Services of Director Penalty Notices (DPN) - DCoT v Issa [2025] NSWSC 144

In the recent case Deputy Commissioner of Taxation v Issa [2025] NSWSC 144, the Court held that service of a DPN is not dependent on the director having received the notice. The DPN will be deemed to have given by the ATO placing it in the post addressed to the last known address of the director (within the ATO or ASIC's record).

Issuance of Director Penalty Notices

On 29 August 2023, the Australian Taxation Office generated and arranged for the posting of three Director Penalty Notices to Elie Issa for unpaid GST liabilities of three companies—Seeky IP, Go Check ID, and Sports Foyer IP. The combined unpaid amounts exceeded $2 million. Under Division 269 of Schedule 1 to the TAA, Elie became personally liable for penalties equal to the companies’ unpaid amounts after they failed to meet their obligations.

Commencement of Recovery Proceedings

On 18 April 2024, the Deputy Commissioner commenced proceedings to recover the penalties. Elie denied liability, asserting that he never received the notices and that, even if they were posted, they were incorrectly issued because they were sent by an external contractor (Computershare Communication Services, CCS) rather than the Commissioner as required.

Evidence Regarding Printing and Posting

The Court accepted detailed evidence from ATO and CCS personnel showing that the ATO transmitted print‑ready correspondence files daily to CCS. On 28 August 2023, CCS received a file containing the three notices addressed to Elie. CCS printed the notices, processed them through its mailing machinery, and lodged them with Australia Post on 29 August 2023.

Arguments About Misaligned Pages

Elie argued that barcodes on the notices suggested possible misalignment in envelopes. The Court rejected this, accepting evidence that CCS’s machines automatically stopped if pages were misaligned and that no irregularities were recorded. The Court found, on the balance of probabilities, that the notices were correctly addressed, pre‑paid, and posted on 29 August 2023.

Use of External Contractors

Elie contended that only the Commissioner, a delegate, or an ATO officer could lawfully perform the act of posting. The Court rejected this argument, holding that printing and posting are administrative tasks that do not require statutory power and may be performed by external service providers without formal delegation.

Conclusion

The Court concluded that, for the purposes of s 269‑25, the notices were validly “posted by the Commissioner” even though CCS physically performed the printing and mailing steps.