Williams v Forgie

[2003] FCA 991

FEDERAL COURT OF AUSTRALIA

Williams v Forgie [2003] FCA 991

PRACTICE AND PROCEDURE – application for inspection of documents on Court file -whether discretion affected by previous common law rule - effect of increasing practice of judicial reliance on out of court reading - suggested effect of inhibition of voluntary disclosure by taxpayers to Commissioner of Taxation - inspection only refused in exceptional circumstances

Income Tax Assessment Act 1936 (Cth) s 16
Taxation Administration Act1953 (Cth) s 8WB
Federal Court Rules O 46 r 6(3)

Australian Competition and Consumer Commission v ABB Transmission and Distribution Ltd (No 3) (2003) 41-873 followed
Canadian Pacific Tobacco Ltd v Stapleton (1952) 86 CLR 1 cited
Pooraka Holdings Pty Ltd v Participation Nominees Pty Ltd (1989) 52 SASR 148 followed
Scott v Scott [1913] AC 417 cited
Herald & Weekly Times Limited v Gregory D Williams (formerly identified as VAI) [2003] FCAFC 217 cited

GREGORY D WILLIAMS v DEPUTY PRESIDENT FORGIE OF THE AAT & ANOR
V741 of 2002

HEEREY J
MELBOURNE
16 SEPTEMBER 2003

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY	V741 of 2002

BETWEEN:	GREGORY D WILLIAMS APPLICANT
AND:	DEPUTY PRESIDENT FORGIE OF THE AAT & ANOR RESPONDENT
JUDGE:	HEEREY J
DATE OF ORDER:	16 SEPTEMBER 2003
WHERE MADE:	MELBOURNE

THE COURT ORDERS THAT:

1. The Herald and Weekly Times Limited (HWT) have leave to inspect outlines of evidence, statements of contentions of fact and law and affidavits filed in this proceeding.

2. The Commissioner of Taxation pay HWT’s costs of this application.

Note:   Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY	V741 of 2002

BETWEEN:	GREGORY D WILLIAMS APPLICANT
AND:	DEPUTY PRESIDENT FORGIE OF THE AAT RESPONDENT

JUDGE:	HEEREY J
DATE:	16 SEPTEMBER 2003
PLACE:	MELBOURNE

REASONS FOR JUDGMENT

1. The Herald and Weekly Times Ltd (HWT) applies for an order for the inspection of documents under O 46 r 6(3) of the Federal Court Rules which relevantly provides:

   Except with the leave of the Court or a judge a person who is not a party to a proceeding must not inspect any of the following documents in the proceeding:

   (a) an affidavit,

   (b) an unsworn statement of evidence filed in accordance with a direction given by the court or a judge;…

2. This application arises in the context of administrative litigation between Mr Gregory Williams and the Commissioner of Taxation (the Commissioner).  Mr Williams was formerly a well-known Australian Rules footballer.  He played for the Carlton Football Club.  The Commissioner has issued assessments against Mr Williams for the tax years 1993 to 1995 based on alleged fraudulent understatements of income of $75,000 in each year.  Mr Williams has sought review of these assessments by the Administrative Appeals Tribunal (AAT).

3. In essence Mr Williams asserts that any fraud in the matter was that of the Carlton Football Club in treating these amounts as payments for building work done by a company controlled by Mr Williams.  No such work was in fact done.  According to Mr Williams, Carlton was trying to avoid the Australian Football League salary cap and, moreover, the payments were in truth fringe benefits, in respect of which Carlton was taxable as his employer. 

4. Mr Williams sought from the AAT an order that the Commissioner provide particulars of the allegations of fraud.  When this was refused Mr Williams sought judicial review in this Court.  Before the AAT Mr Williams had exercised his statutory right to have the proceedings held in private and he was at that stage identified only as VAI. 

5. When the application for review came on before North J on 9 September 2002 his Honour made an order under s 50 of the Federal Court of Australia Act 1976 (Cth) suppressing publication of Mr Williams’ name. On 18 February 2003 North J dismissed the application, that is to say the application to review the AAT’s refusal to order further and better particulars. The substantive dispute between Mr Williams and the Commissioner remains to be determined by the AAT. HWT sought leave to appeal to the Full Court against the suppression order of North J. On 10 August 2003 a Full Court consisting of Finn, Merkel and Stone JJ granted leave to appeal and allowed the appeal: Herald & Weekly Times Limited v Gregory D Williams (formerly identified as VAI) [2003] FCAFC 217.

6. When the judgment of the Full Court was handed down, the question of an order for inspection under O 46 r 6(3) was mentioned but, because the other parties did not have notice, their Honours left the matter to be dealt with by a single judge.  HWT filed a notice of motion on 12 September 2003 seeking an order for inspection and that is the motion on which I have heard argument today.

7. Mr Williams consents to the order sought.  The first respondent, Deputy President Forgie of the AAT, does not seek to be heard.  The order however was opposed by senior counsel on behalf of the second respondent, the Commissioner.  (I think it is fair to describe the Commissioner’s stand as one of opposition.  Although senior counsel made helpful and informative submissions, which of course were particularly so in a context where HWT and its counsel and solicitors had not yet had access to the documents in question, he nevertheless advanced reasons why the order sought should not be made.)

8. It is apparent from the transcript of the proceeding before North J that there was substantial reference to documents which were not read out in the course of the hearing.  His Honour indicated at the outset that he was familiar with the material which had been filed, including submissions of the parties, and two affidavits sworn by Mr Williams' solicitor, Mr Leigh Damien Baring, and exhibits thereto.  Those exhibits included the decision of the Australian Taxation Office refusing Mr Williams' objections, a decision which, amongst other things, discusses the role of the Carlton Football Club.

9. The application of O 46 r 6(3) has recently been considered by Finkelstein J in Australian Competition and Consumer Commission v ABB Transmission and Distribution Ltd (No 3) (2002) ATPR ¶ 41-873. His Honour discussed (at [3]) the common law rule which was quite restrictive on the right of strangers to litigation to examine exhibits and other documents, even those referred to in open court. His Honour referred to the increasing practice in modern civil litigation for affidavits, written submissions and other material not to be read out in court, but to be read beforehand by the judge. His Honour said (at [7]):

   “The question that I must resolve is what principle should be applied when deciding whether to allow inspection in cases where leave is required.  In giving the answer I propose to confine myself to those cases where a non-party seeks access to material which has been relied upon by the judge.  In such a case I have no doubt that the proper approach is that access should be allowed unless the interests of justice require a different course.  It is only by adopting this approach that, in a practical sense, the principle of open justice will be preserved.  Put differently, in my view there is a strong presumption in favour of allowing any member of the public who wishes to do so to inspect any document or thing that is put into evidence.  Inspection should only be refused in exceptional circumstances.  I think that the position is a fortiori when the material has been read by the judge in private and is not read out in court.  If that material is not made available for inspection then the manner in which the case has been conducted will only be known to the parties.  That is an unacceptable position.”

10. I agree with what his Honour says and I propose to apply those principles in the present case.  I do not think the discretion conferred by O 46 r 6(3) should be restricted by reference to the previous, rather illogical, common law rule which, as Finkelstein J points out, is in any case inconsistent with current practices in civil litigation.

11. Senior counsel for the Commissioner referred to a number of statutory provisions. As I understand him he no longer relies on s 16(2) of the Income Tax Assessment Act 1936 (Cth) which provides:

    “Subject to this section, an officer shall not either directly or indirectly, except in the performance of any duty as an officer and either while he is, or after he ceases to be an officer, make a record of or divulge or communicate to any person any information respecting the affairs of another person required by the officer as mentioned in the definition of officer in (1).”

I think senior counsel accepted, tacitly at least, that this provision would not apply to an order of the Court under O 46 r 6(3), the Court or a judge thereof, obviously enough, not being an officer within the meaning of s 16(2); see also Canadian Pacific Tobacco Ltd v Stapleton (1952) 86 CLR 1.

1. Senior counsel did however rely on s 8WB of the Taxation Administration Act1953 (Cth) which prohibits the recording, use or divulging of a person's tax file number. The short answer to that is, I think, that if HWT or its staff were to record or use or divulge the tax file number of Mr Williams or anybody else they would commit an offence. Since that consequence has been specifically raised, I think it unlikely in the extreme that they would in fact do so, quite apart from the apparent lack of newsworthiness in such an item, considered by itself.

2. More generally, senior counsel for the Commissioner pointed out that, as is true, some of the material exhibited to Mr Baring's affidavit referred to taxpayers other than Mr Williams.  Senior counsel said that the Commissioner, in the course of administering taxation legislation, often obtains voluntary disclosures from taxpayers other than a taxpayer under investigation and such voluntary assistance might not be as forthcoming if such persons knew that their own tax and financial affairs might be disclosed.  Senior counsel pointed to some instances in the material in question where there was some passing reference to other taxpayers, as well of course the more substantial reference to the Carlton Football Club.

3. I accept however, as senior counsel for HWT submitted, that the test is whether the material in question was before the court in question, that is, in this case, the hearing before North J.  The fact that the material might in passing refer to other persons, even in an embarrassing way, should not inhibit the making of an order if it is thought otherwise appropriate.  As was pointed out, it is an inevitable feature of litigation in open court that persons who are mentioned in passing may suffer embarrassment and distress.  But that is a price the community has to pay for the undoubted benefit of court proceedings being, except in very exceptional circumstances, conducted in public.  As Lord Atkinson said in Scott v Scott [1913] AC 417 at 463, in a passage cited by the Full Court in the present case at [35]:

   “The hearing of a case in public may be, and often is, no doubt, painful, humiliating, or deterrent both to parties and witnesses…but all this is tolerated and endured, because it is felt that in public trial is to be found, on the whole, the best security for the pure, impartial, and efficient administration of justice, the best means for winning for it public confidence and respect.”

4. I think the fear that voluntary disclosure by taxpayers might be inhibited by the possibility of court publicity is speculative.  One would imagine that, in the vast majority of cases where voluntary disclosure is sought from persons in relation to the affairs of another taxpayer, the identity of that other taxpayer is unlikely to be of any interest to the media.

5. In Pooraka Holdings Pty Ltd v Participation Nominees Pty Ltd (1989) 52 SASR 148 at 157, a case involving an allegation that income tax returns were protected from discovery and inspection on the basis of public interest immunity, the Full Court of the Supreme Court of South Australia said:

   “If it were intended to attach immunity from disclosure to the contents of income tax returns as distinct from imposing obligations and conferring protection on government officers, that intention would surely have manifested itself in the language of the statute.  Copies of tax returns differ little from the financial records upon which they are based and which are clearly not the subject of privilege.  There are no grounds for supposing that under modern conditions taxpayers would be discouraged from making full disclosure in their tax returns by the knowledge that the contents of their returns are subject to inspection in legal proceedings in sufficient numbers or on a sufficient scale to constitute a threat to the revenue of sufficient magnitude to justify withholding relevant information from courts.”

6. I will therefore order that the HWT have leave to inspect, as sought in its motion, outlines of evidence, statements of contentions of fact and law and affidavits filed in this proceeding.

7. There will also be an order that the Commissioner pay HWT’s costs of the application.

I certify that the preceding eighteen (18) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Heerey .

Associate:

Dated:            19 September 2003

Counsel for the Herald & Weekly Times Ltd	W T Houghton QC and D W Bennett
Solicitor for the Herald & Weekly Times Ltd	Corrs Chambers Westgarth
Counsel for the Second Respondent:	B Zichy-Woinarski QC
Solicitor for the Second Respondent:	Australian Government Solicitor
Date of Hearing:	16 September 2003
Date of Judgment:	16 September 2003