IMO the estate of Henry Mischel

[2012] VSC 296

IN THE SUPREME COURT OF VICTORIA Not Restricted

AT MELBOURNE

COMMERCIAL AND EQUITY DIVISION

CORPORATIONS LIST

S CI 2011 6497

PAUL BURNESS AND MATTHEW JESS as joint trustees of the bankrupt estate of HENRY MISCHEL	Plaintiffs
v
BALLANTYNE CHAMBERS PTY LTD               (ACN 112 873 088)
Defendant

---

JUDGE:	EFTHIM AsJ
WHERE HELD:	Melbourne
LAST DATE OF SUBMISSIONS:	16 February 2012
DATE OF JUDGMENT:	13 June 2012
CASE MAY BE CITED AS:	IMO the estate of Henry Mischel
MEDIUM NEUTRAL CITATION:	[2012] VSC 296

---

PRACTICE AND PROCEDURE – Objection to a subpoena – Whether the Commissioner has power to release documents pursuant to the Taxation Administration Act 1997 (Vic) – Sections 91, 93, 94, 95 considered.

---

APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr A. Foster	Foster Nicholson Jones Lawyers
For the Defendant	Ms C.F. Gobbo	Piper Alderman Lawyers
Commissioner of State Revenue	Mr A.M. Dinelli	Mr R. Valher

HIS HONOUR:

1. On 2 February 2012, I made orders that Ballantyne Chambers Pty Ltd be wound up.  The plaintiff has issued a subpoena directed to the Commissioner of State Revenue for the production of documents, which the plaintiff asserts are relevant to the question of costs. 

1. The subpoena requires production of the following documents:

“Extracts from the records of the State Revenue Office recording the execution date of:

(a)       the document stamped by the State Revenue Office on 19 June 2007 under ‘Doc ID 2216046, 19 Jun 2007 SRO Victoria Duty, JRMO’;  and

(b)       the document stamped by the State Revenue Office on 19 June 2007 under ‘Doc ID 2216047, 19 Jun 2007 SRO Victoria Duty, JRMO’;

but redacted to the extent necessary so as not to identify any particular taxpayer.

1. Pursuant to rule 42.04(1) of the Supreme Court (General Civil Procedure) Rules 2005, the Commissioner applies to have the subpoena set aside. The Commissioner submits that the secrecy provisions in Division 3 of Part IV of the Taxation Administration Act 1997 (Vic) apply and therefore the subpoena should be set aside.

1. The relevant sections of this Act provide:

91  Prohibition on certain disclosures of information by tax officers

(1)  A person who is or was a tax officer must not disclose any information obtained under or in relation to the administration or execution of a taxation law, except as permitted by this Part.

Penalty:  100 penalty units.

(2)  For the purposes of the Freedom of Information Act 1982, information referred to in subsection (1) is information of a kind to which section 38 of that Act applies.

. . .

93  Permitted disclosures of a general nature

The Commissioner may disclose information obtained under or in relation to the administration of a taxation law unless that information will or is likely to identify a particular taxpayer.

94  Prohibition on secondary disclosures of information

(1)  A person must not disclose any information obtained from a tax officer in accordance with section 92 unless ―

(a)       the disclosure is made to enable the person to exercise a function conferred on the person by law for the purpose of the enforcement of a law or protecting the public revenue;  and

(b)       the Commissioner consents to the disclosure.

Penalty:          500 penalty units in the case of a body corporate;

100 penalty units in any other case.

(2)  For the purposes of the Freedom of Information Act 1982, information referred to in subsection (1) is information of a kind to which section 38 of that Act applies.

95  Further restrictions on disclosure

A person who is or was a tax officer is not required to disclose or produce in any court any information obtained under or in relation to the administration or execution of a taxation law except ―

(a)  if it is necessary to do so for the purposes of the administration or execution of a taxation law;  or

(b)  if the requirement is made for the purposes of enabling a person who is specified for the time being to be an authorised recipient to exercise a function conferred or imposed on the person by law.”

1. The Commissioner submits that it is clear from the description of the documents sought that the Commissioner is required to produce “information obtained under or in relation to the administration or execution of taxation law”.  It is therefore contended that s. 95 is determinative of this application because:

-it cannot be said that disclosure is necessary for the purposes of the administration or execution of a taxation law, as the dispute between the parties is unrelated to such execution or administration;  and

-the Court is not a person who is specified, for the time being, to be an authorised recipient to exercise a function conferred or imposed on the person by law.

1. The Commissioner relies on AA Tremayne (Kirribilli) Private Hotel Pty Ltd v North Sydney Council[1] in support of the submissions.  Talbot J had an objection before him relating to the Taxation Administration Act 1996 (NSW), which has equivalent provisions to the Victorian Act. His Honour upheld an objection by the Chief Commissioner of State Revenue, New South Wales, to a subpoena for the production of documents. His Honour said:

   [1][2007] NSWLEC 279 (22 May 2007) (‘AA Tremayne’).

“21 Section 81 of the TAA sets the policy of non-disclosure except as expressly permitted otherwise in Part 9, Division 3.

22       Section 85 in terms expressly refers to production in any Court where the information has been obtained under or in relation to the administration of a taxation law.  Although Ms Irish sought to persuade me that there could be documents provided to the Commissioner by the taxpayer on a voluntary basis in order to investigate or seek a ruling on whether the applicant was entitled to an exception under s 10Q, there is no evidence that is the case.  Moreover, I am unable to comprehend how any such information would not be ‘information obtained under or in relation to the administration of a taxation law’.  Prima facie, that is, the very purpose for which the information would be provided.

23       Section 82 is to be construed in the context of providing information for particular purposes or to nominated persons or authorities although the information can be otherwise disclosed with the consent of the person referred to in s 82(a).  There is no consent.  I regard s 82 it (sic) as a separate provision to s 85 providing no assistance for present purposes.

24 Section 85 imposes a specific prohibition on disclosure in any Court except within the narrow confines of the two exceptions in 1(a) and (b). The only relationship between s 85 and s 82 is by way of reference for the purpose of identifying the persons who may require production of the documents in a Court, as the definition at the end of s 85 shows. Not only does s 85(1)(b) limit the class of persons to which it applies, its operation is also confined to circumstances where the requirement to disclose or produce the information is for the purpose of enabling the specified person to exercise a function conferred or imposed on the person by law. Those requirements are not satisfied. Notwithstanding the effects of the Land and Environment Court Act 1979 (LEC Act), and the powers, which the Court has to compel production of documents s 85 operates to overcome the force of those provisions.”

1. The Commissioner submits that AA Tremayne is rightly decided and is indistinguishable to the present circumstances

1. The plaintiffs submit that the State Revenue Office did not bring to the attention of the Court s. 83, (equivalent to s. 93 of the Taxation Administration Act 1997 (Vic)). They state that the subpoena in AA Tremayne was widely drawn.  The plaintiffs agreed that the information sought under that subpoena would identify the personal affairs of the taxpayer and could not fall within s. 83, whereas the subpoena in this proceeding requires the Commissioner to produce documents in a redacted fashion.  The plaintiffs submit that this information, if disclosed by the Commissioner, could not and is not likely to identify a particular taxpayer.

1. The plaintiffs submit that s. 93 is unambiguously clear and cannot be deprived by operation of s. 95. In ss. 93 and 94 of Part 9 of the Act, the Commissioner is identified separately from other tax officers, indicating that he has roles and responsibilities relating to the secrecy provisions over and above those persons who are mere tax officers.

1. The plaintiffs submit that there are three key distinct definitions in relation to persons involved in administration or execution of a taxation law.  That is, the Commissioner, an authorised officer and a tax officer.  Therefore, it is inappropriate to read the term “tax officer” to include the Commissioner in s 95 because in the two preceding sections (ss 93 and 94) the Commissioner is distinguished from a mere “tax officer”, having entitlements and responsibilities above those of tax officers.

1. In s. 3 of the Act, a tax officer means an authorised officer and any other person engaged (whether as an officer, employee or otherwise) in the administration or execution of a taxation law.

1. An authorised officer is defined in s. 3 of the Act as the Commissioner or a person appointed as an authorised officer under s. 70(2).

1. Section 95 of the Act should not be read, as the plaintiffs submit, to exclude the Commissioner.  The words of the Act are clear.  A “tax officer” includes an authorised officer and also the Commissioner. 

1. However, the plaintiffs submit that ss. 93 and 94 cannot make sense if a tax officer in those sections is taken to include the Commissioner. It is said that s. 94 would be nonsensical because the definition of a “tax officer” in s. 94(1) would be that a person must not disclose any information obtained from a “tax officer” (including the Commissioner) unless the Commissioner consents to the disclosure.

1. I do not agree with that submission. There are sound policy reasons why the Parliament may wish to confer certain discretionary powers on the Commissioner himself, under ss. 93 and 94. Parliament has recognised that certain discretionary functions under Div 3 of Pt 9 of the Act are most appropriately reposed with the Commissioner alone. These functions enable the Commissioner to ensure efficient and effective administration of taxation laws, including permitting disclosures of a general nature (s. 93) and permitting the Commissioner to consider what otherwise would be a prohibited secondary disclosure of information (s. 94(1)(b)).

1. The plaintiffs submit that in order to read s. 95 in the manner in which it has been submitted by the Commissioner, would require ignoring the first nine words that appear in s. 95. That is, “A person who is or was a tax officer” would be substituted with “Neither the Commissioner nor any tax officer is required”.

1. Again, I do not accept this submission. I agree with the Commissioner that the plain meaning of those words is unambiguous. All that the section does is relieve the present and former tax officers of an obligation to produce or disclose in any court any information obtained under or in relation to the administration or execution of a taxation law, except in two circumstances. In my view, s. 93 does not derogate from the clear parliamentary intent expressed in the terms of s. 95. The plain words of s. 95 should be given effect and the subpoena should be set aside.

1. The plaintiffs submit that s. 93 is clear and unambiguous and the Commissioner may disclose information obtained in the course of administering taxation laws, unless that information “will or is likely to identify a particular taxpayer.” The information sought by the plaintiffs will not and is not likely to identify any taxpayer according to the plaintiff. It consists of a document with an ID number, a date and the recorded execution. By itself, this information is said not to identify any person nor is it likely to do so.

1. Even if s.93 operated as an exception to s. 95 (which it does not), it is clear that the Commissioner has a discretion under s. 93. In my view, that provision is directed to the release only of general information and not to redacted information relating to a particular taxpayer. In the second-reading speech, the Honourable Alan Stockdale (Treasurer as he then was) stated:

“The Commissioner may disclose general information provided it would not identify a taxpayer.”

1. I also accept, as was submitted by the Commissioner, that the exception in s. 93 provides that information may be disclosed unless it “will or is likely to identify a particular taxpayer.” The use of redaction may not be appropriate to particular information in relation to a taxpayer because the plaintiffs might be in possession of other information, which may be “likely to identify a particular taxpayer”. Given the penal consequences which may follow if such information is disclosed, I agree that s. 93 should not be interpreted to require the Commissioner to make fine judgments regarding whether the information will or is likely to identify a particular taxpayer.

1. The subpoena will be set aside.

---