Deputy Commissioner of Taxation v Frangieh

1. [1]

   HER HONOUR: On 14 October 2015, this matter was fixed for hearing with an estimate of 10 to 15 days. This morning the defendant/cross claimant’s solicitor filed a notice of motion seeking that the hearing dates commencing on 29 February 2016 with an estimate of two to three weeks be vacated and that the hearing be adjourned to a date to be fixed. The plaintiff/cross defendant objects to the vacation of the hearing date, or as an alternative position submits that an adjournment of one week be granted so that the defendant/cross claimant can brief new counsel this week.

2. [2]

   The plaintiff/cross defendant is the Deputy Commissioner of Taxation. The defendant/cross claimant is Joe Frangieh also known as Joseph Frangieh. The plaintiff/cross defendant relied on the affidavit of Wen-Ts’Ai Lim sworn 29 February 2016. The defendant relies upon the affidavit of his solicitor Konrad Wojtasik dated 25 February 2016.

3. [3]

   Mr Wojtasik deposes that on 25 February 2016, counsel for the cross claimant returned his brief and as such the defendant/cross claimant does not have adequate legal representation and is not ready to proceed today. An alternative counsel is being briefed and it is expected that the cross claimant will be ready to proceed to hearing in four weeks given the complexity of the matter. He was cross examined in court. His evidence is that a dispute with counsel over fees was only part of the reason why counsel returned his brief. He has approached a number of barristers to read the brief. Mr Wojtasik has been acting for Mr Frangieh since 2012 and is familiar with the evidence.

Factual background

1. [4]

   On 1 October 2012, an amended notice of assessment in respect of the year of income ended 30 June 2007 was served on Mr Frangieh, in accordance with the Income Tax Assessment Act 1936 (Cth) and the Income Tax Regulations 1936 (Cth). The notice specified that the amount of income tax due as at 25 October 2007 was $1,700,017.85. Mr Frangieh has failed to pay the amount set out in the notice of amended assessment.

The relevant pleadings

1. [5]

   By further amended statement of claim filed 29 July 2013, the Deputy Commissioner of Taxation claimed a total of $3,331,770.82 from Mr Frangieh which included liabilities under the amended notice of assessment in relation to the income tax, the notice of assessment and liability to pay penalty and subsequent shortfall and general interest charges, as well as monies arising from Mr Frangieh’s failure to pay running balance account deficits. Since that time, that amount has been reduced as a consequence of credits arising from the objection decision and from payments received pursuant to a garnishee notice under s 260-5 of Schedule I of the Taxation Administration Act 1953 (Cth).

2. [6]

   The cross claim seeks damages against the Deputy Commissioner of Taxation for misfeasance in public office, abuse of process and breach of duty to act in good faith. There are three misfeasance in public office claims, two abuse of process claims and one claim of breach of duty to act in good faith. The causes of action against the Deputy Commissioner of Taxation are in relation to:

The legal principles in relation to adjournments

1. [7]

   The parties agree that the case is otherwise ready for hearing.

2. [8]

   Sections 56, 57, 58 and 66 of the Civil Procedure Act 2005 (NSW) relevantly read:

3. [9]

   In Hamod v State of New South Wales [2011] NSWCA 375, the Court of Appeal reviewed the principles to be considered in deciding whether an adjournment should be granted. The trial judge had refused an adjournment by a self-represented litigant part way through the hearing. The Court of Appeal referred to Aon Risk Services Australia Ltd v Australian National University [2009] HCA 27; (2009) 239 CLR 175 and stated (at [139] - [145]):

4. [10]

   Senior counsel for the plaintiff/cross defendant relied upon ANZ v Mio Amico Pty Ltd [2013] NSWSC 716, Squire v Rogers (1979) 27 ALR 330 and Dawson (t/as Goodvibes Yachts) v Deputy Commissioner of Taxation (1984) 56 ALR 367. In ANZ v Mio Amico, Davies J referred to the principles set out in Hamod above. At [58] to [60] and [62], his Honour stated:

Consideration

1. [11]

   At [20] to [34] of Mr Lim’s affidavit he sets out the affidavits and expert evidence that will be relied upon at trial and availability of DCT’s witnesses. I rely on those paragraphs. At [37] Mr Lim concludes:

2. [12]

   Both parties refer to the stress that the witnesses and defendant/cross claimant have hanging over their heads while they await the hearing of these proceedings. The solicitor for the cross claimant/defendant submitted that in his view, new counsel will not be able to properly prepare for the hearing in one week. He also submitted that his client also wants these proceedings heard and he does not seek to delay this hearing. If this hearing date is vacated, the next available hearing date is in September 2016.

3. [13]

   It would be unfair for the solicitor representing the defendant/cross claimant to have to conduct the trial commencing today. I accept that the causes of action are not straightforward.

4. [14]

   Counsel that was acting for the defendant/cross claimant withdrew a few days before the hearing today and the reason is only in part due to a dispute over his fees. I do not know whether the defendant/cross claimant is in a position to pay counsel’s fees. The solicitor for the defendant/cross claimant has been instructed since 2012 and is familiar with the defendant/cross claimant’s case and can assist new counsel when one is briefed. To date a considerable amount of legal fees have been incurred by both parties in preparation for this trial. They agree it is otherwise ready to proceed. There is a delay of six months before these proceedings can be relisted for trial. There will be inconvenience to witnesses and the court caused by the adjournment.

5. [15]

   Taking these factors into account and ss 56, 57 and 58 of the Civil Procedure Act, it is my view that the dictates of justice favour an adjournment being granted for one week to allow new counsel to be briefed for the hearing to recommence on 7 March 2016 for three weeks.

Costs

1. [16]

   Rule 42.1 of the Uniform Civil Procedure Rules 2005 (NSW) reads:

2. [17]

   The plaintiff seeks the costs thrown away by the adjournment. The defendant/cross claimant’s solicitor submitted that, as with the interlocutory decisions made, they should be reserved to the end of the hearing.

3. [18]

   Costs are discretionary. Costs normally follow the event. In my view the defendant/cross claimant should pay the plaintiff/cross defendant’s costs thrown away by the adjournment.