Case: Fieldhouse v Commissioner of Taxation (1989) 25 FCR 187
Outcome: cited
applicants submitted that the view that s 251G did not prescribe a topic which permitted the production of information was supported by three authorities: Smorgon v Australia and New Zealand Banking Group Ltd [1976] HCA 53 ; (1976) 134 CLR 475 ; Fieldhouse v Commissioner of Taxation (1989) 25 FCR 187 ; O'Reilly v Commissioners of State Bank of Victoria (1983) 153 CLR 1. The notice was addressed to Armstrong Scalisi Holdings Pty Ltd. The applicants contended that a notice could not be addressed to a corporation but only to its proper officer. In truth, there were two submissions here; one, a submission that a notice could not be served upon a corporation; the other, that if it was, it had to be addressed to the corporation's proper officer. These arguments are, so it seems to me, quite without substance. It has been accepted that a corporation cannot be required physically to attend and give evidence for the very good reason that it is an abstraction lacking physical form: Smorgon v Australian and New Zealand Banking Group [1976] HCA 53 ; (1976) 134 CLR 475 at 481-482 per Stephen J. However, that physical constraint has no impact on the ability of a corporation to answer questions. It is for that reason well established that a corporation may be required to provide information. Indeed, Lockhart J described the contrary argument as "fallacious" in Fieldhouse v Commissioner of Taxation (1989) 25 FCR 187 at 198, an observation with which I respectfully agree. Burchett and Hill JJ also rejected the argument (at 203 and 218 respectively). The power in reg 168(2) to require production of books and documents is a power to produce books and documents in the custody of the person receiving the notice. It does not extend to require a party to bring documents into existence: Fieldhouse at 194-195 per Lockhart J, 204 per Burchett J and 209 per Hill J. It follows that the notice could not lawfully require the production by CAP of copies of original documents held by it. Of course, it is possible that the notice did not on its proper construction seek the creation of documents but instead the production of any copy documents which were in fact held. Lockhart J canvassed this possibility in Fieldhouse at 194-195. In this case, I do not think that the natural and ordinary meaning of subparagraphs (a), (c), (d) and (g) is that they require production of copies already in existence. It follows that these paragraphs are not supported by reg 168(2). Even if that were not so, however, the subparagraphs are ambiguous in that they leave the recipient unsure whether production of copies already existing is called for or whether copies of originals are to be made. The notice is, therefore, also bad for uncertainty: cf. Commissioner of Taxation v Australian and New Zealand Banking Group Ltd (1979) 143 CLR 499 at 525 per Gibbs CJ; Fieldhouse at 193 per Lockhart J, 204 per Burchett J and 210 per Hill J. FAILURE TO SPECIFY MATTER It has been held that a notice under s 264 which is bad in part may be severed. So much was held by Burchett J in Fieldhouse at 204 and by Hill J at 210. Lockhart J clearly assumed such a power to exist. However, on the facts in Fieldhouse , both Lockhart and Burchett JJ thought that severance was not practical because the provision of the copies was central to the notice so that parts of it no longer made sense if the paragraphs dealing with copies were excised. Hill J, on the other hand, did not share this concern. I do not think that the notice in this case suffers from that problem. Paragraphs (a), (c), (d) and (g) can be severed from the notice without the balance of it losing coherence. It should be noted in passing that the form of reg 168(2) may well present difficulties of application in the case of electronically held records, but it is not, presently, necessary to address the issues thereby arising. Interference with course of criminal jurisdiction Sam also challenged the notice on the general ground of its capacity to interfere with the criminal proceedings facing him. It is, I think, important to bring out into the open a suppressed premise upon which that argument rested. It was that the notice presently requires CAP to do something. In fact, the time for compliance with the notice expired on 9 February 2009 and it is no longer capable of being complied with. There is presently no legal obligation upon CAP to provide the information sought in the notice. It would not be possible to obtain a court order to compel CAP to provide the information. In a real sense, the notice is spent. The possible relevance of the notice seems therefore only to be twofold: (a) Although it is no longer capable of being complied with, the non-compliance may have been a criminal offence. If the information which was originally required by the notice were now volunteered by CAP it might be relevant to any penalty which was imposed upon it. A related concern, I would think, is the capacity of the continuing failure to provide the information to constitute professional misconduct. Voluntary production may well be likely reduce the seriousness of these matters. The Board itself made this point in its letter of 6 March 2009 which in terms said: As the Board has not withdrawn its Notice to give evidence to the Board dated 16 January 2009, you are required to comply. Failure to do so may result in prosecution under regulation 168 of the Income Tax Assessment Act 1936 . Any conviction may reflect poorly on your good fame, integrity, character and fitness and propriety. (b) It is possible that CAP may be prosecuted for a failure to comply with the notice. Despite these rather indirect incentives to provide the information to the Board, there was no evidence before me that CAP was proposing now to do so. David's evidence on this issue was: I wanted the Notice issue determined as I do not want to be prosecuted for failure to comply. I do not want to be issued with further notices that I believe are beyond what the Board is entitled to serve. Sam gave no evidence on this issue at all. There is, therefore, no evidence that CAP is intending voluntarily to produce the information previously sought in the notice. It is not the case that CAP is under a present obligation to provide the information sought. In that circumstance, the notice appears to present no real risk to the conduct of the criminal proceedings against Sam. Absent a real risk to the administration of justice in those proceedings, the notice should not be set aside on the basis that it constitutes a contempt: BLF at 56 per Gibbs CJ. Conclusion