Guss v Deputy Commissioner of Taxation

BACKGROUND 4 It is convenient to begin by summarizing the evidence that was before his Honour on the application for review. The question of the characterisation and legal significance of that evidence can be put to one side for the moment.

(a) Judgment debt 5 In July 2004, the respondent filed proceedings against the appellant in the Magistrates' Court of Victoria at Melbourne claiming an amount of $39,839. The claim was based upon penalties equal to the unpaid amounts of estimates of amounts withheld by Gerandu Pty Ltd and Bongania Pty Ltd for the purposes of Division 12, Schedule 1 to the Taxation Administration Act 1953 (Cth) (TA Act); Bongania Pty Ltd is occasionally misdescribed in some of the material as "Bogania Pty Ltd". Pursuant to s 222AGA of the Income Tax Assessment Act 1936 (Cth) (ITA Act) the respondent made estimates of the unpaid amounts of Gerandu's and Bongania's liabilities under subsection 16-70(1) of Schedule 1 to the TA Act to pay to the respondent amounts equal to the amounts withheld by those companies for the purposes of Division 12 to that Schedule. Notices of such estimates were sent to Gerandu and Bongania under s 222AGB of the ITA Act. Those companies were liable to pay those estimates under s 222AHA of the ITA Act. Such notices were not complied with. Moreover, no steps were taken of the type described in s 222APB of the ITA Act. The appellant was a director of these companies at the relevant time. By force of s 222APC of the ITA Act it was alleged that the appellant was liable to pay the respondent a penalty equal to the unpaid amount of each of the estimates. The penalty in respect of Gerandu was $15,215. The penalty in respect of Bongania was $24,624. Hence the claim made for such penalties was $39,839, together with interest and costs. 6 On 28 January 2005, the respondent filed an application for a summary order, in essence judgment on his claim. It appears that at this time at least, the appellant was represented by Joseph Guss, solicitor, the appellant's father. The respondent filed an affidavit in support of the application by Aris Zafiriou of 28 January 2005. The claim concerning the penalty for Gerandu was not proceeded with. The claim concerning the penalty for Bongania was reduced to $18,534.77 by reason of the application of an income tax refund credit on another account. Accordingly the amount claimed was reduced to $18,534.77. A further affidavit was filed by Aris Zafiriou of 12 April 2005. There is little doubt that this material was served; there is in evidence affidavits of service of 6 April 2005 of Christopher Hallinan and of 14 April 2005 of Frank Rebechi. Moreover, this application was defended at this time. 7 On 3 May 2005, the appellant filed an affidavit deposing that he had a good defence to the whole of the respondent's claim. On 11 May 2005 the appellant filed "amended particulars of defence" challenging the estimates and the elements underpinning the statutory claims. At this time, the appellant was represented by Poulton Elliott & Grey, solicitors. 8 Various other affidavits were also filed by the parties around this time including the appellant's affidavit of 18 May 2005 and a further affidavit of Aris Zafiriou sworn 25 May 2005. Assertions and counter assertions were made concerning the merits of the respondent's claim. As at 25 May 2005, according to the respondent, the debt due and payable was $16,294.27; the further reduction was due to other credits. It would appear that the application for a summary order was not pressed at this time. 9 During 2005 and 2006, as his Honour sets out in his reasons at [7] to [10], the various notices were the subject of unsuccessful collateral challenges by the appellant. 10 On 11 December 2006, judgment was entered against the appellant in the proceeding in favour of the respondent in an amount of $21,181.77, being $16,255.27 on the principal claim and $4,926.50 in interest. In evidence is a copy of a certified extract from the Register of the Magistrates' Court setting out such details. The extract noted that the order was made on a "Summary Order Application" which had been granted, the application having been made by the respondent. 11 It would appear that the respondent re-listed the summary judgment application referred to earlier. Upon that application being re-listed, the judgment referred to above was made and entered. I will refer later to evidence surrounding the entry of this judgment. In essence, the appellant has alleged that the judgment was entered irregularly. It was said that neither the appellant nor his legal representatives had received notice of such re-listing. 12 From the time of the entry of that judgment until the issue of a warrant to seize the appellant's property, which I will describe in a moment, little occurred. 13 It would appear from the evidence filed by the appellant in the Federal Circuit Court that during the period 2006 to 2010 the appellant was for the most part working overseas as an international marketing consultant and that during the period 2010 to 2014 he had for the most part lived in China and the United Arab Emirates.