Deputy Commissioner of Taxation v Di Blasio [2015] QDC 247

DISTRICT COURT OF QUEENSLAND CITATION: Deputy Commissioner of Taxation v Di Blasio [2015] QDC 247 PARTIES: DEPUTY COMMISSIONER OF TAXATION (plaintiff/applicant) v DORIS MARIE MAUREEN DI BLASIO (defendant/respondent) FILE NO/S: 354 of 2015 DIVISION: Civil PROCEEDING: Application ORIGINATING COURT: District Court at Brisbane DELIVERED ON: 25 September 2015 DELIVERED AT: Brisbane HEARING DATE: 25 September 2015 JUDGE: Burnett DCJ ORDER: Judgment for the plaintiff in the amount of $612,856.31. CATCHWORDS: TAXES AND DUTIES – INCOME TAX AND RELATED LEGISLATION – COLLECTION AND RECOVERY OF TAX – PROCEEDINGS FOR RECOVERY – SUMMARY JUDGMENT – whether assessment properly made – where summary judgment sought against defendant. PROCEDURE – DISTRICT COURT PROCEDURE – SUMMARY JUDGMENT – application pursuant to r 292 Uniform Civil Procedure Rules 1999 (Qld) – test for summary judgment – where defendant’s case has “no real prospect of success”. Tax Administration Act 1953 (Cth), Part IVC. Uniform Civil Procedure Rules 1999 (Qld), r 292. Commissioner for Taxation v Futuris Corporation Limited (2008) 237 CLR 146. Deputy Commissioner of Taxation v Salcedo [2005] 2 Qd R 232. Swain v Hillman [2001] 1 All ER 91. COUNSEL: Solicitors for the plaintiff/applicant Solicitors for the defendant/respondent SOLICITORS: ATO Legal Practice for the plaintiff/applicant DSS Legal for the defendant/respondent -- 1 of 7 -- 2 DISTRICT COURT OF QUEENSLAND CIVIL JURISDICTION JUDGE BURNETT No 354 of 2015 DEPUTY COMMISSIONER OF TAXATION Plaintiff and DORIS MARIE MAUREEN DI BLASIO Defendant BRISBANE 11.46 AM, FRIDAY, 25 SEPTEMBER 2015 JUDGMENT -- 2 of 7 -- 3 HIS HONOUR: The application made is for summary judgment. The applicant creditor seeks judgment in the sum of $573,527.62, together with a general interest charge which accrued from the 9th of January 2015 to the date of judgment, being today’s date, together with costs. 5 The application for summary judgement was filed on the 1st of September 2015. Initially, it was forwarded by post, which is in accordance with the rules. However, it was sent back not received. Subsequently, it was sent by registered post, a receipt of which demonstrates service was properly effected. 10 The proceedings themselves commenced on the 30th of January this year of seeking that principal sum. The proceedings commenced by way of claim, which included a statement of claim particularising the manner in which that sum was calculated. It is, essentially, tax payable on two bases: first, personal income tax, and second, what has been described colloquially as a form of provisional tax. 15 In response to the claim, the defendant filed a defence on the 5th of March. The defence itself is bereft of any particulars. It simply, in essence, puts everything in issue. In turn, the plaintiff filed a reply on the 19th of March, which seeks to and continues to rely upon the defendant’s failure to accompany any non-admission or 20 denial with a direct explanation of why it is the defendant could not make such admission, and further alleges that by reason of their denial or non-admission the defendant has taken to have admitted the allegations. While that is a matter of detail, it is entirely consistent with the way in which the defendant has prosecuted this proceeding. It seems after the exchange of proceedings the plaintiff sought to engage 25 with the defendant through its officers, and in particular its officer Anna-Marie Scott, who appears to have been appointed from the plaintiff’s review and dispute resolution section, who appears to have been appointed to try and resolve matters between it and the defendant. 30 In a series of correspondence between Ms Scott and Mr Andrew Herford, who was at that time then acting for the defendant, the prospect of a stay to permit a process of amendment to the claims, that is, as explained to me, by seeking to have the assessments re-assessed, appears to have been discussed from early May. Initially, on the 1st of May, in her first email Ms Scott made observation about conversation 35 with Mr Herford about the defendant’s taxation liabilities and noted: As discussed, I give a 21 day stay of proceedings to allow your firm to process the amendments discussed to Ms Di Blasio’s income tax account and RBA deficit debt, until the close of business 22 May 2015, at which time we will have 40 another telephone discussion about the taxpayer consenting for judgment in exchange for a payment plan for the remaining amount of the debt, terms yet to be finalised or agreed. It seems nothing came of those discussions, and, indeed, Ms Scott wrote to Mr 45 Herford on the 24th of June, and again on the 14th of July, seeking some information -- 3 of 7 -- 4 in relation to the matter, at least on the 14th of July noting that “we are keen to resolve the matter”. In any event, Ms Scott put Mr Herford on notice that if the plaintiff hadn’t heard from the defendant it would file for summary judgment. Indeed, the tolerance of the plaintiff was best illustrated in its subsequent correspondence of the 24th of July, where after outlining a brief history of relevant 5 matters and noting that the defence had been filed four months earlier and that “it was only now has action been taken to have the relevant returns assessed and amended” they observed the delay was unacceptable. However, as they continued in paragraph 3 of that letter: 10 As at today’s date no amendments have appeared on two accounts, despite an indication by your tax agents that the first of the amended returns would be lodged on 14 July 2015. We therefore advise that you have until 31 July 2015 to have all relevant amended returns lodged, failing which we intend to apply for summary judgment. You will also need to consider how you will pay the 15 remaining debt once all amended returns have been lodged, accepted and processed. Still nothing appears to have happened, and, ultimately, the application issued, as I have earlier noted, on the 1st of September, first attempt of service was made that 20 date, but was subsequently served on the 4th of September. On the 16th of September, the applicant again wrote to the defendant in these terms: We refer to the above proceedings in our correspondence sent via express post mail dated 1 September 2015, which enclosed the following documents – 25 Which then referred to the application, noting it being this application returnable before this Court on the 24th of September. It continued: To date, we have not been advised as to the position you intend to take on the 30 2th September 2015 (sic) in relation to the applicant’s application. We reiterate our previous advice that pursuant to rule 296(2) of the Uniform Civil Procedure Rules 1999 any affidavit material upon which you intend to rely upon at the hearing of the plaintiff’s application must be filed and served at least four business days before the hearing. By our calculation, that material, 35 if any, must be filed and served on or before 4 pm on Thursday, 17 September 2015, which is tomorrow afternoon. There was a further observation made about faxes to a number which had been earlier provided. It seems, however, that despite that no response was received until 40 the matter was called on yesterday in the course of a list. The matter was called on some time after 11 am, at which time an appearance was entered for the defendant by a solicitor, who informed the Court that her firm had been briefed only a short time before, and at that time a request was made for an adjournment, which was granted for 24 hours. 45 -- 4 of 7 -- 5 The solicitor was informed that while she was not expected to produce significant evidence explaining why an adjournment was necessary, it was at least expected that today, upon its return, the Court might be informed of the substantive matters that would be prosecuted by way of justification for an adjournment if such matters existed. The sort of matters one has in mind, of course, include the capacity or any 5 basis for impact upon the defendant’s capacity to engage with its accountants over the relevant period. Upon the return of the application this morning, Ms McKenzie again appeared for the defendant, and applied again for a further extension or adjournment. The basis contended for was that her client had given her client’s accountants instructions to lodge applications for re-assessments of the various 10 assessment the subject of the plaintiff’s claim. It has to be noted that to date, the defendant appears largely to have acted for herself in these proceedings. It was only upon the return of the application that she engaged any legal assistance, notwithstanding the significant amount of money involved and 15 the contention made by her that the tax and the sum claimed is not owing or at least not to the extent claimed. Respectfully, her conduct, I think, was woefully inadequate. It, in my view, speaks an effort on the part of the defendant to simply obfuscate and/or defer what appears to be the inevitable, having regard to the nature of the claim prosecuted by the plaintiff. As I’ve noted, there has been no justifiable 20 excuse provided by the defendant in support of any application for an adjournment. Had an excuse which, with some time and opportunity, could have been expanded upon by the delivery of material in support of it being proffered, then I would have taken a more permissive view of Ms McKenzie’s position, understanding that she has 25 not had a lot of time to prepare material. However, as I’ve noted, no substantive matter has been raised which, even with the provision of appropriate material, would warrant a favourable application for adjournment. And accordingly, any application for an adjournment is refused, and it is appropriate to proceed to determine the application. 30 As I’ve noted, the application is one brought in respect of unpaid tax. It is one for summary judgment. The principles governing applications for summary judgment are now well-settled. As has been noted in the decision of Deputy Commissioner of Taxation v Salcedo [2005] 2 Qd R 232, which cited with approval the observations of 35 Lord Woolf MR in Swain v Hillman [2001] 1 All ER 91, who said at 92: The words ‘no real prospect of succeeding’ do not need any amplification, they speak for themselves. The word ‘real’ distinguishes fanciful prospects of success or … they direct the court to the need to see whether there is a 40 ‘realistic’ as opposed to a ‘fanciful’ prospect of success. This case is one where, even on the best case submitted for the defendant, were it to have time, it seeks simply to advance what could only be described as a fanciful prospect of a defence. The same, of course, could not be said for the claim. The 45 claim is one which is clearly articulated. It has a foundation in law, as I will explain, and it is one which I do not think necessarily requires trial, and can be -- 5 of 7 -- 6 disposed of summarily. It is, in respect of income tax assessments, here in her personal capacity, and an RBA deficit debt, again, in her personal capacity. I make those observations expressly because, in passing, it should be noted that when there was some discussion about the prospect of an adjournment in correspondence in July 2015, the advisers to the defendant noted that the amended return was for the year 5 2009 and in respect of an amended trust tax return for the trustee for the Di Blasio Trust. In later correspondence of the 14th of July 2015, the advisers confirmed that they were reviewing the accounts of the Di Blasio Trust and associated entities, and advised the plaintiff that they were amending lodgements for the years 30 June 2009 and 30 June 2010. None of those matters are the subject of the assessments which 10 are referred to in the plaintiff’s claim. As the plaintiff has outlined in its comprehensive outline, the production of a notice of assessment of an assessable amount is conclusive evidence that the assessment was properly made. Except in respect of proceedings under Part IVC of the Tax 15 Administration Act 1953 (Cth) (“the TAA 1953”) on review or appeal relating to the assessment, the amounts and the particulars of the assessment are correct. Further, it’s well accepted that in recovery proceedings the Commissioner is entitled to rely upon the notices of assessment under the hand of the Deputy Commissioner, and they are conclusive evidence of the provisions of the applicable taxation legislation: 20 see Commissioner for Taxation v Futuris Corporation Limited (2008) 237 CLR 146 at 166-167. In this case, the first group of assessments, namely, the income tax in a personal capacity: total $292,902.39. The assessments issued in 2012, ’13 and ’14, 25 particulars of which are detailed in the submissions which I will mark exhibit 2 in the proceeding, and require no further expansion in these reasons. The second body of debt relates to the RBA deficit debt liabilities. That is what was colloquially referred to as something akin to the former provisional tax arrangement. 30 Again, the plaintiff’s material establishes that the Commissioner established an RBA under the BAS provisions in respect of the defendant’s primary tax debts, as incurred by her in her personal capacity, and that it notified her, or her agent on behalf of her, of her PAYGE income tax instalments liabilities for certain quarterly reporting periods between 1 July 2012 and 30 June 2014. Statements were produced, and they 35 are, prima facie, evidence that the RBA was duly kept and that the amounts and particulars are correct. And those matters have not been subject to any evidence to the contrary. In respect of those amounts, again, the table included in exhibit 2 particularises the 40 matters which are substantiated in the affidavits filed in support of the application at a sum of $263,770. It is the aggregation of those two sums that gives totals of the sum claimed in the application of the 570-odd thousand dollars. Then with further allowance for general interest, brings the current sum as at today’s date to $612,856.31. Again, those matters are particularised in a table which has been 45 handed to me which I will mark exhibit 3. That table usefully refers to the various paragraphs and affidavits which support the figures cited in the table. As I have noted, the defence generally denies the claim and -- 6 of 7 -- 7 does not, in any substantive way, purport to put any matter in contention between the applicant and the defendant. As the plaintiff has usefully outlined in its submissions from [24] to [35], and has summarised in [35], there are, in essence, no issues that require judicial determination at trial in that the income tax liabilities in question are assessed and cannot be disputed in these proceedings. The PAYGE-ITI liabilities 5 were properly calculated, having regard to the income tax liabilities assessed under the defendant’s then most recently lodged tax return. And those liabilities, once allocated to her RBA, automatically generated credits against her, ultimately assessed against her ultimately assessed income tax liability for the relevant tax years. 10 The defendant had earlier accepted her liability to pay PAYGE-ITI amounts by paying, in full, relevant liabilities for 2012 and for certain prior taxation years. Likewise, the claim in respect of her personal tax suffers the same difficulty. Even if the defendant were to lodge and pursue her rights of objection and review under Part 15 IVC of the TAA 1953, such action by her would not preclude the plaintiff from recovering amounts the subject of the assessments, and so much is consistent with the authority which I have earlier cited. It follows, in my view, that notwithstanding any possible reassessments and rights 20 that are pertinent thereto that might be available to the defendant, the applicant is entitled to summary judgment. In any event, and for reasons I have earlier advanced, judgment should be entered today and not be deferred, given that I have refused any application for an adjournment. 25 ______________________ -- 7 of 7 --