Frangieh v Deputy Commissioner of Taxation

The appeal concerned allegations of misfeasance in public office brought by the appellant, Mr. Frangieh, against the Deputy Commissioner of Taxation. Mr. Frangieh contended that an employee of the Australian Taxation Office (ATO) had unlawfully exercised power under section 167 of the *Income Tax Assessment Act 1936* (Cth) when conducting an income tax audit, resulting in an assessment of a higher taxable income than was appropriate. The matter was heard by Beazley P, Meagher and White JJA in the Court of Appeal of New South Wales.

The central legal issues before the court were whether the ATO employee had acted with malice, bad faith, or conscious maladministration in exercising their statutory power, and whether the Deputy Commissioner of Taxation was vicariously liable for the alleged tortious conduct of the employee. The court also considered whether an inference adverse to the respondent could be drawn from the respondent's failure to call the employee as a witness, pursuant to the principles established in *Jones v Dunkel*.

The Court of Appeal found that Mr. Frangieh had failed to demonstrate the requisite elements of misfeasance in public office. Specifically, the court held that there was no evidence to establish that the ATO employee had acted with malice, bad faith, or conscious maladministration. The court concluded that the employee's actions, in assessing a higher taxable income, were within the scope of their lawful authority and were not tainted by the necessary intent or recklessness required to establish the tort. Consequently, the court determined that the Deputy Commissioner could not be held vicariously liable.

The appeal was dismissed with costs.