Professional Administration Service Centres Pty Limited v Deputy Commissioner of Taxation

REASONS FOR JUDGMENT 1 On 2 March 2012, I ordered that this proceeding be dismissed and that the Taxpayer pay the Commissioner's costs of the proceeding. However, I ordered that those orders be stayed up to and including today. I also granted leave to the Taxpayer to apply today for those orders to be rescinded, provided that three conditions were satisfied by 6 March 2012. One condition was that discovery be given, in accordance with rules 20.16 and 20.17 of the Federal Court Rules 2011, of several categories of documents. The second condition was that the Taxpayer produce, for inspection at the offices of the Commissioner's solicitors, documents called for in a notice to produce. The third condition was that the Taxpayer file an affidavit in proper form explaining why orders made by the District Registrar on 14 November 2011 had not been complied with (see Professional Administration Service Centres Pty Limited v Deputy Commissioner of Taxation [2012] FCA 278). 2 The first two conditions were not satisfied by 6 March 2012. On 7 March, an affidavit of Mr Ian Daley, purporting to annex a list of documents, was delivered to the Commissioner's solicitors. The documents called for in the notice to produce may have been made available today, but were certainly not made available on or before 6 March. The affidavit of Mr Daley, who is the director of the Taxpayer, was filed in the Court on 5 March 2012. Although the affidavit is not dated at the beginning, it does have an attestation indicating that it was sworn in Queensland on 5 March 2012. 3 The affidavit makes an assertion that Mr Daley made reasonable inquiries as to the existence and location of documents. It does not indicate with any precision what those inquiries were or what those documents were. Mr Daley deposes to a conversation with a former director of the Taxpayer, as a result of which he communicated with a Dr John Lamont, who was said to have had custody of some documents. The affidavit asserts that Mr Daley received some 11 folders from the former director and Dr Lamont in December 2011. The affidavit says that Mr Daley did not inspect the documents, but simply forwarded them to the Taxpayer's present solicitor. I do not regard that affidavit, assuming it were admissible, as offering any satisfactory explanation as to why the orders of 14 November 2011 were not complied with by 2 March 2012. 4 The matter was listed today for directions and any further interlocutory hearing. When the matter was called on, Ms Luk, the solicitor for the Taxpayer, moved, ore tenus, for an order that orders 1 and 2 made on 2 March 2012 be rescinded, notwithstanding the non-compliance with the conditions. Ms Luk said that it was her fault that the conditions were not satisfied. There is, however, no satisfactory evidence as to the circumstances that led to the failure to satisfy the conditions. Having regard to the circumstances in which the orders of 2 March 2012 were made, namely the continued failure to comply with Court directions, one might have expected a degree of formality in ensuring that the conditions of 2 March 2012 were complied with. 5 I am simply not persuaded that there is any good reason, on the material presently before me, for rescinding the orders that I made on 2 March 2012, and I decline to do so. The orders were, of course, interlocutory. It would be open to the Taxpayer to make a formal application for the orders to be set aside. Such an application, of course, would have to be supported by evidence that indicates that there is a genuine intention on the part of the Taxpayer to comply with Court orders in a competent and timely fashion. 6 It may well be that it would be appropriate, in entertaining any such application, if it were to be made, for the Court to consider the merits of the proceeding. That is something which has not been investigated to any extent at this stage. It may be, for example, that the Commissioner sought to satisfy the Court that there would be no utility in entertaining any application to rescind or set aside the orders made on 2 March 2012 because there was little prospect of the proceeding having any success. I have formed no view, because I have not considered the merits of the proceeding at all. 7 It follows, from my declining to entertain any further application to rescind the orders made on 2 March, that after today, when the stay expires, the orders will become effective and the proceeding will stand dismissed. One of the orders that I made on 2 March 2012 was that an interlocutory application filed by the Taxpayer be stood over to today. It follows that that application will also be dismissed. I certify that the preceding seven (7) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Emmett.