The Supreme Court of South Australia has dismissed an appeal by a taxpayer against decisions of the Master of the Court to grant summary judgment to a Deputy Commissioner for a tax debt of some $450,000 (plus interest) and to dismiss the taxpayer’s claim for a stay of execution of the judgment.

On appeal, the taxpayer argued that in granting summary judgment and refusing to order a stay of proceedings, the Master failed to properly take into account that there was an application for review of the assessment pending or that enforcement of the judgment would cause extreme personal hardship.

In dismissing the taxpayer’s appeal, the Court agreed with the Master’s finding that the taxpayer had no reasonable prospect of defending the Deputy Commissioner’s substantive claim and that s 177(1) of the ITAA 1936 was conclusive evidence of the debt due.

The Court also found that the issue of extreme financial hardship did not go to the merits of any defence to the claim. In this regard, the Court also found that the taxpayer failed to discharge the onus upon him of showing that extreme personal hardship would follow from the refusal to grant a stay, and that subsequent evidence tended to show otherwise.

Finally, the Court found that the Master had not erred in striking out of the taxpayer’s counterclaim of defamation against the Deputy Commissioner (which was based on his claim that the Deputy Commissioner caused ASIC to publish defamatory statements about him). In doing so, the Court agreed with the Master that the claim was “vexatious and frivolous” in the circumstances and was “foredoomed to fail”.

(DCT v Moignard [2013] SADC 165, Supreme Court of South Australia, Soulio J, 6 December 2013.)

[LTN 239, 10/12/13]

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