Gray v The Commissioner of Taxation
[2014] QDC 30
•Ex tempore 7 February 2014
DISTRICT COURT OF QUEENSLAND
CITATION: | Gray v The Commissioner of Taxation [2014] QDC 30 |
PARTIES: | NEALE GRAY (Appellant) v THE COMMISSIONER OF TAXATION (Respondent) |
FILE NO/S: | 78/2013 |
DIVISION: | Appellate |
PROCEEDING: | Appeal |
ORIGINATING COURT: | Magistrates Court |
DELIVERED ON: | Ex tempore 7 February 2014 |
DELIVERED AT: | Southport |
HEARING DATE: | 7 February 2014 |
JUDGE: | Samios DCJ |
ORDER: | 1. Appeal allowed 2. Orders made by the learned Magistrate on 5 February 2013 set aside 3. Pursuant to section 19B(1)(d) of the Crimes Act 1914 (Cth), the Appellant is discharged without proceeding to conviction upon giving security by way of recognizance of $1,000 and conditioned that he be of good behaviour for a period of 18 months |
CATCHWORDS: | CRIMINAL LAW - Sentence - Appeal - where the Appellant pleaded guilty to four charges before the learned Magistrate of failing to lodge tax returns with the Australian Taxation Office under the Taxation Administration Act 1953 (Cth) - where the learned Magistrate did not initially record a conviction against the Appellant but changed his mind after hearing further submissions from the Prosecution - whether the learned Magistrate allowed the Appellant to complete the Appellant’s submissions in relation to section 19B of the Crimes Act 1914 (Cth) and sentence - whether a conviction should have been recorded against the Appellant APPEAL AND NEW TRIAL - Discretion - Miscarriage of justice - Rehearing - whether the learned Magistrate’s exercise of discretion miscarried Legislation Crimes Act 1914 (Cth) s 19B Justices Act 1886 (Qld) s 222, s 223(1) Taxation Administration Act 1953 (Cth) Cases Commissioner of Taxation v Baffsky [2001] NSWCCA 332 Fox v Percy (2003) 214 CLR 118 House v The King (1936) 55 CLR 499 Mbuzi v Torcetti [2008] QCA 231 Rowe v Kemper [2008] QCA 175 |
COUNSEL: | Mr N Gray for the Appellant (self-represented) No appearances by counsel on behalf of the Respondent |
SOLICITORS: | Mr N Gray for the Appellant (self-represented) Mr Townes of the Commonwealth Director of Public Prosecutions for the Respondent |
HIS HONOUR: Mr Gray pleaded guilty to four charges against the Tax Administration Act[1] for failing to lodge income tax returns for the financial years 2006, 2007, 2009, and 2010. He pleaded guilty to those charges, and the learned Magistrate, after hearing submissions, sentenced Mr Gray to a fine of $3300 and gave him three months to pay. However, the learned Magistrate also recorded a conviction. Mr Gray appeals against the sentence imposed by the learned Magistrate on 5 February 2013. Mr Gray’s notice of appeal contains a contention that the learned Magistrate did not allow him to complete his submissions in relation to section 19B of the Crimes Act[2] and a case of Commissioner of Taxation v Baffsky [2001] NSWCCA 332, a decision handed down on the 7th of September 2001.
[1] Taxation Administration Act 1953 (Cth).
[2] Crimes Act 1914 (Cth).
Mr Gray says, therefore, the learned Magistrate did not fully consider a request that no fine or recording of a conviction be imposed in relation to the sentence. Further, Mr Gray says the learned Magistrate did not give enough weight to extenuating circumstances in sentencing Mr Gray. He says that after the completion of the sentencing, the learned Magistrate took further submissions from the Prosecution, and modified the sentence. Mr Gray says, in his notice of appeal, that the learned Magistrate could have made different orders in that the Magistrate had stated that no conviction would be recorded during the hearing, and this was also ordered during sentencing.
After sentencing concluded, the learned Magistrate changed the orders and recorded a conviction due to a direction from the Prosecution that if a fine was imposed, then a conviction must be recorded. Mr Gray says the learned Magistrate could have modified the orders and removed the fine, as this would have allowed the order that no conviction be recorded to stand, and would have also alleviated the Prosecution concerns raised regarding the sentencing process.
This is an appeal pursuant to section 222 of the Justices Act 1886.[3] Such an appeal is by way of rehearing; see section 223 subsection 1.[4] In Mbuzi v Torcetti [2008] QCA 231, the Court said at paragraph 17:
The appeal proceeded under section 223 subsection 1 on the evidence given in the Magistrates Court. On such an appeal, the judge should afford respect to the decision of the Magistrate and bear in mind any advantage the Magistrate had in seeing and hearing the witnesses give evidence. But the judge is required to review the evidence, to weight the conflicting evidence, and to draw his or her own conclusions: Fox v Percy (2003) 214 CLR 118 at paragraph 25; Rowe v Kemper [2008] QCA 175 at paragraph 5.
[3] Justices Act 1886 (Qld).
[4] Ibid s223(1).
On the hearing of the sentencing, the learned Magistrate heard from the Prosecution that the prosecution related to the failure to lodge income tax returns for the financial years 2006, 2007, 2009, and 2010. The Prosecutor said the final notice was posted on 7 March 2011, requesting lodgement of the outstanding returns by 18 April 2011. In addition to the final notice, there were phone calls on 10 January 2011 and 7 March 2011. She said an intent to prosecute letter, issued on 11 of May 2011. She said the administrative penalty available to the Commissioner and foregone due to the institution of the proceedings in the Court, was $2200. That is, $550 per charge.
It was accepted that Mr Gray had lodged his 2006 return on 4 May 2012; his 2009 return on 30 May 2012; and his 2010 return on 9 November 2012. Further, his 2007 return was outstanding. However, the learned Magistrate was told that despite these circumstances, the amount payable to Mr Gray was $565.09. The learned Magistrate was told that Mr Gray was a medium-level taxpayer based on his 2012 income tax return, and he had no previous taxation convictions. Therefore, a global penalty was sought between $3300 to $3800, and costs were sought in $78. The maximum penalty was told to the learned Magistrate: it was $15,400. An order was sought that the 2007 return be returned by 5 April 2013.
That order has been complied with, and no further action is required in that respect on the hearing of this appeal before me today. When Mr Gray had his opportunity to speak, he told the learned Magistrate that he had a number of personal problems over the years. He was doing his best to ensure two daughters went through university. One was living in Townsville. He was being reassessed for child support, and one of the daughters was still living with her mother. By inference, I took Mr Gray had separated from his daughters’ mother. Therefore, he told the learned Magistrate that he couldn’t pay payments on a unit in which his daughter was living, and the unit had to be sold.
He was then charged by the Queensland government, and had to repay the first owners grant, and his reference was put on the credit reference authority, and he was fined, he thought, $2000. That was being paid off to Queensland Treasury at the time of the hearing before the learned Magistrate. He then went on to tell the learned Magistrate that he thought the taxation system worked on voluntary lodgement of forms, and he’s always voluntarily lodged his forms. He told the learned Magistrate that he had to contact the ATO – that he had contacted the ATO and had given them his address, and had them send out tax packs to him. However, he told the learned Magistrate that all the paperwork was sent to an address from which he had moved some months before. Nine months before.
Even after giving the ATO his correct address, they proceeded with the summonses and everything for these hearings to the previous address. He said, basically, all documentation had gone to the previous address. Then, he’d updated his address with the child support agency before he’d been contacted with the ATO, to send them the relevant documents. He was also waiting for some group certificates which had been ruined in the flood. That is, he didn’t have those, and he needed those by inference, and they were eventually supplied by the person he was dealing with in the ATO. And he told the learned Magistrate he basically was moving along the whole way supplying tax returns, and he had no knowledge of this case going on; that is, the proceedings before the learned Magistrate. He said he voluntarily put in his returns, and he knew that he’d paid all his tax because he was PAYG, and he had a lot of issues, basically, with the child support overstating his income.
It seems the learned Magistrate was concerned that it took six years, and two years respectively, to lodge the 2006, 2009, and 2010 returns. While Mr Gray accepted that, Mr Gray’s response was that his understanding was that if you had paid all your tax, and you knew that you didn’t owe any tax – I took him to say, in the answer transcribed here, that it was not something that he had to comply with. However, he did have a tax file number for the years that were relevant, and he said he always lodged his tax returns. He said he was not trying to avoid the ATO, and they were always in possession of his information. When it got down to it, though, he said the reason he had not lodged the returns was because of his personal problems.
Also, he had lodged his 2012 return on time, and he accepted he didn’t have a proper excuse for not lodging the 2006 return. He also didn’t have funds to see accountants during the whole time. He was living on a meagre income, and he had other expenses. He then referred again to paying child support and supporting his two daughters, and commendably, he said that he had to get them to university. He said they were doing well. He was asked if he had the capacity to pay a fine, and he said that he was a sole IT support at TSS prep school. I take, by inference, his answer to mean he didn’t have the money to pay fines of the order being talked about by the Prosecution. He said he was still financially recovering. I took him to mean from his dealings with the child support agency.
The learned Magistrate then dealt with Mr Gray’s submissions on section 19B of the Crimes Act.[5] However, the learned Magistrate seems to have been, again, impressed by the delay that had occurred during which no returns had been lodged. He did not accept section 19B as being applicable to the circumstances. Notwithstanding being referred to section 19B by Mr Gray, the learned Magistrate did not apply it. The learned Magistrate then gave his decision and he said that the Department was not seeking a conviction and that he has no prior offences and for that reason, “I do not proceed to record a conviction.”
[5] Crimes Act 1914 (Cth).
The learned Magistrate then went on to say, “But in view of the length of time it’s taken for the returns to be lodged, I believe it’s appropriate – it is appropriate to impose a fine and I do impose a fine, of a global fine of one penalty of $3,300.” The learned Magistrate then seems to recognise that he has to record a conviction for the imposition of a fine by law, so he says, “I take back what I said earlier. A conviction is formally recorded against you.” Now that occurred, it appears, although the documentation that I have is a bit difficult to follow.
When the Prosecutor notified the learned Magistrate that in Commonwealth matters a fine cannot be opposed without a conviction being recorded and therefore is a conviction recorded in this matter? And the learned Magistrate said, “Why does a conviction need to be recorded with a fine?” And then he was told by the Prosecutor, in Commonwealth matters, the only way a conviction cannot be recorded is under section 19B of the Crimes Act.[6] Having regard to all the circumstances, it is correct that sentencing is a discretion and when a discretion is involved it is not enough that I, as an Appellant Judge, if I had been in the position of the primary Judge, would have taken a different course. See the House v The King (1936) 55 CLR 499 at 504-505.
[6] Ibid.
However, I am to review this matter and to weigh the conflicting evidence, of which there is none, and to draw my own conclusions, as I have sided earlier from Mbuzi v Torcetti.[7] In the end I do think the learned Magistrate’s exercise of his discretion ultimately miscarried. While there had been the delay in the filing of the returns, and Mr Gray accepted he had no excuse with respect to one of those returns brought to his specific attention, nevertheless, the learned Magistrate himself thought no conviction should be recorded and only recorded one when he was told if he imposed the fine he had to impose a conviction.
[7] Mbuzi v Torcetti [2008] QCA 231.
It seems to me the learned Magistrate was then, as I am, driven to section 19B of the Crimes Act[8] in the Commissioner of Taxation v Baffsky,[9] the Court there held that the Commissioner of Taxation’s submission that section 19B is not available under revenue legislation unless exceptional circumstances are found to exist, is not correct. That’s the approach I would adopt. Mr Gray said much, which I think should be accepted, to show that he had personal problems throughout a long period of time. By inference he was doing the best he could to meet all his financial obligations and his duties to his daughters. The Commonwealth owed him money rather than he owed them money.
[8] Crimes Act 1914 (Cth).
[9] Commissioner of Taxation v Baffsky [2001] NSWCCA.
These circumstances might’ve been different if he owed money and was shown to be a person trying to avoid his financial obligations to the Commissioner of Taxation. He was trying to get tax packs. He was trying to get certificates of earnings. Documents were destroyed in the floods. He had shifted address and there was no suggestion that was a ploy in any way. He had a tax file number. He was corresponding with the representative of the ATO. On balance it is my view that 19B was applicable to his circumstances. That relates to looking at character and antecedents, age, health or mental condition. The extent, if any, to which the offence is of a trivial nature.
Some people argue a certain offence is not trivial but you have to look at the context of all the circumstances and here, one might argue, by the time it got to the learned Magistrate the heat had gone out of Mr Gray’s failure to comply with his obligations, but there were extenuating circumstances, which is the next point raised in section 19B(1) paragraph B of the relevant Act.[10] It was clearly inexpedient here to order as provided for, that is, not to discharge – not to dismiss the charges but to discharge Mr Gray without proceeding to conviction upon him giving security by recognizance that he would comply and be of good behaviour – that he would be of good behaviour for a short period of time.
[10] Crimes Act 1914 (Cth).
By now it’s been over a year before – since he’s been in front of the learned Magistrate and there’s been no further failures that I’ve been told about or should’ve been told about. Therefore, I have come to the view that the appeal should be allowed and I allow the appeal. I set aside the orders made by the learned Magistrate on 5 February 2013 and that I make a recognizance order, pursuant to section 19B(1)(d) of the Crimes Act 1914.[11] I order the Defendant be discharged without proceeding to conviction upon him giving security by way of recognizance of $1,000 – condition that he be of good behaviour for a period of 18 months.
[11] Ibid.
0
3
3