Deputy Commissioner of Taxation (Cth) v Hooper (No 3)
[2006] VSC 206
•5 June 2006
| IN THE SUPREME COURT OF VICTORIA | Not Restricted | |
AT MELBOURNE
COMMON LAW DIVISION
No. 5544 of 2002
| DEPUTY COMMISSIONER OF TAXATION OF THE COMMONWEALTH OF AUSTRALIA | Plaintiff |
| V | |
| ANTHONY EDWARD HOOPER | Defendant |
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JUDGE: | HANSEN J | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 5 June 2006 | |
DATE OF JUDGMENT: | 5 June 2006 | |
CASE MAY BE CITED AS: | Deputy Commissioner of Taxation (Commonwealth) v Hooper (No 3) | |
MEDIUM NEUTRAL CITATION: | [2006] VSC 206 | |
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Income tax - Proceeding to recover income tax, additional tax, interest and charges for late payment – Allocation of payments – Judgment for plaintiff.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr P G Sest | ATO Legal Services |
| For the Defendant | Mr R E Cook | S V Winter & Co |
HIS HONOUR:
Following refusal of the adjournment application, counsel for the defendant did not call any evidence additional to that which had already been given by the defendant on his own behalf. I then heard closing submissions by counsel, which I am now able to deal with by way of judgment in the proceeding. I do not think that there is great advantage in reserving my judgment. Doubtless, if I did, it would be expressed with greater felicity and, perhaps, elaboration, but I think it is better that I venture forth now to conclude the matter as I consider appropriate.
I should say that the submissions of counsel are clear enough and will, doubtless, be well recorded in the transcript. I had the advantage of a written outline from the plaintiff which serves actually to express the essence of his submissions in the case. I have initialed that outline and it will be placed on the file. That submission of the plaintiff has been expanded in final address to take account of matters that have been put by counsel for the defendant.
As I said earlier, the defendant filed an amended defence today which identified that which was relied upon by way of defence to the claim. That came down to two matters.
Firstly, an amount of $61,764.49 which, in paragraph 9 of the amended defence, was stated to have been wrongly retained and applied by the plaintiff in purported payment of additional tax and interest alleged to have been incurred by the defendant for late payment of various amounts of tax for the years ended 30 June 1987 to 1991. Particulars are provided of the allegation.
Then there is included within the particulars a second sum, $6,346.44, which is the aggregate of five sums which are set out, and as to which it is said that "Upon examination of the respective reconciliation statements provided to the defendant by the plaintiff, it is apparent that the plaintiff has wrongly applied them in purported payment of additional tax and interest alleged to have been incurred by the defendant after the making of the 1992 agreement".
So, broadly considered, there are two issues raised as to those two sums of money, both said to be the subject of wrongful application by the plaintiff and, as I said earlier this afternoon, the contention of counsel for the defendant is, or the contention of the defendant in the witness box is, that if these amounts were correctly applied there would be a balance in his favour, or at least his position would be much improved. The amended defence, in paragraph 10, gives particulars which would go towards substantiation of that contention.
In his submissions counsel for the defendant dealt, first, with the contention concerning the five sums which totalled $6,346.44. He referred me to the evidence of the defendant in his affidavit sworn in opposition to the summons for final judgment and, in particular, to paragraphs 47 to 51 in that affidavit where he referred to an agreement and two items of correspondence (being Exhibits 16 and 17 to the affidavit) which related to it.
I should say, too, that in giving evidence this morning the defendant referred to the agreement to which he deposed in the affidavit. That was, to put it simply, that if he paid a sum of money, stated in the letter from the plaintiff dated 18 March 1992, that that "wiped the slate clean", or would do so, to use the expression of counsel.
It was submitted that the reconciliation statement upon which the plaintiff relies - that being the last provided - showed that, in breach of the agreement, to use the language of the defendant in his affidavit, the defendant had, in fact, not "wiped the slate clean" but, notwithstanding the agreement and payment under it by the defendant, had allowed amounts to roll on, against which these five payments may be seen to be allocated. The consequence is, it is submitted, that although the amounts are not large they, nevertheless, erode the accuracy of the reconciliation and the credibility of the document.
In the judgment which I gave, in dealing with the appeal against the Master's order giving the plaintiff final judgment, I dealt with this question of the agreement insofar as it is referred to in the two letters from the plaintiff, exhibits AEH-16 and AEH-17. What I said then was, of course, said for the purpose of an application for final judgment.
Having had the benefit of argument again today, and read the letters again, I remain of the view that I expressed in my earlier judgment as to the meaning and effect of that correspondence. I do, however, bear in mind that Mr Brady, who the defendant said he spoke to, has not given evidence, and it is not, therefore, simply a matter of rejecting out of hand what the defendant has said about his conversation with Mr Brady, as I think initially counsel for the plaintiff seemed to do; but the sense of the thing is adequately (and I think in an obvious way) reflected in the correspondence which the defendant exhibited to his affidavit as reflective of the agreement, and which has been the subject of debate this afternoon.
I do not think that it is necessary to go through each item that comprises this somewhat modest sum of $6,346. Each one was explained by counsel for the plaintiff in his submissions, and in a way which I accept as accurate. It seems to me that what he said in his submissions as to the understanding of the items is well consistent with the correspondence from the plaintiff in Exhibits 16 and 17 to the defendant's affidavit, and it is, I think, unnecessary for me to elaborate on those reasons which were, in the analysis of counsel for the plaintiff, so succinctly expressed.
The submissions concentrate closely upon the relevant dates and the dates of payment, and the fact that there was delay in paying the full amount stipulated in the letter of 18 March 1992. As to the last of the items for $3,067.55, it is readily seen that the relevant date was subsequent to the 18th of March 1992 and, on any basis, in my view, no point could arise.
The second aspect concerns the larger sum of $61,746.49, which was dealt with by the defendant in paragraph 52 of his affidavit in opposition to the summons for final judgment. What was said in the affidavit was relied upon by counsel. I have regard to all that has been said upon that matter, and all that counsel has said today.
What counsel submitted to me was that the plaintiff should not have undertaken the further reconciliation which had the effect of disadvantaging the defendant, that is to say, in producing a higher net balance. Of course, the defendant cannot complain that the amounts have not been allowed in his favour, as they have been so allowed. But it was put that the Commissioner had no power to actually make a revised calculation.
The submission of counsel did not advance beyond that assertion and I do not accept it. I proceed on the basis that the Commissioner has power to revise a calculation seen to be incorrect. It is always open, under the legislative system, for a taxpayer to seek a review of a matter of that type, and that was not done. It is axiomatic, as I think I explained in my earlier judgment, that review of an assessment and amounts in it are not open in the present proceeding.
Then it was said by counsel for the defendant that the plaintiff is estopped from revising the calculations in the way that she did. There are several things to be said about this. In the first place, there is no pleading of estoppel. In the second place, if it be correct to assume, as I do, that the plaintiff has power to correct a statement, then it is an estoppel that is sought to be raised against the performance of a statutory function and, at the very least, detriment would require to be pleaded. There is none pleaded and, as I say, it seems very hard to say that one could be made out because, as counsel for the plaintiff pointed out, apart from anything else, the reconciliation statement relied upon was provided subsequent to the commencement of the proceeding and, in particular, during 2004, since when no payment has been made.
For these reasons, in my view, the submissions of counsel for the defendant on the larger sum remaining are rejected, and the result in my opinion is, having regard to all of the evidence, that there should be judgment for the plaintiff in the proceeding. I think that that amount is the sum which is specified in paragraph 1 of the draft orders provided to me this morning. [Discussion followed as to the form of order and as to costs.]
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