FEDERAL COURT OF AUSTRALIA

Featherby v Commissioner of Taxation [2016] FCA 454

ORDERS

THE COURT ORDERS THAT:

1.    The interlocutory application dated 17 February 2016 be dismissed.

2.    The applicant pay the respondent’s costs of the application to be taxed if not agreed.

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

REASONS FOR JUDGMENT

GILMOUR J:

1    The applicant, by interlocutory application dated 17 February 2016, seeks an order to reopen the hearing of certain preliminary questions in this proceeding conducted before me late last year. Judgment was reserved but was due to be delivered in the near future.

2    He seeks to do so in order to make further submissions as to the reach of s 175 of the Income Tax Assessment Act 1936 (Cth) (ITAA36) as that provision affects s 170 of that Act.

3    In particular, he seeks to make further submissions based on the following authorities: Plaintiff S157/2002 v Commonwealth of Australia (2003) 211 CLR 476; Woods v Deputy Commissioner of Taxation [2011] TASSC 68; and Independent Commission against Corruption v Cuneen [2015] HCA 14.

4    The application is opposed by the respondent Commissioner.

Background

5    Orders were made on 9 November 2015 for the trial of preliminary questions upon a statement of agreed facts.

6    Question A in substance was whether, given the terms of s 175 of the ITAA36, the applicant’s complaint based on ss 171 and 170 (if made good) is a jurisdictional error that invalidates the amended assessment as issued.

7    The hearing in relation to the preliminary questions occurred on 22 December 2015. The applicant filed original written submissions extending to 51 pages. He then filed original submissions in relation to the s 171 issue of 22 pages, followed by replacement original and supplementary submissions to the s 171 issue which consisted of 32 pages. Finally, he filed written submissions in reply which were 35 pages in length. Counsel for the applicant also made extensive oral submissions including submissions in reply at the December hearing.

Relevant Principles

8    It is well established that a superior court of justice has full power to rehear or review a case until judgment is drawn up, passed and entered: Texas Company (Australasia) Ltd v Federal Commissioner of Taxation (1940) 63 CLR 382 at 457 per Starke J, cited with approval by the plurality in DJL v Central Authority (2000) 201 CLR 226 at [34].

9    The Full Court in Davis v Insolvency and Trustee Service Australia (No 2) (2011) 190 FCR 437 at 439-440 at [6] stated:

The principles surrounding the Court’s power to review its own judgment before its perfection are clear: “[w]hat must emerge, in order to enliven the exercise of the jurisdiction, is that the Court has apparently proceeded according to some misapprehension of the facts or the relevant law and that this misapprehension cannot be attributed solely to the neglect or default of the party seeking the rehearing.” (Autodesk Inc v Dyason (No 2) (1993) 176 CLR 300 at 303 per Mason CJ). Because of the importance of the public interest in the finality of litigation, it is a jurisdiction “to be exercised with great caution” (at 302). The onus is on the applicant to demonstrate that he or she has not been heard: Autodesk at 302 citing Wentworth v Woollahra Municipal Council (1982) 149 CLR 672 at 684 per Mason ACJ, Wilson and Brennan JJ.

10    In Autodesk Inc v Dyason (No 2) (1993) 176 CLR 300 at 303, Mason CJ also said:

…It must be emphasised that the jurisdiction is not to be exercised for the purpose of re-agitating arguments already considered by the Court; nor is it to be exercised simply because the party seeking a re-hearing has failed to present the argument in all its aspects or as well as it might have been put.

11    This is not an application to re-open in order to adduce further or new evidence. It is made in order to make further submissions.

12    Once a Court has concluded a hearing it will only be in very exceptional circumstances that the Court will later give leave to a party to supplement submissions. So far as procedural fairness requires that a party be given an opportunity to present its case that opportunity is given at the hearing: Eastman v DPP (ACT) (2003) 214 CLR 318 at [29]-[31].

13    Eastman involved a criminal appeal to the High Court. After the hearing of the appeal the appellant withdrew his instruction to senior counsel and sought to advance supplementary submissions. It is a decision, in substance, to the same effect as Autodesk. The conclusion and reasons of Heydon J concurred with by the other members of the Court cited a decision of Mason J, as his Honour then was, in Carr v Finance Corporation of Australia Ltd [No 1] (1981) 147 CLR 246 at 258.

14    I do not regard the fact that the matter before the Court is the trial of preliminary questions materially, as to principle, distinguishes this case from Eastman or Autodesk.

15    Accordingly, I would apply those principles to this application.

Consideration

16    The failure to advance the submissions now sought to be made was solely contributable to the fault of Counsel for the applicant. The applicant was not denied procedural fairness. It would be contrary to the interest of justice to allow the application.

17    I would refuse the application to re-open.

18    Lest I be wrong in resolving the matter on that basis I will consider whether it is otherwise in the interests of justice to permit the hearing to be re-opened. In my opinion, the contrary is the case for the further following reasons.

19    Properly understood, the applicant’s wish to advance submissions by reference to the decision in Plaintiff S157 is not to supplement or reinforce what was put in submissions at the hearing in December. Rather, it is a completely new argument, namely that as the decision of the High Court in Commissioner of Taxation of the Commonwealth of Australia v Futuris Corporation Limited (2008) 237 CLR 146 was not concerned with ITAA36 s 170 and its wider relationship with s 175 that I should now consider that question in light of what was said in Plaintiff S157, concerning the need to reconcile a privative clause provision (s 175) with another provision in the legislation with which it appears to be in conflict (s 170).

20    It is correct to say that Futuris was not concerned with s 170 of the ITAA36. It was not cited for that purpose at the hearing in December, but rather for the proposition that in review proceedings under s 39B of the Judiciary Act 1903 (Cth) relief will be granted by reason of jurisdictional error upon only two available bases to impugn the privative clause protection otherwise afforded by s 175 of the ITAA36 to an assessment, made beyond power, namely in the case of a tentative or provisional assessment, or in a case involving conscious maladministration.

21    In this case, the applicant has always contended that s 175 does not save the amended assessment in question because it was issued beyond power under s 170 due to the operation of s 171. Indeed that it was beyond power was assumed for the purpose of considering Question A. Section 175 was not considered in isolation. It was considered in light of the amended s 170.

22    Accordingly, the interplay between these statutory provisions was at the very heart of Question A.

23    As part of the Court’s consideration it received submissions from both parties as to the decision in Woods.

24    ICAC v Cuneen was referred to by the applicant in his written submissions in reply in the December hearing and was also an authority cited by him in Pt A of his list of authorities at that time. In any event, nothing said in ICAC v Cuneen touches directly on this case beyond its articulation at [57] of orthodox principles of statutory construction.

25    I am satisfied that the applicant has had every opportunity to advance his arguments. It is antithetical to the interests of justice and to the overarching purpose of this Court as contained in s 37M of the Federal Court of Australia Act 1976 (Cth) to permit these matters to be re-agitated in supplementary submissions. I would for these additional reasons refuse the application.

26    The application to reopen the interlocutory hearing of the preliminary questions will be refused with costs.

Associate:

Dated:    3 May 2016