Albrecht v Australian Taxation Office
[2015] WASC 246
•1 JULY 2015
ALBRECHT -v- AUSTRALIAN TAXATION OFFICE [2015] WASC 246
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2015] WASC 246 | |
| Case No: | CIV:2609/2014 | 1 JULY 2015 | |
| Coram: | PRITCHARD J | 1/07/15 | |
| 11 | Judgment Part: | 1 of 1 | |
| Result: | Application granted | ||
| B | |||
| PDF Version |
| Parties: | AMANDA JANE ALBRECHT AUSTRALIAN TAXATION OFFICE |
Catchwords: | Practice and procedure Strike out application by defendant pursuant to O 20 r 19(1) of the Rules of the Supreme Court 1971 (WA) Indorsement to writ and statement of claim disclose no reasonable cause of action Judgment entered for the defendant |
Legislation: | Rules of the Supreme Court 1971 (WA), O 20 r 19(1) Taxation Administration Act 1953 (Cth), sch 1 s 358-5 |
Case References: | Boase v Axis International Management Pty Ltd [No 2] [2012] WASC 334 Glew v Frank Jasper Pty Ltd [2010] WASCA 87 Kimberley Downs Pty Ltd v Western Australia (Unreported, WASC, Library No 6414, 25 August 1986) Kirk v Industrial Relations Commission (NSW) [2010] HCA 1; (2010) 239 CLR 531 Neil v Nott [1994] HCA 23; (1994) 121 ALR 148 Remuneration Planning Corporation Pty Ltd v Commissioner of Taxation [2001] FCA 255 Tobin v Dodd [2004] WASCA 288 Wentworth v Rogers (No 5) (1986) 6 NSWLR 534 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CHAMBERS
- Plaintiff
AND
AUSTRALIAN TAXATION OFFICE
Defendant
Catchwords:
Practice and procedure - Strike out application by defendant pursuant to O 20 r 19(1) of the Rules of the Supreme Court 1971 (WA) - Indorsement to writ and statement of claim disclose no reasonable cause of action - Judgment entered for the defendant
Legislation:
Rules of the Supreme Court 1971 (WA), O 20 r 19(1)
Taxation Administration Act 1953 (Cth), sch 1 s 358-5
Result:
Application granted
Category: B
Representation:
Counsel:
Plaintiff : No appearance
Defendant : Mr M G Hales
Solicitors:
Plaintiff : No appearance
Defendant : Minter Ellison
Case(s) referred to in judgment(s):
Boase v Axis International Management Pty Ltd [No 2] [2012] WASC 334
Glew v Frank Jasper Pty Ltd [2010] WASCA 87
Kimberley Downs Pty Ltd v Western Australia (Unreported, WASC, Library No 6414, 25 August 1986)
Kirk v Industrial Relations Commission (NSW) [2010] HCA 1; (2010) 239 CLR 531
Neil v Nott [1994] HCA 23; (1994) 121 ALR 148
Remuneration Planning Corporation Pty Ltd v Commissioner of Taxation [2001] FCA 255
Tobin v Dodd [2004] WASCA 288
Wentworth v Rogers (No 5) (1986) 6 NSWLR 534
- PRITCHARD J:
(This judgment was delivered extemporaneously on 1 July 2015 and has been edited from the transcript.)
1 I am dealing today with an application made by the defendant to this action (named as the Australian Taxation Office) by a Chamber Summons dated 1 May 2015. The defendant seeks orders that the plaintiff's entire Statement of Claim be struck out, that the action be dismissed, that judgment be entered for the defendant, and that the plaintiff pay the defendant's costs of the proceedings.
2 The ground for the application set out in the Chamber Summons is that the plaintiff's Statement of Claim does not disclose a reasonable cause of action pursuant to O 20 r 19(1)(a) of the Rules of the Supreme Court 1971 (WA) (RSC), as there is no basis for the legal conclusion contended for by the plaintiff, and that the proceedings constitute an abuse of the process of the Court.
3 The plaintiff has not attended the hearing today. For the reasons outlined below, I am satisfied that the plaintiff has had sufficient notice of the Chamber Summons, and of the listed hearing date of today's hearing, and has chosen not to attend.
4 For the reasons which follow, the defendant's application to strike out the plaintiff's Statement of Claim should be granted, because the Statement of Claim discloses no reasonable cause of action. Furthermore, the plaintiff's action should be dismissed and judgment entered for the defendant.
5 These reasons deal with the following matters:
1. Why it is appropriate to hear the application notwithstanding that the plaintiff has not attended the hearing;
2. An overview of the action: the Indorsement on the Writ, and the Statement of Claim;
3. The principles in respect of strike out applications pursuant to O 20 r 19 RSC;
4. Why the Statement of Claim discloses no reasonable cause of action; and
5. Costs.
1. Why it is appropriate to hear the application notwithstanding that the plaintiff has not attended the hearing
6 I am satisfied that the plaintiff has had sufficient notice of the Chamber Summons, and of the listed hearing date and has chosen not to attend today. The plaintiff has received a number of communications from my staff alerting her to the hearing date. She has responded to those communications, which supports the conclusion that she has received those communications and understood their content. The communications to which I refer are as follows.
7 On 15 May 2015 an email was sent by my Associate to the plaintiff, in which the plaintiff was advised of the hearing date today. The plaintiff responded to that email. A second email was sent by my Associate to the plaintiff on 15 May 2015, which repeated that the hearing date would be today, and again the plaintiff responded to that email. On 19 May 2015, a letter was sent by email from my Associate to the plaintiff, which again repeated the fact that the hearing date had been listed for today. The plaintiff also responded to that email.
8 On 25 May 2015, a letter was sent by my Associate to the plaintiff by email, which also mentioned the hearing date of 1 July 2015, and the plaintiff responded to that letter by email. I should note that that letter addressed the plaintiff's indication that she desired to have the hearing adjourned. The plaintiff was advised that she should make an application if she wished to seek the adjournment of today's hearing, but no application has been properly made.
9 On 29 June 2015, my Associate sent a letter to the plaintiff by email, which again mentioned the hearing date today, and the plaintiff responded to that letter by email. The letter from my Associate addressed the plaintiff's expressed desire (in a previous email) to have this hearing adjourned. The plaintiff was advised that she should make an application if she wished to seek the adjournment of today's hearing, but no application has been pursued by the plaintiff either by attending today or otherwise. On 29 June 2015, a second email was sent by my Associate to the plaintiff. Again, that email specified the date and time of the hearing today, and the plaintiff responded to that email.
10 Finally, by email this morning at 8.56 am, the plaintiff contacted my Associate and advised that she did not intend to attend the hearing today for reasons which I need not outline for present purposes. The plaintiff has chosen not to attend today, notwithstanding being aware of the nature of the application which is made by the defendant.
11 In all of those circumstances, I am satisfied that the plaintiff has had adequate notice of the application which is before the Court today, and that it is proper to proceed to hear that application notwithstanding the plaintiff's failure to attend.
2. An overview of the action: the Indorsement on the Writ, and the Statement of Claim
12 By a Writ of Summons filed 24 November 2014, the plaintiff brought this action against the Australian Taxation Office.
13 I digress to note that it is not apparent that the Australian Taxation Office has legal personality such that it can be sued. Were this action to continue, perhaps the proper defendant would be the Commissioner of Taxation, for reasons which will become apparent in a moment. However, as counsel who appeared on behalf of the defendant at the hearing indicated, in an effort to minimise the costs incurred in this proceeding, the defendant's focus at this stage has been on the substance of the cause of action pleaded, rather than on matters such as the correct name of the defendant.
14 The Indorsement to the Writ of Summons filed by the plaintiff indicates that the plaintiff's claim is for
costs and damages on our Family business, due to Public Tax Ruling TR2010 issued by the Australian Taxation Office. The Australian Taxation Office went beyond their powers, which is to administer the Tax Act, by using this Public Ruling to legislate on Division 7A.
…
Claim is for the costs to comply with this invalid public ruling and damages for loss of family business income for the forced sale of our family business because of the effect this ruling has had on our internally generated cash flow.
…
Costs and damages claimed is $20 million.
15 The Indorsement, and the terms of the Indorsement, suggests that what the plaintiff seeks to do by this action is to challenge the validity of Public Tax Ruling TR20101 (Public Ruling), but no relief is sought directly in respect of that Public Ruling.
16 The plaintiff instead seeks an award of damages. There is no indication in the Indorsement to the Writ as to what the cause of action might be which would found a claim to damages on the basis of a Public Ruling which is said to have exceeded the Commissioner's power to make a Public Ruling.
17 The Statement of Claim filed by the plaintiff on 10 April 2015 is no more enlightening as to the cause of action, but it does give some insight into the plaintiff's complaint. The plaintiff's concern appears to be that in the Public Ruling the Commissioner of Taxation has taken a particular view as to the construction and application of div 7A of pt 3 of the Income Tax Assessment Act 1936 (Cth), and that the Commissioner's approach to that legislation in respect of loans, or funds properly treated as loans, by a private company to a family trust, has resulted in a decrease in the income of the plaintiff's family business. That decrease in income has allegedly resulted from steps taken by the plaintiff, or her family business, or a discretionary family trust of which she is a trustee, in compliance with, or having regard to, the content of that Public Ruling.
18 As I have observed, the plaintiff seeks an award of either damages or compensation for a loss of business income until her retirement age, a loss in the value of the business, and various other costs, including the costs of complying with, and seeking to take action against, the Public Ruling.
19 I digress to observe that annexed to the Statement of Claim were a number of documents including a copy of a private tax ruling, apparently obtained by the plaintiff as trustee for her family trust. The private ruling appears to have been provided by, or on behalf of, the Deputy Commissioner of Taxation. On its face, the private ruling appears to have some overlap with the subject matter of the Public Ruling which is the subject of the plaintiff's action, albeit that the private ruling pertains to the affairs of the family trust concerned. However, there is nothing whatsoever in the Statement of Claim, or in the Indorsement to the Writ, that suggests that the plaintiff's action seeks to challenge the validity of that private ruling, or, alternatively, its application in the context of any particular decision by the Commissioner of Taxation with respect to the assessment of taxation liable to be paid by any corporate entity or individual.
20 It suffices to say that there is nothing whatsoever in the Statement of Claim to indicate a basis for the plaintiff's claim to the relief sought. Nevertheless, the clear thrust of the Statement of Claim is the plaintiff's contention that the Australian Taxation Office (or perhaps, more accurately, the Commissioner of Taxation) has gone beyond the powers available to the Commissioner under the relevant legislation to issue a public ruling, so that that Public Ruling was beyond the power of the Commissioner of Taxation.
21 I will return to these issues below.
3. The principles in respect of strike out applications pursuant to O 20 r 19 RSC
22 The principles in respect of a strike out application under O 20 r 19(1)(a) RSC are well established. They were set out by Master Staples in Kimberley Downs Pty Ltd v Western Australia, as follows:2
(1) The rule is intended to apply only to cases which are really not arguable and not to cases where under the previous practice demurrer would have been the proper course.
(2) On the application, not only must all the facts alleged in the statement of claim be accepted as true, but it must be taken for granted that on all other points the pleading is unassailable.
(3) Great care must be exercised to ensure that a plaintiff is not improperly deprived of his opportunity for the trial of his case by the appointed tribunal.
(4) But the rule should not be reserved for those cases where argument is unnecessary to show the futility of the plaintiff's claim. Argument, even extensive argument, may be necessary to demonstrate that the plaintiff's case is so clearly untenable that it cannot possibly succeed.
(5) As a general rule, a plaintiff is entitled … as of right to have his case heard, to have the facts found and then to argue the question of law as it arises before the trial Judge upon the facts as found. It is only in cases in which it can be seen from the outset that, however the facts be found, there is no basis for the legal conclusion contended for by the plaintiff that the pleading should be struck out.
(6) A court at first instance should be careful not to risk stifling the development of the law by summarily rejecting a claim where there is a reasonable possibility that, as the law develops, it will be found that a cause of action will lie.
23 Furthermore, in approaching the application made by the defendant today, I have borne in mind very keenly the fact that the plaintiff is not legally represented, and the difficulties that are often experienced by individuals without any legal training in pursuing litigation in this and other courts. In this respect, I am grateful for the observations of Beech J in Boase v Axis International Management Pty Ltd [No 2],3 in which his Honour observed that, on an application for summary disposal involving a litigant in person, 'the Court should be astute to ensure that, in a poorly expressed or unstructured document setting out the claim, there is no viable cause of action which, with appropriate amendment, could be put into proper form'. Furthermore, a court should be careful to see that the rights of an unrepresented litigant have not been 'obfuscated by their own advocacy'.4 Although made in a slightly different context, Beech J's observations are entirely apt in the present circumstances.
4. Why the Statement of Claim discloses no reasonable cause of action
24 As I have mentioned, the thrust of the Statement of Claim appears to be that the plaintiff contends that the Commissioner of Taxation acted beyond the power available to him to issue the Public Ruling.
25 The Commissioner has legislative power to make public rulings. That power is set out in div 358 in ch 5 of sch 1 to the Taxation Administration Act 1953 (Cth) (TA Act). In particular, under s 358-5(1):
The Commissioner may make a written ruling on the way in which the Commissioner considers a relevant provision applies or would apply to:
(a) entities generally or a class of entities; or
(b) entities generally, or a class of entities, in relation to a class of schemes; or
(c) entities generally, or a class of entities, in relation to a particular scheme.
26 Under s 358-5(2), such a ruling may cover any matter involved in the application of the provision. Section 358-5(3) provides that such a ruling is a public ruling if it is published and states that it is a public ruling. Finally, s 358-5(4) requires the Commissioner to publish a notice of the making of a public ruling in the Gazette. Annexed to the plaintiff's Statement of Claim is a copy of the Public Ruling referred to in the Statement of Claim - namely, Taxation Ruling TR2010/3, which appears to be a public ruling of the kind referred to in the s 358-5 of the TA Act.
27 I turn, then, to the nature of the cause of action which it appears the plaintiff wishes to pursue. As mentioned, the thrust of the Statement of Claim appears to be that the Public Ruling exceeded the power of the Commissioner of Taxation to issue a public ruling. The action as described is reminiscent of an application for judicial review. Applications for the judicial review of decisions of Commonwealth officers may be pursued by seeking the constitutional writs under s 75(5) of the Constitution, or pursuant to s 39B of the Judiciary Act 1903 (Cth). Furthermore, there may be avenues of review available pursuant to the Administrative Decisions (Judicial Review) Act 1977 (Cth), if the decision in question is made under an enactment capable of being reviewed under that Act.5 The point for present purposes is that, if what the plaintiff seeks to do is to pursue a judicial review in respect of the Public Ruling, it is far from clear how this Court would have any jurisdiction to entertain such an action. This Court has a supervisory jurisdiction with respect to the exercise of State executive power.6 That jurisdiction does not extend to a supervisory jurisdiction with respect to decisions of the Commonwealth executive government.
28 Quite apart from the question of this Court's jurisdiction, there is also a substantive difficulty to the extent that the plaintiff seeks a review of the Public Ruling. The nature of that difficulty is apparent from the decision of Gyles J in Remuneration Planning Corporation Pty Ltd v Commissioner of Taxation.7 In that case, his Honour was dealing with an application made by Remuneration Planning Corporation Pty Ltd, in which (amongst other things) it sought a declaration that a public taxation ruling was invalid. The Commissioner of Taxation sought that the proceeding be dismissed for want of jurisdiction, or by virtue of the fact that it did not disclose a reasonable cause of action.
29 Justice Gyles concluded that an application for the review of a public ruling was not an action which constituted a proper justiciable controversy.8 As his Honour observed, the public ruling in that case was general in operation, was not directed to any particular person or persons, and its operation was purely advisory, in the sense that it notified the public of the opinion of the Commissioner upon the question of taxation involved and did not affect rights or liabilities in any sense necessary to found curial intervention. As his Honour observed, although taxation officials may be likely to act in accordance with such a public ruling, and persons may well be assessed for taxation on the basis of an application of the legislation as outlined in such a ruling, there were elaborate provisions for appeal against assessments pursuant to the provisions of the relevant taxation legislation, and those appeals were the appropriate course for relief.
30 Although his Honour's observations in that case applied to public rulings made pursuant to s 14ZAAI of the TA Act, which has since been repealed, the Public Ruling which is the subject of the Statement of Claim appears to have been made pursuant to provisions which are relevantly nearly identical to s 14ZAAI. Accordingly, the same conclusion follows in this case.
31 That, however, is not the end of the matter. As I have already noted, the Indorsement to the Writ, and the Statement of Claim, disclose that the plaintiff in fact seeks to pursue an action for damages arising from the invalidity of the Public Ruling. Insofar as it is alleged that the Public Ruling has resulted in some loss by virtue of the reliance on it, by the plaintiff or entities with which the plaintiff is associated, counsel for the defendant was unable to envisage, and neither have I been able to envisage, any cause of action which would support a claim for damages by the plaintiff in the circumstances outlined in the Statement of Claim.
32 For these reasons, I am persuaded that the defendant has established that this is a case in which the Statement of Claim does not disclose any reasonable cause of action, and that, in the circumstances, it is appropriate not only to strike out the Statement of Claim but to dismiss the action as a whole.
33 I should add that in the course of the hearing today I endeavoured to explore with counsel for the defendant whether, at the heart of the Statement of Claim, there may be some issue in respect of an assessment of taxation made with respect to either the plaintiff, or the business or family trust with which she appears to be associated (which are referred to in the Statement of Claim) which might be properly able to be the subject of an application for review. Had there been such an indication in the Statement of Claim, I would have been inclined to endeavour to explore whether it would have been possible, with amendment to the Statement of Claim, to transfer the action in proper form to the appropriate forum.
34 However, having carefully reviewed the terms of the Statement of Claim, it is apparent that the plaintiff does not seek to have reviewed, or to rely upon, a decision of the Commissioner in respect of an assessment of taxation for which either she, or the business or family trust with which she is associated, might be liable, or to challenge the private tax ruling referred to at [19] above. In those circumstances, exploration of alternative actions that might be able to be pursued by the plaintiff is likely to be a fruitless exercise.
35 Accordingly, the application by the defendant should be granted, and I will make orders accordingly.
5. Costs
36 Finally, counsel for the defendant seeks a costs order against the plaintiff. The usual starting point in respect of awards of costs is that costs should follow the event. I can see nothing in the circumstances of this case which would warrant any departure from that course. Accordingly, the plaintiff should pay the costs of the proceedings to be taxed, if not agreed.
Orders
37 The orders to be made are as follows:
1. The whole of the plaintiff's Statement of Claim be struck out pursuant to O 20 r 19(1) of the Rules of the Supreme Court 1971 (WA) on the grounds that it discloses no reasonable cause of action.
2. The plaintiff's action against the defendant be dismissed.
3. Judgment be entered in favour of the defendant.
4. The plaintiff pay the costs of the proceedings to be taxed if not agreed.
1 It appears that the Public Ruling referred to in the Indorsement is TR2010/3
2Kimberley Downs Pty Ltd v Western Australia (Unreported, WASC, Library No 6414, 25 August 1986) 6 - 7 (citations omitted).
3Boase v Axis International Management Pty Ltd [No 2] [2012] WASC 334 [57], citing Wentworth v Rogers (No 5) (1986) 6 NSWLR 534, 536, 543, and Tobin v Dodd [2004] WASCA 288 [15].
4Boase v Axis International Management Pty Ltd [No 2] [2012] WASC 334 [57], citing Neil v Nott [1994] HCA 23; (1994) 121 ALR 148, 150, and Glew v Frank Jasper Pty Ltd [2010] WASCA 87 [10].
5 Counsel for the defendant was not able to assist as to whether this course of action would be available in the present case.
6Kirk v Industrial Relations Commission (NSW) [2010] HCA 1; (2010) 239 CLR 531.
7Remuneration Planning Corporation Pty Ltd v Commissioner of Taxation [2001] FCA 255.
8Remuneration Planning Corporation Pty Ltd v Commissioner of Taxation [2001] FCA 255 [11] - [13].
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