Haritos v Commissioner of Taxation

REASONS FOR JUDGMENT THE COURT 1 These reasons deal with the outstanding question of costs. 2 On 30 June 2015 the Court made the following orders: 1. The application for leave to appeal be granted. 2. The appeal be allowed. 3. The orders of the Court made on 20 February 2014 be set aside and in lieu thereof order that: (a) the decision of the Administrative Appeals Tribunal dated 1 March 2013 be set aside; and (b) the matter be remitted to the Administrative Appeals Tribunal to be heard and determined according to law and the reasons herein. 4. Unless a party notifies the Court in writing within 14 days of today that an order as to costs has been agreed between them, the parties are to file and serve submissions as to costs (limited to 3 pages) by 4.00 pm on 31 July 2015. See Haritos v Commissioner of Taxation [2015] FCAFC 92. 3 The orders made by the primary judge on 20 February 2014 were: 1. The proceeding be dismissed as incompetent. 2. The applicants pay the respondent's costs of the proceeding. It may be seen that, by order 3 made on 30 June 2015, the costs order made by the primary judge was set aside. 4 As directed, the parties have filed short written submissions on costs. 5 By s 43 of the Federal Court of Australia Act 1976 (Cth), the award of costs is in the discretion of the Court. Without limiting that discretion, by s 43(3)(e) the Court may award costs in favour of or against a party whether or not the party is successful in the proceeding. 6 The appellants seek, and the respondent accepts, that there should be an order that the respondent pay the appellants' cost of the appeal to the Full Court, including the costs of the application for leave to appeal. We agree that that order should be made. 7 The parties are, however, at odds as to the appropriate costs order in respect of the proceeding at first instance. The respondent submits that the Full Court should not disturb the order of the primary judge that the appellants pay the respondent's costs of the proceeding before the primary judge. The appellants submit that the proper exercise of the costs discretion is that there should be no order as to the costs of the proceeding below, that is, each party should bear its own costs of the proceeding below. 8 In our opinion, the appellants' submission should be accepted. Often a successful appellant will be entitled to their costs of the proceeding below. However in the present case, the appellants, along with the respondent, bear some responsibility for what we have held to be the errors made by the primary judge as to the competency of the proceeding and as to whether or not the appeal from the decision of the Administrative Appeals Tribunal to the Court was on a question or questions of law. We refer here in particular to [204]-[205] of the reasons for judgment in Haritos v Commissioner of Taxation [2015] FCAFC 92. 9 We make orders accordingly. I certify that the preceding nine (9) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Chief Justice Allsop, Justice Kenny, Justice Besanko, Justice Robertson and Justice Mortimer.