Decision impact statement
Caporale v Deputy Commissioner of Taxation
Venue: Federal Court of Australia
Venue Reference No: NSD 590 of 2013
Judge Name: Robertson J
Judgment date: 9 May 2013
Appeals on foot: No
Decision Outcome: Favourable to the Commissioner
Impacted Advice
Relevant Rulings/Determinations:- None
Subject References:
Constitutional law
Legal Services Directions 2005
Model litigant obligations
 This decision has no impact for ATO precedential documents and Law Administration Practice Statements. |
Précis
Outlines the ATO's response to this case which concerns the constitutional validity of provisions relating to the Legal Services Directions. The taxpayer sought to raise allegations of a breach of the Model Litigant Obligations before a court.
Brief summary of facts
On 5 April 2013, the taxpayer commenced proceedings invoking section 39B of the Judiciary Act 1903, essentially challenging the constitutional validity of subsections 55ZG(2) and (3) of that Act. Those sections relate to the Legal Services Directions 2005, issued by the Attorney-General pursuant to section 55ZF of that Act. Those directions include the Commonwealth's obligation to act as a model litigant.
Justice Robertson set out aspects of the taxpayer's claim for interlocutory relief; extracts of her affidavit; and uncontroversial facts. The background does not need to be reproduced. It is sufficient to repeat Robertson J's observations at [4]:
"The applicant's point was that the Model Litigant Policy, which forms Appendix B to Schedule 1 to the Legal Services Directions 2005 made by the Attorney-General pursuant to s 55ZF of the Judiciary Act 1903, had not been complied with by the respondent; that this gave rise to legal rights in her; and the relevant provisions of s 55ZG of the Judiciary Act 1903, ss 55ZG(2) and (3), were invalid to the extent that they purported to prevent those rights from arising or being enforceable in the courts."
Issues decided by the court
Subsections 55ZG(2) and (3) of the Judiciary Act 1903 provide that:
- (2)
- Compliance with a Legal Services Direction is not enforceable except by, or upon the application of, the Attorney-General.
- (3)
- The issue of non-compliance with a Legal Services Direction may not be raised in any proceeding (whether in a court, tribunal or other body) except by, or on behalf of, the Commonwealth.
The taxpayer's challenge to the validity of subsections 55ZG(2) and (3) failed.
His Honour held that "no private rights are conferred by Appendix B "The Commonwealth's obligation to act as a model litigant": at [39]. That "[t]he terms of [provisions in the Legal Services Directions] indicate an intention that the Directions are a means of control by the Attorney-General of Commonwealth legal work. In my opinion they are not designed to create obligations owed by the persons or bodies referred to in s 55ZG to others, especially other litigants" at [44]. And, at [50], that:
"... the provisions do not direct courts that they should not, for example, enforce or give effect to a right which a litigant has. Rather, the provision is a corollary of the limited nature of the obligations and to whom they are owed: a litigant may not rely on a breach of an obligation not owed to him or her."
ATO view of Decision
We do not consider the decision to have broader implications.
Administrative Treatment
Implications for ATO precedential documents (Public Rulings & Determinations etc)
N/A
Implications on Law Administration Practice Statements
N/A