Reardon v Deputy Commissioner of Taxation

The respondents sought summary judgment against the appellants for directors' penalties under the Income Tax Assessment Act. The appellants argued that the directors penalty notices were not sent, and therefore, they could not be liable. The primary judge found that neither appellant had a real prospect of successfully defending the claim at trial, and the appellants were permitted to cross-examine the ATO officer who prepared and sent the notices, but only on the question of whether the notices were posted. The appellants contended that they were denied procedural fairness because the cross-examination was limited. They also argued that incomplete documents and discrepancies in the respondent’s files constituted evidence that the directors penalty notices were not sent. Furthermore, the appellants argued that the notices were invalid because they referred to the recipients having 14 days from the date of the notices to take the required steps, whereas section 29 of the Acts Interpretation Act (Cth) deemed service to take place at the date the notice would be delivered in the ordinary course of the post.

The court held that the primary judge did not err in finding that the material did not raise a real prospect of the appellants successfully defending the claim at trial. The court also held that the appellants were not denied procedural fairness because the cross-examination was limited to the question of whether the notices were posted. The court found that the notices were not misleading and invalid, and the validating legislation did not effect an implied repeal of the amending legislation. The court held that the respondent had an accrued right to take recovery proceedings because 14 days had elapsed from the giving of the notices without the appellants taking the required steps.

The court dismissed the appeals with costs. The court held that the primary judge did not err in finding that the appellants did not have a real prospect of successfully defending the claim at trial. The court found that the appellants were not denied procedural fairness because the cross-examination was limited to the question of whether the notices were posted. The court held that the notices were not misleading and invalid, and the validating legislation did not effect an implied repeal of the amending legislation. The court found that the respondent had an accrued right to take recovery proceedings because 14 days had elapsed from the giving of the notices without the appellants taking the required steps.