Deputy Commissioner of Taxation v Howley

[2021] WASC 82

JURISDICTION     :   SUPREME COURT OF WESTERN AUSTRALIA

IN CHAMBERS

CITATION:   DEPUTY COMMISSIONER OF TAXATION -v- HOWLEY [2021] WASC 82

CORAM:   ACTING MASTER STRK

HEARD:   22 MARCH 2021

DELIVERED          :   22 MARCH 2021

PUBLISHED           :   26 MARCH 2021

FILE NO/S:   CIV 2897 of 2019

BETWEEN:   DEPUTY COMMISSIONER OF TAXATION

Plaintiff

AND

GARY JOHN HOWLEY

Defendant

FILE NO/S:   CIV 2900 of 2019

BETWEEN:   DEPUTY COMMISSIONER OF TAXATION

Plaintiff

AND

KAREN YVONNE HOWLEY

Defendant

Catchwords:

Practice and procedure - Applications for summary judgment - Turns on own facts

Legislation:

Rules of the Supreme Court 1971 (WA)

Result:

Judgment for the plaintiff

Category:    B

Representation:

CIV 2897 of 2019

Counsel:

Plaintiff	:	D Olthof
Defendant	:	J Jacobson

Solicitors:

Plaintiff	:	Craddock Murray Neumann
Defendant	:	Jacobson and Associates

CIV 2900 of 2019

Counsel:

Plaintiff	:	D Olthof
Defendant	:	J Jacobson

Solicitors:

Plaintiff	:	Craddock Murray Neumann
Defendant	:	Jacobson and Associates

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

Nil

ACTING MASTER STRK:

(This decision was delivered extemporaneously on 22 March 2021 and has been edited from the transcript.)

1. Two applications for summary judgment come before me today pursuant to the Rules of the Supreme Court 1971 (WA) O 14 r 3. Both were commenced by the Deputy Commissioner of Taxation. In the proceeding known as CIV 2897 of 2019, the defendant is Gary John Howley. Gary is a partner of a partnership known as GJ & KY Howley (the partnership). In the proceeding known as CIV 2900 of 2019, the defendant is Karen Yvonne Howley. Karen is also a partner of the partnership.

2. While these are separate proceedings and there are two separate applications for summary judgment, it is convenient that I deal with both applications together in these reasons.  In these reasons, I refer to the respective defendants as Gary and Karen.  No disrespect is intended. 

3. The proceedings concern the failure by Gary and Karen to pay tax‑related liabilities which are alleged by the plaintiff to arise from each of them being partners in the partnership.  Each proceeding was commenced by a writ of summons filed on 31 October 2019.  By each proceeding the plaintiff sought judgment in the sum of $824,716.56 as against each of Gary and Karen, together with further interest and costs.

4. I note that the recovery of a lesser amount is now pressed in the applications for summary judgment.  The plaintiff's chamber summons for summary judgment in each proceeding was filed on 3 December 2020.  In each proceeding the application was supported by three affidavits:  the affidavit of Sayeda Islam affirmed on 3 December 2020; the affidavit of Khaled Metlej sworn on 3 December 2020; and a further affidavit of Ms Islam affirmed on 19 March 2021.

Leave

1. Leave to bring the applications for summary judgment is required as they were filed outside of the 21 day period prescribed by the RSC O 14 r 1(1). An appearance was filed on behalf of Gary on 13 November 2021 and on behalf of Karen on 21 November 2019. Leave to bring a summary judgment application in the proceeding commenced against Gary was required from 6 December 2019, and as against Karen from 14 December 2019.

2. It is well understood that the 21 day limit reflects a policy view that such applications should be brought at an early stage in a proceeding.  If there is a delay, it must be explained and the applicant must show that the delay in bringing the application is justifiable in all of the circumstances. 

3. At par 6 of Mr Metlej's affidavit, he deposed that on 21 September 2020, by the consent of the parties, leave was granted to the plaintiff to apply for summary judgment on or before 30 October 2020.  The deponent also said that between 2 January 2020 and 27 October 2020 the solicitors for the parties had engaged in correspondence with a view to resolving the proceedings or otherwise narrowing the issues in dispute.

4. Mr Metlej further deposed to his belief that part of the delay was caused by the plaintiff's attempt to resolve the matters out of court.  Finally, he deposed to his belief that no prejudice has been caused to either defendant by the delay in bringing the applications for summary judgment. 

5. Even with the benefit of the order made by consent on 21 September 2020, the plaintiff's delay in bringing the applications was not completely explained in the affidavit evidence filed.  The delay in bringing the applications between 31 October 2020 and 3 December 2020 (when the applications were filed) was not addressed. 

6. I accept however that there is no evidence of either Gary or Karen having suffered prejudice by the delay.  On the evidence before me, I am satisfied that the plaintiff has met the burden of establishing that the justice of the case requires that an extension of time be granted.  In these circumstances, where delay is largely explained and where there is an absence of any clear defence on the merits, it is appropriate that leave be granted. 

Prima facie case established

1. The facts pleaded in the statements of claim were verified in the affidavit evidence of Ms Islam.  In Ms Islam's second affidavit at par 6 she deposed to the liability of each defendant and the partnership.  The evidentiary foundation for the amounts claimed by the plaintiff as against each of Gary and Karen is contained in Ms Islam's first and second affidavits. This includes three evidentiary certificates annexed to Ms Islam's second affidavit.[1]  Further, in Ms Islam's first affidavit, she deposed to the belief that neither Gary nor Karen have any defence to the pleaded claims. 

   [1] Affidavit of Sayeda Islam affirmed 19 March 2021, 'SI-1' (Certificate under section 8AAZJ of the Taxation Administration Act 1953 (Cth)); 'SI-2' (Certificate under section 350-10(3) and 350-12(2) of Sch 1 to the Taxation Administration Act 1953 (Cth) in respect of superannuation guarantee charge); and 'SI-3' (Certificate under section 350-10(3) and 350-12(2) of Sch 1 to the Taxation Administration Act 1953 (Cth) in respect of additional superannuation guarantee charge).

2. In these proceedings, by the affidavit evidence, I am satisfied that the plaintiff has met the requirements of the RSC O 14 and the plaintiff has a prima facie right to an order for summary judgment.

3. Once the plaintiff has established a prima facie case, the evidentiary onus shifts to the defendant to demonstrate that there is an arguable case or other reason for trial.

4. Although Gary and Karen both filed appearances and are represented in the proceedings, the applications for summary judgment proceed on an undefended basis.  Programming orders were made affording them the opportunity to file affidavit evidence and submissions.  No documents were filed on behalf of Gary nor Karen.  Gary and Karen have not met the evidentiary burden cast on them to satisfy the court that there is a triable issue or an arguable defence to the plaintiff's claims.

Conclusion and orders

1. I am satisfied on the affidavit evidence before me that the plaintiff is entitled to leave and judgment.  After hearing from counsel for the parties, it was not possible to fix the costs payable to the plaintiff. I will therefore make orders in each proceeding in the following terms:

   1.The plaintiff have leave to apply for summary judgment pursuant to O 14 r 1 of the Rules of the Supreme Court 1971 (WA).

   2.Judgment be entered for the plaintiff against the defendant in the sum of $539,656.92.

   3.The defendant pay the plaintiff's costs of the application and the action to be taxed if not agreed.

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.

CB

Associate to Master Sanderson

26 MARCH 2021