Deputy Commissioner of Taxation v Miraki (Summary Judgment)

• Jurisdiction: Australia Federal only
• Judgment Date: 28 October 2021
• Neutral Citation: [2021] FCA 1361
• Court: Federal Court
• Date: 28 October 2021

Federal Court of Australia

Deputy Commissioner of Taxation v Miraki (Summary Judgment) [2021] FCA 1361

File number:	NSD 253 of 2021
Judgment of:	THAWLEY J
Date of judgment:	28 October 2021
Date of publication of reasons:	4 November 2021
Catchwords:	PRACTICE AND PROCEDURE – application for summary judgment under r 26.01 of the Federal Court Rules 2011 (Cth) – no reasonable defence to applicant’s claim – summary judgment plus General Interest Charge entered against the respondent
Legislation:	Federal Court Rules 2011 (Cth) r 26.01 Income Tax Assessment Act 1936 (Cth) s 174 Taxation Administration Act 1953 (Cth) ss 8WB(1)(c), 14ZZM, 14ZZR, Sch 1 s 350-10(3)
Cases cited:	Batagol v Federal Commissioner of Taxation [1963] HCA 51, (1963) 109 CLR 243 Commissioner of Taxation v Ornelas [2016] FCA 457 Deputy Commissioner of Taxation v Taylor (1983) 2 NSWLR 139 Federal Commissioner of Taxation v Prestige Motors Pty Ltd [1994] HCA 39, (1994) 181 CLR 1
Division:	General Division
Registry:	New South Wales
National Practice Area:	Taxation
Number of paragraphs:	11
Date of hearing:	28 October 2021
Counsel for the Applicant:	Mr P Afshar
Solicitor for the Applicant:	HWL Ebsworth
Counsel for the Respondent:	Mr D McGovern SC with Mr D Allen
Solicitor for the Respondent:	William Roberts Lawyers

ORDERS

		NSD 253 of 2021
BETWEEN:	DEPUTY COMMISSIONER OF TAXATION Applicant
AND:	SEPIDEH MIRAKI Respondent

order made by:	THAWLEY J
DATE OF ORDER:	28 OCTOBER 2021

THE COURT ORDERS THAT:

1. Under r 26.01 of the Federal Court Rules 2011 (Cth), summary judgment be entered for the applicant against the respondent in the sum of $5,844,558.03 plus General Interest Charge from the date of filing the originating application to the date of judgment.

2. To the extent necessary, the freezing orders made by Wigney J on 22 March 2021, as subsequently extended and varied, continue in effect until further order, this order having effect from the making of the order for summary judgment in the applicant’s favour.

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

REASONS FOR JUDGMENT

(Revised from Transcript)

THAWLEY J:

1. By an interlocutory application dated 10 August 2021, the applicant (the Deputy Commissioner of Taxation) seeks summary judgment against the respondent (Ms Miraki) pursuant to r 26.01(1)(e) of the Federal Court Rules 2011 (Cth) in the sum of $5,844,558.03 plus General Interest Charge from the date of filing the originating application to the date of judgment. Rule 26.01(1)(e) provides:

26.01 Summary judgment

(1) A party may apply to the Court for an order that judgment be given against another party because:

…

(e) the respondent has no reasonable prospect of successfully defending the proceeding or part of the proceeding.

2. Although the respondent by her written submissions opposed the making of an order for summary judgment, Senior Counsel for the respondent on the hearing of this application indicated that there was no further resistance to that course. This concession, properly made, was only made after the evidence was read and after the Commissioner had made submissions on his application.

3. Summary judgment will be entered in favour of the Commissioner under r 26.01 of the Federal Court Rules.

4. I am satisfied that there is no reasonable defence to the Commissioner’s claim. The relevant principles may be stated by reference to the decision of Bromwich J in Commissioner of Taxation v Ornelas [2016] FCA 457. Mr Ornelas had conceded that the jurisdictional threshold for summary judgment had been met: Ornelas at [6]. Bromwich J considered the concession to be appropriate. His Honour explained at [7]:

On this application for summary judgment, I am able to be satisfied that Mr Ornelas has no reasonable prospect of successfully defending the claim at paragraph 1 of the originating application, for the following reasons:

(a) section 175 of the Income Tax Assessment Act 1936 (Cth) (ITAA 1936) and s 350-10(1) of Schedule 1 to the TAA (which is in substantially similar terms to the former s 177 of the ITAA 1936) and related provisions have the effect that production of a notice of assessment is conclusive evidence of the due making of the assessment and that the amounts and particulars in the notices of assessment are correct other than in proceedings under Part IVC of the TAA [Taxation Administration Act 1953 (Cth)] on a review or appeal relating to the assessment, which is not these proceedings [see also: Commissioner of Taxation v Hua Wang Bank Berhad (2010) 273 ALR 194; [2010] FCA 1014 at 199 at [15] (Kenny J)];

(b) the production of a notice of assessment gives rise to a present debt, not one that arises in future if payment is not made by the date specified in the notice: Deputy Commissioner of Taxation (ACT) v Sharp (1988) 91 FLR 70; (1988) 19 ATR 1515 at 1519 [see also: Deputy Commissioner of Taxation v Shi [2018] FCA 1915 at [19] (Yates J)];

(c) in any event, the certificate under s 255-45 of the TAA establishes that each of the three notices of assessment, plus a notice of assessment of shortfall penalty for the financial years ended 30 June 2012 and 30 June 2013, plus a notice of assessment of penalty for failing to provide a document for the financial year ended 30 June 2014, all notices having been issued on 2 March 2016, were, as at 24 March 2016, debts due and payable to the Commonwealth by Mr Ornelas;

(d) none of the three jurisdictional error limitations on the various assessments taking effect according to their terms are applicable, in that it is not contended, and there is no basis for me to conclude, that any of them are tentative, provisional or the product of maladministration: Commissioner of Taxation v Futuris Corporation Limited [2008] HCA 32; (2008) 237 CLR 146 at 157 [24]-[25]; Roberts v Deputy Commissioner of Taxation [2013] FCA 1108; (2013) 228 FCR 280 at 285 [19]; see also Pratten v Commissioner of Taxation [2015] FCA 1357 at [24]-[26];

(e) the matters excluded from the challenge to the correctness of an assessment by way of objection, [review by] … the Administrative Appeals Tribunal or [appeal to] this Court are not narrowly confined, this being in accordance with legislative policy to give a full opportunity to object by contesting liability in every respect;

(f) as this is not a Part IVC appeal, the presumptive effect of the provisions referred to above must be given full force and effect: see Federal Commissioner of Taxation v Dalco (1990) 168 CLR 614 at 621-622;

(g) no defence has been filed in these proceedings to the relief claimed in paragraph 1 of the originating application by Mr Ornelas and none has been foreshadowed, with it being conceded that he has no defence in this forum;

(h) the manifest and historical policy of tax legislation in Australia has been to give a taxpayer a full opportunity to object to an assessment and to contest liability, while at the same time to require that in proceedings for the recovery of the tax, the taxpayer will be bound by the assessment and will not be able to go behind it: McAndrew v Federal Commissioner of Taxation (1956) 98 CLR 263 at 270;

(i) the overall legislative regime continues to be: “a clear policy in favour of the revenue against the taxpayer”: Trade World Enterprises Pty Ltd v Deputy Commissioner of Taxation [2006] VSCA 191; (2006) 64 ATR 316 at 322 [19];

(j) the legislation places the Commissioner in a “position of special advantage”: Clyne v Deputy Commissioner of Taxation (1983) 57 ALJR 673 at 674-675; and

(k) the Commissioner is generally free to pursue recovery proceedings despite the pendency of Part IVC proceedings: Southgate Investment Funds Ltd v Deputy Commissioner of Taxation [2013] FCAFC 10; (2013) 211 FCR 274 at 293-295 [77].

5. To these observations may be added a reference to ss 14ZZM (relating to a review of an objection decision in...