Nath v Deputy Commissioner of Taxation [2007] FCA 98 (7 February 2007)

Last Updated: 12 February 2007

FEDERAL COURT OF AUSTRALIA

Nath v Deputy Commissioner of Taxation [2007] FCA 98

VIJENDRA NATH v DEPUTY COMMISSIONER OF TAXATION
QUD 453 OF 2006

KIEFEL J
7 FEBRUARY 2007
BRISBANE

IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY	QUD 453 OF 2006

ON APPEAL FROM THE FEDERAL MAGISTRATES COURT OF AUSTRALIA

BETWEEN:	VIJENDRA NATH Applicant
AND:	DEPUTY COMMISSIONER OF TAXATION Respondent

JUDGE:	KIEFEL J
DATE OF ORDER:	7 FEBRUARY 2007
WHERE MADE:	BRISBANE

THE COURT ORDERS THAT:

1. The appeal be dismissed.
2. The appellant pay the respondent’s costs of the appeal, those costs, as and from 4 January 2007, to be taxed on an indemnity basis.

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 453 OF 2006

ON APPEAL FROM THE FEDERAL MAGISTRATES COURT OF AUSTRALIA

BETWEEN:	VIJENDRA NATH Applicant
AND:	DEPUTY COMMISSIONER OF TAXATION Respondent

JUDGE:	KIEFEL J
DATE:	7 FEBRUARY 2007
PLACE:	BRISBANE

REASONS FOR JUDGMENT

1 The appellant appeals from the decision of a Federal Magistrate, Wilson FM, dismissing his application for an extension of time for compliance with the bankruptcy notice issued by the respondent and served on the appellant on 16 October 2006.

2 The notice is based upon a judgment of the Supreme Court of Queensland in favour of the respondent entered on 10 March 2006. The appellant filed an application in that court to set the judgment aside, but failed to appear on the hearing of the application on 7 August 2006 and it was dismissed. The appellant filed a further application in the Supreme Court on 7 November 2006, the day after the time for compliance with the notice expired, assuming a service date of 16 October. The appellant sought an order from the Federal Magistrates Court staying the bankruptcy notice until the determination of the Supreme Court on his application to set the judgment aside. Wilson FM refused the application. I am told that the application to the Supreme Court was heard on 18 December 2006 and dismissed.

3 His Honour, Wilson FM, treated the application as one for an extension of time under s 41(6A) of the Bankruptcy Act 1966 (Cth) which appears to me to be a proper approach to have taken. The difficulty for the appellant, his Honour held, was that that section requires the appellant to have filed his application to set aside the judgment before the time fixed for compliance with the notice. The appellant was one day out of time.

4 His Honour, in his reasons, queried whether service of the notice upon the appellant at 6.15 pm on 16 October meant that it is taken to be served on that day or the day after. Mr Nath sought to rely upon that possibility. Regulation 16.01 of the Bankruptcy Regulations 1996 provides that, in the absence of proof to the contrary, upon a person is taken to have been served when the document is left with them. His Honour was therefore correct to conclude that no application had been made within the time limited by s 41(6A) of the Act. The consequence was, as his Honour correctly held, that the Federal Magistrates Court had no jurisdiction to make an order extending the time for compliance with the notice.

5 His Honour added that, even if there had been jurisdiction, he would not have exercised his discretion to extend time, given the appellant's lack of prospects of success on his repeated application to the Supreme Court and the delays in the matter. His Honour has proved to be correct about the prospect of success. It is not necessary to consider questions relating to exercise of discretion for, as his Honour held in the first place, there was no jurisdiction to make the order sought by the appellant.

6 The appellant did not seek an order setting aside the bankruptcy notice, although he suggested to his Honour that he wished to do so. His Honour observed that no ground was given for doing so. The appellant, in his application to this court, contended that the date of service upon him must be included in the bankruptcy notice. Form 1 does not, however, require this. It is a fact within the appellant's own knowledge.

7 One of the appellant's other contentions was that the amount of the judgment was excessive. This does not amount to proof that he has a cross-claim, set-off or cross-demand equal to or exceeding the amount of the judgment as 40(1)(g) requires if the notice is to be set aside. The balance of the appellant’s contentions have no relevance to the validity of the bankruptcy notice.

8 The appeal will be dismissed.

9 The respondent also seeks an order for costs on an indemnity basis. The only basis upon which the appeal was to proceed to a hearing, when the matter was last before this Court in November, was that the appellant's application to set aside the Supreme Court judgment had not then been determined. After it had been dismissed the respondent’s solicitors, wrote to the appellant on 2 January 2007 requesting that he discontinue the appeal. He did not do so and the respondent incurred further costs. It seems to me that the respondent's application for indemnity costs is well founded. There was no conceivable basis after 18 December for the pursuit of the appeal and the respondent has been put to unnecessary costs.

10 In those circumstances I will make an order that the appellant pay the respondent's costs of the appeal, those costs, as and from 4 January 2007, to be taxed on an indemnity basis.

I certify that the preceding ten (10) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Kiefel .

Associate:

Dated: 12 February 2007

Solicitor for the Appellant	Appellant appeared in person
Solicitor for the Respondent:	Mr O N Ameer, Gadens Lawyers
Date of Hearing:	7 February 2007
Date of Judgment:	7 February 2007