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Decision Impact Statement

Panayi v Deputy Commissioner of Taxation

Court Citation(s):
[2017] HCASL 238
[2017] NSWCA 93
2017 ATC 20-618
(2017) 319 FLR 228

Venue: NSWCA
Venue Reference No: S152 of 2017
Judge Name: Gageler and Keane JJ
Judgment date: 14 September 2017
Appeals on foot: No
Decision Outcome: Favourable to the Commissioner

Impacted advice

Relevant Rulings/Determinations:

  • None
  • Exclamation This decision has no impact on any related advice or guidance.


    Outlines the ATO's response to this case which concerns the application of the lockdown director penalties provisions as introduced by the Tax Laws Amendment Act 2012.

    Brief summary of facts

    The ATO commenced proceedings to recover liabilities due under the director penalty regime against the taxpayer in his capacity as director of a company. The taxpayer defended the proceedings on grounds inter alia that he was not a director of the company at the relevant time and that the liability had been remitted when members of the company resolved that it be wound up voluntarily. The success of this argument depended on the application of section 269-30 of Schedule 1 to the Taxation Administration Act 1953 (Cth) (TAA) in its unamended form as in force before 30 June 2012.

    The primary judge applying the decision of the Western Australian Court of Appeal in Roche v. Deputy Commissioner of Taxation [2015] WASCA 196 at [56] -[58], rejected the arguments and held that the amended form of section 269-30 of Schedule 1 to the TAA applied to the appellant's penalty because the appellant, as a director of the company, did not stop being under the relevant obligation under section 269-15 of Schedule 1 to the TAA until after 30 June 2012, the date of commencement of item 9 of the Tax Laws Amendment Act 2012. Applying that section as amended, subsection (1) did not apply to effect a remission of the appellant's penalty because the company did not give the Commissioner any notification under section 16-150 of Schedule 1 to the TAA within the period of three months after the due date for the payment of any of the withheld amounts.

    Issues decided by the court

    The issue in the appeal as relevant to the special leave application was limited to:

     whether the primary judge erred in applying the amended form of section 269-30 of Schedule 1 to the TAA.

    The Court of Appeal held that an amendment that prospectively alters a person's unexercised opportunity to have a liability remitted does not engage the common law presumption that statutes do not have a retrospective operation.

    The High Court refused to grant special leave and dismissed the application with costs.

    ATO View of Decision

    The decision accords with the ATO's view of the application of the lockdown director penalties provisions as introduced by the Tax Laws Amendment Act 2012.


    We invite you to advise us if you feel this decision has consequences we have not identified. Please forward your comments to the contact officer.

    Date Issued: 14 March 2018
    Due Date: 11 April 2018
    Contact officer: Yaw Acheampong
    Email address: Yaw.Acheampong@ato.gov.au
    Telephone: 02 9374 2281

    Legislative references:
    Civil Procedure Act 2005 (NSW)

    Corporations Act 2001

    Evidence Act 1995 (NSW)

    Taxation Administration Act 1953

    Tax Laws Amendment (2012 Measures No 2) Act 2012
    Sch 1
    Div 3
    Items 8, 9

    Uniform Civil Procedure Rules 2005 (NSW)

    Case references:
    Abbott v. Minister for Lands
    [1895] AC 425

    Alcan (NT) Alumina Pty Ltd v. Commissioner of Territory Revenue
    (2009) 239 CLR 27
    [2009] HCA 41

    Australian Securities Commission v. Marlborough Gold Mines Ltd
    [1993] HCA 15
    (1993) 177 CLR 485

    Colley v. Futurebrand FHA Pty Ltd
    (2005) 63 NSWLR 291
    [2005] NSWCA 223

    Deputy Commissioner of Taxation of the Commonwealth of Australia v. Woodhams
    (2000) 199 CLR 370
    [2000] HCA 10
    (2000) 43 ATR 757
    2000 ATC 4141

    Farah Constructions Pty Ltd v. Say-Dee Pty Ltd
    (2007) 230 CLR 89

    Federal Commissioner of Taxation v. SNF (Australia) Pty Ltd
    (2011) 193 FCR 149
    [2011] FCAFC 74
    2011 ATC 20-265
    (2011) 82 ATR 680

    Gray t/as Clarence Valley Plumbing Services v. Ware Building Pty Ltd
    [2013] NSWCA 271

    Maxwell v. Murphy
    [1957] HCA 7
    (1957) 96 CLR 261

    Perish v. R
    (2016) 92 NSWLR 161
    [2016] NSWCCA 89

    Roche v. Deputy Commissioner of Taxation
    [2015] WASCA 196

    Seltsam Pty Ltd v. McGuinness
    (2000) 49 NSWLR 262
    [2000] NSWCA 29


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