Pedley v Deputy Commissioner of Taxation

1. The application to adjourn the hearing be dismissed.
2. Costs of the application to adjourn be reserved to the hearing of the appeal. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

COLVIN J: 1 In December last year, a judge of this Court determined that Mr Michael Pedley was liable to pay about $160,000 to the Commissioner. Mr Pedley has brought an appeal against the decision. The appeal has been set down for hearing on 8 August 2019. Mr Pedley seeks an order vacating the hearing date and relisting the matter next year. The order sought would defer the hearing of the appeal to a date which will be at least 12 months after the decision by the primary judge and, in the course of things, is likely to be in the May 2020 sittings. 2 The Commissioner opposes the application to the extent that it would result in a deferral of the hearing of the appeal to that extent. The Commissioner would not oppose a short adjournment, but opposes an adjournment of the length sought. The Australian Taxation Office rejected an application for test case litigation funding on about 18 June 2019 and, on 1 July 2019, Mr Pedley filed a notice terminating the retainer of his lawyers who, until then, had acted for him in the appeal and, before that, in the proceedings before the primary judge. 3 It is a significant disruption to the administration of the work of this Court for an appeal hearing to be vacated close to the date listed for hearing. The Court arranges appeals so that they are listed in special sittings and considerable efforts are made to accommodate limitations on availability and to list matters in an efficient way. If the appeal hearing was to be vacated at this stage, there would be no prospect that the date might be allocated to other litigants. When these matters were raised with Mr Pedley, he apologised for raising matters at this late stage. Nevertheless, the consequence that the date will be lost to other litigants would follow if there was an adjournment. 4 Mr Pedley's affidavit in support of his application says that his employer requires him to be overseas at the time of the hearing and that the date was set without regard to his personal availability because he had representation at that time. He says he needs six months to save up and clear his existing debts so that he is able to have adequate funds to afford representation. He says he owes over $10,000 to his former lawyers and is paying that amount off in instalments. 5 In submissions today, Mr Pedley also says he owes money to his father, and that he has family and other expenses to meet, such as school fees. He offers no details as to how he expects to be in a financial position in six months' time to meet the costs of legal representation. As to his termination of instructions to his lawyers, he says that he was advised on 1 July 2019 that the barrister 'was no longer comfortable representing [him] and therefore likewise the solicitors on the record'. He says he has no specific reasons for their decisions. Mr Pedley points to no reason other than his inability to pay his lawyers as to why their instructions were terminated. 6 At the hearing, it emerged that Mr Pedley describes himself as the principal of a tax and accounting business that is owned by a family trust which he controls. Therefore, as to that business, he controls his ability to be available for the hearing of the appeal. He says the travel referred to in his affidavit is for the purposes of another overseas business, of which he is one of five principals. Therefore he has control over his availability to appear at the appeal. He is not properly characterised as simply being an employee who has to travel at the behest of his employer. 7 To the extent that the current position of Mr Pedley as to his legal representation is advanced as a basis for the adjournment, there is no suggestion that his inability to meet his legal costs is of recent origin. There is no suggestion of any commitment by his lawyers to be available that has suddenly come to an end. The hearing date cannot be deferred for an extended period on the basis of a desire to secure representation where there is no real indication as to the basis upon which Mr Pedley expects to be able to secure funds to meet legal costs. He refers to having to clear debts, but there is really no indication of their extent or how they might be expected to be met. Therefore, it has not been shown that there is anything likely to be gained by an adjournment in terms of legal representation. Even if Mr Pedley was to secure funds in six months' time and then engage lawyers, there would be a considerable delay until the matter could be listed. 8 The matters raised by way of defence before the primary judge were quite narrow. First, it was said that the amount claimed had been discharged. That issue arises because of the manner in which the Commissioner allocated payments made to the Commissioner. Second, it is said that the allocation of payments were said to be unreasonable and irrational in a legal sense. There is still a number of weeks until the appeal is to be heard. Mr Pedley is a tax accountant who no doubt has an understanding of the nature of the issues, so there is time for Mr Pedley to prepare any matters he may wish to raise. Any prejudice to Mr Pedley if the matter was not adjourned would not extend therefore to depriving him of a reasonable opportunity to prepare, recognising the limitations that flow from the availability to him of legal representation given his financial circumstances. 9 Taking account of all of these matters, I am not satisfied that the matter should be adjourned. So, the application is refused and I will reserve the costs of the application to be dealt with in the appeal. I certify that the preceding nine (9) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Colvin.