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- Unreported Judgment
Galvin v Australian Taxation Office QDC 269
DISTRICT COURT OF QUEENSLAND
Galvin v Australian Taxation Office  QDC 269
GALVIN, Sonya May
Australian Taxation Office
22 of 2019
District Court at Rockhampton
28 November 2019; delivered ex tempore
28 November 2019
Loury QC DCJ
- The appellant pleaded guilty on the 13th of May 2019 to 34 counts of failing to comply with an order made pursuant to section 8G of the Taxation Administration Act 1953. A single fine was imposed of $35,000.
- The appellant appeals pursuant to section 222 of the Justices Act 1886 on the ground that the sentence was excessive. Such an appeal is by way of rehearing on the evidence before the Magistrate and any other evidence I allow to be admitted. For the appellant to establish that the sentence is manifestly excessive, she must show that there has been a misapplication of principle by the sentencing magistrate or that the sentence is unreasonable or plainly unjust.
- The learned magistrate was misinformed by the prosecutor, who is not the same prosecutor appearing on this appeal, as to the maximum fine available. For the reasons which follow, I consider that this error was one that infected the exercise of the learned magistrate’s discretion.
- On the 20th of May 2017 the appellant was sentenced ex parte in the Townsville Magistrates Court for 34 offences of failing to lodge income tax returns or business activity statements between the 30th of September 2009 and the 30th of June 2016. She was fined $30,000 and ordered, pursuant to section 8G of the Taxation Administration Act 1953, to provide income tax returns and business activity statements to the Commissioner of Taxation on or before the 21st of April 2017. It is that court order to furnish income tax returns and business activity statements, which gave rise to the 34 offences dealt with in the Magistrates Court on the 13th of May 2019 and for which the appellant was fined a further $35,000.
- The learned magistrate was told by the prosecutor that the maximum penalty available for each charge was a fine of $10,500 or 12 months imprisonment. She also said that the maximum aggregate fine available was for $357,000. The prosecutor appearing for the respondent has submitted that this was an error. The maximum penalty available at the time of the date of the offences was a fine of $9,000 per charge or 12 months imprisonment with a maximum fine available for all offending of $306,000.
- The maximum fine that the magistrate considered in determining the appropriate sentence was approximately 17 per cent higher than the maximum fine, in fact, available at the time of sentencing. That is a significant difference. One of the factors that a sentencing magistrate is required to give consideration to in determining the appropriate sentence is the maximum penalty. Given that he determined to impose a single fine on the appellant, it cannot be said that this error did not infect the exercise of his discretion.
- Having determined that there was an error, it is necessary for me to exercise my discretion afresh. The appellant seeks to rely upon further evidence. That evidence serves to provide a little further detail as to the appellant’s financial circumstances. The submission made on behalf of the appellant before the Magistrate was that she was in receipt of the disability support pension. The new evidence demonstrates that after payment of her rent and electricity, which is deducted from her pension by Centrelink, she receives approximately $337 per fortnight. Given that I am required to sentence afresh, I grant leave for the appellant to adduce this new evidence.
- In submissions to the learned magistrate it was said that the appellant had paid $5000 towards the initial fine which had been garnisheed from her bank account after she received that payment upon her mother’s death. It was further submitted that she had some health issues which resulted in her withdrawing her participation in the business that she and her husband were operating in partnership. That was said to be the explanation for her not completing the necessary tax returns and business activity statements. Further, her son was diagnosed with a brain tumour and suffered many seizures, which also affected her involvement in the operation of the business. She separated from her husband and was left with some joint debts, although there is no evidence that she was making any payments towards those debts.
- In McMillan v Bierwirth  49 SASR 403 at 419, (which was followed by Senior Judge Smith in Bamsang Proprietary Limited v The Commissioner of Taxation  QDC 189, Justice Johnston noted that:
“...the starting point for a penalty against section 8C of the Taxation Administration Act 1953 is the statutory penalty which would otherwise have been applicable.”
The statutory penalty for the offences was $24,650. A fine imposed should not usually be less than the statutory minimum. It is apparent to me that the appellant has no capacity to pay a fine in excess of $24,650.
- Deterrence, both personal and general, is of particular importance to the exercise of the sentencing discretion for this type of offending. The appellant was first made aware of her taxation obligations when she was first served with a notice for failing to comply with those obligations. At the time she was convicted of the offences under section 8H of the Taxation Administration Act 1953, she had not filed any returns or statements. Upon being served with the court order requiring her to lodge income tax returns and business activity statements by the 21st of April 2017, the appellant did not attend to the filing of any such returns or statements. By the time she came to be sentenced in May 2019, two years later, she had still not attended to the filing of any such returns or statements. I am told that there was some engagement with the Taxation Office, however, at the end of the day, the Taxation Office prosecuted her for these failures and she pleaded guilty to them. There is nothing, in my view, in the conduct of the appellant that suggests that she is remorseful or that even she is unlikely to reoffend in a similar way. The imposition of a large fine has not deterred her in any way as she has still not lodged any tax returns or business activity statements.
- As was said by Justice Jacobs in Keston v Uren  27 SASR 92, legislation imposes obligations on all citizens.
“It would defeat the purpose of the legislation if the courts were to condone the neglect and/or avoidance of those obligations, particularly when administrative steps have been taken, prior to prosecution, to remind a defaulter of his or her obligations.”
- Section 16A of the Crimes Act 1914 requires that I have regard, in addition to the maximum penalty available, to the nature and circumstances of the offences, the plea of guilty, personal and general deterrence, punishment and the character, age and antecedents of the appellant. As no tax returns were lodged by the appellant and no business activity statements lodged, her taxation liabilities are unknown for that period of some six years. She has still, to date, not complied with her taxation obligations and she is now reliant upon the revenue system for the payment of her pension. The revenue system requires the whole of the community to meet their taxation obligations in order to fund the payment of the social security system and those who find themselves in need of it. The nature and circumstances of the offences are very serious in light of the appellant’s continued refusal to comply with her obligations and with the court order. That refusal necessarily leads to a greater burden being placed upon the rest of the community to fund the very payment that the appellant now seeks to live on.
- I consider that in light of the lengthy period of time over which the appellant has refused to meet her obligations, the absence of a significant fine having any effect upon her in meeting those obligations and her continued to refusal to, even now, meet her obligations, that those features that mean that a sentence of imprisonment is appropriate. I have taken into account whether a sentence of imprisonment is the only appropriate sentence and I consider that to be the case. As was said by Justice Martin in Arbuckle v Commissioner of Taxation  WASC 7 at :
“On some occasions, regrettably, some tax payers are only motivated to meet their obligations when confronted with an imminent loss of their liberty. So be it where that tool of compliance is seen as warranted as a tool of last resort.”
- The sentence I consider appropriate is, therefore, a sentence which is more severe than that which the appellant received when she pleaded guilty before the learned Magistrate. Knowing that was the potential outcome I invited the appellant to abandon her appeal. She has not done so. Accordingly, I will resentence as I have indicated. I have had regard to the very recent decision of Justice Martin in Arbuckle v Commissioner of Taxation which bears some close resemblance to the circumstances of this case.
- My orders are as follows:
- The appeal against sentence is allowed.
- The sentence imposed at first instance is set aside.
- The application to adduce new evidence is allowed.
- I impose one penalty.
- I order that the appellant be sentenced to six months imprisonment released forthwith pursuant to section 20, subsection (1), subsection (b) of the Crimes Act 1914 upon you giving security by way of recognisance in the sum of $1000, conditioned that you be of good behaviour for a period of 24 months.
- Ms Galvin, stand up, please. I have ordered that you be released immediately after you have signed a recognisance which requires you to be of good behaviour for two years. The purpose of the order that I have made is to enable you to remain in the community. However, if you commit any further offences or in any way breach a condition of the recognisance, you may be brought back before the court to be dealt with for that breach. Depending upon the nature of the breach, you may be ordered to serve that six month period of imprisonment, a monetary penalty may be imposed or the period of the recognisance may be extended. You are not required, at this stage, to pay the amount of the recognisance which I’ve set at $1000 but if you breach the conditions of the recognisance, in addition to the other consequences I’ve already made, you may be required to pay that sum.
House v The King  55 CLR 499 at 505.
- Published Case Name:
Galvin v Australian Taxation Office
- Shortened Case Name:
Galvin v Australian Taxation Office
 QDC 269
Loury QC DCJ
28 Nov 2019