Deputy Commissioner of Taxation v Lee; Deputy Commissioner of Taxation v Silverbrook (No. 1) [2019] NSWSC 346

Supreme Court New South Wales

Medium Neutral Citation: Deputy Commissioner of Taxation v Lee; Deputy Commissioner of Taxation v Silverbrook (No. 1) [2019] NSWSC 346 Hearing dates: 1 April 2019 Date of orders: 01 April 2019 Decision date: 01 April 2019 Jurisdiction: Common Law Before: Davies J Decision: The Notice of Motion filed in court on 1 April 2019 is dismissed. Catchwords: CIVIL PROCEDURE – hearings – adjournment – where defendants self-represented – defendants are husband and wife - wife appearing for husband who is medically incapacitated – whether husband has need for wife as 24 hour per day carer – insufficient evidence in that regard - relevance of procedural history of proceedings – repeated failures of defendants to comply with orders of the court – proceedings commenced four years ago – adjournment refused Legislation Cited: Civil Procedure Act 2005 (NSW) Texts Cited: Nil Category: Procedural and other rulings Parties: Deputy Commissioner of Taxation (Plaintiff) Janette Lee (Defendant) Kia Silverbrook (Defendant) Representation: Counsel: S Foda (Plaintiff) S Lipp (Defendants)

Solicitors: Craddock Murray Neumann (Plaintiff) Self-represented (Defendants) File Number(s): 2015/50686 & 2015/50872 Publication restriction: Nil

Judgment 1. These two proceedings commenced on 18 February 2015. They are proceedings by the Deputy Commissioner of Taxation to recover what are said to be unpaid taxes of three types. The first category is actual amounts withheld under the PAYG system. The second category consists of estimates of unpaid and overdue amounts which were not notified under the PAYG system, and the third category consists of assessment for the superannuation guarantee charge. 2. The amounts in question are said to have been due and payable between 10 August 2011 and 30 June 2013. The amounts excluding interest exceed $10 million. The claims are made against the directors of a company known as Worldwide Specialty Property Services Pty Ltd. The claims against the directors arise because of the failure of the company to notify and forward the various amounts said to be due. 3. The present application is one to adjourn the hearing of these proceedings which commenced on Monday 25 March 2019. At that time the defendant in one of the proceedings, Janette Lee, was appearing for herself and had sought leave to appear for the defendant in the other proceedings, Kia Silverbrook. Mr Silverbrook had a heart attack on 15 April 2016, and the medical evidence suggests that he has been a fairly unwell man from that time. 4. The hearing commenced last Monday, and about an hour into the hearing Ms Lee received a notification that Mr Silverbrook had been rushed to hospital or needed to be rushed to hospital because of his heart condition. In the circumstances I adjourned the proceedings to the following day, 26 March. Later on the morning of 25 March, Ms Lee contacted my associate and said she would be in no position to appear on 26 March because of Mr Silverbrook's condition. Having sought the attitude of the Deputy Commissioner's solicitors, I then determined that the proceedings should be adjourned to today, 1 April 2019, for the continuation of the hearing. 5. This morning an application has been made by Mr Lipp of counsel, who was briefed to appear directly by Ms Lee and Mr Silverbrook, to have the proceedings adjourned. The orders sought were that the hearing be vacated and that the matter be listed before the Registrar at a suitable time, presumably for the fixing of a further date for the hearing of the matter. Mr Lipp is not otherwise instructed to appear on behalf of the defendants. 6. In support of the application for an adjournment, Mr Lipp read an affidavit of Ms Lee which provided some information about Mr Silverman's admission to hospital. The affidavit also contained Ms Lee's assessment of Mr Silverbrook's medical condition, but I rejected those parts of the affidavit. Ms Lee annexed to her affidavit a report from a resident medical officer, Sam Ng, at Nepean Hospital. Mr Ng said that Mr Silverbrook was admitted to Nepean Hospital on 25 March under the care of Dr Sonya Burgess of the cardiology department for chest pain that exhibited significant mitral regurgitation and worsening left ventricular ejection fraction after investigation with TTE (a Transthoracic Echocardiogram). Dr Ng went on to say that an angiogram exhibited triple vessel disease, and it was planned for Mr Silverbrook to undergo surgical intervention/open heart surgery by the cardiothoracic team at Westmead Hospital. 7. Two further medical documents were tendered, both post-dating Dr Ng's report. The first was from Dr Luke Hilliar, another resident medical officer at Nepean Hospital. Dr Hilliar set out that Mr Silverbrook presented with chest pain and worsening shortness of breath and fatigue. Dr Hilliar said that Mr Silverbrook was investigated for decompensated cardiac failure, worsening mitral regurgitation and ischaemic heart disease. 8. Dr Hilliar said that the mitral regurgitation would require mitral valve replacement and open-heart surgery, and the ischaemic heart disease would require coronary artery bypass grafting and open-heart surgery. Dr Hilliar concluded his report by saying, "We advise that his legal appointment should be delayed indefinitely until he is cleared by the cardiothoracic surgeon, Dr Yishay Orr." 9. Secondly, there is a discharge summary from Nepean Hospital dated 29 March at 2.26pm. The clinical summary provided as follows: He presented with chest pain on a background of worsening fatigue for the past six months. His history is significant for an anterior ST elevation MI in 2016 requiring stents to both his LAD and RCA. On arrival he had no new ECD changes and his serial troponins were negative. However, as he was high risk for an ischaemic event or progression of his ischaemic heart disease, he was admitted under the care of Dr Sonya Burgess for ongoing management. 1. There are then some lengthy sections in the discharge summary about the care he has received in the hospital. Relevant parts of that are these. First of all, he was said to require coronary arterial bypass grafting for his ischaemic heart disease and, it was said, he needed a mitral valve replacement. The report went on: As he was otherwise stable, he was cleared to follow up with Dr Yishay Orr, cardiothoracic surgeon, next week on 02/04/2019 at 9am with a copy of his angiogram (provided on disc), for planning of coronary arterial bypass grafting and mitral valve replacement. He can otherwise follow up with his regular cardiologist, Dr Skinner, in the next few weeks. If he develops worsening pain, he should seek urgent medical attention. 1. At the conclusion of the report there is a section headed, "Follow up plan and appointments." There is a reference to the appointment with Dr Orr on 2 April: for consideration of coronary arterial bypass grafting and mitral valve replacement. Follow up with Dr Skinner in four weeks' time for ongoing review. Otherwise to see GP in the next two to three days. 1. The affidavit of Ms Lee asserts that it is not feasible for her or Mr Silverbrook to attend the hearing between 1 April and 5 April 2019. The basis for it being suggested that it is not feasible for her to attend appears to be statements that she has made at various times, including in a document annexed to her affidavit, that she is Mr Silverbrook's 24 hour carer. That is a position she has been claimed to be in since he had his heart attack in April 2016. 2. It may be accepted that Mr Silverbrook's medical condition is such that he is not fit to attend court. However, that was the assumption that had been made by both the plaintiff and Ms Lee before the hearing commenced. Ms Lee sought leave to appear for Mr Silverbrook because he was unable to attend. Further, the plaintiff had made it clear that counsel did not wish to cross examine Mr Silverbrook on his affidavit. The case was simply to be conducted by Ms Lee because the defences raised by Ms Lee and Mr Silverbrook were identical in that they were both directors of the company at the relevant time. 3. Section 58 of Civil Procedure Act 2005 (NSW) says that, In deciding whether to make any order granting an adjournment the court must seek to act in accordance with the dictates of justice." 1. Subsection (2) says: For the purpose of determining what are the dictates of justice in a particular case, the Court (a) must have regard to ss 56 and 57 of the Act, and (b) may have regard to the following matters to the extent to which it considers them relevant: The matters I consider to be relevant are these: (ii) The degree of expedition with which the respective parties have approached the proceedings, including the degree to which they have been timely in their interlocutory activities. (iv) The degree to which the respective parties have fulfilled their duties under section 56(3) of the Act. (vi) The degree of injustice that would be suffered by the respective parties as a consequence of the order that is being made. 1. The procedural history of this matter leaves a lot to be desired, as far as the defendants are concerned. 2. Although the proceedings commenced on 18 February, there were difficulties serving the defendants (the place of business recorded in in ASIC search was unoccupied), and an order for substituted service was eventually made on 7 August 2015. A notice of appearance was filed on behalf of the defendants by a firm Brown Wright Stein on 7 September 2015. 3. Notwithstanding that the rules require a defence to be filed within at least 28 days, no defences had been filed by 16 March 2016. On that day a consent order was made that the defences were to be filed by 12 April 2016. They were not filed by that time and, on 19 April, 6 June, 22 August, and 23 September orders were made on each occasion, extending the time for the defences to be filed. 4. The first defence was filed by the defendants on 10 October 2016, more than 12 months after the Notice of Appearance was filed. I note that, throughout that period, the defendant had the solicitors Brown Wright Stein acting for them. 5. On 2 December 2016, Ken Schurgott, commenced to act for the defendants and he remained their solicitor until 24 October 2017. I note in passing that Mr Schurgott had been acting for them at the time the statement of claim was filed, because contact had been made with him with regard to the appropriate orders for substituted service. 6. An amended statement of claim was filed on 12 December 2016, making a relatively inconsequential amendment to one paragraph. A defence was filed to that amended statement of claim on 18 January 2017, with an amended defence being filed on 19 April 2017. By 19 June 2017, the defendants indicated that they wished to file a further amended defence. The Registrar directed on 19 June that they were to serve such proposed defence by 31 July. They did not do so. On 1 August 2017 and 4 September 2017, the Registrar extended time for the defendants to serve that proposed amended defence. The defence was not, in fact, filed until 14 November 2017. That was more than two years since the Notice of Appearance, and almost one year since the filing of the Amended Statement of Claim. I note, again, that throughout that period Mr Schurgott was the solicitor acting for the defendants. 7. On 6 November 2017, the Registrar directed the defendants to notify which parts of their evidence they relied on by 11 December 2017. That direction arose from the fact that, on 8 May 2017, Ms Lee filed an affidavit consisting of more than 4200 paragraphs and Mr Silverbrook also filed an affidavit of almost 900 paragraphs. In addition, on 8 May 2017 and related to the affidavits, the defendants lodged with the Court and served some 31 lever arch folders of documents. On the face of the material in the affidavits, matters were raised which could not be considered to constitute defences to the claim being made. 8. The defendants did not comply with the Registrar's direction to notify which parts of their evidence they relied on by 11 December 2017. On 8 February 2018, the Registrar extended the time for that to occur to 28 March 2018 and imposed a guillotine order. On 18 April 2018, the Registrar directed the defendants to serve a case outline document to try to confine the issues in the matter. 9. That document was to be filed by 16 May 2018. It had not been done by 6 June 2018. The Registrar extended the time for the case outline to be served to 20 June 2018 and referred the matter to the duty judge on 27 June for the defendants to show cause in relation to the matter. On 27 June Justice Hulme directed that the defendants were to file and serve a list of legal questions in dispute by 25 July, confined to five pages of questions. In fact, that document was not filed until 30 July and, contrary to his Honour's direction, consisted of six full pages of legal questions. 10. That history is a lamentable one in terms of compliance with orders of the Court and the defendants' obligations under s 56 of the Civil Procedure Act. The present application for an adjournment must be seen in the light of that procedural history and must be considered bearing in mind that procedural history. 11. Mr Lipp submitted that the poor compliance by the defendants with their procedural obligations ought not to be given the weight that should be given to the medical evidence that points to the unavailability of Mr Silverbrook by reason of his heart condition. If there had been one or two failures by the defendants, that submission would have carried more weight, but there has been constant failure over the time that these proceedings have been on foot. Further, and as noted earlier, the issue on the application is not about whether Mr Silverbrook can appear, but about Ms Lee's availability . 12. Whilst I accept that there may have been an acute event which resulted in Mr Silverbrook attending Nepean Hospital on 25 March, my reading of the discharge summary, in particular, tends to demonstrate that he was fairly quickly stabilised when in hospital, and has now been returned home for follow up with various specialists including a cardiologist and a cardiothoracic surgeons, as well as his own general practitioner. True it is that the discharge summary and the reports from the medical officers suggest that at some time in the future he may need to have open heart surgery for mitral valve replacement and for coronary artery bypass grafting, but nothing in the discharge summary suggests that there is any particular urgency at the present time about dealing with those matters, nor about undergoing that surgery. 13. Again, I can accept that Mr Silverbrook's medical condition is such that he is not able to be present in court, but I have nothing but Ms Lee's say-so that she needs to attend to Mr Silverbrook on a 24-hour basis. She did not need to do so when she was present at the directions hearing I called on 21 March, nor did she need to be with him when the hearing commenced on 25 March nor, seemingly, for the remaining days fixed for the hearing, but for the events of 25 March . 14. Ms Lee has told me on a number of occasions that the reason she and her husband are appearing for themselves is that they cannot afford legal representation. I have not, however, been provided with any information about their financial circumstances that enables me to give any serious weight to that assertion. The matter is also relevant as far as the need to provide for a carer for Mr Silverbrook if, as Ms Lee says, he needs 24 hour care. It was always available to Ms Lee to provide that sort of information on the present application. 15. I am not satisfied on the evidence I have that any basis is shown for adjourning the proceedings, because it is not demonstrated that Ms Lee is not to be able to be present to conduct the proceedings. Furthermore, given that Mr Silverbrook has been considerably incapacitated and unwell since April 2016, there is nothing to suggest that he will improve after today, whether following operations or not, so that it could be said with any certainty that a future hearing date would be able to be accommodated by the defendants in the matter. This does not appear to be an example of an immediate, acute medical crisis, which will pass. 16. Mr Lipp informs me that, if the matter is adjourned today, he has been told that he will be instructed to appear at any future hearing, and that the hearing will be considerably shorter than the ten days which was fixed for the present hearing of the matter. Whilst I accept that Mr Lipp has been told that by Ms Lee, in the absence of some sworn evidence from Ms Lee that she will brief Mr Lipp and will retain his services throughout any future hearing, I can place little confidence in what she has told him in that regard. In any event, the fact that counsel will be engaged to appear at a future hearing is a matter of very little consequence in determining whether the present hearing should be adjourned. 17. For those reasons the application for the adjournment of the hearing is refused. The Notice of Motion filed in court on 1 April 2019 is dismissed.