Deputy Commissioner of Taxation v Tyrrell

[2015] WADC 105

JURISDICTION     :   DISTRICT COURT OF WESTERN AUSTRALIA

IN CIVIL

LOCATION:   PERTH

CITATION:   DEPUTY COMMISSIONER OF TAXATION -v- TYRRELL [2015] WADC 105

CORAM:   DEPUTY REGISTRAR KUBACZ

HEARD:   11 AUGUST 2015

DELIVERED          :   2 SEPTEMBER 2015

FILE NO/S:   CIV 258 of 2014

BETWEEN:   DEPUTY COMMISSIONER OF TAXATION

Plaintiff

AND

DARREN TYRRELL
Defendant

Catchwords:

Practice - Application for summary judgment - No new principles

Legislation:

Nil

Result:

Judgment given

Representation:

Counsel:

Plaintiff:     On the papers

Defendant:     On the papers

Solicitors:

Plaintiff:     Not applicable

Defendant:     Not applicable

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

Ansearch Ltd v Wavtech Pty Ltd [2006] WASC 184

Fancourt v Mercantile Credit Ltd (1983) 154 CLR 87

General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125

Jacka Nominees Pty Ltd v Edwards Karwacki Smith & Co Pty Ltd (Unreported, WASC, Library No 205691, 12 October 1992)

1. DEPUTY REGISTRAR KUBACZ: The plaintiff's application for summary judgment pursuant to O 14 of the Rules of the Supreme Court 1971 (RSC) came before Principal Registrar Melville on 11 August 2015 for hearing.  At that hearing, Principal Registrar Melville ordered that the plaintiff file written submissions and the application was to be dealt with on the papers.

2. The application was supported by an affidavit of Joanne Sue May Ding sworn 27 July 2015 and two affidavits of Santana Theofilopolous affirmed 20 July 2015 and 11 August 2015.

3. Submissions have now been filed.  I have had a chance to consider the submissions and provide written reasons herein.

4. The plaintiff brought proceedings on 30 January 2014 under the Income Tax Assessment Act 1936 (ITAA 1936), the Income Tax Assessment Act 1997 (ITAA 1997), in relation to a running balance account deficit debt and for failure to lodge an income tax return.

5. The plaintiff pleads that the defendant was assessed to pay income tax for the years ended 30 June 2010, 30 June 2011 and 30 June 2012 and that notices of assessment in respect of each period was served on the defendant in accordance with the ITAA 1936 and the Income Tax Regulations 1936 (the Regulations). Income tax then became due and payable pursuant to s 204 of the ITAA 1936 and s 5‑5 of the ITAA 1997 and the defendant failed to pay any of the amount due and owing on or before the due date. Given this the defendant became liable to pay the general interest charge pursuant to s 5‑15 of the ITAA 1997 and pt IIA of the Taxation Administration Act 1953 (TAA).

6. The plaintiff goes on to plead that he established a running balance account (RBA) in respect of primary tax debts due by the defendant under the BAS provisions and primary tax debts due by the defendant as administrative penalties.  From time to time, the balance of the RBA fell in arrears and the defendant then became liable to pay the general interest charge in relation to the deficit debt.

7. Finally, the plaintiff pleads that the defendant failed to lodge an income tax return for the year ended 30 June 2012 on or before its due date and therefore the defendant became liable to pay a penalty pursuant to s 286‑75 in sch 1 of the TAA. The defendant was notified of the penalty and failed to pay the penalty on or before the due date thereby becoming liable to pay the general interest charge.

Delay

1. The defendant entered an appearance to the writ of summons on 25 February 2014.  The application for summary judgment was filed on 27 July 2015.

2. In the affidavit of Joanne Sue May Ding sworn 27 July 2015, it is deposed that the parties had been in negotiations in an attempt to resolve the matter, however Ms Ding does not depose when the negotiations commenced.  She does however depose that some of the delay in applying for summary judgment has been caused by the plaintiff's attempt to afford the defendant the opportunity to resolve the matter out of court and that no prejudice has been caused to the defendant by reason of the delay.

3. The RSC require that a summary judgment application is to be brought at an early stage. The reasoning behind this is to ensure that costs are minimised. According to the affidavit evidence, the plaintiff delayed in bringing the application in order to enter into negotiations with the defendant in order to both be fair to the defendant and to minimise costs. In these circumstances, it would be inappropriate to penalise the plaintiff for the delay in bringing the application, particularly given there does not appear to be any prejudice on the part of the defendant and the defendant has not provided any evidence to the contrary.

4. It is within the court's discretion after considering all of the circumstances of the matter whether and extension of time should be granted (Jacka Nominees Pty Ltd v Edwards Karwacki Smith & Co Pty Ltd (Unreported, WASC, Library No 205691, 12 October 1992)). In the circumstances, I am of the opinion that leave be granted for the plaintiff to bring the application out of time.

Legal principles

1. The principles upon which an application for summary judgment pursuant to O 14 RSC are well settled. The power to order summary judgment should be exercised with great care, and should not be exercised unless it is clear that there is no real question to be tried. In all cases where there remains uncertainty as to a parties right to judgment, then summary judgment must be refused: Fancourt v Mercantile Credit Ltd (1983) 154 CLR 87; General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125; Ansearch Ltd v Wavtech Pty Ltd [2006] WASC 184.

The application

1. Pursuant to s 255‑50 of sch 1 of the TAA, the plaintiff is entitled, in his official name, to sue to recover debts due to the Commonwealth of Australia and payable to the plaintiff.

2. Section 255‑1 and 255‑5 of sch 1 of the TAA state that income tax, administrative penalties and running balance account deficit debt constitute tax related liabilities due to the Commonwealth and payable to the plaintiff and may be sued for in a court of competent jurisdiction.

3. Section 255‑50(1) of sch 1 of the TAA provides that in proceedings to recover an amount of a tax related liability, a statement or averment about a matter in the plaintiff's claim is prima facie evidence of the matter.

4. The evidence shows, in the affidavits of Santana Theofilopolous affirmed 20 July 2015 and 11 August 2015, that the plaintiff issued to the defendant notices of income tax assessment for the relevant years, an RBA statement and an evidentiary certificate.  These documents are prima facie evidence of the matters the subject of the application.

5. The defendant did not appear at the hearing of the matter.  He has not put forward any evidence to challenge the evidentiary basis of the documents, nor has he put forward any evidence to show that there is a real question to be tried.

Conclusion

1. For these reasons, the plaintiff is entitled to judgment in the sum of $27,604.28 in respect of the income tax liabilities and $84,454.13 in respect of the running balance. Further, the plaintiff is entitled to a general interest charge pursuant to s 5‑15 of the ITAA 1997 and s 8 AAZF, Pt IIA and s 298‑25 of sch 1 of the TAA on the outstanding debts until payment.

2. The plaintiff is further entitled to the costs of the action to be taxed if not agreed.