Deputy Commissioner of Taxation v Norris [2008] QCA 38

SUPREME COURT OF QUEENSLAND CITATION: Deputy Commissioner of Taxation v Norris [2008] QCA 38 PARTIES: DEPUTY COMMISSIONER OF TAXATION (plaintiff/respondent) v MICHAEL JOHN NORRIS (defendant/applicant) FILE NO/S: Appeal No 6416 of 2007 SC No 1698 of 2006 DIVISION: Court of Appeal PROCEEDING: Application for Extension of Time General Civil Appeal ORIGINATING COURT: Supreme Court at Brisbane DELIVERED EX TEMPORE ON: 3 March 2008 DELIVERED AT: Brisbane HEARING DATE: 3 March 2008 JUDGES: Keane and Muir JJA and Mullins J Separate reasons for judgment of each member of the Court, each concurring as to the orders made ORDERS: 1. Application for extension of time dismissed 2. Applicant to pay respondent's costs to be assessed on the standard basis CATCHWORDS: APPEAL AND NEW TRIAL – PRACTICE AND PROCEDURE – QUEENSLAND – TIME FOR APPEAL – EXTENSION OF TIME – WHEN REFUSED – where the applicant failed to comply with the court ordered timeline for the filing of an amended notice of appeal – where the applicant seeks to rely upon ignorance on his own behalf and a lack of legal representation as explanation for the delay – where the history of the matter demonstrates numerous delays caused by the applicant – where no satisfactory explanation for the overall delay is offered by the applicant – where the applicant failed to enter any appearance in support of the application – whether an extension of time in which the applicant may appeal should be granted Horne v Commissioner of Main Roads [1991] 2 Qd R 38, applied Wren v Mahony (1972) 126 CLR 212; [1972] HCA 5, applied -- 1 of 6 -- 2 COUNSEL: No appearance for the applicant C J Conway for the respondent SOLICITORS: No appearance for the applicant Australian Taxation Office - Legal Services Branch for the respondent KEANE JA: Mr Norris is an applicant for an extension of time in which to appeal against the decision of the learned primary judge given on 21 June 2007 whereby his Honour refused to set aside a default judgment entered against Mr Norris on 4 May 2006. This was the second occasion on which an application by Mr Norris to have the default judgment set aside was dismissed: an earlier application was dismissed by consent on 14 July 2006. Mr Norris' application came before the Court of Appeal for hearing on 10 October 2007. On that occasion Mr Christian Moore, a solicitor of the firm AEJIS Legal, appeared on behalf of Mr Norris to seek an adjournment of the hearing of his application to enable the proper preparation of argument on Mr Norris' behalf. The Court granted that application and ordered that an amended notice of appeal be filed and served by 9 November 2007. No amended notice was filed. Nothing further was done on behalf of Mr Norris in relation to the advancement of his application. Mr Norris informed the Court by letter on 29 February 2008 that he is no longer represented by AEJIS Legal. When the matter was called on today for hearing, Mr Norris did not appear to support his application. It appears that, on 27 February 2008, Mr Peter Dinoris was appointed Mr Norris' controlling trustee pursuant to section 188 of the Bankruptcy Act 1966 (Cth). As to the application for an extension of time, generally speaking, there must be some good reason why a litigant should be relieved of the consequences of non-compliance with the rules which govern the conduct of litigation. Whether good reason is shown in any -- 2 of 6 -- 3 particular case will depend on whether there is a satisfactory explanation of the delay (which may, in turn, depend on the length of delay) and whether the respondent will be prejudiced by the delay in a way which cannot be compensated by an order for costs, see Horne v Commissioner of Main Roads [1991] 2 Qd R 38. Mr Norris has not offered a satisfactory explanation for the delay in filing a notice of appeal which led to the necessity for an application for an extension of time. At best for him, according to the written argument filed before the 10th of October 2007, it seemed that the delay was due to his ignorance and the fact that he did not then have the benefit of a legal representation which he later arranged. In that argument, Mr Norris emphasised the brief delay which occurred in his filing of his notice of appeal in the absence of any suggestion that the respondent had been prejudiced by that delay. To focus on the brief delay, however, is to fail to recognise other aspects of the history of this matter which militate against allowing an extension of time. Since 14 July 2006, when Mr Norris' first attempt to have the default judgment set aside was dismissed by consent, almost a year elapsed before he made his second application. In that time, on 28 April 2007, the respondent served a bankruptcy notice on Mr Norris. On 27 June 2007, the Federal Magistrates Court heard applications by Mr Norris to set aside the bankruptcy notice and to extend the time for compliance. The decisions on these applications were still reserved when this matter came before this Court in October last year. It would seem that they were ultimately resolved against Mr Norris and nothing turns on that. No satisfactory explanation for the overall delay was offered. That delay now includes the abortive hearing in this Court on 10 October 2007. It is aggravated by Mr Norris' failure to comply with the Court's direction for the filing of an amended notice of appeal. -- 3 of 6 -- 4 In my respectful opinion, this overall delay is relevant to whether this Court should, by the exercise of its discretion, facilitate now the pursuit of an appeal by Mr Norris. This is especially so having regard to the circumstance that the respondent has acted on the faith of the consent order in the bankruptcy proceedings against Mr Norris. These circumstances must be taken into account in determining whether good reason is shown to exempt Mr Norris from the application of the rules. Having regard to Mr Norris' overall delay and the respondent's reliance on the consent order of 14 July 2006, this Court would, I think, exercise its discretion to entertain the appeal which Mr Norris wished to pursue only if it appeared that a negative exercise of the discretion would deny Mr Norris the opportunity to correct a substantial injustice. In this regard, it is apparent that Mr Norris' complaints could be resolved as a practical matter in proceedings in relation to Mr Dinoris' trusteeship. It is well-established that a Court exercising jurisdiction under the Bankruptcy Act may go behind the judgment to determine whether the debt relied upon is truly due and must do so "where substantial reasons are given for questioning whether behind the judgment there was in truth and reality a debt due to the petitioner", see Wren v Mahony (1972) 126 CLR 212 at pages 221 to 226. In any event, Mr Norris did not show by the material which he placed before this Court any reason for this Court to conclude that the default judgment has occasioned any substantial injustice to him. The debt which merged in the default judgment arose pursuant to Mr Norris' liability pursuant to s 222AOC of the Income Tax Assessment Act 1936 (Cth) under Director Penalty Notices ("DPNs") to Mr Norris with respect to Pay-As- You-Go liabilities to income tax of a number of companies of which Mr Norris was a director. One of the arguments on which Mr Norris relied was that two of the relevant DPNs were addressed to "Mulgrave Road" instead of "Musgrave Road" and another DPN was served at a residence which Mr Norris had vacated some days prior to the service of the DPN by -- 4 of 6 -- 5 post, even though that address was still the address for service when the DPN was delivered. The learned primary judge was satisfied that Mr Norris became aware of these notices which, in any event, were not an essential prerequisite to his liability. Mr Norris identified no reason for concern that the learned primary judge erred in rejecting this argument or that he has suffered any substantial injustice as a result. The second point raised by Mr Norris was that the respondent had, in January 2004, issued garnishee notices to supposed debtors of one of his group of companies. Mr Norris says that the addressees of these notices were not debtors of the company nominated as the creditor in the garnishee notice, but of other companies in the group. Mr Norris sought to argue that the finances of companies which were members of the group may have been disrupted by reason of payment by debtors of the group to the creditor company nominated by the respondent's garnishee notices. As a result, so it is said, Mr Norris' ability to comply with the DPNs was adversely affected. There is no apparent substance in this argument. It should be said immediately, that the relevant invoices in respect of the debts have been sent by the members of Mr Norris' group of companies to the debtors with a nominated company identified as a creditor. In other words, the companies, while under Mr Norris' direction, had been content to send the invoices in the name of the nominated company. The suggestion that payment to the respondent by the nominated company of a debt owed by the debtor to another member of the group of companies rather than to the nominated company had the result of adversely affecting the practical ability of members of the group to discharge their tax liabilities, or the ability of Mr Norris to comply with the DPNs, is inherently improbable. It is not supported by any evidence of the financial position of the various companies in the group. -- 5 of 6 -- 6 In my opinion, there is no good reason to extend the time for Mr Norris now to appeal against the judgment which was entered on 4 May 2006. I would dismiss Mr Norris' application. The respondent seeks an order for the cost of the application to be assessed on the standard basis. I would, therefore, dismiss the application for an extension of time with costs to be assessed on the standard basis. MUIR JA: I agree. MULLINS J: I agree. ----- -- 6 of 6 --