The District Court of South Australia has dismissed an appeal from the decision of a Master of the Court which upheld the validity of a Director’s Penalty Notice (DPN) which contained 2 “horizontal” errors in a DPN issued to the directors.
The mistakes occurred in the “horizontal” lines of the notice which set out 6 items of liability in 3 columns consisting of a withholding period, the sum withheld, and the sum unpaid.
In dismissing the directors’ appeal, the District Court found that the Master correctly followed the decision of the Queensland Court of Appeal in DCT v Falzon (2008) 74 ATR 76 in which it held that a DPN which contained one or more horizontal errors was not misleading, as the notice fulfilled its statutory purpose notwithstanding the errors and therefore was valid as to the correctly stated amounts payable.
In applying the decision to the matter before it, the District Court dismissed the directors’ claims that a horizontal error necessarily imported a vertical error and that if the recipient were to add up the individual items of unpaid tax, he would come to a wrong total if one of the individual items was wrong. However, in dismissing this argument, the District Court noted that where a composite notice asserted separate and distinct liability for each individual item (as in this case), the notice was not misleading, notwithstanding there was a horizontal error.
(DCT v Ciccarello & Ors [2013] SADC 30, District Court of South Australia, Barrett J, 13 March 2013.)
[LTN 52, 18/3/13]