Whittaker v Simpson[2017] QDC 230

DISTRICT COURT OF QUEENSLAND

1. [1]
   The appellant defends his noncompliance with a condition to lodge numerous taxation returns pursuant to a recognizance release order on the grounds that the conviction was unlawful and fraudulent, and compliance would have forced him to make a false declaration (and thereby commit an offence) if he signed the taxpayer declaration.

2. [2]
   Both parties provided outlines of argument, and made further submissions on the hearing of the appeal, which I have considered.

Background

3. [3]
   On 3 April 2014, the appellant was convicted after a summary trial in the Magistrates Court of eight income tax offences before the trial magistrate, His Honour Magistrate Priestly.

4. [4]
   The offences were premised on particulars that the appellant, contrary to s 8C(1)(a) of the Taxation Administration Act 1953, failed to give income tax return setting forth a complete statement of income derived by him from all sources in Australia and elsewhere during the relevant year, to the Commissioner pursuant to a taxation law, namely s 162 of the Income Tax Assessment Act 1936 (Cth) by 10 August 2012. The eight separated charges were identical save for the particular financial years for 2002, 2003, 2004, 2005, 2007, 2008, 2009 and 2010.

5. [5]
   The trial magistrate convicted and sentenced the appellant to six months’ imprisonment. By order, he directed that the appellant be released forthwith upon him giving security through his own recognisance in the sum of $5000, a condition that he be of good behaviour for a period of two years, and that he give to the Commissioner of Taxation on or before 3 June 2014, those tax returns as enumerated.

6. [6]
   In his decision, the trial magistrate remarked that:

“You have been found guilty of eight charges of failing to comply with the requirements of submitting income tax returns. The convictions of these charges follow a history that is immediately relevant to those charges, as well as a history of previous offences of a like nature. The earliest offences involve – there’s probably two parts to it – the first is June 2009 on an ex parte basis, although you were aware of the proceedings, you were convicted of six offences contrary to section 8C(1)(a) of the Taxation Administration Act, failing to submit returns as required for the years 2002 to 2007 financial years. A global penalty of 5500 plus costs of the court of $73.80 was imposed by way of penalty. You were also ordered, pursuant to section 8G of the Taxation Administration Act, to lodge outstanding returns by the 21^st of August 2009. You did not do that and on the March of 2010 you were convicted of failure to comply with that court order, five offences, one of each requirement not being proceeded with and a global penalty on that occasion of $1500 plus costs of court of $73.80 was imposed.

The narrative for those events commenced in 2012 and it’s evident from the attitude that you took in relation to those offences as reflected both in your own evidence as well the correspondence submitted by you that you believe that you’re not under a legal obligation to submit income tax returns. And as best as I can discern from what you’ve said today as well as the evidence of that before me you have no intention of submitting any income tax returns until such time as a higher court determines the issue. That of itself is rather nebulous concept in the sense that you didn’t appeal the decisions in 2009 and who knows whether or not, notwithstanding what you’ve said today, you’ll be active in appealing this decision, which would leave a decision of higher court in limbo. I’m not willing to accept that there’s any statement that I couldn’t act upon confidently that you will in the future comply with an obligation to submit the income tax returns

On these bases, I have to regard the present course as a persistent and flagrant disregard for legal obligations and – but as I also say, a social responsibility. I am satisfied that the behaviour associated with the current proceeding, to some degree, shows a bloody minded persistence in respect of a legal argument which you continue to believe has some merit. Tragically for your family, I see that this matter is going to conclude in a way that is not going to be in your interests or your family’s best interests. At some point, the argument that you seek to advance has to be determined with or without your cooperation or at your instigation.

I believe it has come to the point where financial penalties not having worked in the past and in light of your current attitude, a period of imprisonment has to be considered. It seems futile to consider to impose substantial financial penalties, but what I am going to do is impose a period of imprisonment that will be, in effect, suspended, which is forthwith. Basically, you will be sentenced to six. It will be a global penalty, so for one penalty in respect of all the charges. You will be convicted and sentence to six months’ imprisonment. But by order, I direct that you are released forthwith upon your giving security through your own recognisance in the sum of $5000, a condition that you be of good behaviour for a period of two years, and that you give to the Commissioner of Taxation on or before the 3^rd of June 2014, those tax returns as enumerated. …

Recognisance is like an undertaking, in effect, that you will pay a sum of $5000 in the event that you breach either of those conditions:  either the good behaviour component for two years or that you fail to provide income tax returns. What may happen, though, is that a breach of those conditions may well result in the activation of you being required to serve a period of imprisonment.”

7. [7]
   The appellant appealed to the District Court pursuant to s 222 of the Justices Act 1886 (Qld) against the convictions. His appeal was heard in November 2014 and detailed reasons for judgment were published. The appeal was dismissed.^[1]  The appellant was unsuccessful in his bid for leave to appeal to the Court of Appeal on 25 June 2015.^[2]

8. [8]
   The appellant did not give to the Commissioner of Taxation on or before the 3 June 2014, income tax returns in the approved form for the eight financial years.

9. [9]
   On 25 November 2016 the appellant was again before the Magistrates Court for breach proceedings. A different magistrate, Her Honour Magistrate Brassington, heard and determined the breach proceeding. Her Honour concluded that the appellant had without reasonable cause or excuse failed to comply with the condition of an order made by the trial magistrate on 3 April 2014, namely, to give to the Commissioner of Taxation on or before the 3^rd of June 2014 income tax returns in the approved form for the eight financial years, ending 30 June 2002; 2003, 2004, 2005, 2007, 2008, 2009 amend 2010. Her Honour proposed to resentence the appellant.

10. [10]
    Before the resentence, the proceeding was adjourned for various reasons, including to provide an opportunity to the appellant to belatedly lodge the relevant tax returned. He did so, but under protest, and adhering to his belief that he would be making a false declaration (and thereby commit an offence) if he signed the taxpayer declaration. This is consistent with his arguments at the original hearing and appeals that: since he was not a person listed in the gazetted tables under s 161 of the Income Tax Assessment Act 1936 (Cth), and therefore, he is not a taxpayer.

11. [11]
    The appellant was finally re-sentenced on 4 April 2017. The learned resentencing magistrate re-sentenced the appellant for each offence to a term of three months’ imprisonment to be served by way of an intensive corrections order.

12. [12]
    The appellant now appeals against this decision.

Mode of Appeal

13. [13]
    The appellant appeals pursuant to s 222 of the Justices Act 1886 (Qld). Section 222(1) relevantly provides:

“If a person feels aggrieved as complainant, defendant or otherwise by an order made by justices or a justice in a summary way on a complaint for an offence or breach of duty, the person may appeal within 1 month after the date of the order to a District Court judge.”

14. [14]
    Pursuant to section 223 of the appeal is by way of rehearing on the original evidence, and any new evidence adduced by leave. Section 223 provides:

3. (1)
   An appeal under section 222 is by way of rehearing on the evidence (original evidence) given in the proceeding before the justices.

3. (2)
   However, the District Court may give leave to adduce fresh, additional or substituted evidence (new evidence) if the court is satisfied there are special grounds for giving leave.

3. (3)
   If the court gives leave under subsection (2), the appeal is—

1. (a)
   by way of rehearing on the original evidence; and

2. (b)
   on the new evidence adduced.

15. [15]
    For an appeal by way of rehearing, the powers of the appellate court are exercisable only where the appellant can demonstrate that, having regard to all the evidence before that court, the order subject of the appeal is the result of some legal, factual or discretionary error. At least that is so unless there is some statutory provision which indicates that the powers may be exercised whether or not there was error at first instance.^[3]  There is no such provision at play here.

16. [16]
    But the court does not merely consider whether or not the magistrate has made an error of fact or law. The rehearing requires this court to conduct a real review of the evidence before it, and make up its own mind about the case.^[4]

17. [17]
    Its function is to consider each of the grounds of appeal having regard to the evidence and determine for itself the facts of the case and the legal consequences that follow from such findings. In doing so it ought pay due regard to the advantage that the magistrate had in seeing the witnesses give evidence, and attach a good deal of weight to the magistrate’s view.^[5]

Grounds of Appeal

18. [18]
    The appellant appeals on the grounds in the notice of appeal and elaborated in his outline of argument, which can be categorised as follows:

1. That Her Honour erred in finding that there was a failure to furnish an approved form or any information when required to do under or pursuant to a taxation law, namely s 162 of the Income Tax Assessment Act 1936 (Cth).

2. That the order was obtained by fraud or otherwise in breach of s 131 of the Criminal Code 1899 (Qld) and/or s 8WB(1) of the Taxation Administration Act 1953 (Cth).

3. That Her Honour erred in finding that the appellant did not have a reasonable excuse under s 20A(5) of the Crimes Act 1914 (Cth).

Grounds 1 & 2

19. [19]
    The appellant’s grounds of appeal invoke consideration of the nature and scope of the breach proceeding before the Magistrates Court, and later re-sentencing on 4 April 2017.

20. [20]
    The appellant premised his reliance on the appeal grounds with the following arguments:^[6]

“2.In the Court below before Her Honour Magistrate Brassington the appellant was found to have breached a recognizance contrary to section 20A of the Crimes Act 1914 and consequently reconvicted of the offences the subject of the recognizance.

3.The Appellant only appeals the order insofar as a re-conviction is recorded in respect to the same eight offences revoked under the order and does not appeal the revocation of the original order made 3 April 2014.

4.The Information of the respondent alleged the defendant to be, without reasonable excuse, in breach of an order of Magistrate Priestly made on 3 April 2014.

5.In finding the defendant guilty Her Honour set aside the original conviction and convicted the defendant of the same offences.

6.The appellant appeals the conviction only as a hearing de novo on the basis of any of three grounds below which are addressed in order of jurisdictional precedence.”

21. [21]
    As I apprehend the appellant’s case, he does not seek to merely challenge the original conviction of 3 April 2014, but instead, he argues that these grounds necessarily arise as a consequence of a ‘re-conviction’ by the re-sentencing magistrate under ss 20A(5)(c) of the Act, or alternatively, the grounds go to his reasonable excuse for breaching of the orders.

Sentencing Framework

22. [22]
    Since the relevant offences were all Commonwealth offences, the Crimes Act 1914 (Cth) (“Act”) applied.

23. [23]
    Part IB of the Act sets out procedural requirements and penalty options for sentencing offenders who commit Commonwealth offences. In order to achieve consistency throughout the country, the sentencing court must have regard to sentences that are imposed in all States and Territories.^[7]

24. [24]
    Part IB, Div 2 of the Act provides for the General Sentencing Principles. Amongst those provisions, s 16C particularises the matters to which the court must have regard when passing sentence. Also, s 17A provides that a court shall not pass a sentence of imprisonment on any person for a federal offence, unless the judge has considered all other available sentences and is satisfied that no other sentence is appropriate.

25. [25]
    Relevantly here, s 20(1)(b) of the Act empowers the court to make a recognizance release order, which is the Commonwealth analogy of a suspended sentence.  The court sentences the offender to prison but directs that the person be released upon giving security, either forthwith or after the offender has served a specified period of imprisonment. A court must make a recognizance release order, unless the aggregate sentence exceeded 3years or the court is satisfied that it is not appropriate to do so, having regard to the nature of the offence(s) and the antecedents of the defendant.^[8]

26. [26]
    Previously, where a court sentenced an offender to imprisonment for one or more offences and the aggregate sentence exceeded 3 years, s 19AB(1) of the Act provided that the court must either set a non-parole period or make a recognizance release order (but may decline to do either if satisfied it is not appropriate to do so). The making of a recognizance release order was removed as an option for a sentence exceeding 3 years by amendments commencing on 27 November 2015.

27. [27]
    A failure to comply with a condition of a recognizance release order without reasonable cause or excuse may result in the court pursuant to s 20A(5)(c) of the Act (using the sub-paragraphing in the Act):

(ia) imposing a monetary penalty not exceeding $1000;

(ib) extending the period of supervision to a period not greater than 5 years;

(ic) revoking the order and imposing an alternative sentencing option under s 20AB;

1. (i)
   revoking the order and imprisoning the person for that part of the sentence they had not served at the time of release from custody; or

2. (ii)
   taking no action.

Scope of Breach Hearing

28. [28]
    In the circumstances of this case, the original sentence imposed for each offence at first instance by the trial magistrate, was six months’ imprisonment, and a recognizance release order (under s 20(1)(b)), whereby the appellant was released forthwith upon your giving security through his own recognisance in the sum of $5000, a condition of good behaviour for two years, and that he give to the tax returns to the Commissioner of Taxation on or before 3 June 2014.

29. [29]
    The questions or issues to be determined on the breach hearing are:^[9]

1. Whether the defendant breached the recognizance order made by the Magistrates Court on 3 April 2014 pursuant to 20(1)(b) of the Act;

2. Whether the defendant so breached without reasonable excuse under s 20A(5)(c); and

3. Having regard to the nature of the breach and the original sentence, whether to impose any of the sentencing alternatives, relevantly here, whether to revoke the order and imposing an alternative sentencing option under s 20AB.

30. [30]
    Clearly enough, the magistrate was charged with the jurisdiction to resentence in the face of a proven breach. The relevant provisions do not empower the resentencing magistrate to re-convict’, disrupt or otherwise revisit the original conviction already determined by the trial magistrate, or any new arguments about the merit of the original conviction.

31. [31]
    There is no dispute, and the magistrate found, that the appellant breached the recognizance release order by failing to give the required tax returns to the Commissioner of Taxation on or before 3June 2014 (which was undisputed). Further there is also no dispute that the sentencing alternatives under State law as prescribed under s 20ABof the Act included an intensive correction order.^[10]

32. [32]
    This left only one critical issue to be determined by resentencing magistrate – Whether the appellant breached the recognizance order ‘without reasonable excuse’ within the meaning of s 20A(5)(c) of the Act.

Appeal Grounds

33. [33]
    Mindful of the issues before the resentencing magistrate, I now deal with appellant’s appeal grounds 1 and 2 that:

1. Her Honour erred in finding that there was a failure to furnish an approved form or any information when required to do under or pursuant to a taxation law, namely section 162 of the Income Tax Assessment Act 1936 (Cth), and

2. The order was obtained by fraud or otherwise in breach of s 131 of the Criminal Code 1899 (Qld) and/or s 8WB(1) of the Taxation Administration Act 1953 (Cth).

34. [34]
    The appellant has provided comprehensive submissions about these grounds, which strike at the heart of his conviction (or, as he argues, the ‘re-conviction’ by the resentencing magistrate).

35. [35]
    The first ground is advanced on the basis that the appellant was not subject of any ‘requirement’ under the tax law to lodge a tax return and has not offended as alleged; even so, he says that any offending would be subject of a ‘civil proceeding’; and no offence exists at law for breach of s 8C(1)(a) of the Taxation Administration Act 1953 for a failure to comply with a requirement under or pursuant to s 162 of the Income Tax Assessment Act 1936.^[11]

36. [36]
    The second ground overlays these arguments with an attack on the Commissioner of Taxation aided by the Director of Public Prosecutions, for the prosecution of the wrongful proceeding (being civil proceedings and an unauthorised use of a Tax File Number); and the Commissioner’s pursuit despite the administrative power to issue a default notice of assessment.^[12]  Consequently, the appellant asserts the order was obtained by fraud or otherwise in breach of s 131 of the Criminal Code 1899 (Qld) and/or s 8WB(1) of the Taxation Administration Act 1953 (Cth).

37. [37]
    Having regard to my discussion above, it seems to me that these grounds are misconceived and doomed to fail.

38. [38]
    In my view, the resentencing magistrate was neither required to, nor did Her Honour, make the findings pregnant in the appellant’s grounds 1 and 2.

39. [39]
    The breach proceeding, properly characterised, did not effect a revocation of the original conviction or constitute a “re-conviction” for the original offence. It was not a fresh hearing, as if to reconsider afresh the appellant’s old (and new) arguments about his culpability for the offences. Those matters were the subject of the original hearing and determination by the trial magistrate, as well as the appellant’s challenges by appeal to this Court and the Court of Appeal. Both appeals failed and the original convictions were sustained. Neither the breach hearing, nor the resentencing process, displaced or substituted the original conviction.

40. [40]
    In this regard, it does not matter whether the appellant purports to argue these matters afresh, or under the guise of matters constituting a reasonable excuse. As Fullager J said in Jackson v Goldsmith:^[13]

“The rule as to res judicata can be stated sufficiently for present purposes by saying that, where an action has been brought and judgment has been entered in that action, no other proceedings can thereafter be maintained on the same cause of action. The rule is not, to my mind, correctly classified under the hearing of estoppel at all. It is a broad rule of public policy based on the principles expressed in the maxims “interest republicae ut sit finis litium” and “nemo debet bis vexari pro eadem causa.”

41. [41]
    I am bound to conclude that the issues subject of the appellant’s ground 1 and 2 are no longer alive; they are res judicata. In my view, the learned magistrate did not err by proceeding on the basis that the order that was made on 3 April 2014 was incontrovertible.

42. [42]
    Therefore, appeal grounds 1 and 2 will fail.

Ground 3

43. [43]
    The appellant further contends that Her Honour erred in finding that he breached the recognizance release order made on 3 April 2014 without reasonable excuse under s 20A(5) of the Crimes Act 1914 (Cth).

44. [44]
    It was a condition of the recognizance release order made on 3 April 2014 by Magistrate Priestly that:

“(b) You give to the Commissioner of Taxation on or before 3 June 2014 income tax returns in the approved form for you for the following years: (i) 1 July 2001 to 30 June 2002; (ii) 1 July 2002 to 30 June 2003; (iii) 1 July 2003 to 30 June 2004; (iv) 1 July 2004 to 30 June 2005; (v) 1 July 2006 to 30 June 2006; (vi) 1 July 2007 to 30 June 2008; (vii) 1 July 2008 to 30 June 2009; (viii) 1 July 2000 to 30 June 2010.”

45. [45]
    The respondent contended below that the appellant failed to comply with this condition without reasonable cause or excuse and sought the revocation of the revoking the order and imposing an alternative sentencing option under ss 20A(5)(c)(ic) and 20AB of the Act.

“without reasonable cause or excuse”

46. [46]
    The respondent prosecution had the burden of establishing beyond reasonable doubt that each breach charged was committedwithout reasonable cause or excuse.^[14]

47. [47]
    The respondent relied upon the appellant acknowledgment in his affidavit filed in the High Court in the week of the breach proceedings that:^[15]

“To be clear, I had not lodged the income tax returns requests and still have not lodged them. I have no intention of ever lodging those tax returns because if I do so, the commissioner will be legally obliged to issue a notice of assessment.”

48. [48]
    The appellant adhered to his belief that he would be making a false declaration (and thereby commit an offence) if he signed the taxpayer declaration. He argues that this was a reasonable excuse not to comply with the order. He gave evidence of that the form of income tax return required a Taxpayer Declaration^[16] and that he had never made a Tax File Number Declaration.^[17]  The declaration is in the standard form and is headed “TAXPAYER’S DECLARATION … All taxpayers must sign and date the declaration below”. The effect of his contention is that he was not a ‘taxpayer’ subject of the gazetted tables under s 161 of the Income Tax Assessment Act 1936 (Cth),^[18] and therefore, he could not make the requisite declaration in the form.

49. [49]
    Cognate arguments were considered and dismissed in the appellant’s appeal to the District Court^[19] and application for leave to appeal to Court of Appeal.^[20]  In the course of dismissing the application for leave to appeal to the Court of Appeal, Gotterson JA (with whom Morrison and Philippides JJA agreed) said:^[21]

“Grounds 2(d) to (g) and (k) concerned the misconceived tax file number arguments advanced by the applicant. It is clear, as I have said, that the legal efficacy of a s 162 requirement is not dependent upon a person having a tax file number or its having been stated in the request; that consigns to irrelevance the applicants additional and palpably erroneous claim that he might revoke their deployment of his tax file number under the tax file number system.”

50. [50]
    After finding on 25 November 2016 that the prosecution had proved the breach, the resentencing magistrate urged the appellant to consider lodging the outstanding income tax returns, and Her Honour intimated that a term of imprisonment was likely if the returns in were not lodged. The magistrate then adjourned the matter to 4 April 2017 despite opposition by the respondent.

51. [51]
    The appellant belatedly lodged the requisite tax returns with the taxpayer’s declaration signed and dated 24 March 2017, but endorsed “UNDER DURESS ENFORCEMENT ORDER”.

52. [52]
    Consideration of whether the appellant’s contravention was “without reasonable cause or excuse” must be considered in light of the particular circumstances of the case.

53. [53]
    In Taikato v The Queen^[22] the High Court considered the term whether an accused had a "reasonable excuse for possessing it or possessed it for a lawful purpose" in relation to s 545E(1) and(2) of the Crimes Act 1900 (NSW). The Court held:^[23]

“The term “reasonable excuse” has been used in many statutes and is the subject of many reported decisions. But decision on other statutes provides no guidance because what is a reasonable excuse depends not only on the circumstances of the individual case but also on the purpose of the provision to which the defence of reasonable excuse is an exception.

…

However, the reality is that when legislatures enact defences such as “reasonable excuse” they effectively give, and intend to give, to the courts the power to determine the content of such defences.”

54. [54]
    Although both parties recall that the resentencing magistrate referred to these remarks during the course of her reasons delivered on 4 April 2017, that reference is inexplicably omitted from the revised transcript of that decision.

55. [55]
    The appellant argues that his conduct amounted to a "lawful excuse" in the sense of an excuse "supported by the law,^[24] and being, he says, a logically higher standard than a “reasonable excuse”. Using this stricter test he asserts that he was, a fortiori, entitled to not comply with the order because compliance required him to commit an offence of making a false declaration contrary to s 194 of the Criminal Code 1899 (Qld).^[25]

56. [56]
    As I apprehend it, the appellant also maintains that his omission (of lodging declared returns) was excusable because the conviction and order was unlawful. He asserts that the order was obtained by fraud because the court was misled about whether he was a taxpayer. He relies upon s 31 of the Criminal Code 1899 (Qld) which provides that:

“(1)A person is not criminally responsible for an act or omission, if the person does or omits to do the act under any of the following circumstances, that is to say –

(b) in obedience to the order of a competent authority which he or she is bound by law to obey, unless the order is manifestly unlawful; …”

57. [57]
    In my view the appellant’s contentions and arguments are devoid of merit. The original conviction and orders where upheld on appeals to this court and the Court of Appeal, despite the appellant’s passionate adherence to his belief that he is not a “taxpayer”. There was no legal or other impediment which prevented his lodgement of the 8 tax returns in compliance with the recognizance release order made on 3 April 2014.

58. [58]
    In the course of the decision, Her Honour had regard to the appellant’s conviction for failing to lodge taxation returns in the approved form and rejecting his arguments that he was not a taxpayer. The learned magistrate, correctly in my view, decided that it was not a reasonable excuse for the appellant to fail to comply with the order on the basis that would make a false declaration that he was a “taxpayer”.

59. [59]
    The appellant’s third appeal ground fails.

Re-sentence

60. [60]
    Having regard to the nature of the breach and the original sentence, the court must consider whether to revoke the original order and impose an alternative sentencing option under s 20AB of the Act.

61. [61]
    A sentence for breach may not, of course, exceed a sentence, which is appropriate to the objective circumstances; but it should reflect the fact that by his rejection of the trust placed in him by the trial magistrate, the appellant will have shown a lack of remorse and cast doubt upon his prospects of rehabilitation.^[26]

62. [62]
    After providing comprehensive reasons supporting her decision, the resentencing magistrate revoked the original sentence orders and re-sentenced the appellant for each offence to a term of three months’ imprisonment to be served by way of an intensive corrections order.

Conclusion

63. [63]
    On my independent examination of the evidence I am unable to discern any error in the decision of the resentencing magistrate, and the appellant has failed to demonstrate any meritorious grounds for this Court to interfere with the decision.

64. [64]
    Therefore, I will conform the decision of the learned magistrate and dismiss the appeal.

Judge Dean P Morzone QC.