Deputy Commissioner of Taxation v Jewiss (No 2)
[2004] SADC 177
•9 December 2004
DISTRICT COURT OF SOUTH AUSTRALIA
(Civil)
DEPUTY COMMISSIONER OF TAXATION v JEWISS (No 2)
Judgment of His Honour Judge Clayton
9 December 2004
INCOME TAX
HELD: Taxation debt established by Notices of Assessment. Judgment for plaintiff.
Taxation Administraton Act 1953 s.255-45 of Schedule 1; Taxation Administratoin Regulations 1976 reg.45; Income Tax Assessment Act 1996 s.176, 177 and 204(3), referred to.
DEPUTY COMMISSIONER OF TAXATION v JEWISS (No 2)
[2004] SADC 177
The Deputy Commissioner of Taxation claimed an amount of $1,249,592 from the defendant for an income tax liability the general interest charge and a deficit debt on a Running Balance Account in respect of liabilities incurred by the defendant for the years ended 30 June 1998 to 30 June 2001 inclusive.
Assessments of income had been made by a Deputy Commissioner in respect of each of the years and Notices of Assessment were served on the defendant.
In his Defence, the defendant claimed:
·The assessments were contrary to his real and true income.
·The plaintiff made the assessments without any inquiry or due and proper inquiry.
·The assessments were made negligently, carelessly without proper investigation and fraudulently by reason of the plaintiff’s attempts to restrain and/or destroy his lawful business activities.
·The information relied upon by the plaintiff, which had been seized from the defendant’s office was training material.
·The defendant did not earn the amounts which give rise to the assessments.
·The plaintiff had refused to substantiate the purported assessments.
·The defendant did not owe the amounts of the purported assessments.
·The plaintiff had acted beyond his powers.
A counterclaim was lodged which again challenged the assessments and claimed $10,000,000 as compensation for loss and damage. The counterclaim alleged that the plaintiff acted beyond its powers in making the assessments or alternatively acted “recklessly, carelessly or fraudulently in a criminal or quasi criminal manner” in making the assessments. Paragraphs 1 to 5 inclusive of the counterclaim claim:
“1.$10,000,000 as compensation for loss and damages on the basis that the livelihood of the defendant in both Australia and New Zealand has been destroyed by the conduct actions and representations of the plaintiff as follows:
a) My business and creditability in New Zealand has been destroyed.
b) My credit ratings in Australia and New Zealand have been destroyed.
c) have suffered the loss of my health, together with untold stress and anxiety leaving me with posttraumatic stress disorders.
d) My health deteriorated such, that I would find it virtually impossible to re-establish my business to derive an income. I am now destitute and wholly dependant on the Aged Pension to survive (all caused by the acts of the officers of the plaintiff). The continued harassment by the Promotion Task Force into my personal affairs or issues other than income tax matters.
2. The Commissioner of Taxation is unable to exercise powers purported to be given to him pursuant in the Income Tax Assessment Act by the Federal Government of Australia as the Federal Government under the Constitution of the Commonwealth of Australia has no power to delegate powers of the Commonwealth to any person to create law or to justify situations as factual which are not factual or do not exist at all.
3. The Income Tax Assessment Act does not oust the Common Law or Equity rules applying to the Commonwealth of Australia.
4. The plaintiff its officers, servants or agents have acted recklessly carelessly in the extreme to the extent of quasi criminality against the defendant with the extent to injure the defendant in his reputation and with intent to injure or destroy his lawful business.
5. The plaintiffs by its officers servants or agents have acted in a manner against servants or agents of the defendant which amounts to common assault with threats against the defendants servants or agents.”
Paragraph 6 of the counterclaim complains of an alleged failure by the plaintiff to disclose the income which supports the plaintiff’s assessments.
Prior to the hearing of the action I ruled that the District Court did have jurisdiction to hear an argument that the Notices of Assessment were issued in bad faith and should not be admitted into evidence.
When the hearing of the action commenced the defendant raised that argument and there was a voir dire hearing. I ruled that the defendant had not established that the Notices of Assessment were issued in bad faith and each of the relevant notices was admitted into evidence.
The hearing of the action continued, the plaintiff presented its case and Mr Jewiss commenced the presentation of the defence case.
On the afternoon of Friday, 15 October 2004, a witness who had been called by the defendant was in the course of her evidence when Mr Jewiss foreshadowed further evidence of bad faith on the part of the plaintiff. Counsel for the plaintiff objected to the proposed evidence on the basis that the issue of bad faith had already been resolved. I ruled that the issue had been determined by my ruling on the voir dire. Mr Jewiss said:
“MR JEWISS: Then, let me simplify the whole thing and I’ll conclude my whole case as of this moment. I may ask leave to appeal. In fact, I do ask for leave to appeal.
HIS HONOUR: You have an appeal as a right. You don’t need my leave to appeal.
MR JEWISS: Thank you kindly. I have then misread my rights to this trial when I asked some questions yesterday.
If I have no right to add evidence to the voir dire, then it’s pointless continuing the case.
HIS HONOUR: What I’ve ruled is that the evidence does not establish that the assessments were issued in bad faith.
MR JEWISS: Yes.
HIS HONOUR: The consequence of that is that the assessments have been admitted into evidence.
MR JEWISS: Yes.
HIS HONOUR: And having been admitted into evidence, s.177 of the Income Tax Assessment Act has a part to play.
MR JEWISS: Then I conclude this trial.
HIS HONOUR: Take it step by step, you have no further questions of Ms Johnson?
MR JEWISS: In light of what you just said, it’s a waste of the court’s time for me to continue and Ms Johnson, I can see has had sufficient today. That’s not my reasoning for stopping. My reasoning in stopping it is I think it’s pointless me continuing the questioning.
HIS HONOUR: Do you wish to ask Mrs Johnson any questions in the light of that intimation?
MR SALLIS:Not in the light of that intimation.
......
HIS HONOUR: You don’t wish to adduce any further evidence?
MR JEWISS: No.
HIS HONOUR: In that event, there would normally be addresses by counsel. Do you wish to add anything further to what you’ve said already?
MR JEWISS: No.”
Mr Jewiss then ceased his defence of the claim. Counsel for the plaintiff announced that he relied upon written submissions and a written address which had been handed up and judgment was reserved.
I have considered the written submissions and evidence produced by each party.
The plaintiff relies upon the Notices of Assessment for the years 30 June 1998 to 30 June 2001 inclusive which comprise Exhibit P4.
I had already rejected the claim that the assessments which are referred to in the Notices of Assessment were made in “bad faith” when the notices were admitted into evidence. The notices bear the typed name “Geoff Robinson, Deputy Commissioner of Taxation”. Each notice contains a certificate that it is a certified copy of the Notice of Assessment of income tax for the relevant year. The assessments had been issued on 29 October 2002. Each certificate has the stamped signature of “Erin Holland” a Deputy Commissioner of Taxation.
Exhibit P5 is a bundle of evidentiary certificates pursuant to section 255-45 of Schedule 1 of the Taxation Administration Act 1953 dated 21 June 2004 which certified the taxation debt of the defendant as at 13 February 2003 and as at 21 June 2004. The certificates have also been stamped with the name “Erin Holland” Deputy Commissioner of Taxation. Exhibit P6 is a Running Balance Account statement. A certificate bearing the stamped name of a Deputy Commissioner of Taxation is taken to be duly signed by the person. Taxation Administration Regulations 1976, regulation 45.
I accept that exhibits P4 and P5 are evidence of the defendant’s tax related liability. By reason of section 177 of the Income Tax Assessment Act 1996 I find that Exhibit P4 is conclusive evidence of the due making of the assessment and that the amount and all the particulars of the assessment are correct. Additionally, by reason of evidentiary certificates which form part of Exhibit P5, I find that, as at 21 June 2004, the following amounts were due and payable by the defendant to the Commonwealth:
16 Year of income ended 30 June 1998 $30,340.71 17 Year of income ended 30 June 1999 $114,950.91 18 Year of income ended 30 June 2000 $728,486.29 19 Year of income ended 30 June 2001
$459,985.82
Total
$1,333,763.73
These findings rely on the Income Tax Assessment Act 1996, sections 204(3), 176 and 177 and regulation 45 of the Taxation Administration Regulations 1976.
I find that the plaintiff has established that, as at 21 June 2004, the sum of $1,333,763.73 was a debt due and payable by the defendant, Henry William Jewiss, to the Commonwealth in respect of the taxation years ended 30 June 1998 to 30 June 2001 inclusive. That sum updates the general interest charge from the debt at the time when the proceedings were issued until 21 June 2004.
Without descending to deal with each ground seriatim I reject the grounds of the Defence. The allegations are far reaching, but there is simply no evidence which supports the Defence. I also dismiss the counterclaim which is unsupported by evidence. Both defence and counterclaim were effectively abandoned by the defendant after I ruled that the issue of bad faith had already been resolved by the decision on the voir dire.
I have already given reasons which explain my ruling that the assessments were not made in bad faith.
It is unnecessary to descend to an assessment of the claim of the plaintiff because of the evidentiary provisions upon which the plaintiff relies. The certified copies of the Notices of Assessment and the evidentiary certificates are sufficient evidence.
Accordingly, there will be judgment in favour of the plaintiff against the defendant in the sum of $1,333,763.73. The debt is calculated as at 21 June 2004.
The defendant is also liable to pay the general interest charge from 21 June 2004 until payment.
The counterclaim is dismissed.
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