T v Federal Commissioner of Taxation

[1986] FCA 571

CATCHWORDS

INCOME TAX - departure prohibition order - appllcation to revoke or vary - jurisdiction of the court.

Taxation Administration Act 1953 ss.l4S, 14T, 14U, 14V. 14X, 14Y

1T. v FEDERAL COMMISSIONER OF TAXATION

No. VG 407 of 1986

Woodward J.

Melbourne

9 December 1986

IN THE FEDERAL COURT OF AUSTRALIA )

VICTORIA	D STRICT	REGISTRY	)	No. VG 407 of 1986
)

GENERAL DIVISION

T Applicant

and

FEDERAL COMMISSIONER OF TAXATION Respondent

MINUTES OF ORDER

COURT : Woodward J.

: 4 December 1986

: Melbourne

THE COURT ORDERS m T :

The application be dismissed with costs.

(I&&: Settlement and entry of orders is dealt with in 0.36 of

the Federal Court Rules.)

IN THE FEDERAL COURT OF AUSTRALIA )

)

VICTORIA DISTRICT REGISTRY	)	No. VG 407 of 1986
)
GENERAL DIVISION	)

T Applicant

and

FEDERAL COMMISSIONER OF TAXATION Respondent

COURT :	Woodward J.
m:	9 December 1986
PLACE :	Melbourne

REASONS FOR JUDGMENT

This is an application to have a departure prohibition

Order set aside or varied. The order was made by the respondent on 1 April 1986, pursuant to s.14S of the Taxation Administration

1953.

That section provides, so far as is relevant for present

purposes,

“14s. (1) Where -

( a ) a person is subject to a tax liability;

and

(b)

the Commissioner believes on reasonable

grounds that it is desirable to do so for

the purpose of ensuring that the person

does not depart from Australia for a

foreign country without -

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(1) wholly discharging the tax

liability; or

(il) makrng arrangements satisfactory to

the Commissioner for the tax

liabillty to be wholly discharged,

the Commissioner may, by order In accordance

with the prescribed form, prohibit he

departure of the person from Australia for a

foreign country.

( 2 ) Subject to sub-section ( 3 ) , a departure

prohibition order remains in force unless and

until revoked under section 14T or set aside

by a court.

......

( 4 ) Where a departure prohibition order is

made in respect of a person, the Commissioner

shall forthwlth -

(a) cause the person to be informed, as

prescribed, of the making of the order;

......

Because of other circumstances which need not be

detailed here, the applicant was not in a position to consider leaving the country before 5 September 1986. Since about that

time there have been egotiations between the applicant‘s

solicitors and the respondent, designed to establish what payment

the respondent required in settlement of the applicant’s tax

liabilities and what security might be accepted by the respondent

for the return of the applicant to Australia if the departure

order were varied to permit	him to make	an overseas trip for
compassionate reasons.

On 24 November the applicant’s solicitors wrote to the

respondent making a formal offer on his behalf. The offer was

expressed in the following terms,

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“As it does not appear that we are able to agree on

an approprlate amount to settle this dispute, our

client wishes to apply for a variatlon of the

Departure Prohlbltlon Order. Our cllent is

prepared to slgn a written Agreement and to offer a

Mortgage over his Crelatives’ property3	as security
for his return to Australia. We are instructed that the equity in the Cproperty3 totals some

$100,000.00. This would clearly more than satisfy

our client‘s alleged debt to the Department should

our client not return to Australia. We have

indicated to you our client would return to

Australia within four months of the 21st day of

December 1986. ”

Later material put before the Court by the applicant

indicated that the information contained In the letter was

inaccurate because there was second mortgage on the property for

an amount of $100,000. However counsel informed me that evidence

would be led indicating	that a way could be found around this
problem.

In opening his case, counsel for the applicant conceded

that there were reasonable grounds for making the order at the

time at which it was made.

After hearing brief submissions from both parties I

expressed the view that this application to the Court was

misconceived, and I dismissed the application with costs,

reserving my reasons for judgment. These are those reasons.

In my view the scheme of the Act is clear. It provides

for a person who is made the subject of a departure prohibition

order to challenge the making of that order in a court of law.

Section 14V of the	Act, so far as is relevant for present
purposes, provides

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"14V. (1) A person aggrleved by the making of a

departure prohibition order may appeal to the Federal Court of Australia or the Supreme Court of a State or Territory against the rnakmg of the departure prohibition order.

( 2 ) This section has effect -

(a) strbject to chapter I11 of the

Constitution; ......'I

This means that a court has jurisdiction to entertain an

appeal against the making of an order, provided that court does not exceed the judicial powers of the Commonwealth by becoming

involved in administrative d cision-making. The point is

underlined by s.14X which provides,

"14X. A court hearing an appeal under section

14V against the making of a departure prohibition

order may, in its discretion -

(a)	make an order setting aside the departure
prohibition order; or

(b) dismiss the appeal."

Once an order is made, and it is not challenged as

having been improperly made, detailed provision exists in ss.14T and 14U for the Commissioner to revoke or vary the order or to

issue a 'departure authorisation certificate'. If the person the

subject of the order is dissatisfied with the Commissioner's

response to an application pursuant to either	of these sections,
s.l4Y(1) provides,

"14". (1) Applications may be made to the

Administrative Appeals Tribunal for review of decisions of the Commissioner under section 14T or

14U. . . . . . . "

There can be no doubt that, in the circumstances of this case, this is the course which the applicant should have followed.

He wants to have the exercise of an adminlstrative discretion reviewed, not on any legal grounds but on the basis that an unfair

or inappropriate decision has been reached. The Administrative

Appeals Tribunal may, of course, exercise all the powers and

discretions that are conferred on the Commissioner by ss.14T and

14U. This Court may not.

Since the applicant now wishes to rely upon a proposal which differs in some material respects from that contained in the letter of 24 November, it would seem that a fresh application to the Commissioner will be necessary. If that application is unsuccessful, recourse can then be had to the Administratlve

Appeals Tribunal, not to this Court.

It is for these reasons that the application was

dismissed with costs.

I certify that this and the

four (4) preceding pages

are a true and accurate copy of

the Reasons for Judgment herein of

The Hon Mr Justice Woodward

Dated: 9 December 1986

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Counsel for the Applicant: Mr G. Nash

Solicitors for the Applicant: Messrs Coady Dwyer L Associates

Counsel for the Respondent: Dr C.N. Jessup

Solicitor for the Respondent: Australian Government Solicitor