FEDERAL COURT OF AUSTRALIA

Bonnell v Deputy Commissioner of Taxation (No 4) [2008] FCA 990

DAVID NEIL BONNELL v DEPUTY COMMISSIONER OF TAXATION

NSD 1963 of 2006

GRAHAM J

27 JUNE 2008

SYDNEY

THE COURT:

1.                  Orders that the Statement of Claim filed 26 May 2008 be amended by inserting before the words, ‘In making the Remission Decision’, the words, ‘In breach of the matter pleaded in paragraph 36(i)’.

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

REASONS FOR JUDGMENT

1                     An application has been made by senior counsel for the applicant to further amend the Statement of Claim in these proceedings.  The amendment which is sought is an amendment to paragraph 37 of the Amended Statement of Claim filed 26 May 2008. 

2                     This application is made at approximately 11.40 am on the second day of hearing of the respondent’s Notice of Motion filed 6 June 2008 towards the close of submissions by the parties.  The amendment which is sought was foreshadowed yesterday towards the end of the hearing when I expressed some concern that there appeared to be no allegations of non-compliance with what might be called the Hickman provisos, as expressed in paragraph 36 of the Amended Statement of Claim filed 26 May 2008.  At that time, Mr Cashion (transcript p96) indicated that it would have been better if certain words had appeared at the commencement of paragraph 37.  The application which is now made is to add those words.

3                     For the purpose of these reasons for judgment on that application, I will not attempt to restate the history of the matter which I have provided in a judgment earlier today on an application by the applicant to limit the use to which the documents contained in exhibit NMB may be put on the hearing of the present motion.  I will treat that history as having been incorporated in these reasons.

4                     If one turns to the terms of my reasons for judgment of 8 February 2008 and in particular to [124] to [130] inclusive, it is apparent that the applicant, who himself is a solicitor, was being given ‘one last chance’ to get his pleadings right in respect of the case which he desired to make: the seeking of relief under s 39B of the Judiciary Act 1903 (Cth) in relation to the decision of the Commissioner said to have been taken by the Commissioner in exercise of his discretion under s 227(3) of the Income Tax Assessment Act 1936 (Cth) not to remit the whole or any part of the additional tax payable by the applicant by way of penalty under s 226K of that Act.

5                     Given the protracted history of the litigation associated with the Notice of Amended Assessment, I would not have been disposed to allow the amendment now sought on the basis that the applicant had had numerous opportunities to plead his case in appropriate terms and that there was a need to, at some stage, have finality in litigation in the interests of justice and in the interests of the community at large.  The amendment that is sought is that in front of the words ‘In making the Remission Decision’ appearing at the commencement of paragraph 37 of the Amended Statement of Claim filed 26 May 2008, the following additional words should be inserted:

‘In breach of each of the matters pleaded in paragraph 36(i), (ii) and (iii) of paragraph 36,’

6                     Senior counsel for the respondent has indicated that he would not object to an amendment which allowed the insertion of these words, namely ‘In breach of the matter pleaded in paragraph 36(i)’. 

7                     In the light of the concession made by senior counsel for the respondent, I feel constrained to allow the amendment to the extent of the concession.  But for the concession, I would not have allowed the amendment at all and I would certainly not allow the amendment to include the reference to the other provisions and the assertion that they also had been breached. 

8                     As I said in my reasons for judgment of 8 February 2008 at [121]:

‘… an allegation that a decision taken by the Commissioner in exercise of his discretion under s 227(3) of the Assessment Act not to remit the whole or any part of the additional tax payable by the applicant by way of penalty under s 226K of the Assessment Act was taken for ‘an improper purpose’ may be sustained.  On my understanding it is this second allegation which underpins the case the applicant now wishes to bring.’

9                     One might have thought that the words sought to be included in the pleading at this stage would have been included when the Amended Statement of Claim was filed.  In any event, they weren’t. 

10                  In the light of the concession which has been made by senior counsel for the respondent I will allow the amendment to the extent conceded and no more. 

Associate:

Dated:         1 July 2008