FEDERAL COURT OF AUSTRALIA Merrill Lynch Int (Aust) Ltd v Commissioner of Taxation [2001] FCA 338 MERRILL LYNCH INTERNATIONAL (AUSTRALIA) LIMITED v COMMISSIONER OF TAXATION N 87 OF 2000 MERRILL LYNCH (AUSTRALIA) FUTURES LIMITED v COMMISSIONER OF TAXATION N 88 OF 2000 MERRILL LYNCH (AUSTRALIA) PTY LIMITED v COMMISSIONER OF TAXATION N 89 OF 2000 LINDGREN J 23 MARCH 2001 SYDNEY IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY N 87 OF 2000 BETWEEN: MERRILL LYNCH INTERNATIONAL (AUSTRALIA) LIMITED (ACN 002 892 846) APPLICANT AND: COMMISSIONER OF TAXATION RESPONDENT N 88 OF 2000 BETWEEN: MERRILL LYNCH (AUSTRALIA) FUTURES LIMITED (ACN 003 639 674) APPLICANT AND: COMMISSIONER OF TAXATION RESPONDENT N 89 OF 2000 BETWEEN: MERRILL LYNCH (AUSTRALIA) PTY LIMITED (ACN 000 890 451) APPLICANT AND: COMMISSIONER OF TAXATION RESPONDENT JUDGE: LINDGREN J DATE: 23 MARCH 2001 PLACE: SYDNEY REASONS FOR JUDGMENT 1 The reasons which I am about to give relate to each of proceedings N 87, N 88 and N 89 of 2000. I will use the singular number but the facts recounted and the directions and orders made are in each of the three proceedings. 2 The proceeding was before the Court on 21 December last when consent directions were made. They included a direction that the applicant file and serve its Statement of Facts, Issues and Contentions and file and serve any affidavits on which it intended to rely by 16 March and that the respondent file and serve any affidavits on which he intended to rely by 23 April. The proceeding was stood over to 27 April for further directions and liberty was reserved to each party to apply on 24 hours' notice. 3 The applicant became aware that it would not be in a position to comply with the direction for the filing and service of its Statement of Facts, Issues and Contentions and affidavits by 16 March and its solicitors wrote to the solicitor for the respondent on 15 March seeking the respondent's agreement to an extension of time to 6 April. The consent was not forthcoming. Pursuant to the leave which I mentioned, the respondent had the matter re-listed today. 4 The proceeding has had a lengthy history which I will not recount. That history emerges from an affidavit of Roger Quinn of the Australian Government Solicitor's Office and from an affidavit of Benedict John Dunstan of the applicant's solicitor's office. I note, for example, that when the proceeding was before Beaumont J on 13 December last before the matter came into my docket, his Honour remarked on the fact that the matter had "gone nowhere in every sense". 5 The application which commenced the proceeding was filed on 4 February 2000 and the respondent filed his Statement of Facts, Issues and Contentions on 7 April 2000. In fact, the only other documents on the Court file are a List of Documents and a Notice of Appearance filed by the respondent on 7 April 2000, and an order made by Beaumont J on 13 July last year directing the applicant to file and serve its Statement of Issues, Facts and Contentions and any affidavit evidence by 6 October. The proceeding has been before the Court quite a few times. The position as remarked on by Beaumont J on 13 December, so far as revealed by the Court file, remains the same today. 6 Mr Dunstan's affidavit shows that he has prepared draft affidavits for four of the six witnesses to be called for the applicant. He says that he has also prepared a draft Statement of Facts, Issues and Contentions and has reviewed a substantial volume of documentary material and prepared a proposed exhibit bundle of documents. He also says that he has arranged to meet with the remaining two witnesses with a view to preparing an affidavit for each of them to swear. The tax in question has been paid and in this respect there is no prejudice to the respondent, but as Mr McMillan of counsel for the respondent points out, there have been numerous appearances on behalf of his client in respect of which, apparently, costs orders have not been made in the past and there must eventually be a limit. 7 I will not make a self executing order as is sought on behalf of the respondent but I indicate now that although I will make an order for the extension of time sought, there would have to be a very strong case made out before I would grant leave for the filing of any affidavit after 20 April which is the "boundary date" suggested by the applicant in a form of short minutes of orders which its counsel has handed up. 8 The respondent seeks an order for indemnity costs of today. The applicant consents to the making of an order for costs but not on an indemnity basis. 9 At present I do not think that an order for indemnity costs should be made, but again if the applicant does not comply with the directions made today, this would be a factor indicating strongly that an order for indemnity costs ought to be made against the applicant on the next occasion. 10 I will make orders 1 to 4 of the short minutes proposed by Mr Richmond of counsel for the applicant and then add orders 5, 6, 7 and 8 as follows: (5) The applicant is not to rely on any affidavit not filed and served by 20 April 2001 without the leave of the Court on special cause being shown on affidavit evidence; (6) Fix provisionally, the proceeding for final hearing on 2, 3 and 4 July 2001; (7) Order the applicant to pay the respondent's costs of today's directions hearing, including the cost of correspondence and affidavits associated with it; (8) Vacate the directions hearing presently fixed for 27 April 2001. I certify that the preceding ten (10) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Lindgren. Associate: Dated: 30 March 2001 Counsel for the Applicant: Mr M Richmond Solicitor for the Applicant: Allen Allen and Hemsley Counsel for the Respondent: Mr S J McMillan Solicitor for the Respondent: Australian Government Solicitor Date of Hearing: 23 March 2001 Date of Judgment: 23 March 2001