Pearce v Deputy Commissioner of Taxation
[2009] FMCA 1000
•18 September 2009
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| PEARCE v DEPUTY COMMISSIONER OF TAXATION | [2009] FMCA 1000 |
| BANKRUPTCY – Application to review Registrar’s order – application to extend time – factors considered. |
| Federal Magistrates Act1999, s.104 Income Tax Assessment Act, s.177 |
| Winn v Blueprint Instant Printing Proprietary Limited (2008) FMCA 1430 |
| Applicant: | GRANTLEY MYLES PATRICK PEARCE |
| Respondent: | DEPUTY COMMISSIONER OF TAXATION |
| File Number: | BRG 613 of 2008 |
| Judgment of: | Wilson FM |
| Hearing date: | 18 September 2009 |
| Date of Last Submission: | 18 September 2009 |
| Delivered at: | Brisbane |
| Delivered on: | 18 September 2009 |
REPRESENTATION
| Counsel for the Applicant: | N/A |
| The Applicant: | Ms K.J. Pearce (power of attorney for the applicant) |
| Counsel for the Respondent: | N/A |
| Solicitors for the Respondent: | ATO Legal Services Branch |
ORDERS
That the application for review be dismissed.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT BRISBANE |
BRG 613 of 2008
| GRANTLEY MYLES PATRICK PEARCE |
Applicant
And
| DEPUTY COMMISSIONER OF TAXATION |
Respondent
REASONS FOR JUDGMENT
On 29 July 2009, an application for review was filed in this court by which the applicant, by his attorney, seeks to review a sequestration order made by a Registrar on 15 April 2009. Pursuant to s.104(2) of the Federal Magistrates Act1999, this court has power to review a decision of a Registrar, relevantly under the Bankruptcy Act1966 (“the Act”). That application must be filed within 21 days of the making of the sequestration order. In this case, the application was not filed for some three months after the sequestration order was made. There is, however, power to extend the time in which an application for review can be considered.
On 14 August 2009, the fact that the application was out of time was raised and directions were then made for the parties to file further evidence that they intended to rely upon on that issue. It was specifically noted in the order that on 18 September, that is today, the court would consider the application for an extension of time within which to file the application for review. Although the applicant for review did not file and serve his affidavit evidence in compliance with the orders made on 14 August 2009, no issue is taken about that by the representative of the respondent.
The applicant’s material is brief. Before turning to it, I should observe that the principles that a court will apply when exercising its discretion as to whether or not to extend the time for the filing of an application for review are well known. They were usefully summarised by Riley FM in Winn v Blueprint Instant Printing Proprietary Limited (2008) FMCA 1430 at [55], where her Honour said:
“The matters to be considered in granting an extension of time are:
(a) the extent of the delay;
(b) the explanation for the delay;
(c) the prejudice to the respondent; and
(d) the prospects of success of the underlying application.”
In this case, the delay is significant in the context of a bankruptcy matter. The application was filed, as I have said, more than three months after the making of the sequestration order. There has been no satisfactory explanation for the delay offered in the applicant’s own material. The respondent does not contend that it would be prejudiced, other than as to costs, if the time for filing the application was extended. Argument in this case focused primarily on the fourth ground outlined by her Honour, namely, the prospects of success of the underlying application. In my view, that is always the most important consideration because, unless a respondent is actually prejudiced in a meaningful way, mere delay on its own, unless contumelious and excessive, would not preclude a bona fide applicant from pursuing relief in the courts.
In this case, the applicant has identified a number of matters that are said to give rise to good grounds for challenging the making of a sequestration order. The making of a sequestration order followed the usual process in that the respondent obtained a default judgment on 21 September 2007. The applicant made an application to set aside that judgment and that application was dismissed on 6 June 2008. In addition, the respondent has the benefit of the conclusive evidence provisions in s.177 of the Income Tax Assessment Act. In my view, the ground which seeks to challenge the quantum of the debt owed to the Commissioner has negligible prospects of success.
Secondly, the applicant argues that the bankruptcy notice was stale when it was served on him. The bankruptcy notice was served on 6 June 2008, at the time the application by the applicant to set aside the default judgment was dismissed. It is apparent from the face of the document that it was issued on 12 October 2007 and that the time for service of it was extended, so as to expire on 12 October 2008. The bankruptcy notice was therefore served within time and there is no substance to the point sought to be argued.
Thirdly, the applicant argues that he did not actually receive the creditor’s petition by way of service. On 19 March 2009, Registrar Baldwin made an order for substituted service. No challenge is made to that order. Service was carried out in accordance with it. There is no dispute about that. The applicant’s point is that the creditor’s petition did not come to his actual notice.
In my view, service is taken to be effected in accordance with an order for substituted service when that order is complied with. That has occurred in this case. However, the point becomes less meritorious when it is considered that the applicant’s attorney was, in fact, present in court on the day the application for a sequestration order was to be heard. The attorney was not given permission to appear on behalf of the applicant because she did not have with her a valid power of attorney. She then chose to leave the precincts of the court. That was her decision. The fact is that the applicant was aware that the matter was to be heard on 15 April 2009. In my view, there is no substance in the third ground relied upon.
The final matter that is raised concerns the power of attorney itself. As Mr Jury pointed out, the power of attorney that is annexed to the applicant’s affidavit appears to be an incorrect document. That is, it is a document by which Ms Kathy Jane Pearce appoints the applicant as her attorney, rather than vice versa. Assuming, to the benefit of the applicant, that a power of attorney exists between the applicant and Ms Kathy Jane Pearce, it seems to me that this point is not a ground for challenging the making of a sequestration order.
The applicant has not, in my view, demonstrated any grounds upon which he has any prospects of successfully challenging the making of the sequestration order. In those circumstances, when taken with the extent of delay and the absence of any reason for it, leads me to conclude that the application for an extension of time should be refused and, in those circumstances, the application for review should be dismissed.
I certify that the preceding ten (10) paragraphs are a true copy of the reasons for judgment of Wilson FM
Associate: Lynnette Chin
Date: 8 October 2009
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