Commonwealth Director of Public Prosecutions v Vaughan & Buckett [2004] QDC 4

DISTRICT COURT OF QUEENSLAND CITATION: The CDPP v Vaughan [2004] QDC 004 The CDPP v Buckett PARTIES: THE COMMONWEALTH DIRECTOR OF PUBLIC PROSECUTIONS Appellant v GREGORY S VAUGHAN Respondent And THE COMMONWEALTH DIRECTOR OF PUBLIC PROSECUTIONS Appellant v MAUREEN C BUCKETT Respondent FILE NOS: D3163/03 D3164/03 DIVISION: PROCEEDING: Appeal ORIGINATING COURT: District Court Brisbane DELIVERED ON: 22 January 2004 DELIVERED AT: Brisbane HEARING DATE: 15 December 2003 JUDGE: Samios DCJ ORDER: Appeals dismissed CATCHWORDS: APPEAL - MAGISTRATES COURTS TAXES AND DUTIES – INCOME TAX AND RELATED LEGISLATION – CONSTRUCTION OF INCOME TAX STATUTES – PARTICULAR WORDS AND PHRASES – ‘approved form’ – where no evidence of ‘approved form’ TAXES AND DUTIES – INCOME TAX AND RELATED LEGISLATION – EVIDENCE AND ONUS OF PROOF CRIMINAL LAW – EVIDENCE – MATTERS RELATING TO PROOF -- 1 of 12 -- 2 Taxation Administration Act 1953 s8C(1)(a); s388-85 in Schedule 1 A New Tax System (Tax Administration) Act (No 2) 2000 (Act 91, 2000) items 138, 142A, 144 in schedule 2 Income Tax Assessment Act 1936 s161; s162 Knaggs v Commonwealth Director of Public Prosecutions (2003) ATC 4154 COUNSEL: Mr MacSporran for the Appellant Mr A Kimmins for the Respondent SOLICITORS: The Commonwealth Director of Public Prosecutions James White Lawyers for the Respondent [1] These are two appeals being heard together. In both appeals the appellant is The Commonwealth Director of Public Prosecutions. The respondent in one of the appeals is Gregory Steaven Vaughan (Mr Vaughan). The respondent in the other appeal is Maureen C Buckett (Ms Buckett). [2] The respondents were separately charged on the complaint of the Commissioner of Taxation (the Commissioner) that on or about 2 September 2002 they committed offences against s 8C(1)(a) of the Taxation Administration Act 1953 as amended (the TAA). [3] In the case of Mr Vaughan he was charged with eleven offences. The first ten charges alleged he failed to furnish a return of income to the Commissioner when and as required pursuant to a taxation law for the year ended 3 June 1991 to and including the year ended 30 June 2000. The eleventh charge alleged (after amendment) he failed to furnish an approved form namely a return of income to the Commissioner when and as required pursuant to a taxation law for the year ended 30 June 2001. -- 2 of 12 -- 3 [4] In the case of Ms Buckett she was charged with eight offences. The first seven charges alleged she failed to furnish a return of income to the Commissioner when and as required pursuant to a taxation law for the years ended 30 June 1994 to and including the year ended 30 June 2000. The eighth charge alleged (after amendment) she failed to furnish an approved form namely a return of income to the Commissioner when and as required pursuant to a taxation law for the year ended 30 June 2001. [5] The learned Magistrate who heard evidence ordered all the charges be dismissed on the ground the Commissioner had failed to prove there was an approved form for the return of income for the relevant years covered by the charges. [6] The appellant appeals against the orders made by the learned Magistrate dismissing the first ten charges in the case of Mr Vaughan and the first seven charges in the case of Ms Buckett. [7] The ground of appeal is that the learned Magistrate erred in failing to have regard to item 144 in schedule 2 of the A New Tax System (Tax Administration) Act (No 2) 2000 (Act No 91, 2000). [8] In the complaint and summons against Mr Vaughan the Commissioner averred the following: (i) The Deputy Commissioner of Taxation, Client Account Management, did by notice in writing dated 1 July 2002, which issued pursuant to s 162 of the Income Tax Assessment Act 1936 (as amended) require the defendant to furnish the said Deputy Commissioner of Taxation at GPO Box 9990, Brisbane QLD 4001, returns in writing in the prescribed manner duly signed by the defendant setting forth full and complete statements of all his income derived from all sources in Australia and elsewhere during the years ended 30 -- 3 of 12 -- 4 June 1991, 1992, 1993, 1994, 1995, 1996, 1997, 1998, 1999, 2000 and 2001 respectively. (ii) The said notice required the returns to be furnished by 30 August 2002. (iii) The stipulated time for compliance was reasonable. (iv) The said notice was duly served upon the defendant pursuant to Regulation 40 of the Income Tax Regulations 1936 by being posted by pre-paid letter post on 1 July 2002 to his preferred address for service namely 113 Princess Street, Kangaroo Point QLD 4169. (v) The defendant failed to comply with the said notice within the stipulated time for compliance. (vi) The Commissioner of Taxation has delegated his powers and functions in respect to the issue of the said notice to the said Deputy Commissioner of Taxation and such delegation has not at any material time been revoked. [9] In the complaint and summons against Ms Buckett the averments were identical to those set out in the complaint and summons against Mr Vaughan except that in the case of Ms Buckett the first averment referred to the requirement in her case that she furnish to the Deputy Commissioner of Taxation returns for the years ended 30 June 1994 to and including 30 June 2001. [10] In arriving at his decision the learned Magistrate found the relevant returns were not lodged. That finding is not in issue. Further, the learned Magistrate held that as the date of the alleged offences was on or about 2 September 2002 the statute law applicable was that applying as at that date, not the statute law which applied back when the returns were originally required. By “back when the returns were originally required” I take the learned Magistrate to mean by way of example in the case of the return for the year ended 30 June 1991, some time after 30 June 1991 and before the next year’s return was required to be lodged. -- 4 of 12 -- 5 [11] As the averments show the circumstances behind the alleged offences were that on 1 July 2002 the Deputy Commissioner of Taxation issued and served a notice under s 162 of the Income Tax Assessment Act 1936 (as amended) (ITAA) to each respondent requiring him/her to furnish to the Deputy Commissioner of Taxation returns in writing setting out full and complete statements of his/her income for the relevant years by 30 August 2002. [12] A copy of the notice pursuant to s 162 addressed to Ms Buckett and referred to in the averments became Ex 4 in the proceedings before the learned Magistrate. Although no separate notice addressed to Mr Vaughan was tendered as an exhibit I assume it was in the same terms except for the years relevant to the requirement made in the case of Mr Vaughan. In part the notice states:- “This office has no record of income tax returns having been lodged by you for the years ended 30 June 1994, 1995, 1996, 1997, 1998, 1999, 2000 and 2001. Under section 162 of the ITAA 1936, I now require you to give the Commissioner of Taxation, at the address shown above, the income tax returns referred to above by 30 August 2002. The returns must: • give a full statement of total income from all sources in and out of Australia, and • be in the approved form, signed by you. If you ignore this notice you may be prosecuted.” [13] Prior to 1 July 2000 s 8C(1)(a) of the TAA was in these terms: “A person who refuses or fails, when and as required under or pursuant to a taxation law to do so – (a) to furnish a return or any information to the Commissioner or another person … to the extent that the person is capable of doing so is guilty of an offence.” -- 5 of 12 -- 6 [14] Section 8C(1)(a) of the TAA was amended by Section 3 and Schedule 2 item 142A of Act No 91, 2000 by substituting “approved form” for “return”. Therefore, as from 1 July 2000 section 8C(1)(a) of the TAA provided as follows:- “A person who refuses or fails, when and as required under or pursuant to a taxation law to do so – (a) furnish a approved form or any information to the Commissioner or another person … to the extent that the person is capable of doing so is guilty of an offence. [15] Item 144 of Schedule 2 in Part 2 of the Act No 91, 2000 provides that:- “144 application of amendments (1) Subject to this item, the amendments made by this part apply to:- (a) for income tax – returns, statements, notices and other documents given for the 2000-01 income year and later years; and (b) for fringe benefits tax – returns, statements, notices and other documents for the year of tax starting on 1 April 2001 and later years; (c) for other taxes – returns, statements, notices and other documents for the period starting on 1 July 2000 and later periods. (2) Section 388-85 in Schedule 1 to the Taxation Administration Act 1953 applies to approved forms required to be given to the Commissioner on or after 1 July 2000.” [16] Section 8C(1)(a) was further amended by Act No 146 of 2001, section 3 and Schedule 3 items 24 and 25, by substituting “an approved” for “a approved” in paragraph (a) and omitting “to the extent that the person is capable of doing so” before “is guilty of an offence”. The Act No 146 of 2001 provides that these amendments apply to acts or omissions that took place after 15 December 2001. -- 6 of 12 -- 7 [17] Therefore, as at the date it was alleged by the Commissioner the respondents committed the offences, namely on or about 2 September 2002, s 8C(1)(a) of the TAA was in these terms:- “A person who refuses or fails, when and as required under or pursuant to a taxation law to do so: (a) to furnish an approved form or any information to the Commissioner or another person … is guilty of an offence.” [18] In coming to his decision to dismiss the charges the learned Magistrate acted upon s 8C(1)(a) as that section read as at the date the offences were allegedly committed by the respondents, namely 2 September 2002. [19] For completeness I set out s 162 as that section stood when the Commissioner made the requirement of the respondents pursuant to the notice pursuant to s 162 of the ITAA dated 1 July 2002:- “Section 162. Further Returns and Information 162. A person must, if required by the Commissioner, whether before or after the end of the year of income, give the Commissioner, within the time required and in the approved form: (a) A return or a further or fuller return for a year of income or a specified period, whether or not the person has given the Commissioner a return for the same period; or (b) any information, statement or document about the person’s financial affairs.” [20] Item 138 in Schedule 2 of the Act No 91, 2000 repealed the former Section 162. Item 138 and item 142A I referred to earlier are to be found in that Part of the Act No 91, 2000 referred to in item 144 of the Act No 91, 2000. -- 7 of 12 -- 8 [21] The appellant submits that by reason of paragraph (1)(a) of item 144 of the Act No 91, 2000 the reference in s 8C(1)(a) of the TAA to an “approved form” operates only in relation to the tax year ended 30 June 2001 and later years and not in relation to the earlier income years. Therefore, the existence of an “approved form” is not an element of the ten offences against Mr Vaughan and the seven offences against Ms Buckett which allege offences for the years ended 30 June 1991 to 30 June 2000. [22] In his decision the learned Magistrate referred to Knaggs v Commonwealth Director of Public Prosecutions (2003) ATC 4154. That was a decision of Adams J of the Supreme Court of New South Wales. In that case the appellant had been convicted in the District Court of New South Wales of 20 offences under s 8C(1)(a) of the TAA. The averments in that case were to the effect that on or about 4 April 2000 the appellant had failed to furnish a return to the Commissioner of Taxation when and as required pursuant to a taxation law, namely s 162 of the ITAA. Further, the appellant had been required by the Deputy Commissioner of Taxation by notice in writing dated 6 February 2002 to furnish to him by 3 April 2002 a return in writing on the appropriate form duly signed setting forth a complete statement of all income derived by him from all sources in Australia and elsewhere during the year ended 30 June 1982. The other 19 counts were in identical terms except each alleged a failure to furnish returns in respect of each of the years ended 30 June 1983 to 30 June 2001. Adams J held the use of the word “appropriate” and not “approved,” when describing the form required to be furnished by the appellant pursuant to the notice from the Commissioner did not void the information (complaint in Queensland) in the circumstances because of the reference to the sections of the legislation in the averments that unmistakably stated the requirement. However, Adams J dealt with -- 8 of 12 -- 9 a more fundamental problem identified by the appellant in that case. This was that in order to show a failure to comply with the requirement, it was necessary to prove that the relevant forms had, indeed, been approved by the Commissioner. Adams J held the fact of such approval was, in his opinion, an essential ingredient of the charge. Adams J held it was necessary to allege the Commissioner’s approval of the requisite form in accordance with the statutory requirement set out in s 388-50 of the TAA. Therefore, Adams J held the information was void. Further, there was no evidence adduced that approved forms existed, still less that the forms required by the Commissioner were approved forms. [23] For completeness I set out s 388-50 of the TAA: “388-50 Approved Forms (1) A return, notice, statement, application or other document under a *taxation law is in the approved form if, and only if: (a) it is in the form approved in writing by the Commissioner for that kind of return, notice, statement, application or other document; and (b) it contains a declaration signed by a person or persons as the form requires (see section 388-75); and (c) it contains the information that the form requires, and any further information, statement or document as the Commissioner requires, whether in the form or otherwise; and (d) for a return, notice, statement, application or document that is required to be given to the Commissioner – it is given in the manner that the Commissioner requires (which may include *electronically). (2) The Commissioner may combine in the same *approved form more than one return, notice, statement, application or other document. (3) The Commissioner may approve a different *approved form for different entities. Example: The Commissioner may require high wealth individuals to lodge a different income tax return to -- 9 of 12 -- 10 that required to be lodged by an individual whose only income is a salary.” [24] The learned Magistrate in the proceedings brought by the Commissioner against the respondents came to the same conclusion as did Adams J in Knaggs. [25] The appellant submits the effect of item 144 of the Act No 91, 2000 was not considered by the Court in Knaggs and further the learned Magistrate erred by failing to consider the effect of item 144 of the Act No 91, 2000. Further, that the learned Magistrate erred by finding the existence of an “approved form” was an element of each of the charges numbered 1 to 10 in the case of Mr Vaughan and numbered 1 to 7 in the case of Ms Buckett. [26] It is correct to say that Adams J in Knaggs and the learned Magistrate did not in their reasons cite item 144(1)(a). Presumably that was because item 144(1)(a) was not referred to Adams J and the learned Magistrate during submissions. [27] However, in my opinion item 144(1)(a) does not have the effect contended for by the appellant. [28] That is because the prosecution against Mr Vaughan and Ms Buckett was based upon a notice pursuant to s 162 of the ITAA. The offences were alleged to have been committed by Mr Vaughan and Ms Buckett on or about 2 September 2002. The source of the Commissioner’s power to require further returns and information when the Commissioner gave the notice to Mr Vaughan and Ms Buckett is to be found in s 162 as that section stood at the time the notice was given. It was not alleged against Mr Vaughan and Ms Buckett that the Commissioner had given to each of them a notice pursuant to s 162 at some earlier date which had not been -- 10 of 12 -- 11 complied with and therefore constituted an offence against s 8C(1)(a) of the TAA as that section then read. [29] In my opinion what s 162 empowered the Commissioner to require from the respondents by the notice dated 1 July 2002 was a return “in the approved form”. Further, what s 8C(1)(a) of the ITAA made an offence was the respondent’s refusal or failure to furnish a return in “an approved form”. [30] It is correct that item 144 states the amendments to s 162 of the TAA and s 8C(1)(a) of the ITAA apply to income tax to returns, statements, notices and other documents given for the 2000-01 income year and later years. However, in my opinion it does not follow s 162 of the TAA and s 8C(1)(a) of the ITAA as those sections read before 1 July 2002 are to be applied when considering whether an offence was committed by Mr Vaughan or Ms Buckett on or about 2 September 2002 for failing to comply with a notice given on 1 July 2002. [31] During submissions on the hearing of these appeals I was not referred to any legislative provision or authority in support of the proposition that item 144 has the effect contended for by the appellant. If the Commissioner had given a notice pursuant to s 162 before 1 July 2000 and the respondents had not complied with that notice then that may have been a breach of s 8C(1)(a) as that section read prior to 1 July 2000. However, those are not the circumstances behind the offences alleged against the respondents by the Commissioner in the proceedings before the learned Magistrate. [32] It may be that prior to 1 July 2000 the respondents committed offences against s 8C(1)(a) as that section read before 1 July 2000. That is, the respondents would -- 11 of 12 -- 12 have been under an obligation pursuant to another section of the ITAA, namely s 161, to lodge a return for a year of income within the period specified in a notice published in the gazette. However, that is not what was alleged against the respondents by the Commissioner in the proceedings before the learned Magistrate. [33] In my opinion the learned Magistrate was correct when he found there was no evidence the approved forms existed nor that the Commissioner had approved the forms. In my opinion the learned Magistrate was correct to conclude the averments did not provide the prima facie proof required to support the charges in this respect and therefore did not err when he ordered the charges to be dismissed. Therefore, I dismiss the appeals. -- 12 of 12 --