Following a 2010 decision of the Federal Court, in DCT v Hua Wang Bank Berhad (No 2) [2010] FCA 1296, to grant summary judgment for some $39m against several companies, including penalties and GIC of over $2m, the taxpayers have been unsuccessful in their application to have the GIC component of the summary judgment dismissed. However, the taxpayers have been successful in obtaining a stay of the enforcement of the GIC component of the judgment on the basis that it would be unjust to permit the Deputy Commissioner to levy execution on the GIC judgment while the issue of remission of the GIC was still open – particularly as the Court noted that the taxpayers’ application for remission was made 9 months ago and it could not be regarded as “hopeless” in the circumstances.
In arriving at its decision, the Court dismissed the taxpayers’ submissions that they had reasonable prospects of defending the Deputy Commissioner’s claims for GIC as subsequent amendments to the tax law did not apply to proceedings which had already been determined, and that they were also entitled to invoke s 361-5(1) of Sch 1 to the TAA, which broadly provides that a person is not liable to GIC where the person’s liability to GIC arises from reliance upon a ruling given by the Commissioner, and in particular Taxation Ruling TR 2004/15 (dealing with a company’s residency status). Accordingly, the Federal Court concluded that while the Deputy Commissioner was entitled to judgments for the amounts of GIC, [but that] those judgments should be stayed until the taxpayers’ remission applications made on 16 March 2012 were dealt with.
(DCT v Hua Wang Bank Berhad (No 4) [2012] FCA 1482, Federal Court, Perram J, 21 December 2012.)
[LTN 3, 7/1/13]