MacPherson v Commissioner of Taxation

The case of MacPherson v Commissioner of Taxation involved the appellant, Graham MacPherson, who was charged with making false statements to a taxation officer, under section 8P(a) of the Taxation Administration Act 1953 (Cth). The charges related to understating his income by failing to declare certain gross income received and omitting the value of benefits received. After a lengthy hearing, the prosecution was dismissed, leading to a dispute over whether MacPherson should be awarded his costs as a successful defendant. The magistrate ruled that neither party should receive their costs, and this decision was upheld in the District Court. MacPherson then sought leave to appeal to the higher court, which was granted.

The legal issues before the court were twofold: whether the magistrate had correctly exercised their discretion in deciding the appropriate order for costs, and whether the magistrate had applied the correct legal principles in making this decision. Specifically, the court needed to determine whether the magistrate had erred by considering the matters set out in section 158A of the Justices Act 1886 instead of adhering to the general principles set out in Latoudis v. Casey.

In resolving these issues, the court found that the magistrate had indeed acted wrongly by considering the wrong statutory provisions. The court held that the magistrate should have exercised their discretion in accordance with the general law as explained in Latoudis v. Casey. Consequently, the court had to exercise its discretion afresh in deciding the appropriate order for costs under section 8ZN of the Taxation Administration Act 1953 (Cth). Given the circumstances, the court decided that MacPherson should not be awarded costs, despite his success at trial, due to the reasons outlined by McPherson J.A. The court concluded that this was one of those unusual cases where the appellant should not receive costs.