FEDERAL COURT OF AUSTRALIA
Waters v Commonwealth of Australia (Australian Taxation Office)
[2015] FCAFC 46
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Details
- Case
- [2015] FCAFC 46
- Decision Date
CaseChat Overview and Summary
The case of Waters v Commonwealth (Australian Taxation Office) involved an application by Ms Waters for leave to appeal against a decision of the primary judge. The primary judge had refused to grant security for costs, a decision that Ms Waters sought to challenge. The Federal Court was required to determine whether Ms Waters had demonstrated a real prospect of success on appeal and whether the refusal of leave to appeal would cause substantial injustice.
The court found that Ms Waters had not demonstrated any real prospect of success on appeal. The arguments presented by Ms Waters did not expose any error of principle on the part of the primary judge, nor did they generate sufficient doubt as to the correctness of the primary judge’s decision. The court also noted that even if leave to appeal had been granted, the appeal would likely have been dismissed. The court further found that Ms Waters’ arguments were based on a misunderstanding of the primary judge’s reasons, particularly in relation to the costs that were to be incurred in the current proceeding and the exercise of the court’s discretion in granting security for costs.
In light of the above, the court refused Ms Waters’ application for leave to appeal and ordered her to pay the costs of the respondent. The court held that the proposed grounds of appeal did not expose any error of principle or generate sufficient doubt as to the correctness of the primary judge’s decision, and that the refusal of leave to appeal would not cause substantial injustice.
The court also rejected Ms Waters’ argument that the requirement for security for costs was contrary to Chapter III of the Constitution. The court found that this argument was without merit and did not provide any basis for granting leave to appeal. The court further noted that the requirement for security for costs was a well-established principle of equity and was consistent with the principles of natural justice.
The court found that Ms Waters had not demonstrated any real prospect of success on appeal. The arguments presented by Ms Waters did not expose any error of principle on the part of the primary judge, nor did they generate sufficient doubt as to the correctness of the primary judge’s decision. The court also noted that even if leave to appeal had been granted, the appeal would likely have been dismissed. The court further found that Ms Waters’ arguments were based on a misunderstanding of the primary judge’s reasons, particularly in relation to the costs that were to be incurred in the current proceeding and the exercise of the court’s discretion in granting security for costs.
In light of the above, the court refused Ms Waters’ application for leave to appeal and ordered her to pay the costs of the respondent. The court held that the proposed grounds of appeal did not expose any error of principle or generate sufficient doubt as to the correctness of the primary judge’s decision, and that the refusal of leave to appeal would not cause substantial injustice.
The court also rejected Ms Waters’ argument that the requirement for security for costs was contrary to Chapter III of the Constitution. The court found that this argument was without merit and did not provide any basis for granting leave to appeal. The court further noted that the requirement for security for costs was a well-established principle of equity and was consistent with the principles of natural justice.
Orders
Orders of the court
1. Leave to appeal is refused.
2. The Applicant is to pay the costs of the Respondent.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
Background
Background to the litigation
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Evidence
Evidence Before The Court
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Decision
Reasons for decision
It is respectfully concluded that his Honour’s reasons for decision expose no error which has any real prospects of success. The proposed Grounds of Appeal, with respect, do not expose any error of principle on the part of the primary judge of the kind identified in House v R. Those proposed Grounds of Appeal do not generate “sufficient doubt” as to the correctness of his Honour’s decision. Nor, on the evidence adduced before the primary judge, could any view be properly formed that the refusal of leave would cause “substantial injustice”. Indeed, even if leave to appeal were granted in the present case, the appeal would most probably have been dismissed. A failure to properly understand the reasons for decision Notwithstanding the detailed written submissions which have been filed on behalf of the Applicant, the many challenges to his Honour’s approach proceed in large part from a failure to understand what his Honour did and did not decide. But one example is provided by the written submissions’ reliance upon his Honour’s conclusion that it was not “unreasonable for the ATO to seek some protection in respect of its existing and future costs…”. The Applicant submitted that error is exposed by ordering security for costs in respect to costs that had been incurred in litigation between the parties separate from the proceedings before his Honour. On behalf of the Applicant it is submitted that the Court has no power to “protect [the respondent] against unassessed costs in another court”. But no such error was committed. The “existing … costs” to which reference was made was clearly a reference to the “existing … costs” which were to be incurred in the current proceeding. The application for security for costs was filed in March 2014. The estimate of costs relied upon before the primary judge estimated that costs to be incurred were $83,327 (if Senior Counsel were retained) and $65,087 (excluding Senior Counsel). The itemised heads of expenses to be incurred all related to the preparation of the case for hearing subsequent to the filing of the Statement of Claim. Similarly, and again contrary to the Applicant’s submissions, his Honour did not approach the exercise of his discretion by reference to some unspecified standard of “relative impecuniosity”. His Honour did indeed accept a submission advanced on behalf of the Australian Taxation Office that the Applicant was “relatively impecunious”. His Honour referred, for example, to the fact that “for the income tax years 2012 and 2013, the tax withheld from Ms Waters’ income amounted to only $1,613 and $777 respectively”. His Honour also went on to refer to the failure of the Applicant to herself adduce evidence in respect to a number of specified matters “which would have given a clearer picture as to her current financial circumstances…”. Such evidence as was adduced on behalf of the Applicant only supported an assessment that she was “relatively impecunious”. On one view of the very manner in which the application for security for costs was being resisted by the Applicant, it was her “relative impecuniosity” which it was contended on her behalf would lead to her claims being “stifled” if security were to be ordered. It was clearly open to his Honour, on any view of the case, to take into account the financial circumstances of the Applicant and such evidence as was available to him in respect to those circumstances. Contrary to the submission advanced on behalf of the Applicant, there was no impermissible reversing of any “onus of proof”.
Ratio Decidendi
Legal Principle Established
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