Madden, A.W. v Madden, J.L. - [1995] FCA 297

CATCHWORDS

PROCEDURE - summary dismissal - declarations and certiorari sought in respect of income tax assessment - misfeasance in public office - conclusiveness of assessment - frivolous or vexatious allegation as to lack of bona fides.

BANKRUPTCY - whether pleaded claims vested in bankrupt applicant's trustee - appeal against trustee's refusal to institute such proceedings.

Bankruptcy Act 1966 ss58(1), 60(2), 60(4)(a), 116(2)(g), 178

Income Tax Assessment Act 1936 ss175, 177(1)

Judiciary Act 1903 s39B

Daemar v Industrial Commission of New South Wales (1988) 12 NSWLR 45

Daemar v Industrial Commission of New South Wales [No.2] (1990) 22 NSWLR 178

Deputy Commissioner of Taxation v Richard Walter Pty Ltd (1995) 69 ALJR 223

Faulkner v Bluett (1981) 52 FLR 115

Fuller v Beach Petroleum NL (1993) 43 FCR 60

Heath v Tang [1993] 1 WLR 1421

Northern Territory v Mengel (High Court of Australia, 19 April 1995, unreported)

R v Hickman; Ex parte Fox and Clinton (1945) 70 CLR 589 at 615

Re Tyndall (1977) 30 FLR 6

ALEXANDER WILLIAM MADDEN v JOAN LILIAN MADDEN and ORS

No. NG 941 of 1993

Coram:Whitlam J

Place: Sydney

Date: 9 May 1995

IN THE FEDERAL COURT OF AUSTRALIA )

)

NEW SOUTH WALES DISTRICT REGISTRY ) NG 941 of 1993

)

GENERAL DIVISION )

ALEXANDER WILLIAM MADDEN
Applicant

JOAN LILIAN MADDEN
First Respondent

COMMISSIONER OF TAXATION
Second Respondent

OFFICIAL TRUSTEE IN BANKRUPTCY
Third Respondent

Coram:Whitlam J

Place: Sydney

Date: 9 May 1995

MINUTES OF ORDER

THE COURT ORDERS THAT:

1. The application be dismissed.

2. The applicant pay the costs of the second respondent and of the third respondent.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA )

)

NEW SOUTH WALES DISTRICT REGISTRY ) NG 941 of 1993

)

GENERAL DIVISION )

ALEXANDER WILLIAM MADDEN
Applicant

JOAN LILIAN MADDEN
First Respondent

COMMISSIONER OF TAXATION
Second Respondent

OFFICIAL TRUSTEE IN BANKRUPTCY
Third Respondent

Coram:Whitlam J

Place: Sydney

Date: 9 May 1995

REASONS FOR JUDGMENT

Each of the respondents, the Commissioner of Taxation and the Official Trustee in Bankruptcy, applies by notice of motion seeking orders effectively terminating this proceeding.

The applicant is a bankrupt. The sequestration order against his estate was made on the petition of the Commissioner, who relied upon a debt due under a judgment obtained on 23 February 1990. That judgment was given in respect of the applicant's liability for income tax stated in a notice of assessment issued on 1 October 1986. The Official Trustee is the trustee of the applicant's estate.

By his application, as amended in the form of the document filed in court upon the hearing of the respondents' notices of motion, the applicant claims against the Commissioner the following relief:

"3. An order removing the record of the decision of the [Commissioner] to make the assessment in or about late 1986 into this Court.

4. A declaration that the assessment made by the [Commissioner] in about late 1986 was not…

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: [1995] FCA 297
Decision Date: 9 May 1995

CaseChat Overview and Summary

The case of Madden, A.W. v Madden, J.L. and others involved Alexander William Madden, a bankrupt, who brought a claim against the Commissioner of Taxation, the Official Trustee in Bankruptcy, and his former wife. Madden sought declarations and certiorari to challenge an income tax assessment from late 1986, as well as damages for misfeasance in public office. The legal issues before the court were the conclusiveness of the income tax assessment under the relevant statutes and the propriety of the trustee's refusal to institute proceedings on behalf of the bankrupt.

The court found that the assessment was protected by the Income Tax Assessment Act 1936, as it was a bona fide attempt to exercise the Commissioner's powers. The claim that the assessment was made for the purpose of opposing Madden's bail application was dismissed as frivolous or vexatious. Furthermore, the court held that the claims were vested in the Official Trustee as a result of Madden's bankruptcy, and therefore, the trustee's refusal to bring proceedings could not be challenged under the Bankruptcy Act 1966. The damages claim for misfeasance in public office also failed, as the assessment was not an invalid exercise of power, and the mental element of the tort was not made out.

Ultimately, the court dismissed the application and ordered Madden to pay the costs of the Commissioner and the Official Trustee.

Orders