Deputy Commissioner of Taxation v Scott [2015] QDC 99

DISTRICT COURT OF QUEENSLAND CITATION: Deputy Commissioner of Taxation v Scott [2015] QDC 99 PARTIES: DEPUTY COMMISSIONER OF TAXATION (plaintiff) v RHYS DAVID ANDREW SCOTT (defendant) FILE NO: 1221/14 DIVISION: Civil PROCEEDING: Application ORIGINATING COURT: District Court, Brisbane DELIVERED ON: 8 May 2015 DELIVERED AT: Brisbane HEARING DATE: 29 April 2015 JUDGE: Dorney QC DCJ JUDGMENT AND ORDERS: As per amended draft initialled and placed with the papers. CATCHWORDS: Summary judgment – whether relevant Notices of Assessment “served” APPEARANCES: K S Cameron, solicitor, for the Applicant/Plaintiff P R Box, solicitor, for the Respondent/Defendant SOLICITORS: Australian Taxation Office for the Applicant/Plaintiff QBM Lawyers for the Respondent/Defendant LEGISLATION CITED: Acts Interpretation Act 1901 (Cth), s 29 Evidence Act 1995 (Cth), s 69, s 160, s 163, s 163(2), s 182 Income Tax Assessment Act 1936, s 174(1), s 177(1) Income Tax Regulations 1936, reg 35, reg 36, reg 36(1)(a)(ii), reg 36(1)(b), reg 36(1)(c), reg 36(2), reg 37, reg 37A, reg 39, reg 40, reg 40(1)(b), reg 40(1)(f), reg 40(3) Tax Administration Act 1953, Schedule 1: s 255-45, s 255- 45(a), 255-45(1)(b), s 255-45(2), s 255-45(2)(c), s 255-55(a) Taxation Administration Regulations 1976, reg 2 -- 1 of 9 -- 2 Uniform Civil Procedure Rules 1999, r 165(2), r 292, r 292(2), r 685(2) CASES CITED: Deputy Commissioner of Taxation v Taylor [1983] 2 NSWLR 139 Deputy Commissioner of Taxation v Broadbeach Properties Pty Ltd (2008) 237 CLR 473 Deputy Commissioner of Taxation v Salcedo [2005] QCA 227 Pourzand v Telstra Corporation Ltd [2014] WASCA 14 -- 2 of 9 -- 3 Introduction [1] On 29 April 2015, the summary judgment application of the plaintiff, Deputy Commissioner of Taxation (“DCofT”), against the defendant, Rhys David Andrew Scott (“Scott”), filed 30 March 2015, was heard. [2] Scott appeared at that hearing by his legal representative, his solicitor, and in both written and oral submissions contested the summary judgment on the sole basis that the relevant Notices of Assessment and Amended Assessment (“Notices”) had not been “served”. [3] No other basis was maintained by Scott by way of defence, presumably because of judicial interpretation of s 177(1) of the Income Tax Assessment Act 1936 (“ITAA 36”) in DCofT v Broadbeach Properties Pty Ltd1 (at 493). Principles [4] Rule 292 of the Uniform Civil Procedure Rules 1999 (“UCPR”) allows the plaintiff, at any time after a defendant files a Notice of Intention to Defend, to apply for judgment. By r 292(2), if the court is relevantly satisfied (i.e. both that the defendant has no real prospect of successfully defending all or part of the plaintiff’s claim and that there is no need for a trial of the claim or part of the claim) the court may give judgment. [5] There is no contest in this case that the Court of Appeal in DCofT v Salcedo2 decided, as paraphrased, that, with respect to the first limb of the requirement, a prospect of success which is merely fanciful or unrealistic is insufficient: at 235 [11]. Evidence of an address for service of Notices [6] It is not in dispute that the relevant Notices were addressed to Scott at “PO BOX 5646 STAFFORD HEIGHTS QLD 4053”. They were stated to have a “date of issue” of 11 December 2013. [7] In the affidavit of Darran Tweedie (“Tweedie”), filed 30 March 2015, it is deposed that he: is the “case officer” in relation to the taxation liabilities owed by Scott; has 1 (2008) 237 CLR 473. 2 [2005] 2 Qd R 232. -- 3 of 9 -- 4 access to and is familiar with the records of the DCofT relating to Scott; refers to entries contained in a Debt Recovery File (to which he has access); and states that, from his perusal of the Debt Recovery File, the relevant Notices were “served” at the above named post office box “on or about 11 December 2013”. [8] Other evidence led at the hearing demonstrates that the tax agent, Broad Pollock & Company, acted as Scott’s accountant and tax agent up to ceasing to do so “in about August 2012”. Furthermore, Scott himself deposed that, on or about 22 June 2012, Broad Pollock & Company electronically lodged income tax returns on his behalf. Exhibited to Scott’s affidavit is the reference, as a “postal address” for him, to that tax agent’s Fortitude Valley post office box number, a fact reflected in the plaintiff’s records at “DT12” in Tweedie’s affidavits. [9] I accept the submissions of the DCofT that Broad Pollock & Company was Scott’s authorised tax agent for the purposes of notifying the plaintiff of Scott’s preferred address for service, either ostensibly as an implication from the usual incidents of the role of a tax agent, or through that course of dealings whereby it had, solely, provided the plaintiff with addresses for Scott “for service” since 2002 (as deposed to the affidavit Tweedie filed 24 April 2015). See, also, Pourzand v Telstra Corporation Ltd3: at [129]. [10] While Scott deposed that at no time did he authorise, direct or consent to Broad Pollock & Company providing a “postal preferred address for service” for him at PO Box 5646, searches conducted by Tweedie show that the Integrated Core Processing System (which forms part of the Debt Recovery File) contained entries to the effect that, on 14 December 2012, Broad Pollock & Company gave the “postal preferred address” of Scott as PO Box 5646. Furthermore – and this is not contested – as at 11 December 2013, no notification had been received by the Commissioner of Taxation that Broad Pollock & Company was no longer representing Scott, either from it or Scott. No evidence was led from the tax agent as to why it took that step; but, in the circumstances of the application of these provisions, it does not matter, because of the later discussed regulations dealing with change or withdrawal (which cast the obligation on Scott to effect such). Finally, although Scott relied upon other documents held by the Commissioner that other addresses of Scott were known by 3 [2014] WASCA 14. -- 4 of 9 -- 5 the plaintiff from time to time (including the address contained in Scott’s own affidavit filed by leave on the day of the hearing), Scott led no evidence that in any way cast doubt on the other evidence relied upon by the plaintiff. This is in the context that, as will be generally discussed later, where a person has not given the Commissioner a preferred address for service, if the Commissioner has another address “relating” to the person it is open, in given circumstances, to treat that address as the “preferred address for service”. While that has not been relied upon here, it shows that merely having several addresses for a taxpayer does not mean that the plaintiff should not choose a “preferred address” for such service as is relevant here, absent effective withdrawal or change. Effect of statutory provisions [11] Section 174(1) of the ITAA 36 provides that, relevantly, the Commissioner “shall serve notice” of any assessment made “in writing by post or otherwise upon the person liable to pay the tax”. [12] Despite the presence in both the Income Tax Regulations 1936 (“ITR 36”) and the Taxation Administration Regulations 1976 (“TAR 76”) of references to a “preferred address for service”, it is clear from regulation 2 of the latter that its ambit is simply the application of the Taxation Administration Act 1953 (“TAA 53”). Accordingly, the relevant provisions for the above “service” requirements under statute are those in ITR 36. See, also, regulation 35 of the ITR 36. [13] By regulation 36 of the ITR 36, an address in Australia used by or associated with the person “is” a “preferred address for service” of the person if it is, amongst other kinds of address, a postal address [see regulation 36(1)(a)(ii)] – which it is here – and satisfies two further tests. Here, incidentally, an address was “required” to be given to the Commissioner as an address for service of documents by the Commissioner under the relevant act or these regulations (see the reference in regulation 37A to the example of “the approved form of return” and the actual return lodged on or about 22 June 2012). And, therefore, a tax agent notified address in the annual return can satisfy the second test as having been given as a preferred address for service: see regulation 36(1)(b). The third test is that the designation of that address, or other circumstances, “indicate” that the person “wishes” that address to be used by the Commissioner “in preference to other addresses of the person, whether generally or -- 5 of 9 -- 6 in specific circumstances” [see regulation 36(1)(c)], where regulation 36(2) of the ITR 36 states that the designation of such an address “in a form or correspondence” as an “address for service”, a “preferred address”, an “address for correspondence”, or similar term, “satisfies” regulation 36(1)(c). Again, given that the tax agent notified, in June 2012, the address that it later changed, the third test is satisfied. But this analysis, insofar as it affects service of the Notices, depends on the later change of the preferred address being effected in accordance with regulation 37. Given that the tax “agent’s” notification of the change to PO Box 5646 (referred to earlier) complied with sub-regulations (1), (2) and (3) of regulation 37, it then satisfied s 36 as at 11 December 2013, subject to any “change” by Scott himself. [14] Thus, from those conclusions based on Scott’s own evidence about the designation of Broad Pollock & Company as his tax agent and from the relevant extracts from the plaintiff’s files, I find that “PO BOX 5646” at Stafford Heights can correctly be characterised in terms of regulation 36 of the ITR 36 as Scott’s “preferred address for service” as at, on or about 11 December 2013. This conclusion has been reinforced here by regulation 37A of the ITR 36. It states that if a person is “required” to give the Commissioner a preferred address for service for a purpose, the person “must subsequently maintain a preferred address for service for the purpose”. [15] As to the change of such a preferred address for service by Scott, regulations 37 and 39 of the ITR 36 limit such a change, by the former, to giving the Commissioner a notice in accordance with ITR 36, and, by the latter, through precluding pleading as a fact that the preferred address for service was not effective (where the person has not changed the address under regulation 37) in any proceeding instituted against the person under ITAA 36 or ITR 36. Regulation 38 deals with a “substitute” preferred address (which is not directly relevant here). [16] Hence, I conclude that Scott cannot plead the address relied on by the plaintiff as being “not effective”. Service [17] Regulation 40 of the ITR 36 states that the Commissioner may serve a document on a person for the purposes of the ITAA 36 by, if the person has given a preferred address for service that is a postal address, posting a copy of the document to that address: see regulation 40(1)(b). As regulation 40(3) goes on to state, this regulation does not -- 6 of 9 -- 7 affect the operation of any other law of the Commonwealth, or any law of a State or Territory, that deals with the service of documents. [18] It has not been contended by Scott that either the Acts Interpretation Act 1901 (Cth) or the Evidence Act 1995 (Cth) are not relevant operative laws for the purposes of service in this proceeding. [19] Section 163 of the Evidence Act 1995 (Cth) states that such documents as these Notices are presumed to have been “sent” by prepaid post to the address on the notices, on the fifth business day after the date shown on those Notices, “unless evidence sufficient to raise doubt as to (that) presumption is adduced”. Scott has raised no evidence to put in doubt that particular presumption. [20] Even if s 163 were held to be inapplicable [for example, because the Notices were not “letter(s)” as defined in s 163(2)], s 160 is couched in similar terms, though it would rely on a day of “posting”. The combined effect of regulation 40(1)(f) of the ITR 36 and Tweedie’s affidavit filed 30 March 2015 (paragraphs 11 and 18) satisfy that. In particular, concerning the contention by Scott that there is no actual evidence led by any identified person that he or she did, in fact, effect “posting” the relevant documents pursuant to regulation 40(1)(b) of the ITR 36, were I to be wrong about the (later discussed) effect of s 255-45(a) and its cognate provision, s 255-55(a) (both in Schedule 1 of the TAA 53), the unchallenged assertions of Tweedie that the entries contained in the Debt Recovery File were made in the usual and ordinary course of the plaintiff’s undertaking and collectively form the ordinary books of account of the plaintiff’s undertaking (paragraph 8 of the affidavit of Tweedie filed 30 March 2015), taken with s 182 (incorporating s 69) of the Evidence Act 1995, must mean that the plaintiff’s contentions about any lack of appropriate proof should be rejected. [21] The next point arises as a result of s 29 of the Acts Interpretation Act 1901. It states that service is deemed to be effected in the ordinary course of post “unless the contrary is proved”. Given the evidence led by the DCofT, and the absence of evidence (for example, from the defendant’s side) that any search of the relevant PO Box 5646 showed that no service had been so effected, the only conclusion that can be drawn is that “the contrary” has not been proved. It is relevant that Tweedie has deposed to the sending of “regular” statements to that “address” and that none were -- 7 of 9 -- 8 returned as “undelivered or unclaimed mail”: see paragraph 43 and Exhibit “DT7” of the affidavit filed 30 March 2015. This supports a presumption of delivery. Other matters [22] Apart from any effect that r 165(2) of the UCPR has where a fact is not admitted, it is clear from DCofT v Taylor4 (at 143) that it is not to the point that a particular defendant has not received a relevant Notice. [23] The DCofT has conceded that the relevant certificate issued on 27 March 2015, being a certificate issued pursuant s 255-45 of Schedule 1 of the TAA 53, contained an error in that the person who stated that his purpose was to certify, amongst other things, that the relevant Notices “are taken to have been served” on Scott “under a taxation law” did not sign that certificate. Rather, the evidence shows that it was signed by another (duly identified) DCofT. Section 255-45(1)(b) of Schedule 1 provides that a “certificate” that is “signed” by “a Deputy Commissioner” is “prima facie evidence of the matter… in a proceeding to recover an amount of tax-related liability”. Section 255-45(2)(c) provides that such a certificate may state that a notice of an assessment is “taken to have been…” served “on the person under the taxation law.” [24] I accept that the person who “signed” the relevant certificate dated 27 March 2015 was, in truth, a DCofT. Additionally, the “certificate” stated a matter covered by s 255-45(2). In consequence, I find that the certificate is “prima facie evidence” of the matter in this proceeding to recover an amount of a tax-related liability. And no contrary evidence undermines it. But, were I to be wrong about this, because of the other conclusions that I have reached, it would be unnecessary to rely upon that certificate. [25] Further, should it be an issue, s 255-55(a) provides that, in a proceeding to recover an amount of a tax-related liability, a person (such as Tweedie) may give evidence by affidavit. Conclusions [26] Given the decisions that I have reached, in circumstances where the only agitated issue has been whether service has been properly effected for the relevant Notices, 4 [1983] 2 NSWLR 139. -- 8 of 9 -- 9 the defendant has no real prospect of successfully defending the plaintiff’s claim. Moreover, given such conclusions, there is no need for a trial of the claim with respect to the only issue in dispute (name, such service). [27] Hence, where the defendant has not, also, raised any cogent argument that the relevant quantum of costs sought is, reasonably, other than $5,795.50 (as deposed to by Kathleen Scarlett Cameron in her affidavit filed at 24 April 2015), and where r 685(2) of the UCPR and Practice Direction No 3 of 2007 govern the application of the consideration for the Court to order fixed costs and have relevance here, I intend to so order. [28] Since I have been given a draft order, I intend to initial the same since it contains both the judgment of the amount which is not being disputed and the costs with which I have just dealt, though it needs amendment as to the date of judgment. -- 9 of 9 --