Percey and Commissioner of Taxation

[2007] AATA 1706

Administrative Appeals Tribunal

DECISION AND REASONS FOR DECISION [2007] AATA 1706

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No 2007/3272, 2007/3278

TAXATION APPEALS DIVISION		)
Re		LYNDON and SCHERYL PERCEY

Applicants

And COMMISSIONER OF TAXATION

Respondent

DECISION

Tribunal Deputy President P E Hack SC

Date24 August 2007

PlaceBrisbane

Decision Being satisfied that the decisions do not appear to be reviewable by the Tribunal, the Tribunal directs that the applications be dismissed pursuant to section 42A(4) of the Administrative Appeals Tribunal Act 1975, without the Tribunal proceeding to review the decisions.    

..............................................

Deputy President

CATCHWORDS

INSOLVENCY AND BANKRUPTCY – application for extension of time for review – lack of standing due to bankruptcy – applications not made in name of trustee in bankruptcy – applications dismissed

Administrative Appeals Tribunal Act 1975 (Cth) – s 42A(4)

Income Tax Assessment Act 1936 (Cth) – s 167

Robertson v Commissioner of Taxation (2004) 137 FCR 513

REASONS FOR DECISION

24 August 2007 Deputy President P E Hack SC    

1.Mr Lyndon Percey and Mrs Scheryl Percey apply for an extension of time for the making by them of applications to the Tribunal for a review of decisions made by the respondent, the Commissioner of Taxation. I propose to refuse those applications on the basis that each of Mr and Mrs Percey lack standing as they are bankrupts.

2.To understand that conclusion it is necessary to set out the background to the matter.

3.In November and December 2005 the Commissioner made default assessments[1] for each of Mr and Mrs Percey for each of the income years from 2001 to 2005. The assessments were evidenced, in the case of Mr Percey, by notices of assessment dated 15 November 2005 (with a penalty assessment dated 29 November 2005) and, in the case of Mrs Percey, by notices of assessment dated 22 December 2005 (and a penalty assessment dated 30 December 2005). 

[1]        That is, assessments pursuant to s 167 of the Income Tax Assessment Act 1936 (Cth.)

4.Mr and Mrs Percey objected to the assessments on 6 March 2006.

5.On 5 July 2006 sequestration orders were made against the estates of Mr and Mrs Percey by Federal Magistrate Coker; in each case on the petition of the Deputy Commissioner of Taxation. The act of bankruptcy alleged was committed on 7 October 2005. Mr David Offermans, a registered trustee, became the trustee of each estate.

6.On 4 May 2007 the Commissioner determined the objections, having ascertained from Mr Offermans that he wished the objections to be determined. The objection by Mr Percey was allowed to a limited extent and that by Mrs Percey was disallowed in full.

7.Applications seeking a review of the objection decisions were lodged in the Tribunal on 16 July 2007 and applications for extensions of time were lodged the following day. The applications were made in the name of Mr and Mrs Percey, not that of their trustee in bankruptcy.

8.The matters were listed for hearing on 24 August 2007. The attention of the parties was drawn to the decision of the Full Court of the Federal Court in Robertson v Commissioner of Taxation[2] and they were notified in writing that the Tribunal would be assisted by submissions dealing with the question of the standing of Mr and Mrs Percey following the making of the sequestration orders.

[2] (2004) 137 FCR 513.

9.I should add for completeness that Mr and Mrs Percey have filed an application in the Federal Magistrates’ Court seeking an annulment of the bankruptcies. So far as I can ascertain, that application is listed for hearing on 3 September 2007.

10.The applications for extension are opposed by the Commissioner on the grounds that Mr and Mrs Percey lack standing. Reliance is placed upon the decision in Robertson v Commissioner of Taxation[3].

[3] Ibid.

11.In Robertson, the Court held that, upon his bankruptcy, Mr Robertson was unable to maintain his status as a person “dissatisfied” with the objection decision of the Commissioner and accordingly lacked standing to apply to the Tribunal for a review of the Commissioner’s decision. Their Honours’ conclusions was expressed in this way[4]:

“McCallum v Commissioner of Taxation^[[5]] is, unless successfully challenged, authority for the proposition that the principle laid down in Cummings v Claremont Petroleum NL^[[6]] is applicable to the determination of whether a bankrupt has standing to apply to the Tribunal for review of an objection decision. As is mentioned above, the appellant did not challenge the authority of McCallum v Commissioner of Taxation. Nor did he contend that the fact that he had made his application to the Tribunal before he became bankrupt rendered McCallum v Commissioner of Taxation distinguishable. It follows inexorably, in our view, that the contention that he was entitled to maintain his application to the Tribunal under s 14ZZ because, absent any liability to the Commissioner, his estate would have been more than adequate to pay his remaining creditors must fail.”

[4] At para. [22].

[5] (1997) 75 FCR 458.

[6] (1996) 185 CLR 124.

12.I see no basis upon which these decisions, which bind me, could be distinguished. It may be accepted that if Mr and Mrs Percey are successful in obtaining an annulment of their bankruptcies they will then have standing but at present they do not. In the circumstances no useful purpose would be served in granting the extensions sought. 

13.I note the suggestion that the Trustee may wish to pursue applications for review of this objection decision. He, of course, has standing to do so and Mr Keim, for the Commissioner has indicated that it is likely that an application by the Tribunal for an extension of time will not be opposed. But these matters do not affect the absence of standing on the part of Mr and Mrs Percey.

14.The applications must be dismissed.

I certify that the 14 preceding paragraphs are a true copy of the reasons for the decision herein of Deputy President P E Hack SC

Signed:         .....................................................................................
           Eleanor O’Gorman, Associate

Date of Hearing  24 August 2007
Date of Decision  24 August 2007
Representative for the Applicant    Wrights Accounting
Solicitor for the Respondent          Departmental Advocate