Syfurn Pty. Limited v. Chief Commissioner for Land Tax [1999] NSWSC 172

New South Wales Supreme Court CITATION : Syfurn Pty. Limited v. Chief Commissioner for Land Tax [1999] NSWSC 172 CURRENT JURISDICTION : Equity Division FILE NUMBER(S) : 3863/98 HEARING DATE(S) : 9 March 1999 JUDGMENT DATE : 9 March 1999

PARTIES : Syfurn Pty Limited (P) Chief Commissioner for Land Tax (D) JUDGMENT OF : Master McLaughlin

COUNSEL : Mr. M. Anderson (D) SOLICITORS : Michael N. Rayhill & Co (P) I. V. Knight (D) CATCHWORDS : Application to set aside a statutory demand DECISION :

- 6 - SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

MASTER McLAUGHLIN

Tuesday, 9 March 1999

3863 of 1998 SYFURN PTY LIMITED -v- CHIEF COMMISSIONER FOR LAND TAX

1 MASTER: By summons filed on 8 September 1989, the plaintiff Syfurn Pty Limited seeks an order that the statutory demand issued by the defendant the Chief Commissioner of State Revenue be set aside. 2 By that demand, dated 14 August 1998, the Chief Commissioner of State Revenue claims payment to him by the plaintiff of the amount of $14,996.70. That debt is described in the schedule to the demand and comprises land tax for the 1998 year in an amount of $14,211.80 and interest on unpaid land tax pursuant to section 21 of the Tax Administration Act 1996, of $784.90, making a total of $14,996.70. 3 The plaintiff through its solicitors expressly does not dispute the substantive amount of the land tax referred to in the statutory demand. However, the plaintiff disputes the amount of interest claimed. 4 The plaintiff, however, does not place before the Court any alternative amount to suggest that the manner of the calculation of the interest has proceeded upon on incorrect formula. 5 In his affidavit sworn on 10 February 1999, Peter Mackey, a solicitor in the employ of the Crown Solicitor, who has the carriage of the matter on behalf of the defendant, states in paragraph 4 how the interest on the assessed sum of land tax has been calculated and how the figure of $784.90 has been arrived at. 6 In the absence of some submission on the part of the plaintiff concerning either the formula to be applied in the calculation of interest or concerning the correctness of the application of that formula to the amount of unpaid land tax, I am not satisfied that there is any genuine dispute as to the amount of interest owing by the plaintiff upon the unpaid land tax. 7 The ground upon which the plaintiff, however, seeks to have the statutory demand set aside is that, so it is submitted, the plaintiff has complied with that demand. The demand requires, by paragraph 3 thereof, that the plaintiff within twenty-one days of service upon it of the demand shall do one of two things. (A) to pay to the creditor the total of the amounts of the debts; or (B) to secure or compound the total of the amounts of the debts to the creditor's reasonable satisfaction. 8 The plaintiff submits that it has compounded the total of the amounts of the debts to the defendant's reasonable satisfaction. In that regard the plaintiff relies upon the material set forth in paragraph 3 of the affidavit of Michael Norman Rayhill sworn 8 March 1999. 9 That paragraph was objected to by the solicitor for the defendant on the ground, firstly, of form, in that the conversation set forth therein was not given in the first person; and, secondly, on the ground of relevance. Despite the objection upon those grounds, I admitted the paragraph into evidence. 10 The highest that the conversation set forth in those paragraphs can be put is that there was a discussion between a representative of the defendant and the solicitor for the plaintiff in which the plaintiff was informed that an offer of payment by instalments would not be accepted by the defendant but that the defendant would accept payment in full of the amount owing out of the proceeds of the contemplated refinancing or the contemplated sale of the property which was, the subject of the land tax assessment. 11 As I understand it, the concept of compounding a debt means agreeing to accept a lesser amount in full satisfaction of a debt for a higher amount. In the instant case, even if the defendant did agree to accept payment of the amount claimed out of the proceeds of the refinancing or the sale of the subject property, any such agreement related only to payment in total of the outstanding debt. Even if there be an agreement along the lines submitted by the plaintiff, that agreement would not constitute a compounding of the debt owing to the defendant. But, further, it does not appear to me that a statement along the lines set forth in paragraph 3 of Mr Rayhill's affidavit constitutes an agreement which would bind the defendant. 12 There have been a number of earlier approaches by the plaintiff to the defendant for payment by instalments and for an attempt to negotiate the manner by which the debt would be paid. However, as I have said, even if the conversations were to be treated as an agreement, which I am not persuaded they should be, that conversation and an agreement along those lines do not constitute a compounding of the debt. 13 In those circumstances, since there is no dispute as to the existence or the amount of the debt, the plaintiff has not satisfied me that there are any grounds upon which the demand should be set aside. 14 It follows therefore that I will dismiss the plaintiff's summons. I make the following orders: 1) I order that the summons be dismissed. 2) I order that the plaintiff pay the costs of the defendant. 3) Upon the application of the plaintiff, which is opposed by the defendant, I order that the period for compliance with the demand referred to in the summons be extended up to and including 6 April 1999.