Schokker v Commissioner of Taxation (No 2)

The case of Schokker v Commissioner of Taxation (No 2) involves the Commissioner of Taxation and Hank Schokker, who is appealing a decision to dismiss his appeal against the Administrative Appeals Tribunal. The issue before the court concerns the recovery of legal costs by Senior Counsel, R O’Connor QC, who represented Schokker on a pro bono basis. The central dispute is whether O 80 r 9 of the Federal Court Rules can be applied retrospectively to allow counsel to recover costs directly from the Commissioner, and if the agreement between counsel and the taxpayer was against public policy.

The court was required to determine the legal validity of applying O 80 r 9 retrospectively and the public policy implications of the agreement between counsel and the taxpayer. The Commissioner argued that the costs recoverable by the taxpayer should be subject to a set-off of costs awarded against the taxpayer before the primary judge, and that any liability for costs would be to the taxpayer, not to the counsel. The Commissioner further contended that O 80 has no retrospective operation and that the counsel’s agreement with the taxpayer was contrary to public policy.

The court considered the provisions of O 80 and determined that it could not be applied retrospectively. It held that the retrospective application of O 80 r 9 would not be appropriate as it would not align with the original intent and understanding of the agreement between counsel and the taxpayer. Furthermore, the court found that the agreement between counsel and the taxpayer did not contravene public policy. The court concluded that the counsel’s entitlement to recover costs would be contingent upon the taxpayer fulfilling his obligation to pay the costs as per the original agreement.

ORDERS:
The motion is dismissed.