Deputy Commissioner of Taxation v Solway

[2010] QDC 336

[2010] QDC 336

DISTRICT COURT

CIVIL JURISDICTION

JUDGE ROBIN QC

No 117 of 2010

DEPUTY COMMISSIONER OF TAXATION	Plaintiff
and
BRIAN SOLWAY	Defendant

No 118 of 2010

DEPUTY COMMISSIONER OF TAXATION        Plaintiff

and

JOY SOLWAY  Defendant

BRISBANE

..DATE 20/08/2010

ORDER

CATCHWORDS

Income Tax Assessment Act 1936, s 222AOH Taxation Administration Act 1953, s 15(1)(b) Uniform Civil Procedure Rules, r 292

Applications for summary judgment in separate proceedings against directors of a company which failed to remit instalments of income tax withheld from employees' remuneration - adjournment granted at request of a solicitor brought in by defendants at the last minute - defences alleged "miscalculation" and "the debt as alleged is not owed" - no supporting evidence - solicitor sought time to obtain instructions that might show a defence - adjournment ordered defendants to pay indemnity costs (unlikely to be recoverable) - court concerned that separate proceedings not lead to double recovery

HIS HONOUR:  In each of these matters the court adjourns the
plaintiff's summary judgment application to the 3rd of September 2010.  It is further ordered in each that the
defendant file and serve on or before the 30th of August 2010
all evidence desired to be used at the hearing and notice of
any application to withdraw admissions in the defence.

It is ordered that each defendant pay the plaintiff's costs
occasioned by the adjournment to be assessed on the indemnity
basis.  That order in relation to costs may well prove empty.
The plaintiff is represented by Ms Scott pursuant to section
15(1)(b) of the Taxation Administration Act 1953. The relevant conditions, it is understood, preclude professional costs being obtained and the same situation is understood to apply to her instructor, Mr Bell.

The adjournment in each case is granted by the court with
considerable reluctance.  It seems virtually impossible to
imagine that anything by way of defence requiring
consideration at a trial will be forthcoming.  The plaintiff
comes to court with the benefit of the provisions in the
legislation designed to give conclusive effect to certificates
and the like.  As Ms Scott says, the claim in each case is
based on information submitted by the defendants' company to
the taxation office in relation to withholding of instalments
from employees’ remuneration.  Those instalments were to be
transmitted to the office – which, for all that appears, has simply not happened.

Although the defences in the two proceedings are identical and
contain much by way of admissions, each concludes with a
paragraph 4: "Generally and in answer to the Statement of
Claim the defendant says that sum claimed by the plaintiff is
miscalculated and the debt as alleged is not owed."  That is
totally uninformative and no answer to the plaintiff's claim
and summary judgment application which can only be
successfully resisted by presentation of evidence - and one
would think sworn evidence.

Ms Scott resists the granting of this adjournment which is
likely to prove pointless and result in irrecoverable costs
being suffered by the plaintiff.  It is the first request for
an adjournment and comes about in circumstances where
Mr Chand, solicitor, was engaged only at the last minute.
Shortly before the close of business yesterday he advised he
would be seeking an adjournment.  That was confirmed in
writing this morning.  He has been without benefit of access
to papers until this morning.

He foreshadows that upon taking instructions from the clients, it may be that he seeks to withdraw admissions or change his clients’ pleadings.  Something much more than a pleading is needed by way of defence if summary judgment is to be avoided. 

The defendants could have obtained the assistance of a solicitor much earlier. 

The ordinary approach of the court would be to indulge Mr Chand so that he has the opportunity which is sought of time to obtain instructions and see whether there is a case.

One should not beat about the bush, the whole point of this
adjournment is to allow investigation as to whether there is
anything that can be said against the applications for summary
judgment, nothing at all having been revealed so far which
might assist the defendants.

In the circumstances Ms Scott hasn't been prepared with
references to decisions by other Judges in similar
circumstances to refuse an adjournment.  Unsatisfactory as it
is, I think the right course is to grant an adjournment today.

I asked that the two matters be brought on together because of
concern that if proceedings against co-directors are separate there could perhaps be a double recovery.  Although the description of penalty is used in the legislation to describe the liability of the company directors, as the defendants have been, no more is sought to be achieved than the transmission to the tax office of amounts that have been withheld from employees' remuneration.  In a sense these aren't penalties at all.  There is no additional financial demand on directors.  If they were sued in a single proceeding it would be clear that their liability is joint and several.  I had proposed including in any judgment that the court might pronounce a reference to the other one and a stipulation that liability to the extent it overlapped was joint and several. 

The Solways appear to have been directors over different periods of time.  In those circumstances the alleged liability
of Mrs Solway wasn't there for so long, and is less in monetary terms than Mr Solway's. Ms Scott suggested the answer to my concern was in legislative provision that receipt of an amount of relevant contributions by a director was a discharge of the other(s), referring to section 222AOH of the Income Tax Assessment Act 1936 (which there is no need to consider today).

The last matter I wish to say something about concerns the
handling of documents in the registry.  In 1118 of 2010 the
notice of intention to defend came in on the 21st of May 2010
at 11.32 a.m.; it did not reach the file for recording as
document number 5 until after there had been accepted in the
registry on the 31st of May 2005 and recorded as documents
2, 3 and 4 on the file an affidavit of service of the claim, a
request for default judgment and an affidavit of Christian
Evans.  It is confusing to say the least to have documents out
of order on the file in this way.  It is plainly an issue for
the court and the registry, rather than the parties, and how this happened.  It confused me, for one.

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