Gates v Commissioner of Taxation [2006] FCA 739 (14 June 2006)

Last Updated: 15 June 2006

FEDERAL COURT OF AUSTRALIA

Gates v Commissioner of Taxation [2006] FCA 739

PRACTICE AND PROCEDURE – application for action to be dismissed – non-appearance of applicant – Federal Court Rules, O 32 r 2(1)(c) – where applicant given adequate notice of date of hearing – where applicant failed to pay Court fees – non-compliance of statement of claim with rules as to pleadings – previous proceedings in which applicant given every opportunity to formulate claim but failed to do so – held, action dismissed.

Judiciary Act 1903 (Cth), s 39B
Federal Court Rules, O 32 r 2(1)(c)

Engler v Commissioner of Taxation [2002] FCA 226, referred to
Engler v Federal Commissioner of Taxation (No 2) (2003) 52 ATR 642, referred to
Engler v Federal Commissioner of Taxation (2003) 54 ATR 211, referred to
Engler v Federal Commissioner of Taxation (No 3) (2003) 54 ATR 617, referred to






















JEFFREY KENNETH GATES v COMMISSIONER OF TAXATION

WAD 251 of 2004

BESANKO J
14 JUNE 2006
PERTH

IN THE FEDERAL COURT OF AUSTRALIA
WESTERN AUSTRALIA DISTRICT REGISTRY	WAD 251 OF 2004

BETWEEN:	JEFFREY KENNETH GATES APPLICANT
AND:	COMMISSIONER OF TAXATION RESPONDENT
JUDGE:	BESANKO J
DATE OF ORDER:	14 JUNE 2006
WHERE MADE:	PERTH

THE COURT ORDERS THAT:

1.	The action be dismissed, pursuant to O 32 r 2(1)(c) of the Federal Court Rules.
2.	The applicant pay the respondent’s costs of the action, to be taxed or agreed.

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

IN THE FEDERAL COURT OF AUSTRALIA
WESTERN AUSTRALIA DISTRICT REGISTRY	WAD 251 OF 2004

BETWEEN:	JEFFREY KENNETH GATES APPLICANT
AND:	COMMISSIONER OF TAXATION RESPONDENT

JUDGE:	BESANKO J
DATE:	14 JUNE 2006
PLACE:	PERTH

REASONS FOR JUDGMENT

1 In November 2004 Mr Jeffrey Kenneth Gates issued an application alleging a claim against the Commissioner of Taxation under s 39B of the Judiciary Act 1903 (Cth) and in equity. The claim relates to assessments issued by the Commissioner for the financial years ending 30 June 1992, 1993, 1994, 1995, and 1996, respectively, and alleged amendments to the assessments, which are said to have been made on or about 8 September 1998. Mr Gates seeks a number of declarations, damages and costs.

Chronology

2 A number of interlocutory steps have been taken in the action. It is not necessary to describe those steps. It is sufficient to start the chronology with the directions hearing held before Lee J on 8 February 2006. His Honour made a number of orders on that date, including an order that the applicant file an amended statement of claim by 15 February 2006 and orders that put in place a programme for the filing of affidavits upon which the parties intended to rely at the hearing. Lee J also made an order that the matter was to be listed for hearing for two days on dates after 10 May 2006.

3 Mr Gates filed an amended statement of claim on 15 February 2006.

4 On 23 March 2006 Mr Gates filed an affidavit and on 4 April 2006 he filed a second affidavit containing minor corrections to his first affidavit.

5 Mr Gates has appeared in person in the proceedings and he has given details of a residential address, telephone number and a facsimile number.

6 On 5 May 2006 an officer in the Registry of the Court advised Mr Gates that it was proposed to list the proceedings for hearing for one-and-a-half days commencing on 12 June 2006. Mr Gates told the officer that the matter should not be listed for hearing that week as ‘things may change’. The officer then wrote to both Mr Gates and the solicitor for the Commissioner. The letter, dated 5 May 2006, contained the following statement:

‘I note that you stated that this Registry should not proceed to list the matter for hearing this week as "things may change". It is not entirely clear what is meant by this statement. Should the listing dates not be suitable please advise the Court as soon as possible.’

7 Mr Gates did not contact the Registry after receiving that letter. In fact, he has not contacted the Registry since 5 May 2006.

8 On 10 May 2006 the District Registrar wrote to both Mr Gates and the solicitor for the Commissioner advising them that the action had been listed for trial on Monday 12 June 2006 at 10.15 am and Tuesday 13 June 2006 at 10.15 am.

9 On 11 May 2006 Mr Gates was sent an invoice for a setting down fee and a daily hearing fee. He was reminded that the setting down fee became payable on a date for hearing being fixed and should be paid immediately. Mr Gates did not pay the fee, nor has he applied for a waiver of the fee.

10 On 31 May 2006 Mr Gates and the solicitor for the Commissioner were advised that the hearing would commence at 12 noon on Monday 12 June 2006.

11 Mr Gates did not appear on 12 June 2006. As I have said, he has made no contact with the Registry since 5 May 2006. The Commissioner has asked for an order dismissing the action. That is one of the orders that I may make if, when a proceeding is called on for trial, the claimant is absent: Federal Court Rules, O 32 r 2(1)(c). I made such an order on 13 June 2006 and said that I would deliver reasons for making the order. These are my reasons.

The applicant’s claim

12 It is necessary for me to say something more about the nature of Mr Gates’ claim and the history of the claim.

13 It is difficult to describe the claim made by Mr Gates because no particulars of even the most basic nature are provided. I have carefully read his amended statement of claim, and I have also had regard to his affidavit of 4 April 2006 and his outline of submissions of the same date. It seems that Mr Gates alleges that the Commissioner did not act honestly in issuing assessments for the assessment years previously referred to. He also alleges that the Commissioner did not accord him procedural fairness; that the Commissioner acted in bad faith, particularly in 1998, and that the Commissioner did not make a bona fide attempt to deal with assessments for the years ending 30 June 1997, 1998 and 1999. There also seems to be a complaint about an audit commenced by the Commissioner in about 1996.

14 In the material filed by the applicant, there are no allegations or particulars of the conduct that is said to constitute the serious breaches of duty alleged against the Commissioner and his officers. It is not possible to say that the statement of claim discloses a cause of action. It certainly does not comply with the rules as to pleadings.

15 The applicant’s statement of claim contains a request for the matter to be dealt with as soon as possible, ‘considering this matter has been tried to be brought before this Court since 2001 and the applicant has suffered since May 1998 and is still suffering’.

16 Indeed, Mr Gates’ complaints have a long history. There were previous proceedings in this Court (File Number W245 of 2001) that have been the subject of various rulings and judgments, to which I now turn.

Previous proceedings

17 There were two applicants in the previous proceedings, Claudia Charlotte Engler and Mr Gates, and it appears to be common ground that Ms Engler and Mr Gates were, for some years, conducting a business partnership.

18 In Engler v Commissioner of Taxation [2002] FCA 226, delivered on 8 March 2002, French J described the proceedings in the following way (at [3] – [5]):

‘On 18 June 2001, Claudia Charlotte Engler and Jeffrey Kenneth Gates commenced proceedings in this Court against the Commissioner of Taxation. On the basis of affidavits accompanying their application they seek declaratory relief that various notices and amended notices of assessment issued to them under the ITAA are void, these being:

1. Amended Notices of Assessment issued to Engler on 24 September 1998 relating to the financial years ended 30 June 1992, 1993, 1994, 1995 and 1996 and a Notice of Assessment issued on the same date for the year ended 30 June 1997.

2. A Notice of Amended Assessment issued to Gates on 15 September 1998 and relating to the financial year ended 30 June 1992.

They also seek declaratory relief that "any Nil Tax Advices issued by the Commissioner to Gates on or about 15 September 1998 are void". Orders apparently by way of injunction are sought that the Commissioner "be permanently stopped from reviewing the Applicants on any issue that has been reviewed in the past again" and "from reviewing the Applicants’ taxation affairs from the year ended 30 June 1997 and backwards".

A declaration is sought that a Notice of Assessment issued by the Commissioner on or about 6 November 1996 was a proper assessment in accordance with the ITAA and is proof that reviews of the applicants’ taxation affairs commenced by the Commissioner on or about 7 April 1995 were concluded prior to 6 November 1996 in accordance with the ITAA. Other orders are sought that the Commissioner, if reviewing the applicants in the future, must adhere to the principles outlined in the Taxpayers’ Charter and in the law and that from the date of the filing of the application the applicants and any other business or entity in which they become involved should be classed as restricted access taxpayers. A claim is also made for unspecified "losses and damages and costs".’

19 In the course of deciding that the application should be struck out, French J made the following observations (at [54]):

‘Contentions that certain of the assessments are void for having been issued for an improper purpose may enliven the jurisdiction of the Court under s 39B of the Judiciary Act 1903 (Cth). These contentions are to be found in pars 9, 11, 13 and 15 of the application. There is however, on my reading of the points of claim, little exposed in the way of facts which would support a case of improper purpose or want of bona fides. Paragraphs 18 and 19, as the Commissioner contends, do not specify the alleged breach of natural justice. As to pars 20 and 21, the broad brush assertions in the points of claim as to the various species of misconduct attributed to the Commissioner and his officers do not disclose facts sufficient to ground the tort of misfeasance in public office or negligence. That is not to say that on the facts apparent from the chronology and some of the matters raised in the points of claim the applicants may not have had cause to complain about the way in which and the efficiency with which their affairs have been handled in the ATO. But that of itself is not enough to establish a cause of action.’

20 French J gave the applicants leave to file an amended application.

21 On 6 May 2003, French J made an order that the statement of claim filed on 5 March 2003 be struck out: Engler v Federal Commissioner of Taxation (No 2) (2003) 52 ATR 642. He also gave liberty to amend the statement of claim if it be the applicants’ contention that the notices of amended assessment were issued other than in good faith. In the course of his reasons, French J said (at 643 [1]):

‘The application they originally filed was struck out on 8 March 2002. They have now filed an amended application and a statement of claim pursuant to the orders which I made then. The amended application and statement of claim have been prepared with the assistance of pro bono counsel who has since ceased to act for them. The respondent moves to strike out that statement of claim or for an order that the application be dismissed or permanently stayed.’

22 An application for leave to appeal from the order made by French J on 6 May 2003 was dismissed by Lee J on 21 October 2003: Engler v Federal Commissioner of Taxation (2003) 54 ATR 211.

23 The applicants filed a further statement of claim. The Commissioner moved the Court for an order that that statement of claim be struck out and that the proceedings be dismissed generally. That motion came on for hearing before French J and, on 23 December 2003, his Honour made an order that the application be struck out and that the applicants pay the respondent’s costs of the proceedings: Engler v Federal Commissioner of Taxation (No 3) (2003) 54 ATR 617. French J noted that Ms Engler and Mr Gates had had great difficulty in formulating a viable statement of claim, despite the fact that they had had assistance from three different legal practitioners, two of whom acted on a pro bono basis. He made the following observations (at 626 [34] and 627 [36]):

‘The outline of the statement of claim which I have just essayed indicates no basis beyond bold assertion for the contentions of bad faith action on the part of the respondent. The statement of claim is, like its predecessors, a welter of confused and irrelevant allegations which, as the respondent submits, not properly engaged the jurisdiction of the Court. The analysis of paragraph [59] exemplifies the ways in which the applicants will allege fraud on foundations which cannot logically support such an allegation.

The statement of claim cannot stand and the point has now been reached where I am not prepared to allow this proceeding to continue any further. The applicants have demonstrated that they are unable to frame in a responsible and careful way a cause of action which is amenable to determination by the Court. They have had the assistance of two pro bono lawyers, one of whom is Queens Counsel. They have now had a number of opportunities to formulate a viable statement of claim.’

24 To return to the present proceedings, Mr Gates had the opportunity to make a submission about the proposed hearing dates, but he did not do so. As I have said, he did not respond to the letter from the officer of the Registry dated 5 May 2006. He was given adequate notice of the dates fixed for the hearing, but he did not appear at the hearing.

25 Mr Gates’ amended statement of claim clearly does not comply with the rules as to pleadings and, in fact, it is not possible to say that it discloses a cause of action. All of this has occurred in the context of a long history involving previous proceedings in this Court in which Mr Gates was given every opportunity to formulate his claim, but failed to do so.

26 In my opinion, it is appropriate in all the circumstances to order that the claim be dismissed, and I so ordered. It is also appropriate that costs follow the event in the usual way, and I made an order to that effect.

I certify that the preceding twenty-six (26) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Besanko.

Associate:

Dated: 14 June 2006

Counsel for the Applicant:	The applicant did not appear.
Counsel for the Respondent:	Ms L B Price
Solicitor for the Respondent:	Australian Government Solicitor
Date of Hearing:	12 and 13 June 2006
Date of Judgment:	14 June 2006