Briggs v. Deputy Federal Commissioner of Taxation.

Members: Burt CJ
Brinsden J

Kennedy J

Tribunal:
Full Supreme Court of Western Australia

Decision date: Judgment handed down 17 September 1986.

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Kennedy J.

On 12 July 1983, the respondent issued with respect to the appellant notices of amended assessment of income tax, including sums for additional tax for incorrect returns, for the years ended 30 June 1976 to 1978. On the same day, the respondent also issued with respect to the appellant notices of assessment of income tax for the years ended 30 June 1979 to 1981. The date upon which the tax was expressed to be due and payable was in each case 15 August 1983. The appellant lodged notices of objection against each assessment. Thereafter, but prior to the determination of the objections, the respondent instituted the present proceedings against the appellant, claiming the income tax as assessed by him, together with additional tax from the due date for payment.

The appellant sought to resist the claim upon two grounds, the first being that the

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assessments were not served upon him as required by the Income Tax Assessment Act 1936, and the second being that the respondent had abused his position, having regard, in particular, to the manner in which he was said to have ascertained the tax payable and to what was claimed to be his inordinate delay in deciding the objections, with the consequence, it was claimed, that the respondent was not entitled to recover the tax.

At the trial, a statement of agreed facts was tendered. It was in the following terms:

``1. The (respondent) is a Deputy Commissioner of Taxation.

2. On the 12th day of July 1983 the (respondent) acting pursuant to authority delegated to him by the Commissioner of Taxation issued to the (appellant) notices of amended assessment of income tax in respect to the financial years ended 30 June 1976, 1977 and 1978 and notices of assessment of income tax in respect of the financial years ended 30 June 1979, 1980 and 1981 (`the assessments') which purported to be issued pursuant to the provisions of the Income Tax Assessment Act (C'th) 1936 (`the Act'). Annexed hereto and marked `A' to `F' are certified true copies of the assessments.

3. The assessments by their terms made the tax set out therein due and payable on the 15th day of August 1983.

4. The assessments were posted on the 12th day of July 1983 by pre-paid letter post to the (appellant) at the (appellant's) residential address, namely 273 Oceanic Drive, City Beach in the State of Western Australia.

5. The (appellant) received the assessments at the above address on or before the 26th day of July 1983 and lodged with the (respondent) objections to the assessments on the 9th day of September 1983. True copies of the notices of objection dated the 9th September 1983 for the years of income ended 30 June 1976 and 30 June 1979 are attached hereto and marked `G' and `H' respectively.

6. The notices of objection for the financial years 30 June 1977 and 1979 were in identical terms to the notice of objection for the financial year ended 30 June 1976 and the notices of objection for the financial years 1980 and 1981 were in identical terms to the notice of objection for the financial year ended 30 June 1979.

7.

• (a) The last address for service given by the appellant to the (respondent) prior to the issue of the assessments was given in the (appellant's) second 1978 income tax return. Annexed hereto and marked with the letter `I' is the front sheet of that return.
• (b) The last address for service so given was c/- Hampton Management Pty. Ltd., 15th Floor, Elder House, 200 St George's Terrace, Perth.
• (c) By letter dated 4th July 1977 addressed to the (respondent) and signed by the (appellant) the (appellant) advised the (respondent) that Hampton Management Pty. Ltd. was in the process of being struck off the Company Register pursuant to s. 308 of the Companies Act 1962 (W.A.).
• (d) Hampton Management Pty. Ltd. was struck off the Company Register on 3 February 1978 and the (appellant) so advised the (respondent) by letter dated 24 February 1978.
• (e) Hampton Management Pty. Ltd. has never occupied premises at either 15th Floor, 200 St George's Terrace, Perth or 15th Floor, Elder House, III St George's Terrace, Perth.
• (f) The (appellant) had not, up to the issue of the notices notified the (respondent) of any other address for service.

8. Officers of the (respondent) were at the time of issue of the assessments aware of the facts set out in sub-paragraphs 7(a), (b), (c), (d) and (f).

9. As at the date of issue of the assessments the (appellant's) residential address of 273 Oceanic Drive, City Beach was described in the Commonwealth of Australia Electoral Roll for the division of Curtin Sub-Division of Claremont for 1983 a copy of which was in the custody of the (respondent) as at the date of issue of the assessments; and

10.

• (a) Until about January 1980 the (appellant) carried on business as a

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  business man at Ground Floor, 524 Hay Street, Perth and since then has carried on business at 15th Floor, Elder House, 111 St George's Terrace, Perth.
• (b) On 13 August 1982 the (respondent) sent a final notice pursuant to s. 264 of the Act to the (appellant). A copy of the file copy of the final notice containing a handwritten note by Mr G. Wiggins an officer of the (respondent) is attached and marked `J'.
• (c) A note was made by Mr Wiggins on 16 June 1983 and a copy is attached and marked `K'.
• (d) The (appellant) furnished letters dated 9 July 1980 and 25 May 1984 to the (respondent). Attached hereto and marked with the letters `L' and `M' are copies of the said letters.
• (e) A report was written by two of the (respondent's) officers Messrs P. Peacock and G. Wiggins on or about 7 June 1983 and was adopted by the (respondent) and formed part of the basis upon which the assessments were issued to the (appellant). An edited copy of the report is attached and marked `N'.''

The handwritten note on the final notice referred to in para. 10(b), which was addressed to 15th Floor, Elder House, 111 St George's Terrace, Perth W.A. 6000, was in the following terms:

``The address for service of this notice has been applied in accordance with Reg. 29 as Mr Peter Briggs has moved his business from the last known address for the service of notice (Ground Floor, 524 Hay Street, Perth), to the address as shown on this notice. Whilst nothing turns upon it, the last address for service provided by the appellant was C/- Hampton Management Pty. Ltd., 15th Floor, Elder House, 200 St George's Terrace, Perth.''

The note referred to in para. 10(c) was in the following terms:

``Peter Briggs

The address for services of notices as notified by the a/n as at 30/6/78 was:

• C/o Hampton Management P/L Ground Floor 524 Hay Street Perth 6000

From information available it can be established that the above address for service of notices no longer applies. In accordance with Regulation 29 the latest address for service is considered as being his residential address:

• 273 Oceanic Drive, City Beach 6015.''

It is unnecessary for the disposition of this appeal to set out the details of the other documents incorporated in the agreed statement of facts.

On 24 January 1986, the learned trial Judge rejected both of the arguments advanced on behalf of the appellant, and gave judgment in favour of the respondent in the sum of $1,048,179.82.

The appellant now appeals against that judgment upon the following grounds:

• (1) the learned Judge erred in law in holding that the respondent had effected service of the notices of assessment and amended assessment upon the appellant in accordance with sec. 174(1) of the Income Tax Assessment Act 1936 (Cth) because the appellant had acknowledged receipt of the same by lodging objections to them and that there was no need to resort to the construction to be placed upon the Income Tax Regulations.
• (2) His Honour should have held that:
  • (a) section 174(1) did not specify the place or manner of service and it was necessary to resort to the Income Tax Regulations which required service to be effected as provided in reg. 59 thereof at the appellant's address for service;
  • (b) the appellant's address for service at the time of issue of the notices of assessment and amended assessment was 15th Floor, Elder House, 111 St George's Terrace, Perth, Western Australia, being the address for service last given by the appellant to the respondent or, alternatively, the address of the appellant as described in a record in the custody of the appellant [sic] within the meaning of reg. 29 of the Income Tax Regulations ;
  • (c) as the notices of assessment and amended assessment were not served

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    upon the appellant at that address for service there had not been proper service;
  • (d) the fact that the appellant had objected to the relevant assessments and amended assessments the subject of such notices was irrelevant;
  • (e) in the absence of proper service the appellant was under no liability to pay the tax assessed by the respondent.

The first point which should be made is that the learned trial Judge did not rely in any respect upon the fact that the appellant had lodged objections to the amended assessments and assessments. His finding was, quite simply, that service of the notices had been effected under the provisions of sec. 174(1) of the Act. He found it unnecessary to resort to the regulations. In my opinion, the learned trial Judge was entirely correct in so deciding.

It is well established that service of notice of an assessment is necessary to create in the taxpayer an obligation to pay income tax - see
Batagol v. F.C. of T. (1963) 109 C.L.R. 243 at pp. 251-252 . The critical question here is whether notice of the assessments was duly served.

Section 174(1) of the Income Tax Assessment Act is in the following terms:

``As soon as conveniently may be after any assessment is made, the Commissioner shall serve notice thereof in writing by post or otherwise upon the person liable to pay the tax.''

The regulations dealing generally with service are as follows:

``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.

30. The address for service as prescribed in the last preceding regulation shall, for all purposes under the Act and Regulations, be deemed to be the last known place of business or abode in Australia of any person.

31. Any person who changes his address and fails to give to the Commissioner notice of his new address in Australia for service shall not be permitted to plead such change of address as a defence in any proceedings (whether civil or criminal) instituted against him under the Act or Regulations.

...

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.''

Two preliminary observations may be made. First, reg. 59 is not directed, as is sec. 174(1), only to notices of assessment. It extends to ``any notice or other communication by or on behalf of the Commissioner''. Secondly, reg. 59 is merely facultative. It does not purport to require the Commissioner to adopt one of the three methods of service set out therein. Had it done so, then a question as to its validity would arise, having regard to the wide terms of sec. 174(1).

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As Lord Cranworth L.C. expressed it in
Hope v. Hope (1854) 4 De G.M. & G. 328 at p. 342; 43 E.R. 534 at pp. 539-540 :

``The object of all service is of course only to give notice to the party on whom it is made, so that he may be made aware of and may be able to resist that which is sought against him; and when that has been substantially done, so that the Court may feel perfectly confident that service has reached him, everything has been done that is required.''

And see also
Kistler v. Tettmar (1905) 1 K.B. 39 .

Section 174(1) permits service by post. Each of the notices in question was posted on 12 July 1983 by pre-paid letter post to the appellant at his residential address, and each was received by him at that address on or before 26 July 1983. In my opinion, in terms of sec. 174(1), the respondent has therefore served notice of the assessments and amended assessments in writing, by post, upon the appellant. There is no foundation for the contention that the service was ineffective because the address at which the appellant received the notices was not his address for service even assuming for the purposes of this argument, that to be the fact. The position is analogous to that in
Sharpley v. Manby (1942) 166 L.T. 44 .

If, after an assessment has been made by the Commissioner, he has ``serve(d) notice thereof in writing by post... upon the person liable to pay the tax'', the regulations as to service generally need not be relied upon. Nor should they be read in any respect as reducing the scope of sec. 174(1).

The appellant sought to derive some comfort from
D.F.C. of T. v. Naidoo & Anor 81 ATC 4537 , a decision of Everett J. in the Supreme Court of Tasmania, in which he held that, where a taxpayer had given, as his address for service, the post office box of his tax agents, service could not properly be effected by delivering notices of assessment to the offices of the tax agent. But, that case was not concerned with service by post under sec. 174. Furthermore, I am unable to find any indication in the report that the notices of assessment in fact came into the hands of the taxpayer.

It is frequently necessary for the Commissioner of Taxation to establish the time of service of a notice of assessment, for it is from that time that the period permitted for an objection commences to run - sec. 185 - and, in some cases, it may determine the date on which income tax will become due and payable - sec. 204. If service is effected pursuant to reg. 59(c), it is deemed to have been effected, unless the contrary is proved, at the time when the notice would, in the ordinary course of post, have arrived at the place to which it was addressed. But in this case, the respondent had no need to rely upon service under reg. 59(c), for the objections were clearly lodged within time and no question arose as to the date upon which the income tax became due and payable.

In the circumstances, it is unnecessary to deal with the respondent's further arguments that, pursuant to reg. 29 and 30, the notices were posted to the address for service of the appellant or alternatively that the appellant's residential address was his ``proper address'' for the purposes of the application of sec. 29 of the Acts Interpretation Act 1901.

In my opinion, the appeal should be dismissed.