Thai, A.N. v Deputy Commissioner of Taxation

[1994] FCA 442

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JUDGMENT No. ...,., .......,.,., .,,,,,,,,,,.

IN THE FEDERAL COURT OF AUSTRALIA )

NEW SOUTH =ES DIS~RICT REGISTRY ) No. NP 3871 of 1993

GENERAL DIVISBBN 1

Between:  ANTHONY NURUN THAI

Applicant Debtor

DEPUTY COMMISSIONER OF

13 JuL 1994 And:

1. TAXATION

! FEDERAL COUW OF

AUSTRALLA	Respondent Creditor
PRlNClPAL

REASONS FOR JUDGMENT

EINFELD J SYDNEY 16 JUNE 1994

The debtor applies by application filed in court today for leave to appeal out of time against a decision of Justice Davies given on 9 May. That decision was given on the issues raised in paragraphs 1 to 4 of the notice of opposition to the petition which was dated 29 November 1993 but only filed on 15 February

1994. It came about by reason of an application filed by the

applicant on 22 March 1994, and subsequently granted, that those
issues be disposed of by a preliminary and separate hearing.

In the proceedings before Justice Davies, the applicant challenged the assertions made in paragraphs 1 and 2 of the petition presented by the Deputy Commissioner of Taxation. His Honour having rejected the arguments put forward on behalf of the debtor, the debtor now argues that his Honour was in error in his interpretation of section 205 of the Income Tax Assessment Act. to be adopted, and his Honour should have so construed the In particular it is said that the section requires a procedure

section, by which the debtor was -given either a fixed time for the payment of unpaid assessments or no time in which case a statutory time would have taken effect. It should then have been followed by a notice under section 205 which abrogated or reduced that time.

I have read his Honour's judgment and I think that that argument has, for the reasons given by his Honour, no chance of success at all. I note that the application for leave to appeal out of time is not supported by any affidavit neither is the argument

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raised in the application filed in court, so that its first	l.
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appearance was in Court this morning.	No authority was cited to
the Court in support of the contention that his Honour erred in	i
his interpretation of section 205 and the procedure in fact	I
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adopted in this case and I can see no basis at all for suggesting that his Honour made some fundamental error of interpretation as would make it at all possible that an appeal would be upheld.	! : ;
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The application for leave to appeal, which is an entirely
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discretionary matter, is also coloured by the other facts of the !

matter to which I will make brief reference in a moment, and to

the history of the matter as appears from the papers and the	I I
chronology handed up to the Court on behalf of the debtor today.	1 I
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There has been considerable delay in filing this application.

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As I believe his Honour's judgment was a final judgment, time for	l
appeal expired some 16 or 17 days ago. Although he filed no
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affidavit evidence the debtor, who is in Thailand, offered to
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file tomorrow an affidavit of his Australian solicitor Mr Munro. AS it happens, Mr Munro did in fact prepare an affidavit which was presented to the Court this morning in another context but the matter of delay was not covered at all. However, when called to give oral evidence to supplement his affidavit, Mr Munro did give some sworn evidence on delay to support what was said from the bar table. In summary this evidence was that despite the fact that Mr Thai was surprised, even shocked, by the result of the proceedings before Justice Davies, and apparently wanted to challenge it, he did not crystallise his instructions to do so until yesterday or, if I misunderstood the evidence, a few days ago after the recent long weekend.

The debtor's lawyers, quite understandably, press that the debtor as a chartered accountant will suffer what is described in Mr Munro's affidavit as "extreme hardship" if he is made bankrupt because he will be denied a practising certificate. However, the recency of the decision to appeal, long after the time for appeal from Justice Davies' decision has expired, demonstrates a casualness of approach to the matter throwing considerable doubt

upon the genuineness of the debtor's supposed hardship. I should	have thought that if he was shocked by the decision and expected
it, as has been said, to "go the other way", the appeal would have been on within minutes of its having been delivered whereas in fact the matter was still in doubt up to 24 or 48 hours ago. Assuming that what has been said from the bar table in this regard is correct, there is simply no consistency between those facts. I do not think that the delay has been explained, and as I have said, I do not think there-is any basis for a successful appeal in any event. Leave to appeal will be refused.
In the application filedthis morning, the applicant seeks orders in relation to the fifth matter raised in the notice of opposition to the petition which is specially fixed for hearing today. The petition contains an assertion by the Deputy Commissioner that the debtor committed an act of bankruptcy when he departed from Australia on 17 September 1992 and because he has remained outside the country with an intention to defeat or delay creditors. The notice of opposition challenges that assertion and it is the matter which was to be litigated today. However, the debtor applies to the Court today for the hearing to be vacated and for certain directions to be given for the filing of affidavits in the matter. He offers to submit to an order that he pay the creditor's costs thrown away by the delay of the hearing.
The debtor has today presented two affidavits, one by Mr Munro as his solicitor, and the other by Mrs Thai, his estranged wife,
and seeks leave to proceed upon these affidavits in this application. His counsel acknowledges frankly but correctlythat
there is no other evidence before the Court to support the fifth ground of opposition and that without the affidavits the debtor must surely fail. The Deputy Commissioner opposes leave being granted to use these affidavits on the grounds of lack of notice and because the time fixed for their filing has long since expired. In response the debtor suggested that the matter could proceed tomorrow to glve the Deputy Commissioner's representatives an opportunity to consider the affidavits. Alternatively, the debtor stated, the hearing could be adjourned at his cost. It was said that no prejudice would flow to the Deputy Commissioner from either of those arrangements.
I agree that if the matter was adjourned until tomorrow little if any prejudice would be suffered. If the matter was delayed longer more prejudice would be occasioned but that would not be of such a kind as would incline me against the admission of the material. The main factor to consider on this aspect of the case is whether the affidavits actually bear on the issue raised and whether they establish anything of any significance in support of the ground of opposition before the Court for consideration.
There are two aspects to this act of bankruptcy as laid down by the statute. One is that, with intent to defeat or delay creditors, the debtor departed from Australia; the other is that he has remained outside of Australia with that intent. Mrs Thai ' s affidavit , which I am prepared to admit into evidence over the objection of the Deputy Commissioner, says that her husband left Australia because there had been a marriage breakdown and
what she describes as a "nervous breakdown", although it is not clear whose nervous breakdown it was. It has nothing to say
about the matters asserted in the petition. M r Munro's
affidavit, which I also admit into evidence notwithstanding the objection, details a lengthy history of the dealings that he had on behalf of his client with the Taxation Office, and of what is
now two lots of bankruptcy proceedings commenced in relation to Mr Thai's indebtedness. But it too provides no evidence at all to support the debtor's assertion that he left Australia and has remained outside Australia, both of which facts are admitted, without an intention to defeat or delay the Deputy Commissioner as one creditor and perhaps other creditors as well.
Hence, there is no point in granting an adjournment for the purposes of allowing the Deputy Commissioner to meet this evidence because the evidence does not prove anything relevant that requires any meeting. I should add in addition, because it is important on issues of credit and discretion, that the debtor argues by counsel today, and his solicitor gave some brief evidence in support of the assertion, that it was the intention of the debtor to return to Australia to prosecute this matter and deal with it but that on Tuesday of this week he told his solicitor that he had not made any special arrangements to come and could not get on a flight. That is, of course, hearsay evidence at best and should not ordinarily be treated as evidence of the fact. But accepting, as of course I do, that his
told him, it is preposterous, to say the least, that the debtor solicitor has recounted reasonably accurately what his client
has been unable to obtain a booking on a flight to come to Australia for a case that has been set down for hearing for some four months. It is obvious that if he had had a serious intention of coming to deal with the matter, a flight would have been organised. At worst, he would have told his solicitor that if he could not obtain a flight earlier this week, he could obtain one-tomorrow or the next day or next week or on some other occasion. The absence of any such information shows that this whole excuse represents an exercise in humbug to which the Court will certainly not lend its imprimatur.
It is'true that orders were made for the affidavit evidence in
this matter to be filed long ago and it was not. But if these
affidavits raised substantial matters or even matters that might
amount to support for the debtor's assertion in the fifth ground
of opposition, I would certainly have allowed the matter to go
ahead even at the rlsk of losing these days for hearing and
putting the Court and the Deputy Commissioner and perhaps other
people to some inconvenience. Bankruptcy is not something that
ought to be imposed upon people because of technical failures,
even failure to comply with orders or directions of the Court.
But there simply has not been placed before the Court any
material, even by way of hearsay, to suggest that there exists
any evidence anywhere to support the debtor's contention. In
those circumstances it is simply trivialising with the Court and
wasting its time, not to mention others', to contemplate that

this matter should be allowed to go any longer at all.	For my
part, I do not propose to be party to it.

Accordingly, the application for leave to file the affidavits of Mrs Thai and Mr Munro dated today is granted, but the application for an adjournment is refused. The fifth ground of opposition or objection to the petition is dismissed and the debtor must pay the costs of this hearing and of the previous proceedings apparently reserved by Justice Davies until today.

I should add that the offer of the debtor to compensate for the

inconvenience caused by an adjournment by paying the creditor's costs-must itself be regarded as an offer of, to say the least, very questionable substance. Mr Munro gave evidence that his fees and costs are outstanding and have not been paid by Mr Thai. There is evidence before the Court that Mr Thai's indebtedness in Australia is very high indeed. Mrs Thai, in her evidence, says that when he left for overseas, he took no assets with him

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and that no Australian assets have been sent to him. She has received no monetary support from him and exists on a pension

from the Australian Government. The joint assets that she and , .

her husband owned have been sold since his departure and have been used to repay outstanding creditors. There-is no evidence before the Court that Mr Thai has any assets in Australia that could be accessed to pay any costs and no evidence as to how any costs order made as a condition of any concessions made to him in the matter could be met by way of security or otherwise. Thus

possibly figure in any serious consideration of the exercise of	I regard that offer also as being an empty one which cannot
the Court's discretion. ,

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The result of the matter is that the notice of opposition to the

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petition is dismissed with costs.

preceding pages	I certify that this and the Xa/\
Reasons for l

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Justice Elnfel

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Dated: J4-j \yqg

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