Voyka v Deputy Commissioner of Taxation [2008] FCA 469

FEDERAL COURT OF AUSTRALIA

Voyka v Deputy Commissioner of Taxation [2008] FCA 469

JOHN VOYKA v DEPUTY COMMISSIONER OF TAXATION QUD 426 OF 2007

DOWSETT J

6 FEBRUARY 2008

BRISBANE IN THE FEDERAL COURT OF AUSTRALIA

QUEENSLAND DISTRICT REGISTRY QUD 426 OF 2007

BETWEEN: JOHN VOYKA

Applicant

AND: DEPUTY COMMISSIONER OF TAXATION

Respondent

JUDGE: DOWSETT J DATE OF ORDER: 6 FEBRUARY 2008

WHERE MADE: BRISBANE

THE COURT ORDERS THAT:

1. The application for an extension of time in which to appeal be dismissed and leave be refused. 2. The applicant pay the respondent's costs of the proceedings, including reserved costs. 3. The application be amended by inserting the words "Deputy Commissioner of Taxation" in lieu of the words "Australian Taxation Office". 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 426 OF 2007

BETWEEN: JOHN VOYKA

Applicant

AND: DEPUTY COMMISSIONER OF TAXATION

Respondent

JUDGE: DOWSETT J

DATE: 6 FEBRUARY 2008

PLACE: BRISBANE

REASONS FOR JUDGMENT 1 This is an application for an extension of time in which to appeal against a sequestration order made in the Federal Magistrates Court on 9 November 2007. The Commissioner, who was the petitioning creditor, opposes the application upon the sole ground that no appropriate ground of appeal has been demonstrated. In my view, that submission is correct. I should briefly explain why that is so. 2 Firstly, the applicant submits that he was not served with the original bankruptcy notice, non-compliance with which was the basis for the petition. The Federal Magistrate dealt with this argument, particularly at [5]-[10] of his reasons. The applicant was, at the time, a prisoner. The document was served pursuant to provisions for postal service contained in the relevant regulations. The applicant now asserts that he did not receive the document. The Federal Magistrate held that service was effected in accordance with the Regulations. At that time, the respondent had not sworn that he had not received the document. In those circumstances, it is impossible to detect any error in the Federal Magistrate's decision to proceed with the hearing of the petition. 3 The applicant then submits, or so I infer, that the Commissioner of Taxation was in some way estopped, or would otherwise be restrained in equity, from relying upon the bankruptcy notice in support of the petition because of an alleged conversation which occurred between the applicant's nephew, Danny, and Ms Everingham, an employee of the Commissioner, at some time after 1 December 2007. Mr Danny Voyka said that he had sent a letter to the Tax Office on 1 December in which he suggested ways in which the applicant might meet the debt. He said that 'after a couple of days, I still had not heard from the ATO', and that he therefore called Ms Everingham. She said that she had received the letter and intended to look at it before she went on holidays. She also said that she would not return from holidays until the end of January. Mr Danny Voyka said that he discussed with her the fact that there was a 21 day deadline to organize payment under the bankruptcy notice and said that he wanted to make sure that payment was made within that time-frame. He claimed that Ms Everingham assured him that, as he had contacted the Tax Office within the 21 day period, the Commissioner would not proceed on the bankruptcy notice. In a letter to Mr Danny Voyka dated 12 December 2007, the Tax Office made it clear that his earlier proposal was not acceptable. Time for compliance with the bankruptcy notice had expired on or about 7 December 2006. 4 It may be arguable that the Deputy Commission, as petitioning creditor, could be estopped or restrained in equity from prosecuting the petition upon the basis of non-compliance with a bankruptcy notice if it were demonstrated that the Commissioner's conduct had led to the debtor not complying with the bankruptcy notice within the prescribed time. However, in this case, the evidence does not disclose as much. Mr Danny Voyka implied, without saying, that the conversation with Ms Everingham occurred after 1 December and before 7 December, but he did so by use of the expression "after a couple of days". The exact date of the conversation is of particular importance if it is to be said that the present applicant relied upon the assurances given to Mr Danny Voyka by Ms Everingham. In the absence of clear evidence as to the date of the conversation or, more particularly, that it occurred prior to the expiry of the time for compliance with the bankruptcy notice, it cannot be a basis for any equitable relief restraining the Commissioner from proceeding in reliance upon the bankruptcy notice. Ms Everingham does not deal with this conversation at all in her affidavit. I have proceeded upon the basis that it took place, although the letter of 12 December suggests otherwise. 5 There is another reason for holding that the applicant is not entitled to any equitable relief arising out of the alleged conversation. It is that he, in fact, asserted in his outline of submissions today that he was not aware that Danny was dealing with this matter on his behalf 'until much later'. He has candidly told me today that he was not aware of the alleged conversation with Ms Everingham. In those circumstances, it seems that he has not, in any sense, relied upon either Mr Danny Voyka's dealings with the Tax Office or any statement that may have been made by Ms Everingham to Mr Danny Voyka. 6 The third possible ground of appeal is that Mr Voyka has challenged the relevant assessments in the Administrative Appeals Tribunal (the "Tribunal"). While such proceedings are on foot, it may have been appropriate for the Federal Magistrate to adjourn the bankruptcy petition until such time as they had been completed. However that would have depended upon his view as to whether there were reasonably arguable grounds for relief in the Tribunal and/or that the matter was being bona fide prosecuted. The fact of the proceedings in the Tribunal was put before the Federal Magistrate, but he was given no evidence or information as to the nature of those proceedings. In those circumstances, it cannot be said to be an error that he proceeded to determine the bankruptcy petition. 7 The applicant also submits that there are, or may be, errors in the way in which the Commissioner has formulated the relevant assessments. However the magistrate was aware of this claim and found that the debt had been verified in accordance with the terms of the relevant legislation. No error has been demonstrated in that conclusion. The fact that the applicant may now wish to go through various documents with a view to demonstrating error is not to the point. 8 Finally, two other points are made. Firstly, it is said that the applicant has no money. That is not a basis for refusing a sequestration order, let alone for appealing against such an order. Finally, the applicant suggests that he would like to escape bankruptcy so that he can actively pursue proceedings in the Tribunal. Again, that is not, itself, a basis for setting aside the sequestration order. 9 Had I been persuaded that there was a viable ground of appeal, I would have been inclined to extend time in which to appeal. I understand the Commissioner to have accepted that approach. However I am not satisfied that there is any viable ground of appeal. In those circumstances, the application should be refused. 10 I will amend the application by inserting the words "Deputy Commissioner of Taxation" in lieu of the words "Australian Tax Office". As to the question of costs, if there is hardship, then it is for the applicant to take that matter up with the Commissioner. I order that the applicant pay the respondent's costs of these proceedings, including reserved costs. I certify that the preceding ten (10) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Dowsett.