Mostyn v. Deputy Federal Commissioner of Taxation.

Judges:
Lockhart J

Court:
Federal Court

Judgment date: Judgment handed down 11 November 1986.

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Lockhart J.

This is an application for an order of review pursuant to the Administrative Decisions (Judicial Review) Act 1977 (the ``Judicial Review Act''). In the substantive application the applicant, John Joseph Mostyn, seeks to review what are said to be two decisions of the respondent, the Deputy Commissioner of Taxation. First, a decision to seek recovery of moneys from the applicant claimed by the Deputy Commissioner to be owing to him in respect of allegedly unpaid income tax and additional tax allegedly payable pursuant to the provisions of the Income Tax Assessment Act 1936 and second, a decision to commence proceedings No. 27856 of 1985 in the District Court of New South Wales against the applicant to recover the said moneys.

A brief reference to the background of this matter is helpful. The applicant was assessed to income tax for certain years, including the years ended 30 June 1979 and 30 June 1981. Although the applicant lodged objections to the relevant assessments, which were disallowed by the Deputy Commissioner, he did not take the necessary steps within the time provided by the Assessment Act to institute either a review by the Board of Review or an appeal to a Supreme Court.

On 13 December 1985 the Deputy Commissioner issued a statement of liquidated claim in the District Court claiming from the applicant the sum of $58,899.28 plus additional tax for late payment. The statement of liquidated claim was served upon the applicant on 14 January 1986. In argument the applicant asserted that the assessments were fundamentally bad in law as they were founded on bases which superior courts of this country have said are untenable. I say nothing about that claim.

Directions have already been given by the Court for the further conduct of this application, including directions for particulars and the filing of affidavits. However, the applicant has filed a notice of motion, which is the only matter with which I am concerned today, seeking a declaration that he is entitled, pursuant to subsec. 13(1) of the Judicial Review Act, to a statement by the Deputy Commissioner or relevant decision maker within his office, setting out the findings on material questions of fact and the reasons for the two decisions which it is said were made and to which I have already referred. The applicant also seeks in the notice of motion an order directing the Deputy Commissioner to prepare and furnish the applicant with a statement in accordance with subsec. 13(1). The Deputy Commissioner opposes the motion.

The first question that arises is the identification of the alleged decision or decisions made by the Deputy Commissioner. It is not disputed by the Deputy Commissioner that a decision was taken to commence the District Court proceedings against the applicant for recovery of the $58,899.28 and additional tax. Indeed, it is obvious that a decision of that kind must have been taken before the statement of liquidated claim was issued. But the Deputy Commissioner says that there is no evidence that any anterior decision was made by him or any officer in his employ to recover the moneys allegedly owing by the applicant in respect of unpaid income tax and additional tax.

There is scanty evidence on that question. It consists solely of a letter from the Deputy Commissioner to the solicitors for the applicant dated 10 September 1986. I shall say a little about the circumstances in which that letter came to be written. On 28 April 1986 the solicitors for the applicant wrote to the Deputy Commissioner requesting him to furnish a sec. 13 statement in relation to the two alleged decisions. Two further letters were written by the solicitors for the applicant as no reply was received to the first letter. Eventually a letter was written to the solicitors for the applicant on 10 September 1986 which, omitting formal parts, was in the following terms:

``You asked on behalf of the taxpayer for a statement of reasons under section 13 of the Administrative Decisions (Judicial Review) Act, 1977 (the Act) concerning decisions institute (sic) proceedings against the taxpayer to recover outstanding tax. It is considered that those decisions to institute proceedings for the recovery of outstanding tax are decisions falling within schedule 2 of

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ATC 4932

the Act. That schedule sets out the classes of decisions to which section 13 of the Act does not apply. In view of this, I do not propose to provide a statement of reasons as requested in your letter.''

This is a case where it is peculiarly within the knowledge of the Deputy Commissioner as to whether or not he or any of his officers made only one decision, namely, the decision to sue the applicant or that decision and an anterior decision (or formation of an opinion which may be the equivalent of a decision) namely, to seek recovery of the moneys in question. In cases of this kind the Court needs little material before it would be prepared to infer the likelihood of the making of an anterior decision of this kind which is so closely related to the decision to sue. See
Terrule Pty. Limited v. D.F.C. of T. 85 ATC 4173. On the evidence before me I am content to infer for present purposes that the two decisions, which the applicant asserts were made in this case, were in fact made. This is, supported by the language of correspondence from the Deputy Commissioner.

This raises immediately the primary question on the motion before me today, namely, whether these two decisions fall within Sch. 2 to the Judicial Review Act. Certainly decisions such as the two in question here would be reviewable decisions as they are not excluded by Sch. 1 to the Judicial Review Act and the contrary has not been asserted on behalf of the Deputy Commissioner. But the question that arises is whether these decisions answer the description of ``decisions in connection with the institution or conduct of proceedings in a civil court...'' for the purposes of para. (f) of Sch. 2 of the Judicial Review Act.

Although these are exclusionary provisions in what is otherwise an enabling Act, the words ``in connection with'' are words of wide import and must not be given a restricted meaning in para. (f).

It is conceded on behalf of the applicant that the second decision in question, namely, to commence the District Court proceedings is a decision in connection with the institution of those proceedings; and plainly that concession is correct.

In my opinion the anterior decision to seek recovery of the said moneys from the applicant also falls within the description of a decision in connection with the institution of the proceedings. There are, of course, various ways by which the Deputy Commissioner may recover tax which he claims to be due from taxpayers, but in my view a decision to seek to recover moneys from a taxpayer is so closely bound up with any subsequent decision to actually sue, that they both must answer the general description of decisions in connection with the institution of proceedings. For these reasons sec. 13 cannot be resorted to by the applicant in this case.

I need not, therefore, decided another question which was the subject of argument, namely, whether the combination of subsec. 13(1) and (5) together with sec. 5 of the Judicial Review Act operate to bar the applicant from making its request under sec. 13 because, so it was asserted by the Deputy Commissioner, more than 28 days elapsed after the date of service of the District Court statement of claim upon him before he made the request.

Before leaving the matter, however, I would say that, quite independently of sec. 13 of the Judicial Review Act, this Court is seised with the substantive application for review of the two decisions. Therefore, at some stage, the Court must have before it evidence as to what the Deputy Commissioner says were the relevant decisions referable to this application, that were made by him. Whether that is obtained by particulars being sought from the Deputy Commissioner by the applicant or by pleadings being ordered and interrogatories being administered, is not for me to say. But the Court, in the control of its own process, cannot be kept in the dark as to what the decision-making process was. I say that in no way critically of the Deputy Commissioner but simply to indicate that there is a problem in matters of this kind which parties must grapple with to elucidate the true issues.

The distinction between the Court's control of its own processes, including those of discovery, on the one hand and sec. 13 statements on the other hand and the relation between the two, has been adverted to on more than one occasion by decisions of this Court; most recently in a judgment by the Full Court to which I was a party, in
F.C. of T. v. Nestle Australia Ltd. 86 ATC 4760.

Accordingly, the notice of motion is dismissed with costs.