Woods v Deputy Commissioner of Taxation

Principles to apply 7 The issue which now arises is whether or not this Court ought grant the extension of time in which to appeal the decision from the Federal Circuit Court. The power of this Court to grant such an extension arises under r 36.05 of the Federal Court Rules 2011 (Cth). That power has been considered in a number of authorities which bind me. Importantly, the most significant is that of the Full Court in AZAEY v Minister for Immigration and Border Protection (2015) 238 FCR 341. In that case the Full Court referred with approval to Hunter Valley Developments Pty Ltd v Cohen (1984) 3 FCR 344 and Reaper v Baycorp Collections PDL (Australia) Pty Ltd [2014] FCA 426. From these decisions it appears that the principles on which this Court must act are as follows: (a) The Court has an unfettered discretion to grant an extension of time in which to appeal, however, that discretion is one which is required to be exercised judicially. (b) The discretion requires a balancing of the interests arising in the particular circumstances of the case before the Court. (c) The starting point is the recognition of the importance of the time limitation periods created under the Court Rules and ancillary legislation. Those periods have been devised as being the constraints in which parties must act in order to advance litigation. The prescription of the time serves the benefit of bringing finality to disputes. (d) Generally, an applicant will need to show some plausible reason which might explain the delay in commencing an appeal within time. (e) It is also usually necessary for an applicant to demonstrate that it is in the interests of justice that the Court entertain an appeal even though the time limited for appealing has expired. 8 The relative importance of this latter criteria will often be influenced by the ascertainment of whether the proposed grounds of appeal have sufficient merits to warrant their consideration. It should be observed that in considering the merits of any proposed ground, the Courts adopts what is said to be a rough and ready examination of the ground, rather than a rehearsal of a full hearing of the argument. 9 In this case the explanation for the delay in filing the Notice of Appeal is unclear. Although an application for financial hardship exemption was made, there is insufficient evidence to allow this Court to conclude that there were, in fact, no sources of money on which Sonya could rely for the purposes of paying the filing fee. 10 I note that in the submissions made on Sonya's behalf it was said that there is, in fact, no real money in Australia. That may explain a reluctance to pay to the Federal Court the filing fees which usually attach to the filing of an appeal. Additionally, documents were tendered on her behalf which suggested that she was possessed of substantial quantities of silver. Putting those matters aside, one would expect that, on an application of this nature, an applicant would explain why no exemption from paying the filing fee was obtained prior to the date of the expiration of the time allowed for filing the appeal. That remains the case today. It is not clear why the exemption was not obtained at an earlier point in time which, if it were granted, would have allowed the appeal to be brought within time. 11 A second point, which is often considered on applications such as these, is whether or not there is any prejudice to the respondent by the granting of an extension. Very properly, the Commissioner indicated that he will not suffer any prejudice by the extension of time. That is true to an extent. However, the reality is that the administrative workings of the organs of government, including the Office of the Commissioner of Taxation, depend upon the appropriate flow of the decision-making processes and, in that respect, all extensions of time give rise to some form of prejudice. However, as I have said, the approach of the Commissioner today is very properly to indicate that apart from the usual prejudice that exists from delay or extensions of time, no specific prejudice arises in this case. 12 Putting aside the absence of any proper explanation for the delay in filing the appeal, the real question becomes one of whether there are any merits in the proposed grounds of appeal. The substantive ground of appeal is that the applicant was denied procedural fairness before the Federal Circuit Court. That was founded upon allegations that the Federal Circuit Court proceedings came on for hearing on less than 48 hours' notice, despite her advice that she would be interstate until July. It is said that she was unable to file evidence and other important documentations prior to the hearing. 13 The sealed copy of the Notice of Filing and Hearing of her application to the Federal Circuit Court shows that the date and time set for the hearing was 15 June 2018 at 9.30 am. It is clear Sonya would have been aware of that on receipt of a sealed copy of that document. The application was supported by two affidavits, and that indicates a general preparedness to proceed with the application. Indeed, an applicant must file the material on which they rely upon in the first instance, with the application for review. The Commissioner correctly pointed out that the application for review before the Federal Circuit Court might have been adjourned had the applicant sought an adjournment. As I have mentioned, the Commissioner took the very proper position of advising the applicant that she would need to request such an adjournment and that, if she did, it would not be opposed. She was also advised that the Commissioner would be ready to proceed if the Court was not minded to grant the adjournment. As is further observed, at the hearing which Sonya attended by telephone, she stated that she was ready to proceed and on the hearing she made submissions in support of her application. 14 It follows that the applicant was afforded all of the procedural fairness necessitated by the Federal Circuit Court, and that ground has no prospects of success and, indeed, no prospects which would warrant an extension of time for the filing of the Notice of Appeal. 15 Apart from the procedural fairness point, the applicant seems to advance two arguments as to why the sequestration order ought not have been made. The first is that the Bankruptcy Notice issued on 23 November 2017 in the amount of $63,825.72 was invalid. The second was that she had discharged her liabilities which were the subject of the Bankruptcy Notice, by sending a discharge to the United States Treasury. In relation to the first issue, being the validity of the Bankruptcy Notice, the applicant submitted that it was invalid or fraudulent, pursuant to something called the Four Corners Rule, whereby: Every word, phrase, paragraph or number within a box is effectively from one other source. 16 It is not entirely clear what that proposition entails. Certainly, to the extent to which an old rule of construction of contracts identified the Four Corners Rule as being a consideration of all the words in a transactional document, it had nothing to say about the content of a Bankruptcy Notice. This was dealt with by the primary judge, and no error appears in his decision. The Commissioner in his submissions identified that the validity of Bankruptcy Notices is provided for in the Bankruptcy Act 1966 (Cth) and the accompanying regulations, and further submitted that the notice in this case was valid because it was issued in the form prescribed by the Bankruptcy Regulations 1996 (Cth), and based upon a final judgment or order obtained in the Magistrates Court of Queensland in the amount of $63,746.58, and the judgment was attached to the Bankruptcy Notice. That submission is correct and should be accepted. There is no substance in the suggestion that the Bankruptcy Notice was invalid. 17 The second ground which was agitated before the Federal Circuit Court concerned the alleged discharge of Sonya's liabilities. As best as might be ascertained it appears that she asserts that her liability under the Bankruptcy Act was discharged by tender of payment within 21 days. The alleged tender of payment was said to have occurred as a result of certain documents being sent to the United States Treasury with a copy being sent to the Commissioner. 18 Whatever effect Sonya or those who advise her perceive those documents to have, they were not something which under the laws of Australia, can be used to discharge tax-related liabilities. The method of discharging tax-related liabilities is regulated by s 16A of the Taxation Administration Act 1953 (Cth) and reg 21 of the Taxation Administration Regulations 2017 (Cth). They provide that a tax-related liability must be discharged in Australian currency, and a person must pay the tax-related liability using the method approved by the Commissioner and in accordance with instructions provided by the Commissioner. 19 In this case the manner in which the alleged tender of payment was made remains opaque. It appears that what was done was that a Statement of Account issued by the Commissioner of Taxation on 6 February 2018 was marked up with handwritten text, together with a signature, and then delivered to the United States Treasury. Some attempt has been made in the past to claim that this is some form of method of payment. It was dealt with in this Court in Atkinson v Commissioner of Taxation [2014] FCA 1217, where Jagot J said at [37]: The statement of account is not a bill of exchange as defined in s 8 of the Act. The first applicant was not authorised to do anything with the statement of account under the Act. Writing and putting various stamps on the statement of account had no legal effect under the Act. Nor did delivering that statement of account back to the ATO. The Act is simply not engaged at all by the facts of this case. The notion that a person who owes the ATO money for non-payment of tax can transform the ATO's statement of account into a bill of exchange and then deliver the statement of account back to the ATO and, in so doing, discharge the person's own indebtedness for some nominal amount ($1) and render the ATO liable to pay the original amount owed to the ATO plus interest and other charges is some form of fantasy, unconnected to the operation of the Act. 20 That decision has been applied in other cases and, particularly, in the District Court of Queensland in Woods v Australian Taxation Office [2016] QDC 198, which coincidentally was a decision in relation to the applicant before the Court. That decision was upheld by the Queensland Court of Appeal in Woods v Australian Taxation Office [2017] QCA 28. There is no real need to go into the detail of those decisions, save to say that it was observed that the suggestion that the delivery of documents as described might create a legally binding contract, was without any legal merit and truly fanciful. 21 It appears that some further form of payment is also alleged, although again its nature is opaque. As best as might be ascertained, it appears to be suggested that a person's birth certificate is some form of security document or negotiable document which can be exchanged for a substantial amount of money. Mr Evans, on behalf of Sonya, suggested that it could be exchanged for $5 million. Again, there is no need to consider that allegation or submission in detail. It is, likewise, fanciful. But, moreover, the delivery of a Certificate of Title to the Commissioner of Taxation or anyone on behalf of the Commonwealth is not a method of payment of a tax-related liability provided for under the Taxation Administration Act or the Taxation Administration Regulations and cannot be used to discharge that liability. 22 Again, the grounds that appear to go to the merits are without any substance and would not warrant the granting of an extension of time in which to appeal the decision of the Federal Circuit Court. In saying that, I also note that in the course of argument it was said by Mr Evans on behalf of Ms Woods, and with her apparent consent, that, amongst other things, there was no real money in Australia. That is an argument which has been advanced over a long period of time by various ill-informed self-represented litigants, and has been completely debunked. 23 A further argument that was advanced was that the people of Australia are under the military occupation of the Federal Reserve Bank. Again, that is an argument which has no attachment to reality. It was also said that the taxation liabilities imposed upon Sonya were trumped up, but they were, as I identified, the foundation of a judgment of the Magistrates Court of Queensland. 24 It follows that there is nothing in the merits of the proposed appeal which would warrant granting an extension of time in the interests of justice. That being so the application for an extension of time must be dismissed. 25 On the question of costs, the Commissioner does not ask for a costs order in the circumstances and that seems to be appropriate. There will be no order as to costs. I certify that the preceding twenty-five (25) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Derrington.