MacMahon v Block

1. The application for an interlocutory injunction is refused. 2. The applicant pay the third respondent's costs. THE COURT NOTES:
2. The undertaking of the applicant's solicitor to pay the filing fee for the application for an order of review.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. The text of entered orders can be located using Federal Law Search on the Court's website.

REASONS FOR JUDGMENT 1 The applicant is aggrieved by the refusal of the Administrative Appeals Tribunal (AAT) to accede to an application he made on 10 August to stay or, alternatively, adjourn the hearing of his applications for review of several decisions of the third respondent (Commissioner). The hearing was due to start on 10 August. This was not the first time the applicant, Gregory MacMahon, had sought an adjournment and, according to the AAT's reasons, there have been "significant delays" in the proceedings. 2 The occasion for this application was the presentation of a bankruptcy petition the previous day in respect of Gregory's brother, Peter, who had also sought review of several decisions of the Commissioner. The proceedings before the AAT arise out of taxation assessments for the MacMahon brothers over three tax years. Each application was given, and continues to have a different matter number, but, according to the AAT's reasons, they all arise from a series of transactions involving an acquisition of shares in a company in which each of the brothers held half the issued shares. 3 As "a matter of convenience", on 15 March 2010 Deputy President Block directed under s 33 of the Administrative Appeals Tribunal Act 1975 (Cth) (AAT Act) that all the applications brought by Gregory and Peter be heard together and that "[a]ll evidence in respect of either application will be evidence in respect of the others". It was common ground that this was done of the AAT's own motion, but with the parties' consent. 4 After the AAT refused to stay or adjourn the hearing it directed that its earlier directions that the applications be heard together and that evidence in one set of applications be evidence in the other be set aside, and the Gregory applications proceed "forthwith" subject only to the qualification that the tribunal agreed to adjourn the hearing until 2 pm yesterday to enable Gregory's counsel to "make application" to this Court. Yesterday afternoon the applicant filed in court an application for an order of review under s 5 of the Administrative Decisions (Judicial Review) Act 1977 (Cth) (ADJR Act) and for a writ of prohibition and an injunction under s 39B of the Judiciary Act 1903 (Cth) (Judiciary Act) and for interlocutory relief. 5 The claim for interlocutory relief was an application for an injunction restraining the first and second respondents from continuing with the hearing of Gregory's proceedings in the AAT pending the final resolution of the proceeding in this Court. Before me, Gregory sought interlocutory relief submitting that an injunction would only be necessary for a matter of days. The Commissioner vigorously resisted the application arguing that it was totally devoid of merit and was no more than a device to further delay the AAT proceedings. 6 There are four grounds set out in the application for review. They are (without alteration): (1) The First and Second Respondents sitting as the Administrative Appeal Tribunal being the persons who purported to make the 10 August 2010 Decision did not have jurisdiction to make the decision. (2) The making of the 10 August 2010 Decision was precluded by the operation of section 60(2) of the Bankruptcy Act 1966 and the making of the 10 August 2010 Decision was not authorized by any provision of the enactment being the Administrative Appeal Tribunal Act 1975 in pursuance of which it was purported to be made. (3) The making of the 10 August 2010 Decision involved an error of law and was otherwise contrary to law. (4) The making of the 10 August 2010 Decision was an improper exercise of the power conferred by the Act in that the First and Second Respondents exercised the power by failing to take a relevant consideration into account in the exercise of the power namely that continuing with proceedings numbers 2008/2925-2927 and 2009/6129-6131 interferes with and impinges upon the independent processes the Trustees in bankruptcy of Peter MacMahon are required to undertake pursuant to sections 60(2), 60(3) and 134(1)(j) of the Bankruptcy Act 1966 and that a decision of the Administrative Appeals Tribunal in proceedings numbers 2008/2925-2927 and 2009/6129-6131 may operate as an estoppel to the Trustees in Bankruptcy of Peter MacMahon and to the detriment of creditors of the bankrupt estate. 7 The grounds for relief under the Judiciary Act are, as I understand the applicant's case, essentially the same. The proceeding largely turns on the meaning of s 60 subs (2) of the Bankruptcy Act 1966 (Cth) (Bankruptcy Act). The applicant also argued that he was prejudiced by the AAT's decision, although no evidence of prejudice was tendered. The Commissioner challenged the Court's jurisdiction in relation to the claim under s 5 of the ADJR Act, but because of the view that I have taken of the merits, it is unnecessary for me to deal with the argument on this question. 8 It was common ground that in order to secure an interlocutory injunction the applicant had to show that there is a serious question to be tried, that is, that there is a sufficient likelihood of success to justify the preservation of the status quo pending final resolution of the application (Australian Broadcasting Corporation v O'Neill [2006] HCA 46, 227 CLR 57 at [65]-[70] per Gummow and Hayne JJ) and that the balance of convenience favours the grant of the injunction. I turn then to the first question.