Deputy Commissioner of Taxation v Thomas Wilson [2018] NSWDC 302

District Court New South Wales

Medium Neutral Citation: Deputy Commissioner of Taxation v Thomas Wilson [2018] NSWDC 302 Hearing dates: 27 September 2018 Decision date: 19 October 2018 Jurisdiction: Civil Before: Mahony SC DCJ Decision: Verdict and judgment for the plaintiff. For orders see [63] Catchwords: Statutory claim against director of corporation for monies withheld by corporation for PAYG tax Legislation Cited: Civil Procedure Act 2005 Corporations Act 2001 (Cth) District Court Act 1973 Taxation Administration Act 1953 (Cth) Cases Cited: Canty v Deputy Commission of Taxation [2005] 63 NSWLR 152 Deputy Commission of Taxation v Coco [2003] QSC 199 Deputy Commissioner of Taxation v Saunig (2002) 55 NSWLR 722 Forsyth v Deputy Commissioner of Taxation (2014) 62 NSWLR 132 Miller v Deputy Commissioner of Taxation (1997) 26 ACSR 533 Category: Principal judgment Parties: Deputy Commissioner of Taxation (Plaintiff) Thomas Wilson (Defendant) Representation: Counsel: S T Richardson (Plaintiff)

Solicitors: M Vertes (Defendant) File Number(s): 17/78625 Publication restriction: Nil

Judgment 1. By Further Amended Statement of Claim filed with leave on 27 September 2018, the plaintiff claims what are known director penalties in the sum of $111,798.04, pursuant to s 269-20(1) in Schedule 1 of the Taxation Administration Act 1953 ("the TAA"). 2. On 19 April 2015 the defendant had been appointed as a director of Global Piling Contractors Pty Limited (ACN 605361920) ("the company") upon its incorporation on the same date. On two occasions in 2015, on 25 August and 25 November 2015, the company withheld monies due to the plaintiff under Division 12 Schedule 1 of the TAA. The company lodged Business Activity Statements on 30 July 2015 in respect of the period 1 April 2015 to 30 June 2015, and on 17 December 2015 in respect of the period 1 July 2015 to 30 September 2015. Those statements identified the two amounts withheld for PAYG tax on employee salaries referred to above, which were not paid to the plaintiff. 3. On 10 February 2016 the plaintiff issued a Director Penalty Notice ("DPN") to the defendant in respect of the two amounts withheld, and following some credits being adjusted to that sum, there is no issue that, as at the date of hearing, the sum of $111,798.04 was claimed by the plaintiff. 4. The hearing proceeded by way of affidavit evidence. The plaintiff relied on the following affidavits: Affidavit of Ronald Ao sworn on 22 August 2018 Affidavit of Ronald Ao sworn on 26 September 2018 Affidavit of Sarah Farran affirmed on 28 May 2018 None of the deponents were required for cross-examination. 1. The defendant relied on two affidavits sworn by himself on 6 August 2018 and 29 August 2018. He was not required for cross-examination and the factual background to the claim, which is summarised below, is not in dispute between the parties. 2. The plaintiff's claim is a statutory claim pursuant to the TAA. The plaintiff relies on an evidentiary certificate pursuant to s 255-45 dated 7 August 2018 (Annexure G to the affidavit of Ronald Ao sworn 22 August 2018), which, pursuant to s 255-45 of the TAA is prima facie evidence of the sum of $111,798.04 being a debt due and payable by the defendant to the Commonwealth of Australia in respect of a tax related liability. 3. Section 269-35 of the TAA sets out a number of defences to such a claim. The defendant relies on a statutory defence contained in s 269-35(2) which provides as follows, under the heading "All reasonable steps": "(2) You are not liable to a penalty under this division if: (a) You took all reasonable steps to ensure that one of the following happened: (i) The directors caused the company to comply with its obligation; (ii) The directors caused an administrator of the company to be appointed under s 436A, 436B, or 436C of the Corporations Act 2001; (iii) The directors caused the company to begin to be wound up (within the meaning of that Act); or (b) There were no reasonable steps you could have taken to ensure that any of those things happened. (3) In determining what are reasonable steps for the purpose of subsection (2), have regard to: (a) When, and for how long, you were a director and took part in the management of the company; and (b) All other relevant circumstances." 1. Given that there is prima facie evidence establishing the plaintiff's claim, and that the defendant acknowledges receipt of the Director Penalty Notice dated 10 February 2016 (Annexure B to the affidavit of Ronald Ao sworn 22 August 2018), there is no need to rehearse for the purpose of this judgment, the evidentiary material relied on by the plaintiff.