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- Unreported Judgment
Lowden v Australian Taxation Office QDC 40
DISTRICT COURT OF QUEENSLAND
Lowden v Australian Taxation Office  QDC 40
DC No 174 of 2018
Magistrates Court Maroochydore
Ex tempore judgment delivered on 15 March 2019
15 March 2019
Devereaux SC DCJ
MAGISTRATES – HEARING – NON-APPEARANCE OF ACCUSED AND EX PARTE PROCEEDINGS – where the appellant was convicted in his absence ex parte – where the appellant applied for rehearing out of time – whether the Magistrate erred by refusing to grant a rehearing
MAGISTRATES – APPEAL AND REVIEW – QUEENSLAND – APPEAL – where the appellant was convicted and a fine imposed – where the payment of the fine would result in hardship – whether the fine imposed was excessive
Justices Act 1886 (Qld) s 142, s 142A, s 222
Taxation Administration Act 1953 (Cth), s 8ZE
National Mutual Life Association of Australasia Ltd v Oasis Developments Pty Ltd  2 Qd R 441
Rochfort v Habashy  QCA 197
No appearance for the appellant
Commonwealth Director of Public Prosecutions for the respondent
HIS HONOUR: On 24 May 2018, the appellant was convicted and fined in his absence in respect of six offences under the Taxation Administration Act 1953 (Cth). He had failed to file two income tax returns and four GST returns. The magistrate, proceeding under either section 142 or 142A of the Justices Act 1886 (Qld), imposed a single fine of $5,200 and ordered the appellant to pay court costs. On 19 September 2018, the appellant filed an application for rehearing the proceeding under section 142(6) of the Justices Act 1886 (Qld). On 27 September 2018, the application was heard with the applicant, as he then was, appearing by telephone. After some discussion, the hearing was adjourned. It resumed on 25 October 2018 and the application for rehearing was refused.
The appellant’s ground of appeal is stated as follows:
I applied for a reopening of my case as I was under the impression that it was finalised due to a letter from the tax office stating they waived the fines. The 25 May 2018 was also the birth of my daughter. The magistrate was not interested in listening to or hearing anything I had to say. He was rude, belittling, arrogant and disrespectful. This can be heard when listening to the court appearance on 25 October 2018. I feel that my case was dismissed with his prejudice towards me.
I have not listened to a recording of the appearance, but I have read the transcripts of proceedings on 24 May 2018, 27 September 2018 and 25 October 2018. Upon a reading of the transcripts, one may understand why the appellant, from his point of view, left the proceeding with that impression. The appellant annexed to his notice of appeal and his outline of argument several documents. Briefly put, what they show is that the respondent was pursuing the appellant for his failure to file returns. The correspondence includes the respondent informing the appellant of fines that it was imposing for his failures to file documents, such as the returns I have referred to.
Ultimately, on 9 April 2018 the respondent issued to the appellant the complaint and summons for the six charges. Some of the letters to the appellant after this date informed him that the fines would not be pursued. Section 8ZE of the Taxation Administration Act 1953 (Cth) provides that administrative penalties are cancelled by the issue of the complaint and summons.
That seems to have had two effects on the appellant. First, he thought that the complaint and summons was redundant in effect, because he had received several letters telling him that fines would be waived. Second, it made him think he did not have to appear on 24 May 2018. He also was expecting his second child around that time and, at the time, he had a child aged about one and a half years. So, his family life and his small business life were very hectic and he failed to appear.
In short, at the reopening hearing, the appellant did not really present a defence to the charge, but the learned magistrate made a comment that he did have some mitigating features. Now, in his written outline, the appellant, who has decided not to appear again today – but I have been informed that he has been contacted today and wished the matter to proceed in his absence – writes that he is the sole income earner for a young family on a base salary of around $44,000 and that the fine would place him into financial hardship. Before the learned magistrate on 24 May 2018, the prosecutor said that:
The defendant’s most recent income tax return was for the year ended 2017, which shows a taxable income of $66,243.
The amount of the fine – a single fine of $5,200 with court costs – more or less equated the total of the administrative fines that had been waived once the proceeding commenced. The magistrate was also told that all the GST returns the subject of the charges were lodged in April 2018, and that the defendant was then 34 years old with no prior tax convictions.
A very useful chronology, set out in the affidavit of the lawyer who appeared for the respondent on 25 October 2018, Jeffrey Noel Fay, includes the information that the appellant lodged the outstanding returns on 19 April 2018. Those were all the documents the subjects of the charges. With respect to one of the income tax returns, he received a small return; the other was a zero equation. With respect to the GST returns, he received some returns and had to pay some amounts. The amounts he had to pay marginally outweighed the amounts he received back. The reason I raise that is that, as an objective fact, the failures to file the returns did not result in any significant loss, nor was he obviously defrauding the respondent of significant amounts.
The application to reopen was brought under section 142(6) of the Justices Act 1886 (Qld). It provides that upon application made by any of a number of people, including the defendant, within two months after the determination made ex parte, the Court may:
[F]or such reason as it thinks proper, grant a rehearing of the complaint upon such terms and subject to the payment of such costs as it thinks fit.
There is no provision for an extension of that two months, and the application was filed outside that time. That, it seems to me, was sufficient reason to reject it. There is provision in other parts of the Justices Act 1886 (Qld) - for example, the part concerning appeals under section 222 - as there are provisions in the Uniform Civil Procedure Rules 1999 (Qld) and the Criminal Code (Qld) for extensions of periods such as the time within which to appeal. But there is no provision for an extension in section 142(6) of the Justices Act 1886 (Qld). That, it seems to me, compels the conclusion that one may not be given.
It seems to me that there was no real basis for a reopening made out by the applicant, as he then was. I am not aware of any authority on how a Magistrate should deal with an application under section 146(2). There may be some guidance from cases decided upon rule 290 of the Uniform Civil Procedure Rules 1999 (Qld), which sets out when a default judgment may be set aside. McPherson J, as his Honour then was, set out the relevant issues in National Mutual Life Association of Australasia Ltd v Oasis Developments Pty Ltd  2 Qd R 441, which has been subsequently affirmed as good law by the Queensland Court of Appeal, for example, in Rochfort v Habashy  QCA 197. The issues are whether or not the defendant has given a satisfactory explanation for its failure to appear; whether or not there has been any delay in making the application and whether or not the defendant has a prima facie defence on the merits of the claim on which the judgment is founded.
His Honour, McPherson J, said:
Speaking generally, it may be said that it is the last of these considerations that is the most cogent. It is not often that a defendant who has an apparently good ground of defence would be refused the opportunity of defending, even though a lengthy interval of time has elapsed provided that no irreparable prejudice is thereby done to the plaintiff.
A prima facie defence, of course, does not mean a defence that is likely to succeed on the balance of probabilities but an arguable defence. I respectfully adopt Justice McPherson’s remarks, except, of course, for the consideration of delay, given the view I have reached that it is simply not open to apply under section 142 after two months.
It might have been open to the appellant to apply under section 188 of the Penalties and Sentences Act 1992. But that was not done and, in any case, could only result in a different penalty. So I conclude the order dismissing an application to reopen the proceeding should not be overturned as there was no error.
The material that is now before the court leads me to conclude, however, that the sentence imposed was excessive. The learned Magistrate did not have the benefit of information which is before me. That is because, of course, the defendant did not present himself, but he has given persuasive reasons for his failure to appear, if not reasons which amounted to a defence to the charges. So I am of the view that the sentence was excessive. I concede that the fine imposed accorded close to exactly with the administrative penalty foregone by the respondent, and I am informed that that is a useful guide for Magistrates. I do not criticise that approach, but with the information that is now available to the court, it seems to me that that fine was excessive.
The order is that the appeal is allowed to the extent that I give leave to amend the grounds of appeal by adding a ground that the sentence imposed was excessive. I vary the order by the learned Magistrate so that the fine is $4,000 and not $5,200. That is the only variation to the orders that I make.
There is no order as to costs because he has not appeared and he does not have any legal costs. Thanks for your appearance and I will adjourn the court.
MS SHAY: Thank you, your Honour.
- Published Case Name:
Lowden v Australian Taxation Office
- Shortened Case Name:
Lowden v Australian Taxation Office
 QDC 40
15 Mar 2019