Deputy Commissioner of Taxation v Guthridge

The Deputy Commissioner of Taxation brought proceedings against Mr Guthridge in the Federal Circuit Court, seeking payment of penalty amounts under the Income Tax Assessment Act 1936 (Cth) for the company’s failure to remit PAYG withholdings. Mr Guthridge applied for summary judgment, arguing that the Commissioner had no real prospect of succeeding in the claim against him. The Commissioner opposed the application, contending that Mr Guthridge had not raised a reasonable defence to the claim. The court had to decide whether Mr Guthridge had a real prospect of successfully defending the claim by raising a reasonable steps defence.

The court considered whether Mr Guthridge had raised a reasonable defence to the penalty claim by taking reasonable steps to ensure the company remitted the PAYG withholdings. The court found that the reasonable steps defence was arguable on the facts of the case. The Commissioner had not provided evidence to rebut Mr Guthridge’s claim that he had taken reasonable steps to comply with his tax obligations. The court concluded that Mr Guthridge had a real prospect of successfully defending the claim by raising the reasonable steps defence.

Accordingly, the court dismissed the Commissioner’s application for summary judgment. The court also granted Mr Guthridge leave to serve a third party notice on Santo Antonio Coco. The order requires Mr Guthridge to file and serve a third party notice on Santo Antonio Coco within 14 days of the date of the order.