Deputy Commissioner of Taxation for the Commonwealth of Australia v NJO

[2004] WADC 120

JURISDICTION     :   DISTRICT COURT OF WESTERN AUSTRALIA

IN CHAMBERS

LOCATION:   PERTH

CITATION:   DEPUTY COMMISSIONER OF TAXATION FOR THE COMMONWEALTH OF AUSTRALIA -v- NJO & ORS [2004] WADC 120

CORAM:   REGISTRAR CHRISTO

HEARD:   2 JUNE 2004

DELIVERED          :  Delivered Extemporaneously on 2 JUNE 2004 typed from tape and edited by the Registrar

FILE NO/S:   CIV 2294 of 2003

BETWEEN:   DEPUTY COMMISSIONER OF TAXATION FOR THE COMMONWEALTH OF AUSTRALIA

Plaintiff

AND

JOHNNY NJO
First Defendant

PRASAD NARAYAN PILLAI
Second Defendant

MHER NASRATULLAH
Third Defendant

SYED ALWIBIN ALI ALSAGOFF
Fourth Defendant

Catchwords:

Practice - Application for summary judgment under O 14 Rules of the Supreme Court of Western Australia - Notice under s 222 AOE Income Tax Assessment Act (Cth)

Legislation:

Income Tax Assessment Act 1936

Result:

Application for summary judgment granted

Representation:

Counsel:

Plaintiff:     Ms J Tang

First Defendant             :     No appearance

Second Defendant         :     No appearance

Third Defendant           :     Mr T Brickhill

Fourth Defendant          :     No appearance

Solicitors:

Plaintiff:     Deputy Commissioner of Taxation

First Defendant             :     Not applicable

Second Defendant         :     Not applicable

Third Defendant           :     Brickhills

Fourth Defendant          :     Not applicable

Case(s) referred to in judgment(s):

Fitzgerald v Deputy Federal Commissioner of Taxation (1995) 95 ATC 4587

Case(s) also cited:

Commonwealth Bank of Australia v Friedrich & Ors (1991) 5 ACSR 115

Daniels (formerly practicing as Deloitte Haskins & Sells) v Anderson (AWA Case) (1995) 16 ACSR 607

Deputy Commissioner of Taxation v Finney, unreported; DCt (NSW); 10742/2001; 1 February 2002

Deputy Commissioner of Taxation v Gruber (1998) 38 ATR 434

Deputy Commissioner of Taxation v Woodhams (2000) 199 CLR 370

Fancourt v Mercantile Credits Ltd (1983) 154 CLR 87

Group Four Industries Pty Ltd v Brosnan (1992) 8 ACSR 463

HIH Insurance Ltd and HIH Casualty and General Insurance Ltd, Re; Australian Securities and Investments Commission (ASIC) v Adler (2002) 20 ACLC 576

In re City Equitable Fire Insurance Company Ltd [1924] All ER Rep 485

Permanent Building Society (in liq) v Wheeler (1994) 11 WAR 187

Re Scobie v Deputy Commissioner of Taxation (1995) 95 ATC 4525

Simpson v Deputy Federal Commissioner of Taxation (1996) 96 ATC 4661

1. REGISTRAR CHRISTO: In its statement of claim, the plaintiff claims from the defendants, a debt, being payment of penalties under s 222AOC of the Income Tax Assessment Act 1936 ("ITAA"). By an interlocutory summons dated 29 March 2004 and amended by a summons filed on 28 April 2004, the plaintiff sought, among other things, summary judgment against the third defendant pursuant to O 14, r 1 of the Rules of the Supreme Court. The matter was heard by me on 2 June 2004.

2. Based on the statement of claim, the submissions, affidavits and authorities filed by the parties, together with argument at the hearing of the chamber summons, I decided to grant the plaintiff's application for summary judgment and gave a brief outline of my reasons ex tempore.

3. The third defendant's counsel requested written reasons as to my view of the effectiveness of the plaintiff's notice to the third defendant under s 222 AOE of the ITAA, given his submissions in respect of the ASIC records.

4. Section 222AOE of the ITAA provides that:

   "The Commissioner is not entitled to recover from a person a penalty payable under this Subdivision until the end of 14 days after the Commissioner gives to the person a notice that:

   (a)sets out details of the unpaid amount of the liability referred to in subsection 222AOC(1), (1A) or (2) (whichever relates to the penalty); and

   (b)states that the person is liable to pay to the Commissioner, by way of penalty, an amount equal to that unpaid amount, but that the penalty will be remitted if, at the end of 14 days after the notice is given:

   (i)the liability has been discharged; or

   (ii)an agreement relating to the liability is in force under section 222ALA; or

   (iii)the company is under administration within the meaning of the Corporation Act 2001; or

   (iv)the company is being wound up."

5. Section 222AOF provides as follows:

   "222AOF(1) [Place of residence of business] It appears from ASIC documents that a person is, or has been within the last 7 days, a director of the company, the Commissioner may give the person a notice under section 222AOE by leaving it at, or sending it by post to, an address that appears from such documents to be, or to have been within the last 7 days, the person's place of residence or business.

   222AOF(2)  ["ASC document"]  In this section

   . . .

   ASIC document means a return:

   (a)lodged with the Australian Securities and Investments Commission under section 2905B or 345 of the Corporations Act 2001; or

   (b)lodged with a person under a law that, for the purposes of the Corporations Act 2001, is a previous law corresponding to section 205B or 345 of that Act."

6. In her affidavit of 29 March 2004, Joanne Louise Richardson, an employee of the plaintiff, sets out that:

   ·On 2 April 2003, Karen Maxwell ("Maxwell"), an employee of the plaintiff, posted a s 222AOE notice to the third defendant at the address appearing as his address in a company extract obtained by her from ASIC's National Data Base.

   ·The address mentioned in the previous paragraph was also the address of the third defendant last known to the plaintiff.  Based on other affidavit evidence and annexures to the affidavits filed by both parties, it appears that Maxwell's affidavit mistakenly states that within the last seven days from the date of the extract, the third defendant was a director of the company and that he was still a director as at 2 April 2003.  This mistake appears to have occurred due to an error in one of the two extracts of ASIC records annexed to her affidavit.

7. In the previous paragraphs, I refer to the third defendant, although he is referred to in the writ, ASIC records and the s 222AOE Notice, sometimes as "Mher Nasratullah" and other times as "Nasratullah Mher". The residential address in respect of both names was always given as 16 Ullinger Loop, Marangaroo. In addition, wherever they appear in the above documents, the birth details appear as 4 May 1966 in Kabul, Afghanistan. I am satisfied that the two names refer to the one person.

8. The third defendant's counsel argued that:

   ·The plaintiff's entitlement to recover from the third defendant depends on compliance with both s 222AOE and s 222AOF of the ITAA.

   ·The third defendant was not a director when the s 222AOE Notice was given and nor was he a director within the last seven days prior to issue of the notice.

   ·The ASIC record relied upon by the plaintiff was not an "ASIC document" within the definition of s 222AOF(2).

   ·Therefore, the notice was defective and could not be relied upon to found the plaintiff's claim.

9. After considering the arguments, both oral and in the submissions of the parties, I came to the conclusions that:

   ·Section 222AOE prevents the plaintiff from recovering a penalty until 14 days after issuing a notice under that section.

   ·The plaintiff issued a notice under s 222AOE.

   ·Nothing in s 222AOE provides that the relevant person must be a director at the time of issuing the notice (Fitzgerald v Deputy Federal Commissioner of Taxation (1995) 95 ATC 4587 at 4589).

   ·Section 222AOF provides for one method of serving the notice, based on information in ASIC documents as defined in that section.

   ·However, it is my view that the method provided for in this section is permissive rather than mandatory and that service under this section is one of the options available to the plaintiff.  The plaintiff could also serve a notice in reliance on s 28A and s 29 of the Acts Interpretation Act 1901 (Commonwealth) which permits notice to be given to "the address of the place of residence or business of the person last known to the person serving the document…"

   ·I am satisfied that the notice was addressed by Maxwell to the last place of residence or business of the third defendant known to the plaintiff. In addition the third defendant's affidavit of 24 May 2004 confirms that he still lives at that particular address.

   ·Therefore, whether the third defendant was a director at the time the notice was issued and whether the plaintiff consulted ASIC records which were not "ASIC documents" within the meaning of s 222AOF(2) are not issues which affect the plaintiff's entitlement to recover from the third defendant in the circumstances.

10. I find that the s 222AOE Notice was validly issued by the plaintiff and that it was served on the third defendant in accordance with the Acts, Interpretation Act 1901.