Whittaker v Simpson[2014] QDC 289

DISTRICT COURT OF QUEENSLAND

1. [1]
   On 3 April 2014, after a summary trial in the Magistrates Court held in Cairns, the appellant was convicted of eight charges under s 8C(1)(a) Taxation Administration Act 1953 (“TAA”) relating to his failure to give to the Commissioner of Taxation income tax returns for eight financial years.

2. [2]
   The appellant now appeals his convictions.

3. [3]
   The appellant was self-represented at the appeal hearing. Both parties provided outlines of argument, and made further submissions on the hearing of the appeal.

Background

4. [4]
   On 15 June 2012, the Deputy Commissioner of Taxation issued to the appellant a final notice under s 162 Income Tax Assessment Act 1936 (Cth) ("ITAA"), which required the appellant to furnish to the Commissioner of Taxation income tax returns for the eight financial years ending 2002, 2003, 2004, 2005, 2007, 2008, 2009 and 2010 by 10 August 2012.

5. [5]
   The appellant was charged with eight offences contrary to s 8C(1)(a) TAA relating to his failure to give to the Commissioner of Taxation income tax returns for the financial years ending 2002, 2003, 2004, 2005, 2007, 2008, 2009 and 2010.

6. [6]
   The appellant pleaded not guilty to all eight charges, and the matter proceeded by way of summary hearing on 19 March 2014. The appellant elected to testify and was cross-examined. During the hearing, the appellant admitted that he received the final notice^[1] and that he did not lodge any of the income tax returns alleged in each of the eight charges.^[2]  These were not disputed on appeal.

7. [7]
   The prosecution case against the appellant was that:

1. The final notice was valid;
2. The appellant received the final notice;
3. The appellant failed to comply with the final notice in that he did not furnish the income tax returns by 10 August 2012 or at all; and
4. As a consequence of the appellant’s failure, the elements of the offence were proved beyond reasonable doubt, namely that:

1. (a)
   The appellant was required pursuant to a taxation law (s 162 ITAA) to give any information or a document (income tax returns for the eight specified years) to the Commissioner by a specified time (10 August 2012); and

2. (b)
   The appellant failed to comply with that requirement.

8. [8]
   The appellant’s defence primarily hinged on his assertions that

1. He had no legal obligation to lodge income tax returns in the absence of a tax file number (“TFN”);^[3]
2. The Commissioner of Taxation was not authorised to use any TFN in relation to the defendant, and therefore the appellent was not obliged to comply with the final notice.^[4]

9. [9]
   In his Notice of Appeal the appellant relies upon 22 grounds of appeal. He abandoned appeal ground in paragraph 18 at the hearing, which asserted that the trial magistrate’s discretion was miscarried by not allowing the defendant to issue a subpoena.

Grounds of Appeal

10. [10]
    The grounds of appeal can be summarised into 5 broad categories

1. (a)
   Ground 1 about the mode of the appeal “An all grounds rehearing as of right”;

2. (b)
   Grounds 2, 3, 5, 7, 9, 10 and 12 about the wording or particularisation of the charges involving an error of law and failing to set out the relevant and essential elements of the offence;

3. (c)
   Grounds 4, 6, 8, 11, 13, 14, 15, 16, 17, 20 and 21 about the trial magistrate failing to consider the essential elements of the offence;

4. (d)
   Ground 19 about the trial magistrate’s discretion being miscarried in dismissing the defendant’s application for disclosure heard on an earlier date; and

5. (e)
   Ground 22 about the “guilty” verdicts being unreasonable.

Mode of Appeal

11. [11]
    Ground 1 is “An all grounds rehearing as of right”.  I took this as a benign description regarding the usual mode of appeal pursuant to s 222 of the Justices Act 1886 (Qld). 

12. [12]
    Pursuant to section 223 of the Justices Act 1886, an appeal under section 222 is by way of rehearing on the original evidence given in the proceedings before the trial magistrate.  The powers of this appellate court are exercisable only where the appellant can demonstrate some legal, factual or discretionary error.^[5]  This is well settled and was not challenged in the appeal.

13. [13]
    Instead, at the hearing of this appeal the appellant submitted in effect that I should refer the various questions raised in the appeal to the Court of Appeal before proceeding further. His position was explained in paragraphs 40 to 42 of his supplementary summary of argument this way:

[40]The appellant’s position is that what constitutes a ‘person’ for the purpose of s 162 Income Tax Assessment Act 1936, is a mixed question of fact and law. However in so far as it refers to a natural person, it is a question of fact

[41]It is submitted that such a ‘person’ must have applied for and subsequently been issued a tax file number and must have authorised the Commissioner of Taxation to use the tax file number in connection with the person’s identity.  The question of whether the Commissioner of Taxation is subject to, or exempt from, the prohibition in s 8WB of the Taxation Administration Act 1953 is one of fact in which the Commissioner bears the burden of proof.

[42]It is submitted that if the Court should refer these questions to the Court of Appeal before proceeding further

14. [14]
    Section 227 of the Justices Act 1886 empowers the court to state in the form of a special case for the opinion of the Court of Appeal any question of law arising upon the facts of the case.  The procedure for stating a case for the opinion of the Court of Appeal is typically restricted to issue of laws arising from uncontroversial facts.  The appellant seeks to agitate a mixed question of fact and law.

15. [15]
    In my view, the case stated procedure is neither necessary nor applicable in the circumstances of this appeal.

Particulars of Complaint

16. [16]
    The appellant asserts that the wording or particularisation of the charges involved an error of law on that they did not set out the relevant and essential elements of the offence (appeal grounds 2, 3, 5, 7, 9, 10 and 12).

17. [17]
    The complaint set out each charge in the following form with variations in the financial year complained about:

“On or about the eleventh day of August 2012 at Earlville and elsewhere in the State of Queensland MARK ALAN WHITTAKER did, contrary to section 8C(1)(a) of the Taxation Administration Act 1953, fail to give an approved form, namely an income tax return setting forth a complete statement of income derived by him from all sources in Australia and elsewhere during the year …. , to the Commissioner pursuant to a taxation law, namely section 162 of the Income Tax Assessment Act 1936.”

18. [18]
    The eight charges were worded identically except the reference to the financial year. In the context of this case, each charge alleged the appellant had failed to give to the Commissioner of Taxation, the “information or document” referred to in s 8C(1)(a) being “an approved form, namely an income tax return …. pursuant to section 162 of the Income Tax Assessment Act”.  Section 162 ITAA empowered the Commissioner to require a person to give a taxation return “in the approved form”.

19. [19]
    The appellant submitted that the ‘description of the offence in this case follows neither 8C(1)(a) TAA nor 162(1) ITAA and nor does it otherwise give a fair or reasonable description of the particulars of the alleged offence.’  In addition, he says that ‘the complaint omits a crucial element particulars of which are necessary to describe if the defendant is expected to understand the charge.’  His seemed to cross-pollinate his arguments about the complaint and particulars, with his merits arguments.

20. [20]
    Nevertheless, it is incumbent on me to consider the grounds, and the starting point is the relevant legislative provisions giving rise to the offences subject of the complaint.

21. [21]
    The supplementary submissions of the respondent’s counsel trace the effect of the amendments made by the Tax and Superannuation Laws Amendment (2014 Measures No. 4) Act 2014, which received royal asset after the summary hearing of 16 October 2014. 

22. [22]
    Section 2 prescribes the commencement date for the amendments contained in the Act and, so far as is relevant here, s 147 commenced retrospectively on 22 December 1999. Section 147 retrospectively amended a drafting error in an earlier amendment,^[6] that is s 29 of Schedule 6 to the Tax Laws Amendment (2011 Measures No.9) Act 2012.

23. [23]
    For purposes of this appeal, the most significant change in the wording of s 8C(1)(a) effected by the 2014 Act amendments were:

1. “an approved form or” was omitted (s 124);
2. “furnish” was changed to “give” (s 147, 1tem 29)
3. “or document” was inserted after the word “information” (s 149, Item 29A);

24. [24]
    Accordingly, the effect of the retrospective amendments are that s 8C(1)(a) and (b) TAA provided that:

"8CFailure to comply with requirements under taxation law

1. (1)
   A person who refuses or fails, when and as required under or pursuant to a taxation law to do so:

1. (a)
   to give any information or document to the Commissioner or another person; …..
2. (b)
   to lodge an instrument with the Commissioner or another person for assessment; …..

is guilty of an offence.”

25. [25]
    The amendments were not part of the offence provision as it existed when the appellant was tried and convicted. At that time s 8C(1)(a) and (b) TAA was in the following terms:

“8CFailure to comply with requirements under taxation law

1. (1)
   A person who refuses or fails, when and as required under or pursuant to a taxation law to do so:

1. (a)
   to furnish an approved form or any information to the Commissioner or another person; …..
2. (b)
   to lodge an instrument with the Commissioner or another person for assessment; …..

is guilty of an offence.”

26. [26]
    Nothing turns on the amendments and the differences in the appeal.

27. [27]
    Section 162 was in the following terms:

162Further returns and information

A person must, if required by the Commissioner, whether before or after the end of the year of income, give the Commissioner, within the time required and in the approved form:

1. (a)
   a return or a further or fuller return for a year of income or a specified period, whether or not the person has given the Commissioner a return for the same period; or
2. (b)
   any information, statement or document about the person’s financial affairs.

28. [28]
    The purpose of particulars of the nature of a charge is, firstly, a matter of procedural fairness to ensure that a defendant has the exact and reasonable information respecting the charge against him to able enable him to establish his defence, and secondly, to facilitate the administration of justice.

29. [29]
    In my view these are fulfilled here.

30. [30]
    I do not accept the appellant’s arguments that the two sections are difficult to reconcile on their face in that the sections present inconsistent elements. In my view, both provisions have distinctly different legal functions, and there is no tension between them when properly construed. Section 8C(1)(a) is a simple offence provision which captures disobedience of any requirement issued pursuant to the taxation law. Section 162 ITAA is the provision of the taxation law relevant to this case.

31. [31]
    It seems that there are two simple elements to an offence against s 8C(1)(a) TAA in relation to a failure to lodge returns required under s 162 ITAA. Firstly, that the Commissioner required a person to give a tax return within the time required and in the approved form pursuant to the taxation law, and secondly, that the person refused or failed to do so. Section 8C(1A) provides that an offence under subsection (1) is an offence of absolute liability.

32. [32]
    In ground 10 the appellant disputes that the offence took place or was committed “at Earlville and elsewhere in the State of Queensland.”  This simply particularised the appellant’s place of residence, which was not contradicted by any evidence.

33. [33]
    In my view, the particulars of each charge in the complaint addressed the requisite elements, as well as properly provided reasonable information about the relevant requirement and the nature of the document for the time and place where income was derived. The particulars did not and could not reasonably found any miscarriage of justice or appealable error.

34. [34]
    For these reasons, appeal grounds 2, 3, 5, 7, 9, 10 and 12 fail.

Disclosure

35. [35]
    The appellant asserts that the trial magistrate’s discretion miscarried in dismissing the defendant’s application for disclosure heard on 6 November 2013 (appeal ground 19).

36. [36]
    The appellant applied for disclosure which he described in his written submissions in very wide terms:^[7]

"The defendant seeks a Direction from the Court that the prosecution documents and information including, but not limited to, copies of any and all communications, electronic or hand written or recorded on any device, notes, diary entries, or conversations, exchanged between the Director of Public Prosecutions and his employees, servants or agents and with any other person or public entity in relation to any matter regarding the defendant in respect to the affairs or any interest of Office of Commissioner of Taxation and the Office of Child Support Registrar and the Australian Government Solicitor including by their employees, servants or agents and any and all records kept by the Commissioner of Taxation in relation to or regarding the defendant.”

37. [37]
    The application proceeded on the basis that the respondent conceded, perhaps generously, that s 590AB of the Criminal Code (Qld) governed the disclosure obligations.

38. [38]
    It seems to me that the documents, and classes of documents, sought by the appellant were clearly not relevant to the case and fell well outside the disclosure of obligations of the respondent.^[8]  Unfortunately, the appellant’s application was misconceived and doomed to fail, and it did.

39. [39]
    Likewise, appeal ground 19 also fails.

Elements of Offence

40. [40]
    The appellant’s general ground 13 that the trial magistrate erred by identifying only two only two essential elements of the charges as being all the elements, is effectively disposed of by my discussion above having regard to the interaction of the s 162 ITAA with the offence provision s 8C(1)(a) TAA.

41. [41]
    In my view, the trial magistrate succinctly and accurately summarised the elements as:^[9]

The first, that there was a valid requirement made to provide an income tax return and, secondly, that Mr Whittaker failed to comply with that requirement.

42. [42]
    This is consistent with my reasons above, and for the same reasons, I see no merit in appeal ground 13.

43. [43]
    In related grounds 4, 6, 8, 11, 12, 14, 15, 16 and 17, the appellant variously asserts that the trial magistrate failed to consider the essential elements of the offence and thereby erred by not considering all the relevant matters and considered irrelevant matters. I deal with each of these now.

“Person”

44. [44]
    In respect of ground 8, the appellant asserts that he was not “a person or class of person” who may be required pursuant to s 162 ITAA to give a return to the commissioner.  This ground is closely related to the appellant’s arguments about the use of a Tax File Number subject of grounds 15, 16 and 17.

45. [45]
    The appellant submitted that a ‘person’ within the meaning of s 162 ITAA must have applied for and subsequently been issued a tax file number and must have authorised the Commissioner of Taxation to use the tax file number in connection with the person’s identity. The respondent also referred to the probation in 8WB TAA, to submit that he commissioner had the burden to prove, and did not prove, the lawful use a tax file number in a manner connecting it with the appellant’s identity.

46. [46]
    As to whether the appellant had a tax file number or not, it seems to me, is completely irrelevant to the commission of the offence in s 8C(1)(a) in disobedience of a lawful requirement under s 162 TAA. I can see no error in the trial magistrate’s reasoning, or his findings that:

“As closely as I have looked at the arguments of Mr Whittaker, I still fail to see the connection between the use of the – with consent or otherwise of the tax file number and the elements which the Prosecution have to prove in this case. There seems to be a very serious disconnect between the use of the tax file number and its relevance to the two elements which have been identified as proven beyond reasonable doubt”. (Judgement –page 4 line 38) ….

“Therefore I reject as irrelevant the issue of lawfulness of the use of the tax file number to this Prosecution”.  (Judgement –page 4 line 40)”

47. [47]
    That should be the end of the argument, however, the appellant then seems to attack the commissioner’s use of the tax file number formally associated with the appellant.

48. [48]
    As to the use of the tax file number, section 8WB(1) TAA provides that:

1. (1)
   A person must not:

1. (a)
   record another person's tax file number or maintain such a record; or

1. (b)
   use another person's tax file number in a manner connecting it with the other person's identity; or

1. (c)
   divulge or communicate another person's tax file number to a third person

49. [49]
    Not surprisingly, the evidence demonstrated that the records utilised by the commissioner contained information relevant to individuals, including their tax file number. It was be inevitable that the tax file number was incidental to any analysis and detection of possible tax evasion. The notice issued by the Commissioner under s 162 TAA referred to a tax file number (Exhibit 2).

50. [50]
    The appellant asserts that “it was accepted by the prosecution as fact that the Commissioner received correspondence from the defendant in July 2001 stating to the effect that the defendant revoked any deemed or actual authorisation the Commissioner may purport to have to use a TFN in connection with the defendant’s identity, to store or maintain a record of such a TFN or to divulge such a TFN to third parties.”  By purporting to opt out of the tax system this way, the appellant asserts that he had no pending taxation requirements or obligations, and any use of the tax file number was unauthorised, and therefore unlawful.

51. [51]
    In my view, the appellant is not at liberty to opt out of the taxation laws by revoking authority to use a tax file number lawfully associated with him.

52. [52]
    The objects for the tax file number system are contained in s 202 ITAA, including to increase the effectiveness and efficiency of the matching of information contained in reports given to the Commissioner under this Act or the regulations with information disclosed in income tax returns by taxpayers (s 202(a); and to prevent evasion of liability to taxation under the laws of the Commonwealth relating to income tax (s 202(b)).

53. [53]
    Even if the commissioner was subject of s 8WB and used the tax file number in the way described in s 8AW, it seems to me that the conduct of the commissioner was lawful in the circumstances of this case and had no relevance to the commission of the offence.

54. [54]
    Further, the appellant developed the point to the effect that liability for income tax could only arise under a notice of assessment, which in turn, could only arise after lodgement of an income tax return with a tax file number. The argument is misconceived because it wrongly focuses on liability for payment of income tax, and speculation about the commissioner’s use of a tax file number, neither of which are pertinent to the elements of the offence and outcome of this case.

55. [55]
    The charges arose out of an undisputed failure to comply with a lawful requirement under s 162 ITAA. The appellant is a ‘person’ within the meaning of that term as used in ss 8C TAA and s 162 ITAA.

56. [56]
    Therefore, these appeal grounds 4, 6, 8, 11, 12, 13, 14, 15, 16 and 17 also fail.

Lawful Requirement

57. [57]
    The appellant’s submissions in respect of grounds 4, 6 and 11 focussed on the phrase “in the approved form” as used in s 162 ITAA and requirements relating to the form and giving of a taxation return.

58. [58]
    The appellant also argued that a tax return was an “Instrument” under s 8C(1)(b), and was not caught by s 8C(1)(a), because “instrument” is widely and inclusively defined in definition in section 8A as: “Instrument includes any document”.  I reject this argument.  In my view, s 8C(1)(b) will apply in circumstances the instrument is not required to be in an approved form.  That is not the case here.  Instead, s 8C(1)(a) applies to documents that have “an approved form”, like a taxation return, and is the appropriate provision in the circumstances of this case.

59. [59]
    Section 8C(1)(a) TAA provides for the offence if a person refuses or fails to give to the commissioner a return in the approved form as required pursuant to s 162 ITAA.

60. [60]
    The requirement relied upon by the prosecution arose by the notice issued by the Commissioner under s 162 ITAA dated 15 June 2012. The relevant parts excluding the standard notices were:

Under section 162 of the Income tax Assessment Act 1936, as delegate of the Commissioner, I now require you to furnish to the Commissioner of Taxation the income tax returns referred to above by 10 August 2012.

If lodging in paper form, you are required to send them to:

Australian Taxation Office

GPO Box 9845

IN YOUR CAPITAL CITY

Alternatively, a registered tax agent may furnish the returns on your behalf in electronic form where lodgement of the returns can be accepted under the system for electronic lodgement of returns known as the electronic lodgement service (ELS).

For the year ended 30 June 2001 and subsequent years

Each return must:

• give a full statement of total income from all sources in and out of Australia, and
• be in the approved form (this includes a requirement that the form be signed you and/or your authorised agent, as the form requires)

61. [61]
    There was no dispute that the appellant received the notice, or its validity.

62. [62]
    Section 162 ITAA provides that a person, when required, must give the Commissioner a return in the approved form. The term “in the approved form” is defined in s 388-50(1) in Schedule 1 of the TAA:

1. (1)
   A return, notice, statement, application or other document under a * taxation law is in the approved form if, and only if:

1. (a)
   it is in the form approved in writing by the Commissioner for that kind of return, notice, statement, application or other document; and

1. (b)
   it contains a declaration signed by a person or persons as the form requires (see section 388-75); and

1. (c)
   it contains the information that the form requires, and any further information, statement or document as the Commissioner requires, whether in the form or otherwise; and

1. (d)
   for a return, notice, statement, application or document that is required to be given to the Commissioner - it is given in the manner that the Commissioner requires (which may include electronically).

63. [63]
    Sub-section 388-50(1A) provides for a relaxation of form as follows:

(1A)Despite subsection (1), a document that satisfies paragraphs (1)(a), (b) and (d) but not paragraph (1)(c) is also in the approved form if it contains the information required by the Commissioner. The Commissioner must specify the requirement in writing

64. [64]
    The appellant relies upon some inter-play between the offence provision s 8C(1)(a) TAA and s 162 ITAA. He submitted that s 8C(1)(a) did not create an offence encompassing the entire gambit of s 162 ITAA. He asserts that the section does not require a return to be given “in the approved form” which has four discreet elements, particularly that the return have a signed declaration or that it be given in the manner that the Commissioner requires.  He also relied upon the wording of the complaint when compared to the provisions.

65. [65]
    Neither the provisions nor the notice suggest that the appellant need only lodge an incomplete approved form, or nothing at all.

66. [66]
    In my view there is no inconsistency between the relevant provisions. Each serve different functions as I discussed above. The requirement in the notice issued by the Commissioner dated 15 June 2012 constituted a valid notice under s 162. It specified the requirements for the taxation return to be “in the approved form”, and the additional requirement of containing “a full statement of total income from all sources in and out of Australia”, and therefore included all of matters set out in s 388-50(1) and 388-50(1A).

67. [67]
    The appellant did not give the commissioner any taxation returns as required. I discern no error in the decision of the trial magistrate when considering the form of the taxation return, including a signed declaration. It must follow that appeal grounds 4, 5 and 11 fail.

Unreasonable Conviction

68. [68]
    Grounds 20, 21 and 22 seem to turn upon the other more detailed grounds of appeal to conclude that the trial magistrate erred in the exercise of his ‘discretion’ by convicting the appellant because the case was not proved to the standard of a reasonable doubt and the convictions were unreasonable.

69. [69]
    Since I have disposed of all other grounds, and based on my own revision of the evidence, I have no hesitation concluding that the trial magistrate applied the correct standard, and see no viable basis to disturb the convictions.

Orders

70. [70]
    For these reasons, I dismiss the appeal.

Judge Dean P. Morzone QC

District Court of Queensland