Harding v Deputy Commissioner of Taxation

• Jurisdiction: Australia Federal only
• Judgment Date: 10 October 2008
• Neutral Citation: [2008] FCA 1516
• Court: Federal Court

FEDERAL COURT OF AUSTRALIA

Harding v Deputy Commissioner of Taxation [2008] FCA 1516

PRACTICE AND PROCEDURE: application for leave to appeal – whether application for leave to appeal should be heard before a Full Court

Bankruptcy Act 1966 (Cth), ss 30, 31

Federal Court of Australia Act 1976 (Cth), ss 25, 39, 40

Federal Court Rules (Cth), O 52

ROBERT HARDING v DEPUTY COMMISSIONER OF TAXATION

NSD 1498 OF 2008

MOORE J

10 OCTOBER 2008

SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NSD 1498 OF 2008

BETWEEN:	ROBERT HARDING Applicant
AND:	DEPUTY COMMISSIONER OF TAXATION Respondent

JUDGE:	MOORE J
DATE OF ORDER:	10 OCTOBER 2008
WHERE MADE:	SYDNEY

THE COURT ORDERS THAT:

1. The application to refer to a Full Court the application for leave to appeal, is dismissed.

2. The application for leave to appeal is dismissed.

3. The applicant is to pay the respondent's costs of the applications.

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 1498 OF 2008

BETWEEN:	ROBERT HARDING Applicant
AND:	DEPUTY COMMISSIONER OF TAXATION Respondent

JUDGE:	MOORE J
DATE:	10 OCTOBER 2008
PLACE:	SYDNEY

REASONS FOR JUDGMENT

1 Judgment was entered against Mr Harding in the District Court of New South Wales in favour of the Deputy Commissioner of Taxation in the sum of $373,772.47. The Deputy Commissioner subsequently served a bankruptcy notice on Mr Harding who then applied to have the bankruptcy notice set aside. That application was docketed to a single judge. Mr Harding then applied to have his application tried before a jury. That latter application was dismissed in a judgment given on 15 September 2008: Harding v Deputy Commissioner of Taxation [2008] FCA 1403. Mr Harding has sought leave to appeal against that judgment and has also applied to have his application for leave heard by a Full Court. This judgment concerns those last mentioned applications.

2 It is convenient to commence with the question of whether the application for leave to appeal should be heard by a Full Court, although resolution of that question is inextricably linked with at least one issue that must be considered in determining whether leave should be granted. For quite some time uncertainty attended whether a party applying for leave to appeal had a right to elect to have the application dealt with by a single judge or a Full Court. Early Full Court authority suggested there was such a right: Thomas Borthwick & Sons (Pacific Holdings) Ltd v Trade Practices Commission (1988) 18 FCR 424. Later Full Court authority approached the matter differently, doubting there was a right to elect: Wati v Minister for Immigration and Multicultural Affairs (1997) 78 FCR 543 and Kristofferson v Department of Employment, Workplace Relations and Small Business [2002] FCAFC 269. There is at least one comparatively recent judgment of a single judge proceeding on probably the erroneous assumption that there is a right to elect: Tait v Harris [2003] FCA 416 (in which Wati appears not to have been referred to) although there are other recent judgments in which the notion that there is a right to elect has been rejected: see for example, Minister for Immigration and Multicultural and Indigenous Affairs v WAKX [2005] FCA 227 (and the authorities referred to in that judgment).

3 The matter is now addressed by O 52 r 2AA of the Federal Court Rules, which provides:

An application mentioned in subsection 25 (2) of the Act must be heard and determined by a single Judge unless:

(a) a Judge directs that the application be heard and determined by a Full Court; or

(b) the application is made in a proceeding that has already been assigned to a Full Court, and the Full Court considers it is appropriate for it to hear and determine the application.

4 Mr Harding has asserted a right to elect and sought to exercise that right by having his application for leave heard by a Full Court. A submission was made by counsel for Mr Harding that the issue of whether an application for leave to appeal is to be heard by a Full Court of a single judge is addressed by s 25(2) of the Federal Court of Australia Act 1976 (Cth) (FC Act) and O 52 r 2AA could not modify the operation of the FC Act. However, all s 25(2) does is confer appellate jurisdiction on single judges and Full Courts to deal with applications for leave to appeal. Order 52 r 2AA prescribes, in my opinion unexceptionably, the mechanism that determines whether this jurisdiction will be exercised by a single judge, on the one hand, or a Full Court, on the other. As Buchanan J correctly observed in McDonald’s Australia Ltd v Commissioner of Taxation (No. 2) [2008] FCA 395, referring to his Honour's earlier judgment in Optiver Australia Pty Ltd v Tibra Trading Pty Ltd [2008] FCA 47, the provisions of O 52 r 2AA admit no debate about the existence of any such right of election. There is none.

5 Counsel for Mr Harding advanced a number of reasons why the application for leave should be referred to a Full Court. He did so by reference to matters considered by Heerey J in TS Production LLC v Drew Pictures Pty Ltd [2008] FCA 1329. The first was whether the case could be characterised as a minor interlocutory squabble or one where orders had been made with important consequences for the parties. The second was whether the applicant seeking leave would suffer prejudice or an injustice if leave was refused. The third was whether something of value would be lost if the interlocutory judgment stood. The fourth was whether the interlocutory judgment dealt with substantial legal issues. For reasons that I will endeavour to explain shortly, I do not think that any of these matters point, in Mr Harding's favour, to referring the matter to a Full Court.

6 However, it is first necessary to deal with what is said to be the substantial legal issues sought to be raised in the appeal if leave is granted. The power to order trial by jury is conferred on a judge of the Federal Court by s 40 of the FC Act. That section presumptively makes trial in the Federal Court by judge alone, subject to the exercise of the power to order trial by jury. Sections 39 and 40 provide:

Section 39: Trial without jury

In every suit in the Court, unless the Court or a Judge otherwise orders, the trial shall be by a Judge without a jury.

Section 40: Power of Court to direct trial of issues with a jury

The Court or a Judge may, in any suit in which the ends of justice appear to render it expedient to do so, direct the trial with a jury of the suit or of an issue of fact, and may for that purpose make all such orders, issue all such writs and cause all such proceedings to be had and taken as the Court or Judge thinks necessary, and upon the finding of the jury the Court may give such decision and pronounce such judgment as the case requires.

7 Section 30 of the Bankruptcy Act 1966 (Cth) provides:

(1) The Court:

(a) has full power to decide all questions, whether of law or of fact, in any case of bankruptcy or any matter under Part IX, X or XI coming within the cognizance of the Court; and

(b) may make such orders (including declaratory orders and orders granting injunctions or other equitable remedies) as the Court considers necessary for the purposes of carrying out or giving effect to this Act in any such case or matter.

(2) The Court may direct such inquiries to be made and accounts to be taken for the purposes of any proceeding before the Court as the Court considers necessary and may, when directing an account to be taken, or subsequently, give special directions as to the manner in which the account is to be taken or vouched.

(3) If in a proceeding before the Federal Court under this Act a question of fact arises that a party desires to have tried before a jury, the Federal Court may, if it thinks fit, direct the trial of that question to be had before a jury, and the trial may be had accordingly in the same manner as if it were the trial of an issue of fact in an action.

(5) Where:

(a) a bankrupt, a debtor or any other person has failed to comply with an order or direction of a Registrar, or with a direction or requirement of an Official Receiver or trustee, under this Act; or

(b) a trustee has failed to comply with an order, direction or requirement of a Registrar, or with a requirement or request of the Inspector‑General, under this Act;

the Court may, on the application of the Registrar, Official Receiver, trustee or Inspector‑General, as the case requires:

(c) order the person who has failed to comply with the order, direction, requirement or request, as the case may be, to comply with it; or

(d) if it thinks fit, make an immediate order for the committal to prison of that person.

(6) The power conferred on the Court by subsection (5) is in addition to, and not in substitution for, any other right or remedy in respect of the failure to comply with the order, direction, requirement or request, as the case may be.

Section 31 of the Bankruptcy Act directs that any application for the trial of questions of fact with the jury in the trial of those questions be heard in open Court.

8 It probably correct to characterise section 30 of the Bankruptcy Act as conferring on the Federal Court a power to order trial by jury as a bankruptcy court, independently of the general power conferred by s 40 of the FC Act. I proceed on the basis that it is an independent source of power and must, in bankruptcy matters, be exercised in a manner contemplated by the section. This leads to the...