Re Thai, A.N. Ex parte Deputy Commissioner of Taxation

[1993] FCA 870

870 93

JUDGMENT No. ., ..... ,..,.,..,.,/ .1QQ1111111.

JN THE FEDERAL COURT OF AUSTRALIA )

)

FEW SOUTH WALES DISTRICT REGISTRY ) No. NN 4039 of 1992

)

GENERAL DIVISION )

RE:

RECEIVED Debtor

AND: PEPUTY COMMISSIONER OF TAXATION

FEDERAL COURT OF petitioning Creditor

AUSIRAUA

12 November 1993

REASONS FOR JUDGMENT

LOCKHART J.

This matter has a rather long history which I do not find it necessary to recite. The matter came before me on 2 November 1993 as an application by the judgment creditor, the Deputy Commissioner of Taxation, to set aside a bankruptcy notice which had been issued at the request of the judgment creditor against the judgment debtor.

There was no appearance by or on behalf of the judgment debtor on that occasion, but counsel appeared for the Deputy Commissioner of Taxation. It was made clear to me by counsel that the application to set aside the notice was itself by consent, and the notice was in due course set aside by me. I made no order as to the costs of the Deputy Commissioner of the application to set aside the notice.

After that date and before any order giving effect to the Court's judgment of 2 November had been taken out, the judgment	debtor applied to me for an order to discharge the order for
costs on the last occasion, that is, that there be no order as to the costs of the proceedings to set aside the notice, and to substitute an order that the Deputy Commissioner should pay the costs of the judgment debtor including the costs of the application to set aside the bankruptcy notice which was filed on 4 March this year.
There are two grounds relied upon by counsel for the judgment debtor in support of the application. The first, that the judgment which forms the substratum of the bankruptcy notice itself was a judgment obtained in the Supreme Court of New South Wales on 30 September 1992, and that judgment has since been set aside by a Master of the Supreme Court, the order of the Master having been made on 19 July 1993.
The essential basis on which the Master set that judgment aside was that the steps taken by the Deputy Commissioner following an assessment to issue his notices of assessment were such that there was a fundamental flaw in the relevant
documentation issued by the Deputy Commissioner, and therefore it could not be said that tax was due, payable and recoverable
pursuant to it.
Although an appeal seems to have been envisaged by the Deputy Commissioner against the Master's decision, in fact no notice of appeal from his decision has been lodged in the Supreme Court. The Master gave leave to the Deputy Commissioner to file an amended statement of claim, but that leave has not been resorted to by the Deputy Commissioner. It is therefore said that in those circumstances, the notice is based on a fundamentally defective judgment, and that the costs of the application to set aside the notice should in essence follow the fate of the Supreme Court proceeding.
An alternative ground is relied upon by counsel for the judgment debtor, namely, that the service of the bankruptcy notice is itself defective because it was served pursuant to an order for substituted service made by a Registrar of this Court. The order of the Registrar provided in order 2(a) and (b) the method of service, and although there is perhaps some argument as to whether the method of service provided for in 2(a) is alternative to 2(b) it seems to me that the only reasonable construction that the order can bear is that the two are cumulative. The bankruptcy notice was in fact served only in accordance with one of those two subparagraphs. It seems to me to follow from that that there was not a compliance with the
order for substituted service.
Counsel for the Deputy Commissioner does not seek an order for costs in the Commissioner's favour of the proceedings to set aslde the notice. He is content to stand by the order which was made on 2 November, namely, that there be no order as to costs of the application to set aside the notice. He points in particular to the fact that the notice was issued on 2 November
1992 and that no application was made by the judgment debtor to
set it aside until some months later, namely, on 4 March 1993.
In my view the arguments of counsel for the debtor are correct, and I think the proper order for costs is that the judgment debtor's costs of the application to set aside the bankruptcy notice, including any reserved costs and today's
application, should be paid by the Deputy Commissioner. There should be no order as to the costs of 2 November 1993.

I certify that this and the

preceding three (3)

true copy of the

judgment herein of

Mr. Justice l

( ; $ 1 < ~ ,

Associate @ ! Dated: 12 November 1993

Counsel for the Debtor C J Bevan

Solicitors for the Debtor	Gadens Ridgeway
Counsel for Petitioning Creditor :	B Skinner
Solicitors for Petitioning Creditor:	Australian Government Solicitor
Date of Hearing	12 November 1993
Date of Judgment	12 November 1993