Deputy Commissioner of Taxation v Carpenter

[2013] WADC 76

JURISDICTION     :   DISTRICT COURT OF WESTERN AUSTRALIA

IN CIVIL

LOCATION:   PERTH

CITATION:   DEPUTY COMMISSIONER OF TAXATION -v- CARPENTER [2013] WADC 76

CORAM:   REGISTRAR KINGSLEY

HEARD:   16 APRIL 2013

DELIVERED          :   16 MAY 2013

FILE NO/S:   CIV 3431 of 2012

BETWEEN:   DEPUTY COMMISSIONER OF TAXATION

Plaintiff

AND

KENNETH EDWARD CARPENTER
Defendant

Catchwords:

Practice - Application for summary judgment - Claim under Superannuation Guarantee (Administration) Act 1992 and Taxation Administration Act 1953 - No new principles

Legislation:

Nil

Result:

Judgment given

Representation:

Counsel:

Plaintiff:     Ms M Spurge

Defendant:     In Person

Solicitors:

Plaintiff:     Deputy Commissioner of Taxation

Defendant:     Not applicable

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

Ansearch Ltd v Wavtech Pty Ltd [2006] WASC 184

DCT v Heaton (1997) 3 SATR 450

Fancourt v Mercantile Credits Ltd (1983) 154 CLR 87

General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125

Jacka Nominees Pty Ltd v Edwards Karwacki Smith & Co Pty Ltd (Unreported, WASC, Library No 205691, 12 October 1992

1. REGISTRAR KINGSLEY:  On 16 April 2013, I heard the plaintiff's application for summary judgment and gave the judgment on that day.  I indicated I would publish reasons, and these are those reasons.

2. The plaintiff (the deputy commissioner) brought proceedings under two headings; in relation to assessments under the Superannuation Guarantee (Administration) Act 1992 (the SGAA), and in relation to a Running Balance Account debt.

3. The deputy commissioner pleads that the defendant (Carpenter), as a Trustee of the Carpenter family trust (the Trust), was an employer within the meaning of s 12 of the SGAA and became liable to pay a superannuation guarantee charge, pursuant to s 16 SGAA.  Carpenter lodged with the Commissioner of Taxation superannuation guarantee statements as pleaded in par 4 of the statement of claim.  Pursuant to s 35 SGAA, the statements have the effect as an assessment (the deemed assessment).  The deputy commissioner pleads Carpenter failed to pay the superannuation guarantee charges by the relevant dates.  As a result of the non‑payment Carpenter became liable to pay a general interest charge pursuant to s 49 SGAA and pt IIA of the Tax Administration Act 1953 (TAA).

4. The deputy commissioner goes on to plead the commissioner established a Running Balance Account in respect of primary tax debts due by Carpenter.  From time to time, the Running Balance Account fell into arrears and Carpenter became liable to pay the general interest charge in relation to the deficit debt.

5. The deputy commissioner has brought an application pursuant to O 14 Rules of the Supreme Court 1971.  The application is supported by two affidavits of Michael Yong Gee, affirmed on 31 January 2013, and 16 April 2013.  The affidavits of Gee show a prima facie case for the deputy commissioner.

Delay

1. The writ of summons was served on 29 November 2012 and Carpenter's appearance entered on 18 December 2012.  The application for summary judgment was filed on 6 February and is outside the 21 day time period.

2. By an affidavit of Jennifer Claire Tate, affirmed 6 February 2013, Tate deposes that the parties have been in negotiation from 18 January 2013 to 5 February 2013 in an attempt to resolve the matter.  Tate goes on to depose that some of the delay in applying for summary judgment has been caused by the deputy commissioner's attempt to afford Carpenter the opportunity to resolve the matter out of court and that no prejudice has been caused to Carpenter by the delay.

3. By reason of the TAA, the deputy commissioner is in a very strong position. Notwithstanding that strong position the commissioner has adopted the course of seeking to resolve the matter by a negotiated settlement. Whilst the policy of the Rules of the Supreme Court requiring summary judgment applications to be brought at an early stage is to ensure costs are minimised, the deputy commissioner has entered into negotiations in an attempt to be fair to the tax payer and to minimise costs (see DCT v Heaton (1997) 3 SATR 450).

4. In my opinion to penalise the deputy commissioner in those circumstances would be inappropriate.  No firm rules can be laid down as to when extension of time ought to be granted as it is a matter for the court's discretion after consideration of all the circumstances.  (Jacka Nominees Pty Ltd v Edwards Karwacki Smith & Co Pty Ltd (Unreported, WASC, Library No 205691, 12 October 1992). In the circumstances, I am of the opinion that leave be granted for the deputy commissioner to bring the application out of time.

The legal principles

1. The principles upon which an application for summary judgment pursuant to O 14 RSC are well known. The power to order summary judgment should be exercised with great care, and should not be exercised unless it is clear there is no real question to be decided. A party should not be deprived of their opportunity to be heard in the appointed manner under the guise of expeditious finality of the action. In all cases where there remains uncertainty as to a plaintiff's right to judgement, then summary judgment must be refused: Fancourt v Mercantile Credits Ltd (1983) 154 CLR 87; General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125; Ansearch Ltd v Wavtech Pty Ltd [2006] WASC 184.

The Deputy Commissioner's claim

1. Carpenter, was at all material times an employer within the meaning of the SGAA.  Carpenter lodged with the deputy commissioner superannuation guarantee statements for the periods pleaded in par 5 of the Amended Statement of Claim (the ASC).  Those statements had the affect as deemed assessments (s 35 SGAA).  The deemed assessments are taken to have been made on the lodgement date and pursuant to s 46 SGAA the deemed assessments became due and payable on the date the deemed assessment was taken to have been made.

2. Carpenter did not lodge with the deputy commissioner superannuation statements for the periods pleaded in par 12 of the ASC.  Pursuant to s 36 SGAA the deputy commissioner assessed Carpenter in respect of the periods pleaded, and issued default assessments which were served on Carpenter.  Carpenter did not pay on the due date and became liable for the General Interest charge.

3. The deputy commissioner goes on to plead (pars 17 ‑ 23 ASC) that for the quarters pleaded in par 19, the deemed assessments were amended and notice of the amended assessments were given to Carpenter.  Again as the amended assessments were not paid a General Interest charge was raised.

4. Carpenter, as trustee for the Trust, was assessed for additional superannuation guarantee charges by way of penalty pursuant to pt 7 SGAA.  The deputy commissioner notified Carpenter of the additional penalty, but Carpenter has failed to pay the additional penalty.  In this way, a further General Interest charge has been raised (see pars 24 ‑ 30 ASC).

5. The Trust was registered for an Australian Business Number and Carpenter, as trustee, notified the commissioner through Business Activity Statements (BAS) of various Goods and Services Tax amounts. In addition Carpenter, as trustee, being an employer was obliged to withhold amounts under the Pay As You Go withholding regime of the TAA. Carpenter through the lodgement of BAS notified the deputy commissioner of the amounts withheld.

6. Pursuant to s 8AA2C TAA the deputy commissioner has established a running balance account in respect of the amounts owed by Carpenter in respect of the debts due under the BAS provisions. From time to time the balance of the running account was in deficit, and as a result, Carpenter became liable to pay the General Interest charge for each day the account was in deficit (pars 31 ‑ 37 ASC).

The evidence of Carpenter

1. Carpenter has sworn an affidavit on 14 March 2013.  Carpenter disputes the claim both in terms of the superannuation guarantee charge and the running balance account.  In essence, Carpenter deposes that the claim is disputed because he regards the accounts as totally inaccurate.  Carpenter attached documents to his affidavit that he says shows how the deputy commissioner's claim is inaccurate.  I have examined the documents in Gees 13 January 2013 affidavit, and those attached to Carpenter's affidavit.  I am not persuaded that the documents in Carpenter's affidavit are sufficient to overcome the evidentiary burden now cast on Carpenter.

2. Carpenter has filed a defence.  In the defence, and in his submissions at the hearing, Carpenter is of the opinion the deputy commissioner has not taken into account payments that have been made.  Carpenter disputes the primary debt on the basis that, in his opinion and in the opinion of his accountant, the submitted tax returns do not concur with the debt as pleaded in the statement of claim.  Carpenter, both in submissions and in his defence, states he is awaiting more specific details from the deputy commissioner as to how the deputy commissioner arrived at the figures.

3. In the course of submissions, Carpenter stated that no objections had been made to any of the assessments and that he was not aware that he could make an objection.  I note that it is clearly stated on the assessment notices under the heading 'What you can do if you think this assessment is wrong' is the notice to the tax payer that the tax payer may lodge a written request to amend the assessment.  Notwithstanding that, Carpenter submitted, and his defence pleads that he had the assistance of his accountant, he did not make any objection to the various assessment.

The evidentiary certificate

1. The deputy commissioner relies on a certificate made pursuant to s 255 ‑ 45 of sch 1 to the TAA that the sum of $3,412.62 was, at 16 April 2013, in relation to the running balance account deficit debt due and payable by Carpenter. The certificate further states that the sum of $38,912.33 was, at 16 April 2013, for the superannuation guarantee charge debt due and payable by Carpenter.

2. The deputy commissioner enjoys a considerable procedural advantage over ordinary litigants in that the evidentiary certificate is prima face evidence of the matters contained in it (s 255 ‑ 45 TAA). In my opinion, Carpenter has not put forward evidence to challenge the evidentiary basis of that certificate.

Conclusion

1. For these reasons, the plaintiff is entitled to judgment in the sum of $3,412.62 under the running balance account deficit and is entitled to judgment in the sum of $38,912.33 under the superannuation guarantee charge.  Further, the plaintiff is entitled to a general interest charge pursuant to s 49 SGAA and pt IIA TAA on the outstanding debts from 16 April 2013 until payment.  The deputy commissioner is entitled to costs of the action.  The delegate of the deputy commissioner has sought to have costs fixed at $1,367.10 and I fix the costs at that sum.