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Holmes and Ors v. Deputy Federal Commissioner of Taxation

Judges:
Bowen CJ
Wilcox J
Lee J

Court:
Full Federal Court

Judgment date: Judgment handed down 22 November 1988.

Bowen C.J., Wilcox and Lee JJ.

Appeals have been brought to this Court challenging orders made by a Judge of the Court [reported at 88 ATC 4328] in each of three proceedings which were heard contemporaneously. In two cases the respondent has cross-appealed.

The facts

The three appellants, Harry Gerard Wouters, Kerry McGinley Wright and Ian George Holmes, in early 1987 were directors or officers of Grundy Television Pty. Limited. Since December 1985 that company had been listed for audit by the respondent, the Deputy Commissioner of Taxation. During 1986 and early 1987 certain information regarding the company's affairs had been obtained by officers of the Australian Taxation Office but this was apparently considered to be inadequate. Decisions were made by the acting Deputy Commissioner of Taxation at Sydney to issue to the appellants notices under sec. 264 of the Income Tax Assessment Act 1936 requiring their attendances for the purpose of examination into the affairs of the company. Relevantly sec. 264 provides:

``264(1) The Commissioner may by notice in writing require any person, whether a taxpayer or not, including any officer employed in or in connexion with any department of a Government or by any public authority -

  • (a)...
  • (b) to attend and give evidence before him or before any officer authorized by

    ATC 4908

    him in that behalf concerning his or any other person's income or assessment, and may require him to produce all books, documents and other papers whatever in his custody or under his control relating thereto.''

Section 8C of the Taxation Administration Act 1953 makes it an offence for a person to refuse or to fail to attend before the Commissioner or another person ``when and as required under or pursuant to a taxation law to do so''.

On 9 March 1987 notices were dispatched by post to Mr Wright and to Mr Holmes. In each case the notice was posted to the address stated by the addressee in his last personal return of income, in the space labelled ``Postal Address for Service of Notices''. In neither case was this the addressee's residential address, the residential address being also stated. In each case the notice referred to sec. 264(1)(b). The notices were identical, apart from the name and address of the addressee and the date for attendance. Omitting formal parts, the notice to Mr Wright was in the following form:

``Take notice that in exercise of the powers and functions conferred upon me as acting Deputy Commissioner of Taxation by delegation from the Commissioner of Taxation under the provisions of the Taxation Administration Act 1953, I. John Wilfred Osborne, do by this notice require you to attend at the Australian Taxation Office, 13th Floor, 7-13 Hunter Street, Sydney, on Monday 30 March 1987 at 10 o'clock in the forenoon and give evidence on oath before Keith Gregory Johnson and Brian Stephen Fague, officers employed in the Australian Taxation Office whom I hereby authorise in that behalf, concerning the income or assessment of Grundy Television Pty. Limited for the period from 1 July 1980 to 30 June 1986.''

The notice to Mr Holmes required his attendance at 10 a.m. on Wednesday 1 April 1987.

Neither Mr Wright nor Mr Holmes attended the Australian Taxation Office at the appointed time. They instructed a solicitor, Mr J.L.R. Bowman, who wrote a letter dated 27 March 1987 to the respondent reading as follows:

``We act for Ian Holmes and Kerry Wright and are instructed that you may have forwarded to their tax agent letters which purport to be Notices under s. 264(1)(b) of the Income Tax Assessment Act.

Our clients have been advised that the letters do not constitute valid Notices pursuant to s. 264; and that even if they did, they have not been served upon our clients. Furthermore, the time allowed is clearly unreasonable. In this regard, we note that you sent these letters in the clear knowledge that Mr Wright, who is also a company solicitor, was overseas at the time.

Nonetheless, our clients are prepared - without prejudice however to their rights in relation to the above - to volunteer to attend your offices. In this regard, they however wish to have Counsel with them; and in particular, Counsel who has been briefed in relation to the affairs of Grundy Television Pty. Limited at all material times.

The dates you have indicated are not convenient to Counsel. Please contact us to organise both a date suitable to Counsel and our clients as well as yourselves.

It would be preferable to avoid unnecessary legal proceedings. However each of our clients is a person aggrieved within the terms of Section 5 of the Administrative Decisions (Judicial Review) Act and each of them requires you to provide him with a Statement in writing pursuant to Section 13(1) of that Act setting out the findings on material questions of fact, referring to the evidence other material on which those findings were based and giving reasons for each such decision to so issue a notice pursuant to Section 264 of the Income Tax Assessment Act.''

Statements under sec. 13 of the Administrative Decisions (Judicial Review) Act 1977 were subsequently provided to Mr Bowman.

On 31 March and 1 April 1987 Mr Bowman had a conversation with Mr Keith Johnson of the Australian Taxation Office during which he discussed suitable dates for the examination. On 2 April he wrote a letter to the respondent suggesting 24 and 25 June 1987. This suggestion was not acceptable to the Taxation Office. On 6 April 1987 three fresh notices were issued, one addressed to each of the appellants. The notice to Mr Wright required

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his attendance on 14 April 1987, but this notice was subsequently withdrawn and, on 8 April 1987, a new notice was issued specifying 24 April 1987. The notices issued to Mr Holmes and to Mr Wouters required the attendances of those gentlemen respectively on 2 June 1987 and 30 April 1987. All the notices of 6 April and 8 April were served personally. Except for some variation in the names of the officers by whom the examination was to be conducted, the notices followed the same form as that set out above.

Following the issue of these fresh notices Mr Bowman wrote several letters to the Australian Taxation Office regarding the suitability of the selected dates, but no agreement as to substituted dates was reached. Neither Mr Wright nor Mr Wouters attended on the date appointed for their respective examinations, but Mr Holmes did attend on 2 June.

In the meantime each of the appellants had commenced a proceeding in this Court, seeking review under the Administrative Decisions (Judicial Review) Act of the decisions made on behalf of the respondent in respect of each case. There is some variation in the precise form of the filed applications, but each applicant challenges the decision to issue the relevant notices. Mr Wright and Mr Holmes also challenge decisions made on behalf of the respondent to prosecute them for failing to attend at the first appointed examination. Pursuant to orders made in this Court [reported at 88 ATC 4010] those prosecutions were adjourned pending the disposal of the proceedings in this Court.

Several grounds were advanced to the learned trial Judge in support of the appellants' contention that the various notices were invalid. His Honour rejected each of those submissions but he did uphold a further submission, made on behalf of Mr Wright and Mr Holmes, that there had been no proper service upon them of the notices issued on 9 March. He made a declaration to that effect. It is this latter decision which has given rise to cross-appeals by the respondent against Mr Wright and Mr Holmes.

The validity of the notices

It is convenient to deal first with the submissions made by the appellants in connection with the validity of the various notices. As at the trial, counsel for the appellants put a number of arguments in favour of the conclusion that the notices were invalid.

The first submission of counsel for the appellants is that each of the notices was rendered defective by the circumstance that it required the attendance of the addressee before two named officers. Counsel point out that sec. 264(1)(b) authorises the issue of a notice requiring the addressee ``to attend and give evidence before him'' - that is the Commissioner - ``or before any officer authorized by him''. Emphasis is placed upon the fact that the only expressed alternative to attendance before the Commissioner is attendance before an ``officer'', singular. Counsel point to the comment of Mason J. in
O'Reilly & Ors v. Commr of the State Bank of Victoria & Ors 82 ATC 4671 at p. 4678; (1982) 153 C.L.R. 1 at p. 19: ``The power to issue a sec. 264 notice may have a great impact on the affairs of individual persons''. They urge that, if two constructions are available, that construction should be adopted which least interferes with the legal rights of affected persons. Counsel recognise the general principle, contained in sec. 23(b) of the Acts Interpretation Act 1901, that, in the absence of an expression of a contrary intention, words framed in the singular should be read as including the plural. However, they argue that there is here an expression of a contrary intention; the provision for attendance before ``any officer'' is an alternative to attendance before the Commissioner. The Commissioner is necessarily a single person. So, according to counsel, the intention of Parliament was examination by a single person; to read ``officer'' as including ``officers'' would be to add an additional burden to persons summoned for examination.

We accept that, if two constructions are fairly available, the Court ought to adopt that construction which least interferes with the rights of affected persons. However, we cannot see that those rights are more affected by an examination by two or more persons than by one person. Of course, there is always a possibility that a provision such as sec. 264 will be abused; but the realisation of this possibility depends upon the manner in which the examination is conducted, not upon the number of people involved. We do not see in the section any indication that Parliament intended

ATC 4910

to exclude the rule stated in sec. 23(b) of the Acts Interpretation Act.

The second submission of counsel for the appellants is that the notices are bad because they were issued by Mr J.W. Osborne as acting Deputy Commissioner of Taxation. At the relevant time there was in existence a delegation by the Commissioner of Taxation, Mr T.P.W. Boucher, ``to the person for the time being occupying, or performing the duties of, the office of Deputy Commissioner of Taxation, Sydney,'' of certain specified powers and functions of the Commissioner, including his powers and functions under sec. 264 of the Income Tax Assessment Act. But, according to counsel, Mr Osborne had not validly been appointed to the position of acting Deputy Commissioner, Sydney; so that the delegation was ineffective to confer upon him the Commissioner's powers under sec. 264.

The evidence in connection with this matter shows that, by a memorandum dated 20 February 1987, Mr D.J. Cortese, the Deputy Commissioner of Taxation, Sydney, recommended to the Commissioner the temporary transfer of an officer to the position of Deputy Commissioner, Sydney. This recommendation was occasioned by the fact that Mr Cortese was involved in the Program Management Performance Review. Mr Cortese recommended that Mr Osborne, whose substantive position is Senior Assistant Deputy Commissioner, Sydney, be temporarily transferred to his position ``from 24 February 1987 to date of completion of the Review''.

The memorandum from Mr Cortese was endorsed ``approved'' by Mr Boucher, who dated and initialled it. There is no evidence that Mr Osborne saw this endorsement but he did take up the duties of acting Deputy Commissioner, Sydney, on 24 February 1987 and he continued to carry out those duties until 5 May 1987.

Section 51A of the Public Service Act 1922 provides for the making of regulations ``for or in relation to the temporary performance of the whole or a part of the duties of an office (whether vacant or not) in a Department other than an office of Secretary by an officer performing duties in that Department or another Department''.

Pursuant to this power, reg. 108(1) of the Public Service Regulations has been made. It provides:

``108(1) The Secretary of a Department may give a direction in writing to an officer to perform for a specified period, or an indefinite period, the whole, or a specified part, of the duties of a Senior Executive Service officer in that Department.''

As Commissioner, Mr Boucher exercised the powers of a secretary of a department. It was therefore open to him, by a direction in writing, to appoint Mr Osborne to perform the duties of Deputy Commissioner, Sydney, for either a specified period or an indefinite period. However, the appellants say that this course was not in fact followed. Their argument is that the mere endorsement by Mr Boucher of Mr Cortese's memorandum did not constitute a direction in writing within the meaning of reg. 108(1). Two defects are claimed: that a mere authorisation is not capable of being regarded as a direction and that there is no evidence that the memorandum was seen by Mr Osborne.

It is true that the document was not framed in terms of an instruction to Mr Osborne. However, the document evidenced in writing Mr Boucher's decision that Mr Osborne should carry out the duties ordinarily carried out by Mr Cortese during his temporary absence on another project. The endorsement of a memorandum with a signification of approval is a familiar method of recording decisions within government. We see no necessity to construe reg. 108 in such a manner as to impose an obligation to create a separate document directed to the person who is to undertake the duties.

As to the second point, there is an absence of evidence as to whether Mr Osborne saw the memorandum. Mr Osborne gave evidence before the trial Judge, but he was not asked about this matter. However, it does appear that he undertook duties in accordance with the memorandum as from 24 February 1987. Plainly, he knew of the Commissioner's decision. There is a presumption of the regularity of official acts. In the absence of evidence to suggest that Mr Osborne did not in fact see the memorandum, we think that this presumption should be applied so as to lead to the conclusion that the memorandum came to Mr Osborne's attention and that he carried out his duties pursuant thereto.

ATC 4911

The third submission put by the appellants is that sec. 264 of the Income Tax Assessment Act does not itself confer upon a person served with a notice under the section an obligation to attend for examination. Counsel contrast the position under sec. 264 with the terms of the old sec. 223 of the Act, which was repealed in 1984. They refer to
F.C. of T. & Ors v. The ANZ Banking Group Ltd.; Smorgon & Ors v. F.C. of T. & Ors 77 ATC 4522; 79 ATC 4039; (1977-1979) 143 C.L.R. 499;
Ganke v. D.F.C. of T. 75 ATC 4097; (1975) 1 N.S.W.L.R. 252 and O'Reilly and Ors v. Commrs of the State Bank of Victoria and Ors 83 ATC 4156 at pp. 4158-4160 and 4162-4163; (1982) 153 C.L.R. 1 at pp. 42-43, 47 and 49.

The proposition put by counsel may readily be accepted. It is apparent that sec. 264 does not set up any positive obligation or contain any sanction against non-compliance with a notice. This function is left to sec. 8C of the Taxation Administration Act which, as already mentioned, makes it an offence to refuse, or to fail, to attend before the Commissioner or another person when and as required under or pursuant to a taxation law to do so. The function of sec. 264 of the Income Tax Assessment Act is to authorise the issue of a notice. If that notice is properly issued and served, a person commits an offence under sec. 8C of the Taxation Administration Act by refusing or failing to attend as required by the notice. The question whether or not an offence has been committed in a particular case is not a matter which goes to the validity of the notice.

The next submission of counsel relates only to the notice issued to Mr Wright on 8 April 1987. It is said that the decision to require Mr Wright's attendance on 24 April 1987 was a decision which failed to take into account certain relevant circumstances and, alternatively, that, by reason of these circumstances, the decision was unreasonable.

Ten matters are referred to in support of these submissions:

  • (a) The notice of 8 April 1987 was served personally on Mr Wright on 10 April 1987. The period of 14 days which elapsed between the date of service of the notice and the date upon which his attendance was required included the Easter holiday weekend of 17-20 April 1987;
  • (b) Mr Wright left for overseas on 12 April 1987, returned to Australia on 22 April 1987 and had to depart again on 27 April 1987. Consequently, he would have had only two days between the date of his return to Australia from the first trip overseas and the date when his attendance was required;
  • (c) At the relevant time there was a ``rule of thumb'', generally adopted in the Australian Taxation Office, that notices under sec. 264 of the Income Tax Assessment Act should give to a person not less than 28 days' notice of the time for examination;
  • (d) A period of some 16 months had elapsed since the commencement of the Office's investigation into the affairs of Grundy Television Pty. Limited. A major part of this delay had resulted from problems within the Office itself;
  • (e) Some hundreds of documents were involved in the investigation, a number of them being commercial documents in respect of which it was proposed to ask questions of Mr Wright;
  • (f) The complexity and nature of the investigation were such that a good deal of preparation had been required of the Taxation Office investigators, in order to prepare themselves for the examination;
  • (g) Mr B.S. Fague, who made the recommendation that the notice of 8 April 1987 be issued to Mr Wright, was aware that Mr Wright intended to depart overseas on 27 April. He conceded in cross-examination that it had occurred to him that a person in that position ``might more readily co-operate and finish quickly the interview'' that he was proposing to conduct;
  • (h) The solicitors acting for Mr Wright had, by letter dated 27 March 1987, informed the Taxation Office that Mr Wright and Mr Holmes wished to have counsel attend at their respective examinations and the solicitors had subsequently advised that the earliest dates convenient to both the examinees and counsel would be 24-25 June 1987;
  • (i) Mr Fague conceded in cross-examination that a delay in the examinations until 24-25 June would not have ``significantly altered'' the progress of the investigation; and

    ATC 4912

  • (j) Mr K.G. Johnson, the officer of the Taxation Office who had the immediate and everyday charge of the investigation, was not available on 24 April, with the result that his place had to be taken by another officer who lacked any detailed familiarity with the case.

We do not doubt that all of these matters were matters which Mr Osborne might properly take into consideration in deciding the timing of the examination of Mr Wright. Whether he was obliged, as a matter of law, to consider all of these matters is more debatable: see the remarks of Mason J. in
Minister for Aboriginal Affairs v. Peko-Wallsend Ltd. (1985-1986) 162 C.L.R. 24 at pp. 39-42. But let it be assumed that this is the case. The difficulty for Mr Wright is that the evidence does not show that Mr Osborne failed to take the matters into account. Some, at least, of the matters must have been obvious to him. Counsel submit that the Court should infer a failure to take into consideration from the fact that, under cross-examination, Mr Osborne agreed that the contents of a report made to him by Mr Johnson on 9 March 1987 and the knowledge that the information required by the investigators had not been supplied ``were the two bases'' of his decision to issue the notices. A problem arises at this point because the copy of the report which is in evidence is an edited version with substantial sections deleted. Without knowledge of the full content of the report, it is difficult to deal with a submission that particular matters were not taken into account. In any case, the fact that Mr Osborne regarded two matters as the bases of his decision to issue the notice does not exclude the possibility that he took other matters into account in determining the timing of the relevant examination. The allegation that the listed matters were not taken into account was not put to Mr Osborne in cross-examination.

In relation to unreasonableness, we are inclined to share the view of the trial Judge that it would have been preferable for more extensive notice to have been given to Mr Wright and, particularly, for a date to have been selected which would have allowed for the attendance of counsel of Mr Wright's choice. However, it is another matter to say that a contrary decision was unreasonable in the relevant sense, that is as being ``an exercise of a power that is so unreasonable that no reasonable person could have so exercised the power'': see sec. 5(2)(g) of the Administrative Decisions (Judicial Review) Act 1977. This ground of invalidity of an administrative decision has been described by Lord Diplock, in
Bromley London Borough City Council v. Greater London Council (1983) 1 A.C. 768 at p. 821, as being reserved for ``decisions that, looked at objectively, are so devoid of any plausible justification, that no reasonable body of persons could have reached them''. We think that it is impossible to so categorise Mr Osborne's decision to fix 24 April for the examination of Mr Wright. The choice of a date was a matter for judgment under all of the circumstances. There had already been delay in the investigation. It was desirable to complete the investigation as soon as possible. It may have seemed probable that, no matter how much notice Mr Wright was given, he would have to seek time, and an adjournment, in order to obtain information as to some matters of detail. The view was open that it would be sensible to have the examination commence as soon as possible, thereby crystallising the areas in which Mr Wright could, and could not, provide assistance. Whenever the examination was held, Mr Wright was bound only to answer questions to the best of his knowledge and ability. But even if these factors be discounted, the fact that we might think that some later date would have been preferable does not make Mr Osborne's decision unreasonable in the relevant sense. It is worth recalling the comment made by Lord Hailsham L.C. In
re W (An Infant) (1971) A.C. 682 at p. 700:

``Not every reasonable exercise of judgment is right, and not every mistaken exercise of judgment is unreasonable. There is a band of decisions within which no Court should seek to replace the individual's judgment with his own.''

The next submission, on behalf of each of the appellants, fixes upon the circumstance that the report prepared by Mr Johnson for the consideration of Mr Osborne contained material which has not been disclosed to the appellants during the course of this litigation. The appellants argue that they should be given the opportunity of challenging the correctness and relevance of the material excised from the copy of the report supplied to them and, for that purpose, access to the excised material should be made available to their counsel, at least.

ATC 4913

It appears that, at a preliminary stage, the trial Judge gave consideration to the question whether counsel for the appellants should have access to this excised material, objection to access having been taken by the respondent on the basis of public interest immunity. After reading the relevant material, his Honour refused access. Although complaint is made of this decision in the notice of appeal, we have not been asked to consider for ourselves whether public interest immunity extends to the excised material; rather the argument seems to be that, in the absence of access to this material on behalf of the appellants, Mr Osborne erred in taking that material into account. This approach is fallacious. If the material was relevant to the decision which Mr Johnson had to make, he was entitled, and possibly bound, to take it into account. The question whether the material ought properly to be regarded as subject to public interest immunity, and therefore ought not to be disclosed to the appellants or to their counsel, is an entirely separate matter.

The decision to prosecute

Finally, the appellants complain of the decision made by Mr E.W.C. Laird, a senior prosecuting examiner with the Default Section of the Australian Taxation Office, to file informations against Mr Wright and Mr Holmes for non-attendance at the examinations appointed by the notices of 9 March 1987. It appears from the evidence that, in making his decision to lay these informations, Mr Laird relied upon certain information supplied to him by Ms L.M. Bosley, a co-ordinating officer between the Audit and Prosecution sections of the Office. The trial Judge found that Ms Bosley did not show to Mr Laird, or inform him of, the letters from the appellants' solicitors which claimed that the dates selected for the examinations were unreasonable and which offered attendances with counsel on 24 and 25 June. Nor did Ms Bosley inform Mr Laird that new sec. 264 notices had been issued and that Mr Wright had been called upon to attend for examination on 24 April and Mr Holmes on 2 June. His Honour found that this information was material to Mr Laird's decision to prosecute and that, in consequence, Mr Laird's decision was ``flawed''.

Notwithstanding this conclusion, the trial Judge held that, in the exercise of the discretion of the Court, no order ought to be made in connection with Mr Laird's decision. His Honour referred to the words of Fox J. in Newby v. Moodie & Anor 88 ATC 4072 at p. 4074; (1987) 78 A.L.R. 603 at p. 605:

``Following well-established authority, the exercise of the discretion to prosecute is not open to review in the courts (
Hill v. Chief Constable of West Yorkshire (1987) 2 W.L.R. 1126 at pp. 1133-1134;
The Queen v. Toohey; Ex parte Northern Land Council (1980-1981) 151 C.L.R. 170 at p. 283;
Barton v. The Queen (1980) 147 C.L.R. 75 at pp. 94, 96, 107 and 109-110;
The Queen v. McAuley; Ex parte Fardell (1979) 41 F.L.R. 267 at p. 274;
R. v. Commissioner of Police of the Metropolis; Ex parte Blackburn (1968) 2 Q.B. 118 at p. 136).''

In a decision given after the decision of the trial Judge in this case, a Full Court, in Newby v. Moodie & Anor, affirmed the power of this Court to review, under the Administrative Decisions (Judicial Review) Act, a decision to prosecute made under an enactment: see 88 ATC 4881. However, the Full Court emphasised the existence of a discretion and the general undesirability of review of such a decision (see p. 4885):

``Cases abound in which the Court has said that the power to make an order of review in respect of committal proceedings should be exercised only in the most exceptional cases. What was said in
Lamb v. Moss [(1983) 49 A.L.R. 533] at p. 564 to this effect has been consistently followed in subsequent decisions of this Court. We are of the view that the same principle should be applied to applications of this sort. The High Court has recently said: `The undesirability of fragmenting the criminal process is so powerful a consideration that it requires no elaboration from us' (Vereker & Ors v. O'Donovan, application for special leave to appeal, 18.3.88).''

We agree with the trial Judge that, as a matter of discretion, this Court should not review the decision made by Mr Laird to prosecute Mr Wright and Mr Holmes. In any case in which there is an abuse of process or a justifiable concern about a fair trial, the court may intervene to stay the continuance of the prosecution. But, ordinarily, the court does not intervene to review the initial decision to

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prosecute. Whatever the validity of Mr Laird's decision, the prosecutions, if they proceed, will stand or fall upon their own merits.

Service of the notices of 9 March

As we have mentioned, the trial Judge held that the notices of 9 March 1987 addressed to Mr Wright and to Mr Holmes were not validly served. As mentioned, each of the notices was posted to the address stated by the addressee in his last personal return of income. By way of cross-appeal, in the cases of these two appellants, the respondent seeks an order setting aside the declaration made by the trial Judge in relation to service of these notices. In lieu thereof, the respondent seeks a declaration that the service was valid.

Regulations 27, 28 and 29 of the Income Tax Regulations state:

``27. Every person who furnishes a return shall, in the return, give an address in Australia for service.

28. Every person who has given an address for service and who subsequently changes his address shall, within one month after the change, give to the Commissioner, at the place where he furnished his return, notice in writing of his new address in Australia for service.

29. The address for service last given to the Commissioner by any person shall, for all purposes under the Act and Regulations, be his address for service, but where no address for service has been given to the Commissioner, or where the departmental records disclose that such person has subsequently changed his address and he has not notified the Commissioner, either in the return or by separate written advice, of such change, then the address of the person, as described in any record in the custody of the Commissioner, shall be his address for service.''

Regulation 59 provides for the service of notices by post:

``59. Any notice or other communication by or on behalf of the Commissioner may be served upon any person -

  • (a) by causing it to be personally served on him; or
  • (b) by leaving it at his address for service; or
  • (c) by posting it by pre-paid letter post, addressed to him at his address for service;

and in any case to which paragraph (c) of this regulation applies, unless the contrary is proved, service thereof shall be deemed to have been effected at the time when it would, in the ordinary course of post, have arrived at the place to which it was addressed.''

The submission made on behalf of the Deputy Commissioner, in support of the cross-appeals, is that the words of reg. 29 ``for all purposes under the Act and Regulations'' ought to be interpreted literally, so that the address given by a taxpayer in his personal taxation return constitutes his address for service, for all taxation purposes, and notwithstanding that this person is being served with a document unrelated to his personal taxation liability. Counsel emphasise that reg. 29 refers to ``any person''. It does not use the word ``taxpayer''.

A similar submission was put to the trial Judge who rejected it in these words [at 88 ATC 4328 at pp. 4331-4332]:

``Notwithstanding the wide words of reg. 29, I am of the opinion that an address for service specified in a return is an address of the person who furnishes the return only for limited purposes. The capacity in which the person furnishes the return, e.g., as a taxpayer personally, as a trustee, or as an agent, is the determining factor. Each form of return provided by the Commissioner under reg. 9 requires the person who furnishes the return to specify an address for service. Regulations 27 to 29 appear in Pt IV of the Regulations, the heading of which is `Returns and Assessments'. I do not read the Regulations as requiring that a person who furnishes returns in several capacities have only one address for service. A trustee of several trust estates may furnish returns showing separate addresses for each of the trust estates and those addresses may be separate from his own. A person who furnishes a return on behalf of a partnership may specify an address for service different from that appearing in his own personal return. And so on. I read the provisions with respect to address for service accordingly and as relating to the capacity of the person in respect of which the return was furnished.

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It follows, in my opinion, that an address for service specified in a taxpayer's personal return is an address for service for all purposes under the Act and Regulations with respect to documents requiring service upon him in that capacity. Thus, all notices, assessments and demands which are referable to the person as an individual taxpayer may be served at that address for service.

However, the sec. 264 notices served upon Messrs Wright and Holmes did not relate to their personal tax affairs but to the affairs of Grundy Television Pty. Limited. The address for service which Messrs Wright and Holmes had each given in their personal returns was a post office box and notices directed thereto would have been received by Mrs Sue McIntosh, who was their tax agent. That address was not, in my opinion, an address for service of notices concerning not their own affairs but the affairs of Grundy Television Pty. Limited.

For these reasons, I am of the view that, in the circumstances of the case, the service authorised by reg. 59 was personal service.''

The question raised by counsel for the Deputy Commissioner is not free from difficulty. It is correct, as counsel submit, that, if reg. 29 is construed literally, the service which was effected in this case constituted valid service. However, we have come to share the view of the trial Judge that reg. 29 should be read as a reference to an address for service given by a person in a particular capacity, that is in relation to the affairs of the taxpayer upon whose return the address was disclosed. The considerations referred to by the trial Judge, in relation to persons who participate in the furnishing of returns in a number of different capacities, are, in our opinion, highly significant. It must often happen that a person nominates a particular address for service of his or her personal taxation return; yet that person would be inconvenienced, perhaps embarrassed, if documents which had to be served upon him or her in some other capacity were sent to that address. It seems to us that the better view is that reg. 27-29 contemplate the furnishing of an address for service of all documents required to be served in connection with the affairs of the particular taxpayer. In connection with those affairs, the address is available ``for all purposes under the Act and Regulations''; but it is not available for the service of documents related to the affairs of a different taxpayer.

It follows from what we have said that the Deputy Commissioner is not entitled to a declaration that the postal service which was made upon Mr Wright and Mr Holmes was effective service. However, it does not follow from our conclusion that the trial Judge was justified in making a declaration that the service of the notices upon Mr Wright and Mr Holmes was invalid. Regulation 59 is facultative. The essence of service is that the relevant document has reached the person on whom it is to be served. It is possible, in any particular case, that a court may be satisfied that a document has reached the addressee notwithstanding that it has not been shown to have been served in accordance with any of the methods specified in reg. 59. In the present case there is evidence that both Mr Wright and Mr Holmes were aware of the issue of the relevant notices shortly after the date of their issue. In neither case does the evidence before us establish that the particular document was actually received by the addressee. However, if the prosecutions against Mr Wright and Mr Holmes are to be continued, it may be possible for the informant to establish this fact. This is a matter to be explored before the magistrate, free of the embarrassment of any declaration of this Court. It is appropriate that the declaration of the trial Judge be set aside.

Each of the three appeals will be dismissed. Each of the cross-appeals will be allowed, to the extent that the declaration as to the invalidity of the service of the notices of 9 March 1987 will be set aside. In each case the appellant must pay the costs of the Deputy Commissioner.


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