Nestle Australia Ltd v Commissioner of Taxation [1986] FCA 368

proceedings G.184 of 1985, for a stay of an order made by me

By that order it was directed that within fourteen days the respondent produce for inspection by the applicant in the proceedings, Nestle Australia Limited, copies of all documents referred to in part II of schedule I of the List of Documents filed on behalf of the respondent other than certain

The order that was made on 30 July was the most recent of a number of orders and directions made in regard to

The principal proceeding is an application by Nestle Australia Limited for review of a decision by the Commissioner not to grant an extension of time for the payment of the amount due under a number of income tax assessments. The

principal proceedings were commenced on 18 July 1985.

A question arose as to the discovery of documents and I dealt with those questions in a judgment delivered on 14 February 1986. At that time I made an order requiring the respondent to give discovery in respect of all documents, recording the steps taken during the course of (a) the investigation undertaken by or on behalf of the respondent in

relation to the business conducted by the applicant during the

years 1970-1982 inclusive; or (b) the formation of an

. estimate by the respondent of the amount of the taxable income

that might be expected to arise from that business, but not

including documents relating merely to the basis upon which

No application was made for leave to appeal against that order. However, the Commissioner subsequently claimed that the production of documents in accordance with that order would involve the disclosure of documents which ought, in the public interest, not be disclosed. This matter came before me on a number of occasions and various directions were made as

There was some delay in the various affidavits being filed. This, no doubt, was at least partly attributable to the number of documents which had to be considered, but I must say that I felt that the process of sorting out the documents and specifying the grounds of objection took much longer than the period which I would have thought necessary. However, eventually the matter came before me for hearing on 10 July

At that time, the objections which were pressed fell into three categories. There was first a general objection in

relation to the production of any documents. The basis of

this objection was s.16 of the Income Tax Assessment Act 1936

which was said to preclude the production of documents by an officer of the Taxation Office. In the event, I held against

the submission made by the Commissioner on this ground.

The second and third objections were more restricted. The second objection related to documents and information provided by trading competitors of the applicant. To a very large extent, I upheld that objection. The variations made by me between the documents and parts of documents which were the subject of objection to production and the documents and parts of documents which I ordered to be disclosed were quite minor. The main difference related to documents of two companies who were, and possibly still are, trading competitors of the applicant, but who have expressly agreed to the production to the applicant of their documents. I took the view that having regard to that attitude, there was no public interest in

The third category consisted of documents and information provided by foreign governments. This objection was upheld almost entirely. Any variations made by me in regard to those documents consisted merely of very minor variations to the extent of the document which I thought ought

The third category consisted of documents and information provided by foreign governments. This objection was upheld almost entirely. Any variations made by me in regard to those documents consisted merely of very minor variations to the extent of the document which I thought ought

When I handed down judgment on 30 July 1986, reference was made by counsel for the Commissioner to the possibility of an application for leave to appeal and to the question of whether there ought to be a stay of my order in the meantime. I intimated to counsel my view, namely that no stay ought to be granted until it appeared that leave to appeal would be granted. No application for leave to appeal has yet been made, despite the fact that today is the final

Yesterday afternoon a Notice of Motion was filed returnable this morning seeking a stay of the orders of 30 July pending determination by a Full Court of a motion for leave to appeal against the judgment of 30 July. From a supporting affidavit sworn by Miss Barbara Pearson, a Principal Legal Officer in the office of the Australian Government Solicitor, it appears that the instructions from the Commissioner are to seek leave to appeal not only against the decision of 30 July, but also against the decision of 14

It is submitted on behalf of the Commissioner that having regard to the intention to seek leave to appeal, particularly against the more recent decision, a stay of proceedings ought to be granted, otherwise an appeal would be

nugatory. I accept that an appeal against the decision of 30

July would be nugatory in relation to the particular documents if no stay 1s granted and if it is therefore necessary for the respondent to comply with the direction by producing the

I must say that my impression is that the concern of the Commissioner in respect of my decision of 30 July is not so much concern regarding the particular documents which would have to be produced, but rather regarding the general question of the application of s.16 of the Income Tax Assessment Act.

I say this because, as I have already mentioned, the Commissioner almost entirely succeeded in respect of the

documents which were covered by an objection other than s.16.

I can understand that the question of the application of s.16 has some general importance, and is a matter which the Commissioner may at some stage wish to take on appeal; although I observe that there have already been a number of cases, including decisions in the High Court, in which the application of s.16 to discovery andproduction of documents on

In relation to the desire to appeal against the decision of 14 February, I do no more than observe that it is

now exactly six months since that decision was reached, and

• this the first which has been said about any such desire.

I am of the opinion that a stay of proceedings ought not to be granted. I think that the Commissioner of Taxation no less than any other litigant is obliged to act promptly and decisively if he wishes to preserve his position. The situation is that the hearing of the principal proceedings has been extensively delayed because of arguments regarding the production of documents. As I have mentioned, when I handed down judgment on 30 July, I made clear that, so far as I was concerned, the granting of a stay of proceedings would be dependent upon a successful application for leave to appeal.

I should have thought that it would be abundantly clear to the Commissioner and those representing him that it was most important to take prompt action to obtain a hearing of an application for leave to appeal. If it had been desired to have the application for leave heard by a Full Court, steps could have been taken to approach the Chief Judge to constitute a Full Court for that purpose. No action in that regard has been taken until now, and, even at this moment, counsel is unable to give me any indication as to when a Full

Court might be constituted to hear the leave application.

Alternatively, if there was a problem about constituting a Full Court, an application for leave to appeal

against the decision of 30 July could have been made to a

single Judge of the Court. No such application has been made.

I do not think that it is good enough for any litigant to wait until the last day for compliance with an order, and then to come to the Court seeking a stay of the order, thus imposing upon the opponent a further delay. I think that a litigant who desires to appeal against a particular order has a responsibility to ensure that there is an opportunity for the application for leave to appeal to be heard before the matter becomes critical. Although If appreciate the desire of the Commissioner to have a ruling of a Full Court of this Court in relation to the matter of s.16 and discovery, I think that the principle that litigants are expected to act promptly and efficiently is more important. There will no doubt be other opportunities for s.16 to be

I order that the Commissioner of Taxation pay to the applicant in the principal proceedings its costs of this

T certify this and the seven (7) . preceding pages to be a true copy of

• the Reasons for Judgment of his Honour Mr Justice Wilcox.

Counsel for the Applicant: Solicitors for the Applicant: Counsel for the Respondent: