Consolidated Press Holdings Ltd v Deputy Commissioner of Taxation

[1995] FCA 1164

IN THE FEDERAL COURT OF AUSTRALIA  )
  )
NEW SOUTH WALES DISTRICT REGISTRY  )  Nos NG543 & 757 of 1995
  )
GENERAL DIVISION                  )

BETWEEN:CONSOLIDATED PRESS HOLDINGS LIMITED

First Applicant

CPH PROPERTY LIMITED

Second Applicant

MURRAY LEISURE GROUP LIMITED

Third Applicant

KERRY FRANCIS BULLMORE PACKER

Fourth Applicant

CONSOLIDATED CUSTODIANS INTERNATIONAL LIMITED as TRUSTEE FOR THE K2 SETTLEMENT

Fifth Applicant

CONSOLIDATED CUSTODIANS INTERNATIONAL LIMITED as TRUSTEE FOR THE K3 SETTLEMENT

Sixth Applicant

CONSOLIDATED CUSTODIANS INTERNATIONAL LIMITED as TRUSTEE FOR THE K3 SETTLEMENT

Seventh Applicant

AND:DEPUTY COMMISSIONER OF TAXATION

Respondent

CORAM:    HILL J
PLACE:    SYDNEY
DATED:    29 NOVEMBER 1995

REASONS FOR JUDGMENT

Consolidated Press Holdings Limited ("Consolidated Press") has commenced two proceedings in this Court.  The parties are now in agreement that the two proceedings are now redundant and it is agreed that each should be dismissed.  The outstanding question is who should bear the costs of them.  The factual background is relatively simple.

On 14 July 1995 a Deputy Commissioner of Taxation determined, pursuant to s206 of the Income Tax Assessment Act 1936 (Cth) ("the Act"), to grant to Consolidated Press and other related companies, applicants to these proceedings, an extension of time for payment of various tax assessments until sixty days after formal notification of a decision of the determination of objections to these assessments which had been lodged. The Deputy Commissioner also refused applications made under s207 of the Act.

The decision under s207 was objected to because it was said, amongst other things, that the Deputy Commissioner had not taken into account relevant information that had been forwarded by the various applicants in connection with the application. In a letter dated 14 July 1995, in which these requests were dealt with, addressed to Mr Cherry, an adviser to Consolidated Press, the Deputy Commissioner referred to litigation which had taken place between the parties before Lockhart J and which is now the subject of a reported judgment.

That litigation concerned a purported reference of certain financial information to an external accountant which was ultimately successfully challenged by Consolidated Press. The original application was subsequently amended to delete reference to the decisions under s207, but to retain the challenge against the s206 decision. In the particulars attached to the amended application it is said to be evident from the terms of the letter of 14 July that the Deputy Commissioner's decision did not take into account relevant considerations, being submissions and materials put forward in letters dated 13 January 1995 and 24 February 1995, respectively.

I have not seen these documents. In part it seems that there is material which is outstanding which the Commissioner has requested Mr Cherry to supply and there may have been some confusion brought about by a suggestion that there should be signed confidentiality agreements, a suggestion which arose out of the litigation before Lockhart J. Be that as it may, in September 1995 the Deputy Commissioner determined to revoke the decision under s207 and to substitute for that decision an extension of time as an interim measure only until 30 September 1995.

This was done, so I am told from the bar table, to enable the Deputy Commissioner to consider in greater detail material to be supplied by Consolidated Press.  This decision of 8 September 1995 was challenged in proceedings number NG757 of 1995 on the grounds that the Commissioner lacked the power to revoke a decision where the period of time was sixty days from the date of determination to objection and to substitute for it a lesser period, namely something around twenty-two days from the date of the decision.
         The magnitude of the assessments, said to be in the order of $100 million, no doubt is a relevant matter.

Ultimately, the Deputy Commissioner, while not conceding that she was revoking the decision made by her on 8 September 1995, extended pursuant to s207 the time for payment of the assessments until sixty days from notification of the decision on the termination of the objections. The end result is that the parties are substantially back to where they were before the litigation commenced save that, as Mr Griffiths, counsel for the applicants submits, he no longer has a ground for challenging the last determination in the series.

I must say I have some difficulty in seeing in an ordinary case, that it would be likely that the Commissioner would determine to extend the time for payment of the tax for any period significantly longer than sixty days from the date of determining the objection.  Until such time as the merits are decided, where an objection has been lodged, it is difficult to imagine that the Commissioner should lock himself in to a determination that the tax not be made payable.

If, for example, the objection were disallowed, that would presumably be because the Commissioner has formed the view the tax was payable.  In those circumstances it would obviously be a rare case where the Commissioner might determine a lengthier period.  This is not to say that there is not a case where it would be appropriate for a longer extension to be granted, as was applied for here, pending determinations of ultimate appeals.  But ordinarily, an extension of that kind would be better dealt with after the merits have been decided by the Commissioner; that is to say, after the objection has been determined.  It always remains open for the Commissioner in an appropriate case to grant a further extension of time after the sixty days period has expired.

The question still remains as to what should be done about the costs.  Counsel for the applicant submits that his client should be entitled to the costs of both proceedings.  The representative of the Commissioner argues that each party should pay its own costs.  It is difficult without evidence to reach any view as to what the outcome of each of the proceedings would have been.  I must say, however, that the determination of a period of less than thirty days to pay tax of some $100 million does seem to be a determination that might fall within the category of unreasonable determinations.

In saying this I appreciate that it was said to be an interim determination only so that the Deputy Commissioner perhaps envisaged an extension at a later time. The problem with that is that the Act does not make provision directly for interim determinations, it only makes provision for determinations. While, no doubt, the Commissioner may make from time to time fresh determinations, each of these would be a determination to be looked at having regard to all the circumstances, rather than an interim determination.

On the other hand I am conscious of the fact that at the end of the day the parties are back precisely to where they were, notwithstanding the submission made by Mr Griffiths that his client no longer has a right of action.  It seems to me in the circumstances that the applicants have been substantially successful in matter number NG757 of 1995 and should be entitled to the costs of that.  However, I would make no order of costs in respect of matter number NG543 of 1995 as it seems to me that the most likely result of that would be that the parties would be back to where they were as in fact they are now.

So, in these circumstances, I make the following orders.

(1)In matter number NG543 of 1995 the application is dismissed with no order as to costs.

(2)In matter number NG757 of 1995 the matter is dismissed and the respondent to pay the applicants' costs.

I certify that this and the
preceding five (5) pages

are a true copy of the Reasons
for Judgment herein of his Honour
Justice Hill.

Associate:

Date:  22 February 1996

Counsel and Solicitors       J Griffiths instructed by

for Applicant:              Gilbert & Tobin

Solicitors for Respondent:    Australian Government Solicitor

Date of Hearing:            29 November 1995

Date Judgment Delivered:     29 November 1995