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- McEwan v Commissioner of Taxation[2024] QSC 26
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McEwan v Commissioner of Taxation[2024] QSC 26
McEwan v Commissioner of Taxation[2024] QSC 26
SUPREME COURT OF QUEENSLAND
CITATION: | McEwan v The Commissioner of Taxation [2024] QSC 26 |
PARTIES: | JULIE McEWAN (plaintiff) v THE COMMISSIONER OF TAXATION & ORS (first defendant) |
FILE NO/S: | BS971/22 |
DIVISION: | Trial |
PROCEEDING: | Claim |
ORIGINATING COURT: | Supreme Court |
DELIVERED ON: | 5 March 2024 |
DELIVERED AT: | Brisbane |
HEARING DATE: | 19 February 2024 |
JUDGE: | Freeburn J |
ORDERS: |
|
CATCHWORDS: | PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – ENDING PROCEEDINGS EARLY – DISCONTINUANCE AND WITHDRAWAL – where the plaintiff seeks leave to discontinue proceedings against second defendant – where plaintiff seeks leave to avoid delay to trial – where there is no injustice or prejudice to other parties alleged – whether leave should be granted with condition that plaintiff can not commence proceedings against second defendant without leave of the court PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – COSTS – DISCONTINUANCE OF OR WITHDRAWAL FROM PROCEEDING – where costs are to be determined for the departing defendant – where the plaintiff has elected to discontinue proceedings against the departing defendant – where the merits of the plaintiff’s case are not known – whether the question of costs should be reserved PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – TIME, EXTENSION AND ABRIDGMENT – where defendants seek extension of time to file lay evidence – where extensions have previously been given – where no prejudice is alleged from proposed extension – where there is three-month duration till trial – whether extension should be granted |
COUNSEL: | The plaintiff was self-represented M R Wilkinson and O Cook for the Commonwealth Defendants D Favell for the State Defendants |
SOLICITORS: | The plaintiff was self-represented Australian Government Solicitor for the Commonwealth Defendants Crown Law for the State Defendants |
REASONS
- [1]On 19 February 2024 I reviewed this proceeding as part of regular reviews of proceedings on the self-represented litigants’ list.
- [2]The parties agitated a number of issues which I was unable to deal with in the time available. The issues reserved were as follows:
- the plaintiff’s application for leave to discontinue against the second defendant (Mr Rains);
- the appropriate orders as to the costs of the discontinuance; and
- the Commonwealth Defendants’ application for an extension of time until 14 March 2024 for the filing of their lay evidence.
- [3]Because I was concerned that the limited time available may not have enabled the parties to say all they wished to say on those three issues, I invited the parties to file and serve written submissions on the three issues. Ms McEwan has now filed and served five pages of submissions. The Commonwealth Defendants have filed and served eight pages. The State Defendants did not file and serve any written submissions on these issues.
The Application for Leave to Discontinue
- [4]At the review Ms McEwan proposed orders that included the following:
“Pursuant to R68 of the UCPR 1999 Qld the court on the indulgence of the Second Defendant Mr Anthony Rains be removed as a party to the proceedings.”
- [5]Rule 68 of the Uniform Civil Procedure Rules 1999 does not expressly deal with discontinuance of a proceeding or a cause of action. Of course, the court has a wide discretion to order separate trials or separate causes of actions, or to stay a proceeding, where there is the prospect of prejudice, delay or inconvenience.
- [6]The rule that expressly deals with a situation where a plaintiff chooses to discontinue civil proceedings is rule 304 which provides a regime for a party to:
- voluntarily discontinue a proceeding, or part of a proceeding, before a defence or an affidavit in response is filed; and
- specifies that, after that point in the proceeding, the party may only discontinue the proceeding, or part of the proceeding with the court’s leave.
- [7]Obviously, on an application for leave to discontinue, the question is whether there is injustice or prejudice to the other parties. That said, leave to discontinue will ordinarily be given because it is recognised that it is not desirable to force the plaintiff, against his or her will, to continue to litigate, or to continue to litigate against a particular party.[1]
- [8]In this case, Ms McEwan now wishes to discontinue her proceeding against Mr Rains because there are parallel criminal proceedings against Mr Rains[2] and Mr Rains has brought an application to stay these proceedings until the parallel criminal proceedings against Mr Rains are determined.
- [9]In short, Ms McEwan wishes to discontinue these proceedings against Mr Rains so that there will be no need for the court to hear Mr Rains’ stay application and this civil proceeding can continue to trial against the defendants other than Mr Rains.
- [10]No party objects to the discontinuance of this proceeding in so far as it is brought against Mr Rains. No injustice or prejudice is alleged.
- [11]It follows that, pursuant to rule 304(2) the court will grant leave for Ms McEwan to discontinue her proceeding against Mr Rains.
A “No Further Proceeding” Condition?
- [12]The Commonwealth defendants argue that the court should only grant Ms McEwan leave to discontinue the proceeding against Mr Rains on the condition that she does not commence any further proceedings against Mr Rains in any court based on the same allegations and causes of action.
- [13]As the Commonwealth Defendants point out, Chesterman J imposed such a condition on the plaintiff’s discontinuance against a defendant in Wickham v Bell Securities Pty Ltd.[3] In that case His Honour:
- noted that rule 304 does not, in terms, permit the court to impose conditions on the grant of leave to discontinue but rule 310 clearly contemplates that conditions may be imposed on the grant of leave;[4]
- questioned what would happen if a party commenced proceedings in breach of such a condition, and assumed that the breach of such a condition would provide a persuasive basis for the court to stay or strike out the new proceeding;[5]
- decided that, in the circumstances of that case, it was appropriate to impose conditions on the grant of leave to discontinue.[6]
- [14]Implicit in His Honour’s analysis is the limited utility in an order which imposes a condition on a party restricting a party from commencing similar proceedings. The breach of such a condition would inevitably lead the parties back to court. It is also important to recognise that it is necessary for courts to be cautious about making orders that restrict a party from litigating. For my part, any such condition should be expressed as subject to the court’s leave.
- [15]The Commonwealth Defendants argue that such a condition is appropriate in this case for these reasons:
“(a) Firstly, the proceeding has been long-running and has involved substantial interlocutory disputes. It was commenced by the plaintiff in January 2022. Since then, there have been numerous iterations of her Statement of Claim, noting that a Seventh Further Amended Statement of Claim was purportedly filed (without leave or consent) on 12 January 2024. The parties have undertaken disclosure, exchanged disclosure lists and have largely completed the preparation of lay evidence.
- Secondly, the plaintiff commenced a private prosecution against Mr Rains in which she makes a number of allegations that overlap with the allegations she makes in the present proceeding (the Private Prosecution). That is, the plaintiff has commenced multiple proceedings against Mr Rains making similar or the same allegations. She has indicated on several occasions that she plans to institute future proceedings against him too. In those future proceedings, should they eventuate, the plaintiff ought not be permitted to try and litigate what she is here seeking to forego.
- Thirdly, the plaintiff’s reasons for discontinuance are patently, and unambiguously, because Mr Rains’ involvement as a defendant in the private prosecution will impact the procedural timetable of this matter. It is the plaintiff who has brought about this state of affairs. It is the concurrent civil and criminal proceedings, both instituted by her, against the same defendant (Mr Rains) which has given rise to the application for a stay filed by in this proceeding. By seeking to discontinue this proceeding, the plaintiff has elected to give primacy to the Private Prosecution (and not this proceeding). Mr Rains ought not be put to the disadvantage of having to defend the Private Prosecution with the risk that the plaintiff might seek to re-commence further civil proceedings about the same allegations or cause of action.
- Fourthly, the plaintiff’s conduct to date suggests that she will seek to relitigate her claims against Mr Rains later then it suits her better to do so. A grant of leave for the plaintiff to discontinue will, without more, lead to injustice to Mr Rains. There will be nothing preventing the plaintiff from trying to sue him again for the same cause of action and the same allegations. It is respectfully submitted that the Court should not tolerate that conduct.”
- [16]As to the first of those grounds, it is true that the path of this litigation has been long and tortuous. The implication is that Ms McEwan is responsible for all of that. It is true that Ms McEwan has amended her statement of claim on a number of occasions. But the changes have not altered her case significantly. Disclosure from the Commonwealth Defendants has been delayed and extensions have been sought. But it is doubtful that I can conclude on the evidence that the difficulties are entirely or even substantially Ms McEwan’s responsibility. Certainly, though, the long and tortuous nature of this proceeding is a good reason for ensuring that no similar litigation is embarked on without good reason.
- [17]There are two aspects to the second ground. One is that the allegations in Ms McEwan’s private prosecution overlap with the allegations made in this civil proceeding. That much is true but, from this distance, the court cannot conclude that there is an abuse of process element to that overlap. The second aspect is that Ms McEwan has threatened to commence future proceedings.[7] It is difficult to know what future proceedings she has in mind, but it is undesirable for a litigant to be threatened with a multiplicity of proceedings, especially when (as explained below) the real defendant is the Commonwealth.
- [18]The third ground is that Ms McEwan has brought about the present state of affairs because she chose to bring the private prosecution. However, the problem is that the court cannot assess the merits of that case. The prosecution may be well-founded or baseless.
- [19]The fourth ground is a legitimate concern. Mr Rains ought not be put in a position where he is constantly engaged in litigation or subject to the threat of litigation. Ms McEwan ought not be permitted to engage in a never-ending trench warfare. I say that not simply because of the effect of litigation on the litigants. Battles like these involves the expenditure of significant public resources.
- [20]Ms McEwan puts three arguments. First, she argues that it was Mr Rains who sought to stay the civil proceeding. Second, that he has left it late. And third, that Mr Rains consented to allow her to proceed against him civilly on seven days’ notice.
- [21]As to the first of those arguments, Ms McEwan seeks to characterise Mr Rains’ application for a stay as seeking an “indulgence”. I do not agree that a party seeking a stay so as to retain his right to silence and maintain his privilege against self-incrimination has that character. Those legal rights are substantive rights.
- [22]As to the second, Ms McEwan is right that there has been some delay in the application for a stay. But, that is not a powerful factor here where the question is whether, in the future, Ms McEwan ought to be permitted to continue to litigate the same or similar issues.
- [23]As to the third, no evidence is provided of any such consent.
- [24]Another factor relevant to the discretion is that Ms McEwan sues the Commissioner for Taxation and various officers of the Australian Tax Office. In that sense the substantive defendant is the Commonwealth.[8] The likelihood is that the Commonwealth stands behind each of the individual defendants. That means that any further litigation which Ms McEwan might wish to pursue against Mr Rains, or other officers of the Commonwealth, would have limited utility. The principal claim is the one she makes against the Commonwealth.[9]
- [25]In all the circumstances, it is hard to see any justification for Ms McEwan discontinuing against Mr Rains now, only to bring similar proceedings against him at some time in the future. However, for the reasons explained above, the condition should be subject to the leave of the court. That will enable a court to assess whether it is proper, in the circumstances, for Ms McEwan to be permitted to continue to fight this war on another front. No doubt the court hearing such an application will take into account the result of this proceeding, the precise formulation and merits of the proposed claim, and Ms McEwan’s reasons wishing to re-activate her litigation against Mr Rains.
Costs
- [26]The usual price for discontinuance is that the party discontinuing is ordered to pay the departing defendant’s costs.[10] However, as the Commonwealth Defendants point out, there is a broad discretion under rule 307(2).
- [27]The Commonwealth Defendants acknowledge the impracticality of assessing Ms McEwan’s eventual prospects in this proceeding. They argue that this is not one of those cases where there has been some supervening event (such as a change to a statute) and it is not a case where there has been a settlement or where the defendant now desists from the impugned conduct. Rather, as the Commonwealth Defendants argue, Ms McEwan has surrendered her case against Mr Rains, and she has done that in order to avoid the stay application. They say she has elected to pursue her private criminal prosecution rather than the civil proceeding against Mr Rains.
- [28]In my view that is not an accurate portrayal of the current situation. Rather than a surrender, Ms McEwan’s decision to discontinue is better characterised as a tactical withdrawal. In so far as there was an election by Ms McEwan, it was an election forced on her. There is little doubt that, if she could, she would have continued with both the civil proceeding against all defendants and the criminal prosecution against Mr Rains. In the face of Mr Rains’ stay application, Ms McEwan did not wish to risk any further delays to the civil proceeding.
- [29]And so, this case should not be categorised as one of those cases where the plaintiff has surrendered or capitulated.[11]
- [30]Nor is this a case where one can discern unreasonable conduct on the part of either party. In Re Minister for Immigration and Ethnic Affairs; Ex Parte Lia Qin[12] McHugh J described the reasonableness of the conduct of the parties as the guiding principle in the absence of a trial on the merits.
- [31]There is also the fact that the civil case will be proceeding against the continuing defendants, including the Commonwealth. As I have explained, the Commonwealth employs all of the individual Commonwealth Defendants and the same solicitors and counsel have acted for all of the Commonwealth Defendants.[13] In that sense the separate costs of Mr Rains are not likely to be significant.[14]
- [32]The Commonwealth Defendants argued that:
- unless a costs order is made, Mr Rains will be deprived of the benefit of the operation of rule 312 of the Uniform Civil Procedure Rules 1999; and
- merely reserving the costs provides no protection against the plaintiff trying to sue him again, for the same thing, whenever it suits her.
- [33]It is true that rule 312 gives a benefit to a departing defendant. The benefit is that any future proceeding based on the same or similar facts can be stayed if the outstanding costs are unpaid. But the benefit is given to a departing defendant who has the benefit of costs order or otherwise has an entitlement to costs.[15] And so there is an element of circular reasoning here. The argument is that Mr Rains ought to have his costs so that he can secure the benefit of rule 312. But that rule only applies where a departing defendant has an entitlement to costs. In any event, the condition attaching to the proposed order will secure for Mr Rains some protection against having to meet Ms McEwan again on the same battleground.
- [34]Importantly, the merits of that case are not yet known. If Ms McEwan’s case succeeds, she may well have a sound argument that she is entitled to all of the costs of her proceeding, including the costs of her discontinued case against Mr Rains.[16] On the other hand, if Ms McEwan’s case fails the defendants will have a strong case that Ms McEwan should pay the costs of all defendants, including Mr Rains.
- [35]In the circumstances, the discretion should be exercised to reserve the costs for later consideration.
Extension of time
- [36]The Commonwealth Defendants seek an extension of time within which to file the balance of their lay evidence until 14 or 15 March 2024.[17] The context is as follows:
- On 21 November 2023 the court ordered that the Commonwealth and State defendants file and serve the first tranche of their evidence-in-chief by 21 December 2023;
- On 12 December 2023 the court ordered the Commonwealth Defendants to file and serve their evidence-in-chief by way of affidavit by 16 February 2024;
- During the course of preparing the evidence Mr Rains advised, through his own lawyers, that he was exercising his right to silence;
- The proceeding was reviewed on 19 February 2024 and the extension was sought;
- At the same review the proceeding was set down for a trial on a date to be fixed;
- Subsequent to the review the trial has been set down for two weeks commencing on 27 May 2024;
- The plaintiff and the State Defendants have filed and served all of their material;
- The Commonwealth Defendants have filed some of their material.
- [37]It is true that, as Ms McEwan says, each of the parties have sought extensions of time for their material. It is true also that the Commonwealth Defendants have access to the resources of the Commonwealth.
- [38]That said, no prejudice is alleged by reason of the proposed extension. The trial is nearly three months away and there is no suggestion that the plaintiff cannot be ready if the further material is filed and served by 15 March 2024 – about 10 weeks prior to trial.
- [39]The extension should be granted.
Footnotes
[1] See Covell Matthews & Partners v French Wools Ltd [1997] 2 All ER 591 at 594; [1997] 1 WLR 876 at 879.
[2] Ms McEwan initiated those criminal proceedings.
[3] [2006] QSC 167.
[4] [2006] QSC 167 at [25].
[5] [2006] QSC 167 at [26].
[6] [2006] QSC 167 at [27].
[7] Ms McEwan did not dispute that.
[8] For present purposes I am considering only the Commonwealth Defendants.
[9] The position is similar for the State defendants.
[10] UCPR r 307.
[11] In Fairfield Services Pty Ltd (in liq) v Leggett (2020) 5 QR 50 at [19]-[24] Bond J discussed those case that involved a surrender or a capitulation.
[12] (1997) 186 CLR 622 at 624.
[13] Mr Rains has separate representation in the criminal prosecution from Ashurst Australia. That firm filed the stay application in December 2023.
[14] The Commonwealth Defendants argue that there are separate costs referrable to Mr Rains only. They comprise an aspect of disclosure of Microsoft Office Communicator records. However, those separate costs are not quantified or argued to be significant.
[15] The plaintiff may become liable to a departing defendant’s cost without an order. See, for example, UCPR r 307(1).
[16] Ms McEwan is not presently represented but she has foreshadowed having lawyers represent her at the trial.
[17] The Commonwealth Defendants submissions speak of an extension until 14 March 2024. However, their draft order sought an extension until 15 March 2024. The extra day is not significant. Incidentally Ms Gill’s affidavit filed on 16 February 2024 in support of the extension refers to the material being completed within 4 weeks.