Petroulias v Commissioner of Taxation

Declaration and injunction sought 10 I turn then to the third paragraph of Mr Petroulias' application of 5 September 2011. That paragraph seeks a declaration and injunction against the respondent and the Australian Crime Commission from taking any action that interferes with or adversely affects the applicant's witnesses. There is any number of reasons why that particular application should be dismissed. First, the Australian Crime Commission is not a party to these proceedings. Secondly, there is no evidence before me that the Commissioner of Taxation, as the respondent in these proceedings, is interfering with, or adversely affecting, Mr Petroulias' witnesses in these proceedings. Finally, until such time as a statement of claim is filed in these proceedings, that properly defines the causes of action Mr Petroulias wishes to pursue, it is difficult to see how the applicant's witnesses can be identified. It follows that para three of Mr Petroulias' application of 5 September 2011 must be dismissed.

Application to dismiss proceedings 11 On 28 October 2011, the Commissioner filed an application seeking two orders: first, that pursuant to Rule 5.23(1)(b), the proceedings be dismissed by reason of the applicant's default in relation to an order of the Court and, secondly, that pursuant to Rule 5.21(a), unless the applicant files a further amended statement of claim by 5 pm on 8 February 2012, the proceedings be dismissed. That date has already passed. 12 The default to which the Commissioner's application is directed is Mr Petroulias' failure to file an amended statement of claim by 29 August 2011. To understand the context in which this application is made, it is necessary for me to briefly summarise the history of these proceedings. 13 The proceedings were commenced in November 2010. At that time, they were supported by a lengthy statement of claim. Mr Petroulias has since claimed that statement of claim defined four causes of action. As described by Mr Petroulias, they were:

1. misfeasance on the Commissioner's part;
2. a refusal to issue rulings amounting to misfeasance on the Commissioner's part;
3. a challenge to various administrative actions illegally taken by the Commissioner; and
4. a challenge to the default assessments issued by the Commissioner in relation to Mr Petroulias and various companies with which he is connected. 14 From what Mr Petroulias has said, the first cause of action, viz misfeasance by the Commissioner, is in a different category to, and requires much more work to define, than the other three causes of action. Those all relate to specific rulings made, administrative actions untaken or assessments issued by the Commissioner. 15 On 4 February 2011, on the Commissioner's application, I ordered that this first statement of claim be struck out and Mr Petroulias have leave to file an amended statement of claim by 18 March 2011. It is not clear exactly when Mr Petroulias filed his amended statement of claim. It appears to have occurred during a directions hearing held in March 2011. However, it is clear from the record that the Commissioner applied to strike out Mr Petroulias' amended statement of claim and on 18 July 2011, I ordered that the amended statement of claim be struck out and that Mr Petroulias have leave to file a further amended statement of claim by 29 August 2011. 16 No further amended statement of claim was filed by 29 August 2011. Indeed, none has been filed since then. 17 Mr Petroulias filed an application for various orders (see above) on 5 September 2011. However, he did not include any application for an extension of the time within which to file a further amended statement of claim. 18 On 26 October 2011, a number of orders were made, including one requiring Mr Petroulias to file any application seeking any extension of time within which to file a further amended statement of claim by 4 pm on 9 December 2011. 19 At the same time, Mr Petroulias' existing application filed on 5 September 2011 and any future application he may file under the abovementioned order were set down for hearing on 1 February 2012. 20 By 9 December 2011, Mr Petroulias had not filed any application seeking an extension of time within which to file a further amended statement of claim. 21 In the meantime, on 28 October 2011, the Commissioner filed the present application. 22 This history demonstrates very clearly that Mr Petroulias is in default of the orders of 18 July 2011 that he should file his further amended statement of claim by 29 August 2011. Furthermore, it is clear from this history that he has made no attempt, despite orders that he should do so, to seek any extension of time for compliance with those orders. That compounds his default. 23 Nonetheless, there is clear authority that the court should be very slow to dismiss proceedings under Rule 5.23 if there exists a genuine cause of action which a litigant wishes to litigate. There have been two previous statements of claim in this matter. While those two statements of claim were seriously defective in relation to the pleading of the first cause of action, the pleading of the other three causes of action, albeit defective enough to be struck out, was perhaps not as fundamentally defective as the first. 24 On the face of those documents, there is, therefore, some possible basis for a cause of action against the Commissioner, for example in relation to the challenge to the default assessment (cause of action 4 above). 25 Mr Petroulias has told me in very emphatic terms that he wishes to pursue all of the causes of action he has described (see [13] above). In those circumstances, I consider it would be harsh and unjust to dismiss these proceedings if there is a possibility that Mr Petroulias could plead at least one of the four causes of action and that cause of action has some prospects of proceeding to a determination without offending s 31A of the Federal Court of Australia Act 1976 (Cth). 26 While there is no doubt Mr Petroulias' default or failure to comply with my order of or 18 July 2011 is deliberate and continuing, I do not consider that I should dismiss his proceedings at this stage. Instead, in the exercise of my discretion, I consider I should give him one last chance to properly plead his cause, or causes, of action against the Commissioner. He claims that he will require approximately two months to do that. Mr Fagan SC, for the Commissioner, submits I should only allow Mr Petroulias one month in view of the time he has already had to date. In the circumstances, whether Mr Petroulias is allowed one month or two months is not going to make a great deal of difference in the context of the delay that has already occurred in these proceedings. However, should Mr Petroulias fail to comply within the period of his own choosing, viz two months, that will obviously be a significant factor in any subsequent application to strike out these proceedings. 27 So, I propose to adjourn the Commissioner's application to be relisted, if he wishes, after the next order is complied with. I also propose to order that Mr Petroulias have leave to file a further amended statement of claim by the close of business on 30 April 2012. Further, I propose to order that, unless Mr Petroulias files a further amended statement of claim by the close of business on 30 April 2012, these proceedings do thereby stand dismissed. I certify that the preceding twenty (27) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Reeves.