FEDERAL COURT OF AUSTRALIA

Deputy Commissioner of Taxation v Raptis (No 2) [2023] FCA 1683

ORDERS

THE COURT ORDERS THAT:

1.    The freezing order made against the Seventh Respondent on 1 October 2021 (as set out in Annexure G of the orders of Collier J made on that date and varied by the orders of Thawley J made on 21 October 2021) is varied with effect from 14 December 2023 to read as follows:

EXCEPTIONS TO THIS ORDER

10.    This order does not prohibit you from:

(a)     paying your reasonable legal expenses;

(b)     dealing with or disposing of any of your assets in the ordinary course and proper course of your business, including paying business expenses bona fide and property incurred;

(c)     dealing with or disposing of any of the properties (or any part thereof) in a manner expressly agreed to by the applicant in writing; and

(d)     in relation to matters not falling within (a) to (c), dealing with or disposing of any of your assets in discharging obligations bona fide and properly incurred under a contract entered into before this order was made, provided that before doing so you give the applicant, if possible, at least two working days written notice of the particulars of the obligation.

2.    The Applicant notify the Third Respondent of this order in accordance with the orders for service set out in Annexure C of the orders of 1 October 2021, plus any other methods of service known to the Applicant.

3.    The costs of the hearing commenced at 11.30am AEST on 14 December 2023 be reserved.

4.    There be no orders as to costs with respect to the further hearing commencing at 3.30pm AEST on 14 December 2023.

5.    The parties have liberty to apply on 24 hours’ notice.

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    On 1 October 2021, a judge of this Court, upon an ex parte application by Deputy Commissioner of Taxation (Deputy Commissioner), made what might – in a generalised way – be described as freezing orders in respect of Mr James Raptis and various other respondents. Those orders are, to say the least, detailed.

2    One of the respondents, the third respondent, Sevinhand Company Limited (company number 02100771) was the subject of a requirement, under the orders made on 1 October 2021, to be given notice in ways set out in that order. Such notice was given, as attested to in an affidavit made by Mr Thomas Bradley Trotman, filed on 20 October 2021: see [9]. The third respondent has not thereafter – notwithstanding that notice – filed any notice of acting, nor has there been otherwise any involvement whatsoever by or on behalf of that company in the proceedings to date.

3    The orders as made on 1 October 2021 have been varied from time to time. Earlier this week, a further variation particularly effecting the seventh respondent, Rosea Pty Ltd (ACN 119 837 455) was promoted to a registrar for the making of what was said to be a consent order. The registrar had a particular concern as to not only a registrar’s power to make that order, but indeed, whether it was in terms of r 39.11 of the Federal Court Rules 2011 (Cth), one which could actually be described at all as a consent order.

4    The apprehension was that there was no signification of consent by or on behalf of the third respondent. Hence, in terms of that rule, it could not be said that the order was promoted by consent of the parties to the proceeding. That concern was one which, upon it being drawn to my attention by the registrar, as Duty Judge, I shared. I therefore directed the proceeding be listed for hearing, as if the promoted consent were a notice of motion for the variation in terms of the proposed orders of the order of 1 October 2021, as hitherto variant.

5    For their own respective reasons, the Deputy Commissioner, as applicant, and each of the other respondents (save the third respondent) who appeared today, promoted the making of the variation. It was put deliberately on behalf of each of the parties represented that the variations were, firstly, similar to those which had commended themselves earlier in respect of conduct of the eighth respondent, Kiedis Investments Pty Ltd (ACN 062 677 365) and would not materially affect the third respondent.

6    In support of the application, an affidavit of Mr James Raptis was filed by leave in Court. Of that affidavit the Deputy Commissioner took objection to particular parts, in which reference was made to what was described in [21] of that affidavit, as a “non-binding agreement” with the Deputy Commissioner as a sequel to the original freezing orders.

7    The basis of the objection, consistent with a disposition of the Deputy Commissioner not to waive, or be seen to waive, without prejudice privilege was that the references to the “non-binding agreement”, were references to without prejudice discussions, which had had a particular result also reached without prejudice. The affidavit was prepared in circumstances of some urgency, resulting from my indication that I was not prepared to make an order by consent, because I did not consider it covered by the rule mentioned, and required an application in court supported by affidavit.

8    I rather think, that whatever transgression, if any, there has been to without prejudice discussions, was not an intentional subversion by Mr Raptis or those acting for him are of any without prejudice quality. Rather it was just an endeavour to put before me for the purposes of the application, that particular conduct had occurred as a sequel to the freezing orders as varied. Insofar as there are references to non-binding agreement or agreement, I uphold the objection and regard those references as inadmissible. Nonetheless, what I act on is the revelation that there has been a course of conduct engaged in as a sequel to the freezing orders.

9    I was informed by counsel for each of the represented parties that the parties had, in effect, agreed to disagree for quite pragmatic reasons as to whether or not that conduct did or did not fall within the terms of the orders as varied to date. It is noteworthy that there has been no application by the Deputy Commissioner to move the Court for any orders grounded in an alleged transgression of the freezing orders as varied to date.

10    The characterisation of the orders that are sought by application made today is that those orders are sought out of an abundance of caution, again, informed by – and with respect, commendably – pragmatic positions taken by each of the parties – particularly, perhaps, the seventh respondent – so as to ensure that there be no question as to whether conduct is or is not within the terms of orders made to date. That stands very much to the credit of the seventh respondent, and it also stands to the credit of the Deputy Commissioner, in terms of recognising the prudence and pragmatism that attends a variation in the terms sought.

11    I am persuaded by reference to Mr Raptis’ affidavit, insofar as it is admissible, that there has been, at the very least, a spirit of cooperation between respondent companies associated with Mr Raptis and the Deputy Commissioner and for that matter in turn, by the Deputy Commissioner with those companies – in an endeavour to comply with the orders.

12    It makes eminent sense to me to make the variation so as to ensure there be no question that that disposition to cooperation falls not just within the spirit but the letter of the Court’s orders.

13    There is a question as to what to do in relation to the third respondent. One answer would be, given its apparent indifference after having been given notice of the proceedings, to make no order. If only out of an abundance of caution, I rather think it is prudent to require the Deputy Commissioner to give notice of the variation of the orders to the third respondent by the means prescribed in the original order of 1 October 2021 and by such further means – be they postal address or email – as may be apparent to the Deputy Commissioner from information within the Deputy Commissioner’s possession.

14    I put matters that way, taking into account an ability of the Deputy Commissioner under the Tax Administration Act 1953 (Cth), for other revenue law purposes, to use for the purposes of law service information which has come to the Deputy Commissioner’s attention in the ordinary course of the public administration of the tax laws of this country.

15    For these reasons, then, the orders that I make are:

(1)    Firstly, orders in terms of those promoted by earlier short minutes of order to which I have referred, which were promoted as consent orders, together with the requirement for notice to the third respondent just pronounced.

(2)    So, the orders, then, will take up the terms of the consent so-called, which includes, also, the costs reserved and liberty to apply, as well as what I have announced and was pronounced in respect of notice.

[FURTHER REASONS FOR JUDGMENT AFTER THE LUNCHEON ADJOURNMENT]

16    These reasons for judgment supplement those given earlier today in respect of the making of a variation to freezing orders, as hitherto varied, originally made on 1 October 2021. Upon returning to chambers, Mr Marks of King’s Counsel and Ms Mendelson of counsel, who had appeared for all respondents – save the third respondent – became aware of an exchange which had occurred yesterday as between the third respondent and, in effect, those acting on behalf of other respondents. That takes the form of an email on 13 December 2023, which makes reference to today’s hearing, directed to, apparently, someone acting in the interests of the third respondent and a responsive letter from under the hand of a director of the third respondent to a Mr Vara of Lubbock Fine in London.

17    That letter makes reference to the proposed consent order and to a request made of the third respondent to agree to consent to that order. It does, however, contain a proviso as to that consent, which is subject to there being no tax or money demand from Sevinhand, and so on. Counsel for the other respondents, having indicated that there hadn't been communication from the third respondent before lunch, quite properly – upon it coming to their attention on returning to chambers that there had, in fact, been an exchange – requested that the case be relisted as a matter of urgency, so as to fulfill an ethical obligation in terms of a representation earlier made to the Court.

18    I am quite satisfied that the statement earlier made was inadvertent and, indeed, the product of the urgency which had attended the listing of the case before me.

19    The question then becomes whether there is any occasion to revisit the variation order? Neither the Deputy Commissioner nor the respondents, save the third respondent, put that there is any such occasion. In effect, there is a consensual position put, which is that the third respondent has had notice for a very long time ago of the existence of freezing orders and has chosen not to file a notice of acting.

20    Further, insofar as there may, in ways not presently apprehended, be any adverse effect in relation to the third respondent arising from the variation order made earlier today, its interests are protected to the extent that, in accordance with those orders, it will be given notice of their making by the Deputy Commissioner. And further, there is a reservation of liberty to apply, such that, in the event that the third respondent were to apprehend any adverse effect, it would be open subject to the filing of a notice of acting – to make an application for such orders as may be just, varying in ways it put in an interlocutory application, on notice to the other respondents and the Deputy Commissioner, the freezing order as varied up to and including the variation made today.

21    I fully concur with that consensual position. Indeed, quite independently from it being put to me, taking into account the terms of that exchange of correspondence – which has become Exhibit 2 – I am well satisfied that there is presently no occasion to make any variation in respect of the orders pronounced earlier today. These reasons for judgment, then, supplement those earlier given, in respect of the variation orders.

22    As to the costs of the relisting after lunch, the occasion for that listing are, again, of the proceeding was the result of an inadvertent incompleteness of instructions. That might have seen the Deputy Commissioner entitled to an order, however modest that might be, in respect of the costs of the counsel and solicitor attending this afternoon. However, the Deputy Commissioner has – hardly unfairly – put to the Court that there should be no order as to costs.

23    In those circumstances, the appropriate order to make in respect of the further listing of the proceeding today is that there be no order as to costs.

Associate:    

Dated:    20 February 2024

SCHEDULE OF PARTIES