Colgate Palmolive Pty Ltd v Commissioner for Taxation

[1998] FCA 523

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NG 578 of 1998

BETWEEN:	COLGATE PALMOLIVE PTY LIMITED APPLICANT
AND:	COMMISSIONER FOR TAXATION RESPONDENT

JUDGE(S):	SACKVILLE J
DATE:	8 MAY 1998
PLACE:	SYDNEY

REASONS FOR JUDGMENT

The issue in these proceedings is whether certain co-operative allowances paid by the applicant to Woolworths Ltd (“Woolworths”) in New South Wales, during the period 1 August 1996 to 31 January 1997, in relation to goods purchased by Woolworths during that period, reduced the price (and therefore the taxable value for sales tax purposes) of the goods.  It is said by the applicant, and Mr Gibb on behalf of the respondent concurs, that the issue in the case is of significance to it and the retail grocery industry generally.  This is apparently because promotional rebate arrangements of the type under consideration have been implemented broadly throughout the retail grocery industry.

On 17 April 1998, I set down the matter for hearing on 16 and 17 June 1998.  Two days have been set aside because the parties’ estimate, based on the advice of counsel, is that the matter will require one to two days of hearing time.

The present application is brought on behalf of the applicant.  It seeks an order vacating the hearing dates.  Alternatively (to use the language of the affidavit of the solicitor for the applicant), “consistent with the case management objectives of the individual docket system...pursuant to which one of the intended benefits is to provide greater efficiency and flexibility in setting dates for hearing”, the applicant requests that the matter be transferred to a Judge for hearing on a date suitable to both parties.

Prior to the directions hearing of 17 April 1998, the parties filed a joint status report.  A covering letter from the solicitor for the respondent gave the following dates which were suitable to both parties:

• 27 July - 31 July 1998;

• 3-10 August 1998;

• 14-21 August 1998;

• 19-30 October 1998.

The status report indicated that the applicant’s counsel was not available at any time prior to 29 July 1998.  I was also told that one of the applicant’s witnesses was not available during the period 15 June 1998 to 19 June 1998.

I ascertained that none of the dates nominated by the parties, before October 1998, was suitable to the Court because of prior listings and other commitments.  I took the view that it was not satisfactory to allocate a hearing date six months hence for a relatively short case that is ready for hearing more or less immediately.  I offered the parties any time during the week of 15 June 1998 and ultimately allocated 16 and 17 June 1998.  I was aware that I had been told that a witness would not be available on that date.  However, I had not been told why the witness was unavailable.  It is very frequently the case that, once a matter is set down, it turns out that a witness whose availability is in doubt is not required for cross-examination or, if required, can attend Court or give evidence through a video-link.  This, indeed, is the situation in the present case.  The applicant’s solicitor’s affidavit indicates that the witness is now available to give evidence on 16 and 17 June 1998, if required.  Indeed, Mr Sullivan on behalf of the applicant puts the case solely on the basis that the applicant wishes to retain its counsel of choice for the purposes of the hearing.  (I should say that Mr Sullivan is not one of the counsel briefed on the applicant’s behalf in the principal proceedings.)

The affidavit of the applicant’s solicitor indicates that the applicant has briefed senior and junior counsel in the matter.  These counsel have specialist expertise in sales tax matters, and considerable experience in representing taxpayers and the Commissioner before the Federal Court in relation to such matters.  The solicitor states that he has briefed counsel with a substantial volume of documents relating to the issues in dispute.  The solicitor claims that it is essential in these matters that a taxpayer be represented in a sales tax appeal by counsel who have specialist expertise and experience in this area of the law.  The solicitor also says that the reason senior counsel is unavailable is because of other Court commitments.  Junior counsel is unavailable on 16 and 17 June 1998 because he is committed to another client for five days commencing 15 June 1998 to prepare for a five day hearing commencing on 22 June 1998.

The objects of the individual docket system include that referred to in the solicitor’s affidavit.  However, they also include ensuring that cases are resolved by the Court as soon as reasonably practicable, having regard to the interests of justice, including of course fairness to the parties.  It is also one of the objectives of the individual docket system to ensure that Court time is utilised effectively and that cases receive consistent management from inception to determination.

My practice, and I have little doubt the practice of other members of the Court, is to take account of the convenience of the parties where that is reasonably practicable.  However, it is not always reasonably practicable to take this course.  In this case, the parties nominated only three weeks over a six month period (that is, the period until late October 1998) which they jointly regarded as convenient for the hearing of the case.  As it happens, none of those dates was or is suitable to the Court.

In these circumstances, I took the view that the case should be listed for hearing at a reasonably early stage, but at a time which gave the applicant ample opportunity to brief fresh counsel if necessary.  I took into account the need to make the most effective use of court time.  If cases ready for hearing are postponed for a significant period, the consequence is often that cases ready for hearing in the ordinary course will have to be postponed because of the need to accommodate the earlier, unheard cases.  There is also the risk that court time will not be utilised effectively if matters ready or soon to be ready for hearing cannot be listed within a reasonable period because the parties find that the available dates do not meet their joint convenience.

The applicant’s solicitor, in the affidavit to which I have referred, expressed the opinion that it is essential that the taxpayer be represented by counsel who have specialist expertise and experience in the area of sales tax law.  I make no comment on that proposition, beyond stating that I do not wish to be taken to accept the proposition that competent and experienced counsel, without substantial experience in sales tax law, are not equipped competently to conduct a case in that area of the law.  Be that as it may, the applicant’s solicitor offers no evidence that attempts have been made to engage other counsel experienced in the area of sales tax law.  Having regard to the availability of expertise at the Bar, there is nothing to indicate, in my view, that the applicant will be significantly disadvantaged in the conduct of its case.

I should add some other comments.  First, that the issue in the case is said to be important to the retail grocery industry generally is a very good reason for ensuring that it is heard and determined swiftly, rather than after a considerable delay in order to meet the convenience of one or both of the parties. 

Secondly, there are difficulties in accepting the proposition that the listing of a case should be determined according to the period counsel has set aside for the preparation of another case, at least where that period is of the dimensions referred to in this case.  I accept, of course, that junior counsel is committed to the period for the preparation to which I have already referred.  However, the logical consequence of the applicant’s position, that it is entitled to a date which meets the convenience of its counsel, is that cases can be listed only at times suitable to counsel, having regard not merely to their Court commitments, but to counsel’s judgment as to the period of time required to prepare for other cases. 

Thirdly, while I do not doubt that the issues in the case are important, there is nothing to suggest that they are of particular complexity.  Mr Sullivan has said that there is a need for counsel involved in the case to have some appreciation of the commercial realities of the relationship between the applicant and Woolworths.  Doubtless that is the case.  But there is nothing to indicate that other counsel briefed in good time for the hearing would not be able to acquire the necessary understanding of the commercial realities.

The applicant has filed three affidavits, two of which are very brief and the third, of eight pages, largely addresses either documentary material or issues that do not appear to give rise to major factual disputes.  I have been told that there will be cross-examination by the Commissioner, and I accept that that will take place.  Nonetheless, the fact that the Commissioner intends to engage in cross-examination of some or all of the applicant’s witnesses does not transform this case into one of particular complexity.  I should also mention that one affidavit has been filed on behalf of the respondent.  However, that deals exclusively with documentary material and is unlikely to require cross-examination of the deponent.

In my opinion, there is nothing to indicate that competent counsel would not be able to present the issues thoroughly and appropriately, having regard to the time available before the hearing.  I accept that there are cases where continuity of counsel has a special significance (and not merely in cases that happen to involve substantial sums of money).  However, this is not one of them.

Fourthly, a practice commonly adopted in the Court is to offer parties, in cases that are ready for hearing, dates that become available at relatively short notice because of settlements or the like.  I would follow this practice in the present case although, judging from the fact that the applicant’s counsel are unavailable for a period of three months, this may not be an opportunity of which it wishes to avail itself.  I should mention, in this connection, that the parties were offered a hearing date on 28 April 1998 but, for understandable reasons, they could not take advantage of that offer.

In the result, I decline to vacate the hearing dates.

I certify that this and the preceding four (4) pages are a true copy of the Reasons for Judgment herein of the Honourable Justice Sackville

Associate:

Dated:             8 May 1998

Counsel for the Applicant:	Mr B Sullivan
Solicitor for the Applicant:	Mallesons Stephen Jaques
Counsel for the Respondent:	Mr S W Gibb
Solicitor for the Respondent:	Australian Government Solicitor
Date of Hearing:	8 May 1998
Date of Judgment:	8 May 1998