Deputy Federal Commissioner of Taxation v. Corwest Management Pty. Ltd. and Registrar of Titles.

Judges: Burt CJ

Wickham J
Brinsden J

Court:
Supreme Court of Western Australia (Full Court)

Judgment date: Judgment handed down 9 June 1978.

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Wickham J.: I have read the reasons for judgment of the Chief Justice and I agree with them and with his conclusion.

On the face of the writing of the 3rd May, 1977 Kierad had no interest in the land after that date. The appellant's judgment was not registered until the 15th August 1977 and there was then no interest of Kierad in the land which that judgment could bind.

The appellant submits that that writing (which was called a deed of assignment) was ineffective to convey Kierad's equitable interest in the land to Corwest and this was said to be so for several reasons.

Kierad was the company, Corser Homes Pty. Ltd. which had changed its name on the 29th April and it was said that the document had been executed by a company which no longer existed. This was not so. It was the same company.

It was further submitted that the instrument was ineffectual as an assignment because it lacked the attestation of a witness as provided in sec. 10(4) of the Property Law Act. The respondent submitted that this was an enabling provision only and that the instrument was nevertheless effective as a deed under the provisions of sec. 35(3) of the Companies Act Alternatively the respondent submitted that even if the writing was defective as a deed it operated as an agreement yielding an equity to specific performance. There was also some discussion about the proper law of the instrument and whether any defect in its

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execution went to essential validity or merely to form.

It is unnecessary to examine these matters closely because whether or not the writing is effective as a conveyance, or as an agreement, it is effective as evidence and the evidence before his Honour was that the full value of the equity was paid, on about the date of the writing, by Corwest to Kierad and that therefore the transaction was fully executed. In these circumstances Corwest not only had at the 3rd May the registered and the legal interest in the land but also the totality of the equitable interest. I think Jones J. to have been right in his conclusion that, at the date of the registration of the judgment, the judgment debtor had no interest in the land.

The appellant sought leave to tender additional affidavits deposing to facts which could raise triable issues of fact as to whether Kierad had been paid for its interest in the land, wholly, partly or at all. This was with a view to demonstrating that the judgment debtor still had an interest in the land, by way of lien or otherwise, at the date of the registration of the judgment. This would be a new case which would require a trial, and in my opinion the affidavits tendered should not be received on the hearing of this appeal which involves only the question as to whether the caveat ought to have been summarily removed. If the appellant wishes to try to make out such a case (or some other case) then the matter may be pursued in the ordinary way.

It was further argued both below and before us, that the Commonwealth Crown had at material times a charge to secure the debt raised by the assessment, both by virtue of a Crown prerogative and by virtue of the provisions of the Statute 33 Henry VIII, C.39. Nothing that was well said in argument caused me to think that this might be so.

In dealing with the Statute of Henry, Blackstone in the Commentaries, Vol. 3, 4th Ed. at p. 424 states that:

• Crown ``debts of record bind the defendants lands from the date of the record; judgments from the day in which the judgment is obtained; bonds under 33 Henry VIII C.39 from the time they are entered into; and simple contract debts from the time of filing the inquisition by which they are made debts of record. The time is reckoned from the teste of the process.''

I can find no satisfactory authority for the proposition that the Commonwealth Crown has a prerogative or a statutory right to a charge over land, whether State or Commonwealth land or alienated from the State or Commonwealth, to secure the payment of a tax imposed under the provisions of the Income Tax Assessment Act. I find no useful analogy between a debt so arising and the provisions of the Statute of Henry or the statutes Merchant or Staple, or the Crown prerogative relating to revenues so far as it might still exist. A debt due or to become due to the Commonwealth Crown for income tax has its source in the taxation power conferred by the constitution upon a Parliament of limited legislative power, and arises through the exercise of that power under the authority of the assessment statute. Its essential nature and its incidental characteristics is found in the statute, as I think is implicit in the dicta in F.C. of T. v. E.O. Farley Ltd. mentioned by the Chief Justice.

The statute does create a charge but only of the limited kind contained in sec. 216(d). The provisions under the old State Income Tax Assessment Act No. 13 of 1937 are similar: see sec. 181 and sec. 189 which raises expressly a charge on land of the taxpayer under certain circumstances where the taxpayer is deceased. By way of further examples, the State Land Tax Assessment Act 1907 and amendments expressly charges the land under the provisions of sec. 64. The Customs Act expressly charges the goods under sec. 153. The Commonwealth Land Tax Assessment Act 1910 and amendments contains elaborate charging provisions: see sec. 51 and 56. By contrast the Payroll Tax Assessment Act 1941-1973 does not provide for any charge, and the Commonwealth Sales Tax Assessment Act 1930 and amendments by sec. 30 and 34 contains provisions similar to the Income Tax Assessment Act charging property only in the case of a deceased taxpayer.

Upon the material before his Honour there was no support for the caveat and he was justified in the order in which he made,

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including the declaration that the caveat was lodged without reasonable cause. The consequences of that declaration are of course yet to be litigated. I would add that, having regard to the interest claimed in the caveat, an absolute caveat was not in any event justified.

I agree that the appeal should be dismissed.