Deputy Commissioner of Taxation v Kelly (No 3)

[2007] FCA 1143

FEDERAL COURT OF AUSTRALIA

Deputy Commissioner of Taxation v Kelly (No 3) [2007] FCA 1143

DEPUTY COMMISSIONER OF TAXATION v GRAHAM EDMUND KELLY, SILVERCOURT PROPERTIES PTY LTD AND PALL MALL FINANCE COMPANY LIMITED
NSD 1291 OF 2007

ALLSOP J
27 JULY 2007
SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NSD 1291 OF 2007

BETWEEN:

DEPUTY COMMISSIONER OF TAXATION
Applicant

AND:

GRAHAM EDMUND KELLY
First Respondent

SILVERCOURT PROPERTIES PTY LTD
Second Respondent

PALL MALL FINANCE COMPANY LIMITED
Third Respondent

JUDGE:	ALLSOP J
DATE OF ORDER:	27 JULY 2007
WHERE MADE:	SYDNEY

THE COURT ORDERS THAT:

1.   The public may have access, upon request, to:

(a)the folder of exhibits to the affidavit of Prashant Singh dated 5 July 2007 marked “non-confidential” and initialled by Allsop J and dated today, while such documents are in the possession of the Court;

(b)the affidavit of Charles Brannen sworn 26 July 2007.

2.   The above access be granted only upon an initialled copy of these orders being placed on the file.

3.   The said non-confidential exhibits to Mr Singh’s affidavit may be returned to the applicant on 10 August 2007.

4.   Costs of 18 July 2007 and 27 July 2007 be costs in the cause.

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

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NSD 1291 OF 2007

BETWEEN:

DEPUTY COMMISSIONER OF TAXATION
Applicant

AND:

GRAHAM EDMUND KELLY
First Respondent

SILVERCOURT PROPERTIES PTY LTD
Second Respondent

PALL MALL FINANCE COMPANY LIMITED
Third Respondent

JUDGE:	ALLSOP J
DATE:	27 JULY 2007
PLACE:	SYDNEY

REASONS FOR JUDGMENT

1. In this matter on Friday, 13 July 2007, proposed short minutes of order were circulated by the applicant to the various respondents with a view to holding the position of the property and/or funds that may be obtained from the sale of the property which was likely in the near future.  On 13 July 2007 there had been a contract exchanged for the sale of the property but there had been no notice to complete.  There was a lack of complete specificity of the applicant’s case at that time.  The matter had been brought on urgently before the duty judge earlier in the month to obtain ex parte orders and the short minutes of order which the applicant circulated were orders dealing with the holding of the position pending a resolution of the matter.  They were not orders that depended upon an understanding of the strength or weakness of the applicant’s case.

2. The third respondent is the mortgagee of the property and has its head office, apparently, in London.  By reason of that fact and the shortness of time on Friday, 13 July 2007, the respondents were not in a position to agree or disagree with the short minutes of order.  Thus, the matter was stood over for a period of almost five days to the following Wednesday at 9.30 am so that, amongst other things, the position of the short minutes could be attended to.  On that day, the first and second respondents were in a position to agree to those orders.  The third respondent was not and I was informed that the managing director of the third respondent would not be able to give his instructions before Friday. 

3. I raised the question at that time as to why the third respondent should not, therefore, pay the costs of the directions hearing which had involved no less than eight practitioners coming to Court to deal with, substantially, the question of the resolution of the holding short minutes.  I raised that question because I wanted to understand whether or not the third respondent personally was responsible for this failure.  An application is now made for the costs and on an indemnity basis.

4. Though I am sorely tempted to do so, I do not propose to award the costs.  The explanation put forward in the affidavit and the submissions is that natural justice required that before this commercial entity agreed to a holding position for the product of a conveyancing transaction, it required to understand the particulars of the applicant’s case.  I do not think that is right but it appears to be the basis upon which the solicitors have been working and were working at the time.  There does not appear to have been any sense of urgency in the third respondent’s lawyers in getting their instructions about the holding position.  Even in that light, no one appeared to have the common sense to seek to avoid eight practitioners coming to Court to be told that the third respondent’s managing director needed a couple more days to consider the matter.

5. Looking at all the evidence and listening to the submissions I do not think this is necessarily the fault in the third respondent personally. As I said, though I am sorely tempted, I do not propose to order costs against the third respondent.  The costs will be costs in the cause but may I say for my part, I expect matters in my list to be attended with the same attention to despatch in matters of this kind as they would in any commercial court in this city.  I will not say any more than that.

6. Now, I will add to the order that I made earlier.  Given that the order of access that I made was upon request, rather than having to revisit all this, unless anyone wants to argue anything to the contrary now it has been an affidavit that has been read, I will not only grant access upon request to the folder of exhibits while they are in the possession of the Court, but also to the affidavit of Charles Brannen sworn 26 July 2007.  The costs of the application will also be costs in the cause. 

I certify that the preceding six (6) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Allsop.

Associate:

Dated:       9 August 2007

Counsel for the Applicant:	Mr M Aldridge and Ms R M Henderson
Solicitor for the Applicant:	Australian Government Solicitor
Counsel for the First and Second Respondents:	Mr A Robertson SC
Solicitor for the First and Second Respondents:	Minter Ellison
Counsel for the Third Respondent:	Mr D Robertson
Solicitor for the Third Respondent:	Colin Biggers & Paisley
Date of Hearing:	27 July 2007
Date of Judgment:	27 July 2007