Deputy Commissioner of Taxation v Miller [No 2]
[2021] WADC 65
•30 JUNE 2021
JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
IN CIVIL
LOCATION: PERTH
CITATION: DEPUTY COMMISSIONER OF TAXATION -v- MILLER [No 2] [2021] WADC 65
CORAM: RUSSELL DCJ
HEARD: 2 MARCH 2021
DELIVERED : 30 JUNE 2021
FILE NO/S: CIV 2244 of 2017
BETWEEN: DEPUTY COMMISSIONER OF TAXATION
Plaintiff
AND
WAYNE ROBERT MILLER
Defendant
Catchwords:
Taxation - Pay as you go withholding - Pay as you go withholding amounts - Director penalty - Director's liability for unpaid penalty - Defences - Statutory defences - All reasonable steps - Estoppel - Whether Deputy Commissioner estopped from bringing claim to recover unpaid tax-related liabilities
Legislation:
Taxation Administration Act 1953 (Cth), div 12B sch 1, div 12-B sch 1 s 12-35,
s 12-40, div 16 sch 1, div 16 sch 1 s 16-70(1), s 16‑75(3), s 16-150(1)(a),
subdivsion 16-B, div 250 s 250-10, div 255 sch 1 s 255-1, s 255-5(2),
div 269 sch 1, s 269-10(1), s 269-15, s 269-15(1), s 269-15(2), s 269-15(2)(b),
s 269-15(2)(c), s 269-20, s 269-20(1), s 269-20(2), s 269-20(5), s 269-25(2),
s 269-30(1), s 269-35, s 269-35(2), s 269-35(2)(a), s 269-35(2)(a)(i),
s 269-35(2)(a)(ii), div 350 sch 1, s 350-10, s 350-10(3), s 350-12(1),
s 350-12(2)(a), s 350-12(2)(e), s 350-15, s 350-20
Result:
Judgment for the plaintiff in the amount claimed
Representation:
Counsel:
| Plaintiff | : | Mr P A Walker |
| Defendant | : | In person |
Solicitors:
| Plaintiff | : | Minter Ellison |
| Defendant | : | Not applicable |
Case(s) referred to in decision(s):
AGC (Investments) Ltd v Federal Commissioner of Taxation (1991) 91 ATC 4180
Australian Goldfields NL (in liq) v North Australian Diamonds NL [2009] WASCA 98; (2009) 40 WAR 191
Canty v Deputy Commissioner of Taxation [2005] NSWCA 84; (2005) 63 NSWLR 152
Commissioner of Taxation v Croft [2016] QSC 190
Deputy Commissioner of Taxation of the Commonwealth of Australia v Woodhams [2000] HCA 10; (2000) 199 CLR 370
Deputy Commissioner of Taxation v Arora [2017] NSWSC 1016; (2017) 106 ATR 257
Deputy Commissioner of Taxation v George [2002] NSWCA 336; (2002) 55 NSWLR 511
Deputy Commissioner of Taxation v Miller [2021] WADC 29
Federal Commissioner of Taxation v Wade (1951) 84 CLR 105
Maritime Electric Co Ltd v General Dairies Ltd [1937] AC 610
Minister for Immigration and Ethnic Affairs v Kurtovic (1990) 21 FCR 193
Oamington Pty Ltd (Receiver & Manager Appointed) v Commissioner of Land Tax (1997) 98 ATC 5051
Re Scobie; ex parte Commissioner of Taxation (1995) 59 FCR 177
Snell v Deputy Commissioner of Taxation [2020] NSWCA 29
The Bell Group Ltd (in liq) v Westpac Banking Corporation [No 9] [2008] WASC 239; (2008) 39 WAR 1
The Commonwealth of Australia v Verwayen (1990) 170 CLR 394
Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387
RUSSELL DCJ:
Introduction
The defendant, Mr Wayne Robert Miller, was a director of ACI Broking (WA) Pty Ltd (ACIB) from 27 February 2007 until 5 November 2017 and Australian Consolidated Insurance Pty Ltd (ACI) from 2 March 2005 to 14 April 2017.
Each company was obliged to withhold money from the wages and salaries of its employees and directors in respect of pay as you go withholding (PAYG) and remit the amounts withheld to the Commissioner of Taxation (Commissioner) by the relevant due day.
Each company withheld PAYG amounts for various monthly withholding periods between 1 September 2012 and 28 February 2015 for ACIB, and between 1 February 2011 and 28 February 2015 for ACI.
The companies did not comply with their obligations to remit the PAYG amounts withheld to the Commissioner by the relevant due day, or at all.
The plaintiff, the Deputy Commissioner of Taxation (Deputy Commissioner) claims payment from Mr Miller of director penalties in the amount of $361,841 under div 269 of sch 1 to the Taxation Administration Act 1953 (Cth) (TAA) in respect of the unpaid PAYG liabilities of ACIB and ACI.
The amount claimed by the Deputy Commissioner in relation to amounts withheld and not paid by:
1.ACIB is $260,684; and
2.ACI is $101,157.
It is not in dispute that each of the companies withheld PAYG amounts and failed to meet their obligations under the TAA to pay the amounts withheld to the Commissioner.
Nor is it disputed that Mr Miller, as a director of the companies at the relevant times, was under an obligation under s 269-15 of sch 1 in the TAA to cause the companies to comply with their obligations to pay the amounts withheld to the Commissioner by each due day.
However, Mr Miller denies he is liable to pay the amount claimed and raises the following defences.
First, he relies on the statutory defence in s 269-35(2)(a) of sch 1 of the TAA and says that he is not liable to pay the director penalties because he took all reasonable steps to cause the companies to comply with their obligations to pay each of the amounts withheld to the Commissioner, to appoint an administrator or to cause the companies to begin to be wound up.
Secondly, Mr Miller claims that the Deputy Commissioner is estopped from bringing the claim against him or has waived the right to do so.
Thirdly, Mr Miller claims that the companies made certain payments against the PAYG withholding amounts.
For the reasons that follow, I am satisfied that judgment should be entered against Mr Miller in the amount claimed, being $361,841 together with interest pursuant to s 32 of the Supreme Court Act 1935 (WA).
The issues
There are three key issues that I must determine. They are:
1.Is the amount claimed by the Deputy Commissioner due and payable by Mr Miller?
2.If so, do any of the defences raised by Mr Miller apply to negate his liability to pay the amount due and payable to the Deputy Commissioner? That is, in respect of each company:
(a)Did Mr Miller take all reasonable steps to cause:
(i)the company to comply with its obligations to pay each of the amounts withheld to the Commissioner;
(ii)an administrator to be appointed to the company; or
(iii)the company to begin to be wound up?
(b)Is the Deputy Commissioner estopped from bringing the claims against Mr Miller or has she waived the right to do so?
(c)Did each of the companies make the payments alleged by Mr Miller against the PAYG withholding amounts?
The legislative framework
The relevant sections of the TAA are reproduced in Schedule 1 to this judgment. The effect of those provisions is as follows.
PAYG withholding
Division 12 of sch 1 to the TAA (div 12), relevantly required ACIB and ACI to withhold income tax from the salary and wages of its employees and directors: div 12-B; s 12-35, s 12-40.
Under div 16 of sch 1 to the TAA (div 16), ACIB and ACI were required to:
1.notify the Commissioner of the amount of tax withheld on or before the day on which the amount is due to be paid (regardless of whether it is paid): div 16; s 16-150(1)(a); and
2.pay those amounts to the Commissioner by those dates: div 16; s 16-70(1); s 16-75(3).
I will refer to the amounts required to be withheld, notified and paid as the PAYG withholding amounts.
Director penalty regime
Division 269 of sch 1 to the TAA (div 269):
1.imposes obligations on directors to ensure that a company meets its obligation, relevantly, to pay PAYG withholding amounts in accordance with subdivision 16-B; and
2.provides that directors who fail to comply with those obligations will be liable to pay a penalty.
Directors' obligations
Section 269-10(1) of sch 1 to the TAA identifies the obligations with which a director must cause the relevant company to comply. Those obligations arise if, on a particular day (the 'initial day'), relevantly, the company withholds an amount under div 12 and the company is obliged to pay to the Commissioner the amount in accordance with subdivision 16-B on or before a particular day (the 'due day').
Section 269-15(1) of sch 1 to the TAA provides that the directors of the company on or after the initial day must cause the company to comply with its obligation.
Section 269-15(2) of sch 1 to the TAA provides that the directors of the company continue to be under their obligation until:
1.the company complies with its obligation to pay the PAYG withholding amounts; or
2.an administrator is appointed to the company under s 436A, s 436B or s 436C of the Corporations Act 2001 (Cth); or
3.the company begins to be wound up (within the meaning of the Corporations Act).
Director penalties
A director is liable to pay a penalty if the director does not comply with their obligations pursuant to s 269-15 by the due day: s 269-20(1) of sch 1 to the TAA.
The penalty is due and payable at the end of the due day: s 269‑20(2) of sch 1 to the TAA.
The amount of the penalty is equal to the unpaid amount of the company's liability under its obligations: s 269-20(5) of sch 1 to the TAA.
Recovery of director penalties and director penalty notices
The Deputy Commissioner must not commence proceedings against a director to recover a penalty until the end of 21 days after giving the director written notice of the penalty under s 269-25(2) of sch 1 to the TAA. I will refer to that notice as a director penalty notice (DPN).
The penalty is remitted if, before or within 21 days after the Deputy Commissioner gives the DPN, the director stops being under the obligation because the company's liability has been discharged; or an administrator is appointed to the company; or the company begins to be wound up: s 269-30(1) of sch 1 to the TAA.
The issue of the DPN does not itself impose a liability on or create a right of action against the director. The issue of the DPN is a precondition to the Deputy Commissioner's power to commence proceedings to recover the penalty from the director. The director's obligations and liability under div 269 arise from the time the company comes under the obligation, and that obligation continues beyond the due date until one of the three matters outlined in s 269-15(2) of sch 1 to the TAA as set out in [22] above occurs.[1]
[1] See Deputy Commissioner of Taxation of the Commonwealth of Australia v Woodhams [2000] HCA 10; (2000) 199 CLR 370 [19]; Snell v Deputy Commissioner of Taxation [2020] NSWCA 29 [40]; Re Scobie; ex parte Commissioner of Taxation (1995) 59 FCR 177, 182 - 183.
As was explained by the High Court in Deputy Commissioner of Taxation v Woodhams,[2] the purpose of these provisions is to protect the revenue, by making directors of non-remitting corporate employers liable to penalties equivalent to the amounts which the corporation fails to remit.
Statutory Defence
[2] Deputy Commissioner of Taxation of the Commonwealth of Australia v Woodhams [13] (Gleeson CJ, McHugh, Gummow, Kirby & Callinan JJ), considering the equivalent predecessor provisions in Income Tax Assessment Act 1936 (Cth), div 9.
A director will be liable to pay a director penalty, and the Deputy Commissioner will be entitled to judgment for the amount of the penalty after expiry of the time stated in the DPN unless the director can establish by admissible evidence one of the statutory defences in s 269-35 of sch 1 to the TAA.[3]
[3] Re Scobie; ex parte Commissioner of Taxation 183 - 184.
Relevantly, s 269-35(2)(a) provides that a director will not be liable to a penalty under div 269 of sch 1 to the TAA if the director took all reasonable steps to ensure that one of the following happened:
…
(i)the director caused the company to comply with its obligation;
(ii)the director caused an administrator of the company to be appointed under section 436A, 436B or 436C of the Corporations Act; or
(iii)the director caused the company to begin to be wound up (within the meaning of that Act).
In determining what are reasonable steps for the purposes of s 269‑35(3) of sch 1 to the TAA, the following are relevant:
(a)when, and for how long, the director took part in the management of the company; and
(b)all other relevant circumstances.
Company's and director's liability reduced by amount of any payment
If a company pays the PAYG withholding amounts or part of those amounts to the Deputy Commissioner it reduces both the company's and the director's liability by the amount paid. Similarly, if a director pays a penalty or part of a penalty it reduces the amount of the company's and the director's liability by the amount paid: s 269-40 of sch 1 to the TAA.
Evidentiary certificate
Under s 350-10(3) of sch 1 to the TAA, production of a certificate that is signed by (relevantly) the Deputy Commissioner and states that, from the time specified in the certificate, an amount was payable under a taxation law is prima facie evidence that the amount is payable from that time and that the particulars stated in the certificate are correct.
The particulars that may be stated in the evidentiary certificate produced under s 350-10(3) of sch 1 to the TAA include (relevantly) that:
1.a person named in the certificate has a tax-related liability: s 350-12(1); s 350-12(2)(a); and
2.a sum specified in the certificate is, at the date specified in the certificate, a debt due and payable by a person to the Commonwealth: s 350-12(1); s 350-12(2)(e).
A 'tax-related liability' is a pecuniary liability to the Commonwealth arising directly under a taxation law and includes a penalty under s 269‑20 of sch 1 to the TAA: s 255-1, 250-10 of sch 1 to the TAA.
Section 350-15 of sch 1 to the TAA provides that all courts, and all persons having by law or consent of parties' authority to hear, receive and examine evidence, must take judicial notice of the signature of every person who is or has been (relevantly) a Deputy Commissioner if the signature is attached or appended to an official document for the purposes of a taxation law.
Statements or averments in proceedings to recover tax‑related liabilities
Section 350-20 of sch 1 to the TAA provides that:
(1)In a proceeding to recover an amount of a tax‑related liability, a statement or averment about a matter in the plaintiff's claim is prima facie evidence of the matter.
(2)This section applies even if the matter is a mixed question of law and fact. However, the statement or averment is prima facie evidence of the fact only.
(3)This section applies even if evidence is given in support or rebuttal of the matter or of any other matter.
(4)Any evidence given in support or rebuttal of the matter stated or averred must be considered on its merits. This section does not increase or diminish the credibility or probative value of the evidence.
(5)This section does not lessen or affect any onus of proof otherwise falling on a defendant.
The plaintiff's claim
The Deputy Commissioner's case is set out in further detail below. It is, in essence, that Mr Miller is liable to pay the Deputy Commissioner $361,841 under s 269-20 of sch 1 to the TAA in respect of director penalties for PAYG amounts withheld by ACIB and ACI, which were not remitted to the Commissioner.
Evidence
The Deputy Commissioner relied on the following evidence at trial:
1.Evidentiary certificates under s 350-10(3) of sch 1 to the TAA dated 7 March 2021 certifying that Mr Miller has a tax‑related liability for director penalties for the unpaid PAYG withholding amounts and the amounts payable in respect of those tax-related liabilities for:
(a)ACIB, in respect of which the amount payable by Mr Miller is $260,684 (Exhibit 1); and
(b)ACI, in respect of which the amount payable by Mr Miller is $101,157 (Exhibit 2).
2.Affidavit of Mr Yi Deng sworn on 11 June 2020 and the annexures to that affidavit (Exhibit 3).
The Deputy Commissioner also relied on:
1.The statements and averments in the statement of claim as prima facie evidence of the matters referred to under s 350-20 of sch 1 to the TAA.
2.Admissions made by Mr Miller in the Defence and in the response to the notice to admit facts filed on 28 May 2020, in which Mr Miller admitted certain facts, including that:
(a)Mr Miller was a director of ACIB from 27 February 2007 to 5 November 2017;[4]
(b)Mr Miller was a director of ACI from 2 March 2005 to 14 April 2017;[5] and
(c)on each of the dates stated, the Deputy Commissioner gave Mr Miller a DPN recording purported liabilities for PAYG withholding amounts for the amounts stated.[6]
[4] Further amended statement of claim filed 20 September 2018, par 4 (SOC), Amended defence filed 16 January 2020, par 4 (Defence); Notice to admit facts, par 4; Response to notice to admit facts, par 1.
[5] SOC, par 13; Defence, par 16; Notice to admit facts, par 9; Response to notice to admit facts, par 1.
[6] Notice to admit facts, pars 15 - 23; Response to notice to admit facts, pars 3 - 4.
In accordance with the orders made in relation to evidence at trial, Mr Deng gave his evidence by video-link from Melbourne and his affidavit stood as his evidence-in-chief (Exhibit 3). He was cross‑examined by Mr Miller, who appeared in person.
Mr Deng is an Australian public servant employed by the Debt and Lodgement Business Line of the Australian Taxation Office (ATO). He gave evidence about the records kept and systems used by the ATO in relation to taxation liabilities, including activity statements, PAYG withholding, director penalties, payments, credits and other information relating to taxpayers and communications between them and the ATO.
Mr Deng annexed to his affidavit records and documents he had obtained from those systems and also a number of Australian Securities and Investments Commission (ASIC) searches relating to ACIB and ACI and gave evidence about the PAYG withholding amounts and DPNs issued to Mr Miller, payments and credits applied and the amounts payable by ACIB, ACI and Mr Miller.
I accept Mr Deng's evidence.
The plaintiff's case and evidence adduced
The Deputy Commissioner's case is as follows. Where applicable, the evidence adduced in support is identified in the relevant footnote. I accept that evidence.
The Deputy Commissioner is entitled, pursuant to s 255-5(2) of sch 1 to the TAA, to sue to recover an amount of a tax-related liability that remains unpaid after it becomes a debt due to the Commonwealth of Australia and payable to the Commissioner.[7] This is not in dispute.[8]
[7] SOC, par 1.
[8] Defence, par 1.
Mr Miller was, at the relevant times, a director of both ACIB and ACI, within the meaning of s 269-15(1) of sch 1 to the TAA.[9] The relevant times were between 1 September 2012 and 28 February 2015 in relation to ACIB and between 1 February 2011 and 28 February 2015 in relation to ACI. This is not in dispute.[10]
[9] SOC, pars 4 and 13.
[10] Defence, pars 4 and 16.
Each of ACIB and ACI withheld amounts under div 12 of sch 1 of the TAA, but failed to meet its obligations under subdivision 12-B of sch 1 to the TAA to pay each amount withheld to the Commissioner.[11] This is not in dispute.[12]
[11] SOC, pars 5 and 14.
[12] Defence, pars 5.1, 5.2, 16.1 and 16.2.
The PAYG withholding amounts were notified by ACIB and ACI in the business activity statements lodged by each company in the relevant periods.[13]
[13] Exhibit 3, pars 29 - 32, 'YD-11', 'YD-12' and pars 59 - 62, 'YD-27', 'YD-28'.
The PAYG amounts withheld by ACIB, the initial day and due day in respect of each PAYG withholding amount was as follows:[14]
[14] SOC, par 6; Exhibit 3, par 31.
| The Amount Withheld | Period of Withholding (The initial day was a day falling within this period) | Due Day | Amount Withheld ($) |
| First | 1 September 2012 to 30 September 2012 | 26 November 2012 | 9,896.00 |
| Second | 1 October 2012 to | 21 November 2012 | 14,382.00 |
| Third | 1 November 2012 to | 21 December 2012 | 9,688.00 |
| Fourth | 1 December 2012 to | 28 February 2013 | 9,110.00 |
| The Amount Withheld | Period of Withholding (The initial day was a day falling within this period) | Due Day | Amount Withheld ($) |
| Fifth | 1 January 2013 to | 21 February 2013 | 9,010.00 |
| Sixth | 1 February 2013 to | 21 March 2013 | 9,602.00 |
| Seventh | 1 March 2013 to | 27 May 2013 | 8,402.00 |
| Eighth | 1 April 2013 to | 21 May 2013 | 9,238.00 |
| Ninth | 1 May 2013 to | 21 June 2013 | 15,587.00 |
| Tenth | 1 September 2013 to | 25 November 2013 | 9,876.00 |
| Eleventh | 1 October 2013 to 31 October 2013 | 21 November 2013 | 15,244.00 |
| Twelfth | 1 November 2013 to 30 November 2013 | 23 December 2013 | 8,511.00 |
| Thirteenth | 1 December 2013 to 31 December 2013 | 28 February 2014 | 8,927.00 |
| Fourteenth | 1 January 2014 to 31 January 2014 | 21 February 2014 | 9,168.00 |
| Fifteenth | 1 February 2014 to 28 February 2014 | 21 March 2014 | 8,580.00 |
| Sixteenth | 1 March 2014 to 31 March 2014 | 26 May 2014 | 9,830.00 |
| Seventeenth | 1 April 2014 to 30 April 2014 | 21 May 2014 | 10,292.00 |
| Eighteenth | 1 May 2014 to 31 May 2014 | 23 June 2014 | 13,132.00 |
| Nineteenth | 1 June 2014 to 30 June 2014 | 25 August 2014 | 9,263.00 |
| Twentieth | 1 September 2014 to 30 September 2014 | 25 November 2014 | 10,001.00 |
| Twenty-first | 1 October 2014 to 31 October 2014 | 21 November 2014 | 14,588.00 |
| Twenty-second | 1 November 2014 to 30 November 2014 | 22 December 2014 | 9,732.00 |
| Twenty-third | 1 December 2014 to 31 December 2014 | 3 March 2015 | 9,732.00 |
| Twenty-fourth | 1 January 2015 to 31 January 2015 | 23 February 2015 | 9,732.00 |
| Twenty-fifth | 1 February 2015 to 28 February 2015 | 23 March 2015 | 9,732.00 |
| Total | $261,255.00 |
The PAYG amounts withheld by ACI, the initial day and due day in respect of each PAYG withholding amount was as follows:[15]
[15] SOC, par 15; Exhibit 3, par 61.
| The Amount Withheld | Period of Withholding (The initial day was a day falling within this period) | Due Day | Amount Withheld ($) |
| First | 1 February 2011 to 28 February 2011 | 21 March 2011 | 33,654.00 |
| Second | 1 March 2011 to 31 March 2011 | 26 May 2011 | 13,316.00 |
| Third | 1 April 2011 to 30 April 2011 | 23 May 2011 | 31,954.00 |
| Fourth | 1 July 2011 to 31 July 2011 | 22 August 2011 | 11,926.00 |
| Fifth | 1 June 2011 to 30 June 2012 | 27 August 2012 | 6,676.00 |
| Sixth | 1 November 2013 to 30 November 2013 | 23 December 2013 | 5,180.00 |
| Seventh | 1 December 2013 to 31 December 2013 | 28 February 2014 | 8,927.00 |
| Eighth | 1 March 2014 to 31 March 2014 | 26 May 2014 | 5,180.00 |
| Ninth | 1 April 2014 to 30 April 2014 | 21 May 2014 | 5,180.00 |
| Tenth | 1 May 2014 to 31 May 2014 | 23 June 2014 | 7,770.00 |
| Eleventh | 1 August 2014 to 31 August 2014 | 22 September 2014 | 8,892.00 |
| Twelfth | 1 September 2014 to 30 September 2014 | 25 November 2014 | 8,892.00 |
| Thirteenth | 1 October 2014 to 31 October 2014 | 21 November 2014 | 8,892.00 |
| Fourteenth | 1 November 2014 to 30 November 2014 | 22 December 2014 | 8,892.00 |
| Fifteenth | 1 December 2014 to 31 December 2014 | 3 March 2015 | 8,892.00 |
| Sixteenth | 1 January 2015 to 31 January 2015 | 23 February 2015 | 8,892.00 |
| Seventeenth | 1 February 2015 to 28 February 2015 | 23 March 2015 | 8,892.00 |
| Total | $195,007.00 |
At the end of each due day, in respect of each PAYG withholding amount, Mr Miller as a director of ACIB and ACI was obliged under s 269-15 of sch 1 to the TAA to cause each company to comply with its obligations under subdivision 16-B of sch 1 to the TAA because:
1.each company had not been caused to comply with its obligation under subdivision 16-B to pay each PAYG withholding amount to the Commissioner;
2.an administrator had not been appointed to ACIB or ACI; or
3.ACIB and ACI had not begun to be wound up.[16]
[16] SOC, pars 7 - 8 and 16 - 17; Exhibit 3, pars 33 - 34, 36, 63 - 64 and 66.
Mr Miller admits that as a director of each of ACIB and ACI, he was subject to a prima facie obligation under s 269-15(1) of sch 1 to the TAA to cause each company to comply with its obligations. He also admits that at the end of each due day no administrator had been appointed to ACIB or ACI for the purpose of s 269-15(2)(b) of sch 1 to the TAA and the company did not begin to be wound up for the purpose of s 269-15(2)(c) of sch 1 to the TAA.[17] As outlined below, it is Mr Miller's case that he took reasonable steps to cause the companies to comply with their obligations to pay the PAYG withholding amounts to the Commissioner.[18]
[17] Defence, pars 7.1, 7.2, 8, 18.1 - 18.2 and 19.
[18] Defence, pars 7.3 - 7.4 and 18.3 - 18.5.
After deduction of payments and credits, the PAYG withholding amounts unpaid and the corresponding penalties due and payable by Mr Miller are:
1.in relation to ACIB, $260,684;[19] and
2.in relation to ACI, $101,157.[20]
Mr Miller disputes the amounts claimed and denies he is liable to pay them.[21]
[19] SOC, pars 9 - 12; Exhibit 3, pars 33 - 35.
[20] SOC, pars 18 - 21; Exhibit 3, pars 63 - 65.
[21] Defence, pars 9 - 12 and 20 - 23.
The Deputy Commissioner issued DPNs to Mr Miller in respect of the unpaid PAYG withholding amounts as follows:
1.in respect of ACIB, DPN's were issued on:
(a)9 July 2013, as to 9 PAYG withholding amounts for periods between 1 September 2012 to 31 May 2013;[22]
(b)4 February 2014, as to 3 PAYG withholding amounts for periods between 1 September 2013 to 30 November 2013;[23]
(c)1 April 2014, as to 3 PAYG withholding amounts for periods between 1 December 2013 to 28 February 2014;[24]
(d)17 April 2015, as to 10 PAYG withholding amounts for periods between 1 March 2014 to 28 February 2015;[25] and
2.in respect of ACI, DPN's were issued on:
(a)14 January 2014, as to 1 PAYG withholding amount for the period 1 November 2013 to 30 November 2013;[26]
(b)17 April 2015, as to 1 PAYG withholding amount for the period 1 December 2013 to 31 December 2013;[27] and
(c)17 April 2015, as to 12 PAYG withholding amounts for various periods between 1 July 2011 to 28 February 2015.[28]
[22] Exhibit 3, pars 37 - 42, 'YD-13' - 'YD-16'.
[23] Exhibit 3, pars 43 - 47, 'YD-17' - 'YD-19'.
[24] Exhibit 3, pars 48 - 53, 'YD-20' - 'YD-23'.
[25] Exhibit 3, pars 54 - 58, 'YD-24' - 'YD-26'.
[26] Exhibit 3, pars 77 - 82, 'YD-35' - 'YD-38'.
[27] Exhibit 3, pars 83 - 87, 'YD-39' - 'YD-41'.
[28] Exhibit 3, pars 88 - 92, 'YD-42' - 'YD-44'.
Neither ACIB nor ACI paid all of the PAYG withholding amounts referred to in the DPNs, appointed an administrator or began to be wound up within 21 days after the date on which each DPN was given.[29]
[29] Exhibit 3, pars 33 - 34, 63 - 64 and 94 - 95, 'YD-7' - 'YD-10'.
As a result, Mr Miller's director penalties became incapable of remission, other than through payment of the relevant PAYG withholding amount liabilities. They have not been paid and Mr Miller is, therefore, liable to pay the Deputy Commissioner the unpaid amount of $361,841.[30]
[30] Plaintiff’s written submissions, pars 45; Exhibit 3, pars 94 - 95 and 98.
The Deputy Commissioner also relies on s 350-10(3) of sch 1 to the TAA and the evidentiary certificates tendered at trial[31] as prima facie evidence that Mr Miller is liable for that amount by way of director penalties under s 269-20 of sch 1.
[31] Exhibits 1 and 2.
The Deputy Commissioner seeks judgment against Mr Miller in the amount of $361,841 together with interest.
The defence to the plaintiff's claim
As stated above, Mr Miller admits he was a director of both ACIB and ACI at the relevant times and that, prima facie, he is liable for director penalties in relation to unpaid PAYG withholding amounts. He disputes the amounts claimed to be outstanding in relation to the PAYG withholding amounts and that he is liable to pay the penalties. I discuss Mr Miller's pleaded defences in further detail below.
Evidence
Mr Miller did not adduce any evidence at trial. Mr Miller was required to serve any affidavits he intended to rely on and adduce as evidence‑in‑chief at trial by 25 January 2021. He did not file any affidavits by that time with the effect (under the orders made) that he could not adduce any witness evidence at trial.
On 19 February 2021, I heard an application filed on behalf of Mr Miller for leave for him to file and serve affidavit evidence and to adduce it at trial. On 23 February 2021, I dismissed Mr Miller's application. The reasons for my decision are set out in Deputy Commissioner of Taxation v Miller.[32]
[32] Deputy Commissioner of Taxation v Miller [2021] WADC 29.
On 26 February 2021, Mr Miller filed notice of change of representation stating that he intended to act in person.
Mr Miller appeared in person at the trial. He did not rely on or tender any documents.
The defences
There are essentially three limbs to Mr Miller's defence.
Reasonable steps defence
The first is the statutory defence under s 269-35(2)(a) of sch 1 to the TAA. Mr Miller says that he is not liable to a penalty because he took all reasonable steps to ensure that he caused:
1.each of ACIB and ACI to comply with their obligations: s 269‑35(2)(a)(i) of sch 1 to the TAA;[33]
2.an administrator to be appointed to each of ACIB and ACI: s 269-35(2)(a)(ii) of sch 1 to the TAA;[34] and
3.ACIB and ACI to begin to be wound up: s 269-35(2)(a)(iii) of sch 1 to the TAA.[35]
[33] Defence, pars 5.2.1 and 16.2.1 and schedule 1. See also Defence, pars 7.3 - 7.4, 9.1.4, 10.2, 11.2, 17.2, 18.3 ‑ 18.5, 20.2, 21.2 and 22.2.
[34] Defence, pars 5.2.2 and 16.2.2.
[35] Defence, pars 5.2.3 and 16.2.3.
The reasonable steps Mr Miller relies on are particularised in schedule 1 to the Defence.[36] Fourteen 'steps' are referred to in schedule 1. They are summarised in the Defence as follows:[37]
[36] Further amended schedule 1 to Defence.
[37] Defence, par 5.2.1 and 16.2.1.
1.selling certain assets of the Insured Group (of which ACI was a wholly owned subsidiary) to reduce debt at large;
2.applying for increases in the limits of debt facilities;
3.entering into a heads of agreement to raise capital;
4.entering into personal loan arrangements;
5.selling shares in ACI to raise capital;
6.attempting to sell ACIB;
7.negotiating terms of several payment plans and engaging in significant, long term conferral with the Deputy Commissioner; and
8.making a series of payments to the Deputy Commissioner.
Estoppel and waiver defences
The second limb to Mr Miller's defence is that he claims the Deputy Commissioner is estopped from bringing the claim against him or has waived the right to do so. There are three alternative pleas in this regard, as follows:
1.First, Mr Miller pleads an estoppel, which is set out in further detail in the Defence,[38] to the effect that:
[38] Defence, pars 13 and 25.
(a)the Deputy Commissioner induced an assumption that she agreed that the steps being taken by him were reasonable steps to cause the companies to comply with their obligations to pay the amounts withheld and would not, without notice, resile from the assumed position while he took those steps;
(b)the Deputy Commissioner induced that assumption either by making a representation or by conduct by negotiating with him in relation to his execution or fulfilment of the steps and not taking legal action to compel payment or to otherwise have the companies wound up;
(c)he relied on the assumption;
(d)the Deputy Commissioner knew that; and
(e)the Deputy Commissioner is estopped from resiling from the assumption by the issue of these proceedings and asserting that the steps taken by the defendant were not reasonable steps for the purpose of s 269-35(2)(a) of sch 1 to the TAA.
2.Second, an alternative plea of an estoppel by convention, which is set out in further detail in the Defence,[39] and is to the effect that:
[39] Defence, pars 14 and 26.
(a)Mr Miller assumed the Deputy Commissioner agreed to the steps being taken by him were reasonable steps for him to take to cause the companies to comply with their obligations and the Deputy Commissioner would not resile from that assumed position while Mr Miller sought to execute or fulfil those steps;
(b)the Deputy Commissioner adopted the same assumption by her conduct in continuing to agree to or acquiesce to Mr Miller seeking to execute or fulfil the steps;
(c)both Mr Miller and the Deputy Commissioner adopted the assumption as a convention, which Mr Miller relied on in continuing to seek to execute and fulfil the steps and not causing an administrator to be appointed to or for either company to begin to be wound up;
(d)Mr Miller will suffer detriment if the Deputy Commissioner resiles from the convention by asserting that the steps taken by him were not reasonable steps for the purpose of s 269-35(2)(a) of sch 1 to the TAA; and
(e)the Deputy Commissioner is estopped from doing so.
3.Third, a further plea of an election or waiver by the Deputy Commissioner, which is set out in further detail in the Defence,[40] and is to the effect that:
(a)the Deputy Commissioner represented or, by her conduct, communicated to Mr Miller that she agreed the steps being taken by him were reasonable steps for him to take to cause the companies to comply with their obligations, and would not without notice resile from that position while Mr Miller sought to execute or fulfil those steps;
(b)in reliance on the Deputy Commissioner's representations or conduct, Mr Miller continued to seek to execute or fulfil the steps and did not cause an administrator to be appointed to or for either company to begin to be wound up; and
(c)the Deputy Commissioner elected and/or waived any right to allege the steps were not reasonable; and
(d)the Deputy Commissioner cannot now resile from that position.
[40] Defence, pars 15 and 27.
The estoppel claims were not referred to during the course of the trial. The Deputy Commissioner denies each of the estoppel claims[41] and says that she is not bound by an estoppel, election or waiver, or analogous doctrine, which would prevent her collecting unpaid tax‑related liabilities due and payable under the TAA and/or conflict with or fetter her statutory duties or discretions under the TAA.[42]
Payments made by ACIB and ACI
[41] Reply to amended defence filed 29 January 2020 (Reply), pars 2 - 7.
[42] Reply, par 8.
The third limb of Mr Miller's defence is that the companies made certain payments against the PAYG withholding amounts, which are pleaded in schedule 2 to the Defence.[43]
[43] Defence, pars 9, 17, and 20 and Schedule 2.
Is the amount claimed by the Deputy Commissioner due and payable by Mr Miller?
I am satisfied on the evidence adduced by the Deputy Commissioner in Exhibits 1 to 3 that the amount of $361,841 claimed by the Deputy Commissioner is due and payable by Mr Miller.
The affidavit of Mr Deng sworn on 11 June 2020,[44] sets out how the amounts owing by Mr Miller are calculated in respect of the claim against him for the director penalties relating to the PAYG withholding amounts.[45]
[44] Exhibit 3.
[45] Exhibit 3, pars 29 - 35 and 59 - 65.
Mr Deng also gives evidence in his affidavit which confirms that neither ACIB nor ACI paid the PAYG withholding amounts referred to in the DPNs issued to Mr Miller which relate to the amount claimed, appointed an administrator or began to be wound up within 21 days after the date on which each DPN was given.[46]
[46] Exhibit 3, pars 33 - 34, 63 - 64 and 94 - 95, 'YD-7' - 'YD-10'.
As a result, Mr Miller's director penalties became incapable of remission, other than through payment of the relevant PAYG withholding amount liabilities. They have not been paid and Mr Miller is, therefore, liable to pay the Deputy Commissioner the amount of $361,841.
The evidentiary certificates dated 1 March 2021 signed by a Deputy Commissioner of Taxation state that, as at 1 March 2021, Mr Miller had tax-related liabilities for director penalties for the unpaid PAYG withholding amounts in respect of:
1.ACIB, in respect of which the amount payable by Mr Miller is $260,684;[47] and
2.ACI, in respect of which the amount payable by Mr Miller is $101,157.[48]
[47] Exhibit 1.
[48] Exhibit 2.
As noted above, production of a certificate under s 350-10 of sch 1 to the TAA is prima facie evidence of the matters stated in it for the purposes of proceedings to recover an amount of a tax‑related liability. There is no evidence to the contrary.
Do any of the defences raised by Mr Miller apply to negate his liability to pay the amount due and payable to the Deputy Commissioner?
Mr Miller's reasonable steps defence
For the reasons that follow, Mr Miller has not made out his defence that he took all reasonable steps under s 269-35(2)(a) of sch 1 to the TAA.
Did Mr Miller take all reasonable steps to cause each of the companies to comply with their obligations to pay each of the amounts withheld to the Commissioner?
As noted in [30] above, the Deputy Commissioner will be entitled to judgment for the amount of the director penalties after expiry of the time stated in the DPNs unless Mr Miller can establish by admissible evidence the statutory defence in s 269-35(2)(a) of sch 1 to the TAA.
There is no evidence to support Mr Miller's defence under s 269‑35(2)(a)(i) of sch 1 to the TAA that he took all reasonable steps to cause each of ACIB and ACI to comply with their obligations to pay each of the amounts withheld to the Commissioner.
In any event, the steps set out in schedule 1 to the Defence do not give rise to a defence under s 269-35(2)(a)(i) of sch 1 to the TAA. The obligation of a director under s 269-15(2) is a continuing one that applies throughout the period commencing on the breach of the obligation to pay the PAYG withholding amounts on the due day and continuing until the expiry of the DPNs. As a consequence, any defence under s 269-35(2)(a) must cover the whole of that period.[49]
[49] See Snell v The Deputy Commissioner of Taxation [52] - [57], referring to Canty v Deputy Commissioner of Taxation[2005] NSWCA 84; (2005) 63 NSWLR 152 [45] and Deputy Commissioner of Taxation v George[2002] NSWCA 336; (2002) 55 NSWLR 511 [27]. (Both referring to predecessor provisions in Income Tax Assessment Act 1936 (Cth), which were to substantially the same effect as the relevant provisions in div 269 of sch 1 to the TAA.) See also Deputy Commissioner of Taxation v Arora [2017] NSWSC 1016; (2017) 106 ATR 257 [55], [58].
Though no evidence of the reasonable steps said to have been taken in schedule 1 to the Defence has been adduced, the 'steps' referred to do not cover the whole period from the due day until expiry of the DPN. The 'steps' numbered (1) - (4) pre-date the due day in relation to the outstanding unpaid PAYG withholding amounts for ACIB and ACI. The first due day in relation to ACIB is 26 November 2012.[50] The first due day in relation to the unpaid PAYG withholding amounts for ACI is 27 August 2012, being the amount withheld for the period 1 June 2012 to 30 June 2012 as set out in the table at par 61 of Exhibit 3. [51]
[50] SOC, par 6; Exhibit 3, par 31.
[51] SOC, par 15; Exhibit 3, par 61.
As such, even if Mr Miller could prove that those steps were taken, they would not be reasonable steps for the purpose of the statutory defence in s 269-35(2)(a)(i). That defence therefore fails.
Did Mr Miller take all reasonable steps to cause an administrator to be appointed to each of the companies?
There is no evidence that Mr Miller took reasonable steps to cause an administrator to be appointed to ACIB or ACI for the purpose of s 269‑15(2)(ii) of sch 1 to the TAA.
Mr Miller admits, as was the case, that no administrator was appointed to ACIB or ACI.[52]
[52] Defence, pars 7.2, 7.3, 18.2 and 18.3.
The defence under s 269-35(2)(a)(ii) of sch 1 to the TAA therefore fails.
Did Mr Miller take all reasonable steps to cause each of the companies to begin to be wound up?
There is no evidence that Mr Miller took reasonable steps to cause ACIB or ACI to begin to be wound up for the purpose of s 269‑15(2)(c) of sch 1 to the TAA.
ACIB was not wound up until 22 Decmeber 2015.[53] ACI was not wound up until 23 July 2015.[54]
[53] Exhibit 3 'YD-5', page 113.
[54] Exhibit 3 'YD-10', page 185.
The defence under s 269-35(2)(a)(iii) of sch 1 to the TAA therefore fails.
Is the Deputy Commissioner estopped from bringing the claim against Mr Miller or has she waived the right to do so?
There is no evidence to support Mr Miller's estoppel claims in any of the forms advanced. In any event, for the reasons that follow, the Deputy Commissioner is not estopped from bringing the claim against Mr Miller. Nor can the Deputy Commissioner have waived the right to do so.
An estoppel may arise in certain circumstances to prevent an unjust departure by one person from an assumption adopted by another as the basis of some act or omission which, unless the assumption be adhered to, would operate to that other's detriment.
The principles relating to estoppel by representation or conduct, estoppel by convention and equitable estoppel were comprehensively summarised by Owen J in The Bell Group Ltd (in liq) v Westpac Banking Corporation [No 9].[55] As Owen J noted in that case,[56] the criteria necessary to establish an equitable estoppel were set out in the often cited passage of the judgment of Brennan J in Waltons Stores (Interstate) Ltd v Maher,[57] as follows:
1.The plaintiff has assumed that a particular legal relationship then existed between the plaintiff and the defendant or has expected that a particular legal relationship would exist between them and, in the latter case, that the defendant would not be free to withdraw from the expected legal relationship.
2.The defendant has induced the plaintiff to adopt that assumption or expectation.
3.The plaintiff has acted or has abstained from acting in reliance on the assumption or expectation.
4.The defendant knew or intended him to do so.
5.The plaintiff's action or inaction will occasion detriment if the assumption or expectation is not fulfilled.
6.The defendant has failed to act to avoid that detriment whether by fulfilling the assumption or expectation or otherwise.
[55] The Bell Group Ltd (in liq) v Westpac Banking Corporation [No 9][2008] WASC 239; (2008) 39 WAR 1 [3459] - [3553]; see also Australian Goldfields NL (in liq) v North Australian Diamonds NL[2009] WASCA 98; (2009) 40 WAR 191 [194].
[56] The Bell Group Ltd (in liq) v Westpac Banking Corporation [No 9] [3539].
[57] Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387, 428 - 429.
For the purposes of explanation, the references in those six matters to the plaintiff is a reference to the party asserting the estoppel, and the reference to the defendant is a reference to the party against whom the estoppel is asserted.
In The Commonwealth v Verwayen,[58] Deane J described the conceptual foundation and essential operation of the doctrine of estoppel by conduct, which he referred to as having emerged as a coherent body of substantive and consistent principle, as follows:
1.While the ordinary operation of estoppel by conduct is between parties to litigation, it is a doctrine of substantive law the factual ingredients of which fall to be pleaded and resolved like other factual issues in a case …
2.The central principle of the doctrine is that the law will not permit an unconscionable or, more accurately, unconscientious departure by one party from the subject matter of an assumption which has been adopted by the other party as the basis of some relationship, course of conduct, act or omission which would operate to that other party's detriment if the assumption be not adhered to for the purposes of the litigation.
3.Since an estoppel will not arise unless the party claiming the benefit of it has adopted the assumption as the basis of action or inaction and thereby placed himself in a position of significant disadvantage if departure from the assumption be permitted, the resolution of an issue of estoppel by conduct will involve an examination of the relevant belief, actions and position of that party.
4.The question whether such a departure would be unconscionable relates to the conduct of the allegedly estopped party in all the circumstances. That party must have played such a part in the adoption of, or persistence in, the assumption that he would be guilty of unjust and oppressive conduct if he were now to depart from it. The cases indicate four main, but not exhaustive, categories in which an affirmative answer to that question may be justified, namely, where that party (a) has induced the assumption by express or implied representation; (b) has entered into contractual or other material relations with the other party on the conventional basis of the assumption; (c) has exercised against the other party rights which would exist only if the assumption were correct; (d) knew that the other party laboured under the assumption and refrained from correcting him when it was his duty in conscience to do so. Ultimately, however, the question whether departure from the assumption would be unconscionable must be resolved not by reference to some preconceived formula framed to serve as a universal yardstick but by reference to all the circumstances of the case, including the reasonableness of the conduct of the other party in acting on the assumption and the nature and extent of the detriment which he would sustain by acting upon the assumption if departure from the assumed state of affairs were permitted. …
[58] The Commonwealth of Australia v Verwayen (1990) 170 CLR 394, 443 - 445.
No evidence has been adduced by Mr Miller as to the representations alleged to have been made by the Deputy Commissioner or as to the conduct of the Deputy Commissioner said to give rise to the alleged assumption. Nor has any evidence been adduced as to Mr Miller adopting the alleged assumption, the Deputy Commissioner's knowledge that Mr Miller had adopted the alleged assumption, Mr Miller's alleged reliance on the assumption or the detriment or significant disadvantage alleged to have been or to be suffered by him as a result.
For the reasons that follow, this defence cannot succeed, in any event.
The principles of estoppel have evolved largely in the context of private law and not legal relations arising from legislation.
In the legislative context, depending on the nature and construction of the relevant statute and its purpose, it is generally not possible to hold a public officeholder to a representation that exceeds the powers or defeats the duties given to them under the statute.[59]
[59] Maritime Electric Co Ltd v General Dairies Ltd [1937] AC 610. See also Commissioner of Taxation v Croft [2016] QSC 190, [41] - [42]; Oamington Pty Ltd (Receiver & Manager Appointed) v Commissioner of Land Tax (1997) 98 ATC 5051; Minister for Immigration and Ethnic Affairs v Kurtovic(1990) 21 FCR 193, 208 ff (Gummow J).
No conduct on the part of the Deputy Commissioner could operate as an estoppel against the operation of the TAA.[60] Specifically, any conduct of or representation made by the Deputy Commissioner cannot give rise to any estoppel, election or waiver, or analogous doctrine, which would conflict with the operation of the TAA and her statutory duties relating to the collection and recovery of unpaid tax-related liabilities due and payable under the TAA.
[60] Federal Commissioner of Taxation v Wade(1951) 84 CLR 105, 117 (Kitto J); AGC (Investments) Ltd v Federal Commissioner of Taxation (1991) 91 ATC 4180, [4194] - [4195] and the authorities there referred to.
Mr Miller's claims that the Deputy Commissioner is estopped from bringing a claim against him to recover the unpaid director penalties or has waived the right to do so must therefore fail.
Did each of the companies make the payments alleged by Mr Miller against the PAYG withholding amounts?
Mr Miller has not made out this aspect of his defence to the Deputy Commissioner's claim.
There is no evidence that any payments were made against the PAYG withholding amounts the subject of the Deputy Commissioner's claim, either as set out in Schedule 2 to the Defence, or at all.
Conclusion and orders
For the reasons set out above:
1.I am satisfied that the amount of $361,841 claimed by the Deputy Commissioner is due and payable by Mr Miller.
2.Mr Miller has not made out:
(a)the statutory defence under s 269‑35(2)(a) of sch 1 of the TAA that he took all reasonable steps to cause ACIB and ACI to comply with its obligations in relation to the PAYG withholding amounts, to cause an administrator to be appointed or for the companies to begin to be wound up;
(b)his estoppel or waiver defence; or
(c)his defence that the companies made payments as alleged against the PAYG withholding amounts.
Having found in favour of the Deputy Commissioner and that none of the defences raised by Mr Miller have been made out, I will enter judgment for the Deputy Commissioner in the amount claimed of $361,841 together with interest pursuant to s 32 of the Supreme Court Act.
I will hear from the parties in relation to the final form of orders and in relation to costs.
SCHEDULE 1
Taxation Administration Act 1953 (Cth)
Division 12 - Payments from which amounts must be withheld
Subdivision 12‑B - Payments for work and services
12‑35 Payment to employee
An entity must withhold an amount from salary, wages, commission, bonuses or allowances it pays to an individual as an employee (whether of that or another entity).
12‑40 Payment to company director
A company must withhold an amount from a payment of remuneration it makes to an individual:
(a)if the company is incorporated - as a director of the company, or as a person who performs the duties of a director of the company; or
(b)if the company is not incorporated - as a member of the committee of management of the company, or as a person who performs the duties of such a member.
Subdivision 16‑B ‑ To pay withheld amounts to the Commissioner
When and how to pay amounts to the Commissioner
16‑70 Entity to pay amounts to Commissioner
(1)An entity that withholds an amount under Division 12 must pay the amount to the Commissioner in accordance with this Subdivision.
…
16‑75 When amounts must be paid to Commissioner
…
Small withholders
(3)Subject to subsection (4), if a *small withholder withholds an amount under Division 12 (other than section 12‑175 or 12‑180) during a month in a *quarter, it must pay the amount to the Commissioner by the end of the 21st day of the month after the end of that quarter.
(4)If a *small withholder:
(a)withholds an amount under Division 12 (other than section 12‑175 or 12‑180) during a month in a *quarter; and
(b)is a *deferred BAS payer on the 21st day of the month after the end of that quarter;
the small withholder must pay that amount to the Commissioner as shown in the table:
Payments by *deferred BAS payers Item If the amount is withheld during the *quarter ending on: the amount must be paid to the Commissioner by the end of: 1 30 September the following 28 October 2 31 December the following 28 February 3 31 March the following 28 April 4 30 June the following 28 July
Subdivision 16-C - To provide information
To the Commissioner
16-150 Commissioner must be notified of amounts
(1)An entity that must pay an amount (even if it is a nil amount) to the Commissioner under:
(a)subsection 16‑70(1) (about amounts withheld under Division 12); or
…
Part 4-15 - Collection and recovery of tax‑related liabilities and other amounts
Division 250 - Introduction
250-10 Summary of tax‑related liabilities
(1)The following table is an index of each tax‑related liability under the Income Tax Assessment Act 1936. The key provision for the liability, as set out in the table, specifies when the liability becomes due and payable.
…
(irrelevant parts of table omitted)
Tax‑related liabilities under the Income Tax Assessment Act 1936
Item
Topic
Provision
105
payment of withheld amount to Commissioner
16‑75 in Schedule 1
Taxation Administration Act 1953
139
penalty under Subdivision 269‑B
269‑20 in Schedule 1
Taxation Administration Act 1953
Division 255 - General rules about collection and recovery
Subdivision 255-A - Tax‑related liabilities
255‑1 Meaning of tax‑related liability
(1)A tax‑related liability is a pecuniary liability to the Commonwealth arising directly under a *taxation law (including a liability the amount of which is not yet due and payable).
Note 1:See section 250‑10 for an index of tax‑related liabilities.
Note 2:A taxation law, or a provision of it, may be excluded from being applied to this Part. See section 265‑65.
255‑5 Recovering a tax‑related liability that is due and payable
(1)A tax‑related liability is a pecuniary liability to the Commonwealth arising directly under a *taxation law (including a liability the amount of which is not yet due and payable).
Note 1:See section 250-10 for an index of tax‑related liabilities.
Note 2:A taxation law, or a provision of it, may be excluded from being applied to this Part. See section 265-65.
(2)The Commissioner, a *Second Commissioner or a *Deputy Commissioner may sue in his or her official name in a court of competent jurisdiction to recover an amount of a *tax‑related liability that remains unpaid after it has become due and payable.
Note:The tables in section 250‑10 set out each provision that specifies when an amount of a tax‑related liability becomes due and payable. The Commissioner may vary that time under Subdivision 255‑B.
Division 269 ‑ Penalties for directors of non-complying companies
269-10 Scope of Division
(1)This Division applies as set out in the following table:
Obligations that directors must cause company to comply with Item Column 1
This Division applies if, on a particular day (the initial day), a company is a company registered under the Corporations Act 2001, and on the initial day …
Column 2
and the company is obliged to pay to the Commissioner on or before a particular day (the due day) …
1 the company withholds an amount under Division 12 that amount in accordance with Subdivision 16‑B. 2 the company receives an *alienated personal services payment an amount in respect of that alienated personal services payment in accordance with Division 13 and Subdivision 16‑B. 3 the company provides a *non‑cash benefit an amount in respect of that benefit in accordance with Subdivision 16‑B. 5 a *quarter ends superannuation guarantee charge for the quarter in accordance with the Superannuation Guarantee (Administration) Act 1992. 6 a *tax period ends an *assessed net amount for the tax period in accordance with the *GST Act. 7 a GST instalment quarter (within the meaning of the *GST Act) ends a GST instalment (within the meaning of the GST Act) for the quarter in accordance with the GST Act.
269‑15 Directors' obligations
Directors' obligations
(1)The directors (within the meaning of the Corporations Act 2001) of the company (from time to time) on or after the initial day must cause the company to comply with its obligation.
(2)The directors of the company (from time to time) continue to be under their obligation until:
(a)the company complies with its obligation; or
(b)an administrator of the company is appointed under section 436A, 436B or 436C of the Corporations Act 2001; or
…
(c)the company begins to be wound up (within the meaning of that Act).
269‑20 Penalty
Penalty for director on or before due day
(1)You are liable to pay to the Commissioner a penalty if:
(a)at the end of the due day, the directors of the company are still under an obligation under section 269‑15; and
(b)you were under that obligation at or before that time (because you were a director).
Note:Paragraph (1)(b) applies even if you stopped being a director before the end of the due day: see subsection 269‑15(2).
(2)The penalty is due and payable at the end of the due day.
Note:The Commissioner must not commence proceedings to recover the penalty until the end of 21 days after the Commissioner gives you notice of the penalty under section 269‑25.
Amount of penalty
(5)The amount of a penalty under this section is equal to the unpaid amount of the company's liability under its obligation.
Note 1:See section 269‑40 for the effect on your penalty of the company discharging its obligation, or of another director paying his or her penalty.
Note 2:See section 269‑45 for your rights of indemnity and contribution.
269‑25 Notice
…
Content of notice
(2)The notice must:
(a)set out what the Commissioner thinks is the unpaid amount of the company's liability under its obligation; and
(b)state that you are liable to pay to the Commissioner, by way of penalty, an amount equal to that unpaid amount because of an obligation you have or had under this Division; and
(c)explain the main circumstances in which the penalty will be remitted.
269-30 Effect on penalty of directors' obligation ending before end of notice period
(1)Subject to subsection (2), a penalty of yours under this Division is remitted if the directors of the company stop being under the relevant obligation under section 269‑15:
(a)before the Commissioner gives you notice of the penalty under section 269‑25; or
(b)within 21 days after the Commissioner gives you notice of the penalty under that section.
269‑35 Defences
…
All reasonable steps
(2)You are not liable to a penalty under this Division if:
(a)you took all reasonable steps to ensure that one of the following happened:
(i)the directors caused the company to comply with its obligation;
(ii)the directors caused an administrator of the company to be appointed under section 436A, 436B or 436C of the Corporations Act 2001;
(iia)the directors caused a small business restructuring practitioner for the company to be appointed under section 453B of that Act;
(iii)the directors caused the company to begin to be wound up (within the meaning of that Act); or
(b)there were no reasonable steps you could have taken to ensure that any of those things happened.
(3)In determining what are reasonable steps for the purposes of subsection (2), have regard to:
(a)when, and for how long, you were a director and took part in the management of the company; and
(b)all other relevant circumstances.
269‑40 Effect of director paying penalty or company discharging liability
Liabilities
(1)This section applies to the following liabilities:
(a)the liability of the company under its obligation referred to in section 269‑10;
(b)the liability of each director (or former director) to pay a penalty under this Division in relation to the liability of the company referred to in paragraph (a);
(c)a liability under a judgment, to the extent that it is based on a liability referred to in paragraph (a) or (b).
Discharging one liability discharges other liabilities
(2)If an amount is paid or applied at a particular time towards discharging one of the liabilities, each of the other liabilities in existence at that time is discharged to the extent of the same amount.
(3)If, because of section 268‑20 (Nature of liability to pay estimate), one of the liabilities is discharged at a particular time to the extent of a particular amount, each of the other liabilities in existence at that time is discharged to the extent of the same amount.
(4)This section does not discharge a liability to a greater extent than the amount of the liability.
Part 4‑90 - Evidence
Division 350 - Evidence
350‑10 Evidence
(3)The production of a certificate that:
(a)is signed by the Commissioner, a *Second Commissioner, a *Deputy Commissioner or a delegate of the Commissioner; and
(b)states that, from the time specified in the certificate, an amount was payable under a *taxation law (whether to or by the Commissioner);
is prima facie evidence that:
(c)the amount is payable from that time; and
(d)the particulars stated in the certificate are correct.
350‑12 Prima facie evidence - particulars stated in evidentiary certificate
(1)Without limiting subsection 350‑10(3), the particulars that may be stated in a certificate under that subsection include the matters in subsections (2) and (3) of this section.
(2)The certificate may state:
(a)that a person named in the certificate has a *tax‑related liability; or
…
(e)that a sum specified in the certificate is, as at the date specified in the certificate, a debt due and payable by a person to the Commonwealth.
350-15 Judicial notice of signature
All courts, and all persons having by law or consent of parties authority to hear, receive and examine evidence, must take judicial notice of the signature of every person who is or has been:
(a)the Commissioner; or
(b)a *Second Commissioner; or
(c)a *Deputy Commissioner; or
(d)a delegate of the Commissioner;
if the signature is attached or appended to an official document for the purposes of a *taxation law.
350‑20 Certain statements or averments in proceedings to recover tax‑related liabilities
(1)In a 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.
(2)This section applies even if the matter is a mixed question of law and fact. However, the statement or averment is prima facie evidence of the fact only.
(3)This section applies even if evidence is given in support or rebuttal of the matter or of any other matter.
(4)Any evidence given in support or rebuttal of the matter stated or averred must be considered on its merits. This section does not increase or diminish the credibility or probative value of the evidence.
(5)This section does not lessen or affect any onus of proof otherwise falling on a defendant.
I certify that the preceding paragraph(s) comprise the reasons for decision of the District Court of Western Australia.
AD
Associate to Judge Russell
30 JUNE 2021
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