Deputy Commissioner of Taxation v Baker

[2013] NSWSC 1826

Supreme Court

New South Wales

Medium Neutral Citation:

Deputy Commissioner of Taxation v Baker [2013] NSWSC 1826

Hearing dates:

9 December 2013

Decision date:

09 December 2013

Jurisdiction:

Common Law

Before:

Davies J

Decision:

1. Defence filed 16 May 2013 struck out.

2. Judgment for the Plaintiff in the sum of $17,120,141.76.

3. Defendant to pay Plaintiff's costs of the proceedings.

Catchwords:

PROCEDURE - application to strike out defence - failure of defendant to comply with orders to serve evidence - defence struck out - default judgment

Legislation Cited:

Civil Procedure Act 2005

Category:

Interlocutory applications

Parties:

Deputy Commissioner of Taxation (Plaintiff)
Theodore Baker

Representation:

Counsel:
R Scruby (Plaintiff)
No appearance (Defendant)
Solicitors:
ATO Legal Services Branch (Plaintiff)
No appearance (Defendant)

File Number(s):

2011/304098

Judgment

1. The proceedings commenced on 21 September 2011. The current form of the Statement of Claim is an Amended Statement of Claim filed 10 December 2012. The Deputy Commissioner seeks income tax for various income tax years from 1998 to 2009.

1. The Defendant was represented by Dettmann Longworth Lawyers and filed a Defence to the Amended Statement of Claim on 16 May 2013. Apart from responses to individual paragraphs with admissions, non-admissions or denials, the defence raises what is said to be an estoppel arising out of taxation ruling 94/24 given in the tax year ending 30 June 2000. The Defendant claims in this part of his defence that, in reliance on that tax ruling, he ordered his affairs in a particular way and that the Commissioner is therefore precluded from claiming the tax he seeks from the Defendant.

1. On 28 June 2013 consent orders were made for the service of evidence by the parties. Pursuant to those directions, the Defendant was to serve his evidence-in-chief by 12 September 2013. On 26 September 2013 the solicitor for the Deputy Commissioner received a Notice of Intention to File a Notice of Ceasing to Act from the Defendant's solicitors. Subsequently, a Notice of Ceasing to Act was filed. No evidence was served by the Defendant by 12 September 2013 or otherwise.

1. On 31 October the matter was again before the Registrar. There was no appearance by the Defendant. The Court made a direction that the Defendant was to serve his evidence by 21 November 2013 and stood the proceedings over to 2 December 2013.

1. On 31 October the Principal Registrar sent a letter to the Defendant setting out the orders that had been made. The letter said, "Should Defendant not serve evidence then on next occasion matter to be referred to duty judge to consider striking out the defence."

1. Similarly, the Plaintiff sent a letter on 6 November 2013 to the Defendant setting out the directions that were made on 31 October 2013 and also referred to the fact that the Court may refer the matter on 2 December 2013 with a view to the defence being struck out. The letter went on to say, "This might mean that the Deputy Commissioner will then apply for judgment against you."

1. On 2 December the matter came again before the Court for directions. No evidence had been served by the Defendant. The Plaintiff sought a one-week adjournment to today so that counsel would be available to make an application to have the defence struck out. So much was notified to the Defendant in a letter from the Plaintiff dated 2 December 2013. On the same day the Court sent a letter to the Defendant informing him that the matter had been stood over to today for the matter to be referred to the duty judge to consider striking out the defence.

1. There was no appearance by the Defendant either before the registrar or when the matter was called outside my court.

1. Section 61(3)(c) Civil Procedure Act 2005 and Rule 12.7(2) UCPR both give power to the Court to make an order striking out a defence where there has been a failure to comply with directions that the Court has made. In the present case, I consider that the Defendant has had ample opportunity to comply with orders to serve his evidence. The Plaintiff's evidence was served on 14 August 2013, almost four months ago. Time has been extended to the Defendant and he has had further opportunities to comply by further adjournments of the proceedings up to today. I am satisfied in those circumstances that the defence should be struck out.

1. The Plaintiff seeks default judgment. Rule 16.2(1)(c) provides that the Defendant is in default for the purposes of Part 16 of the Rules if the Court has ordered that the defence be struck out.

1. I am satisfied from reading an affidavit of Theresa Crea sworn 4 December 2013 that the amount outstanding to the Plaintiff in the proceedings at the date of swearing that affidavit was $17,120,141.76.

1. In the circumstances, there will be judgment for the Plaintiff for that sum. The Defendant should pay the Plaintiff's costs of the proceedings.

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Decision last updated: 10 December 2013