Resort Huntervalley Pty Limited v Commissioner of Taxation (No 2)
[2009] FCA 311
•31 March 2009
FEDERAL COURT OF AUSTRALIA
Resort Huntervalley Pty Limited v Commissioner of Taxation (No 2)
[2009] FCA 311
Federal Court of Australia Act 1976 (Cth), s 31A
Federal Court Rules, O 20 r 5Resort Huntervalley Pty Limited v Commissioner of Taxation [2009] FCA 301 related
RESORT HUNTERVALLEY PTY LIMITED ACN 58 098 802 665 and HIGH TRADE COMPANY PTY LIMITED ACN 46 003 983 104 v COMMISSIONER OF TAXATION
NSD 206 of 2009
FOSTER J
31 MARCH 2009
SYDNEY
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
NSD 206 of 2009
BETWEEN: RESORT HUNTERVALLEY PTY LIMITED ACN 58 098 802 665
First ApplicantHIGH TRADE COMPANY PTY LIMITED ACN 46 003 983 104
Second Applicant
AND: COMMISSIONER OF TAXATION
Respondent
JUDGE:
FOSTER J
DATE OF ORDER:
31 MARCH 2009
WHERE MADE:
SYDNEY
THE COURT ORDERS THAT:
1.The applicants’ Application filed on 13 March 2009 be dismissed upon terms that the applicants must not bring further proceedings based upon the same or substantially the same cause or causes of action or based upon the same or substantially the same facts without first obtaining the prior leave of a judge of this Court.
2.The applicants pay the respondent’s costs as agreed, or, failing agreement, as taxed.
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
NEW SOUTH WALES DISTRICT REGISTRY
NSD 206 of 2009
BETWEEN: RESORT HUNTERVALLEY PTY LIMITED ACN 58 098 802 665
First ApplicantHIGH TRADE COMPANY PTY LIMITED ACN 46 003 983 104
Second Applicant
AND: COMMISSIONER OF TAXATION
Respondent
JUDGE:
FOSTER J
DATE:
31 MARCH 2009
PLACE:
SYDNEY
REASONS FOR JUDGMENT
Yesterday, when the matter was called on before me, I was told that, during the course of the day on 13 March 2009, a company called Greenjoy Pty Limited had taken a mortgage over a number of the villa properties owned by one or other of the applicants in the Hunter Valley. I was also told that the same company now had the benefit of a fixed and floating charge over the assets of the applicants.
The mortgage is said to secure an amount of $39 million. The fixed and floating charge is said to secure up to $100 million. I was told from the Bar table that the mortgage had been entered into before the applicants gave the undertakings to the Court given by them by their Counsel on 13 March 2009. It is not clear from what was said yesterday whether the applicants assert that the fixed and floating charge was also entered into before those undertakings were given.
In the face of what I was told yesterday, I released the respondent from the undertaking which he had given on 13 March 2009 (see Resort Huntervalley Pty Limited v Commissioner of Taxation [2009] FCA 301).
The matter was again listed before me this morning. When the matter was called on, I was informed by the legal representatives for the parties that the respondent sought an order that the Application be summarily dismissed pursuant to s 31A of the Federal Court of Australia Act 1976 (Cth) and that the respondent also sought a further order that the applicants pay the respondent’s costs as agreed, or failing agreement, as taxed. I was handed a document which bears the signature of the solicitor for the first and second applicants and the signature of an authorised officer of the respondent. I was also told that the respondent relied upon O 20 r 5 of the Federal Court Rules in support of his application. That rule is in the following terms:
5 Stay or dismissal (proceedings commenced on or after 1 December 2005)
(1)This rule applies to a proceeding commenced on or after 1 December 2005 if the Court is satisfied that, for the proceeding generally or for a claim for relief in the proceeding:
(a)the proceeding or claim is frivolous or vexatious; or
(b)the proceeding or claim is an abuse of the process of the Court.
(2)The Court may order that the proceeding be stayed or dismissed generally or in relation to the claim for relief.
(3)The Court may receive evidence on the hearing of an application for an order under subrule (2).
Note For a proceeding commenced on or after 1 December 2005 in which the prosecuting party has no reasonable prospect of success, see subsection 31A (2) of the Act.
I have not been given a full explanation or, for that matter, much of an explanation as to what occurred on 13 March 2009 during the course of that day and before the undertakings were given on that day. Nor, indeed, have I been given any explanation of what has subsequently occurred insofar as the assets of the applicants are concerned.
I have engaged with Counsel for the applicants with a view to exploring whether or not I should take steps to direct the Registrar to investigate whether proceedings should be commenced against the applicants for contempt of Court and/or whether any dismissal of the proceedings should be permitted only on terms and conditions which restrict the applicants’ capacity to commence fresh proceedings based upon the same causes of action or based upon the same facts.
There appear to me to be grounds for suspecting that the applicants may have been guilty of using the Court’s processes for a collateral purpose. The use of the Court’s processes in that way would be an abuse of the process of the Court.
Although the respondent has not sought to tender evidence in support of his application for an order that the proceedings be summarily dismissed, he has relied upon O 20 r 5 of the Federal Court Rules. His application that the proceedings be summarily dismissed is consented to by the applicants.
I am entitled to conclude from this joint approach to the question of dismissal that the parties agree that summary dismissal is warranted on one or more of the grounds set out in O 20 r 5 of the Federal Court Rules. Indeed, when the question of the imposition of terms upon any dismissal was raised with Senior Counsel for the applicants, he informed me that his clients had no objection to my imposing terms upon the order for dismissal along the lines of those raised in argument.
I do not think I have enough information or evidence that would cause me to refer the matter to the Registrar in order to investigate whether proceedings for contempt are warranted and I do not propose to take that course. However, there is, in my view, sufficient in the material that has been placed before me to justify the imposition of some terms on the termination of these proceedings, with a view to ensuring that any future proceedings brought by the applicants in respect of the alleged debt to the respondent pass through a filter constituted by a judge of this Court. I would expect that any judge called upon to consider whether leave to commence fresh proceedings should be granted to the applicants would require, at the very least, a full and frank exposition of the circumstances which led to the creation of the securities of which I was informed yesterday.
What I propose to do is to order that:
(1)The applicants’ Application filed on 13 March 2009 be dismissed upon terms that the applicants must not bring further proceedings based upon the same or substantially the same cause or causes of action or based upon the same or substantially the same facts without first obtaining the prior leave of a judge of this Court;
(2)
The applicants pay the respondent’s costs as agreed, or, failing agreement, as taxed.
I certify that the preceding eleven (11) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Foster. Associate:
Dated: 2 April 2009
Counsel for the Applicants: Mr K Connor SC Solicitor for the Applicants: Ernst & Young Law Solicitor for the Respondent: Ms Krisstine Nash of ATO Legal Services Branch
Date of Hearing: 31 March 2009 Date of Judgment: 31 March 2009
0
1
0