FEDERAL COURT OF AUSTRALIA Groves v Commissioner of Taxation [2011] FCA 222 Citation: Groves v Commissioner of Taxation [2011] FCA 222 Parties: LE NEVE ANN GROVES v COMMISSIONER OF TAXATION File number(s): QUD 582 of 2010 QUD 583 of 2010 QUD 584 of 2010 QUD 585 of 2010 QUD 586 of 2010 QUD 587 of 2010 QUD 588 of 2010 QUD 589 of 2010 Judge: LOGAN J Date of judgment: 15 March 2011 Catchwords: PRACTICE AND PROCEDURE – application for temporary stay of taxation appeals – applicant but not Commissioner of Taxation a party to proceeding in Supreme Court of Queensland involving some issues of law and fact common to taxation appeal – consideration of relevant principles – application refused Legislation: Evidence Act 1995 (Cth) s 91 Federal Court of Australia Act 1976 (Cth) ss 23, 31A Income Tax Assessment Act 1936 (Cth) ss 44, 318 Income Tax Assessment Act 1997 (Cth) ss 6-5, 6-10, 8-1, 25-45, 104-10, 116-45, 116-60, subdiv 207-A Judiciary Act 1903 (Cth) s 39B Taxation Administration Act 1953 (Cth) ss 14ZY, 14ZYA, 14ZZN, 14ZZO, 14ZZR Federal Court Rules O 52B Limitation of Actions Act 1974 (Qld) s 10 Cases cited: Baker; Re Flatwash Pty Ltd v Commissioner of Taxation (1987) 87 ATC 4626 applied Commissioner of Taxation v Denlay [2010] QCA 217 considered Denlay v Commissioner of Taxation [2010] FCA 1434 cited Deputy Commissioner of Taxation v Broadbeach Properties Pty Ltd (2008) 237 CLR 473 cited Deputy Commissioner of Taxation (NSW) v Brown (1958) 100 CLR 32 considered Federal Commissioner of Taxation v Futuris Corporation Ltd (2008) 237 CLR 146 considered Giris Pty ltd v Commissioner of Taxation (1969) 119 CLR 365 considered Hoare Bros Pty Ltd v Commissioner of Taxation (1996) 62 FCR 302 cited Jefferson Ltd v Bhetcha [1979] 1 WLR 898 cited MacCormick v Federal Commissioner of Taxation (1984) 158 CLR 622 considered McMahon v Gould (1982) 7 ACLR 202 cited National Mutual Life Association of A/asia v Grosvenor Hill (Qld) (2001) 183 ALR 700 cited Rochfort v John Fairfax & Sons Ltd [1972] 1 NSWLR 16 considered Snow v Deputy Commissioner of Taxation (WA) (1987) 14 FCR 119 considered Sterling Pharmaceuticals Pty Ltd v The Boots Company (Australia) Pty Ltd (1992) 34 FCR 287 considered Date of hearing: 9 March 2011 Place: Brisbane Division: GENERAL DIVISION Category: Catchwords Number of paragraphs: 58 Counsel for the Applicant: Mr DJ McInerney Solicitor for the Applicant: Cooper Grace Ward Counsel for the Respondent: Mr SR Lumb Solicitor for the Respondent: McInnes Wilson IN THE FEDERAL COURT OF AUSTRALIA QUEENSLAND DISTRICT REGISTRY GENERAL DIVISION QUD 582 of 2010 QUD 583 of 2010 QUD 584 of 2010 QUD 585 of 2010 QUD 586 of 2010 QUD 587 of 2010 QUD 588 of 2010 QUD 589 of 2010 BETWEEN: LE NEVE ANN GROVES Applicant AND: COMMISSIONER OF TAXATION Respondent JUDGE: LOGAN J DATE OF ORDER: 15 MARCH 2011 WHERE MADE: BRISBANE THE COURT ORDERS THAT: 1. The applicant's application for a temporary stay of the taxation appeals (proceedings QUD 582 of 2010, QUD 583 of 2010, QUD 584 of 2010, QUD 585 of 2010, QUD 586 of 2010, QUD 587 of 2010, QUD 588 of 2010 and QUD 589 of 2010) be dismissed, with costs. 2. Those proceedings be tried at the same time. 3. The trial of those proceedings be held over seven (7) sitting days, commencing on 17 October 2011. 4. The applicant, provide, on or before 30 March 2011, discovery of documents in the following categories: (a) documents on which the applicant intends to rely; (b) documents that materially affect the applicant's own case adversely; (c) documents that materially affect the respondent's case adversely; and (d) documents that materially support the respondent's case. 5. Each party seek non-party discovery on or before 20 April 2011. 6. The respondent provide, within twenty-one (21) days of receipt of all documents on non-party discovery, discovery of documents in the following categories: (a) documents on which the respondent intends to rely; (b) documents that materially affect the respondent's own case adversely; (c) documents that materially affect the applicant's case adversely; and (d) documents that materially support the applicant's case. 7. The applicant file and serve any notice to admit facts and documents on or before 15 June 2011. 8. The respondent file and serve any response to the applicant's notice to admit facts and documents on or before 29 June 2011. 9. The respondent file and serve any notice to admit facts and documents on or before 13 July 2011. 10. The applicant file and serve any response to the respondent's notice to admit facts and documents on or before 27 July 2011. 11. The applicant file and serve any affidavits on which she proposes to rely on or before 10 August 2011. 12. The respondent file and serve any affidavits on which he proposes to rely within 21 days of receipt of the applicant's affidavit material. 13. The applicant file and serve any affidavits in reply within 14 days of receipt of the respondent's affidavit material. 14. Documents filed in proceeding QUD 582 of 2010 stand as documents filed in the other proceedings. 15. This order stand as an order in each of the proceedings. 16. A further directions hearing be held on Friday 16 September 2011 at 9.30am. 17. There be liberty to apply on two clear days written notice. 18. Save as aforesaid, costs are reserved. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. The text of entered orders can be located using Federal Law Search on the Court's website. IN THE FEDERAL COURT OF AUSTRALIA QUEENSLAND DISTRICT REGISTRY GENERAL DIVISION QUD 582 of 2010 QUD 583 of 2010 QUD 584 of 2010 QUD 585 of 2010 QUD 586 of 2010 QUD 587 of 2010 QUD 588 of 2010 QUD 589 of 2010 BETWEEN: LE NEVE ANN GROVES Applicant AND: COMMISSIONER OF TAXATION Respondent JUDGE: LOGAN J DATE: 15 MARCH 2011 PLACE: BRISBANE REASONS FOR JUDGMENT 1 Dr Le Neve Ann Groves has instituted a series of taxation appeals (QUD 582 of 2010 – QUD 589 of 2010) against a decision by the Commissioner of Taxation in respect of an objection by her against income tax assessments for the years ended 30 June 2001 to 30 June 2008 (inclusive). She has applied for a stay of these appeals pending the hearing and determination of a proceeding in the Supreme Court of Queensland (No 10662 of 2008). That application is opposed by the Commissioner. 2 The Supreme Court proceeding was commenced on 23 October 2008. In that proceeding and in addition to interest and costs, Dr Groves as plaintiff claims the following relief against these parties: (a) as against Mr Edmund Stuart Groves: (i) restitution in the sum of $33,481,195 as monies had and received; (ii) the balance of dividends, which as at the date of the claim are estimated to be approximately $10,734,000. (b) as against Citigroup Global Markets Australia Pty Ltd (Citigroup), restitution in the sum of $6,706,517.62; (c) as against BT Securities Ltd (BT Securities), restitution in the sum of $13,279,200; (d) as against Citibank, N.A. (Citibank), restitution in the sum of $13,495,477.38. 3 Mr Groves is the former husband of Dr Groves. During the period covered by the taxation appeals they were married but separated. They divorced after March 2008 but during that calendar year. 4 The total claimed in Dr Groves' restitution claim against her former husband is an amalgam of claims in respect of allegedly misappropriated dividends and the restitution claims against the other defendants (collectively, the financiers). As to the latter, a joint and several liability with Mr Groves to make restitution as a result of unjust enrichment is said to arise. 5 The Commissioner is not a party to the Supreme Court proceeding. 6 Dr Groves' submission is that there are common issues of law and fact as between the taxation appeals and the Supreme Court proceeding such that it is in the interests of justice to stay those appeals pending the hearing and determination of the Supreme Court proceeding. Consideration of that submission requires some elaboration as to the issues in the respective proceedings as they are revealed by, in the case of the taxation appeals, the appeal statements, and in the case of the Supreme Court proceeding, by the pleadings. I set out below factual allegations made in these court documents. It is not necessary for the purposes of deciding the stay application to do other than assume that matters are as alleged. 7 In the period covered by the 2001 to 2008 income years Dr Groves was a shareholder in ABC Learning Centres Limited ("ABC"). Though Dr Groves' shareholding fluctuated over time, by about 26 February 2008 she was the beneficial owner of 17,000,000 shares in ABC. Over that period, ABC declared the following annual dividends in respect of Dr Groves' shares: Year Dividend 2001 $865,536 2002 $717,472 2003 $1,182,175 2004 $1,377,897 2005 $1,933,929 2006 $1,917,530 2007 $1,997,600 2008 $1,530,000 8 In each income year, corresponding sums were paid by ABC into a bank account with Westpac Banking Corporation in the names ES and LA Groves ("the Westpac account"), ie in the names of Mr Groves and Dr Groves. In each of the Supreme Court proceeding and the taxation appeals, Dr Groves alleges that she had no control over the Westpac account and was only permitted to access the funds held in the account on the instructions and at the direction of Mr Groves. She further alleges that Mr Groves controlled access to the Westpac account and controlled the use of funds deposited in that account. 9 A further allegation made by Dr Groves in the two proceedings is that the amounts deposited in the Westpac account were used by Mr Groves for his own purposes, save for amounts totalling $1,190,000 at the direction of Mr Groves. Those amounts are said to have been paid to her as follows: 7 April 2004 $100,000 18 July 2005 $200,000 16 September 2005 $100,000 20 June 2006 $100,000 5 October 2006 $300,000 6 February 2007 $90,000 3 October 2007 $300,000 10 Dr Groves alleges that the following are unpaid dividends: Year of Dividend declared Amount received by the applicant Unpaid dividends income 2001 $865,536 Nil $865,536 2002 $717,472 Nil $717,472 2003 $1,182,175 Nil $1,182,175 2004 $1,377,897 $100,000 $1,277,897 2005 $1,933,929 Nil $1,933,929 2006 $1,917,530 $400,000 $1,517,530 2007 $1,997,600 $390,000 $1,607,600 2008 $1,530,000 $300,000 $1,230,000 11 It is these unpaid dividends that Dr Groves claims from Mr Groves in the Supreme Court proceeding. In the taxation appeals, her contention is that the ABC share dividends which were declared do not, in terms of s 44(1)(a) of the Income Tax Assessment Act 1936 (Cth) (ITAA36) constitute dividends paid to her by ABC. She further contends that she did not "derive" these dividends as income for the purposes of s 6-5 or s 6-10 of the Income Tax Assessment Act 1997 (Cth) (ITAA97) by reason of not having received those dividends. 12 In the Supreme Court proceeding, Mr Groves admits that Dr Groves held shares in ABC but does not admit that she was entitled to dividends totalling $11,924,000 as alleged by her. 13 By way of defence, Mr Groves alleges that such dividends as were declared were paid into the Westpac account. He further alleges that, in the period between the 2001 and 2008 income years, other dividends in respect of Dr Groves' shares were credited in her favour by two other financiers, Citi Singapore and Tricom Equities Ltd. The total of all of these dividend payments or payments by direction equals or exceeds, he alleges, so much of Dr Groves' claim as is referable to ABC dividends. In respect of so much of this claim as in substance pleads a cause of action in debt which arose prior to 23 October 2002, Mr Groves also pleads a defence under s 10(1)(a) of the Limitation of Actions Act 1974 (Qld) on the basis that the six year limitation period there specified has expired. 14 For his part, the Commissioner's position in the taxation appeals is that the dividends as declared and paid by ABC into the Westpac account fall within s 44 of the ITAA36 and form part of Dr Groves' assessable income in the income years in which they were paid. He contends that they constitute income derived by her, it being nothing to the point that, after derivation, Mr Groves may have withdrawn some or all of those sums from a joint account and applied the same to his own use. 15 It was common ground on the stay application that Dr Groves' liability to tax was to be assessed on a cash, rather than on an accruals, basis. 16 There are further, related issues concerning the dividends in the taxation appeals. These are: (a) whether Dr Groves derived the amounts identified as franking credits in the 2001 to 2008 years of income, for the purposes of subdiv 207-A of the ITAA97; and (b) whether Dr Groves was entitled to a deduction under s 8-1 of the ITAA97, or alternatively s 25-45 of that Act, for the total of what she alleges are "unpaid dividends", in the 2001 to 2008 years of income or alternatively in the 2008 year of income. 17 Dr Groves' position in the taxation appeals with respect to s 25-45 of the ITAA97 is that if, which she denies, she derived the dividends: (a) she suffered a loss in each year which totals the sum of the amounts paid to the Westpac account and not paid to her by Mr Groves, that total being equal in each year to the sum of the unpaid dividends; (b) she discovered that loss, for the purposes of s 25-45 of the ITAA97, in each respective income year by reason of not receiving the income, alternatively, she discovered the loss in the 2008 year; (c) the loss was caused by theft, stealing, embezzlement, larceny, defalcation or misappropriation, for the purposes of s 25-45 of the ITAA97, by Mr Groves in his capacity as her agent; (d) the amounts were included in her assessable in each respective year of income. 18 As to the controversy between Dr Groves and the financiers, a review of the pleadings in the Supreme Court proceeding discloses that shares held by Dr Groves in ABC were sold by these financiers in the exercise of power of attorney conferred upon each of them in guarantees purportedly granted by Dr Groves and respectively held by them. The qualification "purported" is necessary because it is Dr Groves' case in those proceedings that the signature on each of those guarantees was not hers but rather a forgery. For its part, BT Securities also pleads in its defence that in any event it gave consideration to Dr Groves for the sale of the shares by crediting the proceeds of the same in the discharge of liabilities of Dr Groves and Mr Groves and by paying a remaining balance to the Westpac account, thereby changing its position to its detriment. 19 In the taxation appeals, the Commissioner's position is that, irrespective of whether Dr Groves' signature on the respective guarantees was a forgery, each of the sales by the financiers of a parcel of ABC shares to third parties constituted a "CGT event A1" for the purposes of the ITAA97. It is submitted that the shares were "CGT assets" owned by Dr Groves. In terms of s 104-10(2) of the ITAA97, the sales by the financiers of those shares constituted a disposal of a CGT asset by reason of a change of ownership which occurred from Dr Groves to a third party purchaser, which had occurred either because of some act or event or by operation of law. On this basis, the Commissioner contends that a net capital gain of $14,378,326 accrued to Dr Groves in the 2008 income year in relation to the sales of her ABC shares by Citigroup, Citibank N.A. and BT Securities. 20 For her part, Dr Groves denies that any CGT event occurred with respect to her ABC shares. Alternatively, she contends that if, which she denies, she did or is to be treated as disposing of her ABC shares, the capital proceeds from the CGT event that occurred on that disposal are to be reduced by the sum of $33,481,195 as: (a) for the purposes of s 116-45 of the ITAA97: (i) she is not likely to receive some or all of the capital proceeds; (ii) the failure to receive some or all of the capital proceeds was not caused by anything she has done; (iii) to the extent the failure to receive some or all of the capital proceeds was caused by Mr Groves, Mr Groves was not acting in his capacity as her "associate" for the purposes of s 318 of the ITAA36; (iv) she has taken all reasonable steps to get the unpaid amount paid. (b) for the purposes of s 116-60 of the ITAA97: (i) Mr Groves was her agent in respect of the disposal; (ii) Mr Groves misappropriated all or part of the capital proceeds of $33,481,195, with which he reduced debt owing by him to Citigroup, Citibank N.A. and BT Securities. 21 It is not necessary for the purposes of determining Dr Groves' application for a stay to descend into any further level of detail as to the issues in the respective proceedings. Even at the level of generality in the foregoing summary, it is clear that there are issues of fact and law that are common to both the taxation appeals and the Supreme Court proceeding, even though there is not complete congruence. 22 It was common ground between the parties that the Court had power to grant the stay sought by Dr Groves. They were also agreed that whether or not to exercise that power required the making of a discretionary value judgement. I accept as correct each of these propositions. A case relied upon by Dr Groves, Sterling Pharmaceuticals Pty Ltd v The Boots Company (Australia) Pty Ltd (1992) 34 FCR 287 (Sterling Pharmaceuticals), illustrates them. It is frequently cited in cases concerning applications like the present for the summary offered, at 291, by Lockhart J of considerations which, on the authorities, have proved relevant in relation to whether or not a stay ought to be granted. The stay application in Sterling Pharmaceuticals arose in the context of there being related foreign proceedings. Jefferson Ltd v Bhetcha [1979] 1 WLR 898 and McMahon v Gould (1982) 7 ACLR 202 offer notable examples of other contexts in which the like discretion has arisen for consideration. The ability to make such an order is an incident of the Court's general power to control its own proceedings for which s 23 of the Federal Court of Australia Act 1976 (Cth) (Federal Court of Australia Act) is in this regard declaratory. 23 Dr Groves submitted that it is not in the public interest for there to be a potential for two courts differently to decide such issues. The Supreme Court proceeding, she submitted, was at a more advanced stage. Thus, she submitted, it would be unduly burdensome on her in terms of costs to have to undertake, for the purposes preparing for the taxation appeals, work which had already been done for the purposes of the Supreme Court proceeding. She drew attention to the implied undertaking as to use only for the purposes of that proceeding that attended documents disclosed by a party or non-party. Where they related to transactions in question, such documents, she submitted, would have to be sought afresh in and for the purposes of the taxation appeals. It was preferable, she submitted, if the taxation appeals were adjourned to await the fate of an adjudication of common issues by the Supreme Court. 24 It was emphasised on behalf of Dr Groves that the parties to the Supreme Court proceeding, unlike the taxation appeals, were those who were the very parties to the transactions which underpinned the controversial assessments. One might therefore anticipate, so the submission went, that it would be in those proceedings, rather than the taxation appeals, that the greatest range of direct evidence concerning those transactions would be led. It was further submitted that evidence "disclosed on the public record" in those proceedings would be "available for use" in the taxation appeals. 25 Dr Groves also submitted that an adjournment did not put the revenue at risk. It was common ground that the total of the assessed income tax in the taxation appeals was $12,872,407.84. Of this, a little more than half had been paid by Dr Groves - $6,531,085.80. Allowing for the impact of an allowance of franking credits, it was also common ground that the amount of tax in dispute in the taxation appeals was approximately $9.5 million. Dr Groves submitted that recovery of the income tax outstanding by the Commissioner was not prejudiced by any stay of the taxation appeals because the statutory general interest charge (GIC) continued to accrue on the amount of the unpaid balance. It was also common ground that, after allowing for other amounts standing to Dr Groves' credit on her running balance account in respect of taxation liabilities to the Commonwealth, the present amount of the GIC was some $900,000. 26 In developing this submission, Dr Groves contended that there would be advantage, in terms of taxation recovery, in staying the taxation appeals pending the determination of the Supreme Court proceeding as, in the event that she succeeded in that case, she would then be equipped with a judgement on the strength of which she could recover sums which would enable her to pay the balance of tax outstanding under the disputed assessments. The evidence led by her on the stay application included a statement by Dr Groves' solicitor, made on information from her, that, absent such recovery, she did not have sufficient financial resources to discharge in full that outstanding taxation liability. 27 In response, the Commissioner emphasised that the taxation appeals were not recovery proceedings. He drew attention to the dichotomy between the two highlighted by the express provision in s 14ZZR of the Taxation Administration Act 1953 (Cth) (TAA) that tax may be recovered even though there is a pending appeal. That said, he acknowledged that a pending judicial determination by this Court of such appeals had proved to be a relevant consideration in relation to the stay of recovery proceedings. 28 The Commissioner further submitted that no issue estoppel would arise against him as a result of any findings on any issues in the Supreme Court proceeding. This was conceded by Dr Groves. 29 A further matter relied upon by the Commissioner was the lengthy potential delay that would be introduced by staying the taxation appeals pending the determination of the Supreme Court proceeding. He also submitted that it was even speculative as to whether there would be any judicial determination of the issues in that case. It might settle, in whole or in part, at mediation. 30 Since its institution in October 2008, the Supreme Court proceeding has reached the stage where, following the making of amendments, pleadings have closed. BT Securities was joined, by consent, as a fourth defendant in March 2009. Disclosure of documents, which has included non-party disclosure, has largely been completed. There is an outstanding issue as to disclosure as between Dr Groves and Mr Groves which is the subject of an as yet undetermined interlocutory application. The case is on that court's Supervised Case List. Its next review date in that list is 17 March 2011. At the moment, the parties to that proceeding are preparing for the exchange of expert evidence reports, which include handwriting expert reports. The existing Supreme Court directions make provision for mediation. That has yet to occur, though the parties are presently liaising one with the other so as to fix a mutually convenient date. No trial date has yet been fixed. It was put to me on behalf of Dr Groves, and not gainsayed by the Commissioner, that any such trial could be heard in the Supreme Court this year. 31 Measured though its pace to date has been, there is no doubt that the Supreme Court proceeding is at a more advanced stage than the taxation appeals. In the latter, the present position is that the appeal statements for which O 52B of the Federal Court Rules provide have been filed and served, as have the questionnaires and lists of potential witnesses for which Practice Note "TAX 1" provides. All other interlocutory steps have yet to be completed. 32 It is to be remembered though that the taxation appeals are the culmination of a statutory process specified in the TAA for the challenging of an income tax assessment. That process commenced in December 2009 when Dr Groves lodged objections against the assessments. These objections, including where required, the granting of an extension of time within which to object, were determined by the Commissioner on 15 October 2010. Thereafter, if she was to challenge that objection decision in this Court, Dr Groves had but 60 days within which to file the requisite application: s 14ZZN of the TAA. 33 The Commissioner's reasons for the objection decision disclose that he was made aware of the existence of the Supreme Court proceeding by Dr Groves. Indeed, the unjustness of not extending, where necessary, time to object in circumstances where findings by the Supreme Court as to particular facts might, if accepted by the Commissioner, disclose an absence of taxation liability, was put forward to him as a reason why an extension of time should be granted. 34 While the Commissioner has a statutory obligation to determine an objection: s 14ZY of the TAA, a time limit within which so to do (60 days) is introduced only at the initiative of a taxpayer: s 14ZYA of the TAA. It would certainly have been possible for the Commissioner, as a matter of discretion and in the course of his general administration of the TAA, the ITAA36 and the ITAA97, to have deferred the determination of the objections until after the Supreme Court proceeding had been heard and determined. He could, for example, have chosen to do this on the basis that he would be informed, for the purpose of determining the objections, by the evidence led and findings made in the Supreme Court proceeding. However, the Commissioner was under no obligation to adopt this course. 35 There are, for the present, no taxation recovery proceedings pending. Further, given that Dr Groves has paid not less than half the tax in dispute, the Commissioner's general policy, so I was informed, is not to press for recovery of the whole via court proceedings. That position is subject to a reservation, not presently relevant on the evidence, of the institution of recovery proceedings in the event of some apprehension by the Commissioner as to dissipation of assets which might otherwise be available for recovery. 36 For all that, the existence of a dispute in this Court concerning an assessed taxation liability has, notwithstanding, materially, s 14ZZR of the TAA, proved influential, even in some cases determinative, qv Commissioner of Taxation v Denlay [2010] QCA 217 (Denlay), in deciding whether, at a particular stage, to stay a taxation recovery proceeding. Denlay, though of persuasive weight, is not binding in this Court. It is not necessary in this case to explore whether it can be reconciled with Deputy Commissioner of Taxation v Broadbeach Properties Pty Ltd (2008) 237 CLR 473 or Hoare Bros Pty Ltd v Commissioner of Taxation (1996) 62 FCR 302, each of which do bind me. It is enough to make it a relevant consideration in relation to whether or not temporarily to stay the hearing and determination of the taxation appeals that there is a contingency, illustrated by Denlay, that the existence of an unresolved dispute may be treated as relevant in, for example, a decision as to whether to stay the execution of such judgement as the Commissioner may obtain were he to decide to institute a recovery proceeding in a court of competent jurisdiction. Beyond this, Denlay has no present relevance for, as the Commissioner highlighted, this is not a taxation recovery proceeding. That there is no present taxation recovery proceeding pending at present against Dr Groves means that the contingency that the existence of an unresolved dispute might adversely impact upon any such recovery proceeding has an abstract quality. 37 What is not abstract is the continuing accrual of the GIC. That was put as a factor which protected the revenue in the event of a stay. While the GIC is a means of compensation for the Commonwealth being kept out of the payment, within the time allowed, of the primary income tax liability, the amount of the GIC is itself a debt and one that increases over time until that primary tax is either paid, extinguished or diminished by the resolution of the taxation appeals. The evidence before me indicates that Dr Groves is not able at the moment even to pay the outstanding balance of the income tax in dispute. To stay the taxation appeals beyond when they might otherwise be heard will, in the event that the Commissioner is successful in them, increase by the further accrual of GIC, Dr Groves' overall indebtedness to the Commonwealth. She has not given any detail as to her present financial position nor of the prospect of her improving that by enforcement of any judgement in her favour in the Supreme Court proceeding. That GIC would continue to accrue in the event of a temporary stay is not a factor which tells only one way in relation to deciding whether to stay proceedings the result of which would settle a present controversy as to Dr Groves' taxation liability in the 2001 to 2008 income tax years. Postponement may just add to the overall recovery deficiency for the Commonwealth. 38 Obviously enough, there is and always has been a public interest in the resolution, in such timely a manner as is justly possible, of any proceeding in this Court. It has been held, in the context of an application by a defendant for a temporary stay that, prima facie, a plaintiff is entitled to have his action tried in the ordinary course of the procedure and business of a court: Rochfort v John Fairfax & Sons Ltd [1972] 1 NSWLR 16 at 19. The converse at least must necessarily follow where it is a plaintiff who seeks a stay and a defendant who resists the same. Any defendant, too, has prima facie, a right to have the case made against him tried in the ordinary course of the business and procedure of a court. I state "at least" in respect of a defendant because it is usually incumbent on a plaintiff, as an initiating party, diligently to prosecute a proceeding he has commenced. In this case though, for reasons which I canvas below, it would not be appropriate to treat that as a factor telling against the granting of Dr Groves' application. 39 That, additionally, it is a feature of the taxation appeals that Dr Groves' ability to institute them is a constitutionally necessary part of our system of taxation, qv Deputy Commissioner of Taxation (NSW) v Brown (1958) 100 CLR 32 at 40; Giris Pty Ltd v Commissioner of Taxation (1969) 119 CLR 365 at 378-379; MacCormick v Federal Commissioner of Taxation (1984) 158 CLR 622; Federal Commissioner of Taxation v Futuris Corporation Ltd (2008) 237 CLR 146 at [8], places that general public interest in a very particular context. There is a particular public interest in the timely disposal of controversies touching upon the consolidated revenue of the Commonwealth and the liability of any person to contribute to that revenue by way of taxation. The imposition of a limitation period as short as 60 days within which to institute appeals of the present kind underscores Parliament's recognition of this public interest. I expressly take this consideration into account. 40 So far as the Commissioner is concerned, the Supreme Court proceeding is truly res inter alios acta. He is not in any way bound by the outcome in that proceeding. In the taxation appeals, any decision and any finding of fact in the Supreme Court proceeding would not be admissible to prove the existence of a fact which was in issue in that proceeding: s 91(1) of the Evidence Act 1995 (Cth); National Mutual Life Association of A/asia v Grosvenor Hill (Qld) (2001) 183 ALR 700 at [48]. 41 It is true that, in the absence of an order releasing her from the same, Dr Groves is subject to an implied undertaking to the Supreme Court to use documents disclosed to her by a party or non-party solely for the purposes of those proceedings. There is no evidence that she has sought to be released from that undertaking so as to use documents in the taxation appeals. Were a party or non-party to those proceedings to oppose any such release of Dr Groves, that would, in my opinion, be a relevant consideration to take into account in deciding whether to allow the person concerned any or only part of such costs as he (or it) may incur in giving non-party discovery to Dr Groves for the purposes of the taxation appeals. To the extent that there is an overlap in relevant transactional documents, one might expect that document retrieval costs have already been incurred by such persons for the purposes of the Supreme Court proceeding such that a correspondingly lower cost would be entailed in any event if discovery of a like class of documents was sought by Dr Groves for the purposes of the taxation appeals. In the same fashion, one might also expect that costs incurred by Dr Groves in the analysis of discovered documents for the purposes of the Supreme Court proceeding would not be wasted in relation to the taxation appeals. She will thereby have the advantage of knowing in advance of which documents to seek non-party discovery in relation to the taxation appeals. 42 In the same way, such costs as have already been incurred by Dr Groves in the preparation of a proof of evidence will not have been wasted so far as a requirement to file an affidavit of her evidence in chief in the taxation appeals is concerned. That Supreme Court preparation ought greatly to reduce the costs of preparing such an affidavit for use here. And the reverse may well apply in relation to the Supreme Court proceeding. 43 Dr Groves' obligation in this Court is, by reference to the grounds stated in the objection, to prove the assessments concerned to be excessive: s 14ZZO of the TAA. She must do so by adducing such admissible evidence as she may be advised. 44 In that regard, it is relevant to note that the only testimonial evidence presently foreshadowed in the taxation appeals is that of Dr Groves herself. The draft directions proposed by the parties provide for filing and service of notice to admit facts and documents and for discovery. It is certainly possible that the results of these interlocutory processes might necessitate Dr Groves to revise her present position in relation to testimonial evidence. However, it is a feature of the procedural reform in relation to the practice in this court with respect to taxation appeals that parties are expected, prior to the first scheduling conference, to have given very serious attention indeed to the subject of who will be a necessary witness on the hearing of the taxation appeals. For example, I should have expected that any contingency that Dr Groves might, in the absence of admission by the Commissioner as to a signature on a guarantee not being hers, desirably have to lead corroborative evidence from a forensic document examiner would already have been taken into account and, if considered necessary, disclosed on the list of potential witnesses. 45 Equally, the Commissioner has filed no such list and done so, so I was informed, on the basis that he does not intend to adduce testimonial evidence. This he is entitled to do, given the statutory burden of proof that lies upon Dr Groves. The prudence of such a course and whether it is a product of any failure to take prior advantage of the sweeping powers of inquiry conferred on the Commissioner for the purposes, materially, of assessing and of determining objections is no concern of mine. 46 That Dr Groves as applicant in the taxation appeals seeks the temporary stay is not, in my opinion, a factor which counts against her in terms of whether or not to grant it. As already mentioned, there is a statutory time limit for the institution of such proceedings. Once the Commissioner determined her objections the TAA gave her a right to elect to appeal to this Court against those objection decisions or to seek their review by the Administrative Appeals Tribunal. If she wished to engage the exercise of the judicial power of the Commonwealth in the determination of her liability to tax she had no choice other than to institute these proceedings within the time limited. Often, in other proceedings in this Court in relation to applications like the present, it will be a respondent who is the moving party for a stay of proceedings. Here though, for the reasons just given, circumstances have dictated that Dr Groves is the moving party. 47 In this sense, there is analogy to be drawn between Dr Groves' situation and that of the applicants in Baker; Re Flatwash Pty Ltd v Commissioner of Taxation (1987) 87 ATC 4626. There, the occasion for the seeking of the adjournment of taxation appeals by the applicants was the contingency that criminal proceedings arising out of overlapping facts might subsequently be instituted against them. That they sought a stay of proceedings which they themselves had instituted was not treated as a disentitling factor by Sheppard J. Like Sheppard J (87 ATC at 4628), I consider that, "in the end it is a question of what should be done in the overall interests of the administration of justice, that is to say to the parties to the litigation". Lest it be thought that the focus on the interests of the justice to the parties in that statement is inconsistent with the public interest which I have mentioned in the timely quelling of controversies touching upon the revenue, it is to be remembered that the parties here are parties to just such a controversy and the Commissioner is sued not in a personal capacity but as the Commonwealth's chief revenue officer, responsible, inter alia, for the assessment of taxation liabilities. 48 The Commissioner submitted that factors considered relevant by French J (as the Chief Justice then was) in Snow v Deputy Commissioner of Taxation (WA) (1987) 14 FCR 119 at 139 (Snow) were, even though considered in the context of proceeding for the judicial review of a decision to extend time for payment of tax, nonetheless presently relevant. The factors listed by French J were these: 1. The policy of the ITAA as reflected in its provisions gives priority to recovery of the revenue against the determination of the taxpayer's appeal against his assessment. 2. The power to grant a stay is therefore exercised sparingly and the onus is on the taxpayer to justify it. 3. The merits of the taxpayer's appeal constitute a factor to be taken into account in the exercise of the discretion (although some judges have expressed different views on this point). 4. Irrespective of the legal merits of the appeal a stay will not usually be granted where the taxpayer is party to a contrivance to avoid his liability to payment of the tax. 5. A stay may be granted in a case of abuse of office by the Commissioner or extreme personal hardship to the taxpayer called on to pay. 6. The mere imposition of the obligation to pay does not constitute hardship. 7. The existence of a request for reference of an objection for review where appeal is a factor relevant to the exercise of the discretion. 49 On their face, these factors have a particular, obvious relevance in relation to questions which in one way or another touch upon the staying of a proceeding to recover a taxation liability. This is not such a case. 50 Of the factors listed, numbers 3 and 4 may possibly be relevant to the present type of application. That is because, coincidentally, it is relevant to take into account, in deciding whether temporarily to stay any proceeding at the request of a party, whether that party's claim or defence is in any way frivolous or vexatious or an abuse of process. Obviously enough, if one or the other is doomed to failure, it would be a rare case where the Court agreed to postpone the inevitable. Further, if the moving party's case in a taxation appeal did not enjoy a reasonable prospect of success in the sense described in s 31A of the Federal Court of Australia Act, one might expect that the opposing party would usually meet the application for a temporary stay with an application for summary judgment. The Commissioner has made no such application. 51 At first blush, a proposition that a person has not derived income by way of dividend when the dividend has been both declared and then paid into a bank account in which that person has an interest seems difficult to sustain. Much, however, might turn on the evidence as to the nomination of payment and the operation of the account. Overall, the grounds of objection raise issues of law and fact in the taxation appeals which are triable. That they have this quality does not mean that a trial should be postponed, rather the reverse. 52 Factor 5 in Snow, insofar as it is grounded in abuse of office by the Commissioner, may also be relevant in relation to a decision temporarily to stay the hearing of a taxation appeal. It would though require very singular evidence to raise that as a factor for consideration. Further, one might expect that any such application would be associated with the institution of a proceeding under s 39B of the Judiciary Act 1903 (Cth) for the quashing of the assessment concerned: Federal Commissioner of Taxation v Futuris Corporation Ltd (2008) 237 CLR 146 at [24] - [25]. Whether or not to hear the latter first and to adjourn a taxation appeal pending its determination, as I did in Denlay v Commissioner of Taxation [2010] FCA 1434, or to hear the two concurrently, would be a matter for the exercise of discretion in the circumstances of a particular case. This factor is not raised for consideration in the present case. 53 When the appeals might be heard is a relevant consideration, as is when the Supreme Court proceeding might be heard. Each side in the taxation appeals considered that they could comfortably be heard well within ten sitting days, perhaps as few as five. Given that Dr Groves is the only presently proposed witness, the suggested trial length seems an eminently reliable estimate, even allowing for the range of issues to be covered in submissions. That being so, I can, as I informed the parties on the hearing of the application, offer a trial of the taxation appeals in the latter half of October this year. 54 Though I was informed that a trial in the Supreme Court proceeding would occur "this year", quite when was not stated. Given the reference in the material to the calling of expert handwriting evidence and the number of parties, it seems inherently likely that a trial in that proceeding, if it occurs at all, will, as matters stand at present, be lengthier than that for the taxation appeals. One might expect that the Supreme Court would be informed by Dr Groves of any dates fixed for the hearing of the taxation appeals and would avoid any direct clash in listings. A direct clash seems unlikely. Were it nonetheless to loom in fact, there would be nothing to prevent an application for a stay being made then. It does not provide a basis for the ordering now of a temporary stay of the taxation appeals. 55 Whether the Supreme Court proceeding will ever come to trial is indeed, as the Commissioner submitted, speculative. It may settle at mediation. Any settlement inter partes will not bind the Commissioner. 56 There are then factors which tell in favour of the granting of a temporary stay and those which tell against that. On balance, I am not persuaded that a temporary stay of the taxation appeals is warranted. That conclusion does not forever foreclose the seeking by Dr Groves of a stay of the taxation appeals. 57 To meet the contingency that the stay application might not succeed I canvassed with the parties directions which might be made to progress the matters to trial. I propose to make such directions. They will include the reservation of liberty to apply pursuant to which Dr Groves may renew her application for a stay if so advised in light of further developments occur. 58 The application for a temporary stay of the taxation appeals will be dismissed, with costs. I certify that the preceding fifty-eight (58) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Logan. Associate: Dated: 15 March 2011