Glennan v Commissioner of Taxation S195/2002

[2002] HCATrans 607

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Sydney  No S195 of 2002

B e t w e e n -

MICHAEL JOHN GLENNAN

Applicant

and

COMMISSIONER OF TAXATION

Respondent

Summons

GUMMOW J

(In Chambers)

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON MONDAY, 18 NOVEMBER 2002, AT 2.15 PM

Copyright in the High Court of Australia

MR C.P. LOCKE:   I appear for the appellant, your Honour.  (instructed by A.E. Dunne)

MR D.B. McGOVERN, SC:    May it please the Court, I appear for the respondent.  (instructed by the Australian Government Solicitor)

HIS HONOUR:   Yes, Mr Locke.

MR LOCKE:   Your Honour, this is an application by Mr Glennan to file a proposed amended notice of appeal.  Your Honour, we received the respondent’s written submissions last Friday and we have prepared some brief additional submissions in response to that.  Could I hand that  up to your Honour?

HIS HONOUR:   Have you seen a copy, Mr McGovern?

MR McGOVERN:   At 2.10, your Honour.

MR LOCKE:   I have a list of authorities, your Honour.  I regret to say we do not have copies of those but some of them your Honour ‑ ‑ ‑

HIS HONOUR:   We will not need authorities, thank you.  Just sit down for a minute, if you would.  What are these affidavits about in paragraphs 6 and 7 of the summons?  Why would we be receiving further evidence on the appeal?

MR LOCKE:   Your Honour, I am instructed that, in fact, there will not be any new evidence as such, that that was intended to refer to the paragraph headed “Relevant Decisions and” ‑ it essentially relates to judgments to be brought to the Court’s attention.

HIS HONOUR:   We do not need any order for that, do we?

MR LOCKE:   No, your Honour.

HIS HONOUR:   Now, what do you say as to this, Mr McGovern?

MR McGOVERN:   Your Honour, we oppose the application but, as we have indicated in paragraph 5 of our written submissions, we consider that the most efficacious course for the Court to adopt would be to refer this motion to the Full Court pursuant to Order 55 rule 2.  The matter of the appeal is listed for hearing in the High Court before the Full Court on 10 December.  The advantage of taking that course would be that, no doubt, if it has not already occurred, the judges of the Federal Court would need to be served.  They would probably, almost certainly, file a submitting appearance and ‑ ‑ ‑

HIS HONOUR:   Yes.  I am not, at the moment, minded to make any order joining judges of the Federal Court.

MR McGOVERN:   No, but they would need to be served with the application though, your Honour.

HIS HONOUR:   If the application were successful on the hearing date for the appeal, it would provoke an adjournment, I would think.  That would have to be.

MR McGOVERN:   I was anticipating that there might be a chance that if the application were successful, the judges having been served with the process ‑ ‑ ‑

HIS HONOUR:   No, no, I am not going to have the Federal Court judges vexed in this provisional way.

MR McGOVERN:   No,  your Honour.

HIS HONOUR:   It seems to me at the moment there are a number of problems with joining them.  Firstly, their role in the matter is spent, if you like.  Secondly, they were not joined before the Chief Justice at first instance.  If they had been, the relief sought would have been quite different or quite additional, I suppose I should say.

MR McGOVERN:   Yes, your Honour.

HIS HONOUR:   Whilst one sometimes adds parties on appeals to cope with a pure technicality, that means this is not a pure technicality, the relief sought would have been significantly different.  Furthermore, there would be a problem of the type adverted to in McBain and Catholic Bishops, namely, that if the application had been made to the Chief Justice, an answer would be that in discretion the relief sought would not be given because the Constitution marks out the appropriate course which is to appeal, which happened.

MR McGOVERN:   Yes, your Honour, and which appeal was, of course, discontinued.

HIS HONOUR:   Yes.  Further, extension of time would be needed for certiorari and mandamus under the Rules.

MR McGOVERN:   Yes, Order 55 rule 17, your Honour.

HIS HONOUR:   Yes, and there would have to be a satisfactory case made out for that.

MR McGOVERN:   Yes.

HIS HONOUR:   So, for all of those reasons, I would not make those orders at this stage.  The application can be renewed at the commencement of the proceedings set down for hearing on 10 December.  That is on the footing that, if successful, that would provoke a necessary adjournment and a fixing of a further hearing date.  Is there anything you want to say about that, Mr Locke?

MR LOCKE:   Your Honour, in my respectful submission, the proposed course that is being advocated by the appellant would have the benefit, potentially, of avoiding an adjournment and additional costs, and we would rely upon section 32 of the Judiciary Act in relation to the additional relief sought.  That is couched in terms that appear to be mandatory.

HIS HONOUR:   Section 32 is talking about the original jurisdiction, surely, in this context.

MR LOCKE:   It is.  It deals with the exercise of its original jurisdiction.

HIS HONOUR:   We are not in the original jurisdiction any more.

MR LOCKE:   Nevertheless, your Honour, I would submit that there would be no prejudice to the respondent by allowing the matter to be argued and there would be some prospect if the orders were made today.

HIS HONOUR:   If the application failed, there is then a prospect of an application for leave to appeal from that, if the application succeeded.

MR LOCKE:   Indeed, your Honour.

HIS HONOUR:   And the prospect of a cross‑application.  That is not advancing matters very much.

MR LOCKE:   The difficulty is my client has very limited resources, your Honour, and if the matter was to be a two‑step process rather than one hearing day that could affect his ability to retain counsel for both of those days.

HIS HONOUR:   Yes.  Well, I can understand that.  The question is why has this application been made so late?

MR LOCKE:   Your Honour, the essential difficulty was that the plaintiff – much of it is set out in the affidavit of Mr Glennan.

HIS HONOUR:   Yes, I have read that.

MR LOCKE:   Which I think your Honour has there before you, and much of his submissions, effectively, are in that as well, supplemented by the three‑page document I handed up.  The essential problem for Mr Glennan was that he was unrepresented for much of the way through these rather lengthy proceedings and various stages of proceedings and he was not aware or fully aware of the decision in CSR – FCT v CSR and apparently that also did not get mentioned in the judgment of the court below of Chief Justice Gleeson.  That decision is highly pertinent to the appellant’s claims.

HIS HONOUR:   Why is that?

MR LOCKE:   Essentially, because the appellant contends that there was never any assessable income in relation to the transaction upon which the Commissioner has purported to levy penalty and interest and, indeed, the initial tax as well, that being, essentially, because the payment or the receipt related to a compromise of litigation and litigation relating to the plaintiff’s rights against a particular firm and claims that were either entirely in the nature of capital claims or at least partly. 

The settlement was an agreement in which the original settlement agreement was set aside, in effect – ab initio – and the agreement then, pursuant to which the payment was made, consisted of a form of terms of settlement of a kind which the Tax Commissioner could not go behind and he did go behind it and looked at other documents, for example, the Transfield agreement, with the appellant and so forth, and that tainted the matter right from the outset.  We say CSR and, indeed, Allsop – CSR is a development of Allsop – is authority that the Commissioner could not do that, he was bound by the terms of the agreement and unless it was clear from the agreement or the causes of action that at least there was an income involved, then it was not assessable income.  That is a rather convoluted answer, your Honour, but that is essentially the nub of it.

The appellant, whilst he is a legally qualified person, was unaware of CSR or, I think, only had a passing knowledge of it.  It went from a single judge of the Federal Court to the Full Bench on appeal, I believe, and he only quite recently found out about that and it is a matter of very considerable significance to his claim for relief in these proceedings.

So, it was not done due to any carelessness or sloth or the like on his part, it was simply that he was unaware of that and it is a matter that would

have a very significant impact on the outcome of the proceedings if he is permitted to rely upon the additional grounds.

HIS HONOUR:   Thank you.  Now, one question that arises is whether this appeal is as of right.  The Chief Justice did make an order entering judgment for you, did he not, Mr McGovern?

MR McGOVERN:   He did, I think, your Honour, yes.

HIS HONOUR:   That makes it an appeal as of right, I suppose.

MR McGOVERN:   Yes.  I think I have checked that.  Yes, the action was dismissed.  That is at page 298 of volume 2.

HIS HONOUR:   That is accepted, is it, that it is an appeal as of right?

MR LOCKE:   Yes.

HIS HONOUR:   Now, what attention has been given to section 78B notices?

MR LOCKE:   None has been served as far as I am aware, your Honour.  Filed.

MR McGOVERN:   Yes.  There is a document in the second appeal book at page 347.  I have assumed that was the one filed on 9 October 2002, your Honour. 

MR LOCKE:   I can inform your Honour that my instructions are that they have been filed and we are awaiting the outcome of today’s application before serving them.

HIS HONOUR:   Yes.  Well, you had better get on and serve them.

I propose:

(1)  to dismiss paragraphs 6 and 7 of the summons filed on 8 November;

(2)  to stand over the balance of that summons to the hearing of the appeal fixed 10 December 2002;

(3)  I direct the appellant to file the appropriate number of folders ‑

there is no need to have an appeal book; there is no need to have a volume 3 ‑

containing the summons and the affidavit in support filed 8 November 2002, and the exhibits thereto;

(4)  costs of today be costs of the appeal;

(5)  I certify for counsel.

So, we just need the appropriate number of these folders.

Is there anything else?

MR McGOVERN:   No, your Honour.

HIS HONOUR:   Very well, then, I will make those orders and I will now adjourn.

AT 2.31 PM THE MATTER WAS CONCLUDED