FEDERAL COURT OF AUSTRALIA Henderson v Deputy Commissioner of Taxation [2005] FCA 1806 Henderson v Deputy Commissioner of Taxation [2005] FCA 1574 referred to Henderson v Commissioner of Taxation [2005] AATA 606 referred to Three Rivers District Council v Bank of England (No 3) [2003] 2 AC 1 referred to Northern Territory v Mengel (1995) 185 CLR 307 applied General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125 applied JOHN WILLIAM HENDERSON v NEIL MANN, A DEPUTY COMMISSIONER OF TAXATION OF THE COMMONWEALTH OF AUSTRALIA VID 1436 OF 2004 SUNDBERG J MELBOURNE 13 DECEMBER 2005 IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY VID 1436 OF 2004 BETWEEN: JOHN WILLIAM HENDERSON APPLICANT AND: NEIL MANN, A DEPUTY COMMISSIONER OF TAXATION OF THE COMMONWEALTH OF AUSTRALIA RESPONDENT JUDGE: SUNDBERG J DATE OF ORDER: 13 DECEMBER 2005 WHERE MADE: MELBOURNE THE COURT ORDERS THAT: 1. The proceeding be dismissed under Order 20 rule 2 of the Rules of Court on the ground that it discloses no reasonable cause of action. 2. The applicant pay the respondent's costs of the proceeding. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY VID 1436 OF 2004 BETWEEN: JOHN WILLIAM HENDERSON APPLICANT AND: NEIL MANN, A DEPUTY COMMISSIONER OF TAXATION OF THE COMMONWEALTH OF AUSTRALIA RESPONDENT JUDGE: SUNDBERG J DATE: 13 DECEMBER 2005 PLACE: MELBOURNE REASONS FOR JUDGMENT BACKGROUND 1 On 8 November 2005, in Henderson v Deputy Commissioner of Taxation [2005] FCA 1574 (the earlier reasons), I declined to grant the relief sought in the respondent's motion, notice of which was filed on 13 May 2005, namely for orders pursuant to O 20 r 2 of the Rules of Court that the proceeding be permanently stayed or dismissed on the grounds that it discloses no reasonable cause of action, is frivolous or vexatious or is an abuse of the process of the Court (the motion). Instead, I ordered that: (a) the applicant file and serve a further amended statement of claim on or before 22 November 2005; (b) the respondent file and serve written submissions in response to the further amended statement of claim on or before 29 November 2005; and (c) the applicant file and serve any written submissions he wished to make in response to the respondent's written submissions on or before 6 December 2005. Those orders have been complied with and I have considered the further amended statement of claim and the parties' submissions. Therefore, I will now, as indicated at [19] of the earlier reasons, proceed to dispose of the motion. 2 I said at [17] and [18] of the earlier reasons: "By his written submissions, the applicant asks the Court to indulge him in relation to the conduct of the proceeding generally. He is unrepresented and without legal training. His brother is also without legal training. At the hearing, the applicant also explained to the Court the difficulties involved in running the proceeding from the prison where he is on remand. He also complains that the respondent has not acted as a 'model litigant'. The Court is aware of the difficulties faced by unrepresented litigants generally and the applicant particularly. He has already been indulged to a considerable extent. The proceeding has been on foot for nearly a year. In that time, and allowing for the fact that he is an unrepresented litigant, he has, despite numerous opportunities, failed to put his pleadings in order. By the late filing of the documents referred to at [3], he secured a significant amount of extra time. He is about to be given another opportunity to put his pleadings in order. Moreover, his written submissions – particularly that part described at [12] – tend to suggest that his 'disadvantage' is not as significant as he would have the Court believe." 3 After I handed down the earlier reasons, I said to the applicant's brother (who represented the applicant): "In summary, the position is this. The current statement of claim is not satisfactory in that it doesn't give particulars of what we call the mental element in the tort of misfeasance in public office, and what is meant by mental element appears in paragraph 12 [of the earlier reasons]. … And the effect of the orders is that I am giving … your brother a final opportunity to put the document in proper form with full particulars. Now, I stress that this is to be done by particulars in a statement of claim and not by evidence. Not by an affidavit. … I would like to explain the difference between statements of claim and particulars on the one hand, and affidavits and evidence on the other. Affidavits contain evidence to support what is in a statement of claim, so the statement of claim comes first, and when the statement of claim is in a satisfactory form with particulars, then you do an affidavit containing the evidence to support what is in the statement of claim and the particulars. You don't do the affidavits first. You do them when the pleadings are in proper form. So, we haven't yet reached the stage of putting on affidavits or giving any sort of evidence. We are still at what lawyers call the pleading stage: statement of claim followed by defence and then the evidence." 4 These reasons should be read together with the earlier reasons. THE FURTHER AMENDED STATEMENT OF CLAIM 5 The further amended statement of claim pleads that on or about 5 and 6 February 2003 the respondent issued garnishee notices (the garnishee notices): para 2. The respondent has conceded that the garnishee notices were invalid because they were served before the assessments to which they related were served (see [14] of the earlier reasons). The garnishee notices were served on the Property Officer of the Police Station at Cairns, Queensland (the Police garnishee notice) and an officer of each of the Bendigo and Commonwealth Banks (the Bank garnishee notices): para 3. 6 Paragraph 4 pleads that: "The Respondent made the Invalid Garnishee Notices knowing that he was not authorised by s 260-5 of Schedule 1 of the [Taxation Administration Act 1953 (Cth)] to do so and did so with the object of creating a device to prevent the sum of $598,325.00 (the Queensland Cash) from being returned to the Applicant by the Property Officer …." The particulars to para 4 are lengthy. The following is a summary thereof. Unfortunately, they are not in chronological order. (a) On 20 April 2002, the applicant was arrested by the Queensland Police. Charges were laid. One of those charges arose from his possession of a substantial amount of cash reasonably suspected of being tainted property. (b) On 30 November 2002, a magistrate at Cairns dismissed the charges. (c) The Queensland Police "appealed the magistrate's order for dismissal to the District Court of Queensland". (d) The appeal was to be heard on 12 February 2003. "There was a real danger that the appeal would not succeed and that the [Queensland Police] would be compelled to return the Queensland Cash to the applicant." (e) On 10 February 2003, on an ex parte application to the Supreme Court of Queensland, the Queensland Police obtained an order under the Criminal Proceeds Confiscation Act 2002 (Qld) restraining any person from dealing with the cash seized from the applicant. The application was "an abuse of the Court's process as the Queensland Cash had already been dealt with by … the Queensland Police in April 2002" – which fact was not disclosed to the Court on the application. (f) Detective Inspector Webster of the Queensland Police wrote to the respondent on 9 June 2002. (That is, between the events described in particulars (a) and (b).) The respondent replied. (No date is given.) (g) In an affidavit dated 3 March 2003 (after the event described in particular (e)), Senior Constable Kokoschko of the Queensland Police deposed that, in the course of his investigations in relation to the applicant, he had been advised by an officer of the respondent that the applicant's former wife had last lodged a tax return for the financial year ending in 1984. (h) On 27 June 2005, the Administrative Appeals Tribunal varied decisions of the respondent to disallow the applicant's objections to assessments of income tax for the financial years ending in 1998, 2000, 2001 and 2002: Henderson v Commissioner of Taxation [2005] AATA 606. The Tribunal found that "as a result of information obtained from the Queensland Police, the respondent commenced an investigation of the applicant's affairs which resulted in the disputed assessments." (i) By letter dated 5 February 2002, the respondent asked the applicant to examine calculations of the applicant's income made as part of an audit. The respondent also advised that default assessments had been made on the basis of information obtained from third parties. (j) A note obtained by the applicant pursuant to a Freedom of Information (FoI) request discloses that, on 11 February 2003, the applicant telephoned the respondent, the applicant was told that his call would be returned, the applicant was unavailable when his call was returned and a message was left for the applicant. (k) The applicant again called the respondent later the same day and was advised that the person with whom he should speak was unavailable. Particulars (l) to (t) plead that by various notices dated 5 and 6 February 2003 and addressed to the applicant by various names at various addresses, the respondent informed the applicant of the service of the garnishee notices as described at [5] (the service notices). Those particulars further plead that the respondent knew or ought to have known that all but one of those names and addresses was not the applicant's name and address and, as a result, the applicant was not aware of the relevant service notices' existence until he obtained them pursuant a FoI request. (According to those particulars, a service notice in relation to the Police garnishee notice was not sent to the applicant's correct address). Particular (u) pleads that a note obtained by the applicant pursuant to a FoI request discloses that, on 3 February 2003, an officer of the respondent advised an unknown person: "Assuming all goes well with the keying / processing the debt will be on the system by this Friday." Particular (v) pleads that a note obtained by the applicant pursuant to a FoI request discloses that, on 8 November 2001, the respondent received a notice of change of name of the applicant. By letter dated 6 March 2003, the applicant's solicitors requested the respondent to provide them with the information obtained from third parties referred to in particular (i) in order to allow the applicant to object to the default assessments: particular (w). Particular (w) further pleads that: "In an evasive manoeuvre to avoid detection of his misfeasance, the Respondent ignored the request … and treated the said letter as a notice of objection. Repeated requests for full details as to how the assessments were calculated and from what source of evidence were ignored or evaded by the Respondent." Finally, particular (x) pleads that the respondent did not fully respond to a FoI request (presumably the same as that referred to in particulars (j) to (v)) made on 6 March 2003. 7 Paragraph 5 pleads that each of the garnishee notices: "(a) Was not authorised by s 260-5 of Schedule 1 of the [Taxation Administration Act 1953 (Cth)]; (b) Was not the result of a bona fide attempt to exercise the power conferred by [that section]; and (c) Was a purported exercise of the powers conferred by [that section] for an improper or collateral purpose." 8 Paragraph 6 pleads that the applicant suffered, and continues to suffer, loss and damage as a result of the conduct described in paras 2 to 4. No particulars are given. 9 Paragraph 7 sets out the applicant's claims for relief. 10 By para 8, the applicant reserves the right to file and serve further and better particulars upon discovery. REASONING 11 As noted in the earlier reasons, the applicant's claim against the respondent is solely in the tort of misfeasance in public office. In Three Rivers District Council v Bank of England (No 3) [2003] 2 AC 1 at 191, Lord Steyn said: "The case law reveals two different forms of liability for misfeasance in public office. First there is the case of targeted malice by a public officer, ie conduct specifically intended to injure a person or persons. This type of case involves bad faith in the sense of the exercise of public power for an improper or ulterior motive. The second form is where a public officer acts knowing that he has no power to do the act complained of and that the act will probably injure the plaintiff. It involves bad faith inasmuch as the public officer does not have an honest belief that his act is lawful." That accords with what Brennan J (as he then was) said in Northern Territory v Mengel (1995) 185 CLR 307 at 357: "… the mental element is satisfied either by malice (in the sense stated) or by knowledge. That is to say, the mental element is satisfied when the public officer engages in the impugned conduct with the intent of inflicting injury or with knowledge that there is no power to engage in that conduct and that that conduct is calculated to produce injury." His Honour, at 356, defined "injury" as "something which the plaintiff would not or might not have suffered if the power … had been validly exercised". At 357, his Honour said "[i]f the impugned conduct then causes injury, the cause of action is complete". 12 The applicant's claim must be dismissed for lack of any injury caused by the impugned conduct. The absence of damage or causation makes his claim so untenable it cannot possibly succeed: see General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125. 13 As to damage, the applicant has suffered nothing he would not or might not have suffered were the garnishee notices valid – that is, if they were served after the assessments to which they related were served. It is not disputed that no moneys were forwarded to the respondent pursuant to the Police garnishee notice. Meanwhile, the moneys forwarded to the respondent pursuant to the Bank garnishee notices have been repaid with interest (see [7](c) and [15] of the earlier reasons). 14 The applicant's written submissions – which run to sixteen pages – do not address the question of damage. Rather than avail himself of the opportunity provided by the relevant order to respond to the respondent's written submissions – particularly in relation to the crucial question of damage squarely raised by those submissions – the applicant merely elaborates upon the further amended statement of claim by way of bald assertions of an extremely serious nature as to the motives of the respondent and misconceived requests that the Court draw various inferences in support of the same. Most of these relate to ultimately peripheral issues such as the letter referred to in particular (i) to para 4 of the further amended statement of claim and the fact that, notwithstanding the various service notices described in particulars (l) to (t), a service notice in relation to the Police garnishee notice was not sent to the applicant's correct address. 15 As to causation, the order of the Supreme Court of Queensland described in particular (e) to para 4 of the further amended statement of claim rendered the Police garnishee notice a dead letter: it prevented any person, including the Queensland Police and the respondent, from dealing with the cash seized from the applicant. By his written submissions, the applicant contends that the Queensland Police and the respondent "collaborated [with] respect to the applicant" and the cash seized from him and that this is reflected in particulars (f) to (h). Nowhere does the further amended statement of claim say that. At most, it shows that the Queensland Police and the respondent communicated with one another in relation to the applicant. In any case, the Queensland Police doubtless had their own reasons for seeking to restrain any dealing with the cash seized from the applicant. The applicant's complaints in particular (e) as to the circumstances in which that order was obtained – by someone other than the respondent who, in the absence of a tenable allegation to that effect in the further amended statement of claim, I must assume was not acting at the behest of the respondent – are irrelevant to any claim against the respondent. 16 Moreover, the further amended statement of claim fails to disclose the requisite mental element – in either of the forms referred to at [11]. To the extent that they amount to assertions of fact – as opposed to mere conjecture – and assuming, as I must, that they are true, the particulars to para 4 shed no light whatsoever on the respondent's state of mind. Indeed, many of them are patently irrelevant to any claim against the respondent. Further, there are no particulars to para 5. Finally, the respondent rightly points out that knowingly issuing invalid garnishee notices in order to prevent the return of the cash seized from the applicant would have been "counterproductive, to say the least." CONCLUSION 17 By his written submissions, the applicant asked the Court not to summarily dismiss his claim if its deficiencies "may be cured by further pleading or the filing of further affidavit material." To that end, he asked the Court to "further indulge him [with] another opportunity to fix any deficiency". For the reasons appearing in the passage quoted at [2], I will not accede to those requests. In any case, I very much doubt that the deficiencies of the further amended statement of claim can be cured by its amendment. As to the filing of further affidavit material, I repeat what I said in the last two paragraphs quoted at [3]. 18 The proceeding should be dismissed on the ground that it discloses no reasonable cause of action. The applicant must pay the respondent's costs of the proceeding. I certify that the preceding eighteen (18) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Sundberg. Associate: Dated: 13 December 2005 The Applicant represented himself with his brother making submissions on his behalf. Counsel for the Respondent: S Sharpley Solicitor for the Respondent: Australian Government Solicitor Date of Last Written Submissions: 6 December 2005 Date of Judgment: 13 December 2005