Quach v Commissioner of Taxation
[2024] ACTSC 312
•16 October 2024
SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY
Case Title: | Quach v Commissioner of Taxation |
Citation: | [2024] ACTSC 312 |
Hearing Date: | 14 August 2024 |
Decision Date: | 16 October 2024 |
Before: | Ainslie-Wallace AJ |
Decision: | (1) The Originating Application dated 8 April 2024 is dismissed. (2) The Applicant is to pay the Respondent’s costs. |
Catchwords: | CIVIL LAW – PRACTICE AND PROCEDURE – False and misleading statement to the Court – whether Respondent knowingly mislead the Court – whether Respondent’s statement that proceedings were interlocutory breached s 723 of the Criminal Code ACT (2002) – whether proceedings were interlocutory – application of res judicata to interlocutory proceedings |
Legislation Cited: | Court Procedure Rules 2006 (ACT) Pt 5.2, rr 425, 5070, 5402, 5403, 5310, 5472 |
Cases Cited: | Annetts v McCann (1990) 170 CLR 596 |
Parties: | Dr Michael Wan Thanh Quach ( Applicant) Commissioner of Taxation ( Respondent) |
Representation: | Counsel Self-represented ( Applicant) J Moffett ( Respondent) Solicitors Self-represented ( Applicant) Australian Government Solicitor ( Respondent) |
File Number: | SC 125 of 2024 |
AINSLIE-WALLACE AJ:
Introduction
Dr Michael Van Thanh Quach (the Applicant) by application filed on 8 April 2024 seeks orders as follows:
The Commissioner of Taxation is guilty of contempt by misleading the court
Costs
Compensatory damages
Interests
The basis of the application is expressed:
Res Judicata cannot be applied to interlocutory proceedings, pursuant to Dr Michael Van Thanh Quach v MLC Life Limited (No 4) [2020] FCA 532 at [24]. Griffiths J referencing Zetta Jet Pte Ltd v The Ship “Dragon Pearl” (No 2) [2018] FCAFC 132, 265 FCR 290 at [14] ff per Allsop CJ, Moshinsky and Colvin JJ).
Background
The background to this particular application lies in proceedings between Bennelong Medical Pty Ltd (Bennelong) and the Commissioner of Taxation. The Applicant is the sole director and shareholder of Bennelong Medical Pty Ltd. The principal proceedings appear to concern a dispute over an “R & D. incentive refund pursuant to a section of the Taxation Administration Act 1953 (Cth)”.
The originating process filed by Bennelong against the Commissioner of Taxation seeks the following order:
Ruling pursuant to the High Court ruling in the Yager v Queen (1977) 139 CLR 28, 43 and Quach v Butt [2016] ACTSC 153 at [13].
As part of those proceedings, the Applicant sought leave to act on Bennelong’s behalf in the proceedings.
Senior Deputy Registrar refuses leave for Dr Quach to represent Bennelong
That application came before the Senior Deputy Registrar of the ACT Supreme Court and on 24 March 2023, the Registrar dismissed the application.
It is to be noted that throughout the course of the various appeals and applications brought on behalf of Bennelong, leave has been given to the Applicant to appear for Bennelong for the limited purpose of that particular hearing. However, it is important to draw a distinction between those applications where Bennelong was the applicant, and the instant application in which the Applicant appears in his own right. For ease of reference in these reasons and against this context, I will refer to applications brought by Bennelong as such.
Appeal to Mossop J against the Senior Deputy Registrar’s decision
Bennelong appealed the decision which was heard by Mossop J sitting as a single judge of the Supreme Court on 11 April 2023. His Honour dismissed the appeal and ordered Bennelong to pay the Respondent’s costs. His Honour observed that the hearing of the appeal from the Senior Deputy Registrar was a hearing de novo. (Bennelong Medical Pty Ltd v Commission of Taxation [2023] ACTSC 74).
Appeal against Mossop J’s decision and application to dismiss the Notice of Appeal
Being dissatisfied with the result, on 27 April 2023, Bennelong filed a notice of appeal against his Honour’s orders. There was but one ground in the filed Notice of Appeal, namely:
Registrar Gatehouse [sic] decision of 24 March 2023 is contrary to Mossop J decision of 11 April 2023
On 5 June 2023, the Respondent sought an order that the Notice of Appeal be struck out “… as incompetent pursuant to rule 5472 of the Court Procedure Rules and/or as noncompliant with the Rules”.
The asserted basis of the incompetence or non-compliance was that the grounds of appeal did not specify the asserted error of law pursuant to rr 5402(2), 5403(1)(f) of the Court Procedure Rules 2006 (ACT) (the Rules).
The hearing before Curtin AJ
The hearing of the application came before Curtin AJ on 20 June 2023 sitting as a single judge of appeal (Bennelong Medical Pty Ltd v Commissioner of Taxation (No 2) [2023] ACTCA 28). His Honour concluded that the application was inapt because asserted non-compliance with the Rules as they relate to drafting of Notices of Appeal is not susceptible to r 5472 which his Honour said was concerned with the jurisdiction of the Court to entertain an appeal.
However, his Honour said that the Notice of Appeal as filed by Bennelong was defective in that it did not comply with r 5403(1)(f) and 5402(2) and specify a ground of appeal. His Honour concluded that the Notice of Appeal as filed fell within r 425, that is, it may tend to prejudice, delay or embarrass the fair trial of a proceeding, and so struck out the Notice of Appeal. His Honour granted Bennelong leave to redraw the Notice of Appeal.
His Honour ordered the Respondent to pay Bennelong’s costs of the application because the application, as then framed, was bound to fail.
In passing, his Honour made two comments. He said, in relation to the inapt application at [19]:
The application, as presently framed, was bound to fail because of the two decisions to which I have referred and it would appear that the respondent did not undertake any substantive research as to the grounds required to be established to obtain the relief it sought.
The Applicant lays much emphasis on his Honour’s comments on the inadequacy of the Respondent’s research to which I will return.
His Honour also said at [17]–[18]:
The other issue that arose is whether the appeal is competent because the decision appealed from may be an interlocutory decision and not a final decision. The respondent did not include in its application that a ground for seeking that the Notice of Appeal be struck out was because the decision appealed from was interlocutory (and therefore the appellant required leave to appeal and had no absolute right to appeal).
It appears that, prima facie, but without the benefit of argument, Mossop J's decision may well have been interlocutory, and therefore leave to appeal is required. Therefore, that issue should be determined, and the respondent has indicated that, if given the opportunity, it would seek leave to amend its application in proceeding to seek that this appeal be struck out as incompetent because leave to appeal is required and has not been sought or granted.
To that end, his Honour gave leave to the Respondent to file an Amended Application in Proceeding to challenge the Notice of Appeal.
The hearing before Taylor J
An Amended Notice of Appeal was filed by Bennelong on 23 June 2023. In its amended form, the Notice included the following:
On the 11 April 2023, Mossop J presided over an appeal from a decision to refuse leave represent [sic] Bennelong medical Pty Ltd, as an authorised officer.
Submissions were heard on the Australian Taxation Officer as a model litigant. His Honour referred to correspondences between the Applicant and the Respondent.
His Honour relied on Manny v David Lardner & Associates (No 2) [2019] ACTSC 86 to state the following,
As a consequence, I reached the same conclusion as that reflected in the orders made by the Senior Deputy Registrar. As a consequence, the appeal will be dismissed. Costs of the appeal should follow the event.
On 26 June 2023, the Respondent filed an application seeking that the Amended Notice of Appeal be struck out. The basis of the application was said to be:
The Appellant requires leave of the Court to appeal which leave the Court has not granted.
In support of the application, the Respondent relied on an affidavit of Vincent Daniel Tavolaro, a solicitor employed by the Australian Government Solicitor in which he said:
4. The order made by Justice Mossop on 11 April 2023 is an interlocutory order. An appeal from an interlocutory order may only be brought with the leave of the Court of Appeal
That application was heard by Taylor J on 6 September 2023, sitting as a single judge of appeal (Bennelong Medical Pty Ltd v Commissioner of Taxation (No 3) [2023] ACTCA 37).
The Respondent argued that Mossop J’s decision in dismissing Bennelong’s appeal from the Deputy Registrar’s decision was interlocutory and thus required leave of the Court of Appeal before a Notice of Appeal could be filed.
Counsel for the Respondent contended that the decision did not finalise or resolve the rights of the parties, and the suit between Bennelong and the Respondent remained on foot, albeit the Applicant was unable to appear for Bennelong. Counsel further noted that the hearing before Mossop J was an appeal in the form of a hearing “de novo” in which the issue considered by the Deputy Registrar was considered afresh by his Honour. Thus, it was argued that the decision was interlocutory and s 37E(4) of the Supreme Court Act 1933 (ACT) applies, which says:
… an appeal may be brought against an interlocutory order of the court constituted by a single judge only with leave of the Court of Appeal.
(Emphasis added.)
Therefore, it was argued that the Amended Notice of Appeal, not being filed with leave, was incompetent and her Honour would strike it out as incompetent pursuant to r 5472 of the Rules.
Her Honour said to the Applicant:
Well, I just want to make sure that you understand Mr Moffett’s position as at today. The application I’m determining today is the application he brings to strike out your notice of appeal on the basis that there is a requirement for leave to be granted before you can appeal Mossop J’s decision. Something Curtin JA referred to in the matter that he dealt with that you now have…
Her Honour continued and explained to the Applicant:
…Mr Moffett’s position is that your amended notice of appeal, that you require leave, that is, there’s a process that goes before the appeal proper, if I can put it that way, and that process is that you require leave of the court to appeal Mossop J’s decision because it was an interlocutory decision. That’s the substantive argument that Mr Moffett makes ….
The thrust of the Applicant’s argument on this application was that there was no statutory basis for requiring leave to be granted before the appeal can be brought. He argued that appeals from a decision of a Registrar are governed by the provisions in pt 5.2 of the Rules and there is nothing in that Part which requires leave to appeal. In relation to r 5070, which deals with appeals to the Supreme Court from an order of a court or tribunal which says that if the “relevant law requires the Supreme Court’s leave” then leave must be sought, the Applicant asserted that there is “… no relevant law that requires leave to appeal from Mossop J’s decision”. The Applicant argued that Mossop J’s decision was not interlocutory because, the Applicant argued, an interlocutory hearing is commenced using Form 6.2 and the form commencing the appeal from Mossop J’s decision was Form 5.1 and thus it was a different kind of proceeding which was not interlocutory.
Her Honour concluded that the proceedings before Mossop J were indeed interlocutory and, as a result, leave to appeal from his determination was required. Her Honour also concluded that as the appeal was commenced without leave, it was incompetent, and the Amended Notice of Appeal was struck out. Her Honour continued and considered whether, if leave had been sought, would it have been granted. She concluded that she would have refused leave to appeal.
Further proceedings
It needs to be noted that on 10 May 2024, the Applicant again applied for leave to represent Bennelong. That application was heard by Loukas-Karlsson J who dismissed the application because there had been no material changes of circumstances in respect of the Applicant’s relationship to Bennelong and her Honour found it to be an abuse of process.
In June 2024 Bennelong’s principal cause of action against the Commissioner was heard by Mossop J. The Applicant was refused leave to appear for Bennelong. The proceedings were dismissed.
Finally, on 11 July 2024 the Applicant sought leave to appeal from the decision of Loukas-Karlsson J refusing him leave to appear for Bennelong. That application came before Elkaim AJ who dismissed it on the basis that the principal proceedings had been finalised by Mossop J and there was nothing from which the Applicant could appeal, with or without leave.
The Contempt Proceedings
The Applicant brings this application in his own right and contends that on 6 September 2023 before Taylor J, the Commissioner of Taxation through counsel made a misrepresentation to the Court which was false and which counsel knew was false.
The genesis of the application
As I have said, the genesis of this application lies in statements made in an affidavit and orally in the hearing before Taylor J on behalf of the Commissioner of Taxation.
The false statement was identified by the Applicant as the assertion that the decision of Mossop J was an interlocutory decision and leave to appeal was thus necessary.
The Applicant argued that in so doing, the Respondent was applying “res judicata” to bring his appeal to an end to the Applicant’s detriment knowing that “res judicata” did not apply to interlocutory orders.
In an affidavit filed on 20 May 2024, the Applicant said:
2. On 6 September 2023, the Commission of Taxation, through his Counsel Jason Moffet [sic], made representation to the Court to apply res judicata on a proceeding he says was an interlocutory proceeding.
3. Mr Jason Moffet is well aware, from his participation in Quach v ATM Residential Pty Ltd [2022] ACTSC 210, that res judicata does not apply to interlocutory proceedings
4. Pursuant to Barristers’ rules, Mr Jason Moffet has a paramount duty to the Court.
In written submissions on the application, the Applicant contended that the Commissioner of Taxation, through his counsel, in stating that the decision of Mossop J was interlocutory “intended to stop the appeal by applying res judicata on interlocutory orders”. He further argued that counsel, Mr Moffett was well aware that res judicata did not apply to interlocutory proceedings through his involvement in two cases, Bennelong Medical Pty Ltd v Commissioner of Taxation [2023] ACTSC 74 and Quach v ATM Residential Pty Ltd [2022] ACTSC 210.
He said:
In my respectful submissions, the Commissioner of Taxation has misled the Court. Making a false or misleading to the Court is an offence under s 723 of the Criminal Code 2002 (ACT).
Contempt
Section 723(1) of the Criminal Code 2002 (ACT) relevantly says:
(1)A person commits an offence if the person makes a false sworn or unsworn statement in a legal proceeding before a court and the person is reckless about whether the statement is false.
The impugned statement must be false in fact and the maker must be aware that there is a substantial risk that the statement is false having regard to the circumstances known to him, it is unjustifiable to take that risk.
The elements of the charge must be proved beyond reasonable doubt. Thus, in order to make good his application, the Applicant must prove beyond reasonable doubt that the statements (both written and spoken) that Mossop J’s determination was interlocutory were false in fact, that the makers knew that the assertion was false or knew that there was a substantial risk that the assertion was false, and nonetheless made the statement or took the risk.
Was the decision of Mossop J interlocutory
Before Curtin AJ and Taylor J, the Applicant asserted that the decision was not interlocutory because there was no rule or statute that says it has that nature and that leave to appeal was necessary. He relied on the High Court’s decision in Annetts v McCann (1990) 170 CLR 596 (Annetts), at 598:
It can now be taken as settled that, when a statute confers power upon a public official to destroy, defeat or prejudice a person's rights, interests or legitimate expectations, the rules of natural justice regulate the exercise of that power unless they are excluded by plain words of necessary intendment:
Thus, he contended that if he was to be deprived of his “right to appeal” Mossop J’s order, clear statutory words to that effect must exist and they do not.
In his argument on this point, the Applicant relied on what was said by Curtin AJ in the proceedings before him to emphasise that there was no foundation to assert that the decision was interlocutory.
In the argument on this application, the Applicant said:
Curtin AJ … was very very clear in his criticism of the Commissioner of Taxation and on the day he asked Vincent Daniel Tavolaro:
His Honour: Do you understand what the definition of incompetence is? ---No
His Honour: did you do any research? ---No
…..
Dr Quach: …I’m saying that the court was and is the Court of Appeal. Curtin J was sitting as a single judge of the Court of Appeal. His Honour made it very clear in his criticism that there was no research done and in this case, there is no research to back up the statement that Mossop J’s decision of 11 April 2023 is an interlocutory order.
Alas for the Applicant, his Honour’s criticism of the solicitor then appearing for the Respondent was not as to whether the Respondent had done any research to back up the statement that Mossop J’s decision was interlocutory, but was to the point that, as his Honour Curtin AJ’s reasons make clear, to the correct section by which the application to strike out the Applicant’s Notice of Appeal could be brought. So much is clear from his Honour’s comments repeated above.
Further, his Honour Curtin AJ at [18] reflected that Mossop J’s decision “may well be interlocutory, and therefore leave to appeal is required”. Which is why his Honour gave leave to the Respondent to file an amended application which was, in the result determined by Taylor J.
As long ago as 1976, the High Court in Licul v Corney (1976) 180 CLR 213 (Licul v Corney) at [18] established the test to be applied to determine whether a decision is final:
To be final for this purpose, the order, in my opinion, must of its own force put an end to the action or proceeding between the parties.
In Carr v Finance Corporation of Australia Ltd(No 1) (1981) 147 CLR 246, Gibbs CJ referred to the test established in Licul v Corney and said at 248:
In my opinion the test in Licul v. Corney requires the Court to have regard to the legal rather than the practical effect of the judgment.
Later decisions adhered to this principle to distinguish between decisions which “finally determined the rights, duties and obligations of the parties or finally determined the rights of parties in a principal cause pending between them”, which are final. Those which do not bear that characteristic are interlocutory. (Kowalski v MMAL Staff Superannuation Fund Pty Ltd [2009] FCAFC 117; 259 ALR 319 at [32]).
The High Court and subsequent authorities have emphasised that the determination of whether a decision is final or not rests on the legal effect of the decision. It does not, in my view, rest on the process by which the court was seized of the matter, that is whether it was through a process of seeking interlocutory or final orders.
It is pellucidly clear that Mossop J’s decision did not finally determine the rights of the parties to the principal action, being Bennelong and the Commissioner of Taxation. In short, Mossop J’s decision was interlocutory. His decision, in effect, prevented the Applicant from appearing for Bennelong. That the principal proceedings were not concluded by his decision is demonstrated by the fact that in June 2024, Mossop J heard the principal proceedings and dismissed them.
That being the case, to bring an appeal against Mossop J’s interlocutory decision required a grant of leave before the appeal could competently be instituted in accordance with s 37J of the Supreme Court Act 1933 (ACT) and r 5310 of the Rules.
It follows that the cornerstone of the application for contempt falls away. The statement advanced by Mr Tavolaro in the affidavit filed in the proceedings before Taylor J and the statements of Mr Moffet before her Honour, both to the effect that the decision of Mossop J was interlocutory, were, demonstrably, not false.
It follows that the application to have the Commissioner of Taxation dealt with for contempt through making a false statement to the Court will be dismissed.
Res judicata
While strictly unnecessary, I turn to the Applicant’s contention that the effect of alleging that the decision was interlocutory applied “res judicata” to the proceedings and brought his appeal to an end, with the intention of causing detriment to the Applicant. I was unable, through the submissions of the Applicant, to entirely understand how the principle of res judicata had a role to play. The following exchange took place:
Dr Quach: … res judicata means that that is the final decision of the court. In my respectful submission the decision of Mossop J of 11 April 2023 wasn’t a decision of finality…
It seems then that the Applicant’s reference to “res judicata” was to demonstrate that Mossop J’s determination was final “at the level of the Supreme Court” and thus he had an unfettered right of appeal from that decision and, in contending that the decision was interlocutory and therefore to deny him the automatic right of appeal, was done to cause the Applicant harm.
Of course, the argument that the decision was interlocutory and therefore a grant of leave to appeal was necessary before an appeal could competently be brought, did not bring his appeal to a halt. It imposed an antecedent condition on the Applicant’s appeal, a point Taylor J attempted to make with the Applicant on 6 September 2023.
Orders
For the above reasons, I make the following orders:
(1)The Originating Application dated 8 April 2024 is dismissed.
(2)The Applicant is to pay the Respondent’s costs.
| I certify that the preceding sixty [60] numbered paragraphs are a true copy of the Reasons for Judgment of her Honour Acting Justice Ainslie-Wallace. Associate: Date: |
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Amendments
1 November 2024 Replace “Application in Proceeding” with “Originating Application” Paragraphs: [Cover Page]
1 November 2024 Replace “Application in Proceeding” with “Originating Application” Paragraphs: [60]
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