Deputy Commissioner of Taxation v Raskovic
[2009] NSWSC 281
•20 April 2009
Reported Decision:
75 ATR 359
New South Wales
Supreme Court
CITATION: Deputy Commissioner of Taxation v Raskovic [2009] NSWSC 281 HEARING DATE(S): 9 April 2009
JUDGMENT DATE :
20 April 2009JUDGMENT OF: Schmidt AJ DECISION: 1. Judgment be entered in favour of the plaintiff in the sum of $739,297.80.
2. The defendant is to pay the plaintiff’s costs of the proceedings, as agreed or assessed.CATCHWORDS: TAXES AND DUTIES - income tax and related legislation - collection and recovery of tax - unpaid income and other tax - failure to lodge tax returns - penalties - no appearance by defendant - attempts at service - order under Rule 10.14 of the Uniform Civil Procedure Rules 2005 - s.255-45 Schedule 1 of the Taxation Administration Act 1953 (Cth) - prima facie case - judgment in favour of plaintiff - costs LEGISLATION CITED: Civil Procedure Act 2005
Income Tax Assessment Act 1936 (Cth)
Taxation Administration Act 1953 (Cth)
Uniform Civil Procedure Rules 2005CATEGORY: Principal judgment CASES CITED: Deputy Commissioner of Taxation v Broadbeach Properties Pty Ltd [2008] HCA 41
Deputy Commissioner of Taxation v Lewer [2001] VSC 114PARTIES: Deputy Commissioner of Taxation - Plaintiff
Lubo Jack Raskovic - DefendantFILE NUMBER(S): SC 15682/07 COUNSEL: Mr D Liebhold, counsel - Plaintiff
No appearance by DefendantSOLICITORS: ATO Legal Services Branch - Plaintiff
SCHMIDT AJIN THE SUPREME COURT
OF NEW SOUTH WALES
COMMON LAW DIVISION
Monday, 20 April 2009
JUDGMENT15682/08 DEPUTY COMMISSIONER OF TAXATION v LUBO JACK RASKOVIC
1 HER HONOUR: These proceedings were commenced by statement of claim in November 2007. They concern unpaid income tax for the years ending 30 June 2000, 2001, 2002, 2003 and 2004 and primary tax due under the Business Activity Statement ('BAS') provisions of the Income Tax Assessment Act 1936 (Cth); as well as director penalties in relation to failures in respect of moneys withheld by Site Workforce Pty Ltd, and penalties flowing in relation to failure to lodge tax returns for the years ending 30 June 2002, 2003 and 2004, in accordance with the Taxation Administration Act 1953 (Cth). The total sum claimed was $776,450.24, plus interest and costs.
2 A defence was filed by the defendant in December 2007, in which various matters were raised, including a claim that certain notices relied on had not been served, so that penalties claimed were not due and that an agreement had been made by Site Workforce Pty Ltd with the Commissioner of Taxation under s 222ALA of the Income Tax Assessment Act. Certain amounts claimed by the plaintiff were also disputed and liability for the sums claimed was denied or not admitted, the defendant claiming that he had taken all reasonable steps to ensure that s 222AOB of the Income Tax Assessment Act had been complied with.
3 A notice of ceasing to act was filed by the defendant’s solicitor in August 2008. There has since been no appearance for the defendant. There was evidence that the statement of claim was served personally on the defendant in 2007. The plaintiff’s evidence in chief was served on the defendant’s solicitors in August 2008, before they ceased acting. The defendant has not maintained an address for service on the Court file and correspondence sent to him at his last known address has been returned. In September 2008, the plaintiff filed a motion seeking orders striking out the defence and for judgment to be given in its favour, together with supporting affidavits.
4 The matter has been repeatedly before the Court since August 2008. There has been no appearance for the defendant on any of those occasions.
Service
5 There was evidence of considerable effort made by the plaintiff to locate the defendant after his solicitors ceased acting, in order to serve documents in the proceedings upon him personally and to inform him of the Court’s directions and orders. Those efforts all failed. For abundant caution, at the hearing the plaintiff sought an order under Rule 10.14(3) of the Uniform Civil Procedure Rules 2005 ('the Rules'). The Rule provides:
- 10.14 Substituted and informal service generally
- (cf SCR Part 9, rules 10 and 11; DCR Part 8, rules 5 and 16; LCR Part 7, rules 5 and 16)
- (a) cannot practicably be served on the person, or
(b) cannot practicably be served on the person in the manner provided by law,
the court may, by order, direct that, instead of service, such steps be taken as are specified in the order for the purpose of bringing the document to the notice of the person concerned.
(3) If steps have been taken, otherwise than under an order under this rule, for the purpose of bringing the document to the notice of the person concerned, the court may, by order, direct that the document be taken to have been served on that person on a date specified in the order.
(4) Service in accordance with this rule is taken to constitute personal service.
6 That application must be approached consistently with the requirements of the Civil Procedure Act 2005. I am satisfied, having in mind that statutory scheme, especially what is required by s 56 as to the overriding purpose of the Act, namely the just, quick and cheap resolution of the real issues in the proceedings, that the order should be made. The requirements of ss 57, 58, 59 and 60 of that Act must also be borne in mind. They all point to the conclusion that justice requires that in the circumstances here before the Court, the order sought should be made.
7 That conclusion has particular regard to the fact that some of the documents which the plaintiff attempted to serve on the defendant were a motion and affidavits, as to which the Rules provide:
10.1 Service of filed documents
- (cf SCR Part 15, rule 28)
(1) Unless the court orders otherwise, a party that files a document must as soon as practicable serve copies of the document on each other active party.
10.2 Service of affidavits(2) ...
- (cf SCR Part 38, rule 7; DCR Part 30, rule 7; LCR Part 25, rule 7)
(2) A party who fails to serve an affidavit as required by subrule (1) may not use the affidavit except by leave of the court.
(1) A party intending to use an affidavit that has not been filed must serve it on each other interested party not later than a reasonable time before the occasion for using it arises.
8 There is some question as to whether the defendant may any longer be considered to be an 'active party' in the proceedings, that term being defined in the Dictionary to the Rules as:
- active party , in relation to any proceedings, means a party who has an address for service in the proceedings, other than:
(a) a party against whom judgment has been entered in the proceedings, or
(b) a party in respect of whom the proceedings have been dismissed, withdrawn or discontinued,
being, in either case, a party against whom no further claim in the proceedings subsists.
9 Rule 4.6 contemplates that the defendant should have put on a new address for service, after his solicitor ceased to act. That did not occur. The advice given by the solicitor as to the defendant’s last known address is not one where contact has been able to be made with the defendant. In any event, even if not active, Rule 10.2 contemplates that the affidavits on which the plaintiff sought to rely at the hearing had to be served on the defendant, who, despite his inactivity, appears to remain an ‘interested party’ in the proceedings, even if not an active one. That is a term which is not defined in the Rules.
10 Given the circumstances, it would not be just to preclude the plaintiff from relying on evidence relevant to its claims, which could not be served on the defendant because of the defendant’s failure to put on a current address for service. Given the plaintiff's extensive efforts to locate the defendant, so that documents and correspondence could be served upon him, I am satisfied that it is just to make the order pressed as to the attempted service.
11 Accordingly, I order that as a result of the steps taken by the plaintiff in September, October and November 2008 to effect service of various documents on the defendant, as described in exhibit 3, the affidavit of Ms Marion McGuire, an officer employed in the Australian Taxation office, and the further steps taken in January, February and March 2009, as described in exhibit 2, the affidavit of Mr Frank Hoare, a licensed process server, the documents there described, which were sought to be served by the plaintiff, will be taken as having been served on the dates specified in the respective affidavits as the dates on which service was attempted, either personally or by post.
The orders sought
12 At the hearing the plaintiff pressed for judgment in its favour, relying on evidence as to the history of the proceedings, the attempts made to locate the defendant, to advise him of the plaintiff’s intention to seek judgment against him in the proceedings and the basis of the claimed debts.
13 The plaintiff relied on a number of certificates issued under s 255-45 of Schedule 1 of the Taxation Administration Act, to show that the defendant’s total indebtedness to the plaintiff in respect of the matters pursued in these proceedings is $739,297.80. Section 255-45 provides:
(1) A certificate:
255-45 Evidentiary certificate
(b) signed by the Commissioner, a Second Commissioner or a Deputy Commissioner;(a) stating one or more of the matters covered by subsection (2) or (3); and
- is prima facie evidence of the matter or matters in a proceeding to recover an amount of a tax-related liability.
(2) A certificate may state:
(a) that a person named in the certificate has a tax-related liability; or
(b) that an assessment relating to a tax-related liability has been made, or is taken to have been made, under a taxation law; or
(c) that notice of an assessment, or any other notice required to be served on a person in respect of an amount of a tax-related liability, was, or is taken to have been, served on the person under a taxation law; 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.(d) that the particulars of a notice covered by paragraph (c) are as stated in the certificate; or
(3) A certificate may state:
(a) that a foreign revenue claim for an amount specified in the certificate has been made by the competent authority under the relevant international agreement; or
(b) that the relevant requirements of the relevant international agreement have been complied with in relation to the foreign revenue claim; or
(c) that the claim was registered under Division 263 on the date specified in the certificate; or
(e) that the particulars of any reduction or discharge of an amount to be recovered under the claim are as specified in the certificate.(d) that, as at the date of the certificate, the Commissioner has or has not received advice from the competent authority under the relevant international agreement about the reduction or discharge of an amount to be recovered under the claim; or
14 Exhibit 4, an affidavit of Ms Sandra Meyer, an officer employed in the Australian Taxation Office, explained the paper file and computer records maintained by the plaintiff, which include a Receivables Management System ('RMS') in relation to taxpayers’ accounts, including those of the defendant and the company Site Workforce Pty Limited.
15 Ms Meyer also explained that the RMS system records taxpayers’ liabilities, payments and credits by reference to tax file numbers. A report from the RMS system as at 7 April 2009 in relation to the defendant’s account, so far as it related to the plaintiff’s claim for income tax, failure to lodge on time penalties and general interest charged to the defendant, was in evidence. The record showed that an amount of $10,417.13 was outstanding. Certificates issued under s 255-45 of Schedule 1 of the Taxation Administration Act in relation to the income tax debt (of $7,584.67) and the administrative penalty tax debt (of $2,832.51), were also in evidence.
16 A report from the RMS system in relation to the defendant’s director penalty liabilities in relation to Site Workforce Pty Ltd as at 7 April 2009 was also in evidence. The record showed credits totalling $8,732.80 applied to director liabilities, with the result that an amount of $636,792.40 was outstanding. Certificates issued under s 255-45 of Schedule 1 of the Taxation Administration Act in relation to this amount, of $89,255.40 and $547,537.00 respectively, was also in evidence.
17 A report from the RMS system as at 7 April 2009 in relation to the defendant’s running balance account deficit debt was also in evidence. This showed an amount of $92,088.27 outstanding. A certificate issued under s 8AAZJ of the Taxation Administration Act was also in evidence. Section 8AAZJ provides:
- Evidentiary certificate about RBA transactions etc.
(1) In proceedings for recovery of an RBA deficit debt, a Commissioner's certificate stating any of the following matters in respect of a specified RBA is prima facie evidence of those matters:
- (a) that no tax debts (other than general interest charge on the RBA deficit debt) were allocated to the RBA after the balance date shown on a specified RBA statement for the RBA;
(b) that general interest charge is payable on the RBA deficit debt, as specified in the certificate;
(c) that payments and credits were allocated to the RBA, as specified in the certificate;
(d) that a specified amount was the RBA deficit debt on the date of the certificate.
- "Commissioner's certificate" means a certificate signed by the Commissioner or a delegate of the Commissioner, or by a Second Commissioner or Deputy Commissioner.
18 There was a further affidavit sworn by Ms Meyer in which she deposed that no payments had been made, or credits applied in reduction of the defendant’s debts, as at 9 April 2009.
19 The plaintiff relied on the prima facie evidence of the defendant’s unpaid debt. It did not press for orders striking out the defence, submitting rather that even if the defence was arguable, there was no evidence of any of the matters there raised. On the evidence before the Court it was entitled to judgment in its favour.
Consideration
20 The defendant has not appeared to resist the orders sought against him, or to advance his defence of the plaintiff’s claims. The plaintiff’s evidence in chief was served on his solicitors on 4 August 2008. Since 19 August 2008, when his solicitors filed a notice of ceasing to act, the matter has been before the Court on 3 and 17 September, 13 and 27 November and 8 December 2008. There was no appearance for or by the defendant on any of these occasions, nor did he appear at the hearing. The defendant has not been in contact with the plaintiff. He has taken no steps to maintain a current address for service on the Court file.
21 It may not be overlooked that since August 2008 the defendant has failed to take any steps to pursue his defence, to comply with the Court’s directions, or to take any active part in the proceedings. The matter has come before the Court repeatedly, with no appearance for the defendant. All attempts to contact him have failed, so that that he could be informed that the plaintiff would press for judgment against him and that the updated information contained in Ms Meyer’s affidavits as to the debt outstanding to the plaintiff could be served upon him. The earlier evidence as to that debt was served on the defendant before his solicitors ceased acting.
22 Even if the matters raised in the defence were arguable, the defendant has not taken available steps to defend the plaintiff's claims, even to appear before the Court, to pursue that defence. No evidence of the matters raised in the defence is before the Court. Certificates which evidence the defendant's debts to the plaintiff are in evidence. As the plaintiff submitted, under the statutory scheme, they establish a prima facie case which has not been challenged by the defendant. (See Deputy Commissioner of Taxation v Broadbeach Properties Pty Ltd [2008] HCA 41 at [38] and Deputy Commissioner of Taxation v Lewer [2001] VSC 114 at [6], where the procedural advantages which the legislative scheme confers on the plaintiff are discussed.)
23 It follows that the plaintiff has established an unchallenged evidentiary basis for the orders sought. The matter must be dealt with in accordance with the provisions of the Civil Procedure Act. Section 56 of that Act is concerned with the just, quick and cheap resolution of proceedings.
24 Section 59 is concerned with elimination of delay and s 60 with proportionality of costs. Consistently with these statutory dictates, in the circumstances, the plaintiff having established a prima facie basis for the orders sought, there is no just reason for these orders being refused.
25 Costs must follow the event in the usual way.
Orders
26 For the reasons given, the plaintiff’s application must succeed. I order that:
2. The defendant is to pay the plaintiff’s costs of the proceedings, as agreed or assessed.1. Judgment be entered in favour of the plaintiff in the sum of $739,297.80.
5