Dawson (trading as Goodvibes Yachts) v. Deputy Commissioner of Taxation.

Members: King CJ

Legoe J
Cox J

Tribunal:
Supreme Court of South Australia (Full Court)

Decision date: Judgment handed down 28 September 1984.

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Legoe J.

The respondent by ordinary summons claimed an amount of $9,365.36 payable by the defendant as a taxpayer to the plaintiff as and for sales tax and additional tax for late payment pursuant to the sales tax legislation. The appellant filed a defence by solicitors acting on his behalf. In that defence the appellant denied that he was a taxpayer within the Act. Further, he did not admit that a supplementary return as alleged in the particulars of claim declared certain additional taxes or any other sum and that if such supplementary return was furnished then the defendant says that it was of no effect for at no material time had the appellant entered into a transaction or transactions rendering him liable to sales tax.

The disputed issue of tax liability was listed before the District Court full jurisdiction on 15 March 1982. The transcript shows that counsel applied for an adjournment. Counsel for the respondent (Deputy Commissioner of Taxation) opposed the application which was refused. Counsel for the appellant then sought leave to withdraw which application was granted. The case proceeded with the appellant appearing in person to defend the claim. The appellant is a yacht builder. The transcript further shows that he attempted to explain to the learned trial Judge that what he was doing in connection with the boats was to hire moulds to persons who wanted boats built and that those persons purchased the materials for the boat construction. The appellant told the trial Judge that the amount claimed was determined from figures through books kept by the appellant and that they were amounts of money ``that were paid to Goodvibes Yachts as a labour payment for the construction of the boats''. He also said that the sales tax was paid on the materials purchased by the owner and that any liability for further sales tax was owed by what he called ``the owner/builder'' and not himself. The appellant is then recorded as having told the learned trial Judge ``and because of this - if there was to be an adjournment, I could organise witnesses to back me up on the way that it was actually organised''. He informed his Honour that he was in an awkward position because the solicitor who had been acting for him ``went stale on the issue''. The learned Judge informed the appellant that he only wanted to hear his evidence at that stage. The appellant gave some further evidence and was then cross-examined.

Having presented his evidence he told the learned trial Judge that other than presenting witnesses to the Court he did not know of further evidence that he could give. He then listed some witnesses whom he wished to call. Those witnesses were not present at that time. The application for an adjournment was opposed by counsel for the respondent. The basis of the opposition as recorded in the transcript was that as counsel for the respondent understood the factual situation ``the evidence that can be given by these witnesses does not alter the way the law can be applied. The plaintiff is relying on sec. 17A of the Sales Tax Assessment Act 1930 ...'' and counsel then quoted the section. The learned trial Judge then asked counsel for the respondent whether the story about supplying labour for moulds did not get the appellant out of liability to pay sales tax and counsel for the respondent answered that question in the affirmative. His Honour is then recorded as having said:

``So that any evidence called about that subject won't assist, you say. I can certainly understand that argument and it seems to me pretty clear, from a reading of that section that the defendant is liable notwithstanding any arrangement he may have had with these people for whom he moulded hulls or decks or whatever it was. You say in that situation I should refuse him an adjournment to call those witnesses because it will not help or advance the case anyway?''

Counsel for the respondent answered his Honour's question, ``Yes''. The appellant was then asked whether he had anything further to say to which he replied that he only sought an adjournment for the opportunity to call the witnesses and to be able to present the contracts that were made during that period to the Court. The application for an adjournment was refused and the Court proceeded to find in favour of the plaintiff based on the certificate which had been

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ATC 4760

tendered by the plaintiff, the respondent on this appeal.

On the hearing of this appeal we were supplied with certain affidavits from the appellant and from counsel who applied for the first adjournment at the beginning of the hearing on 15 March 1982. Without going into the details contained in those affidavits it appears that the appellant first consulted the solicitors who are currently acting for him in November 1981. At that time the solicitors were concerned with a re-organisation of the business and the legal affairs associated with the business. The appellant advised his solicitors at some stage of the impending local Court action. The solicitors asked him to produce the file which was with another solicitor who had ceased to take any active part in the proceedings. The appellant outlined to counsel the facts of the case. The appellant advised his solicitors in about the month of February 1982 that he had difficulties in obtaining the particular file because he could not pay the account. In the week prior to the hearing the appellant's solicitors advised him to obtain the file as a matter of urgency. By then the appellant was able to pay his former solicitor and obtain the file and deliver it to his solicitors. Further instructions were taken from the appellant on 12 March 1982. His solicitors then considered the documentary evidence and the fact that witnesses would be needed as well as the fact that a good deal of preparation was necessary to fully research and present the appellant's case. The appellant was accordingly advised to seek an adjournment of the trial and fully instruct his then solicitors. On 15 March 1982 that same counsel attended the callover and as stated above applied for the adjournment which application was refused. It does appear from paragraph 8 of the affidavit of the appellant's counsel that the respondent's counsel opposed the application on the ground that the appellant had received notice of trial and been aware of the hearing date, and that it was therefore too late to adjourn the case.

The Ground of Appeal as to the refusal of an adjournment

The first question to be decided on this appeal was whether as claimed in the Notice of Appeal the learned Judge had erred in refusing to grant the adjournment in the circumstances. It is claimed in ground 2 of the Notice of Appeal that he did not allow the appellant ``to fully or adequately present his defence in the circumstances'', and that the appellant was not permitted to set up his defence or given sufficient opportunity to do so. (See ground 3.)

Undoubtedly the learned Judge had a discretion in the matter. As stated in Williams Supreme Court Practice (p. 1563) an order for an adjournment (or a refusal) is within the discretion of the Judge. Furthermore, the Court on appeal will not interfere with that discretion unless there has been a denial of justice or the Judge has exercised his discretion upon a wrong principle. In the present case the appellant claims there was a denial of justice in that the appellant was not allowed to put forward his defence. Undoubtedly this discretion is an unfettered one; see
Dick v. Piller (1943) 1 K.B. 497 at p. 498 per Scott L.J. In
Watson v. Watson (1968) 2 N.S.W.R. 647 at p. 652 Holmes J.A. said:

``The principle is that it is a matter for the discretion of the trial Judge whether or not to grant an adjournment. Like all discretions it must be exercised judicially and not according to whim or fancy. Primarily a case should proceed to be heard when it comes into the list for hearing. When a case has been specially fixed for hearing at a date some months in the future then it cannot be said when both parties are present with their witnesses that a Judge is wrong in law in exercising his discretion to refuse an adjournment at the request of one of the parties unless to refuse an adjournment would prejudice that party to a point that he has been denied justice. See
Walker v. Walker (1967) 1 All E.R. 412 .''

I accept that one of the matters which any Court considering the application for adjournment will take into account is the competing claims of other litigants in the list, see
Squire v. Rogers (1979) 39 F.L.R. 106 at p. 113 per Deane J. and
Sarunic Bros. Pty. Ltd. v. A.F.G. Insurances Ltd. Judgment of the Full Court ( 12 March 1984 ) . However, in the present case it is quite clear that the question raised by the appellant was a question of mixed fact and law. It seems to me that the learned trial Judge on the information before him was in fact denying the appellant any opportunity to substantiate the general question which had been raised by the appellant already in his evidence albeit in layman's terms without the benefit of legal representation. Clearly it is the duty of the Court to ensure that unrepresented defendants are

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ATC 4761

given every opportunity to explore the rights which they may appear to have. In view of the fact, as we ascertained on the hearing of this appeal, that the appellant had lost his former solicitor acting in this matter, and had to instruct other solicitors, it seems to me that prima facie the learned trial Judge exercised his discretion either somewhat hastily or without giving sufficient consideration to the possibility of this defence, which was open on the pleadings, to be presented in full. Accordingly, in my judgment I consider that the appellant had prima facie established his right to set aside the order refusing the adjournment.

Ground 5 and 6 of the Appeal

In the abovementioned grounds the appellant claims that he should have been given an opportunity to present his defence and more particularly in ground 6 claims that the learned Judge erred in his interpretation or application of the legislation relied upon by the respondent.

In order to determine this ground of appeal we further adjourned the hearing of the appeal during which time the appellant produced further affidavit material relating to the facts which it was intended to put before the Court at the time of the first hearing and on the retrial which was requested in the Notice of Appeal. Those facts are fully set out in the reasons of the learned Chief Justice which I have had the opportunity to peruse. Applying the facts thus presented to us I am satisfied after consideration of the arguments that the word ``supplied'' as used in sec. 17A of the Sales Tax Act is to be interpreted widely enough to cover those facts. I accept the submissions put to this Court by counsel for the respondent that sec. 17A of the Act, and in particular the word ``supply'', is not to be interpreted narrowly (as submitted by counsel for the appellant) but that it takes a wider meaning than that, and in particular it takes into account the supply of materials by whatever means it is secured by the owner/builder to the person actually carrying out the work on the manufacture of the boat. Having come to this conclusion on the proper interpretation to be placed on the relevant section in relation to the facts as they are now fully disclosed and before this Court, it seems to me that there would be no point in remitting this matter for rehearing. There is in fact no viable defence on the mixed question of fact and law which is to be retried.

For these reasons I am of the opinion that the appellant has failed to establish grounds 5 and 6 of the Notice of Appeal and for these reasons the appeal should be dismissed.