In Commissioner of Taxation v Multiflex Pty Ltd  FCA 1316, Justice Edmonds granted the Commissioner’s application that the orders of the Full Court in Commissioner of Taxation v Multiflex Pty Ltd  FCAFC 142 be stayed pending an application by the Commissioner for special leave to appeal to the High Court. A discussion of the decision of the Full Court can be found here.
The stay did not come cheap for the Commissioner, who was required to pay half of the refunds in issue as a condition of the stay being extended to 13 December 2011 (with the hope that the application for special leave can be heard at the sitting on 9 December 2011 – the judgment states that the Commissioner filed an application for special leave was filed on 15 November 2011 and that an application for expedition of the application would also be filed). The High Court list shows that the expedition application will be heard before Gummow J on Monday 21 November 2011 at 9.30am at High Court in Melbourne (by video link with Sydney).
The decision of Edmonds J is interesting. His Honour appeared to take the view that the threshold for the Federal Court granting a stay was lower than for the High Court. His Honour referred to the following statement of Brennan J in Jennings Construction Limited v Burgundy Royale Investments Pty Ltd (1986) 161 CLR 681 at 684:
A stay to preserve the subject-matter of litigation pending an application for special leave to appeal is an extraordinary jurisdiction and exceptional circumstances must be shown before its exercise is warranted. [emphasis added]
Nevertheless, his honour found that the threshold in the Federal Court would not seem to require ‘exceptional’ or ‘special’ reasons for the stay, merely a requirement on the part of the applicant for a stay pending the determination of an appeal to demonstrate ‘a reason or an appropriate case to warrant the exercise of discretion in his favour’.
His Honour made the following findings:
- he was far from satisfied on the evidence that a stay was required to preserve the subject matter of the litigation;
- there was a real prospect that the High Court would conclude that it was not appropriate to grant special leave;
- the refusal of the Commissioner to pay the refunds would cause loss to Multiflex.
Notwithstanding the above matters, his Honour found that, marginally, the balance of convenience lay in favour of granting the stay on the conditions set out in the orders.
The Court also noted that if the High Court does not grant the Commissioner’s application for expedition, or if it is granted and special leave is given, it would be open to the Commissioner to apply for a further stay of the Full Court’s orders. Given the statement of Brennan J referred to above, one might think that the Commissioner would face significant difficulties in such an application.