Federal Court of Australia

Mandalinic v Stone (Liquidator) (No 2) [2023] FCAFC 176

ORDERS

THE COURT ORDERS THAT:

1.    The appellant is to pay the respondents’ and the intervener’s costs of the appeal.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

THE COURT:

1    For the reasons published on 4 September 2023, we dismissed the appeal in this matter and made consequential orders for the determination of any costs applications on the papers: Mandalinic v Stone (Liquidator) [2023] FCAFC 146 (Primary Reasons). The respondents apply for the usual costs order. The Deputy Commissioner of Taxation as intervener seeks his costs. The appellant resists each application and submits that each party should bear their own costs on the basis that whilst unsuccessful in the appeal overall, he did achieve some measure of success “in resisting orders being made that he was in breach of” s 198G of the Corporations Act 2001 (Cth). These reasons assume familiarity with the Primary Reasons.

2    There is no merit in the appellant’s submission. The usual order is that an unsuccessful appellant must pay the costs of an appeal. It is normally unproductive and distracting to resolve the costs of an appeal issue by issue. There is no reason to depart from the usual order in this case. The primary judge determined four separate questions at the request of the parties and the intervener: Primary Reasons at [70]. The third concerned whether an affidavit made by the appellant on 29 October 2021 (Revocation Affidavit) and filed in the Supreme Court proceeding was filed in breach of s 198G of the Corporations Act. The primary judge answered that it was not. The Commissioner by a notice of contention challenged that conclusion of the primary judge. It was not necessary for that question to be resolved upon the appeal.

3    The appeal failed for differing reasons. Justices Stewart and Button concluded that the affidavit could not constitute an affidavit for the purposes of s 268-40 of Sch 1 to the Taxation Administration Act 1953 (Cth) (the Act) in that the reference to “you” is to the recipient of the estimate and not to a director who may have a liability based on the estimate. In separate reasons, McElwaine J concluded that it is not open to a director of a company in liquidation to file an affidavit to reduce or revoke an estimate pursuant to s 268-40 of the Act. Although Stewart and Button JJ differed from McElwaine J on that question, that difference did not affect the outcome on the appeal. The substantive argument on the appeal was consumed by these two issues.

4    The Commissioner submits that he should also receive an order for costs, despite his status as an intervener where the general rule is that an intervener neither pays nor receives costs: see the discussion by Debelle J in City of Burnside v Attorney-General of South Australia (1994) 63 SASR 65. Here the intervention of the Commissioner was in our view necessary. At issue was an important question of construction of a statute administered by the Commissioner. The Commissioner is a party to the Supreme Court proceeding. The primary judge and this Court each granted leave to the Commissioner to make oral and written submissions without becoming a party. The appellant did not oppose those orders. The Commissioner agreed to be bound by the outcome of the separate questions in the Supreme Court proceeding. The Commissioner’s arguments were presented efficiently and were of considerable assistance. The Commissioner’s interests in the Supreme Court proceeding are separate and distinct from those of the respondent.

5    For these reasons, the Commissioner should also receive a costs order. We order as follows:

1.    The appellant is to pay the respondents’ and the intervener’s costs of the appeal.

Associate:

Dated:    6 November 2023