Constantine Karageorge v Deputy Commissioner of Taxation [1999] NSWSC 1009 (6 October 1999)

Last Updated: 7 October 1999

NEW SOUTH WALES SUPREME COURT

CITATION: Constantine Karageorge v Deputy Commissioner of Taxation [1999] NSWSC 1009

CURRENT JURISDICTION: Equity

FILE NUMBER(S): 3575/99

HEARING DATE{S): 26 August 1999

JUDGMENT DATE: 06/10/1999

PARTIES:

Constantine Karageorge (Plaintiff)

Deputy Commissioner of Taxation (Defendant)

JUDGMENT OF: Hamilton J

LOWER COURT JURISDICTION: Not Applicable

LOWER COURT FILE NUMBER(S): Not Applicable

LOWER COURT JUDICIAL OFFICER: Not Applicable

COUNSEL:

In person (Plaintiff)

SJ McMillan (Defendant)

SOLICITORS:

In person (Plaintiff)

Australian Government Solicitor (Defendant)

CATCHWORDS:

PROCEDURE [316] - Inferior Courts - District Court - Removal into Supreme Court - After judgment entered - Whether District Court Act 1973, s 145 confers power to remove.

ACTS CITED:

District Courts Act 1912, s 47,

District Court Act 1973, s 145.

DECISION:

Ruling that there is power under s 145 of District Court Act 1973 to remove proceedings into Supreme Court after judgment has been entered in the District Court.

JUDGMENT:

IN THE SUPREME COURT

OF NEW SOUTH WALES

EQUITY DIVISION

HAMILTON J

WEDNESDAY, 6 OCTOBER 1999

3575/99 CONSTANTINE KARAGEORGE v DEPUTY COMMISSIONER OF TAXATION

JUDGMENT

His Honour:

1 In proceedings 2907/97 the Deputy Commissioner of Taxation ("DCT") sued Ann Maree Bowen to recover part of the proceeds of the sale of a house property ("the property") which she had co-owned with the present plaintiff, with whom she had once lived in a de facto relationship. The DCT alleged that the moneys were the plaintiff's, and that the DCT was entitled to take them in satisfaction of an assessment of the plaintiff to income tax ("the assessment"). Ms Bowen denied that the moneys were the plaintiff's, and by cross claim against both the DCT and the plaintiff sought a declaration that the plaintiff had held his share of the property in trust for Ms Bowen. The plaintiff was not, but should have been, a defendant to the DCT's claim, since it was alleged that the moneys were his. When the matter was called on for hearing, it was announced that it was settled as between the DCT and Ms Bowen; in effect the DCT abandoned his claim against Ms Bowen. At that time, the present plaintiff was seeking to file a cross claim against the DCT for a declaration that the assessment was invalid. The DCT submitted that I should, without more, refuse that application out of hand, leaving the plaintiff to bring fresh proceedings if he so desired, by reason that the proceedings were otherwise settled. I declined to do that, on the ground that the cross claim was closely associated with the subject matter of those proceedings and the plaintiff had made his application before the DCT, in effect, abandoned his claim. The DCT further objected to the application to file the cross claim on the grounds (1) that the plaintiff's proposed cross claim was bad on its face, and (2) that he had a judgment in the District Court at Sydney against the plaintiff in proceedings 6808/97 based upon the assessment, which judgment foreclosed the plaintiff's claim to have the assessment declared invalid. The plaintiff, on the other hand, claims to be entitled to have the District Court judgment set aside. The judgment was entered after a trial from which the plaintiff was absent. He says that the cause of his absence was that he was in prison and no warrant had been issued under s 44 of the Prisons Act 1952 for his attendance at Court. He has now brought these proceedings by summons to have the District Court proceedings removed into this Court under s 145 of the District Court Act 1973 ("the new Act"), so that the same Court may adjudicate upon his entitlement to have the District Court judgment set aside and whether his cross claim for a declaration of invalidity of the assessment ought be allowed into Court, or as the DCT submits, rejected, because foreclosed by the District Court judgment or because it is manifestly bad.

2 The matters are, as appears above, closely interrelated and it seems to me that there is a prima facie case that the District Court proceedings should be removed into this Court to permit them to be dealt with simultaneously or in association with the application to bring the cross claim. This would be convenient, and economical for both the parties and the State. However, the DCT objects to this course on the ground that proceedings cannot be removed from the District Court to this Court under s 145 after judgment. The question therefore arises as to whether this proposition is correct.

3 This proposition flows from a number of decisions under or, more accurately, obiter dicta relating to, the corresponding provision in the predecessor of the new Act, namely, s 47 (1) of the District Courts Act 1912 ("the old Act"). That section, prior to an amendment operative in 1972, provided:

"Any plaint entered in any District Court may be removed by the writ of certiorari into the Supreme Court by order of any judge thereof upon such terms as to payment of costs, giving security for the amount claimed or costs or such other terms as such judge thinks fit."

4 After the amendment (effected by the Supreme Court Act 1970 s 7 and the Second Schedule and operative 1 July 1972) the sub section read:

"Any plaint entered in any District Court may be removed into the Supreme Court by order of the Supreme Court upon such terms as to payment of costs, giving security for the amount claimed or costs or such other terms as the Supreme Court thinks fit."

It would seem that the amendment was simply a result of the abolition by the Supreme Court Act 1970 of the prerogative writs and their replacement by prerogative orders.

5 When the new Act 1973 repealed the old Act, s 145 replaced the old s 47. Section 145 provides:

"(1) Proceedings may, upon the application of a party, be removed into the Supreme Court by order of the Supreme Court upon such terms as to payment of costs, giving security for the amount claimed or costs, or otherwise, as the Supreme Court thinks fit.

(2) An action for damages in respect of personal injury or death (other than a motor accident claim) may be so removed only if the Supreme Court is satisfied that the amount to be awarded to the plaintiff in the case, if successful, would be likely to exceed $750,000 or that there is other sufficient reason for trying the action in the Supreme Court.

(3) A motor accident claim may be so removed only if the Supreme Court is satisfied that the amount to be awarded to the plaintiff in the case, if successful, would be likely to exceed $1,000,000 and that the case involves complex legal issues or issues of general public importance."

Section 4(1) of the new Act relevantly defines "proceedings" to mean "civil proceedings", which is in turn defined as "proceedings in the Court in its civil jurisdiction".

6 Mr McMillan, of counsel for the DCT, cited a number of authorities relating to s 47 which he said support the view that proceedings cannot be removed into the Supreme Court after judgment has been entered, but only before judgment.

7 Ex parte Vigilant Finance (NSW) Pty Ltd; Re Cameron Smith [1964] NSWR 1282 was a decision of the Court of Appeal under the old s 47. The matter was decided upon another point, but Herron CJ doubted whether s 47 was intended to cover cases where a default judgment had been regularly entered (at 1284) as did Brereton J (at 1285) and Walsh J (at 1286). Their Honours did not set out the reasons for their doubts.

8 Hewins v Formica Plastics Pty Ltd (1968) 87 WN (Pt 1) (NSW) 469, also a decision of the Court of Appeal, dealt with a s 47 application for removal. There it became apparent that the injuries of a plaintiff who had claimed $6,000 were more serious than at first thought. The defendant filed a confession of the plaintiff's claim and sought to have the Registrar enter up judgment for $6,000. The plaintiff sought removal to the Supreme Court to permit him to increase his claim. The defendant sought a writ of mandamus to compel the Registrar to enter judgment on the basis of the confession. Sugerman JA would have granted mandamus and on the application for certiorari said (at 472)

"It follows from the success of the application for mandamus that the application for certiorari must be refused, as the matter of the plaint will become merged in the judgment which the registrar is ordered to enter up and nothing will remain for the Supreme Court to try."

Jacobs JA and Manning A-JA both considered the certiorari application first, granted it, and therefore did not need to consider the issue of mandamus.

9 Isaacs J in Ex parte Sabbatini; Re Australian Iron & Steel Pty Ltd (1970) 92 WN (NSW) 377 (at 383) considered that it was implicit in Sugerman JA's judgment in Hewins that "once the judgement had been entered the plaint merged in the judgment and certiorari would not lie." His Honour also took the view that the approach of the other Judges, in considering the certiorari application before the mandamus application, reflected a view that once judgement had been entered there would have been no plaint to remove. In this case, after confession by the defendant, judgment for the plaintiff for $6,000 had been entered up in the District Court. Although Isaacs J considered that a valid District Court judgment would preclude removal, His Honour held that the District Court judgment in that case was a nullity, and ordered removal by certiorari.

10 In Ex parte Sadler; Re Cemac Modular Constructions Pty Ltd [1973] 1 NSWLR 263 the Court of Appeal also appears to have considered s 47 in its form prior to the 1972 amendment (see per Reynolds JA at 267). The case involved a jury verdict in the sum of $35,360. Section 95A(2) of the old Act provided that where there was a verdict for an amount in excess of $10,000 in the trial of any cause in the District Court, the Court should find and record a verdict for $10,000. No finding or record of a verdict for $10,000 had been made before removal was sought pursuant to s 47. Jacobs P (at 266) expressed serious doubt as to whether removal would be available once a verdict had been recorded and entered and thought that "more probably than not, the language of s 47 envisages the removal to the Supreme Court of a District Court plaint for the purpose of hearing and determination in the Supreme Court." He went on to say that -"[t]o remove a plaint when there had been a proper verdict thereon would be to remove it for re-hearing, not for hearing." Reynolds and Hutley JJA were of the view that removal to the Supreme Court was permissible, but refused to exercise the discretion to remove. Reynolds JA said (at 270):

"There may be and probably is a `plaint' within the meaning of s 47 still subsisting, which can be the subject of an order under that section. It would, however, come to this Court with the issue of liability concluded against the defendant and a jury's verdict as to amount standing and presently unchallenged. I know of no machinery in this Court to set aside that verdict or the earlier verdict as to liability."

Hutley JA (at 271-272) discussed the scope of the word "plaint". He rejected a narrow meaning confining it to the initiating process. He decided that the writ of certiorari defined the scope of the meaning of "plaint". He said (at 272) that "[w]hen the writ is granted what must be removed into the Supreme Court is the whole process, and where the proceeding is under way what must be removed is the process at the stage it has reached when the order is served."

11 Reference was also made to High Court cases dealing with removal under s 40(1) of the Judiciary Act 1903 (Cth). However, as that section expressly stipulates that removal is available only "before final judgement", these decisions are not of assistance in the present context.

12 Three things appear from the above. The first is that, as previously observed, the dicta on this subject in the Court of Appeal and by Isaacs J are all obiter. Secondly, they all deal with the old Act, under which the subject matter of the removal was the "plaint" and not the proceedings. The third is that the views expressed are not uniform: some Judges were of the view that removal could occur after judgment in appropriate circumstances.

13 In my opinion, on its proper construction, s 145 permits removal at any stage of the proceedings, if anything remains to be done in those proceedings. It will not be appropriate, and may be impermissible, if, after contest, judgment has been entered for the defendant, or if a judgment entered for the plaintiff has been fully satisfied. But if anything remains to be done in the proceedings, they may be removed into the Supreme Court, if the occasion for the exercise of the discretion is demonstrated. This interpretation provides a full and flexible power which may be exercised in the interests of the just, cheap and quick disposal of proceedings. In my view it accords with the legislative intent to be derived from the words of the statute as enacted. It will permit, in circumstances such as the present, the avoidance of the agitation of the same or closely related subject matter before two tribunals at the same time. I do not accept the suggestion that the Disrtrict Court has no power to set aside the judgment: see Coles v Burke (1987) 10 NSWLR 429. Even if that decision remains effective after the decision of the High Court in FAI General Insurance Co Ltd v Southern Cross Exploration NL [1988] HCA 13; (1988) 165 CLR 268, it seems to me that an express power is conferred by DCR Part 26 r 5A. Equally, I do not accept the suggestion, insofar as it was made, that the Supreme Court cannot after removal set aside a judgment entered in the District Court; once the matter is in this Court, the judgment stands in a proceeding in this Court, which has power over it as in the case of other judgments standing in this Court. But I am not to be taken as expressing any view as to the basis on which an application should be dealt with to set aside the judgment in the District Court if removed into this Court, or the appropriate result of such an application.

14 I do not, therefore, accede to Mr McMillan's submission that there is no power to remove the District Court proceedings into this Court. It may flow from the views that I have already expressed in [2] that that course would best serve the interests of justice, by avoiding the possibility of simultaneous although interdependent proceedings in two Courts, and thus conducing to convenience and economy. However, I have said that I should hear further submissions on whether or not the order should be made and a time will be appointed to hear those submissions.

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LAST UPDATED: 06/10/1999