T v. Federal Commissioner of Taxation.

Woodward J

Federal Court

Judgment date: Judgment handed down 9 December 1986.

Woodward J.

This is an application to have a departure prohibition order set aside or varied. The order was made by the respondent on 1 April 1986, pursuant to sec. 14S of the Taxation Administration Act 1953.

That section provides, so far as is relevant for present purposes:

``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.

(2) Subject to sub-section (3), a departure prohibition order remains in force unless and until revoked under section 14T or set aside by a court.


(4) Where a departure prohibition order is made in respect of a person, the Commissioner shall forthwith -

  • (a) cause the person to be informed, as prescribed, of the making of the order;...''

ATC 4895

Because of other circumstances which need not be detailed here, the applicant was not in a position to consider leaving the country before 5 September 1986. Since about that time there have been negotiations between the applicant's solicitors and the respondent, designed to establish what payment the respondent required in settlement of the applicant's tax liabilities and what security might be accepted by the respondent for the return of the applicant to Australia if the departure order were varied to permit him to make an overseas trip for compassionate reasons.

On 24 November the applicant's solicitors wrote to the respondent making a formal offer on his behalf. The offer was expressed in the following terms:

``As it does not appear that we are able to agree on an appropriate amount to settle this dispute, our client wishes to apply for a variation of the Departure Prohibition Order. Our client is prepared to sign a written Agreement and to offer a Mortgage over his [relatives' property] as security for his return to Australia. We are instructed that the equity in the [property] totals some $100,000.00. This would clearly more than satisfy our client's alleged debt to the Department should our client not return to Australia. We have indicated to you our client would return to Australia within four months of the 21st day of December 1986.''

Later material put before the Court by the applicant indicated that the information contained in the letter was inaccurate because there was a second mortgage on the property for an amount of $100,000. However, counsel informed me that evidence would be led indicating that a way could be found around this problem.

In opening his case, counsel for the applicant conceded that there were reasonable grounds for making the order at the time at which it was made.

After hearing brief submissions from both parties I expressed the view that this application to the Court was misconceived, and I dismissed the application with costs, reserving my reasons for judgment. These are those reasons.

In my view the scheme of the Act is clear. It provides for a person who is made the subject of a departure prohibition order to challenge the making of that order in a court of law. Section 14V of the Act, so far as is relevant for present purposes, provides:

``14V(1) A person aggrieved by the making of a departure prohibition order may appeal to the Federal Court of Australia or the Supreme Court of a State or Territory against the making of the departure prohibition order.

(2) This section has effect -

  • (a) subject to chapter III of the Constitution;...''

This means that a court has jurisdiction to entertain an appeal against the making of an order, provided that court does not exceed the judicial powers of the Commonwealth by becoming involved in administrative decision-making. The point is underlined by sec. 14X which provides:

``14X A court hearing an appeal under section 14V against the making of a departure prohibition order may, in its discretion -

  • (a) make an order setting aside the departure prohibition order; or
  • (b) dismiss the appeal.''

Once an order is made, and it is not challenged as having been improperly made, detailed provision exists in sec. 14T and 14U for the Commissioner to revoke or vary the order or to issue a ``departure authorization certificate''. If the person the subject of the order is dissatisfied with the Commissioner's response to an application pursuant to either of these sections, sec. 14Y(1) provides:

``14Y(1) Applications may be made to the Administrative Appeals Tribunal for review of decisions of the Commissioner under section 14T or 14U.''

There can be no doubt that, in the circumstances of this case, this is the course which the applicant should have followed. He wants to have the exercise of an administrative discretion reviewed, not on any legal grounds but on the basis that an unfair or inappropriate decision has been reached. The Administrative Appeals Tribunal may, of course, exercise all the powers and discretions that are conferred on the Commissioner by sec. 14T and 14U. This Court may not.

ATC 4896

Since the applicant now wishes to rely upon a proposal which differs in some material respects from that contained in the letter of 24 November, it would seem that a fresh application to the Commissioner will be necessary. If that application is unsuccessful, recourse can then be had to the Administrative Appeals Tribunal, not to this Court.

It is for these reasons that the application was dismissed with costs.


The application be dismissed with costs.

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