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Stergis & Ors v. F.C. of T. & Anor

Judges:
Hill J

Court:
Federal Court

Judgment date: Judgment handed down 14 April 1989.

Hill J.

The applicants in these two proceedings which were heard together by consent seek judicial review under the provisions of the Administrative Decisions (Judicial Review) Act 1977 (``the ADJR Act'') of decisions said to have been made by the respondents to commence proceedings in the Local Court in Sydney for prosecution of certain offences to which I will shortly refer. The first respondent is the Commissioner of Taxation and is sued in that capacity. The second respondent who was the informant in the informations and summonses to which the applications refer is an officer of the Australian Taxation Office employed as a senior prosecuting examiner in the Defaults Prosecution Section. In fact it seems that the decision to lay the summonses and thereby commence the proceedings in the Local Court was made by another officer of the Australian Taxation Office who is not a party to the present proceedings. No objection has been taken to the proceedings on this ground.

The proceedings commenced by Mr Stergis arise out of the same underlying factual circumstances as those commenced by Fishwives Pty. Ltd. and Pludal Pty. Ltd. It appears that Mr Stergis is a director of the two applicant companies which companies, albeit in a trustee capacity, conduct restaurants under the name ``Fishwives Seafare Restaurant'' and the ``Harbour Watch Restaurant'' respectively.

Apparently, an investigation was commenced by the Australian Taxation Office into the withholding and payment of group tax payable by these companies in respect of wages paid to its employees for the period from 1 July 1986 to 30 June 1987. As part of the investigation Mr Duck, an officer of the Australian Taxation Office, interviewed Mr Stergis in the company of his solicitor on 6 August 1987. Prior to the interview Mr Duck cautioned Mr Stergis that he was not obliged to answer the questions but that if he did, what he said would be taken down and might later be given in evidence. Mr Stergis, however, indicated that he did not wish to answer any questions but required that the questions be submitted to him in writing.

On 3 September 1987 Mr Stergis was served with a notice under sec. 264 of the Income Tax Assessment Act 1936 as amended (``the Act'') requiring him to attend at the Australian Taxation Office and give evidence concerning certain matters specifically identified as relating to the liability of the two companies to make instalment deductions pursuant to sec. 221C(1A) of the Act for the period 1 July 1985 to 30 June 1987. That interview was scheduled to take place on 1 October 1987. The appointment for interview was not kept and a subsequent interview took place on 7 October 1987 by agreement between Mr Duck and the accountant for Mr Stergis. The case proceeded before me on the basis that this adjourned interview took place pursuant to the original notice given under sec. 264 of the Act. Mr Duck at the commencement of the interview said to Mr Stergis:

``Mr Stergis I caution you that any statement made which is knowingly false is an offence under s. 8P of the Taxation Administration Act and can therefore lead to prosecution action being taken. If you only have a belief in regard to an answer you provide to a question you must state as part of the answer that you believe this to be so. Furthermore, refusal to answer a question will constitute an offence under s. 8D(1)(a) of the Taxation Administration Act and the privilege against self-incrimination is not a defence for failing to answer. Do you understand these cautions?''

Mr Stergis replied that he did and the interview then proceeded and it perhaps suffices to say of the interview a transcript of which was in evidence before me, that it contained certain admissions.

A third interview took place on 29 October 1987 with Mr Stergis. In this interview Mr Duck cautioned Mr Stergis that he was not obliged to answer any question and that if he did anything he said might later be used in evidence against him. Mr Stergis responded by saying that he understood that caution.

As a result of the investigation the Commissioner formed the view that each of the companies had failed to deduct the proper amount of group tax from the salary and wages of its employees and as a result penalties were imposed under sec. 221EAA of the Act against Fishwives Pty. Ltd. in the amount of $7,590.54 and against Pludal Pty. Ltd. in the amount of $24,824.06. These penalties however did not relate to the failure to deduct tax from wages payable to a Mr Doronzo apparently employed by Pludal Pty. Ltd. or to the failure to deduct

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tax from wages payable to a Mr Wichannakorn apparently employed by fishwives Pty. Ltd.

On 22 June 1988 two informations were laid by Mr McDermott against Mr Stergis alleging that he had knowingly made a statement to a taxation officer that was false in a material particular contrary to sec. 8P of the Taxation Administration Act 1953 in relation to group certificates involving employees of the two companies and that he kept wages records of the two companies in such a way that they did not correctly record and explain the matters, transactions, acts or operations to which they related with the intent of deceiving the Commissioner of Taxation and defeating the enforcement of a taxation law. On the same day Mr McDermott laid informations in respect of 25 summonses against Fishwives Pty. Ltd. each alleging in respect of a particular date during 1986 and 1987 that Fishwives Pty. Ltd., being an employer of Mr Wichannakorn, failed to deduct tax instalment deductions at the rate prescribed in accordance with sec. 221C(1A) of the Act. Also laid at the same time were 24 informations sworn against Pludal Pty. Ltd. alleging in respect of particular dates in 1986 and 1987 that that company, being an employer of Mr Doronzo, had failed to deduct tax instalment deductions at the rate prescribed in accordance with sec. 221C(1A) of the Act.

Mr Stergis was served with the two summonses addressed to him on 27 June 1988; the summonses in respect of the two companies were served on 24 June 1988. All of the summonses were returnable at the St James Local Court on 29 July 1988. On the return date, at which the applicants for review were represented by counsel, the summonses were adjourned for further mention on 30 September 1988 and they were thereafter adjourned until 16 December 1988. At neither of the two mentions was there any indication that the applicants proposed to institute the present proceedings.

The present proceedings were instituted on 30 September 1988 but were not served until 21 October 1988, that date being apparently the first date upon which notice was given to any person on behalf of the respondents that the applications had in fact been made.

When the summonses were further mentioned in the Local Court on 16 December 1988 that Court was advised of the proceedings in this Court and the Magistrate, Mr Webb, after hearing submissions from both sides set the matters down for hearing on 7 June 1989.

The application in respect of Mr Stergis seeks to attack the decision to commence the proceedings brought against him in the Local Court on three grounds namely:

  • 1. That the making of the decision was an improper exercise of the power conferred by sec. 8D and 8T of the Taxation Administration Act 1953.
  • 2. That a breach of the rules of natural justice occurred in connection with the making of the decision, that breach being later said, in reply to a request for particulars, to be related to the fact that at the interview of 7 October 1987 Mr Stergis was erroneously told that he was required to answer the questions put to him under pain of penalty.
  • 3. That the procedures that were required by law to be observed in connection with the making of the decision to lay the summonses were not made and that the respondents acted in bad faith. The bad faith particularised in the application was that the summonses were laid in respect of the same issues which had previously been dealt with by the imposition of statutory penalties under sec. 221EAA of the Act against the two companies, that there had been an error of law by Mr Duck in failing to caution Mr Stergis of his right to claim privacy against self-incrimination at the interview of 7 October 1987 and that Mr Duck had improperly threatened Mr Stergis with prosecution under sec. 8P of the Taxation Administration Act 1953 if he gave an answer which was false.

The application brought by the two companies contained the same three grounds and substantially involved the same claims.

The respondents objected to the competency of the Court on the basis that the application was brought outside the time specified in sec. 11 of the ADJR Act 1977 and that the decision sought to be reviewed was not a decision to which the ADJR Act 1977 applied, and moved the Court for the dismissal of the application. Thus the present proceedings came before the Court on the motion of the respondents rather than by way of hearing of the substantial

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application. However, all parties agreed that I should hear the notice of motion and the application together so that if I were of the view that the notice of objection to competency should fail, I could proceed and deal with the applications for judicial review.

I shall deal first with the notice of objection to competency.

Counsel for the respondents submitted that having regard to the terms of sec. 11 of the ADJR Act the applicable time limit was that set out in sec. 11(3)(b)(iii), that is to say that the time limited for making applications was 28 days after ``the day on which a document setting out the terms of the decision is furnished to the applicant''. The document which the respondents relied upon as setting out the terms of the decision was the summons itself; 28 days having passed since the summonses were served, it was said that the applicant was out of time and that the Court should not extend the time within which the application should be lodged with the Court.

Counsel for the applicant on the other hand, submitted that the present was a case that fell within sec. 11(4) being a case not falling within sec. 11(3) so that the application had to be made within a reasonable time after the decision was made.

Sections 11(4) and 11(5) are in the following terms:

``(4) Where -

  • (a) no period is prescribed for the making of applications for orders of review in relation to a particular decision; or
  • (b) no period is prescribed for the making of an application by a particular person for an order of review in relation to a particular decision,

the Court may -

  • (c) in a case to which paragraph (a) applies - refuse to entertain an application for an order of review in relation to the decision referred to in that paragraph; or
  • (d) in a case to which paragraph (b) applies - refuse to entertain an application by the person referred to in that paragraph for an order of review in relation to the decision so referred to, if the Court is of the opinion that the application was not made within a reasonable time after the decision was made.

(5) In forming an opinion for the purposes of sub-section (4), the Court shall have regard to -

  • (a) the time when the applicant became aware of the making of the decision; and
  • (b) in a case to which paragraph (4)(b) applies - the period or periods prescribed for the making by another person or other persons of an application or applications for an order or orders of review in relation to the decision,

and may have regard to such other matters as it considers relevant.''

The question that arises is whether it is correct to characterise the summonses served on the applicants each as being documents setting out the terms of a decision to commence proceedings by way of laying informations. In my view, it is not. The summonses as issued are the fruit or outcome of the decision and do not set out the terms of it. It is of course but a matter of simple inference from the fact of the summons to deduce that there has been a decision made by a decision-maker to issue it but it does not follow from the fact that such an inference may be simply made that the summons sets out the term of the decision.

The evident policy of sec. 11(3) is that the time for making application shall be circumscribed by reference to the furnishing by the decision-maker of some document which informs the recipient precisely what it is that has been decided. It may not be necessary that the document furnished say in so many words that a decision has been made and that the terms of that decision are set out in the document, but clearly this will normally be the case. The kind of document that is contemplated appears to some extent from sec. 11(3)(a), in that that subsection contemplates that the document setting out the terms of the decision will be a relatively formal one setting out not only the terms of the decision itself but findings on material questions of fact with references to evidence and other material. While it is obvious that the cases falling within sec. 11(3)(b) will be cases where the documents setting out the terms of the decision

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does not itself make findings of material questions of fact, nevertheless there is an element of formality in my view contemplated by sec. 11(3) such that the recipient of the document will be left in no doubt not only as to whether or not a decision has been made but precisely as to the terms of that decision.

In the present case it may well for example have been that the decision-maker determined to commence proceedings without qualification or it may be that the decision-maker determined that only in some eventuality would proceedings be commenced. When reference is had to the summons itself, it is obvious enough that the terms of the decision cannot confidently be ascertained. All that can be said is that a decision must have been made.

In my view, for these reasons, the present is not a case falling within sec. 11(3)(b). The judgment of the Full Court of this Court in
Newby v. Moodie & Anor 88 ATC 4881 at p. 4882 notes that in that case (which has some similarity to the present case) it was common ground before the trial Judge that there was no period prescribed under sec. 11(3) in a case where summonses had been served upon the appellant so that it was open to the trial Judge to refuse to entertain the application if he was of the opinion that it was not made within a reasonable time after the making of the decision. Their Honours expressed no comment adverse to this view of the matter and while certainly it cannot be said that the question was argued in that case, it seems to me that the view of the parties, which the Court was content to accept, was a correct one.

It follows therefore, in my view, that I must next determine whether the applications, made as they were approximately six months after the decision was made to commence proceedings, were lodged with this Court within a reasonable time. It is clear from sec. 11(4) that the period to be tested for reasonableness commences from the date as at which the decision-maker makes his decision. It appears in evidence that the decisions in question were made on 11 March 1988 although the summonses were not served until near the end of June in 1988. Clearly the period between March and June 1988 disappears from consideration altogether once it is realised that the person affected by the decision had no knowledge of it until near the end of June 1988. The present proceedings were initiated on 30 September 1988 so that the real issue is whether that period of three months was such that it was unreasonably long: see too sec. 11(5)(a) of the ADJR Act.

From evidence before me it appears that upon receipt of the summonses the applicants promptly sought legal advice and the solicitors for the applicants prepared a brief to counsel to appear on the hearing of the summonses and to advise generally, that brief being delivered on or about 13 July 1988. Nothing further emerges to explain the delay from mid-July until the end of September during which time the matter had been mentioned at the Local Court on 29 July 1988 and on the very day that the application was filed. However, the period of delay involved from the time that counsel was briefed until the time the application was filed, a period of some six weeks, was no doubt understandable having regard to the exigencies of practice of counsel and certainly not such as, in my view, to constitute an unreasonably long period.

The question of what is a reasonable period must of course be considered in the light of the facts of each particular case. Some guide however is to be found in sec. 11 itself. In a case where the applicant is served with a document which sets out all of the terms of the decision for the applicant to understand and indeed, sets out all of the decision-maker's findings on material questions of fact with references to evidence and other material on which the findings were based, the period of 28 days is prescribed. Indeed the general policy of sec. 11 is to prescribe the 28-day period to run from the time where the decision-maker has furnished all information relevant to enable the person affected by the decision to consider his position and make an informed decision as to whether to commence proceedings under that section. It is for this reason that the period of 28 days generally runs from the date when the person affected by the decision has all the material relevant to enable him to determine on proper legal advice if necessary whether or not to make application to the court. Where not only no reasons are given (and the present is not a case where a sec. 13 statement could be requested, see Sch. II to the ADJR Act para. (e) or perhaps (f)), but also where the material before the decision-maker is not freely available to the person complaining of the decision, and where the precise terms of the decision may be gleaned only by inference, a

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reasonable period will necessarily be longer than in a case to which sec. 11(3)(a) applies. The longer the period which elapses between the time an applicant is made aware of a decision and the time in which he appeals, the more the onus will be upon him to show an ``acceptable explanation of the delay'', cf.
Duff v. Freijah (1982) 62 F.L.R. 280.

In argument reference was made to the decision of Wilcox J. in
Hunter Valley Developments Pty. Ltd. v. Cohen (1984) 3 F.C.R. 344 where his Honour summarises as a guide the principles which have been adopted in a number of decisions in this Court in applications to extend the time for review. Those principles are not in my view directly applicable to the question of whether in the discretion of the Court the time in which the application was made was reasonable because the exercise of the discretion under sec. 11(1) proceeds from the position that the statutory time has already been exceeded. Thus while in the case of an application under sec. 11(1) the prospect of success in the ultimate application for review will be a relevant matter:
Lucic v. Nolan (1982) 45 A.L.R. 411, it can have no relevance to the issue whether a particular period of time was or was not a reasonable one to allow to elapse. Nevertheless in considering the reasonableness of a period of time it will clearly be relevant to consider any prejudice that may result to the decision-maker, not for the reasons that such an issue is relevant under sec. 11(1), but because in considering what is reasonable as a period it is necessary to consider the effect of that period of time both on the applicant and on the decision-maker. If the period were so long that the decision-maker would be prejudiced by an inability to obtain evidence relevant to the basis upon which the decision was made, that fact would be relevant in determining the reasonableness of the period. So too the complexity of the issue will be a relevant matter. The more complicated the issue the more time may be necessary to be taken to consider whether an appeal would be appropriate. Nevertheless the reasonableness of the time must be seen against the general policy to be found in sec. 11, viz. that there be finally in decision-making, so that a person affected by a decision who wishes to seek review will act with some promptness. In my view, in the circumstances of the present case, the application was in all the circumstances made within a reasonable time after the making of the decision having regard to the fact that the applicants were unaware of the decision having been made at all until towards the end of June 1988.

Newby v. Moodie & Anor requires in my view no different conclusion. That case involved a consideration by the Full Court of the question whether the period which had elapsed was reasonable. Service occurred in March 1987 and the application for judicial review was not filed until 4 December 1987, after a period of almost nine months. No evidence was put before the Court as to the reasons for the delay but in the Local Court the possibility of an application in that Court to stay the proceedings on the grounds of abuse of process was foreshadowed and in the circumstances this Court concluded that it was a reasonable inference that the appellant made a deliberate decision that the Local Court was the most appropriate forum in which to pursue an application that the proceedings were an abuse of process. In the words of the Full Court at p. 4883:

``Thus, there was not merely a long delay in seeking relief under the Judicial Review Act. It was the delay occasioned by a calculated decision to seek similar relief in the Local Court.''

It does not in view of my conclusion that the time between the making of the decision and the lodgment of the application was reasonable, become necessary to consider the question left open in Newby v. Moodie & Anor, whether if the Court was of the view that the application were not made within a reasonable time it had nevertheless a discretion in any event to proceed and hear the application, or whether it was required to dismiss the application.

Accordingly, but subject to the respondents' second submission, the Court has jurisdiction to entertain the application for judicial review.

The respondents sought to argue that the decision complained of was not a decision under an enactment. It was said that the summonses in question were not made under the sections of the Income Tax Assessment Act or the Taxation Administration Act as the case may be, which it was alleged that the applicants had contravened. Those sections, it was said, merely proscribed certain conduct and made

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that conduct an offence, providing in respect of the commission of those offences for penalties.

While it may be conceded that the mere existence of a penalty section does not of itself require the conclusion that a decision to prosecute under the offence provision was a decision made under the section providing for the offence, the answer, in my view, is that the Commissioner of Taxation has the general administration both of the Income Tax Assessment Act 1936 and the Taxation Administration Act 1953: sec. 8 and 3A respectively. As Ellicott J. observed in
Burns v. Australian National University (1982) 40 A.L.R. 707 speaking of the ADJR Act at pp. 716-717:

``The clear object of the Act is to confer rights on aggrieved citizens as a result of the exercise of powers conferred by an enactment on Ministers, public servants, statutory authorities and others. In many cases the power exercised will be precisely stated in the legislation. In other cases the power to do a particular thing will be found in a broadly stated power. The Act should not be confined to cases where the particular power is precisely stated. In each case the question to be asked is one of substance, whether, in effect, the decision is made `under an enactment' or otherwise.''

Although the decision of his Honour was reversed on appeal: (1982) 43 A.L.R. 25, Bowen C.J. and Lockhart J. expressly stated their approval of the above comments.

In Newby v. Moodie & Anor the Full Court of this Court was of the view that the decision in question in that case being a decision made by the Director of Public Prosecutions under the Director of Public Prosecutions Act, sec. 6 of which provided that the functions of the Director of Public Prosecutions include the institution of prosecutions for indictable offences against the laws of the Commonwealth and the carrying on of such prosecutions, were decisions to which the ADJR Act applied. The respondent sought to distinguish the present case from Newby v. Moodie & Anor by the absence in either the Income Tax Assessment Act or the Taxation Administration Act of provisions similar to those contained in sec. 6 of the Director of Public Prosecutions Act 1983. While there are specific provisions in the Taxation Administration Act: e.g. Div. 4 of that Act dealing generally with the institution of prosecutions for prescribed taxation offences, the short answer to the submission is that the powers and obligations conferred upon the Commissioner of Taxation are vastly wider than those conferred upon the Director of Public Prosecutions.

The relevant Acts confer upon the Commissioner the obligations to assess and collect the revenue of this country. To protect the revenue certain conduct is proscribed as an offence. Where such an offence is committed, the Act, in committing its general administration to the Commissioner, confers upon him, and through him upon his delegates or agents, the power to institute proceedings by way of prosecution for breach of the offence provisions. Too narrow a view of the words ``under an enactment'' should not be taken here. A decision to prosecute is clearly one made ``in pursuance of'' or ``under the authority of'' the relevant Tax Act and is accordingly the subject of judicial review under the ADJR Act:
Evans v. Friemann per Fox A.C.J. (1981) 35 A.L.R. 428 at p. 436. Accordingly, I would dismiss the respondents' objection to competency.

I turn accordingly to the application. In support of the grounds in the application alleging that the decision-maker had taken into account irrelevant considerations or failed to take into account relevant considerations, the applicants pointed to the provisions of Div. 2 of Pt VI of the Income Tax Assessment Act 1936 and in particular to the provisions of sec. 221EAA which provides, inter alia, that in the event of an employer failing to deduct the requisite amount of tax from the salary or wages of his employee he should be liable to pay a penalty equal to the amount which was not deducted plus 20 per cent per annum.

The relevant principles of judicial review are not in dispute; they are authoritatively expounded in the judgment of Mason J., as his Honour then was, in
Minister for Aboriginal Affairs v. Peko-Wallsend Ltd. (1985-1986) 162 C.L.R. 24 at p. 39. Relevantly, to succeed in showing that the decision-maker has failed to take into account a relevant consideration it must be shown that the decision-maker has failed to take into account a consideration which, having regard to the construction of the statute, he was bound to take into account. However not every failure to take into account

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a consideration will justify a court setting aside the decision: the consideration must be sufficiently significant that the failure to take into account might have materially affected the decision. Where the issue is that a decision-maker has taken into account factors which were irrelevant to the power, again the question of relevancy or irrelevancy will be determined as a matter of construction, determined if necessary by implication from the subject matter, scope and purpose of the statute. It will ordinarily be an easier matter to identify factors irrelevant to the power than it will be to show that the decision-maker has failed to take into account a relevant matter. See
Century Metals & Mining N.L. & Ors. v. The Liquidator of the Phosphate Mining Corporation of Christmas Island, French J., 16 March 1989 (unreported).

Division 2 of Pt VI of the Act is at the heart of the system of PAYE tax and has been in substantially its present form since the Division was substituted by Act No. 63 of 1947. The scheme of the Division is that an employer who pays ``salary and wages'' as defined in sec. 221A(1) is required to deduct an amount prescribed by regulation from those salaries or wages unless exempted from the requirement so to do and to pay that amount to the Commissioner. The manner of payment depends upon whether the employer is or is not registered as a group employer under sec. 221F. If, as is the case with the corporate applicants in the present case, the employer is registered as a group employer it will be obliged not later than the seventh day of the month next succeeding the month in which it is required to make the deduction to pay the totality of the amounts to be deducted by it to the Commissioner with a return which sets out the amount of deductions in the preceding month. If the person is not registered as a group employer he is required to keep a tax deduction sheet and to purchase, not later than the last day of each successive period of four weeks, tax stamps equal to the amount of deductions which he has made.

The tax deducted and paid in this way to the Commissioner is an advance payment on account of the employee's ultimate liability to income tax so that when the employee lodges his return he is required under sec. 221H(1) to enclose either the tax stamp sheet or the group certificate which the employer is obliged to furnish him and the Commissioner is obliged to credit the tax deducted against the employee's liability or, if the amount deducted exceeds the ultimate liability, to refund to the employee the amount of any tax ultimately found to have been overpaid.

The requirement that tax be deducted and remitted to the Commissioner by a group employer, or be paid for weekly by way of tax stamps, ensures to the Government a continuous stream of revenue to finance the outgoings of the Commonwealth. To protect this stream of revenue the failure to deduct or the failure to remit gives rise to penalties. Thus in the case of a failure to make a deduction from salary or wages the Act imposes upon an employer a liability to pay to the Commissioner an additional amount by way of penalty equal to the tax which was not deducted plus 20 per cent per annum. However, the Act also makes the failure to deduct, and for that matter the failure to remit an amount otherwise deducted, an offence, breach of which renders applicable a penalty. Thus sec. 221C(1A) imposes the obligation upon an employer to deduct at the prescribed rate and provides for a penalty, presently $1,000, for failing so to do. On conviction the Court may in addition to the penalty order the convicted person to pay to the Commissioner an amount not exceeding the amount of the deduction.

To alleviate against the possibility that a person might be both liable directly to the Commissioner for the penalty under sec. 221EAA and be subjected to a penalty for committing an offence under sec. 221C(1A), sec. 221NB, inserted in 1984, ensures that in the event that a prosecution is instituted and a person is in fact convicted that the penalty under sec. 221C(1A) will not be exigible, or if paid will be refunded.

Section 221NB makes it clear that there is an overlap between the occasions where there will be a liability accruing under sec. 221EAA and where a person will have committed an offence under sec. 221C(1A).

Nevertheless, it was argued that the Commissioner had an obligation in the ordinary case not to institute a prosecution under sec. 221C(1A) but merely to ensure that he recovered the penalty under sec. 221EAA and that his failure to proceed to recover the penalty under sec. 221EAA indicated that he had

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proceeded in accordance with some wrong principle or otherwise taken into account some irrelevant principle. In support of this argument, which has no secure foundation in the wording of the statute or in its policy, counsel for the applicants referred to the decision of the Full Supreme Court of South Australia in
McMillan v. Bierwirth 88 ATC 4056. There a taxpayer appealed against the severity of fines imposed upon him under sec. 221F for failing to remit amounts which he had deducted. Reference was made to a passage from the judgment of Johnston J. at p. 4070 where his Honour said:

``I think one could make a case (not perhaps a completely compelling case) for limiting a fine to the amount of the statutory penalty. But I do not think that one could justify a reduction below that figure, particularly in the light of the fact that I think that the Judge was right in assuming that the defendant has been given the benefit of warnings, etc. before action was taken.''

Reference was also made to what was said by Jacobs J. in the same case at pp. 4071-4072 where his Honour said:

``The most difficult question in the case is to determine the extent to which the sentencing discretion is affected, if at all, by the scheme of the legislation which imposes alternative sanctions, either a statutory penalty exacted without prosecution, or fines and the possibility of imprisonment upon conviction if it is decided to prosecute instead of imposing the statutory penalty. In a case which clearly merits imprisonment, the sentencing dilemma is less acute; but where fines are to be imposed, the appropriate level of pecuniary penalty invites some comparison with the statutory penalties that might have been exacted.''

Prosecution is no doubt a serious matter and may involve the Commissioner in more expense than might be incurred if he relied merely upon the statutory penalty. Further, it may very well be that as a guide in the exercise of the sentencing discretion a court will exercise that discretion with an eye to the statutory penalty so that it would generally be inappropriate for the fine to be less than the statutory penalty that might have been exacted. But it does not follow that there is some obligation in some classes of case upon the Commissioner to rely solely upon the statutory penalty rather than to proceed to prosecute. Successful prosecution may act not only to deter the offender but also as a deterrent generally to persons who might otherwise be encouraged to fail to deduct or remit tax properly required to be paid. Further, there is no doubt that a successful prosecution will in many cases act as a more serious deterrent against a continuation of the offending conduct of the person who has been prosecuted than the mere exaction of the statutory penalty. As a practical matter the Commissioner will restrict the number of cases to be prosecuted where to prosecute might not only be cost ineffective but also where the circumstances are trivial or such as not in the Commissioner's opinion to warrant prosecution. It is however for the Commissioner and not for this Court to decide which cases should be the subject of prosecution and in which cases he will accept the statutory penalty as an alternative to prosecution. The mere existence of the statutory penalty will not of itself preclude the Commissioner properly deciding to prosecute. Unless some quite extraneous factor be taken into account in the decision to prosecute, e.g. by way of fanciful illustration, gender or ethnicity, a decision to take one course rather than the other will not be interfered with.

It will be recalled that in the present case the Commissioner in respect of a number of employees accepted the statutory penalty rather than proceeded to prosecution. That fact that he did so was no doubt based on practical grounds but does not in my view show either that irrelevant considerations were taken into account or that the Commissioner failed to take into account considerations which were relevant.

The submission put in Mr Stergis' case was, with respect, barely arguable. It was said that because the prosecution of Mr Stergis arose out of the same facts as were involved in the prosecutions of the two companies that the decision to prosecute Mr Stergis should be set aside. It suffices to say that while the prosecutions of Mr Stergis were grounded in the same facts as those against the two companies, what is alleged against Mr Stergis is quite different from what is alleged against the companies. What is alleged against Mr Stergis is that he made a false statement to a taxation officer and that he kept the records of

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the companies in such a manner that they did not correctly record and explain transactions to which they related with the intention of deceiving the Commissioner and defeating the enforcement of the Income Tax Assessment Act. These offences are so different from those alleged to be committed by the companies that the argument has no substance. The mere fact that prosecutions were commenced against the companies does not show in my view either that the Commissioner must have taken into account irrelevant matters in deciding to prosecute Mr Stergis or that the Commissioner in making that decision failed to take into account a matter that was relevant.

The next substantial matter of which complaint was made was that there had been a breach of the rules of natural justice, in that an officer of the Australian Taxation Office in connection with an examination under sec. 264 not only failed to caution Mr Stergis that he was not obliged to answer questions but positively informed him that he was under threat of penalty if he did not. It was said that the failure was such that the very summonses themselves were tainted since having regard to the averment provisions of sec. 8ZL of the Taxation Administration Act applicable to offences coming within the expression ``prescribed taxation offence'' in sec. 8A of that Act it was unnecessary for the Commissioner even to attempt to tender the evidence illegally obtained. Even if the averment provisions were not relied upon and the prosecution sought to adduce evidence, there would be a residual discretion in the magistrate to admit the evidence illegally obtained:
Bunning v. Cross (1977-1978) 141 C.L.R. 54.

Counsel for the respondent was content to assume for the purposes of the argument, as do I, that the rules of natural justice or as they are perhaps more accurately described the rules of procedural fairness, apply to a decision of the kind impugned, it being clear that the application and content of these rules for the exercise of a particular power will involve a question of construction, cf.
Salemi v. MacKellar (No. 2) (1977) 137 C.L.R. 396 at p. 401 per Barwick C.J., p. 419 per Gibbs J., and p. 460 per Aickin J.;
Heatley v. Tasmanian Racing & Gaming Commission (1977) 137 C.L.R. 487 at p. 491 per Barwick C.J., and p. 498 per Aickin J., Stephen and Mason JJ. agreeing. Rather the issue was treated before me as being whether the provisions of sec. 264 of the Act when read in conjunction with sec. 8C of the Taxation Administration Act are such that the common law privilege against self-incrimination is abrogated.

Counsel for the respondents argued first that the question of the fairness or unfairness of the obtaining evidence from Mr Stergis is a matter for decision by the magistrate hearing the informations in due course and that even if this Court were to conclude that evidence was illegally obtained by Mr Duch in his questioning of Mr Stergis it would be a matter for the exercise of discretion of the magistrate whether that illegally obtained evidence should be admitted. Cf. Bunning v. Cross (1977-1978) 141 C.L.R. 54. That submission is perhaps better subsumed into the more general submission that the Court in the exercise of its discretion should refuse to entertain the application whatever its merits rather than to impede the process of the proceedings in the Local Court.

The genius of the common law lay in its ability to respond to the needs of the liberty of the subject. Thus, at least in the absence of statutory intervention, no man could be compelled to answer questions the answer to which might tend to incriminate him. The history of the origin of the privilege against self-incrimination is traced in the judgment of Brennan J. in
Sorby v. The Commonwealth (1983) 152 C.L.R. 281 at pp. 319-320 and see too Stephen's History of the Criminal Law Vol.1, Ch. XI; Glanville Williams, The Proof of Guilt, 3rd ed. (1963), Ch. 3; Wigmore on Evidence, Vol. VIII, para. 2250, pp. 276-304 and Holesworth, History of English Law, Vol. 9, pp. 198-200. This history is succinctly described and the importance of the principle emphasised in the decision of Brown J. delivering the opinion of the Supreme Court of the United States in
Brown v. Walker (1896) 161 U.S. 591 at pp. 596-597 cited by Brennan J. in
Hammond v. The Commonwealth (1982) 152 C.L.R. 188 at p. 203:

``The maxim nemo tenetur seipsum cusare had its origin in a protest against the inquisitorial and manifestly unjust methods of interrogating accused persons, which has long obtained in the continental system, and, until the expulsion of the Stuarts from the British throne in 1688, and the erection

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of additional barriers for the protection of the people against the exercise of arbitrary power, was not uncommon even in England.... [The abuses of interrogation which were] so painfully evident in many of the earlier state trials, notably in those of Sir Nicholas Throckmorton, and Udal, the Puritan minister, made the system so odious as to give rise to a demand for its total abolition. The change in the English criminal procedure in that particular seems to be founded upon no statute and no judicial opinion, but upon a general and silent acquiescence of the courts in a popular demand. But, however adopted, it has become firmly embedded in English, as well as in American jurisprudence.''

It is no longer in dispute that the privilege against self-incrimination is not merely a rule of evidence; thus it was held in Sorby by Gibbs C.J., Mason, Murphy, Wilson and Dawson JJ. (Brennan J. dissenting) that the privilege was not confined to judicial proceedings but applied to proceedings before a Royal Commission unless the statute constituting the Commission operated to abrogate it. It is also not in dispute that Parliament can exclude the privilege against self-incrimination, see
Huddart Parker & Co. Pty. Ltd. v. Moorehead; Appleton v. Moorehead (1908-1909) 8 C.L.R. 330; Sorby v. The Commonwealth (1983) 152 C.L.R. 281 at p. 308. The test to be applied in determining whether the privilege is abrogated by statute is not in dispute. It is stated in Sorby by Mason, Wilson and Dawson JJ. at p. 309:

``The privilege against self-incrimination is deeply ingrained in the common law. The principle is that a statute will not be construed to take away a common law right, including the privilege against self-incrimination, unless a legislative intent to do so clearly emerges, whether by express words or necessary implication: Pierce, Statutory Interpretation in Australia, 2nd ed. (1981), paras, 113-116; Pyneboard;
Crafter v. Kelly (1941) S.A.S.R. 237, at p. 242.''

See too Hammond v. The Commonwealth (1982) 152 C.L.R. 188;
Pyneboard Pty. Ltd. v. Trade Practices Commission (1983) ATPR ¶40-341 44,105; (1982-1983) 152 C.L.R. 328 at p. 341 per Mason A.C.J., Wilson and Dawson JJ.;
Controlled Consultants Pty Ltd. v. Commr for Corporate Affairs (1985) 3 ACLC 136; (1984-1985) 156 C.L.R. 385 at ACLC p. 141; C.L.R. p. 394 per Gibbs C.J., Mason and Dawson JJ. and at ACLC p. 142; C.L.R. p. 396 per Brennan J.;
Police Service Board v. Morris (1984-1985) 156 C.L.R. 397 at p. 404 per Gibbs C.J. at p. 409 per Wilson and Dawson JJ. and at p. 411 per Brennan J. and
Hamilton v. Oades, High Court of Australia, 12 April 1989 (unreported), where Mason C.J. commented that the phrase ``necessary implication'' imports ``a high degree of certainty as to legislative intention''.

In Pyneboard, Mason A.C.J., Wilson and Dawson JJ. said at ATPR p. 44,105; C.L.R. p. 341:

``In deciding whether a statute impliedly excludes the privilege much depends on the language and character of the provision and the purpose which it is designed to achieve. The privilege will be impliedly excluded if the obligation to answer, provide information or produce documents is expressed in general terms and it appears from the character and purpose of the provision that the obligation was not intended to be subject to any qualification. This is so when the object of imposing the obligation is to ensure the full investigation in the public interest of matters involving the possible commission of offences which lie peculiarly within the knowledge of a person who cannot reasonably be expected to make their knowledge available otherwise than under a statutory obligation. In such cases it will be so, notwithstanding that the answers given may be used in subsequent legal proceedings.''

Both in Pyneboard and Sorby reference is made to the decision in
Mortimer v. Brown (1969-1970) 122 C.L.R. 493 as being ``a compelling illustration'' of a case where the privilege was abrogated by necessary implication from a statutory provision. That case concerned sec. 250 of the Companies Act 1961 (Qld) which it was held excluded the privilege in the case of a public examination by a Judge of directors of a company in voluntary liquidation. As Mason, Wilson and Dawson JJ. said in Sorby at p. 309:

``In Pyneboard we concluded that it is less difficult to show that the privilege has been impliedly abrogated in the ordinary case where a statute imposes an obligation to answer questions otherwise than on oath,

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provide information or produce documents in the course of an administrative investigation than in the case of an examination on oath before a judicial officer whether or not an object of that examination is a preliminary to committal for trial or summary prosecution. As we there said, in deciding whether a statute impliedly excludes the privilege much depends on the language and character of the provision and the purpose which it was designed to achieve.''

Section 264(1) and (2) provide as follows:

``(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) to furnish him with such information as he may require; and
  • (b) to attend and give evidence before him or before any officer authorized by 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.

(2) The Commissioner may require the information or evidence to be given on oath and either verbally or in writing, and for that purpose he or the officers so authorized by him may administer an oath.''

Prior to the amendments made by Act No. 123 of 1984, the sanction for failure to answer a question put under sec. 264(1) was to be found in sec. 224 of the Act which provided:

``Any person who refuses or neglects to duly attend and give evidence when required by the Commissioner or any officer duly authorized by him, or to truly and fully answer any questions put to him by, or to produce any book or paper required of him by the Commissioner or any such officer, shall, unless just cause or excuse for the refusal or neglect is shown by him, be guilty of an offence.

Penalty: not less than $4 or more than $200.''

As the law then stood it was no doubt arguable whether the privilege against self-incrimination was abrogated. On the one hand, there were clearly no express words requiring such an abrogation either in sec. 264 or in sec. 224. However, in support of the view that privilege was not abrogated the words ``just cause or excuse'' in sec. 224 could be pointed to. Those words when coupled with the complete generality of the wording in sec. 264 might have been said to imply that the legislature did not intend to abrogate the privilege.

Against this argument could be put the context in which sec. 264 appears in the Act. The Commissioner of Taxation is obliged by the Act to cause assesments to be made of the taxable income and the tax payable by all taxpayers and, if necessary, to take steps to recover that tax. To protect the revenue the legislature has provided for a number of offences including the making of false statements, the irregular keeping of records and the like. For the purposes of the Act the Commissioner is given full and free access to all buildings, places, books, documents and other papers under sec. 263, and is empowered to obtain information or evidence under sec. 264. Material which a taxpayer has in his possession and in respect of which the Commissioner may require access under sec. 263 may reveal to the Commissioner the participation of a taxpayer in an offence against the general law or it may reveal that the taxpayer has not kept proper records in accordance with sec. 262A(1) or that an income tax offence or offence under some other law administered by the Commissioner has been committed. Similarly, information or evidence which a taxpayer or other person may be required to furnish or give under sec. 264 may tend to incriminate the person required to furnish such information or give such evidence in the same ways. The legislative policy of giving wide power to the Commissioner and those authorised by him under sec. 263 and 264, the subject of comment in
O'Reilly & Ors v. Commrs of the State Bank of Victoria & Ors 82 ATC 4671; 83 ATC 4156; (1982-1983) 153 C.L.R.T. and
F.C. of T. v. ANZ Banking Group Ltd. (Smorgon's case) 77 ATC 4522; 79 ATC 4039; (1977-1979) 143 C.L.R. 499;
Smorgon & Ors v. F.C. of T. & Ors 76 ATC 4364; (1976) 134 C.L.R. 475 and
Southwestern Indemnities Ltd. v. Bank of N.S.W. and F.C. of T. 73 ATC 4171; (1973) 129 C.L.R. 512, would be

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frustrated if the privilege were found not to be abrogated.

In 1981 Leslie J. of the District Court of New South Wales held in
Walsh v. F.C. of T. 81 ATC 4693 that the privilege against self-incrimination was inapplicable to sec. 264. In 1983 the Full Court of the Supreme Court of Queensland in
Scanlan v. Swan 83 ATC 4112 found it unnecessary to determine whether the privilege was abrogated by force of sec. 224 and 264, the point being academic because the question of privilege could only arise once the person to whom the sec. 264 notice was addressed attended and was asked a question which was such reasonably that the answer to it might have tended to incriminate him.

Authority in the United Kingdom, where the legislation is of course different, would tend to support the view that the privilege against self-incrimination would be abrogated by sections empowering the revenue to make enquiries.

In
Commrs of Customs and Excise v. Ingram & Ors (1948) 1 All E.R. 927 (C.A.) the context in which the Court of Appeal considered the issue was the Finance Act 1946 (U.K.) sec. 20 which provided, inter alia, that every person concerned with the purchase or importation of goods or the application to goods of any process of manufacture was required to furnish to the Commissioners as they might require, information relating to the goods or to the purchase or importation thereof. It was held that an order for the production of books, accounts, records and documents would be made notwithstanding that the effect of the order was that the persons required to produce the documents might incriminate themselves. Lord Goddard C.J. said at p. 929:

``The very object of the Finance Act, 1946, in the sections which relate to this matter, is to the Crown the power of investigating a person's accounts and so forth to see whether he is defrauding the revenue by not paying that which he ought to pay. To my mind, no new principle here is introduced into the law. It is said that this is compelling a man to incriminate himself or putting an onus on a man to show that he has not been committing an offence, but, it is quite a commonplace of legislation designed to protect the revenue of the Crown, as it is realised that all the information must generally be within the knowledge of the taxpayer or the subject, to put an onus on him or to oblige him to do certain things which may have the effect of incriminating him... It is said that when a man is called on under s. 20 to produce his documents, his books, invoices or accounts, or whatever they may be, he is entitled to take objection and say: `I will not produce this one or that one because it may incriminate me.' It seems to me that that would be stultifying the whole purpose of the section, and the claim for privilege, which, as between subject and subject in an action, may be made, has no application to this class of discovery or production.''

The question was considered again in the context of sec. 24(6) of the Purchase Tax Act 1963 (U.K.), the successor to sec. 20 of the Finance Act 1946, in Commrs of Customs and
Excise v. Harz (1967) 1 A.C. 760 in the House of Lords. It was held that, provided the demand for information was made in the proper manner, a trader was bound to answer the demand within the time and in the form required whether or not the answer might tend to incriminate him.

Act No. 123 of 1984 inserted into the Taxation Administration Act a series of offence sections in place of sections which had previously been comprised in the Income Tax Assessment Act. In particular sec. 8C provided that it was an offence if a person refused or failed, when and as required pursuant to a taxation law, inter alia, to furnish information to the Commissioner or to produce books, papers, records or other documents to him or to attend before the Commissioner, and sec. 8D made it an offence for a person who, attending before the Commissioner or other person pursuant to a taxation law, refuses or fails, as and when required pursuant to that law to do so, to answer a question asked or to produce a book. It should be noted that each of sec. 8C and 8D is expressed to make the relevant conduct an offence: ``to the extent that the person is capable of'' in fact complying with the request.

It would seem that the omission of the defence of ``just cause and excuse'' in sec. 8C and 8D and the use of the words ``to the extent that the person is capable of doing so'' represented a deliberate attempt on the part of the legislature to make it clear that the privilege

ATC 4456

of self-incrimination was in fact abrogated whatever may have been the situation beforehand. Cf. the Explanatory Memorandum to the Taxation Laws Amendment Bill 1984 circulated by authority of the Minister Assisting the Treasurer, the Hon. Chris Hurford M.P., where in the note to sec. 8C it is said:

``Further it requires compliance to the extent that the subject person is capable of complying with the particular requirement. Thus, self-incrimination would not be a defence to a charge under s. 8C.''

Similar comment is made in respect of sec. 8D.

The High Court in Pyneboard considered the issue whether sec. 155 of the Trade Practices Act, which authorised the issue of a notice in writing by a member of the Trade Practices Commission requiring a person to furnish information and to produce books and documents, operated to abrogate the common law privilege closely related to the privilege against self-incrimination namely that a party could not be compelled to discover that which, if answered, would tend to subject him to any punishment, penalty, forfeiture or ecclesiastical censure. The offence subsection (sec. 155(5)) made it an offence for a person to refuse or fail to comply with a notice ``to the extent that the person is capable of complying with it''. In commenting on whether the privilege was impliedly excluded Mason A.C.J., Wilson and Dawson JJ. said at ATPR p. 44,106; C.L.R. p. 343:

``The comments made by Kitto and Walsh JJ. in Mortimer are apposite to sec. 155. Subsection (1) confers a power on the Commission to require the provision of information, the production of documents or the giving of evidence relating to contravention, or possible contravention, of the Act. It is significant that subsec. (5) makes it an offence for a person to refuse or fail to comply with a notice under subsec. (1) `to the extent that the person is capable of complying with it' for these words in themselves are quite inconsistent with the existence of a privilege entitling the recipient of a notice to refuse to comply whether on the ground that compliance might involve self-incrimination or otherwise. Moreover, it is apparent that the purpose of conferring the power and imposing the obligation is to enable the Commission to ascertain whether any contravention of the Act has taken place, or is taking place, and to make the information furnished, the documents produced and the evidence given admissible in proceedings in respect of contravention of the Act, a purpose which would be defeated if privilege were available.''

Counsel for the applicants sought to distinguish Pyneboard by reference to sec. 155(7) [Trade Practices Act] which provided:

``A person is not excused from furnishing information or producing or permitting the inspection of a document in pursuance of this section on the ground that the information or document may tend to incriminate the person, but the answer by a person to any question asked in a notice under this section or the furnishing by a person of any information in pursuance of such a notice, or any document produced in pursuance of such a notice or made available to an authorized officer for inspection, is not admissible in evidence against the person -

  • (a) in the case of a person not being a body corporate - in any criminal proceedings other than proceedings under this section; or
  • (b) in the case of a body corporate - in any criminal proceedings other than proceedings under this Act.''

It does not seem however that the High Court based its decision upon the presence in the Act of sec. 155(7). Indeed, at ATPR p. 44,107; C.L.R. p. 344 the Court expressed the view that the first part of subsec. (7) was redundant and in any event it does not necessarily follow that the rule against self-incrimination referred to in sec. 155(7) necessarily encompasses the privilege against self-exposure to penalties, forfeiture or ecclesiastical censure. Thus Murphy J. at ATPR p. 44,109; C.L.R. p. 347 said:

``Although sec. 155 expressly excludes any privilege against self-incrimination, it does not recognise any privilege from exposure to ecclesiastical censure, forfeitures or civil penalties. In the light of its subsec. (5) which provides that a person shall not refuse to fail or comply with a notice to the extent

ATC 4457

that a person is capable of complying with it, it would be wrong to adopt a federal common law rule which conferred a privilege against self-exposure to civil penalties. It would be absurd to read sec. 155 as expressly denying privilege against self-incrimination but impliedly allowing privilege against self-exposure to civil penalties.''

Having regard to the purpose for which the powers under sec. 264 are conferred, the context in which that section applies in the Act and the language now enshrined in sec. 8C and 8D of the Taxation Administration Act I am of the view that where an officer of the Australian Taxation Office acting properly and in accordance with sec. 264 of the Act requires a person to furnish information or to answer any question, that person will not be entitled to refuse to furnish that information or answer that question on the grounds that to do so might tend to incriminate him. It follows in my view that when Mr Duck advised Mr Stergis that he was required to answer questions and that the privilege against self-incrimination was not a defence for failing to answer, Mr Duck correctly stated the law with the result that on any view of the matter there could not have been any breach of the rules of natural justice in the obtaining of the information which came into the hands of the Australian Taxation Office as a result of the questions put to Mr Stergis on that day.

The allegations made by the applicants that the commencement of the prosecution against the companies was an endeavour to obtain a conviction for the purpose of achieving a more severe penalty for any future taxation offences and that the discretion to prosecute was exercised in accordance with a policy without considering the facts of the particular case, were not pressed and I need not deal with them.

The allegations of bad faith made in each application related essentially to the two matters with which I have already dealt, namely the relationship of the ordinary penalty provisions relating to group tax on the one hand, and sec. 8D and 8T of the Taxation Administration Act on the other, and the question whether the privilege against self-incrimination was abrogated. These matters being decided adversely to the applicants, no separate question of bad faith arises.

I have dealt at length with the substantive matters raised in the applications in deference to the full arguments of counsel for both sides presented to me. However, ultimately I prefer to rest my decision on the basis that whatever view I should take as to the substantive issues, I should in the exercise of discretion dismiss the applications.

It is abundantly clear that where proceedings are pending in another court and an application is made to this Court for judicial review in a matter which might well affect the outcome of those other proceedings it will be in only quite exceptional circumstance that this Court will intervene. Thus in
Lamb v. Moss (1983) 49 A.L.R. 533 the Full Court of this Court held that there was a discretion to refuse relief notwithstanding that the statutory preconditions to a grant of relief were satisfied and that while this Court had jurisdiction to review the decision of a magistrate in respect of committal proceedings, that discretion should be exercised only in most exceptional circumstances.

In Newby v. Moodie & Anor 88 ATC 4881 it was held that it was quite inappropriate for the Court's jurisdiction to review a decision to prosecute made under the Director of Public Prosecutions Act, to be exercised, for in the circumstances of that case not only were there no exceptional circumstances present but the circumstances that the delay had involved a conscious decision to litigate the question of abuse of process before the magistrate, made it quite inappropriate for the jurisdiction to be exercised. However, the Full Court of this Court in Newby v. Moodie & Anor also expressed the view that even if there had been no delay in bringing the application and even if the Local Court had not been initially requested to determine whether prosecution was an abuse of process, it would still have been appropriate to refuse relief on discretionary grounds.

In principle where criminal proceedings have been commenced they should be allowed to follow their ordinary course unless the circumstances are so exceptional as to justify intervention. Such circumstances may arise if both parties agree that the jurisdiction should be exercised in respect of a discrete and important point of law which arises before the magistrate although the Court is not bound to act upon the request of the parties:
Wiest v. Director of Public Prosecutions (1988) 81 A.L.R. 129.

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The mere existence of an underlying question of law which, by reason of the review receive prompt and authoritative decision, may be sufficient, cf.
Clyne v. Director of Public Prosecutions (1984) 55 A.L.R. 9; 58 A.L.J.R. 493. The occasions for exceptional circumstances will ultimately be comprehended in those cases where the intervention by the Court is necessary in the interests of justice:
Foord v. Whiddett (1984) 60 A.L.R. 269 per Sheppard J. at pp. 278-279.

In
Holmes & Ors v. D.F.C. of T. 88 ATC 4906, a decision of the trial Judge, Davies J. to dismiss an application to review a decision to prosecute, notwithstanding that his Honour had been of the view that the decision was flawed, was held by the Full Court of this Court to be correct; the Court comprising Bowen C.J., Wilcox and Lee JJ. saying at pp. 4913-4914:

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

It was argued for the [applicants] that the present case differed from that considered by this Court in Newby v. Moodie & Anor because Newby v. Moodie & Anor dealt with committal proceedings whereas the present case did not. Further, it was said that the continuance of the prosecution in the present case would be unfair to the applicants because of the provisions to which I have already referred in the Taxation Administration Act which permit averments which are prima facie evidence, other than in respect of matters going to intent. Thus it was said that having illegally obtained evidence the Commissioner had no need in the prosecutions to rely upon that evidence because of the averment.

I should say that there is no evidence before me to suggest that the so-called ``tainted'' material obtained in the interview under sec. 264 had in fact been used to frame the averments.

It is both in the public interest and ultimately in the interests of the parties that proceedings for prosecution that have been commenced, whether for taxation offences or for other offences, proceed in due course rather than that they be interrupted by proceedings for review which raise matters which in any event could be dealt with in the ordinary course of the proceedings before the magistrate. I exclude, of course, those cases that may be comprehended by the expression ``exceptional''.

Although the present applications raise for decision two discrete issues of law so that it might be argued that it convenient that this Court express a view upon them at this stage, that fact alone does not, in my opinion, require as a matter of law that the present case fall within the category of ``exceptional'' circumstances. It would be open to the applicants in proceedings before the magistrate to show that the commencement of the prosecutions was an abuse of process. Both of the present issues could be agitated in those proceedings and the ordinary avenue of appeal would lie from the decision of the magistrate. Thus there is no compelling reason why the interests of the administration of justice compel that a review of the decisions to prosecute take place in this Court prior to the hearing. I might say that in my view there is no relevant distinction between the present case and the facts of Newby v. Moodie & Anor. Thus to paraphrase what was said by the Full Court in Holmes & Ors v. D.F.C. of T. (supra), whatever the validity of the decisions to prosecute Mr Stergis and the companies, those prosecutions must ultimately stand or fall upon their own merits.

Accordingly, the respondents have been unsuccessful in the objection to competency and must bear the costs of the motion to strike out the application. Otherwise I order the applicants to pay the respondents' costs of the application which is dismissed.


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