Consideration: abuse of process
89 The overlap between the proceeding before the primary judge and the first two s 39B proceedings in the Federal Court and the High Court is central to determining whether the proceeding the applicant seeks to now initiate is an abuse of process and thus a vexatious proceeding having regard to the definition in s 37AM(1).
90 In the original s 39B application commenced in the Federal Court on 26 November 2014 by amended originating application, the applicant sought relief which included declarations that the Commissioner's notices of amended assessment were void. Although the amended originating application filed on 18 February 2015 is not exhibited to Ms Clay's affidavit, Collier J's reasons for judgment (which are exhibited to that affidavit) set out the 17 grounds of relief sought under s 39B in full: Hii v Federal Commissioner of Taxation (2015) 230 FCR 385 at [19].
91 In the first s 39B proceeding before Collier J, the applicant by his amended originating application, sought: a declaration that notices of amended assessment issued to him for the years ending 30 June 2001 to 30 June 2009, as a result of the Commissioner's audit decisions, were void and of no effect (Declaration No. 1); a declaration that notices of amended assessment issued as a result of the Commissioner's determination of objections to assessments for the years ending 30 June 2001 to 30 June 2009, lodged under Part IVC of the Administration Act, were void and of no effect (Declaration No. 2). A declaration in similar terms to Declaration No. 2 was sought concerning a further amended assessment for the year ending 30 June 2004 (Declaration No. 2A). As to those claims, the applicant sought remedial orders in the form of the constitutional writs of certiorari, mandamus and prohibition in reliance on s 39B of the Judiciary Act. Other declarations were sought that the Commissioner had no power to make the amended assessments for the years ending 30 June 2001 to 30 June 2004, under the 1936 Act, until the Commissioner had formed a view that there had been an avoidance of tax due to fraud or evasion and that no such view had been formed (Declaration Nos. 3 and 4). Similar declarations were sought as to the amended assessments for the years ending 30 June 2007 to 30 June 2009 (Declaration Nos. 5 and 6). The applicant sought a further declaration that if the amended assessments are void and of no effect (having regard to the declarations sought), the shortfall penalty assessments for the years ending 30 June 2001 to 30 June 2009 are also void and of no effect.
92 Thus, it can be seen that in the first s 39B proceeding, the applicant was seeking the grant of the constitutional writs in relation to the contended invalidity of the amended assessments due to their relationship with the Commissioner's anterior audit decisions and the subsequent objection decisions, among other matters.
93 The applicant contends that because these matters were not determined either in the first s 39B proceeding or in the proceeding before Edelman J, the application for leave to appeal the orders and judgment of the primary judge (which is the proceeding the applicant seeks leave to initiate) is not an abuse of the process of the Court. The matters and issues are said to remain extant and unresolved. The matters in issue, of course, could have been addressed in the first s 39B proceeding to the extent that such challenges were competent and susceptible of a remedy under s 39B having regard to the principles established by the High Court in Futuris, or addressed in the Part IVC proceedings had the applicant chosen to comply with orders in those proceedings and prosecuted them to determination (and any appeals from that determination).
94 In the High Court application filed on 8 February 2019, the applicant also sought declarations and the grant of the constitutional writs in relation to the audit decision and the objection decision. Edelman J summarised the applicant's grounds for seeking those writs in the following terms:
In very broad summary his grounds include: (i) the Commissioner's decision that the plaintiff was a "resident according to ordinary concepts" involved a misconstruction of the legislative scheme concerning residence and therefore a misconstruction of the Commissioner's powers, a failure to take account of a relevant consideration, a denial of natural justice or procedural fairness, and reaching a decision that was legally unreasonable; (ii) the Commissioner's additional two grounds for the Objection Decision involved errors of law on the face of the record and jurisdictional errors of law including misconstruing the law applicable to domicile, relying upon irrelevant material, making an erroneous finding, reaching a mistaken conclusion, failing to take into account relevant considerations, making statements without evidence, denial of procedural fairness, and reaching a decision that was legally unreasonable; (iii) the Commissioner's decision on evasion involved errors of law on the face of the record and jurisdictional errors including ignoring relevant material, relying upon irrelevant material, making an erroneous finding, reaching a mistaken conclusion, and reaching a decision that was legally unreasonable; and (iv) the Audit Decision and the Objection Decision were made in bad faith.
95 In the proceeding before the primary judge, the applicant similarly challenged the audit and objection decisions. The applicant sought declarations that those decisions were invalid; the grant of writs of certiorari quashing both decisions; an order allowing the applicant's objection in full or alternatively the grant of a writ of mandamus directing the Commissioner to reconsider the decisions in relation to "residence". Particular matters raised in the first s 39B proceeding before Collier J were also sought to be re-agitated, with the applicant seeking a writ of prohibition or alternatively an injunction to restrain the Commissioner from taking any action based on the notices of amended assessment to the extent that those amended assessments arose out of the impugned audit and objection decisions.
96 Clearly, there is substantial overlap between the first s 39B proceeding, the proceeding commenced in the High Court and the proceeding before the primary judge. As to the challenge to the Commissioner's findings concerning the residency of the applicant and the applicant's "evasion" in relation to disclosing assessable income, those challenges engage a challenge to decisions made in the course of and as a result of the audit leading to the issue of the amended assessments to the applicant, and subsequently the objection decisions of the Commissioner concerning objections to those amended assessments leading to further amended assessments. The amended assessments in each case are said to be invalid due to errors of law, jurisdictional errors in the decision-making in the audit decisions and objection decisions and due to bad faith.
97 Having regard to the scope of the issues arising in the first s 39B proceeding, the Part IVC proceeding, the proceeding before the High Court and then the proceeding before the primary judge, the primary judge ultimately correctly found that the applicant was seeking to re-agitate and re-litigate through the vehicle of yet another s 39B proceeding, matters which were the subject of the matters in controversy in the proceedings before Collier J and then Edelman J.
98 The following matters going to the question of abuse of process should be noted.
99 When the proceeding was litigated before Edelman J, his Honour observed that the application for a writ of certiorari so as to quash the audit decision and the objection decision was made more than six years and four and a half years out of time, respectively. Edelman J described the application for the grant of the writ of certiorari in relation to these decisions as lying "at the heart of the relief" sought by the applicant. The application seeking the grant of the writ of certiorari, in respect of the same decisions, before Logan J, was filed five months later and thus, even further out of time. Edelman J also observed that the grant of the writ of certiorari would require "absolutely exceptional circumstances when the delay, as here, is measured in years rather than months". Having regard to the High Court's observations in Tyne and Tomlinson concerning the public interest in the timely and efficient administration of justice, allowing the applicant to re-litigate proceedings seeking materially identical relief to that already sought, out of time, in the Federal Court and the High Court, would not be consistent with serving that interest.
100 As observed by Edelman J, all of the grounds on which the applicant sought to challenge the audit and objection decisions either were, or could have been, raised before Collier J, such that Edelman J was satisfied that the proceeding before his Honour was an abuse of process. In circumstances where a very similar collateral challenge to the assessments was made before Logan J, by seeking judicial review of the anterior audit decision and the subsequent objection decisions leading to the amended assessments, the primary proceeding is properly characterised as an abuse of the process of this Court. The application for leave to appeal seeks leave to agitate matters that, in the exercise of the appellate jurisdiction, agitates questions of contended error in the dismissal of the s 39B proceeding by re-agitating the very questions which were found to be the expression of an abuse of the process of this Court. Thus, the applicant is seeking leave to institute a proceeding which is itself an expression of an abuse of the process of this Court or a furtherance of an abuse of the process of this Court by seeking to continue it in the appellate jurisdiction.
101 As to the applicant's contention that these proceedings are not an abuse of process because there was never a final as opposed to an interlocutory hearing of the applicant's claim for judicial review, on the merits, before Collier J, Edelman J or Logan J, these matters should be noted.
102 In order to challenge the amended assessments (outside the statutory scheme as construed in Futuris at [24] and [25], by means of a proceeding in reliance upon s 39B of the Judiciary Act or s 75(v) of the Constitution in which the essential contention is one of jurisdictional error), on the ground that there were errors of a particular kind or character in the Commissioner's audit and objection decisions leading to the issue of the amended assessments, the applicant must demonstrate that the matters sought to be agitated in such proceedings fall within the limits of such a challenge described in Futuris at [24] and [25].
103 As to whether the amended assessments were "tentative", no such contention was raised by the applicant.
104 As to the question of "conscious maladministration", the applicant contends, at a high level of abstraction, that there was "bad faith" or conscious maladministration because "the errors of law and other matters as referred to in all the grounds of the application cumulatively amount to evidence of the claim". This is simply a rolled-up contention. Absent precision and particularity, it is difficult to make sense of the submission. Clearly, the proceedings before Edelman J and then Logan J, had no prospect of success. The absence of a final hearing on the merits, rather than an interlocutory hearing following which summary relief was granted, does not establish that the proceeding the subject of this application is not an abuse of process.
105 As to the Part IVC proceedings, the applicant neither elected to challenge the security for costs order, nor to comply with it. The Part IVC challenge to the income tax assessments was therefore deemed dismissed, and the applicant discontinued his challenge to the penalty assessments in the Tribunal. In those circumstances, it is true that there was never a hearing of the applicant's Part IVC challenge on the merits. However, the applicant elected not to proceed with causes of action which could have been ventilated in an earlier proceeding. He failed to give an explanation for not doing so in the Clay affidavit in this proceeding, other than indirectly, by exhibiting the reasons for judgment of Edelman J, in which his Honour observed, in relation to the applicant's decision not to comply with or challenge the security for costs order, that:
The plaintiff's tax agent now deposes that the reasons were the short timeframe for payment, the plaintiff's concern about further amounts that would need to be paid, and the advice of legal representatives that there was little or no prospect of success if the plaintiff did not return to Australia to give evidence.
106 Later in those reasons, further reference was made by Edelman J to explanatory affidavit material from Ms Clay in the context of the applicant's explanation for the late invoking of the jurisdiction of the High Court, in these terms:
As the plaintiff's tax agent deposes, the primary ground for his application in this Court is an assertion of jurisdictional error in relation to the finding of the Commissioner that he was an Australian resident. The plaintiff's tax agent deposes that the plaintiff "has consulted four legal firms as well as eight barristers, of which four were QCs or SC on the question of residence and the possibility of proceeding". His tax agent explains that "no barrister was willing to proceed with an application on the question of residence" and that in late November or early December 2018, the plaintiff advised the tax agent that "he would proceed with the application without legal counsel if necessary". In submissions, however, the plaintiff alleges that his delay was caused by the Commissioner's failure to consider or to give reasons for various legal matters, which the plaintiff said caused him to be unable to find any legal representation. The plaintiff then says that it took him time to research and understand the matters of law involved.
[emphasis added]
107 Edelman J concluded that none of the matters raised by the applicant provided a "reason for any substantial extension of time, particularly an extension of time measured in years". The applicant made a conscious choice to abandon his Part IVC proceedings, only to subsequently seek judicial review in multiple separate proceedings. None of the explanatory material referred to by Ms Clay provides a reason for seeking to re-litigate a challenge to the amended assessments under Part IVC or a challenge under s 39B of the Judiciary Act or s 75(v) of the Constitution concerning the validity of the assessments.