Federal Court of Australia

Commissioner of Taxation v Perez [2023] FCA 1221

ORDERS

THE COURT ORDERS THAT:

1.    The cross-claim be dismissed in so far as it seeks compensation or damages.

2.    The amended cross-claim be struck-out.

3.    The cross-claimant be granted leave to file a further amended cross-claim, limited to a claim for orders setting aside the decision of the Tax Practitioners Board on 1 August 2019 and consequential relief.

4.    The cross-claimant pay 60 percent of the cross-respondents’ costs of the interlocutory application, as agreed or assessed.

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

REASONS FOR JUDGMENT

KENNETT J:

introduction

1    In this proceeding, the applicant (the Commissioner) contends that the respondent (Mr Perez), trading as “Grow Fast Consulting”, contravened s 290-50 of Schedule 1 to the Taxation Administration Act 1953 (Cth) by:

(a)    marketing, or encouraging growth of, tax exploitation schemes relating to research and development (R&D) tax incentives; and/or

(b)    engaging in conduct that resulted in other persons marketing or encouraging growth of such schemes.

2    On 15 December 2022 Mr Perez filed a notice of cross-claim. An amended notice was filed on 22 March 2023 (the amended cross-claim). The cross-respondents are the Commissioner, the Tax Practitioners Board (the Board) and five individuals who were employed by the Australian Taxation Office at relevant times. The cross-claim seeks the following orders.

1.     Lost of Income created by malpractise and bias conduct against growfast, by using Subjective creteria to disqualify all customers including all presented in the SOC by the commisioner, and putting the onus the poof on the tax payerbreaching Administration tax practoise laws, by puting guide lines that technically saying nothing seeking more and broad discretional powers which the commisioner does not have with the objective to create financial harm, so a personal benefit can be obtained dishonestly.

2.     Compensation of business total distroyed by bias conduct against growfast Consulting and Misuse of the power of the public office based on malpractise

3.     Re – instated as Tax Agent limited to R&D, as it was before the tax commissioner, tax agent board, and all part involved have the common purpose of take Growfast out of business

4.     Compensation for all assets lost as consequential malpractice and bias conduct from all Cross respondents against Growfast.

(Spelling and capitalisation as in original.)

3    Each of the cross-respondents has filed an interlocutory application seeking:

(a)    an order that the amended cross-claim be struck out pursuant to r 16.21 of the Federal Court Rules 2011 (Cth) (the Rules); and

(b)    summary judgment against Mr Perez on the cross-claim pursuant to r 26.01 of the Rules and/or s 31A(2) of the Federal Court of Australia Act 1976 (Cth) (the Federal Court Act).

4    Rule 16.21 is concerned with the striking out of a document (ie a pleading) that is on the Court’s file, and the focus of attention under this provision is therefore whether the document satisfies requirements imposed by the Rules. If a pleading is struck out, leave is usually (but not always) granted to reframe the pleading: Fair Work Ombudsman v Eastern Colour Pty Ltd [2011] FCA 803; 209 IR 263 at [93]-[94] (Collier J) (Eastern Colour). When discussing strike-out in what follows, I will refer to the pleading in question (ie the amended cross-claim).

5    Rule 26.01 and s 31A(2) are concerned with the dismissal of all or part of a substantive proceeding, and thus involve consideration of the viability of the claims being advanced rather than the manner in which they are expressed. Plainly enough, if part of a proceeding is dismissed there is no occasion to consider whether leave should be granted to reframe the relevant pleading. When discussing summary dismissal, I will refer to the relevant part of the proceeding (the cross-claim) and the claims that it advances, rather than the pleading in which it is embodied.

6    For the reasons that follow, the amended cross-claim should be struck out. The cross-claim should be dismissed in part, with Mr Perez given leave to replead the remaining aspects.

striking out under rule 16.21

7    Rule 16.21 is as follows.

16.21 Application to strike out pleadings

(1)    A party may apply to the Court for an order that all or part of a pleading be struck out on the ground that the pleading:

(a)     contains scandalous material; or

(b)     contains frivolous or vexatious material; or

(c)     is evasive or ambiguous; or

(d)     is likely to cause prejudice, embarrassment or delay in the proceeding; or

(e)     fails to disclose a reasonable cause of action or defence or other case appropriate to the nature of the pleading; or

(f)     is otherwise an abuse of the process of the Court.

(2)     A party may apply for an order that the pleading be removed from the Court file if the pleading contains material of a kind mentioned in paragraph (1)(a), (b) or (c) or is otherwise an abuse of the process of the Court.

8    Paragraphs (c) and (d) must, like the rest of r 16.21(1), be understood in the light of the requirements set out in r 16.02(1) and (2), which are as follows:

16.02 Content of pleadings—general

(1)    A pleading must:

(a)     be divided into consecutively numbered paragraphs, each, as far as practicable, dealing with a separate matter; and

(b)     be as brief as the nature of the case permits; and

(c)     identify the issues that the party wants the Court to resolve; and

(d)     state the material facts on which a party relies that are necessary to give the opposing party fair notice of the case to be made against that party at trial, but not the evidence by which the material facts are to be proved; and

(e)     state the provisions of any statute relied on; and

(f)     state the specific relief sought or claimed.

(2)     A pleading must not:

(a)     contain any scandalous material; or

(b)     contain any frivolous or vexatious material; or

(c)     be evasive or ambiguous; or

(d)     be likely to cause prejudice, embarrassment or delay in the proceeding; or

(e)     fail to disclose a reasonable cause of action or defence or other case appropriate to the nature of the pleading; or

(f)     otherwise be an abuse of the process of the Court.

9    Both provisions must be read in the light of the functions of pleading, which were aptly described as follows in Barclay Mowlem Construction Ltd v Dampier Port Authority [2006] WASC 281; 33 WAR 82 (Martin CJ) at [4]:

… the definition of the issues to be determined in the case and enabling assessment of whether they give rise to an arguable cause of action or defence as the case may be, and apprising the other parties to the proceedings of the case that they have to meet.

10    Thus, a pleading may readily be said to be “evasive or ambiguous” or “embarrassing” if it is “unintelligible, ambiguous, vague or too general, so as to embarrass the opposite party who does not know what is alleged against him” (Eastern Colour at [18]), if it suffers from “narrative prolixity or irrelevancies to the point that it is not a pleading to which the other party can reasonably be expected to plead” (KTC v David [2022] FCAFC 60 at [121] (Wigney J)), or if facts are couched in a way that leaves difficulties or doubts in piecing together what is being referred to (Australian Parking and Revenue Control Pty Ltd v Reino International Pty Ltd [2016] FCA 744 at [19(4)] (Perry J)).

11    The cross-respondents cannot be expected to plead to the amended cross-claim as presently formulated, and I am in no doubt that it should be struck out.

12    It would be idle to attempt to list in detail the many flaws of the amended cross-claim. It is sufficient to describe its organisation and contents at a fairly general level.

13    Although the document says in its first section that Mr Perez “claims” the relief set out at [2] above (which is itself not easy to understand), what follows under the heading “Details of the Amended Notice of Cross Claim” seems to be organised by reference to other orders that are sought. Whether these are additional claims for relief is not clear. The first of these is:

1.)- A declaration that the fist Cross respondent, the Tax Commissioner of Australian, used the power of the public office to obtained information from myself/Growfast Consulting on the following dates:

1.1- Request for information dated 3rd of March 2017

1.2 Request for information dated 21 of November 2017

1.3.- Request of Information dated 30th of August 2019

1.4.- Request of Information dated 23rd of May 2019

Which was used to create harm as the commissioner looking to obtain a personal benefit dishonestly, focus on the following information:

A) List of customers (over 200)

B) List of Referrers or contractors (approx. 12)

…

14    It will be noted that, after the word “dishonestly”, the document seems to move from identifying relief that is sought into propounding the “information” relevant to the claim. There then follow several pages of text which mix together factual allegations, references to evidentiary material, argument and characterisations of conduct (including allegations of dishonesty).

15    Next, on p 11 of the document, there appears:

2.)- A declaration that the second respondent, (Tax Agent Board) acted together with the first respondent to create intentionally financial damages to my business so a personal benefit can be obtained dishonestly by using the power of the public office.

16    This appears to be another order that Mr Perez seeks. Again there follow several pages of text mixing factual allegation, references to evidence, argument and conclusions (including an allegation of dishonesty).

17    Pages 17-18 set out what are described as further “declarations”:

3.) A declaration that the appointment of the Third Respondent as the decision maker in relation to the First Respondent’s investigation of the Applicant was contrary to the rules of natural justice because prior to being appointment as decision maker the forth Respondent had, or could reasonably be considered to have had, already formed adverse views of the Applicant and Grow Fast, including that they were engaging in conduct in breach of promoter penalty laws; Therefore their intention was to create harm using the power of the public office so a personal benefit can be obtained dishonestly. So Damages has be created by abusing the power of the public office.

4.) A declaration that appointment of the Third Respondent to the investigative team carrying out an investigation of the Applicant was contrary to the rules of natural justice because prior to being appointed to the investigative team the First Respondent, had, or could reasonably be considered to have had, already formed adverse views of the Applicant and Grow Fast, including that they were engaging in conduct in breach of promoter penalty laws. So Damages has be created by abusing the power of the public office

5) A declaration that the Fourth, Fifth, Sixth and seven Respondents have failed to observe the rules of natural justice in connection with the First and second Respondent’s investigation of the Applicant and Grow Fast as they have been guilty of bias or alternatively perceived bias as against the Applicant and Grow Fast. With the intention of creating harm using the power of the public office, so they can united in obtaining a benefit dishonestly. So Damages has be created by abusing the power of the public office.

6) All respondents and cross respondent were looking the same objective (Common Purpose) which was to obtained information using the power of the public office to create harm, so they can obtain a personal benefit dishonestly by taking Growfast out of business.

18    These “declarations” are not followed by supporting text. Possibly, they are intended to be read as laying out the foundation for relief claimed earlier in the document. Again, it is not clear. It will be noted that several of these declarations refer to “Damages”. Possibly, these are intended to articulate a claim for damages. The cross-respondents should not be left to work this out.

19    The document fails to meet most if not all of the requirements for a pleading in r 16.02. It is not divided into consecutively numbered paragraphs. It does not identify (at least with any clarity) the issues that Mr Perez wants the Court to resolve. It presents a jumble of facts, mixed with arguments and conclusions, leaving the cross-respondents with the burdensome task of working out which facts are material. It is confusing as to the relief that is sought. It contains allegations of dishonesty that are not properly explained. Thus, it fails to perform the basic functions of a pleading as described above.

20    The document is, for that reason, embarrassing in the sense referred to at [10] above. If the claims it seeks to advance are not dismissed (as to which see below), the document is clearly liable to be, and should be, struck out.

summary dismissal

21    The more substantial question is whether the amended cross-claim should simply be struck out, with Mr Perez permitted to file an amended version that complies with the relevant rules, or the cross-claim should be dismissed.

22    The Court has power, under s 31A(2) of the Federal Court Act, to grant summary judgment to the respondent to a proceeding (or to a part of a proceeding) if is satisfied that the moving party “has no reasonable prospect of successfully prosecuting the proceeding or that part of the proceeding”. Section 31A(3) provides that a proceeding or part of a proceeding does not have to be hopeless, or bound to fail, in order for it to have no reasonable prospect of success.

23    Rule 26.01(1) of the Rules provides:

(1)      A party may apply to the Court for an order that judgment be given against another party because:

(a)      the applicant has no reasonable prospect of successfully prosecuting the proceeding or part of the proceeding; or

(b)      the proceeding is frivolous or vexatious; or

(c)      no reasonable cause of action is disclosed; or

(d)      the proceeding is an abuse of the process of the Court; or

(e)      the respondent has no reasonable prospect of successfully defending the proceeding or part of the proceeding.

24    Although r 26.01(1) literally refers only to the ground on which an application may be made, sub-r (5) refers to an “order made under subrule (1)”. Subrule (1) should therefore be taken as identifying the circumstances in which judgment may be given summarily against an applicant in a proceeding or part of a proceeding (which clearly includes judgment against a cross-claimant on the cross-claim). Those circumstances include that the applicant “has no reasonable prospect of successfully prosecuting the proceeding or part of the proceeding”, which adopts the language of s 31A(2).

25    Rule 26.01 must be read with the provisions for striking out pleadings, referred to above. Where a pleading is simply badly expressed, the remedy will usually be to strike it out and allow the party concerned to re-plead. Whether that party has a reasonable prospect of successfully prosecuting the proceeding must therefore be considered not solely in the light of the defective pleading. In many cases it will be appropriate to allow for the possibility that an amended pleading would explain the claims properly and prospects of success would then become apparent. Thus, defects in pleading are not the end of the matter; it is necessary to try to understand the relief being claimed, the causes of action asserted and the facts relied on before coming to a conclusion as to whether there exists a reasonable prospect of success (or whether a “reasonable cause of action” is disclosed). (The position may be different, of course, if the party concerned has already had opportunities to reformulate the pleading following successful strike-out applications.)

Analysis of the amended cross-claim

26    It is useful to begin with the relief that the amended cross-claim asks the Court to grant. This appears to be:

(a)    compensation for loss of income, destruction of Mr Perez’s business and assets lost (the compensation claim);

(b)    reinstatement as a tax agent (the tax agent claim); and

(c)    (possibly) declaratory relief.

27    No statutory regime is referred to as the basis for the compensation claim. As can be seen from the quotations above, the claim is put on the basis of “malpractice” and “bias conduct”. So far as this pleads any identifiable cause of action, I understand it to be misfeasance in public office. This terminology is not used in the amended cross-claim. However, it appears to allege, in various ways, use of public powers for improper purposes so as to cause damage to Mr Perez. If such claims gave rise to a cause of action sounding in damages, they would do so by way of the tort of misfeasance in public office.

28    Nor does the amended cross-claim articulate the basis on which it is said that the Court could order Mr Perez’s registration as a tax agent to be reinstated. The background to this aspect of the cross-claim is that, on 1 August 2019, the Board made a decision under s 40-5 of the Tax Agents Services Act 2009 (Cth) (the Tax Agents Act) to terminate Mr Perez’s registration as a tax agent on the ground that he ceased to meet one of the “taxpayer registration requirements” (in that he was no longer a “fit and proper person”: s 20-5(1)(a)) (the termination decision). This Court has no power to engage in review of the merits of the termination decision, or to decide that Mr Perez should be registered.

29    The reinstatement claim can be understood as an application for orders, in the Court’s jurisdiction under s 39B(1A)(c) of the Judiciary Act 1903 (Cth) (the Judiciary Act), setting aside the termination decision. Such orders would quash the legal effect of the decision but would not necessarily prevent the Board from considering again, in the exercise of its powers under the Tax Agents Act, whether Mr Perez’s registration should be terminated. Bearing in mind the latitude that is properly allowed to a self-represented litigant, I will treat the claim in this way.

30    I am reinforced in this understanding by the fact that, rather than mounting a case that Mr Perez currently meets the criteria for registration and deserves to be registered, the amended cross-claim limits itself to allegations that the termination decision was infected by actual or apprehended bias and made for improper purposes. These are grounds familiar to administrative lawyers and, it would appear, are the grounds upon which it is sought to be contended that the termination decision should be set aside.

The compensation claim

31    The fundamental difficulty lying in the way of the compensation claim is that Mr Perez has no capacity to sue in relation to it.

32    The evidence shows, and it was not controversial, that Mr Perez was declared bankrupt on 4 December 2019. At the time of hearing of the application he had not been discharged from bankruptcy.

33    Under s 58(1)(a) of the Bankruptcy Act 1966 (Cth) (the Bankruptcy Act), when a person becomes bankrupt, “the property of the bankrupt” vests “forthwith” in the trustee in bankruptcy. “The property of the bankrupt” is defined in s 5 to mean, relevantly:

(i)     the property divisible among the bankrupt’s creditors; and

(ii)     any rights and powers in relation to that property that would have been exercisable by the bankrupt if he or she had not become a bankrupt.

34    “Property” is defined in s 5 as “real or personal property of every description…”.

35    The property “divisible among the bankrupt’s creditors” is identified by s 116 of the Bankruptcy Act. Section 116(1) provides, relevantly, as follows.

(1)      Subject to this Act:

(a)      all property that belonged to, or was vested in, a bankrupt at the commencement of the bankruptcy, or has been acquired or is acquired by him or her, or has devolved or devolves on him or her, after the commencement of the bankruptcy and before his or her discharge; and

(b)      the capacity to exercise, and to take proceedings for exercising all such powers in, over or in respect of property as might have been exercised by the bankrupt for his or her own benefit at the commencement of the bankruptcy or at any time after the commencement of the bankruptcy and before his or her discharge; and

…

is property divisible amongst the creditors of the bankrupt.

36    Section 116(2) carves out exceptions from the operation of sub-s (1). Relevantly, it provides:

(2)      Subsection (1) does not extend to the following property:

…

(g)      any right of the bankrupt to recover damages or compensation:

(i)      for personal injury or wrong done to the bankrupt, the spouse or de facto partner of the bankrupt or a member of the family of the bankrupt; or

(ii)      in respect of the death of the spouse or de facto partner of the bankrupt or a member of the family of the bankrupt;

and any damages or compensation recovered by the bankrupt (whether before or after he or she became a bankrupt) in respect of such an injury or wrong or the death of such a person.

37    Growfast was not at any relevant time a corporate entity; it was a business name that Mr Perez used. Consequently, any claim against one or more of the cross-respondents for misfeasance (or any other tortious conduct) alleged to have caused loss or damage to Growfast’s business was, at the time Mr Perez became bankrupt, a claim maintainable by and vested in him. The claims sought to be advanced in the amended cross-claim are in that category, by reference to when the relevant acts occurred. By operation of ss 58 and 116(1), therefore, unless s 116(2)(g) applies, the claim vested in the trustee when Mr Perez became bankrupt.

38    The claim that Mr Perez seeks to advance, if made out at trial, would be a “right of the bankrupt to recover damages or compensation”. However, the claim does not come within sub-para (i) or (ii) of s 116(2)(g).

39    As to sub-para (ii), this conclusion is clear from the words of the provision. As to sub-para (i), it follows from the statutory context and from authority. The Bankruptcy Act establishes a scheme by which the creditors of a bankrupt person have access to their assets, and the bankrupt person is thereafter freed from liability to those creditors. Section 116(2)(g) reflects an understanding that it is excessively harsh to “give the solace for the hurt to the person or personal feelings of the bankrupt to general creditors” (Berryman v Zurich Australia Ltd [2016] WASC 196 at [62] (Tottle J) (Berryman)). However, there is no reason consistent with the purposes of the Act why that logic should extend to claims which have vested in the bankrupt person in the course of or as a result of their business activities. A distinction is properly to be made between the bankrupt person as a human being who suffers injury or hurt and the bankrupt person as an economic actor.

40    Authority supports this understanding. The right to sue remains with the bankrupt where “the essential cause of action is the personal injury done to the person or feelings of the bankrupt”, but passes to the trustee where “the primary and substantial right is direct pecuniary loss to the property or estate of the bankrupt”: Faulkner v Bluett (1981) 52 FLR 115 at 119 (Lockhart J). The distinction depends on “the substance of the matter rather than the form of the action”, so that the legal basis of the claim is not determinative: Berryman at [67]-[68]. The critical question is “whether the damages or part of them are to be estimated by immediate reference to pain felt by the bankrupt in respect of his mind, body or character and without reference to his rights of property”: Morris v IMF Bentham Limited [2018] FCA 1009 at [71] (Wigney J).

41    The primary and substantial right sought to be vindicated by the compensation claim in the present case is an asserted right to be compensated for direct pecuniary loss to Mr Perez’s business interests; that is, his “property or estate”. The measure of damages would be assessed by reference to the value of the assets and the business that he lost, not (at least principally) pain felt by him in his mind, body or character.

42    The compensation claim therefore does not come within s 116(2)(g) of the Bankruptcy Act. To the extent that there is a viable cause of action, it vested in the trustee of Mr Perez’s bankrupt estate; and the claim is therefore maintainable only by the trustee. The juridical consequence of this conclusion is that Mr Perez does not have a sufficient interest in the subject matter of the claim for his agitation of it to form part of a “matter” in respect of which jurisdiction is, or can be, invested in this Court (see ss 75-77 of the Constitution and Croome v Tasmania (1997) 191 CLR 119 at 126-127. In so far as it seeks to advance the compensation claim, therefore, the amended cross-claim must fail in this Court for want of jurisdiction. It should be dismissed under s 31A of the Federal Court Act and r 26.01(1)(a).

43    In the light of this conclusion, it is not necessary to consider the other grounds on which the cross-respondents submitted that this aspect of the amended cross-claim should be summarily dismissed. Because the document is drafted in such a confusing manner (and clearly requires re-pleading before any aspect of it could go forward), it is far from clear that any purpose is served by a closer analysis attempting to discern whether it contains a viable point. If Mr Perez were not prevented from advancing the compensation claim, I would probably have granted him leave to make at least one further attempt to articulate the claim in a proper manner.

The reinstatement claim

44    As noted above:

(a)    the reinstatement claim is potentially viable only to the extent that it is understood, in substance, as an application for orders setting aside the termination decision on grounds of bias and/or improper purpose; and

(b)    I consider that it should be understood in that way.

45    The first question that arises is whether the reinstatement claim suffers the same fate, pursuant to the Bankruptcy Act, as the compensation claim.

46    It is clear that the reinstatement claim does not involve any “claim for damages or compensation”, and therefore does not engage s 116(2)(g) of the Bankruptcy Act. The question is whether the claim constitutes “property that belonged to, or was vested in” Mr Perez (s 116(1)(a)) or the “capacity to exercise, and to take proceedings for exercising [power] in, over or in respect of property as might have been exercised by [Mr Perez] for [his] own benefit” (s 116(1)(b)).

47    The underlying rights with which the reinstatement claim is concerned are Mr Perez’s right to remain registered as a tax agent under the Tax Agents Act and the statutory rights and privileges attaching to that status. That is because the substance of the claim must necessarily be that the termination decision is affected by jurisdictional error and therefore, in legal terms, a nullity. The relief that would be granted if the claim succeeded (writs of prohibition and/or certiorari, and potentially a declaration of invalidity) would authoritatively establish the legal ineffectiveness of the termination decision, thus confirming the continued existence of the underlying rights which it purported to terminate.

48    These rights (if they exist) might possibly be characterised as “property” for some purposes. However, they are rights conferred by statute on Mr Perez – consequent and conditional upon satisfaction that he met relevant criteria – and not in their nature capable of “vesting” in the trustee in bankruptcy or becoming “divisible” among Mr Perez’s creditors. They are not within the general conception of property set out by Lord Wilberforce in National Provincial Bank Ltd v Ainsworth [1965] AC 1175 at 1247-1248 (a formulation quoted by Justices of the High Court: eg R v Toohey; Ex parte Meneling Station Pty Ltd (1982) 158 CLR 327 at 342 (Mason J); Australian Capital Television Pty Ltd v Commonwealth (1992) 177 CLR 106 at 165 (Brennan J); ICM Agriculture Pty Ltd v Commonwealth [2009] HCA 51; 240 CLR 140 at [197] (Heydon J)), as follows:

Before a right or an interest can be admitted into the category of property, or of a right affecting property, it must be definable, identifiable by third parties, capable in its nature of assumption by third parties, and have some degree of permanence or stability.

(Emphasis added.)

49    In my view, therefore, the underlying rights with which the reinstatement claim is concerned are not part of the “property” that becomes divisible under s 116(1)(a) of the Bankruptcy Act and thus not part of “the property of the bankrupt” that vests under s 58(1). The proposition that a statutory licence or status held by a bankrupt person vests in their trustee and becomes divisible among creditors need only be stated in order to be dismissed.

50    The conclusion reached in the previous paragraph makes it difficult to identify the right being exercised by Mr Perez in bringing the reinstatement claim as either a form of “property” (s 116(1)(a)) or a right to “take proceedings for exercising … powers in, over or in respect of property” (s 116(1)(b)). Two further points should be made here. One is that Mr Perez possesses the “capacity” to “take proceedings” in respect of the termination decision only in the sense that he has standing to seek the relevant public law relief. In theory at least, there could be other persons who also have standing. This is not a right personal to him. Similarly, the relief granted would enforce limits on the statutory power of the Board, and only indirectly vindicate private rights of Mr Perez (cf Health Insurance Commission v Peverill (1994) 179 CLR 226 at 241-243 (Brennan J)). The other point is that the potential forms of relief (writs of prohibition and/or certiorari, declarations and/or injunctions) are discretionary. The right to “take proceedings” therefore does not have a definite content in the sense that a court will necessarily grant relief to vindicate the underlying rights if they are made out. It is different in that way from, for example, a right to take proceedings for damages for breach of contract or negligence.

51    For these reasons, I am not satisfied that the Bankruptcy Act prevents Mr Perez from advancing the reinstatement claim.

52    The content of proposed declarations (4) to (6), set out at [17] above, indicates grounds on which the reinstatement claim might at least potentially be advanced. They foreshadow submissions that the termination decision was vitiated by actual bias or a reasonable apprehension of bias on the part of the Board itself or officers assisting it, and that the decision was made for an improper or extraneous purpose (“the intention of creating harm using the power of the public office, so they can united [sic] in obtaining a benefit dishonestly”). The reference to damages in this context is confusing, since damages clearly are not available as a remedy for the errors here alleged. However, it does not alter the fact that the allegations made in this part of the amended cross-claim would, if made out on the facts, provide a basis upon which the termination decision could be set aside.

53    The cross-respondents have led evidence establishing a course of communications between the Board and Mr Perez, and submit that there is nothing in the material currently before the Court to indicate any bias. This is true; however, the evidence does not negative the existence of bias, or of a basis upon which a fair minded observer might apprehend that the Board had a closed mind. It only establishes that Mr Perez was given a proper opportunity to make submissions and his submissions were considered. Mr Perez has not led any evidence that points persuasively to the existence of bias (or a basis for apprehending bias), or an improper purpose, but the time has not yet come for him to meet the onus of proof that he bears in that regard. I do not think it is possible, at this stage, to hold that the reinstatement claim has no reasonable prospect of success for evidentiary reasons. Indeed, it is difficult to see how evidence from the respondents, in a case where bias is alleged, could disprove the allegation to the standard required for summary dismissal.

54    A further potential hurdle facing the reinstatement claim is that, if it is understood as an application to set aside the termination decision (as I think it must be), it has been brought very late. Complaints concerning the termination decision were first raised in Mr Perez’s original cross-claim, filed in December 2022 (more than three years after the decision), and do not seem to have solidified into any claim for relief in connection with that decision until the amended cross-claim was filed. Long delay in bringing a claim for relief under s 39B of the Judiciary Act is a discretionary consideration that may lead the Court to refuse relief (Daley v Child Support Registrar [2020] FCAFC 161 at [43] (Flick, Perry and Markovic JJ)). However, there is no formal limitation period (other than for claims in respect of migration decisions), and Mr Perez is therefore not in the position of needing to obtain an extension of time in order to advance the claim. The cross-respondents may yet submit that relief in respect of the termination decision should be refused in the exercise of the Court's discretion as a consequence of delay; however, they have not yet done so, and Mr Perez has therefore not been required to adduce evidence explaining the delay.

55    I am therefore not persuaded that the cross-claim should be summarily dismissed in so far as it seeks relief in respect of the termination decision.

the declarations

56    The declarations that are (apparently) sought by the amended cross-claim fall into two categories. Proposed declarations (1) and (2) (set out at [13] and [15] above) would effectively state findings that Mr Perez seeks in order to found the compensation claim. They are ancillary to that claim. Proposed declarations (3) to (5) appear to perform a similar role in relation to the reinstatement claim. They express the basis on which that claim is put.

57    Proposed declarations (1) and (2) arguably do not involve rights that have vested in Mr Perez’s trustee in bankruptcy, as the compensation claim has done. However, they have no relevance or utility apart from that claim. They would not perform the conventional function of declaratory relief, which is to quell a controversy by declaring the rights of the parties, because they only record conclusions about past events. Further, while they seek to characterise those events, apparently in order to form the basis for the compensation claim, they would not (for example) declare that any specific statutory provision or common law obligation was breached. They are thus further removed from the traditional function of declaratory relief than the declarations which are often made in regulatory proceedings recording contraventions of statutory norms (see, eg, Islam v Director-General, Justice and Community Safety Directorate [2022] ACTSC 124 at [62]-[64] and the cases cited there). In circumstances where the compensation claim cannot be advanced by Mr Perez, these proposed declarations would have no foreseeable consequence for the parties and no utility. The cross-claim should therefore be dismissed in so far as it seeks these declarations.

58    Declarations (3) to (6) as currently framed are very unlikely to be made. If Mr Perez achieves overall success on the reinstatement claim, they will be unnecessary; and if he does not, they will most likely be inappropriate. However, some form of declaratory relief may be appropriate as part of the resolution of the reinstatement claim if that claim succeeds. I will therefore not dismiss the amended cross-claim in so far as it seeks declaratory relief in connection with that claim. The current formulation of these directions comprises part of the amended cross-claim that is to be struck out, but Mr Perez will not be prevented from seeking declarations concerning the termination decision as part of a further amended cross-claim.

disposition

59    The cross-claim will be dismissed in so far as it seeks compensation or damages. The amended cross-claim will be struck out. Mr Perez will be granted leave to file a further amended cross-claim, limited to a claim for orders setting aside the termination decision and consequential relief.

60    The cross-claimants also sought their costs of the interlocutory application. As they have achieved substantial but not complete success, I will order that Mr Perez pay 60 percent of their costs as agreed or assessed.

Associate:

Dated:    13 October 2023

SCHEDULE OF PARTIES