Kiff v Deputy Commissioner of Taxation
[2005] QDC 456
•9 December 2005
DISTRICT COURT OF QUEENSLAND
CITATION: | Kiff - v – Deputy Commissioner of Taxation [2005] QDC 456 |
PARTIES: | KIFF, Peter Charles Appellants Against DEPUTY COMMISSIONER OF TAXATION Respondent |
FILE NO: | 296/05 |
PROCEEDINGS: | Appeal from Magistrates court. |
DELIVERED ON: | 9 December 2005 |
DELIVERED AT: | Townsville |
HEARING DATE: | 1 December 2005 |
JUDGE: | C.F Wall Q.C |
ORDERS: | Appeal dismissed with costs. |
CATCHWORDS: | APPEAL - INCOME TAX - wh valid notice under s222AOE Income Tax Assessment Act -wh s222AOF Income Tax Assessment Act is a code for serving notice under s222AOE – wh service pursuant to s28A Acts Interpretation Act 1901 is valid service. Legislation referred to: Cases referred to: |
| COUNSEL: | Mr G. Humphries (solicitor) for the Appellant |
SOLICITORS: | Connolly Suthers for the Appellant |
HIS HONOUR: This is an appeal by the defendant (the appellant) against a decision of the Magistrates Court at Townsville on the 24th of August 2005 dismissing the defendant's application for summary judgment. I shall refer to the appellant as the defendant.
The issue before the Magistrate and on appeal relates to the means by which the Deputy Commissioner of Taxation ascertained the address of the defendant for the purpose of serving on him notices under section 222AOE of the Income Tax Assessment Act.
The defendant concedes that the notices were sent by pre-paid post to 75 Beatty Avenue, Glenroy, Victoria, the address where he resided.
The defendant's argument is that section 222AOF is a code for the purpose of serving such notices and that unless the Deputy Commissioner of Taxation ascertained his address by the means stated in that section and only by those means, then service is ineffectual, has not occurred according to law and the respondent's claim, which is dependent upon proper service of the notices, must fail. Mr Humphries, who appeared for the defendant, submitted that this was because of the serious financial consequences for a director which are likely to flow from service upon him/her of such notices.
In the present case the Magistrate concluded, correctly in my view, that section 222AOF was "not a code covering the field providing the only method by which service of notices under section 222AOE is to be effected."
In my view there is an air of artificiality about the defendant's argument, notwithstanding the support Mr Humphries submitted was provided by decisions of other Courts. Mr Humphries was not, for example, uncomfortable with the fact that, on his argument, even if an officer of the respondent had personal knowledge of the appellant's address, service of a section 222AOE notice at that address, either personal or by pre-paid post, would be ineffectual.
The respondent ascertained that the defendant was a director of Millers on the Beach Proprietary Limited (the relevant company) and his address from a search of the MASCOT database of the Australian Securities and Investments Commission (ASIC) (the company search) and not from the source document being the "return" or "notice" filed by the company with ASIC. Mr Humphries submits that this is fatal to the respondent's claim conceding though that the position would be otherwise if the defendant's details had been ascertained from the source document.
Section 222AOF provides as follows:
How notice may be given
222AOF (1) [Service at place of residence or business] If it appears from ASIC documents that a person is, or has been within the last 7 days, a director of the company, the Commissioner may give the person a notice under section 222AOE by leaving it at, or sending it by post to, an address that appears from such documents to be, or to have been within the last 7 days, the person's place of residence or business.
Note: Sections 28A and 29 of the Acts Interpretation Act 1901 are also relevant to giving notice under section 222AOE.
222AOF (2) ["ASIC document"] In this section:
"ASIC document" means a return:
(a)lodged with the Australian Securities and Investments Commission under section 205B or 345 of the Corporations Act 2001; or
(b)lodged with a person under a law that, for the purposes of the Corporations Act 2001, is a previous law corresponding to section 205B or 345 of that Act.
The footnote to subsection (1) is not part of the Act, see section 13(3) of the Acts Interpretation Act.
Two matters about section 222AOF should be mentioned at the outset. Section 205B of the Corporations Act refers to "a notice" not "a return" and section 345 of that Act has been repealed. The notice which a company must lodge with ASIC is to contain (inter alia) the names and addresses of directors of the company.
The first case relied upon by Mr Humphries, Deputy Commissioner of Taxation v. Gruber, unreported, Supreme Court of New South Wales, No. 13774/95, 17 October 1997, does not in fact, in my view, support his argument. On the contrary it supports the position advanced by the respondent. In that case the defendant's position as a director and his address were ascertained by the plaintiff from ASCOT searches (the predecessor of MASCOT) and as a result "these searches did not allow the plaintiff to claim the benefit of section 222AOF(1) of the Act."
The Judge said:
"In this case section 222AOF(1) of the Act was not invoked."
A reading of the judgment indicates that the issue about service of the notices revolved around whether the provisions of section 28A of the Acts Interpretation Act had been complied with. The Judge held that it hadn't remarking though that:
"The giving of a section 222AOE notice has considerable significance in terms of its timing and effect and I do not consider the informal receipt of a copy to be capable of having such effect"
That statement supports the need for proper service of such notices. Other than that, the decision does not suggest that only service in accordance with section 222AOF is allowed. There were also other grounds referred to by the Judge in that case which invalidated the notices.
An appeal to the Court of Appeal by the Deputy Commissioner of Taxation in that case failed but the Deputy Commissioner of Taxation did succeed on its argument that the trial Judge was wrong in the conclusion he reached as to service and section 222AOF, the Court of Appeal holding that "the notices were effectively served." See Deputy Commissioner of Taxation v. Gruber (1998) 43 NSWLR 271.
In the Court of Appeal Stein JA (Powell JA and Sheppard AJA agreeing) said at page 277:
"It seems to me that it did "appear" from the documents lodged with the Australian Securities Commission that the respondent was a director of the company and that 157 Fullers Road was his place of residence as at the date of each notice. I do not see why the on-line search (ASCOT) of the Australian Securities Commission documents, which are company extracts from the Australian Securities Commission database, is not sufficient.
Should it be necessary to refer to or rely upon s 28A and s 29 of the Acts Interpretation Act 1901 (Cth) (see the "Note" specifically included within s 222AOF) then the presumptions inherent in the sections apply and are not displaced by the respondent's evidence of non-receipt. Proof of non-receipt is not proof of non-delivery: Fancourt v Mercantile Credits ltd (1983) 154 CLR 87 at 96-97)."
It clearly follows from these passages that service of a section 222AOE notice can be effected relying on section 222AOF (and using a MASCOT search) or any other relevant statutory service provisions.
The final decision relied upon by Mr Humphries is Deputy Commissioner of Taxation v. Nercessian, an unreported decision of Judge Goldring in the New South Wales District Court, No. 250/04, 15 September 2005. One of the issues in that case related to service on the defendant of section 222AOE notices. The defendant's address had been obtained by the plaintiff (like the present case) from the MASCOT database. The Judge was referred to the Court of Appeal's decision in Gruber and said:
"It does seem implicit from what Stein JA did that the procedure followed by the officers there was that they looked at a database and obtained an address from it. However, this is a taxation statute and traditionally taxation statutes have been construed with the utmost strictness in favour of the taxpayer. I believe that because of the omission to state fully the actual procedures followed in Gruber's case, I should confine this case to its facts, and it seems to me that what section 222AOF(2) requires is that the officer actually search in the registry of the Australian Securities and Investments Commission and look at the actual return lodged by the taxpayer. I agree with Stein JA that this flies in the face of logic and the intention of the company's register, but nevertheless it is stated in the Act, an Act that gives many advantages to the Commissioner and it is a provision, which in my view requires strict compliance.
I therefore find that the address was not obtained in accordance with the Act and the notices were not properly served."
His Honour gave judgment for the defendant.
The "actual procedures followed in Gruber's case" are set out in the judgment at first instance and having considered those, I am unable, with respect to Judge Goldring, to see that there is any basis for distinguishing the remarks of Stein JA. In my view those remarks do have application to the present case and I think Judge Goldring's judgment should, with respect, be regarded as per incuriam. Judge Goldring also did not consider whether service in accordance with section 28A of the Acts Interpretation Act would, in any event, have been sufficient. I am told that the Deputy Commissioner of Taxation has appealed against the decision of Judge Goldring.
Sections 28A and 29 of the Acts Interpretation Act provide, so far as is relevant, as follows:
28A Service of documents
(1)For the purposes of any Act that requires or permits a document to be served on a person, whether the expression "serve", "give" or "send" or any other expression is used, then, unless the contrary intention appears, the document may be served:
(a) on a natural person:
(i)by delivering it to the person personally; or
(ii)by leaving it at, or by sending it by pre-paid post to, the address of the place of residence or business of the person last known to the person serving the document; or
(b)on a body corporate-by leaving it at, or sending it by pre-paid post to, the head office, a registered office or a principal office of the body corporate.
(2) Nothing in subsection (1):
(a)affects the operation of any other law of the Commonwealth, or any law of a State or Territory, that authorizes the service of a document otherwise than as provided in that subsection; or
(b)affects the power of a court to authorize service of a document otherwise than as provided in that subsection.
29 Meaning of service by post
(1)Where an Act authorizes or requires any document to be served by post, whether the expression "serve" or the expression "give" or "send" or any other expression is used, then unless the contrary intention appears the service shall be deemed to be effected by properly addressing prepaying and posting the document as a letter, and unless the contrary is proved to have been effected at the time at which the letter would be delivered in the ordinary course of the post.
(2)This section does not affect the operation of section 160 of the Evidence Act 1995.
Mr Humphries concedes that these provisions can apply but only if the defendant's address has first been ascertained in accordance with the provisions of section 222AOE.
Section 28A is not concerned with how the address for service is ascertained.
Section 222AOE requires that the Commissioner "gives" to the person a notice in the terms set out in the section. For the purposes of section 28A this means "serves" and, by that provision, the notice may be given by sending it by pre-paid post to the address of the place of residence of the defendant last known to the respondent. (See also section 29). This was done here, it being conceded by Mr Humphries that the address to which the notices were sent was the defendant's address.
In my view section 222AOF is not the only way in which a section 222AOE notice may be given or served. The section is not expressed in mandatory terms, on the contrary it provides that "the Commissioner may give" a section 222AOE notice in the way referred to in the section. The Commissioner may also give the notice in accordance with section 28A and, if there is a "preferred address for service" of the defendant given to the Commissioner under part 4A of the Income Tax Regulations or part 2A of the Taxation Administration Regulations in accordance with those provisions.
I should also mention that if section 222AOF(2) now has no sensible meaning because section 205B of the Corporations Act does not speak of "a return" but "a notice" (assuming they are not interpreted as meaning the same thing) then "ASIC documents" in subsection (1) would, in my view, on a normal reading of those words be capable of including the MASCOT database documents.
It follows then that the section 222AOE notices were validly given to the defendant either under section 222AOF (notwithstanding the use of the MASCOT database) or under section 28A and that the Magistrate was correct in the decision he reached. The Magistrate, at page 3 of his decision, refers to an apparent concession by the defendant that service of "such notices could be effected by personal service, a method not provided for in section 222AOF." Presumably that concession was dependent on the address being ascertained in accordance with section 222AOF but it does further highlight the artificiality of the defendant's argument.
For these reasons the appeal will be dismissed and the appellant is ordered to pay the respondent's costs of and incidental to the appeal fixed at $2,100.
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