Ryan J

Federal Court


Judgment date: 26 July 2001

Ryan J

There is before the Court a motion on notice by the respondent Commissioner of Taxation (``the Commissioner'') seeking, substantively, that the proceeding be dismissed. The proceeding was instituted on 13 October 2000 by an application filed in this Court, purportedly pursuant to O 52B r 4(3) of the Rules of this Court (``the Rules'') and, also purportedly, in accordance with Form 55D referred to in that sub-rule.

2. In the heading to the application, the applicants are described as ``Krampel Newman Partners Pty Ltd... & Others according to the Schedule attached.'' The attached schedule is in the following terms:


| No |           Applicant         | Date of Objection | Date of Applicant's | Date of Amended  |
|    |                             |      Decision     |      Objection      |    Assessment    |
| 1  | Krampel Newman Partners Pty |   14 August 2000  |    7 April 2000     |  2 March 2000    |
|    | Ltd ACN 005 533 764         |                   |                     |                  |
| 2  | Cosmotec Australia Pty Ltd  |   14 August 2000  |    27 May 1999      | 28 April 1999    |
|    | ACN 007 119 717             |                   |                     |                  |
| 3  | Project Hardware Pty Ltd    |   14 August 2000  |   31 March 1999     | 24 February 1999 |
|    | ACN 004 867 083             |                   |                     |                  |
| 4  | Michael Robert Martin       |   14 August 2000  |    8 May 2000       | 27 March 2000    |
| 5  | William Gerard Graham       |   14 August 2000  |   25 March 1999     |  5 February 1999 |
| 6  | Stephen John Costley        |   14 August 2000  |   25 March 1999     | 29 January 1999  |
| 7  | Martin Tobias Sammon        |   14 August 2000  |   25 March 1999     |  3 February 1999 |
| 8  | Gerrard John Sullivan       |   14 August 2000  |   25 March 1999     |  29 January 1999 |
|    | Bruce Richard Penny         |   24 August 2000  |   25 March 1999     |  29 January 1999 |
* all amended assessments relate to the year ending 30 June 1994.

3. The body of the application recites:

``Each of the Applicants appeal to the Court against the appealable objection decision referred to below and in so far as the decision relates to each Applicant and applies for such decision to be set aside or to be varied in the manner set out below.

Objection decisions appealed against

The decisions of the Commissioner to disallow each relevant Applicant's objection to the Amended Assessments for the year ended 30 June 1994 and issued to each of the Applicants as per the schedule attached.

Manner in which decisions are to be varied

Each decision should be wholly set aside or varied on the grounds set out in each of the Notices of Objection filed by or on behalf of each of the Applicants on the dates set out in the Schedule - that is, the Amended Assessments should be wholly set aside or varied by allowing the whole or some part of the amount claimed by each relevant Applicant in connection with the film entitled `Mephisto's Web' as a deduction (`Deduction') under Division 10B of Part III of the Income Tax Assessment Act 1936 as amended, thereby reducing the taxable income for each of the Applicants by all or part of the amount of the Deduction and also by reducing the additional tax assessed as claimed in each objection.''

4. In support of the motion, Counsel for the Commissioner contended that this Court has jurisdiction to entertain an appeal against a decision on an objection to an assessment by the Commissioner only if the appeal is confined to a single decision on an objection taken by a single taxpayer. That result was said to flow from the judgment of Goldberg J in
Carter v FC of T 2001 ATC 4260; [2001] FCA 575.

5. In that case the applicant on the record, Mr Carter, had, on 9 May 2001, filed an application by way of appeal against an appealable decision of the Commissioner in respect of the applicant's objection dated 19 December 2000 against an amended assessment issued on 14 November 2000 for the year ended 30 June 1999. At the time of filing his application, Mr Carter sought orders pursuant to O 6 r 2(b) of the Rules that four other named persons (``the proposed applicants'') be joined as applicants in the proceeding. The proposed applicants had been co-investors with Mr Carter in the projected production by Village Roadshow Motion Pictures Pty Ltd (``Village'') of five films. Mr Carter had claimed a tax deduction in each of the tax years ended 30 June 1998 and 30 June 1999 in respect of his investment in the project. On 14 November 2000, the Commissioner issued a notice of amended

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assessment, presumably for each tax year, disallowing the deduction. Mr Carter lodged a notice of objection which was disallowed by a decision of the Commissioner of which notice was given on 29 March 2001.

6. As his Honour noted, each of the proposed applicants had claimed similar tax deductions for the same years although the amounts claimed by each of them were different. The deductions claimed by each of the proposed applicants were disallowed and each objected to the resultant amended assessment. The Commissioner issued decisions allowing each objection. The applicant requested Goldberg J to exercise, in his favour, the discretion conferred by O 6 r 2(b) and O 52A r 13(2)(b) of the Rules and allow the joinder of the proposed applicants. His Honour declined to take that course on the ground that the Court only has jurisdiction to entertain an appeal against an appealable objection if the application is lodged in the name of a dissatisfied taxpayer in the form of Form 55D within the prescribed period of sixty days. In reaching that conclusion, his Honour referred to s 14ZZN of the Taxation Administration Act 1953 as amended which provides:

``An appeal to the Federal Court against an appealable objection decision must be lodged with the Court within 60 days after the person appealing is served with notice of the decision.''

7. His Honour then continued at [30]-[32]:

``... In Bayeh v DFC of T [99 ATC 4895; (1999) 100 FCR 138], Beaumont J held that there could not be implied in the Taxation Administration Act a power to grant an extension of time within which an appeal might be lodged as an incident of the Court's jurisdiction under s 14ZZN. His Honour said at ATC 4897; FCR 140:

`... But the use of the verb ``must'' in s 14ZZN is, I think, consistent only with an intention on the part of the Parliament to require, as a jurisdictional fact, that the appeal has to be lodged with the Court within the 60 day period there specified, if the Court is to have any jurisdiction in the matter at all.'

The reasoning of Beaumont J as to the time within which an appeal is to be lodged is equally applicable to the manner in which an appeal is to be instituted. The appeal has to be lodged with the Court. As Beaumont J observed in
Re Dalton (1995) 120 FLR 408 at 411:

`... the word ``must'' is, in my view, the word of most insistent obligation in the English language, and is, if anything, stronger than the word ``shall''.'

It is also significant that the requirement in s 14ZZN is one which relates to the commencement of an appeal, an initiating court process, rather than one which relates to the taking of a step in an existing proceeding. The provision therefore leaves little room for the argument that an appeal may be instituted in a manner other than that specified in the provision.''

8. After characterising s 14ZZN as substantive or jurisdictional rather than procedural and after referring to the judgment of Gummow J in
CTC Resources NL v FC of T 94 ATC 4072; (1994) 48 FCR 397, his Honour continued at [34]-[35]

``I do not consider that the imperative command in s 14ZZN that an appeal must `be lodged with the Court' is answered by ordering that a taxpayer dissatisfied with the Commissioner's decision on the taxpayer's objection to an assessment or an amended assessment be joined as an applicant or appellant in an existing appeal which was itself lodged in the form of Form 55D to the Rules within the required time. The notion of `lodging' an appeal with the Court connotes the filing or depositing of a document with the Court in the name of the appellant, rather than the joinder of the person to a proceeding initiated by a document or application previously lodged or deposited with the Court.

Neither s 14ZZN, nor any other provision in the Taxation Administration Act, prescribes the manner or form in which the appeal is to be lodged with the Court. That prescription is left to 0 52B of the Federal Court Rules, and in particular to rules 4(1) and 4(3) of that Order (par 27 above). Again, the word of most insistent obligation, `must' is used in those rules. In
Posner v Collector for Inter-state Destitute Persons (Vic) (1946) 74 CLR 461, Williams J (who dissented on a different issue) described `must' as `a word of absolute obligation'. Do 0 52B r 4(1) and r 4(3) have the consequence that the only

ATC 4476

means by which an appeal against an appealable objection decision can be instituted is by the applicant filing a Form 55D application in the applicant's name?''

9. His Honour then acknowledged that the requirements contained in O 52B r 4(1) and Form 55D may aptly be described as procedural. However, he continued at [36]-[38]:

``... but that does not answer the question whether the requirement in them is that each appellant or applicant must file his, her or its own application. Nor does it answer the question whether the requirement is mandatory, so that disregard of the requirement will render void and ineffective what is otherwise done, such as joinder to an existing appeal, or whether it is directory only in which case non-compliance with the requirement will be treated as an irregularity, with the result that the validity of the joinder of the appellant or applicant will not be affected.

The answer to those questions depends upon a consideration of the scope and purpose of the Rules, recognising that they are designed to implement an appeal process provided for by ss 14ZZ and 14ZZN of the Taxation Administration Act.

Although 0 1 r 8 enables the Court to dispense with compliance with any of the requirements of the Rules and although the Court has the power under 0 52A r 13 (through 0 52B r 3) to direct the joinder of parties in an appeal against an appealable objection decision, I do not consider that these powers extend to dispensing with the requirement in 0 52B r 4 that an application be filed in the form of Form 55D in order for an appeal to be instituted for the purposes of ss 14ZZ and 14ZZN.

The scheme of the Rules, taken in conjunction with the jurisdiction created by s 14ZZ and the mandatory requirements of s 14ZZN, leads me to the conclusion that the only way in which an appeal may be instituted in the Court against an appealable objection decision of the Commissioner is to file or lodge with the Court an application in the form of Form 55D. An application for joinder in an existing appeal, if granted, would not constitute the institution of such an appeal by the joined applicant.''

10. The present case does not concern an application by some prospective applicants to be joined as applicants in an existing appeal which has concededly been validly instituted. In the present case, all applicants have joined in filing or lodging an application to the Court and the question is whether that application is a nullity so that the jurisdiction of this Court is not attracted by any applicant.

11. Order 52B of the Rules, as its heading indicates, is concerned to regulate ``Appeals against Appealable Objection Decisions made under the Taxation Administration Act 1953''. Rule 3 of O 52B makes applicable to an appeal against an appealable objection decision, various provisions of O 52A, which has been made to apply, by O 52A r 2(1) to ``an appeal to or proceeding in the Court under or pursuant to a law of the Commonwealth dealing with the assessment of taxation and to questions referred under such a law to the Court.'' Significantly, one of the provisions of O 52A made applicable by O 52B r 3 to an appeal against an appealable objection decision, is O 52A r 13, which provides;

``(1) On a directions hearing under this Order the Court or a Judge shall give such directions with respect to the conduct of the proceeding as is thought proper.

(2) Without prejudice to the generality of sub-rule (1) the Court or a Judge may-

  • (a) determine what additional documents shall be forwarded to the Registry;
  • (b) direct the joinder of parties;
  • (c) make orders with respect to:
    • (i) discovery and inspection of documents;
    • (ii) interrogatories;
    • (iii) admissions of fact or of documents;
    • (iv) the defining of the issues;
    • (v) the filing and serving of affidavits;
    • (vi) the giving of particulars;
    • (vii) the place, time and mode of hearing;
    • (viii) the giving of evidence at the hearing, including whether evidence of witnesses in chief shall be given orally or by affidavit, or both; and
    • (ix) costs.''

12. Order 52B r 4 provides;

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``(1) An appeal must be commenced by filing an application in accordance with Subrule 1(1) of Order 4.

(2) The following provisions of Order 4, with any appropriate changes and subject to any direction of the Court or a Judge, apply to an appeal: rules 4, 5, 7, 8, 10, 11, 13 and 14.

(3) An application must:

  • (a) be in Form 55D; and
  • (b) set out:
    • (i) brief details of the appealable objection decision; and
    • (ii) the address of the office of the Australian Taxation Office shown on the written notice of the appealable objection decision served on the applicant under the Taxation Administration Act; and
  • (c) be filed in the Registry of the Court in the State or Territory in which the Taxation Office is located.

(4) The applicant must serve a sealed copy of the application on the Commissioner, as respondent, at the office of the Australian Government Solicitor in that State or Territory.

(4A) If the appeal relates to a private ruling, the sealed copy of the application must be served, within 6 days after filing, the application.

(5) The date fixed for the directions hearing must be:

  • (a) if the appeal relates to a private ruling - a date not later than 21 days after filing the application, unless the parties agree to a later date; or
  • (b) in any other case - a date at least 5 weeks after filing the application.''

13. Order 4 deals generally with the commencement of proceedings in this Court and the rules specified in O 52B r 4(2) stipulate various matters required to be included in an application, the procedure to be followed by the registrar upon filing, the specification of a date for a directions hearing and its endorsement on the application, time for service and a facility to proceed by a solicitor or in person.

14. Although, as Goldberg J noted in Carter, O 52B r 4 is peremptory in requiring, by sub-r (1) that an appeal must be commenced by filing an application in accordance with O 4 r 1(1) and by sub-r (3) that the application must be in Form 55D, those requirements do not entail, in my view, that only one objecting taxpayer can be an applicant in a single application. Form 55D, so far as is relevant, is as follows;

|                                APPLICATION                              |
|                        (Order 52B, subrule 4(3))                        |
|                            (Heading in Form 1)                          |
|                                                                         |
| The applicant appeals to the Court against the appealable objection     |
| decision referred to below and applies for the decision to be set aside |
| or to be varied in the manner set out below.                            |
|                                                                         |
| Objection decision appealed against                                     |
|                                                                         |
|                                    AND                                  |
|                                                                         |
| Manner in which decision is to be varied (if variation is applied for)  |
|                                                                         |
| e.g. By allowing the objection lodged to the extent of excising from my |
|      taxable income the amount of $                                     |
|                                                                         |
| Date: e.g. 7 May 19  .                                                  |
|                                                                         |
|                      .................................................  |
|                      (Signature of applicant or applicant's solicitor)  |
| To: The respondent                                                      |

15. The use, in the singular, of ``applicant'' where twice appearing in that form, is not conclusive. For one thing, the prescribed form indicates that the heading to be used is that in Form 1, which stipulates the full form of heading for each document to be filed in

ATC 4478

connection with a proceeding in the Court, including a proceeding in which there is more than one applicant, as contemplated, for example, by O 6 r 2. In the second place, by force of s 23 of the Acts Interpretation Act 1901, the singular expressions ``appeal'' and ``applicant'' in O 52B r 4 and ``applicant'' and ``objection decision'' in Form 55, are to be taken, unless the contrary intention appears, to include the plural. I have been unable to discern any contrary intention either in the actual language of O 52B or Form 55 or arising by implication from the terms of s 14ZZN of the Taxation Administration Act. In that sense, these provisions are to be contrasted with the sections of the Companies Act discussed by the Privy Council in
Blue Metal Industries Ltd v Dilley (1969) 117 CLR 651.

16. It is true that a practice has grown up of confining applications under s 14ZZN to a single taxpayer and, indeed, to a single objection decision in respect of one taxpayer, so that several applications are filed on behalf of the same taxpayer in relation to successive tax years. That practice is recognised by sub-regs (2)(2A) and (2B) of the Federal Court Regulations to which Mr Steward of Counsel for the Commissioner referred. Those sub- regulations provide;

``2(2A) A fee is not payable in relation to:

  • (a) an appeal under section 14ZZ of the Taxation Administration Act 1953; or
  • (b) an appeal from a decision of the Administrative Appeals Tribunal in its Taxation Appeals Division; or
  • (c) an appeal from a single Judge to the Full Court in relation to an appeal under section 14ZZ of the Taxation Administration Act 1953;

if the Registrar who receives the appeal is satisfied that the appeal (in this regulation called `the relevant appeal' ) meets the criteria set out in subregulation (2B).

2(2B) The criteria are that:

  • (a) the person lodging the relevant appeal has lodged another appeal and has paid a fee in relation to it; and
  • (b) the same paragraph of subregulation (2A) described both appeals; and
  • (c) the relevant appeal concerns an issue (other than a procedural issue) that is substantially the same as an issue raised in the other appeal.''

17. However, the existence of a practice which has grown up before the enactment of a particular statutory provision like s 14ZZN, cannot govern the interpretation or effect of that provision. Nor can delegated legislation like rules of court, which an Act like the Taxation Administration Act might contemplate as existing, but does not enable to be made. Moreover, O 52B finds its place in a body of procedural rules which, even though some of them are cast in imperative or peremptory terms, does not evince an intention that any non-compliance will render the resultant act null and void. Thus, O 1 r 8 provides;

``The Court may dispense with compliance with any of the requirements of the Rules either before or after the occasion for compliance arises.''

18. On the other hand, non-compliance with s 14ZZN itself, either by exceeding the time limit or by failing to lodge with this Court anything answering the description of an appeal, will nullify the right of appeal conferred by s 14ZZ(a)(ii) of the Taxation Administration Act. An illustration of an exercise in interpretation giving effect to this distinction is afforded by the reasoning of Dixon CJ, McTiernan, Taylor and Windeyer JJ in
Clayton v Heffron (1960) 105 CLR 214 at 247. In my view, Goldberg J gave effect to the distinction in Carter when he held that an application to join proposed applicants to an existing appeal did not amount to lodging an appeal within the meaning of s 14ZZN and so was a nullity. However, it was not necessary for his Honour to consider the effect of a purported appeal lodged in the name of more than one taxpayer or, in respect of more than one objection decision. Accordingly, his Honour's reasoning does not compel the conclusion that a purported appeal, having either of those features, is a nullity and incapable of enlivening the jurisdiction of this Court.

19. It was for these reasons that I ordered, on 20 July, that the Commissioner's motion be dismissed.

ATC 4479


1. The application by motion dated 7 June 2001 be dismissed.

2. The respondent pay the applicant's costs of and incidental to the Notice of Motion, such costs to be taxed in default of agreement.

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