Sidebottom v Giuliano

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FEDERAL COURT OF AUSTRALIA

Sidebottom v Giuliano [2002] FCA 1262

RAYMOND LESLIE SIDEBOTTOM & ORS v EMMANUEL GIULIANO

V 12 of 2002

GOLDBERG J
15 OCTOBER 2002
MELBOURNE

IN THE FEDERAL COURT OF AUSTRALIA

VICTORIA DISTRICT REGISTRY

V 12 of 2002

BETWEEN:

RAYMOND LESLIE SIDEBOTTOM
First Applicant

KELVIN ERNEST SIDEBOTTOM
Second Applicant

RPM COMMODITIES PTY LTD
Third Applicant

GV LIQUID TANKERS PTY LTD
Fourth Applicant

AUSTRALIAN PETROLEUM SUPPLIES PTY LTD
Fifth Applicant

AND:

EMMANUEL GIULIANO
Respondent

JUDGE:

GOLDBERG J

DATE:

15 OCTOBER 2002

PLACE:

MELBOURNE

CORRIGENDUM

In the reasons for judgment delivered 15 October 2002, counsel for the applicant should read “Ms M Lodge”, not “Ms B Lodge”.

VERITY QUINN
Associate to Justice Goldberg
15 October 2002

FEDERAL COURT OF AUSTRALIA

Sidebottom v Giuliano [2002] FCA 1262

TAXATION – review of decisions by Collector to issue demands pursuant to s 60(1) Excise Act 1901 (Cth) – where prosecution proceeding already on foot in respect of same excisable goods – where reparation of duty pursuant to s 21B Crimes Act 1914 (Cth) sought in prosecution proceeding – whether prosecution proceeding and recovery proceeding pursuant to a demand constituted two mutually exclusive regimes for the collection of duty under the Excise Act 1901 (Cth) – whether demands made for an improper purpose – whether demands could be said to be made for the protection of revenue – whether making of demands was unreasonable or otherwise unfair.

Excise Act 1901 (Cth): s 60

Sidebottom v Commissioner of Taxation (1999) 95 FCR 255, referred to
Collector of Customs (NSW) v Southern Shipping Co Ltd (1962) 107 CLR 279, considered
Sidebottom v Giuliano (2000) 98 FCR 579, applied
Cubillo v Commonwealth (2001) 112 FCR 455, applied
Pickering v Deputy Commissioner of Taxation (1997) 37 ATR 41, referred to
Bellinz vCommissioner of Taxation (1998) 84 FCR 154, referred to
Laker Airways Limited v Department of Trade [1977] 1 QB 643, referred to

RAYMOND LESLIE SIDEBOTTOM & ORS v EMMANUEL GIULIANO

V 12 of 2002

GOLDBERG J
15 OCTOBER 2002
MELBOURNE

IN THE FEDERAL COURT OF AUSTRALIA

VICTORIA DISTRICT REGISTRY

V 12 of 2002

BETWEEN:

RAYMOND LESLIE SIDEBOTTOM
First Applicant

KELVIN ERNEST SIDEBOTTOM
Second Applicant

RPM COMMODITIES PTY LTD
Third Applicant

GV LIQUID TANKERS PTY LTD
Fourth Applicant

AUSTRALIAN PETROLEUM SUPPLIES PTY LTD
Fifth Applicant

AND:

EMMANUEL GIULIANO
Respondent

JUDGE:

GOLDBERG J

DATE OF ORDER:

15 OCTOBER 2002

WHERE MADE:

MELBOURNE

THE COURT ORDERS THAT:

1.        The appeal be dismissed.

2.        The applicants pay the respondent’s costs of and incidental to the appeal.

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

IN THE FEDERAL COURT OF AUSTRALIA

VICTORIA DISTRICT REGISTRY

V 12 of 2002

BETWEEN:

RAYMOND LESLIE SIDEBOTTOM
First Applicant

KELVIN ERNEST SIDEBOTTOM
Second Applicant

RPM COMMODITIES PTY LTD
Third Applicant

GV LIQUID TANKERS PTY LTD
Fourth Applicant

AUSTRALIAN PETROLEUM SUPPLIES PTY LTD
Fifth Applicant

AND:

EMMANUEL GIULIANO
Respondent

JUDGE:

GOLDBERG J

DATE:

15 OCTOBER 2002

PLACE:

MELBOURNE

REASONS FOR JUDGMENT

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Details
Case
[2002] FCA 1262
Decision Date

CaseChat Overview and Summary

Sidebottom v Giuliano is a case that arose from decisions made by the National Director of the Excise Investigation Branch of the Australian Taxation Office, who demanded payment from various applicants for excise duty on petroleum products. The applicants contested these demands in the Administrative Appeals Tribunal, which affirmed the demands, leading to an appeal to the court. The applicants argued that the demands were not made for the purpose of protecting revenue, that they were unreasonable, and that they were unfair. The court was required to determine whether the demands were made for the protection of revenue, if they were unreasonable or unfair, and if the applicants had any other valid grounds for contesting the demands.

The court found that the applicants were unable to identify any purpose for the demands other than the protection of revenue, and rejected their argument that the revenue was already protected by a separate Supreme Court proceeding. The court further examined whether the decisions to make the demands were unreasonable or unfair under the Wednesbury test, which requires a decision to be so unreasonable that no reasonable person could have come to it. The court found that the statutory criteria for making the demands were met and that the applicants did not contest the Tribunal's findings. Therefore, the decisions to make the demands were not unreasonable or unfair.

In conclusion, the court dismissed the appeal and ordered that the applicants pay the respondent's costs of and incidental to the appeal. This decision reinforces the authority of the Excise Investigation Branch to make demands for excise duty and highlights the importance of meeting statutory criteria when doing so. The court's rejection of the applicants' arguments also serves as a reminder that the protection of revenue is a valid purpose for making such demands, even in the presence of other legal proceedings.

Orders

Orders of the court

1. The appeal be dismissed.

2. The applicants pay the respondent’s costs of and incidental to the appeal.

Background

Background to the litigation

On 31 January 2000 the respondent, the National Director of the Excise Investigation Branch of the Australian Taxation Office and a “Collector” for the purposes of the Excise Act 1901 (Cth) (“the Act”), made decisions under s 60(1) of the Act to demand from each of the applicants the sum of $9,289,732.33. This sum was said to be an amount equivalent to the duty then payable on certain excisable goods which the respondent alleged had been in the possession, custody or control of the applicants, namely various quantities of petroleum products. On 24 February 2000 the applicants applied to the Administrative Appeals Tribunal (“the Tribunal”) pursuant to s 162C of the Act to have the respondent’s decisions to issue the demands reviewed by the Tribunal. On 24 December 2001 the Tribunal affirmed the decisions of the respondent to make the demands. The applicants appealed to this Court from the Tribunal’s decision.Background The fifth applicant (“APS”) carries on the business of a wholesaler of petroleum products. It purchases petroleum products from wholesale distributors situated in various places including Queensland and New South Wales. One of the premises upon which it carries on its business is situated at Saxton Street, Numurkah in Victoria (“the depot”) which premises are owned by the third applicant (“RPM”). A number of underground and above ground storage tanks are located in the depot. The fourth applicant (“GVLT”) operates a freight cartage business. Its largest customer is APS for whom it collects and delivers petroleum products. The first and second applicants were at relevant times directors of APS, RPM and GVLT. Prior to October 1998 the Australian Customs Service (“Customs”) carried out an investigation in relation to quantities of petroleum products including diesel fuel, solvent and kerosene which had been transported to, and stored at, the depot. Customs formed the view that quantities of petroleum products were mixed with other products on the premises to produce blended petroleum products which were then entered into home consumption without the payment of excise duty. On 29 October 1998 the Chief Executive Officer of Customs issued a writ in the Supreme Court of Victoria against the applicants in which he alleged that:(a)between 1 July 1996 and 1 August 1997 GVLT delivered to the depot various quantities of petroleum products which were placed in tanks at the depot and blended with other substances so that blended petroleum products were produced within the meaning of s 77G of the Act;(b)the blending of the petroleum products occurred to the knowledge of the applicants and was initiated, controlled and directed by each of the first and second applicants;(c)each of the petroleum products was an excisable good classifiable to item 11 or 12 of the schedule to the Excise Tariff Act 1921 (Cth) and a petroleum product within the meaning of Pt VIIB of the Act;(d)excise duty was payable in respect of each act of blending and each of the applicants intentionally evaded excise duty which was payable on the excisable blended petroleum product produced on each occasion of blending;(e)the excisable blended petroleum products which were produced were sold with diesel fuel removed from the depot;(f) each of the applicants committed the following offences against the Act:(i) manufacturing excisable goods in contravention of s 35 of the Act;(ii)having in its or his possession, custody or control manufactured excisable goods upon which excise duty had not been paid in contravention of s 117(1) of the Act;(iii)evading payment of duty which was payable in contravention of s 120(1)(iv) of the Act;(iv)moving, altering or interfering with goods subject to the control of Customs, namely excisable blended petroleum products, without being authorised to do so by the Act, in contravention of s 61 of the Act;(v)unlawfully conveying excisable goods, namely excisable blended petroleum products upon which excise duty had not been paid, in contravention of s 119(1) of the Act.The Chief Executive Officer sought the following relief:·declarations that each of the applicants had committed each of the offences alleged;

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

GOLDBERG J
It follows from the matters to which I have referred that I reject the ground of appeal that the Tribunal erred in that it should have found that the respondent did not make the demands for the purpose for which the power to make a demand was conferred, namely to protect the revenue. The applicants were unable to point to or identify what the purpose might have been in making the demands other than the protection of the revenue. Rather, their submission was that the purpose for the demands could not have been the protection of revenue as the revenue was protected by the Supreme Court proceeding. I have already rejected that submission.Were the decisions to make the demands unreasonable in the Wednesbury sense or otherwise unfair? I turn to the submission that no reasonable decision‑maker would have made the decisions to make the demands or that the decisions were otherwise unfair. The parties were in agreement that the exposition of Wednesbury unreasonableness by the Full Court of the Federal Court in Cubillo v Commonwealth (2001) 112 FCR 455 at 521 expressed the manner in which the issue of unreasonableness should be approached. The Court said:“… it is necessary to bear in mind that a decision will be vitiated by Wednesbury unreasonableness, only if no decision‑maker, acting reasonably, could have made that decision or if it is shown that the decision was so unreasonable that no reasonable person could have come to it. In applying this standard a court must proceed with caution lest it exceed its supervisory role by reviewing the decision on the merits: Minister for Aboriginal Affairs v Peko‑Wallsend Ltd (1986) 162 CLR 24 at 41‑42, per Mason J; Attorney‑General (NSW) v Quin (1990) 170 CLR 1 at 36‑37, per Brennan J. It is not enough to show that another decision‑maker might have reached a different result or even that the court takes the view that a different decision would have been more appropriate: Minister for Immigration and Multicultural Affairs v Eshetu (1999) 197 CLR 611 at 626‑627, per Gleeson CJ and McHugh J; Friends of Hinchinbrook Society Inc v Minister for Environment (No 2) (1997) 69 FCR 28 at 59‑65, per Sackville J.”Applying this test, I do not consider that unreasonableness is made out in relation to the decisions to make the demands for payment. The statutory criteria which needed to be established prior to the making of the demands were found to the satisfaction of the Tribunal and the applicants did not contest the Tribunal’s findings in relation to the blending of the petroleum products, the possession, custody and control of the products which were subject to the control of Customs and the failure of the applicants to keep those goods safely. In those circumstances it was not unreasonable, nor indeed was it unfair, for the decisions to be made to make the demands upon the applicants. The fact that duty might be recoverable by way of the payment of reparation pursuant to s 21B of the Crimes Act in the Supreme Court proceeding did not make it unreasonable to make the demands as, at the time of the making of the demands, it did not follow inexorably that the duty otherwise payable on the blended goods would be recovered in the Supreme Court proceeding. As I have noted earlier, liability is denied by the applicants in the Supreme Court proceeding and the nature of the proceeding in the Supreme Court and the elements of proof required in it are different from the nature of the proceeding and the elements of proof required in it in any proceeding taken by a Collector to recover the duty as a debt due to the Commonwealth pursuant to s 60(2) of the Act.

Ratio Decidendi

Legal Principle Established

Established by: GOLDBERG J

Full text does not contain this section.