CLK Kitchens & Joinery Pty Ltd v Commissioner of Taxation

• Jurisdiction: Australia Federal only
• Judge: DERRINGTON J
• Judgment Date: 12 July 2019
• Neutral Citation: [2019] FCA 1086
• Court: Federal Court
• Date: 12 July 2019

FEDERAL COURT OF AUSTRALIA

CLK Kitchens & Joinery Pty Ltd v Commissioner of Taxation [2019] FCA 1086

File numbers:	QUD 369 of 2017QUD 241 of 2018
Judge:	DERRINGTON J
Date of judgment:	12 July 2019
Catchwords:	TAXATION – PAYG liability – whether estimates by Commissioner of PAYG amounts valid – whether PAYG withholder gave a statutory declaration which had the effect of reducing or revoking estimate – whether DPNs issued on basis of PAYG estimates valid – whether reduction in estimate required withdrawal of DPNs ; PRACTICE – summary judgment in complex cases – where substantial material and numerous jurisdictional errors alleged – where Court asked to assess large amounts of evidence – where evaluation discloses no real prospect of success by applicant – where most evidence irrelevant
Legislation:	Administrative Decisions (Judicial Review) Act 1977 (Cth) Federal Court of Australia Act 1976 (Cth) Income Tax Assessment Act 1936 (Cth) Income Tax Assessment Act 1997 (Cth) Judiciary Act 1903 (Cth) Statutory Declarations Act 1959 (Cth) Taxation Administration Act 1953 (Cth), Sch 1, s 12-35, s 16-70, Div 268, Div 269 Tax Laws Amendment (Transfer of Provisions) Act 2010 (Cth) Federal Court Rules 2011 (Cth)
Cases cited:	Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321 Bank of New South Wales v Murphett [1983] 1 VR 489 Barclays Bank Ltd v W J Simms Son & Cooke (Southern) Ltd [1980] QB 677 Bernstrom v National Australia Bank Ltd [2003] 1 Qd R 469 Bibby Financial Services Australia Pty Ltd v Sharma [2014] NSWCA 37 Brinsmead v Harrison (1871) LR 7 CP 547 Cassaniti v Federal Commissioner of Taxation (2010) 186 FCR 480 Commercial Bank of Australia v Younis [1979] 1 NSWLR 444 Commissioner of Taxation v Craddock (2006) 204 FLR 274 Commonwealth Bank of Australia v ZYX Learning Centres Ltd (2014) 103 ACSR 476 Commonwealth of Australia v Verwayen (1990) 170 CLR 394 Deputy Commissioner of Taxation v Applied Design Development Pty Ltd (in liq) (2002) 117 FCR 336 Deputy Commissioner of Taxation v Armstrong Scalisi Holdings Pty Ltd [2019] NSWSC 129 Filgate v Thompson (1874) 5 AJR 124 Foodco Management Pty Ltd v Go My Travel Pty Ltd [2002] 2 Qd R 249 Guss v Commissioner of Taxation (2006) 152 FCR 88 Jessup v Lawyers Private Mortgages Ltd [2006] QSC 3 K J Davies (1976) Ltd v Bank of New South Wales [1981] 1 NZLR 262 Perdikaris v Deputy Commissioner of Taxation (2008) 172 FCR 412 Price v Commissioner of Taxation [2019] FCA 543 Queensland University of Technology v Project Constructions (Aust) Pty Ltd (in liq) [2003] 1 Qd R 259 Re Plutus Payroll Pty Ltd [2017] NSWSC 1360 Roche v Deputy Commissioner of Taxation (2014) 290 FLR 268 Sargent v ASL Developments Ltd (1974) 131 CLR 634 Seventeenth Canute Pty Ltd v Bradley Air-Conditioning Pty Ltd [1987] 1 Qd R 111 SK Foods LP v SK Foods Australia Pty Limited (in liq) (No 3) (2013) 214 FCR 543 Spencer v Commonwealth of Australia (2010) 241 CLR 118 Theseus Exploration NL v Foyster (1972) 126 CLR 507 Transtar Linehaul Pty Ltd v Deputy Commissioner of Taxation (2011) 196 FCR 271 Zippo Manufacturing Co v Jaxlawn Pty Ltd [2011] FCA 1125 Zippo Manufacturing Co v Jaxlawn Pty Ltd [2011] FCA 1125
Date of hearing:	13 December 2018
Registry:	Queensland
Division:	General Division
National Practice Area:	Taxation
Category:	Catchwords
Number of paragraphs:	268
Counsel for the Applicants:	Mr D Marks QC with Mr C Craig
Solicitor for the Applicants:	Morgan Conley
Counsel for the Respondent:	Dr R Schulte
Solicitor for the Respondent:	Australian Taxation Office

ORDERS

		QUD 241 of 2018
BETWEEN:	CLK KITCHENS & JOINERY PTY LTD ACN 110 815 828 First Applicant ; CLINT LUCKY KARANANOS Second Applicant
AND:	COMMISSIONER OF TAXATION Respondent
		QUD 369 of 2017
BETWEEN:	ACN 110 815 828 PTY LTD First Applicant ; CLINT LUCKY KARANANOS Second Applicant
AND:	COMMISSIONER OF TAXATION Respondent

JUDGE:	DERRINGTON J
DATE OF ORDER:	12 JULY 2019

THE COURT ORDERS THAT:

1. In proceeding QUD 369 of 2017:

(a) the proceeding is dismissed;

(b) the applicants pay the respondent’s costs of the proceeding.

2. In proceeding QUD 241 of 2018:

(a) the proceeding is dismissed;

(b) the applicants pay the respondent’s costs of the proceeding.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

DERRINGTON J:

INTRODUCTION

1 The Commissioner of Taxation seeks summary judgment in two proceedings brought against him. The applicants in each proceeding are CLK Kitchens & Joinery Pty Ltd (CLK Kitchens) and its sole director, Clint Lucky Karananos. The proceedings seek judicial review of decisions and conduct of the Commissioner. The decisions and conduct relate to enforceable estimates of the liability of CLK Kitchens to remit amounts withheld under the Pay As You Go Withholding scheme (PAYGW amounts) to the Commissioner, and Director Penalty Notices (DPNs) issued to Mr Karananos in respect of the estimated amounts.

2 In the first proceeding, QUD 369 of 2017, the applicants impugn the Estimate Notice and DPNs issued by the Commissioner in July 2017. The second further amended originating application (2FAOA) seeks review of an array of “decisions” and related “conduct”. Despite the needlessly over-complicated approach adopted, the real complaints concern: the validity of the Commissioner’s decision to estimate CLK Kitchens’ liability to remit PAYGW amounts; whether a statutory declaration by Mr Karananos was effective (or required the Commissioner) to reduce or revoke the estimate; and whether the Commissioner was required to withdraw the DPNs.

3 The second proceeding, QUD 241 of 2018, seeks review of “decisions” and related “conduct” in March 2018, in relation to a reduction to the estimate the subject of the first proceeding. The further amended originating application (FAOA) in the second proceeding is also over-complicated, but turns on many of the same fundamental questions of the operation of Schedule 1 to the Taxation Administration Act 1953 (Cth) (TAA).

4 CLK Kitchens and Mr Karananos will be referred to in these reason as the applicants, even...