Deputy Commissioner of Taxation v Quach
[2020] WASC 291
•7 AUGUST 2020
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
CITATION: DEPUTY COMMISSIONER OF TAXATION -v- QUACH [2020] WASC 291
CORAM: ACTING MASTER STRK
HEARD: ON THE PAPERS
DELIVERED : 7 AUGUST 2020
FILE NO/S: CIV 1565 of 2020
BETWEEN: DEPUTY COMMISSIONER OF TAXATION
Plaintiff
AND
QUAN LONG QUACH
Defendant
Catchwords:
Practice and procedure - Application for summary judgment - Turns on own facts
Legislation:
Income Tax Assessment Act 1936 (Cth)
Income Tax Assessment Act 1997 (Cth)
Rules of the Supreme Court 1971 (WA)
Taxation Administration Act 1953 (Cth)
Treasury Laws Amendment (2019 Measures No 2) Act 2020 (Cth)
Result:
Judgment for the plaintiff
Category: B
Representation:
Counsel:
| Plaintiff | : | No appearance |
| Defendant | : | No appearance |
Solicitors:
| Plaintiff | : | Australian Taxation Office - Legal Services Branch |
| Defendant | : | Diana Velevski |
Case(s) referred to in decision(s):
Commissioner of Taxation v Futuris Corporation Limited (2008) 237 CLR 146
Deputy Commissioner of Taxation of Australia v Lewer [2001] VSC 114
Deputy Commissioner of Taxation v Broadbeach Properties Pty Ltd (2008) 237 CLR 473
Deputy Commissioner of Taxation v Epov [2008] NSWSC 1085
Deputy Commissioner of Taxation v Todisco (2004) 55 ATR 234; [2004] VSC 93
FJ Bloemen Pty Ltd v Federal Commissioner of Taxation (1981) 147 CLR 360
Kolichis v Deputy Commissioner of Taxation [2014] WASCA 76
ACTING MASTER STRK:
An application is made by the plaintiff, the Deputy Commissioner of Taxation, for judgment to be entered against the defendant pursuant to the Rules of the Supreme Court 1971 (WA) (RSC) O 14 r 1. The plaintiff seeks judgment as against the defendant in relation to alleged tax related liabilities, together with an order for costs.
Background
A writ of summons with a statement of claim was issued by the court on 13 May 2020. An appearance was filed on behalf of the defendant on 19 May 2020. The defendant is represented by a solicitor in the action.
The action was listed before a registrar for a first case management conference on 18 June 2020. By the consent of the parties, on 11 June 2020, the case management conference was vacated and it was ordered that the defendant file and serve a defence on or before 18 June 2020; and that the plaintiff have leave to file and serve any application for summary judgment on or before 1 July 2020. No defence was filed on behalf of the defendant and on 1 July 2020, the plaintiff filed an application for summary judgment.
The application for summary judgment was listed in Master's chambers on 28 July 2020. Without prior notice to the court, despite the solicitor remaining on the record for the defendant in the proceeding, there was no appearance on behalf of the defendant. Counsel for the plaintiff informed the court that he had received notice that the defendant's solicitor did not intend to appear. Counsel for the plaintiff pressed that judgment be entered against the defendant pursuant to the RSC O 14 r 1.
At the hearing, I resolved to determine the application on the papers filed, and to give the defendant notice of the same. I made orders in those terms and reserved the costs of the appearance on 28 July 2020. A copy of the orders made on 28 July 2020 was sent to the solicitor for the defendant. No correspondence has since been received on behalf of the defendant and no materials were filed on behalf of the defendant in opposition to the application.
Documents filed by the plaintiff in support of the application
The following documents were filed in support of the application for summary judgment on 1 July 2020:
(a)a memorandum of conferral; and
(b)the affidavit of Nadia Nakhla, an Australian Public Service officer in the Australian Taxation Office (the Nakhla affidavit).
The memorandum of conferral was filed pursuant to the RSC O 59 r 9(1). By that memorandum, the plaintiff's solicitor certified that the parties had conferred or attempted to confer by telephone, in writing, by letter and by email about the issues giving rise to the application made by the plaintiff for summary judgment, but had not resolved them.
On 21 July 2020, the plaintiff filed the affidavit of Venus Shakuntala Lakshman, an Australian Public Service officer in the Australian Taxation Office (the Lakshman affidavit). The plaintiff seeks to rely on the Lakshman affidavit to supplement the Nakhla affidavit.[1] On the same date, the plaintiff also filed a written outline of submissions and list of authorities in support of the application for summary judgment.
[1] Plaintiff’s submissions filed 21 July 2020 par 7.
On 23 July 2020, the plaintiff filed the affidavit of Dino Todorov, an Australian Public Service officer in the Australian Taxation Office. In his affidavit, Mr Todorov deposed to having served on the defendant's solicitor a copy of the application for summary judgment together with all of the supporting documents.
Leave
An application for summary judgment must be made within 21 days after appearance, or at any later time by leave of the court.[2] The plaintiff's application was made outside of the prescribed period. However, by the orders made by the consent of the parties on 11 June 2020, leave was granted to the plaintiff to bring the application on or before 1 July 2020, and the application was made in the period for which leave had been secured.
[2] RSC O 14 r 1(1).
The plaintiff's claim
The plaintiff contends that an amount of a 'tax‑related liability' that is a debt due and payable is a debt due to the Commonwealth of Australia and is payable to the Commissioner of Taxation. The plaintiff is a Deputy Commission of Taxation and says that in her official name, she is entitled to sue to recover debts due to the Commonwealth of Australia and payable to the Commissioner of Taxation pursuant to the Taxation Administration Act 1953 (Cth) subsection 255‑5(2) of sch 1.
By the proceeding, the plaintiff seeks to recover from the defendant 'tax‑related liability', in particular, income tax; failure to lodge on time penalties; excess superannuation contributions tax; and general interest charges pursuant to the Income Tax Assessment Act 1936 (Cth), the Income Tax Assessment Act 1997 (Cth), and the Taxation Administration Act.
Amounts payable in respect of income tax
The plaintiff pleads and particularises in the statement of claim the income tax liabilities claimed to be due and owing by the defendant to the Commonwealth.[3]
[3] Statement of claim par 2 – 7.
The plaintiff pleads that the defendant was assessed to pay income tax for the years of income ended 30 June 2015 and 30 June 2016 (defined in the statement of claim as the Relevant Periods); notices of assessment in respect of the Relevant Periods were served on the defendant; income tax for the Relevant Periods became due and payable pursuant to the Income Tax Assessment Act 1997 s 5‑5 on 23 November 2015 and 21 November 2016, respectively; and the defendant failed to pay income tax for the Relevant Periods on or before the relevant due dates.
The plaintiff pleads that by reason of the failure to pay income tax by the relevant due dates the defendant became liable to pay the general interest charge pursuant to the Income Tax Assessment Act 1997 s 5‑15 and the Taxation Administration Act pt IIA; and the defendant is indebted to the Commonwealth in the sum of $838,504.43, in respect of income tax and additional charges for late payment.
Failure to lodge on time penalties
The plaintiff pleads and particularises in the statement of claim the amounts claimed to be due and payable by the defendant to the Commonwealth as penalties for the failure to lodge on time income tax returns.[4]
[4] Statement of claim par 8 - 15.
The plaintiff contends that the defendant failed to give to the Commissioner returns of income tax for the income years ended 30 June 2015 and 30 June 2016 on or before the day on which the returns were required to be given to the Commissioner pursuant to the Income Tax Assessment Act 1936 s 161(1); and by reason of the failure to give to the Commissioner the returns by the relevant due dates, the defendant became liable to pay penalties pursuant to the Taxation Administration Act s 286-75 in sch 1.
The plaintiff says that the Commissioner gave written notices of the failure to lodge penalties to the defendant in accordance with the Taxation Administration Act s 298‑10 in sch 1; and the failure to lodge penalties became due and payable on 14 March 2017 and 28 March 2017, respectively.
The plaintiff says that the defendant failed to pay the failure to lodge penalties on or before the relevant due dates, and by reason of the same, the defendant became liable to pay the general interest charge pursuant to the Taxation Administration Act s 298‑25 in sch 1 and pt IIA.
The plaintiff pleads that the defendant is indebted to the Commonwealth in the sum of $2,361.80, in respect of failure to lodge penalties and the general interest charge.
Excess superannuation contributions tax & general interest charge
The plaintiff pleads and particularises in the statement of claim the excess superannuation contributions tax (described as the Div 293 tax), claimed to be due and payable by the defendant to the Commonwealth.[5]
[5] Statement of claim par 18 - 21.
The plaintiff pleads that the defendant was assessed pursuant to the Income Tax Assessment Act 1997 s 293‑15 and the Taxation Administration Act div 155 in sch 1, to pay Div 293 tax in relation to the defendant's 'taxable contributions', within the meaning provided by the Income Tax Assessment Act 1997 s 293‑20, for the years of income ended 30 June 2014 and 30 June 2015 (defined in the pleading as the Relevant Period).
The plaintiff contends that notices of assessment in respect of the Relevant Period were served on the defendant and the Div 293 tax for the Relevant Period became due and payable pursuant to the Income Tax Assessment Act 1997 s 293‑C on 10 April 2017 and 27 March 2017, respectively.
The plaintiff says that the defendant failed to pay the Div 293 tax for the Relevant Period on or before the relevant due dates; and by reason of the failure to pay the Div 293 tax by the relevant due dates the defendant became liable to pay the general interest charge pursuant to the Income Tax Assessment Act 1997 s 293‑75 and the Taxation Administration Act pt IIA.
The plaintiff pleads that the defendant is indebted to the Commonwealth in the sum of $1,147.34, in respect of the Div 293 tax and the general interest charge.
Relief sought
In the statement of claim, the plaintiff presses for judgment in the amount of $842,013.57, which the plaintiff says is due and unpaid together with:
(a)further general interest charge pursuant to the Income Tax Assessment Act 1997 s 5‑15 and the Tax Administration Act pt IIA, calculated upon an amount or amounts and for a period or periods, at the rates prescribed in the Tax Administration Act to payment;
(b) further general interest charge pursuant to the Tax Administration Act s 298‑25 in sch 1 and the Tax Administration Act pt IIA calculated upon an amount or amounts and for a period or periods, and at the rates prescribed in the Tax Administration Act to payment;
(c) further general interest charge pursuant to the Income Tax Assessment Act 1997 s 293‑75 and the Tax Administration Act pt IIA, calculated upon an amount or amounts and for a period or periods, at the rates prescribed in the Tax Administration Act to payment; and
(d) costs.
Prima facie case established
By the Nakhla affidavit, the plaintiff verifies the facts on which the plaintiff's claim is based. Further, Ms Nakhla deposed to her belief that the defendant has no defence to the plaintiff's claim, or any part thereof.[6]
[6] Nakhla affidavit [31].
At par 28 of the Nakhla affidavit, Ms Nakhla deposed that as at 1 July 2020, the total amount of $850,953.99 was and continued to be a debt due and payable by the defendant to the plaintiff. Annexed to the Nakhla affidavit at 'NN‑7' was an evidentiary certificate made by the plaintiff pursuant to the Taxation Administration Act s 255‑45 of sch 1, in respect of the amounts claimed by the plaintiff against the defendant. However, the plaintiff no longer relies on the evidentiary certificate annexed to the Nakhla affidavit.
By her affidavit, Ms Lakshman deposed that as at 21 July 2020, the total amount of $854,261.57 was and continues to be a debt due and payable by the defendant to the plaintiff as claimed in the plaintiff's statement of claim, being the amount described at in the Nakhla affidavit at par 28, plus general interest charges calculated up to and including 20 July 2020.[7]
[7] Lakshman affidavit [9].
Annexed to the Lakshman affidavit are three evidentiary certificates made by the plaintiff pursuant to the Taxation Administration Act s 350‑10(3) and s 350-12(2) of sch 1, and sought to be relied upon in this action. The first is an evidentiary certificate in respect of the defendant's liability to pay income tax.[8] The second is an evidentiary certificate in respect of the defendant's liability to pay failure to lodge penalties.[9] The third is an evidentiary certificate in respect of the defendant's liability to pay Div 293 tax.[10]
[8] Lakshman affidavit 'VSL-1'.
[9] Lakshman affidavit 'VSL-2'.
[10] Lakshman affidavit 'VSL-3'.
In her affidavit, Ms Lakshman also deposed to her belief that the defendant has no defence to the plaintiff's claim, or any part thereof.[11]
Evidentiary certificates relied upon by the plaintiff
[11] Lakshman affidavit [14].
The evidentiary certificate annexed to the Nakhla affidavit was made pursuant to the Tax Administration Act s 255-45 of sch 1. The plaintiff notes that effective 1 July 2020, s 255‑45 of sch 1 was repealed and wholly replaced in substantively identical terms with s 350‑10(3) and s 350‑12(2) of sch 1 to the Taxation Administration Act.[12]
[12] By the enactment of the Treasury Laws Amendment (2019 Measures No. 3) Act 2020 (Cth).
The plaintiff contends that the three evidentiary certificates annexed to the Lakshman affidavit, made pursuant to s 350‑10(3) and s 350‑12(2) of sch 1 to the Taxation Administration Act, are prima facie evidence that as at 21 July 2020, the amount of $854,261.57 was a debt due and payable by the defendant to the plaintiff in respect of the claimed tax‑related liabilities.[13]
[13] Plaintiff’s submissions filed 21 July 2020 par 16.
I accept the plaintiff’s submission that the decisions concerning s 255-45 of sch 1, as it had stood, in respect of the applicability of that provision are instructive as to the proper interpretation of the scope and force of the replacement provisions.
It was accepted in the earlier decisions that the Deputy Commissioner of Taxation enjoyed a number of procedural advantages over ordinary litigants conferred upon the Deputy Commissioner by legislation.[14] A certificate made by a plaintiff pursuant to the Tax Administration Act s 255-45 of sch 1 was accepted to be prima facie proof of the matters to which it addressed, including matters relating to the service of assessments, the quantum of assessments and the total amount owing, and it could not be overcome by mere assertions. In the absence of proof to the contrary, it was accepted that a certificate made by a plaintiff pursuant to the Tax Administration Act s 255-45 of sch 1 ought to have been accepted by the court.[15]
[14] Deputy Commissioner of Taxation of Australia v Lewer [2001] VSC 114 [6].
[15] Deputy Commissioner of Taxation v Broadbeach Properties Pty Ltd (2008) 237 CLR 473 [38]; Deputy Commissioner of Taxation of Australiav Lewer [6]; Deputy Commissioner of Taxation v Todisco (2004) 55 ATR 234; [2004] VSC 93 [6], [13], [18]; and Deputy Commissioner of Taxation v Epov [2008] NSWSC 1085 [32], as cited in the plaintiff’s submissions filed 21 July 2020 at par 13 ft 5.
The plaintiff also referred to the Court of Appeal decision of Kolichis v Deputy Commissioner of Taxation,[16] where at [23], Murphy JA, Beech J and Martin CJ jointly held that the Court '…would accept that for the purposes of O 14 r 2(1), the Commissioner's claim was sufficiently verified by deposing to and annexing a true copy of the s 255‑45 certificate…'.
[16] Kolichis v Deputy Commissioner of Taxation [2014] WASCA 76 [23].
The plaintiff has filed and served the Lakshman affidavit to supplement the Nakhla affidavit by annexing at annexures 'VSL-1' to 'VSL-3', being evidentiary certificates made pursuant to s 350‑10(3) and s 350‑12(2) of Sch 1 to the Taxation Administration Act. The plaintiff seeks leave to rely on the Lakshman affidavit and those annexures.
I accept that for the purposes of the plaintiff’s application for summary judgment, the certificates are prima facie evidence that as at 21 July 2020, the amount of $854,261.57 was a debt due and payable by the defendant to the plaintiff in respect of the claimed tax related liabilities.
The notices of assessment
In addition to the prima facie evidentiary provisions, the plaintiff also relies on the conclusive evidence provision in the Taxation Administration Act s 350‑10(1) item 2 of sch 1.
Pursuant to that provision, the production of a notice of assessment is conclusive evidence that the assessment is properly made and, except in proceedings under the Taxation Administration Act pt IVC, that the amounts and particulars of the assessment are correct.[17]
[17] FJ Bloemen Pty Ltd v Federal Commissioner of Taxation (1981) 147 CLR 360, 375; Commissioner of Taxation v Futuris Corporation Limited (2008) 237 CLR 146, 166 [64], [65]; Deputy Commissioner of Taxation v Broadbeach Properties Pty Ltd [40] – [45], which decisions concerned the correctness of an assessment produced in accordance with the Income Tax Assessment Act 1936 s177, the predecessor of s 350-10. See the plaintiff’s submissions filed 21 July 2020 par 19 ft 8.
Annexed to the Nakhla affidavit and marked 'NN‑2' and 'NN‑3' are income tax notices of assessment for the years of income ended 30 June 2015 and 30 June 2016. Annexed to the Nakhla affidavit and marked 'NN‑5' and 'NN‑6' are Div 293 tax notices of assessment for the years ended 30 June 2014 and 30 June 2015.
Disposition
I am satisfied that the plaintiff has satisfied the preconditions for exercise of the power to order summary judgment and has established a prima facie entitlement to judgment. The affidavits relied upon do verify the essential elements of the cause of action on which the application for summary judgment is based.
An evidential burden is then cast on the defendant to show why judgment ought not to be given for the plaintiff. As noted above, no materials were filed on behalf of the defendant in opposition to the application. The defendant has failed to demonstrate that there is an arguable defence or other reason for trial. No other reason is evident on the material before me for there to be a trial of the action, and no proper basis upon which summary judgment should properly be refused.
Judgment and costs
In all of the circumstances, I am satisfied that the defendant has no defence to the claim and that the plaintiff is entitled to judgment. Judgment will be entered for the plaintiff against the defendant in the amount of $854,261.57. It is also appropriate that the plaintiff recover its costs of the application and the action, to be taxed if not agreed, including the costs of the appearance on 28 July 2020, which costs were reserved.
I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
MH
Associate to Acting Justice Strk7 AUGUST 2020
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