Swiss Aluminium Australia Limited v. Federal Commissioner of Taxation

Judges:
Beaumont J

Court:
Federal Court

Judgment date: Judgment handed down 8 April 1987.

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Beaumont J.

Before the Court is an application by the prosecutor for an order that the Commissioner discover certain documents. The history of the litigation is described in my earlier judgment in the matter now reported at (1986) 68 A.L.R. 587 at p. 588. In the first instance, the prosecutor sought general discovery but when this was resisted by the Commissioner, the prosecutor sought discovery of the following classes of documents:

"B. Any documents which:

• (i) the decision maker has already considered or presently expects will be considered by him in making a determination with respect to the Notices of Objection dated 17 August 1984 lodged by the Prosecutor against the said income tax assessments;
• (ii) records any recommendation or decision as to whether or when a determination with respect to such Notices of Objection should be made.

C.(i) Any original or amended assessments issued to other producers of alumina or bauxite which were issued pursuant to Section 136 of the Income Tax Assessment Act 1936, or pursuant to the provisions of any double taxation agreement comprising a Schedule to the Income Tax (International Agreements) Act 1953, relating to the period from 1976 to 1979 inclusive.

• (ii) Any documents which were in fact considered by the officer who made the decision to issue to any such producer any such Notice of Assessment for income tax.
• (iii) Any Notices of Objection lodged against any such assessments.
• (iv) Any documents recording any determination made with respect to any such Notices of Objection.
• (v) Any document which was in fact considered by the decision maker in making a determination with respect to any such Notices of Objection.
• (vi) In so far as no determination has been made with respect to any such Notices of Objection, any documents which:
  • (a) the decision maker has already considered or presently expects will be considered by him in making a determination with respect to the Notices of Objection against the said income tax assessments;
  • (b) records any recommendation or decision as to whether or when a determination with respect to such Notices of Objection should be made.
• (vii) Any correspondence between the decision maker and the relevant taxpayer

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  ATC 4301

  with respect to any such Notices of Objection.

For the purposes of this Schedule `decision maker' refers to the person who is presently expected to make a determination with respect to a Notice of Objection."

The Commissioner has now supplied the documents described in para. B(ii).

The relevant Rules of Court and the authorities dealing with the availability of discovery in prerogative writ proceedings are summarised in
D.F.C. of T. (W.A.); Ex parte Briggs, unreported, Beaumont J. at pp. 6-7. It appears that, earlier, the view was taken that since the right of discovery existed only in aid of civil proceedings, discovery should not be ordered except where the prerogative relief was to enforce a civil right (see Bray's Principles and Practice of Discovery at p. 3). The modern view is that discovery can be ordered in proceedings for judicial review (see
R. v. Secretary of State for the Home Department; Ex parte Herbage (No. 2) (1987) 2 W.L.R. 226). Although the Court's function in such proceedings is supervisory, it may well involve some investigation of the facts (per May L.J. in Herbage at p. 235). Once a fact-finding role is assumed by the Court, it must follow that the power to order discovery exists even if, as May L.J. pointed out (at p. 236), it should not be often that the power need be exercised.

Accepting that a power to order discovery exists, there remains the question what, if any, order should be made here. It appears that there is little, if any, common ground between the parties as to the primary facts of the case. Since it will be necessary for the Court in the first place to find those facts, it is appropriate that discovery be ordered for this purpose.

The next question is the type of order - should it be general discovery or particular discovery? The prosecutor seeks particular discovery of the documents already described. The Commissioner resists such an order on the ground that all the documents mentioned are legally irrelevant.

For the purposes of discovery of a document, the test is one of adjectival rather than substantive relevance. It is "sufficient if it would, or would lead to a train of enquiry which would, either advance a party's own case or damage that of his adversary" (per Menzies J. in
Mulley v. Manifold (1959) 103 C.L.R. 341 at p. 345). Whilst the test is thus more generous than the ultimate test of substantive relevance, it is no easy matter for the Court to determine, in advance of the trial, whether the documents have even adjectival relevance. Although the prosecutor asserts a material connection between the documents and the issues in the principal proceedings, the existence of any such nexus is disputed by the Commissioner at this stage.

The subject matter of the Commissioner's assessments is plainly both complex and complicated. The Commissioner is in a far superior position than the Court is to judge the adjectival relevance of the documents in his possession. Rather than have the Court make an attempt at judging in advance of the trial what may be relevant, it is preferable that the Commissioner first have the opportunity to form that judgment. If an order for general discovery is made against him, he will be obliged to form an informed judgment on a matter well within his knowledge. If his attempt to give general discovery is perceived by the prosecutor to be inadequate, the prosecutor may pursue an application for further or better discovery or particular discovery if it is so advised.

I propose to order that the Commissioner give general discovery but to reserve liberty to the prosecutor to apply for further or particular discovery in the event that it becomes appropriate to do so. Since the prosecutor has been partially successful, costs of this application will be the prosecutor's costs in the principal proceedings. I propose also to reserve liberty to apply to the Commissioner in the event that he wishes to seek directions on the question of any possible claim for confidentiality by a third party in respect of a document in the Commissioner's possession or control.

I make the following orders:

1. Order that on or before 8 May 1987, the respondent give discovery of documents in accordance with O. 15 r. 2(2).

2. Order that the costs of this application be the prosecutor's costs in the principal proceedings.

3. General liberty to apply.