Kronen v Commissioner of Taxation [2009] FMCA 1019 (11 March 2009)

Last Updated: 23 October 2009

FEDERAL MAGISTRATES COURT OF AUSTRALIA

KRONEN v COMMISSIONER OF TAXATION

[2009] FMCA 1019

INDUSTRIAL LAW – Application for summary dismissal of application for interpretation of an award – proceedings dismissed as no reasonable prospect of success.

Commonwealth Superannuation Guarantee Charge Act 1992 Federal Magistrates Act 1999 (Cth), s.17A(2) Federal Magistrates Court Rules 2001 (Cth), r.13.10 Superannuation Guarantee (Administration) Act 1992 The Vehicle Industry – Repair, Services and Retail – Award 1983

Kronen v Commercial Motor Industries Pty Ltd (CMI Toyota) [2008] FCAFC 171

Applicant:

HORST WILHELM KRONEN

Respondent:

COMMISSIONER OF TAXATION

File Number:

ADG 260 of 2008

Judgment of:

Simpson FM

Hearing date:

11 March 2009

Date of Last Submission:

11 March 2009

Delivered at:

Adelaide

Delivered on:

11 March 2009

REPRESENTATION

The Applicant:

In person

Counsel for the Respondent:

Mr N. Parkyn

Solicitors for the Respondent:

Australian Government Solicitor

ORDERS

(1) The application filed on 11 November 2008 be dismissed.
(2) The applicant pay the respondent’s costs fixed in the sum of $3,248 payable within three (3) months of today’s date.

FEDERAL MAGISTRATES COURT OF AUSTRALIA AT ADELAIDE

ADG 260 of 2008

HORST WILHELM KRONEN

Applicant

And

COMMISSIONER OF TAXATION

Respondent

REASONS FOR JUDGMENT

Revised from Transcript

1. These extempore reasons concern an application by the Commissioner of Taxation, Australian Taxation Office (“the respondent”) seeking that the applicant's proceedings be dismissed with costs.
2. The applicant in the proceedings, Mr Kronen (“the applicant”), commenced the proceedings with an application filed on 11 November 2008 together with a supporting affidavit filed the same day. The applicant, who was unrepresented, sought the following order:
   • “I ask the Court to provide an interpretation of the "Vehicle Industry Repair Service and Retail Award" relating to employee superannuation.”
3. The application included the following words which the applicant today indicated to the Court were intended to elaborate upon the order that was being sought:
   • “I seek an order that, pursuant to the Commonwealth Superannuation Guarantee Charge Act 1992 and the Superannuation Guarantee (Administration) Act 1992, an employer must make superannuation contributions on an employee's commission earnings.”

Throughout today’s hearing, the applicant has stressed that he does not seek any relief against the respondent but simply asks for an interpretation of the The Vehicle Industry – Repair, Services and Retail – Award 1983 (“the Award”) that will be binding on the Respondent. He simply asks that the Court determine that on a correct interpretation of the Award, employers must include an employee’s commission earnings in calculating that employee’s compulsory superannuation entitlements.

4. The applicant's supporting affidavit states:
   • “It is my contention that a past employer, CMI Toyota, failed to make sufficient compulsory superannuation contributions on my behalf pursuant to the Superannuation Guarantee Charge Act 1992 and the Superannuation Guarantee (Administration) Act 1992.
   • In this instance, pursuant to the acts, the earnings base upon which superannuation contributions must be calculated is determined by reference to the Vehicle Industry Repair Service and Retail Award 1983.
   • Under the Acts, employees are unable to recover any unpaid or outstanding amounts themselves.
   • Sole authority/responsibility for recovery of any unpaid or outstanding amounts rests with the Commissioner and/or Deputy Commissioner of Taxation.
   • In the first instance, the Australian Taxation Office (ATO) advised me that my claim of underpayment was valid.
   • When the ATO was asked to recover the unpaid or outstanding superannuation contributions on my behalf, its position was this:
     • (1) The ATO claimed that it was not suitably qualified to properly interpret an industrial award.
     • (2) It encouraged me to obtain a formal interpretation of the Award by way of the Courts.
     • (3) In the absence of a formal interpretation of the Award, the ATO made its own determination regarding the Award, which had the effect of not requiring it (the ATO) to recover any amount on my behalf.
     • (4) The ATO advised me that, based on any subsequent formal interpretation of the Award that differed from its own, it would recover any amount deemed to be unpaid or outstanding on my behalf.
   • Therefore, I ask the Court to provide a formal interpretation of that section of the Award that will establish the proper earnings base for the calculation of compulsory superannuation contributions.”
5. I note that a copy of the Award has not been put into evidence. I accept what has been put to me in submissions, namely that the applicable award is The Vehicle Industry – Repair, Services and Retail – Award, 1983 and that this is a Federal award. There were earlier proceedings brought by the applicant that related to the Award. In the decision of Kronen v Commercial Motor Industries Pty Ltd (CMI Toyota) [2008] FCAFC 171, a decision of the Full Federal Court delivered on 8 October 2008 their Honours referred to the Award as "The Vehicle Industry - Repair, Services and Retail - Award 1983" and described it as "an award made under the Workplace Relations Act 1996 (Cth)".
6. It is clear from the documents that have been filed on behalf of the Respondent, that the Respondent interpreted the initiating application as the applicant to obtain orders pursuant to the Superannuation Guarantee Charge Act 1992 (Cth) and/or the Superannuation Guarantee (Administration) Act 1992 (Cth). It is clear however from what the applicant has said in open Court today that he does not seek such orders against the Respondent at this stage.
7. The applicant has filed an outline of submission. I have taken into account all that is contained in the submission, and the annexures thereto. The applicant summarises his position at the beginning of the submission when he says:
   • “I submit that in this matter:
     • The authority and responsibility for recovery of any shortfall in superannuation contribution lies solely with the Australian Taxation Office (the ATO).
     • The ATO has acknowledged that it is bound by the terms of the Award.
     • The only impediment to the recovery of any unpaid superannuation contributions is the ATO's own (incorrect) interpretation of the Award.
     • The ATO is properly listed as a party to these proceedings.”
8. I have had the benefit of an outline of submissions from the Respondent. The Respondent says in relation to the application in-so-far as it relates to the order for interpretation of the award that:
   • “ ... it ought not be named as a party to these proceedings in so far as the applicant seeks an interpretation of the Award because:
     • (1) The Commissioner of Taxation (the Commissioner) is not an individual who is bound by the Award;
     • (2) The Australian Taxation Office (the ATO) is not an organisation which is bound by the Award;
     • (3) Neither the Commissioner or the ATO are charged with any statutory powers and/or obligations to oversee the implementation, compliance or administration of the Award;
     • (4) Neither the Commissioner or the ATO have any relevant interest in the interpretation of the Award and do not wish to make any submissions and/or be heard in relation to any matters pertaining to the interpretation of the Award.”
9. None of the material or submissions put to me by the applicant challenges what was put on behalf of the Respondent.
10. It is, in my view, quite inappropriate for the Respondent to be made a party to these proceedings. The applicant can, in certain situations, apply for an interpretation of an award but, if he wishes to do so, he should ensure that all appropriate parties are joined in the proceedings. The Respondent is not such a person.
11. As I mentioned earlier in these reasons, I have not seen the Award and therefore cannot say who the appropriate parties should be. It is for the applicant to take whatever legal advice he considers appropriate and to take such further action as he considers appropriate, but as the proceedings stand at the moment, I cannot see any proper basis for them.
12. The respondent has provided further detailed submissions concerning why the orders sought should not be made. Without going into those submissions in detail, I can only say that, if the applicant's case had been presented as the respondent had thought it would be prior to coming to Court today, I would have been inclined to dismiss the application for those reasons also.
13. I have approached this matter on the basis that it is an application for dismissal pursuant to s.17A(2) of the Federal Magistrates Act 1999 (Cth) and pursuant to r.13.10 of the Federal Magistrates Court Rules 2001 (Cth). These provisions provide that the Court should dismiss proceedings if they have no reasonable prospect of success. This is clearly such a case. In my view the proceedings should be dismissed, and I make an order accordingly.

I certify that the preceding thirteen (13) paragraphs are a true copy of the reasons for judgment of Simpson FM

Associate: J. Semler

Date: 20 October 2009