Arcidiacono v Commissioner for Act Revenue; Canberra Cleaners Pty Ltd v Commissioner for Act Revenue (No 2)

The applicants, Arcidiacono and Canberra Cleaners Pty Ltd, sought judicial review of decisions made by the Commissioner for ACT Revenue to issue garnishee notices and director compliance notices. These notices were issued to enforce payroll tax liabilities assessed against the applicants. The applicants contended that the underlying assessments of their payroll tax liabilities were invalid due to conscious maladministration by the Commissioner, and that the garnishee notices rendered the corporate entities insolvent. They also argued that the director compliance notices were issued for an improper purpose and were legally unreasonable. The matter was heard by the Supreme Court of the Australian Capital Territory.

The central legal issues before the Court were whether the Commissioner's decisions to issue the garnishee notices and director compliance notices were legally unreasonable, and whether these decisions were affected by an improper purpose. A further issue was whether the Court should entertain a collateral challenge to the validity of the payroll tax assessments themselves, or whether the applicants were precluded from raising this issue in the context of challenging the enforcement measures. The Court was also required to consider whether the primary judge had erred in exercising their discretion to decline review and withhold relief.

The Court held that the applicants could not collaterally challenge the validity of the payroll tax assessments in proceedings concerning the enforcement of those assessments. The Court found that the applicants had not demonstrated that the Commissioner's decisions to issue the garnishee notices and director compliance notices were legally unreasonable or made for an improper purpose. The Court affirmed that the Commissioner had a statutory duty to recover outstanding tax liabilities and that the issuance of enforcement notices was a legitimate exercise of that power. The Court also found no error in the primary judge's exercise of discretion.

The appeals were dismissed.