Snow v. Deputy Federal Commissioner of Taxation.

Judges:
French J

Court:
Federal Court

Judgment date: Judgment handed down 24 March 1987.

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French J. (ex tempore)

By an application filed in this Court on 20 November 1986 under the Administrative Decisions (judicial Review) Act 1977 the applicant sought review of three decisions on the part of the respondent, they being characterised in the application in the following way:

"On or about 12 September 1986 he decided to refuse the Applicant's requests made by letter dated 19 August 1986 that the Respondent: -

• (a) Grant an extension of time pursuant to section 206 of the Income Tax Assessment Act, 1936 as amended (`ITAA') for payment of the tax assessed and notified in amended Assessments of income tax, which issued to the Applicant for the years ended 30 June 1974, 1975 and 1976, until such time as each Assessment has been confirmed and no further avenue of appeal is available to the Applicant pursuant to Part V of the ITAA;
• (b) Determine that pursuant to section 207 of the Income Tax Assessment Act the date from which the penalty tax shall be computed shall be the date upon which each amended Assessment is confirmed with no further avenue of appeal being available to the Applicant pursuant to Part V of the Income Tax Assessment Act;
• (c) Defer the issue of a Writ or Writs for the recovery of tax assessed and outstanding pursuant to the said amended Assessments until such time as the said amended Assessments are confirmed with no further avenue of appeal being available to the Applicant pursuant to Part V of the Income Tax Assessment Act."

A claim for interlocutory relief was included in the application, and on 4 February 1987 an order was made granting limited interlocutory relief pending the reference to the Administrative Appeals Tribunal of objections lodged by the respondent to the amended assessments in question. Directions were also then given in relation to the future conduct of the proceedings, requiring the filing of affidavits by each party and the giving by each party of discovery -
Snow v. D.F.C. of T. 87 ATC 4078.

By a motion made returnable today, the respondent seeks orders that the application for an order of review be dismissed or adjourned sine die and such further or other orders as the Court deems fit. It also seeks an order that the applicant pay the respondent's costs of and incidental to the claim for interlocutory relief, and that each party otherwise bear its own costs of the application. This motion was supported by an affidavit sworn by Lorraine Betty Price who is described in the affidavit as an acting principal advising officer attached to the appeals branch of the Australian Taxation Office, Perth, under the control of the respondent.

In the affidavit, after referring to the history of the application to the point at which the interlocutory relief was dealt with, the deponent says that the applicant's objections were referred to the Administrative Appeals Tribunal on 16 February 1987, and then goes on to say that on 27 February 1987 the Australian Taxation Office received a letter of that date from the solicitors for the applicant enclosing a photocopy of a letter dated 27 February 1987 from those solicitors to the Commissioner of Taxation in his capacity as Chairman of the Board constituted under sec. 265 of the Income Tax Assessment Act 1936.

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ATC 4304

The letter to the Commissioner sought release of the taxpayer from his liability to pay income tax assessed pursuant to amended assessments for the years ended 30 June 1974, 1975 and 1976.

The amount of the tax assessed and outstanding at present totals some $429,845.95.

In the letter to the Deputy Commissioner which was accompanied by a copy of the letter to the Commissioner, the applicant applied for an extension of time pursuant to sec. 206 for payment of the tax assessed and outstanding until such time as the Board constituted under sec. 265 had made a determination of the taxpayer's application for release.

It is, according to the affidavit, the usual practice of the Board, where a claim for relief is sought for a liability exceeding $10,000, to refer the application to the Administrative Appeals Tribunal for examination of the applicant, but with a request that examination be delayed until the Pt V appeal under the Income Tax Assessment Act 1936 has been determined, and to delay consideration of the application for release until the Deputy Commissioner has advised the Board that the appeal under Pt V has been determined.

The affidavit then goes on:

"12. The Deputy Commissioner is presently considering the Applicant's application for extension of time to pay referred to in paragraph 9 above and is reviewing his earlier decision referred to in paragraph 3A(i) herein.

13. Additional tax is due and payable on unpaid tax pursuant to section 207 of the ITAA either on the date when it becomes due and payable or, if an extension of time pursuant to section 206 of the Income Tax Assessment Act has been granted, from such date as the Commissioner determines.

14. The relief sought by the Applicant referred to in paragraph 3A(ii) herein will be affected by the Deputy Commissioner's decision to review his previous decision referred to in paragraph 3A(i) herein.

15. Following the application for interlocutory relief and the order made by His Honour Mr Justice French on 4 February 1987, the Deputy Commissioner reviewed his earlier decision made on 12 September 1986 not to defer recovery proceedings and his decision made on 15 September 1986 to instruct his solicitor to issue the writ for the recovery of the tax assessed. On 6 March 1987 he made a fresh decision in relation to the institution of recovery proceedings. This decision was made by him before the letters from the Applicant's solicitor referred to in paragraph 6 herein were brought to his attention.

16. In view of the Applicant's application for release from liability and request for an extension of the time pursuant to section 206, the Deputy Commissioner is further reviewing his decision made on 6 March 1987 in relation to the institution of recovery proceedings."

In summary, as Miss Price said, the decision that the applicant seeks to review in relation to the grant of an extension of time is in the process of being reviewed generally by the respondent, as is the decision relating to the date from which penalty tax should be computed.

The decisions in relation to recovery proceedings are said to have already been reviewed once by the Deputy Commissioner, and the decision made by him on 6 March 1987 has been stayed by him pending further consideration of the application made on 27 February 1987 for extension of time pursuant to sec. 206.

Although it is not stated in the affidavit, I presume that the reference to the decision of 6 March 1987 is a reference to a decision taken then to institute recovery proceedings.

When the matter came on before the Court on 24 March 1987, after some discussion counsel for the respondent took instructions and advised the Court that the respondent had, to use her words, instructed her that he had vacated the decisions which were the subject of the application and that the subject matter of those decisions is now under reconsideration.

The respondent says that in the circumstances, an appropriate order would be that the application for an order of review be dismissed since it is now futile, but accepts that the respondent, having brought about that circumstance by vacating the decisions the subject of the application, should pay the applicant's costs of the proceedings.

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ATC 4305

Although the respondent's counsel initially submitted that the applicant should pay the respondent's costs of the claim for interlocutory relief, when pressed for reasons in support of that submission she conceded that the appropriate order would be the reverse, namely that the respondent should also pay the applicant's costs of the interlocutory proceedings.

The applicant maintains that this is a cynical exercise to escape from the supervisory jurisdiction of the Court under the Administrative Decisions (Judicial Review) Act 1977, and submits that what I ought to do is to make an order quashing or setting aside the decisions under review and an accompanying order for costs.

In my opinion, where the decision-maker has, as in this case he has liberty to do, effectively changed his mind and decided to reconsider the matters which were the subject of the decisions for which review was sought under the application filed on 20 November 1986, there would not appear to be any decision upon which a quashing order or an order to set aside could operate, or, if there were, such an order would be in the circumstances futile.

Counsel for the applicant submits that if he is allowed to "get away" with this technique, the respondent will be in a position to reconsider his decisions afresh without the benefit of any guidance as to the errors that the applicant is confident he made in coming to the decisions the subject of the original challenge.

However, in my view, the role of this Court is not to give legal advice to Commonwealth officers, it is to determine whether or not to grant or withhold relief where there is a lis inter partes upon which to base the grant or refusal of the appropriate remedies. The making of an appropriate order for costs should properly compensate the applicant for the fact that his application has been rendered futile by the actions of the respondent.

In the circumstances I will direct that the application should be dismissed, but that the respondent should pay the applicant's costs of the proceedings, including the costs of the claim for interlocutory relief.

THE COURT ORDERS THAT:

1. The application is dismissed.

2. Respondent to pay applicant's costs of proceedings including the costs of the claim for interlocutory relief.