James v Deputy Commissioner of Taxation [1957] HCA 36

High Court of Australia Dixon C.J. Fullagar and Kitto JJ. James v Deputy Commissioner of Taxation [1957] HCA 36

ORDER Order that the appeal from the order of sequestration of 27th February 1957 be allowed with costs and that the said order be set aside and in lieu thereof that the petition of the respondent be dismissed with costs. Execution for costs not to issue without the order of the court or judge. The question whether such costs should be set off against the claim of the commissioner reserved. Liberty to apply.

Cur. adv. vult.

Dixon C.J. The Court delivered the following written judgment:—

June 10 Dixon C.J., Fullagar and Kitto JJ.

This is an appeal from an order pronounced on 27th February 1957 in the Supreme Court of Queensland by Moynihan A.J. The order, which was drawn up, in accordance with the Bankruptcy Rules (S.R. 1934 No. 77 as amended to S.R. 1956 No. 61), under the caption "In the Court of Bankruptcy District of Southern Queensland" was an order for sequestration. The appellant is the debtor and the order was made against him on the petition of the Deputy Commissioner of Taxation based upon the unpaid balance of £13,524 15s. 0d. of a final judgment for £13,923 3s. 0d. which he had recovered for income tax and costs. The act of bankruptcy alleged was failure to comply with a bankruptcy notice. The appellant filed a notice of opposition to the petition disputing, among other things, the alleged act of bankruptcy. We have come to the conclusion that the bankruptcy notice was served out of time so that failure to comply with it did not amount to an act of bankruptcy. Subject to the power of the court exercising jurisdiction in bankruptcy to extend the time the bankruptcy notice must be served within one month of its issue. The notice was issued on 18th January and served on 7th April 1956. On 23rd February 1956 there was endorsed upon the notice what purported to be an order of "the Court" made pursuant to s. 27 (2) (c) of the Bankruptcy Act 1924-1955 and r. 148 of the Bankruptcy Rules extending the time for service to 23rd April 1956. The purported order of extension was not in fact made by any court but by a "registrar in bankruptcy". For reasons which we shall give it appears to us to have no legal effect. It was said for the respondent that even on the footing that service of the bankruptcy notice was out of time, the appellant had waived service within due time. Of this contention it is enough to say that no foundation of fact can be found for it. It is true that the exact legal ground for concluding that no act of bankruptcy had been committed was not raised before the Supreme Court of Queensland but it arose on the face of the proceedings and the commission of the act of bankruptcy was in issue. We cannot regard the conditions of par. (j) of s. 52 as satisfied if before service of the bankruptcy notice it has expired and the time for service has never been extended.