293 Nicholson Road Pty Ltd as trustee for the Whitby Trust v Administrative Appeals Tribunal - [2017] WASC 321

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION: 293 NICHOLSON ROAD PTY LTD as trustee for the Whitby Trust -v- ADMINISTRATIVE APPEALS TRIBUNAL [2017] WASC 321

CORAM: KENNETH MARTIN J

HEARD: 18 OCTOBER 2017

DELIVERED : 18 OCTOBER 2017

PUBLISHED : 9 NOVEMBER 2017

FILE NO/S: CIV 2742 of 2017

BETWEEN: 293 NICHOLSON ROAD PTY LTD as trustee for the Whitby Trust
First plaintiff
CHRISTINE CARATTI
Second plaintiff
NATALIE CARATTI
Third plaintiff
ALISHA BETH CARATTI
Fourth plaintiff
NICOLE CARATTI
Fifth plaintiff
AND
ADMINISTRATIVE APPEALS TRIBUNAL
First defendant
COMMISSIONER OF TAXATION OF THE COMMONWEALTH
Second defendant

Catchwords:

Practice and procedure - Cross-vesting - Federal jurisdiction - Injunction - Special federal matter - Other proceedings pending in Supreme Court

Legislation:

Jurisdiction of Courts (Cross-vesting) Act 1987 (Cth)
Jurisdiction of Courts (Cross-vesting) Act 1987 (WA)

Result:

Application refused
Proceeding transferred to Federal Court of Australia

Category: B

Representation:

Counsel:

First plaintiff                  :     Mr M Robertson QC & Mr J W Fickling
Second plaintiff             :     Mr M Robertson QC & Mr J W Fickling
Third plaintiff                :     Mr M Robertson QC & Mr J W Fickling
Fourth plaintiff               :     Mr M Robertson QC & Mr J W Fickling
Fifth plaintiff                  :     Mr M Robertson QC & Mr J W Fickling
First defendant              :     Submitting appearance
Second defendant          :     Mr N Williams SC, Ms C H Thompson & Mr M O'Meara

Solicitors:

First plaintiff                  :     Zafra Legal
Second plaintiff             :     Zafra Legal
Third plaintiff                :     Zafra Legal
Fourth plaintiff               :     Zafra Legal
Fifth plaintiff                  :     Zafra Legal
First defendant              :     Australian Government Solicitor
Second defendant          :     Australian Government Solicitor

Case(s) referred to in judgment(s):

Anglo American Investments Pty Ltd v Deputy Commissioner of Taxation (2017) 347 ALR 134; [2017] NSWCA 17
Platypus Leasing Inc v The Commissioner of Taxation [2005] NSWCA 399
Reidy v Trustee of the Christian Brothers (1994) 12 WAR 583
The Trustee for the Whitby Trust v Commissioner of Taxation [2017] AATA
Whitby Land Company Pty Ltd as Trustee for the Whitby Trust v Caratti [2017] WASC 131
KENNETH MARTIN J:
(This judgment was delivered extemporaneously on 18 October 2017 and has been edited from the transcript).

These are my reasons on the application of the applicants by their chambers summons of 13 October 2017, seeking injunctive relief as identified and on the basis of an undertaking as to damages provided by the sole director (Mr Allen Caratti) of the first applicant (trustee), 293 Nicholson Road Pty Ltd, received today.
The orders sought are the subject of the applicants' memorandum of proposed orders, filed 18 October 2017 seeking that:
(1)The applicants' applications for review before the first respondent (namely, the Administrative Appeals Tribunal (AAT)) and allocated file numbers 6108 ‑ 6110 of 2016 and 6124 ‑ 6127 of 2016, seeking a merits review of the second respondent's objection decisions under s 14ZY in pt IVC of the Taxation Administration Act 1953 (Cth) (TAA) be stayed, pending further order of this court.
(2)alternatively, the decision of the AAT of 27 September 2017 be varied so that the administrative review proceedings in the AAT be stayed until further order of this court, per s 16(2) of the Administrative Decisions (Judicial Review) Act 1977 (Cth) (ADJR Act).

Background

The present action commenced in this court by a writ of summons issued by the applicants against the two named respondents, on 13 October 2017.
The writ displays a rather unique indorsement of claim that resembles more a written submission. It displays a section headed 'Grounds of Review' (page 3 of the indorsement) setting out the jurisdiction this court is said to exercise upon the present application.
I also refer, from within that lengthy indorsement to the writ, to a section headed s 6(3) (Cross-vesting) Act (par 34). Under the subheading 'Application', it is said:
On the grounds stated herein, any accompanying affidavits filed in this matter and any other document prescribed by the Supreme Court Rules, the applicants seek an order that the Supreme Court of Western Australia maintain jurisdiction of the claims for relief set out herein.
Paragraph 40 of the indorsement to the writ, under the heading 'Section 118 Constitution of the Commonwealth‑Injunction', and subheading 'Relief', reads:
On the grounds stated herein, any accompanying affidavits filed in this matter or any other document prescribed by the Supreme Court Rules, the applicants seek an injunction against the (relevantly, AAT) from continuing the administrative proceedings until the further order of the court.
The interlocutory relief sought is then identified under par 43 and further particularised by a submission from par 44 and following.
The indorsement to the writ (and as specifically mentioned in the applicants' chamber summons of 13 October 2017 at pars 1, 2 and 3 thereof) states that interim injunctions are sought until this court's determination, respectively, of matters as identified under pars 40, 52 and 58 of that indorsement. Paragraph 40 displays arguments advanced under s 118 of the Commonwealth of Australia Constitution Act (the Constitution) (the full faith and credit provision) (as outlined above). Paragraph 52 of the indorsement invokes s 75(v) of the Constitution, by s 39B of the Judiciary Act 1903 (Cth), and s 4 of Jurisdiction of Courts(Cross-vesting) Act 1987 (Cth) (Commonwealth (Cross-vesting) Act). Paragraph 58 of the indorsement to the applicants' writ invokes reference to s 5 of the ADJR Act and again to s 4 of the Commonwealth (Cross‑vesting) Act.
In my experience, this is a wholly unique proceeding pursued in this court. Clearly, the present application is not brought in the exercise of any state jurisdiction I hold as a justice of the Supreme Court of Western Australia.
Rather, the present application is made pursuant to jurisdiction that is conferred on this court by s 4(1) of the Commonwealth (Cross-vesting) Act. That legislation of the Commonwealth vests in State superior courts the jurisdiction of the Federal Court of Australia. I note s 4(1)(a) of the Commonwealth (Cross-vesting) Act makes reference to the jurisdiction of the Federal Court with respect to a civil matter, and then to a conferral of that federal jurisdiction upon the Supreme Court of a State, thereby investing the State court with cross‑vested federal jurisdiction in respect to that matter.
I will digress at this point to note some recent observations by Payne JA, delivering the reasons, in effect, of all the members of the New South Wales Court of Appeal in Anglo American Investments Pty Ltd v Deputy Commissioner of Taxation (2017) 347 ALR 134; [2017] NSWCA 17, on 15 February 2017. Payne JA's reasons, with respect, are a contemporary compilation of the relevant statutory provisions bearing upon the present position, commencing from [20] of those reasons.
Paragraphs [74] and [75] of Payne JA's reasons conveniently summarise the proper cross‑vested jurisdiction, I accept I hold today, for the purposes of evaluating the present application, that being the jurisdiction of the Federal Court of Australia.
At [74] Payne JA said:
Section 9(1) of the ADJR Act has the effect that a State court has no jurisdiction under s 39(2) of the Judiciary Act to grant certiorari or make a declaration in relation to the making of a taxation assessment under the 1936 Act.
His Honour was referring, of course, to the Income Tax Assessment Act 1936 (Cth).
Payne JA continued at [75], and this is pertinent to my cross‑vested jurisdiction today (he was referring to the New South Wales Supreme Court, but his observations would apply equally to this court):
This court does, however, have jurisdiction to grant the remedies available to the Federal Court under s 39B (His Honour referring to the Judiciary Act) by reason of s 4 of the Jurisdiction of Courts (Cross‑vesting) Act 1987. As explained by this court in Hopkins v Governor‑General of Australia [2013] NSWCA 365 [24] the Cross‑vesting Act grant of jurisdiction prevails over the restriction of jurisdiction in s 9 of the ADJR Act.
His Honour continued his observations in pars 76 and 77, which I do note but will not read. That is the basis upon which all counsel have proceeded for today's application.
So it is accepted that I am today exercising federal jurisdiction. But this is as well, jurisdiction that is otherwise enjoyed by the Federal Court of Australia, over a 'special federal matter', as that term is defined by s 3(1) of the Commonwealth (Cross-vesting) Act. [See definition of 'special federal matter' under subparagraph (c) as regards matters arising under the ADJR Act and also, subparagraph (e) in relation to a matter that is within the original jurisdiction of the Federal Court by virtue of s 39B of the Judiciary Act 1903, being a matter in respect of which the Supreme Court of a State would not, apart from the Commonwealth (Cross‑vesting) Act, have jurisdiction.]
From the analysis conducted in the Anglo decision, the Supreme Court of Western Australia would not have held any jurisdiction to hear the present application ‑ but for a conferral of federal jurisdiction as a consequence of s 4 of the Commonwealth (Cross‑vesting) Act, operating in conjunction with s 9(a) of the counterpart Western Australian cross‑vesting legislation, Jurisdiction of Courts (Cross‑vesting) Act 1987 (WA). The local provision authorises me to exercise that jurisdiction: see Reidy v Trustee of the Christian Brothers (1994) 12 WAR 583, 586 (Anderson J).
Special considerations arise where a State court has a special federal matter. That takes me essentially to s 6 of the Commonwealth (Cross‑vesting) Act. Relevantly the operative sections are s 6(1), through to s 6(9) which I set out below:
6Special federal matters: general rules
(1)If:
(a)a matter for determination in a proceeding that is pending in the Supreme Court of a State or Territory is a special federal matter; and
(b)the court does not make an order under subsection (3) in respect of the matter;
the court must transfer the proceeding in accordance with this section to the Federal Court or a court mentioned in paragraph (2)(b).
Note: This section has effect subject to section 6A (Special federal matters: Commonwealth authorities or officers acting under the laws of States).
(1A) However, the court must only transfer so much of the proceeding as is, in the opinion of the court, within the jurisdiction (including the accrued jurisdiction) of the Federal Court, or the court mentioned in paragraph (2)(b), as the case may be.
(2)If the court orders that a proceeding or part of a proceeding be transferred, the proceeding or part of the proceeding must be transferred:
(a)if the matter for determination in the proceeding is a matter mentioned in paragraph (a), (b), (c) or (e) of the definition of special federal matter in subsection 3(1) ‑ to the Federal Court; or
(b)if the matter for determination in the proceeding is a matter mentioned in paragraph (ab) of that definition ‑ to whichever of the Family Court, the Family Court of Western Australia or the Supreme Court of the Northern Territory, in the opinion of the court, is appropriate in the circumstances.
(3)The Supreme Court may order that the proceeding be determined by that court if it is satisfied that there are special reasons for doing so in the particular circumstances of the proceeding other than reasons relevant to the convenience of the parties.
(4)Before making an order under subsection (3), the court must be satisfied that:
(a)a written notice specifying the nature of the special federal matter has been given to the Attorney-General of the Commonwealth and the Attorney-General of the State or Territory where the proceeding is pending; and
(b)a reasonable time has elapsed since the giving of the notice for the Attorneys-General to consider whether submissions to the court should be made in relation to the proceeding.
(5)For the purposes of subsection (4), the court:
(a)may adjourn the proceeding for such time as the court thinks necessary and may make such order as to costs in relation to an adjournment as it thinks fit; and
(b)may direct a party to the proceeding to give a notice in accordance with that subsection.
(6)In considering whether there are special reasons for the purposes of subsection (3), the court must:
(a)have regard to the general rule that special federal matters should be heard by the Federal Court or a court mentioned in paragraph (2)(b), whichever is appropriate in the particular case; and
(b)take into account any submission made in relation to the proceeding by an Attorney-General mentioned in subsection (4).
(7)The Attorney-General may authorise the payment by the Commonwealth to a party of an amount in respect of costs arising out of the adjournment of a proceeding under this section, under a corresponding provision of a law of a State or under this section and under such a provision.
(8)Nothing in this section prevents the court granting urgent relief of an interlocutory nature if it is in the interests of justice to do so.
(9)Where, through inadvertence, the Supreme Court of a State or Territory determines a proceeding of the kind mentioned in subsection (1) without:
(a)the court making an order under subsection (3) that the proceeding be determined by that court; or
(b)a notice mentioned in subsection (4) being given;
nothing in this section invalidates the decision of that court. (emphasis added)
Hence, it can be seen that s 6(1) renders it plain enough that unless a special federal matter falls within subsection (3) of s 6 this court, if exercising federal jurisdiction in the special federal matter, 'must' transfer the proceeding to the Federal Court, or to a court mentioned at par 2(b).
Where a State court contemplates keeping a special federal matter, then by s 6(3), then there must be 'special reasons' for it to do that, arising in the particular circumstances of the proceeding. And the special reasons must be reasons other than reasons of convenience to the parties.
Sections 6(4) and 6(5) provide further in terms of requiring notifications to both the Commonwealth and State Attorney‑General even before a State court could make an order under s 6(3) on a basis that there were special reasons for that court keeping the special federal matter in the State court, rather than transferring it to the Federal Court.
Nevertheless, it is the case as under s 78B(5) of the Judiciary Act, that s 6(8) of the Commonwealth (Cross‑vesting) Act provides that nothing will prevent a court granting urgent relief of an interlocutory nature, if it is in the interests of justice to do so.
Hence, s 6(8) is the urgency provision invoked today by the applicants in pursuing their interlocutory relief as they say is now necessary to effectively restrain, by injunction, the AAT of the Commonwealth of Australia from proceeding to conduct a pending review application brought in that tribunal by the same applicants. The AAT has fixed that review hearing to be heard and determined, commencing Monday next for three days, from 23 October to Wednesday 25 October 2017.

The arguments

Beyond what is found in a lengthy indorsement of claim to the writ, I also hold the applicants' written outline of submissions of 16 October 2017. I also hold the second respondent's written submissions of 17 October 2017 filed in opposition to the grant of any interlocutory relief.
The basis for suggested urgency by the applicants is, as I have explained, the looming three‑day review hearing by the AAT next week.
I note that there has been an earlier application made directly to the AAT by these applicants, effectively, asking the AAT to voluntarily stay its hand to not proceed with the substantive review hearing in which the applicants are, effectively, the same applicants as upon this application.
The AAT has refused that stay application. That was determined by O'Loughlin DP on 29 September 2017: see The Trustee for the Whitby Trust v Commissioner of Taxation [2017] AATA. (The learned deputy president's refusal reasons are before me via Mr Marzec's affidavit affirmed 16 October 2017.)
The applicants, under Mr Marzec's affidavit, have also provided a transcript of the argument before the deputy president of 19 September 2017.
The AAT declined to voluntarily stay the review hearings listed for next week.
It was put for the applicants, on arguments made today, that there is demonstrable error in the articulated reasons of the AAT in refusing to stay, found across 11 paragraphs of the learned deputy president's decision of 29 September 2017.
The basis for injunctive relief as now sought by the applicants is tied to their argument concerning the existence of pending litigation they have commenced earlier in the Supreme Court of Western Australia and which is case managed by Allanson J. In civil action CIV 2880 of 2016, an application brought by, essentially, the same applicants invoking a trustee's right to seek directions from a court under s 92 of the Trustees Act 1962 (WA).
Section 92 enables this court to give directions, if sought, to trustees concerning the administration of trust estates or a trustee's allied responsibilities.
The application for directions under s 92 is brought to this court by the applicants. They have in that proceeding made the Commissioner a 10th defendant to that action for directions. But I was also told the applicants also seek further declaratory relief in that proceeding as to the identification of the correct person(s) entitled to trust income or trust distributions.
Initially, the Commissioner as 10th defendant filed only a conditional appearance by O 12 of Rules of the Supreme Court 1971 (WA) and otherwise challenged the court's jurisdiction. That challenge of the Commissioner to jurisdiction was the subject of Allanson J's reasons in Whitby Land Company Pty Ltd as Trustee for the Whitby Trust v Caratti [2017] WASC 131, delivered on 12 May 2017. His Honour rejected the challenge. But axiomatically his Honour has not yet considered any aspects of the merits of that pending action.
I am told that the interlocutory decision of Allanson J as to jurisdiction is the subject of an application by the Commissioner for leave to appeal which is pending to the Court of Appeal of this State. But that leave to appeal application has not yet been listed for a hearing.
Before O'Loughlin DP in the AAT, some information was put, as it was again to me, to the effect that no date has yet been fixed for the hearing of the Commissioner's leave to appeal application, that would usually be heard in conjunction with the substantive hearing of the appeal, once fixed. Presently, it looks that an appellate hearing would appear to be unlikely ‑ until at least a time perhaps towards the middle of 2018.
Some further developments are pending before Allanson J who, effectively, has been the case manager of that s 92 Trustees Act litigation from inception. I am told that the application seeks not only directions to assist the trustee (under the powers of a court of equity to provide guidance to trustees) but the applicants also pursue their declaratory relief as well to have the Commissioner of Taxation bound by a decision, if the Commissioner remains a 10th defendant.
I am told that on 7 November 2017, Allanson J has returnable before him for determination, as I understand, an application by the Commissioner to dismiss, as hopelessly unarguable and an abuse of process the proceedings, pursuant to O 16 of the rules of this court.

There has now been filed in the action pending before Allanson J in this court a lengthy statement of claim of 27 July 2017. This is before me as DSR12 to the affidavit of Mr Romano sworn 13 October 2017.
The law in relation to the conclusiveness in all courts of income tax assessments which have been issued by the Commissioner is well known. In Platypus Leasing Inc v The Commissioner of Taxation [2005] NSWCA 399, Handley JA observed at [2]:
The Supreme Courts of the States have undoubted jurisdiction to grant declaratory relief against the Commissioner of Taxation where this is appropriate and an assessment has not been made. The jurisdiction being exercised is Federal because the Commissioner is a person suing or being sued on behalf of the Commonwealth for the purposes of s 75(iii) of the Constitution.
And at [3]:
The position changes once an assessment has been made. If declaratory relief is granted against the Commissioner before an assessment is made the declaration, unless set aside on appeal, would be binding on the Commissioner as a res judicata. An assessment inconsistent with the declaration would be liable to be set aside on appeal on that ground, and the declaration, as a res judicata, would also be binding on the Federal Court and the High Court.
His Honour continued [4]:
Where the assessment is issued before declaratory relief is granted in the Supreme Court the position is radically different. The Commissioner was not bound by any res judicata when the assessment was made, and was free to act in accordance with his own views. The assessment will be valid, and can only be challenged on an appeal or application for review in accordance with the provisions of the Tax Administration Act.
I also note the further observations, at [9] ‑ [10] of those reasons.

Evaluation

The reasons of O'Loughlin DP dealt with the applicants' application to the AAT seeking a voluntary stay ‑ in order to let the pending action in this court before Allanson J unfold to a conclusion. But that event may be some time away. It must be observed that the action in this court, on my assessment, is in its infancy.
There is also, as I have noted, the Commissioner's pending summary judgment dismissal application to be dealt with on 7 November 2017.
In action CIV 2880 of 2016 there is now the statement of claim pleading I have mentioned ‑ but there is also the pending application for leave to appeal to the Court of Appeal. A substantive outcome in that proceeding looks to be a long way off. By my assessment, it will be some time before it is likely that this court might deliver a result in terms of any outcome by way of directions to a trustee of the Whitby Trust, vis-à-vis trust distributions to potential trust beneficiaries, as to which the directions and declaratory relief are sought.
The unfolding chronology of events is important. It is noted, at [3] from the learned AAT deputy president's reasons, that income tax objections against the Commissioner's income tax assessments were issued on 6 February 2015 and 21 December 2015. Objections were made by the trustee (at the time) of the Whitby Trust, and by members of the Caratti family as beneficiaries who had been subjected to income tax assessments by the Commissioner.
On 9 September 2016 and then on 23 September 2016, decisions were issued by the Commissioner of Taxation, effectively, rejecting all objections which had been filed during 2015.
It was not until after the Commissioner's refusal decisions against those objections (the last being at 23 September 2016), that the Supreme Court of Western Australia proceedings commenced as CIV 2880 of 2016, on 31 October 2016 by the applicants. They remain, as I have indicated, in their infancy.
In the course of rejecting the stay application made earlier to the AAT for effectively a voluntarily stay, the learned AAT deputy president made certain observations, particularly under par 7. The learned deputy president said, in part, at [7]:
It is neither necessary nor desirable to have these matters addressed by a court as a prelude to a consideration of the part IVC dispute. If a tribunal considers these matters and makes an error in its assessment of the state of equitable or contractual rights and entitlements appeal avenues exist. Multiplicity of litigious and quasi-litigious events involving the same subject matter are to be avoided. And, in any event, the Supreme Court proceedings could not dispose of the part IVC issues currently before the tribunal, only the tribunal can do that.
The learned deputy president rendered further observations at [8]. They were criticised today by senior counsel for the applicants as being either wrong or as being irrelevant considerations.
The applicants' submissions as to errors made in the AAT are advanced in a context of it now being put to this court, in effect, that either under the full faith and credit provisions of s 118 of the Constitution, or via the Federal Court (whose cross vested jurisdiction I presently exercise), either under s 39B of the Judiciary Act or by the ADJR Act, that the AAT's refusal to stay its hand is seriously wrong. It is argued that faith and credit must require the AAT to effectively stay the pending review hearing until the proceedings presently pending in this court are resolved to finality. I must respectfully disagree with that proposition.
There is a basal difficulty I hold with the applicants' submission underlying the application made today (in an exercise of federal jurisdiction, in effect, as the Federal Court). The problem is that what is pending to be heard next Monday before AAT (which the AAT has declined to stay) is an administrative review hearing which has been initiated at the behest of these applicants. It stands in some direct contrast to curial proceedings pending in this court as CIV 2880 of 2016 (before Allanson J). The two processes in different places deal with completely distinct issues and subject matters. One is administrative in character, whilst the other is not.
The pending AAT review application is an administrative review scenario, instituted at the behest of the applicants, by the trustee and members of the Caratti family as potential beneficiaries vis-à-vis the Trust and the trust income distributions.
In the administrative federal tribunal process the AAT is effectively being asked to exercise statutory powers as a tribunal to review afresh what were the objection refusal decisions as made by the Commissioner of Taxation in 2016 ‑ in rejecting objections raised by the applicants against tax assessments issued either to the trustee or to members of Caratti family. That is an entirely administrative review process pending in the AAT. It is a non‑curial process in its implementation.
Had there been some earlier declaration issued out of this court, then for the reasons as were explained by Handley JA in the Platypus decision, that event could have carried some broader significance flowing through to the Commissioner. But manifestly on the presenting facts before me today, that is not the position I am dealing with. Nothing yet has happened of relevance within this court concerning the pending AAT review. A court has yet to issue a declaration of any relevant kind bearing upon the process unfolding before the AAT. What the applicants have asked the AAT to do, and which they now, in effect, again ask me to do, (effectively as the Federal Court) is to temporarily stop the implementation of an administrative process in the AAT - pending a final outcome of the proceedings in this court. This is novel.
The pending proceedings before this court as CIV 2880 of 2016 before Allanson J, as I have indicated, remain in their infancy. They look to have a very long way to go. And they might potentially fall over before any final outcome is reached, for many possible reasons. And I would factor into assessing the pending overall position in this court the unresolved application for leave to appeal not yet before the Court of Appeal.
Even if the pending proceedings in this court were to reach a culmination by a determination that becomes the subject of final declarations, that would still, on my assessment, be an insufficient basis to defer the AAT review hearing ‑ as the learned deputy president of the AAT has already recognised. It could not bear upon a distinct tax objection review scenario pending before the AAT as an administrative tribunal.
Depending upon where the proceedings in this court ultimately end up, there may be a theoretical potential for one or other Whitby Trust beneficiaries who may in the meantime have paid out money on some or all of a tax assessment, to later seek a recovery or a contribution from other beneficiary members of the Caratti family, or to seek indemnity from the trustee or as against trust assets. However, today, none of that speculation has anything to do with the applicants as initiated review in the AAT pending from next Monday.
Two more things need only be said. First, it lies fully within the power of the applicants themselves today to end any potential conflict they might see arising as between their initiated administrative review proceedings in the AAT with the curial proceeding they have also begun out of this court, if they so choose. If they wish to retain the perceived benefit from a de novo review in the AAT of the Commissioner's rejections of their objections to their income tax assessments, that is the choice they make. An exercise of a right of review in the AAT carries with it certain potential outcomes.
The applicants' contention that I will not accept as seriously arguable today for the purposes of a grant of interlocutory relief (qua the Federal Court of Australia) is that there is a sufficiently arguable basis to suggest any relevant error by the AAT in refusing the applicants' request to the AAT to voluntarily stay its hand ‑ in order to allow their initiated litigation pending in this court to unfold to an outcome across an uncertain timeframe. The litigation in this court is distant in its potential relationship to the income tax issues which are the subject of the administrative proceedings before the AAT. No authority was put to me to support the halting of review proceedings before the tribunal, pending the awaiting of an outcome by unrelated litigation. The matter has been argued out today entirely as a matter of principle. Evaluated on that same basis, there is insufficient arguable merit to support the interlocutory injunctive relief now sought.
Second, (again, acting as a de facto Federal Court by a cross-vested exercise of federal jurisdiction) I remain troubled as to the end character of the applicants' cause(s) of action needed to support the underlying final relief as sought. That end relief as articulated seems to vary somewhat, between what is seen on the indorsement to the writ, compared to what was articulated today by senior counsel for the applicants - which was effectively some temporary stay sufficient to allow a result to substantively unfold in the litigation in the Supreme Court of Western Australia. I am not satisfied there is as presently shown any arguable cause of action viably held by these applicants at present to support any grant of urgent relief today.
Those reasons essentially lead me to my conclusion that the interlocutory relief sought today, should not be granted.
Moreover, if there is to be a challenge to a decision of the AAT via mechanisms under federal jurisdiction through the ADJR Act or via the Federal Court's powers by s 39B of the Judiciary Act, then that challenge should be properly pursued in the Federal Court, rather than in this court. The Federal Court of Australia is the natural (federal) forum to pursue challenges concerning decisions of the AAT, either in terms of the AAT refusing to grant a voluntary stay, as evaluated by the learned deputy president, or in relation to any aspects of the pending AAT review hearing that is due to start on Monday. What has been raised so far clearly falls under the rubric of being a 'special federal matter'. By s 6 of the Commonwealth (Cross-vesting) Act it is made explicit where such matters should be determined, namely in the Federal Court of Australia.
The current action commenced out of this court must then, under s 6(1) of the Commonwealth (Cross‑vesting) Act, as a special federal matter, be transferred from this court to the Federal Court of Australia. I see no basis to suggest that there is any 'special reason' to retain the action in this court, potentially via s 6(3) that might bear upon not taking that step. The Federal Court of Australia presents as the natural and proper forum. That is clearly articulated by s 6(1) towards special federal matters.
I will, in the circumstances, not only dismiss the present urgent application for injunctive relief, but I will also issue a further order transferring this action from this court to the Federal Court of Australia, by s 6(1) of the Commonwealth (Cross‑vesting) Act.
In all the circumstances, the second respondent should also have its costs on the usual basis. The applicants should pay the second respondent's costs of this unsuccessful application, to be taxed, if not agreed. However, I am not persuaded in all the circumstances that a higher level of indemnity costs order should be made against them.