The Qld Supreme Court has granted a Deputy Commissioner’s application for summary judgment for directors’ penalties totalling almost $1.7m against 2 directors of a company.
The amounts claimed by the Deputy Commissioner were for penalties imposed on the directors in respect of amounts withheld by the company in respect of PAYG tax from payments made to its employees, but which amounts were not paid by the company to the Commissioner. The directors sought to defend the claim on the basis that the penalties had been remitted by operation of law under s 269-30 of the Taxation Administration Act 1953 or, in the alternative, on the basis that they took all reasonable steps under s 269-35.
After review, the Court found that the s 269-30 defence did not have any real prospect of succeeding.
The taking all reasonable steps defence also did not find favour with the Court.
It noted that the explicit purpose of Div 269 was that a company either meets its obligations under Div 16-B or goes promptly into voluntary administration or liquidation. After looking at the material presented, the Court was of the view there was no reason to believe that the defendants had any real prospect of successfully relying on s 269-35(2). It said the defendants’ evidence fell “a long way short of establishing an arguable case that the defendant took all reasonable steps to ensure that one of the s 269-35(2)(a) events occurred or that there were no reasonable steps that he could have taken to ensure that any of those events happened“. The Commissioner’s application for summary judgment was upheld.
(DCT v Rablin; DCT v Shaw  QSC 68, Qld Supreme Court, Bond J, 1 April 2016.)