Commissioner for Act Revenue v Arcidiacono t/as Rose Cleaning Service

[2018] ACTSC 10

SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY

Case Title:

Commissioner for ACT Revenue v Arcidiacono t/as Rose Cleaning Service

Citation:

[2018] ACTSC 10

Hearing Date:

On the papers.

DecisionDate:

1 February 2018

Before:

Murrell CJ

Decision:

Plaintiff to pay the defendants’ costs of the application.

Catchwords:

COSTS – Application for summary judgment dismissed – Defendants failed to file written submissions in accordance with directions – Defendants belatedly raised significant argument – Costs orders as compensatory rather than punitive 

Parties:

Commissioner for ACT Revenue (Plaintiff)

Phillip Arcidiacono trading as Rose Cleaning Service (ABN 28 057 543 242)  (First Defendant)

Canberra Cleaners Pty Ltd (ACN 142 575 095) (Second Defendant)

Rose Cleaning Service Aust Pty Ltd atf Rose Cleaning Service Aust Trust (ACN 602897 850) (Third Defendant)

RCS Australia Pty Ltd atf Rose Cleaning Services Trust (ACN 611 682 850) (Fourth Defendant)

Rose Cleaning Services ACT Pty Ltd (ACN 154 648 508) (Fifth Defendant)

Rose Cleaning Group (A.C.T) Pty Ltd (ACN 613 111 112) (Sixth Defendant)

P & S Price Holdings Pty ltd atf P & S Price Discretionary Trust (ACN 155 887 264) (Seventh Defendant)

6 Lyell Street Pty Ltd (ACN 605 727 133) (Tenth Defendant)

4 Lyell Street Pty Ltd (ACN 605 727 124) (Eleventh Defendant)

Spa Asset Holding Pty Ltd (ACN 149 361 286) (Twelfth Defendant)

Spa Holdings A.C.T Pty Ltd (ACN 613 504 279) (Thirteenth Defendant)

11 Cessnock Street (ACT) Pty Ltd (ACN 138 335 029) (Fourteenth Defendant)

Spirant Building Pty Ltd atf Rose Cleaning Trust No 1 (ACN 155 304 493) (Eighteenth Defendant)

Lloyds Cleaning Service Pty Ltd atf Rose Cleaning Trust (ACN 155 393 429) (Nineteenth Defendant)

United Financial Pty Ltd atf United Financial Trust (ACN 168 547 859) (Twentieth Defendant)

R Cleaning Group Pty Ltd atf R Cleaning Group Trust (ACN 610 692 781) (Twenty-first Defendant)

Rose Cleaning Asset Services Pty Ltd (ACN 607 365 506) (Twenty-second Defendant)

Representation:

Counsel

Mr P Walker SC with Mr B Buckland (Plaintiff)

Mr D McGovern SC with Mr S Lees and Mr A Russoniello (Defendants)

Solicitors

ACT Government Solicitor (Plaintiff)

McEvoy Legal (Defendants)

File Number:

SC 167 of 2017

MURRELL CJ

1. The Commissioner sought summary judgment against numerous defendants for $3,910,739.99 or, alternatively, for $4,612,887.59 plus interest and costs.

1. On 13 December 2017, the application was dismissed on the basis that it was reasonably arguable that the Commissioner’s assessment of payroll tax was infected with jurisdictional error.

1. When the application was dismissed, I indicated my view that, unless I was persuaded otherwise by written submissions, I would order the Commissioner to pay the defendants’ costs of the application.

1. The parties filed written submissions.

Commissioner’s submission on costs

1. The Commissioner argued that the proposed order was not appropriate because the defendants raised the jurisdictional issue only belatedly.  In accordance with the Court’s directions made on 14 September 2017, the defendant should have filed written submissions in response to the application for summary judgment by 20 October 2017, but failed to do so.  On 27 November 2017, the Commissioner’s solicitors reminded the defendants of their non-compliance.  It was not until 30 November 2017 that the defendants notified the Commissioner that they wished to raise the jurisdictional argument; on that date the defendants provided the proposed amended defence and an outline of submissions to the Commissioner.

1. The Commissioner argued that the Court should not condone the defendants’ defiance of its directions.  Further, had the defendants raised the jurisdictional argument at an earlier time, the Commissioner could have properly reflected on whether he should proceed with the summary judgment application.

1. The Commissioner submitted that it was appropriate to order that the Commissioner pay the defendant’s costs of the application, but that there should be no order as to the costs of, or incidental to, the hearing of the application.

Consideration

1. The defendants’ failure to comply with Court directions was most unsatisfactory, as was the belated raising of a very significant and, as it transpired, determinative argument.  However, the purpose of costs orders is compensatory rather than punitive.  There was no suggestion that the Commissioner was put to additional trouble or expense because of the late raising of the jurisdictional error point.

1. Initially, at the hearing on 6 December 2017 the Commissioner indicated that he needed further time to consider the amended defence.  However, the Commissioner then decided that he would not seek an adjournment and he proceeded to deal with the jurisdictional error point by way of oral argument.  The Commissioner did not seek to file supplementary written submissions.

1. Had the Commissioner incurred additional costs because the proceedings had to be adjourned or because the Commissioner wished to file additional submissions to deal with arguments of which he had had inadequate notice, there may well have been merit to the Commissioner’s submission that the usual costs order should be moderated.  However, that did not occur.

1. The additional material provided by the Commissioner in support of the costs application is marked Exhibit 1.

1. The Commissioner is to pay the defendants’ costs of the application.

I certify that the preceding twelve [12] numbered paragraphs are a true copy of the Reasons for Judgment of her Honour Chief Justice Murrell.

Associate:

Date: 1 February 2018