MNWA Pty Ltd v Deputy Commissioner of Taxation

REASONS FOR JUDGMENT 1 These proceedings were commenced by originating processes which were filed on 26 September 2014. The proceedings seek to set aside two statutory demands issued by the defendant in respect of the two plaintiffs. 2 The matters came before District Registrar Wall in October 2014, who made directions for the plaintiffs to file evidence in November 2014, and for the defendant to file its evidence by December 2014 for the proceeding commenced by MNWA Pty Ltd, and January 2015 for the proceeding commenced by Gucce Holdings Pty Ltd, with a further order that the plaintiffs file any evidence in reply by about the end of January 2015 and February 2015, respectively. 3 There were subsequent directions hearings before District Registrar Wall, in which an extension of time was given to the defendant to file and serve its evidence. In a directions hearing on 10 March 2015, District Registrar Wall ordered the plaintiffs to file and serve their outline of submissions by 3 April 2015. 4 In the events that occurred, the plaintiffs filed their joint outline of written submissions on 14 April 2015. The defendant filed its outline of written submissions on 16 June 2015. And pursuant to subsequent orders that were made by District Registrar Wall on 23 June 2015, the plaintiffs filed their written submissions in reply on 20 July 2015. 5 The matter was then set down for a two-day hearing commencing today before me. At the commencement of the hearing, Mr Robertson QC, who appeared with Mr Peadon for the plaintiffs, handed up an eight-page document which was entitled "The Plaintiffs' Summary of Case". At the same time, he handed a copy of the document to Ms Foda who appeared for the defendant. 6 It was evident, on a quick perusal of the document, that the case that was now being put by the plaintiffs differed significantly in some respects from the case previously presented by the plaintiffs in their written outline of submissions in chief and the outline of submissions in reply. Mr Robertson confirmed that the Summary of Case document superceded the written submissions which had previously been filed on behalf of the plaintiffs. 7 The new matters that were raised in the Summary of Case document included matters such as: (a) what was the appropriate test and who carried the onus in seeking to have a statutory demand set aside under section 459J(1)(b) of the Corporations Act 2001 (Cth); (b) whether or not Mr Burns had made a unilateral mistake in his understanding of an alleged oral agreement or oral agreements which had been struck by the parties, according to the plaintiffs' case on 10 April 2014; (c) whether the parties had, on 10 April 2014, reached a global security agreement or, alternatively, a series of "deals" were negotiated on 10 April 2014 (it only having previously been claimed by the plaintiffs that there was a single oral agreement that was arrived at, at that date); and (d) the plaintiffs sought to rely on various provisions in taxation legislation for the proposition whether, as at 10 April 2014, taxation liabilities already existed at that time under GST legislation in the case of MNWA Pty Ltd and under income tax legislation in respect of Gucce Holdings Pty Ltd. This was the first time the plaintiffs sought to rely on these provisions. 8 After the plaintiffs opened their case for almost two hours, I took an early adjournment to enable Ms Foda to digest the new case that was now presented. Upon resuming, Ms Foda orally applied for the proceedings to be adjourned until tomorrow morning to enable her to obtain further instructions in respect of the new case that was now being put by the plaintiffs, and for her also to get instructions on whether additional evidence needed to be obtained by the Deputy Commissioner in order to answer that case. 9 The application for an adjournment was opposed by the plaintiffs, essentially on the basis that, while there were some new issues that were raised, those of a factual nature were not of any considerable scope and those of a legal nature ought to be able to be dealt with by Ms Foda. 10 I disagree. The plaintiffs have not behaved satisfactorily in turning up at the commencement of this hearing and seeking to present a case which, I accept, catches the Deputy Commissioner, in large part, by surprise. Fairness requires that the Deputy Commissioner have more time in order to consider the case as is now being put and, if necessary, to seek leave to file additional evidence in response to it. I also consider that Ms Foda is entitled to an appropriate amount of time to be able to digest, seek to understand and deal with the new legal and factual issues that are presented by the new case. 11 For those reasons, I grant the application for an adjournment. The hearing will resume at 9.00 am tomorrow. The plaintiffs should bear the defendant's costs therein arising by the adjournment. I certify that the preceding eleven (11) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Griffiths.