Deputy Commissioner of Taxation v Putrino - [2018] WADC 53

JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION:   DEPUTY COMMISSIONER OF TAXATION -v- PUTRINO [2018] WADC 53
CORAM:   DEPUTY REGISTRAR HEWITT
HEARD:   19 APRIL 2018
DELIVERED          :   3 MAY 2018
FILE NO/S:   CIV 1370 of 2017
BETWEEN:   DEPUTY COMMISSIONER OF TAXATION
Plaintiff
AND
DAVID PUTRINO
Defendant

Catchwords:

Practice and procedure - Application for summary judgment - Cross-application for stay - Turns on its own facts

Legislation:

Taxation Administration Act 1953 s 8AAG

Result:

Summary judgment granted
Application for stay dismissed

Representation:

Counsel:

Plaintiff	:	Mr K Chu
Defendant	:	Mr J W Fickling

Solicitors:

Plaintiff	:	Minter Ellison
Defendant	:	Hayes Legal

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

Nil

DEPUTY REGISTRAR HEWITT:

This matter commenced by a writ filed in May 2017 and is before me on a chamber summons for summary judgment. The claim of the plaintiff is for a primary tax debt and a general interest charge accruing on that debt.
It is trite law that summary judgment should not be entered in all but the clearest of cases and that requirement has been satisfied in regard to the primary tax debt by the certificate which has been filed. The issue in dispute concerns a general interest charge. The amount of that charge is considerable and approximates half the amount claimed as a primary tax. The defendant has admitted a liability totalling $144,611 as the primary tax obligation and for the purposes of the present application there will be a judgment for at least that amount.
The defence which is raised by the defendant concerns the general interest charge. The defendant applied for and was refused a remission of the general interest charge which had accrued on his primary taxation liability. A copy of the application or remission appears as exhibit PCC2 of the affidavit of Paul Costi filed 18 April 2018. A number of factors were advanced to justify the remission of the general interest charges. It is notable that the application does not appear to have been supported by any documentary evidence whatsoever. The applicant entirely relied upon the commissioner accepting without question the information which was contained in the application for remission. In assessing such an application the commissioner is applying the powers which are contained in s 8AAG of the Taxation Administration Act 1953 which is in the following terms:
Remission of the charge
(1)The Commissioner may remit all or a part of the charge payable by a person.
(2)However, if a person is liable to pay the charge because an amount remains unpaid after the time by which it is due to be paid, the Commissioner may only remit all or a part of the charge in the circumstances set out in subsection (3), (4) or (5).
(3)The Commissioner may remit all or a part of the charge referred to in subsection (2) if the Commissioner is satisfied that:
(a)the circumstances that contributed to the delay in payment were not due to, or caused directly or indirectly by, an act or omission of the person; and
(b)the person has taken reasonable action to mitigate, or mitigate the effects of, those circumstances.
(4)The Commissioner may remit all or a part of the charge referred to in subsection (2) if the Commissioner is satisfied that:
(a)the circumstances that contributed to the delay in payment were due to, or caused directly or indirectly by, an act or omission of the person; and
(b)the person has taken reasonable action to mitigate, or mitigate the effects of, those circumstances; and
(c)having regard to the nature of those circumstances, it would be fair and reasonable to remit all or a part of the charge.
(5)The Commissioner may remit all or a part of the charge referred to in subsection (2) if the Commissioner is satisfied that:
(a)there are special circumstances because of which it would be fair and reasonable to remit all or a part of the charge; or
(b)it is otherwise appropriate to do so.
When one looks at the range of matters which the commissioner may take into account in deciding to remit a whole or a part of a general interest charge, the only applicable material would appear to be s 8AAG(5), namely there are special circumstances because of which it would be fair and reasonable to remit all or part of the charge or that it is otherwise appropriate to do so.
Given the fact that the tax payer has not paid any portion of the tax for which he was liable, his failure to comply with the relevant legislation extended over a substantial period of time and he chose not to disclose anything of his financial circumstances it is difficult to see how the application for remission could possibly have found favour. The defendant was advised that the commissioner had refused his application to remit the general interest charge on the basis that his circumstances did not warrant that remission. Those circumstances were identified by the commissioner as financial misfortune, living away from home, family sickness, anxiety and stress. Given that the application for a remission is almost totally lacking in useful information and detail, it is hard to image how the commissioner could have said much more than he did. Nonetheless it is alleged that his refusal constituted a reviewable error because he did not give sufficient reasons for the conclusion that he reached. That contention has now given rise to a counterclaim lodged by the defendant on the day before the hearing of the summary judgment application effectively seeking a judicial review of the dismissal of the application for remission of the general interest charge. It is said that the decision miscarried by failing to provide appropriate reasoning. Given the inadequacy of the application for remission, it is difficult to conceive how the commissioner could have said much more than he did, other than he was not satisfied that the grounds advanced justified the remission sought.
Clearly the counterclaim which is filed in this court is beyond the jurisdiction of this court. It was filed the day before the hearing of the summary judgment application. It repeats the proposition contained elsewhere in materials filed by the defendant that he will pay the primary tax on the basis that the general interest charge is remitted. In other words what the defendant is saying is abandon your claim for general interest and I will pay that portion of claim to which I have no defence whatsoever. When that obligation would be satisfied is not stated.
It is also to be noted that:
(a)notwithstanding his claim to financial distress, the defendant has acquired what is described as an investment property; and
(b)the defendant is trustee of a trust and the assets of that trust are not disclosed.
Also filed on the day before the hearing of the application was a stay application that sought a stay for a period of 45 days. The basis of the stay was the fact that the defendant had applied for finance. Documentation relevant to the application is exhibited to the affidavit of Mr P C Costi. That affidavit and the application were filed on the actual day of the hearing. The basis of the proposed stay is the fact that the defendant has applied for finance. Interestingly the application is not signed, there is no evidence that it has been submitted to the proposed lender, it is in the name of the defendant and his wife and there is no evidence to suggest that she acquiesces in the application. Other points of interest are that he deposes in an affidavit lodged on 17 April 2018 that he had $40,000 of cash reserves and a further $100,000 available from drawing down on free equity on the primary residence. Other notable features which can be gleaned from the information are that the $40,000 seems to have disappeared between the date Mr Putrini swore his affidavit on 17 April 2018 and the date of preparation of the application for finance, a day or so later, if indeed there is such an application since the evidence before me does not establish that it was ever signed or lodged.
Mr Putrini's affidavit lodged on 17 April is also notable for the following paragraph:
On the basis that the Commissioner of Taxation agrees to exercise his discretion to remit the whole of the general interest charge and shortfall interest charge, I hereby depose that I will pay the primary tax debt in the manner set out in paragraph 7 of this affidavit.
In par 7 he deposed to the fact that:
I depose that I am able and I am willing and able to meet the primary tax liability as follows:
7.1An immediate payment of $40,000 from cash reserves which my wife and I currently hold.
7.2A further payment of $100,000 from drawing down on free equity on our primary residence.
It is therefore clear that the defendant is only prepared to pay any sum of money to the plaintiff if the plaintiff remits the general interest charge. That being notwithstanding the fact that he cannot possibly have any defence to the primary tax charge.
I now turn to a further application for remission lodged by the solicitors for the defendant dated, and presumably posted on the day before the hearing of this application which is essentially a rehash of the earlier application which the defendant made in person.
I think it worth noting that on refusing the original application for remission of the general interest charge the commissioner advised the defendant of his rights to have his decision reviewed under the Administrative Decisions (Judicial Review) Act 1977. The commissioner also invited the defendant to submit any further information which he thought might assist his application for the remission. No further information was provided to the commissioner nor was an application for a judicial review initiated.
What I now have is a counterclaim effectively seeking a judicial review of the decision which was made by the commissioner which is outside the jurisdiction of this court. The defendant is not, however, troubled by the want of jurisdiction in the sense he considers it appropriate for the matter to be transferred to the Supreme Court and dealt with there. The transfer to the Supreme Court is not automatic. It is a discretionary matter and there are many instances within this court where such applications have been refused. The defendant therefore has to overcome two hurdles. The first is whether or not his proposed attack on the decision to refuse the remission has any merit and, secondly, whether or not a transfer to the Supreme Court of Western Australia is likely to be entertained.
On the first point I consider that the application for a remission lodged by the defendant was inadequate in many respects which I have identified and those inadequacies made a response other than that which was given by the commissioner difficult to envisage. In regard to the likelihood of achieving a transfer to the Supreme Court of Western Australia, I think the fact that this issue was raised less than 24 hours before the hearing of the summary judgment application would weigh heavily against the likelihood of any transfer to the Supreme Court. In short, I consider that the propositions advanced in the counterclaim lack merit and the circumstances in which that counterclaim was lodged are clouded with suspicion. Furthermore, the attitude of the defendant in his defence material in which he appears to make it a precondition of paying the primary debt that the general interest charge first be remitted suggests an attitude which I think would poison his chances of success. In short therefore, I think that the proposed defences lack all merit, the plaintiff's case is substantiated not only in respect of the primary tax debt but also in respect of the general interest charge by virtue of the documentation filed and, accordingly, there will be judgment in the amount claimed by the plaintiff against the defendant including the general interest charge.
As to the application for the stay, the inconsistencies in the asset position disclosed in the materials filed on behalf of the defendant weigh against such a stay being granted. Additionally, there is no reason the application for finance could not have been lodged earlier and finally, I consider the conduct of the defendant in regard to this issue, and generally, as unsatisfactory. The application for a stay will be dismissed.
I certify that the preceding paragraph(s) comprise the reasons for decision of the District Court of Western Australia.
JC
REGISTRAR'S ASSOCIATE
1 MAY 2018