Schokker, Hank B v Commissioner of Taxation, Commonwealth of Australia [1998] FCA 68

FEDERAL COURT OF AUSTRALIA

COSTS - appeal from Administrative Appeals Tribunal - applicant unsuccessful - whether normal costs rule should be varied - whether public interest involved - whether Tribunal reasons invited appeal - whether moral arguments relevant - whether Deputy President invited appeal - whether applicant's economic status of hardship relevant - whether relevant possibility of appeal would be minimised by absence of cost order.

SCHOKKER V COMMISSIONER OF TAXATION COMMONWEALTH OF AUSTRALIA

WAG 83 of 1997

R D NICHOLSON J

PERTH

23 JANUARY 1998

LIMITED DISTRIBUTION IN THE FEDERAL COURT OF AUSTRALIA

western australia DISTRICT REGISTRY WAG 83 of 1997

BETWEEN: HANK B SCHOKKER

Applicant

AND: COMMISSIONER OF TAXATION, COMMONWEALTH OF AUSTRALIA

Respondent

JUDGE: R D NICHOLSON J

DATE: 23 JANUARY 1998

PLACE: perth

EX TEMPORE REASONS FOR COSTS ORDER HIS HONOUR: The appeal from the decision of the Administrative Appeals Tribunal ("the Tribunal") brought by the applicant has been dismissed for reasons which have been delivered. The normal rule regarding costs is they follow the event - that is, that the applicant, having been unsuccessful, should be subject to an order to meet the costs of the respondent. The applicant advances a number of reasons why the normal rule should not be applicable in this instance. The first is that the issue dealt with in the reasons under the heading of "Unlawful representation" was brought by him in the public interest in order to clarify a point of law he considered to be controversial. It has been a long standing practice for the Commissioner of Taxation to be represented by a legal practitioner, whether a solicitor or a barrister, and that has been the case since the appellate system provided for reference to the Tribunal. In the reasons I have expressed the opinion the relevant statutes make clear the right of representation. In my view there was no issue which could be characterised as having been brought "in the public interest". It was the applicant who chose to raise the issue in the face of clear statutory provisions and long standing unchallenged practice. The second factor on which the applicant relies to vary the normal rule is there was what he described as confusion in the reasons for decision of the Tribunal, which in turn generated the need for an appeal. Having studied those reasons, I do not consider it could be said they were in any noteworthy sense confused to the point where an appeal was inevitable. Again, it was the applicant who chose to bring the appeal. The third factor on which the applicant relies is there are moral considerations in relation to his bringing the application. As I have said in the reasons, moral considerations cannot weigh with the Court. The Court is obliged to decide the matter according to law. The presence of those matters cannot assist the applicant in his submissions that the normal rule as to costs should not apply. Then the applicant says the Deputy President invited an appeal by saying the applicant should go elsewhere if he wished to maintain a different view. Whether or not that is factually the case is not established. However, assuming it to be the case, it could be taken as nothing more than a reference by the Deputy President to the right of appeal if the applicant persisted in maintaining a point of view which the Tribunal was not prepared to accept. It provides no basis whatever for varying the normal rule. Then the applicant referred to his precarious financial status. It was common ground throughout the proceedings the applicant is on what he describes as hardship wages from his employment, the future of which is under consideration. The applicant submits any costs order would place him under greater hardship and would be likely to lead to his bankruptcy. It is of course for the respondent to decide whether to enforce any costs order. The liability to costs is also a factor which the applicant was required to weigh in deciding to bring the appeal. By bringing the appeal he placed himself at risk of an adverse costs order in the event of his being unsuccessful. Those possibilities are not properly to be taken into account to vary the normal rule. Further, the amounts in issue in the appeal were, in respect of the income year 1995, the sum of $1,669 and, in respect of the year of income 1996, the sum of $2,156. It was for the applicant to determine whether the impact of deductions of those maximum sums would have a sufficient impact upon his taxable position as to merit the likely costs liability which he would attract if he was unsuccessful. Finally it is said for the applicant if no costs order is made there may be encouragement to the applicant not to appeal. This, it is submitted, would minimise the work of the courts. Whether or not an appeal is to be brought depends upon whether the applicant decides there is an issue of law likely to succeed on appeal. In deciding whether to bring an appeal it is for the applicant to decide whether he should subject himself to further exposure to an adverse costs order. Those are considerations for the applicant to have in mind. They are not considerations for the Court in determining the question whether the normal costs rule should be varied. In my opinion none of the factors relied upon by the applicant support variation of the normal rule. Accordingly, it is appropriate to order the applicant pay the respondent's costs. I certify that this and the preceding two (2) pages are a true copy of the Reasons for Judgment herein of the Honourable Justice R D NICHOLSON