Case: Deputy Commissioner of Taxation v Broadbeach Properties Pty Ltd [2008] HCA 41
Outcome: applied
At the time when the submission was made the appeal to the High Court from the Queensland Court of Appeal's submission had yet to be decided. Shortly after I reserved my decision on this appeal, the High Court in Deputy Commissioner of Taxation v Broadbeach Properties Pty Ltd [2008] HCA 41 ( Broadbeach Properties ) unanimously reversed the decision of the Queensland Court of Appeal, thereby exposing a false line of Queensland authority the origins of which may be traced back via Willemse Family Co Pty Ltd v Deputy Commissioner of Taxation [2003] 2 Qd R 334 to Re Softex Industries Pty Ltd; Softex Industries Pty Ltd v Commissioner of Taxation (2001) 187 ALR 448. I therefore invited the parties to make such further submissions as they may be advised in relation to the relevance of the objection. 114 For Mr Pattenden, the submission was that the existence of an objection remained relevant with it being put that Broadbeach Properties concerned a provision which deemed a company to be insolvent whereas the present, as with an order for the winding up of a company or a sequestration order against the estate of a debtor concerned a change in status, in this case "the fundamental right to freedom of movement". Further, the focus of the "residual discretion" seemed to change from that said to be possessed by the Court to one said to be possessed by the Commissioner. The Commissioner maintained his position that the existence of the objection was not a relevant consideration. 115 Just what purpose is served by the words, "in its discretion" in s 14X of the TAA is moot. It is, for example, difficult to envisage a circumstance in which, even assuming that they bespeak a "residual discretion", a court which had concluded that reasonable grounds did not exist for the belief referred to in s 14S(1)(b) of the TAA would do anything other than set the DPO aside. Likewise, if each of the questions inherent in an appeal against the making of a DPO were resolved against the appellant, it is difficult to envisage how any order other than the dismissal of the appeal might be made. In the event that all existing tax liabilities had been paid, that there were no prospective tax liabilities and that the Commissioner refused to revoke the DPO under s 14T, the appropriate course would be to challenge the adverse revocation decision, not to institute or further to prosecute an appeal against a DPO the making of which satisfied each of the three questions derived from Poletti's Case in the hope of nonetheless securing a favourable exercise of a "residual discretion" from a court. 116 Further and more fundamentally, as the Full Court reminded in Poletti's Case (supra, at 157), "[F]ederal courts or other courts exercising federal jurisdiction exercise only the judicial power of the Commonwealth, and do not act administratively or exercise administrative or executive powers by, for example, substituting their own discretion for the discretion of the original decision-maker". It is the Commissioner, not the Judiciary, who administers the TAA. Whatever the words, "in its discretion" mean, they do not offer a basis for any consideration of the merits of an objection in the face of the engagement of s 177(1) of the ITAA36 by appropriate tender of duly authenticated copies of the assessments concerned. In that circumstance, for reasons given above, the tax liability is a given. While, as an administrator, it would not be an "irrelevant consideration" (as opposed to being a "relevant consideration") for the Commissioner, if so disposed, to consider the merits of an objection in deciding whether to make a DPO, it is not for a court to do that on an appeal, even assuming that there is a "residual discretion". In this regard, this particular submission of Mr Pattenden is subversive of s 177(1) of the ITAA36 and seeks to resurrect what I have described as a false line of authority. I reject it.