Deputy Commissioner of Taxation v Commercial & General Law

The Application is Incompetent 83 The Deputy Commissioner has argued that the application is incompetent. Unsurprisingly, Commercial & General Law has argued that the application is competent. It has argued that if the finding of fact made by the Registrar cannot be reviewed by this Court then the delegation of powers to the Registrar is unconstitutional. 84 However, the question here is not whether the Court cannot ever review the exercise of judicial power by the Registrar. Rather, the question is whether the Court can review a finding of fact made in a proceeding where no power has been exercised by the Registrar. 85 The Commonwealth Parliament can legislate to allow Registrars of the Court to exercise part of the jurisdiction, powers and functions of the Federal Court. However, "the power of delegation cannot be exercised in a manner that is inconsistent with the continued existence of the … Court as a federal court constituted under Ch III": Harris v Caladine (1991) 172 CLR 84 at 94 per Mason CJ and Deane J. 86 The delegation will only be lawful and in conformity with Chapter III of the Constitution if the delegation is not "inconsistent with the obligation of a court to act judicially and that the decisions of the officers of the court in the exercise of their delegated jurisdiction, powers and functions must be subject to review or appeal by a judge or judges of the court": Harris v Caladine at 95 per Mason CJ and Deane J. 87 In Trustees of the Franciscan Missionaries of Mary v Weir (2000) 98 FCR 447, the Full Court said, speaking of the delegation of the exercise of judicial power to an officer of the Court, at [20]: [20] …What is essential is that the control and supervision of the Court over the exercise of the delegated powers must be so real and effective that the decision, being within the Court's jurisdiction, though made by an officer who is not a Judge, can still be seen to be a decision of the Court. … 88 Section 35A of the Federal Court Act provides: 35A Powers of Registrars (1) Subject to subsection (2), the following powers of the Court may, if the Court or a Judge so directs, be exercised by a Registrar: (a) the power to dispense with the service of any process of the Court; (b) the power to make orders in relation to substituted service; (c) the power to make orders in relation to discovery, inspection and production of documents in the possession, power or custody of a party to proceedings in the Court or of any other person; (d) the power to make orders in relation to interrogatories; (e) the power, in proceedings in the Court, to make an order adjourning the hearing of the proceedings; (f) the power to make an order as to costs; (g) the power to make an order exempting a party to proceedings in the Court from compliance with a provision of the Rules of Court; (h) a power of the Court prescribed by Rules of Court. (2) A Registrar shall not exercise the powers referred to in paragraph (1)(f) except in relation to costs of or in connection with an application heard by a Registrar. (3) The provisions of this Act and the Rules of Court that relate to the exercise by the Court of a power that is, by virtue of subsection (1), exercisable by a Registrar apply in relation to an exercise of the power by a Registrar under this section as if references in those provisions to the Court were references to the Registrar. (4) Notwithstanding any other provision of this Act and any provision of the Public Service Act 1999 or of any other law, a Registrar is not subject to the direction or control of any person or body in relation to the manner in which he or she exercises powers pursuant to subsection (1). (5) A party to proceedings in which a Registrar has exercised any of the powers of the Court under subsection (1) may, within the time prescribed by the Rules of Court, or within any further time allowed in accordance with the Rules of Court, apply to the Court to review that exercise of power. (6) The Court may, on application under subsection (5) or of its own motion, review an exercise of power by a Registrar pursuant to this section and may make such order or orders as it thinks fit with respect to the matter with respect to which the power was exercised. (7) Where an application for the exercise of a power referred to in subsection (1) is being heard by a Registrar and: (a) the Registrar considers that it is not appropriate for the application to be determined by a Registrar acting under this section; or (b) an application is made to the Registrar to arrange for the first-mentioned application to be determined by the Court; he or she shall not hear, or continue to hear, the application and shall make appropriate arrangements for the application to be heard by the Court. (8) In this section, Registrar means the Registrar, a Deputy Registrar, a District Registrar or a Deputy District Registrar of the Court. 89 Section 35A(1) identifies the powers delegated to the Registrar, including powers prescribed by Rules of Court: s 35A(1)(h). Section 35A(7) allows for a party to a proceeding to insist upon the application which is to be heard by the Registrar be heard by the Court by obliging the Registrar to cease to hear, or continue to hear, the application and to make arrangements for the application to be heard by the Court: s 35A(7). In other words, s 35A(7) allows a party to request the Court to hear an application at any time, even after the Registrar has commenced the hearing. 90 I offered to hear the application for winding up in lieu of the Registrar but that offer was declined by Commercial & General Law. Mr McNamara said that no application would be made to the Registrar to have the Registrar cease to hear, or continue to hear, the application for winding up in the event that this matter was returned to the Registrar. Therefore, I proceed on the basis that Commercial & General Law is content to have the Registrar continue to hear the application for winding up if I find that this application is incompetent or, alternatively, if competent, that it should be dismissed. 91 Section 35A(5) addresses the Constitutional imperative in Chapter III by allowing a party to apply to the Court for a review of the exercise of a power of the Court by a Registrar under subsection (1). Subsection (6) allows the Court to carry out that review of its own motion and make such order or orders as the Court thinks fit with respect to the proceeding in which the power has been exercised by the Registrar. 92 Section 35A(1) empowers the Registrar to exercise the powers identified in the paragraphs of the subsection. Importantly, it authorises the Registrar to exercise the powers to make orders although, for some reason, paragraph (a) only talks about the power to dispense with service of any process of the Court. However, that power could only be exercised by the Registrar making an order to that effect. 93 In all other respects subsection (1) identifies the powers that may be exercised by the Registrar. 94 As I have said, s 35A(1) allows for Rules of Court to prescribe the power of the Court which may be exercised by the Registrar. It is important to note that paragraph (h) talks of Rules of Court, not "the Rules of Court". The Federal Court Rules 2011 have prescribed a wide-range of powers that may be exercised by the Registrar, but those powers are not relevant in this proceeding. Instead the relevant authority is given to the Registrar by the Corporations Rules, which provide in r 16.1: 16.1 Powers of Registrars (1) For the purposes of paragraph 35A(1)(h) of the Federal Court of Australia Act 1976, if the Court or a Judge so directs, a Registrar may exercise a power of the Court: (a) under a provision of the Corporations Act mentioned in column 2, or a provision of these Rules mentioned in column 3, of an item in Part 1 of Schedule 2; or (b) under a provision of the ASIC Act mentioned in column 2, or a provision of these Rules mentioned in column 3, of an item in Part 2 of Schedule 2. (2) A decision, direction or act of a Registrar made, given or done under these Rules, may be reviewed by the Court or a Judge. (3) An application for the review of a decision, direction or act of a Registrar made, given or done under these Rules, must be made within: (a) 21 days after the decision, direction or act complained of; or (b) any further time allowed by the Court. 95 Schedule 2 of the Corporations Rules identifies the provision of the Corporations Act and the rule of the Federal Court Rules, and then identifies (for information only) the power which is given to the Registrar. 96 Item 48 provides for the power given to the Court in s 459P of the Corporations Act. Rule 16.1 of the Corporations Rules and Schedule 2 to those Rules are consistent with s 35A(1) of the Federal Court Act in that what is given to the Registrar is the power to make an order. In the case of s 459P the Registrar is given the power to wind up a company in insolvency. 97 Rule 16.1(2) provides that a "decision, direction or act of a Registrar made, given or done under these Rules, may be reviewed by the Court or a Judge". Rule 16.1(2) is superfluous because that power is given to the Court in s 35A(6). Section 35A does not empower the Court to make rules providing for a review process not otherwise contemplated in s 35A itself. There are no other powers given to the Court in the Federal Court Act to provide for wider review powers to the Court than those powers contemplated in s 35A. 98 Section 35A(5) does not contemplate that a party may, from time to time, seek to have the Court review individual findings of fact made by a Registrar before the Registrar exercises the power given to the Registrar in s 35A(1) or pursuant to the rules under s 35A(1)(h). 99 The power which is given to the Court in s 35A(5) and (6) is to review the exercise of the power, which means the order made by the Registrar under that power. If it were otherwise a party could, without asking the Registrar to cease hearing the application, ask the Court to review every individual finding of fact as and when the Registrar made those findings of fact. 100 It is for those reasons that in my opinion the application is premature. No right of review is available to a party in relation to a finding of fact made by a Registrar except insofar as a party might apply under s 35A(7) to have the matter referred to a court for further consideration. If a party is content for the matter to proceed before the Registrar, then the party's right to review arises when the Registrar has exercised the power that the Registrar has been given either under s 35A itself or under Rules of Court pursuant to s 35A(1)(h). The Registrar exercises the power when the Registrar makes the relevant order. As soon as that order is made the party who seeks the review is entitled to apply to the Court for that review. 101 It follows then that in my view the application is incompetent because the Registrar has not yet exercised any power. 102 However, in case I am wrong about that I will address the application on its merits because I think, as did the Registrar, that Commercial & General Law's evidence falls far short of that necessary to prove that it compounded for the debt owed to the Deputy Commissioner.