Reported Decision : (2001) 47 ATR 406 New South Wales Supreme Court CITATION : Harris v Deputy Commissioner of Taxation [2001] NSWSC 550 CURRENT JURISDICTION: Common Law FILE NUMBER(S) : SC 20090/99 HEARING DATE(S) : Wednesday 20 June 2001 JUDGMENT DATE : 2 July 2001 PARTIES : John Harris v Deputy Commissioner of Taxation JUDGMENT OF : Michael Grove J at 1 COUNSEL : In person (Plaintiff) N.J. Williams (Defendant) SOLICITORS : Australian Government Solicitor (Defendant) CATCHWORDS : PLEADING - AMENDMENT - WHETHER REASONABLE CAUSE OF ACTION POSSIBLY DISCLOSED - CLAIMED TORT REMEDY DECISION : Directions Given THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION MICHAEL GROVE J Monday 2 July 2001 20090/99 - JOHN HARRIS v DEPUTY COMMISSIONER OF TAXATION JUDGMENT 1 HIS HONOUR : John Patrick Harris (the plaintiff) has grievances against the Federal revenue authorities. In March 1999 he caused a statement of claim to issue in which the defendant was named as "Deputy Commissioner of Taxation (Small Business)". At all times the plaintiff has acted as his own lawyer in the litigation. Application to strike out the plaintiff's pleading was made by the Australian Government Solicitor on behalf of the named defendant and an order to that effect was made by Master Malpass on 12 July 2000 but the plaintiff was granted liberty to apply to amend. On 6 September 2000 the plaintiff filed a notice of motion to which I will later refer. The litigation came before Master Harrison on 6 February 2001 when certain orders were made and before Kirby J on 9 May 2001 when a hearing date fixed for that day was vacated. It is unnecessary to detail these interlocutory skirmishes. 2 The matter came before the Court on 20 June 2001 and it became common ground that I would be invited to deal with the notice of motion filed in September last by the plaintiff and a further notice of motion filed by the Australian Government Solicitor in April 2000 which sought stay or summary dismissal of the plaintiff's action. 3 The plaintiff's notice of motion seeks leave to file an amended statement of claim in the form of a proposed pleading, a copy of which I have signed for identification and placed with the papers. The intended pleading seeks to substitute as named defendants the "Commissioner of Taxation, Michael Carmody and Ian James". Mr Carmody is the current Commissioner of Taxation and Mr James is apparently an officer of the Australian Tax Office. The notice of motion also seeks that "an application be approved under Part 66A for the provision of legal assistance". This was not pursued at the hearing at which the plaintiff mentioned negotiations which he was undertaking with lawyers and steps that he was taking to raise funds by the sale of a motor vehicle. The critical issues turn upon the causes of action purported to have been pleaded in the document which I have identified. 4 The proposed pleading is lengthy - there are 162 paragraphs of particulars - but examination of it reveals that it is intended as a vehicle for the recovery of tort damages on three causes of action which can be categorized as negligence, breach of statutory duty and defamation. Paragraph 17 of the particulars reads: "The plaintiff seeks no injunctions, writs or declaratory orders in the NSW Supreme Court. The plaintiff seeks only remedies for unnecessary tort damages including defamation, not a declaratory judgment." 5 A considerable amount of repetition is manifest in the document and a similar bulk is devoted to recitation of chains of events whereby the plaintiff claims to have been damaged. Counsel instructed by the Australian Government Solicitor appeared in the interests of the defendant and those defendants whom the plaintiff now wishes to join. He observed, as can be gleaned from the intended pleading, that the plaintiff's grievances emerged from default assessments of liability to pay tax issued to the plaintiff by delegates of the Commissioner of Taxation. When these demands were not satisfied they were followed by the despatch of notices pursuant to power vested by s218 of the Income Tax Assessment Act 1936 to persons or entities holding money on behalf of, or owing money to, the plaintiff. Again, it is not necessary for present purposes to trace precise detail. Section 218 authorizes the issue of a type of garnishee. 6 The plaintiff referred to various sources including the Commonwealth Public Service Regulations, the Taxpayers Charter and to screening processes and audit which preceded the issue of the notices. He has also apparently accessed documentation pursuant to Freedom of Information rights and he has detected a notation which he asserts in the pleading is as follows: "Mr Harris appears to have most of his assets in liquid form. He has accounts with large balances at various banking institution …………. (folio references are mentioned). He has no financial or personal ties to the region or Australia and he could easily consolidate his cash assets and leave. It is therefore considered there could be a risk to the revenue. As a result it is recommended that action under s218 of (the Act) be taken." 7 I would infer that, assuming that the extract is accurately recounted, it represents an internal submission in the files of the Australian Taxation Office. 8 The pleading does not precisely specify the role of the proposed second defendant but I note that paragraph 25 states: "The plaintiff claims that Ian James was negligent as no reasonable person could review previous tax returns, the screening reports and Secret Audit reports and conclude that the secret audit or S218 seizures by ATO Canberra were bona-fide or 'reasonably necessary' especially given the net worth of the Galston stud property and the value of the property mortgage indicated on the document registered with the Lands Title Office of New South Wales (LTO), and the results of standard RTA and ATO inquiries." 9 In oral submission the plaintiff emphasized that at the core of his complaints was his assertion that the recipients of the s218 notices would infer that he was a "tax evader or tax cheat" and that had screening and investigation been diligent and bona fide, no risk to revenue would have been discerned and therefore no notices issued and consequently the asserted consequences of the notices, avoided. 10 It should also be recorded that much content of the document refers to denial of natural justice and the synonymous procedural unfairness. Counsel for the defendants did not dispute that grievances arising in such a fashion would, subject to requirements appropriate to the relevant proceedings, be amenable to potential review before an appropriate administrative tribunal or pursuant to jurisdiction for judicial review of administrative action. Ignoring the absence of jurisdiction in this Court to provide such remedy, it is noted that the plaintiff disclaimed seeking relief of that nature. 11 The proposed pleading ignores the existence of remedies of the type just mentioned and in its terms is insistent upon claiming damages. I should add that it is liberally interpolated by out of context references to decided cases and extracts from judgments in some of these. The final flourish seems to be an attempt to avoid the requirements of processes designed to give focus to issues for litigation: "162. The plaintiff is not skilled in pleadings but asks that 'res ipsa loquitur' (the facts speak for itself) can be applied to this statement of claim to allow a fair hearing to both parties." 12 I return to the apparent intended causes of action. I deal first with negligence. There is no identified duty of care specified as being owed by the defendants to the plaintiff. Such a duty is not established by reference to proclamations such as the Taxpayers Charter which express aims of treating citizens from whom tax is to be levied, fairly and reasonably. Even if there was a departure from some standard specified in such a document, it could not vest a private right to recover tort damages in a person affected by the departure. In recent times the determination of the existence of a duty of care has been directed to be established by recognition of novel areas of duty on an incremental or case by case basis: Perre v Apand Pty Limited 1999 198 CLR 180; Crimmins v Stevedoring Industry Finance Committee 1999 200 CLR 1. There is no basis upon which to conclude that there is a tort liability in the Australian Taxation Office or its named officers towards a taxpayer arising out of the lawful exercise of functions under the Income Tax Assessment Act. The pleading does not suggest that the steps taken were outside of the scope of the Act. There is no identified act or omission which could give rise to an entitlement of the plaintiff to damages against any intended defendant. 13 The document misconceives the basis upon which damages may be payable to one who suffers loss as a result of an alleged breach of statutory duty. An action for breach of statutory duty is not available to all persons suffering special damage consequent upon a breach of public duty. What must be shown is that the duty was owed to the injured party at least in the sense that the duty was created for the benefit of a class of person less extensive than the general public of which the injured party was a member. To state this is not to imply that there can be discerned any asserted breach for which damages would be available to a member of a definable class. I have already commented that much of the verbiage in the pleading adverts to alleged procedural unfairness for which tort damages are not an available remedy. There is nothing in this pleading, whether referring to statute or regulation, which could vest a cause of action for damages in the plaintiff. 14 Thirdly, I turn to the claim of defamation. In New South Wales this tort is subject to statutory control: Defamation Act 1974. The intended statement of claim recognizes that there is a requirement to sue upon imputations allegedly conveyed and a series of asserted imputations is scheduled in paragraph 48 of the document. They read: "I. The plaintiff's reputation for integrity, and probity must be false. II. The plaintiff's extraordinary frugality and single-minded work ethic OVER A SUSTAINED PERIOD is not the real source of his wealth as we had previously thought. III. The plaintiff wasn't trusted by the ATO to co-operate; we can't trust him. IV. The plaintiff's must be a serious tax evader to warranted secret S218 seizure. V. The plaintiff's tax debt must be exorbitant (exceeds the value of the Galston stud). VI. The plaintiff is most likely a leading criminal or involved in organised crime. VII. Maybe the plaintiff's horse breeding business was from the proceeds of crime. VIII. The plaintiff's valuable horse stud at 395 Galston Road was ill-gotten. IX. The plaintiff's auction purchase of a lucerne farm used ill-gotten gains. X. The plaintiff's recent motor vehicle purchases are likely ill-gotten." 15 For present purposes I will ignore the confused part of the introductory statement in the paragraph which asserts that these imputations "were caused by the negligence of the defendants". 16 It would have to be conceded that the imputations recited, if conveyed by publication, would be capable of being held to be defamatory, for example an imputation that a person is involved in organized crime would have to be acknowledged as being likely to cause an ordinary right thinking member of the public to think less of the person of whom that was conveyed. 17 The problem with the document however is not the absence of pleading imputation but other absences including identification of the matter complained of; particulars of publication especially by whom, to whom and when; as well as the basis upon which it is claimed that the defendants (or any of them) were responsible for the publication. It cannot suffice to plead (as paragraph 48 of the document does): "Defamatory imputations were caused by the ATO letters, notices, phone calls, field visits, verbal secrecy warnings and other things and actions with Unisys, and LINC sites such as Australian Customs, Gladstone Port Authority and other sources of livelihood for the plaintiff." 18 My conclusions are that no reasonable causes of action in negligence or for breach of statutory duty are disclosed by the intended pleading, nor is it perceptible that any amendment could rectify that situation. On the plaintiff's notice of motion, leave to amend in these regards should be refused and on the defendant's motion appropriate orders made to stay further attempts to pursue these untenable actions. 19 Different considerations apply to the claim for damages for defamation. In the light of the multiple technical and other defects in the documents the defendants could not reasonably be asked to plead to what I have discerned to be the plaintiff's presumed allegations. I accept the submission on behalf of the defendants that the plaintiff has had abundant opportunities to seek legal advice and properly reformulate his statement of claim. It is to be noted that the present status of the plaintiff's action is that the statement of claim as filed has been struck out pursuant to the order of Master Malpass noted above. However, as it is conceivable that a cause of action in defamation may be pleadable (and I emphasize that I am dealing only with a question of pleading), the plaintiff should have a final opportunity to demonstrate whether he can so plead before any peremptory order is made such as is sought in the defendant's notice of motion. 20 I am conscious that summary dismissal of a claim is a jurisdiction which should be exercised sparingly and when the case is shown to be manifestly groundless and not admitting of reasonable argument: General Steel Industries Inc v Commissioner for Railways 1964 112 CLR 125. I have reached that conclusion in respect of the purported causes of action in negligence and breach of statutory duty. Whether the same conclusion should be reached in respect of defamation I cannot tell. The claim is woven through a confusing and uncoordinated variety of references in the document. No defendant could be required to plead to such unspecific allegations. 21 Accordingly I give the following directions and make the following orders, in order to be in a position to determine whether there is a surviving aspect to the plaintiff's claims which should be permitted to proceed. 22 A. Leave for the plaintiff to file an amended statement of claim against the defendant or the proposed substituted defendants asserting causes of action in negligence or breach of statutory duty is refused. B. Any claim for damages for defamation against the defendant or the proposed substituted defendants is to be incorporated in a draft statement of claim in proper form, a copy of which is to be served on the office of the Australian Government Solicitor at Sydney no later than 4 pm on 30 July 2001. C. The matter is adjourned to be listed before me for directions at 9.30 am on 3 August 2001 at which hearing the plaintiff is to supply a copy of any draft statement of claim served pursuant to the direction just given. D. Subject to cause being shown otherwise, I foreshadow that, in the absence of the production of a document in proper form for instituting a claim for damages for defamation, further leave for the plaintiff to amend will be withheld and the current pleading struck out in its entirety and, to the extent that they may be required, orders made inhibiting the plaintiff from seeking to relitigate the claims. ********** Last Modified: 07/03/2001 DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. 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