Pullen v Deputy Commissioner of Taxation
[2007] QDC 55
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- Unreported Judgment
- Pullen v Deputy Commissioner of Taxation[2007] QDC 55
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Pullen v Deputy Commissioner of Taxation[2007] QDC 55
Pullen v Deputy Commissioner of Taxation[2007] QDC 55
DISTRICT COURT OF QUEENSLAND
CITATION: | Pullen v Deputy Commissioner of Taxation [2007] QDC 055 |
PARTIES: | KEVIN MICHAEL PULLEN Appellant V DEPUTY COMMISSIONER OF TAXATION Respondent |
FILE NO/S: | Maroochydore D255/2006 |
DIVISION: | Appellate |
PROCEEDING: | Appeal |
ORIGINATING COURT: | Magistrates Court of Queensland, Caloundra |
DELIVERED ON: | 30 March 2007 |
DELIVERED AT: | Maroochydore |
HEARING DATE: | 29 March 2007 |
JUDGE: | Alan Wilson SC, DCJ |
ORDER: | 1. Appeal dismissed 2. Appellant to pay respondent’s costs of and incidental to the appeal assessed on the standard basis |
CATCHWORDS: | APPEAL – APPEAL FROM MAGISTRATE – DEFAULT JUDGMENT – APPEAL FROM ORDER REFUSING TO SET ASIDE DEFAULT JUDGMENT – whether judgment obtained irregularly – whether, if obtained regularly, judgment should be set aside at the discretion of the court Uniform Civil Procedure Rules, rr 111 & 290 Cases considered: Deputy Commissioner of Taxation v Gruber (1998) 43 NSWLR 271 Deputy Commissioner of Taxation v Johnstone [2006] QSC 61 |
COUNSEL: | Appellant in person Mr K J Bell, solicitor for respondent |
SOLICITORS: | Appellant in person ATO Legal Services for respondent |
- [1]This is an appeal from the decision of a Magistrate sitting at Caloundra on 23 August 2006 which refused the appellant’s application to set aside a default judgment entered on 1 June 2006.
- [2]By a statement of claim filed in the Landsborough Registry of the Magistrates Court on 29 June 2005 the respondent, the Deputy Commissioner of Taxation (DCT), claimed $29,127.36 from the appellant for an ‘RBA Deficit Debt in respect of primary tax debts payable under the BAS provisions … and primary tax debts payable as administrative penalties …’. No defence was filed and on 1 June 2006 a default judgment was entered by her Honour Magistrate Fingleton in the sum of $29,325.66 (including $198.30 costs).
- [3]The appellant filed an application to set that default judgment aside on 27 July 2006. It came before the court at Caloundra on 9 August 2006. The appellant claimed that he had not been served with the claim and statement of claim and the learned Magistrate acceded to his application for an adjournment, but only to 23 August.
- [4]A full hearing took place before the learned Magistrate on that day. After receiving written and oral submissions, and a full hearing, she refused the appellant’s application, saying:
I do believe … that you have been given adequate time and in fact consideration by the plaintiff and the court to properly show the court that you could properly defend this matter. This is my decision. I have read all the material that has been put before me, including the various affidavits. I decide that there has been proper service of … the claim, that the defendant has no defence capable of being proved for the matter to go to hearing based on the sworn material before me from the plaintiffs.
- [5]In his written and oral submissions in this appeal the appellant relied principally upon two matters: his assertion that he had never been properly served with the originating proceedings; and that, at the hearing on 23 August the DCT misled the court about the nature of the judgment debt.
- [6]There was evidence before the Magistrate, in the form of an affidavit from a process server, that the originating proceedings had been served by leaving a copy of the documents with a female person at an address in Landsborough. That person agreed to receive the documents on the appellant’s behalf but, as the process server swears, said after she had looked at them that she would not accept them. The process server placed them on the ground in her vicinity. At the hearing on 23 August the appellant tendered a statutory declaration from his estranged wife to the effect that she was the person with whom the documents had been left and that, after she looked at them, she placed ‘cancellation marks on every page of the document’ and then posted them to the Australian Taxation Office.
- [7]Although the Uniform Civil Procedure Rules (UCPR) generally require personal service, r 111 makes special provision for service of documents in Magistrates Court proceedings. The effect of that rule is that documents required to be personally served may be served by leaving the documents with someone who is apparently an adult, living at the person’s ‘relevant address’. The appellant did not adduce any evidence to suggest that the address at which the female person was served was not his relevant address. He certainly received the documents at the hearing on 9 August and then had two weeks to prepare affidavit evidence in support of his application pursuant to r 290 UCPR. The circumstances do not suggest, then, that the judgment was obtained irregularly.
- [8]When a default judgment has been regularly obtained, it may nevertheless be set aside at the discretion of the court. The criteria relevant to an application of that kind were identified by Atkinson J in Deputy Commissioner of Taxation v Johnstone [2006] QSC 61: whether there has been a satisfactory explanation of the failure to defend; whether any delay precludes the relief sought; and, whether the defendant has a prima facie defence on the merits.
- [9]It is appropriate to give the appellant the benefit of any doubt in respect of the first element, and to accept that the delay occurred because, although service was lawfully affected, he did not receive the documents till some time later. It was not submitted, for the respondent, that any delay on the appellant’s part precludes the relief he seeks. The essence of his case in respect of the third element – establishing a prima facie defence on the merits – rests on the submission that an affidavit filed by the DCT in response to the appellant’s application to set the default judgment aside contained incorrect information.
- [10]The statement of claim relies upon what is called a ‘Running Balance Account’ (RBA) in respect of sums alleged to be due by the appellant under the BAS provisions, and primary tax debts. An affidavit from a Ms Crump on behalf of the respondent filed on 16 August 2006 swore that most of the amount claimed by the DCT was comprised of outstanding GST liabilities. Another affidavit about the debt, by a Ms Clarke and sworn 22 August 2006, appears to have been filed by leave before the learned Magistrate at the hearing on 23 August.
- [11]In an affidavit filed on 13 February 2007 Ms Jayaratne of the ATO says:
- I refer to the affidavit in the proceedings in the court below sworn on 15th August 2006 by Jennifer Ann Crump. The description in that affidavit of the tax debt the subject of those proceedings as comprising GST was incorrect, in that the three liabilities stated in the three BAS and claimed in the proceedings were unpaid instalments of Pay As You Go Income Tax.
- The Commissioner gives each PAYG Instalment taxpayer a Notice of Instalment Rate. The taxpayer is then required to pay PAYG instalments directly to the Commissioner, with BAS issuing to the taxpayer, usually on a quarterly basis showing a debit amount entered for that quarter’s instalment then due. These instalments are usually based on the taxpayer’s ordinary income for a past period, usually the amount of annual income shown in the last tax return lodged.
- The instalments determined by the Commissioner can be varied, but the appellant did not exercise that right – the three instalments set out in the three BAS were calculated using the appellant’s income showing his 1999 tax return, which was then the most recent tax return lodged by him.
- The due date for each instalment payment generally coincides with the taxpayer’s BAS quarterly payment obligation. Under the Running Balance Account regime, moneys otherwise due for a PAYG Instalment may be offset where applicable against a credit otherwise due to the taxpayer, for example, where GST has been paid and claimed on purchases.
- Unpaid amounts of quarterly PAYG instalments are collected under Schedule 1 Part 4-15 of the TAA.
- The PAYG Quarterly Instalment amounts due were printed on the BAS forms that the appellant signed and lodged. Copies of those BAS forms in electronic form are exhibit ‘JAC-2’ to Ms Crump’s affidavit, and in hard copy form and signed by the appellant as pages 20 to 25, exhibit E, to his Outline of Argument.
- On 14 August 2002 the appellant was advised of a change made by the Commissioner to his BAS for the period 1st April 2002 to 30 June 2002, by way of an adjustment to the PAYG Instalment amount in Item 5A. Now produced and shown to me and marked with the letters ‘AJ-2’ is a true copy of a Business Activity Statement Change Advice issued to the appellant that day.
(emphasis added)
- [12]At the hearing before the Magistrate the appellant, despite assertions in his Outline that he had been misled about the nature of the tax debt the subject of the judgment he sought to have set aside, correctly identified the tax liability as one based on an estimate, and described such a situation as unjust[1]. Further, the PAYG Quarterly Instalments amounts due were printed on the BAS forms which the appellant signed, and lodged[2]. Hence, while the mis-description of the nature of the primary tax debt in Ms Crump’s affidavit was admitted, in open court, by the respondent’s representative, no injustice appears to flow from it. The actual debt was set out in the statement of claim and shown to be a potential component of an RBA; it was acknowledged by the appellant in his oral submissions as a component of the respondent’s claim against him; and, no evidence has been adduced showing it was not properly claimed in the proceedings.
- [13]Once this is understood, it is clear the defendant is unable to establish a prima facie defence, on the merits, to the claim on which the default judgment is founded. The appellant sought to rely upon the decision in Deputy Commissioner of Taxation v Gruber (1998) 43 NSWLR 271[3] in which it was held that any notice issued by the DCT must be accurate in substance and accurately set forth any amount paid. However, the facts and circumstances there are distinguishable from the present case. Here, there is no evidence to show that the notices which preceded the proceedings or the claims in the proceedings themselves, were inaccurate. All that has happened is that an affidavit filed to resist an application to set aside the default judgment contained an erroneous statement about the source of the debt in the RBA.
- [14]No error on the part of the learned Magistrate has been shown. While the evidence before her contained a mistake, her conclusion about the absence of a prima facie defence was, with respect, entirely correct. Setting aside her decision, and judgment, would be a futility. For these reasons, the appeal is dismissed. The appellant should also pay the respondent’s costs of and incident to the appeal assessed on the standard basis.