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Trade World Enterprise Pty Ltd v Deputy Commissioner of Taxation

Trade World Enterprise Pty Ltd v Deputy Commissioner of Taxation

Case [2006] VSCA 191 18 September 2006

Civil Litigation & Procedure

Taxation Law

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SUPREME COURT OF VICTORIA

COURT OF APPEAL

No. 6618 of 2004

TRADE WORLD ENTERPRISE PTY LTD
TRADE WORLD ENTERPRISE PTY LTD	Appellant
v.
DEPUTY COMMISSIONER OF TAXATION OF THE COMMONWEALTH OF AUSTRALIA	Respondent

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JUDGES:	CHERNOV, NETTLE and REDLICH, JJ.A.
WHERE HELD:	MELBOURNE
DATE OF HEARING:	18 September 2006
DATE OF JUDGMENT:	18 September 2006
MEDIUM NEUTRAL CITATION:	[2006] VSCA 191	2^nd Revision 28 September 2006

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Practice and procedure – Summary judgment – Application by Deputy Commissioner of Taxation for summary judgment in respect of company’s tax liabilities – Concurrent criminal proceedings against director of company for failure to pay customs duty and excise duty – Application for stay of summary proceeding refused – Commissioner’s assessments conclusive evidence of amount due – Whether “for some other reason” the matter should go to trial – Pending review of Commissioner’s decision at Administrative Appeals Tribunal stayed – Whether real injustice if proceeding not stayed – Supreme Court (General Civil Procedure) Rules 2005, r.22.06(1)(b), Taxation Administration Act 1953 (Cth), ss.14ZZM, 14ZZR.

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APPEARANCES:	Counsel	Solicitors
For the Appellant	Mr S.K. Wilson, S.C. with Mr B.J. McCullagh	Felipe Tellez
For the Respondent	Ms C. Mavroudis	Australian Government Solicitor

CHERNOV, J.A.:

This is an appeal by Trade World Enterprise Pty Ltd ("Trade World") against the decision of a judge in the Practice Court made on 30 September 2005. On that day his Honour dismissed the appeal of Trade World – brought pursuant to r. 77.05 of the Supreme Court Rules – against the orders of Master Evans made on 2 September 2005. The Master had ordered that there be judgment against Trade World in favour of the respondent, the Deputy Commissioner of Taxation ("the Commissioner") in the amount of $1,096,602.18, reflecting various taxes, penalties and interest that were assessed against Trade World. The Master had also refused the company's application that the summary judgment proceeding be "stayed or adjourned" until the determination of criminal proceedings against the director of Trade World, Hoang Hai Chiem ("Chiem"). Thus, his Honour effectively decided that Trade World's application for adjournment or stay of the summary proceeding be refused and that there be summary judgment for the Commissioner in the above sum. His Honour also ordered a stay of execution of the judgment for 30 days.

Before considering the matter it is necessary to summarise the context in which it comes before us. Trade World is a company that owns and operates a duty free business trading as "Box Hill Duty Free" which sells goods, including tobacco and alcohol products, to travellers departing Australia temporarily or permanently, by aircraft or ship. Between 19 July 1999 and 1 July 2001, Chiem was a director of the company and, since 2 August 2002, has been its sole director. By various assessments made by the Commissioner, Trade World was assessed to various taxes to which reference will be made later, amounting to approximately $1,000,000. On 10 December 2003 Trade World lodged objections with the Commissioner in respect of the assessments. The objections were disallowed on 5…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

AGLC: Trade World Enterprise Pty Ltd v Deputy Commissioner of Taxation [2006] VSCA 191
Case: [2006] VSCA 191
Decision Date: 18 September 2006

CaseChat Overview and Summary

Trade World Enterprise Pty Ltd was in dispute with the Deputy Commissioner of Taxation over unpaid tax liabilities, which came before the Supreme Court of Queensland. The Deputy Commissioner sought summary judgment against the company for the outstanding tax amounts. Concurrently, the company’s director faced criminal charges related to the non-payment of customs and excise duties. The company applied to stay the summary judgment proceedings, citing the ongoing criminal case and a pending review of the Commissioner’s decision at the Administrative Appeals Tribunal. The court had to determine whether the summary judgment proceeding should be stayed due to the other ongoing proceedings and whether there was any other reason the matter should proceed to trial.

The court considered whether the Commissioner’s assessments constituted conclusive evidence of the tax liabilities, and if there were exceptional circumstances warranting a trial. The company argued that a real injustice would result if the summary judgment proceeding was not stayed, considering the overlapping legal matters. The court noted the provisions of the Supreme Court (General Civil Procedure) Rules 2005 and the Taxation Administration Act 1953, which provide for summary judgment and the conclusive nature of the Commissioner’s assessments. The court concluded that the assessments were indeed conclusive evidence of the tax liabilities and found no exceptional circumstances that would warrant a trial.

The Supreme Court refused the application to stay the summary judgment proceeding. The court held that the Commissioner’s assessments were conclusive and there was no other reason for the matter to go to trial. Consequently, the company’s application to stay the proceeding was dismissed, and the review of the Commissioner’s decision at the Administrative Appeals Tribunal was also stayed. The court ordered that the summary judgment application proceed, and the company was directed to pay the outstanding tax liabilities as assessed by the Deputy Commissioner.

Orders