Supreme Court New South Wales Medium Neutral Citation: Deputy Commissioner of Taxation v Jones (No. 1) [2018] NSWSC 1821 Hearing dates: 28 November 2018 Date of orders: 28 November 2018 Decision date: 28 November 2018 Jurisdiction: Common Law Before: Johnson J Decision: Objection upheld. Catchwords: CIVIL – application for summary judgment – recovery proceedings - whether Defendant has arguable defence - Plaintiff relies on evidence of officer in the Australian Taxation Office for purpose of Rule 13.1(b) Uniform Civil Procedure Rules 2005 – objection to question in cross examination regarding foundation for belief that Defendant has no arguable defence – reasonableness of belief a matter for the Court – additional objection to relevance of question to issues arising in recovery proceedings – objection upheld Legislation Cited: Uniform Civil Procedure Rules 2005 Cases Cited: --- Texts Cited: --- Category: Procedural and other rulings Parties: Deputy Commissioner of Taxation (Plaintiff) Wayne Curtis Jones (Defendant) Representation: Counsel: Mr ST White SC; Ms J Gatland (Plaintiff) Mr J Ireland QC (Defendant) Solicitors: Australian Government Solicitor (Plaintiff) McGirr Lawyers (Defendant) File Number(s): 2017/313940 Publication restriction: --- Judgment 1. JOHNSON J: The Court is presently hearing a Notice of Motion in which the Plaintiff, the Deputy Commissioner of Taxation, seeks summary judgment against the Defendant, Wayne Curtis Jones, for a sum in excess of $5 million in relation to what could be broadly described as taxation indebtedness, including interest and penalties. 2. The Plaintiff has relied upon affidavits of Vladimir Klendo sworn 2 August 2018 and 28 November 2018 in support of the application. Mr Klendo is an officer in the Australian Taxation Office. 3. The affidavit of Mr Klendo sworn 2 August 2018 expresses (in paragraphs 32 and 33) his belief that the Defendant has no defence to the claim having regard to the Amended Defence filed by the Defendant on 6 June 2018. 4. The fact that evidence of that sort is adduced for the Plaintiff on this application can be explained by Rule 13.1(b) Uniform Civil Procedure Rules 2005 ("UCPR") which requires the Plaintiff, on a summary judgment application, to adduce evidence given by the Plaintiff or by some responsible person that, in the belief of the person giving the evidence, the Defendant has no defence to the claim, or part of the claim, or no defence except as to the amount of any damages claimed. 5. If there was no evidence of this type at all, the application for summary judgment would fall at the first hurdle. There is evidence of that type here. 6. Mr Klendo is being cross-examined by Mr Ireland QC for the Defendant. He has asked Mr Klendo the foundation for his belief as contained in paragraphs 32 and 33 of his first affidavit. Objection was taken to the question by Mr White SC for the Plaintiff on the basis that it is essentially irrelevant to these recovery proceedings. 7. The Amended Defence expresses, amongst a series of admissions and non-admissions, a broad denial of liability on bases which extend to what is said to be past involvement of the Defendant with the present Commissioner of Taxation and other aspects going to what could be described as the general merits of the claim. There is, amongst other things, an assertion that the interest and administrative penalties contained in the claim are excessive and unreasonable, that (in one respect) the administrative penalties imposed are false or misleading in a material particular and that, in the circumstances alleged in the Amended Defence, it would be unconscionable and inequitable for the Plaintiff to continue and maintain these proceedings. 8. It is submitted for the Plaintiff that the nature of these recovery proceedings is such that all those issues are effectively irrelevant. 9. The scope of issues which are relevant to recovery proceedings will be the subject of submissions on the application itself, with a ruling being made on that topic in my final judgment. I do not, at this stage, reject this question on the basis of the lack of relevance of the subject matter. I will, in due course, consider that issue in determining the application itself. 10. However, it seems to me that in circumstances such as this and, in particular, given the controversial nature of the issues which the Amended Defence seeks to raise (that is, controversial in the sense as to whether they are even capable of providing a defence to the claim), then it is a matter for the Court to determine whether there is an arguable defence which is open so that the Defendant can resist the claim for summary judgment. 11. What the Plaintiff has done is comply with the formal requirement of Rule 13.1(b) UCPR by having this evidence from Mr Klendo. However, the reasonableness or otherwise of that belief is a matter for the Court in deciding the inevitable related issue as to whether there is an arguable defence based on the Amended Defence. 12. In those circumstances, I uphold the objection to the question. It is not appropriate, in my view, to have cross-examination of Mr Klendo on those matters which ultimately are for the Court to determine. ********** Amendments 10 December 2018 - Coverpage - Amendment to counsel's name. DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 10 December 2018