Canty v Deputy Commissioner of Taxation

The appeal concerned the liability of a company director, Mr. Canty, for unremitted group tax. The Deputy Commissioner of Taxation sought to recover from Mr. Canty, as a director of a company that had failed to remit group tax instalments, the amount of the unremitted tax, together with the general interest charge (GIC) that had accrued on that amount. The appeal was heard in the Court of Appeal of New South Wales.

The primary legal issues before the Court of Appeal were whether the director was personally liable for the GIC, and if so, whether the recovery of such interest was precluded by any inconsistency between State and Federal law. Specifically, the court had to determine if the *Taxation Administration Act 1953* (Cth) and related Commonwealth legislation governing the recovery of unremitted group tax, including the imposition of the GIC, were inconsistent with the *Civil Procedure Act 2005* (NSW) which provides for pre-judgment interest.

The Court of Appeal held that the director was personally liable for the GIC. The court reasoned that the GIC, as a component of the debt owed to the Commissioner, was recoverable from a director under the relevant Commonwealth provisions. Furthermore, the court found no inconsistency between the Commonwealth provisions and the NSW legislation. The Commonwealth legislation created a statutory debt, and the GIC was an integral part of that debt. The NSW legislation, which allowed for the recovery of pre-judgment interest, was not rendered inoperative by the Commonwealth provisions, as it did not operate in a field exclusively occupied by Commonwealth law. The court concluded that the Commissioner was entitled to recover the GIC from the director.

The appeal was dismissed, and Mr. Canty was ordered to pay the costs of the Deputy Commissioner of Taxation.