Federal Court of Australia

Rusanov v Commissioner of Taxation (No 2) [2025] FCAFC 116

ORDERS

THE COURT ORDERS THAT:

1.    The Administrative Appeals Tribunal be removed as the second respondent in these proceedings.

2.    The application by the appellants for the adjournment of the appeal be dismissed.

3.    The appellants pay the respondent’s costs of and incidental to the adjournment application on a lump sum basis to be fixed by a registrar if not agreed.

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

REASONS FOR JUDGMENT

(REVISED FROM TRANSCRIPT)

LOGAN J:

1    An application for the adjournment of this appeal was listed for hearing at 9.15 am this morning, with the substantive appeal being listed for hearing at 10.15 am. Obviously enough, in the event that the adjournment application were successful, that substantive hearing would necessarily have been adjourned.

2    That listing was made at a time when it was apprehended, as a result of dealings with the registry, that the appellants would appear on their own behalf. With that in mind, arrangements were put in place for the engagement of a Russian-speaking interpreter, if only, so far as the male appellant is concerned, out of an abundance of caution. It is apparent from the course of proceedings which started in the Administrative Appeals Tribunal and progressed into the original jurisdiction of this court by way of an appeal under the then s 44 of the Administrative Appeals Tribunal Act 1975 (Cth) (AAT Act), that the male appellant at least does have some reasonable command of the English language, although is more comfortable in speaking his first language, Russian.

3    However that may be, when the application for adjournment was called on this morning, an appearance for the appellants, or at least the male appellant, was announced by a solicitor, Ms Dabbagh. She informed the court that she had been retained, but yesterday afternoon. In those circumstances, and in the absence of the prior filing of a notice of acting, the court permitted Ms Dabbagh to make submissions upon her giving an undertaking to file forthwith the required notice of acting.

4    Ms Dabbagh repeated the application for adjournment which had been foreshadowed by the appellants to the registry when acting for themselves. The only evidentiary material to which she pointed in support of the adjournment application was the affidavit of the male appellant, Mr Rusanov, filed on 18 July 2025. That affidavit has its argumentative qualities, but in terms of updating a position which had prevailed earlier this year and which had informed the court’s granting an adjournment of the appeal as listed for the March sittings (see Rusanov v Commissioner of Taxation [2025] FCAFC 11), the crucial document in that affidavit is a medical certificate dated 17 July 2025 authored by Dr Sergey Bromberg.

5    No objection was taken to the annexing of that certificate in terms of its evidentiary quality. If nothing else, it appears to me to be admissible as containing statements made in the ordinary course of a business. In that certificate, Dr Bromberg states that:

Mr Rusanov suffers from:

exacerbation of PTSD

Anxiety Depression

Insomnia - difficult to concentrate

Left leg pain post-surgery, exacerbation after a fall,

unstable hypertension; and

drowsy

“not able to concentrate, as taking Valium, Valdoxan and Panadeine Forte”.

6    Dr Bromberg also opines:

His condition has significantly deteriorated over the past two months, which, in my professional opinion, is directly related to the stress of ongoing legal proceedings and the sudden withdrawal of legal representation. In that current psychological state, the patient is not able to adequately participate in legal proceedings without appropriate support.

7    The statements of opinion in that certificate might be contrasted with those expressed in a certificate of 17 January 2025, also authored by Dr Bromberg, and which also forms an annexure to Mr Rusanov’s affidavit of 17 July. The conditions described at that time are alike to those in the certificate of 17 July 2025, but the opinion expressed at that time was:

As a result of these conditions. he is undergoing treatment, taking multiple medications, attending a psychologist, he still has difficulty concentrating and will be unfit to work/concentrate/prepare for court from 17 January 2025 to 17 February 2025 inclusive. (sic)

8    It was that earlier medical certificate which formed part of the evidentiary foundation for the granting of the adjournment earlier this year. At the time when the court granted that adjournment, the court also ordered that a pro bono referral certificates issued. The intent behind that certificate on the evidence came to fruition in that a member of the Bar provided pro bono advice, including some assistance in relation to preparation of documents, to the appellants. In turn, the barrister concerned later withdrew from acting. It is evidently the phenomenon of the provision of that advice and ceasing acting to which reference is made in the medical certificate of 17 July 2025, and for that matter, in the body of Mr Rusanov’s affidavit.

9    Ms Dabbagh was unable to give us precision as to the present whereabouts of either of the appellants. It may or may not be the case, according to a statement from the bar table, that Mr Rusanov is in hospital, but it needs to be stated that there is just no evidence at all of the whereabouts of either of the appellants, save for this statement. It is quite apparent that neither is present in court. So much was acknowledged for them.

10    Whether or not to grant an adjournment is, of course, a matter for the exercise of a judicial discretion. The case is one which has already seen two allocations of time for the hearing of an appeal, with the related commitment of judicial resources to constitute the Full Court for that purpose. The most recent medical certificate makes it plain that the occasion for the stressors has, at its heart, the appeal which the appellants themselves chose to institute, as was their right. Having so done, it behoved, and still behoves, the appellants to prosecute that appeal with due diligence.

11    Neither in January nor in July was the medical evidence to the effect that there was a need for a litigation guardian for the appellants. It seems to me that the evidence does not rise to that point, given that Mr Rusanov, who appears to be the lead appellant, has had the ability to engage with, assimilate and form views about the pro bono legal advice which he received. It would not do to speculate as to what that advice may have been. The point is that Mr Rusanov has had the ability mentioned in terms of engaging, assimilating and forming views about the advice. That, to me, bespeaks someone who does have sufficient mental capacity to conduct litigation. It is just that the litigation is causing stress.

12    The most recent medical certificate gives no indication as to when the condition might resolve, unlike the earlier. The stresses seem to be inherently related to the existence of the litigation. On that premise, the condition described in the certificate of 17 July is indefinitely continuing, unless and until the litigation is resolved. Resolution may or may not yield a different form of stress, but the present stressor is just the litigation.

13    Against this background, it seems to me that an appellant, committed to the prosecution of the appeal, would have acted with much greater dispatch than yesterday in engaging legal representation for the purpose of at least obtaining a second opinion, and further, he would have acted with much greater dispatch in furnishing instructions to provide a factual foundation beyond the certificate of 17 July for the granting of an adjournment. As observed in the course of submissions, Ms Dabbagh was really put in an impossible position. Having been engaged, she was duty-bound to attend, but in so doing necessarily had to put before us that she had not had any sufficient time at all to prepare for the hearing of an appeal, including, if need be, engaging counsel.

14    There are statements in the Federal Court of Australia Act 1976 (Cth), notably found in s 37M, about the overarching purpose of civil litigation, but when all is said and done, it may be doubted, in my respectful view, whether such statutory pronouncements add anything to considerations which would, in any event, intrude in the exercise of the judicial discretion to adjourn or not.

15    The appeal is against the dismissal of an appeal under s 44 of the AAT Act. Necessarily, such an appeal is jurisdictionally only founded on a question of law. The court has, under s 44(7), a limited ability to make factual findings, but it is unlikely in the circumstances of this case, which arose against the background of default assessments under s 167 of the Income Tax Assessment Act 1936 (Cth), that the court would, either in original jurisdiction had the appeal succeeded, much less in the exercise of appellate jurisdiction, embark upon making factual findings.

16    Rather, the outcome, if the appeal were successful, would be to remove the case for hearing in the successor to the Administrative Appeals Tribunal, (the Administrative Review Tribunal). In turn, that would visit upon both the Commissioner and the appellants a hearing afresh in excess of three years after the objection decision and some three years after the initial hearing in the tribunal. Inevitably, with the passage of time, memories can fade. In a case such as this where the onus of proving an assessment excessive fell upon the appellants (see s 14ZZK of the Taxation Administration Act 1953 (Cth)), that lapse of time may be prejudicial.

17    That, in turn, is another reason why it behoved the appellants to confront the need to prosecute their appeal and engage lawyers with sufficient lead time to allow this appeal to proceed to hearing today, or at least to take advice which might inform a considered value judgment to no longer prosecute that appeal.

18    It only comes to this: in my view, the appellants have been allowed a number of indulgences in terms of appeal book preparation. They have filed no submissions, ever, in respect of the substantive merits of the appeal. They have engaged lawyers very late in the piece, allowing no lead time at all for submissions to be made, or advice about merits to be received before the hearing date. All that has occurred against the background of an adjournment earlier granted where the court made plain in the reasons for granting that adjournment that it should not be assumed that any further adjournments would be granted.

19    The appellants have, in my view, had quite sufficient time to prosecute this case to finality. I would therefore refuse the adjournment.

Associate:    

Dated:    28 August 2025

REASONS FOR JUDGMENT

(REVISED FROM TRANSCRIPT)

FEUTRILL J:

20    I agree. I wish only to add that, in my mind, a further factor in support of refusing the application concerns a report that was part of the material upon which the first appellant relied in support of the application dated 15 January 2025 of his then psychologist, Ms Lysychka. That was relied upon by the Court at the time the adjournment was granted earlier in the year, and, at that time, the treating psychologist recommended that the hearing on 12 March 2025 should be postponed for at least one to three months, as at that time the first appellant lacked the mental capacity to conduct legal proceedings.

21    There has not been any update to that report, and that is an additional reason for, in my mind, refusing the application.

Associate:

Dated:    28 August 2025

REASONS FOR JUDGMENT

(REVISED FROM TRANSCRIPT)

WHEATLEY J:

22    Subject to the following, I agree with the reasons given by each of Logan and Feutrill JJ.

23    The additional observation I wish to add is that regarding s 37M of the Federal Court of Australia Act 1976 (Cth) and the exercise of the judicial discretion. In this regard, I refer to the observations of the Full Court in Luck v Chief Executive Officer of Centrelink [2015] FCAFC 75, at [41] to [50], but particularly at [42] where the Full Court observed that:

The court must also determine how the grant or refusal of an adjournment will promote the overarching purpose of the civil practice and procedure provisions governing the exercise of its jurisdiction, here, its appellate jurisdiction, including the objectives in s 37M(2) of the FCA Act.

24    In my view, that does not change the result at all, but provides further support for the refusal of the adjournment sought by the appellants.

Associate:    

Dated:    28 August 2025