FEDERAL COURT OF AUSTRALIA Ibolya Szucs v Deputy Commissioner of Taxation [2007] FCA 1492 IBOLYA SZUCS v DEPUTY COMMISSIONER OF TAXATION QUD 226 OF 2007 TRACEY J 26 SEPTEMBER 2007 BRISBANE IN THE FEDERAL COURT OF AUSTRALIA QUEENSLAND DISTRICT REGISTRY QUD 226 OF 2007 ON APPEAL FROM THE FEDERAL MAGISTRATES COURT OF AUSTRALIA BETWEEN: IBOLYA SZUCS Appellant AND: DEPUTY COMMISSIONER OF TAXATION Respondent JUDGE: TRACEY J DATE OF ORDER: 26 SEPTEMBER 2007 WHERE MADE: BRISBANE THE COURT ORDERS THAT: 1. The application be dismissed with costs. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA QUEENSLAND DISTRICT REGISTRY QUD 226 OF 2007 ON APPEAL FROM THE FEDERAL MAGISTRATES COURT OF AUSTRALIA BETWEEN: IBOLYA SZUCS Appellant AND: DEPUTY COMMISSIONER OF TAXATION Respondent JUDGE: TRACEY J DATE: 26 SEPTEMBER 2007 PLACE: BRISBANE REASONS FOR JUDGMENT 1 There is before the Court an application by Ms Ibolya Szucs for an enlargement of time in which to bring an appeal against a decision of a Federal Magistrate. Leave is necessary because the requisite notice of appeal was not filed within the 21 day period prescribed by the Federal Court Rules. 2 The relevant history of the matter can be traced to a judgement of the Supreme Court of Queensland, entered on 28 October 2005, by which Ms Szucs was held liable to pay the Deputy Commissioner of Taxation the sum of $423,969.14. This sum remained unpaid when a bankruptcy notice, dated 4 January 2007, was issued requiring Ms Szucs to pay this sum to the Deputy Commissioner of Taxation within 21 days after service of the notice. Ms Szucs did not comply with the notice within the required time. She thereby committed an act of bankruptcy: see s 40(1)(g) of the Bankruptcy Act (1966) (Cth) ("the Act"). The Deputy Commissioner of Taxation filed a creditor's petition seeking the making of a sequestration order against Ms Szucs's estate. The application was made to the Federal Magistrates' Court. The application came on for hearing on 11 July 2007 before Federal Magistrate Burnett. On that day his Honour made the orders sought, appointed two named persons as trustees of Ms Szucs's estate and ordered that she should pay the Deputy Commissioner of Taxation's costs if the application. 3 On 2 August 2007 Ms Szucs filed an application for extension of time to file and serve a notice of appeal against the Federal Magistrate's decision. 4 The application for an extension of time was supported by an affidavit in which Ms Szucs said that she needed an extension of time because of "sickness". By this I understand her to mean that sickness prevented her from filing a timely appeal. The notice of appeal identified four grounds. They were: "(a) I have completed a Private Administrative Process evidencing an agreement between the parties. (b) The matter has been already settled and closed in the PAP as agreed to by all parties as evidenced by the Certificate of Dishonour. (c) Debt cannot be discharged with a Debt Instrument - Currency Act 1965. (d) My confidential commercial information cannot be made public under the Privacy Act 1988." The notice of appeal sought orders that the sequestration order be set aside, that the Deputy Commissioner of Taxation, the Australian Taxation Office and an officer employed in the Australian Taxation Office pay Ms Szucs $25 million in damages and that all relevant fees be waived. 5 When the appeal was called on for hearing on 24 September 2007 Ms Szucs appeared in person. She pressed her application for an enlargement of time, confirming that she had been ill in the three week period following the handing down of the Federal Magistrate's decision. She did not produce a medical certificate or other evidence to support her claim. I invited her to address her various grounds of appeal so that I could assess the strengths of the case she sought to make. 6 The submissions made by Ms Szucs were, I regret to say, largely incomprehensible. The so called "Private Administrative Process", mentioned in the first two grounds, was referred to in an affidavit, sworn by Ms Szucs on 10 July 2007, which was before the Federal Magistrate. In that affidavit Ms Szucs deposed that the matter had already been settled and closed as agreed to by all parties "as evidenced by the Certificate of Dishonour and the debt offset by tender of private prepaid asset account." A "notice of dishonour" dated 24 October 2006, signed by Ms Szucs was exhibited to the affidavit. It contained the following passages: "The Undersigned hereby fully accepts the presentment and promptly tenders to you (or one of your Agents) consideration in the form of INCOME TAX PAYMENT, to honourably discharge the account, attached hereto, and that you (or one of your Agents) discharge the debts of the Debtor/Bailee – IBOLYA SZUCS which the Undersigned, has accepted for value, returned for value, and tendered for consideration to the Australian Taxation Office and that your (or one of your Agents) promptly ledger the accounts stated herein to reflect the discharge of said accounts and forward the Undersigned an official evidentiary receipt demonstrating that such a ledger has taken place. Should the Undersigned not receive official notification from you (or one of your Agents) of the ledgering of the accounts stated herein, the Undersigned shall accept that one of your following 4 (four) options have been willingly and voluntarily elected by you and/or one of your Agents: A): That you (or your Agents) have deposited the instruments into your bank or other financial institution for processing, thereby discharging the proposed debts of the Debtor/Bailee – IBOLYA SZUCS; B): That the debt has been forgiven, ergo waived; C): That the instruments were converted by you or your Agents, for a different purpose other than that for which each were intended, thereby discharging the proposed debts of the Debtor/Bailee – IBOLYA SZUCS; D): That the instruments have been dishonoured due to a deficiency in either the forms or amount stated on and/or of the instruments, that you (or your Agents) failed to notify the Undersigned of such deficiency (ies) thereby preventing the Undersigned from exercising an opportunity to remedy the situation, thereby discharging the proposed debt of the Debtor/Bailee – IBOLYA SZUCS The Undersigned humbly thanks you for your time and your attention given to this notification of the ledgering of the accounts stated herein." [Emphasis in original]. 7 The "consideration" which Ms Szucs claimed constituted a payment which would honourably discharge her debt to the Deputy Commissioner of Taxation consisted of a series of Court documents (including the Bankruptcy Notice) and various documents raised by the Australian Tax Office over which Ms Szucs had, on each page, stamped the following statement: "Accepted and returned for value by drawee for full settlement and closure of account exempt from levy and duty. Deposit to the Australian Treasury and charged named to the Australian Taxation Office ACC # 0003549929. Silence or non-response shall be deemed that this account has been settled in full and closed. All actions to be completed within 21 days. Signed Ibolya Szucs 19/03/07 Ibolya: Szucs Authorised Agent and Secured Party Creditor FOR IBOLYA SZUCS E.I.N. 184026710." Having considered this material the learned Federal Magistrate observed that: [10] It seems that what the respondent sought to do, in effect, was write to the Tax Office and inform it that if it didn't respond in the manner which she requested, then she regarded the debt as having been waived or otherwise disposed of. There is no evidence, of course, to suggest that any such agreement was ever reached beyond something that was a figment of the respondent's own views of this matter. There is certainly no evidence to support, even on a subjective basis, any consideration moving in support of that purported agreement, and its quite clear that, in the absence of any agreement or any waiver giving rise to, for instance, an argument of estoppel, that the proposal by one party which is not accepted by another could ever be enforceable by one party against another." Similar submissions about the Private Administrative Process were made on this appeal. I consider, with respect, that the learned Magistrate was correct in the manner in which he assessed and responded to these submissions. His Honour went on to conclude that Ms Szucs had not demonstrated any sufficient cause as to why a sequestration order should not be made. In particular, she had not adduced any evidence of any ability to pay her debt to the Deputy Commissioner of Taxation. 8 The "Debt Instrument/Currency Act" ground, insofar as I could judge from submissions made by Ms Szucs, seeks to call into question the legality of aspects of the currency and banking systems which operate in this country. Such arguments bear some resemblance to those rejected by the High Court in Re Skyring (1985) 58 ALR 629 and Re Cusack (1985) 66 ALR 93. In any event I am unable to comprehend how any challenge to the currency and banking systems can have any bearing on the outcome of an appeal against the making of a sequestration order. No argument on this point was advanced before the Federal Magistrate. 9 I do not understand what is meant to be conveyed by the Privacy Act ground. It was not raised before the Federal Magistrate. 10 At the start of the hearing I asked Ms Szucs to summarise for me the arguments which she was proposing to advance. She handed up an affidavit. The affidavit was largely argumentative in nature but I received it and treated it on the basis that it provided a point form outline of argument. I invited Ms Szucs to elaborate on each of the points raised in the affidavit. She was prepared to provide some elaboration of some of the points; she declined to assist me in understanding some of the others. 11 A number of the points related to the legal status of the Australian Taxation Office and the powers of the Office. I sought to explain to Ms Szucs that the Australian Taxation Office was not a party to the proceeding. The applicant before the Federal Magistrate was a Deputy Commissioner of Taxation. By s 255-5 of the Taxation Administration Act 1953 (Cth) a Deputy Commissioner of Taxation may sue in her official name to recover an amount of a tax related liability that is due and payable to the Commonwealth and remains unpaid. 12 Ms Szucs's application for an enlargement of time with which to lodge her notice of appeal was made only one day after the prescribed period had expired. Had I come to the view that she had even a barely arguable ground which might have led to her appeal being allowed, I would have granted her application. It appears that she was prevented by illness from lodging a timely appeal and the Deputy Commissioner of Taxation does not allege that she would suffer any prejudice were the application be granted. I have, however, come to a clear conclusion that there is no substance in any of the grounds contained in the notice of appeal or in any of the points raised in argument at the hearing. I should add that I have read the Federal Magistrate's reasons for judgment and I can discern no other basis on which an appeal from his decision might succeed. 13 I will, therefore, refuse Ms Szucs's application. She should pay the respondent's costs of the application. I certify that the preceding thirteen (13) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice TRACEY J. Associate: Dated: 26 September 2007 Appellant appeared in person Counsel for the Respondent: Mr B Cosgrove Solicitor for the Respondent: Australian Government Solicitor Date of Hearing: 24 September 2007 Date of Judgment: 26 September 2007