Deputy Commissioner of Taxation v Miller [No 2]

The Federal Court of Australia in the case of Deputy Commissioner of Taxation v Miller [No 2] dealt with issues surrounding pay as you go (PAYG) withholding tax obligations, specifically whether the Deputy Commissioner of Taxation was estopped from pursuing a director's personal liability for unpaid tax-related liabilities. The case involved the Miller family and their associated companies, where the Deputy Commissioner sought to recover PAYG withholding amounts that had not been remitted to the tax office. The legal issues before the court centred on whether the Deputy Commissioner could be estopped from enforcing the director's liability due to representations or conduct that induced a reliance on an assumption that the director would not be held personally liable.

The court carefully examined the principles of estoppel, particularly equitable estoppel, as outlined in the judgment of Brennan J in Waltons Stores (Interstate) Ltd v Maher, and the conceptual foundation of estoppel by conduct as described by Deane J in The Commonwealth v Verwayen. The court found that for an estoppel to be effective, the plaintiff must have adopted an assumption as the basis of action or inaction, thereby placing themselves in a position of significant disadvantage if the assumption were not adhered to. In this case, the court held that the Deputy Commissioner had not induced the assumption that the director would not be held personally liable for unpaid tax liabilities, nor had the Deputy Commissioner engaged in conduct that would justify an estoppel. The court found that the Miller family had not acted in reliance on any assumption made by the Deputy Commissioner and that the Deputy Commissioner had not acted in a way that would justify an estoppel.

Consequently, the court dismissed the claim for estoppel, allowing the Deputy Commissioner to pursue the director's personal liability for unpaid tax-related liabilities. The court held that the principles of estoppel did not apply in this instance, and the Deputy Commissioner was not estopped from enforcing the director's liability.