Chief Commissioner of State Revenue v Walker & Moloney in their capacity as Voluntary Administrators of ABC Learning Centres Ltd

REASONS FOR JUDGMENT 1 On 9 November 2009 a Registrar of this Court made an order requiring that the Chief Commissioner of State Revenue for New South Wales produce to the Federal Court of Australia those documents described in Schedule 2 "which are in your custody, care or control" (Order). The Order was issued at the request of the plaintiffs, the Administrators of ABC Learning Centres Limited (Administrators Appointed) (Receivers and Managers Appointed) and associated companies listed in Schedule 1 (together, "ABC Learning") and was made pursuant to O 33 r 13 of the Federal Court Rules and s 597(9) of the Corporations Act 2001 (Cth). 2 By notice of motion filed on 2 December 2009, the Commissioner sought a declaration that the Court has no power to compel production of the documents. In the alternative, the Commissioner sought to have the Order set aside. The Commissioner's motion came on for hearing before me on 3 December. At the conclusion of the hearing I dismissed the motion with costs and undertook to provide reasons in due course. These are my reasons. 3 The documents that the Commissioner was ordered to provide are listed in Schedule 2. Loosely described, they are those "evidencing, recording or concerning" dealings involving ABC Learning. They include documents relating to the financial position of ABC Learning including in relation to payroll tax. The Administrators require the documents for the purpose of enabling them to investigate the affairs of ABC Learning in the course of their administration. 4 At issue between the parties was the correct construction of certain provisions of the Taxation Administration Act 1996 (NSW) (TAA). The relevant provisions of the TAA are to be found in Pt 9 Div 3 which is headed "Secrecy" and are set out below. Division 3 Secrecy 81 Prohibition on certain disclosures of information by tax officers A person who is or was a tax officer must not disclose any information obtained under or in relation to the administration of a taxation law, except as permitted by this Division. Maximum penalty: 100 penalty units. 82 Permitted disclosures - to particular persons A tax officer may disclose information obtained under or in relation to the administration of a taxation law: (a) with the consent of the person to whom the information relates or at the request of a person acting on behalf of the person to whom the information relates, or (b) in connection with the administration or execution of the following laws (including for the purpose of any legal proceedings arising out of any of those laws or a report of any such proceedings); (c) (Repealed) (d) in accordance with a requirement imposed, or authorisation conferred, by or under an Act, or (e) to the Commissioner for the New South Wales Crime Commission or a person authorised by the Commissioner, or (f) to the Australian Securities and Investments Commission, or a person authorised by the Australian Securities and Investment Commission, for the purposes of the administration or execution of the Corporations Act 2001of the Commonwealth or Part 3 of the Australian Securities and Investments Commission Act 2001of the Commonwealth (or regulations in force under that Act or Part), or (g) to the Australian Crime Commission, or a person authorised by that Commission, for the purposes of the administration or execution of: (i) the Australian Crime Commission Act 2002 of the Commonwealth, or (ii) a law of a State or Territory that makes provision for the operation of that Commission in that State or Territory, or (h) to the Commissioner of the Australian Federal Police, or a member of the Australian Federal Police designated by the Commissioner, for the purpose of enforcing a law of the Commonwealth that creates an offence, or (i) to the Official Receiver in Bankruptcy for the purposes of the administration or execution of the Bankruptcy Act 1966 of the Commonwealth, or (j) to the Chief Executive Officer of the Australian Customs Service for the purposes of the Customs Act 1901 of the Commonwealth, or (k) to any of the following persons or a person authorised by any of the following persons: (i) the Ombudsman, (ii) the State Records Authority of New South Wales, (iii) the Australian Statistician, (iv) the Auditor-General, (v) the Valuer-General, (vi) a member of the Public Service acting in the execution or administration of the Regional Development Act 2004, or (vii) the WorkCover Authority, (viii) the Legal Services Commissioner, a member of the Law Society Council, an investigator appointed under section 267 of the Legal Profession Act 2004or an external examiner appointed under Division 4 of Part 3.1 of that Act, (ix) the Head of a Department of the Public Service, the chief executive officer of a declared authority (within the meaning of Part 6.4 of the Public Sector Employment and Management Act 2002) or the holder of a statutory office if the information relates to land, including its description, ownership and value, (x) the Hardship Review Board constituted under Division 5 of Part 10 or a member of that Board, (xi) the Director-General of the Department of Gaming and Racing, (xia) the Director-General of the Department of State and Regional Development, (xii) the Bookmakers Revision Committee constituted under the Racing Administration Act 1998, (xiii) the Director-General of the Department of Transport, for the purposes of administration of the Parking Space Levy Act 2009, (xiv) the Commissioner of Police, (xv) the Commissioner for Vocational Training, (xvi) the Independent Commission Against Corruption, (xvii) the Commissioner of NSW Fire Brigades or the Commissioner of the NSW Rural Fire Service, or (l) to a person prescribed by the regulations, or a person authorised by any such person. 85 Further restrictions on disclosure (1) A person who is or was a tax officer is not required to disclose or produce in any court any information obtained under or in relation to the administration of a taxation law except: (a) if it is necessary to do so for the purposes of the administration or execution of a taxation law, or (b) if the requirement is made for the purposes of enabling a person who is specified for the time being to be an authorised recipient to exercise a function conferred or imposed on the person by law. (2) In this section: authorised recipient means a person to whom information may be disclosed under section 82. 5 It is not in dispute that the documents sought contain information obtained under or in relation to a taxation law. The Commissioner noted that as a tax officer he is not required to disclose information "obtained under or in relation to the administration of a taxation law" except as provided in subss 85(1)(a) and (b). It has not been suggested that s 85(1)(a) applies (and clearly it does not) so the issue was whether the Commissioner should be required to disclose the information under s 85(1)(b). 6 The Administrators submit that the Commissioner is obliged to produce the documents pursuant to subs 85(1)(b) because: (a) the Commissioner is a tax officer within the meaning of s 3(1) of the TAA - this is common ground; (b) the Administrators are persons to whom information may be disclosed under subs 82(a); (c) information may be disclosed to the Administrators pursuant to subs 82(a) because when performing functions or exercising powers as administrators of ABC Learning they are taken to be acting as ABC Learning's agents; Corporations Act s 437B. They are therefore persons acting on behalf of the person (ABC Learning) to whom the information relates. (d) because they are persons to whom information may be disclosed under subs 82(a) they are authorised recipients within the definition in subs 85(2). (e) the Administrators' purpose in requiring the documents is to exercise the functions imposed on them as administrators appointed under s 438A of the Corporations Act, namely to investigate the affairs of ABC Learning. 7 The Commissioner contends that the Administrators are not "authorised recipients" within the meaning of subs 85(2) and therefore subs 85(1)(b) does not apply. The analysis put forward was as follows. The definition of "authorised recipient" in subs 85(2) refers to a "person" to whom s 82 permits information to be disclosed. Subsections 82(a)-(d) inclusive refer, not to persons, but to circumstances in which information may be disclosed and therefore are not relevant to the statutory definition. In contrast subss (e) et seq refer to persons, natural or artificial, including those who are designated ex officio, eg the Ombudsman. The Commissioner finds support for this view in the fact that subs 85(1)(b) refers to a person "who is specified for the time being" to be an authorised recipient, thus recognising the fact that a person authorised ex officio is so authorised only while he or she holds the relevant office. 8 In further support of this analysis the Commissioner referred to the decision of the New South Wales Land and Environment Court in AA Tremayne (Kirribilli) Private Hotel Pty Ltd v North Sydney Council [2007] NSWLEC 279. North Sydney Council served a subpoena on the Office of State Revenue (OSR) requiring the OSR to produce a broad range of documents relating to any application lodged by or on behalf of the applicant, AA Tremayne (Kirribilli) Private Hotel Pty Ltd. Relying on the TAA, the OSR submitted that it was neither obliged not permitted to produce the documents because: (a) the production of documents was not for the purpose of the administration or execution of a taxation law; and (b) the Council had not provided any proof that the person to whom the information related had consented to the disclosure. Talbot J upheld the OSR's objection. 9 In my view the case does not support the Commissioner's submissions. The circumstances in Tremayne were materially different from those under consideration here. Talbot J noted, at [23], that because the applicant had not consented to the disclosure, subs 82(a) did not apply and for this reason his attention was drawn to the persons identified in the following subsections. His Honour concluded, with respect correctly, that the Council was "not a specified person falling within any of the paragraphs (e) to (l) of s 82". It followed that the Council was not an authorised recipient within the meaning of subs 85(2). Neither his Honour's reasons nor his conclusion provides any basis for limiting the operation of s 85 to the persons identified in those subsections. 10 The distinction the Commissioner draws between subss 82(a)-(d) and those that follow cannot be maintained. The persons to whom information may be disclosed pursuant to those subsections are as clearly identified or identifiable with reference to their circumstances as those who are designated with reference to their office.