Briggs v. Deputy Federal Commissioner of Taxation.

Judges:
Toohey J

Court:
Federal Court

Judgment date: Judgment handed down 6 September 1985.

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Toohey J.

As I indicated yesterday, I propose to give my reasons orally. They will be available to counsel later if required.

Part IVA of the Taxation Administration Act 1953, effective as from 14 December 1984, regulates the departure from Australia of what are described as certain tax debtors. The key section is sec. 14S, subsec. (1) of which reads:

``14S(1) Where -

• (a) a person is subject to a tax liability; and
• (b) the Commissioner believes on reasonable grounds that it is desirable to do so for the purpose of ensuring that the person does not depart from Australia for a foreign country without -
  • (i) wholly discharging the tax liability; or
  • (ii) making arrangements satisfactory to the Commissioner for the tax liability to be wholly discharged,

the Commissioner may, by order in accordance with the prescribed form, prohibit the departure of the person from Australia for a foreign country.''

Section 14T empowers the Commissioner to revoke or vary an order made under sec. 14S. Section 14U empowers the Commissioner, in certain circumstances, to issue a departure authorisation certificate authorising departure from Australia of a person in respect of whom a departure prohibition order is in force. Subsection 14U(1) reads:

``14U(1) Where, on application made by a person in respect of whom a departure prohibition order is in force -

• (a) the Commissioner is satisfied -
  • (i) that, if a departure authorization certificate is issued in respect of the person, it is likely that -
    • (A) the person will depart from Australia within such period as the Commissioner considers to be appropriate in relation to the person; and
    • (B) circumstances of the kind referred to in paragraph 14T(1) (a) will come into existence within such period as the Commissioner

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      considers to be appropriate in relation to the person; and
  • (ii) that it is not necessary or desirable for the person to give security under sub-section (2) for the person's return to Australia; or
• (b) in a case where the Commissioner is not satisfied with respect to the matters referred to in paragraph (a) -
  • (i) the person has given security under sub-section (2) to the satisfaction of the Commissioner for the person's return to Australia; or
  • (ii) if the person is unable to give such security, the Commissioner is satisfied that -
    • (A) a departure authorization certificate should be issued in respect of the person on humanitarian grounds; or
    • (B) a refusal to issue a departure authorization certificate in respect of the person would be detrimental to the interests of Australia,

the Commissioner shall issue a certificate authorizing the person to depart from Australia for a foreign country on or before the seventh day after a day (being a day later than, but not more than 7 days later than, the day on which the certificate is issued) specified in the certificate.''

The applicant, Peter Briggs, is due to fly to Europe tonight for a fortnight on a business matter. At 3.15 p.m. on Wednesday, 4 September 1985, a departure prohibition order issued by the Deputy Commissioner of Taxation as delegate of the Commissioner was served on him. Yesterday, 5 September, the Deputy Commissioner wrote to the applicant's solicitors declining to issue a departure authorisation certificate. Yesterday Mr Briggs' solicitors lodged three applications, each aimed at challenging the Deputy Commissioner's actions. Those applications were heard yesterday afternoon.

The applications were made under the Taxation Administration Act itself, under the Administrative Decisions (Judicial Review) Act 1977, and under sec. 39B of the Judiciary Act 1903. This was done to some extent from an excess of caution since the arguments presented on behalf of the applicant were much the same in respect of each application.

The departure prohibition order lists income tax assessments against Mr Briggs amounting to $704,058.95 plus additional tax of $297,694.65, and further tax for late payment. There is also an assessment against him of $527,468 under the provisions of the Taxation (Unpaid Company Tax) Assessment Act 1982.

Mr Briggs has objected to these assessments but the objections have not yet been determined. The Commissioner has brought proceedings in the Supreme Court of Western Australia to recover the amounts in question.

On 18 May 1984 the applicant was arrested on what was described rather vaguely as a conspiracy charge. Committal proceedings have been on foot for two months or so and presently stand adjourned. Since his arrest, Mr Briggs has travelled overseas on eight occasions. A condition of his bail is that he deposit his passport with the Director of Public Prosecutions, but he was able to secure the temporary return of his passport for those journeys.

In respect of the journey he proposes to make tonight, Mr Simpson S.M. made an order on 30 August for the return of his passport between 3 and 18 September. Of course, the issue of a departure prohibition order now prevents his departure.

The matter before the Court was argued primarily by reference to sec. 14V of the Taxation Administration Act which enables a person aggrieved by a departure prohibition order to appeal to the Federal Court against the making of the order. Although described as an appeal, the proceedings in this Court are within the original jurisdiction of the Court. Appeals under the Administrative Appeals Tribunal Act 1975 provide an analogy in this regard. However, while an appeal under that Act must be on a question of law (sec. 44), an appeal under the Taxation Administration Act is not so limited. Nevertheless, sec. 14X of the latter statute confines a court hearing an appeal under sec. 14V to an order setting aside the departure prohibition order or dismissing the appeal.

Counsel for the Deputy Commissioner made submissions as to the nature of an appeal under the Taxation Administration Act. That is not a

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matter I need spend time on. The Court is called upon to review an administrative decision which the Commissioner is empowered by subsec. 14S(1) to make in the circumstances there mentioned. One of those circumstances is that the Commissioner believes on reasonable grounds that it is desirable to make an order for the purpose of ensuring that a person subject to a tax liability does not depart from Australia without wholly discharging that liability or making arrangements satisfactory to the Commissioner for the liability to be wholly discharged.

Counsel for the applicant accepted that subpara. 14S(1)(b)(ii) requires more than the provision of security adequate to meet the tax liability. It requires an arrangement, for example payment by instalments, for that liability to be discharged.

The Act does not spell out criteria according to which the Commissioner might reach the belief of which the section speaks. The difficulty of supporting a challenge to an order which recites such a belief on the part of the Commissioner is obvious, particularly when the Act imposes no obligation on the Commissioner to give reasons for his belief - see Brennan J. in
W.A. Pines Pty. Ltd. v. Bannerman (1980) 30 A.L.R. 559 at pp. 566-567.

Whether the Commissioner might have been called upon to make discovery of documents is a matter I need not pursue here, for discovery was not sought. No doubt time was against such a course in any event. However, the applicant, without objection, filed an affidavit deposing to various matters, most of which have been mentioned earlier in these reasons. None of that material and nothing said in the course of the applicant's submissions leads me to conclude that the Commissioner did not have a belief on reasonable grounds in terms of para. 14S(1)(b). The fact that the applicant has been abroad on other occasions and has returned, and that he has sworn to his intention to return on this occasion, does not preclude the Commissioner from holding the necessary belief. While the belief must relate to the objects of the legislation itself, it is not hard to imagine reasons related to those objects that might lead the Commissioner to the required belief. The onus is on the applicant to show otherwise, and he has not done so.

The application under the Judicial Review Act turned on para. 5(1)(e) - that the Commissioner's decision to issue the order and his decision not to issue a departure authorisation certificate was each an improper exercise of power. This ground was amplified by reference to para. 5(2)(b) - failing to take a relevant consideration into account - and para. 5(2)(c) - exercising a power for a purpose other than a purpose for which the power is conferred.

But Mr Briggs faces the same obstacle as he faces with his application under the Taxation Administration Act. He says that the Commissioner failed to take into account that he will return and that his absence will provide no threat to the revenue. These are matters for the judgment of the Commissioner, though not for an arbitrary judgment. Equally there is nothing to show that the Commissioner exercised his power for some ulterior purpose. Certainly the departure prohibition order was issued at short notice, but until Mr Simpson S.M. made his order, Mr Briggs could not in any event depart, at any rate not without the consent of the Director of Public Prosecutions.

Whether the Commissioner was bound to provide reasons under the Judicial Review Act is a matter I need not decide for again none was sought. In that regard I refer to sec. 13 and Sch. 2 para. (m). There may be cases where, despite the absence of expressed reasons, an inference may be drawn in terms of one of the grounds in sec. 5 of the Judicial Review Act, but that is not the case here. And it is, I think, of some importance that the applicant has not invoked para. 5(2)(g) - that there was an exercise of power so unreasonable that no reasonable person could have so exercised it.

It is unnecessary to say anything about the application under sec. 39B of the Judiciary Act. Counsel for the applicant conceded that if the other applications failed, this application could not succeed. In my view, each application should be dismissed.

THE COURT ORDERS THAT:

1. Each application is dismissed.

2. The applicant pay the respondent's costs of the applications, to be taxed as one set of costs.