Deputy Commissioner of Taxation v Chemical Trustee Limited

REASONS FOR JUDGMENT 1 The applicant applies for an indemnity costs order in respect of its expenses in bringing Mr Zafiriou to court yesterday to be cross-examined. 2 Notice was given to the applicant that Mr Zafiriou would be required for cross-examination at the urgent hearing which took place before Buchanan J on the afternoon of Friday, 21 September 2012. The applicant ensured that Mr Zafiriou was present. Counsel then appearing for Chemical Trustee, sought to apply for leave to cross-examine Mr Zafiriou, but in the argument which ensued that application appears not to have been pursued. 3 After the matter was called on yesterday morning, the solicitor for Chemical Trustee informed the applicant's solicitors that it would be seeking leave to cross-examine Mr Zafiriou before me. The applicant then took steps to ensure that Mr Zafiriou, who hails from Melbourne, was present in Court when the matter came on for hearing at 2.15 (the matter having come on for hearing just before lunch). Mr Zafiriou was successfully brought to Court and, in due course, Ms Seiden applied for leave to cross-examine Mr Zafiriou. I did not grant such leave, it being explained to me at the time that the cross examination was going to be directed to the circumstances in which the notices of assessment came to be issued such a short time after Mr Zafiriou had just indicated that it might take several weeks for them to be issued. 4 During the course of the day a letter was sent by the Australian Government Solicitor to Henry Davis York, indicating that, if the taxpayer and its advisers persisted in requiring Mr Zafiriou for cross examination, the Deputy Commissioner of Taxation would, in the event that the cross examination did not occur, seek an order that its costs of bringing him to Court should be borne on an indemnity basis. 5 The situation in which an indemnity costs order will be made are not closed but, as was indicated by Sheppard J in Colgate-Palmolive Company v Cussons Pty Ltd (1993) 46 FCR 225, they usually include situations such as persistence in an argument which is contrary to known authority or the putting of arguments which cannot possibly succeed. There is no prohibition in procedural law on applying for leave to cross-examine and whilst I do not think that the application which was made was one containing much merit, I do not think that it can be placed in the same category of misbehaviours as those which Colgate-Palmolive indicates needs to be present in order to justify an indemnity costs order. 6 I do not, therefore, think this a case where such an order ought to be made. I will, however, order the respondent to pay the applicant's costs of bringing Mr Zafiriou to Sydney. I have not made any other costs order in relation to the application, which means that, as is usual in applications of this kind, the costs will be costs in the cause. I certify that the preceding six (6) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Perram.