Deputy Commissioner of Taxation v Williams

Catchwords: TAXATION – director penalty liabilities – PAYG withholding amounts – assessed net amount under the A New Tax Systems (Goods and Services Tax) Act 1999 (Cth) –where the Taxation Administration Act 1953 (Cth) provides that allegations in certain documents are prima facie evidence of certain matters – where the defendant did not challenge the quantum of primary tax due – where the defendant did not plead a defence but gave evidence as to reasons why he should not be liable

Legislation Cited: A New Tax Systems (Goods and Services Tax) Act 1999 (Cth), s 33-3
Civil Procedure Act 2005 (NSW), s 100
Corporations Act 2001 (Cth), ss 1317, 1318(1)
Income Tax Assessment Act 1997 (Cth), s 995-1(1)
Taxation Administration Act 1953 (Cth), ss 3AA(2), div 269 of sch 1, ss 155-15, 255-1, 255-5, 269-10(1), 269-15(1) and (2), 269-20(1), (2) and (3), 269-30(1), 269-35(2)(a)-(b) and (5), 269-45, 350-10(3), 350-12, 350-15, 350-20(1), 350-25(a), div 12 sub-div 16B

Cases Cited: Canty v Deputy Commissioner of Taxation (2005) 63 NSWLR 152; [2005] NSWCA 84
DCT v Epov [2008] NSWSC 1085
Deputy Commissioner of Taxation v Clark (2003) 57 NSWLR 113; [2003] NSWCA 91
Deputy Commissioner of Taxation v Hartman [2021] NSWDC 274
Deputy Commissioner of Taxation v Houston [2026] NSWSC 392
Deputy Commissioner of Taxation v Lewer [2001] VSC 114
Deputy Commissioner of Taxation v Raskovic [2009] NSWSC 281; (2009) 75 ATR 359 at 364
Deputy Commissioner of Taxations v Lawson [2017] VSC 789; (2017) ATC 20-644
Miller v DC of T [1997] NSWCA 205; (1997) 98 ATC 4059
Snell v Deputy Commissioner of Taxation [2020] NSWCA 29

Category: Principal judgment

Parties: Deputy Commissioner of Taxation (Plaintiff)
Ian Comrie Williams (Defendant)

Representation: Solicitors:
Craddock Murray Neumann Lawyers (Plaintiff)
Ian Comrie Williams self-represented for Defendant

File Number(s): 2025/84700

Publication restriction: Nil.

JUDGMENT

Introduction

1. The Plaintiff (DCT) brought these proceedings to recover, as a debt, amounts alleged to be owed by the Defendant arising from the failure by CCS Operations Pty Ltd (CCS), Beacon Financial Group Limited (Beacon) and CPG Research & Advisory Pty Ltd (CPG) to pay outstanding taxation liabilities.

2. The Plaintiff ultimately sought judgment in the amount of $689,647.45 plus interest pursuant to s 100 of the Civil Procedure Act 2005 (NSW) (CPA), and costs.

3. The DCT proceeded by way of a Statement of Claim which pleaded the facts upon which the liability of the Defendant was alleged to arise.

4. The Defendant was a director of each of the companies referred to in paragraph [1] in the periods in relation to which the DCT alleges he became under an obligation to pay the outstanding tax debts of those companies. The DCT alleged that the Defendant was indebted to the Commonwealth of Australia (Commonwealth) as a director of each of those companies for director penalties due under div 269 of sch 1 to the Taxation Administration Act 1953 (Cth) (Act).

5. The Defendant filed a defence denying liability for the amounts claimed by the DCT. In his Defence he:

(a) did not admit the quantum of tax owed by the companies referred to above because he did not have access to any financial documents relating to those companies; (b) did not accept liability because :

(i) he was but one of two directors of two of the companies and he did not have operational control nor did he manage the bank accounts of each of the companies; (ii) in relation to CPG, the shareholder Grove Financial Services Pty Ltd sold all its shares to TA Capital Pty Ltd who, under the Share Sale Agreement, assumed the liabilities of CPG (Share Sale);

(c) stated that he did not have the financial capacity to pay the amounts sought by the DCT; and (d) sought relief pursuant to ss 1317 or 1318(1) of the Corporations Act 2001 (Cth) (Corporations Act) in relation to any liability he might otherwise have.

The Hearing

6. The proceedings were heard on 25 August 2026. The DCT was represented by its solicitor. The Defendant appeared for himself.

7. After trial, I concluded that the DCT had proved that the Defendant was liable in the amount claimed, and made the following orders:

8. Judgment for the Plaintiff against the Defendant in the amount of $748,375.52, inclusive of interest.

9. The Defendant pay the Plaintiff’s costs as agreed or assessed.

10. These are my reasons for making those orders.

Evidence

9. The DCT read and relied on the following affidavits:

10. Jinia Alam affirmed on 7 May 2026. Ms Alam works in the Frontline Compliance section of the Australian Taxation Office. The DCT tendered the exhibit to this affidavit; and

11. Rhys Griffiths affirmed on 25 August 2026. Mr Griffiths also works in the Frontline Compliance section of the Australian Taxation Office.

12. The DCT’s evidence includes certificates signed by a Deputy Commissioner of Taxation stating, amongst other things, the amounts of director penalties in relation to which the Defendant is liable. Those amounts are set out in paragraphs [27]-[29] of this Judgment (Certificates). I address the force of these Certificates below. The Certificates in Ms Alam’s affidavit also state that the Director Penalty Notices relevant to each of the amounts claimed by the DCT to the Plaintiff were given to him. There was, however, no dispute at trial that those notices were received by the Plaintiff.

13. The Defendant did not serve any affidavits in accordance with the pre-trial Court Orders or at all. He nevertheless gave evidence at the Hearing without objection from the DCT.

Statutory Scheme

12. Under s 255-5(1) of the Act, a tax-related liability that is due and payable is a debt due to the Commonwealth and is payable to the Commissioner and, by force of s 255-5 of the Act, may be recovered by the DCT in this Court.

13. The Act provides the DCT with several procedural advantages in proceedings to recover tax-related liabilities. In particular, the Act provides that allegations in certain documents are prima facie evidence of the facts alleged in those documents. [1]

14. Relevantly, to these proceedings, the Act provides that in a proceeding to recover an amount of a tax-related liability, such as these proceedings:

(a) a statement or averment about a matter in the plaintiff’s complaint, claim or declaration is prima facie evidence of the matter (s 350-20(1) of the Act); (b) the production of an evidentiary certificate signed by, amongst others, a Deputy Commissioner that states that, from the time specified in the certificate, an amount is payable under a taxation law to the Commissioner, is prima facie evidence that the amount is payable from that time and that the particulars stated in the certificate are correct (350-10(3) and 350-12 of the Act); (c) Section 350-15 of sch 1 to the Act provides that judicial notice must be taken of the signatures of, amongst others, a Deputy Commissioner; (d) the DCT may proceed by way of affidavit (s 350-25(a)).

15. It is clear, however, that these provisions do not make averments, or evidentiary certificates and the like, conclusive evidence of the matters stated, and those matters may be rebutted by evidence, or indeed can be undermined potentially by cross-examination. The evidence, as a whole, must be considered by the Court.

16. However, in the absence of evidence rebutting the prima facie evidence, or putting it in doubt, that evidence may be determinative in assessing whether the DCT has discharged its legal burden of proving the case. [2]

17. The procedural advantages identified apply in relation to proceedings for the recovery of a ‘tax-related liability’. That phrase is defined in s 255-1 of sch 1 to the Act. It means a pecuniary liability to the Commonwealth arising directly under a taxation law (including a liability the amount of which is not yet due and payable). Section 995-1(1) of the Income Tax Assessment Act 1997 (Cth) applies to sch 1 to the Act by operation of s 3AA(2) of the Act and broadly defines ‘Taxation law’.

The tax-related liabilities and Director liabilities

18. In certain circumstances, the Act imposes tax-related liabilities on a director of a company that has not complied with its tax obligations.

19. The imposition of those tax-related liabilities is commonly known as the Act’s Director Penalty regime. The relevant provisions imposing those liabilities are in div 269 of sch 1 of the Act.

20. In these proceedings, the DCT alleges that:

21. CCS failed to comply with its tax-related obligations in relation to amounts withheld under div 12 to the Commissioner in accordance with sub-div 16B (PAYGW Obligation);

22. Beacon failed to comply with its tax-related obligations in relation to an assessed net amount under the A New Tax Systems (Goods and S**ervices Tax) Act 1999 (Cth) (GST Act) (Net Amount Obligation);

23. CPG failed to comply with its tax-related obligations in relation to a Net Amount Obligation.

24. In summary:

(a) the PAYGW Obligation is the obligation on an employer to withhold amounts from certain payments to, amongst others, employees which amounts must be remitted to the Commissioner by the relevant due dates; (b) the Net Amount Obligation concerns the obligation on an entity registered under the GST Act to give the Commissioner a GST return for each tax period. In the circumstances set out in s 155-15 of the Act, that return is treated as being a notice of assessment by the Commissioner and the entity must pay that assessed amount by the date specified in s 33-3 of the GST Act.

22. Section 269-15(1) of the Act imposes an obligation on the directors of a company on or after the initial day to cause the company to comply with the obligations set out in paragraph [21] above. The initial day referred to in s 269-15(1) is defined in s 269-10(1).

23. Section 269-15(2) of the Act provides that the obligation on directors referred to above continues until the company complies with its obligations or an event described in s 269-15(2) occurs (which concerns a form of external administration).

24. Section 269-20(1) of the Act imposes an obligation on such a director to pay a penalty if the obligations of the director under s 269-15 are not complied with by the due day, and by s 269-20(2) that penalty is due and payable at the end of the due day.

25. Proceedings against a director to recover a penalty, however, must not be commenced unless the Commissioner has given the director 21 days' notice setting out what the Commissioner thinks is the unpaid amount of the company’s liability under its obligation. Such a notice is commonly known as a director penalty notice (DPN). A director’s penalty is, however, remitted under s 269-30(1) of the Act if, before or within 21 days after the Commissioner gives the DPN, the director stops being a director because of events stated in that section.

DCT proved its case

26. I accepted that the following was established by the DCT’s evidence, including the contents of the Certificate. The following is largely extracted from the Plaintiff’s written submissions which I accepted, with necessary adjustments based on Mr Griffith’s evidence updating the unpaid amounts as at the date of the hearing.

27. In relation to CCS:

(a) CCS was incorporated on 24 January 2013 and was wound up on 24 October 2023; (b) the Defendant was appointed as a director on 15 April 2019 and ceased to be a director on 30 June 2020; (c) the Defendant’s liability to pay a penalty under div 269 arose in respect of CCS’s failure to pay to the Commissioner by the relevant due dates amounts withheld under the PAYG Withholding provisions in the sum of $575,616.45; (d) for each of the months in the period 1 January 2019 to 30 June 2020, CCS notified the Commissioner of amounts of PAYG Withholding by lodging BAS Forms (CCS N****et Amounts); (e) upon being appointed as a director of CCS on 15 April 2019, the Defendant was under an obligation to cause CCS to pay the CCS Net Amounts. The Defendant became liable to pay to the Commissioner a penalty equal to the unpaid amount of the CCS Net Amounts because CCS did not pay by the due days the total amount of the CCS Net Amounts. In relation to the amounts in which the due dates occurred before his appointment, the Defendant became liable to penalty equal to those unpaid amounts because he remained under an obligation to pay those amounts 30 days after having been appointed as a director of CCS; [3] (f) subject to any defence, the Defendant is liable to pay to the Commissioner a penalty in the amount of $575,616.45 in respect of the unpaid amount of the Net Amounts.

28. In relation to Beacon:

(a) Beacon was incorporated on 7 March 2013; (b) the Defendant was appointed as a director on 31 May 2013 and ceased to be a director on 10 January 2024; (c) for the tax periods 1 April 2020 to 30 April 2020 and 1 May 2020 to 31 May 2020 the Commissioner made, or is taken to have made, assessments of Beacon’s assessed net amounts in relation to GST (Beacon Net Amounts); (d) the Defendant, as a director of Beacon, was under an obligation to cause Beacon to pay the Beacon Net Amounts. Beacon did not pay the Commissioner by the due days the total amount of the Beacon Net Amounts, and, accordingly, the Defendant became liable to pay to the Commissioner a penalty under div 269 equal to the unpaid amount of the Beacon Net Amounts; (e) the unpaid Beacon Net Amounts is the sum of $31,570; (f) subject to any defence, the Defendant is liable to pay to the Commissioner a penalty in the amount of $31,570.00 in respect of the unpaid amount of the Beacon Net Amounts.

29. In relation to CPG:

(a) CPG was incorporated on 20 June 1991; (b) the Defendant was appointed as a director on 14 February 2014 and ceased to be a director on 14 March 2023; (c) for each of the monthly tax periods in the period:

(i) 1 April 2020 to 31 March 2021; (ii) 1 May 2021 to 30 June 2021; and (iii) 1 August 2021 to 31 December 2021

the Commissioner made, or is taken to have made, assessments of CPG’s assessed net amounts (CPG Net Amounts);

(d) the Defendant, as a director of CPG, was under an obligation to cause CPG to pay the CPG Net Amounts. CPG did not pay the Commissioner by the due days the total amount of the CPG Net Amounts, and accordingly the Defendant became liable to pay to the Commissioner a penalty equal to the unpaid amount of the CPG Net Amounts; (e) the total of the unpaid CPG Net Amounts is the sum of $82,461.00; (f) subject to any defence, the Defendant is liable to pay to the Commissioner a penalty in the amount of $82,461.00 in respect of the unpaid amount of the CPG Net Amounts.

30. The evidence established that written notice of the director penalties was given to the Defendant on:

(a) 20 March 2025 in relation to CCS; (b) 15 March 2024 in relation to Beacon; and (c) 3 June 2024 in relation to CPG.

31. None of the events set out in s 269-30 occurred in relation to any of the unpaid amounts, and accordingly, there was no remittance of any of the penalties.

32. Accordingly, I found, based on the evidence in the two affidavits relied upon by the DCT, including the Certificates, the facts and matters set out in paragraphs [26]-[31] above and that subject to the Defendant making good a defence, the DCT had established that the Defendant was liable to it in the amounts referred to in paragraph [27]-[29] above.

Defendant’s Evidence and Argument

33. The following is a summary of the Defendant’s evidence:

(a) The companies formed part of the Linchpin Group which was at relevant times in liquidation, although the Defendant accepted that the directors of the subsidiaries of that Group, which included the three companies relevant to these proceedings, remained directors notwithstanding the position of their holding company (or ultimate holding company – there was no clarity in the evidence of the structure of the Linchpin Group); (b) In relation to CCS and Beacon, there were two directors and the Defendant was neither a managing director, chief executive officer (CEO), chief financial officer (CFO), nor was he a signatory to the bank accounts of those companies. In relation to CPG, he was the sole director but not a signatory to the bank account of the company. There was a CFO across each of the companies. He was not a signatory to the bank account of CPG; (c) In relation to CPG, he said that initially the Share Sale was for a price of $600,000 but ultimately the sale price was reduced to $5,000 because the purchaser was to take on the liabilities of CPG. The Defendant tendered the Share Sale Agreement. Clause 5.1 of that agreement stated:

“The parties agree that the Purchaser will assume all assets and liabilities of the Company”;

(d) He did not know the intention of the purchaser of the shares in CPG other than what was set out in the Share Sale Agreement although he had held the view that the outstanding tax was taken care of by reason of the Share Sale. He said that sometime after completion of the Share Sale Agreement, he had a communication with the purchaser who enquired whether the outstanding tax obligations of CPG had been paid. He said he did not know what that inquiry meant; (e) Beacon was sold to another company owned by the purchaser of the shares in CPG and that Beacon had enough cash at the time to pay its outstanding tax obligation and that he did not know why that had not been done.

34. Ultimately, the Defendant made submissions which substantially repeated the matters set out in paragraph [5(b)-(d)] above and the matters referred to in paragraph [33] above.

35. There was no merit in the following matters raised by the Defendant for the following reasons:

(a) First, the fact that he was not the only director of the relevant companies has no bearing on his liability to the DCT. Directors are severally liable for Director Penalties. Further, a director has rights of contribution if the DCT seeks and recovers penalties from one but not all directors; [4] (b) Secondly, the Defendant’s financial position, although no doubt a concern for him, is not relevant, nor does it provide a defence, to the DCT’s claim against him; (c) Neither ss 1317 nor 1318 of the Corporations Act is available to the Defendant. Section 269-35(5) provides that s 1318 has no operation with respect to an obligation or liability of a director under div 269. Section 1317 on its express terms applies only in relation to proceedings for a contravention of a civil penalty provision under the Corporations Act.

36. With respect to the DCT’s claim in relation to CPG, the Defendant relied on the Share Sale. Whilst not pleaded, and not articulated clearly, it appeared that in doing so, the Defendant sought to call in aid the defence in s 269-35(2)(a) or (b). Section 269-35(2)(a) provides that a director is not liable to a penalty if the director “took all reasonable steps to ensure that one” of the things set out in s 269-35(2)(a) occurred. Section 269-35(2)(b) provides that a director is not liable to a penalty if there were no reasonable steps the director could have taken to ensure that any of those things happened.

37. It appears that the Defendant sought to advance an argument that by participating in the Share Sale he took a reasonable step, and because he was not the principal person managing the companies and was not a signatory to the bank accounts, there were no reasonable steps he could have taken to ensure any of the things set out in s 269-35(2)(a)(i)-(iii) occurred.

38. In Canty v Deputy Commissioner of Taxation (Canty), [5] Handley JA (with whom Beazley JA agreed):

(a) at [42]-[49], determined that the defences in the predecessor to s 269-35(2)(a) and (b) had to be assessed against the whole period from the time of the obligation on the Defendant to cause the relevant company to pay the outstanding tax until the expiry of the Director’s Penalty Notice for that outstanding tax (14 days after the giving of the notice). That is, for example, with respect to the predecessor of s 269-35(2)(a), it may not be enough to establish all reasonable steps were taken for a part of that period; the circumstances that obtained for the whole period must be taken into account; (b) at [32]-[41], having regard to the fact that the defence in the predecessor of s 269-35(2)(a) required all reasonable steps to be taken to ensure one the things set out happened, noted that it may not be enough to establish only that all reasonable steps were taken in relation to one of those things. His Honour determined that it would depend on the circumstances and the reasonable availability of the other things set out in the predecessor of s 269-35(2)(a). That is, the Defendant must show, having regard to the four matters set out in the subsection, that all reasonable steps were taken to ensure one of those things happened; (c) at [32], referred with approval to Miller v DC of T [6] in which it was held that in relation to the defence in the predecessor of s 269-35(2)(b), which required proof that there were no reasonable steps that could be taken to secure compliance, that proof of that negative required a defendant to address each of the steps referred to in the predecessor of s 269-35(2)(a).

39. In my view, the approach of the Court of Appeal in Canty has application to s 269-35(2)(a) and (b). There is no material difference between those sections and the predecessor sections considered in Canty. [7]

40. The Defendant’s evidence simply did not address the matters necessary to make good either defence in s 269-35(2).

41. First, in relation to s 269-35(2)(a):

(a) as it relates to CPG, other than the Share Sale, there was no evidence of any step he took to ensure one of the things set out in that section happened. Indeed, it was not apparent on the evidence what step he took in relation to the Share Sale (noting that the vendor of the shares was a corporate entity). In relation to the Share Sale, my view is that it is not a step to “ensure” that the directors caused one of the things set out in the subsection to happen. It was a sale which, inter partes, shifted the obligation to cause CPG to pay its outstanding tax to the purchaser. The Share Sale Agreement was entered into on 9 June 2022 and the Plaintiff conceded that completion occurred in 2023. The Penalty Notice in relation to CPG was not served until 3 June 2024. However, the Defendant led no evidence as to any step he took prior to the Share Sale nor after the Share Sale up to the expiry of the Director Penalty Notice (that is, in the period referred to in paragraph [38(a)] above. There was no evidence that he sought to ensure the directors caused any one of the things set out in the subsection to occur, particularly in the period prior to the Share Sale. Leaving management of a company to another director or leaving the signing authority of bank accounts to other individuals does not relieve a director from his or her director tax obligations nor is it a basis for making good a defence under s 269-35(2). [8] The Defendant did not establish that he “took all reasonable steps” throughout the whole relevant period to ensure one of the things set out in the subsection happened; (b) in relation to CCS and Beacon, the Defendant did not give any evidence of any step he took, let alone that he took “all reasonable steps”. His evidence was simply that another director or CFO was managing the relevant operation and was signatory to the relevant bank account. That is, he left it to others to cause the company to comply with its tax obligations and does not know why they did not (particularly in relation to Beacon which he said had sufficient funds to pay its obligations). In the absence of such evidence, his defence failed.

42. Secondly, in relation to s 269-35(2)(b):

(a) The Defendant did not address each of the things set out in subsection (a) to establish that no reasonable steps could have been taken to ensure that any of those things happened; (b) In any event:

(i) in relation to CCS and Beacon, there is no evidence that can support a finding that no reasonable steps could have been taken. The Defendant’s evidence, at its highest, is that another director had management of the company and that he was not a signatory to the relevant bank accounts. Those facts simply could not make good the defence as they do not prove the negative required; (ii) in relation to CPG, in the period prior to the Share Sale, similarly there is no evidence that can support a finding that no reasonable steps could have been taken. The Defendant’s obligations as a Director for the company’s outstanding tax arose well before the Share Sale. The Defendant’s evidence in relation to this period, at its highest, is that another director had management of the company and that he was not a signatory to the relevant bank accounts. Those facts simply could not make good the defence as they do not prove the negative required.

43. For these reasons, the Defendant failed to establish either defence in s 269-35(2)(a) or (b).

Conclusion

44. The DCT established an entitlement to judgment against the Defendant in the amount of $748,375.52 inclusive of interest pursuant to s 100 of the CPA to the date of judgment, and costs. At the Hearing, the DCT indicated that it was seeking interest only from the date of the filing of the Statement of Claim. The DCT was entitled to interest pursuant to s 100 of the CPA.

45. Accordingly, for the above reasons, I made the following Orders:

46. Judgment for the Plaintiff against the Defendant in the amount of $748,375.52, inclusive of interest.

47. The Defendant pay the Plaintiff’s costs as agreed or assessed.

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Endnotes

See Deputy Commissioner of Taxation v Lewer [2001] VSC 114 at [6] where Bongiorno J was dealing with the application of s 255-5 (the statutory precursor to s 350-12) which was, in material respects in the same terms as s 350-12 of the Act. See also Deputy Commissioner of Taxation v Raskovic [2009] NSWSC 281 at [22]; (2009) 75 ATR 359 at 364; Deputy Commissioner of Taxations v Lawson [2017] VSC 789; (2017) ATC 20-644; Deputy Commissioner of Taxation v Houston [2026] NSWSC 392.

A defendant must do more than merely plead matters attacking the DCT’s prima facie evidence: DCT v Epov [2008] NSWSC 1085 at [32]. See also Deputy Commissioner of Taxation v Houston [2026] NSWSC 392 at [23].

Act, s 269-20(3).

Act s 269-45

(2005) 63 NSWLR 152; [2005] NSWCA 84.

[1997] NSWCA 205; (1997) 98 ATC 4059.

Deputy Commissioner of Taxation v Hartman [2021] NSWDC 274 at [69].

Deputy Commissioner of Taxation v Clark (2003) 57 NSWLR 113 at 141-142; [2003] NSWCA 91 at [116], [121]; Snell v Deputy Commissioner of Taxation [2020] NSWCA 29 at [49] and [89]-[90].