Deputy Commissioner of Taxation v Russell [2018] QDC 116

DISTRICT COURT OF QUEENSLAND CITATION: Deputy Commissioner of Taxation v Russell [2018] QDC 116 PARTIES: DEPUTY COMMISSIONER OF TAXATION (Plaintiff) V RONALD NORMAN RUSSELL (Defendant) FILE NO/S: DC No 2808 of 2015 DIVISION: Civil PROCEEDING: Application ORIGINATING COURT: District Court at Brisbane DELIVERED ON: Ex tempore reasons delivered on 15 June 2018 DELIVERED AT: Brisbane HEARING DATE: 15 June 2018 JUDGE: Porter QC DCJ ORDER: 1. The proceeding be stayed pursuant to rule 72(1) of the Uniform Civil Procedure Rules 1999 (Qld). 2. The Plaintiff have liberty to apply upon 5 business days’ notice to the Defendant. 3. The costs of the application be the Plaintiff's costs in the proceeding. CATCHWORDS: PROCEDURE – STATE AND TERRITORY COURTS: JURISDICTION, POWERS AND GENERALLY – INHERENT AND GENERAL STATUTORY POWERS – TO STAY OR DISMISS ORDERS OR PROCEEDINGS GENERALLY – where the defendant applies for adjournment of the trial on the basis of his mental health condition – whether the defendant has become a person with impaired capacity during proceeding – whether the proceedings should be stayed. Legislation Uniform Civil Procedure Rules 1999 (Qld) r 72 COUNSEL: G Coveney for the plaintiff R Russell for the defendant, appearing in person SOLICITORS: HWL Ebsworth for the plaintiff -- 1 of 5 -- [1] In July 2015, this matter was commenced by claim and statement of claim by the Deputy of Commissioner of Taxation. It seeks to recover as director's penalties an amount of some $192,000 in unpaid pay-as-you-go withholding amounts due by HR Contractors Pty Ltd, a company of which Mr Russell, the defendant, was a director. [2] On 6 November 2017, Judge Fantin set the matter down for trial on 8 and 9 February 2018 and made directions, amongst other things, for the filing of affidavits of evidence-in-chief. The Deputy Commissioner and Mr Russell both complied with those directions, though somewhat late. I make no critical comment about that. [3] On 2 February 2018, Mr Russell sought an adjournment of the trial. He did so on the basis that the illness of his son made it difficult for him properly to prepare and attend at trial. On 2 February 2018, I adjourned the trial on that basis. [4] On 26 February 2018, I gave leave to Mr Russell to amend his defence and listed the matter for trial on Monday and Tuesday next week, that is, 18 and 19 June 2018. The matter was also placed on the commercial list, and it was listed specifically now, and court arrangements were made and changed, so that I could hear the matter on those days. [5] Pursuant to the leave I gave on 26 February, Mr Russell impermissibly sought also to file a counter-claim alleging misfeasance in public office. The matter was brought before me again on 27 March 2018. On that date, I explained the defects in the counter- claim to Mr Russell, and I explained the need to seek leave to file, at this stage, a counter-claim. [6] The counter-claim in its then form failed properly to plead any cause of action, including misfeasance in public office. On that day also, I explained the elements of that cause of action and the need to allege actual misconduct against certain officers. Mr Russell, to his credit, hesitated to make such an allegation against the officers he had dealt with, who he said had acted fairly towards him. [7] Despite all that, I gave leave for him to file any application to file a counter-claim by 5 April 2018. That was a lenient and generous grant of leave in the circumstances. Notwithstanding my discussions on 27 March 2018, Mr Russell sent to the court an amended defence and counter-claim in substantially the same form as I had previously indicated was utterly defective. I dismissed the application and ordered the amended defence be filed with the counter-claim struck through. [8] On that date, I also vacated some of the trial directions by Judge Fantin, bearing in mind, in particular, Mr Russell being self-represented, and made shorter orders to get the matter to trial. On that date, Mr Russell also raised the question of the location of the trial, and ultimately agreed that he would rather come to Brisbane for the trial than make other arrangements. [9] So matters stood, until 11 June 2018. On 11 June 2018, my Associate received an email from an Amanda McNamara (who seems to be an officer of the local Neighbourhood Centre), attaching a medical certificate, which sought, it appears, an adjournment of the trial. The medical certificate was inadequate to sustain the adjournment. It said: This letter is to certify that the abovenamed person has been having significant health issues and is not in a health condition and mental state to attend his upcoming court case in Brisbane on 18 and 19 June. -- 2 of 5 -- [10] This letter was signed by a GP, Dr Sayyal, from the Emerald Medical Group. No background or detail was provided in that letter to justify an adjournment. [11] In response to the email I just described, my Associate sent this email to Mr Russell on the 11th of June: Dear Mr Russell His Honour has received the below email from a Ms McNamara. It appears from her email and the attachment you are seeking to adjourn the trial of this matter. If you wish to do so, you must seek an adjournment from the court. His Honour will hear any such application at 9 am on Thursday. You may attend by telephone. You may send other documents you wish to rely upon by email to me and copied to Mr Lawrence. While it is up to you what evidence you put before the court, you may wish to consider providing a little more detail on your problems, preferably something more detailed from your GP if possible. It is important to address when it was these issues emerged and when you consider you'll be ready for the trial to be heard. It is important to address the fairness to the plaintiff of adjourning the trial in the context where it was already adjourned at your request last year. [12] Thereafter, Ms McNamara sent an email saying Mr Russell would like to adjourn the matter. My Associate responded on the afternoon of the 12th , in an email to Ms McNamara and copied to the parties: Dear Ms McNamara His Honour has asked me to communicate two matters. First, the court will not act on your communications on behalf of Mr Russell, unless Mr Russell confirms you're authorised to communicate on his behalf. This can be done by email. … Absent some confirmation from Mr Russell that he wishes to seek an adjournment, the adjournment hearing will not proceed. [13] There was no response to that email until the morning of Thursday the 14 June. On that morning Mr Russell called my Associate asking about the hearing of the adjournment application. The email sent by my Associate at 9.16 am sets out what occurred in the course of that conversation. In effect, because there had been no confirmation from Mr Russell, as required, my associate communicated that the time was no longer available for the adjournment to be heard on Thursday. I directed that the matter be heard at 9 am this morning. [14] At 11am on the morning of 14 June, Mr Russell sent finally emailed an informal adjournment application, the basis being his medical health state, the difficulties with his son, the fact that he could not attend in Brisbane because the Neighbourhood Centre might not provide the money to come to Brisbane that he was expecting, and that he was getting a further report from Dr McPhee. [15] My Associate, at 2 o'clock that day, confirmed that the hearing of the adjournment application would proceed this morning. This morning, my Associate received a further email from the defendant attaching a letter from a Dr McPhee from Central Highlands Health Care Limited sent around 7 pm last night. The doctor says this, relevantly: I am a registered GP and the personal physician of Mr Russell since August 2012. This letter is to certify he has a severe major depressive order with active suicidal ideation. He's cognitively impaired, unable to concentrate and has pervasive thoughts of self- harm. He's not of sound mind and incapable of representing himself in any matter that requires forward planning, financial matters or issues of personal and family wellbeing. -- 3 of 5 -- [16] The doctor then goes on to explain some of the circumstances that have contributed to that state, the primary being problems with his son, personal problems, the protracted legal battle with the Tax Office and the destitution of his family rendered by the costs of defending the claims. He then concludes in this way: The person has been referred for urgent psychiatric care and may, in the interim, require admission to a safe facility to ensure personal safety. [17] That report, which the Commissioner rightly accepted as genuine, is of considerable weight. [18] Dr McPhee, first, has had an extended period of time in which he has treated Mr Russell and been able to observe Mr Russell. Second, he has avoided conclusory opinions about legal capacity. Rather, he has identified specific mental health conditions and identified the seriousness of those health conditions. Further, he has reported on the factors that contribute to those. They can't be acted on as necessarily evidence of the truth of their contents, although, on an application of this kind, if it had been sworn to, they could be. But in any event, they don't particularly detract from the conclusions, and my observations of the other matters I've seen in the course of this case is that many of them appear to be correct, at least in substance. Fourth, his observation that Mr Russell may require, in effect, involuntary admission is something which, in the absence of contrary evidence, I have to take seriously from a well- qualified GP who has a long history with this man. [19] Mr Russell appeared on this application. As in other cases, Mr Russell behaved courteously to the court, and he has endeavoured to articulate his case. He doesn't present as someone utterly unable to attend to his own public affairs. The Commissioner put before me correspondence right up until lunchtime yesterday which is consistent or appears consistent with that conclusion. However, it is not unknown that people with depressive illnesses can present as capable, and often do so. In the face of this doctor's credible, direct and serious report, I don't think that I can press the matter on, notwithstanding the matters that were properly raised by the Commissioner. [20] I say that in the context of these matters: (a) First, there is definitely a public interest in the prompt resolution of disputes. Adjournments are no longer available for the asking, even if costs which are wasted are to be paid. A lot of costs have been wasted in this case. I have an affidavit before me showing more. I know from my involvement in managing the case that a lot of those costs have been caused by Mr Russell failing properly to conduct the litigation. (b) Second, there is a public interest in the efficient use of court resources, particularly where an adjournment is sought at the last minute. When that happens, it's impossible to allocate time to another matter for the trial; judicial resources are wasted, to the detriment of everybody - the court and other litigants and the plaintiff. A party to litigation has an interest in the prompt and efficient disposition of claims. Ongoing litigation is expensive and takes up resources of the party and their solicitors. Costs rarely cover but part of the true cost of an adjournment, and that is definitely true in this case. [21] I also note that this adjournment application was brought at the last minute; that Mr Russell can't afford, on any view, to pay the costs that have been thrown away for this adjournment, much less the last one; that Mr Russell's defence appears to have very little prospect of success; and that it doesn't appear that effective cross-examination in -- 4 of 5 -- respect of the Commissioner's case is likely to make much difference. I'm also conscious that Mr Russell hasn't read Mr Das’s affidavit, which seeks to answer Mr Russell’s defence by explaining how the payments made were allocated to other debts of the company. [22] However, as I've said, with enormous reluctance, I'm going to adjourn the trial on the strength of Dr McPhee's evidence, the strength of which I took some time to explain so the Deputy Commissioner could understand why this trial, with so little prospect of being defended, is being adjourned. [23] Notwithstanding the weakness of Mr Russell’s case, and all the other factors telling against an adjournment, there is more to the legal process than that. Not only must the law be applied, but justice must be seen to be done. On the face of Dr McPhee's evidence, Mr Russell is not in a position to say what he might be able to say in his defence, and public confidence in the integrity of the judicial system requires that that matter be taken into account as well. [24] If I just adjourn this trial to another date, the parties and the Court may be in exactly the same position again at some other date as they are now. This would be an utterly unacceptable outcome for the Commissioner, for Mr Russell, and for the court and the public interest. Ordinarily, that would be an additional reason not to adjourn the trial. [25] However, Dr McPhee's letter seems to me to engage rule 72(1) of the Uniform Civil Procedure Rules (Qld). I am satisfied, on the basis of this letter, that Mr Russell has become a person with impaired capacity and is not able, at the moment, to conduct a defence, whatever it might be, in the trial. Having formed that view, I order that the proceedings be stayed under rule 72(1), unless the court gives leave to proceed. [26] Now, it's a matter for the Commissioner where to take the matter. It may be that the Commissioner seeks to challenge the evidence that was put before the court to engage the stay under rule 72(1). I should make clear that, given the lack of full opportunity the Commissioner has had to investigate and challenge the conclusion that Mr Russell is of impaired capacity, it would be open, it seems to me - although it would be ultimately a matter for another judge or me when hearing such an application - for the Commissioner to apply to discharge the stay, either on evidence in the Commissioner's possession, as long as it's evidence other than the evidence I've already considered. [27] It would be open to the Commissioner to seek an order for Mr Russell to submit himself to psychological examination. If that wasn't agreed to, that would be an order that would have to be sought from the court. I give leave to the Commissioner to file any application for leave to proceed on five business days’ notice to Mr Russell. [28] The Commissioner, of course, is in a difficult position, given the conclusion I have reached. It may be that a litigation guardian can be appointed. That might be an appointment the Public Trustee would take, given the public interest in the matter. That could be done extra-curially. It could also be done by an application to a judge. -- 5 of 5 --