The NSW Supreme Court has set aside an order allowing a taxpayer to repay his tax debts by instalments.
The order allowing the taxpayer’s tax debts to be repaid by instalment was made in chambers on 4 July 2013 by a Deputy Registrar pursuant to s 37.3 of the Uniform Civil Procedure Rules 2005 (NSW). The debt owing was a judgment debt of $940,000 and the order granted by the Deputy Registrar required payment of $41,500 per month.
The Deputy Commissioner sought for the order to be set aside. The Deputy Commissioner submitted that r 37.3 of the Uniform Civil Procedure Rules and s 107 of the Civil Procedure Act 2005 (NSW) (whether separately or in combination) did not confer a power to permit the taxpayer to pay his judgment debt by instalments. This was because both provisions were inconsistent with Commonwealth legislation that contains an exclusive regime for the payment and recovery of Commonwealth tax-related liabilities. As a result, it was argued, r 37.3 and s 107 were not “picked up” by the Judiciary Act 1903 (Cth) in these proceedings (which were in federal jurisdiction).
The Supreme Court concluded there was no power for the Deputy Registrar to make an instalment order pursuant to s 107 of the Civil Procedure Act and Pt 37 of the Uniform Civil Procedure Rules. Accordingly, the order was set aside.
(DCT v Meakes [2014] NSWSC 1001, NSW Supreme Court, Hulme J, 24 July 2014.)