Clyne, P. v Deputy Commissioner of Taxation

[1985] FCA 502

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CATCHWORDS

Administrative Law - Judicial Review - Commissioner of

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Taxatlon - pover to Inspect documents - whether L;

decision to Inspect	irltiated - whether decision	to	c
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inspect documents made in uood faith	-	same	issue

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determined other In proceedknqs - appllcatlon

dismlsced r

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Admini3tratlve Ijecisions (Judicial Review) Act 1977,

9.5

Income Tax Assessment	Acr; 1936.	5 . 2 6 3
ilo. G 737 of 1385

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IN THE FEDEi?dL COURT OF AUSTP-ALIA	)
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!	IJEW SOUTH WALES DISTRICT REGISTRY	1	No. G 287 of 1935
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l	GENERAL DIVISION	)
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i	BEThEEN :	PETER CLYNE
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Applicant

:  DEPUTY COMMISSIONER OF TXaTION

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Respondent

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MINUTE OF ORDER

i	JUDGE IQICING ORDER : Morling J.
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I	LATE OF ORDER : 30 September 1385
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i	I4- iEE W.DE : %ydney
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I	THE CC)LTS:T ORLEZS .X FC;LLCI+!.!S: ‘
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1.      Application dismssed.

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... Xppl lcant to pay respondent‘s costs.

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ROTE :  jettlement and entry sf orders 15 dealt

i	571th in Ordsi 36 of the Fsderal L’oUrt hules.
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IN THE FEDERAL COURT OF AUSTRALIA	) )
NEW SOUTH WALES DISTRICT REGISTRY	) No. G 287 of 1985
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GENERAL DIVISION	)

BETbTEEN :  PETER CLYNE

Applicant

A m	:	DEPUTY COMMISSIONER OF TAXATION
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Respondent

Morling J. 30 September 1985

REASONS FOR JUEGMENT

Thls 1 s an appllcaclcn under the hdmlnistratlve

Ijecislons (Judicial Rsview) Act 1977 for an order of renew In

respect of a number of decislons made by the Eeputjr

Cornmissloner of Taxation. TE dsclslons are ldentlfied in the

applicatlon In the following terms:

“1. A search of a storeroom at the Sebel Town

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House should be undertaksn k:? the respondent’ s

afficsrs on the 12th Ssptember 1985.

2.       Access should be gained to the said premises.

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3 .       Coples of documents held at the said premises

on behalf of the applicant should be copied by

or on behalf of the respondent.

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4. Access EO the said documents '(which were

subsequently lodged wlth this Honourable

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Court) should be sought by the Respondent."

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The appllcant is Mr Peter Clyne, who 1 s a bankrupt.

The circumstances In whlch the Deputy Commissioner took the decislons which are the subject of the present proceedings are

referred to in reasons which I have given In dismlssing an

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applicatlon brought by Mr Clyne in matter No. W 929 of 1983.

These reasons should be read as incorporatlng the reasons whlch

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I have glven In thar; matter. . L

"1. That It be declared that the conduct of the

first respondent (I.e. the Deputy Commlssioner

of Ta:,:ation, and hls of f i c s r s on the 12th

September 1985 In obtaining access to the stsreroom at the Sebel Tocm House, In searchlng

the s a d storeroom. m lnspectlng the files of

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I	the applicant and of the applicant's clients,
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and in making copies of the applicant's files

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and, more particularly, of the files of the

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;	applicant's clients, was illegal.
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I	-	2	That it be declared that	the sald conduct was
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illeqal because the first respondent exercised

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his powers under Section 263 of the Income Tax

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!	Assessment Act mala fide and for a collateral
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I	and improper purpose and not f o r any of the
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!	purposes of the Income Tax Assessment Act.
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! !	3 .	Alternatively, that it	be declared that on the
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J 12th September 1985 the first respondent did not

possess the powers which would normally have

i	vested in him under Section 263 of the Income
Tax Assessment Act becauie such powers are not
available agalnst a bankrupt except in relatlon
to a pOSt-bankrUptC:? tax Invesizigation.

1. That ir: be declared that, assumlng the sazd

Section 263 was avallable tG the ilrst

respondent. it was not available against any

i person other than the appllcant because nu

speclfic person was belng Investigated other

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l	than the applicant.
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5.     Alternatively, that it be declared that the said

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conduct was illegal because the firt respondent

was usurping the powers and functions of the

second respondent and such conduct was an abuse

of the processes of this Court and a contempt of

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6.    An order that the first respondent be restrained

from seeking access to any premises and from
seizmg, inspecting or copying any documents in
purported pursuance of his powers under Section

263 of the said Act in so far as he is

investlgatlng the Applicant.

7. An order that the first respondent forthwith

deliver all copies of documents made by him or on his behalf of documents Inspected at the Sebel Town House on the 12th Sepember 1905 to

the Reqlstrar of thls Honoura3le Court.
9 .	That the first respondent be ordered forthgith

to deliver any copies that he has made of such

copies to the Reqistrar of this Honourable

Court.

9 .	That the first respondent be restrained from
retainlnq any such copies or coples of coples as

aforesaid.

10. That the first and second respondents be not .

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permitted to inspect or have access to any of

the client files contained in the five black

covered cardboard boxes delivered by the

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applicant to the Registrar of this Honourable

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- Court on the 16th September 1985."

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In the reasons which I have given in matter No. W 929

of 1983 I have held that the evidence does not establlsh that

the Deputy Cornmlssioner	or his officers are seeking to exercise
the power referred to In	5.263 of the Income Tax Assessment Act
1536 for a collateral purpose. In effect,	ghat I have held is

that the Commissioner seeks to exerclse his power to inspect

and	copy the relevant documents for one or more of	the
permlssible purposes referred to in	5 . 2 6 3 .	In the present

proceedings an order of revlew of the respondent's decisions	1s
sought on the	followmg grounds:

"1. Tkat a brtach si bhe rules of natural Justlce

occurred In connectlodn 31th the xaklng of	the
sald decisions. - ADJE Act. Section 5(l)(a).

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2.     That ths sald declslons wer? not aut'norlsed ~p the enactment In pursucnce of zhhlch they were

purported to be made. - . G J R Act. Sectlon

5tij ( d c NOTE:  That the enactment5 in

pursuance of  which they were purported to be

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made are the Income Tax Assessment Act	1936,
andlor the Bankruptcy Act.

3 . That the making of the said decisions was an

improper exerclse of the power conferred bp	the .
said enactments in pursuance	of which they were

purported	to	be	made.	- ADJR Act,	Section
5(l)(e).

4. That the said decisions involved an error of

law. - ADJR Act, Section 5(l)(f).

5.	That the sald decisions were contrary to law.	-
ADJR Act, Section 5(1)(]).
6.	That the said decislons constituted	an exercise

of a power f o r a purpose other than a purpose

i ~ r	which the power =as conferred. - WJR 2it.
Sectlsn	5 ( 2 1 ( c ) .

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i	7.	That the sard declsions were	an exerclse of a
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discretionary power in bad faith.	- ADJR	Act,
Section 5(d).

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I	8.	That the said decislons were	an exercise of a
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power In a way that constitutos an abuse of that

i	poner. - ADJR Act. Section 5[1)(j).''
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The application	identifies	the	bad	faith	alleged
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a ,inst the respondent in the following terms:

I' 1 . The said decisions constitute an attempt to

usurp the functions of the trustee in the

current bankruptcy of the applicant.

2. The said declsions whilst made purportedly in

reliance upon the powers conferred on the

respondent by Section 263 of the Income Tax

Assessment Act were In fact made and carried

into effect pursuant to a collateral and

improper purpose, namely to carry on a long-

standing vendetta between the applicant and the
respondent and to gain last minute ammunition
which the respondent might be able to use in the

course of the appllcant's public examination."

The appiicmt has >souqht mterlocutory r e h e r ' ta

ensure thar; the files xhch are now In the trustee's possession

are not made available by the trusr;ee to the Deputy

Commlssloner pending the final hearmg of thls applicatlon f o r review.

The grounds relied upon In the present appllcatlon

cover substantially the same ground as those rslled m the

proceedings under the ! ' Bankruptcv Act. N Iotwith . S t anding Mr

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Clyne's submission to the contrary, I do not think that the

issues which arise In the application under the Judicial Review

Act are, in substance, any different from those whlch arose in

the application under the Bankruptcy Act. Nor do I think that

the rules of natural justice apply to the exercise of the power

under 5.263 of the Income Tax Assessment Act. '

Had I not already heard and determined the application

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in the bankruptcy jurisdiction, I might well have been mlnded

to grant interlocutory relief. But the posltion 1s now

different. I have heard and determined the appllcation under the Bankruptcv Act and have reached the opinlon that the

respondent is not abusing the wide power vested in hlm under

5.263. In these circumstances I am unable to come to the

concluslon that there 1 s a serlous question to be tried in the

present proceedings. I therefore do not think that I should

grant interlocutory relief. The appllcatlon is dlsmissed with

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However, I am mindful of the fact that Plr Clynt's

clients, =hose flles are in the possession of the trustee, may
=ish to consider their position. The dismissal of the present
application is111 not pre3udice any action which they may wlsh

to take under the Judiclal Review Act, or otherwise, should

they be so advised. I am informed by counsel for the trustee

that the files will not be furnished to the Deputy Commissioner

or his officers durmg'the next few days at least. Hence, i

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Mr Clyne's clients wish to approach the Court they will have an opportunity of doing so before the flles are inspected by the Deputy Commissioner.