Case: Deputy Commissioner of Taxation v Cumins [No 4] [2008] FCA 558 
Outcome: cited
The alleged misstatements, by reason of missed credits and payments in item 5 of the Schedule to the bankruptcy notice, originally fell into the following four categories. The third and fourth of these were the subject of an earlier decision in this matter: Deputy Commissioner of Taxation v Cumins [No 4] [2008] FCA 558. They are not pressed by the respondent, leaving only the first two categories for consideration: (a) PAYG payments totalling $9,516 received on behalf of the respondent by the applicant effectively on 14 August 2005; (b) general interest charge credits arising from garnishee payments totalling $7,350 made by the respondent before the date of judgment but not credited to his account until after the date of judgment, resulting in an unquantified overcharge of general interest charges. The overcharge relates to the periods from the respective dates of receipt, as contended for by the respondent, to the judgment date. The applicant did not claim interest in the bankruptcy notice for the post-judgment period; (c) missed credits amounting to $31,007.72; and (d) a rounding credit of four cents. 20 PAYG payments were made on the respondent's behalf by his employer for the 2005 tax year as follows: PAYG Period Date Received by the ATO Amount of PAYG Paid ($) July 2004 23/08/2004 793 August 2004 21/09/2004 793 September 2004 27/10/2004 793 October 2004 22/11/2004 793 November 2004 17/12/2004 793 December 2004 28/02/2005 793 January 2005 16/02/2005 793 February 2005 21/03/2005 793 March 2005 21/04/2005 793 April 2005 20/05/2005 793 May 2005 20/06/2005 793 June 2005 20/07/2005 793 44 Applying even the most benevolent constitution to the last sentence in para [36], I do not consider that it provides sufficient information to enable the applicant to identify the asserted misstatements presently relied upon. So far as concerns the alleged misstatements said to arise by reason of missed credits amounting to $31,007.72 as well as rounding credit of four cents I repeat what I said in Deputy Commissioner of Taxation v Cumins [No 4] , particularly at [16]. 45 The respondent then submits that para [36], taken as a whole, is sufficient to embrace the misstatements related to the PAYG and garnishee payments. He says that he was at a "severe informational disadvantage" during the period when a s 41(5) notice had to be given. I take this to mean, at least, that during the period in which notice was required to be given he did not have a copy of the taxation account maintained in respect to him by the applicant showing amounts received from him or on his behalf from time to time. A copy of this document was before the Court. It is discovered document No 1 in Part 1 of Schedule 1 in the applicant's list of documents made pursuant to orders 1 and 2 of District Registrar Jan made on 29 January 2008 filed on the 6 February 2008. It is described as the "Original income tax account history for Brian Cumins showing transactions and interest for the period 05.01.99 to 25.01.08" and is dated 31.01.08. 46 If the respondent had had a copy of this document during the period in which notice under s 41(5) might have been given by him to the applicant, he would have seen, for example, that, contrary to his understanding, the seven alleged garnishee payments of $1,050 each had not been recorded as received by the applicant in each month from December 2004 to June 2005 inclusive. Further, in relation to the $9,516 PAYG payments he would have seen that this amount in respect of the financial year ended 30 June 2005 was not credited to his account until 21 July 2006. This too would have been contrary to his understanding that it should have been credited to his taxation account in the period between the date of judgment and the date of the bankruptcy notice. He would have had sufficient information to give notice under s 41(5) in respect to both of those matters. 47 In this context the respondent submits that where a government body is involved and has the benefit of a statutory regime, the s 41(5) notice requirements should not be interpreted strictly or narrowly. There is, in my opinion, no basis to this submission. There is only one proper construction of the section. What will constitute sufficient notice will vary from one case to another. If a debtor does not have the necessary information to enable notice to be given under s 41(5) and could not have obtained it by reasonable endeavours, then this may well form a basis for seeking an extension of time under s 33(1)(c) for giving notice when that information, by whatever means, comes into the hands of the debtor: cf Deputy Commissioner of Taxation v Cumins [No 4] [2008] FCA 558 at [20] - [24] . I decided there that the respondent could, merely by making a request, have obtained a copy of his taxation account from the applicant. I would not revise that conclusion even after considering the content of paras [5]-[19] of the affidavit of Mr Kevin Dundo sworn on 29 April 2008. I do not accept that the respondent was at any disadvantage in this respect. If he was, it was occasioned by his own inaction. 48 The respondent points to the fact that the sum of $10,500 mentioned in para [36] is a multiple of $1,050 which was the amount garnisheed on a monthly basis in the hands of the respondent's employer. This, he submits, should have alerted the applicant to look closely at payments received and credits allowed in respect of the period after judgment and before the bankruptcy notice issued. I do not accept that submission. The onus is upon the respondent to sufficiently articulate the misstatements upon which it relies. 49 Even if para [36] were thought to have put the applicant on such a train of enquiry, it would have been unproductive. First, the period mentioned in para [36] concerning payments of $10,500 is said to be between May 2005 to 14 March 2006. However, what is now complained about concerns seven payments of $1,050 totalling $7,350 alleged to have been made between December 2004 to June 2005. This involves an overlap of but two months across a combined period of 15 months. Second, according to the applicant's records, the amount of $7,350 was received together with one other payment of $1,050, a total of $8,400, on 22 September 2005. This amount was included in the figure set out under item 5 of the Schedule to the bankruptcy notice. Paragraph [36] states that the $10,500 was paid to the applicant between May 2005 and 14 March 2006. Obviously 22 September falls between those two dates. The applicant did direct its attention to garnishee payments made by the respondent for the purposes of the bankruptcy notice and gave a credit in item 5 for $16,800, which amount includes the $7,350. The $16,800 comprises the following garnishee payments made according to the applicant's records, between the date of the judgment and the date of the bankruptcy notice. 59 As to the garnishee payments of $7,350, it is unnecessary to decide when they were received by the applicant, whether on 22 September 2005 as the applicant contends, or on various dates between December 2004 and 6 June 2005 according to the respondent. Accepting for present purposes only that they were received on the dates asserted by the respondent, the resultant overcharge of general interest charges extends only to the date of judgment. The applicant did not claim interest in the bankruptcy notice for the post-judgment period. Accordingly, it is the amount of the judgment debt which would, to the extent of those overcharges, be incorrect. Such amounts were not credits or payments required to be included in item 5 of the Schedule to the bankruptcy notice. What I said in Deputy Commissioner of Taxation v Cumins [No 4] [2008] FCA 558 at [26] is apt on this point. The fact of such an overcharge would not operate to render, as a matter of law, the amount due under the bankruptcy notice as incorrect. 60 The respondent, despite an invitation by counsel for the applicant to seek an extension of time under s 33(1)(c) of the Act for the giving of a notice under s 41(5) covering the alleged missed payments or credits, declined to do so. Accordingly, the position of the respondent is, as is evident also from his outline of closing submissions, confined to reliance upon para [36] of Mr Dundo's affidavit as constituting notice under s 41(5) for the purposes of the alleged missed payments and credits. 61 If the respondent had sought such an extension of time, I would have refused to grant it on discretionary grounds as being futile for the same reasons as are set out under paras [55]-[59] above. 73 The respondent further submits that even if it were to be accepted that he is presently facing an unshakeable claim of some $4.8 million in respect of the 1998 assessment, that figure raises very different issues in relation to possible payment or compromise of the claim than if he were to face the current $38 million claim in the bankruptcy notice. The figure of $4.8 million is, I infer, a reference to a finding made in an earlier decision that the total amount of the judgment debt which is not related to the AAT applications is in the order of $4.8 million: Commissioner of Taxation v Cumins [2008] FCA 353 at [63] . 74 Mr Kevin Dundo in his 29 April 2008 affidavit annexed a copy of the Outline of Submissions filed by the respondent in his application to the AAT seeking an extension of time for lodging an application to review the decision of the applicant made in an amended assessment in respect of the 1998 tax year pursuant to s 29(7) of the Administrative Appeals Tribunal Act 1975 (Cth) as well as his application in that matter for amendment or extension of the grounds of the objection lodged by him in respect of the amended assessment pursuant to s 14ZZK(a) of the Taxation Administration Act 1953 (Cth). 75 There was no argument before me as to the content of these submissions. I earlier refused to adjourn the hearing of this petition despite the currency of the respondent's two applications to the AAT. I was not then satisfied that the respondent had established genuine and arguable grounds in relation to either of his AAT applications: Commissioner of Taxation v Cumins [2008] FCA 353. That position has not altered. The respondent's submissions on the exercise of discretion are predicated upon his being successful, on the merits, before the AAT. The likelihood of that occurring has not been established.