Re Carmody; Ex parte Glennan [2000] HCA 37

Re Carmody; Ex parte Glennan [2000] HCA 37 - HCA 2000 case summary — Zoe

[15]

The approach to the application, which rests substantially upon s 75(v) of the Constitution, is not in doubt. That provision of the Constitution enacts that, in all matters "in which a writ of Mandamus or prohibition or an injunction is sought against an officer of the Commonwealth", the High Court shall have original jurisdiction. It is for the applicant to make out a case for the order he seeks. The nature of the case which he must make out has been variously described. In Re Brennan; Ex parte Muldowney[1], Mason CJ stated that the applicant had "failed to make out a prima facie or arguable case". In Re Australian Nursing Federation; Ex parte State of Victoria[2], McHugh J, granting relief, stated that the applicant had to "show that he or she has an arguable case".
In judging what is an "arguable case" in this context, certain considerations must be kept in mind. First, there is the importance of the constitutional provision itself[3]. It is of cardinal significance. By it, all officers of the Commonwealth (including federal judges[4]) are rendered accountable in this Court to the Constitution and the laws of the Commonwealth. Being the means by which the rule of law is upheld throughout the Commonwealth, the provision is not to be narrowly construed or the relief grudgingly provided.
Secondly, where this Court's original jurisdiction is invoked, by an application made pursuant to s 75(v), it is a jurisdiction which the Court is bound to exercise according to law[5]. The rider imposes restraints, including the requirement, where challenged, for an applicant to demonstrate standing and to rebut a suggestion that the grant of an order nisi would, in the particular circumstances, be "premature"[6]. Such a case would arise where the applicant has other available remedies which, in the circumstances of the particular case, should be exhausted before the provision of constitutional relief is considered.
Thirdly, a practical consideration which restrains an unduly restrictive view of the provision of an order nisi for constitutional writs is that, were it to be refused in a demonstrably arguable case, the disaffected applicant might seek leave to appeal from the order of the Justice concerned or otherwise endeavour to overcome it[7]. Were a Full Court to consider that the order nisi ought to have been granted, it could so provide. In some cases, at least, the refusing Justice might then be disqualified from participating in the matter returned before the Full Court, although that matter concerns the Constitution or an important point of federal law upon which the Justice would ordinarily be expected to provide his or her opinion[8].
These considerations explain why, instead of refusing relief altogether, an order is sometimes made[9] directing the applicant to apply by notice of motion to a Full Court. In such a case the application before the single Justice is adjourned so that notice of the application to the Full Court may be given[10]. All of the foregoing considerations must be kept in mind.
However, as the contesting respondents disputed the provision of the relief sought by the applicant, and as their contentions have been fully argued over a day's hearing, it is my duty to decide whether the applicant has made out an "arguable" or "prima facie" case. In so far as there is a difference between these two standards, I will apply the test of whether the applicant has shown a reasonably arguable case[11]. I shall approach the hurdle which he must overcome bearing in mind that its fundamental purpose is not to put applicants out of court but to ensure that the Full Court, and other parties, are not troubled by futile arguments that are not reasonably open or by arguments that are premature. In the nature of applications of this kind, the Justice determining them does not ordinarily hear all of the arguments that would be advanced on the return of the order nisi before a Full Court. But that does not mean that argument, even of an extensive kind, is not appropriate to reach the conclusion that the serious step should be taken of issuing the order nisi[12]. In the present application, I have had the benefit of detailed argument. Extensive written submissions were also received following the hearing.

[16]

For some years, the applicant and the Commissioner of Taxation have been engaged in a dispute concerning an assessment of the applicant's assessable income for the year ended 30 June 1988. During that year, the applicant received payment of a lump sum of $1.365 million pursuant to the terms of settlement of proceedings in the Supreme Court of New South Wales between himself and a third party. The applicant asserts that the sum is of a capital nature[13]. The Commissioner contends that this sum is assessable as income. He included it in the applicant's Notice of Assessment dated 8 May 1995. The applicant objected to this decision on 19 July 1995. His objection was disallowed by the Deputy Commissioner on 29 January 1996. The applicant, being dissatisfied with this decision, applied to the Administrative Appeals Tribunal ("the Tribunal") for review of the decision[14]. The Tribunal, on 8 November 1996, determined that review adversely to the applicant and affirmed the decision of the Commissioner[15].
The applicant then "appealed" to the Federal Court. This "appeal" was heard by Foster J, then a judge of that Court[16]. His Honour delivered two decisions. The first was pronounced on 17 October 1997 and ordered that the decision of the Tribunal be set aside and that the matter be remitted to the Tribunal "for determination in accordance with these reasons"[17]. On 9 September 1998, Foster J acceded, in part, to an interlocutory motion which was brought on behalf of the applicant and which sought enlargement of the original orders. The motion also sought to advance a number of constitutional arguments. Although Foster J rejected the constitutional arguments, for reasons which he gave[18], his Honour was persuaded, on the merits, to vary the orders previously made. In consequence, he added to the orders which he had pronounced on 17 October 1997 a variation which provided a direction to the Tribunal to "find that the receipt in question was not taxable under ss 25(1) or 25A(1) of the Income Tax Assessment Act 1936 (Cth)".
Before the Tribunal could hear the remitted proceedings in accordance with the varied orders, two appeals to the Full Court of the Federal Court were lodged from those orders. The applicant lodged an appeal against the judgment of 9 September 1998 on 29 September 1998. The Commissioner lodged an appeal against both judgments on 30 September 1998.
In due course, the Full Court (Hill, Sackville and Hely JJ) heard and determined the appeals[19]. The Full Court granted an extension of time to the Commissioner to file a notice of appeal from the judgment of Foster J of 17 October 1997. It ordered that the Commissioner's appeals from both judgments be allowed and that the orders of Foster J be set aside. In lieu of the first orders, the Full Court substituted orders dismissing the appeal from the Tribunal and ordering the present applicant to pay the Commissioner's costs. It also dismissed, with costs, the applicant's appeal from the judgment of Foster J of 9 September 1998.
The applicant has applied for special leave to appeal to this Court from the foregoing orders of the Full Court of the Federal Court. His application has not yet been determined. On 26 May 2000, the application came on for hearing before this Court constituted by Gaudron J and myself. The applicant notified the Court of the constitutional points which he wished to argue, the substance of most of which were included in his grounds of appeal and in the filed argument in support of the grant of special leave. The applicant expressed concern that some, at least, of the constitutional arguments raised by him might affect the jurisdiction which the Federal Court had to hear and determine the appeals purportedly brought to it. If this proved to be so, the constitutional grounds could, he feared, destroy the validity of his purported application and contemplated appeal to this Court. The applicant therefore informed the Court of this possible jurisdictional problem.
Where a court is aware of a possible problem affecting its jurisdiction, it is ordinarily necessary for that court to resolve the problem in order to determine the extent of its powers and jurisdiction to make orders disposing of the proceedings[20]. Being informed of the applicant's intention to prosecute the present application to bring the issues of jurisdiction to a head, the Court, constituted to hear the special leave application, adjourned that hearing. The purpose of such adjournment was to permit the application for an order nisi for constitutional writs and ancillary relief to be heard. It is in that way that the present application has now come before me.

[34]

In the case of interlocutory judgments (such as, according to the applicant, the second judgment of Foster J on 9 September 1998) an application for leave to appeal must be brought within seven days[24]. Therefore, neither the appeal from the first judgment, nor the application for leave to appeal from the second judgment, were brought within the times from the pronouncement of the judgment in question required by the Federal Court Rules. Accordingly, so the applicant contended, upon the proper construction of s 14ZZQ(2) of the Taxation Administration Act, no appeal had been lodged against the order "within the period for lodging an appeal". Thus, the order had become "final at the end of the period".
On this basis, each of the judgments of Foster J and the orders which his Honour had made were, according to the applicant, final[25]. Therefore, in terms of s 24(1) of the Federal Court Act (assuming it to apply), the Full Court had no jurisdiction to hear and determine the Commissioner's purported appeals from the judgments of Foster J[26]. The judgments of the Full Court in determining such purported appeals were accordingly made without jurisdiction. They were at least voidable. Being invalid orders made by officers of the Commonwealth, they were susceptible to the constitutional writs and also any ancillary relief required to make the issue of such writs effective. Accordingly, an order nisi for certiorari should be issued so that this Court could quash the Full Court's orders which were made without jurisdiction.
At first, I was inclined to consider that the foregoing arguments presented a fairly arguable case entitling the applicant to an order nisi for prohibition and certiorari. However, the Commissioner was given leave to reopen his argument to call attention to the suggested flaw in the applicant's submissions. In order to explain this flaw, it is necessary to return to the Taxation Administration Act. By s 14ZZ, that Act provides that, if a person is dissatisfied with the Commissioner's objection decision, which is the ruling upon a taxpayer's objection to the assessment of tax payable by him or her, the person concerned is given a choice. He or she may:

[40]

It follows that this section governs appeals from the Tribunal to the Federal Court in a case in which the taxpayer has elected to apply to the Tribunal for review of the Commissioner's decision[28]. Such appeals are not governed by s 14ZZQ of the Taxation Administration Act, as contended by the applicant. That last-mentioned section appears not in Div 4 but in Div 5. It is part of the provisions controlling what happens if the taxpayer elects not to apply to the Tribunal but appeals directly to the Federal Court against the Commissioner's decision. As this is not the course which the applicant took, Div 5 has no application. Thus s 14ZZQ (and also s 14ZZP), upon which the applicant relied, have no relevant work to do in these proceedings.
It is true that by s 14ZZL(2) of the Taxation Administration Act, if no appeal is lodged against the Tribunal's decision within the period for lodging an appeal, the decision becomes "final at the end of the period". However, an appeal from the Tribunal to the Federal Court having followed the stream envisaged in Div 4, no other provisions were made by the Taxation Administration Act to govern the subsequent steps in the Federal Court. Those steps could not be taken to be at large. Necessarily, they were governed by the Federal Court Act and the Federal Court Rules. Ample provision is made under the Federal Court Rules[29] for extensions of time where an appeal (or application for leave to appeal) is brought out of time. In respect of the belated appeals to it, the Full Court considered whether such extensions of time should be granted to the Commissioner. It decided that they should. There is no principled basis upon which this Court could disturb such a decision. Specifically, no basis exists in the language and scheme of the Taxation Administration Act.
It necessarily follows that the suggested basis upon which the Full Court was deprived of jurisdiction to hear the Commissioner's appeals from the judgments of Foster J could not be established. Those appeals (subject to the fourth argument) fall within the jurisdiction of the Federal Court by virtue of s 24(1) of the Federal Court Act. They do so without any relevant qualifying provision in another Act to which the applicant could point. So far as he suggested that the Full Court's jurisdictional disqualification arose from s 14ZZQ of the Taxation Administration Act, I would reject that contention as unarguable. That section is inapplicable to his case. There is no precisely equivalent section in Div 4 of Pt IVC of the Taxation Administration Act. The first ground for the provision of an order nisi to the applicant is therefore unavailing. By the applicable test, that ground is not reasonably arguable. I would therefore refuse relief on that ground.

[41]

Nor am I convinced that the applicant has made out a reasonably arguable case in relation to his claim for an order nisi for the constitutional writ of mandamus directed to the Commissioner and his officers to require them to perform their alleged duty to comply with the Public Tax Ruling upon which the applicant relies.
The fundamental flaw in the applicant's argument on this ground concerns whether the Commissioner and his officers could ever be subject to a lawful duty to perform their functions, as asserted by the applicant, in a way that would contradict their undoubted duty to comply with a judgment which has been formally entered by the Full Court of the Federal Court with respect to the same subject matter. Such a judgment, being a judgment of a court designated as a superior court of record[30], is, by our law, valid between the parties until it is lawfully set aside. It binds the parties to it, as well as their relevant employees and agents. Until it is set aside (as by the process of appeal which the applicant has sought to invoke in this Court) or quashed (as in the process now under consideration), that order must be obeyed, as much by the officers of the Commonwealth (such as the Commissioner and Deputy Commissioner) as by anyone else.
Accordingly, I do not consider that the second point advanced by the applicant is reasonably arguable. At the end of his oral submissions and in his later written submissions I did not take the applicant seriously to contest this conclusion. However, he did not formally abandon the submission. If, contrary to my analysis, either on the first or fourth grounds raised in these proceedings, the applicant were granted special leave and were able to persuade this Court that the Full Court of the Federal Court entered its judgments without jurisdiction or power to do so, such judgments would doubtless be set aside. It might then be open to the applicant to renew his application for relief in the nature of mandamus directed to the Commissioner and Deputy Commissioner to perform their "duty" under the Public Tax Ruling in question. But so long as the judgment of the Full Court of the Federal Court stands, the applicant's contention that he is entitled to a constitutional writ of mandamus is not made out. I would therefore refuse relief on the second ground.

[44]

Resonances of this opinion may be found in the reasons of the minority of this Court in Abebe v Commonwealth[34]. In that matter, the Court was closely divided and the legislation under consideration in Abebe was different from that here in question. Essentially, the applicant contended that the provisions of the AAT Act confining appeals from the Tribunal to the Federal Court to appeals "on a question of law"[35] amounted to an impermissible endeavour to divide a constitutional "matter". Because that division had affected the judgments which Foster J had entered, they called for correction. The entitlement to have an entire legal controversy decided by a federal court whose jurisdiction had been invoked was said to be an important right deriving from the Constitution[36]. At the least, the applicant submitted, the point was reasonably arguable and, for that reason, should be returned before a Full Court of the High Court by the issue of an order nisi.
I would not dispose of the applicant's third ground on the footing that it was not reasonably arguable. In the light of the division of opinion of this Court in Abebe and the express concerns referred to by Gummow J in Skypak, I do not believe that, in the present consideration of the point, that would be a reasonable conclusion. In the manner that the proceedings were conducted before Foster J, there are certain problems in the way of the applicant's demand for judgment to be entered in his favour. In accordance with the legislation, Foster J confined his examination strictly to the points of law raised and did not enter otherwise upon the facts.
However, the precise issues presented in the application on this point are already before a Full Court of this Court in the form of the applicant's application for special leave to appeal. Because I am not convinced that there is any arguable jurisdictional flaw in the judgments of the Full Court of the Federal Court which might undermine the validity of the applicant's application for special leave to appeal (and, if granted, appeal to this Court) the proper course is to permit the point to be argued in the context of the special leave application. That is the jurisdiction of the Court which the applicant has already lawfully invoked. The appellate jurisdiction of this Court has been regularly sought. There will be no delay in its determination. If the Court constituted to hear the special leave application considers that the point is reasonably arguable, it will grant special leave at least upon this ground. Because the point involves a question of constitutional interpretation, if it is reasonably arguable, it would normally attract a grant of special leave.
In that event, the additional provision of constitutional and ancillary writs would be unnecessary. Entire relief can be granted in the disposal of the appeal. Ordinarily, in my view, that is the appropriate way to proceed where the officer of the Commonwealth in question is a federal judge, and where an appeal has been sought and discretionary relief pursuant to s 75(v) of the Constitution is claimed from this Court at the same time. Whilst no hard and fast rule can be laid down, in the present case, where the application for special leave raising the identical point is pending, the issue of a constitutional writ would be premature.
On this basis, I would reject the applicant's third ground. In the event that the applicant is dissatisfied by the determination of the application for special leave, it would remain open to him to reapply and to submit that, on the third ground, an order nisi should nonetheless issue.

[45]

The fourth and final ground upon which the applicant sought an order nisi rested on his contention that s 44 of the AAT Act stated the entire law by which proceedings which were before the Tribunal could get before a Full Court of the Federal Court on appeal. There are a number of flaws in this argument which are apparent when the provisions of the Federal Court Act and the AAT Act are considered side by side, and the scheme of the inter-relationship of the Tribunal and the Federal Court, as provided in those Acts, is understood.
Where a taxpayer has applied to the Tribunal for review of the Commissioner's objection decision[37], the AAT Act applies, subject to any modification set out in Div 4 of Pt IVC of the Taxation Administration Act which may limit its operation. There are no such relevant modifications in the Taxation Administration Act which diminish the provisions of s 44(1) of the AAT Act.
Therefore, a party to proceedings before the Tribunal for review of the Commissioner's decision may, if dissatisfied, appeal to the Federal Court on a question of law from any decision of the Tribunal in that proceeding. The width of the language should be noted. The provisions of s 44, in so far as they make special reference to the constitution of the Federal Court as a Full Court, do not, in my view, arguably, or at all, cut down the application of s 24(1) of the Federal Court Act which affords jurisdiction to a Full Court of that Court to hear and determine an appeal from a judgment of the Federal Court constituted by a single judge.
Once the Federal Court is engaged by that name pursuant to the provisions of s 44 of the AAT Act, necessarily the general statute governing its jurisdiction and powers is also engaged to the extent applicable. The special provisions relating to the constitution of a Full Court in respect of the exercise by the Federal Court of its original jurisdiction are obviously intended to observe considerations of hierarchy and courtesy that apply where, in the particular case, the Tribunal was constituted by a presidential member[38]. To suggest that such special provisions in relation to the exercise by the Federal Court of its original jurisdiction operate to oust the general provisions of the Federal Court Act in respect of appeals from a single judge of the Federal Court is most unconvincing. It would take very clear language in the applicable legislation to limit the general appellate powers of the Federal Court in such a way. This is so because such a construction would deprive litigants of an important right for which the Parliament has otherwise provided once a matter is in the Federal Court.
I see no reasonably arguable construction of the AAT Act, or of the Federal Court Act, which would lead to such an uncongenial conclusion. In my view, the applicant's argument that s 44 of the AAT Act is an entire code for the hearing by a Full Court of the Federal Court of proceedings from a decision of the Tribunal in that Court is not reasonably open. The application for an order nisi on the fourth ground is therefore refused.

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