Stewart v Deputy Commissioner of Taxation [2009] FCA 1249 (2 November 2009)

Last Updated: 5 November 2009

FEDERAL COURT OF AUSTRALIA

Stewart v Deputy Commissioner of Taxation [2009] FCA 1249

ANTHONY STEWART, PAUL HOGAN and JOHN SYDNEY CORNELL v DEPUTY COMMISSIONER OF TAXATION
NSD 330 of 2009

PERRAM J
2 NOVEMBER 2009
SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION	NSD 330 of 2009

BETWEEN:	ANTHONY STEWART First Applicant PAUL HOGAN Second Applicant JOHN SYDNEY CORNELL Third Applicant
AND:	DEPUTY COMMISSIONER OF TAXATION Respondent

JUDGE:	PERRAM J
DATE OF ORDER:	2 NOVEMBER 2009
WHERE MADE:	SYDNEY

THE COURT ORDERS THAT:

1. The motion for vacation and stay of the proceedings be dismissed with costs.
   

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IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION	NSD 330 of 2009

BETWEEN:	ANTHONY STEWART First Applicant PAUL HOGAN Second Applicant JOHN SYDNEY CORNELL Third Applicant
AND:	DEPUTY COMMISSIONER OF TAXATION Respondent

JUDGE:	PERRAM J
DATE:	2 NOVEMBER 2009
PLACE:	SYDNEY

REASONS FOR JUDGMENT

1. Mr Stewart, who is the first applicant, seeks to vacate a two-day hearing scheduled to commence on Monday 9 November 2009, and also seeks, orally, a stay of the present proceedings. At the hearing on 9 and 10 November 2009 the Court is to hear the Deputy Commissioner’s application summarily to dismiss the whole of the present proceedings brought by Mr Stewart, Mr Hogan and Mr Cornell, on the basis that those proceedings have no reasonable prospects of success. Broadly speaking, the present proceedings attack the lawfulness of a notice issued by the Deputy Commissioner to Mr Stewart pursuant to s 264 of the Income Tax Assessment Act 1936 (Cth). That notice required Mr Stewart to attend and give evidence before officers appointed by the Deputy Commissioner of Taxation for that purpose.
2. Mr Stewart did attend, but he declined to be sworn and he did not – or so it would seem, at least, on the present application – answer any questions which were put to him in a substantive fashion. The Deputy Commissioner of Taxation has taken the view that that conduct exposes the existence of a criminal offence of a summary nature, and has accordingly commenced summary criminal proceedings against Mr Stewart before the Local Court in New South Wales. It is apparent that the lawfulness of the s 264 notice is likely to be a significant issue in those criminal proceedings. If the notice is invalid, then, arguably, no offence can have been committed by Mr Stewart. Mr Stewart contends that now to require him to defend the Deputy Commissioner of Taxation’s summary dismissal application in this Court would, in effect, require him to disclose in advance parts of his defence to the criminal proceedings presently pending in the Local Court.
3. This would, so it is said, thereby interfere with his privilege against self-incrimination. The Deputy Commissioner denies that that would provide a proper basis for adjourning the present proceedings. However, I do not think that it is necessary to resolve that issue. This is because the debate which is to take place on Monday 9 November 2009 is about the adequacy of Mr Stewart’s present proceedings. The way in which he attacks the s 264 notice is presently fully disclosed in his statement of claim. I do not see how a debate as to whether that pleading discloses a case which is sufficiently tenable to go forward to trial takes the matter examined any further than Mr Stewart’s expressly articulated attack on the s 264 notice.
4. Mr Stewart has already put forward one set of reasons as to why the s 264 notice is unlawful. The question is only whether those reasons disclose a claim which is able to be maintained. It is true that Mr Stewart has foreshadowed that he proposes further to amend his statement of claim, a not uncommon occurrence in the face of a summary dismissal application. However, he has already articulated a draft of that pleading and the issue will be whether it is sufficiently viable to attract a grant of leave to amend. That may be determined by an examination of the very text which Mr Stewart now propounds. For those reasons I find it impossible to embrace the notion that Mr Stewart’s privilege against self-incrimination is somehow undermined by the hearing of the summary dismissal application.
5. There are three further matters which should be mentioned. First, Mr Stewart also seeks a stay of the whole of the present proceedings on the basis that he may be forced to be cross-examined in these civil proceedings, thereby exposing him to peril in the criminal proceedings. I do not see any particularly plausible reason why Mr Stewart needs to give evidence on the summary dismissal application which is, after all, only interlocutory in nature. If the proceedings survive that summary dismissal application, however, this issue may need to be revisited. The question of what evidence will be necessary for the substantive trial may well raise issues of greater moment.
6. Secondly, it is possible that Mr Stewart may seek to resist the summary dismissal application on the basis of arguments not presently disclosed in the statement of claim or in the proposed amended statement of claim. However, no such claim has at this stage been intimated, still less disclosed. An affidavit with a confidential exhibit containing Mr Stewart’s written submissions on the summary dismissal application was filed but was not read before me and I have not sighted it. The only extant legal issues are, therefore, those which I have described; viz, the viability of the statement of claim and the viability of the proposed amended statement of claim.
7. Thirdly, the present proceedings have been brought by Messrs Stewart, Hogan and Cornell. The notion of a party seeking to stay his own proceedings has an air of the novel about it. Other courses open to Mr Stewart include seeking the leave of the Court to discontinue the present proceedings; no such application was made to me.
8. On such application the question of costs would inevitably have come into view, an issue which the present application, it seems to me, avoids. The existence of that alternate route to the same result is itself an additional reason for declining to adjourn the proceedings or otherwise to stay them. In those circumstances, I refuse the application for an adjournment, and I also refuse the oral application for a stay. That Mr Hogan and Mr Cornell also consented to that course does not alter the outcome. Mr Stewart is to pay the Deputy Commissioner’s costs of the present application.
   

I certify that the preceding eight (8) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Perram.

Associate:

Dated: 2 November 2009

Counsel for the Applicants:	A. Abbott QC and T. Thomas
Solicitor for the Applicants:	Robinson Legal
Counsel for the Respondent:	J. S. Hilton SC and E. A. Kennett
Solicitor for the Respondent:	Australian Government Solicitor

Date of Hearing:	29 October 2009
Date of Judgment:	2 November 2009