Commissioner of Taxation of the Commonwealth of Australia v Coombes, David

[1998] FCA 1634

COMMISSIONER OF TAXATION OF THE COMMONWEALTH OF AUSTRALIA v DAVID COOMBES
No. VG 448 of 1998
FED No. 1634/98
Number of pages - 3
Practice and Procedure

IN THE FEDERAL COURT OF AUSTRALIA

VICTORIA DISTRICT REGISTRY

GENERAL DIVISION

HEEREY J

Practice and Procedure - application by solicitors' professional association to intervene - Commissioner of Taxation served notice on solicitor to provide identity of clients to whom certain advice provided - interests of proposed intervener and respondent identical

Income Tax Assessment Act 1936 (Cth) s 264

United States Tobacco Company v Minister of Consumer Affairs (1988) 20 FCR 520 mentioned

Levy v Victoria (1997) 189 CLR 579 discussed

MELBOURNE, 4 December 1998 (hearing and decision)

#DATE 4:12:1998

Appearances

Counsel for the Applicant: Mr G Davies QC with Ms J Davies

Solicitor for the Applicant: Australian Government Solicitor

Counsel for the Respondent: Ms M Groves

Solicitors for the Respondent: Deacons Graham & James

Counsel for Victoria Lawyers RPA Ltd: Mr J I Fajgenbaum QC with Ms H Symon

Solicitor for Victorian Lawyers RPA Ltd: Joseph Barravecchio

THE COURT ORDERS THAT:

1. The application by Victorian Lawyers RPA Ltd to intervene in the proceedings is dismissed.

   2. Victorian Lawyers RPA Ltd pay the applicant's costs.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

HEEREY J

Victorian Lawyers RPA Ltd ("RPA") seeks leave to intervene in this proceeding which has been brought by the Commissioner of Taxation against Mr David Coombes, a solicitor. Jurisdiction to make such an order is not in dispute; counsel accept that it arises under the inherent jurisdiction of the Court. RPA seek to intervene rather than to be admitted as amicus curiae. As to that distinction see United States Tobacco Company v Minister for Consumer Affairs (1988) 20 FCR 520 at 534. The principles as to intervention are discussed by Brennan CJ in Levy v Victoria (1997) 189 CLR 579 at 600 . The solicitors for Mr Coombes supported RPA but did not take an active part in the application.

The proceeding between the Commissioner and Mr Coombes arises out of a notice given under s 264(1)(a) of the Income Tax Assessment Act 1936 (Cth). The Commissioner requires Mr Coombes to furnish certain information and in particular, the names of clients to whom advice has been given relating to employee share plans. As between the Commissioner and Mr Coombes, it is accepted that s 264 does not override legal professional privilege. It is also, as I apprehend it, common ground that the disclosure of the identity of a lawyer's client will usually not breach legal professional privilege. However, there are exceptional cases when there will be a breach and Mr Coombes will seek to argue that the present case is such a one.

Mr Coombes or his firm has provided memoranda of advice in general terms and the Commissioner is already aware of these memoranda. Mr Coombes' argument is that if he were then to disclose the identity of individual clients that would, as it were, provide the last piece in the jigsaw and would have the same practical effect as disclosing legal advice to an individual client.

Counsel for RPA argued that his client has a special role to play in this matter. RPA is one of two recognised professional associations which, since the introduction of the Legal Practice Act 1996 (Vic), is responsible for the regulation of legal practice in the State of Victoria; the other recognised professional association being the Victorian Bar. Although the Act is a substantial one containing a detailed regulatory scheme, I was told that, for the purposes of the present argument, the role of RPA is not in substance different from that previously exercised by the Law Institute of Victoria which in one form or another has regulated the practice of law by solicitors in Victoria since 1859.

In particular, the Legal Practice Act sets out under s 64 general principles of professional conduct, which relevantly state:

"The general principles of professional conduct to be reflected, in the practice rules, are that a legal practitioner or firm, in the course of engaging in legal practice, should -

...

(c) maintain a client's confidences".

It is argued that the present case between the Commissioner and Mr Coombes raises novel and important questions of principle which bear on that obligation.

In declining to grant the leave sought, I am influenced by the following factors. First, as far as I can see, the interests of RPA and Mr Coombes are identical. Both seek the same result, namely that Mr Coombes not be required to provide the names of the clients in question. It was not explained to me how the RPA, if admitted as an intervener, would put the case in any significantly different way from that which would be advanced by Mr Coombes.

It may be that RPA has different arguments, but there has certainly been no suggestion on the present application, that they would be in any way inconsistent with arguments put on behalf of Mr Coombes. To the extent that RPA wish to assist Mr Coombes, there would, of course, be no impediment to them providing such advice and assistance to him for the conduct of his case.

Secondly, it is not suggested, and I have no reason to doubt, that the case on behalf of Mr Coombes will not be put adequately by competent practitioners on his behalf.

Thirdly, it seems to me that this case, while doubtless important and perhaps difficult, is one where the relevant principles are not in doubt. As I have already mentioned, it is accepted that the obligation under s 264 is subject to legal professional privilege and it is further accepted that ordinarily the disclosure of the identity of the client would not breach privilege. What remains is the narrow and special, albeit, important, point as to whether, in the particular circumstances of this case, the disclosure of the fact that the general memorandum has already been disclosed to the Commissioner makes a relevant difference. So this case is an example of the common law system at work; principles are developed by decisions of courts between parties arising out of novel fact situations.

Fourthly, there is the question of further cost. In Levy where leave was given to media proprietors to intervene, although not to industrial associations involving the media, that intervention was conditional on the interveners bearing the cost of the parties occasioned by its intervention on a party and party basis: 189 CLR at 605 note 91. However, in the present case, Senior Counsel on behalf of RPA was not able to indicate to the Court that he had instructions that in the event of his client being joined and Mr Coombes' side succeeding he would not seek costs against the Commissioner.

It is fair to say, of course, that the question of costs can really only be determined in the light of the ultimate result of the case and the way it has been conducted. However, it does seem to be significant for present purposes that at the very least the Commissioner is being put at risk for liability for two sets of costs rather than one, should he fail in the substantive proceeding.

For all the foregoing reasons, I conclude that it is not an appropriate case to allow the intervention sought. It seems to me a very different kind of case from Levy where the High Court was concerned with fundamental constitutional questions which had wide application.

So for those reasons the application is dismissed. There will be an order that RPA pay the Commissioner's costs.