Kennedy v Commissioner of Taxation

Case [2007] FCA 932

FEDERAL COURT OF AUSTRALIA

Kennedy v Commissioner of Taxation [2007] FCA 932

TAXATION – application for leave pursuant to s 14ZZO of the Taxation Administration Act 1953 (Cth) to amend an objection in relation to an appealable objection decision

JENNIFER MAREE KENNEDY, RODNEY JOHN KENNEDY AND KENNEDY HAULAGE (QLD) PTY LTD v COMMISSIONER OF TAXATION
QUD61 OF 2007
QUD62 OF 2007
QUD63 OF 2007
QUD64 OF 2007
QUD65 OF 2007
QUD66 OF 2007

GREENWOOD J
15 JUNE 2007
BRISBANE


IN THE FEDERAL COURT OF AUSTRALIA

QUEENSLAND DISTRICT REGISTRY

QUD61 OF 2007

QUD62 OF 2007
QUD63 OF 2007
QUD64 OF 2007
QUD65 OF 2007
QUD66 OF 2007

BETWEEN:

JENNIFER MAREE KENNEDY
First Applicant

RODNEY JOHN KENNEDY
Second Applicant

KENNEDY HAULAGE (QLD) PTY LTD
Third Applicant

AND:

COMMISSIONER OF TAXATION
Respondent

JUDGE:

GREENWOOD J

DATE OF ORDER:

15 JUNE 2007

WHERE MADE:

BRISBANE

THE COURT ORDERS THAT:

1.Leave be given to each applicant to amend the applicant’s grounds of objection to include a further ground in the following terms:

‘The decision to assess penalty made under Div 298 in schedule 1 to the Taxation Administration Act 1953 (TAA) was not duly made in accordance with law, is thereby a nullity, and is thereby excessive within s 14ZZO TAA in that no debt is owed to the Commonwealth under it:  McAndrew v FC of T (1956) 98 CLR 263’.

THE COURT DIRECTS THAT:

1.The applicant has leave pursuant to O 16 of the Federal Court Rules to deliver interrogatories to the respondent in relation to the assessment of penalty.

2.The applicant has leave to deliver any interrogatories upon which the applicant proposes to rely on or before 28 June 2007.

3.The respondent answer the applicant’s interrogatories (subject to proper objections) by 20 July 2007. 

4.The respondent file and serve any Amended Statement of Facts, Issues and Contentions on or before 20 July 2007. 

5.The applicant file and serve a Notice to Admit Facts and Documents on or before 3 August 2007.

6.The respondents file and serve a response to the Notice to Admit Facts and Documents on or before 17 August 2007.

7.The applicant file and serve a Statement of Facts, Issues and Contentions and any Affidavits upon which the applicant intends to rely at the hearing of the appeal in relation to the appealable objection decision on or before 31 August 2007.

8.The matter be listed for review at 9.30am on 10 September 2007. 

9.        The costs of the application and directions hearing are reserved.

10.      The parties have liberty to apply to the Court on two days notice. 

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.


IN THE FEDERAL COURT OF AUSTRALIA

QUEENSLAND DISTRICT REGISTRY

QUD61 OF 2007

QUD62 OF 2007
QUD63 OF 2007
QUD64 OF 2007
QUD65 OF 2007
QUD66 OF 2007

BETWEEN:

JENNIFER MAREE KENNEDY
First Applicant

RODNEY JOHN KENNEDY
Second Applicant

KENNEDY HAULAGE (QLD) PTY LTD
Third Applicant

AND:

COMMISSIONER OF TAXATION
Respondent

JUDGE:

GREENWOOD J

DATE:

15 JUNE 2007

PLACE:

BRISBANE

EX TEMPORE REASONS FOR JUDGMENT

  1. I have before me six applications by each applicant in the following proceedings, namely, QUD61/2007 Jennifer Maree Kennedy v Commissioner of Taxation; QUD62/2007 Jennifer Maree Kennedy v Commissioner of Taxation; QUD63/2007 Rodney John Kennedy v Commissioner of Taxation; QUD64/2007 Rodney John Kennedy v Commissioner of Taxation; QUD65/2007 Kennedy Haulage (Qld) Pty Ltd v Commissioner of Taxation; and QUD66/2007 Kennedy Haulage (Qld) Pty Ltd v Commissioner of Taxation, for the exercise of the Court’s discretion under s 14ZZO of the Taxation Administration Act 1953 (Cth) (‘TAA’) for leave to amend the grounds of objection made by each applicant in a taxation objection in relation to an appealable objection decision to an assessment issued by the Commissioner of Taxation.

  2. Leave is sought to introduce the following further ground:

    ‘The decision to assess penalty made under Div 298 in schedule 1 to the Taxation Administration Act 1953 (TAA) was not duly made in accordance with law, is thereby a nullity, and is thereby excessive within s 14ZZO TAA in that no debt is owed to the Commonwealth under it:  McAndrew v FC of T (1956) 98 CLR 263’.

  3. The respondent does not oppose the making of the order in each application although the respondent makes it plain that the proposed ground is contested and will in part constitute the controversy between the parties.

  4. Accordingly, I propose to grant leave to amend the ground of objection in each application in the above terms. 

  5. I propose to make the following further directions:

    1.The applicant has leave pursuant to O 16 of the Federal Court Rules to deliver interrogatories to the respondent in relation to the assessment to penalty

    2.The applicant has leave to deliver any interrogatories upon which the applicant proposes to rely on or before 28 June 2007.

    3.The respondent shall answer the applicant’s interrogatories (subject to proper objections) by 20 July 2007. 

    4.The respondent shall file and serve any Amended Statement of Facts, Issues and Contentions on or before 20 July 2007. 

    5.The applicant shall file and serve a Notice to Admit Facts and Documents on or before 3 August 2007.

    6.The respondents shall file and serve a response to the Notice to Admit Facts and Documents on or before 17 August 2007.

    7.The applicant shall file and serve a Statement of Facts, Issues and Contentions and any Affidavits upon which the applicant intends to rely at the hearing of the appeal in relation to the appealable objection decision on or before 31 August 2007.

    8.The matter shall be re‑listed for review at 9.30am on 10 September 2007. 

    9.The costs of the application and directions hearing are to be reserved.

    10.The parties have liberty to apply to the Court on two days notice. 

I certify that the preceding five (5) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Greenwood.

Associate:

Dated:        15 June 2007

Counsel for the Applicant: Mr M Robertson
Solicitor for the Applicant: Hartnett Lawyers
Counsel for the Respondent: Respondent represented by Solicitors
Solicitor for the Respondent: Ms K Lynch, Australian Government Solicitor
Date of Hearing: 15 June 2007
Date of Judgment: 15 June 2007
Details
AGLC
Kennedy v Commissioner of Taxation [2007] FCA 932
Case
[2007] FCA 932
Decision Date

CaseChat Overview and Summary

The case of Kennedy v Commissioner of Taxation involved Kennedy, the taxpayer, contesting the penalty assessment imposed by the Commissioner of Taxation. The dispute was heard by the Federal Court of Australia, which had to determine whether the penalty assessment was lawful and whether it was excessive under the relevant statute.

The primary legal issues before the court were whether the penalty assessment made under Division 298 of Schedule 1 to the Taxation Administration Act 1953 (TAA) complied with legal requirements and was not excessive, as per section 14ZZO of the TAA. The court had to consider the argument that the penalty assessment was a nullity because it was not duly made in accordance with the law, referencing the precedent set in McAndrew v FC of T.

The court granted Kennedy leave to amend the grounds of objection to include the contention that the penalty assessment was a nullity and excessive. It also directed the respondents to respond to interrogatories, file amended statements, and provide responses to notices to admit facts and documents within specified deadlines. The matter was scheduled for review, and the court reserved costs and allowed the parties to apply for further orders on two days' notice.

The court's orders included granting Kennedy leave to amend the grounds of objection, setting deadlines for interrogatories and document exchanges, and scheduling a review hearing. These directions aimed to facilitate a comprehensive examination of the penalty assessment's legality and excessiveness.

Orders

Orders of the court

1. Leave be given to each applicant to amend the applicant’s grounds of objection to include a further ground in the following terms:

‘The decision to assess penalty made under Div 298 in schedule 1 to the Taxation Administration Act 1953 (TAA) was not duly made in accordance with law, is thereby a nullity, and is thereby excessive within s 14ZZO TAA in that no debt is owed to the Commonwealth under it: McAndrew v FC of T (1956) 98 CLR 263’.

THE COURT DIRECTS THAT:

1. The applicant has leave pursuant to O 16 of the Federal Court Rules to deliver interrogatories to the respondent in relation to the assessment of penalty.

2. The applicant has leave to deliver any interrogatories upon which the applicant proposes to rely on or before 28 June 2007.

3. The respondent answer the applicant’s interrogatories (subject to proper objections) by 20 July 2007.

4. The respondent file and serve any Amended Statement of Facts, Issues and Contentions on or before 20 July 2007.

5. The applicant file and serve a Notice to Admit Facts and Documents on or before 3 August 2007.

6. The respondents file and serve a response to the Notice to Admit Facts and Documents on or before 17 August 2007.

7. The applicant file and serve a Statement of Facts, Issues and Contentions and any Affidavits upon which the applicant intends to rely at the hearing of the appeal in relation to the appealable objection decision on or before 31 August 2007.

8. The matter be listed for review at 9.30am on 10 September 2007.

9. The costs of the application and directions hearing are reserved.

10. The parties have liberty to apply to the Court on two days notice.

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

GREENWOOD J

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Ratio Decidendi

Legal Principle Established

Established by: GREENWOOD J

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