Mostyn, J.J. v Commissioner of Taxation

[1986] FCA 565

,

LIMITED DISTRIBUTION

CATCHWORDS

.WMINISTRATIVE LAW - Income Tax - Taxpayer seeking a statement

pursuant to S . 13 of the Administrative Decisions (Judicial Review)

-

Act 1977 of reasons for Deputy Commissioner's decisions to institute

recovery proceedings - whether decision to sue for recovery of tax was

preceded by decision to seek recovery of tax - whether such decisions

are in connection with the institution or conduct of proceedlngs.

PRACTICE AND PROCEDURE - Distinction between Court's power over own

process and a statement of	reasons under S . 13 of the Admlnistrative
Decisions (Judicial Review)	Act.

Administrative Decisions (Judicial Review) Act: ss . 5, 13, Schedule 2 .

JOHN JOSEPH MOSTYN v. DEPUTY COMMISSIONER OF TAXATION

G 414 of 1986

.

LOCKHART J.

SYDNEY

11 NOVEMBER

.

IN THE FEDERAG COURT OF AUSTRALIA

)

NEW SOUTH WALES DISTRICT	REGISTRY	)	No. G 414 of 1986
)
GENERAL DIVISION	)

BETWEEN: JOHN JOSEPH MOSTYN

Applicant

AND : DEPUTY COMMISSIONER OF TAXATION

Respondent

JUDGE MAKING ORDER:	LOCKHART J.
WHERE ORDER MADE:	SMNEY
DATE OF ORDER:	11 NOVEMBER 1986

MINUTES OF ORDER

THE COURT ORDERS THAT:

1. The notice of motion be dismissed.

2. The applicant Pay the respondent’s costs of 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 )

)

NEW SOUTH WALES DISTRICT REGISTRY	)	No. G 414 of 1986
)

G?2NERAL D I V I S I O N )

BETWEEN: JOHN JOSEPH MOSTYN Applicant

AND : DEPUTY COMMISSIONER OF TAXATION

Respondent

11 November 1986

REASONS FOR JUCGMENT

LOCKHART J.

This is an application for an order of review pursuant to the

Administrative Decisions (Judicial Review) Act, 1977 (the "Judicial

Review Act"). In the substantive application the applicant, John

Joseph Mostyn, seeks to review what are sald to be two decislons of

the respondent, the Deputy Commissioner of Taxatlon. First, a

decision to seek recovery of moneys from the applicant claimed by the

Deputy Commissioner to be wing to him in respect of allegedly unpaid

income tax and additional tax allegedly payable pursuant to the

provisions of the Income Tax Assessment Act, 1936 and second, a

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decision to commence proceedings No. 27856 of 1985 in the District

Court of New South Wales against the applicant to recover	the	said
moneys.

A brief reference to the background of this matter is

helpful. The applicant was assessed to income tax for certain years,

including the years ended 30 June 1979 and 30 June 1981. Although the

applicant lodged objections to the relevant assessments, which were

disallowed by the Deputy Commissioner, he did not take the necessary

steps within the time provided by the Assessment Act to Institute

either	3	review by the Board of Review or an appeal to a Supreme
Court.

On 13 December 1985 the Deputy Commissioner issued a

statement of liquidated claim in the District Court clalming from the

applicant the sum of $ 5 8 , 8 9 9 . 2 8 plus additional tax for late payment.

The statement of liquidated claim was served upon the applicant on 14

January 1986. In argument the applicant asserted that the assessments

were fundamentally bad in law as they were founded on bases which

superior courts of this country have	said are untenable.	I	say
nothing about that claim.

Directions have already been given by the Court for the

further conduct of this application, Including directions for particulars and the filing of affidavits. However, the applicant has filed a notice of motion, which is the only matter with which I am concerned today, seeking a declaration that he Is entitled, pursuant

to sub-S. 13(1) of the Judicial4eview Act, to a statement by the

Deputy Commissioner or relevant decision maker within his office,

setting out the findings on material questions of fact and the reasons

for the two decisions which it is said were made and to which I have

already referred. The applicant also seeks in the notice of motion an

order directing the Deputy Commissioner to prepare and furnish the

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applicant with a statement in accordance with	sub-S. 13(1).	The
Deputy Commissioner opposes the motion.

The first question that arises is the identification of the alleged decision or decisions made by the Deputy Commissioner. It is not disputed by the Deputy Commissioner that a decision was taken to commence the District Court proceedings against the applicant for

recovery of the $58,899.28 and additional tax. Indeed, it is obvious

that a decision of that kind must have been taken before the statement

of liquidated claim was issued. But the Deputy Cornmissioner says that there is no evidence that any anterior decision was made by him or any

officer in his employ to recover the moneys allegedly owing by the

applicant in respect of unpaid income tax and additional tax.

There is scanty evidence on that question. It consists

solely of a letter from the Deputy Commissioner to the solicitors for

the applicant dated 10 September 1986. I shall say a little about the

circumstances In which that letter came to be written. On 28 Aprll

1986 the solicitors for the applicant wrote to the Deputy Commissioner

requesting him to furnish a section 13 statement in relation to the

two alleged decisions. WO further letters were written by the

,

solicitors for the applicant as no reply was received to the first

letter. Eventually a letter was written to the solicitors for the

applicant on 10 September 1986 which, omitting formal parts, was in

the following terms:

4 .

“You asked on behalf of the taxpayer for a

statement of reasons under section 13 of the

Administrative Decisions (Judicial Review) Act,

1977 !the Act) concerning decislons institute (sic)

proceedings against the taxpayer to ecover

outstanding tax. It is consldered that those

decisions to institute proceedings for the recovery

of outstanding tax are decisions falling within

schedule 2 of the Act. That schedule sets out the

classes of decisions to which section 13 of the Act

does not apply. In view of this, I do not propose

to provide a statement of reasons as requested in

your letter.	”
This

is a case where it is peculiarly within the knowledge officers made only one decision, namely, the decision to sue the applicant or that decision and an anterior decision tor formation of an opinion which may be the equivalent of a decision) namely, to seek recovery of the moneys in question. In cases of this kind the Court of the Deputy Commissioner as to whether or not he or any of his

needs little material before it would be prepared to infer the

likelihood of the making of an anterior decision of this k m d which is

so closely related to the decision to sue. See Terrule Ptv. Limited

v. Deputv Federal Commissioner of Taxation 85 A.T.C. 4173. On the

evidence before me I am content to infer for present purposes that the

two decisions, which the applicant asserts were made in this case,

were in fact made. This ig, supported by the language of

correspondence from the Deputy Commissioner.

This raises immediately the primary question on the motion

before me today, namely, whether these two decisions fall within the

Schedule 2 to the Judicial Review Act. Certainly decisions such as

the two in question here would be reviewable decisions as they are not

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5.

excluded by Schedule 1 to the Judicial Review Act and the contrary has

not been asserted on behalf of the Deputy Commissioner. But the

question that arises is whether these decisions answer the description

of “decisions in connection with the institution or conduct of

proceedings in a civil court . . . ‘ I for the purposes of paragraph (f) of

Schedule 2 of the Judicial Review Act.

Although these are exclusionary provisions in what 1s

otherwise an enabling act, the words “in connection with“ are words of

wide import and must not be given a restricted meaning In paragraph

(f).

It is conceded on behalf of the applicant that the second

decision in question, namely, t o commence the District Court

proceedings is a decision in connection with the institution of those

proceedings; and plainly that concession is correct.

In my opinion the anterior decision to seek recovery of the

said moneys from the applicant also falls within the description of a

decision in connection with the institution of the proceedings. There

are, of course, various ways by which the Deputy Commissioner may

recover tax which he claims to be ‘due from taxpayers, but in my view a

decision to seek to recover moneys from a taxpayer is so closely

bound up with any subsequent decision to actually sue, that they both

must answer the general description of decisions in connection with

the institution of proceedings. For these reasons S. 13 cannot be

resorted to by the applicant in this case.

.

6.

I need not, therefore, decide another question which was the

subject of argument, namely, whether the combination of sub-ss. 13(1)

and (5) together with S. 5 of the Judicial Review Act operate to bar

the applicant from making its request under section 13 because, so it

was asserted by the Deputy Commissioner, more than 28 days elapsed

after the date of service of the District Court statement	of	clam
upon him before he made the request.

Before leaving the matter, however, I would say that, qulte

independently of S. 13 of the Judicial Review Act, this Court is

seized with the substantive application for review of the two

decisions. Therefore, at some stage, the Court must have before	it
evidence as to what the Deputy Commissioner says were the relevant

decisions referable to this application, that were made by hlm.

Whether that is obtained by particulars being sought from the Deputy

Commissioner by the applicant or by pleadings being ordered and

interrogatories being administered, is not for me to say. But the

Court, in the control of its own process, cannot be kept in the dark

as to what the decision making process was. I say that in no way

critically of the Deputy Commissioner but simply to indicate that

there is a problem in matters of this kind	which parties must grapple
with to elucidate the true issues.

The distinction between the Court's control of its own

processes, including those of discovery, on the one hand and section

13 statements on the other hand and the relation between the two, has

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been adverted to on more than one occasion by decisions of this Court:

most recently in a judgment by the Full Court to which I was a party,

in Commissioner of Taxation v. Nestle Australia Limited, unreported,	5
November 1986.

Accordingly, the notice of motion is dismissed with costs.

Counsel and Solicitors	Mr. A.J. Sullivan instructed by
for the Applicant.	Wronker 6 Partners
Counsel and Solicitors	Mr. P. Roberts instructed by
for the Respondent.	Australian Government Solicitor.
Date of Hearing:	11 Novenber 1986

Date Judgment Dellvered: , 11 November 1986