Clyne, Peter Leopold v Deputy Commissioner of Taxation

[1982] FCA 302

Re: PETER LEOPOLD CLYNE
And: DEPUTY COMMISSIONER OF TAXATION
No. B3465 OF 1982
Bankruptcy

COURT

IN THE FEDERAL COURT OF AUSTRALIA

GENERAL DIVISION
BANKRUPTCY DISTRICT OF THE STATE OF NEW SOUTH WALES AND THE AUSTRALIAN CAPITAL TERRITORY
Fox J.

CATCHWORDS

Bankruptcy - Application to further extend time for compliance with a bankruptcy notice - Whether supported by lodgment of notice of appeal to the High Court from a decision of the Full Court of the Federal Court of Australia upholding the dismissal of an application to set aside a bankruptcy notice - Decision discretionary - Public interest considerations.

Bankruptcy Act 1966, s.41

Federal Court of Australia Act 1976, s.33(4)

HEARING

SYDNEY

#DATE 23:12:1982

ORDER

The application be deemed to have been filed and served in due time.

The application be refused.

The applicant pay the costs of the respondent.

JUDGE1

This is an application by Peter Leopold Clyne that the time for compliance with a bankruptcy notice be further extended and, indeed, extended from time to time, until the High Court has heard and determined a certain appeal. The appeal in question is from a decision of the Full Court of the Federal Court of Australia delivered on 17 December 1982. That Court upheld a decision made on 11 October by Mr. Justice Lockhart.

One of the matters sought by the present applicant from Mr. Justice Lockhart, sitting as a Judge in Bankruptcy, was an extension of time to comply with the bankruptcy notice; his Honour did in fact extend the date for compliance until 25 October 1982. The reason for that extension as given by his Honour was to enable the present applicant to comply with the notice. In deciding the appeal against Mr. Clyne, the Full Court of the Federal Court extended the time for compliance until 24 December 1982, which is tomorrow.

The present application was made on 20 December and in the same application an order was sought that the time for service of the application be abridged. Having in mind the course of proceedings before me it is apparent there is no objection to time being abridged in accordance with that application and I so order.

The debt upon which the bankruptcy notice is based was a judgment of the Supreme Court of New South Wales for an amount of $334,826.25. I understand that an appeal from the judgment was taken to the Court of Appeal where it was unsuccessful and that a further appeal has been taken to the High Court. The lodgment of the security for that appeal had the effect of staying execution on the judgment and application was made on behalf of the judgment creditor, the Deputy Commissioner of Taxation, to the High Court to remove the stay. That matter came on for hearing before Mr. Justice Mason, the Acting Chief Justice, and is reported as Clyne v. The Deputy Commissioner of Taxation, 56 A.L.J.R., at p.57. His Honour, for the reasons which he then gave, removed the stay so that, amongst other things, the bankruptcy proceedings - that is to say, the present bankruptcy proceedings - could proceed.

The recent notice of appeal to the High Court is dated 20 December 1982 and I imagine was lodged about that time. It states two grounds; it is not my business to decide on the correctness or otherwise of those grounds of appeal or their prospects of success, except that I should say for the purpose only of deciding the present proceedings that their probable success is not at all evident to me. The appeal was stated in the appeal papers to have been brought as of right. Counsel for the Deputy Commissioner of Taxation, who has opposed the present application, tells me, as has his instructing solicitor in evidence, that it is intended to file a notice of objection to the competency of the appeal on the ground that it does not lie as of right because it does not satisfy the terms of s.33(4) of the Federal Court of Australia Act 1976. Again, whilst it is not my province to make any decision upon this matter except that for the purposes presently in hand, it seems to me that the prospective appellant in the High Court - the present applicant, Mr. Clyne - may have some difficulty in persuading the High Court that the appeal does lie as of right.

This will not preclude an application for special leave, but that is a different matter; there is no intimation before me that any such application would be made, were the necessity to arise.

The essence of the present application, as I have said, is that the appeal has been lodged to the High Court and that it would be reasonable, fair and proper to extend the time for compliance with the bankruptcy notice until that appeal has been determined.

A number of particular matters have been put to me on both sides. On behalf of the Deputy Commissioner, I have a number of exhibits representing proceedings before the Board of Review when Mr. Clyne was challenging some of the income tax assessments in question and before Mr. Justice Lockhart when an application was being made by him to set aside the bankruptcy notice and for time for compliance to be extended, and for other matters. I have also been furnished with three books written by Mr. Clyne. I am therefore in possession of a considerable volume of material, indicating the various applications that have been made by Mr. Clyne and his own attitude to these proceedings and to matters of taxation generally.

I also read the decision of Lockhart J. to which I have referred, the decision of the Full Court of the Federal Court on appeal and the decision of McGregor J. to which I have not yet referred. It was handed down on 15 December last. In that case an application was made to set aside or stay the operation or extend the operation of the bankruptcy notice because there was said to exist a set-off or cross-claim against, inter alia, the Commissioner of Taxation in his personal capacity, arising out of what were alleged to be defamatory comments made by him about Mr. Clyne. That application was also dismissed and I add, in passing, these various orders all included orders that Mr. Clyne pay the costs.

The order of Mason J. to which I have referred was that the costs of the application were to be the respondent's costs in the appeal, the respondent of course, being the Deputy Commissioner of Taxation.

The matter is a discretionary one to be based upon proper principles. I need not rehearse all the remaining facts and I think it is unnecessary to attempt a survey of the decisions upon the application of the relevant section, s.41 of the Bankruptcy Act 1968.

It seems to me that, far from there being a case for an extension of time to comply with the bankruptcy notice, it is very much in the public interest that it not be extended. It is in the public interest that, if Mr. Clyne is to become bankrupt for not satisfying the bankruptcy notice, the time to which his bankruptcy should relate back be fixed at as early a time as is possible. The original notice was to be complied with on 13 August 1982 and that has already been extended by several applications for a total period of something over four months. If, in the ultimate, it should appear that Mr. Clyne has any defence of substance in relation to the debts claimed to be payable or any other successful defence to the making of a sequestration order against him, those matters can be brought forward at the time the petition is heard. Non-compliance with the bankruptcy notice leads simply to an act of bankruptcy. This is of course not to understate its significance, or the detrimental effect it can have. There are a number of acts of bankruptcy and non-compliance with a bankruptcy notice is one of them. The commission of an act of bankruptcy is a first and necessary step towards the making of a sequestration order, but only a step.

It would seem to me that it is in the public interest, if Mr. Clyne does not satisfy the bankruptcy notice in question, that a petition be filed with great promptness and brought before the Court as soon as this can reasonably be done.

I understand from the arguments that have been presented and, indeed, from the whole attitude of the applicant, that it is highly probable and virtually certain that the bankruptcy notice will not be complied with. As I have said, it is for a substantial amount and it is for taxation. Mr. Clyne should not understand that he is in some specially privileged position so far as his meeting of public debts is concerned.

It is said on his behalf that he has a flair for publicity and a great sense of humour or fun in relation to what he has written and the ways in which he deliberately seeks to obstruct, not simply the administration of justice but the proper administration of the affairs of our society. For myself, I think he is a pitiful character, quite contemptible, and an utter humbug. The sooner these matters are brought to finality the better. I refuse the application with costs.