IN THE FEDERAL COURT GF AUSTRALIA ) VICTORIA DISTRICT REGISTRY » No. VGs386 of 1336 GENERAL DIVISION } BETWEEN COMMISSIONER OF TAXATION OF THE COMMONWEALTH OF Applicant AND: JANMOR NOMINEES PTY. LTD. (As Trustee of the J. Redman Family Trust) Respondent No. VG387 of 1986 BETWEEN: COMMISSIONER OF TAXATION OF THE COMMONWEALTH OF Appellant AND: JANMGR NOMINEES PTY. LTD. (As Trustee of the J. Redman Family Trust) Respondent CORAM: Jenkinson J. PLACE: Melbourne DATE: 6 March, 1987 REASONS FOR JUDGMENT Motion by a respondent for an order that the hearing of an appeal be postponed toa sittings of the Full Court which succeeds the sittings at which an application for leave to bring that appeal will be heard. ti The proceedings relate to the disallowance by the applicant of the respondent's objection against an assessment of the respondent's income tax. At the respondent's request the objection was referred to a Board of Review which gave its wr decision on the refer iD nce in August 1385. In September 1985 the appellant appealed from the Board s decision to the Supreme Court of Victoria, pursuant to 5.196(1) of the Income Tax Assessment Act i 936. On 1 July 1986 that section was repealed by 5.84 of the Taxation Boards of Review iTranster of Jurisdiction) Act 1386. In October 13985 the Supreme Court of Victoria gave its decision on the appeal, which was dismissed. Sub-section 196(5) of the Income Tax Assessment Act 1936 had provided that the Commissioner of Taxation or the taxpayer might appeal against a decision of a Supreme Court on such an appeal as that for which sub-section 196(1) provided:- "(a) by leave of the Federal Court of Australia, to that Court; or (b) By special leave of the High Court, to that Court." Although transitional provisions were included in the Taxation Boards of Review (Transfer of Jursidiction) Act 1936, no provision has been made, in that or in any other Act, for appeal against a decision of a Supreme Court on an appeal which had been instituted under sub-section 196(1) and which was pending on 1 July 1986 and the decision of which was given after that date. In November 1986 the Commissioner filed and served notice of an appeal to this Court against the decision of the Supreme Court, and the proceeding thus instituted is numbered VG387 of 1986. The Commissioner also filed on the same day and served a notice of an application for leave to appea to this Court against that d 1D cision, and the proceeding thus instituted is numbered VG386 of 1387. A judge of this Court having fixed each proceeding for hearing at the March sittings of the Full Court in Melbourne, the respondent moves for an order that the hearing of the appeal, if appeal there is to be, be deferred until a later sittings of the Full Court. The parties are not in dispute that an appeal against the decision of the Supreme Court lies to this Court, if at all, only by leave. The respondent desires to defer incurring any costs of contesting the appeal until it has become clear - (a; that leave has been granted; and (b) whether leave has been granted subject to any condition in favour of the respondent concerning costs; and (c) what the terms of any such a condition are. The respondent hopes - and will submit on the hearing of the application for leave to appeal - that any grant of leave to appeal be conditioned on the appellant's paying the respondent's costs.in this Court and consenting to leaving stand in any event the order of the Supreme Court for costs in the respondent's favour. The amount of income tax in issue is under 35,000 and, if the respondent's hopes about the imposition of a condition on the grant of leave are disappointed, the respondent desires an opportunity then to consider whether to expend any costs in contesting the appeal. Only if the hearing of the appeal were now postponed to a sittings later than the sittings at which the application for leave is to be heard could that opportunity be gained. There was no suggestion by either party that an appeal against the decision of the Supreme Court might lie without leave. If leave is required, the filing of the notice of appeal has not achieved the institution of an appeal, which must follow the grant of leave. If leave is granted, only by the drastic abridgment of times precribed by several of the court's rules could the appellant be enabled to have a hearing at the March sittings of an appeal which cannot be instituted until leave has been granted. For example, the Federal Court Rules require that an appeal Brought by leave of the Court be instituted by the filing of a notice of appeal, a copy of which must be served on the respondent, having annexed to it a copy of the order giving leave, and that an appeal shall be set down for hearing, at least 21 days before the day appointed for the commencement of the sittings, at a sittings appointed to be held after the expiration of 6 weeks from the institution of the appeal : see 0.52. rr. 12(1), 13(3)(b), 16(2)}, 29(3) and 29(4). Unless it were concluded that an appeal lies without leave, the notice of appeal filed by the appellant in November 1986 will be wholly ineffective to institute - or to constitute part of the Court's process in- an appeal, except to the extent that the Court may by the exercise of dispensing powers give the notice efficacy. It seems likely that some of the grounds by which an wit appeal would be supported, if leave were granted, will receive little consideration on the hearing of the application for leave. It may well be that more extensive preparation would be required for a hearing which might include the substantive appeal than for a hearing only of the application for leave. If so, greater costs may be incurred to the commencement of the first refresher in the former case than in the latter. If leave be granted, more time will of course be cccupied by the hearing of both application and appeal than would have been occupied by the hearing only of the application. And the longer the hearing, the greater the costs. The hearing of the respondent's motion concluded on 26 February 1987, when I reserved my decision. Thereafter 0.52 £.37 came to my notice. That rule provides: "(1) The Court or a Judge may at any time make such orders as appear just for expediting of the appeal. bd ~ A party requiring leave to appeal may move on notice before the Court for an order that the application for leave to appeal be heard concurrently with or immediately before the hearing of the appeal, and for such consequential orders as may be necessary." The word "Court" is defined to mean in 0.52, unless the contrary intention appears, "the Court exercising its appellate or related jurisdiction under Part III Division 2 of the Act." A consideration of the usage of that word and the word "judge" in 0.52 has persuaded me that in 0.52 r.37 the word Court means "Full Court". I drew that provision to the attention of counsel and had the motion re-listed yesterday for further argument. Yesterday Me. Chadwick of counsel for the applicant announced the applicant's intention to move a Full Court for orders of the kind which 0.52 r.37(2) authoris m S. 0.52 £.37 formed part of the Federal Court Rules on their first coming into operation in 1979. By Statutory Rule No. 258 of 1984 sub-rule 1(1A) was inserted into Order 10 of those Rules. That sub-rule provides: "In any proceeding which is to be heard by a Full Court, whether in the original or appellate jurisdiction, such directions as is thought proper with respect to the conduct of the proceeding may be given by the Court constituted by a single Judge." As I have indicated, there is, in my opinion, at present no appeal proceeding "which is to be heard by a Full Court", unless it shall be concluded that an appeal against the decision of the Supreme Court lies as of right, in which case it will appear that on the filing in November 1386 of the notice of appeal an appeal proceeding was instituted. If the words "proceeding which is to be heard by a Full Court" in 0.10 f£.1(1A) be understood to comprehend an appeal, leave to bring which was being sought but had not yet been granted, I doubt whether it would be "proper" for the Court constituted by a single Judge to give directions involving substantially the grant or denial of an order of the kind contemplated by 0.52 £.37(2), except when circumstances made it very inconvenient to abstain from giving such directions. The intent of the Rules, read as a whole, seems to me to be to reserve for the consideration of a Full Court' the question whether an application for leave to appeal and the appeal are to be heard concurrently or in immediate sequence. In the case, an order by me such as the n particular circumstances of thi respondent seeks - that the applicant's appeal against the decision of the Supreme Court, considered as an appeal which will hereafter lie if leave be granted to bring it - be not heard at the March sittings of the Full Court would preclude, for practical purposes, the exercise by the Full Court of the power which 0.52 e.37(2) confers on the Full Court to decide that the appeal should be heard concurrently with or immediately after the hearing of the application for leave. If on the other hand I refuse such an order, the Full Court may be thought to be embarrassed in its consideration of any application the applicant may make to it for exercise by it of the power reposed in it by 0.52 £.37(2), by the circumstance that my order dismissing the respondent's motion has been recently made. I am inclined to doubt whether there are in this case circumstances of sufficient gravity to attract the exercise of any power 0.10 r.1(1A) may confer on me to preclude, or to embarrass, as the case may prove to be, the exercise by the Full Court of the power conferred on it by 0.52 ¥.37(2). With the notice of application for leave to appeal and the notice of appeal the applicant served on the respondent's solicitors a letter drawing attention to the repeal of 5.196 and to the absence of transitional legislative provision for a case such as this. The letter included a statement of the applicant's opinion that leave to appeal would be required. The parties were advised on or about 25 November, 1986 that the view was taken by a judge of the Court that the application for leave should be heard ca by a Full Court. At a call-over of cases for hearing by a Full Court which was held on 16 December, 1386 Woodward J. declined to entertain an application for separation of the hearing of the application for leave from hearing of the projected appeal, I was informed by counsel for the respondent. It is of course to be expected that consideration of such an application would not be undertaken at a call-over. The notices of the motions now before me were not filed until 18 February, 1987, and notice of a motion by the respondent of the kind for which 0.52 r.37(2) provides has still not been filed. Arrangements for the constitution of a Full Court, involving inter-state travel by judges, are made well in advance of the date of hearing. Alteration of those arrangements now cannot be made without expense and inconvenience. But the constitution of a Full Court for the hearing of an application for leave to appeal from this decision of the Supreme Court might have been different if it had been known that no hearing of the appeal would be undertaken by that Full Court. When parties aware since November 1986 of the questions which are now being agitated before me have delayed until the latter part of February 1987 the proper submission of those questions. to the Court, consideration of the Court's interest in the orderly and effective deployment of its resources ought in my opinion to be allowed ai substantial influence on the resolution of those questions. Further, these questions turn, from the parties' points of view, merely on considerations of costs. The Full Court will have an ample discretion in relation to costs. In all the circumstances, I think that I should dismiss the respondent's motions and reserve to the Full Court the costs thereof. The practical result of my dismissing the motion will be that the respondent must, if it is to be assured that it will be able to participate in the hearing of the appaal, incur now the Ci osts of preparing for such a hearing without knowing what orders will be made with respect to costs. But the making of this order does not of course imply any prejudgment of the questions whether leave to appeal should be granted, on what terms leave should be granted and when, if leave is granted, the appeal should be heard. They are questions for the Full Court. The forms employed by the respondent to bring the substantive motion which I have been hearing before the Court should be explained, so that the formal orders I make may he understood. In the proceeding numbered VG386 of 1986, which is the proceeding for leave to appeal, the notice of the respondent's motion reads as follows: "i. That the Application for Leave to Appeal in this matter be listed for hearing by the Full Court on the 12th March, 1987. Such other orders, if any, as to the Court seems fit." be When that notice of motion was filed, and at all material times, the application for leave to appeal to which it refers stood in the list of cases for hearing at the March sittings of the Full Court, and 12 March 1987 was specified as the date for commencement of that hearing. It would seem that the notice was framed in those terms to make clear the respondent's desire to have the application for leave heard at those sittings. Since no 10. order of the kind specified is required, the order disposing of that motion will be that: 1. The motion of which notice was filed on 18 February, 1987 be dismissed. 2. Each party's costs of the said motion be reserved to the Full Court by which the application for leave to appeal shall be heard. In the proceeding numbered VG387 of 1986, which was commenced by nmotice of appeal, the notice of the respondent's motion reads: - "Ll. That the Notice of Appeal in this matter be adjourned to the next call-over after the hearing of the Application for Leave to Appeal in matter number VG 386 of 1386. 2. Such other orders, if any, as to the Court seems fit." If this proceeding be regarded, as I think that it should be regarded, as one of appeal without leave, the order should be one of dismissal of the motion, because a respondent who comes to hearing on 12 March 19387 prepared to argue an appeal brought by leave will be as well prepared then to argue the appeal in the unlikely event that it is held to lie as of right. The orders will be in the same terms as those disposing of the motion in the other proceeding, except that the word "appeal" is to be substituted for the words "application for leave to appeal". I certify that this and the 9 preceeding pages are a true copy of the Reasons for Judgment herein of the Honourable Mr. Justice JENKINSON. Associate Dated: 6 March, 1987