FEDERAL COURT OF AUSTRALIA Bitomsky v Commissioner of Taxation [2013] FCA 589 Citation: Bitomsky v Commissioner of Taxation [2013] FCA 589 Parties: GREGORY BITOMSKY v COMMISSIONER OF TAXATION File number: QUD 791 of 2012 Judge: REEVES J Date of judgment: 16 May 2013 Date of hearing: 16 May 2013 Place: Brisbane Division: GENERAL DIVISION Category: No Catchwords Number of paragraphs: 24 Counsel for the Applicant: P Bickford Solicitor for the Applicant: McCullough Robertson Solicitor for the Respondent: L Amundsen of Australian Government Solicitor IN THE FEDERAL COURT OF AUSTRALIA QUEENSLAND DISTRICT REGISTRY GENERAL DIVISION QUD 791 of 2012 BETWEEN: GREGORY BITOMSKY Applicant AND: COMMISSIONER OF TAXATION Respondent JUDGE: REEVES J DATE OF ORDER: 16 MAY 2013 WHERE MADE: BRISBANE THE COURT ORDERS THAT: 1. The application filed 19 April 2013 be dismissed. 2. The costs of this application be reserved. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. IN THE FEDERAL COURT OF AUSTRALIA QUEENSLAND DISTRICT REGISTRY GENERAL DIVISION QUD 791 of 2012 BETWEEN: GREGORY BITOMSKY Applicant AND: COMMISSIONER OF TAXATION Respondent JUDGE: REEVES J DATE: 16 MAY 2013 PLACE: BRISBANE REASONS FOR JUDGMENT (Corrected from transcript) 1 Mr Gregory Bitomsky, the applicant, filed an interlocutory application on 19 April 2013 seeking two categories of orders: (a) one preventing the Commissioner of Taxation, the respondent, from relying on affidavits or parts of affidavits that have been filed or that the Commissioner intends to file (the evidentiary issue); and (b) the other to require the Commissioner to file an amended points of defence (the pleadings issue). 2 Both the Commissioner and Mr Bitomsky have outlined their position in relation to each of these categories of orders in correspondence annexed to the affidavit of Mr Bitomsky's solicitor, filed in support of his application. BACKGROUND AND PROCEDURAL HISTORY 3 In the substantive proceedings, Mr Bitomsky has applied under the Judiciary Act 1903 (Cth) for certain declarations in relation to certain determinations the Commissioner has made under the Income Tax Assessment Act 1936 (Cth). The initial scheduling conference in the proceedings was heard before Logan J. At that conference, Logan J ordered the following pre-trial program: (a) the parties were to exchange points of claim and points of defence, then; (b) the parties were to exchange evidence in affidavit form, then; (c) the parties were to exchange outlines of argument. 4 The date by which the exchange of the documents was to occur in accordance with the first two stages of this program has now passed. That is, each party has now filed his points of claim or defence and the evidence that he intends to rely on at trial. The final stage of these programming orders has not yet come into effect. 5 While this matter is allocated to my docket, I am unable to hear the trial of the proceedings. That trial is currently set down for two days in late June. THE EVIDENTIARY ISSUE 6 On the evidentiary issue, I agree with the Commissioner's position that the time for considering any objection to the contents of any of the affidavits filed by the Commissioner will arise once he moves to read and rely upon those affidavits at the trial of these proceedings. If the parts of the affidavits in contention are not read, as the Commissioner's solicitor clearly states is to be the case in one of his letters, no occasion for an objection will arise and nor, obviously, will the need to consider that objection. 7 If, on the other hand, contrary to what the Commissioner's solicitor says in his letter, some or all of the contentious parts of the affidavits are read, and objections are then taken, the most efficient course is for the trial judge to determine those objections. That is so because, among other things, it will be necessary to know the general background to this dispute and the circumstances in which the material in question was created in order to determine whether it was a privileged communication. 8 Since the trial judge will almost certainly have to consider the background to the dispute in any event, it would be wasteful of time and resources for another judge to go through the same process at this stage, on the assumption the contentious material will be read and relied upon at trial. That is particularly so where, as I have already noted, that assumption appears from the Commissioner's solicitor's letter to be quite ill-founded. THE PLEADINGS ISSUE 9 The pleadings issue is directed to the Commissioner's points of defence. Mr Bitomsky's objections to that document fall into three categories. 10 First, Mr Bitomsky claims that the Commissioner's points of defence do not address the points of law and related arguments he has raised in his points of claim. 11 Secondly, Mr Bitomsky contends that in his points of defence, the Commissioner simply disagrees with Mr Bitomsky's version of various conversations pleaded in the points of claim, rather than pleading the Commissioner's version of those conversations. 12 Finally, Mr Bitomsky raises a technical point about the lack of a certificate under Rule 16.01(c) of the Federal Court Rules 2011 (the Rules). 13 I will deal with these three categories in reverse order. 14 As to the third category, in his letter of 12 April 2013, the Commissioner's solicitor implicitly acknowledged his failure to comply with Rule 16.01(c), because he proffered the necessary certificate in that letter at paragraph 4. While that rule requires the certificate to be in the points of defence document itself, in the circumstances I consider the most just, quick, inexpensive and efficient course is to waive this technical non-compliance with the rules under Rule 1.34 of the Rules. I would add that I consider this particular aspect of Mr Bitomsky's application, although only minor, involves a shameful waste of time and resources. 15 As to the second category, the Commissioner's solicitor's response is that all of the Commissioner's evidence about the conversations is contained in the affidavits he has now filed and, as such, there is no necessity for him to include his versions of them in his points of defence. 16 As noted above, the pre-trial program requiring the exchange of pleadings and evidence in affidavit form is now complete. 17 There is no indication in the correspondence that the Commissioner wishes to go outside the factual issues he has pleaded in his defence, nor the affidavit evidence he has now filed. If he attempts to do so at the trial, given the import of Mr Bitomsky's current application, the Commissioner is certain to face stiff opposition from Mr Bitomsky and have a difficult task persuading the trial judge that he should be permitted to do so. In these circumstances, I can see little, if anything, to be achieved, and much time and resources to be wasted, by assuming the Commissioner will attempt to do that and attempting to resolve that point in advance of it ever becoming an issue. 18 As to the first category, for his part, Mr Bitomsky claims that he has identified the legal issues that arise in these proceedings in his points of claim and set out his arguments thereon at some length. Mr Bitomsky claims that this was the intention of Logan J when his Honour made the orders for the exchange of points of claim and points of defence. The Commissioner disagrees and claims that while Logan J may have offered the opportunity for that to occur, his Honour certainly did not require it. Instead, the Commissioner contends that the appropriate time for that to occur is when the parties exchange their outline of submissions in accordance with the final stage of the orders made by his Honour. 19 Rather than waste more time and resources embarking upon a consideration of what was intended by the orders of Logan J, I consider the most efficient and pragmatic course in the circumstances is to reset the timetable for the exchange of submissions and to add to it an opportunity for submissions in reply by Mr Bitomsky. Both parties will therefore know well in advance of the trial precisely what legal and factual issues the other side wishes to vent at the trial and what his arguments will be on each of those issues. FILING OF SUBMISSIONS 20 For these reasons, I propose the following timetable: Mr Bitomsky is to file his outline of argument for the trial by 23 May 2013. That is one week hence and four weeks before Mr Bitomsky was originally required to do so under the orders made by Logan J. However, since his solicitors said in their letters that Mr Bitomsky's position is already set out in detail in his points of claim, I cannot see how he will suffer any hardship by having to comply with this new deadline. 21 The Commissioner is to file his outline of argument for the trial by 13 June 2013. That is about a week before he is required to do so under the orders of Logan J. However, as these proceedings have been on foot now for some months and the Commissioner has four weeks notice of this new deadline, I also cannot see how he will suffer any hardship in having to comply with it. 22 Finally, I propose to order that Mr Bitomsky is to have an opportunity to file an outline of argument in reply if he wishes to do so, by 20 June 2013. COSTS 23 On the question of costs, since Mr Bitomsky's application appears to be borne out of cynicism with respect to the statements contained in the Commissioner's solicitor's letter and since I have largely based these reasons on the Commissioner doing what his solicitor says he will do in those letters, I consider the most appropriate order on costs is to reserve them to the trial judge. If the Commissioner proceeds essentially as outlined in those letters, the trial judge will no doubt take that into account in deciding which side should pay the costs of this application. Conclusion 24 For these reasons, the application filed 19 April 2013 is dismissed. I certify that the preceding twenty-four (24) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Reeves. Associate: Dated: 14 June 2013