Bennelong Medical Pty Ltd v Commissioner of Taxation
[2023] ACTSC 74
SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY
| Case Title: | Bennelong Medical Pty Ltd v Commissioner of Taxation | ||||||||||
| Citation: | [2023] ACTSC 74 | ||||||||||
| Hearing Date: | 11 April 2023 | ||||||||||
| Decision Date: | 11 April 2023 | ||||||||||
| Before: | Mossop J | ||||||||||
| Decision: |
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| Catchwords: | APPEAL – APPEAL FROM REGISTRAR – Decision of | ||||||||||
| Senior Deputy Registrar refusing plaintiff leave to represent company under r 30(4) of the Court Procedures Rules 2006 | |||||||||||
| (ACT) – where plaintiff is the sole director and shareholder of the company – where final relief seeks declaration as to interpretation of Income Tax Assessment Act 1997 (Cth) – relationship between declaration sought and circumstances of case unclear – unnecessary steps taken in proceedings so far – incorrect defendant named – appeal dismissed | |||||||||||
| Legislation Cited: | Court Procedures Rules 2006 (ACT), rr 30(4), 5301(3) Taxation Administration Act 1953 (Cth), s 8AAZLGA Income Tax Assessment Act 1997 (Cth), s 355 | ||||||||||
| Cases Cited: | Manny v David Lardner & Associates (No 2) [2019] ACTSC 86 Quach v Butt [2016] ACTSC 153 Yager v The Queen (1977) 139 CLR 28 | ||||||||||
| Parties: | Bennelong Medical Pty Ltd (Appellant) | ||||||||||
| Commissioner of Taxation (Respondent) | |||||||||||
| Representation: | Counsel | ||||||||||
| Self-represented (Appellant) | |||||||||||
| C Katerelos (Respondent) | |||||||||||
| Solicitors | |||||||||||
| Self-represented (Appellant) | |||||||||||
| Australian Government Solicitor (Respondent) | |||||||||||
| File Number: | SC 1 of 2023 | ||||||||||
| Decision under appeal: |
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| MOSSOP J: | |||||||||||
| Introduction |
1. This is an appeal from a decision of the Senior Deputy Registrar refusing
Michael Van Tan Quach leave under r 30(4)(b) of the Court Procedures Rules 2006
(ACT) to represent the plaintiff Bennelong Medical Pty Ltd. Mr Quach is the sole director
and shareholder of the company.
2. An appeal from the Senior Deputy Registrar is a hearing de novo.
The proceedings
3. The Originating Application seeks the following final relief:
Ruling pursuant to the High Court ruling in the Yager v Queen (1977) 139 CLR 28, 43 and
Quach v Butt [2016] ACTSC 153 at [13],There is, therefore, no legitimate foundation for resorting to the definitions [expense] contained in the [Taxation Administration Act 1953 (Cth)] for the purpose of modifying or qualifying another statutory definition [R&D expenses] contained in [Income Tax Assessment Act 1997 (Cth)] a different Act of Parliament.
4. The grounds of the application simply repeat the above from the reference to Yager v
The Queen (1977) 139 CLR 28 through to the end of the quote. The grounds do not
explain how any question of statutory interpretation arises or what that question is.
5. At the same time as the Originating Application was lodged for filing, an application in
proceeding was filed seeking leave for an officer of the corporation authorised by the
corporation to represent it. Filed with that application in proceeding was an affidavit of
Mr Quach dated 5 January 2023 identifying that he is a director of the plaintiff and
authorising himself to act on behalf of the plaintiff. The affidavit also sought to support
the originating application by saying:
3. The Australian Taxation Office is retaining a R&D Tax Incentive refund under s 8AAZLGA of the Taxation Administration Act 1953 (Cth). A letter, dated 25 July 2022, was sent to the
Plaintiff, nominating Graham Turci as the contact officer (Annexure ‘A’).
4. Mr Graham Turci verifies the R&D and VC incentives expenses for the Australian Taxation Office.
5. Mr Graham Turci was informed that there is no valid authority, ‘jurisdictional fact,’ under
the Taxation Administration Act 1953 (Cth) to verify R&D tax incentive expense claims. In response, Mr Graham Turci stated that he relies on the s 355 of the Income Tax Assessment Act 1997 (Cth) to verify R&D tax incentive claims.
6. Mr Graham Turci was advised in a email (Annexure ‘B’), dated 8 December 2022,
… pursuant to the High Court ruling in the Yager v Queen (1977) 139 CLR 28, 43,
There is, therefore, no legitimate foundation for resorting to the definitions [expense] contained in the [Taxation Administration Act 1953 (Cth)] for the purpose of modifying or qualifying another statutory definition [R & D expenses] contained in [Income Tax Assessment Act 1997 (Cth)] a different Act of Parliament.
6. The letter annexed to the affidavit was a letter dated 25 July 2022 from a
Deputy Commissioner of Taxation headed “We are checking your refund”. The letter
indicated that the refund was being checked. The checking was pursuant to s 8AAZLGA
of the Taxation Administration Act 1953 (Cth) and identified under three different headings
categories of documents which were required to be provided. From those headings it is
apparent that information was sought in relation to a claim of “R&D Salary Expenditure” of
$44,295 and “R&D Other Expenditure” of $631,321.
7. Also annexed to the affidavit was an email from Mr Quach to the contact officer for the
letter, Mr Graham Turci which provided as follows:
Dear Graham,
In your letter dated 25 July 2022 (attached), you stated,
“We are retaining any refund you may be entitled to while we check your claim. We are
allowed to do this under section 8AAZLGA of the Taxation Administration Act 1953
(Cth).”
With respect, you are not allowed [my emphasis] to do this (i.e. ‘retaining any refund’
pursuant to High Court ruling in Yeager the the Queen (1977) 139 CLR 28, 43,
There is, therefore, no legitimate foundation for resorting to the definitions [expense] contained in the [Taxation Administration Act 1953 (Cth)] for the purpose of modifying or qualifying another statutory definition [R & D expenses] contained in [Income Tax Assessment Act 1997 (Cth)] a different Act of Parliament.
I look forward to hearing from you. Thank you so much.
Yours sincerely,
Dr Michael Quach
8. Subsequently on 23 January 2023 an application in proceeding apparently seeking a stay
of some aspect of the verification of expense process was filed but that appears to have
been withdrawn on 17 February 2023.
9. Mr Quach also relied upon an affidavit of 22 February 2023 in which he authorises himself
to act on the part of the plaintiff. The affidavit also annexes a company search indicating
that he is the sole director and shareholder of the company.
10. On 24 March 2023 the Senior Deputy Registrar dismissed Mr Quach’s application for leave
to represent the company. The orders made by the Senior Deputy Registrar were:
1. The application dated 16 January 2023 is dismissed.
2. The applicant to pay the costs of and incidental to the application dated 16 January 2023 as taxed or agreed.
11. The Notice of Appeal was filed on 29 March 2023. Also on that date, an application for a
stay of the orders of the Senior Deputy Registrar was filed. That application was identified
as being pursuant to r 5301(3) of the Court Procedures Rules 2006 (ACT).
12. Mr Quach also relied upon an affidavit of 29 March 2023 annexing the model litigant policy
of the Australian Taxation Office. That document included the following statement:
We are required to act consistently across cases to avoid:
• relying upon technical arguments unless the government’s interests would be prejudiced by not doing so
•
taking advantage of taxpayers who do not have the same resources to pursue a claim.
13. Two points can be made about this history.
14. First, the Originating Application is inadequate in that it does not coherently describe a
claim for final relief. It appears to be a claim for a declaration relating to the determination
of R&D expenses contained in the Income Tax Assessment Act 1997 (Cth). However, that
is not adequately explained in the application itself or in the supporting affidavit and the
relationship between the declaration sought and the circumstances of the case is not set
out in a straightforward manner.
15. Second, the proceedings have involved some apparently unnecessary steps namely the
filing and then discontinuance of an application for a stay of the verification of expenses,
apparently an application for a stay of the underlying matter, and the application for a stay
of the Senior Deputy Registrar’s orders in circumstances where the only operative order
was an order for costs which would never have been enforced prior to the hearing of the
de novo appeal.
16. At the commencement of the hearing of the appeal I made an order removing
“Australian Taxation Office” as the defendant in the proceedings and substituted
“Commissioner of Taxation”. This was done at the request of the Commissioner and
without opposition from Mr Quach.
Decision
17. The approach to be taken in relation to applications under r 30(4) is summarised by
McWilliam AsJ in Manny v David Lardner & Associates (No 2) [2019] ACTSC 86 at
[50]-[52].
18. I accept that given that Mr Quach is the sole director and shareholder of the company, it
is his alter ego and he is authorised to act on its behalf. I do not accept Mr Quach’s
submission that to oppose the application for leave would involve any infringement of the
Commissioner’s obligation as a model litigant. I accept that, at least in some
circumstances, it is open to the court to take into account whether or not a submission
made by a party subject to model litigant obligations is consistent with those obligations.
I accept that the Commissioner has greater resources than the plaintiff. I do not consider that opposing a grant of leave to Mr Quach involves reliance upon a technical argument
that does not affect the government’s interests. It is very clearly in the government’s
interests to have claims brought against it in a superior court clearly articulated and
conducted efficiently. As I will indicate in a moment, in the present case I consider that
there is a significant risk that if leave was granted the present claim would not be clearly
articulated and conducted efficiently. For those reasons I do not consider that there is
merit in Mr Quach’s claim of a breach of the model litigant obligations.
19. In my view the following matters, taken together, indicate that the court should not grant
Mr Quach leave to represent the plaintiff:
(a) Insofar as it is possible to work out from the documents filed to date, the claim is one which raises a question of statutory interpretation. However, the claim
has not been clearly articulated and, as a result, the connection between the
question of statutory interpretation and the facts of the case is not clear.
(b) There will be some legal complexity in relation to the pursuit of such a claim both having regard to the question of statutory interpretation raised but also
having regard to other issues which will or may arise in relation to the jurisdiction
of the court, the question of whether or not any declaration could be appropriate
in the circumstances and matters of procedure more generally.
(c) From the conduct of the case to date it is not apparent that it will be able to be conducted in an orderly fashion without a solicitor. That is illustrated by the
difficulty with the formulation of the claim and the inadequacy of the evidential
material put forward in support of that claim.
(d) There is no evidence that Mr Quach or the plaintiff is unable, because of financial constraints, to engage a solicitor to conduct the case.
(e) It is very likely that if the case is conducted by Mr Quach rather than a solicitor the defendant will be put to substantially greater expense in defending the claim.
(f) It is likely that if the case is conducted by Mr Quach rather than a solicitor greater court resources will be required to be devoted to the matter at the expense of
other litigants in the court list.
20. As a consequence, I reached the same conclusion as that reflected in the orders made
by the Senior Deputy Registrar. As a consequence, the appeal will be dismissed. Costs
of the appeal should follow the event.
| Order | |
| 21. | The order of the Court is: |
1. The appeal is dismissed with costs.
I certify that the preceding twenty-one [21] numbered paragraphs are a true copy of the Reasons for Judgment of his Honour Justice Mossop
Associate:
Date: 1 May 2023
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