On Call Interpreters and Translators Agency Pty Ltd v Commissioner of Taxation (No 2)
[2010] FCA 258
•23 February 2010
FEDERAL COURT OF AUSTRALIA
On Call Interpreters and Translators Agency Pty Ltd v Commissioner of Taxation (No 2) [2010] FCA 258
Citation: On Call Interpreters and Translators Agency Pty Ltd v Commissioner of Taxation (No 2) [2010] FCA 258 Parties: ON CALL INTERPRETERS AND TRANSLATORS AGENCY PTY LTD (ACN 006 272 760) v COMMISSIONER OF TAXATION File number(s): VID 409 of 2009 Judge: BROMBERG J Date of judgment: 23 February 2010 Catchwords: PRACTICE AND PROCEDURE – s 78B notices – whether court should continue to hear matters said to be severable from matters arising under Constitution –
s 78B(2)(c).Legislation: Judiciary Act 1903, s 78B
Superannuation Guarantee (Administration) Act 1992, s 12Cases cited: Agtrack (NT) Pty Ltd v Hatfield (2005) 223 CLR 251
Fencott v Muller (1983) 152 CLR 570Date of hearing: 23 February 2010 Place: Melbourne Division: GENERAL DIVISION Category: Catchwords Number of paragraphs: 15 Counsel for the Applicant: Ms F O'Brien SC with Mr G Hill Solicitor for the Applicant: McNab Lawyers Counsel for the Respondent: Mr P Sest Solicitor for the Respondent: Maddocks Lawyers
IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
GENERAL DIVISION
VID 409 of 2009
BETWEEN: ON CALL INTERPRETERS AND TRANSLATORS AGENCY PTY LTD (ACN 006 272 760)
ApplicantAND: COMMISSIONER OF TAXATION
Respondent
JUDGE:
BROMBERG J
DATE OF ORDER:
23 FEBRUARY 2010
WHERE MADE:
MELBOURNE
THE COURT ORDERS THAT:
1.The applicant have leave to amend its application and its appeal statement by raising a constitutional challenge to the Superannuation Guarantee (Administration) Act 1992 to the effect that the tax imposed by that Act is not a tax for a public purpose.
2.The hearing listed to commence 1 March 2010 is vacated.
3.The matter be listed for a directions hearing at 9.30 am on 12 March 2010.
4.The costs of and incidental to the hearing today and the costs of and incidental to the adjournment of the hearing listed to commence on 1 March 2010 be reserved.
Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
The text of entered orders can be located using Federal Law Search on the Court’s website.
IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
GENERAL DIVISION
VID 409 of 2009
BETWEEN: ON CALL INTERPRETERS AND TRANSLATORS AGENCY PTY LTD (ACN 006 272 760)
ApplicantAND: COMMISSIONER OF TAXATION
Respondent
JUDGE:
BROMBERG J
DATE:
23 FEBRUARY 2010
PLACE:
MELBOURNE
REASONS FOR JUDGMENT
This matter is listed to be heard for 5 days commencing 1 March 2010. The parties sought that the matter be urgently listed for mention this afternoon. That request was accommodated by the Court.
Ms O’Brien who appeared for the applicant advised that the applicant will tomorrow serve a notice under s 78B of the Judiciary Act 1903 (Cth). Ms O’Brien told the Court that the applicant does not wish to have the hearing of the matter vacated, but instead seeks:
·leave to amend the applicant’s application and appeal statement in order that the applicant may raise, in those documents, its constitutional challenge; and
·that the Court exercise the power that Ms O’Brien submits is given to it by s 78B(2)(c) of the Judiciary Act to continue to hear part of the matter and make orders for the hearing of the constitutional challenge at a later time.
The nature of the constitutional challenge was briefly outlined. That challenge is a challenge to the constitutionality of the Superannuation Guarantee (Administration) Act 1992 (Cth). The applicant intends to challenge the constitutionality of that Act on the basis that the Act imposes a tax for a purpose which is not a public purpose. It was argued by the applicant that the constitutional issue is separate and distinct from the issue that is currently raised in the proceeding; namely, whether or not the applicant has a liability to pay tax by reference to the operation of s 12 of the Superannuation Guarantee (Administration) Act.
The issue raised by reference to s 12 is whether particular persons utilised by the applicant in the running of its business are employees within the meaning of s 12 or, alternatively, are independent contractors. The applicant’s position in relation to what I might call the s 12 construction issue is that it can be dealt with separately to the applicant’s foreshadowed constitutional challenge to the Superannuation Guarantee (Administration) Act. Accordingly, the applicant urges the Court to utilise the hearing dates listed for the purpose of dealing with the s 12 construction issue and make arrangements for the hearing of the constitutional issue at a later time.
Putting aside questions of discretion, the first matter I need to address is whether s 78B would allow me to entertain the course that the applicant encourages me to take. Section 78B(1) of the Judiciary Act provides that:
(1)Where a cause pending in a federal court including the High Court or in a court of a State or Territory involves a matter arising under the Constitution or involving its interpretation, it is the duty of the court not to proceed in the cause unless and until the court is satisfied that notice of the cause, specifying the nature of the matter has been given to the Attorneys‑General of the Commonwealth and of the States, and a reasonable time has elapsed since the giving of the notice for consideration by the Attorneys‑General, of the question of intervention in the proceedings or removal of the cause to the High Court.
Section 78B(2) deals with what a court may do while a cause referred to in
s 78B(1) is pending. There is a capacity under s 78B(2)(c) for a court to “continue to hear evidence and argument concerning matters severable from any matters arising under the Constitution or involving its interpretation”. The argument that I have had before me today centres upon whether the s 12 construction issue can be regarded as a matter severable from the matter arising under the Constitution or involving its interpretation, within the meaning of s 78B(2)(c).
The word “matter” (in the context of the phrase “a matter arising under the Constitution” or “a matter arising under any law”) has often been considered, including in a number of decisions of the High Court. As Gleeson CJ and McHugh, Gummow, Hayne and Hayden JJ said in Agtrack (NT) Pty Ltd v Hatfield (2005) 223 CLR 251 at [29]:
It is well settled that a “matter” means more than a legal proceeding and that “an important aspect of federal judicial power is that, by its exercise, a controversy between parties about some immediate right, duty or liability is quelled”.
The common understanding of the word “matter” as referring to a “justiciable controversy” has been stated in a number of High Court decisions, including Fencott v Muller (1983) 152 CLR 570 at 603. As the above passage in Agtrack makes clear, the meaning of the word is well settled: see further Australian Competition and Consumer Commission v CG Berbatis Holdings Pty Ltd (1999) 95 FCR 292, at [19]. The applicant does not suggest that the meaning of “matter” in the phrase “a matter arising” as utilised in s 78B(1) is to be given a different meaning to its well-settled meaning. The applicant accepts, as I do, that the phrase “a matter arising” is a reference to the justiciable controversy and not simply an aspect of that controversy.
The next relevant question then, is what is the justiciable controversy before the Court? Both parties accept that the justiciable controversy is whether or not the applicant is liable to pay the tax which has been imposed upon it pursuant to the Superannuation Guarantee (Administration) Act. If that is the justiciable controversy, I fail to see how the s 12 construction issue is not part of that controversy. In fact, the applicant conceded as much.
In the end, the applicant argued that the word “matters” in the phrase “matters severable” in section 78B(2)(c), should be given a different meaning to the meaning to be given to the word “matter” in the phrase “a matter arising” in s 78B(1). In essence, the applicant suggests that “matters severable” should be read as though it said “issues severable”.
The difficulty with the applicant’s argument, even if its construction of “matters” in
s 78B(2)(c) is correct, is that s 78B(2)(c) only permits a court to continue to hear evidence and argument concerning “matters severable” from any “matter arising under the Constitution or involving its interpretation”. If I am to give that phrase, as it appears in s 78B(2)(c), the same meaning as the identical phrase which appears in s 78B(1), as I believe I must do, then the applicant’s argument must fail. It must fail because once it is accepted that the s 12 construction issue is part of the “matter arising” referred to in s 78B(1), that construction issue must also form part of the “matter arising” to which s 78B(2)(c) refers. In other words, the s 12 construction issue is part of the justiciable controversy and is not severable from it for the purposes of s 78B(2)(c).
I have concluded therefore that I have no capacity pursuant to s 78B(2)(c) to accede to the applicant’s application that I exercise a power to continue to hear evidence and argument in relation to the s 12 construction issue.
Given the proximity of the hearing dates and that s 78B notices are to be served tomorrow, it is incumbent upon me to adjourn the hearing in order to give the Attorneys-General of the Commonwealth and of each of the States a reasonable time to consider whether or not they wish to intervene or to have the proceeding removed to the High Court.
In the circumstances, what I propose to do is grant the leave requested by the applicant to amend its application and appeal statement, vacate the hearing listed to commence on 1 March 2010 and adjourn the proceeding to a directions hearing.
Given the applicant’s desire to have the s 12 construction issue dealt with as soon as possible, on the adjourned date I will consider any application to effectuate that desire in the most timely way possible. At that juncture, I will have the benefit, if they choose to participate, of the views of the Attorneys‑General of the Commonwealth and/or each of the States.
I certify that the preceding fifteen (15) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Bromberg. Associate:
Dated: 22 March 2010
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