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Federal Court of Australia |
Last Updated: 8 March 2000
Caratti v Commissioner of Taxation [2000] FCA 199
JOHN MICHAEL CARATTI, VENETIAN NOMINEES PTY LTD, ZEL NOMINEES PTY LTD, DELBAR INVESTMENTS PTY LTD, GRANGEFIELD HOLDINGS PTY LTD, EXCELCO MINING PTY LTD, MINE EXC PTY LTD, ROBINSWOOD PTY LTD, LARKSLOCK PTY LTD, UNICORN VALLEY PTY LTD, TERCON HOLDINGS PTY LTD, JUNANA PTY LTD, OPALSWAN PTY LTD, GIBATE PTY LTD, TOSMAN PTY LTD, CARATTI HOLDING CO PTY LTD, GALVESTON PTY LTD, HARVARD NOMINEES PTY LTD, MAMMOTH INVESTMENTS PTY LTD, NAVARAC PTY LTD, KELENA NOMINEES PTY LTD, BELLA GUARDA FARM PTY LTD and JAMESWAY NOMINEES PTY LTD
v
COMMISSIONER OF TAXATION OF THE COMMONWEALTH OF AUSTRALIA and THE DIRECTOR OF PUBLIC PROSECUTIONS OF THE COMMONWEALTH OF AUSTRALIA
No. W109 of 1999
WILCOX, LEE and CARR JJ
PERTH
28 FEBRUARY 2000
IN THE FEDERAL COURT OF AUSTRALIA |
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WESTERN AUSTRALIA DISTRICT REGISTRY |
1. Leave to appeal be refused.
2. The appeal be dismissed as incompetent.
3. The applicants pay the costs of the respondents.
Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
IN THE FEDERAL COURT OF AUSTRALIA |
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WESTERN AUSTRALIA DISTRICT REGISTRY |
JUDGE: |
WILCOX, LEE and CARR JJ |
DATE: |
28 FEBRUARY 2000 |
PLACE: |
PERTH |
1 WILCOX J: On 15 September 1999 a judge of the Court, French J, gave judgment in which he dismissed an application made by the present applicants, John Michael Caratti and various companies associated with him. The application named as respondents the Commissioner of Taxation, the Director of Public Prosecutions and Dianne Yeats, an officer of the Australian Taxation Office. His Honour was of the opinion that the statement of claim filed in the proceeding before him did not disclose a reasonable cause of action.
2 The applicants at first instance filed a notice of appeal. The Commissioner of Taxation and the Director of Public Prosecutions each filed motions seeking dismissal of the appeal on the basis that it was incompetent. They said his Honour's decision was an interlocutory judgment and leave to appeal had not been obtained. These motions were made returnable today, the day fixed for the hearing of the appeal.
3 A few days ago, the persons named as applicants in the notice of appeal filed a motion seeking leave to appeal. That motion also was made returnable today. As a result of these motions, debate this afternoon has centred on the questions whether leave is necessary and, if so, whether it ought to be granted. The latter issue has predominated.
4 In my opinion the judgment given by French J was an interlocutory judgment within the meaning of s24(1A) of the Federal Court of Australia Act 1976. Leave to appeal is necessary.
5 The fact that the application for leave to appeal was made so late in the day is a circumstance pointing against the grant of leave, but I would not wish to put much weight on that consideration. In my opinion the more significant questions are, firstly, whether the judgment at first instance is attended with sufficient doubt to warrant reconsideration by a Full Court and, secondly, supposing the decision at first instance was wrong, whether substantial injustice would result if leave to appeal were refused. It seems to me both those issues must be resolved contrary to the argument put by the applicants for leave.
6 In relation to the first question, it is sufficient to say I am of the opinion that the reasons of French J are persuasive and I am not of the opinion there is sufficient doubt to warrant reconsideration of his view. His Honour's judgment was directed, of course, to the case made before him. It says nothing, and was intended to say nothing, about any case that might emerge, on different materials, in the future.
7 The second matter has special weight in this case. At the outset of the argument this afternoon, Mr J. Davies, counsel for the applicants, indicated that the application for leave would not have proceeded if the Western Australian Court of Criminal Appeal had decided to reject an appeal by Mr Caratti against his conviction last year on charges of conspiring to defraud the Commonwealth. Mr Davies told us the Court of Criminal Appeal recently heard the appeal and reserved its decision. Whether the appeal will succeed and, if so, whether there will be a retrial, are matters about which we can only speculate. We have no material that enables us to form any views about them.
8 From what has been said by Mr Davies, it is clear that one of the reasons for the applicants pressing the application for leave to appeal is their desire to obtain an interim order restraining the Commissioner of Taxation from undertaking, or continuing, certain audits. The audits are not confined to the affairs of the applicants, but extend to other persons with whom they have an association. As I understand counsel, it is conceded by the applicants that there would not be a case for the Court interfering with the auditing process unless it was satisfied this was being done for an improper purpose. In the proceeding before French J, there was no specific allegation of improper purpose; although counsel suggested to us this was implicit in the Statement of Claim. We were informed that the applicants now wish to amend their Statement of Claim in order to make an express allegation of improper purpose.
9 I accept that, if an allegation of improper purpose was made and established, this may justify the Court making an order restraining continuation of the audit. Subject to that possibility, it seems to me the only basis upon which this Court could intervene would be if it became apparent that the Commissioner of Taxation or Director of Public Prosecutions, or both of them in concert, proposed to use for the purposes of a new criminal trial material that was obtained in the course of an audit and was not properly available to be used for that purpose.
10 The very statement of the possible issues indicates the need for specificity as to any allegation that is made and any relief that is sought. The general principles applicable to a case such as this have been canvassed in recent decisions that are referred to in counsel's outline of submissions. There is really no need for a Full Court again to consider matters of general principle; the principles have been spelt out. The critical matter in any particular case will be the application of the general principles to the facts of that case. This can only be done with specific information as to the documents or other information which is said to be threatened to be used in an improper way.
11 It seems to me impossible satisfactorily to deal with the issues that the applicants wish to raise until it is known, first, whether there will be a retrial, second, if so, whether there will be any limitation of its ambit and, third, what material is proposed to be tendered by the prosecution at the retrial. This compels the conclusion that there would be no injustice in maintaining his Honour's decision to terminate the existing proceeding, leaving it to the applicants, if so advised, to institute a new proceeding when it is known whether there will be a retrial and what material will be tendered.
12 I wish to guard against any impression that I have formed a view that the appropriate course would be for any dispute about the use of material at a retrial to be dealt with in this Court. It may be that, as a matter of discretion, this Court ought not to intervene in such a case; but rather leave the matter to be dealt with by the judge presiding at the retrial on objection to admissibility of evidence. There are circumstances where this course is not the most appropriate one to take, and cases have occurred in which this Court has been prepared to look at issues likely to arise at a criminal trial; however, that tends to be the exception. Once again, I think this is a matter that should be looked at by a single judge of this Court, if the occasion arises, with the specific problem in view.
13 In considering the matter of injustice, it is worth noting that the complaints sought to be made in this proceeding, in relation to use at a criminal trial of material gathered by the Commissioner, were not complaints made to the criminal trial judge or to the Court of Criminal Appeal. That is not to say there is no room for complaint, or there might not be a valid complaint at a new trial; but it serves to emphasise the fact that these are matters for determination by reference to specific material.
14 For the reasons I have indicated, the appropriate course is that this Court should refuse to grant leave to appeal and, that being so, should dismiss the appeal as incompetent. I think the applicants should pay the costs of the respondents.
15 LEE J: I am not satisfied that this is a case in which leave to appeal should be granted and therefore would determine that leave be refused with costs.
16 CARR J: I agree with the orders proposed by the presiding judge and with the reasons given for proposing those orders. I have nothing further to add.
I certify that the preceding sixteen (16) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justices Wilcox, Lee and Carr JJ. |
Associate:
Dated: 28 February 2000
Counsel for the Applicants: |
Mr P W Nichols and Mr J A Davies |
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Solicitor for the Applicants: |
Davies & Co |
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Counsel for the First Respondent: |
Ms L F Ward |
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Solicitor for the First Respondent: |
Australian Government Solicitor |
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Counsel for the Second Respondent; |
Ms L B Price |
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Solicitor for the Second Respondent: |
Commonwealth Director of Public Prosecutions |
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Date of Hearing: |
28 February 2000 |
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Date of Judgment: |
28 February 2000 |
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URL: http://www.austlii.edu.au/au/cases/cth/FCA/2000/199.html