Kevin Emanuel Zammitt v Deputy Commissioner Of Taxation

[2014] HCASL 187

KEVIN EMANUEL ZAMMITT

v

DEPUTY COMMISSIONER OF TAXATION

[2014] HCASL 187
S103/2014

1. The respondent ("the Commissioner") commenced proceedings in the District Court of New South Wales against the applicant to recover penalties that arose from the failure of a company of which the applicant was a director to remit tax deductions from the salary and wages of its employees.

2. Under s 222AOE of the Income Tax Assessment Act 1936 (Cth) ("the 1936 Act") the Commissioner was not entitled to recover penalties "until the end of 14 days after the Commissioner" gave notice of the liability. The notice was required to state that the penalty would be remitted if, among other things, at the end of the 14 days after the notice was given, the liability was discharged. On 1 July 2010, that provision was repealed and replaced with a provision in the Taxation Administration Act 1953 (Cth) ("the 1953 Act"), which introduced a 21 day notice period. Transitional provisions, found in the Tax Laws Amendment (Transfer of Provisions) Act 2010 (Cth), provided that the new provision applied in relation to an amount payable to the Commissioner before, on or after its commencement on 1 July 2010.

3. On 27 November 2009, an officer of the Australian Taxation Office posted to the applicant a written notice pursuant to s 222AOE of the 1936 Act ("the Notice") and a covering letter. The letter referred to the Notice and stated that the Commissioner would commence action for the recovery of the penalty 14 days from the "date the enclosed notice" was given to the applicant and provided for remittal of the penalties if various circumstances were met "14 days from the issue date of this letter". The applicant did not comply with the Notice. At the time the Notice was given, an authority of the Court of Appeal of the Supreme Court of New South Wales, Deputy Commissioner of Taxation v Meredith[1], held that notice was given for the purpose of s 222AOE on the date that it was posted. However, on 25 February 2011, Meredith was overruled in Soong v Deputy Commissioner of Taxation[2], which held that notice was given when it was delivered rather than posted.

   [1] (2007) 245 ALR 150.

   [2] (2011) 80 NSWLR 226.

4. In the District Court proceedings, the Commissioner conceded, in light of Soong, that the Notice was invalid, but maintained that Sched 7 of the Tax Laws Amendment (2011 Measures No 7) Act 2011 (Cth) ("the 2011 Act"), introduced in response to Soong, operated to validate the Notice. This schedule relevantly provided in item 1 that, in relation to notices given on or after 10 December 2007, "[f]or the purpose of former s 222AOE, treat the notice as having been given at the time the Commissioner sent it by pre-paid post in accordance with s 28A of the Acts Interpretation Act 1901 [(Cth)]". The District Court (Taylor DCJ) held that, although Sched 7 validated the Notice, the respondent was required to issue a new notice under the 1953 Act.

5. On 4 April 2014, the Court of Appeal of the Supreme Court of New South Wales (Bathurst CJ, Beazley P, Gleeson JA, Bergin CJ in Eq and Tobias AJA) allowed the Commissioner's appeal against the orders of Taylor DCJ.  The Court of Appeal held that item 1 of Sched 7 of the 2011 Act had the effect of treating any notice sent between 10 December 2007 and 30 June 2010 as having been given at the time the Commissioner sent it by pre-paid post, and accordingly upheld the validity of the Notice. 

6. As the applicant does not have legal representation, the application falls to be dealt with under r 41.10 of the High Court Rules 2004.

7. In his application to this Court, the applicant relies upon the same arguments advanced in the Court of Appeal, without identifying any error in their rejection by that Court.  There is no reason to doubt the correctness of the conclusions reached by the Court of Appeal.  An appeal to this Court would enjoy insufficient prospects of success to warrant a grant of special leave. 

8. Pursuant to r 41.10.5 we direct the Registrar to draw up, sign and seal an order dismissing the application.

K.M. Hayne
15 October 2014 S.M. Crennan