Australian Taxation Office v De Longville
[2007] QMC 1
•1 November 2007
MAGISTRATES COURTS OF QUEENSLAND
CITATION:
Australian Taxation Office v De Longville [2007] QMC 001
PARTIES:
AUSTRALIAN TAXATION OFFICE
(complainant)
v
MARK DE LONGVILLE
(defendant)
FILE NO/S:
MAG218959/06(7)
DIVISION:
Magistrates Court
PROCEEDING:
Complaint
ORIGINATING COURT:
Brisbane Magistrates Court
DELIVERED ON:
1 November 2007
DELIVERED AT:
Brisbane
HEARING DATE:
3 October 2007
MAGISTRATE:
Previtera T
ORDER:
The defendant is guilty of the offences
CATCHWORDS:
TAXES AND DUTIES – INCOME TAX AND RELATED LEGISLATION – SERVICE OF NOTICES – service by post
Income Tax Regulations 1936 (Com), reg 40(1)(b)
COUNSEL:
Nicolson appeared for the complainant
Kiem appeared for the defendant
SOLICITORS:
Complainant on their own behalf
Ryan and Bosscher for the defendant
Mr. De Longville is charged that on or about the 16th of May, 2006 at Manly in the State of Queensland he committed offences in terms of section 8C(1)(a) of the Taxation Administration Act 1953 (as amended), (“TAA”) by failing to furnish Income Tax Returns to the Commissioner for Taxation when and as required, pursuant to Section 162 of the Income Tax Assessment Act 1936, (“ITAA”)for seventeen (17) years, being the years ended 30th June, 1989 to the 30th of June, 2005 inclusive.
Section 162 of the ITAA provides:
“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”.
Section 8C(1)(a) of the TAA provides:
“(1) 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”.
For the purposes of the prosecution of the alleged offences, and pursuant to Section 8ZL of the TAA, and Regulation 40(1)(b) of the Income Tax Regulations 1936 (“ITR”) the complainant relies on averments for proof of service upon the defendant of a final notice dated 20th March 2006 requiring the defendant to furnish the relevant returns. These averments include that the notice “was duly served upon the defendant by being posted by pre-paid letter post on 20th of March 2006 to the defendants preferred address for service namely, PO Box 5488, Manly, Queensland, 4179”.
Section 8ZL of the TAA provides:
“(1)In a prosecution for a prescribed taxation offence, a statement or averment contained in the information, claim or complaint is prima facie evidence of the matter so stated or averred.
(2)This section applies in relation to any matter so stated or averred although:
(a)evidence in support or rebuttal of the matter stated or averred, or of any other matter, is given; or
(b)the matter averred is a mixed question of law and fact, but, in that case, the statement or averment is prima facie evidence of the fact only.
(3)Any evidence given in support or rebuttal of a matter so stated or averred shall be considered on its merits, and the credibility and probative value of such evidence shall be neither increased nor diminished by reason of this section.
(4) This section:
(a) does not apply to any fault element of an offence; and
(aa)does not apply in relation to any offence for which imprisonment is a penalty; and
(b)does not lessen or affect any onus of proof otherwise falling on a defendant.
Regulation 40(1) (b) of the Income Tax Regulations 1936 (“ITR”) provides:
“(1)The Commissioner may serve a document on a person for the purposes of the Act and these Regulations by:
…. (b)if the person has given a preferred address for service that is a postal address -- posting a copy of the document to that address; …
The complainant also relies, in establishing that the defendant was served with the notice, upon Section 29 of the Acts Interpretation Act 1901 (“AIA”) which provides:
“(1) Where an Act authorizes or requires any document to be served by post, whether the expression “serve” or the expression “give” or “send” or any other expression is used, then unless the contrary intention appears the service shall be deemed to be effected by properly addressing prepaying and posting the document as a letter, and unless the contrary is proved[1] to have been effected at the time at which the letter would be delivered in the ordinary course of post.
[1] Emphasis added.
(2)….”
The combined effect of s 8ZL of TAA, reg 40 (1) (b) ITR and s 29 AIA is that upon the prosecution proving by averment the postage of the pre-paid letter to the address for service, service upon the defendant is deemed to be proved (that is, beyond reasonable doubt) unless the defendant proves to the contrary (that is, on the balance of probabilities.[2].
[2] Per White J. in Van Reesma v. Mills (1981) 81 ATC 4483 at 4485.
The prosecution called one witness, the complainant Mrs. Drake, an employee of the ATO duly authorised by the Commissioner of Taxation, who relies on the averments and whose oral evidence the court accepts in relation to the sending of the final notice in a bulk mail delivery with the added protection of a system check by way of a return indicator being recorded if mail is returned to the ATO.
The defendant gave evidence and called his wife Joanne Maree Buckley, both of whom gave sworn evidence that the final notice dated 20th March 2006 was never received at the defendant’s postal address. The defendant seeks thereby to rebut the presumption of service by “proving the contrary” as stated in Section 29(1) AIA.
THE LAW
The law is clear and undisputed.
In the decision in Fancourt and another v. Mercantile Credits Limited[3] the High Court considered the application of the Queensland equivalent of s 29 of the AIA. In that case notices required under the Hire Purchase Act of 1959 which may be served or given to a hirer by posting it addressed to him at his last known place of abode or business, were posted care of the Post Office Sapphire in the State of Queensland which was the postal address of the hirer’s place of residence last known to the sender. The hirer denied receipt of the notices and there was evidence that he had made enquiries to persons living at his abode and persons at his place of residence and no such notice was left for him at either place. An employee of the sender saw that neither notice had been returned to the office of the sender.
“The appellants swore that they did not receive the notices but it was not contended that this amounted to proof that they were not served with them. Such a contention would have been difficult having regard to the fact that there is nothing to show that the notices were not delivered as addressed and having regard to the fact that” …… (the relevant section of the Hire Purchase Act)… ”clearly contemplates…service other than personal service……the notices were not returned undelivered and there was no other circumstance which suggested that they did not reach their destination”[4].
[3]1983 154CLR at 87.
[4] Per Mason J., Murphy J., Wilson J., Deane J., and Dawson J.
The Court went on to say that the Queensland equivalent of s 29 of the AIA is also subject to the expression of any contrary intention in the Act authorising service. In their view no contrary intention was expressed. Similarly no contrary intention is expressed in Regulation 40(1) (b) of the ITR. The court observed that delivery of an item of correspondence may be different from receipt.
“…. proof of non-delivery means that service cannot be deemed to have taken place under the second limb of the section at the time of delivery in the ordinary course of the post and cannot be established as having taken place at any other time. The consequence is that where it is necessary to establish service at a particular time, proof of non-delivery is as effective as proof of non-service, notwithstanding that service by post is in the circumstances permitted and the requirements of the Interpretation Act are observed…. It may be thought that there is an anomaly in such a result because it means that, notwithstanding the adoption of a permitted means of service, the service is nevertheless ineffective if there is proof of non-delivery. ... Despite remarks in the judgements about non-receipt by the intended recipient and, provided that delivery is not dis-proved, the fact of non-receipt does not displace the result that delivery is deemed to have been effected at the time of which it would have taken place in the ordinary course of the post. There is no evidence here of non-delivery”.
[10]In determining whether the defendant has satisfied the legal onus of proving on the balance of probabilities that the final notice was not delivered to his postal address (and was not therefore duly served), the court has had regard to the undisputed facts and the evidence of the witnesses.
Undisputed facts
[11]ATO records admitted into evidence[5] indicate that, on the 12th of August 2005, as a result of an enquiry by the ATO in relation to his failure to lodge income tax returns for the years ended 1989-2004 inclusive, the defendant provided the ATO with his postal address as PO Box 5488, Manly, Queensland, 4179 and his residential address as 44 Barrinia Street, Manly, Queensland, 4179. This information was updated in the automated integrated system of the Taxation Office.[6]
[5] Exhibit 3.
[6] Exhibit 3.
[12]On the 20th of March 2006 an ATO officer contacted the defendant about the outstanding income tax returns. The ATO records of the conversation indicate that the defendant expressed surprise that he had actually not received a final notice. The defendant again confirmed his postal and residential addresses as those indicated above and requested that all ATO letters be forwarded to the postal address. He was notified that a final notice would issue seeking lodgement of the outstanding returns by the new due date of 15th of May 2006; that if not lodged by that date the matter would be referred to prosecution without any further notice; and that he should contact the ATO if he had any problems in receiving the new final notice[7].
[7] Exhibit 3.
[13]The ATO records indicate that a final notice issued on 20th March 2006[8] and Mrs. Drake’s evidence was that it was placed for postage in pre-paid bulk delivery and a copy of the notice placed on the ATO computer drive.
[8] Exhibit 1.
[14]The defendant made notes of the 20th March 2006 conversation with the ATO officer, as was his practice in relation to all discussions with the ATO. His notes of this conversation are to a similar effect.
[15]After the 20th March 2006 conversation with the ATO officer, the defendant told his wife, the only other key-holder of the post office box, of the contact, after which the defendant maintains that he was constantly looking for the final notice in the post box mail and that both he and his wife were vigilant in looking for it, because he was aware that it was a very important document.
[16]On the 4th of May 2006 the defendant initiated telephone contact with the ATO, provided certain information, and requested tax packs for all outstanding years. Those in stock, for the years ending 2002 to 2005, were posted to, and received by, the defendant at his postal address to which the final notice had been sent. The defendant was advised to lodge income tax returns for the most recent years to indicate his intention to comply and he was requested to call back to discuss the situation with lodgements and his progress to date.
[17]There is no note in the ATO records of the 4th May 2006 contact that the defendant advised the ATO officer that he had not received the final notice dated 20th March 2006, or that he requested an extension of the deadline of 15th May 2006.
[18]Similarly, in the defendant’s own notes of this contact with the ATO, he made no notation that he told the ATO officer that he had not received the final notice; or that he sought an extension of the deadline of 15th May 2006.
[19]On the 28th of August 2006 an ATO officer telephoned the defendant. The notes made by the officer Cynthia Browne[9] indicate that when asked if he was aware of the second final notice issued on the 20th March 2006 to his PO Box, the defendant indicated that he wasn’t sure if he received the final notice but he was aware of outstanding returns and provided explanations as to why he had not lodged returns. Once again, the defendant made his own notes of this conversation.
[9] Exhibit 3.
[20]There is no notation in either the ATO records or the defendant’s own notes of the 28th August 2006 conversation that the defendant told the ATO officer that he had not received the final notice.
[21]Checks to the ATO integrated system, between May 2006 and 2nd October 2007, confirmed that there was no “return to sender” or return indicator notice against the defendant’s postal address in relation to the final notice dated 20th March 2006.
[22]At no time between 20th March 2006 and the date of hearing, did the defendant or his wife notify Australia Post of the non-receipt of the final notice dated 20th March 2006 or request that Australia Post investigate the whereabouts of the notice.
[23]The defendant experienced no problems receiving other pieces of mail during the period from the 20th of March 2006.
Mrs. Drake’s evidence
[24]There was no significant challenge to the evidence of Mrs. Drake as to ATO practices in relation to bulk delivery of mail. Whilst Mrs. Drake’s evidence was given entirely from documentation tendered to the Court and not on the basis of her personal knowledge, the ATO notes of conversations with the defendant are consistent with the actions taken by the ATO and consistent with notations on the same matters as were made by the defendant. The ATO has utilised a computer-generated system of recording conversations and issuing and posting notices which also includes a checking mechanism in the form of the “return indicator” in relation to mail sent out in a bulk delivery. There is no evidence of the notice being returned by the post office to the ATO. There is indeed express evidence of non-return of the notice to the ATO.
The defendant’s evidence
[25]The defendant’s evidence was inconsistent, vague and conflicting in relation to a number of material matters.
1.Whilst not challenging the evidence that an ATO officer told him on 12th August 2005 that the ATO would be issuing a final notice for the 1989-2004 income tax years, the defendant stated in his evidence in chief that he was surprised to hear, when told in the conversation on 20th March 2006, that a final notice had issued in August 2005.
2.Despite the defendant’s evidence that he expected to receive a final notice after 20th March 2006; that he immediately told his wife about the notice; that he and his wife were constantly on the lookout and vigilantly looking for the notice because he considered it an important document; that he had made a note of the 15th May 2006 lodgement date and knew it was an important date because prosecution action would be taken if he failed to lodge the returns:
(a) the defendant did not at any time approach Australia Post to enquire about or complain of the non-delivery of the final notice;
(b) the defendant gave evidence that he didn’t know if his wife approached Australia Post at any time to complain of the non-delivery of the final notice;
(c) he made no notes at any time that he had advised the ATO that he had not received the notice; or that he had requested an extension of the deadline.
3.The defendant’s explanation for not making enquiries of Australia Post (“that the matter had gone past the date where an enquiry would have been constructive”) is not accepted by the court as a credible explanation, in light of other evidence of the defendant.
4.In his evidence-in-chief, the defendant stated that he had wanted to communicate to the ATO on 4th May 2006 that he had not received the final notice. Despite initiating that contact with that intention, however, and having always made notes of discussions with the ATO, the defendant made no notation that he advised the ATO that he had never received the notice. Under cross-examination, however, he stated that the whole purpose of the phone call of 4th May 2006 was to seek an extension of time for the filing of the returns because he wasn’t going to get the documentation together by 15th May 2006. Again, the defendant made no notation that he had requested an extension of the 15th May 2006 deadline. Under further cross-examination, however, he stated that the topic of conversation whenever he spoke to the ATO was that he had not received the final notice, although he then conceded that he did not complain to the ATO that he did not receive the notice.
5.The defendant’s evidence was vague in relation to the reference in the ATO records of 28th August 2006 contact that he was “not sure if he received the final notice however he is aware of outstanding returns.”[10] In evidence in chief he stated that this statement was a qualification of his uncertainty as to whether his wife had received it because she also had access to the postal box. Under cross examination, he then denied that he had told the ATO officer that he was unsure about receiving the final notice. Under further cross-examination, however, he stated that he could only think that the ATO officer, Cynthia, perceived it was his wife about whom he was not sure. In any event, and once again, the defendant made no notation in his own notes of 28th August 2006 conversation that he had told the ATO that he had not received the notice.
[10] Exhibit 3.
6.In relation to the 28th August 2006 contact, the defendant’s evidence was “I told her of all my problems and my wife’s problems and that I was doing the best to comply…”. He gave similar evidence in relation to information he had provided during the 4th May 2006 contact. Indeed, the flavour of the defendant’s entire evidence was to attempt to impress upon the court the numerous difficulties that he had experienced over the period 1989-2005 in relation to his ill-health, unemployment, dependence on his spouse, payment of tax at source and his troubled financial position. This impression is also gleaned from the records of the ATO and the notes made by the defendant himself in relation to conversations with the ATO.
7.The court was left with an impression that the whole purpose of the defendant’s discussions with the ATO was in fact to impress upon the ATO the difficulties giving rise to the situation in which he then found himself. Ms. Buckley also referred to the defendant’s attempts to explain his personal circumstances to the ATO.
8.The defendant’s evidence as to the mode and manner of collection of the mail was inconsistent. Whilst he said that Saturday morning was the only opportunity to clear the mail, he also stated that on other occasions his wife might collect the mail. As to the manner of collection of the mail, his evidence was that they went together to collect the mail, sorted it at a table within the post-office, discarded any mail that was not relevant into a bin, paid any bills and then placed the retained mail in a plastic bag with the newspaper and went to breakfast.
9.Ms. Buckley’s evidence as to the mode and manner of collection of the mail was limited to the period during the first quarter of 2006. She too stated that unwanted mail was discarded in a bin beside the table within the post office where they sorted the mail together, although under cross-examination she conceded that she could not say categorically that they went to the post box together 100% of the time during that period. Her evidence differed to that of the defendant in that she said that the mail collection and sorting occurred after they had breakfast and before they returned home. In any event, despite her evidence that she too was vigilant in looking out for the notice and understood that it was an important document, she made no complaint to Australia Post either.
10.Having regard to all of the above matters, the court does not accept that there was in place a system of mail collection which was comprehensive and methodical so as to disprove the delivery of the notice. The envelope containing the notice may have been mislaid among the postage in the post box, inadvertently discarded in the rubbish bin at the post office with other mail deemed to be rubbish, or otherwise overlooked or ignored by the defendant.
[26]The defendant has not, therefore, adduced evidence proving the contrary of service. The appellant’s evidence and that of his wife did not provide a satisfactory or convincing explanation why it was not reasonably possible that he did not actually receive the final notice. Consequently, the prima facie case of the complainant serves as “sufficient basis for an inference of proof of service upon the defendant beyond reasonable doubt”[11].
[11] Per White J. in Van Reesma v. Mills (1981) 81 ATC 4483 at 4489.
FINDINGS
[27]The final notice was served as averred.
[28]The defendant failed to furnish income tax returns in compliance with the said notice within the stipulated time for compliance to the extent the defendant was capable of doing so.
DECISION
[29]The defendant is guilty of the offences.
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