OR Cormack Pty Limited v The Federal Commissioner of Taxation

AND: COMMISSIONER OF TAXATION Respondent CORAM: Beaumont J. DATED: 31 August 1995

This proceeding has been remitted from the High Court of Australia. In essence, it is a proceeding for a declaration that certain paint brushes were and are to be classified within Item (1)(j) of the Third Schedule to the Sales Tax (Exemptions and Classifications) Act 1935 and within Item (1)(k) of Schedule Two to the Sales Tax (Exemptions and Classifications) Act 1992. In opening the matter, counsel for the applicant taxpayer indicated that Davies J., in OR Cormack Pty Limited v The Federal Commissioner of Taxation (1992) ATC 4121, had decided that brushes, which could for present purposes be regarded as identical with the applicant's brushes, were not exempt within the meaning of the earlier legislation. For that reason, counsel for the applicant foreshadowed an application that the Court invoke the power conferred by s.25(6) of the Federal Court of Australia Act 1976. The nature of that power and the discretion there conferred was discussed by Sheppard J. in Barton v Westpac Banking Corporation (1983) 50 ALR 397 at 415. With respect, I agree entirely with his Honour's observations and propose to apply them in the present context. The respondent Commissioner believes that the application to state the case is a matter entirely for the Court and, therefore, neither consents nor opposes the stating of a case for a Full Court. In the course of argument, I was referred to several authorities which indicate that, as a matter at least of comity, a single Judge of the Court should follow a decision of another single Judge unless it is thought that the earlier decision was clearly wrong (see, for instance, Marr v Australian Telecommunications Corporation (1991) 25 ALD 473 per Hill J. at 475; Upperedge v Bailey (1994) 13 ACSR 541 per Jenkinson J. at 543; Bank of Western Australia v The Federal Commissioner of Taxation (1994) 125 ALR 605 per Lindgren J. at 627). Although Bowen C.J. and Foster J. held in Chamberlain v R (1983) 46 ALR 493 at 498 that the Federal Court is not bound by its previous decisions, the Court would normally follow an earlier decision unless convinced that it is wrong (see the extra-judicial comments of Lockhart J. in "The Doctrine of Precedent-Today and Tomorrow" (1987) 3 ABR 1 at 10). I agree with the approach taken in the three single instance decisions to which I have referred. It would follow that since the parties in the present case are agreed that the decision in Cormack is a square authority on the present question, there would appear to arise in the present case, at this stage at least, a consideration of the question whether Davies J. was "clearly wrong". It is common ground that the facts in the present matter are not in dispute and that the point for decision is one of pure statutory interpretation. From my brief acquaintance with the matter, I would agree with this assessment. The point appears to be a short one and one of impression. In Barton Sheppard J., in the passage to which I have referred, mentions the possibility that notwithstanding a request to reserve a question for a Full Court made by one of the parties or even both of them, the Judge may, nonetheless, consider it inappropriate to refer the question and preferable to decide the case at first instance, leaving the matter to the appellant processes to correct any error that may be made. This possibility emphasises the width of the discretion involved. In the present case, I have come to the conclusion that it is appropriate and, indeed, desirable that the matter go forthwith to the Full Court. I take into account, in this connection, the circumstances that I have mentioned, in particular, the fact that the dispute is within a narrow compass in terms of the facts and of the law. Without prejudice to the Commissioner's position, the parties have conferred and provided me with a draft special case which I have marked "1" for identification. The terms of that case confirm that it is possible to state the facts concisely and to isolate, with precision, quite a narrow point of statutory construction. Given the pressures on the Court's listing requirements, it is desirable that the Full Court expresses an opinion on the ultimate legal question, whether the judgment in Cormack was "clearly wrong" at this stage, rather than for it to be undertaken by a Judge at first instance. Ultimately, considerations of cost and expedition dictate that the matter proceed to a Full Court as soon as practicable. I propose, therefore, to reserve a question for the Full Court in the terms of the draft special case (MFI 1), and I direct that the applicant bring in, as soon as practicable, a final version of that document for signature. I certify that this and the preceding three (3) pages are a true copy of the Reasons for Judgment herein of his Honour Justice Beaumont. Associate Dated: 31 August 1995 Counsel and Solicitors Mr. D.H. Bloom Q.C. with for Applicant: Mr. A. Robertson instructed by Malleson Stephen Jacques Counsel and Solicitors Mr. A. Slater Q.C. instructed for Respondent: by Australian Government Solicitors Date of hearing: 31 August 1995 Date Judgment delivered: 31 August 1995