Hill, G.G. v Deputy Commissioner of Taxation

[1990] FCA 197

JUDGMENT No ..... 1.7.1 .../...?.Q-

IN THE FEDERAL COURT OF AUSTRALIA	)
1
NEW SOUTH WALES DISTRICT REGISTRY	) NO. ~ 2 6 9 of 1990
)
GENERAL DIVISION	)

BETWEEN:  GEOFFREY GUILD HILL

Applicant

AND :  DEPUTY COMMISSIONER OF
TAXATION

First Respondent

ANDREW CLAYTON MORROW

Second Respondent

VICKI LEE FLYGHT

Third Respondent

BERNARD MARKS

Fourth Respondent

STEPHEN CATT

Fifth Respondent

which notice was given under s.264 of the Income Tax

Davies J.
22 May 1990

Sydney

REASONS FOR JUDGMENT

EX TEMPORE

This is an application for an inter1

injunction to restrain the holding of an investigation of

Assessment Act 1936 (Cth)("the Act"). The matter has followed on a similar application made in relation to a Mr Elliott. The notice that was given to Mr Elliott under s.264 was followed by a letter which indicated that the examination would be conducted by two named officers, and that Professor Bernard Marks would and officers of the Australian Government Solicitor's office may be present at the examination to assist the two officers. That notice was challenged on a number of grounds.

It was also sought to restrain the holding of the

inquiry until the Court had ruled upon the question as to

whether Mr Elliott was obliged to answer questions that he

considered might tend to incriminate him. I refused relief

on that latter ground as it seemed to me that there was no
particular issue brought before the Court with respect to
it, and that it was untenable to argue that an examination
could not in general ask questions which might have the
tendency to incriminate. I put to Mr Edmonds of counsel the

point that the tax was levied on criminal activities as well

as on legal activities and it seemed to me that s.264 was

applicable to such activities as well as to legal activities

so I 'rejected that ground.

However, it was arguable that the inquiry was

intended to be a private inquiry and that the attendance of
a person such as Professor Marks could be improper unless
the attendance of Professor Marks was shown to be necessary
or desirable for the purposes of the inquiry. That was the
substance of the point I had in mind.

I have since had the opportunity to consider the

decision of Crossman J. in Re Beaumont British Picture
Corporation Limited [l9401 2 Ch. 506. His Lordship was
there dealing with the position of an inspector appointed by

the Board of Trade to make investigations. There had been

an objection to the investigation on two grounds: first,

that shorthand writers were to be present, and secondly,
that some person described by the inspector as "my

representative in charge of the investigation" was to be

present. The inspector did not insist upon the attendance

of the representative in charge of the investigation but did
insist on the attendance of the shorthand writer. That
issue went before Crossman J. and his Lordship held that the
issue that he had to consider was whether the presence of
the shorthand writer was reasonably necessary for the
purpose of the investigation. His Lordship held that it

was. Perhaps it is a good thing that Mr Edmonds did not

contend that the taking of notes by the Commonwealth

Reporting Service was improper.

Nevertheless, it seemed there would be an issue as

to whether Professor Marks1 attendance was reasonably
necessary for the purpose of the tax investigation. The
onus was on the respondents to at least put forward material
to say why his presence was necessary and that material was
not before me. Therefore, I was prepared to grant an
injunction restraining the holding of the inquiry in the

presence of Professor Marks. I did so until the matter

could be fully debated at a later date.

The present proceedings are an associated matter.

Mr Hill was subject to a similar notice and that notice was returnable at 10.00 am tomorrow. A further additional notice was given to Mr Hill requiring him to attend before all or any of four officers. The first two officers mentioned were those named in the first notice, that is to say, Andrew Clayton Morrow and Vicki Lee Flyght; the others were Bernard Marks and Stephen Catt.

The first notice is challenged on the grounds
raised in the matter of Elliott. The second notice is
challenged on like grounds to the first notice. However,
there are at least two further matters which are now raised
which are proper for the consideration of a judge of this

Court.

The first is whether, having regard to the second

notice and the fact that it is returned at the same time as

the first notice, and the fact that it specifies four people
and that the inquiry is to be before "any or all" of them,
the existence of the two notices and the reference to the
any or all is such as to make the notice invalid as not
specifying the officer before whom the inquiry is to
proceed. This is an arguable point which should be put to a

judge of the Court.

It is also arguable as to whether or not Professor

Marks and Mr Stephen Catt are "officers" for the purposes of

s.264. The term "officer" is not defined in that section

and there is at least an argument as to whether the word
"officer" refers to an officer of the Australian Taxation
Office, an officer of the Australian Public Service or some
wider concept of "officer" such as one finds in cases
involving constitutional law. That is an issue which should

be considered by a judge.

So far as Professor Marks is concerned, it appears

that he has been appointed a temporary officer in the Australian Taxation Office simply to overcome this problem. Assuming Professor Marks was not presumably an officer for the purposes of s.264, it is arguable that the Commissioner was not entitled to appoint a person who was not an officer to be an officer solely for the purpose of overcoming the problem that he was not an officer. It is arguable that the Commissioner's right under s.264 is simply to authorise a person who is an officer for the purposes of that section,	and that the Commissioner cannot get around s.264 and widen	the ambit of the persons who can be appointed by appointing
someone as a temporary employee of the Australian Public Service just for that purpose.

These are matters which are simply arguable. I

express no view about them. If it turns out that affidavits
show that the attendance of Professor Marks and of Mr Catt
is reasonably necessary for the purpose of the inquiry by Mr
morrow and Hrs Flyght, it may be that all the problems will
be overcome and that no other issues will need to be
debated.

Upon the usual undertakings as to damages, the

proper course is to order that the inquiries under the two

notices directed to Mr Hill not proceed before 5.00 pm on

Friday next. I shall direct the Deputy Commissioner to

extend the time for attendance accordingly.

I certify that this and the 5

preceding pages are a true copy of the Reasons for Judgment herein of the Honourable Mr Justice Davies.

Associate: @?.h---

Date:  22 may 1990