HOOKHAM v R

Judges:
Brennan J
Deane J
Dawson J
Toohey J
Gaudron J

Court:
Full High Court of Australia

Judgment date: Judgment handed down 9 November 1994

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Brennan J

The question in this case is whether, pursuant to s. 21B(1) of the Crimes Act 1914 (Cth), a court may order an offender convicted of a taxation offence pursuant to s. 8Y(1) of the Taxation Administration Act 1953 (Cth) to make reparation to the Commonwealth in respect of a loss suffered by the Commonwealth by reason of the offence. In my opinion, the terms of s. 21B(1) dictate an affirmative answer. Section 21B(1) reads as follows:

``Where:

• (a) a person is convicted of an offence against a law of the Commonwealth; or
• (b) an order is made under section 19B in relation to a federal offence committed by a person;

the court may, in addition to the penalty, if any, imposed upon the person, order the offender:

• (c) to make reparation to the Commonwealth or to a public authority under the Commonwealth, by way of money payment or otherwise, in respect of any loss suffered, or any expense incurred, by the Commonwealth or the authority, as the case may be, by reason of the offence; or
• (d) to make reparation to any person, by way of money payment or otherwise, in respect of any loss suffered by the person as a direct result of the offence.''

The offence by reason of which the Commonwealth suffers a reparable loss must be the federal offence for which the offender is convicted or in respect of which an order is made under s. 19B. However, s. 19B is immaterial to this case. The conviction for a particular federal offence is one of the conditions on which the power to order the offender to make reparation arises. The other is that the offence be the reason for the loss. It is therefore necessary to identify the offence for which the offender is convicted.

In this case, the appellant was convicted pursuant to s. 8Y(1) of the Taxation Administration Act of nine taxation offences committed by The Markham Boat Company Pty. Ltd. (``the corporation'') in the management of which he had been concerned or taken part. Section 8Y reads:

``(1) Where a corporation does or omits to do an act or thing the doing or omission of which constitutes a taxation offence, a person (by whatever name called and whether or not the person is an officer of the corporation) who is concerned in, or takes part in, the management of the corporation shall be deemed to have committed the taxation offence and is punishable accordingly.

(2) In a prosecution of a person for a taxation offence by virtue of subsection (1), it is a defence if the person proves that the person -

• (a) did not aid, abet, counsel or procure the act or omission of the corporation concerned; and
• (b) was not in any way, by act or omission, directly or indirectly, knowingly concerned in, or party to, the act or omission of the corporation.

(3) For the purposes of subsection (1), an officer of a corporation shall be presumed, unless the contrary is proved, to be concerned in, and to take part in, the management of the corporation.

(4) In this section, `officer', in relation to a corporation, means -

• (a) a director or secretary of the corporation;
• ...''

As the appellant did not prove the matters mentioned in pars (a) and (b) of s. 8Y(2), he was convicted of the taxation offences constituted by the relevant acts or omissions of the corporation. The corporation, being a group employer, had omitted to pay to the Commissioner of Taxation the amounts of deductions made from the salary and wages of employees in nine of the months between May 1989 and March 1990, contrary to the provisions of s. 221F(5)(a) and (14) of the Income Tax Assessment Act 1936 (Cth). That was the gravamen of the offences of which the appellant was convicted and, by reason of those offences, the Commonwealth lost the amounts of the deductions which should have been paid

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ATC 4791

but were not paid. Thus the conditions upon which the power to order the appellant to make reparation depended were satisfied.

The appellant's argument that s. 8Y(1) deems an offender to have committed an offence for a purpose other than the making of a reparation order misses the point. Once s. 8Y(1) deems an offender to have committed an offence, its work is done so far as it affects the power conferred by s. 21B(1). Section 8Y(1) is relevant to the power conferred by s. 21B(1) in that it identifies the corporation's offence as the offence for which the offender is liable to be convicted.

Section 8Y(1), like s. 5(1) of the Crimes Act , ^[1] The difference between them lies in a differing onus of proof. identifies the parties to a single offence. Although those provisions ``deem'' a party to have committed an offence, the liability to conviction thus imposed is not a fiction created for the purpose of punishment only. Section 21B(1) is not concerned with the purpose for which an offender is deemed liable to conviction. Nor is it concerned with the legislative facilitation of proof of guilt of a federal offence. It is concerned merely with the fact of conviction on which the power conferred by s. 21B(1) depends. Convictions which follow from application of s. 8Y(1) or s. 5(1) are nonetheless convictions and may enliven the power conferred by s. 21B(1).

That is not to say that a court, exercising its discretion under s. 21B(1), will not inquire into the circumstances which have exposed the offender to liability to conviction. It is one thing to hold that a court has power to make a reparation order; it is another to determine how that power should be exercised. The question reserved for determination in a case stated by a District Court Judge for the opinion of the Court of Criminal Appeal was whether the Judge had jurisdiction (which I take to mean power) to order the appellant, who stood convicted of nine taxation offences, to pay reparation. The answer to that question is yes, as the Court of Criminal Appeal held. The appeal to this Court must therefore be dismissed.

The respondent, by a notice of contention, seeks to canvass an observation by Priestley J.A. as to the propriety of the Judge having regard to the ``personal circumstances and means of an offender'' in exercising the s. 21B(1) discretion. That is not a question which arises under the stated case, nor is it appropriate to deal with such a question except on appeal in a concrete case when a challenge is made to the relevance of a factor that has affected the exercise of the judge's discretion. The respondent must be content with the observation that the scope and purpose of the law containing the power determine the boundaries of relevance.

The appeal should be dismissed.