Deputy Com of Tax v Ford

[2001] HCATrans 68

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Brisbane  No B1 of 2001

B e t w e e n -

DEPUTY COMMISSIONER OF TAXATION

Applicant

and

TREVOR ANTHONY FORD

Respondent

Application for removal pursuant to section 40 of the Judiciary Act 1903

CALLINAN J

(In Chambers)

TRANSCRIPT OF PROCEEDINGS

AT BRISBANE ON WEDNESDAY, 21 MARCH, 2001, AT 11.27 AM

Copyright in the High Court of Australia

MR R.G. ORR, QC:   If the Court pleases, I appear for the Attorney‑General of the Commonwealth.  (instructed by the Australian Government Solicitor)

MR C.D. COULSEN:   For the Deputy Commissioner, your Honour.  (instructed by the Australian Government Solicitor)

HIS HONOUR:   I certify that I have been informed by the solicitor for the first respondent that the first respondent does not wish to appear in this application.  Do you know anything about that?

MR COULSEN:   I do not know anything about it, your Honour.

HIS HONOUR:   All right.  Mr Orr - - -

MR ORR:   We have had a notice of motion seeking removal of these proceedings into the High Court.  That notice of motion is dated 20 December 2000.  It is supported by an affidavit of Anna Katherine Lukeman which was affirmed on 22 December 2000.  I read that affidavit.

HIS HONOUR:   You say you have a right to have the matter – is there a right to have the matter - - -

MR ORR:   Yes, there is, your Honour, under section 40 of the Judiciary Act. These proceedings which were in the District Court arose – a matter under the Constitution and because of that the Attorney‑General for the Commonwealth has a right to have the proceedings removed to the High Court. There is also a draft case stated which we have filed on 19 March 2001.

HIS HONOUR:   Mr Coulsen, you appear for - - -?

MR COULSEN:   The Deputy Commissioner, your Honour.

HIS HONOUR:   Mr Orr, you appear for the Attorney‑General?

MR ORR:   That is true, your Honour.

HIS HONOUR:   Mr Ford, do we know whether he is likely to appear or what is - - -

MR ORR:   I assumed he was the person who had given the message that he did not seek to be heard on this.

HIS HONOUR:   Yes, but is it likely that he is going to turn up?

MR COULSEN:   I simply cannot answer that, your Honour.

HIS HONOUR:   He has filed a defence in the District Court, is that right?

MR ORR:   Yes, your Honour

MR COULSEN:   I think that is so, your Honour.

HIS HONOUR:   At what stage are those proceedings at? 

MR COULSEN:   The District Court proceedings  ‑ ‑ ‑

HIS HONOUR:   I will tell you why I am asking.  Although you may have a right to have the matter referred, it would be very unsatisfactory if it were referred and there were no contradictor, in the High Court.

MR ORR:   That is true, your Honour, but - - -

HIS HONOUR:   I mean, it would be a fairly pointless exercise, would it not?

MR ORR:   It would, your Honour, except the position we are in is that there are proceedings in the District Court.

HIS HONOUR:   Why do you not get judgment in them?

MR ORR:   The Attorney‑General’s position is that the matter raised in the District Court, the defence to this matter, is that the company which is involved in these proceedings was never properly incorporated.

HIS HONOUR:   I have read the stated case and I understand the issue but why do you not argue that issue?  I mean, it may or may not be that the defendant will turn up.  Why can you not get that decided as a point of law, perhaps, and get judgment in the District Court?

MR ORR:   Because, your Honour, the point having been raised, the Attorney’s position is that it is in the public interest to have that point determined by the High Court.

HIS HONOUR:   But it is not in the public interest to have a matter decided without a contradictor in the High Court.

MR ORR:   That is true, your Honour, but I understood the message to have been to this Court that the party did not want to appear in this hearing with regard to the removal but  ‑ ‑ ‑

HIS HONOUR:   Well, that is as far as it goes but it does not look promising  ‑ ‑ ‑

MR ORR:   I think if there was to be no contradictor in the High Court, clearly the position would be that – well, I would have thought the position would be that the matter would not proceed in the High Court.  But at the moment there is a contradictor in the District Court.  This matter has been raised.  The District Court is really the only substantive defence to the claim.  A section 78B notice has been issued to the Attorney-General in relation to this matter.

HIS HONOUR:   Look, I understand all of that but, as you know, the High Court has a very, very long list and I really do not understand why the matter is not first determined in the District Court where we know for certain there will be a contradictor or, indeed, if there is not, you will end up almost certainly getting judgment by default, in which event this matter need not be entertained by the High Court.

MR ORR:   Yes, your Honour.  I have put the position which the Attorney takes and that is that this matter is of such significance that it should be determined in the High Court.

HIS HONOUR:   I can understand that the Attorney-General would want it determined in the High Court but a determination without a contradictor is just a waste of everybody’s time and, indeed, involves a waste of quite a lot of money.  Mr Coulsen, what - - -

MR ORR:   Perhaps I could deal with that point.  Your Honour may be aware that other decisions have been referred into the High Court which raise this issue.  They were referred there by your Honour and they were proceedings called GPS First Mortgage  ‑ ‑ ‑

HIS HONOUR:   Yes, I have a vague recollection of that.

MR ORR:   So, those proceedings were removed.  They were bankruptcy proceedings that are slightly different to the proceedings in this case.

HIS HONOUR:   But they involved the same issue.

MR ORR:   It involved an almost identical issue in that the liability arose – in that the allegation was the company which was a creditor in that case had not been properly incorporated.  Those matters were removed in order to have that matter determined in the High Court.  That matter has stalled, your Honour, in particular on the issue of representation of the debtor and issues in relation to that.  So, that is one of the reasons why the Attorney is keen to get other matters where this issue is raised to the High Court so that this matter can be determined.

Now, if there is not a contradictor; if it becomes clear that there is not going to be someone who is going to put the argument then, of course, the position would need to be revisited and it could well be that this matter will not proceed either in the High Court but given that in the District Court there is a contradictor; the issue has been put; it is intended to pursue that issue; section 78B notices have been issued; the Attorney feels obliged to remove the matter.  So, if it is to be heard, it is to be heard in the High Court.

HIS HONOUR:   I really do not understand why the Attorney just does not litigate the matter in the District Court and that might well be the end of it.

MR ORR:   It might, your Honour, but it might not.

HIS HONOUR:   Exactly.

MR ORR:   And the outcome of this might be of such significance that a significant matter of time, delay and uncertainty will arise.  If the matter is to go against the Deputy Commissioner and the Attorney, who will be arguing validity of these provisions, the effect of that may well be that every company or the vast majority of companies incorporated since the Corporations Law scheme came into existence are not properly incorporated.

HIS HONOUR:   You do not have to persuade me that it is an important matter.  I can see that it is; it is a very important matter.

MR ORR:   And to have a judgment of the District Court which would undoubtedly be appealed to the High Court on that  ‑ ‑ ‑

HIS HONOUR:   Well, it might not be.  If you win in the District Court, that might be the end of it.

MR ORR:   Of course, your Honour, but because we cannot predict that, which is why the Attorney is seeking to remove it so that win or lose, the matter will be determined at the highest level and then appropriate steps can be taken.  But, I do not think the significance of the matter can be understated.

HIS HONOUR:   Where does the appeal go?  The appeal goes to the Full Federal Court, does it not?  It does not go to the Court of Appeal, does it, on a tax matter, or does it?  No, it goes to the Court of Appeal.

MR COULSEN:   This would just be a collection, so it would be the Court of Appeal, your Honour.  Your Honour, the only thing I can really say is we have six more of these matters concerning the Deputy Commissioner and various company directors pending in the District or Supreme Courts at the moment.  All those matters stand adjourned.

HIS HONOUR:   Are there any of them that look as if they are certain starters in the High Court with a contradictor?  All I am looking for is an
assurance there is likely to be a contradictor, that is all.

MR COULSEN:   Your Honour, I cannot really answer that.  All I can really say in response is that I understand there has been a change of solicitor – sorry, or, alternatively, the former solicitor has ceased to act in a number of those matters.

HIS HONOUR:   So, it looks as if they might go off too, in the District Court, is that why you are saying?

MR COULSEN:   It is hard to know, your Honour, but all I can say is in a Magistrates Court recently where I appeared and a similar argument – not this argument but a similar argument was raised, the solicitors on the record had been on the record in a number of related matters sought to withdraw.

HIS HONOUR:   These were not ITS cases?

MR COULSEN:   ITR, yes, they were, your Honour, and the solicitor sought to withdraw.

HIS HONOUR:   ITR.  Are there any cases that are not ITR cases, do you know, apart from this one?

MR COULSEN:   Your Honour, of the matters I know about, the only matter which is not, to use the words loosely, “an ITR-related one”, is, in fact, Lynch v GPS Nominees.  For instance, Mr Ford was a director of a company formerly called Bluehaven Transport.  Mr Ingram was another director.  There are parallel and sister proceedings against Mr Ingram.  Whether they will be removed in the near future, I do not know, but the issues are the same; the pleadings are the same.  Whether Mr Ingram will turn up to be, in fact, a contradictor ‑ ‑ ‑

HIS HONOUR:   So, what you are really saying is it is very hard to get a contender in this area?

MR COULSEN:   Yes, it is hard to get someone to step up to the line, your Honour.

HIS HONOUR:   The saying was, “I could have been a contender”.

MR ORR:   Your Honour, I think the position of the Attorney would be that if there was no contradictor in the proceedings, then that proceedings should not proceed in the High Court but at this stage, there having been a contradictor in the District Court and notwithstanding the lack of one today, I think the Attorney would still seek to have it removed and then see if we can get into position before the High Court of having a contradictor.  Now, if there is not, I think the Attorney would agree, the matter should not proceed in the High Court and other steps might need to be taken but I think, from the Attorney’s point of view, this is an issue of such significance that the matter should be removed to the High Court in an endeavour to see if that matter can be got before the High Court in an appropriate form.

HIS HONOUR:   Mr Coulsen, you can keep your eye open anyway for another starter perhaps.

MR COULSEN:   That is so, your Honour.

HIS HONOUR:   I could possibly make an order or you can make an application to me for an order that perhaps two cases stated be heard together and we might get one to start that way.

MR COULSEN:   That is so, your Honour.

HIS HONOUR:   Do you understand what I am putting?

MR COULSEN:   Yes.  As much as I can say anything, your Honour, I would be surprised if Ford is the only starter, so to speak.

HIS HONOUR:   Yes.  All right, I am prepared to make an order for a stated case in terms of the case that has been settled.  You have looked at that carefully, Mr Coulsen?

MR COULSEN:   Yes, we are happy with the case stated, your Honour.

HIS HONOUR:   I should make an order as I did in the previous matter that the case stated proceed as if it were an appeal, so that the parties file outlines and they will be bound by the same time limits as apply with respect to appeals.  Is there anything else we should do?

MR COULSEN:   No, your Honour.

HIS HONOUR:   The States, are they likely to intervene, do you think?  They will, will they not?

MR ORR:   I think they are certain to intervene, your Honour.  As I said before, your Honour, if we could get this matter before the High Court it would be a matter of great significance in terms of the operation of the Corporations Law in Australia so I would anticipate they would intervene.

HIS HONOUR:   How long do you think?  Two days?  If a number of States came in, it probably would.

MR ORR:   Yes.

MR COULSEN:   The issue is similar to the matter considered in the Hughes Case by the High Court.  That is essentially the issue.  That was about the power of the Commonwealth DPP to prosecute a Corporations Law offence.  This is about the power of the ASC to incorporate a corporation.  So, I would have thought that hearing would be a good guide to this hearing, your Honour.

HIS HONOUR:   All right.  I will tell the Chief Justice that, if the matter does proceed, it could take up to two days.  Is there anything further?

MR ORR:   No, your Honour.

MR COULSEN:   No, your Honour.

AT 11.40 AM THE MATTER WAS CONCLUDED