Deputy Commissioner of Taxation v Hall

Legislation Cited: Income Tax Assessment Act 1936 (Cth), s 175
Taxation Administration Act 1953 (Cth), Sch 1 Div 298 Subdiv 298-A s 298-10, Sch 1 Div 350 Subdiv 350-A s 350-10
Uniform Civil Procedure Rules 2005 (NSW), rr 13.1, 14.28

Cases Cited: Commissioner of Taxation v Futuris Corporation Limited (2008) 237 CLR 146; [2008] HCA 32

Category: Principal judgment

Parties: Deputy Commissioner of Taxation (Plaintiff)
David Matthew Hall (Defendant)

Representation: Solicitors:
ATO Litigation and Legal Services (Plaintiff)

File Number(s): 2024/246144

Publication restriction: Nil

JUDGMENT

1. HIS HONOUR: By statement of claim filed as long ago as 4 July 2024, the Deputy Commissioner of Taxation claims approximately $2.002M from David Hall for outstanding income tax, interest and penalties for the financial years ending 30 June 2014 and 2015. Mr Hall’s defence to the statement of claim was filed on 9 September 2024. It contains a series of uncontroversial admissions, anodyne denials and non-admissions. The defence does not in any substantive respect plead why or how Mr Hall maintains that he is not liable to the Deputy Commissioner for the amount claimed.

2. By notice of motion filed on 1 July 2025, the Deputy Commissioner seeks an order that the defence be struck out pursuant to UCPR 14.28 or, in the alternative, that there be summary judgment pursuant to UCPR 13.1. That relief is sought upon the basis of the affidavits of Craig Mitchell affirmed on 3 March and 8 August 2025, and of Kiri Purchase affirmed on 1 July 2025. Mr Hall has not read or tendered any evidence in response to the Deputy Commissioner’s application.

3. Both parties have provided me with extensive written submissions. I have had regard to those submissions in coming to my decision. It is evident that there is no dispute about the legal principles that apply.

4. The stated burden of Mr Hall’s position is that he is “not able to prove” [sic] that the Deputy Commissioner is wrong. He frankly concedes that all he can do in response to the claim is to insist that the Deputy Commissioner proves the case against him. He maintains, in terms, that the Deputy Commissioner can only establish that claim “in full hearing of the matter by the Court, including cross-examination of the plaintiff’s witnesses”.

5. In that regard, Mr Hall has set out in his written submissions what he has described as the “matters in dispute that require a final hearing”. They are as follows:

“33. It is within this context that the defendant points to the following ‘specific factual or evidentiary disputes that make a trial necessary …’, notwithstanding the plaintiff’s prima facie case. For these reasons, the plaintiff cannot [demonstrate that, sic?] ‘there is no real issue to be tried’.

34. It is important to respond to the matters addressed in paragraphs 25 to 31 of the plaintiff’s outline of submissions. Critically, everything the plaintiff outlines in those paragraphs relates specifically, and exclusively, to ‘the Commissioner’s capacity to recover income tax which is due and payable’ and the ‘conclusive evidential force to notices of assessment under a taxation law’.

35. As the plaintiff notes, the term, ‘assessment’, is defined in s 6(1) of the ITAA 1936 to mean, in part, ‘[t]he ascertainment of the amount of taxable income (or that there is no taxable income) and of the tax payable on that taxable income (or that no tax is payable)’.

36. Nothing in paragraphs 25 to 31 of the plaintiff’s outline of submissions prevents a taxpayer from taking issue in relevant proceedings with the extent to which General interest Charges or penalties have been validly imposed or to raise non-compliance of the RBA with the requirements of the legislation. The conclusive evidence provision in s 350-10(1), and the authorities that have considered it, do not mean the defendant in these proceedings does not have any means, legal or factual, to resist judgment in relation to those matters in respect of which the plaintiff seeks judgment that are not based on an ‘assessment’ – namely the alleged ability for General Interest, penalties and the RBA.”

6. Mr Hall’s contentions can hardly be doubted. A taxpayer’s entitlement to put the Deputy Commissioner to proof, either with respect to the relevant assessments in the first place, or any alleged liability for penalties and interest, is clear. However, there is a distinct and fundamental difference between a correct statement of the principles to apply on the one hand and a persuasive and convincing account of how those principles, when applied to the facts of this case, demonstrate the invalidity of the claim or the availability of a defence on the other hand.

7. To that end, Mr Hall made further oral submissions. First, Mr Hall contended that the Deputy Commissioner had failed to comply with a machinery provision relating to the imposition of an administrative penalty.

8. Subdivision 298-A of the Taxation Administration Act 1953 deals with administrative penalties. Section 298-10 is in the following terms:

298-10 Notification of liability

The Commissioner must give written notice to the entity of the entity’s liability to pay the penalty and of the reasons why the entity is liable to pay the penalty. The Commissioner is not required to give reasons if he or she decides to remit all of the penalty.

9. By a document entitled “Notice of assessment of penalty for failing to provide a document” dated 24 January 2019, the Deputy Commission assessed Mr Hall with an administrative penalty of $66,936.35.

10. The Deputy Commissioner relies upon the evidence to which I have earlier referred. Mr Hall’s submissions do not allude, other than in theoretical or hypothetical terms, to the way in which that evidence is insufficient or inadequate to prove the matters alleged. The notice said, among other things, that Mr Hall had been assessed with an administrative penalty “because [he] failed to provide a document as required”. Mr Hall contended that the notice did not comply with s 298-10 inasmuch as it failed to provide him with reasons in accordance with that provision.

11. I disagree. The reason why Mr Hall was assessed with an administrative penalty is clearly, if not expansively, stated. It is a mistake to confuse the adequacy of reasons with the existence of reasons.

12. Secondly, Mr Hall contends that the notices of assessment are invalid as they failed to state a time by which he was required to lodge returns in the two years in question. He also maintains that the evidence suggesting that he had been “assessed” for income tax in the relevant years is deficient because it fails to state in terms precisely who it was that carried out or performed the assessment. Mr Acheampong for the Deputy Commissioner described this class of attack by Mr Hall as one that in effect invited me to go behind the assessment. He submitted that cases such as Commissioner of Taxation v Futuris Corporation Limited (2008) 237 CLR 146; [2008] HCA 32 were a complete answer to that approach.

13. I agree. It is sufficient to observe that s 175 of the Income Tax Assessment Act 1936 is a complete answer to Mr Hall’s concerns. That section is in the following terms:

175 Validity of assessment

The validity of any assessment shall not be affected by reason that any of the provisions of this Act have not been complied with.

14. Futuris Corporation was a case that concerned an allegation by the taxpayer that the Commissioner had deliberately double counted amounts of assessable income. It is sufficient for present purposes to note what the majority observed at [24] in that case:

“[24] Section 175 must be read with s 175A and s 177(1). If that be done, the result is that the validity of an assessment is not affected by failure to comply with any provision of the Act, but a dissatisfied taxpayer may object to the assessment in the manner set out in Pt IVC of the Administration Act; in review or appeal proceedings under Pt IVC the amount and all the particulars of the assessment may be challenged by the taxpayer but with the burden of proof provided in s 14ZZK and s 14ZZO of the Administration Act. Where s 175 applies, errors in the process of assessment do not go to jurisdiction and so do not attract the remedy of a constitutional writ under s 75(v) of the Constitution or under s 39B of the Judiciary Act.”

15. Moreover, s 350-10(1), Item 2 of Sch 1 to the Taxation Administration Act gives conclusive effect to notices of assessment under a taxation law. Section 350-10(1) Item 2 provides as follows:

The production of…a notice of assessment under a taxation law…is conclusive evidence that…(a) the assessment was properly made; and (b) except in proceedings under Part IVC of [the TAA] on a review or appeal relating to the assessment – the amounts and particulars of the assessment are correct.

16. Whatever complaints Mr Hall may have about the assessment, its accuracy or any other like concern, they do not correspond to a triable issue in these proceedings: his potential remedies lie elsewhere.

17. In my opinion, the Deputy Commissioner has demonstrated that there is no real issue to be tried. Without wanting or appearing illegitimately to reverse the onus of proof, it is plain enough that Mr Hall has not, and as far as the material before me goes, cannot identify precisely or even in general terms what he says that triable issue might be. Insisting somewhat uncontroversially that the Deputy Commissioner must prove the pleaded case is entirely different to the identification of a triable issue which would frustrate the application for summary judgment. The Deputy Commissioner has the benefit of statutory presumptions such as s 175 and s 350-10(1) to which Mr Hall has not provided me with any answers. I do not accept that there is a triable issue.

18. I should note that Mr Hall has mentioned in his written submissions that “relevant records held by third parties (including accountants, real estate agents, banks, and [his] former law firm) have been destroyed”. Whether that circumstance is of any assistance to Mr Hall in discussions or negotiations he may have had, or may wish to have, with the Deputy Commissioner, it is not one that Mr Hall has suggested informs the identification or existence of a triable issue or which otherwise illuminates or clarifies any defence upon which he seeks to rely.

19. At the hearing before me today, the Deputy Commissioner tendered certificates under s 350-10(3) of Sch 1 of the Taxation Administration Act, verifying the amount of the claim updated with further general interest charges. In these circumstances, there should be judgment for the plaintiff for $2,051,102.00 plus costs.

**********