Schokker & Anor v Federal Commissioner of Taxation

[1996] FCA 769

CATCHWORDS

JUDICIAL REVIEW - jurisdiction - whether reviewable decision under an enactment - decision by respondent not to refer matter for prosecution - whether reviewable decision

Administrative Decisions (Judicial Review) Act 1977 (Cth), s3(1),
Crimes Act 1914 (Cth), s29P
Crimes (Taxation Offences) Act 1980, s2(1)
Income Tax Assessment Act 1936 (Cth), s8XB, s16, s16(2), s16(4), s16(4)(a), s30, s70, s263, s264
Public Service Act 1922 (Cth),
Public Service Regulations, reg35
Taxation Administration Act 1953, s3C(2), s8ZA, s15(1),

Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321
Edelsten v Health Insurance Commission (1990) 96 ALR 673
Gillis v Commonwealth DPP (1993) 42 FCR 181
Hells Angels Ltd v DCT (1984) 6 ALD 420
Little River Goldfields NL v Moulds (1991) 32 FCR 456
Ricegrowers Cooperative Mills Ltd v Bannerman and Trade Practices Commission (1981) 38 ALR 535
Tooheys Ltd v Minister for Business and Consumer Affairs (1981) 36 ALR 64

HANK BERNARD SCHOKKER AND JACQUELINE M SCHOKKER v THE COMMISSIONER OF TAXATION OF THE COMMONWEALTH OF AUSTRALIA
NO WAG46 OF 1996

R D NICHOLSON J
PERTH
30 AUGUST 1996

IN THE FEDERAL COURT OF AUSTRALIA   )

WESTERN AUSTRALIA DISTRICT REGISTRY )

GENERAL DIVISION                   )     NO. WAG 46 OF 1996

B E T W E E N:              HANK BERNARD SCHOKKER AND JACQUELINE M SCHOKKER

Applicants

and

THE COMMISSIONER OF TAXATION OF THE COMMONWEALTH OF AUSTRALIA

Respondent

MINUTE OF ORDER

JUDGE MAKING ORDER:     R D NICHOLSON J

DATE OF ORDER:         30 AUGUST 1996

WHERE MADE:            PERTH

THE COURT ORDERS THAT:

1. The respondent's motion dated 5 July 1996 be refused.

1. There be no order as to costs.

Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA   )

WESTERN AUSTRALIA DISTRICT REGISTRY )

GENERAL DIVISION                   )     NO. WAG 46 OF 1996

B E T W E E N               HANK BERNARD SCHOKKER AND JACQUELINE M SCHOKKER

Applicants

and

THE COMMISSIONER OF TAXATION OF THE COMMONWEALTH OF AUSTRALIA

Respondent

CORAM:R D NICHOLSON J

DATE:30 AUGUST 1996

PLACE:PERTH

REASONS FOR JUDGMENT

The applicants seek an order of review pursuant to the Administrative Decisions (Judicial Review) Act 1977 (Cth) (the "ADJR Act"). The respondents have brought a motion seeking to have that application dismissed or set aside on the ground there is no "reviewable decision" identified in the application which qualifies pursuant to s3(1) of the ADJR Act so this Court lacks jurisdiction to hear and determine the application for review. 

The decision identified in the motion and the application is one said to have been made by the Director, Fraud Prevention and Control, Internal Assurance Branch, of the Australian Taxation Office and set out in a letter from him to the first applicant dated 10 April 1996.  The letter reads:-

"In reference your correspondence alleging breaches of the secrecy provisions on part of audit staff at the Cannington Branch of the Tax Office.  Investigations were conducted by Fraud Prevention and Control staff into these allegations.  Material was subsequently forwarded to the Director of Public Prosecutions in Perth for his consideration and adjudication."

We have received advice from the [Deputy] Director, Mr I Bermingham, in which he states inter alia, "The Deputy Commissioner is entitled to refer information "relating to the possible commission of an offence by  the employee to the
police for investigation." and "I can see nothing wrong whatsoever with the Deputy Commissioner having done so or with the referral of the matter to the Western Australian police (with advice to the AFP or the fact)"

In light of this advising, no prosecution action against audit staff for these alleged breaches will be instituted."

It is the final paragraph of that letter which is identified as the relevant decision.

Circumstances surrounding decision

The correspondence referred to in the Director's letter was a letter signed by each of the applicants (although written in the singular person) to the respondent dated 2 January 1996.  The letter commences:

"I am being persecuted by the illegal activities of the senior members of the ATO in Cannington.  There are at least 5 senior officers at the Cannington ATO who have committed several separate breeches (sic) of secrecy provisions in relation to my, my wife's and my daughter's income tax affairs, and used this information and the misuse of the ITAA access provisions to conduct an enquiry into my personnel file."

In the letter two principal categories of breach of secrecy were alleged. The first was the use by the Special Audit Manager in a personnel inquiry of information concerning possession by the first applicant of blank medical certificates when the information was said to come into his possession from a notice served pursuant to s264 of the Income Tax Assessment Act 1936 (Cth) ("the ITA") on the Western Australia Police.  Secondly, it was alleged the Auditor also made extensive use of confidential and personal information concerning the applicants and their daughter's income tax audits to conduct a personnel evaluation of the leave entitlements of the first applicant under the Public Service Regulations.

By their letter the applicants made two requests.  The first was the withdrawal of a complaint made by the Commissioner of Taxation to the Western Australia Police which had resulted in charge of imposition made against the first applicant.  The second was that action be taken against the officers who had allegedly abused the secrecy provisions of the ITA.  The applicants recommended criminal proceedings against one officer in particular.

The complaint to the Western Australian Police arose from a letter written by a Deputy Commissioner of Taxation on 8 June 1995 to the Criminal Investigation Branch advising information received by the Australian Taxation Office indicated the first applicant was in possession of blank medical certificates. Further enquiries were requested. Investigations followed and the first applicant was subsequently charged with one count of imposition pursuant to s29P of the Crimes Act 1914 (Cth).

When the applicants' letter was received by the respondent it was interpreted as involving, at least in part, the question whether the matter should have been referred to the Police.  The Principal Investigator of the Fraud Prevention and Control Section of the respondent's office therefore wrote to the Commonwealth Director of Public Prosecutions ("DPP") seeking advice concerning the legal aspects of the inquiry and referral.  In response the DPP advised on 26 February 1996 in terms of the statements quoted in the letter to the applicants of 10 April 1996.

In affidavit evidence for the respondent it is accepted the wording of the letter of 10 April 1996 may have caused the applicants confusion and that the letter dealt only with the first allegation of breach of secrecy, namely, the use of information concerning the blank medical certificates.  In short, the letter of 10 April 1996 is conceded as not having answered the second aspect of the applicants' complaint that officers had made use of information concerning their tax position in relation to personnel assessment of the applicant.

As a consequence of further correspondence from the applicants the Director wrote to the first applicant on behalf of the applicants on 8 May 1996 stating that enquiries conducted by his section had established the allegations of breaches of s16 of the ITA were unsubstantiated.  He then dealt in detail with the alleged breaches and set out the results of investigation of them. 

He also stated inquiries had indicated the applicants had referred the matters to the Australian Federal Police which, on the basis of legal advice provided by the DPP, had declined to investigate the allegations. The view taken by the DPP was that s16(4)(a) of the ITA provided a complete defence to the allegations that officers had illegally divulged information.  The Director stated he was aware the Commonwealth Ombudsman held a contrary view to the DPP on this issue of legal interpretation.  Nevertheless the Director considered the DPP was the determinative authority on whether a prosecution was to be commenced.  In his view there was therefore no point in presenting a case to the DPP for consideration of prosecution.

In argument on the respondent's motion it was accepted this further letter of 8 May 1996 answered the second and major aspect of the applicants complaint concerning breaches of secrecy.  It was accepted for the respondent that although that letter was not presently identified in the application seeking an order of review it should be dealt with by the Court on the hearing of the motion on the jurisdictional point on the same basis as the letter of 10 April 1996 and as if it were referred to in the application and motion.

Relevant statutory regime

The prohibition against divulging information is contained in
s16(2) of the ITA which provides:

"16(2) subject to this section, an officer shall not either directly or indirectly, except in the performance of any duty as an officer, and either while he is, or after he ceases to be an officer, make a record of, or divulge or communicate to any person any information respecting the affairs of another person acquired by the officer as mentioned in the definition of "officer" in subsection (1)"

That definition provides:

"16(1) an "officer" means a person who is or has been appointed or employed by the Commonwealth or by a State, and who by reason of that appointment or employment, or in the course of that employment, may acquire or has acquired information respecting the affairs of any other person, disclosed or obtained under the provisions of this Act or of any previous law of Commonwealth relating to income tax."  

Section 16(4) provides:

"nothing in this section should be deemed to prohibit the Commissioner, a Second Commissioner, or a Deputy Commissioner, or any person authorised by him, from communicating any information to:

(a) any person performing, in pursuance of any appointment or employment by the Commonwealth, any duty arising under any Act administered by the Commissioner of Taxation for the purpose of enabling that person to carry out any such duty."

A penalty of $10,000.00 or imprisonment for two years or both is provided by s16 for breach of that section.

On the evidence before the Court the DPP formed the view this section provided a complete defence to the applicants complaint because the words "administered by" in s16(4) were perceived as applying generally and not being referable to whether the Commissioner of Taxation administered the act under which the officers were acting in making a personnel assessment of the first applicant, namely the Public Service Act 1922 (Cth) ("PSA").  As a consequence of Administrative Arrangements Orders, the PSA is administered by the Prime Minister through the Department of Prime Minister and Cabinet.  The Commonwealth Ombudsman's officer considered the view that the relevant Act was the PSA accorded more closely with the purpose and intent of the ITA in s16(4). 

Prosecution of taxation offences is provided for in the Taxation Administration Act 1953 (the "TAA"). Part iii deals with "Prosecutions and Offences". Because the penalty for breach of s16 of the ITA involves imprisonment, it is not an offence which comes within the definition of "Prescribed Taxation Offence" in that part. Similarly it is not a "Prescribed Offence" because it is not an offence under the sections to which that definition applies. It is therefore a "Taxation Offence" against a taxation law for the purposes of that part. Being a taxation offence punishable by imprisonment for a period exceeding twelve months and being allegedly committed by a actual person or persons, would involve an indictable offence: s8ZA. Section 15(1) envisages that in a prosecution arising under or out of a taxation law that the prosecution maybe "instituted by or on behalf of the Commissioner".

Section 3C(2) in Pt1A of the same Act also creates a prohibition against disclosure of information providing a penalty in the same terms as ITA s16(2). A further offence with the same penalty is created by s8XB of the ITA.

It is also provided in the Crimes (Taxation Offences) Act 1980 ("Taxation Offences Act"), s2(1) that s16 of the ITA has effect as if the Taxation Offences Act were part of the ITA Act.

There are other provisions and statutes which the applicants maintain are relevant to their case.  They refer to ITA s263 which provides entitlement of an officer to certain records; s30 (Seizing Goods and Commonwealth Custody) and s70 (Disclosure of Information by Commonwealth Officers) of the Crimes Act 1914 (Cth); and reg35 of the Public Service Regulations  providing restrictions on divulging of information.

In my opinion it is not necessary to give consideration to these additional statutory references because it follows from the consideration of the provisions of the ITA and the TAA that prosecutions for a taxation offence are either instituted by or on behalf of the Commissioner of Taxation.  Consequently it follows the Commissioner must make a decision under those provisions whether or not to occasion a prosecution to be brought.

The letters of 10 April 1996 and 8 May 1996 therefore fall for consideration in that context and in relation to the requirements at law for a decision to be reviewable.

Before turning to that final aspect, it is the applicants' case that the decision which they allege the Commissioner made should be reviewed because it is important, if a prosecution is to follow, that the Commissioner be an instigator of the prosecution. Furthermore they contend that the view which the DPP previously held on the effective s16(4) of the ITA should not be seen as a barrier to the prosecution proceeding because on the evidence it is open to argument that view was in error.  I accept each of these submissions. 

Whether decision reviewable

In Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321 at 337 it was stated by Mason CJ:

"... a reviewable "decision" is one for which provision is made by or under a statute.  That will generally, but not always, entail a decision which is final or operative and determinative, at least in a practical sense, of the issue of fact falling for consideration.  A decision would not ordinarily amount to a reviewable decision, unless the statute provided for the making of a finding or ruling on that point so that the decision under an enactment.  Another essential quality of a reviewable decision is that it be a substantive determination."

Decisions which are interim in nature are not decisions which can be reviewed unless the statute specifically provides for that interim decision.  A decision to conduct an investigation is not reviewable even where it is authorised by a statutory power: Edelsten v Health Insurance Commission (1990) 96 ALR 673; Little River Goldfields NL v Moulds (1991) 32 FCR 456.

There must be a manifestation of a conclusion by the decision‑maker: Ricegrowers Cooperative Mills Ltd v Bannerman and Trade Practices Commission (1981) 38 ALR 535; also see Northrop J's comments in Hells Angels Ltd v DCT (1984) 6 ALD 420. In the Ricegrower's case Northrop J held that the manifestation may be in written form.

A refusal to act will constitute a decision where the decision‑maker has a clear statutory duty to act or not take action: Tooheys Ltd v Minister for Business and Consumer Affairs (1981) 36 ALR 64. A decision by the Commonwealth DPP to prosecute has been held to be reviewable under the AD(JR) Act: Gillis v Commonwealth DPP (1993) 42 FCR 181 at 187.

A decision by the Commissioner of Taxation not to prosecute pursuant to the ITA is a decision which is expressly authorised by the ITA.  Any decision which is expressly authorised by an Act of the Commonwealth is a decision under an enactment: s3.  Such a decision is similar to the decision the Commonwealth DPP must make in prosecuting offences under the Crimes Act.  Further, it is not a decision to conduct an investigation.  It is a decision to prosecute an offence.

The negative character of the decision does not preclude it from being reviewable.  It is final, operative and determinative in its nature because it prevents a further step being taken.  It is not a step taken along the way to a final decision by the Commissioner.

The decision taken by the Commissioner is manifested by the letter sent to the applicants.

In my opinion the decision by the Commissioner is therefore one which is a decision under an enactment which is reviewable.  It follows the respondent's motion should be refused.

I certify that this and the preceding 7 pages are a true copy of the Reasons for Judgment of his Honour Justice R D Nicholson.

Associate:

Date:30 August 1996

APPEARANCES

The applicants appeared in person.

Counsel for the Respondent:      Ms L Price

Solicitors for the Respondent:    Australian Government

Solicitor

Date of Hearing:                 29 July 1996

Date of Judgment:                30 August 1996