In a complex procedural matter, the Federal Court has refused the application of 2 taxpayers to transfer the whole or part of their proceedings to the NSW Supreme Court. At the same time, it held that the taxpayers’ applications to have assessments set aside should be stood over generally in the circumstances. The taxpayers brought an application under s 39B of the Judiciary Act1903 seeking, among other grounds, to have the assessments issued to them held invalid and quashed (which were subject to appeal in the Federal Court).
The taxpayers were also defendants in criminal proceedings in the Supreme Court having been charged with conspiring with each other with the intention of dishonestly influencing the Commissioner in the exercise of his duties as a public official contrary to the Criminal Code Act 1995. The taxpayers also sought to impugn the validity of search warrants under which information was obtained that related to the criminal proceedings. In the upshot, the taxpayers sought to have the matter transferred to the NSW Supreme Court.
However, the Federal Court refused to transfer the matter to the NSW Supreme Court even though it found it had no jurisdiction in respect of those parts of the application by the taxpayer to impugn the validity of the search warrants. It refused to do so for, among other reasons, that a transfer would only be a temporary removal of jurisdiction from the Federal Court, as the s 39B application would to a large extent be a Federal matter and because there were tax appeals brought by both of the applicants in the Federal Court.
The Federal Court also refused to strike out other grounds in relation to the validity of the assessments and have these matters transferred to the Supreme Court as the Federal Court noted that it would again have jurisdiction over the issues once the prosecution proceedings were concluded in the Supreme Court. Finally, the Federal Court held that in the matters bought before it under s 39B should be generally stood over, in the absence of something exceptional occurring.
(McCarthy v FCT [2013] FCA 715, Federal Court, Robertson J, 25 July 2013.)
[LTN 143, 26/7/13]