Hart v Deputy Commissioner of Taxation

[2003] FCA 445

FEDERAL COURT OF AUSTRALIA

Hart v Deputy Commissioner of Taxation [2003] FCA 445

MICHAEL HART V DEPUTY COMMISSIONER OF TAXATION
Q274 of 2001 AND Q280 of 2001

KIEFEL J
16 APRIL 2003
BRISBANE

IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY	Q274 OF 2001
Q280 OF 2001

BETWEEN:	MICHAEL HART APPLICANT
AND:	DEPUTY COMMISSIONER OF TAXATION RESPONDENT
JUDGE:	Kiefel J
DATE OF ORDER:	16 April 2003
WHERE MADE:	BRISBANE

THE COURT DECLARES THAT:

1. The undertakings given by the respondent on 11 December 2002 require the respondent not to make an inquiry of a person or organisation on the Legal Resource Club List, where the inquiry relates to services from, or communications from, Cleary and Hoare, without first giving 14 days notice of the intention to make that inquiry and at the same time providing the general nature of the inquiry.  Once advised, the Commissioner’s obligation under the undertaking is discharged.
2. The Respondent to pay the applicant’s costs on the motion.

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

IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY	Q274 OF 2001
Q280 OF 2001

BETWEEN:	MICHAEL HART APPLICANT
AND:	DEPUTY COMMISSIONER OF TAXATION RESPONDENT

JUDGE:	Kiefel J
DATE:	16 April 2003
PLACE:	BRISBANE

REASONS FOR JUDGMENT

1. A question has arisen as to the true meaning to be given to the undertaking provided by the respondent as encapsulated in the order of 11 December 2002:

   “On the undertaking of the respondent in proceedings No Q274 of 2001 that [with the exception of exercising his powers pursuant to s 263 of the Income Tax Assessment Act 1936] prior to making the initial contact with persons or organisations appearing on the Legal Resource Club List, where the impetus for such contact is the fact that those persons or organisations were identified on that list, Cleary Hoare will be given at least fourteen days notice of the intention to make such initial contact and, where the nature of the inquiry relates to services from or communications from Cleary Hoare, the general nature of the inquiry,…”

2. The respondent’s contention is that it was only if an inquiry was made in the initial contact with a person on the list that the obligation, to advise of the general nature of the inquiry, arose. In my view the question which has arisen is to be resolved by having regard to the evident purpose of the undertaking.  The undertaking acknowledges the need, on the part of the applicant and his firm, Cleary and Hoare, to know of any intended contact of a person on their list.  They need to be able to talk to that person and take any other steps which might allay concerns created by the Commissioner’s first contact. That contact might not, of course, be an inquiry. In my view, however, the undertaking also appears to accept that the applicant and his firm need to know if information is to be required of those persons, or questions asked.  They are to be in a position to address the topics to be taken up by the respondent.  It is in that connexion that the general nature of the inquiry is to be given where the inquiry of that person relates to services from, or communications with, Cleary and Hoare.  I stress that it is clear from the terms of the undertaking that that was not intended to be an ongoing obligation but that it might relate to a first inquiry.

3. I do not think, however, it is within the spirit and intendment of the undertaking that if the first contact does not contain the inquiry that no further obligation on the part of the Commissioner to give the advice predicated with respect to the inquiry is to be given.  It may have been assumed, when the undertaking was provided, that it would always be known at the point of first contact whether an inquiry was intended so that on each occasion, the general nature of the inquiry would be given.

4. If it was known that such an inquiry was intended, I do not consider that the undertaking was honoured by simply making contact and postponing the inquiry.  I do not think, however, that I need to make a finding in that regard.  I do not make a finding adverse to the respondent about his understanding of the terms of the undertaking.  It was to an extent ambiguous and I think it is clear from the correspondence that a genuine difference of view was held about it.

I certify that the preceding four (4) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Kiefel J.

Associate:

Dated:            16 April 2003

Counsel for the Applicant:	S Doyle QC
Solicitor for the Applicant:	Damien Burke & Associates
Counsel for the Respondent:	D Boddice SC
Solicitor for the Respondent:	Australian Government Solicitor
Date of Hearing:	16 April 2003
Date of Judgment:	16 April 2003