Pratten v Commonwealth of Australia

[2017] HCATrans 124

[2017] HCATrans 124

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Sydney  No S116 of 2016

No S117 of 2016

B e t w e e n -

TIMOTHY CHARLES PRATTEN

Plaintiff/Applicant

and

COMMONWEALTH OF AUSTRALIA 

Defendant/Respondent

GAGELER J

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON FRIDAY, 16 JUNE 2017, AT 9.15 AM

Copyright in the High Court of Australia

HIS HONOUR:   I am concerned in these reasons for decision with two proceedings in the original jurisdiction of the High Court.  The first (No S116 of 2016) is a proceeding in which Mr Timothy Charles Pratten is the plaintiff and the Commonwealth of Australia is the defendant.  By writ of summons, supported by a statement of claim, Mr Pratten seeks in that proceeding declaratory and injunctive relief.  I will refer to it as the “declaration proceeding”.  The second (No S117 of 2016) is an application under s 40 of the Judiciary Act 1903 (Cth) for removal of a criminal proceeding which Mr Pratten claims to be pending in the Supreme Court of New South Wales. I will refer to it as the “removal proceeding”.

In the declaration proceeding, I am specifically concerned with an application by the Commonwealth for summary dismissal.  In the removal proceeding, I am concerned with whether the order for removal can or should be made.

The proceedings share a common background and raise common issues.  The common background is as follows.

On 4 April 2011, the Commonwealth Director of Public Prosecutions charged Mr Pratten on indictment in the Supreme Court of New South Wales with seven counts of dishonestly obtaining a financial advantage from the Commonwealth contrary to s 134.2(1) of the Criminal Code (Cth). Each charge related to a failure by Mr Pratten to disclose assessable income in a tax return with a resultant reduction in his liability to pay income tax.

Counts 1 and 2 related to financial years ending 30 June 2003 and 30 June 2004 respectively, each return being lodged on 18 August 2005.  Count 3 related to the subsequent financial year, the return being lodged on 21 June 2006.  Counts 4 to 7 related to the four subsequent financial years, the returns being lodged on 29 September 2009.

Following an initial trial by jury, Mr Pratten was on 13 June 2012 found guilty on all seven counts.  He was convicted and sentenced on 31 March 2014:  R v Pratten (No 12) [2014] NSWSC 396. In the interim, he had commenced civil proceedings against the Director which had been dismissed on 21 May 2013: Pratten v Director of Public Prosecutions (Cth) (2013) 302 ALR 329. Mr Pratten appealed against his initial convictions. On 1 July 2014, the Court of Criminal Appeal quashed the convictions and ordered a retrial: Pratten v The Queen [2014] NSWCCA 117.

Following a second trial by jury, Mr Pratten was on 9 September 2015 again found guilty on all seven counts.  On 29 April 2016, he was convicted and sentenced to five years’ imprisonment with a non‑parole period of two years:  R v Pratten (No 25) [2016] NSWSC 539. By that time, Mr Pratten had commenced the declaration proceeding and the removal proceeding.

Mr Pratten had sought and, earlier on 29 April 2016, had been refused an adjournment of the criminal proceeding until the declaration proceeding and the removal proceeding had been determined.  The trial judge refused the adjournment on the basis that he did not consider the issues Mr Pratten sought to raise in the declaration proceeding and the removal proceeding to be arguable and that, even if he were wrong, “the application before the High Court” (by which I understand him to mean the declaration proceeding) would not be “rendered nugatory” by him going on to convict and sentence Mr Pratten:  R v Pratten (No 26) [2016] NSWSC 935 at [14].

The Director appealed against the sentence.  On 17 March 2017, the Court of Criminal Appeal allowed that appeal and resentenced Mr Pratten to imprisonment for a period of six years and four months with a non‑parole period of three years and nine months:  Director of Public Prosecutions (Cth) v Pratten (No 2) [2017] NSWCCA 42.

Mr Pratten filed a Notice of Intention to Appeal against his convictions on 17 May 2016, but as at 4 May 2017 had yet to lodge a Notice of Appeal.

The issues which Mr Pratten seeks to bring before the High Court in the declaration proceeding and the removal proceeding concern that element of the offence of which Mr Pratten was charged and convicted which required that he be found to have obtained a financial advantage.  The financial advantage alleged in respect of each count was a reduction in Mr Pratten’s liability to pay income tax consequent on his failure to disclose assessable income, as to which the trial judge instructed the jury that they would have to come to their own opinion “as to whether income tax was payable and whether income was received”.

What Mr Pratten seeks to argue is that, for constitutional reasons, his liability to pay income tax and consequently the existence or non‑existence of any financial advantage to him could only be determined in proceedings under Pt IVC of the Taxation Administration Act 1953 (Cth). Until proceedings under Pt IVC have been completed, he says, the existence of a financial advantage to him can be nothing more than a hypothesis.

Mr Pratten has in fact commenced proceedings under Pt IVC which have been completed.  On 4 August 2010 the Commissioner of Taxation issued amended assessments in respect of the years of income covered by each count.  Mr Pratten filed objections, which the Commissioner disallowed, following which, on 27 November 2011, Mr Pratten commenced review proceedings in the Administrative Appeals Tribunal.  On 27 August 2013 and again on 2 September 2014 those proceedings were adjourned until further order of the Tribunal.

Mr Pratten seeks to frame his constitutional argument in a variety of ways. One is in reliance on covering cl 5 of the Constitution. Another is in reliance on the doctrine of separation of powers deriving from Ch III of the Constitution. While stressing that he is not a lawyer and that his precise formulation of the argument may not be optimal, Mr Pratten seeks to illustrate the gravamen of his argument by pointing out the incongruity of there being one outcome in the criminal proceeding and another outcome in the proceedings under Pt IVC, both of which would ultimately be appealable to the High Court.

Whatever way the constitutional argument might possibly be formulated, I cannot consider it viable.  For the purpose of determining his criminal liability, the question of whether Mr Pratten obtained a financial advantage through a reduction in his liability to pay income tax consequent on his failure to disclose assessable income was a question of fact.  No doubt, it might have been sought to have been proved in a number of ways.  But, as a question of fact, it was properly a question for the jury. 

What the jury plainly could not do was determine Mr Pratten’s civil liability to pay income tax.  But the jury was distinctly not asked to do that.  The verdicts of the jury cannot bind the Tribunal in the conduct of the Pt IVC proceedings.  Nor could it be suggested that the continuation of those proceedings by Mr Pratten would be an abuse of process in light of his convictions:  see Saffron v Commissioner of Taxation (1991) 30 FCR 578.

There is, as Mr Pratten points out, the theoretical potential for the continuation of his proceedings under Pt IVC to produce a result which is inconsistent with the implicit finding of the jury that he obtained a reduction in his liability to pay income tax consequent on his failure to disclose assessable income in each of the relevant years of income.  But inconsistency between outcomes on similar issues in different proceedings cannot alone be indicative of a constitutional difficulty.

The conclusion that Mr Pratten’s constitutional argument is not viable is sufficient to lead to summary dismissal of the declaration proceeding as well as dismissal of the removal proceeding.

There is, however, another and more basic reason why the removal proceeding must be dismissed.  The reason is that the removal proceeding has become moot.  What Mr Pratten seeks to have removed is the proceeding in which he has now been convicted and sentenced.  The proceeding has been concluded by final judgment.  There is nothing left to remove.  I reject Mr Pratten’s argument that the proceeding remains on foot because the refusal to adjourn on 29 April 2016 involved an error of law.  I can see no error in the decision then made.  Nor would the validity of the subsequent conviction and sentence be affected even if there had been an error.

In proceeding S116 of 2016, I make the following orders:

1.The proceeding is dismissed.

2.The plaintiff is to pay the costs of the Commonwealth of Australia.

In proceeding S117 of 2016, I make the following orders:

1.The application for removal is dismissed.

2.The applicant is to pay the costs of the Commonwealth of Australia.

I publish my reasons.

The Court will now adjourn until 9.30 am.

AT 9.16 AM THE MATTERS WERE CONCLUDED