Mathews, Russell Gordon Haig v McCarthy, J M, Deputy Commisioner of Taxation

[1996] FCA 841

FEDERAL COURT OF AUSTRALIA             No. QG 59 of 1996
QUEENSLAND DISTRICT REGISTRY  
GENERAL DIVISION  

BETWEEN:              RUSSELL GORDON HAIG MATHEWS

Applicant

AND:J M  McCARTHY, DEPUTY COMMISSIONER OF TAXATION

Respondent

MINUTES OF ORDERS

JUDGE MAKING ORDER:  Drummond J
DATE OF ORDER:  29 August 1996
WHERE MADE:  Brisbane

THE COURT ORDERS THAT:

1.  The proceedings be dismissed.

2.  The applicant pay the respondent’s costs of and incidental to the proceedings.

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

FEDERAL COURT OF AUSTRALIA  No. QG 59 of 1996
QUEENSLAND DISTRICT REGISTRY  
GENERAL DIVISION  

BETWEEN:              RUSSELL GORDON HAIG MATHEWS

Applicant

AND:J M  McCARTHY, DEPUTY COMMISSIONER OF TAXATION

Respondent

CORAM:Drummond J

DATE:29 August 1996

PLACE:Brisbane

REASONS FOR JUDGMENT

I have before me a notice of motion by the respondent in the present proceedings, which notice of motion was filed on 10 July 1996.  It seeks orders terminating summarily the proceedings, as well as other relief, if the proceedings are to continue.  Mr Mathews, the applicant in the originating proceedings and respondent to the motion, is legally unrepresented but has appeared at all times to make submissions to the Court.

On 12 July, I gave directions for the hearing of the respondent's motion to ensure that Mr Mathews would know, well before today, precisely the grounds upon which the respondent would be relying in argument to support its claim for the
summary termination of the proceedings, and to ensure that Mr Mathews would know precisely all the evidence upon which the respondent would also rely in support of that attack on his action.

In accordance with those directions, the respondent has filed its evidence, the last such affidavit being filed and served on 31 July 1996, and the respondent, in compliance with the directions, has also filed and served a detailed written outline of submissions, again on 31 July 1996.  Mr Mathews has had a very full opportunity to consider the evidence and the arguments relied on today by the respondent to justify the summary termination of his action.

The directions I gave on 12 July also included a direction to Mr Mathews in his presence that he, if he wished to rely on any evidentiary material in answer to the respondent's material, should file and serve that material by 23 August. Notwithstanding the various issues raised by the respondent in its material and in its outline of submissions, Mr Mathews has elected not to file any material.

He makes submissions from the bar table that in the last week or so he has had dental problems which have caused him considerable distress and explains his failure to do what he says he would otherwise have done by filing answering material, or at least submissions by way of argument.  But it is plain that Mr Mathews has had the fullest opportunity to prepare to deal with the respondent's challenge and I therefore propose to deal with that challenge on the evidence before me.

The proceedings in question were commenced by Mr Mathews on 22 April 1996 when he filed an application seeking relief under s 39B of the Judiciary Act 1903 (Cth) and under the Administrative Decisions (Judicial Review) Act 1977 (Cth) against the Deputy Commissioner of Taxation.  The relief claimed, by way of mandamus and declarations, had the object of requiring the Commissioner to treat a company, Aah-Rem Securities Pty Ltd, with which Mr Mathews has an association, as having been at all material times a registered tax agent, with him as its nominee.  The contention at the heart of Mr Mathews' case is that the decision of the Tax Agents Board of 20 October 1992, notified to Aah-Rem Securities on 21 October 1992, is void and of no effect at all, as a decision depriving Aah-Rem Securities of its pre-existing registration as a tax agent, with Mr Mathews as its nominee.

Mr Mathews' point is that what the Board had before it on that occasion was no more nor less than an application by the company for re-registration as a tax agent, it having been registered some years previously, and that, if the decision, as recorded in the minutes and as evidenced by the letter I have referred to, is read, it can only be read as a decision to refuse registration of the company as a tax agent.  Registration as opposed to re-registration was not applied for;  a decision to refuse registration was, so Mr Mathews says, not open to the Board.

It is apparent from a reading of the material, including the history of registration of the company as a tax agent some years prior to October 1992, that the only sensible reading of the material is that the Board made a decision to refuse re-registration of the company as a tax agent with Mr Mathews as its nominee.  The core point upon which the whole case is based by Mr Mathews is, in my opinion, without any merit.

That is not the only reason, in my judgment, why the application should be summarily dismissed now.  As I have mentioned, the present proceedings take the form of an application by Mr Mathews against the Deputy Commissioner of Taxation for orders designed to compel the Deputy Commissioner, in effect, to ignore the decision of the Tax Agents Board in October 1992 to refuse re-registration of the company and to treat the company with Mr Mathews as its nominee as "having at all times up till now been registered as a tax agent with Mr Mathews as its nominee".

When the Tax Agents Board notified the company, by the letter I have referred to on 21 October 1992, of its refusal to re-register the company as a tax agent, it drew the company's attention to the availability of review under the Administrative Appeals Tribunal Act 1975 (Cth) of that decision.  The company did not take advantage of that procedure.  However, on 2 November 1992, Mr Mathews, who had obviously received the letter directed to the company, brought proceedings in his own name in this Court under the ADJR Act seeking to review the decision of the Tax Agents Board on various grounds.  He ultimately discontinued those proceedings on 18 December 1992 and there the matter rested until, by way of the collateral challenge now made to the decision of the Tax Agents Board, Mr Mathews commenced the present proceedings in April of this year.

The relief he seeks in the present proceedings, whether it be under the Judiciary Act or under the ADJR Act, is discretionary.  It is a matter of great importance where such a long period of delay has passed between the making of the decision, the validity of which is at the core of Mr Mathews' claim in these proceedings for relief, and the time of institution of the proceedings.  Mr Mathews must be well aware of the need to deal with these issues in view of the explicit raising of the issue of delay by the respondent in his written outline of 31 July.  He has elected not to put any evidence before the Court to offer an explanation for this very long period of delay which might provide a ground, if that were the only impediment to the continuance of his action, upon which the Court would be justified in refusing the Deputy Commissioner’s application for its summary termination.

Mr Mathews justifies this position by submitting, as I understand him, that the delay that has occurred is of no legal relevance to the relief he now seeks.  Secondly, he asserts that he did not appreciate that now, rather than at the trial, would be the time to deal with these issues.  I reject the second assertion in view of the very explicit notice he was given in the respondent's outline that this issue was one for determination today and, in view of the directions I gave, drawing his attention to the need for him to put any material he wanted to rely on before the Court at today’s hearing.

There being no explanation for such an extraordinarily long period of delay, that, in my judgment, given the nature of the decision, the validity of which is at the core of Mr Mathews' proceedings before me now, would be sufficient, of itself,
to justify the summary termination of those proceedings.  Unexplained delay coupled with explicit knowledge of the need to explain the delay is, to my mind, in the circumstances of this case, a matter which well justifies their summary termination.

So far as the question of delay is concerned, the material relied upon by the respondent raises matters which suggest that Mr Mathews has a possible motive for instituting the present proceedings which would disable him from offering to the Court an acceptable explanation for the delay in instituting them.

The material relied upon by the respondent indicates that, on 20 May 1994, Mr Mathews was found guilty of an offence under the Income Tax Assessment Act 1936 (Cth) of unlawfully involving himself in the preparation of taxation returns.

The offences occurred between 27 November 1992 and 27 October 1993, ie, after, it would appear, he had notice of the Tax Agents Board's decision to refuse registration of the company with which he was associated and of which he had been its nominee.  The evidence of the respondent also indicates that in February of this year a further prosecution was launched by the relevant authorities against Mr Mathews for what was, in effect, alleged to be a repetition of the same unlawful conduct by Mr Mathews, conduct allegedly occurring in September, October and November 1994, and again in January and in February of 1995.

Given the evidence before me and Mr Mathews' silence on the question of explaining the delay in instituting the present proceedings, it is open to
me to infer that the real explanation for these present proceedings being brought so late in the day, designed collaterally to obtain orders identifying the Tax Agents Board's decision of October 1992 as being void, is to cut away the ground from under the prosecution proceedings presently pending against him and perhaps also to demonstrate the lack of justification for the earlier conviction.

I think that there is good ground for suspecting that the existence of the raft of new prosecution proceedings against Mr Mathews, which appear still to be pending, may well have something to do with the institution, very belatedly, of the present proceedings.  Such a consideration only serves to reinforce me in the conclusion I have already indicated I have come to, that the unexplained delay by Mr Mathews for instituting these proceedings in the circumstances of this case self-justifies their summary dismissal.

There are other grounds raised by the respondent in his written outline for summarily terminating the present proceedings.  I do not propose to deal with them since it seems to me that, for the reasons I have given, viz, the lack of any merit in the applicant's case and the delay to which I have referred, are sufficient to justify my making an order that the proceedings be dismissed on the ground that there is no reasonable basis for the orders sought and on the further ground that the application is frivolous and vexatious.

I will order that Mr Mathews pay the respondent's costs of and

incidental to the present proceedings.

[DW1] 

I certify that this and the preceding seven
pages are a true copy of the reasons
for judgment herein of the Honourable
Justice Drummond.

Associate:

Date:  29 August 1996

[DW1]CHECK THAT THE REASONS ARE IN DOUBLE LINE SPACING.