DIRECTOR of PUBLIC PROSECUTIONS v. PHILLIP WAYNE ROGERS No. 4150 Judgment No. SCCRM 93/306 Number of Pages - 4 Constitutional Law (1993) 26 ATR 485

[1993] SASC 4150

COURT IN THE SUPREME COURT OF SOUTH AUSTRALIA DUGGAN J

CWDS
Constitutional law - operation and effect of the commonwealth constitution - the taxation power - Accused charged with opening and operating accounts with a 'cash dealer' under an assumed name contrary to Financial TransactionReports Act, 1988 (Commonwealth) s.24 - challenge to validity of the Act rejected - subject matter of s.24 incidental to taxation power under s.51(ii) of the Commonwealth Constitution - R v Sharkey (1949) 79 CLR 121 referred to - efficiency of Provisions and motive for legislation irrelevant to validity - Second Uniform Tax Case (1952) 86 CLR 169 and Stemp v Australian Glass Manufacturers Co. Ltd (1917) 23 CLR 226 referred to.

HRNG ADELAIDE, 24 August 1993 #DATE 6:9:1993
Counsel for prosecutor:         Mr S F Vorreiter
Solicitors for prosecutor:        Director of Public
  Prosecutions
  (Cwlth)
Accused Phillip Wayne Rogers:     In Person

ORDER
Appeal dismissed.

JUDGE1 DUGGAN J The accused, who at this stage is unrepresented, has been charged with a number of offences of opening and operating accounts with a cash dealer in a false name contrary to s.24 of the Financial Transaction Reports Act, 1988 (Commonwealth). He has raised a preliminary objection to the information claiming that the section of the Act under which he has been charged is beyond the legislative power of the Commonwealth. 2. The long title to the Act describes the legislation as: "An Act to provide for the reporting of certain transactions and transfers, to establish an Australian Transaction Reports and Analysis Centre and to impose certain obligations in relation to accounts, and for related purposes." 3. Section 4 provides as follows:
     "4(1) The principal object of this Act is to facilitate
    the administration and enforcement of taxation laws.
     (2) A further object of this Act is to facilitate the
    administration and enforcement of laws of the Commonwealth and of
    the Territories (other than taxation laws).
     (3) Without prejudice to the effect of this Act by virtue of
    subsections (1) and (2), a further object of this Act is to make
    information collected for the purposes referred to in subsection
    (1) or (2) available to State authorities to facilitate the
    administration and enforcement of the laws of the States." 4. Mr Vorreiter for the Commonwealth Director of Public Prosecutions based his argument in favour of the validity of the Act on the power of the Commonwealth to make laws with respect to taxation (s.51(ii) of the Constitution). He contended that s.24 was incidental to the subject of taxation and he pointed to s.51(xxxix) of the Constitution. Both the accused and Mr Vorreiter relied upon the statement by Dixon CJ in R v Sharkey (1949) 79 CLR 121 at 151 that: "The power to legislate with respect to incidental matters has always been applied flexibly and liberally, as it must in a Constitution, but it cannot authorize legislation upon matters which are prima facie within the province of the States upon grounds of a connection with Federal affairs that is only tenuous, vague, fanciful or remote." 5. The Act is designed to establish reporting procedures and to facilitate generally the availability to government agencies of knowledge of various financial transactions. Part III imposes a number of duties on "cash dealers" (which term includes financial institutions such as banks) to record and maintain certain information concerning accounts opened by customers. Section 24 is one of a number of provisions dealing with the identity of persons who have opened or are in the course of opening accounts. It provides as follows:
     "24(1) A person shall not open an account with a cash dealer
    in a false name.
     (2) A person shall not operate an account with a cash dealer in
    a false name.
     (3) Where a person is commonly known by 2 or more different
    names, the person shall not use one of those names in opening an
    account with a cash dealer unless the person has previously
    disclosed the other name or names to the cash dealer.
     (4) Where a person is commonly known by 2 or more different
    names, the person shall not use one of those names in operating
    an account with a cash dealer unless the person has previously
    disclosed the other name or names to the cash dealer
     (5) Where a person using a particular name in dealings with a
    cash dealer discloses to the dealer a different name or different
    names by which the person is commonly known, the dealer shall
    make a record of the disclosure and shall, upon request in
    writing from the Director, give the Director a copy of that
    record.
     (6) A person who contravenes subsection (1), (2), (3), (4) or
    (5) is guilty of an offence against this subsection punishable,
    upon conviction by: (a) if the offender is a natural person - a
    fine not exceeding $5,000 or imprisonment for a period not
    exceeding 2 years, or both; or (b) if the offender is a body
    corporate - a fine not exceeding $25,000.
     (7) For the purpose of this section:
     (a) a person opens an account in a false name if the person, in
    opening the account, or becoming a signatory to the account, uses
    a name other than a name by which the person is commonly known;
    and
     (b) a person operates an account in a false name if the person
    does any act or thing in relation to the account (whether by way
    of making a deposit or withdrawal or by way of communication with
    the cash dealer concerned or otherwise) and, in doing so, uses a
    name other than a name by which the person is commonly known." 6. It cannot be denied that the availability of the financial information contained in the accounts which are the subject matter of this part of the Act would enhance the ability of the Commissioner of Taxation to ascertain the income of individuals and investigate attempts to evade the payment of taxation. As for s.24, its immediate purpose is plain enough. The aim of this part of the Act, namely, to provide access to information concerning financial transactions and details of the contents of accounts would be significantly impeded if accounts were opened in false names. In my view these considerations establish a reasonable connection between the legislation and the subject matter of taxation so that s.24 can be viewed as a provision incidental to the power to make laws with respect to that topic. 7. The accused, in his carefully prepared argument, criticised these measures. He said this was "big brother" legislation and he emphasised the inroads which the provisions make on the freedom of a person to contract with financial institutions and others coming within the definition of "cash dealer". He also questioned the efficacy of the provisions. However these are matters beyond the constitutional considerations which I must take into account. In the Second Uniform Tax Case (1952) 86 CLR 169 at 179 Dixon CJ said: "These matters of incidental powers are largely questions of degree, but in considering them we must not lose sight of the fact that once the subject matter is fairly within the province of the Federal legislature the justice and wisdom of the provisions which it makes in the exercise of its powers over the subject matter are matters entirely for the Legislature and not for the Judiciary. 8. In the administration of the judicial power in relation to the Constitution there are points at which matters of degree seem sometimes to bring forth arguments in relation to justice, fairness, morality and propriety, but those are not matters for the judiciary to decide upon. The reason why this appears to be so is simply because a reasonable connection between the law which is challenged and the subject of the power under which the legislature purported to enact it must be shown before the law can be sustained under the incidental power." (See also The Herald and Weekly Times Limited v The Commonwealth (1966) 115 CLR 418 at 437). 9. The accused also complained that the common law did not prevent a person from assuming any name as long as there was no fraudulent conduct. Of course this argument fails to appreciate that the legislature can make unlawful, conduct which is lawful at common law. Nor is it to the point to argue, as the accused did, that the introduction of the concept of a false name into the legislation would create anomalies and absurdities. The question is whether these laws are constitutionally correct. "Their wisdom and expediency is a political question for Parliament." (Stemp v Australian Glass Manufacturers Co. Ltd (1917) 23 CLR 226 at 233). Then the accused argued that the Act was using taxation as a disguise so as to invade privacy for more sinister motives. However once it is recognised that the legislation is incidental to one of the enumerated powers in s.51 of the Constitution a criticism of this nature amounts to no more than an allegation of "an external motive or purpose incapable of invalidating the statute". (Moore v The Commonwealth (1951) 82 CLR 547 at 568). 10. The accused relied on Huddart Parker and Co Pty Ltd v Moorehead (1909) 8 CLR 330 in support of the proposition that the Commonwealth was regulating purely intrastate transactions. Huddart Parker's case dealt with the scope of the Corporations power under s.51(xx). It was overruled in Strickland v Rocla Concrete Pipes Ltd (1971) 124 CLR 468. The present case falls to be decided under the taxation power and there is no provision elsewhere in the Constitution which would prevent the Commonwealth from enacting the section of the Financial Transaction Reports Act which is under consideration. Finally the accused argued that the legislation discriminated between States contrary to the limitation imposed in s.51(ii) and that a preference was given to one State over another contrary to s.99 of the Constitution. However the argument which he advanced rested on an alleged discrimination arising out of the categories of persons and institutions included in the definition of "cash dealer". 11. He could not point to any discrimination between States. I have considered all the arguments advanced by the accused but I am of the view that the provisions under which he has been charged come within the legislative power of the Commonwealth and his contention to the contrary must be rejected.