Jewiss v Deputy Commissioner of Taxation

[2006] HCATrans 478

[2006] HCATrans 478

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Adelaide  No A1 of 2006

B e t w e e n -

HENRY WILLIAM JEWISS

Applicant

and

DEPUTY COMMISSIONER OF TAXATION

Respondent

Application for special leave to appeal

Publication of reasons and pronouncement of orders

GUMMOW J
HEYDON J

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA ON TUESDAY, 5 SEPTEMBER 2006, AT 9.17 AM

Copyright in the High Court of Australia

GUMMOW J:   The applicant seeks leave to appeal against a decision of the Full Court of the Supreme Court of South Australia (Perry ACJ, Duggan and Anderson JJ) affirming a judgment entered by the District Court of South Australia (Clayton DCJ) against the applicant (“the taxpayer”) in favour of the respondent (“the Commissioner”) in the sum of $1,364,729.64.  That sum represented as at the date of judgment an income tax liability, the general interest charge and a deficit debt on a Running Balance Account (see Pt IIA, Div 1 and Pt IIB, Div 2 of the Taxation Administration Act 1953 (Cth) (“the 1953 Act”)) in respect of the income years ending 30 June 1998 to 30 June 2001 inclusive. The assessments were default assessments issued after failure of the taxpayer to lodge returns for the relevant years. The taxpayer has been unrepresented at all stages in the proceedings.

Clayton DCJ awarded judgment in favour of the Commissioner based upon s 177 of the Income Tax Assessment Act 1936 (Cth) (“the 1936 Act”) which required him to treat Notices of Assessment as “conclusive evidence” that the amount and particulars specified therein were correct. (There is an exception in the case of proceedings under Pt IVC of 1953 Act, but these were not such proceedings.) The taxpayer had challenged the assessments on the basis that they were made in excess of power or “recklessly, carelessly or fraudulently in a criminal or quasi criminal manner”, and had made a counterclaim seeking damages in the sum of $10,000,000 for loss of business. Prior to hearing the action, Clayton DCJ had determined against the taxpayer an objection to admissibility of the Notices of Assessment on the basis that they were issued in bad faith. Later in the proceedings, his Honour prevented the taxpayer from adducing further evidence of bad faith. Clayton DCJ found that upon that ruling the taxpayer effectively abandoned his defence and counterclaim, and dismissed the latter for want of evidence.

The Full Court held that Clayton DCJ acted correctly in treating the Notices of Assessment as conclusive evidence of the making of the assessments. In this respect, it noted a concession of the Commissioner that for the purposes of the appeal the Court should assume that there was a limited right to challenge the admission of notices of assessment into evidence on the ground that they were made in the course of an abuse of power and for improper purposes. The Full Court also noted that the taxpayer had brought separate proceedings in the Federal Court under Pt IVC of the 1953 Act, in which proceedings s 177 would not operate. The Full Court observed that, although the taxpayer did not contest the dismissal of the counterclaim, the further material which he sought to adduce would not have established it in any event.

There are no prospects of success on any appeal to this Court.  Leave should be granted to the taxpayer to apply for special leave out of time (based upon the material disclosed in the affidavit sworn 16 January 2006), but the application should be refused.   

Pursuant to r 41.10.5 we direct the Registrar to draw up, sign and seal an order dismissing the application for special leave.  I publish the disposition signed by Heydon J and myself.

AT 9.21 AM THE MATTER WAS CONCLUDED