Hart v Deputy Commissioner of Taxation

1. Orders 2 and 4 to 7 of the orders made on 8 March 2016 be discharged.
2. The hearing dates of 21-24 March 2016 be vacated.
3. Costs of this application be reserved. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

EDELMAN J: 1 This is an application by the applicant in these proceedings, Mr Hart, for an adjournment of his trial. The trial of this matter was due to commence today and due to run for two weeks. However, last week I vacated the first week of trial due to the illness of senior counsel for Mr Hart. The respondent, the Commissioner, did not oppose the vacation of dates for the first week of trial. With expedition of some matters, and with the determination of an interlocutory issue this week, there was a basis to expect that the trial might have been able to be concluded within the second week. 2 On Friday last week, Mr Hart sought to vacate the dates for the second week. The reason for his application was that senior counsel remained ill and the medical report was that he would be unfit to appear in Court during the second week. Mr Hart's application was, understandably, opposed by the Commissioner. The opposition by the Commissioner was understandable in light of the lengthy delays that have been encountered in the history of this proceeding. Because I have only managed this matter since mid-2015, I gave the parties leave to file any evidence and submissions in relation to this application within one working day. The parties agreed that the matter should be determined on the papers. 3 It is unnecessary to descend into all of the detail of the delays in this matter or allegations by the Commissioner that very recently the process of conferral has been, in some respects, inadequate. However, I note that the Commissioner has been prejudiced by the failure of those instructed by Mr Hart to file submissions in support of the interlocutory application, or opening submissions for trial. Those matters occurred before senior counsel fell ill. 4 The reason why it is unnecessary to descend into all the detailed history of this matter is because I am satisfied that both the long delay in moving this matter to trial, and the unfortunate medical circumstances of Mr Hart's senior counsel, were and are matters beyond Mr Hart's control. As to the long delay in moving this matter to trial, at the first directions hearing in 2015 when this matter was allocated to my docket, senior counsel for Mr Hart informed the Court that the reason for the delay between 2011 and 2014 was because Mr Hart was suffering from cancer. Trial dates had been set for July 2014 but those dates were vacated after the Commissioner wished to file further expert evidence. A further delay was caused by the Commissioner's need to obtain a supplementary report from the expert. 5 The principles concerning an application for an adjournment are well known. Those principles were referred to by the Full Federal Court in Luck v Chief Executive Officer of Centrelink [2015] FCAFC 75 [42] (the Court): In considering an application for an adjournment, issues particular to the parties and the circumstances of the case must be considered. The Court must also determine how the grant or refusal of an adjournment will promote the overarching purpose of the civil practice and procedure provisions governing the exercise of its jurisdiction, here its appellate jurisdiction, including the objectives in s 37M(2) of the FCA Act, to which we have referred earlier in these reasons in summary form. 6 The overarching purpose in s 37M(2) of the Federal Court of Australia Act 1976 (Cth) is the facilitation of the just resolution of disputes according to law and as quickly, inexpensively, and efficiently as possible. This includes important matters involving timeliness in the disposal of proceedings, and efficient use of the judicial and administrative resources available for the purposes of the Court. These are important considerations. As French CJ said in Aon Risk Services Australia Ltd v Australian National University [2009] HCA 27; (2009) 239 CLR 175, 182 [5], the inefficiencies in the use of the Court's time arising from vacation or adjournment of trials must be taken into account as well as the need to maintain public confidence in the judicial system. 7 In the joint judgment in Aon, Gummow, Hayne, Crennan, Kiefel and Bell JJ referred to four matters which should have been taken into account when discretion was exercised to grant an adjournment. Those matters were: (1) the explanation for the adjournment sought (216 [108]); (2) the detriment to other parties (217-218 [114]); (3) the detriment to other litigants in the Court (217-218 [114]); and (4) the parties' choices to date in the litigation as to the claims to be made and how they were to be framed (217 [112]). 8 In this case, there will be prejudice to the administration of justice and to the Commissioner in the vacation of the hearing dates. There are a number of related Pt IVC proceedings in the Administrative Appeals Tribunal. Those proceedings have been stayed until the determination of this proceeding. The Commissioner will have thrown away significant preparation and possibly costs related to the attendance of interstate counsel for the trial. However, it is unclear how the costs of preparation of Court Books, to which the Commissioner refers, is related to this adjournment application. 9 There will also be prejudice to other litigants in my docket arising from the loss of two weeks' hearing time at short notice. And there is real concern about the delay in this matter proceeding to trial, albeit where the main reason for delay has been the applicant's health. 10 Against these factors must be weighed the very serious prejudice to Mr Hart if the trial is not adjourned. The matter is plainly of sufficient importance to justify engagement, and reliance upon, senior counsel. The Commissioner has instructed senior counsel. Mr Hart's further amended appeal statement seeks to have the Commissioner's objection decision set aside. That objection decision included in Mr Hart's assessable income, over a five year period, the amount of $5,728,893. 11 The evidence on behalf of Mr Hart broadly includes the following: (1) senior counsel for Mr Hart has been briefed in this matter for more than five years; and (2) the solicitors for Mr Hart have attempted to brief four alternative senior counsel. Three of those alternatives are unavailable, and the fourth is available (although not for the interlocutory application) but with a fee that is far outside Mr Hart's budget. 12 Although this evidence on behalf of Mr Hart was expressed in general terms, it was prepared in a matter of hours as a result of the short timetable that I imposed on the parties. The evidence demonstrates that there will be great prejudice to Mr Hart, arising from circumstances beyond his control, if the trial currently listed for next week were not vacated. 13 It might be unlikely that any senior counsel would be able to accept this brief at such short notice. The Commissioner relies upon affidavit evidence filed on his behalf that the Commissioner has been preparing for the case for five months. The Court Book filed by the Commissioner is 14 volumes and 5,947 pages long. Although the Commissioner submits that many of these documents "need not be examined in detail", it would be very unusual for a freshly briefed senior counsel to consider only in a desultory way thousands of pages of documents. This is so even despite the assistance of a solicitor who is very familiar with the matter and an able junior who has been briefed in the matter for some time. 14 It is also understandable that the only available senior counsel has a fee that is far outside Mr Hart's budget. There would be substantial additional cost of a new senior counsel preparing for a matter that Mr Hart's current counsel has been engaged upon for over five years (even taking into account the time the hearing was adjourned due to Mr Hart's health problems). 15 Taking into account all of the circumstances of this case, the extent of prejudice to Mr Hart arising from matters beyond his control requires that the trial dates for next week be vacated. 16 The parties should confer about their availability for relisting of the matter, including whether there is any reason why the interlocutory dispute concerning admissibility of the Commissioner's expert evidence should not be heard during the period that had been listed for the trial. That dispute is currently listed for Friday 18 March 2016. It concerns a short and discrete matter about which it currently appears to me that separate counsel could be briefed to make submissions at short notice. There may be real benefit in hearing that dispute in the period previously listed for trial, particularly in circumstances where the primary issue concerns admissibility of an expert report relied upon by the respondent, and in which (i) the Commissioner has filed short, and clear, submissions concerning that report, and (ii) the report, if admissible, may have the effect of ensuring the length of trial is confined to five days. 17 The parties should also confer about the appropriate orders for costs thrown away in relation to the vacation of the trial. My preliminary view is that an appropriate order may be, as the solicitor for Mr Hart submits in the alternative, that the costs thrown away should be the Commissioner's costs in any event. It is, at the moment, difficult to see how it would be proportionate to descend for the purposes only of a costs order into the minutiae of allegations concerning matters such as conduct during meetings to discuss objections. I certify that the preceding seventeen (17) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Edelman.