Hamilton v Commission for Taxation (Cth) - [2007] SASC 165

Supreme Court of South Australia
(Magistrates Appeals: Criminal)
HAMILTON v COMMISSION FOR TAXATION (CTH)
[2007] SASC 165
Judgment of The Honourable Justice White (ex tempore)
8 May 2007
CRIMINAL LAW - JURISDICTION, PRACTICE AND PROCEDURE - JUDGMENT AND PUNISHMENT - SENTENCE - RECOGNISANCES, PROBATION AND OTHER NON-CUSTODIAL ORDERS - DISCRETION TO NOT RECORD CONVICTION
Appeal against sentence - failure to lodge tax return - guilty plea - magistrate refused to exercise discretion under s 19B of Crimes Act 1914 to order that no conviction be recorded - whether magistrate's decision affected by error - no sentencing error demonstrated - appeal dismissed.
Taxation Administration Act 1953 (Cth), s 8C; Income Tax Assessment Act 1936 (Cth), s 162; Crimes Act 1914 s 19B, referred to.
HPS Transport Pty Ltd v Australian Taxation Office (Unreported, Supreme Court of South Australia, Martin J, 12 December 2003); Kelton v Uren (1981) 27 SASR 92; Commissioner for Taxation v Doudle (2005) 195 FLR 76, applied.
Parente v The Commonwealth (2002) 220 LSJS 126; Talisco Pty Ltd v Sarney (1987) 18 ATR 420, distinguished.
Commissioner of Taxation v Baffsky (2001) 192 ALR 92, discussed.

HAMILTON v COMMISSION FOR TAXATION (CTH)
[2007] SASC 165
Magistrates Appeal
WHITE J (ex tempore):

The appellant pleaded guilty in the Magistrates Court to an offence of failing, contrary to s 8C of the Taxation Administration Act 1953 (Cth), to lodge an income tax return within the time required. By the terms of a final notice issued to the appellant pursuant to s 162 of the Income Tax Assessment Act1936 (Cth), the Australian Taxation Office had directed the appellant to lodge his personal income tax return in respect of the financial year ending on 30 June 2005 by no later than 15 May 2006. The appellant did not comply with that direction. The appellant was convicted and fined $150 in addition to court and service fees.
By his notice of appeal, the appellant complains of the recording of the conviction. His complaint is that the magistrate should have acceded to a submission that s 19B of the Crimes Act1914 (Cth) be invoked and that a conviction should not have been recorded. On the hearing of the appeal Mr Quinn submitted, in addition, that the magistrate had erred in not dismissing the complaint, but in the substance of the submissions, the appellant confined himself to the ground stated in the notice of appeal, namely, that a conviction should not have been recorded.
Circumstances of the Offence
The appellant is a legal practitioner. On 24 April 2006 he was served by the Australian Taxation Office with a final notice requiring him to lodge his personal taxation return for the 2004/2005 financial year by 15 May 2006. That would have allowed the appellant some 10½ months from the end of the financial year in which to lodge his return. As already noted, the appellant did not lodge the return by the stipulated date and, indeed, the return…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2007] SASC 165
Decision Date: 8 May 2007

CaseChat Overview and Summary

In the matter of Hamilton v Commission for Taxation (Cth), the appellant, Mr. Hamilton, was convicted for failing to lodge a tax return, and he appealed against the sentence imposed by the magistrate. The central dispute was whether the magistrate had erred in not exercising the discretion to not record a conviction under section 19B of the Crimes Act 1914. The appeal was heard and ultimately dismissed by the court.

The primary legal issue before the court was whether the magistrate's decision not to exercise discretion under section 19B of the Crimes Act 1914 was erroneous. The appellant's defence argued that the magistrate had failed to consider relevant mitigating factors, such as the appellant's good character, the absence of any prior criminal record, the absence of any likelihood of reoffending, and the fact that the income tax return had been lodged before the summons was served. The court was tasked with determining if these considerations warranted the invocation of section 19B, which allows for the discretion to not record a conviction.

The court examined the magistrate's reasoning and found no error in the sentencing process. The magistrate had considered the appellant's good character and other mitigating factors but ultimately decided that the failure to lodge the tax return was a typical example of the offence and not committed under extenuating circumstances. The court found that the magistrate had exercised his discretion appropriately and that the decision to record a conviction was reasonably open, given the circumstances. The appeal was dismissed as the court could not identify any specific error in the magistrate's decision-making process.

The final orders of the court confirmed the dismissal of the appeal and upheld the magistrate's decision to record a conviction for Mr. Hamilton's failure to lodge a tax return. The court's decision underscored the importance of the magistrate's discretion in sentencing and the limited grounds upon which the court could interfere with such decisions.

Orders

Orders of the court

Full text does not contain this section.

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

WHITE J

It is to be remembered that the question for this Court presently is not whether s 19B(1) could appropriately be invoked in relation to the appellant. Instead, the issue of whether the magistrate erred in not invoking s 19B(1) in this case. It is the magistrate’s discretion. This court will interfere with its exercise only if satisfied that the magistrate has erred in sentencing principle, or if he has failed to have regard to a relevant consideration, or has had regard to an irrelevant consideration or if, despite the inability to identify any specific error, it can be said that the decision to record a conviction in this case was not reasonably open.The Magistrate’s Decision The magistrate recounted the factual circumstances to which I have already referred, and then said: The defendant here simply did not respond in time to the notice or the follow-up telephone call. This is a very strict regime obviously designed to ensure that tax returns are lodged in a timely fashion. True, it is found that the defendant enjoyed a credit of about $14000 for the relevant year, and I bear that in mind. But the essence of the offending is the failure to lodge the return in response to the notice. I do not believe that any of the considerations in s 19B(1)(b) apply here. The offence is not of a trivial nature. It is rather a typical example of its kind, as a perusal of the taxation lists in this court over many years will demonstrate. Nor was the offence committed under extenuating circumstances, being “circumstances which excuse (removes) to an appreciable degree, the commission of the offence charged”: O’Sullivan v Wilkinson (1952) SASR 213. True, the defendant is of good character with no prior convictions but then so are many others who commit such offences. Sitting in this Court over recent months I have noticed that a significant number of solicitors have been charged with this type of offending. The submissions on appeal emphasised the appellant’s good character, the absence of any criminal record, the absence of any likelihood of re-offending, the fact that the income tax return had been lodged prior to service of the complaint and summons, and the fact that the delay in lodging the return had not involved any avoidance of a taxation liability. It was submitted that it was those circumstances, together with the appellant’s explanation for the delay in lodging the return, in combination, which made this matter atypical and which constituted relevant circumstances for the purposes of s 19B(1). Each of these matters was put to the magistrate. With the exception of the explanation for the delay each was referred to by him in the sentencing remarks. It was submitted that the magistrate had failed to give sufficient weight to these matters.Consideration of Submissions I do not regard the fact that the appellant had lodged the taxation return before being served with the summons, or the fact that he had overpaid in advance his taxation liability, as being very significant. The offence was comprised of a failure to lodge the return by 15 May 2006. The fact that it was lodged nearly seven months later, on 6 December 2006, is not mitigatory of an offence constituted in that way.

Ratio Decidendi

Legal Principle Established

Established by: WHITE J

Each of these matters was put to the magistrate. With the exception of the explanation for the delay each was referred to by him in the sentencing remarks. It was submitted that the magistrate had failed to give sufficient weight to these matters.Consideration of Submissions I do not regard the fact that the appellant had lodged the taxation return before being served with the summons, or the fact that he had overpaid in advance his taxation liability, as being very significant. The offence was comprised of a failure to lodge the return by 15 May 2006. The fact that it was lodged nearly seven months later, on 6 December 2006, is not mitigatory of an offence constituted in that way. Prepayment of tax, pursuant to the PAYG regime, is a normal effect of the taxation system and not one which I would regard as making this case atypical. It was not suggested that any of the prepayment by the appellant in this case had been in addition to that required by the PAYG regime. The significance of a taxpayer’s entitlement to a refund, in circumstances such as the present, was discussed by Martin J in HPS Transport Pty Ltd v Australian Taxation Office,[2] in terms with which I agree. Martin J said: While the existence of the entitlement to a refund does not negate the essence of the offending under consideration which centres on the failure to file or provide the appropriate returns and the administrative difficulties that such failures occasion, the existence of the entitlement does demonstrate that this was not a case in which the appellant was seeking to evade the appellant’s liability. If the prosecution establishes, in a prosecution of this type, that an offender was seeking to evade liability, that fact would be a relevant circumstance of aggravation. Such a circumstance does not exist in the matter under consideration.[3][2] (Unreported, Supreme Court of South Australia, Martin J, 12 December 2003).[3] Ibid at 5. The remarks of Martin J were made in the context of a failure to lodge GST returns - as I understand it, business activity statements - but the observations apply, in my opinion, with as much force in the present circumstance as they did in that case. The magistrate was pressed with the decision of Bleby J in Parente v the Commonwealth.[4]The magistrate distinguished the circumstances considered in that case from the present and I did not understand the appellant to submit that the magistrate’s reasoning in that respect was in error. The factual circumstances of the present case are quite different from those considered by Bleby J in Parente to be of such an unusual kind as to warrant the invoking of s 19B.[4] [2002] SASC 212; (2002) 220 LSJS 126. It was submitted, in addition to the features which I have already mentioned, that the reason for the taxation return not being lodged in a timely way was relevant. It was submitted that the appellant’s taxation return had not been lodged until 6 December 2006 because of the inability of the appellant’s accountant to meet the deadlines imposed by the Australian Taxation Office. That is, the effect of the submission was that the delay in lodgement did not result from any act or omission of the appellant himself but, rather, from that of his tax agent.