duty Judge. 10 It seems to me that, in considering that application, there are two relevant considerations. The first is the somewhat unusual circumstance that, although I am probably the person who ought to be hearing Mr Morris' substantive application, I am disabled from doing so by reason of having to recommence a trial in 25 minutes' time. And the second is the fact that there are presently other proceedings on foot in which a freezing order is sought. They both seem to me to be relevant matters in considering whether or not to grant the adjournment. 11 Another relevant matter to consider is whether, in substance, to accede to such an adjournment application might not rather be regarded as the granting of some form of interim relief akin to an interlocutory injunction or a stay. Were the matter to be viewed that way, there might be something to be said for the view that Mr Morris' client was seeking to do through the form of an adjournment what it could not achieve through the form of an interim injunction. It seems to me that is also a relevant consideration in considering whether to grant the adjournment sought. 12 There is no easy answer to the present conundrum. But I have come to the view that, notwithstanding that there is some force in the proposition that the adjournment resembles an injunction, considerations of administrative commonsense and my simple inability to deal with an application that Mr Morris wishes to make require that I should accede to the adjournment application. What I will do is I will adjourn proceedings NSD 887 of 2010 to my directions list next Tuesday morning at 9.30 am. I certify that the preceding twelve (12) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Perram.