Deputy Commissioner of Taxation v Ngoc Lan Chiem

[1999] VSC 538

SUPREME COURT OF VICTORIA
PRACTICE COURT	Do not Send for Reporting
Not Restricted

No. 4597 of 1999

DEPUTY COMMISSIONER OF TAXATION	Plaintiff
v.
NGOC LAN CHIEM	Defendant

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JUDGE:	BEACH, J.
WHERE HELD:	MELBOURNE
DATE OF HEARING:	9 DECEMBER 1999
DATE OF JUDGMENT:	9 DECEMBER 1999
CASE MAY BE CITED AS:	DEPUTY COMMISSIONER OF TAXATION v. NGOC LAN CHIEM
MEDIA NEUTRAL CITATION:	[1999] VSC 538

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CATCHWORDS:      Summary judgment – Appeal – Judgment confirmed – Income Tax Assessment Act 1936 (Com.) s.177 – Taxation Administration Act 1953 (Com.) s.14ZZM.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	J. Lenczner	Australian Government Solicitor
For the Defendant	B. Guzzo	C. Tang & Associates

HIS HONOUR:

1. These are proceedings brought by the Deputy Commissioner of Taxation against two taxpayers, Van Thong Chiem and Ngoc Lan Chiem, seeking to recover tax assessed as being payable on the income of the two defendants.

1. On 26 October 1999 Master Wheeler entered judgment against the defendant Van Thong Chiem in the sum of $999,798.40 together with interest in the sum of $18,867.43 and costs.

1. On the same day the Master entered judgment against the defendant Ngoc Lan Chiem in the sum of $996,066.12 together with interest in the sum of $18,797 and costs.

1. On 29 October 1999 each defendant filed a notice of appeal in the court in respect of the Master's orders.

1. On 17 November 1999, on the application of the Deputy Commissioner, the Master amended the two judgments he had earlier entered against the defendants.  In the case of the defendant Van Thong Chiem he amended the judgment by substituting the sum of $1,006,867.83 for the original judgment and in the case of the defendant Ngoc Lan Chiem he amended the judgment by substituting the sum of $1,003,109.38 for the original judgment.

1. When the two appeals came before me this morning it was agreed by the parties that, having regard to certain adjustments which had been made in respect of the tax said to be payable by the defendants, the appropriate judgment against the defendant Van Thong Chiem should now be $1,000,593.81 with interest of $18,867.43.  In the case of the defendant Ngoc Lan Chiem it is agreed that the amount involved should be $996,835.36 with interest of $18,797.

1. Section 177 of the Income Tax Assessment Act 1936 provides:

"The production of a notice of assessment or of a document under the hand of the Commissioner, Second Commissioner or a Deputy Commissioner purporting to be a copy of the notice of assessment shall be conclusive evidence of the due making of the assessment and, except proceedings under Part 4C of the Taxation Administration Act 1953 on a review or appeal relating to the assessment, that the amount and all the particulars of the assessment are correct."

1. In each case the Deputy Commissioner has produced appropriate assessments in respect of what he contends is the outstanding tax and he relies on that provision to maintain each judgment.

1. It is clear that I have no right to go behind such an assessment and that such an assessment cannot be challenged.  In that regard see F.J. Bloeman Pty.Ltd. v. Federal Commissioner of Taxation (1991) C.L.R. 360.

1. However, it is said on behalf of the defendants that the defendants have lodged notices of objection in respect of what are now the amended assessments and that those objections will in due course be dealt with by the Administrative Appeals Tribunal. 

1. The complaint each defendant makes is that the Deputy Commissioner has wrongly included in betterment statements he did in respect of each defendant investments that are capital as income, and to that extent the assessments are defective. As I observed a moment ago, the accuracy of assessments cannot be challenged in recovery proceedings of the type presently before me. The fact of the matter is that there is no obvious error on the face of the amended assessments. One also must have regard to the provisions of s.14ZZM of the Taxation Administration Act 1953, which reads:

"The fact that a review is pending in relation to a taxation decision, other than a registration type sales tax decision, does not in the meantime interfere with or affect the decision and any tax or other amount may be recovered as if no review were pending."

1. In my opinion it is not to the point in the present case to contend that the Deputy Commissioner has made errors in preparing the betterment statements he has in relation to each taxpayer because, as I have already said, the assessments cannot be challenged.

1. In that situation, in the case of the defendant Van Thong Chiem, the appeal will be allowed.  I must adopt that course to enable me to enter judgment for the correct sum.  The appeal will be allowed and the orders of the Master made on 26 October and 17 November 1999 will be set aside.  In lieu thereof there will be judgment for the plaintiff in the sum of $1,000,593.81 with interest of $18,867.43 with costs of the proceeding including the costs of this appeal.

1. In the proceeding in which Ngoc Lan Chiem is defendant, the appeal will be allowed and the orders of Master Wheeler made on 26 October 1999 and 17 November 1999 will be set aside.  In lieu thereof there will be judgment for the plaintiff in the sum of $996,835.36 with interest in the sum of $18,797 together with the costs of the proceeding including the costs of this appeal.

1. It is said that in the event judgment is entered against the defendants the defendants should be granted a stay pending the hearing and determination of their notices of objection by the Administrative Appeals Tribunal. I am not persuaded in either case that that is an appropriate course to adopt because to grant such a stay for that reason would fly directly in the face of the provisions of s.14ZZM of the Taxation Administration Act. What I will grant to each defendant, however, is a stay of 14 days.

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