Deputy Commissioner of Taxation v Bonaccorso (No.3)

1. [1]

   On 19 February 2014, the plaintiff, the Deputy Commissioner of Taxation (“the Deputy Commissioner”) commenced proceedings against the defendant, Garry Bonaccorso, claiming a sum in excess of $1.5M, being income tax for the financial year ended 30 June 2008.

2. [2]

   A Notice of Amended Assessment was issued on 12 May 2010 with respect to that income and it fell due on 4 June 2010. The sum claimed was the outstanding amount on the defendant’s running balance account under the relevant statutory provisions. The sum claimed included interest and administrative penalties.

3. [3]

   Since that time, there has been a complex series of interlocutory steps. On 12 May 2016, for the reasons which were then published, Schmidt J granted leave to the defendant to file a further Defence within 21 days: see Deputy Commissioner of Taxation v Bonaccorso [2016] NSWSC 595. Her Honour’s comprehensive reasons sufficiently outlined the history of these proceedings. There is no need for me to repeat that material.

4. [4]

   On 30 May 2016, the defendant filed a document entitled “Further Amended Defence to Amended Statement of Claim”.

5. [5]

   On 16 June 2016, the plaintiff filed a Notice of Motion seeking the following orders:

6. [6]

   The matter came before the Court on 22 June 2016. The defendant did not appear. On that day, I made the following orders:

7. [7]

   This judgment deals with the Motion filed 16 June 2016.

Further Amended Defence

1. [8]

   The Further Amended Defence consists of over 33 pages in total. It is plain that the defendant denies, on a very large number of bases, that there is any debt due by him to the Commonwealth of Australia, or that he is liable to make any payment to the Deputy Commissioner.

2. [9]

   The defendant is self-represented and the Defence has been drafted by him without any legal assistance. In considering this motion, it is necessary to keep in mind that some latitude ought to be allowed to the defendant with respect to the pleading’s form and content.

3. [10]

   It is appropriate, however, to set out in this judgment some parts of the Further Amended Defence so as to understand the plaintiff’s submissions in support of the orders sought in the Notice of Motion.

4. [11]

   Before doing so, it is convenient to set out the summary of the pleading given by the Deputy Commissioner in its written submissions to the Court. The Deputy Commissioner submitted:

5. [12]

   In my view, this is an accurate summary of the defendant’s Defence.

6. [13]

   It is now appropriate to set out here some of the contents of the pleading so that its general sense and nature can be readily comprehended. It includes the following material:

Applicable Principles

1. [14]

   Pleadings are fundamentally important because they assist courts in achieving the overriding purpose of facilitating the just, quick and cheap resolution of the real issues in the proceedings: s 56 Civil Procedure Act 2005; McGuirk v The University of NSW [2009] NSWSC 1424 at [24] per Johnson J.

2. [15]

   From the perspective of the parties, pleadings serve to define the issues between them and provide the basis upon which evidence may be gathered by the parties. Such evidence may then be ruled admissible or inadmissible at trial on the basis of its relevance to the pleaded issues: Banque Commerciale SA v Akhil Holdings Ltd [1990] HCA 11; (1990) 169 CLR 279 at 286, 296, 302-3; Dare v Pulham [1982] HCA 70; (1982) 148 CLR 658 at 664.

3. [16]

   Not only does the pleading inform the opposing party of the case which is to be made against it and therefore the case which it has to meet, but a pleading must also set out the material facts upon which a party relies to make good its claim. Those facts must be set out with sufficient particularity to enable a fair trial to be conducted: see Kirby v Sanderson Motors Pty Ltd [2002] NSWCA 44; (2001) 54 NSWLR 135 at 142-143; Gunns Ltd v Meagher [2005] VSC 251 at [14].

4. [17]

   A pleading is embarrassing if it does not adhere to the principles which I have just articulated, and where it is “unintelligible, ambiguous, vague or too general”: Gunns Ltd at [14].

5. [18]

   As Ward J (as her Honour then was) said in Szanto v Bainton [2011] NSWSC 985 at [107]:

Discernment

1. [19]

   The Defence raises a number of “constitutional issues” which are not intelligibly set out. On the one hand it appears that the defendant challenges the capacity of the Federal Parliament, although created under the Constitution, to validly enact legislation. If that is what the defendant is asserting, then such an assertion is obviously untenable and ought to be struck out.

2. [20]

   Similarly, the pleading that, in a case such as this, Mr Bonaccorso is entitled to a trial by jury is just nonsense. He has no such right. Such an assertion is wholly untenable and ought to be struck out.

3. [21]

   There are very few material facts pleaded by the defendant upon which the Court could determine that he has any valid defence to the claim of the Deputy Commissioner. In paragraph 26 of the Defence, the defendant makes a claim for damages. He is not entitled so to do in a defence. In paragraphs 17, 19 and 20, he makes a claim for some orders under the Crimes Act 1914 (Cth). Again, given that these are civil proceedings for the recovery of a debt, a claim for orders under the Crimes Act is obviously irrelevant, and the inclusion in a defence of such claims is plainly embarrassing within the meaning of the Uniform Civil Procedure Rules 2005 (“UCPR”).

4. [22]

   The Deputy Commissioner submits that this pleading has significant similarities with the previous version of the Defence, which was struck out by the Court on 12 May 2016. The Deputy Commissioner points to the fact that Schmidt J concluded, by way of an example, that a claim for an order for the assessment of damages in favour of the defendant could not be entertained by the Court in the manner in which it had been raised. Yet, the latest version of the Defence seems largely to advance a similar claim. This claim should be accepted.

5. [23]

   It is entirely possible that some words, lines or parts of a paragraph in the Defence which I am considering could, standing alone, be said to be properly pleaded. The difficulty for Mr Bonaccorso, however, is that those allegations do not stand alone, and are inextricably mixed with irrelevant material in the context of a pleading which is itself embarrassing. This pleading could not be cured by striking out a few words, or a few lines, or perhaps a small number of whole paragraphs. It is not possible for the Court to edit the pleading in that way.

6. [24]

   I am abundantly satisfied that the Defence complies neither with the requirements of the UCPR, nor with the principles of pleading to which I have earlier referred. It is unintelligible and embarrassing.

7. [25]

   As well, the pleading does not disclose any reasonable defence and has a clear tendency to cause delay in the proceedings. Viewed as a whole, and having regard to the substance of what is alleged, given what was said in the judgment of Schmidt J just a few months ago, I have also concluded that the pleading is an abuse of the process of the Court.

8. [26]

   The only available conclusion is that the Defence must be struck out. The first order sought in the Notice of Motion must be granted.

Re-pleading

1. [27]

   The Deputy Commissioner submits that the Court should order that the defendant not be granted leave to file a further amended pleading.

2. [28]

   Schmidt J, in [75]-[76] of her judgment, articulated in general terms a possible available defence for the defendant and referred to facts which, if proved, could make out such a defence. There is nothing in the defendant’s current pleading which addresses that defence. However, there is every reason to think that a defence which is reasonably arguable could be drafted by the defendant if he were to pay attention to the UCPR requirements, the authorities which have been articulated in this case, and the terms of the judgment of Schmidt J.

3. [29]

   In those circumstances, and notwithstanding that the defendant has now had four attempts at pleading a valid defence, it would not be right to forever bar the defendant from defending these proceedings with a properly formulated and pleaded defence.

4. [30]

   However, it would not be fair to the Deputy Commissioner simply to allow the defendant to draft another pleading of the same form and content as the pleading dealt with in this judgment. That would neither reflect the overriding purpose in s 56 of the Civil Procedure Act, nor reduce the costs incurred by the Deputy Commissioner in forcing him to file a Motion seeking to strike out the defence.

5. [31]

   The appropriate approach is to order that if the defendant wishes to defend these proceedings, then he ought to do so by filing a Notice of Motion seeking leave to file a proper pleading. Such a Notice of Motion ought, in the first instance, to be dealt with on the papers. That would have the effect of minimising the costs incurred by the Deputy Commissioner.

6. [32]

   Whether or not the defendant chooses to comply with the orders formulated to give effect to the conclusion just reached, I will make an order that the proceedings be listed before the Registrar, at an appropriate time, so that regardless of the defendant’s compliance, it would be open to the Deputy Commissioner to seek to have the matter finally disposed of.

Orders

1. [33]

   I make the following orders:

   1. (1)

      The Defence filed by the defendant on 30 May 2016, is struck out.

   2. (2)

      If the defendant wishes to file any further Defence in these proceedings, then he must first seek leave to do so by filing and serving a Notice of Motion and affidavit in support, which includes the proposed Defence.

   3. (3)

      Together with the Notice of Motion and affidavit, the defendant is to file and serve written submissions, no more than 10 pages in length, setting out the basis upon which the Court ought grant leave to file the Notice of Motion.

   4. (4)

      Within 7 days after service of the Notice of Motion upon the plaintiff, the plaintiff is to file and serve any written submissions in opposition to the leave being sought.

   5. (5)

      The Notice of Motion will, unless otherwise ordered by a Judge of the Court, be dealt with on the papers.

   6. (6)

      The costs of the Notice of Motion dated 16 June 2016 filed by the plaintiff are to be paid by the defendant.

   7. (7)

      The proceedings are fixed for further directions before the Registrar of the Common Law Division on Monday 5 September 2016 at 9am.