Case: Hunter v Leahy and Others [1999] FCA 1075 ; (1999) 91 FCR 214
Outcome: cited
paragraph 17 of the reasons for judgment, delete the quotation mark that appears after the words 'primary tax'. I certify that the preceding two (2) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Conti. Associate: Dated: 6 October 2006 FEDERAL COURT OF AUSTRALIA IEL Finance Limited v Commissioner of Taxation [2006] FCA 1293 PRACTICE AND PROCEDURE summary judgment entered upon strike-out of initiating processes comprising statements of facts, issues and contentions pleaded by three corporately related taxpayers in complex revenue disputes partial dismissal of taxpayers' appeals primary ground of dismissal being abuse of process secondary ground of dismissal Anshun estoppel appropriate form of orders as to dismissal of parts of initiating processes of each applicant order to be made as to costs Taxation Administration Act 1953 (Cth) ss 14ZZO , 14ZZP , 14ZR (1), 14ZU , 14ZW , and 14ZZ Federal Court of Australia Act 1976 (Cth) ss 22 and 23 Federal Court Rules O 20 subrule 2(1) IEL Finance Limited and Others v Commissioner of Taxation (2006) 62 ATR 165 referred to Commissioner of Taxation v Queensland Trading and Holding Company Limited [2006] FCAFC 112 discussed Hunter v Leahy and Others [1999] FCA 1075 ; (1999) 91 FCR 214 cited IEL FINANCE LIMITED, QUEENSLAND TRADING AND HOLDING COMPANY LIMITED AND SPASSKED PTY LIMITED v COMMISSIONER OF TAXATION NSD 539 OF 2004 NSD 543 OF 2004 NSD 540 OF 2004 NSD 94 OF 2005 CONTI J 29 SEPTEMBER 2006 SYDNEY IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY NSD 539 OF 2004 BETWEEN: IEL FINANCE LIMITED Applicant AND: COMMISSIONER OF TAXATION Respondent JUDGE: CONTI J DATE OF ORDER: 29 SEPTEMBER 2006 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. Paragraphs 5 to 16, 18, 21, 26 to 51, 60 to 62 and 65 to 67 of the applicant's amended statement of facts issues and contentions be struck out. 2. The applicant's appeal against the respondent's taxation objection decision so far as it relates to the assessment of the applicant's taxable income for the year ended 30 June 1993 be dismissed. 3. The applicant pay the respondent's cost of this motion and of the application to date. 4. The applicant be granted leave to file a further amended statement of facts, issues and contentions on or before 21 days from the date of this order. 5. The respondent have leave to file any reply to the applicant's further amended statement of facts, issues and contentions on or before 21 days from the date of service of the applicant's further amended statement of facts, issues and contentions. 6. The applicant be granted leave to file an application for leave to appeal and a notice of appeal from the judgment of Conti J dated 21 March 2006 and the foregoing orders on or before 20 October 2006. 7. The applicant's application for leave to appeal from the judgment of Conti J dated 21 March 2006 and the foregoing orders be heard concurrently with the applicant's appeal against such judgment and orders by a Full Court of this Court. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules . IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY NSD 540 OF 2004 BETWEEN: QUEENSLAND TRADING AND HOLDING COMPANY LIMITED Applicant AND: COMMISSIONER OF TAXATION Respondent JUDGE: CONTI J DATE OF ORDER: 29 SEPTEMBER 2006 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. Paragraphs 4 to 18, 20, 23, 30 to 59, 63 to 67 and 69 to 72 of the applicant's amended statement of facts, issues and contentions be struck out. 2. The applicant's appeal against the respondent's taxation objection decision so far as it relates to the assessment of the applicant's taxable income for the year ended 30 June 1991 be dismissed. 3. The applicant pay the respondent's costs of this motion and of the application to date. 4. The applicant be granted leave to file a further amended statement of facts, issues and contentions on or before 21 days from the date of this order. 5. The respondent have leave to file any reply to the applicant's further amended statement of facts issues and contentions on or before 21 days from the date of service of the applicant's further amended statement of facts, issues and contentions. 6. The applicant be granted leave to file an application for leave to appeal and a notice of appeal from the judgment of Conti J dated 21 March 2006 and the foregoing orders on or before 20 October 2006. 7. The applicant's application for leave to appeal from the judgment of Conti J dated 21 March 2006 and the foregoing orders be heard concurrently with the applicant's appeal against such judgment and orders by a Full Court of this Court. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules . IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY NSD 543 OF 2004 BETWEEN: IEL FINANCE LIMITED Applicant AND: COMMISSIONER OF TAXATION Respondent JUDGE: CONTI J DATE OF ORDER: 29 SEPTEMBER 2006 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. Paragraphs 5 to 16, 18, 21, 26 to 51, 59 to 51 and 65 to 68 of the applicant's amended statement of facts, issues and contentions be struck out. 2. The applicant's appeal against the respondent's taxation objection decision so far as it relates to the assessment of the applicant's taxable income for the year ended 30 June 1996 be dismissed. 3. The applicant pay the respondent's costs of this motion and of the application to date. 4. The applicant be granted leave to file a further amended statement of facts, issues and contentions on or before 21 days from the date of this order. 5. The respondent have leave to file any reply to the applicant's further amended statement of facts, issues and contentions on or before 21 days from the date of service of the applicant's further amended statement of facts, issues and contentions. 6. The applicant be granted leave to file an application for leave to appeal and a notice of appeal from the judgment of Conti J dated 21 March 2006 and the foregoing orders on or before 20 October 2006. 7. The applicant's application for leave to appeal from the judgment of Conti J dated 21 March 2006 and the foregoing orders be heard concurrently with the applicant's appeal against such judgment and orders by a Full Court of this Court. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules . IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY NSD 94 OF 2005 BETWEEN: SPASSKED PTY LIMITED Applicant AND: COMMISSIONER OF TAXATION Respondent JUDGE: CONTI J DATE OF ORDER: 29 SEPTEMBER 2006 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. Paragraphs 5 to 16, 18, 24 to 49, 57 to 59 and 62 to 64 of the applicant's amended statement of facts, issues and contentions be struck out. 2. The applicant's appeal against the respondent's taxation objection decision so far as it relates to the assessment of the applicant's taxable income for the year ended 30 June 1994 be dismissed. 3. The applicant pay the respondent's costs of this motion and of the application to date. 4. The applicant be granted leave to file a further amended statement of facts, issues and contentions on or before 21 days from the date of this order. 5. The respondent have leave to file any reply to the applicant's further amended statement of facts, issues and contentions on or before 21 days from the date of service of the applicant's further amended statement of facts, issues and contentions. 6. The applicant be granted leave to file an application for leave to appeal and a notice of appeal from the judgment of Conti J dated 21 March 2006 and the foregoing orders on or before 20 October 2006. 7. The applicant's application for leave to appeal from the judgment of Conti J dated 21 March 2006 and the foregoing orders be heard concurrently with the applicant's appeal against such judgment and orders by a Full Court of this Court. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules . IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY NSD 539 OF 2004 NSD 543 OF 2004 NSD 540 OF 2004 NSD 94 OF 2005 BETWEEN: IEL FINANCE LIMITED, QUEENSLAND TRADING AND HOLDING COMPANY LIMITED AND SPASSKED PTY LIMITED Applicants AND: COMMISSIONER OF TAXATION Respondent JUDGE : CONTI J DATE: 29 SEPTEMBER 2006 PLACE: SYDNEY REASONS FOR ORDERS On 21 March 2006 I directed the parties to the four subject proceedings ( IEL Finance Limited and Others v Commissioner of Taxation (2006) 62 ATR 165) to provide draft declarations and/or orders giving effect to the reasons for judgment delivered on that prior occasion. The first of those four proceedings, being numbered NSD 539 of 2004 and involving IEL Finance Limited as applicant, was treated by the parties as the precedent vehicle, for the most part, for implementation of orders to be made in the remaining three proceedings. The abbreviations adopted in these reasons reflect those used in the preceding principal reasons for judgment of 21 March 2006. There appears to be no controversy between the relevant parties regarding the content of the first order to be made in all four proceedings brought of course at the instance of the applicable applicant. Nor is there controversy as to consequential orders numbered 4 to 7 concerning grant of leave to the applicant in all four proceedings to file the amended pleading and to the Commissioner filing a subsequent reply. Where controversy lies is in relation to the nature and scope of the order required to give effective operation as to the implications of the strike-out of the foregoing paragraphs of amended statement of facts, issues and contentions (the proposed order 2) and to the order to be made as to costs of this motion and of the application for summary judgment (the proposed order 3). The Commissioner submitted in response that the thrust of IEF's contentions I have outlined above tend to confuse the subject matter of the applicants' respective applications in the principal proceedings with the subject matter of the Commissioner's amended notice of motion filed on 25 July 2005, being summary relief for abuse of process. The Commissioner drew attention however to Order 20 rule 2, subrule (1) whereof reads as follows: '2(1) Where in any proceeding it appears to the Court that in relation to the proceeding generally or in relation to any claim for relief in the proceedings (a) no reasonable cause of action is disclosed; ... (c) the proceeding is an abuse of the process of the Court, the Court may order that the proceeding be stayed or dismissed generally or in relation to any claim for relief in the proceedings. ... .' Upon either footing, and by reason moreover of ss 22 and 23 of the Federal Court of Australia Act 1976 (Cth) ('the Federal Court Act'), the Commissioner asserted justification for an order in the form the subject of the Commissioner's proposed Order 2 (see again [3] above). I was referred in that regard to the decision of Hunter v Leahy and Others [1999] FCA 1075 ; (1999) 91 FCR 214, where in relation to the operation of s 23 of the Federal Court Act, French J observed at [14] and [15]: '14. ...It is accepted that courts of law and equity have general powers now accepted as an established part of their armoury to prevent the abuse or frustration of their processes in relation to matters coming within their jurisdictions... 15. Although the term "inherent jurisdiction" was used to describe such a power in courts of general jurisdiction, it is better described in a statutory court as an implied power... .' The Commissioner emphasised that an order was not sought that part of the objection decision be affirmed, but rather an order that the proceedings, so far as they relate to the objection decision in respect of primary tax, be dismissed, and that whether the objection decision is to be affirmed or set aside in part is a matter that may be dealt with when the remaining issue the subject of the proceedings, which relate to the objection decisions in respect of additional tax, have been determined. In my opinion and in the light in particular of the circumstance that the proceedings to date have been dominated by the issue as to liability to primary tax, the Commissioner's case in relation to the framework of the proposed Order 2 is to be preferred. The Federal Court's authority to make an order in relation to proceedings, so far as the same may constitute an abuse of process, does not originate from the Administration Act, but under and pursuant to the inherent powers of the Court and of the Federal Court Rules , in conformity with which the orders sought by the Commissioner have been presented. Moreover the power of the Court to make orders for the dismissal of proceedings, in whole or in part, originates under Order 20 rule 2, the concluding words whereof being reflected implicitly in the form of Order 2 proposed by the Commissioner in [3] above. That power resides also in the power of the Federal Court conferred by s 23 of the Federal Court Act, as the dictum of French J in Hunter makes clear. For ease of reference, section 23 reads as follows: 'The Court has power, in relation to matters in which it has jurisdiction, to make orders of such kinds, including interlocutory orders, and to issue, or direct the issue of, writs of such kinds, as the Court thinks appropriate.' It is upon that footing, which I pointed out in [126] of my reasons for judgment given on 21 March 2006 in the strike-out proceedings ( supra ), being '[m]y primary juridical basis for granting or upholding the Commissioner's application for summary judgment is that of abuse of process' , I would make Order 2 as proposed by the Commissioner.