Husband and wife taxpayers (“the Oswals”) have been successful in their application before the Federal Court to seek mediation of their tax dispute with the Commissioner to be heard by a judge in Victoria who was also conducting the mediation of their commercial dispute with another party. The Court arrived at its decision essentially on the basis that the potential resolution of the commercial dispute “may also have a significant impact” upon the resolution of their tax dispute – or at least that the ability of either proceedings being settled may be affected by settlement of the other proceedings.  This was despite the fact that the tax dispute had been heard and judgment reserved.

In agreeing to the taxpayers’ application the Court first noted that the fact that a previous attempt to mediate the tax dispute had failed did not mean that another mediation should not be ordered – especially as there had been significant developments in the tax dispute which substantially narrowed and focused the differences between the parties. However, the Court ordered, as per the Commissioner’s request, that the mediation take place in Sydney a week later than sought by the taxpayers in order that the Commissioner have available at the mediation those advisers and decision-makers who were significantly involved in the conduct of the dispute.

(Oswal v FCT (No 6) [2016] FCA 1007, Federal Court, Pagone J, 22 August 2016.)