The Magazine Company and Commissioner of Taxation (Taxation)
[2020] AATA 2791
•29 July 2020
The Magazine Company and Commissioner of Taxation (Taxation) [2020] AATA 2791 (29 July 2020)
Division:TAXATION AND COMMERCIAL DIVISION
File Number(s): NT2003/138-143
Re:The Magazine Company
APPLICANT
AndCommissioner of Taxation
RESPONDENT
File Number(s): [redacted]
Re:LLUN and XUGV
APPLICANT
AndCommissioner of Taxation
RESPONDENT
DECISION
Tribunal:Deputy President B W Rayment OAM QC
Date:29 July 2020
Place:Sydney
Pursuant to sections 33 and 35 of the Administrative Appeals Tribunal Act 1975 (Cth) (‘the AAT Act’), the Tribunal DIRECTS:
1.in respect of The Magazine Company and Commissioner of Taxation proceedings (‘The Magazine Company proceedings’):
a.the respondent is released from the implied undertaking to the extent necessary and existing confidentiality orders in the proceedings, to use the following documents in the Federal Court of Australia proceedings Gould v Jordan No. NSD 1735/2017 (‘the defamation proceedings’), including by adducing any of the documents in evidence (whether annexed or exhibited to an affidavit or otherwise tendered), provided that the name of the applicant and any information in those documents reasonably capable of being used to identify the applicant is redacted in any of the documents so adduced in evidence:
i.the statement of Vanda Russell Gould sworn 29 January 2004, together with all material annexed or exhibited to it;
ii.the statement of Vanda Russell Gould sworn 6 April 2004, together with all material annexed or exhibited to it; and
iii.the transcript of these proceedings for 18 to 21 October 2004.
2.in respect of the LLUN and XUGV and Commissioner of Taxation proceedings (‘the LLUN and XUGV proceedings’):
a.the respondent is released from the implied undertaking to the extent necessary and existing confidentiality orders in the proceedings, to use the following documents in the defamation proceedings, including by adducing any of the documents in evidence (whether annexed or exhibited to an affidavit or otherwise tendered), provided that the name of the applicant and any information in those documents reasonably capable of being used to identify the applicant is redacted in any of the documents so adduced in evidence:
i.the statement of Vanda Russell Gould sworn 31 August 2016 (including exhibits); and
ii.the transcript of these proceedings dated 13 and 14 December 2016.
3.if it becomes desirable in the Federal Court to refer to pseudonyms given to Mr Vanda Russell Gould in the published reasons of the Tribunal in the LLUN, XUGV and The Magazine Company proceedings, the Federal Court may be informed of the pseudonyms given to him.
The Tribunal NOTES it is not intended that the above orders should cause the redaction of the name of Mr Vanda Russell Gould from the documents listed above.
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Deputy President B W Rayment OAM QC
CATCHWORDS
PRACTICE AND PROCEDURE – release from implied undertaking – use of transcript and affidavit evidence of witness from previous proceedings – where material to be used in Federal Court proceedings – where evidence goes towards a defence in the Federal Court proceedings – whether specific purpose for documents has been identified – where specifying documents sought to be released generally or usually necessary – where impossible to predict all purposes for documents – documents and purpose identified – whether to release part of whole document – whether to vary confidentiality orders made in previous proceedings – application granted
LEGISLATION
Administrative Appeals Tribunal Act 1975 (Cth) s 35
Evidence Act 1995 (Cth) s 128
Taxation Administration Act 1953 (Cth) s 14ZZJ(2D)
CASES
Ambridge Investments Pty Ltd v Baker& Ors (No 3) [2010] VSC 545
Australian Securities & Investments Commissioner v Marshall Bell Hawkins & Ors [2003] FCA 833
Anglo American Investments (Trustee) v Commissioner of Taxation [2019] FCA 1027
Hua Wang Bank Berhad v Commissioner of Taxation [2014] FCA 1392; (2014) 100 ATR 244Von Stieglitz and Comcare [2012] AATA 217; (2012) 127 ALD 633
REASONS FOR DECISION
Deputy President B W Rayment OAM QC
29 July 2020
The Commissioner of Taxation (‘the Commissioner’) has been sued in defamation in the Federal Court, arising from remarks made in answering a question from the press when he addressed the National Press Club on 5 July 2017 (‘the defamation proceedings’).
The Commissioner was a party to three proceedings heard in the Tribunal in years past. The applicants in the three proceedings (‘the taxpayers’) were identified in the published reasons as LLUN, XUGV, and The Magazine Company: LLUN and Commissioner of Taxation [2017] AATA 3058 (also dealing with XUGV); The Magazine Company and Commissioner of Taxation [2014] AATA 1173. The Commissioner, by his delegate, an Assistant Commissioner, has applied to the Tribunal for a variation of all orders made by the Tribunal under s 35 of the Administrative Appeals Tribunal Act 1975 (Cth) (‘the AAT Act’) in those proceedings, and, to the extent necessary, for release of the implied undertaking given in those three proceedings, so as to permit the Commissioner to furnish to his legal representatives in the defamation proceedings, and, if so advised, to deploy in the defamation proceedings, identified evidence given in the earlier Tribunal proceedings by the applicant in the defamation proceedings. The orders sought were opposed by the taxpayers and their associates and by the person who sued the Commissioner for defamation. Attention was given during the argument not only to whether it was appropriate to release the implied undertaking and to the question of varying existing confidentiality orders but also to the conditions which should be imposed on any order made.
The applicant in the defamation proceedings is Mr Vanda Russell Gould. The evidence which the Commissioner wishes to have available in the defamation proceedings is Mr Gould’s evidence.
RELEASE FROM IMPLIED UNDERTAKING
I will deal first with the release of the implied undertaking.
Mr Livingston, counsel for the Commissioner, drew attention to part of a paragraph in the defence filed by the Commissioner in the defamation proceedings. That paragraph is as follows so far as relevant:
Further or in the alternative, the Respondent says that insofar as, and to the extent that, it may be found that the matter complained of was of and concerning the Applicant and defamatory of the Applicant in its natural and ordinary meaning, or as bearing the imputations set out in paragraph 3 of the Statement of Claim (the Applicant’s imputations) he has the following complete defences to the Applicant’s claim:
…
(b)Contextual Truth – Section 26 of the Defamation Act and equivalent sections in legislation in all States and Territories of Australia
(i) the matter complained of carried, in addition to the Applicant’s imputations, an imputation that the Applicant is dishonest (the Contextual Imputation);
(ii) The Contextual Imputation is substantially true;
(iii) By reason of the substantial truth of the Contextual Imputation, publication of so many of the Applicant’s Imputations as are found to have been carried and defamatory and not to be substantially true, did not further harm the reputation of the Applicant.
(emphasis original)
Mr Livingston submitted that one matter to which the evidence in question in this application may well go to is the “Contextual Imputation” defined in the Commissioner’s defence. He referred to remarks and findings made concerning Mr Gould by Perram J in Hua Wang Bank Berhad v Commissioner of Taxation [2014] FCA 1392 at [344]–[345] and [485].
The remarks and findings made in those paragraphs were not proved to be correct on this application, as was pointed out by Mr Hyde Page, counsel for the taxpayers, the associated persons, and Mr Gould. However, on an interlocutory application such as this, where hearsay would be admissible if this application were made to a court, it is reasonable to assume that the remarks and findings were supported by probative evidence, and I do so. Mr Gould did not give evidence before Perram J.
Mr Livingston made it clear that the purposes for which the Commissioner, by his counsel in the defamation proceedings, might seek to deploy the written and oral evidence of Mr Gould to which this application relates may not be limited to the Contextual Imputation and may go to other issues in the defamation proceedings.
He submitted that I should act by analogy with a recent decision of Logan J in Anglo American Investments (Trustee) v Commissioner of Taxation [2019] FCA 1027 (‘Anglo American Investments’) including at [22] which, together with other parts of the judgment and orders made, resulted in the unrestricted release from the implied undertaking of affidavits and all their annexures. As it happens, the affidavits in that case were ones sworn by Mr Gould.
Mr Livingston’s reliance on the Contextual Imputation pleaded by the Commissioner had the effect of making it unnecessary to consider submissions made by Mr Hyde Page that the documents in question on this application were not shown to go to issues arising in the defamation proceedings other than the Contextual Imputation.
Mr Livingston’s submissions did draw attention, in my opinion, to aspects of Mr Gould’s evidence in the three Tribunal proceedings which may cast light on facts relevant to the Contextual Imputation pleaded by the Commissioner. I do not understand Mr Hyde Page to have submitted to the contrary.
Mr Hyde Page submitted that the authorities identified in his written submissions showed that on an application such as this, it is necessary for the moving party to identify the specific purpose to which each document will be put and also the case the litigant is seeking to make, which the documents would be used to support in the defamation proceedings and that, the Commissioner having indicated the passages which go to the Contextual Imputation, the application should not be allowed in to extend beyond the passages identified in Mr Livingston’s submissions.
The authorities referred to in Mr Hyde Page’s written submissions were Australian Securities & Investments Commission v Marshall Bell Hawkins & Ors [2003] FCA 833 (‘Marshall Bell Hawkins’) at [25], Von Stieglitz and Comcare (2012) 127 ALD 633 (‘Von Stieglitz’), and Ambridge Investments Pty Ltd v Baker& Ors (No 3) [2010] VSC 545 (‘Ambridge Investments’) at [54]–[55].
In Marshall Bell Hawkins, Merkel J refused to release ASIC from its implied undertaking, which was made in the first instance, to enable ASIC to decide whether to hold a hearing in relation to the dealer’s licence of one of the defendant companies. His Honour was not satisfied that for that purpose, ASIC required access to all of the documents in question and commented that the evidence did not show that any ASIC officer had turned his mind to which documents were required for that purpose. The documents in question extended to some 40 boxes of documents which had been seized by the Australian Federal Police (‘AFP’) and were treated as documents discovered in the case. At [25] his Honour said:
I am also not satisfied that ASIC’s fall-back position of deferring the question of relevance is an appropriate way to proceed. It is incumbent upon ASIC to specify the documents in respect of which the relief is sought and the precise purpose for the release. Both matters are relevant to whether the special circumstances relied upon by ASIC warrant or justify the release it seeks. Although I am prepared to accept that there are special circumstances that are likely to warrant some modification of or release from the implied undertaking, the modification or release should only be in respect of the discovered documents that are demonstrated to be relevant to or required for a decision in respect of the convening of a hearing concerning SPM’s Dealer’s Licence. ASIC has not satisfied me of the relevance of or need to access all of the discovered documents for that purpose or that it has been hindered or impeded in making any such decision by not having access to those documents.
When discussing the authorities on release of an implied undertaking, Merkel J said at [7]–[13]:
ASIC is also under a duty not to use the discovered documents of the defendants, being the documents provided to it by the AFP, other than for the proper conduct of the present proceeding. The duty arises because ASIC is taken to have given an implied undertaking to the Court not to use the discovered documents, or information derived from the discovered documents, other than for the proper conduct of the proceeding: see Harman v Secretary of State for the Home Department [1983] 1 AC 280 (“Harman”) at 304-305, 307-308 and 326 and Crest Homes Plc v Marks [1987] AC 829 at 854. Thus, ASIC is not entitled to have access to the discovered documents for the purpose of exercising its statutory powers in relation to SPM’s Dealer’s Licence unless the Court has released it from the implied undertaking. ASIC has now made an application to the Court to be released from that undertaking.
In Taylor v Director of the Serious Fraud Office [1999] 2 AC 177 at 210 Lord Hoffmann made the following observations concerning the policy underlying the implied undertaking:
“I am not sure that it is right to treat the implied undertaking in civil proceedings merely as an inducement to a litigant to disclose documents which he might otherwise have been inclined to conceal. I think that it is more a matter of justice and fairness, to ensure that his privacy and confidentiality are not invaded more than is absolutely necessary for the purposes of justice.”
The implied undertaking can, in appropriate circumstances, be released or modified by the Court. However, as was observed by Brennan J in Esso Australia Resources Ltd v Plowman (1995) 183 CLR 10 (“Esso Australia”) at 37:
“That dispensing power is not freely exercised, but it will be exercised when special circumstances appear. In the Federal Court, special circumstances have been held to exist where ‘there is a special feature of the case which affords a reason for modifying or releasing the undertaking and [the feature] is not usually present’. It is unnecessary to consider whether the dispensing power should be so broadly defined. It is relevant to note only that the obligation enforceable as an undertaking to the court in the case of a curial order is not unqualified.” [citations omitted]
The passage quoted by Brennan J appears in the reasons for judgment of Wilcox J in Springfield Nominees Pty Limited v Bridgelands Securities Limited (1992) 38 FCR 217 (“Springfield Nominees”) at 225 where his Honour, in the course of discussing the requirement for “special circumstances” to be established before the Court would exercise its discretion to modify or release the undertaking, stated:
“For ‘special circumstances’ to exist it is enough that there is a special feature of the case which affords a reason for modifying or releasing the undertaking and is not usually present. The matter then becomes one of the proper exercise of the court’s discretion, many factors being relevant. It is neither possible nor desirable to propound an exhaustive list of those factors. But plainly they include the nature of the document, the circumstances under which it came into existence, the attitude of the author of the document and any prejudice the author may sustain, whether the document pre-existed litigation or was created for that purpose and therefore expected to enter the public domain, the nature of the information in the document (in particular whether it contains personal data or commercially sensitive information), the circumstances in which the document came into the hands of the applicant for leave and, perhaps most important of all, the likely contribution of the document to achieving justice in the second proceeding.”
The observations of Wilcox J in relation to “special circumstances” have been applied on a number of occasions in the Court: see Australian Competition and Consumer Commission v INFO4PC.COM Pty Ltd [2001] FCA 258 at [6]-[7] and the cases there cited.
Generally, a party applying for the modification or release of the undertaking should:
· specify the documents in respect of which the modification or release is sought;
· specify the purpose for which the modification or release is sought; and
· satisfy the Court that the special circumstances relied upon by the party warrant or justify the modification or release sought.
The requirements of specificity in respect of the documents to be used and the purpose for which they are to be used is appropriate because the implied undertaking should only be modified or released to the extent that it is in the interests of the administration of justice or in the public interest to do so: see Springfield Nominees at 225 and Moage Limited (in liq) v Jagelman (2002) 43 ACSR 173 (“Moage”) at 176. Thus, the modification or release should be no greater than is necessary or appropriate to meet the interests of the administration of justice or the public interest. Further, in determining whether to exercise its discretion to grant the modification or release sought, it will usually be necessary for the Court to identify with precision the documents to be released and the purpose of that release.
The above paragraphs are a convenient summary of the existing authority for present purposes.
Specifying the documents sought to be released is, as his Honour noted, generally or usually necessary. Indicating the purpose is also generally or usually necessary.
In this case, the documents sought have been identified, unlike in Marshall Bell Hawkins. One such purpose has been identified, and because those briefed to appear before the Tribunal on this application are not briefed in the defamation proceedings, and those briefed on behalf of the Commissioner in the defamation proceedings have not yet seen the documents in question, an identification of all of the purposes for which the documents may be used is not possible. The question remains, should all of the affidavits and their annexures or exhibits and all of the transcripts in question be released?
It would be inconvenient for the documents to be released in the first instance only to the Commissioner’s legal representatives in the defamation proceedings with a view for a further application being made to the Tribunal once the documents have been considered by the other legal representatives and more specific information can be put before the Tribunal about the use to which the documents will be put. In any event, it may not be possible to predict all the uses to which the documents will be put because the trial may develop in unpredicted ways.
The defamation proceedings are presently the subject of case management in the Federal Court and further directions are to be made early in August.
If, as seems to be agreed, the documents will be relevant to at least one issue, the question is whether their use should be limited to particular passages already identified by Mr Livingston. I would not do that because other parts of the same documents may be necessary or desirable to be referred to, even by Mr Gould himself: cf Logan J in Anglo American Investments at [22].
The witness and the deponent in the case of all the relevant documents is the person suing the Commissioner for defamation.
Although Merkel J refused ASIC’s application in Marshall Ben Hawkins, he did not preclude a further, more limited application in the future.
The same was true of Member Webb’s decision in Von Stieglitz at [30] and [31]. That was another case in which relevant documents had not been properly identified by Comcare, which as applying for the release of the implied undertaking.
Vickery J in Ambridge Investments at [54] and [55] did not lay down any general principle governing the exercise of discretion in the present case.
The need for “special circumstances” to be established is clear. The circumstances in which they will be present have not been stated exhaustively so as to bind a tribunal or court, but factors usually and generally relevant have been discussed. Usually and generally the documents in question will be identified clearly. One purpose for which the documents may be required has been identified satisfactorily in this case, and the release of the whole documents, subject to appropriate redactions, may be necessary to avoid injustice.
THE ORDERS FOR CONFIDENTIALITY
The “serving party” of the affidavits and the persons who called Mr Gould were the taxpayers in the three Tribunal proceedings. Confidentiality orders were no doubt applied for on their behalf for the purpose of protecting their identities. That did not make the hearing of the proceedings private, in the sense that the public was not admitted. The taxpayers were entitled to require the proceedings to be heard in private, which was what occurred in the LLUN and XUGV proceedings, and it may be assumed that in The Magazine Company proceedings the applicant also did so. Nor did the confidentiality orders affect the terms in which witnesses and facts were described in the reasons of the Tribunal, so as to make it unlikely that the taxpayers could be identified directly or indirectly. That result was accomplished by s 14ZZJ(2D) of the Taxation Administration Act 1953 (Cth), given that there was no appeal. That section requires the Tribunal’s reasons not disclose information that would enable the taxpayer to be identified if the hearing was held in private and an appeal had not been lodged with the Federal Court. Rather, orders for confidentiality were made under s 35 of the AAT Act. Most such orders were made until further order. Those not so expressed were implicitly subject to future variation or discharge. No submission was made to the contrary before me.
The Tribunal has wide powers under s 35 of the AAT Act. For reasons given by Deputy President McCabe, it should not be assumed that such an order is appropriate to immunise a witness from prosecution as a result of evidence he or she gives: HSJW and Commissioner of Taxation [2017] AATA 1906 at [10]–[40]. Before the Tribunal, a witness can exercise a privilege against self-incrimination but no certificate under s 128 of the Evidence Act 1995 (Cth) is available in Tribunal proceedings.
The confidentiality orders having been made expressly or impliedly until further order, I see no reason why they should not be modified so as to permit the transcripts and affidavits to be relied upon in the defamation proceedings.
DECISION
Mr Livingston proposed, when I raised the matter of terms on any order, that not only should the names of the taxpayers be redacted from documents now released, but that also the names of the applicants and their directors and any information reasonably capable of being used to identify them be redacted or replaced with pseudonyms be redacted. Mr Hyde Page agreed that some such course should be followed. His written submissions refer at [22] and [23] to a number of matters in the documents sought to be released from the implied undertaking, and from which the taxpayers’ identity could be discovered.
The orders I make will require information in those documents reasonably capable of being used to identify the taxpayers to be redacted. I will make the orders proposed in the terms proposed by Mr Livingston, noting that it is not intended that the name of Mr Gould should be redacted. Similarly, I will order that if it becomes desirable in the Federal Court to refer to pseudonyms granted to Mr Gould in the published reasons of the Tribunal in the LLUN, XUGV and The Magazine Company proceedings, the Federal Court may be informed of the pseudonyms given to him.
I certify that the preceding 30 (thirty) paragraphs are a true copy of the reasons for the decision herein of Deputy President B W Rayment OAM QC
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Associate
Dated: 29 July 2020
Date(s) of hearing: 16 July 2020 Counsel for the Applicant, associated persons and Mr Gould: Mr J Hyde Page
Solicitors for the Applicant, associated persons and Mr Gould: Mark J Ord Lawyer & Consultant
Counsel for the Respondent: Mr L Livingston and Mr D Lewis Solicitors for the Respondent: Australian Government Solicitor
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