Nelson Tobacco Company Pty Limited v Commissioner of ACT Revenue Sca [1992] ACTSC 75; (1992) 23 ATR 550; (1992) 109 FLR 323 (14 August 1992)

SUPREME COURT OF THE ACT

NELSON TOBACCO COMPANY PTY LIMITED v. COMMISSIONER FOR ACT REVENUE
S.C.A. No. 96 of 1992
Appeal - Practice and Procedure
[1992] ACTSC 75; (1992) 23 ATR 550
(1992) 109 FLR 323

COURT

IN THE SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY
Miles C.J.(1)

CATCHWORDS

Appeal - practice and procedure - application for extension of time - general principles - how justice best served - prospects of success of appeal.

Practice and procedure - parties - correction of misnomer and misdescription - applicability of relevant rules.

Gallo v. Dawson [1990] HCA 30; (1990) 64 ALJR 458 at 459

Australasia Ltd. (1978) VR 257

Federal Commissioner of Taxation v. Official Receiver and Another [1956] HCA 24; (1956) 95 CLR 300

Bridge Shipping Pty. Limited v. Grand Shipping S.A. and Another [1991] HCA 45; (1991) 173 CLR 231

HEARING

CANBERRA
14:8:1992

Counsel for the plaintiff: Mr A. Robertson

Solicitors for the plaintiff: Mallesons Stephen

Jaques

Counsel for the defendant: Mr P. Walker

Solicitors for the defendant: ACT Government
Solicitors

ORDER

The Court orders that:

1. The time for instituting the appeal be extended to 14 August 1992 on terms that the plaintiff proceed to obtain a hearing date for the appeal without delay.

2. The costs of the application for extension of time be reserved.

DECISION

This was an application for extension of time to appeal against an order of the Master dismissing the plaintiff's action against the defendant. That order was made on 19 December 1991 at the conclusion of a hearing of a motion by the defendant that the plaintiff's action be struck out as disclosing no reasonable cause of action against the named defendant, alternatively that certain paragraphs of the statement of claim be struck out as an abuse of process. The application for extension of time was filed on 9 June 1992. On 7 August 1992 I granted the extension of time and said that I would give reasons later. These are the reasons.

2. The nature of the action is set out succinctly in the Master's reasons as follows:

"Essentially, the plaintiff, by its action, sought
to recover licence fees in respect of its wholesale
tobacco licence, which it had paid under protest, and
the assessment of which was subsequently set aside by
order of the Federal Court.
Although the statement of claim alleged that the
defendant had failed to repay the licence fee, it was
common ground that the licence fee itself had in fact
been repaid to the plaintiff after issue of the writ,
but before delivery of the statement of claim. The
plaintiff seeks to continue the action to recover
interest and costs. The defendant's contention is
that, if it has any cause of action, the plaintiff has
sued the wrong defendant. The defendant named in the
writ is the Commissioner for ACT Revenue. The
defendant's point is that action may be maintained only
against the Commonwealth."

To the above it might be added that the interest claimed in the writ and statement of claim is interest pursuant to s.53A of the Australian Capital Territory Supreme Court Act 1933 (the Supreme Court Act).

3. The Master held that as a consequence of various provisions of the Business Franchise (Tobacco and Petroleum Products) Act 1984, the Taxation (Administration) Act 1987 and the Self-Government (Consequential Amendments) Act 1989 (ACT), it was the Australian Capital Territory that was liable for repayment of the licence fee and that the Territory was "the proper defendant". Accordingly the claim for interest against the defendant was not sustainable. The reasoning which led to the Master's conclusion necessarily involved a rejection of the submission that it was the Commonwealth that was responsible for repayment of the licence fee.

4. The plaintiff, however, now takes the attitude that it is precluded from pursuing the claim for interest against the Territory by virtue of the terms of s.53A itself, whereby it is provided that interest may be included in the sum for which judgment is given "in any proceedings for the recovery of any money (including any debt or damages or the value of any goods)". Because the licence fee was repaid to the plaintiff after issue of the writ against the defendant, the plaintiff now has no cause of action on which to bring proceedings for the recovery of any money and there can be no such proceedings to which a claim of interest might be added. Furthermore, according to what is put on behalf of the plaintiff, it is futile to seek to add the Territory as an additional party to the proceedings brought against the defendant because of the provisions of O.19 r.12. That rule provides that where a party is added to proceedings, the proceedings against that party shall be deemed to have begun only on the service of the writ or notice required to be served on the additional party by the provisions of the Rules.

5. A curious feature of the case is that although it is strenuously denied on behalf of the Territory that the Territory was liable to the plaintiff for repayment of the licence fee, it was in fact the Territory who paid to the plaintiff an amount equivalent to the licence fee after the issue of the writ against the defendant.

6. The correspondence between the parties indicates that the plaintiff was at first content with the Master's decision, and, having failed in its claim against the defendant, sought to rely upon the Master's decision in order to claim interest from the Territory. However, the Territory insisted, despite the Master's decision, that it was the Commonwealth that was responsible to the plaintiff and not the Territory. It made its attitude clear enough in a letter dated 25 November 1991. The solicitors for the plaintiff asked for reasons but none were forthcoming. Eventually, the notice of motion to lengthen the time for appeal was filed.

7. The importance of the various factors to be taken into consideration in an application to extend time for an appeal vary according to the circumstances of the case. Overall, however, there is the need to do justice to the parties. An ancillary question which is particularly relevant to the present case is the length of the delay and the effect of delay on the parties. Another question relevant to the present case relates to the prospects of success of the proposed appeal. The delay in the present case is very considerable, regardless of whether the decision appealed against is characterised as interlocutory (where the time for appeal is five days) or as final (where the time for appeal is twenty-eight days). There is no explanation for the delay except that the plaintiff's solicitors sought advice from counsel in February, March and April 1992.

8. In Gallo v. Dawson [1990] HCA 30; (1990) 64 ALJR 458 at 459, McHugh J. said:

"A case would need to be exceptional before a court
would enlarge by many months the time for lodging an
appeal simply because the applicant had refrained from
appealing until he or she had researched the issues
involved. In Hughes, McInerney J. pointed out (at 263)
that one object of fixing times under court rules is
"to achieve a timetable for the conduct of litigation
in order to achieve finality of judicial
determinations." When the time for appealing has
expired, the litigation is at an end; the successful
party is entitled to the benefit of the judgment in his
or her favour. At that stage, the successful party has
a "vested right to retain the judgment". It would make
a mockery of O 70 r 3 if, months after the time for
appealing has expired, the unsuccessful party could
obtain an extension of time on the ground that he or
she had delayed appealing because that person wanted to
research the issues involved. Lack of legal knowledge
is a misfortune, not a privilege. Since I am firmly of
the opinion that the proposed appeal of the applicant
cannot possibly succeed, however, it is unnecessary to
determine what conclusion I would have reached in this
matter if I had thought that the appeal was arguable."

9. The reference is to Hughes v. National Trustees Executors and Agency Co. of Australasia Ltd. (1978) VR 257. That case is simply one of many in which the principles have been discussed and applied, but it appears to have the imprimatur of a Justice of the High Court. McInerney J. held, as the headnote states, that the discretion to extend time is conferred in order to avoid injustice and the Court must consider whether justice between the parties is best served by granting or refusing the extension sought, which involves a consideration of all factors, including the prospects of success of the appeal if the extension be granted.

10. The effect of the considerable delay, however, does not appear to me to be of any particular importance to either party. None was demonstrated. It would be expected that any award of interest that might be made in the plaintiff's favour would take into account any delay caused by the plaintiff. In any event it is unlikely that interest awarded would not run beyond the date of refund of the licence fee made after the issue of the writ.

11. The prospect of success in the appeal is a matter for consideration in an application for leave to appeal out of time. This is where the present case is in marked contrast to Gallo v. Dawson. The draft ground of appeal asserts that the Master was in error in applying the decision of the High Court in Federal Commissioner of Taxation v. Official Receiver and Another [1956] HCA 24; (1956) 95 CLR 300 to the case in hand. I do not think it desirable to say more than that it is arguable that that High Court decision does not govern the present case, insofar as the High Court was there concerned with the construction of a different statute altogether and did not lay down a general principle.

12. However, it is not only the identity of the correct defendant which is called into issue by the proposed appeal, it is also contended that the Master was in error in failing to consider whether leave to amend the proceedings should be granted to the plaintiff to correct any misnomer or misdescription in the name of the defendant. O.19 R.12 embodies and extends the provisions of s.24 of the Supreme Court Act, and gives the Court power, either upon or without the application of any party, to add the names of any parties "who ought to have been joined, or whose presence before the Court is necessary to enable the Court effectually and completely to adjudicate upon and settle all the questions involved in the cause or matter". Order 32 R.1 also empowers the Court to allow all such amendments to the pleadings "as are necessary for the purpose of determining the real questions in controversy between the parties" and such amendments may be made in such manner and on such terms as are just. The High Court has recently held that a rule in Victoria similar to O.32 R.1 covers not only cases of misnomer, clerical error and misdescription, but also cases where the plaintiff, intending to sue a person identified by a particular description, was mistaken as to the name of the person who answered that description: Bridge Shipping Pty. Limited v. Grand Shipping S.A. and Another [1991] HCA 45; (1991) 173 CLR 231. In my view, there is a real question as to the application of O.32 R.1 in the present case, since if it were applicable, the proper order of the Master might have been not to dismiss the plaintiff's claim but to amend the pleadings to substitute the name of the Australian Capital Territory for that of the defendant.

13. Returning to the question whether it is in the interests of justice that leave should be granted to appeal out of time, there was never any real question raised, once the plaintiff commenced proceedings, as to its entitlement under the Taxation (Administration) Act 1987 to the refund of the licence fee. The provisions of that Act, however, did not identify the source from which the refund was payable or the identity of the person charged with the liability to repay it. The omission of the legislation to identify the person liable to make the repayment did not of course entitle the plaintiff to claim the refund from anyone it chose. At the same time, however, the legislation did not make the choice of defendant an easy one, particularly in the light of apparent changes consequent upon self-government. It was the initiation of proceedings against the defendant (erroneously, according to the Master's decision) which stimulated the Territory into repaying the licence fee to the plaintiff. There is, at the very least, some irony in the Territory seeking to take advantage of the payment made by it, which payment it asserts it was not obliged to make, with consequent immunity from suit for interest under s.53A of the Supreme Court Act. There is indeed the possibility of a substantial injustice to the plaintiff. It is impossible, in my view, to avoid the conclusion that unless the matters raised by the proposed appeal are considered and adjudicated upon, there has not been a complete and final determination of all matters in controversy between the parties. The Supreme Court is charged by s.24 of the Supreme Court Act with the duty of making such a determination in proceedings brought before it. In this light, it is to be remembered that the application before the Master (although resulting in an order that the action be dismissed) was brought in the form of an application by the defendant for an order that the plaintiff's claim be struck out as disclosing no reasonable cause of action. It did not and could not result in a final adjudication of the matters in controversy between the parties. There was no judgment on the merits. The case is perhaps an illustration of the difficulties that can arise when a plaintiff's claim is sought to be defeated at an interlocutory stage, without pleadings, without defined issues, without evidence about all the facts, and without a hearing on the merits.

14. For these reasons, time for instituting the appeal was extended until 14 August 1992 on terms that the plaintiff proceed to obtain a hearing date for the appeal without delay. The costs of the application for extension of time were reserved.