Fyna Projects Pty Ltd v Deputy Commissioner of Taxation
[2018] FCA 2041
•21 December 2018
FEDERAL COURT OF AUSTRALIA
Fyna Projects Pty Ltd v Deputy Commissioner of Taxation [2018] FCA 2041
File number: NSD 1921 of 2017 Judge: THAWLEY J Date of judgment: 21 December 2018 Catchwords: TAXATION – review of decisions of the Deputy Commissioner of Taxation to issue notices under s 260-5 of Sch 1 to the Taxation Administration Act 1953 (Cth) – where applicant paid amounts in breach of a s 260-5 notice – where Commissioner subsequently issued s 260-5 notices to third party debtors of the applicant – whether notices issued to third parties being debtors of the applicant were invalid – whether the applicant’s breach of s 260-5 gave rise to a “tax-related liability” within the meaning of s 255‑1 which could found the issuing of further notices – whether the applicant had a “pecuniary liability” to the Commonwealth arising “directly” under a taxation law
TAXATION – whether s 260-5 notices were invalid – whether the notices issued to third party debtors of the applicant were issued for an improper purpose – whether the notices issued to the applicant and its third party debtors were invalid because they identified the amounts required to be paid disjunctively – whether the notices were otherwise liable to be set aside as vague or ambiguous in certain identified respects
CONSTITUTIONAL LAW – whether s 260-5 is supported by the taxation power in s 51(ii) of the Constitution – whether s 51(ii) authorised the issuing of notices to third party debtors of the applicant in respect of a “tax-related liability” purportedly created by breach of an earlier notice issued to the applicant under s 260-5 – whether the true source of legislative power was s 51(xxxi) of the Constitution
Legislation: Constitution ss 51(ii), 51(xxxi)
A New Tax System (Tax Administration) Act 1999 (Cth)
Acts Interpretation Act 1901 (Cth) s 15AC
Income Tax Assessment Act 1936 (Cth) s 8, 218 (repealed), 221F (repealed)
Income Tax Assessment Act 1997 (Cth) ss 1-3, 1-7, 950-100, 950-150, 995-1
Taxation Administration Act 1953 (Cth) ss 2, 3A, 3AA; Sch 1, Pt 4-15, Div 250, Subdiv 250-A, s 250-10; Subdiv 250‑B, s 250-25; Div 255, Subdiv 255-A, ss 255-1, 255-5; Div 260, Subdiv 260-A, ss 260-1, 260-5, 260-5(1), 260‑5(2), 260-5(3), 260-5(4), 260-5(5), 260-5(6), 260-5(7), 260-15, 260-20; ss 284-90, 990-5
Explanatory Memorandum, A New Tax System (Tax Administration) Bill 1999 (Cth)
Cases cited: Australian Securities Commission v Macleod (No 4) (1994) 48 FCR 152
Australian Tape Manufacturers Association Ltd v Commonwealth (1993) 176 CLR 480
Barry R Liggins Pty Ltd v Comptroller-General of Customs (1991) 32 FCR 112
Bruton Holdings Pty Ltd (in liq) v Federal Commissioner of Taxation (2009) 239 CLR 346
Burness; In the matter of Denward Lane Pty Ltd (in liq) [2009] FCA 893; 259 ALR 339
Clyne v Commissioner of Taxation (1981) 150 CLR 1
Commissioner of Stamps (WA) v West Australian Trustee, Executor and Agency Company Ltd (1925) 36 CLR 98
Commissioner of Taxation v Barnes (1975) 133 CLR 483 at 493
Deputy Commissioner of Taxation v Broadbeach Properties Pty Ltd (2008) 237 CLR 473
Dinning v Federal Commissioner of Taxation [1999] FCA 785; 42 ATR 299
Director of Public Prosecutions (Cth) v Keating (2013) 248 CLR 459
Elsinora Global Ltd v Healthscope Ltd (No 2) [2006] FCA 18; 61 ATR 482
Federal Commissioner of Taxation v Barnes Development Pty Ltd (2009) 178 FCR 352
Federal Commissioner of Taxation v Consolidated Media Holdings Ltd (2012) 250 CLR 503
Federal Commissioner of Taxation v DeMartin and Gasparini Pty Ltd [2011] FCA 286; 82 ATR 906
Federal Commissioner of Taxation v Hart (2004) 217 CLR 216
Federal Commissioner of Taxation v Spotless Services Ltd (1996) 186 CLR 404
Mallinson v Scottish Australian Investment Company Ltd (1920) 28 CLR 66
Moore v Commonwealth (1951) 82 CLR 547
Muc v Deputy Commissioner of Taxation (2008) 73 NSWLR 378
Mutual Pools & Staff Pty Ltd v Commonwealth (1994) 179 CLR 155
O’Reilly v The Commissioners of the State Bank of Victoria (1983) 153 CLR 1
Perpetual Trustee Co (Ltd) v Holdsworth [1966] 2 NSWR 755
Power v Deputy Commissioner of Taxation [2013] NSWSC 428; 96 ATR 912
Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355
Rana v Google Inc (2017) 254 FCR 1
Re Mendonca; Ex parte Federal Commissioner for Taxation (1969) 1 ATR 571; 15 FLR 256
Waterhouse v Deputy Federal Commissioner of Land Tax (SA) (1914) 17 CLR 665
Date of hearing: 19 July 2018, 18 October 2018 Date of last submissions: 1 November 2018 (Applicant)
25 October 2018 (Respondent)Registry: New South Wales Division: General Division National Practice Area: Taxation Category: Catchwords Number of paragraphs: 121 Counsel for the Applicant: Mr D Hume Solicitor for the Applicant: Diamond Conway Lawyers Counsel for the Respondent: Mr N Williams SC and Mr M O’Meara Solicitor for the Respondent: Australian Government Solicitor ORDERS
NSD 1921 of 2017 BETWEEN: FYNA PROJECTS PTY LTD
Applicant
AND: DEPUTY COMMISSIONER OF TAXATION
Respondent
JUDGE:
THAWLEY J
DATE OF ORDER:
21 DECEMBER 2018
THE COURT ORDERS THAT:
(1)The parties confer with a view to agreeing orders to give effect to these reasons and any further orders sought.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
REASONS FOR JUDGMENT
THAWLEY J:
Fyna Projects Pty Ltd applied to review decisions of the Deputy Commissioner of Taxation to give 11 notices under s 260-5(2) of Sch 1 to the Taxation Administration Act 1953 (Cth) (TAA) and sought orders in the nature of certiorari setting the notices aside. The notices were:
(1)a notice dated 20 June 2017 to Fyna, being an entity which owed or might later owe money to Pladmira Pty Ltd (Fyna Notice);
(2)seven notices dated 12 October 2017 and three notices dated 24 October 2017 to entities which owed or might later owe money to Fyna (Other Notices).
FACTUAL BACKGROUND
The genesis of the dispute lay in a “tax-related liability” of Pladmira, being a running balance account deficit of $777,643.47 as at 20 June 2017.
On 20 June 2017, an officer of the Australian Taxation Office (ATO) issued a s 260‑5 notice to Fyna in respect of Pladmira’s tax-related liability. The notice was transmitted to Fyna by facsimile on 21 June 2017.
The substance of the Fyna Notice is at Annexure A to these reasons.
After the Fyna Notice issued, between 21 June 2017 and 2 August 2017, Fyna made payments to Pladmira totalling $455,100. Although it was originally disputed by Fyna, it was ultimately accepted that, at the time of each payment by Fyna to Pladmira, Fyna “owed” the relevant amount to Pladmira within the meaning of s 260-5(2) and (3) of Sch 1.
Accordingly, it was not in dispute that – if the Fyna Notice was valid (which was disputed) – Fyna failed to comply with the notice by paying amounts totalling $455,100 to Pladmira rather than to the Commissioner.
The Commissioner took the view that Fyna’s non-compliance with the Fyna Notice gave rise to a “tax-related liability” within the meaning of s 255-1 of Sch 1 on the part of Fyna to the Commissioner. The Commissioner considered Fyna’s “tax-related liability” was a “debt” within s 260-5(1) of Sch 1, such that the Commissioner could issue notices under s 260-5(2) to third parties who owed or might later owe money to Fyna, as “debtor” to the Commissioner. Accordingly:
(1)On 12 October 2017, an ATO officer issued seven s 260-5 notices to entities which owed or might later owe money to Fyna. Those seven notices are in similar form. The substance of one of them is at Annexure B to these reasons.
(2)On 24 October 2017, the Commissioner issued a further three s 260-5 notices in similar terms to the example at Annexure B, except that the amount appearing in the notices was $408,711.05 rather than $408,453.32.
One of the principal issues in dispute was whether Fyna’s failure to comply with the Fyna Notice gave rise to a “tax-related liability” such that the Other Notices could lawfully be issued to entities that owed or might later owe money to Fyna.
LEGISLATIVE CONTEXT
Section 260-5 is in Pt 4-15 of Sch 1. Part 4-15 of Sch 1 is entitled “Collection and recovery of tax-related liabilities and other amounts” and is divided into seven divisions:
(1)Division 250 – Introduction;
(2)Division 255 – General rules about collection and recovery;
(3)Division 260 – Special rules about collect and recovery;
(4)Division 263 – Mutual assistance in collection of foreign tax debts;
(5)Division 265 – Other matters;
(6)Division 268 – Estimates and recovery of PAYG withholding liabilities and superannuation guarantee charge; and
(7)Division 269 – Penalties for directors of non-complying companies.
Division 250, entitled “Introduction”, is divided into two subdivisions:
(1)Subdivision 250-A – Guide to Part 4-15;
(2)Subdivision 250-B – Object of this Part.
Subdivision 250-A is a “Guide”, kept separate from the “operative provisions”: s 995-1(1) (definition of “Guide”) and s 950-150 of the Income Tax Assessment Act 1997 (Cth) (ITAA 1997); s 3AA(2) and (3) TAA.
A “Guide” forms a part of Sch 1: s 950-100(1) ITAA 1997; s 3AA(3) TAA. However, the “Guide” may only be considered in the particular ways indicated by s 950-150(2) ITAA 1997:
Guides form part of this Act, but they are kept separate from the operative provisions. In interpreting an operative provision, a Guide may only be considered:
(a) in determining the purpose or object underlying the provision; or
(b) to confirm that the provision’s meaning is the ordinary meaning conveyed by its text, taking into account its context in the Act and the purpose or object underlying the provision; or
(c) in determining the provision’s meaning if the provision is ambiguous or obscure; or
(d) in determining the provision’s meaning if the ordinary meaning conveyed by its text, taking into account its context in the Act and the purpose or object underlying the provision, leads to a result that is manifestly absurd or is unreasonable.
Section 250-10 of Sch 1 provides:
250‑10 Summary of tax‑related liabilities
(1)The following table is an index of each tax‑related liability under the Income Tax Assessment Act 1936. The key provision for the liability, as set out in the table, specifies when the liability becomes due and payable.
… [Table omitted]
(2)The following table is an index of each tax‑related liability under other Acts. The key provision for the liability, as set out in the table, specifies when the liability becomes due and payable.
… [Table omitted]
Section 250-10(1) contains “an index of each tax-related liability under the Income Tax Assessment Act 1936 (Cth)” (ITAA 1936). Section 250-10(2) contains “an index of each tax-related liability under other Acts”, which includes the TAA.
A failure to comply with a s 260-5 notice is not identified in the table to s 250-10(2) as a “tax-related liability”. The parties were not able to identify a tax-related liability which had been omitted from the tables in s 250-10, apart from the contended tax-related liability which the Commissioner submitted arises under s 260-5.
In Muc v Deputy Commissioner of Taxation (2008) 73 NSWLR 378 at [49], Mason P (with whom Beazley and Giles JJA agreed) observed that the Guide in Subdiv 250-A cannot confine the operative provisions. His Honour noted that a Guide is in the nature of intrinsic explanatory material and like extrinsic explanatory material cannot be used to contradict the language of the operative text, referring to Barry R Liggins Pty Ltd v Comptroller-General of Customs (1991) 32 FCR 112 at 120.
The decision in Muc concerned the application of the collection and recovery provisions in Pt 4-15 of Sch 1 to PAYE (pay as you earn) tax liabilities which arose under former s 221F (contained in Pt VI Div 2 ITAA 1936) which were outstanding as at 1 July 2000 when the PAYE system and the former collection and recovery provisions in Pt VI Div 2 were discontinued. The relevant table in s 250-10 contained no reference to former s 221F. Nevertheless, the Court held that the Pt 4-15 collection and recovery provisions applied, having regard to: (1) the definition of “tax-related liability” in s 255-1; (2) the terms of the transitional provision which accompanied the introduction of Sch 1; (3) relevant paragraphs of the Explanatory Memorandum to the New Tax System (Tax Administration) Bill 1999 (Cth); and (4) a notation which had been inserted to s 221R(1A) which contained a clear statement that Pt 4-15 governed collection and recovery of amounts payable under Pt IV Div 2 on or after 1 July 2000.
Subdivision 250-B contains only one provision, an operative provision, being s 250-25:
The object of this Part is to ensure that unpaid amounts of tax-related liabilities and other related amounts are collected or recovered in a timely manner.
Division 255 is entitled “General rules about collection and recovery”. It is divided into four subdivisions:
(1)Subdivision 255-A – Tax-related liabilities;
(2)Subdivision 255-B – Commissioner’s power to vary payment time;
(3)Subdivision 255-C – Recovery proceedings; and
(4)Subdivision 255-D – Security deposits.
Subdivision 255-A defines in s 255-1 the term “tax-related liability” and provides in s 255-5 that an amount of a tax-related liability that is due and payable is a debt due to the Commonwealth, payable to the Commissioner:
255-1 Meaning of tax-related liability
(1)A tax‑related liability is a pecuniary liability to the Commonwealth arising directly under a taxation law (including a liability the amount of which is not yet due and payable).
Note 1: See section 250‑10 for an index of tax‑related liabilities.
Note 2:A taxation law, or a provision of it, may be excluded from being applied to this Part. See section 265‑65.
(2)A civil penalty under Division 290 of this Schedule or Part 5 of the Tax Agent Services Act 2009 is not a tax‑related liability.
255‑5 Recovering a tax‑related liability that is due and payable
(1) An amount of a tax‑related liability that is due and payable:
(a) is a debt due to the Commonwealth; and
(b) is payable to the Commissioner.
(2)The Commissioner, a Second Commissioner or a Deputy Commissioner may sue in his or her official name in a court of competent jurisdiction to recover an amount of a tax‑related liability that remains unpaid after it has become due and payable.
Note:The tables in section 250‑10 set out each provision that specifies when an amount of a tax‑related liability becomes due and payable. The Commissioner may vary that time under Subdivision 255‑B.
Notes to sections form a part of Sch 1: s 950-100(1) ITAA 1997; s 3AA(3) TAA. The notes to both s 255-1 and s 255-5 (being operative provisions) refer to s 250-10 (which is part of a Guide).
Division 260 is entitled “Special rules about collection and recovery”. It contains its own “Guide” in s 260-1 and then deals with collection and recovery in five subdivisions:
(1)Subdivision 260-A – From third party;
(2)Subdivision 260-B – From liquidator;
(3)Subdivision 260-C – From receiver;
(4)Subdivision 260-D – From agent winding up business for foreign resident principal; and
(5)Subdivision 260-E – From deceased person’s estate.
The notices in these proceedings were issued under s 260-5 in Subdiv 260-A.
The Guide in s 260-1 provides:
This Division deals with the collection and recovery of an amount from a person who is not personally liable to pay that amount. Apart from Subdivision 260‑A, which covers a wider range of amounts, this Division primarily deals with amounts of tax‑related liabilities.
Section 260-5, under which each of the notices was issued, provides:
260-5 Commissioner may collect amounts from third party
Amount recoverable under this Subdivision
(1)This Subdivision applies if any of the following amounts (the debt) is payable to the Commonwealth by an entity (the debtor) (whether or not the debt has become due and payable):
(a) an amount of a tax-related liability;
(b) a judgment debt for a tax-related liability;
(c) costs for such a judgment debt;
(d)an amount that a court has ordered the debtor to pay to the Commissioner following the debtor’s conviction for an offence against a taxation law.
Commissioner may give notice to an entity
(2)The Commissioner may give a written notice to an entity (the third party) under this section if the third party owes or may later owe money to the debtor.
Third party regarded as owing money in these circumstances
(3)The third party is taken to owe money (the available money) to the debtor if the third party:
(a) is an entity by whom the money is due or accruing to the debtor; or
(b) holds the money for or on account of the debtor; or
(c)holds the money on account of some other entity for payment to the debtor; or
(d) has authority from some other entity to pay the money to the debtor.
The third party is so taken to owe the money to the debtor even if:
(e)the money is not due, or is not so held, or payable under the authority, unless a condition is fulfilled; and
(f) the condition has not been fulfilled.
How much is payable under the notice
(4) A notice under this section must:
(a)require the third party to pay to the Commissioner the lesser of, or a specified amount not exceeding the lesser of:
(i) the debt; or
(ii) the available money; or
(b)if there will be amounts of the available money from time to time—require the third party to pay to the Commissioner a specified amount, or a specified percentage, of each amount of the available money, until the debt is satisfied.
When amount must be paid
(5)The notice must require the third party to pay an amount under paragraph (4)(a), or each amount under paragraph (4)(b):
(a) immediately after; or
(b) at or within a specified time after;
the amount of the available money concerned becomes an amount owing to the debtor.
Debtor must be notified
(6) The Commissioner must send a copy of the notice to the debtor.
Setting-off amounts
(7)If an entity other than the third party has paid an amount to the Commissioner that satisfies all or part of the debt:
(a) the Commissioner must notify the third party of that fact; and
(b)any amount that the third party is required to pay under the notice is reduced by the amount so paid.
The following general observations can be made about s 260-5:
(1)In order for s 260-5 to operate there must be an amount (referred to in the section as a “debt”) of a kind described in s 260-5(1) payable to the Commonwealth by an entity (referred to as the “debtor”). Paragraph (a) of s 260-5(1), which is relevant in this case, is an amount of a “tax-related liability”. Paragraphs (b) to (d) describe debts which flow from or after a curial process. If there is no amount payable (referred to as a “debt”) of a kind identified in paragraphs (a) to (d) of s 260-5(1), a notice purportedly issued under s 260-5(2) can have no operative effect: Federal Commissioner of Taxation v Barnes Development Pty Ltd (2009) 178 FCR 352 at [9] (Gilmour J).
(2)If there is an amount of a kind identified in s 260-5(1) payable to the Commonwealth, the Commissioner has the discretionary power under s 260-5(2) to issue a notice to a “third party” who “owes or who may later owe money to the debtor”. The obvious purpose of the provision is to facilitate recovery (by the Commissioner) from a third party of the amount payable (the “debt” to the Commonwealth) by the “debtor” to the Commonwealth.
(3)Section 260-5(3) sets out circumstances in which a third party is taken to owe money to the debtor. In Elsinora Global Ltd v Healthscope Ltd (No 2) [2006] FCA 18; 61 ATR 482 at [63] Edmonds J observed that subsection (3) is:
(a)a deeming provision, identifying when a third party is taken to owe money to the debtor;
(b)exhaustive and extends to situations where, but for the deeming, the third party may not, or would not, be regarded as owing money to the debtor.
(4)Section 260-5(4) addresses how much is payable under a notice. It provides that a s 260-5 notice must require the third party to pay to the Commissioner the lesser of, or a specified amount not exceeding the lesser of, the debtor’s “debt” (that is, the amount payable by the “debtor” to the Commonwealth which falls within s 260-5(1)) or the “available money” (being the amount the third party is taken to owe the debtor under s 260-5(3)).
(5)Section 260-5(5) has the effect that a notice cannot require payment to the Commissioner of an amount before the time at which the amount “becomes an amount owing to the debtor”. The notice must require the third party to pay an amount immediately, or within a specified time, after the amount of available money becomes owing to the debtor. The third party is under a statutory obligation to pay to the Commissioner, at that time, the amount owing to the debtor.
(6)Section 260-5(6) requires the Commissioner to send a copy of the s 260-5 notice to the debtor.
(7)Section 260-5(7) operates to reduce pro tanto the amount a third party must pay to the Commissioner under a s 260-5 notice if the debtor’s debt to the Commonwealth has been wholly or partly satisfied by an entity other than the third party.
Sections 260-15 provides:
260-15 Indemnity
An amount that the third party pays to the Commissioner under this Subdivision is taken to have been authorised by:
(a) the debtor; and
(b) any other person who is entitled to all or a part of the amount;
and the third party is indemnified for the payment.
In Bruton Holdings Pty Ltd (in liq) v Federal Commissioner of Taxation (2009) 239 CLR 346 at [13], the High Court observed:
… Section 260‑5(3), read with s 260‑15, provides, in effect, that the Commissioner has the right to give to the third party a valid receipt and discharge for money paid in compliance with the notice.
Section 260-20 provides:
260-20 Offence
(1) The third party must not fail to comply with the Commissioner’s notice.
Penalty: 20 penalty units
Note 1:Chapter 2 of the Criminal Code sets out the general principles of criminal responsibility.
Note 2:See section 4AA of the Crimes Act 1914 for the current value of a penalty unit.
(2)The court may, in addition to imposing a penalty on a person convicted of an offence against subsection (1) in relation to failing to pay an amount under the notice, order the person to pay to the Commissioner an amount not exceeding that amount.
It is not necessary for present purposes to summarise the remaining Divisions of the collection and recovery provisions of Pt 4-15.
It is relevant to note that Subdiv 990-A in Sch 1 makes it clear that the Commissioner may combine notices:
990‑5 Commissioner may combine notices
(1)For the purposes of a taxation law under which the Commissioner must or may give you a document (however described), that document may be included in or with any other document (however described) that the Commissioner gives you under a taxation law.
(2) This section is enacted for the avoidance of doubt.
THE ISSUES
At the hearing, the applicant indicated it no longer pressed Grounds 1 and 2 of the further amended originating application (FAOA). This left six issues:
(1)Issue 1: whether as at 12 October 2017 and 24 October 2017, by reason of the issue of the Fyna Notice and Fyna’s non-compliance with it, Fyna had a “tax-related liability” within the meaning of s 255-1(1) in the amount of at least $408,453.32 on 12 October 2017, and at least $408,711.05 on 24 October 2017 (Ground 3, FAOA);
(2)Issue 2: whether the Fyna Notice and the Other Notices were invalid because they were ambiguous in stating the amount required to be paid to the Commissioner as an identified amount (respectively, $777,643.47, $408,453.32 and $408,711.05) or, if the amount owed by the recipient of the notice to the relevant debtor (respectively, Pladmira or Fyna) (available money) was less than that identified amount, the whole of the available money (Grounds 4 and 5, FAOA), or because they were otherwise ambiguous in certain identified respects;
(3)Issue 3: whether, if s 260-5 of Sch 1 authorised the issue of a notice in relation to a tax-related liability created by an anterior notice issued under s 260-5, the provision is constitutionally valid (Ground 6, FAOA);
(4)Issue 4: whether the Other Notices were invalid because they were issued for an improper purpose, that being the purpose of recovering amounts which ought to have been, but were not, paid by Fyna to the Commissioner under the Fyna Notice (Ground 7, FAOA);
(5)Issue 5: whether all of the notices were invalid because they were issued by decision-makers who were not authorised to make the relevant decisions (Ground 7A, FAOA); and
(6)Issue 6: whether the Fyna Notice was invalid because it was issued by a person without authority to issue the notice (Ground 7B, FAOA).
CONSIDERATION
Issue 1: Did Fyna have a “tax-related liability” within the meaning of s 255-1(1)?
The first issue is only relevant to the Other Notices.
The Commissioner contended that non-compliance with a s 260-5 notice gives rise to a “tax-related liability” within the meaning of s 255-1(1) such that there was a “debt” on the part of Fyna as “debtor” to the Commonwealth under s 260-5(1)(a). That “tax-related liability” could support the issue of further s 260-5 notices to persons who owe or might late owe money to Fyna.
In fact, the Commissioner went further. The definition of “tax-related liability” in s 255-1(1) includes “a liability the amount of which is not yet due and payable”. The Commissioner confirmed that, on his construction of the provisions, immediately upon service of a s 260-5 notice on a “third party” (B) who owed or might later owe money to a “debtor” of the Commonwealth (A), and without there being any breach of the notice by B and even before B’s time for compliance had arrived, the Commissioner could serve a valid notice on a person (C) who owed or might later owe money to the third party (B). C would be a “third party” using the terminology in s 260-5 and B (although a “third party” in relation to A) would be a “debtor” (like A) even before the time for compliance by B had arrived. Further –without any breach by C – the Commissioner could immediately issue a further notice on another party (D) who owed or might later owe money to C, and so on.
The Commissioner observed that he can sue in debt to recover an amount that is required to be paid by a s 260-5 notice when the time for payment of the relevant amount as specified in the notice has arrived and the amount has not been paid to the Commissioner: Barnes at [35] (Gilmour J). The Commissioner argued that “this is no different to any other tax-related liability which is due and payable, and to which s 255-5 applies”.
The question is not whether the ability to enforce compliance with a s 260-5 notice by an action in debt is or is not different to the statutory right, provided by s 255-5, to recover a “tax-related liability” as a debt. The question is whether Fyna’s admitted non-compliance with the obligation imposed on it by s 260-5 gave rise to a “tax-related liability” within the meaning of s 255-1. Section 255-5 only operates where there is a “tax-related liability” within the meaning of s 255-1. Section 255-5 provides that, where there is a “tax-related liability” within the meaning of s 255-1 which is due and payable, it is a debt due to the Commonwealth, payable to the Commissioner. Section 255-5 does not say that any debt due to the Commonwealth is a “tax-related liability” or that a statutory obligation enforceable by action in debt is a “tax-related liability”.
The Commissioner submitted that “the liability created by a s 260-5 notice is a liability to the Commonwealth, payable to the Commissioner and recoverable by the Commissioner (or a Second Commissioner or Deputy Commissioner) in his or her official name”. That may be accepted. However, the question is whether it is a liability which falls within the definition of “tax-related liability” in s 255-1. For it to be such, it must be “a pecuniary liability to the Commonwealth arising directly under a taxation law (including a liability the amount of which is not yet due and payable)”.
A similar argument as made by the Commissioner in the present case was made in Barnes. The Commissioner issued two notices to the respondent, Barnes Development Pty Ltd, in relation to tax-related liabilities of two of its then directors, Mr and Mrs Barnes. One issue was whether the Commissioner could recover for non-compliance with the notices. The Commissioner put his case in two ways:
(1)His “primary submission” was that an action in debt arose by implication on the proper construction of s 260-5 of Sch 1: at [17], [18]. Where an Act creates a duty or obligation to pay money, an action will lie for its recovery, unless the Act contains “some provision to the contrary”: Mallinson v Scottish Australian Investment Company Ltd (1920) 28 CLR 66, 70.
(2)His “alternative submission” was that the amounts due to the directors by the company were a “tax-related liability” (within s 255-1) which might be sued for as debts under s 255-5 of Sch 1: at [17].
As to the “primary submission”, the respondent argued that s 260-20 provided a sanction for non-compliance under the criminal law, which also empowered the criminal court to order payment of an appropriate sum to the Commissioner, with the effect of denying the Commissioner’s right to pursue civil recovery proceedings that would otherwise arise by implication from s 260-5. That argument was rejected, his Honour saying at [22]:
As to s 260-20, there is no general principle that the availability of civil remedies is excluded by provision for a criminal sanction with a discretionary power to order payment of monies due. I do not consider that the Parliament intended the criminal sanctions in s 260-20 to be the exclusive means of enforcing a notice.
The respondent also argued that s 255-5, which provides an express recovery regime, but which did not extend to amounts arising under s 260-5, was also a “provision to the contrary”. Gilmour J rejected this argument on the basis that the existence of an affirmative provision dealing with recovery did not override the principle in Mallinson. His Honour stated at [26]:
The respondent further submits that s 255-5, which provides for an express regime of civil recovery but does not extend to amounts arising under s 260-5, is also “a provision to the contrary”. This seeks, in effect, to apply the maxim expressio unius est exclusio alterius as an aid to construction. It is an aid which must be used with caution: Houssein v Under Secretary, Department of Industrial Relations and Technology (NSW) (1982) 148 CLR 88 at 94; Barratt v Howard (1999) 92 IR 350; 165 ALR 605 at [45] per Hely J. If applied in this case it would bring about a result which I doubt the Parliament intended: Ainsworth v Criminal Justice Commission (1992) 175 CLR 564 at 575. The existence of affirmative provisions elsewhere in the Act does not, in my opinion, override the principle articulated in Mallinson.
Gilmour J held that s 260-5 created an obligation which was enforceable by an action in debt: at [27], [34], [35]. His Honour did not expressly deal with the Commissioner’s “alternative submission” that non-compliance with s 260-5 itself gave rise to a “tax-related liability” within s 255-1. It is noted, however, that in the first sentence of the passage set out above, his Honour recorded the respondent’s submission that s 255-5 did not extend to amounts arising under s 260-5 and proceeded to deal with the point being made by the respondent without stating that the submission that s 255-5 did not extend to amounts arising under s 260-5 was incorrect.
Fyna contended that its breach of the Fyna Notice did not give rise to a “tax-related liability” within the meaning of s 255-1(1). There was no “debt” as contemplated by s 260-5(1) which could support notices issued to entities which owed or might later owe money to Fyna as “debtor” to the Commonwealth.
Fyna’s principal argument was that a liability arising under a s 260-5 notice is a liability to “pay to the Commissioner”, not to the Commonwealth: s 260-5(4). Fyna observed that s 255‑1 speaks of a “pecuniary liability to the Commonwealth”, not to the Commissioner. It was submitted that, for the purposes of s 255‑1(1), the Commissioner was not to be identified with the Commonwealth.
I reject that submission. Subdivisions 255-A and 260-A do not draw the distinction Fyna suggests. This is made clear by s 260-5(1). The chapeau indicates that the section applies where an amount (referred to as a “debt”), which includes “an amount of a tax-related liability” (paragraph (a)), is “payable to the Commonwealth”. Section 255-5(1), however, provides that “tax-related liabilities” are debts due to the Commonwealth, payable to the Commissioner. If the legislature intended to draw a sharp distinction between the Commissioner and the Commonwealth, then s 260-5(1) would be a nonsense because, according to s 255-5(1), tax-related liabilities are debts due to the Commonwealth, payable to the Commissioner.
Nevertheless, for the reasons which follow, in my view Fyna’s breach of the statutory obligation created by s 260-5 did not give rise to a “tax-related liability” within the meaning of s 255‑5(1). When s 255-5(1) and s 260-5 are read in context, including in the context of the limited operation of the statutory indemnity in s 260-15, the better construction is that non-compliance with a s 260-5 notice does not give rise to a tax-related liability capable of supporting a s 260‑5 notice. This conclusion is also supported by the legislative history of the provision.
The question is whether Fyna’s (B’s) admitted breach of the s 260-5 notice, in paying money to Pladmira (A) rather than to the Commissioner, gave rise to a “tax-related liability” within the meaning of s 255-1 of Fyna such that there was an amount payable to the Commonwealth by Fyna within s 260-5(1)(a) capable of supporting notices issued to third parties (C) who owed or might later owe money to Fyna (B).
A “tax‑related liability” is a “pecuniary liability to the Commonwealth arising directly under a taxation law”: s 255-1(1).
As to the meaning of “taxation law”, s 2(1) of the TAA provides that the phrase has the meaning given in the ITAA 1997 (but note also s 2(2) of the TAA). Section 995-1(1) ITAA 1997 includes:
taxation law means:
(a)an Act of which the Commissioner has the general administration (including a part of an Act to the extent to which the Commissioner has the general administration of the Act); or
(b)legislative instruments made under such an Act (including such a part of an Act); or
(c)the Tax Agent Services Act 2009 or regulations made under that Act.
The Commissioner has the general administration of the taxation laws, including the TAA: s 8 ITAA 1936; s 1-7 ITAA 1997; s 3A TAA; s 356-5 of Sch 1. Accordingly, s 260‑5 is a “taxation law”.
The word “directly” is included in the definition of “tax-related liability” and must have some meaning. A “pecuniary liability to the Commonwealth arising … under a taxation law” is a pecuniary liability created or established (Rana v Google Inc (2017) 254 FCR 1 at [18]) by a “taxation law”. The word “directly” must narrow the scope of the phrase “pecuniary liability to the Commonwealth arising directly under a taxation law” as compared to the meaning of that phrase without the word “directly” in it – see: Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 at [71].
The High Court in Deputy Commissioner of Taxation v Broadbeach Properties Pty Ltd (2008) 237 CLR 473 at [28] stated:
An amount of a “tax-related liability” that is due and payable as indicated by the tables in s 250-10, is a debt due to the Commonwealth and payable to the Commissioner (s 255-5(1)), and may be sued for recovery in a court of competent jurisdiction (s 255-5(2)). The phrase “tax-related liability” means a pecuniary liability to the Commonwealth “arising directly” under a statute of which the Commissioner has the general administration (s 2(1) of the Administration Act and s 5-1 in Sch 1 of that statute; s 995-1 of the 1997 Act). The consequence is that liabilities for income tax and GST are within the scope of these provisions.
In Bruton at [12], the High Court further observed:
A notice under s 260-5 gives the Commissioner the right to recover from a third party an amount that the third party owes or may later owe to a taxpayer who is indebted to the Commonwealth for tax. It is established that the remedy given to the Commissioner by s 260-5 is available in respect of revenue obligations, which are given the character of “debts” by force of the Administration Act itself [citing Broadbeach at [26]-[29]] and without prior curial determination.
The present issue was not raised or considered in Bruton or Broadbeach.
The direct operation of s 260-5 is to create statutory obligations on the recipient of the notice (B), including to create obligations on B to pay money (a debt) which B owes to A to the Commissioner, rather than to A. That statutory obligation may be enforced by the Commissioner by an action in debt when the time for payment has arrived: Barnes at [27], [34], [35]. However, the statute does not, at least directly, create a debt on the part of B to the Commissioner or the Commonwealth. B’s default is required before the Commissioner could enforce the obligation to pay by action in debt.
Of course, the question is not whether s 260-5 creates a debt; it is whether it gives rise to a “tax-related liability”, namely a “pecuniary liability” of the kind described in s 255-1. The failure by B to comply with its statutory obligation – to pay money owed to A to the Commissioner instead of A – has the consequence that, upon default, the recipient of the notice could be sued in debt for recovery of a monetary amount. That is a liability which arises because of s 260-5 but it is not a liability which arises independently of the giving of a notice, or until there has been a breach of that which is required by the terms of the particular notice issued. It is therefore not a liability “arising directly” under s 260-5. The liabilities which arise “directly” under a taxation law are those, as the tables in s 250-10 show, which arise by direct operation or force of the statute. Those liabilities generally give rise, even before ascertainment by assessment, to a liability for tax, interest or penalties: Commissioner of Stamps (WA) v West Australian Trustee, Executor and Agency Company Ltd (1925) 36 CLR 98; Re Mendonca; Ex parte Federal Commissioner for Taxation (1969) 1 ATR 571 at 573-574; 15 FLR 256 at 259, per Gibbs J. A liability to pay an amount for breach of s 260-5 does not arise directly by operation of the statute in the same way as liabilities for tax, interest and penalties. There can be no potential liability absent the giving of a notice and it is then default or non-compliance which triggers the Commissioner’s ability to recover in an action in debt.
If B is issued with a notice which, for example, requires B to make payment to the Commissioner immediately B’s debt to A is due for payment, B remains liable in debt to A up until the time for payment arises. The Commissioner could not successfully sue B in debt to enforce compliance because the time for B to pay has not arrived. B has an obligation, imposed by statute, to pay the debt it owes A at the appropriate time to the Commissioner instead of A. The statute does not create a second debt on the part of B (namely a debt to the Commissioner); it operates to redirect payment of a particular debt. It creates, in this example, what is capable of being described as a “pecuniary liability” in the sense that there is an obligation on B to pay to the Commissioner at the appropriate time B’s liability or debt to A. Payment by B to the Commissioner of the amount B owed A will result, by force of the statute, in a discharge by A of B’s debt to A: s 260-15. The liability of B to A then ceases and B has performed its statutory obligation to pay that amount to the Commissioner instead of A. In this example, the present obligation on B to pay to the Commissioner amounts owed by B to A immediately after the amounts would otherwise become payable to A is not captured by the concept of a “pecuniary liability to the Commonwealth arising directly under a taxation law (including a liability the amount of which is not yet due and payable)”.
The direct effect of s 260-5 is to create statutory obligations on the recipient of a notice (B) to pay to the Commissioner liabilities B owes to a “debtor” of the Commonwealth. Section 260-5 creates an obligation which has the effect of redirecting payment of B’s debt to the Commissioner instead of A. In my view, and accepting that a contrary conclusion is open on the statutory language, this obligation is not captured by the phrase “pecuniary liability to the Commonwealth arising directly under a taxation law (including a liability the amount of which is not yet due and payable)”.
This conclusion is supported by other aspects of the statutory language and context. Section 260-15 provides that payment to the Commissioner of an amount which a third party owes the “debtor” is taken to have been authorised by the debtor and any other person entitled to the amount, and the third party is indemnified for the payment. Assume A (Pladmira) is the tax “debtor”, B (Fyna) is the “third party” who owes or might later owe money to A and C is a “third party” who owes or might later owe moneys to Fyna (B). Fyna (B) is a “third party” so far as concerns the notice issued to it in relation to A’s tax debt, but also the “debtor” to the Commonwealth so far as concerns the notice issued to C in relation to B’s breach of the obligation imposed on it by s 260-5. If C pays an amount to the Commissioner in compliance with a notice issued to C on the basis of a debt owed by B to the Commonwealth arising from B’s breach of the notice issued to B, then C’s payment to the Commissioner is taken to have been authorised by B (the “debtor” referred to in s 260-15). The consequence of the statute deeming the payment to be authorised by the “debtor” is that the debt owed by C to B is extinguished: Burness; In the matter of Denward Lane Pty Ltd (in liq) [2009] FCA 893; 259 ALR 339 at [45] (Gordon J); Bruton at [13]. The Commissioner would apply the amount received from C in reduction of the tax A owed the Commissioner. The Commissioner would do so because B’s obligation (which was breached and founded the notice to C) was to pay to the Commissioner amounts B owed A. The notice issued to B was based on A’s tax debt and any amount received from B would have had to be applied to that tax debt. Although the money received from C would have to be applied by the Commissioner to reduce A’s tax debt and A has therefore received the benefit of money owed by C to B, B still owes a debt to A whilst having C’s debt to it (B) extinguished. B’s debt to A is not extinguished by s 260-15.
To answer this analysis, the Commissioner contended that s 260-15 had “successive operation” with the consequence that, in the scenario just posited, B’s debt to A was also extinguished because s 260-15 operated a second time to deem A to have authorised B’s payment to the Commissioner.
However, the payment by C to the Commissioner is not “[a]n amount that the third party [B] pays to the Commissioner” within the meaning of s 260-15. B “pays” no amount to the Commissioner unless C is to be treated as B’s agent. The statute does not deem C to be B’s agent. Section 260-15 is not to be read in the “successive” way contended. If it was intended to have such an operation, other and clearer language would have been employed. Indeed, as stated above, the language in s 260-15 indicates that s 260-5(1)(a) and s 255-1 do not have the operation contemplated by the Commissioner in issuing the Other Notices.
If the Commissioner did apply the amount paid by C to satisfy or reduce A’s tax liability (and it is difficult to see how he could do otherwise), then the Commissioner would need to notify B of that fact and B’s obligation under its s 260‑5 notice would be reduced by the amount so paid from that point in time – see: s 260‑5(7). However, that would not alter the fact that B had failed to comply with the s 260‑5 notice served on it. The criminal consequences of that non-compliance would remain. Further, as noted above, s 260‑15 does not operate to extinguish B’s debt to A, notwithstanding A’s tax liability was satisfied or reduced by moneys actually owed to B. It may be that A would have difficulty actually recovering the debt owed to it by B in the example just postulated (see: Mason K, Carter JW, Tolhurst G, Mason and Carter’s Restitution Law in Australia (3rd ed, LexisNexis Butterworths, Chatswood, 2016) at [847]), but that is not a reason to read the statute as operating to extinguish the debt in the absence of clear words to that effect.
The construction of s 260-5(1)(a) as not authorising the issue of a s 260-5 notice founded upon a breach of a s 260-5 notice is also supported by the absence in s 250-10(2) of a reference to s 260-5 in the “index of each tax-related liability” arising under various Acts, including the TAA. Section 250-10(2), although part of a “Guide”, can be used in the limited way identified at paragraph [12] above. It is also relevant to note that s 260-5 is contained in the collection and recovery provisions of Pt 4-15: “Collection and recovery of tax-related liabilities and other amounts”.
The conclusion reached is also supported by a consideration of the legislative history, recognising that legislative history and extrinsic materials cannot displace the meaning of the statutory text and their examination is not an end in itself. As the High Court observed in Federal Commissioner of Taxation v Consolidated Media Holdings Ltd (2012) 250 CLR 503 at [39]:
This Court has stated on many occasions that the task of statutory construction must begin with a consideration of the [statutory] text” [citing Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (2009) 239 CLR 27 at 46 [47]]. So must the task of statutory construction end. The statutory text must be considered in its context. That context includes legislative history and extrinsic materials. Understanding context has utility if, and in so far as, it assists in fixing the meaning of the statutory text. Legislative history and extrinsic materials cannot displace the meaning of the statutory text. Nor is their examination an end in itself.
Further, s 260-5 is to be construed according to its terms and not according to the terms of the provisions it replaced – cf: Federal Commissioner of Taxation v Hart (2004) 217 CLR 216 at [51]; Federal Commissioner of Taxation v Spotless Services Ltd (1996) 186 CLR 404 at 415.
Section 260-5 of Sch 1 replaced a number of other provisions in the taxation law. To name a few, s 260-5 replaced former s 218 of the ITAA 1936, former s 99 of the Fringe Benefits Tax Assessment Act 1986 (Cth), former s 34 of the TAA (dealing with GST, wine equalisation tax and luxury car tax) and former s 74 of the Sales Tax Assessment Act 1992 (Cth). Section 260‑5 brought together, in the one place, the power to issue notices in respect of all tax-related liabilities.
Section 260-5 is cast in different terms to these earlier provisions. However, despite the different terms, the underlying object is evidently the same.
It is sufficient to use former s 218 of the ITAA 1936 by way of example. That section was brought to an end with effect from 1 July 2000 by the A New Tax System (Tax Administration) Act 1999 (Cth). It was ultimately repealed in 2006. Prior to its repeal, s 218 relevantly provided:
(1)The Commissioner may at any time, or from time to time, by notice in writing (a copy of which shall be forwarded to the taxpayer at his last place of address known to the Commissioner), require:
(a)any person by whom any money is due or accruing or may become due to a taxpayer;
(b)any person who holds or may subsequently hold money for or on account of a taxpayer;
(c)any person who holds or may subsequently hold money on account of some other person for payment to a taxpayer; or
(d)any person having authority from some other person to pay money to a taxpayer;
to pay to the Commissioner, either forthwith upon the money becoming due or being held, or at or within a time specified in the notice (not being a time before the money becomes due or is held):
(e)so much of the money as is sufficient to pay the amount due by the taxpayer in respect of tax or, if the amount of the money is equal to or less than the amount due by the taxpayer in respect of tax, the amount of the money; or
(f)such amount as is specified in the notice out of each payment that the person so notified becomes liable from time to time to make to the taxpayer until the amount due by the taxpayer in respect of tax is satisfied;
and may at any time, or from time to time, amend or revoke any such notice, or extend the time for making any payment in pursuance of the notice.
(2)Any person who refuses or fails to comply with any notice under this section is guilty of an offence.
Penalty: $1,000.
(3)Where a person (in this subsection referred to as the “convicted person”) is convicted before a court of an offence against subsection (2) in relation to the refusal or failure of the convicted person or another person to comply with a notice under this section, the court may, in addition to imposing a penalty on the convicted person, order the convicted person to pay to the Commissioner an amount not exceeding the amount or the aggregate of the amounts, as the case requires, that the convicted person or the other person, as the case may be, refused or failed to pay to the Commissioner in accordance with the notice.
(4)Any person making any payment in pursuance of this section shall be deemed to have been acting under the authority of the taxpayer and of all other persons concerned and is hereby indemnified in respect of such payment.
(5)If the Commissioner receives any payment in respect of the amount due by the taxpayer before payment is made by the person so notified he shall forthwith give notice thereof to that person. …
Section 218 permitted recovery of “tax” from third parties owing money to the “taxpayer”. The object of the provision was to facilitate recovery of taxes from persons owing money to the “taxpayer” without having to proceed to judgment and issue execution. Former s 218(6B) contained definitions relevant to former s 218 including “tax” which was defined to include:
(a) additional tax under Part VII;
(ab) the general interest charge under a provision of this Act;
(b)an amount that a person is liable to pay to the Commissioner under Division 1AAA, 1AA, 1A, 1B, 1C, 2, 3, 3A, 3B, 4, 8 or 9;
(ba)an amount of interest that a person is liable to pay to the Commissioner under section 102AAM;
(c) a judgment debt or costs in respect of:
(i) tax;
(ii) additional tax under Part VII;
(iia) the general interest charge under a provision of this Act;
(iii)an amount that a person is liable to pay to the Commissioner under Division 1AAA, 1AA, 1A, 1B, 1C, 2, 3, 3A, 3B, 4, 8 or 9; or
(iv)an amount of interest that a taxpayer is liable to pay to the Commissioner under section 102AAM;
(d) any fine or costs imposed by a court in respect of:
(i) an offence against this Act or the regulations; or
(ii)any other taxation offence within the meaning of Part III of the Taxation Administration Act 1953 that relates to this Act or the regulations; or
(e)any amount ordered by a court, upon the conviction of a person for an offence of a kind referred to in paragraph (d), to be paid by the person to the Commissioner; …
Section 218(6B) defined “taxpayer” in terms linked to the definition of “tax”:
taxpayer includes a person who is liable to pay an amount to the Commissioner under Division 1AA, 1A, 1B, 1C, 2, 3, 3A, 3B, 4, 8 or 9.
Section 218 did not operate to permit a s 218 notice to be issued to recover amounts from entities (fourth parties) which owed money to third parties who defaulted under a s 218 notice; it could not be contended that a debt arising by the default of a third party in relation to a s 218 notice was a “tax”. I was not taken to any case in which a s 218 notice or a notice under any of the equivalent provisions which existed before the introduction of s 260-5 was contended, or held, to permit such a course.
Section 260-5 now revolves around concepts including amounts which constitute a “tax-related liability” (rather than “tax” in s 218) payable (rather than “due” in s 218) by an “entity” (rather than a “taxpayer”). However, this change in language does not suggest the new provision is to be understood as extending the previously well-understood scope of such provisions.
I was not taken to any extrinsic material which would suggest that s 260-5 was intended to effect such a significant departure from the pre-existing regime to permit recovery from “fourth” (and subsequent) parties in respect of non-compliance with a notice by a third party. I note that the Commissioner in Barnes submitted that former s 218 was substantially to the same effect as s 260-5 and s 260-20 taken together: at [27]. I also note that re-written provisions of the ITAA 1936, appearing in either the ITAA 1997 or Sch 1 to the TAA, are not to be taken to be different merely because they express the same idea using different words: s 1-3 of the ITAA 1997, read with the definition of “this Act” in s 995-1(1); s 15AC of the Acts Interpretation Act 1901 (Cth); Power v Deputy Commissioner of Taxation [2013] NSWSC 428; 96 ATR 912 at [26]-[27] (per Emmett JA, with whom Ward JA agreed).
To the limited extent extrinsic material was of assistance, it confirmed that the new provision did not depart from the operation of s 218 in the substantial way contemplated by the facts of this case. Paragraph 2.32 of the Explanatory Memorandum to the A New Tax System (Tax Administration) Bill 1999 (Cth) stated (emphasis added):
New Subdivision 260-A will enable the Commissioner to continue to recover outstanding tax-related liabilities of a taxpayer by giving a notice to an entity (a third party) who owes or may later owe money to the taxpayer. Section 218 is the relevant section in the ITAA 1936 and the Finding tables in Section 3 of this explanation show the similar provisions in other taxation laws that are being standardised.
This is consistent with the High Court’s observations in Bruton at [12] (extracted at [53] above) in relation to the operation of s 260-5.
In my view, non-compliance with a s 260-5 notice does not give rise to a “tax-related liability” within the meaning of s 260-5(1)(a) and s 255-1(1). Accordingly, the Other Notices have no operative effect and should be set aside.
Issue 2: did the Notices comply with s 260-5(4) and (5)?
At the heart of Fyna’s case on Issue 2 was the contention that s 260-5 notices must: (1) comply with the statutory requirements of the section authorising their issue; and (2) not leave the recipient in any doubt as to what was required for compliance.
Fyna referred to the decision in Perpetual Trustee Co (Ltd) v Holdsworth [1966] 2 NSWR 755. In that case, a notice issued by the Deputy Federal Commissioner of Taxation included the words “I hereby require you to pay to me in conjunction with State the money due or accruing”. A notice issued by the Commissioner of Taxation for the State of New South Wales required payment “to me [i]n conjunction with Federal the money which is due or accruing”. Myers AJ observed at 757 that the State Act entitled the Commissioner to require payment to him and him alone. The inclusion of the words “[i]n conjunction with Federal” was “not justified by the section”. His Honour said at 757:
This is a section which has penal consequences. Failure to comply with it is an offence punishable by a fine of £50, and I think that any notice issued under the section must therefore be explicit and be strictly within the terms of the Statute. If words are added to it that the section does not authorize, it is not sufficient in my opinion to say that the words have no meaning. They at least must place the person to whom the notice is given in some doubt as to what his duty is, and the addition of them, in my opinion, makes the notice invalid.
Fyna also referred to Bennett J’s decision in Federal Commissioner of Taxation v DeMartin and Gasparini Pty Ltd [2011] FCA 286; 82 ATR 906 at [5], where her Honour stated:
There is no dispute on the standard for a notice under s 260-5 of Sch 1 to the TAA. Failure to comply with the section is punishable by a fine: s 260-20 of Sch 1 to the TAA; s 2A of the TAA applies Chapter 2 of the Criminal Code to all offences under the TAA. The notice must be explicit and strictly within the terms of the TAA. The person receiving the notice must be in no doubt as to what the duty is. The notice must leave no ambiguity as to the nature of the recipient’s obligation: Perpetual Trustee Co (Ltd) v Holdsworth [1966] 2 NSWR 755 at 757; DCT v Government Insurance Offıce of New South Wales (1992) 36 FCR 314 at 320; 23 ATR 378 at 384; 92 ATC 4295 at 4300; 109 ALR 159 at 166; Goodin v FCT (2002) 50 ATR 220 at 224 [12]; 169 FLR 282 at 286 [12]; 2002 ATC 4572 at 4575 [12]. This depends on the form and content of the notice, rather than what the recipient may fortuitously have guessed: Goodin (at ATR 224-225 [14]; FLR 287-288 [14]; ATC 4575-4576 [14]).
In DeMartin, page one of the relevant document required payment every four weeks and page two required payment every two weeks. The Commissioner contended page one was not part of the notice, but was a covering letter; the notice was page two. Her Honour concluded that it was not clear that page one was not part of the notice (at [20]) and that the recipient was “left in doubt as to its obligations as to the specified time for payment”: at [25]. It was ambiguous and it failed “to comply with the statutory requirement that it nominate a specified time for payment”: at [25] (emphasis in original).
Fyna’s first contention in respect of Issue 2 was that a s 260-5 notice cannot purport to require payment of either the “debt” or the “available money”. That contention was advanced by reference to the following reasons:
(1)First, it was said that s 260-5(4)(a) and (b) refer to a “specified amount” and that an amount is not specified if it is identified disjunctively.
(2)Secondly, it was noted that non-compliance with the obligation imposed by s 260-5(4) is a criminal offence under s 260-20(1) and that, accordingly, a narrow construction is warranted to ensure that the recipient of a notice is certain as to the obligation imposed: Director of Public Prosecutions (Cth) v Keating (2013) 248 CLR 459 at [48].
(3)Thirdly, it was said that s 260-5(4) is not (or not just) permissive; it is restrictive and identifies what a notice “must” do. Fyna contended that, read naturally, s 260‑5(4)(a) has the effect that a notice must require the third party to pay either “the debt” or “the available money”, but not both.
Fyna submitted that the difficulties of complying with a s 260-5 notice are compounded by “the breadth and vagueness” of the concept of “available money”. Money can be “available” even if it does not fall due and payable unless a condition is fulfilled, and that condition has not been fulfilled: s 260-5(3)(e)-(f). Money can be available merely because there is authority to pay it to the debtor: s 260-5(3)(d).
As to the first contention:
(1)The s 260-5 notices required payment of the lesser of the debt (which was quantified) or the “available money” if that was less than the quantified debt. It is tolerably clear that the notices were limited to the amount of the debt.
(2)Section 260-5(4) authorised the Commissioner to issue a notice in those terms – on its proper construction, the section does not require the Commissioner to choose to issue a notice only for the debt or for the available money. In any event, s 990-5(1) of Sch 1 (set out at [31] above) permits the Commissioner to combine notices.
(3)There was no real ambiguity about what was required by the s 260-5 notices.
Fyna’s second contention in respect of this issue was that a s 260-5 notice does not comply with s 260-5(4) if the quantum of the obligation is vague or ambiguous. If the quantum of the obligation is ambiguous, it is not “specified” for the purposes of s 260-5(4). It was said that the notices here were vague and ambiguous in not identifying whether the “available money” referred to money owing at the time the notices were issued or money owing at any time thereafter. It was said that a reference to “the whole of the available money” was not a precise concept having regard to the breadth and vagueness of the concept of “available money”.
The s 260-5 notices were not vague or ambiguous for these or any other reasons. They specified the amount required to be paid by identifying numerical amounts ($777,643.47, $408,453.32 and $408,711.05) or such lesser amounts of “available moneys”, being amounts owed by the recipient of the relevant notice to the “taxpayer” (Pladmira in the case of the Fyna Notice and Fyna in the case of the Other Notices). Where the relevant third or fourth party did not owe the whole amount specified in the notice, the amount which was owed by them to the “taxpayer” was ascertainable by them on the facts known to them: Dinning v Federal Commissioner of Taxation [1999] FCA 785; 42 ATR 299 at [28]-[31].
As to the contention that the s 260-5 notices were ambiguous in not making clear whether the “available moneys” meant moneys owing at the time the notices were issued or moneys owing at any time thereafter, the statute expressly contemplates that the Commissioner can issue a notice with respect to moneys which will become owing in the future. It cannot be a disqualifying ambiguity to issue a notice which operates, as the s 260-5 notices here do, to require payment of “available moneys” at the time of the issue of the notice and “available moneys” which become owing after the issue of the notice.
The third contention was that a s 260-5 notice does not comply with s 260-5(5) if it identifies the time for payment disjunctively for the same reasons as it does not permit the disjunctive identification of payment of “the debt” or “the available money” (see the first contention above). This contention is rejected for equivalent reasons. It was clear what was required for compliance.
Section 260-5 authorises the issue of notices expressing the time for payment disjunctively. The same was true of s 218. In Clyne v Commissioner of Taxation (1981) 150 CLR 1 at 23, Mason J stated in respect of a s 218 notice:
… The section relates to moneys owing to the taxpayer when the notice is given, it imposes an obligation to pay forthwith moneys which are then payable; it imposes an obligation to pay moneys which become payable at a future time when that time arrives. It does not explicitly prescribe as a condition preliminary to the creation of the obligation to pay that the moneys owing to the taxpayer at the date of the notice shall continue to be owing to him when they become payable. It merely requires the recipient to pay to the Commissioner when they become payable moneys owing to the taxpayer at the date of the notice. The obligation attaches to the recipient on service of the notice, though it cannot be performed until a future date. …
The fourth and final contention was that a s 260-5 notice which relies on s 260-5(4)(b) does not comply with that provision unless, on its face, it requires amounts to be paid “until the debt is satisfied”. The obligation of a recipient of a notice to pay an amount to the Commissioner is reduced pro tanto by any reduction in the debt to the Commissioner on which the notice was based: s 260-5(7). The recipient of a notice would not be under a misapprehension that their statutory obligation to pay amounts to the Commissioner (s 260-5(4)) continued even after the debt referred to in s 260-5(1) to the Commonwealth had been paid. There is no warrant for a conclusion that a notice is invalid unless the words “until the debt is satisfied” are present.
It follows that this issue is resolved against Fyna in respect of the Fyna Notice.
I would also have resolved the issue against Fyna in respect of the Other Notices if I had held those notices to be validly issued.
Issue 3: constitutional validity
The third issue was whether, if s 260-5 authorises the issue of a notice in relation to a “tax-related liability” created by an anterior notice issued under s 260-5, it is constitutionally valid. This issue does not arise given the conclusion reached that Fyna’s breach of the obligation imposed on it by s 260-5 did not give rise to a “tax-related liability” under s 260-5(1)(a), even though the obligation was enforceable in debt. Nevertheless, I will consider the constitutional issue in the event my view as to the operation of s 260-5 is incorrect.
The substance of this ground was that, if s 260-5 authorised the giving of a notice to fourth party debtors (C) of a third party (B) who had paid money in breach of a notice, then the section was not supported by the taxation power in s 51(ii) of the Constitution. It was submitted that the money paid in breach of a notice might make a person liable to the Commissioner for the amount paid in breach, but that amount was not a tax. The liability of B for breach of the requirements imposed by s 260-5 do not give rise to a tax (whether or not the liability falls within the definition of “tax-related liability”). It was accepted that a notice to a third party debtor (B) of the person who owed tax (A) was constitutionally valid as incidental to the imposition and collection of tax. However, it was submitted, s 51(ii) did not authorise the issuing of notices to a debtor (C) of a third party debtor (B) who was liable to the Commissioner for something other than a tax.
Section 51(ii) authorises laws with respect to taxation. A law imposing tax is within the core or “centre of the power to make laws with respect to taxation”; laws creating liabilities to facilitate the collection of tax are laws “ancillary to levying and collecting income tax”: Moore v Commonwealth (1951) 82 CLR 547 at 568 (Dixon J). Whilst such liabilities are not taxes, they are liabilities “with respect to taxation”: Moore at 569 (Dixon J), at 577-578 (Fullagar J), at 582-583 (Kitto J). Section 51(ii) authorises laws “incidental to the imposition and collection of taxation”; that which is incidental to the main purpose of the power is contained within the grant itself: Moore at 569 (Dixon J).
A law directed to the collection of tax not only from a third party debtor (B) of the taxpayer (A) but also from a fourth party debtor (C) of that third party debtor (B) is further removed from the “centre of the power” than a law directed to the collection of A’s tax liability from A’s debtor, B. However, such a law is not “so divorced from the subject of taxation as to fall outside the scope of the power conferred by s 51(ii)”: Moore at 569. That is shown by the facts of this case. The issuing of the s 260-5 notices to entities which owed money to Fyna was clearly directed at recovering the tax owed by Pladmira.
Once it is accepted that a law authorising the issue of a notice to B is constitutionally valid, it is difficult to see why a law which authorises collection from a person who owes B moneys should be regarded as invalid. The mere fact that it is more remote is not a sufficient answer.
Fyna submitted that the reason the notice to C was constitutionally invalid was that collection from C did not operate to reduce or extinguish A’s tax liability; rather it operated to extinguish B’s liability for B’s breach of its s 260-5 notice. B’s obligation was to pay moneys to the Commissioner because B owed, or might later owe, moneys to A which owed tax.
If the Commissioner recovered moneys from C because of B’s failure to comply with its statutory obligation, those moneys would have to be applied to satisfy B’s obligation. The satisfaction of B’s obligation necessarily reduces A’s tax liability because B’s obligation was to pay to the Commissioner money it owed to A. Accordingly, collecting from C necessarily operated to reduce or extinguish both B’s obligation and A’s tax liability (but not B’s debt to A for the reasons given at [59] to [62] above).
Fyna relied upon the decisions in Waterhouse v Deputy Federal Commissioner of Land Tax (SA) (1914) 17 CLR 665, Commissioner of Taxation v Barnes (1975) 133 CLR 483 at 493, and Australian Securities Commission v Macleod (No 4) (1994) 48 FCR 152 at 156D (Drummond J) to submit that a law which required money owing to the Commonwealth by A to be paid out of property to which B was beneficially entitled would be beyond the power of the Federal Parliament because it would not be a law with respect to taxation. However, that is not what would be occurring here on the hypothesis that the Other Notices were validly issued. A’s liability would be paid out of property which C owed to B and which, on receipt, B owed to A but which B was required to pay over to the Commissioner. Section 260-5 would not be operating to pay A’s liability with property to which C was “beneficially entitled” in the sense contemplated in Commissioner of Taxation v Barnes.
It was also submitted that, if the Commissioner’s construction was correct, the law was one which was caught by s 51(xxxi). Section 51(xxxi) gives power to make laws with respect to “the acquisition of property on just terms”. Taxation laws are, by their nature, outside the scope of s 51(xxxi): Australian Tape Manufacturers Association Ltd v Commonwealth (1993) 176 CLR 480 at 508-509; Mutual Pools & Staff Pty Ltd v Commonwealth (1994) 179 CLR 155 at 170-171 (Mason CJ), at 177-178 (Brennan J), at 197-198 (Dawson and Toohey JJ), at 221 (McHugh J). At 221-222, McHugh J observed (emphasis added):
[I]f the purpose of a law passed under s 51 is to impose sanctions for breach of a law passed under that section or … to facilitate the collection of taxes, that law is not within the scope of s 51(xxxi) even though it incidentally or even directly results in the Commonwealth acquiring the property of a … person.
Fyna referred to the observations of Dawson and Toohey JJ at 198 in Mutual Pools. Their Honours noted that s 51(xxxi) reduced the ambit of the taxation power in some respects, giving the example of a law which provided for the acquisition of a building for use as a taxation office. Their Honours stated that, although such a law would be incidental to the taxation power, the true source of the power to acquire the property in those circumstances was s 51(xxxi). McHugh J stated the same thing at 217, footnote 94. It was submitted that, once the relevant law was outside of the core power and within the incidental power, then the source of the power was s 51(xxxi), not s 51(ii).
That is not what their Honours intended or said. Their Honours were making the point that “it is crucial to distinguish between taxation and the acquisition of property”: at 198. The proper characterisation of the law which their Honours gave as an example was that it was one for the acquisition of property even though it could be supported as one which was incidental to the power to make laws with respect to taxation.
If the proper construction of s 260-5 is that it authorised the issue of the Other Notices, contrary to the view I have reached, I would have determined this issue against Fyna.
Issue 4: improper purpose
The fourth issue was whether the Other Notices were invalid because they were issued for an improper purpose, that being the purpose of recovering amounts which ought to have been, but were not, paid by Fyna to the Commissioner under the Fyna Notice (Ground 7, FAOA). It is strictly not necessary to deal with this issue in light of the conclusion reached in respect of Issue 1. Nevertheless, I address it in the event my conclusion on that issue is incorrect.
It was contended that the purpose of issuing the Other Notices was to secure payment of Fyna’s non-tax liabilities which arose when it paid money in breach of the Fyna notice.
It was submitted that it could not be inferred that the purpose of issuing the Other Notices was to ensure discharge of Pladmira’s tax liability; compliance with the Other Notices would not affect Pladmira’s tax liability.
The proper inference to draw is that the Other Notices were issued for the ultimate purpose of recovering Pladmira’s tax liability. It is correct that the Commissioner’s receiving money from debtors of Fyna would operate to reduce the liability of Fyna to the Commissioner for failing to comply with the Fyna Notice. It is correct that this was a purpose of issuing the Other Notices. However, the receipt of money from debtors of Fyna would necessarily operate to reduce the tax owed by Pladmira to the Commissioner. The Commissioner could not properly have applied the money received only towards a reduction of Fyna’s liability and, at the same time, not have reduced Pladmira’s tax liability. A reduction of Fyna’s liability operated to reduce Pladmira’s tax liability. The obvious objective in issuing the Other Notices was to recover Pladmira’s tax liability.
Fifth issue: decision-makers not authorised to make decisions
The fifth issue (Ground 7A, FAOA) was put only formally because it was accepted that it would be rejected by this Court as contrary to the decision of the High Court in O’Reilly v The Commissioners of the State Bank of Victoria (1983) 153 CLR 1.
Fyna contended that the power to issue a s 260-5 notice is given to the Commissioner. He may delegate that power in accordance with s 8(1) of the TAA, but he may not delegate the power of delegation. The Commissioner has delegated the power to issue s 260-5 notices to the Second Commissioners of Taxation and officers in the Senior Executive Service. However, the decisions to issue the Fyna Notice and the Other Notices were not made by persons holding those offices. They were issued by a person employed at Executive Level 1 (EL1) (the Other Notices) and APS Level 4 (APS4) (the Fyna Notice).
It was submitted that the document entitled “Service Delivery Instrument of General Authorisations” dated 26 April 2017 did not validly authorise persons in the position of EL1 or APS4 to exercise powers under s 260-5 as agents for a delegate because such agency, purportedly created by that document, was inconsistent with the express statutory conferral of power on the Commissioner, subject only to the Commissioner’s power to delegate, which power could not in turn be delegated.
As Fyna properly submitted, this argument is inconsistent with O’Reilly, which is binding on this Court.
Issue 6: authority
The sixth and final issue was whether the Fyna Notice was invalid because it was issued by a person without authority to issue the notice (Ground 7B, FAOA). This issue was not raised in relation to the Other Notices.
The Fyna Notice was issued by a person in the position of APS4. It was submitted that such a person does not have the power or function to “form an opinion that a taxpayer has intentionally disregarded the tax law”. That submission was made by reference to Sch 4 and Sch 6 of the Service Delivery Instrument (at pages 12 and 14 respectively) which relevantly provided:
SCHEDULE 4: AUTHORISATIONS FOR APS LEVEL 6
The authorisations given to persons holding or occupying or performing the duties of APS Level 6 are limited to the powers and functions of an Executive Level 1, and exclude the powers and functions to:
1.seek leave to quash or reduce the severity of a conviction where a person has been convicted in his or her absence of a Prescribed Taxation Offence (section 13CA of the Taxation Administration Act 1953);
2. make a determination or form an opinion that a taxpayer has intentionally disregarded the tax law.
…
SCHEDULE 6: AUTHORISATIONS FOR APS LEVEL 4
The authorisations given to persons holding or occupying or performing the duties of APS Level 4 are limited to the powers and functions of an APS Level 5, and exclude the powers and functions to:
1.make adjustments to the taxable amount where there is a scheme or arrangement to avoid or reduce tax or obtain a tax benefit;
2.remit any penalties, including penalties by way of additional tax, additional duty, charge or levy where there is a scheme or arrangement to avoid or reduce-tax or obtain a tax benefit, including PAYG instalments;
3.remit any penalties, including penalties by way of additional tax, additional duty, charge or levy, if a taxpayer has been reckless, or failed to take reasonable care, or been involved in fraud or evasion or that a taxpayer has intentionally disregarded the tax legislation;
4.when carrying out debt recovery functions, make decisions to reject applications from taxpayers to compromise tax debts due to the Commonwealth;
5.issue notices requiring the production of documents or the giving of evidence (under paragraphs 353-10(1)(b)-(c) in schedule 1 to the Taxation Administration Act 1953 and equivalents in other legislation).
Fyna submitted that the ATO officer who decided to issue the Fyna Notice did “form an opinion that a taxpayer has intentionally disregarded the tax law”. This submission was based on the reasons for issuing the Fyna Notice, which included:
Reason for issuing a garnishee:
I have made a decision to issue garnishee to known trade debtor for 100% of the tax liability because the company and its director continue not to make its tax obligations and poses a high risk to revenue. The director has a history of liquidated entities where the tax office has incurred significant losses.
The company has a poor compliance history shown by late lodgement and non-payment of their tax obligations.
Fyna contended that, read naturally, this indicated that the decision-maker had formed the view that Pladmira and its director had a history of deliberately failing to meet their tax obligations.
Fyna’s case on this issue is misconceived. Specific provisions in the tax law turn on the Commissioner’s formation of a view that a taxpayer has intentionally disregarded the tax law. The imposition of an administrative penalty of 75% of a shortfall amount in item 1 of s 284-90 of Sch 1 is an example. Section 260-5 is not an example of such a provision.
The Service Delivery Instrument, in excluding the power or function to “make a determination or form an opinion that a taxpayer has intentionally disregarded the tax law” is referring to provisions such as that identified in s 284-90 of Sch 1. It is not excluding the ability to take a view such as that set out at [116] above in deciding whether to issue a s 260-5 notice.
CONCLUSION
For the reasons given in relation to Issue 1, ground 3 of the FAOA is made out with the consequence that the Other Notices have no operative effect. The remaining grounds comprising Issues 2 to 6 are rejected.
Accordingly, I would set aside the Other Notices.
Fyna also sought an order that the Commissioner pay to Fyna any amounts paid under the Other Notices. There is nothing before this Court to indicate whether there are any such amounts. There may also be a question about whether such an order is appropriate.
In the circumstances, I will order that the parties confer with a view to agreeing orders to give effect to these reasons and seeking to agree any outstanding issues, including costs.
I certify that the preceding one hundred and twenty-one (121) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Thawley. Associate:
Dated: 21 December 2018
ANNEXURE A
The Fyna Notice
Notice
FYNA PROJECTS PTY LTD, YOU are a third party who owes, or may later owe, money (“the available money”) to PLADMIRA PTY LTD (“the debtor”), of (or previously of) SUITE 3, 2 FACTORY STREET, GRANVILLE NSW 2142, who, in terms of section 260-5 of Schedule 1 of the Taxation Administration Act 1953 (TAA) has a debt payable to the Commonwealth of $777, 643.47.
In exercise of powers conferred on me as Deputy Commissioner of Taxation by delegation from the Commissioner of Taxation under section 8 of the TAA, YOU, FYNA PROJECTS PTY LTD, ARE REQUIRED TO PAY TO THE COMMISSIONER OF TAXATION the sum of $777,643.47 or, if the available money is less than $777,643.47, the whole of the available money.
If you now owe the available money to the debtor, the payment to the Commissioner of Taxation is to be made IMMEDIATELY. If you do not owe the available money to the debtor but you will later owe it to the debtor, the payment to the Commissioner of Taxation is to be made immediately the money becomes owing to the debtor.
For the purpose of section 260-5 of Schedule 1 of the TAA, a third party is taken to owe money (the available money) to the debtor if the third party:
(a) is an entity by whom the money is due or accruing to the debtor, or
(b) holds the money for or on account of the debtor; or
(c) holds the money on account of some other entity for payment to the debtor; or
(d) has authority for some other entity to pay the money to the debtor.
The third party is so taken to owe the money to the debtor even if:
(e)the money is not due, or is not so held, or payable under the authority, unless a condition is fulfilled; and
(f) the condition has not been fulfilled.
If the debt (or any part of the debt) is paid by the debtor or another entity before a payment is made by you under this notice, I will notify you of that fact and any amount that you are required to pay under this notice will be reduced by the amount so paid.
WARNING
You are legally required to comply with this notice. Should you receive instructions from the debtor or any other party regarding payment which are in contravention of this notice, please notify this office immediately.
The Legislation imposes severe penalties upon those who do not comply with its requirements. A penalty of 20 penalty units is prescribed for a failure to comply with the notice. Under section 4AA of the Crimes Act 1914 the current value of a penalty unit is $180.
In addition to imposing a penalty on a person convicted of an offence in relation to failing to pay an amount under the notice, the court may order the person to pay to the Commissioner an amount not exceeding that amount.
Dated this Twentieth day of June 2017.
…
Deputy Commissioner of Taxation and
Delegate of the Commissioner of Taxation
ANNEXURE B
Example Other Notice
Notice
ADCO CONSTRUCTIONS PTY LTD, YOU are a third party who owes, or may later owe, money (“the available money”) to FYNA PROJECTS PTY LTD (“the debtor”), of (or previously of) SUITE 1, 2 FACTORY STREET, GRANVILLE NSW 2142, who, in terms of section 260-5 of Schedule 1 of the Taxation Administration Act 1953 (TAA) has a debt payable to the Commonwealth of $408,453.32.
In exercise of powers conferred on me as Deputy Commissioner of Taxation by delegation from the Commissioner of Taxation under section 8 of the TAA, YOU, ADCO CONSTRUCTIONS PTY LTD, ARE REQUIRED TO PAY TO THE COMMISSIONER OF TAXATION the sum of $408,453.32 or, if the available money is less than $408,453.32, the whole of the available money.
If you now owe the available money to the debtor, the payment to the Commissioner of Taxation is to be made IMMEDIATELY. If you do not owe the available money to the debtor but you will later owe it to the debtor, the payment to the Commissioner of Taxation is to be made immediately the money becomes owing to the debtor.
For the purpose of section 260-5 of Schedule 1 of the TAA, a third party is taken to owe money (the available money) to the debtor if the third party:
(a) is an entity by whom the money is due or accruing to the debtor; or
(b) holds the money for or on account of the debtor; or
(c) holds the money on account of some other entity for payment to the debtor; or
(d) has authority for some other entity to pay the money to the debtor.
The third party is so taken to owe the money to the debtor even if:
(e)the money is not due, or is not so held, or payable under the authority, unless a condition is fulfilled; and
(f) the condition has not been fulfilled.
If the debt (or any part of the debt) is paid by the debtor or another entity before a payment is made by you under this notice, I will notify you of that fact and any amount that you are required to pay under this notice will be reduced by the amount so paid.
WARNING
You are legally required to comply with this notice. Should you receive instructions from the debtor or any other party regarding payment which are in contravention of this notice, please notify this office immediately.
The Legislation imposes severe penalties upon those who do not comply with its requirements. A penalty of 20 penalty units is prescribed for a failure to comply with the notice. Under section 4AA of the Crimes Act 1914 the current value of a penalty unit is $180.
In addition to imposing a penalty on a person convicted of an offence in relation to failing to pay an amount under the notice, the court may order the person to pay to the Commissioner an amount not exceeding that amount.
Dated this Twelfth day of October 2017.
…
Deputy Commissioner of Taxation and
Delegate of the Commissioner of Taxation
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