Deputy Commissioner of Taxation v Chemical Trustee Limited

REASONS FOR JUDGMENT 1 Derrin Brothers Properties Limited ('Derrin') and Southgate Investment Funds Limited ('Southgate') apply for a stay of the Commissioner's proceedings for the making of charging orders, which is listed for hearing on the afternoon of Friday 16 November 2012. There is presently pending before a Full Court to be heard on 21 November an appeal from orders made by me earlier this year. Those orders involved, in at least one part, a dismissal by me of an application by Derrin and Southgate for a stay of certain judgments obtained by the Commissioner on the basis of notices of assessment: Deputy Commissioner of Taxation v Hua Wang Bank Berhad (No 3) [2012] FCA 594. 2 Part of the reasoning for refusing those stays was based upon the notion, which I apprehended could be extracted from the High Court's decision in Deputy Commissioner of Taxation v Broadbeach Properties Pty Ltd (2008) 237 CLR 473, that the fact that the taxpayers had on foot Part IVC appeals was not a matter which ought to be taken into account in considering whether to grant a stay or not. That statement may oversimplify the issues which were before me on that occasion, and is not intended either to substitute or contradict my earlier reasons. The Full Court will next week consider the question of whether the approach which I took to the issue of a stay was a correct one. 3 In the meantime, Mr Hyde Page has discovered in the course of his preparations for the hearing before the Full Court on 21 November a decision of the High Court which was not drawn to my attention during the argument for the stay. This is the decision in Australian Machinery & Investment Co Pty Ltd v Deputy Commissioner of Taxation (No. 2) (1946) 20 ALJ 326 per Latham, Rich, Starke, Dixon and Williams. A passage in the Australian Law Journal's report of the case was brought to my attention. It includes the following: Latham CJ said Rich, Dixon and Williams JJ and he were of opinion that the contention that there was no jurisdiction to grant a stay in these proceedings by reason of the provisions of the Income Tax Assessment Act, s. 201, and the associated sections should not be accepted. They were of the opinion that there is jurisdiction to grant a stay in such proceedings, but that in considering any application for a stay the policy of the Act as stated in s. 201 is a matter to which great weight should be attached. 4 It does not seem to me that it would be in the interests of justice that a further stay should now be granted by me pending the outcome of the Full Court's determination. The reasons for this are practical and are two. The first practical consideration concerns the fact that the Commissioner has undertaken that, in the event that the charging orders are made by the Court on Friday afternoon or at such later time that the Court delivers judgment, the Commissioner will forbear from the appointment of a receiver pursuant to those orders. Secondly, the Commissioner has undertaken that no receiver will be appointed until the outcome of the Full Court's decision is known. This has the practical consequence, so it seems to me, that the chief concern that the taxpayers have, namely, that their shares might be sold, even whilst the question of whether a stay should have been granted is under consideration, is not one which will arise. 5 I will order that: 1. The respondents' interlocutory application seeking to amend the orders of 26 June 2012 be listed for hearing at 2:15 pm on 16 November 2012. 2. The respondents' interlocutory application seeking a stay of execution against its assets be dismissed. I certify that the preceding five (5) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Perram.