Deputy Commissioner of Taxation v McManus

[2019] WADC 93

JURISDICTION     :   DISTRICT COURT OF WESTERN AUSTRALIA

IN CHAMBERS

LOCATION:   PERTH

CITATION:   DEPUTY COMMISSIONER OF TAXATION -v- MCMANUS [2019] WADC 93

CORAM:   PRINCIPAL REGISTRAR MELVILLE

HEARD:   21 JUNE 2019

DELIVERED          :   5 JULY 2019

FILE NO/S:   CIV 1322 of 2018

BETWEEN:   DEPUTY COMMISSIONER OF TAXATION

Plaintiff

AND

DAVID LEIGH MCMANUS

Defendant

Catchwords:

Practice and procedure - Summary judgment application - Evidential value of documents

Legislation:

Evidence Act (1906) (WA)
Evidence Act (1995)(Cth)
Income Tax Assessment Act 1997
Rules of the Supreme Court 1971
Taxation Administration Act 1953 (Cth)

Result:

Summary judgment for the plaintiff

Representation:

Counsel:

Plaintiff	:	Mr K Chu
Defendant	:	In Person

Solicitors:

Plaintiff	:	Minter Ellison
Defendant	:	Not Applicable

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

Deputy Commissioner of Taxation v Heaton (1997) 35 ATR 540

Kolichis v Deputy Commissioner of Taxation [2014] WASCA 76

Smec Australia Pty Ltd v Valentine Falls Estate Pty Ltd [2011] WASCA 138

PRINCIPAL REGISTRAR MELVILLE:

1. By way of a writ endorsed with the statement of claim filed 13 April 2018 the plaintiff commenced an action for the recovery of the sum of $165,224.61 constituted by unpaid income tax for several years between 1998 and 2009, unpaid penalties for failure to lodge an income tax return for the financial years ending 2009, 2011 and 2012, plus the general interest charge on the unpaid income tax and the unpaid penalties.

2. The defendant filed a memorandum of appearance on 17 May 2018.

3. On 30 January 2019 the plaintiff brought an application for summary judgment supported by an affidavit sworn by Arulkumaran Jeganathan and an affidavit sworn by Kenis Ling Fung Chu.  By the Rules of the Supreme Court 1971 O 14 r 1(1) an application for summary judgment must be brought within 21 days after appearance or at any later time by leave of the court.

4. The affidavit sworn by Mr Chu provides evidence that the memorandum of appearance whilst filed on 17 May 2018 was not served on the defendant and that the defendant, via an employee Ms A Beaumont, only became aware of it when searching the court file on the 5 September 2018.  Mr Chu deposes that from his own conferrals he believes the plaintiff and the defendant were in negotiations from 15 October 2018 to 19 November 2018 in an attempt to resolve the matter.  No explanation is provided for the period between 29 November 2018 and the 30 January 2019.  Mr Chu then deposes to the belief that the defendant has no defence to the plaintiff's claim.

5. The chamber summons first came before the court on 6 March 2019 at which time the application was adjourned to a special appointment on 10 April 2019.  The defendant was ordered to file any affidavit by 20 March 2019.

6. On 10 April 2019 there was no appearance by the defendant and the application was adjourned to 30 April 2019.  On 30 April 2019 the application was again adjourned to special appointment for 21 June 2019 and the defendant was again ordered to file and serve any affidavit, this time by 31 May 2019.

7. The defendant has not filed and served any affidavit.

8. In considering whether to grant leave I have regard for the explanation for why there was a delay in making the application, the prejudice to the defendant and what costs may have been incurred as a result of the plaintiff's delay in bringing the application:  Deputy Commissioner of Taxation v Heaton (1997) 35 ATR 540. I also have regard to the merits of the application.

9. In the circumstances I conclude that much of the delay has been brought about by the defendant in failing to serve the memorandum of appearance.  Further delay was brought about by negotiations between the parties which in my view cannot be said to be unreasonable.  There is no evidence of any prejudice to the defendant or the incurring of costs as a result of the delay and having regard to the merits of the application and for the reasons set out below it is my view the plaintiff should be given leave to bring the application outside of the prescribed time.

The power to order summary judgment

1. The Court of Appeal in Smec Australia Pty Ltd v Valentine Falls Estate Pty Ltd [2011] WASCA 138 said [20]:

   The power to order summary judgment is one that should be exercised with great care: Fancourt v Mercantile Credits Ltd [1983] HCA 25; (1983) 154 CLR 87, 99. It is only in the clearest of cases, when there is a high degree of certainty about the ultimate outcome of the proceedings if it went to trial, that summary judgment ought properly be granted: Agar v Hyde[2000] HCA 41; (2000) 201 CLR 552 [57]; Batistatos v Roads and Traffic Authority of New South Wales[2006] HCA 27; (2006) 226 CLR 256 [46]. And whilst the court may determine any difficult question of law on such an application, it will usually be appropriate to leave the determination of such questions for trial: see Theseus Exploration NL v Foyster[1972] HCA 41; (1972) 126 CLR 507, 514 - 515; Casella v Hewitt[2008] WASCA 13; (2008) 36 WAR 1 [36].

2. In this case the plaintiff's case is set out in the statement of claim.  The plaintiff sets out his standing to sue and pleads that tax assessment notices were issued for the financial years to 30 June 1998, 1999, 2000, 2004, 2005, 2006, 2007 and 2009.  The plaintiff then pleads that these amounts were unpaid and attract the general interest charge pursuant to s 5 – s 15 of the Income Tax Assessment Act 1997.

3. The plaintiff then avers that the sum of $165,224.61 remains unpaid being the amount owing as stated in the notices of assessment calculated in the manner set out in par 9 of the statement of claim and the particulars thereto.  From par 10 to par 17 of the plaintiff avers that the defendant failed to provide returns of income tax for the financial years ending 30 June 2009, 2011, and 2012 and as a result became liable to pay penalties pursuant to s 286 - 75 and sch 1 of the Taxation Administration Act 1953(Cth). The plaintiff further avers that the defendant is liable to pay the general interest charge on those penalties, all of which total $2,907, the calculation whereof is set out in par 17 of the statement of claim and the particulars thereto.

4. Attached to the affidavit of A Jegernathan I found documents purporting to be copies of notices of assessment said to be '…under the hand of a Deputy Commissioner…' together with notices of the penalties issued for the failure to lodge the income tax returns on time and finally, at annexure AJ - 12 a copy of a document that purports to be a certificate signed by the Deputy Commissioner of Taxation under s 255 - 45 of sch 1of the Taxation Administration Act.

5. The plaintiff is assisted in proving its case by a number of legislative provisions found in the Taxation Administration Act, more particularly, s 255 - 50(1) which provides:

   In any proceeding to recover an amount of a tax -related liability, a statement or averment about a matter in the plaintiff's complaint, claim or declaration is prima facie evidence of the matter.

6. Section 255 - 45(1) which provides that a certificate stating one or more of the matters set out in s 255 - 45(2) or 45(3) signed by the commissioner is prima facie evidence of the matter or matters in a proceeding to recover an amount of a tax related liability, and s 350 ‑ 10 which provides that certain specified documents are 'conclusive evidence', certain other documents signed by the commissioner are 'prima facie evidence' and that the production of a document that appears to be a copy of, or extract from, any document (the original document) made or given to an entity for the purposes of a taxation law signed by the commissioner, is evidence of the matters set out in the document to the same extent as the original document would have been evidence of those matters.

7. It was submitted on behalf of the plaintiff that the documents that purport to be copies of the tax assessment notices are conclusive evidence that the assessments were duly made and the amounts in the assessments are correct.

8. With respect I disagree.  In my opinion in order for those documents to come within the provisions of s 350 - 10 and so be conclusive evidence, they must be either:

   a)originals; or

   b)a document that

   (i)appears or purports to be a copy of a document issued by the commissioner or made or given by or to an entity for the purposes of a taxation law; AND

   (ii)        is under the hand of or signed by the commissioner.

9. In my opinion the documents that purport to be copies of the tax assessment notices are neither under the hand of the commissioner or signed by the commissioner.

10. However, relying on the Court of Appeal authority of Kolichis v Deputy Commissioner of Taxation [2014] WASCA 76, I am of the view that the documents are nevertheless admissible under s 79C of the Evidence Act (1906) (WA) as a business record or the equivalent provisions in the Evidence Act (1995)(Cth).

11. Accordingly, it is my view that there is prima facie evidence of all the material facts set out in the plaintiff statement of claim.  There is no evidence in rebuttal and I am satisfied on the material before me there is no defence to the action.  Accordingly, judgement should be entered for the plaintiff. 

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

LF
Court Officer

4 JULY 2019