Jamieson v Commissioner for Internal Revenue - [2007] NSWSC 324

Reported Decision:
66 ATR 441
210 FLR 210

New South Wales

Supreme Court

CITATION: Jamieson v Commissioner for Internal Revenue [2007] NSWSC 324

HEARING DATE(S): 11/04/07

JUDGMENT DATE :
18 April 2007

JUDGMENT OF: Gzell J

DECISION: Leave to proceed granted. Court determination that Plaintiff entitled to distribute the assets of the estate among the persons entitled without regard to the deficiencies, penalties and additions to tax determined by order of the United States Tax Court.

CATCHWORDS: TAXES AND DUTIES - Income Tax - Judgment of United States Tax Court against executrix of estate of deceased for deficiencies of Unites States tax - Application for determination of question whether the executrix free to distribute estate without regard to tax debt under Supreme Court Rules 1970, Pt 68 r 2 or for order barring the claim under the Wills Probate and Administration Act 1898, s 93 - No entry of appearance by Commissioner for Internal Revenue of the United States - Whether leave to proceed under the Uniform Civil Procedure Rules 2005, r 11.4 should be granted - Whether proper service under the Foreign States Immunities Act 1985 (Cth) established - Whether deceased had adopted a domicile of choice in the United States or whether he died domiciled in New South Wales for the purpose of the Uniform Civil Procedure Rules 2005, Sch 6, item (o) - Whether a foreign tax claim will be enforced by Australian Courts - Whether the judgment of the United States Tax Court can be enforced in Australia - Whether the claim of the Commissioner should be barred

LEGISLATION CITED: Domicile Act 1979
Family Law Act 1975 (Cth)
Foreign Judgments Act 1991 (Cth)
Foreign States Immunities Act 1985 (Cth)
Supreme Court Rules 1970
Taxation Administration Act 1953 (Cth)
Uniform Civil Procedure Rules 2005
Wills Probate and Administration Act 1898

CASES CITED: Attorney-General (United Kingdom) v Heinemann Publishers Australia Pty Ltd (1988) 165 CLR 30
Castagna v Conceria Pell Mec Spa, NSWCA, 15 March 1996, unreported
Government of India v Taylor [1955] AC 491
Robb Evans of Robb Evans & Associates v European Bank Ltd (2004) 61 NSWLR 75
The News Corporation Ltd v Lenfest Communications Inc (1996) 21 ACSR 553

PARTIES: Michelle Susan Jamieson - Plaintiff
Commissioner for Internal Revenue - Defendant

FILE NUMBER(S): SC 2293/06

COUNSEL: Mr P Braham/Ms B Arste

SOLICITORS: Taperell Rutledge Solicitors

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

GZELL J

WEDNESDAY 18 APRIL 2007

2293/06 MICHELLE SUSAN JAMIESON v COMMISSIONER FOR INTERNAL REVENUE

JUDGMENT

1 Michelle Susan Jamieson is the executrix of the estate of her late father, Robert Stephen Hastings. He died in the United States of America on 29 July 2004. All the assets of the estate were situated in New South Wales. Probate of the will was granted to Ms Jamieson by this court on 2 December 2004. The Commissioner of Internal Revenue of the Internal Revenue Service of the United States obtained a judgment from the United States Tax Court against the estate…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2007] NSWSC 324
Decision Date: 18 April 2007

CaseChat Overview and Summary

The case of Jamieson v Commissioner for Internal Revenue involved an application by an executrix of an estate for a determination regarding the enforcement of a United States tax judgment against the estate. The executrix sought to know if she could distribute the estate without settling the tax debt, or if there was an order that could bar the claim under the Wills Probate and Administration Act 1898. The United States Commissioner for Internal Revenue did not enter an appearance in response to the application. The court was required to decide whether leave should be granted to proceed under the Uniform Civil Procedure Rules 2005, rule 11.4, if the service of the claim was proper under the Foreign States Immunities Act 1985, and if the deceased had adopted a domicile of choice in the United States or was domiciled in New South Wales at the time of death.

The court examined whether the Commissioner for Internal Revenue of the United States was properly served under the Foreign States Immunities Act 1985, and if the deceased had adopted a domicile of choice in the United States or was domiciled in New South Wales at the time of death, which would be relevant under the Uniform Civil Procedure Rules 2005. The court concluded that the service was proper and the deceased was domiciled in New South Wales. The court further assessed whether a foreign tax claim would be enforced by Australian courts and whether the judgment of the United States Tax Court could be enforced in Australia. It determined that the judgment could not be enforced as the Commissioner for Internal Revenue had not been properly served, and thus the claim should be barred.

In conclusion, the court granted the application and barred the claim of the Commissioner for Internal Revenue. The executrix was permitted to distribute the estate without settling the tax debt, as the Commissioner had not been properly served and therefore could not enforce the foreign judgment in Australia. The court's decision ensured that the estate could proceed with its distribution according to the laws of New South Wales, without the encumbrance of an unenforceably served foreign tax claim.

Orders