HOOKHAM v R

Members: Brennan J

Deane J
Dawson J
Toohey J
Gaudron J

Tribunal:
Full High Court of Australia

Decision date: Judgment handed down 9 November 1994

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Deane, Dawson and Gaudron JJ

The Markham Boat Company Pty. Ltd., of which the appellant was a director, failed to pay group tax deductions (i.e., PAYE deductions in respect of its employees) to the Commissioner of Taxation as required by s. 221F(5)(a) of the Income Tax Assessment Act 1936 (Cth). It thereby committed nine distinct offences under ss. 221F(14) and 221F(5)(a) of that Act. Each of those offences was a ``taxation offence'' within the definition contained in s. 8A(1) of the Taxation Administration Act 1953 (Cth). Section 8Y of the Taxation Administration Act provides, as far as is relevant:

``(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.''

The appellant pleaded guilty in the Maitland Local Court to nine counts of failing to pay group tax deductions to the Commissioner, having been charged with those offences as ``a person who was concerned in, or took part in, the management of a corporation, namely the MARKHAM BOAT COMPANY PTY LTD'' which had ``omitted to do an act the omission of which constituted... an offence against

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ATC 4792

paragraph 221F(5)(a) of the Income Tax Assessment Act''.

Section 21B of the Crimes Act 1914 (Cth) provides, as far as is relevant:

``(1) Where:

• (a) a person is convicted of an offence against a law of the Commonwealth;...

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;...''

The appellant was convicted and fined $1000 in respect of each of the offences to which he pleaded guilty and was ordered to pay reparation in the sum of $198,224.43. He appealed to the District Court where the judge stated a question of law for the determination of the Court of Criminal Appeal as follows:

``Upon the true construction of section 21B of the Crimes Act 1914 and section 8Y of the Taxation Administration Act 1953, do I have jurisdiction to order the appellant to pay reparation?''

The Court of Criminal Appeal answered the question in the affirmative and the appellant now appeals by special leave to this Court. He contends that he is deemed by s. 8Y of the Taxation Administration Act to have committed the offences only for the purpose of punishment and not for any other purpose, in particular, not for the purpose of s. 21B of the Crimes Act . He supports this contention by reference to the words ``shall be deemed to have committed the taxation offence and is punishable accordingly'' in s. 8Y(1).

The appellant's argument misconceives the function of s. 8Y. That function is to reverse the onus of proof which would otherwise rest upon the prosecution of proving that a defendant who is concerned in, or takes part in, the management of a corporation is a participant in a taxation offence by reason that he or she aided, abetted, counselled, procured or was knowingly concerned in, or party to, its commission. Apart from the reversal of the onus of proof, it is to the same effect as s. 5(1) of the Crimes Act which provides:

``Any person who aids, abets, counsels, or procures, or by act or omission is in any way directly or indirectly knowingly concerned in, or party to, the commission of any offence against any law of the Commonwealth, whether passed before or after the commencement of this Act, shall be deemed to have committed that offence and shall be punishable accordingly.''

That provision, extended to persons knowingly concerned in the commission of offences, merely reflects the position at common law, namely, that a person who intentionally assists in the commission of an offence or encourages its commission may be convicted as a party to it. That is to say, there may be parties to the one offence, other than the actual perpetrator, with varying degrees of participation, each of whom commits the offence. The ``deeming'' provisions in both s. 5(1) of the Crimes Act and s. 8Y of the Taxation Administration Act do not create a situation in which one person is to be regarded as having committed another person's offence. Rather, they require persons with the specified complicity in an offence to be regarded as parties to that offence. ^[2] See Lee v. Mallan [ 1949] SASR 17 ; Mallan v. Lee (1949) 80 CLR 198 .

Section 8Y, in providing that the person is ``punishable accordingly'', is not providing for punishment for an offence which was really committed by the corporation and is only ``deemed'' to have been committed by that person; it is providing for punishment for an offence to which that person is deemed to be a party because of his or her complicity in it. The offences of which the appellant was convicted under s. 8Y were the same offences as those committed by the corporation and he therefore fell within the words of s. 21B of the Crimes Act making him liable to an order for reparation.

The appellant also submits that the Commonwealth has not suffered a loss by reason of the offences committed by him. That submission is again based upon the misconception that the offences committed by the appellant were a fiction, being only ``deemed'' to have occurred. But, as we have endeavoured to explain, the offences were actual offences to which the appellant was deemed to be a party. There is, therefore, no basis upon which to draw a distinction between the offences committed by the appellant and the

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ATC 4793

offences committed by the corporation. The appellant goes on to submit that there was no loss suffered by the Commonwealth by reason of those offences because the Commonwealth was not deprived of anything in the nature of property. But a loss need not involve the transfer from the Commonwealth to someone else of a proprietary interest. The Commonwealth suffered a loss by being deprived of money which it would have been paid had it not been for the commission of the offences in question. ^[3] See Murphy v. H.F. Trading Co. Pty. Ltd. & Anor (1973) 47 ALJR 198 at 200 . There is no reason why that should not be regarded as being a reparable loss.

For these reasons the District Court judge had jurisdiction (or more accurately, power) to order reparation and the question reserved for the consideration of the Court of Criminal Appeal was correctly answered in the affirmative.

The respondent filed a notice of contention dealing with the extent of the discretion conferred by s. 21B(1) upon a trial judge to order reparation. In particular, the respondent contends that the discretion does not extend to taking into account the offender's personal circumstances and means to meet any order. That, however, is not a question which arose upon the case stated by the District Court judge and is not a question before us. It is, however, appropriate to point out that, in a context where the Parliament has not expressly identified the considerations to be taken into account in making an order for reparation under s. 21B, a trial judge would be excluded from taking account of an offender's personal circumstances and means only if, and to the extent that, ``unconfined except in so far as the subject matter and the scope and purpose of the statutory enactments may enable the Court to pronounce given reasons to be definitely extraneous to any objects the legislature could have had in view''. ^[4] R. v. The Australian Broadcasting Tribunal & Ors ; Ex parte 2HD Pty. Ltd. (1979) 144 CLR 45 at 49 .

We would dismiss the appeal.