Deputy Commissioner of Taxation for the Commonwealth of Australia v Michael John Heaton (Unreported, WASC, Library No 970139, 8 April 1997)

Deputy Commissioner of Taxation v Broadbeach Properties Pty Ltd [2008] HCA 41

Deputy Commissioner of Taxation v Deering [2025] WASC 485

Deputy Commissioner of Taxation v Lafferty [2017] WASC 257

Osgood v Wham [2007] WASCA 178

1. Prithin Vellai is a director of Zariana Holdings Pty Ltd. The Deputy Commissioner of Taxation (DCT) notified the company of an audit in respect of its Pay As You Go (PAYG) and Super Guarantee Contribution (SGC) tax obligations.
2. After a series of investigations and negotiations the DCT ultimately imposed penalties on Mr Vellai under the Director penalty regime of the Taxation Administration Act 1953 (Cth). These penalties were imposed on Mr Vellai in relation to the company's failure to deal with its PAYG, SGC (and GST) obligations.
3. This much is not in dispute.
4. The DCT now seeks summary judgment under the Rules of the Supreme Court 1971 (WA) (RSC) O 14 r 1 in relation to these penalties. The application is out of time and the DCT requires leave to bring the application.
5. Mr Vellai opposes the application.
6. For completeness, I note that the preliminary requirements necessary to ground the plaintiff's application for summary judgment have been complied with in that the action is one commenced by writ, the statement of claim has been served on Mr Vellai, Mr Vellai has entered an appearance and the DCT relies on affidavits that attest to the fact that the DCT verily believes that Mr Vellai has no defence to the action. See O 14 r 1 RSC.

1. Order 14 r 1 provides that an application for summary judgment ought be brought within 21 days after an appearance is entered or at any later time by leave of the court.
2. The DCT filed the writ indorsed with the statement of claim on 4 November 2024.
3. Mr Vellai entered an appearance on 13 November 2024. Accordingly, the DCT had 21 days from that date to bring an application for summary judgment.
4. However, the DCT's application was not lodged until 11 August 2025. That is just under nine months after Mr Vellai entered his appearance and a little over eight months after the DCT was entitled to apply for summary judgment without leave.
5. It is not necessary to set out the authorities as to leave in any length only to briefly restate the principles which are well understood and not controversial.
6. The rationale for the time limit is to ensure that summary judgment applications are brought promptly and at an early stage of proceedings, before unnecessary expense has been incurred.
7. In making an application outside the 21-day period the onus is on the DCT to justify the delay by affidavit evidence. If there is a delay, which in this case is significant, it must be explained.
8. The discretion to extend time is given for the sole purpose of enabling the court to do justice between the parties and may be exercised in favour of an applicant where strict compliance with the rules will work an injustice upon the applicant.
9. In order to determine whether the rules will work an injustice it is necessary to have regard to the merits of the application, the history of the proceedings, the conduct of the parties, the nature of the litigation, and the consequences for the parties of the grant or refusal of the application for the extension of time.
10. The question of whether the DCT ought be afforded leave to bring an application for summary judgment out of time has been considered before, most recently perhaps in Deputy Commissioner of Taxation v Deering [2025] WASC 485 and also Deputy Commissioner of Taxation v Lafferty [2017] WASC 257 although the principle statement on this point seems to flow from Master Sanderson's decision in Deputy Commissioner of Taxation for the Commonwealth of Australia v Michael John Heaton (Unreported, WASC, Library No 970139, 8 April 1997), 8.
11. Master Sanderson recognised that the 'overriding consideration' in regard to questions of leave to bring a summary judgment application out of time was the 'enormously powerful position' the DCT occupies in regard to statutory enactments and evidentiary advantages in the DCT's favour affording evidentiary certificates (or even averments in the pleadings) either conclusive or prima facie weight.
12. Given this position of power, it is incumbent on the DCT 'to follow the rules of court as strictly as possible' (my emphasis added).
13. Of course, each case turns on its own facts and must be assessed according to the affidavit evidence advanced in support of it.
14. Although the DCT filed several affidavits in support of the application it is principally the affidavit of Ms McClurkin that is relevant to the question of leave.
15. This was not objected to.
16. The DCT advances three reasons why leave ought be granted in the present situation.

1. Firstly, Ms McClurkin attests that from 13 November to around 15 December 2024 the DCT did not 'allocate or appoint a representative in the proceedings due to administrative delays'.
2. What these 'administrative delays' are is not explained.
3. I also note that it appears that the DCT has handled this 'in-house', as it were, the writ being filed by the Australian Taxation Office, Legal Services (ATO).
4. Someone must have been allocated the matter in order to draft the writ and statement of claim otherwise that work would not have been done. The statement of claim is comprehensive and seems largely to accord with the material advanced in support of the summary judgment application.
5. Someone was acting in the proceedings as the writ and statement of claim were settled, filed and served around 4 November 2024.
6. However, it is not explained how less than ten days later (that is within the time that Mr Vellai had to respond to the writ and enter an appearance to avoid the potential for an application for default judgment) no-one was allocated responsibility for conduct of this matter due to an administrative delay.
7. It can be appreciated that the ATO is a large organisation with a great many matters on foot at any one time. However, by that same token, it can equally be appreciated that the ATO is a large and well resourced litigant used to the conduct of many matters at once.
8. To sweep this initial delay up under the generalised and unexplained banner of 'administrative delay' is unsatisfactory in the circumstances.
9. This means that in the time in which the DCT had to bring an application for summary judgment without leave, no-one was attending to this matter even though the DCT was the party that had commenced the litigation.

**Parties conferring and attempts to resolve the matter 'out of court'

1. Secondly, Ms McClurkin attests that between 18 December 2024 and 28 July 2025 the parties conferred 'on matters relating to the proceedings and the summary judgment application'. Ms McClurkin attests that this occurred on a variety of dates in this period and she references them.
2. However, Ms McClurkin does not attach the correspondences referenced or reference whether these are captured as attachments to other affidavits the DCT relies on in support of its application. All that can be relied on is the assertion that conferral did occur.
3. Furthermore, the DCT submitted in argument that it does not negotiate in relation to Director penalties.
4. If that is the case then what can this conferral be about?
5. Mr Vellai had previously lodged an objection to the notified assessments. However, that objection had been heard and determined by the time the DCT brought this action.
6. Accordingly, awaiting the outcome of such a review cannot be a reason why the DCT did not proceed in a more timely fashion.
7. As it turns out Mr Vellai was successful on some (a very few) of the notices issued and so the figures presently pursued are not those claimed in the statement of claim but those varied (in a minor fashion) as a result of the review.
8. However, whilst this might be an issue that the parties could confer about, this is not meaningful negotiation of the kind that occurred in Lafferty (where the court accepted that the ATO engaged in negotiations for much of the 2 ½ year period between the notices being issued and summary judgment being sought, including attending court ordered mediation) and so the DCT's submission stands: it does not negotiate on Director penalties.
9. This then brings into focus a further submission advanced by the DCT being that the DCT is not obliged to wait for any review or objection to be pursued but can rely on the averment and certificate provisions and if the amounts claimed vary as a result of a review or objection, the amount pursued will be varied.
10. However, as noted, this was not a delay occasioned whilst awaiting the outcome of an objection or review.
11. Mr Vellai in his affidavit of 13 August 2025 does reference some of the conferral that Ms McClurkin refers to in her affidavit. Although Ms McClurkin objected to parts of Mr Vellai's affidavit evidence, no objection was taken to this particular aspect of his affidavit of 13 August 2025.
12. Mr Vellai confirms there was conferral by telephone on 18 December 2024 but the contents of that conferral remain undetailed. Mr Vellai states that the DCT advised him that it needed further time to confer and that he would be notified of the DCT's intention to pursue the matter before the Christmas break in 2024.
13. However, Mr Vellai goes on to say that this did not occur and it was not until 16 April 2025 (some four months later) that the DCT advised it was proceeding with the summary judgment application.
14. Mr Vellai attaches the letter of 19 May 2025 referenced by Ms McClurkin as conferral. That letter references correspondence of 16 and 29 April 2025 but does not clarify what these were in relation to.
15. Whilst this letter does constitute conferral it does little more than confirm the DCT's position that it relies on its evidentiary certificates, its view that this proceeding is not the appropriate forum to challenge its rulings and confirms its intention to proceed with the summary judgment application.
16. This seems to have always been the DCT's position.
17. If so, this correspondence, although constituting conferral, does little to explain the delay in the bringing of the application for summary judgment.
18. I note that this situation appears to be factually different from that which applied in Heaton and Lafferty.
19. In Heaton there was affidavit evidence that objections to the relevant rulings had been lodged and that an application for recovery ought not be made until these had been determined.
20. In Lafferty there was evidence before the court that the parties were negotiating for a considerable period of time and that the application was held in abeyance pending the outcome of a two-day court ordered mediation.
21. In Mr Vellai's case, the affidavits filed indicate that Mr Vellai's objections had long been resolved prior to the application being commenced. Mr Vellai indicated in argument that he had recently sought further review with the Department of Finance. Ms McClurkin indicated she was unaware of this but this did not change her view as she maintained that the DCT was not obliged to have regard to any ruling by the Department of Finance and was entitled to rely on the evidentiary certificates before the court.
22. Furthermore, Ms McClurkin maintained that the DCT did not negotiate on Director penalties.
23. And so whilst I accept there was conferral 'on matters relating to the proceedings and the summary judgment application', where the DCT contends that:

(b) it is not obliged to wait for the outcome of any review or objection but can rely on the averment and evidentiary provisions and that any adjustments the result of an objection or review can be accounted for at some later date; and

(c) there was in fact no objection or review being considered, then it seems difficult to accept that an eight-month delay might be justified for this reason alone on the basis of 'conferring'.

1. Again, the DCT appears to have swept up this further period of delay in a generalised fashion without reference to any details.

1. Ms McClurkin also contended that 'some of the delay in applying for summary judgment has been caused by the Plaintiff's [DCT's] attempt to resolve the matter out of Court'.
2. She does not reference what this means or attach or reference anything in support of this.
3. The only document I can see that might possibly fall within this category is a letter written on 30 October 2025 inviting Mr Vellai to consent to judgment and save the cost of the summary judgment hearing.
4. This was filed in this proceeding by Mr Vellai but the DCT objected to it as it was not attested to in any affidavit.
5. I accept it cannot form part of the evidence before me and in any event, as this appears to be written after the application had been brought even if it were admissible and could be afforded any weight, it would not be relevant to explaining the delay in bringing the summary judgment application, being created after that had been commenced.
6. In the circumstances, I cannot see that there is anything corroborating Ms McClurkin's contention that the parties were attempting to resolve this out of court.
7. Furthermore, even if this was the case, it is not clear how much of the delay can be attributed to such attempts as Ms McClurkin does not unpack what 'some' might mean.

Further time required to prepare the summary judgment application

1. Finally, Ms McClurkin attests that the DCT otherwise required:

[F]urther time to prepare the summary judgment application, taking into account the quantum and nature of the debt claimed and extensive and comprehensive nature of the summary judgment application documents.

1. I accept that a great deal of material has been presented in support of the summary judgment application.
2. However, it seems that the vast majority of that material must have been collated to form the basis for the DCT's statement of claim. That statement of claim sets out in quite some detail the payments and penalties due.
3. The DCT also relied on an updated affidavit of Mr Mitchell that confirmed the figures in question had not changed. That affidavit only attached the evidentiary certificates relied on by the DCT. It seems from Mr Mitchell's evidence that this was a matter of accessing the DCT's records rather than any process requiring calculation, creation or compilation of these certificates.
4. The volume of material submitted in support of the summary judgment application was queried in the course of submissions with Ms McClurkin who conceded that much of this was really the workings or records behind the final figures arrived at and that all that really needed to be filed (and attention directed to) were the evidentiary certificates relied on by the DCT which are prima facie evidence of their contents.
5. As noted, it has long been recognised that the DCT enjoys significant evidentiary advantages in such matters including the ability to rely on evidentiary certificates and averments.
6. If the work to ensure that the writ and statement of claim is properly brought and is based on a very detailed rendering of the material facts and amounts needed to produce an indorsement on the writ of such a detailed statement of claim, then it seems likely that the work necessary to generate the relevant certificates upon which the DCT is entitled to rely upon would have already been done.
7. If so, it seems incongruous to submit that an application for summary judgment cannot be brought until some eight months after the time for that has expired because of the 'comprehensive nature' of the summary judgment application.
8. Indeed, Ms McClurkin submitted that the significant documents grounding the application were the three evidentiary certificates in relation to the Director penalties imposed in regard to the company's unpaid PAYG, SGC and GST liabilities.

1. The DCT contends that it is entitled to rely on the averment and certificate provisions available to it and that the District Court is not the correct forum to challenge the amounts averred or certified. Rather, there are specific mechanisms provided to challenge those via the objection and review provision of the Taxation Administration Act.
2. I accept this to be so.
3. This then requires consideration of the merits of the application. I note that in the previous cases to which I have referred (Heaton, Lafferty and Deering) where the DCT required leave, the question of merit was held to be determinative. However, merit was not considered in isolation.
4. In that regard I accept that the DCT enjoys strong prospects of success in this matter.
5. However, as noted, each case must be determined on its own facts and the merit of an application is but one factor to which regard must be had.
6. In Deering the delay was minimal and no defence was raised, only a capacity to pay argument.
7. As noted above, in Heaton and Lafferty the affidavit evidence and explanations for the delay differed in that it appears the evidence in those matters descended to the particulars of the conferral that was relied on to explain the delay in bringing the application for summary judgment.

DCT does not negotiate in relation to Director penalties

1. As noted, the DCT submitted that it did not negotiate in relation to Director penalties.
2. If this is the case, then what was the purpose of conferring as the DCT relies on as the second basis for the grant of leave sought particularly in circumstances where no objection was pending?
3. If so, then it seems difficult to accept that an eight-month delay might be justified for this reason alone.
4. This then brings into focus a further submission advanced by the DCT - being that the DCT is not obliged to wait for any review or objection to be pursued, but can rely on the averment and certificate provisions and if the amounts claimed vary as a result of a review or objection, the amount pursued will be varied.
5. Again, if this is the case how is the delay of eight months explained?

1. The question of prejudice to the parties must also be considered.
2. If the application is denied the DCT will be forced to proceed to trial on an application in which there are strong prospects of success.
3. Had the application been brought in time, Mr Vellai faced a very difficult task in resisting the application. His position is little better now given the fact that the basis for his resistance is really a matter for objection and review under the Taxation Administration Act, not through defending this proceeding.
4. Mr Vellai has represented himself in these proceedings and is not prejudiced by having incurred significant professional costs although his own time and energy has been consumed in responding to the statement of claim (and amended statement of claim).

1. As noted, the merits of the application (and perhaps the issue of the prejudice to the DCT) favour the grant of leave given the evidentiary advantages the DCT enjoys.
2. As noted in Deputy Commissioner of Taxation v Broadbeach Properties Pty Ltd [2008] HCA 41 [44], 'harsh though the operation of these provisions may be, they implement a long-standing legislative policy to protect the interests of the revenue'.
3. However, merit is but one aspect of the leave factors to which regard is to be had and must be reconciled with Master Sanderson's words from Heaton: that given the advantages the DCT enjoys that provide for such harsh outcomes, the DCT must comply with the provisions of the rules 'as strictly as possible'.
4. Furthermore, the question of prejudice if leave is not granted must be viewed through the prism of how the delay has arisen and who might be said to be the architect of that prejudice. In this respect, the delay seems largely unexplained and almost entirely of the DCT's own making.
5. Although arising in the context of non-compliance with a springing order, the principle behind McLure J's comments in Osgood v Wham [2007] WASCA 178 [20] can be applied here:

[T]here is a widely held view in this jurisdiction, based on the decision of the High Court in The State Of Queensland v J L Holdings Pty Ltd [1997] HCA 1; (1997) 189 CLR 146, that the justice of the case will always, or practically always, permit a party to litigate an issue that is fairly arguable regardless of non-compliance with court procedures and orders. It has produced a culture in the legal profession in this State of non-compliance with court rules, practice directions and court orders, in particular, interlocutory orders. The view is misconceived: see Monteleone v The Owners of the Old Soap Factory [2007] WASCA 79. The Court has the duty and power to protect the integrity of its processes once they are set in motion. Case management is not an end in itself but it exists to further the interests of justice which are advanced by the timely and efficient disposition of proceedings.

1. I am conscious that the DCT routinely appears in this jurisdiction pursuing unpaid tax liabilities. Many of these actions end up being pursued by way of summary judgment. The DCT is well familiar with the rules of court requiring applications be brought in time or, if they are not, being able to satisfy the court that the discretion to extend time ought be exercised in its favour.
2. I accept that case management is not an end unto itself but rather a means to attain the ends of justice. All parties before the court are subject to the obligations of case management. What is just will depend on the facts of each case.
3. In my view, it seems to overly favour considering an application for leave on the issues of merit and prejudice when other factors to which regard must also be had remain unexplained contrary to the strict compliance with the rules of court required of the DCT.
4. The DCT enjoys a special advantage in relation to questions of leave to bring a summary judgment application out of time, but only in regard to the question of merit (and as a consequence of that, perhaps prejudice). In all other regards it is in no different position to any other litigant. Any delay must be properly explained.
5. If the DCT enjoys the advantage of being able to rely on the evidentiary certificates where it appears the majority of the work done to compile them had already been done, does not negotiate in respect of Director penalties, was not faced with any extant or pending objections that might amend the amount being pursued (and was in any event not obliged to await the outcome of such an objection) and further, is required to strictly comply with the obligations imposed by the rules of court, then notwithstanding the merits of the application it is incumbent on the DCT to properly explain in detail (as opposed to by reference to generalised propositions) to why the application was not brought either within time or sooner.
6. In my view, to permit an application to proceed in the face of such unexplained delay is not in the overall interests of justice.
7. Indeed, if the DCT is in such a strong position, then consistent with the court's comments in Broadbeach it would seem that acting swiftly, despite having a severe outcome, is ultimately the kindest outcome rather than delaying the (almost) inevitable. Especially, if there is (as here) no compelling evidence of any meaningful attempts to in fact negotiate or otherwise resolve the dispute or reduce the amount claimed.
8. When regard is had to all of the factors relevant to the question of leave, and although enjoying a strong prospect of success by virtue of the evidentiary advantages afforded the DCT, on the facts of this case the application is, in my view, nevertheless inexplicably out of time.
9. The explanations given for the delay in bringing the application (and affidavit evidence relied on) are inconsistent with the advantageous position enjoyed by the DCT and the obligation of the DCT to comply as strictly as possible with the rules of court.
10. In the circumstances, I am not satisfied that the DCT ought be afforded leave to bring the application out of time and as such the application for summary judgment ought be dismissed on that basis.

I certify that the preceding paragraph(s) comprise the reasons for decision of the District Court of Western Australia.