Deputy Commissioner of Taxation, In the Matter of Piccinin v Piccinin [2001] FCA 1609 (7 September 2001)

Last Updated: 19 November 2001

FEDERAL COURT OF AUSTRALIA

Deputy Commissioner of Taxation, In the Matter of Piccinin v Piccinin

[2001] FCA 1609

BANKRUPTCY - creditors petition - judgment debt - judgment of Local Court of Western Australia - alleged invalidity of judgment - alleged invalidity of appointments of Western Australian Judges and Magistrates - alleged possible want of authority for issue of penalty notices by Commissioner of Taxation underpinning judgment debt - validity of Corporations Law - no substance to objections - sequestration order made

IN THE MATTER OF NEIL PICCININ AND JEANNY PICCININ

DEPUTY COMMISSIONER OF TAXATION OF THE COMMONWEALTH OF AUSTRALIA v NEIL PICCININ and JEANNY PICCININ

W7015 OF 2001

FRENCH J

7 SEPTEMBER 2001

PERTH

IN THE FEDERAL COURT OF AUSTRALIA
WESTERN AUSTRALIA DISTRICT REGISTRY	W7015 OF 2001

IN THE MATTER OF NEIL PICCININ AND JEANNY PICCININ

BETWEEN:	DEPUTY COMMISSIONER OF TAXATION OF THE COMMONWEALTH OF AUSTRALIA APPLICANT
AND:	NEIL PICCININ AND JEANNY PICCININ RESPONDENT
JUDGE:	FRENCH J
DATE OF ORDER:	7 SEPTEMBER 2001
WHERE MADE:	PERTH

THE COURT ORDERS THAT:

1. A sequestration order be made against the estate of the debtors, Neil Piccinin, Businessman of 19 Blair Road, Yokine and Jeanny Piccinin, Businesswoman of 19 Blair Road, Yokine ("the Respondents").

2. The Applicant creditor's costs be taxed and paid from the estates of the Respondent debtors in accordance with the Bankruptcy Act 1966.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA
WESTERN AUSTRALIA DISTRICT REGISTRY	W7015 OF 2001

IN THE MATTER OF NEIL PICCININ AND JEANNY PICCININ

BETWEEN:	DEPUTY COMMISSIONER OF TAXATION OF THE COMMONWEALTH OF AUSTRALIA APPLICANT
AND:	NEIL PICCININ AND JEANNY PICCININ RESPONDENTS

JUDGE:	FRENCH J
DATE:	7 SEPTEMBER 2001
PLACE:	PERTH

REASONS FOR JUDGMENT

1 This is the return of a creditor's petition dated 9 March 2001 issued against Neil Piccinin and Jeanny Piccinin. The petition was based upon judgments of the Local Court of Western Australia given on 28 August 1998 in the amounts of $11,749.44 and $5,703.93. The judgment in relation to the sum of $11,749.44 was the subject of a bankruptcy notice served on each of the respondents on 16 January 2001.

2 The act of bankruptcy relied upon in the petition is the failure on or before 6 February 2001 in each case to comply with the requirements of the bankruptcy notice. There is no dispute that the bankruptcy notice was not complied with and that the relevant act of bankruptcy has occurred. An affidavit of debt and search of the National Personal Insolvency Index filed on 6 September indicates that, other than the petition in relation to these proceedings, no bankruptcy proceedings in the Bankruptcy District of the State of Western Australia were pending against the respondents and there was no record that either of them is a bankrupt. The record in relation to the respondents shows that the sum claimed in the creditor's petition remains due and owing by the respondents. None of those matters was in issue today.

3 In opposition to the petition the respondents raised a number of points going to the validity of the judgment obtained in the Local Court of Western Australia which was based upon notices of penalties issued by the applicant in relation to unpaid group tax connected with the administration by the respondents of corporations of which they were directors and which were themselves the subject of winding-up applications in the Supreme Court and, indeed, winding-up orders in that court.

4 It is not necessary to go into the detailed history of the winding-up proceedings and the related proceedings in the High Court which were subsequently discontinued, nor the detailed history of proceedings in the Local Court which ended in a default judgment which was the subject of an application to set aside which was in the event dismissed.

5 The two issues which are directed to the validity of the judgment in the Local Court are the validity of the appointments of Western Australian judges and magistrates, which is raised by Mr Piccinin on the basis that such appointments have been made by the Governor acting under the authority of Letters Patent issued by the Queen of England. They are said to be invalid as not made under the provisions of the Commonwealth and State Constitutions. Secondly, he raises the question of the authority of the relevant officers of the Commissioner to issue notices of penalty which grounded the judgments made in the Local Court. He does not bring evidence to establish that there is any break in that chain of authority, but simply indicates that the Australian Taxation Office has so far been unable to satisfy him that there is a relevant continuity in the chain of authority.

6 There is no substance in the validity of appointment question. It was adverted to recently by Hayne J in the High Court in the matter of Miller v Chapman, M31/2001, an ex tempore judgment which was given on 18 July 2001. His Honour there observed, in response to a similar argument, that the complaint about invalidity of judicial appointments was without foundation:

"The Constitutions of the States, in accordance with which judicial appointments are made, were continued by operation of section 106 of the Commonwealth Constitution and the complaints now made seek to challenge steps taken by the constitutional monarch of Australia under those State Constitutions."

7 The chain of authority issue may go to the question of the validity of the notices of penalty and that may go to the question of the judgment but to agitate that issue in this Court involves going behind the judgment and, in my opinion, the Court ought not to do that and more particularly, ought not to do that on a mere speculation that there is some break, as yet unascertained, in the authority to issue the relevant notices.

8 A third point which was raised concerned the validity of the Corporations Law under which the winding-up orders were made. I have been unable to ascertain any connection between the validity of the winding-up orders of the companies of which the respondents were directors and the liability they have under the penalty notices which grounded the Local Court judgments. In any event, that issue was also dealt with by Hayne J in Miller v Chapman. His Honour there observed:

"As I have said, it was the Corporations Law of South Australia which was engaged in the application to wind up ITR. In both what preceded and what succeeded that application, the law that was applied was law enacted by the legislature of the State of South Australia. No Commonwealth law was engaged and no effect was given in the proceedings mentioned in the statement of claim to a law of the Commonwealth having application in the Australian Capital Territory. The fact that law having relevantly identical content may apply in that Territory is not to the point. So much, in my opinion, is well established in the extensive consideration that has been given to the Corporations legislation in such cases as Re Wakim; Ex parte McNally [1999] HCA 27; (1999) 198 CLR 511; Reg v Hughes [2000] HCA 22; (2000) 74 ALJR 802, 171 ALR 155; Bond v The Queen [2000] HCA 13; (2000) 201 CLR 213; Re Macks; Ex parte Saint [2000] HCA 62; (2000) 75 ALJR 203, 176 ALR 545; ASIC v Edensor Nominees Pty Ltd [2001] HCA 1; (2001) 75 ALJR 363, 177 ALR 329."

In any event, that is a matter which goes to the winding-up and, as I have said, has no impact upon the judgment which grounds the bankruptcy notice which in turn is relied upon in the petition.

9 None of the points that have been raised by Mr Piccinin on behalf of himself and his wife in my opinion have any substance as going to the issue that I have to decide today, that is, whether a sequestration order ought to be made. I am satisfied that the respondents in this case committed the acts of bankruptcy alleged in the petition. I am satisfied of the proof of the other matters of which s 52(1) of the Act requires proof and I am going to make a sequestration order in accordance with the minute which has been prepared by the applicant.

I certify that the preceding nine (9) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice French.

Associate:

Dated: November 2001

Counsel for the Applicant:	Ms ME Lindley
Solicitor for the Applicant:	Australian Government Solicitor
	Mr N Piccinin appeared on his own behalf
Date of Hearing:	7 September 2001
Date of Judgment:	7 September 2001