Deputy Commissioner of Taxation v Kean Henry Flanagan [2007] NSWSC 304

Reported Decision : 66 ATR 293

New South Wales Supreme Court

CITATION : Deputy Commissioner of Taxation v Kean Henry Flanagan [2007] NSWSC 304

HEARING DATE(S) : 5, 6, 7 March 2007

JUDGMENT DATE : 10 April 2007

JUDGMENT OF : Patten AJ at 1

DECISION : See paragraph 42

Income Tax Assessment Act 1936 LEGISLATION CITED : Taxation Administration Act 1953 Acts Interpretation Act 1901

CASES CITED : Canty v Deputy Commissioner of Taxation 59 ATR 408

PARTIES : Deputy Commissioner of Taxation - Plaintiff Kean Henry Flanagan - Defendant

FILE NUMBER(S) : SC 11633 of 2004

COUNSEL : Mr R Quinn - Plaintiff Kean Flanagan (in person) - Defendant

SOLICITORS : Australian Government Solicitor - Plaintiff

THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION

Patten AJ

10 April 2007

No:11633 of 2004

Deputy Commissioner of Taxation v Kean Henry Flanagan

JUDGMENT 1 The Plaintiff claims that the Defendant is liable to penalties as a director of Halion Pty Ltd (the Company) in respect of its unpaid taxation liabilities. At the hearing, Mr R Quinn of counsel, appeared for the Plaintiff. The Defendant represented himself. 2 Two separate amounts are claimed viz $516,945 (the first claim) being alleged penalties for tax liabilities incurred by the Company in the period 1 September 2000 to 30 November 2001 and $103,641 (the second claim) for penalties representing tax liabilities incurred by the Company in the period 1 December 2001 to 28 February 2002. 3 The first claim is made on an alternative basis. Primarily, it is alleged that the sum is due by virtue of the Company's default in complying with an agreement entered into pursuant to s 222ALA of the Income Tax Assessment Act (the Tax Act). The alternative basis relied upon, and the basis for the second claim, is the Defendant's alleged failure to comply with the requirements stipulated in notices served under s 222 AOE of the Tax Act. 4 A number of statutory provisions are relevant to the case. The obligations of the company to deduct tax from its employees' salary and wages and to pay the amount of such deductions to the Plaintiff are contained respectively in Divisions 12 and 16 of Part 2-5 of Schedule 1 to the Taxation Administration Act (the Administration Act). The relevant sections are: "12-35 Payment to employee An entity must withhold an amount from salary, wages, commission, bonuses or allowances it pays to an individual as an employee (whether of that or another entity)"