A recent decision by the District Court of Western Australia has criticised the ATO’s practice of routinely bringing summary judgment applications out of time. Will it be enough to force a change in the ATO’s practices?
Deputy Registrar Hewitt observed in Deputy Commissioner of Taxation v Babij that ‘the Deputy Commissioner… invariably brings applications for summary judgment outside the time permitted by the rules, and his delay in doing so is usually significant.’
Deputy Registrar Hewitt went on to say that the Deputy Commissioner ‘has not been diligent in pursuing this matter and certainly has not complied with the relevant rules concerning the filing of summary judgment applications’.
The Deputy Registrar also observed regarding the relevant claim against Mr Babij for ‘it is arguable that there was no effective step which [the defendant] could take’ to ensure his compliance with tax obligations. Indeed, the court considered that the defendant may not have even been reasonably expected to recognise any breach of his obligations. Therefore, the request for summary judgment was rejected on the factual grounds, in addition to being out of time.
Under the court rules, summary judgments are reserved for the clearest of cases. The court voiced its disapproval of the Deputy Commissioner bringing such an application in all of the circumstances and stated that ‘the way that this action has been conducted does not engender sympathy for the plaintiff’.
This decision brings to mind our other articles on the ATO’s obligations as a model litigant. In that article we discussed the high standards to which Government agencies are required to adhere within the litigation process.
Cove Legal offers specialist expertise in the area of tax disputes and insolvency. We represent clients on all aspects of ATO debt recovery action (such as director penalty notices, garnishee notices, freezing orders, default assessments, audit requests and ATO criminal prosecutions). If you are facing actual or threatened ATO debt action or need advice on an insolvency situation generally, speak to us today.
Roger Blow, Practice Director, Ph: +61 8 6381 0326, or e: roger@covelegal.com.au
This publication is not intended to provide and does not provide legal advice. You should seek professional legal advice relating to your specific situation(s) before taking any action based upon its contents.