Harvey and Harvey and Anor - [2017] FamCA 1111

FAMILY COURT OF AUSTRALIA

HARVEY & HARVEY AND ANOR

[2017] FamCA 1111

FAMILY LAW – PRACTICE AND PROCEDURE – adjournment application – where the Commissioner of Taxation seeks an adjournment pending the outcome of a special leave application in an unrelated proceeding – where the outcome of that appeal process will directly impact the resolution of the issue raised by the husband in the case – adjournment granted.

Family Law Act 1975 (Cth)

Cadbury UK Ltd v Registrar of Trade Marks and Another [2008] FCA 1126
City of Sydney Council v Satara [2007] NSWCA 148
Geelong Football Club Ltd v Clifford [2002] VSCA 212
Meggitt Overseas Ltd & Ors v Grdovic (1998) 43 NSWLR 527
Ramsay v Aberfoyle Manufacturing Co (Australia) Pty Ltd (1935) 54 CLR 230
Spralja v Bullard (t/as ‘Bullards’ (a firm)) [2017] VSCA 32

Tomaras & Tomaras & Anor & The Commissioner of Taxation [2017] FamCAFC 216

APPLICANT:

Ms Harvey

RESPONDENT:

Mr Harvey

INTERVENOR:

Commissioner of Taxation

FILE NUMBER:

MLC

2362

2014

DATE DELIVERED:

22 December 2017

PLACE DELIVERED:

Melbourne

PLACE HEARD:

Melbourne

JUDGMENT OF:

Johns J

HEARING DATE:

20 November 2017

REPRESENTATION

THE APPLICANT:	In Person
THE RESPONDENT:	In Person
COUNSEL FOR THE INTERVENOR:	Mr Sest QC and Ms Jacobson

SOLICITOR FOR THE INTERVENOR:

Australian Government Solicitor

Orders

That paragraphs 6 to 9 inclusive of the Orders dated 16 June 2017 be discharged.
That within three weeks of service of the judgment of the High Court of Australia in the matter of Tomaras the applicant wife file and serve any written submissions upon which she seeks to rely with respect to paragraph 6 and 7 of the husband’s Amended Response to Initiating Application filed 7 June 2017 (“the husband’s s 90AE applications”).
That within three weeks of service of the wife’s submissions pursuant to Order 2 hereof the husband file and serve any written submission upon which he seeks to rely with respect to the husband’s s 90AE application.
That within three weeks of service of the husband’s submissions pursuant to Order 3 hereof the intervener file and serve any written submission upon which he seeks to rely with respect to the husband’s s 90AE application.
That the wife file any submissions in reply to those of the husband and the intervener within 14 days of receipt of the intervener’s submissions.
That the husband’s s 90AE applications be otherwise adjourned on a date to be fixed.

Note: The form of the order is subject to the entry of the order in the Court’s records.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Harvey & Harvey and Anor has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).

FAMILY COURT OF AUSTRALIA AT MELBOURNE

FILE NUMBER: MLC 2362 of 2014

Ms Harvey

Applicant

And

Mr Harvey

Respondent

REASONS FOR JUDGMENT

Introduction

These proceedings relate to the alteration of property interests between the applicant wife, Ms Harvey and the respondent husband, Mr Harvey. The Commissioner of Taxation has intervened in the proceedings seeking to recover the outstanding taxation liabilities of the husband.
It is common ground between the parties that the husband’s taxation liabilities for the period 30 June 2013 to 30 June 2015 are unpaid. The husband has partially satisfied his taxation liability for the year ending 30 June 2012. General interest charges are payable in relation to the husband’s taxation liabilities for the years ending 30 June 2009 to 30 June 2015 inclusive.
By his Amended Response to Initiating Application filed 7 June 2017 the husband seeks orders as follows:-
6.THAT, in the setting that the Australian Taxation Office liabilities are not met in accordance with Orders 1 to 5 as sought above the Commissioner for Taxation remit all General Interest Charges to date.
7.AND THAT until an agreement is reached between the Husband and the Australian Taxation Office THAT the Wife remain fully liable for both:
(a)the husband’s primary debt owed to the Australian Taxation Office and
(b)Any fines, and General Interest Charges owed to the Australian Taxation Office.
In effect, the husband seeks a remittance of all general interest charges otherwise payable as a result of his unpaid taxation liability or alternatively an order that the wife remain responsible for those labilities. That is an application made pursuant to s 90AE of the Family Law Act 1975 (Cth) (“the Act”).
At the time that the matter was listed for final hearing before me there was a case stated pending before the Full Court of this Court in an unrelated matter. In that matter the Court was asked to consider whether s 90AE(1)-(2) of the Act confers power to make an order substituting one party to a marriage for the other party in relation to a taxation liability. The Court was asked to consider whether the Commissioner of Taxation should be treated as a creditor for the purposes of s 90AE of the Act. As a result of that pending judgment an application was made on behalf of the Commissioner of Taxation at the commencement of the final hearing of these proceedings to adjourn the determination of the husband’s applications pursuant to paragraphs 6 and 7 of his Amended Response to Initiating Application, which relate to s 90AE of the Act, until such time as the Full Court had delivered its judgment in the unrelated matter.
I acceded to that application on the basis that the hearing would proceed, my judgment be reserved and the parties have the opportunity to make submissions with respect to the decision of the Full Court in the unrelated matter after which I would determine the parties’ competing applications. To that end, at the conclusion of the hearing on 16 June 2017 I made orders as follows:
5.That all extant applications be adjourned to 10.00am on 1 September 2017 for closing arguments, save as to paragraphs 6 and 7 of the husband’s Amended Response to Initiating Application filed 7 June 2017.
6.That within three weeks of service of the Judgment of the Full Court in case number NA70/2016 the applicant wife file and serve any written submissions upon which she seeks to rely with respect to paragraphs 6 and 7 of the husband’s Amended Response to Initiating Application filed 7 June 2017 (“the husband’s s 90AE applications”).
7.That within three weeks of service of the wife’s submissions pursuant to Order 6 hereof the husband file and serve any written submission upon which he seeks to rely with respect to the husband’s s 90AE application.
8.That within three weeks of service of the husband’s submissions pursuant to order 7 hereof the intervener file and serve any written submission upon which he seeks to rely with respect to the husband’s s 90AE application.
9.That the wife file any submissions in reply to those of the husband and the intervener within 14 days of receipt of the husband’s and the intervener’s submissions.
10.That the husband’s s 90AE applications be otherwise adjourned on a dated to be fixed.
The Full Court delivered its judgment in the unrelated matter, Tomaras & Tomaras & Anor & The Commissioner of Taxation [2017] FamCAFC 216 (“Tomaras”) on 13 October 2017.
By letter dated 10 November 2017 addressed to my Associate the Australian Government Solicitor on behalf of the intervener sought an adjournment of the timetable for filing written submissions in relation to the s 90AE issues pursuant to my orders dated 16 June 2017. That adjournment was sought as a result of the decision of the Commissioner for Taxation to seek special leave to appeal the decision of the Full Court of the Family Court of Australia in the matter of Tomaras in the High Court of Australia.
As a result of that request I listed the matter for hearing before me on 20 November 2017. At that hearing, the intervener made an oral application for an adjournment of the timetable as provided in my orders of 16 June 2017. That application was opposed by both the applicant wife and the respondent husband.
These are my Reasons for Judgment with respect to the application by the intervener for an adjournment of the determination of the s 90AE issues pending the outcome of the special leave application to the High Court in the unrelated proceeding of Tomaras.

Submissions on behalf of the Intervener

It was submitted on behalf of the intervener that the Commissioner of Taxation had filed an application for special leave in the High Court of Australia on 10 November 2017. Senior Counsel for the intervener submitted that his instructor’s inquiries of the High Court Registry indicate that if the special leave application is to be determined on the papers, it would likely be determined in February 2018 and if the papers are to be referred for oral hearing, then such hearing would likely occur in April 2018. Assuming that the application for special leave is granted, it is anticipated that the matter would be fixed for hearing before the High Court in early to mid-September 2018.
It was submitted on behalf of the intervener that the decision by the High Court in Tomaras will directly impact on the outcome of these proceedings. In Tomaras the Full Court held that s 90AE of the Act does confer power on the Court to make an order substituting one party to a marriage for the other in relation to a taxation debt. That is the relief sought by the husband in these proceedings. Accordingly, it was submitted on behalf of the intervener that the outcome of the application by the Commissioner to the High Court in Tomaras will have a direct impact on the outcome of these proceedings.
It was submitted that the decision in Tomaras was the first occasion upon which the Court has been asked to consider its powers with respect to substitution of creditors and whether such power extends to the Commissioner of Taxation.
It was also submitted on behalf of the intervener that any prejudice to the husband and the wife by the adjournment is capable of being ameliorated on the basis that the Commissioner for Taxation has offered to remit general interest charges otherwise payable upon the husband’s outstanding taxation liability from the date of the decision of the Full Court in Tomaras to the date of any judgment delivered in these proceedings.

Submissions of the husband

The husband opposed the intervener’s application.
His position was articulated in his letter to the Australian Taxation Office dated 17 November 2017 (Exhibit H-1). In summary, the husband submits that:-
·But for previous adjournments granted upon application by the intervener, the matters before this Court would now be finalised;
·The husband suffers “extreme prejudice” whilst the proceedings continue, particularly in terms of lost income, amenity and quality of life for the parties and their children.
In conclusion, the husband sought to reserve his right to seek “fair and reasonable compensation in relation to lost income, loss of work opportunity, loss of amenity, loss of time, or any other damage to his health, professional practice or person resulting from the [intervener’s] actions”.

Submissions of the wife

The wife too opposed the intervener’s application for an adjournment.
During her oral submissions, the wife expressed concern at a further delay. She complained of having to take leave from work in order to attend Court to address these issues. She implored the Court to refuse the intervener’s application as she simply wished for the proceedings to be concluded.

Legal Principles

The question of whether proceedings should be adjourned pending the outcome of a special leave application to the High Court in an unrelated proceeding was considered by the Court of Appeal in the Supreme Court of Victoria in the matter of Geelong Football Club Ltd v Clifford [2002] VSCA 212 (“Geelong Football Club Ltd v Clifford”). That matter concerned an application for leave to appeal a decision of a County Court judge to vacate a trial date and adjourn a proceeding indefinitely so that it might await the outcome of an application for special leave to the High Court and if such leave is granted that appeal.[1] Ultimately the court determined to allow the appeal. At paragraphs [6] and [7] Ormiston JA stated:
The error here demonstrated was the judge's failure to appreciate that a party is entitled to a trial of a proceeding ready for hearing unless it is clearly shown that injustice is likely to be caused if the adjournment is refused. It is not ordinarily sufficient to show that an appeal yet to be heard in another case may reach a legal conclusion which could support the claim made by the party seeking the adjournment. Of course there are no black and white rules preventing adjournments in appropriate circumstances…
…there may be cases involving some technical rule of law or the disputed meaning of a particular section, where an appeal court has reserved its decision (or, even, is just about to hear argument), where the hearing and the resolution of the case will directly depend on the outcome of an appeal in a test case, such that it would be preferable to await the expected outcome. The sooner the appeal is likely to be resolved, the stronger may be the argument in favour of delay, especially in terms of convenience to parties and the trial court itself.
[1] Geelong Football Club Ltd v Gregory Allan Clifford [2002] VSCA 212, 1.
His Honour further stated:
Possible changes in the law are too speculative and it is ordinarily rare that one can foresee that a decision on appeal will necessarily apply in the subject proceeding. In the end…it is the principle which counts, not the outcome of a particular case. Many issues are on appeal in the High Court at any one time and many applications for special leave are in the pipelines, but one cannot demand that trials be delayed and adjourned merely because the outcome of any one of those appeals may have a bearing on the outcome of a particular trial. One may think of exceptions, particularly where the issue is limited and the appeal to the High Court is intended to resolve a dispute between two directly conflicting lines of authority binding on the trial court, but that would seem to be a rare situation.[2]
[2] Ibid 8.
His Honour noted that “each case must depend on its facts”.[3]
[3] Ibid 9.
That decision was cited with approval by Finkelstein J in the Federal Court decision of Cadbury UK Ltd v Registrar of Trade Marks and Another [2008] FCA 1126. His Honour highlighted that the authorities establish that “a case should not be adjourned for an indefinite period to await clarification of the law”.[4]
[4] Cadbury UK Ltd v Registrar of Trade Marks and Another [2008] FCA 1126, 15.
In City of Sydney Council v Satara [2007] NSWCA 148 (“City of Sydney Council v Satara”) the New South Wales Court of Appeal considered an appeal against the decision of Rothman J to adjourn proceedings pending determination of an application for special leave to appeal in the High Court in another matter.
In determining that matter firstly McColl JA referred to the High Court decision of Ramsay v Aberfoyle Manufacturing Co (Australia) Pty Ltd (1935) 54 CLR 230 in which Starke J stated:
Court of law, however can only act upon the law as it is, and have no right to, and cannot, speculate upon alterations in the law that may be made in the future.
McColl JA reviewed the authorities as to the circumstances in which it is open to a trial judge to adjourn a hearing pending the outcome of an appeal in an unrelated case which is yet to be heard. McColl JA stated at [32]:
It is apparent from the authorities that there are circumstances in which it is open to a trial judge to adjourn the hearing of a case pending the outcome of an appeal yet to be heard in another case. In Meggitt, Mason P pointed out that one of the distinguishing features in such cases was the “level of certainty that the point will be addressed” and the “knowledge that if and when it is, the decision of the Court higher in the appellate chain will declare the law on the relevant topic with retrospective effect.” In Yates, too, the fact that a case was known to be subject to appeal to the House of Lords or from a judge at first instance to the Court of Appeal was a matter a judge might reasonably take into account in deciding not to hear a case on the same lines until the result of the case under appeal had become known. In Thornton, too, it was certain that there would be a decision of the High Court on the relevant point of law as, at that stage, the High Court had reserved its decision.
(citations omitted)
McColl JA went on to distinguish those scenarios to the situation in which a special leave application has been filed. McColl JA stated at paragraphs [33]-[35]:
The situation is different, however, in my view, when only a special leave application has been filed. In that case, as Geelong Football Club v Clifford demonstrates, if the fact that such an application was on foot was the basis for an adjournment, many trials would be delayed and adjourned merely because the outcome of one of the many cases on appeal to the High Court, or the subject of an application for special leave, might have a bearing on the outcome of a particular trial.
That was this case at the time the adjournment was granted. There was no certainty that the High Court would grant special leave in North Sydney Council v Roman, or, if it did, when the appeal will be heard, let alone decided. Further, the question whether the outcome in North Sydney Council v Roman will affect the present trial is certainly debateable as between the parties.
McColl JA went on to discuss the circumstance in the case before her Honour, in particular noting the uncertainty of the timing of the hearing of the special leave application. Her Honour stated at paragraphs [36]-[38]:
Further even if the outcome of North Sydney Council v Roman would clearly affect this case, the uncertainly attaching to the timing of the hearing of the special leave application, and any consequential hearing and decision if leave be granted, was too great to warrant adjourning a three week trial, which had been specially fixed for so long.
The duty of the Court was to act upon the law as stated in North Sydney Council v Roman and not to speculate upon the prospect that special leave to appeal would be granted, with the prospect that, in due course, the ultimate decision may, not will, affect the outcome in the instant case.
In so saying I am not intending to indicate that adjournments should be granted whenever a special leave application has been filed if the outcome could affect the outcome of the pending trial. As the authorities indicate each case must turn on its own facts. The position may (but not necessarily) have been different if special leave had been granted and the hearing of the appeal expedited.
Ultimately the court in City of Sydney Council v Satara held that Rotham J erred in granting the adjournment.
The Victorian Court of Appeal in Spralja v Bullard (t/as ‘Bullards’ (a firm)) [2017] VSCA 32 also confirmed that “there is no obligation to grant an adjournment by reason of the grant of special leave in a matter raising substantially similar issues”. In this decision the Court of Appeal discussed the decisions of Geelong Football Club Ltd v Clifford and City of Sydney Council v Satara. The court held at paragraph [62]:
In our view, there is no obligation to grant an adjournment by reason of the grant of special leave in a matter raising substantially similar issues. Where an application for an adjournment is made, and it is considered that refusal is the most appropriate course, then we agree that the issues in the proceeding should be determined as the law stands. However, a judge may, in the individual circumstances of a case, determine that an adjournment of the proceeding is the better course. The grant of an adjournment is almost invariably a matter within a judge’s discretion. It is a decision of practice and procedure, dependent upon the individual circumstances of the case, and ‘an appeal court will exercise particular caution before interfering with an exercise of discretion in relation to practice and procedure’.
(citations omitted)

What is clear from the above authorities is that the decision of the court whether or not to grant the adjournment is matter of discretion. It is also evident from those decisions that the circumstances where a court should accede to such a request for an adjournment are rare. In my view this is one of those rare cases.
The issue raised by the husband in this matter is the question of whether an order may be made substituting one party to a marriage for the other with respect to a taxation liability. That is the issue raised upon appeal in the matter of Tomaras. It is the first time that issue has been considered by the Full Court. The determination of the special leave application (and if such leave granted, the appeal) in the High Court will determine that question once and for all. The outcome of that appeal process will directly impact the resolution of the issue raised by the husband in this case. I am satisfied that the circumstances presented in this matter is in that category of cases as contemplated by Ormiston JA in the decision of Geelong Football Club Ltd v Clifford . The resolution of the issue in the High Court will clarify the application of s 90AE of the Act and the outcome of the current matter will depend on that decision.
Further, unlike the authorities referred to above, the evidence in these proceedings has already been heard. I determined in June 2017 that it was necessary to await the outcome of the Full Court appeal in Tomaras before resolving the matter as it was then clear that the issues raised on appeal directly impacted the outcome of these proceedings. That position has not changed.
Upon resolution of the appeal by the High Court, the parties will be required to file written submissions to address the s 90AE issues. Thereafter, the matter will be capable of conclusion within a relatively short timeframe.
I am satisfied that the impact of the decision of the High Court is significant to the parties in this case. From the wife’s perspective, if the appeal fails the husband will likely press his application for her to be substituted as the creditor in relation to the general interest charges which have accrued. If the appeal succeeds, the intervener will likely maintain its view that the husband is not entitled to seek such substitution with respect to that liability. Hence the outcome of the appeal will have a direct bearing on the positon of each of the parties in this matter. As was contemplated by McColl JA when referring to Meggitt Overseas Ltd & Ors v Grdovic (1998) 43 NSWLR 527 (“Meggitt”) in the decision of City of Sydney Council v Satara the decision of the High Court will likely “declare the law on the relevant topic with retrospective effect”.[5] Further, as was discussed in Meggitt it is clear that when considering the “level of certainty that the point will be addressed”[6], the s 90AE issue is the principal issue to be considered by the High Court.
[5] City of Sydney Council v Satara [2007] NSWCA 148, 32 citing Meggitt Overseas Ltd & Ors v Grdovic (1998) 43 NSWLR 527
[6] Meggitt Overseas Ltd & Ors v Grdovic (1998) 43 NSWLR 527, 534.
Under the current timetable provided by my orders of 16 June 2017, the wife was to file her submissions in reply to those of the intervener and the husband by 10 January 2018. Based on the estimates given by Senior Counsel for the intervener, the special leave application will be dealt with by the High Court by the end of April 2018. Assuming the application for special leave is unsuccessful, that represents a delay of a little over three months. If the matter proceeds to appeal upon the granting of special leave that hearing will likely be heard in September 2018 with judgment to follow.
I am mindful of the burden these proceedings have placed upon the parties. Both are self-represented and both urge the Court to bring this matter to a conclusion. The husband submits that his capacity to work is affected whilst these proceedings continue. Nonetheless, his evidence at trial was that he is continuing in his practice as an anaesthetist. He is living in rental premises and rents a separate property from which he stores his medical records. The proposed delay will not in any real sense impact on his capacity to work.
The parties’ former matrimonial home has already been sold and the sale proceeds applied to the reduction of the husband’s taxation liability. The central issue for determination by me at the conclusion of the hearing will be whether or not the investment property held by the wife at Suburb C should be sold in order to further reduce the husband’s taxation liability and if so, the extent to which it should be applied to those liabilities. The wife also resides in rental accommodation and continues to work.
Sensibly, the intervener has conceded that interest should not continue to accrue in respect of the outstanding taxation liability as from the date of the Full Court judgment in Tomaras until the conclusion of this matter. Hence, there is no direct financial consequence to the parties if the matter is adjourned.
Having regard to all of the above factors, I am satisfied that this is a unique case as was contemplated by Ormiston JA in the decision of Geelong Football Club Limited v Clifford that requires an adjournment pending the determination of the appeal to the High Court in the matter of Tomaras to enable the resolution once and for all of the s 90AE issue.
The orders that I make are as follows:
(1)That paragraphs 6 to 9 inclusive of the Orders dated 16 June 2017 be discharged.
(2)That within three weeks of service of the judgment of the High Court of Australia in the matter of Tomaras the applicant wife file and serve any written submissions upon which she seeks to rely with respect to paragraph 6 and 7 of the husband’s Amended Response to Initiating Application filed 7 June 2017 (“the husband’s s 90AE applications”).
(3)That within three weeks of service of the wife’s submissions pursuant to Order 2 hereof the husband file and serve any written submission upon which he seeks to rely with respect to the husband’s s 90AE application.
(4)That within three weeks of service of the husband’s submissions pursuant to Order 3 hereof the intervener file and serve any written submission upon which he seeks to rely with respect to the husband’s s 90AE application.
(5)That the wife file any submissions in reply to those of the husband and the intervener within 14 days of receipt of the intervener’s submissions.
(6)That the husband’s s 90AE applications be otherwise adjourned on a date to be fixed.

I certify that the preceding forty-one (41) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Johns delivered on 22 December 2017

Associate:

Date: 22 December 2017