Muc v Deputy Commissioner of Taxation (No 2)

[2007] NSWDC 340

CITATION:	Deputy Commissioner of Taxation v Muc (No 2) [2007] NSWDC 340 This decision has been amended. Please see the end of the judgment for a list of the amendments.
HEARING DATE(S):	26 February 2007
JUDGMENT DATE:	26 February 2007
EX TEMPORE JUDGMENT DATE:	26 February 2007
JURISDICTION:	District Court
JUDGMENT OF:	Johnstone DCJ at 1
DECISION:	Judgment for the plaintiff with costs
CATCHWORDS:	TAXES and DUTIES - proceedings for recovery of superannuation guarantee charges under default assessments - tax liability disputed by taxpayer - taxpayer not entitled to go behind the assessments and thus precluded from challenging the debt in a state court - her remedy lies in a challenge in the AAT or Federal Court - PRACTICE and PROCEDURE - the plaintiff's case must succeed, and no purpose could be served by any adjournment - application to amend Defence refused
LEGISLATION CITED:	Income Tax Assessment Act 1936 (Cth) Superannuation Guarantee (Administration) Act 1992 (Cth); s 75(1) Taxation Administration Act 1953 (Cth)
CASES CITED:	DCT v Russo 44 ATR 197
PARTIES:	Deputy Commissioner of Taxation (Plaintiff) Katarina Muc (Defendant)
FILE NUMBER(S):	1777/06
COUNSEL:	Mr R Quinn (Plaintiff) Mr G H Healey
SOLICITORS:	Australian Government Solicitor (Ms E Whan) (Plaintiff) G H Healey & Co (Defendant)

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JUDGMENT

HIS HONOUR:

1. The plaintiff is the Deputy Commissioner of Taxation who seeks to recover a debt from the defendant, a taxpayer, which it is alleged is due to the Commonwealth of Australia and payable to the Commissioner of Taxation (“the Commissioner”).

2. The plaintiff’s claim relates to liabilities in respect of superannuation guarantee charges under default assessments: see the exhibit to the affidavit of Bronwyn Parker sworn 12 September 2006. The debt is made up of the primary liability, additional charges for late payment, and a general interest charge. The total claim is for $167,986.05: see the affidavit of Barbara Ackland of 23 February 2007.

3. The defendant denied liability. She disputes the quantum of the claim and the calculation of the GIC: paragraph 10 of the Defence. She says further that certain credits have not been allowed: paragraphs 11 and 12 of the Defence. She also argues that the liability has been discharged by payment of the relevant amounts to the relevant superannuation funds of the employees concerned. She also raises other factual matters which she argues go to her liability in respect of superannuation guarantee charges.

4. The plaintiff relies on s 75(1) of the Superannuation Guarantee (Administration) Act 1992 (“the SGAA”) to conclusively prove the debt. It is to be noted that s 75(1) is in identical terms to s 177(1) of the Income Tax Assessment Act 1936 (“the ITAA36”), as to which there is a body of case law, to which I was referred.

5. The effect of s 75(1) is to preclude the defendant from challenging the debt sued for in these proceedings. It is theoretically possible for her to challenge the calculation of the GIC in these proceedings, but in my view that possibility is an unrealistic one, as it is purely a mathematical calculation, made by the computer.

6. The defendant’s remedy is to challenge the assessments under Part IV(C) of the Taxation Administration Act 1953 (“the TAA53”) in either the AAT or the Federal Court.

7. The conclusive effect of s 75(1) is in my view unquestionable: see the written submissions of the plaintiff at paragraphs 24 and following.

8. The defendant seeks to go behind the assessments in these proceedings. She is not entitled to do so. Any evidence sought to be relied on to impugn those assessments in these proceedings is irrelevant and inadmissible: DCT v Russo 44 ATR 197

9. It follows that the plaintiff must succeed in these proceedings.

10. No purpose could be served therefore by any adjournment.

11. In the course of the hearing the defendant sought leave to amend her defence to raise a further defence based on the Constitution: s 51 and s 109. The precise basis of this proposed defence was articulated as the absence of an assessment issuing in the relevant period, namely the years 2001 to 2002. This, it was submitted, is contrary to the fundamental constitutional right of a taxpayer to have an assessment before becoming liable for tax.

12. Leaving aside issues such as the lateness of the defence proposed, I refuse that amendment on the basis that such a defence has no prospects of success, for the reasons already articulated.

13. For all these reasons I find in favour of the plaintiff. I will enter a verdict in favour of the plaintiff for $167,986.05 and direct the entry of judgment accordingly.

14. The plaintiff seeks costs. He seeks those costs on the ordinary basis, notwithstanding that the basis upon which I have made this decision is one on which this plaintiff was clearly on notice having regard to the judgment I delivered on the same point on 29 August 2006, where I made it abundantly clear that this court is not the forum in which to contest these issues: see paragraph 49 and following of that judgment. Nevertheless, the plaintiff does not apply for indemnity costs. Accordingly I will order the defendant to pay the plaintiff’s costs of the motion and of the action, as agreed or assessed on the ordinary basis.

15. I am going to order a stay of the judgment for twenty-eight days.

16. There are no exhibits, so there is no need to make an order in that regard.

05/06/2008 - Error in title - Paragraph(s) Title