Case: George v Rockett [1990] HCA 26 ; (1990) 170 CLR 104
Outcome: applied
Whether reasonable grounds existed for the holding of the requisite belief is "an objectively determined postulate", Poletti's Case, at 161. The following passage from the joint judgment of the Full Court of the High Court in George v Rockett [1990] HCA 26 ; (1990) 170 CLR 104 at 112 definitively states the relevant law: When a statute prescribes that there must be "reasonable grounds" for a state of mind - including suspicion and belief - it requires the existence of facts which are sufficient to induce that state of mind in a reasonable person. That was the point of Lord Atkin's famous, and now orthodox, dissent in Liversidge v. Anderson [1941] UKHL 1 ; [1942] AC 206: see Nakkuda Ali v. M.F. De S. Jayaratne [1951] AC 66 , at pp 76-77; Reg. v. I.R.C.; Ex parte Rossminster [1979] UKHL 5 ; [1980] AC 952 , at pp 1000, 1011, 1017-1018; Bradley v. The Commonwealth [1973] HCA 34 ; (1973) 128 CLR 557 , at pp 574-575; W.A. Pines Pty. Ltd. v. Bannerman (1980) 41 FLR 169, at pp 180-181; [1980] FCA 79 ; 30 ALR 559 , at pp 566-567. That requirement opens many administrative decisions to judicial review and precludes the arbitrary exercise of many statutory powers: see, for example, Attorney-General v. Reynolds [1980] AC 637. Therefore it must appear to the issuing justice, not merely to the person seeking the search warrant that reasonable grounds for the relevant suspicion and belief exist. 59 Put in the context of an appeal under s 14V, what this means is that it is for the appellant to prove that, viewed objectively and on the material before the decision-maker or otherwise then available, reasonable grounds for the requisite belief did not exist. 60 The submission to Mr Benson recommending the making of a DPO in respect of Mr Pattenden put the following version of what were said to be "material facts &amp; findings" and made the following comments: Material Facts &amp; Findings &#8226; Mr Pattenden was issued with Notices of Amended Assessment (for $4,316,142) and Penalty Notices (amounting to $2,133,242) on 25/01/08. &#8226; Mr Pattenden's current consolidated account balance is $7,786,500 Dr. &#8226; When contacted by an advanced (High Value Debt) Recovery ATO Officer, Mr Craig Duly (TAG; on 03/03/08) stated that he would lodge an objection against the total debt in 1-2 weeks time. &#8226; After the 1-2 weeks had expired, the ATO office re-contacted Mr Duly on 26/03/08. Mr Duly stated that he not yet contacted Mr Pattenden's solicitor, who was tasked to prepare the objection. &#8226; On 28/03/08, Mr Duly stated that he not yet contacted Mr Pattenden's solicitor, who was tasked to prepare the objection. &#8226; As on 11/04/08, there is no record of an objection being received anywhere in the ATO. Mr Duly is also not contactable. &#8226; A second Interim Decision Summary (Position Paper) was issued by facsimile and by post on 4/4/08. &#8226; In the above correspondence, the ATO provided a reply by date/timeframe of 09/05/08 for Mr Pattenden to provide comments and any additional information or evidence. &#8226; The second Interim Decision Summary proposed ITR amendments and penalties of a further $1.69 million. &#8226; During the interview of 18/05/07, Mr Pattenden advised that both his luxury home units (in RUNAWAY BAY, QLD) had been sold two weeks prior to 18/05/07. The units are cumulatively worth at least $2 million. &#8226; Mr Pattenden previously sold a portion of his equity in his associated ACBF Group in July 2001 for $1 million. &#8226; Mr Pattenden reportedly sold his racehorses at a significant loss. &#8226; In his letter of 31/10/07, Mr Hughes advised that Mr Pattenden had now ceased all involvement in the ACBF Group, other than his shareholding. By virtue of this statement, Mr Hughes conceded that Mr Pattenden maintained substantial business ties (directorships and shareholdings) in Australia in the recent past. &#8226; Also in the recent past, Mr Pattenden has made numerous trips in and out of Australia. &#8226; In light of all of the above, I believe that this evidence shows Mr Pattenden is in the process of divesting himself of his Australian assets and is removing them from our jurisdiction. Due to this behaviour together with the fact that he holds a British passport, he also represents a flight risk. &#8226; I also specifically make mention of my earlier minute of 2/12/07 that Mr Pattenden knew conclusively that his PAYG(W) obligations under the TAA 1953 and intentionally chose to disregard them in the 2001 FY. &#8226; In his responses of 09/01/08 and 25/01/08, Mr Duly has neither refuted nor provided any evidence to the contrary. Other Relevant comments: &#8226; Mr Pattenden holds the remaining 80 shares (valued at $4 million) in ACBF Group Holdings Pty Ltd. &#8226; I hypothesize that Mr Duly's delays in lodging an objection may be strategy to delay legal action by the ATO to recover debts owed by Mr Pattenden. &#8226; Mr Pattenden's noncompliant history clearly evidences his disregard for Income Tax and other laws. 93 I respectfully agree with that summary. In particular I prefer it to the submission made on behalf of the Commissioner that the use of the word "desirable" in s 14S(1) meant that not much was required to warrant the making of a DPO. "Desirable" is certainly a word of lesser moment than "essential" but, to repeat an observation of Jessup J, "The purpose of s 14S ... is not the prevention of persons (owing tax) from leaving Australia simpliciter ". That was a purpose evident in the earlier regime. The word "desirable" must be read in the context of affecting recovery. Further, part of that context, are the words "reasonable grounds" which, as the passage quoted above from George v Rockett underscores, are a protection against the exercise of arbitrary power. The word "desirable" does not offer a basis for trivialising that protection. 94 Having regard to this approach to the construction of s 14S(1)(b) it is, in my opinion, relevant to take account when considering whether reasonable grounds for the requisite belief existed, to take account of the ability to enforce an Australian revenue debt in places for which a debtor might reasonably be expected to reside abroad, insofar as it may be possible to identify the same.