Deputy Commissioner of Taxation v Tannous

[2016] NSWSC 281

Supreme Court

New South Wales

Medium Neutral Citation:

Deputy Commissioner of Taxation v Tannous [2016] NSWSC 281

Hearing dates:

26 February 2016

Date of orders:

26 February 2016

Decision date:

26 February 2016

Jurisdiction:

Common Law

Before:

Campbell J

Decision:

(1)     Vacate the hearing date of 11 March 2016.

(2)       Direct the defendant to file and serve its submissions in response to the plaintiff’s submissions on or before 1 April 2016.

(3)       Direct the parties to approach the listing manager today for the fixing of the first available hearing date thereafter with an estimate of one day.

(4)       Costs of Monday, today and thrown away by reason of the adjournment granted (if any) are to be paid by the plaintiff

Catchwords:

PROCEDURE – vacation of hearing date – failure to serve plaintiff submissions until two weeks before trial – where plaintiff is government department

Legislation Cited:

Civil Procedure Act 2005 (NSW)
Taxation Administration Act 1953 (Cth)

Cases Cited:

Aon Risk Services Australia Limited v Australian National University [2009] HCA 27; 239 CLR 175
Kelly v Westpac Banking Corporation [2014] NSWCA 348.

Category:

Procedural and other rulings

Parties:

Deputy Commissioner of Taxation (Plaintiff)
Paul Tannous (Defendant)

Representation:

Counsel: J D Little (Plaintiff)
P Costa (Defendant) (solicitor)

Solicitors: Australian Taxation Office - Legal
Costa & Associates (Defendant)

File Number(s):

2014//316952

EX TEMPORE JUDGMENT - REVISED

1. The defendant applies for an adjournment of the hearing date fixed for 11 March 2016. The plaintiff’s claim is to recoup tax from the defendant in his capacity as a director, and for long periods as a sole director, of a company which failed to observe its obligation to pay tax.

2. By the amended statement of claim filed on 23 February pursuant to leave granted on the 22nd the amount of the Deputy Commissioner’s claim has been reduced from $867,903 to $677,895.

3. The position of the plaintiff is that it is entitled to recover the tax due, penalties and interest, as a debt subject to the defendant establishing, if he can, the defence including the taking of reasonable steps provided for by s 269-35(2) Taxation Administration Act 1953 (Cth).

4. The plaintiff substantially complied with timetable requirements to file its evidence by early November 2015. There has been some recent supply of supplementary evidence but I do not understand the defendant to complain about that. What the defendant does complain about is that the timetable fixed when the matter was set down for hearing required the plaintiff to provide its written submissions by 18 December 2015. The timetable, allowing for the intervention no doubt of the Christmas and holiday period, then allowed the defendant a period of seven weeks to respond.

5. In contravention of those orders, the written submissions for the plaintiff were not filed until 24 February 2016.

6. The submissions were prepared by Ms J D Little of counsel who appears before me for the plaintiff. They run to fourteen pages, containing fifty-six paragraphs. If I may say with respect it seems to be a document of admirable succinctness. Ms Little strongly argues with nearly two weeks left before the hearing, the defendant has sufficient time to file his submissions in response, and the plaintiff will live with the fact that it will not receive those submissions until just before the hearing.

7. The explanation for the delay in relation to the provision of submissions is that there was apparently a change of management of the file in the plaintiff’s internal legal department and with the intervening holiday period the preparation of the submissions was overlooked. This is of course understandable in human terms but the consequence is that the time that it was envisaged that the defendant would have to respond has now been truncated if the hearing date is to be maintained.

8. I accept the force of Ms Little’s argument that the preparation of submissions which will be substantially a statement of the defendant’s case depends largely upon the efforts of his solicitors rather than his personal efforts.

9. However that may be, as the plaintiff’s submissions make clear its case, and the basis on which it claims to be entitled to recover the tax, penalties and interest due as a debt cover the period from 1 April 2002 to 30 November 2013, some eleven and a half years. One can see from considering the submissions of the plaintiff its case depends upon factual matters which are admirably summarised, as I have said, in the plaintiff’s submissions.

10. The defendant, according to the affidavits of Mr Costa of 19 February and 25 February 2016, has pressing personal commitments. He is employed these days and his work often takes him interstate. Regrettably his wife is suffering from a very serious illness requiring ongoing treatment which imposes significant additional domestic burdens upon the defendant. However that may be it is obviously necessary that he attend this legal matter which is a very serious one, having potentially very serious consequences for him and his family.

11. I note in passing that the defendant has not seen fit to instruct his solicitors to engage counsel so far. Mr Costa argued that in all the circumstances it is just unreasonable to expect the defendant to respond to the written submissions in a truncated way. This argument is underpinned by the idea that if seven weeks was reasonable when the timetable was set, surely it must remain reasonable now?

12. Ms Little reminds me that under the Civil Procedure Act 2005 (NSW) there is a strong emphasis upon efficiency considerations and she submits that hearings, once set, will not be readily adjourned especially given the considerations discussed by the High Court of Australia in Aon Risk Services Australia Limited v Australian National University [2009] HCA 27; 239 CLR 175.

13. However one must bear in mind that the object of the efficiency provision of the Civil Procedure Act as emphasised by s 58 of the Act are the interests of justice and I bear this in mind. As the Court of Appeal pointed out in Kelly v Westpac Banking Corporation [2014] NSWCA 348 other considerations than pure efficiency need to be borne in mind, such as the capacity of an individual, as opposed to an institution or a corporation, to deal with complex legal matters. That is to say, it is harder for ordinary people to cope with what might be complex commercial litigation than it is for institutions including Government departments.

14. Whereas the explanation for the delay in compliance with the timetable by the plaintiff is understandable in human terms, it does fall short of what is expected of Government departments as model litigants and in the circumstances I am satisfied that the defendant has been forensically prejudiced by the very late service of the plaintiff’s written submissions and that the hearing date should be adjourned.

(New timetable discussed)

15. My orders are:

1. Vacate the hearing date of 11 March 2016.

2. Direct the defendant to file and serve its submissions in response to the plaintiff’s submissions on or before 1 April 2016.

3. Direct the parties to approach the listing manager today for the fixing of the first available hearing date thereafter with an estimate of one day.

4. Costs of Monday, today and thrown away by reason of the adjournment granted (if any) are to be paid by the plaintiff.

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Decision last updated: 17 March 2016