Donoghue v Commissioner of Taxation
[2018] FCA 768
•8 May 2018
FEDERAL COURT OF AUSTRALIA
Donoghue v Commissioner of Taxation [2018] FCA 768
File number: QUD 326 of 2013 Judge: LOGAN J Date of judgment: 8 May 2018 Catchwords: TAXATION – security for costs – power of the Court to dismiss proceedings under s 56(4) Federal Court of Australia Act 1976 (Cth) – failure to provide security for costs – failure to attend at case management hearing – Federal Court of Australia Act 1976 (Cth) s 37P – matter dismissed. Legislation: Federal Court of Australia Act 1976 (Cth) ss 37P, 56(4) Cases cited: Donoghue v Commissioner of Taxation; Donoghue v Commissioner of Taxation [2016] HCASL 131 Date of hearing: 8 May 2018 Date of last submissions: 8 May 2018 Registry: Queensland Division: General Division National Practice Area: Commercial and Corporations Sub-area: Corporations and Corporate Insolvency Category: Catchwords Number of paragraphs: 13 Counsel for the Applicant: The applicant did not appear Counsel for the Respondent: Ms K Mellifont QC Solicitor for the Respondent: Minter Ellison ORDERS
QUD 326 of 2013 BETWEEN: GARRY JOHN DONOGHUE
Applicant
AND: DEPUTY COMMISSIONER OF TAXATION
Respondent
JUDGE:
LOGAN J
DATE OF ORDER:
8 MAY 2018
THE COURT ORDERS THAT:
1.The application be dismissed.
2.The trial dates presently fixed for the period commencing 11 June 2018, be vacated accordingly.
3.The applicant, Mr Donoghue, pay the Commissioner’s costs of and incidental to the proceedings including the costs of the application heard today and reserved costs, if any, to be taxed if not agreed.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
REASONS FOR JUDGMENT
(Revised From Transcript)LOGAN J:
Proceeding QUD326/2013 is a taxation appeal in the Court’s original jurisdiction by Mr Garry John Donoghue against an objection decision in respect of notices of assessment for the income years ended 30 June 2005 to 30 June 2007 inclusive. Mr Donoghue chose separately to institute judicial review proceedings in respect of the assessing decisions. Those proceedings were ultimately concluded against Mr Donoghue upon the dismissal by the High Court of an application for special leave to appeal: see Donoghue v Commissioner of Taxation; Donoghue v Commissioner of Taxation [2016] HCASL 131.
That then left Mr Donoghue’s taxation appeals for substantive hearing. In the meantime, a recovery proceeding originally instituted by the Commissioner against Mr Donoghue on the strength of the debts created by the assessments was cross-vested from the Supreme Court of Queensland to this Court. It has been adjourned from time to time, pending the hearing and determination of the taxation appeals.
Today is the day appointed for further case management of the taxation appeals. Those appeals were earlier allocated trial dates, but those dates had to be vacated in light of unfortunate health issues encountered by Mr Donoghue. Further trial dates were allocated by the Court for two weeks commencing on 11 June 2018.
On 16 April 2018, the registrar sent both to Mr Donoghue and to the Commissioner’s solicitor, the Australian Government Solicitor, a notice of listing in respect of today’s case management hearing. On 4 May 2018, by an email directed to the email address notified by Mr Donoghue as an address for service, the Commissioner gave notice to him of an application to be made today of a dismissal of the proceeding. Enclosed with that email was a copy of the interlocutory application concerned, a supporting affidavit made by Mr Martin Hanson of the Australian Government Solicitor’s office, and an outline of submissions.
Suffice it to say, there are two foundations for the application for dismissal. One is to be found in a failure by Mr Donoghue to provide security for costs in the sum of $10,000 in accordance with an order made by the court on 12 March 2018. A copy of that order was sent both to Mr Donoghue at his email address for service, as well as to the Australian Government Solicitor by the registrar on 16 March 2018. Mr Donoghue has failed to provide security either by the date ordered, 4 April 2018, or for that matter to date in the sum of $10,000 in accordance with the order of 12 March 2018.
Mr Donoghue has also failed either personally or by counsel of solicitor to appear today. That is so notwithstanding that arrangements in the past have been readily made for him to appear by telephone from London where, on the evidence to hand, he presently resides. 8 May was deliberately fixed as a date for case management having regard to earlier evidence, which was to the effect that Mr Donoghue was to undergo some additional surgery in mid-April. That being so, it seemed to me that a period of about three weeks after that would be a desirable period to allow for an appearance by telephone, if he chose to continue that means of appearance. As it happens, the last appearance by telephone which Mr Donoghue made in the proceedings, was on 27 February 2018. It was at that time that 12 March was fixed as the date for a hearing, in respect of an applicant by the Commissioner, for security for costs. I made it plain, on 27 February, that it was not essential for Mr Donoghue to appear that day, if he so chose. I left the question of whether to make an appearance so as to make submissions in respect to the application for security for costs to Mr Donoghue’s considered value judgment. As it turned out, he chose not to appear, in person or by telephone, that day.
It is also apparent though, from Mr Hanson’s affidavit and oral evidence, which he gave today, that 27 February 2018 is, in effect, the last contact which either the Court or the Australian Government Solicitor have had with Mr Donoghue. That also extends to the Commissioner’s officers, with whom there has been no separate contact by Mr Donoghue, in relation to the outstanding tax debt liability.
I am far from convinced, on the basis of the material filed substantively in the tax appeals, that Mr Donoghue has no arguable case in respect of one or more of the assessments being excessive. Even so, it is and always has been, up to Mr Donoghue to prosecute his tax appeal with due diligence. This, I am persuaded, he has since 27 February and, even more particularly and pertinently, on and from 4 April 2018, failed to do. It seems to me, having regard to his own ability to procure advice from specialist treating practitioners in the past that it would have been no great step to make some sort of effort to furnish both to the Australian Government Solicitor and the registrar some evidence as to a particular medical treatment calamity, post-operatively, that might provide an explanation as to the failure to appear today. As it is, there is just nothing at all.
It appears, on the face of things, that Mr Donoghue, for his own reasons, has chosen no longer to prosecute his taxation appeal, notwithstanding, as I have said, that there does appear to be an arguable case for him in respect of at least some of the assessments concerned. That does trouble me but, as I have observed, it is up to him to prosecute his tax appeal.
The Court has power, under s 56(4) of the Federal Court of Australia Act 1976 (Cth) (Act) to make an order of dismissal in respect of a failure to provide security. Equally, under s 37P of that Act, one of the orders which may be made at a case management hearing, on the basis of a failure to comply with directions, is an order of dismissal.
The Commissioner, in my view is, on the material to hand, entitled to such an order.
In voicing that view, I am conscious that the letter of 4 May was also sent, albeit by Express Post, but nonetheless by post, to a postal address in Hamilton, Brisbane, furnished by Mr Donoghue as an additional address for service. Were there just that means of service relied upon, and given that Monday was the Labour Day public holiday, I would have particular reservations about making an order of dismissal today. However, an additional means of service, namely, by email, was adopted, and that means was directed to the email address notified for service by Mr Donoghue. So I am satisfied that he has had due notice that an application for dismissal would be made today.
In hindsight, and it is always clearer in hindsight, the better course for Mr Donoghue to have taken in this case may well have been not to be diverted by the apparent attraction of an apprehended illegality on the part of the Commissioner in making the assessments concerned and just to have focused upon meeting those assessments on their merits. However that may be, that is not the course he chose, and today is perhaps eloquent for others as to whether questions as to the illegality or otherwise of assessments should be regarded as having siren-like qualities diverting one, if one has a good case on the merits, from discharging the onus of proof in respect of that.
I certify that the preceding thirteen (13) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Logan. Associate:
Dated: 30 May 2018
0