Beneficial Finance Corporation Ltd v Commissioner of Taxation

[1992] FCA 155

IN THE FEDERAL COURT OF AUSTRALIA ) VICTORIAN DISTRICT REGISTRY )

GENERAL DIVISION 1 No. VG 57 of 1992

Re :  BENEFICIAL FINANCE
CORPORATION LTD.

Applicant

And :  THE COMMISSIONER OF
TAXATION OF THE
COMMONWEALTH OF AUSTRALIA

Firstnamed Respondent

And :  DR. HARRY IMBER

r , Secondnamed Respondent

Coram:	Olney J
Place:	Melbourne

Date : 2 March 1992

EX TEMPORE JUDGMENT

Beneficial Finance Corporation Limited (the applicant) seeks an order pursuant to Order 27 Rule 4A of the Federal Court Rules for the payment by the firstnamed respondent (the Commissioner) of costs said to have been incurred in complying with 2 subpoenae issued at the request of the Commissioner in the course of application VG 97 of 1990 in this Court, being a matter in which Harry Imber was the applicant and the Commissioner was the respondent. The history of those proceedings is well known to the parties and need not be

proceedings was that an accommodation was reached between the	canvassed in detail. The net result of the earlier
parties, a fact that has nothing to do with the present application.
There is evidence before me from the applicant's officer, M r Parkinson (which I accept) that in response to the Commissioner's two subpoenae, a considerable amount of work was undertaken to meet the extensive demands made in the subpoenae.
The Commissioner questions whether all of the work actually performed by the applicant was performed in answer to the subpoenae; but it is really begging the question to raise that issue. The only question which I need to address at this stage, given that it is common cause that the applicant is "a person named in a subpoena (who) is not a party to the proceeding", is whether the applicant has incurred substantial expense or loss in complying with the subpoena. If that fact be established the Court may order the party who requested the issue of the subpoena to pay an amount to compensate for such
complying with the subpoena. expense or loss as was reasonably incurred or lost in
I am satisfied that the applicant did incur substantial expense or loss in complying with subpoenae issued at the Commissioner's request. It appears that in and around the same time the applicant also incurred other expense, probably substantial, in undertaking matters not associated with complying with the subpoenae; but that is quite irrelevant. I think it is appropriate that there should be a recognition of the entitlement of the applicant to be compensated for such of its expense and loss as is contemplated by Order 27, Rule
4A, but it is also appropriate that there be a proper
opportunity for the Commissioner to test any claims made in respect of costs incurred or losses sustained to ensure that they are within the scope of the rule.
I accept that the taxation process which is contemplated, that is, by a taxing officer of the Court, involves an assessment of the money value to be placed upon the work that is properly contained within the bill and that the question of whether or not any particular item might be beyond the scope of the rule, that is, was not incurred in complying with a subpoena, is a matter for the Court. I propose, therefore, to make the following orders.
I order that the Commissioner pay to the applicant in addition
to any amount which the applicant is entitled to be paid
pursuant to Order 27, Rule 3, or the Second Schedule of the Federal Court Rules, an amount to compensate it for such
expense or loss as it reasonably incurred or lost in complying with the subpoenae issued at the request of the Commissioner on 14 March 1991 and 16 April 1991.
I further order that the amount of the costs so payable shall be fixed by the taxing officer and taxed on a solicitor and client basis.
Upon the applicant filing its bill of costs for taxation the Commissioner shall have liberty to apply within one month thereafter to seek any orders that may be appropriate to facilitate the proper taxation of the bill.
Those orders will set in train the necessary steps to achieve the ends that have been talked about here today.
I turn now to the question of the costs of this application. The applicant has obviously been successful. It has had to come to the Court to obtain recognition of its entitlement in terms of the rules of the Court. The Commissioner has however drawn attention to the fact, through cross-examination of Mr Parkinson, that the Commissioner's solicitor at an earlier time (indeed on more than one previous occasion) requested, without response, details of the costs that are being claimed and seeks to resist a costs order on that basis. It seems to me that there are two competing considerations here. One is whether it was appropriate for the applicant to comply with
Commissioner would in the end accept responsibility for the the Commissioner's requests without knowing that the
payment of the reasonable costs involved in complying with the subpoenae and, second, whether the applicant could have avoided the need for coming to Court by supplying the information as requested.
On balance, I have come to the conclusion, particularly in view of the response that the Commissioner made to this application, that the applicant was entitled to obtain an order for its costs before undertaking the costly and time- consuming task of preparing a detailed bill. The evidence is that a draft bill has been prepared but it does not include all of the claim and that the applicant is unwilling to go to further expense without some assurance that its costs will be covered.
I think in the circumstances of this case, in view of the magnitude of the work involved, the applicant has not acted unreasonably in taking the approach that it has taken and in the circumstances the costs of this application, including any reserved costs, should be taxed and paid by the Commissioner.

I certify that this and the preceding 4 pages is a true copy of the Ex Tempore Judgment of the Honourable Mr. Justice Olney

Heard:	2 March 1992
Place:	Melbourne
Judqment :	2 March 1992
Counsel for the applicants:	Mr. A. Chernov QC and Mr. P. Cosgrave
Solicitors for the applicant:	Gadens Ridgeway

Counsel for the firstnamed respondent: Mr. P. Sest

Solicitor for the firstnamed

respondent:  Australian Government
Solicitor

The secondnamed respondent did not appear on the application.