Deputy Commissioner of Taxation v Scott

[2014] QDC 215

[2014] QDC 215

DISTRICT COURT OF QUEENSLAND

CIVIL JURISDICTION

JUDGE RACKEMANN

No 4379 of 2012
DEPUTY COMMISSIONER OF TAXATION             Plaintiff
and
PETER DOUGLASS SCOTT  Defendant

No 4380 of 2012
DEPUTY COMMISSIONER OF TAXATION             Plaintiff
and
CATHERINE ANNE SCOTT  Defendant

BRISBANE

9.41 AM, THURSDAY, 11 SEPTEMBER 2014

JUDGMENT

CATCHWORDS: 

PRACTICE AND PROCEDURE – summary judgment sought on part of claim – application to strike out counterclaims – claim based on RBA  tax liability – defence contains non-admissions – RBA statement and evidentiary certificates prima facie evidence – where more than 1 RBA statement – whether trial warranted

COUNSEL: 

SOLICITORS:

K Cameron (solicitor, Australian Taxation Office

 Dispute Resolution) for the plaintiff

C Coulsen for the defendants

Australian Taxation Office Dispute Resolution for the plaintiff

QBM Lawyers for the defendants

HIS HONOUR:   This is an application in each matter for summary judgment pursuant to rule 292 on part of the Plaintiff’s claim together with an order that the Defendants counterclaim in each case be struck out.  The Defendants are husband and wife, who conducted a business called All Type Secretarial as a partnership.  Part of the Plaintiff’s claim in each matter is for the running balance count deficit debt incurred through the partnership, along with consequential amounts of general interest charge, otherwise known as GIC.  It is that part of the claim which is the subject of the application for summary judgment.  The Plaintiff’s claim also relates to unpaid pay as you go withholding where a director penalty notice has been issued, but no summary determination of that part of the claim is sought.

Pursuant to section 8AAZH(1) of the Tax Administration Act 1953, if there is an RBA deficit debt on an RBA, at the end of the day the tax debtor is liable to pay the Commonwealth the amount of the debt.  The amount is due and payable at the end of that day.  The primary tax liabilities in the RBA upon which the Plaintiff relies were self-assessed amounts.  By the respective notices of intention to defend, which were formulated at a time when they were self-represented, the Defendants in each case raised no positive defences but relied on non-admissions in relation to the RBA liabilities. 

The Plaintiff’s material in support of the applications included an RBA statement in the trading name.  Pursuant to section 8AAZI of the Tax Administration Act, the production of an RBA statement is prima facie evidence that the RBA was duly kept and is prima facie evidence that the amounts and particulars in the statement are correct. The Plaintiff’s material also included an evidentiary certificate pursuant to section 8AAZJ, which provides prima facie evidence in relation to the RBA deficit debt and GIC. 

Upon the return of the application counsel for the Defendant pointed to the fact that the RBA upon which reliance was made was in the name of the trading name rather than the Defendants’ names and that the Plaintiff had not properly proved that that trading name was operated by the Defendants in partnership.  That was remedied by material which was filed by leave.  He also pointed out that the evidentiary certificate purported to relate to an RBA held in the name of each Defendant, whereas in fact, the RBA upon which reliance was placed was held in the name of the trading name.  That too was clarified by further affidavit material.

One matter raised on behalf of the female Defendant concerned an amount of $14,300.  That amount was, however, applied to the Defendant’s director penalty liabilities for unpaid PAYGW liabilities collected by a company of which the Defendant was a director.  Those payments have not affected the claimed debt as they were applied to the debts not related to the Plaintiff’s claim for which summary judgment is being sought. 

Counsel for the Defendant then pointed to the documentation which proved the partnership as operating the business.  It contained a note as to when the registration for GST purposes ceased.  He pointed to some apparent anomalies in the dates of the entries within the RBA statement upon which the Plaintiff was relying.  I adjourned the hearing to today to enable that to be investigated.  Upon the matter coming back before me, the Plaintiff relied upon an affidavit of Michael O’Neil, which satisfactorily deals with that, and no point was taken about that by the Defendant when the matter resumed.

The affidavit of Mr O’Neil explains that an RBA was established for the BAS liabilities of the partnership, that on or about the 11^th of October 2010 the Plaintiff transferred the liabilities the subject of the partnership’s RBA into a legal account to commence litigation against the Defendants for the unpaid RBA deficit debt.  The transfer was for the purpose of quarantining the RBA primary tax debts the subject of the claim so that new primary tax debts could not be added to the claimed amount.  Only GIC continued to increase the balance of the legal RBA.  On the 8^th of June 2012 the claim filed by the Plaintiff in respect of that debt was discontinued.  On the 23^rd of June 2012 the Plaintiff again transferred all of the partnership’s RBA deficit debt back into the normal RBA account to commence the present claim. 

That explanation led the Defendants to call for a copy of that other RBA account statement.  That was produced last night and is exhibit 1.  It is an RBA account in the name of “P.D. and C.A. Scott” and shows a nil balance, consistently with the explanation given by Mr O’Neil.  It was pointed out, by counsel for the Defendants, that in the particulars of the amended statement of claim the RBA deficit debt is particularised in each case as “for the Defendant as a partner of the partnership of P.D. and C.A. Scott as at 1 November 2012”.  It was submitted that that would point to the relevant RBA being exhibit 1, rather than one that is relied upon to establish the debt which is sued upon and for which summary judgment is sought.  I gave the Plaintiff instanter leave to amend the particulars. 

The Defendant’s counsel then asserted that summary judgment should be denied because, there being these two RBA statements, there should be a trial to examine the way that they were dealt with. In my view, a trial is not warranted in the circumstances.  It is, on the material, clear that the RBA statement upon which the Plaintiff relies relates to an RBA account, which raises a liability.  The statement before me is prima facie evidence, and now that the particulars have been corrected there can be no doubt about which RBA statement is being sued upon.  As I have already noted, the only defence was one of non-admissions.  The material as it stands is sufficient, in my view, to grant summary judgment, rather than requiring the matter to go to trial. 

Insofar as the counter-claims are concerned, aside from the issue relating to the amount of $14,030 concerning the female Defendant, with which I have already dealt, the counter-claims make allegations relating to the Plaintiff’s actions concerning the winding up of a certain company.  They also refer to an alleged agreement for a reduction of the GIC by $222,000.  For the reasons set out in the Plaintiff’s outline of submissions there is nothing in those allegations.  Counsel for the Defendant made no submission in response to the application to strike out the counter-claims.  I am satisfied it is appropriate to do so. 

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