Deputy Commissioner of Taxation v Armstrong Scalisi Holdings Pty Ltd

January 2017 Estimate Notice

1. As noted earlier, by letter dated 16 January 2017 (the 2017 Covering Letter), the 2017 Estimate Notice was served on the defendant. The 2017 Covering Letter was prepared by Mr Zafiriou (see T 30/11/18; 1.39-41) and signed by Mr Zafiriou in the name of Mr Robert Ravanello, Deputy Commissioner of Taxation (see T 30/11/18; 1.48-50). The 2017 Estimate Notice bore the facsimile signature of Mr Ravanello (affixed by Mr Zafiriou - see T 30/11/18; 2.30-32) under which there was a similar description of Mr Ravenello (as Deputy Commissioner of Taxation and Delegate of the Commissioner of Taxation) as the earlier description of Mr Diment contained in the 2015 Estimate Notice (see [17] above).
2. In his affidavit sworn 10 May 2018, Mr Zafiriou has deposed to the process by which he prepared the 2017 Estimate Notice (see [14]) and as to his satisfaction (evidence that was read by me as to his state of mind or state of satisfaction in that regard) that the summary of the defendant's liabilities under s 16-70(1) in Sch 1 to the TAA for each of the relevant tax periods was an accurate and reasonable estimate of those liabilities, on which he relied in preparing the estimate notice (see [18]).
3. Mr Zafiriou was cross-examined in effect to suggest that the method of creation of the 2017 Estimate Notice was simply to "cut and paste" across to the later notice the detailed information that had been extracted in July 2015 for the earlier notice (a suggestion that Mr Zafiriou rejected "out of hand" - see T 30/11/18; 16.18). Mr Zafiriou explained that the word processing system did not enable that to be done and that it was necessary manually to reproduce the notice and to input again the figures (see T 30/11/18; 9.2-10; and the later explanation at 16.7-28). In particular, Mr Zafiriou said the following in that regard (see T 30/11/18; 8.33-8.43; 8.48-9.4; 9.32-9.44): Q. And can I put this to you, that what actually occurred in 2017 was simply to cut and paste across to the 2017 notice the detail information that had been extracted in July 2015 for the purposes of the preparation of the July 2015 notice, do you agree? A. In terms of the actual drafting, but not as to the thought process. At the end of the day I was required to give thought to whether or not the Commissioner's estimates at the time given they were making a new estimate notice was reasonable, so I had to reacquaint myself with all the material and that would be including AZ5 and the other records within the organisation, and then having concluded they were basically the same situation, therefore the same estimate amount issued. That is my position. … Q. When you came to the January 2017 notice, one of the first steps that was taken was to access the July 2015 notice and transpose all of the information about withholding periods and amount of estimate to the 2017 notice from the '15 notice, is that right? A. No, because the system, the notices are templates. Unless you save the notice in a Word for Windows document or whatever you will not be able to transpose it. We didn't do that. Q. Right? A. So we were required to manually reproduce the notice, so it was a manual input again of the figures, there was no cut and pasting. What I do is go back to the 2015 financial information, reran the PAYG analyser to make sure the information is still valid and then proceeded to manually transcribe the figures. … Q. And in relation to the work that was done in July 2015, apart from the extract from the bank statement which is AZ5, what other information from 2015 did you use in constructing the 2017 notice of estimate? A. Insofar as hard documents zero, because apart from the bank statements, we need to, we went through again just to make sure that we were correct in looking at what is the majority of the outward goings then we went on to the computer programme which is called the analyser, which I referred to in one of my affidavits, I'm not sure which one now so I do apologise for that, and downloaded all the information within the Commissioner's possession and then provided me with a figure of gross wage, net wage and CID as lodged by the different various taxpayers or the employees, and then from there we went on to the job, so in terms of the actual hard core documents in 2015 it was only the bank statement.

2017 Statutory Declaration

1. On 23 January 2017 (and, as the plaintiff accepts, within the seven day period allowed under the TAA for such a response), Mr Lowe made the 2017 Statutory Declaration, to which 11 volumes of documents were exhibited (see T 12/10/18; 3.1; 12.6).
2. Emphasis is placed by the defendant on the relatively short period of time within which a taxpayer seeking to invoke the operation of s 268-40 must serve a statutory declaration as something that informs the construction to be placed on s 268-90, the provision which sets out the requisite contents of such a declaration. From a practical point of view, since the 2015 and 2017 Estimate Notices were broadly identical, one might infer that the relatively short timeframe for a response posed no insuperable difficulty for the defendant in the present case (since a statutory declaration to the earlier notice had been prepared and served in 2015 and hence much of the work in preparing the 2017 Statutory Declaration might be thought already to have been done). That said, I accept that, even if that was the case here, it does not detract from the nub of the defendant's proposition that the shortness of the time period provided in the legislation within which a taxpayer can invoke the revocation/reduction provisions of the legislation is relevant when considering what the legislature contemplated would be required of a statutory declaration to be compliant with that process.
3. In the 2017 Statutory Declaration, Mr Lowe declared, inter alia, that: he has been a director of the defendant since 1 March 2016 ([1]); he has been the public officer of the defendant since 1 March 2016 ([2]); and, from about October 2011 to 31 June 2015, his service was contracted to the defendant as a manager ([3]). Mr Lowe declared that: he verified the sums withheld as PAYG during each of the relevant periods and the sums remitted to the Commissioner of Taxation ([7]); the amount specified in each BAS statement that covers the Notice Period (from 1 July 2009 - 31 October 2013) correctly identifies "the amount withheld and withholdable" by the defendant on account of PAYG ([8]); and that there is no amount of PAYG relating to the Notice Period that ought to have been and/or was withheld by the defendant and has not been remitted to the Deputy Commissioner of Taxation ([10]) (emphasis added). To the 2017 Statutory Declaration, Mr Lowe annexed a table that he declared correctly set out the amount (if any) of any PAYG liability of the defendant (see [9] and Annexure A).
4. Mr Lowe explained (from [14]) the role of the defendant, including that at all times during the Notice Period it had been the trustee of the ASH Trust (commencing in its role as trustee on 1 July 2011). (The Notice Period in fact commenced on 1 July 2009 but, as I understand it, the statement at [14] is to the effect that, at all times during the Notice Period after the establishment of the ASH Trust on 1 July 2011, the defendant had been the trustee of the said trust.)
5. Mr Lowe declared that, for the period from 1 July 2009 to 30 June 2011, the defendant operated a business in its own right under the business name CAP Accounting ([15]) and that, from 1 July 2011, it operated that business in its capacity as trustee of the ASH Trust ([16]).
6. Mr Lowe declared that the principal of the CAP Accounting office was at all relevant times Mr David Cassiniti ([17]) and went on to summarise the employment arrangements of the persons working in the CAP Accounting business, first, from 1 July 2011 to 22 May 2012 and then from 23 May 2012 to 31 October 2013 (see [19]). In summary, he declared that, from 1 July 2011, Mr Cassaniti was an employee of the defendant in its own right and then in its capacity as trustee of the ASH Trust; and that the staff of the CAP Accounting firm were employed by labour hire companies or other entities (see [4]; [41]; [46]; and the defendant's oral submissions at T 12/10/18; from 24.1).
7. Mr Lowe set out details of the St George account that he declared the defendant had operated for the CAP Accounting business (to which I will refer as Account A), exhibiting what he said was a complete set of the bank account statements; and set out details from those bank statements of payments to Mr Cassiniti "and the hire companies" (see [23]). Other documents in relation to payments made by the defendant were exhibited to the 2017 Statutory Declaration. Details were provided of the withholding and remittal of tax from Mr Cassiniti's payments (see [38]-[40]). Mr Lowe then set out details of "staff payments" to 30 May 2012 by Ultra Nova Financial Services Pty Ltd and by the trustee of the Ultra Nova Discretionary Trust; and details of other staff payments ([53]-[59]).

Response to the 2017 Statutory Declaration

1. By a letter dated 30 January 2017, signed, as noted above, in the name of the Deputy Commissioner, the defendant was advised (in similar terms to the 2015 letter responding to the 2015 Statutory Declaration), that the 2017 Statutory Declaration was inconsistent with information held by the Commissioner "and the number of employees known to the Commissioner" and, consequently, that the 2017 Estimate Notice "will not be revoked".
2. As noted earlier, it appears that a statutory demand was issued (but not ultimately relied upon) in relation to the underlying liability estimated as owing in the 2017 Estimate Notice. These proceedings were subsequently commenced on 8 November 2017 by way of statement of claim. The defendant filed its defence on 13 December 2017 and in due course made an application for the separate determination of the questions as set out above, which led to the hearing before me (sitting in the Common Law Division for that purpose).

Mr Zafiriou's position within the ATO

1. Before setting out the relevant statutory provisions, I note the evidence as to the position within the ATO of Mr Zafiriou, he being the person who had responsibility for the preparation and issue of the 2017 Estimate Notice and the subsequent correspondence in relation to the 2017 Statutory Declaration (and whose authority to issue the said notice is challenged on the present application).
2. Mr Zafiriou has sworn a number of affidavits in the proceedings. In his second affidavit, of 14 August 2018, he deposes that he is a director employed in the Debt section of the ATO and subject to the direction of the Deputy Commissioner ([1]).
3. Exhibited to that second affidavit is a copy of the Instrument of the Commissioner's Delegations and Authorisations which was issued on 17 September 2015 (the Commissioner's Delegation), by which the Commissioner delegated his relevant powers and functions under the TAA to the persons who from time to time hold, occupy or perform the duties of the position of Second Commissioner of Taxation or of an Officer in the Senior Executive Service employed by the ATO (see [5]).
4. In particular, by reference to the Commissioner's Delegation (Schedule 1, read with Appendix 1), it can be seen that the Commissioner delegated, pursuant to s 8 of the TAA, his powers and functions under the TAA to the persons who from time to time hold, occupy or perform the duties of the position of: (a) Second Commissioner of Taxation or (b) an Officer in the Senior Executive Service employed by the ATO. The Commissioner's powers and functions so delegated are those specified in column A of Appendix 1 to the instrument of delegation, except the powers and functions specified in column B of Appendix 1. In Appendix 1, the Commissioner identified in column A the TAA and Div 268 of Sch 1 of the TAA was not identified as an exception. Hence, the Commissioner's Delegation includes the Commissioner's powers under ss 268-10 and 268-35 of Sch 1 to the TAA. (Relevantly, for the purposes of the defendant's general authority argument, the delegation was not expressed as a delegation to "the office of Deputy Commissioner".)
5. Also exhibited to Mr Zafiriou's second affidavit is a copy of a Service Delivery Instrument of General Authorisation (the Deputy Commissioner's General Authorisation) executed by the then Deputy Commissioner (Mr Ravanello), the authorised delegate of the Commissioner for Service Delivery, on 30 October 2015, by which certain officers employed by the ATO were authorised to exercise the Deputy Commissioner's power and functions under the TAA (see [6]).
6. In particular, the Deputy Commissioner's General Authorisation stated that, in the exercise of the powers and functions delegated to the Deputy Commissioner by the Commissioner's Delegation, and of the powers and functions he exercised in his own right, the Deputy Commissioner authorised all officers (a) from time to time holding or occupying or performing duties in Service Delivery business and/or (b) who exercise powers and functions in relation to any matters arising in Service Delivery "to exercise in the name of the person from time to time holding, occupying or performing the duties of the Deputy Commissioner of Taxation, Service Delivery": • all the powers and functions delegated to the office of Deputy Commissioner of Taxation, Service Delivery by Schedules 1, 4 and 5, and Appendix 1 to the Instrument of the Commissioner's Delegations and Authorisations signed 17/09/2015; and • the powers and functions which the Deputy Commissioner of Taxation, Service Delivery, exercises in his or her own right; • subject to the limitations identified in Schedules 2 to 9 of this instrument.
7. The interpretation section of the Deputy Commissioner's General Authorisation includes provision (cl 5.5) that the instrument is to be construed in broad terms and the meaning is not limited to the exact words used in the legislation. Schedule 1 sets out a table of the legislation containing powers and functions covered by the instrument. The exceptions to the authorisation in relation to the TAA do not include the Deputy Commissioner's powers and functions under the statutory provisions here under consideration. Schedule 2 to the instrument relates to the authorisations for Executive Level 2 Officers (and again does not exclude the powers and functions here under consideration (i.e., those under Div 268 of Sch 1 to the TAA), from the authorisation to exercise "in the course of their duties in the name and on behalf of the person from time to time holding or occupying or performing the duties of Deputy Commissioner of Taxation, Service Delivery, all the Deputy Commissioner's power and functions").
8. In the context of the 2017 Estimate Notice, Mr Zafiriou deposes in his second affidavit that Mr Ravanello was the Deputy Commissioner for Service Delivery and that he, Mr Zafiriou, performed duties within the Debt business line of the ATO (which forms part of the Service Delivery business line) (see [7]), exhibiting documents in relation to Mr Ravanello's appointment in 2016 and his position as a Deputy Commissioner and Officer in the Senior Executive Service employed by the ATO (an SES Band 2 officer) as at the date of issue of the notice (see [8]).
9. Mr Zafiriou deposes that, as at the date of issue of the 2017 Estimate Notice, he was acting as an Assistant Commissioner for the Debt business line (within the Service Delivery business line of the ATO) (see [9]).
10. In his 25 September 2018 affidavit, Mr Zafiriou gives further detail as to the way in which the 2017 Estimate Notice was prepared: namely, by use of a Pay As You Go Analyser program (PAYG Analyser) collating all the PAYGW data associated with a specified taxpayer to cross-check the lodged income tax returns of the individuals referred to in the defendant's bank records (see [4]-[6]) and by the use of an Integrated Core Processing System (the ICP System) to obtain an office copy of the income tax returns received from individuals identified by the PAYG Analyser program (see [7]-[8]). He then sets out the results of some of the searches he conducted (from [11]).
11. The upshot of Mr Zafiriou's searches was that he formed the view that there was a discrepancy between the withholding reported by various entities to which he refers in his statutory declaration (Caiman Pty Ltd; the trustee for the Aleksandra Holdings Discretionary Trust; Ultra Nova Financial Services Pty Ltd; the trustee for Darlinghurst Financial Services Trust; and the trustee for ACS Building Services Trust) and the withholding claimed by individuals who reported receiving salary and/or wages from those entities in their income tax returns (see [14]; [20]; [27]; [32]; [38]). In cross-examination, he accepted that, served with the 2017 Statutory Declaration, there were documents that purported to say that some of the said entities were withholding amounts (see T 30/11/18; 14.22-42), but he clearly did not accept the correctness of those documents.
12. In cross-examination, it was made clear by Mr Zafiriou that the 2015 Estimate Notice was not formally revoked prior to the issue of the 2017 Estimate Notice, in the sense of there being any formal consultation process or decision recorded to that effect (see, for example, his evidence at T 30/11/18; 4.28; 4.32; 5.22); and that his understanding was that it was the issue of the 2017 Estimate Notice itself which in effect rendered void the old (2015) Estimate Notice, by replacing or superseding it (see, for example, his evidence at T 30/11/18; 4.42; 4.45; 5.5; 5.14; 5.22; 5.26; 6.12). His evidence was that this was the intention of the Commissioner (see T 30/11/18; 5.10) - though he elsewhere made clear that, in raising the 2017 Estimate Notice, he did not consult with either the Deputy Commissioner or the Commissioner and he agreed that, so far as he knew, neither of them had turned his mind to the quantum of the estimate or was in any way involved in the preparation of the estimate (see T 30/11/18; 11.41; 11.45; 11.50).
13. As to his authority to issue the notice, Mr Zafiriou's understanding (the relevance of which for present purposes is by no means clear to me) was that, as at 16 January 2017, by reason of his level at the ATO (executive level number 2), he was the subject of a delegation from the Commissioner and that he was also authorised by the Deputy Commissioner to sign the notice of estimate (see T 30/11/18; 12.38-13.1), and said that (see T 30/11/18; 12.5-8): A. … I say that I've got delegation to do certain things and I'm also authorised by the Deputy Commissioner to do certain things so it's a combination of both delegation and authorisation.

Relevant legislation

1. The obligation to withhold amounts referable to PAYG tax from salary or wages is imposed by s 12-35 of Sch 1 to the TAA, which relevantly provides that: An entity must withhold an amount from salary, wages, commission, bonuses or allowances it pays to an individual as an employee (whether of that or another entity). [emphasis added]
2. As adverted to above, the plaintiff emphasises that the obligation to withhold is imposed upon the entity which pays salary, wages, commission, bonuses or allowances to an individual as an employee, irrespective of whether or not the entity is the employer of that individual.
3. The obligation upon the withholding entity to remit to the plaintiff the amounts so withheld is relevantly imposed by Div 16 of Sch 1 to the TAA; in particular, by s 16-70.
4. Div 268 of Sch 1, which was introduced into the legislation with effect from 1 July 2010, deals with estimates and recovery of PAYG withholding liabilities. It is not disputed that the provisions in this Division enable the Commissioner to make an estimate of, inter alia, amounts not paid as required under the PAYGW provisions (Part 2-5) and to recover the amount of the estimate (see s 268-1) as a separate and distinct liability from the underlining liability (see s 268-20(2)).
5. The stated object of Div 268 is, relevantly, "to enable the Commissioner to take prompt and effective action to recover ... amounts not paid as required" by the PAYGW provisions (see s 268-5).

Predecessor "estimate" regime

1. Before turning to the particular provisions of Div 268 under consideration in the present case, I note that the defendant drew attention to the predecessor to Div 268, that being the "estimate" regime in Pt VI, Div 8 of the Income Tax Assessment Act 1936 (Cth) (ITAA), which was introduced in 1993 and contained ss 222AFA to 222AMB. The stated purpose of that estimate regime (similar to that of the regime which replaced it) was to promote the timely and efficient recovery of amounts that had not been remitted to the Commissioner despite a liability to withhold and remit them under provisions such as s 12-35 of Sch 1 to the TAA (s 222AFA(1) of the ITAA).
2. The defendant places weight on various statements contained in the 1993 Explanatory Memorandum to the Insolvency (Tax Priorities) Legislation Amendment Bill 1993 (Cth) (at Chapter 2) (the Explanatory Memorandum), including the statement that, before this regime, the Commissioner could recover such amounts from the payer but first had to establish the exact amount of the liability, by which time the "efficient and timely recovery of the unremitted deductions" was often frustrated.
3. The estimate regime under the ITAA enabled the Commissioner to estimate the amount which a payer was liable to remit on account of its withholding obligations, and to demand payment of that estimate (s 222AHA(1) of the ITAA). The payer had the opportunity to declare that no amount was remitted to prove that there was no withholding obligation (ss 222AGC(1), 222AGD(1) and 222AHC(2) of the ITAA).
4. The Explanatory Memorandum further stated (at 25) that: In practice it will be most unusual for the Commissioner to estimate precisely the actual unremitted amounts. Of course the estimate could be reduced to the actual unremitted amount when the person liable, upon being notified of the estimate by the Commissioner, declares what the actual unremitted amount was.
5. The defendant argues that the Explanatory Memorandum is of considerable assistance to an understanding of the scope, impact and intention of the 2010 legislation, which effectively mirrored the regime provided for under the ITAA (including references to the new regime enabling the Commissioner to recover debts earlier and more effectively; and to obtain prompt recovery through estimates).
6. The defendant notes that (at p 20 of the Explanatory Memorandum) it is said that the key feature of the new regime would enable a Commissioner to make an estimate of unremitted amounts when time for payment has passed and to take action to recover that estimate if the Commissioner is not advised of the actual amount. It is said that, as the Commissioner is only interested in collecting the actual unremitted amounts, a person will be given an opportunity to inform the Commissioner of the actual amounts deducted. At p 24 of the Explanatory Memorandum, it is noted that decisions about estimates are not reviewable under the Administrative Decisions Judicial Review legislation. The person who becomes liable under the estimate has the right to vary the amount of the estimate by completing a statutory declaration.
7. The defendant submits that the legislation, understood in the context of the Explanatory Memorandum and the statutory purpose of the Commissioner only being interested in the actual liability, supports the approach that the defendant says is mandated under Div 268 of the TAA: namely, that of looking at the statutory declaration and, if satisfied of its compliance with s 268-90(2) and s 268-40(2), for the automatic reduction of the liability to nil (or, I would add, where some lesser amount of unpaid liability is specified, to that specified lesser amount).

Introduction of Division 268 in July 2010

1. On 1 July 2010, the Tax Laws Amendment (Transfer of Provisions) Act 2010 (Cth) repealed Pt VI of the ITAA, including the estimate provisions in the former Div 8 of Pt VI, and added the new estimate provisions (which came into force on 1 July 2010) as Div 268 of Sch 1 to the TAA (Sch 1, Pt 1, Item 10 of the Tax Laws Amendment (Transfer of Provisions) Act 2010 (Cth)). Sch 1, Pt 3, Item 58 of the Tax Laws Amendment (Transfer of Provisions) Act 2010 (Cth) provided that an existing estimate remains in force from the commencement time of the new regime as if it had been made under s 268-10 in Sch 1 to the TAA.
2. Pursuant to s 268-10(1), the Commissioner may estimate the unpaid and overdue amount of a liability (defined as the "underlying liability") under s 16-70 in Sch 1 (the requirement to pay to the Commissioner amounts withheld under the PAYGW rules). The amount of the estimate must be what the Commissioner thinks is reasonable (s 268-10(2)) and in making the estimate the Commissioner may have regard to anything he or she thinks relevant (s 268-10(3)).
3. Pursuant to s 268-10(4), while the estimate "is in force" the Commissioner must not make another estimate relating to the underlying liability. (Pausing here, the defendant argues, and I accept, that it is clear from s 268-10(4) that there must only be one estimate in relation to each underlying liability for each withholding period at any particular time.) Section 268-10(5) provides that the estimate is in force if: (a) the Commissioner has given notice of the estimate; (b) the estimate has not been revoked; and (c) the liability has not been discharged.
4. Pursuant to s 268-15, the Commissioner must give written notice of the estimate and the notice must: identify the underlying liability; specify the date of the estimate; set out the amount of the estimate; state that the amount of the estimate is due and payable; and explain how the recipient may have the amount of the estimate reduced or the estimate revoked. The section makes clear that a single notice may relate to two or more estimates but if so it must comply with sub-s (2) (the provision specifying the contents of the notice) in relation to each of them.
5. Despite s 29 of the Acts Interpretation Act 1901 (Cth), a notice under sub-s (1) is taken to be given at the time the Commissioner leaves it or posts it (s 268-15(4)) (rather than when it is delivered in the ordinary course of post - see DCT v Meredith [2007] NSWCA 354; 2007 ATC 5353), a matter to which the defendant points in the context of what is to be expected of a statutory declaration made in response to the notice of estimate.
6. Pursuant to s 268-20, the amount of the estimate is due and payable when the Commissioner gives a notice of estimate in accordance with s 268-15 and (see sub-s (2)), liability to pay the amount of the estimate is separate and distinct from the underlying liability and for all purposes. Pursuant to s 268-25, the recipient of the notice is liable to pay the unpaid amount of the estimate even if: the underlying liability never existed or has been discharged in full; or the unpaid amount of the underlying liability is less than the unpaid amount of the estimate. (Note 1 to this section states that "[s]ection 268-40 revokes the estimate if you give the Commissioner a statutory declaration, or file an affidavit, to the effect that the underlying liability never existed".)
7. Sub-division 268-D, headed "[r]educing and revoking estimates", contains a series of provisions as to how an estimate may be reduced or revoked; when reduction or revocation takes effect; and the consequences of reduction or revocation. Relevantly, there are a number of ways in which the statute provides for the reduction or revocation of estimates, including by the Commissioner in the exercise of his or her powers under s 268-35 and by the operation of s 268-40(1).
8. Section 268-35 ("How estimate may be reduced or revoked - Commissioner's powers") provides, relevantly, as follows: Reduction (1) The Commissioner may at any time reduce the amount of the estimate, but is not obliged to consider whether or not to do so. (2) If the Commissioner reduces the amount of the estimate under subsection (1), he or she must give you a written notice that: (a) identifies the underlying liability; and (b) sets out the reduced amount of the estimate . Note: The estimate is taken always to have had effect as reduced: see section 268-55. Revocation (3) The Commissioner may at any time revoke the amount of the estimate, but is not obliged to consider whether or not to do so. (4) If the Commissioner revokes the amount of the estimate under subsection (3), he or she must give you a written notice that: (a) identifies the underlying liability; and (b) states that the estimate has been revoked. Note: The estimate is taken never to have been made: see section 268-55
9. Sub-section (5) sets out the principles to which the Commissioner must have regard in exercising the power under s 268-35 (as well as the effect of reduction or revocation on liabilities). These principles include: that the estimate is of the unpaid amount of the underlying liability as at a particular time; and that the purpose of reducing the amount of the estimate is to bring it closer to the unpaid amount of the underlying liability as at the time the estimate was made.
10. Section 268-40 contains the procedure whereby the recipient of a notice can itself take steps to effect a reduction of the amount of the estimate or the revocation of the estimate. The section applies as set out in the three scenarios outlined in the table to sub-s (1). Item 1 of the table, relevant in the present case, is where the Commissioner gives notice of the estimate and the recipient gives the Commissioner a statutory declaration for the purposes of s 268-40 either within seven days after the notice is given by the Commissioner or within such longer period as allowed by the Commissioner. Item 2 of the table is where the recipient is a party to proceedings before a court that relate to the recovery of the unpaid amount of the estimate and the recipient files an affidavit for the purposes of s 268-40 and serves a copy on the Commissioner within 14 days after the recipient first takes a procedural step as a party to the proceedings or within such longer period as allowed by the court. Item 3 relates to the scenario where a statutory demand was served and provides for the filing and service of an affidavit only.
11. Section 268-40 goes on to provide: Reduction (2) The amount of the estimate is reduced if the statutory declaration is to the effect, or the affidavit verifies facts sufficient to prove, that a specified lesser amount is the unpaid amount of the underlying liability. Example: Subsection (2) will apply if the statutory declaration etc. is to the effect that the underlying liability has been discharged in full (and therefore the unpaid amount of the liability is nil). (3) The amount of the reduction is the amount by which the unpaid amount of the estimate (just before the reduction) exceeds the amount specified. Note: The effect of subsection (3) is to reduce the unpaid amount of the estimate to the amount specified. Revocation (4) The estimate is revoked if the statutory declaration is to the effect, or the affidavit verifies facts sufficient to prove, that the underlying liability never existed.
12. The content of the requisite statutory declaration or affidavit, for the purposes of s 268-40, is set out in s 268-90(2), which relevantly provides that in a case covered by paragraph 268-10(1)(a): ... the statutory declaration or affidavit must verify the following facts: (a) whichever of the following are applicable: (i) the sum of all amounts you withheld under Division 12 during the relevant period, or the fact that you did not withhold any such amounts during the period; (ii) the sum of all amounts you were required to pay under Division 13 (Alienated personal services payments) during the relevant period, or the fact that you were not required to pay any such amounts during the period; (iii) the sum of all amounts you were required to pay under Division 14 (non-cash benefits and accruing gains) during the relevant period, or the fact that you were not required to pay any such amounts during the period; (b) what has been done to comply with Division 16 (Payer's obligations and rights) in relation to the amounts referred to in paragraph (a).
13. Pursuant to s 268-55(2), if the amount of the estimate is reduced, the estimate has effect, and is taken always to have had effect, as if the original amount of the estimate had been the reduced amount. Pursuant to s 268-55(3), if the estimate is revoked, the estimate is taken never to have been made.
14. Amounts due and payable under an estimate notice may be recovered in accordance with Pt 4-15 of Sch 1 to the TAA (formerly, s 222AFA(5) of the ITAA). General interest charge accrues on these amounts while they remain outstanding (see ss 8AAA-8AAH, s 8AAZF of the TAA). An estimate of payable amounts is a "tax related liability" (s 250-10(1), Sch 1 to the TAA, Item 138) and, as such, a debt due to the Commonwealth and payable to the plaintiff (s 255-5, Sch 1 of the TAA). Similarly, the general interest charges are debts due and payable to the Commonwealth and to the plaintiff (s 250-10(2), Sch 1 of the TAA, Items 70, 125, 130 and 135).
15. Section 268-20 describes the nature of a liability to pay an estimate, the amount of which becomes due and payable upon the Commissioner giving the notice. The amount of the estimate is separate and distinct for all purposes from the underlying liability. The Commissioner may take proceedings to recover the unpaid amount of the estimate as well as the unpaid amount of the underlying liability or both and the discharge of one liability discharges the other liabilities.

Questions for Determination

1. As, logically, questions 1 and 2 do not arise if question 5 is answered in the manner for which the defendant contends, I will deal first with question 5.

Was the notice of estimate dated 16 January 2017 invalid by reason of an absence of delegated authority to issue it?

1. As noted above, the 2017 Estimate Notice bears the facsimile signature of Mr Ravanello, who is described as Deputy Commissioner of Taxation and Delegate of the Commissioner of Taxation. Both the estimate and the notice itself were prepared and issued by Mr Zafiriou (see [13]-[17] of his affidavit sworn 10 May 2018), in the manner noted above.
2. Section 8(1) of the TAA permits the Commissioner to delegate to a Deputy Commissioner or any person his powers and functions under a taxation law. A delegation of powers and functions must be in writing and may be in general terms or as specified in the instrument of delegation. Section 8(1) provides that: The Commissioner may, either generally or as otherwise provided by the instrument of delegation, by writing signed by the Commissioner, delegate to a Deputy Commissioner or any other person all or any of the Commissioner's powers or functions under a taxation law or any other law of the Commonwealth or a Territory, other than this power of delegation. [emphasis added]
3. Where a delegated power or function is exercised or performed by a delegate, it is deemed to be exercised or performed by the Commissioner for the purposes of the relevant taxation law. (I have noted above the evidence as to the Commissioner's Delegation that was in place at the relevant time.)
4. It is also relevant to note regulation 45 (headed, "[p]resumption as to signatures") of the Taxation Administration Regulations 1976 (Cth), which provides as follows: (2) A document bearing the name (however produced) of a person who is, or was at any time, the Commissioner, a Second Commissioner, a Deputy Commissioner or a delegate of the Commissioner in the place of the person's signature is taken to have been duly signed by the person, unless it is proved that the document was issued without authority. (3) A document given under a taxation law that purports to be signed by the authority of the Commissioner is as effective for all purposes under the taxation laws as if it had been signed personally by the Commissioner. (4) Any notice that, under a taxation law, is to be given to an entity by the Commissioner may be given to the entity by an officer who is authorised by the Commissioner to do so.
5. In written and oral submissions, the defendant raised a number of points as to the authority issue (see from T 12/10/18; 9). Those may be summarised as follows.
6. First (raised for the first time in oral submissions as noted above), that the existence of the 2015 Estimate Notice precluded the issue of the 2017 Estimate Notice.
7. Second, that the document in question bore a facsimile stamp of the Deputy Commissioner of Taxation's signature (which it is submitted was affixed without requisite authority).
8. Third, that if Mr Zafiriou was himself exercising delegated authority from the Commissioner, then (by signing the document or affixing the facsimile signature in the name of the Deputy Commissioner rather than of the Commissioner) the execution of the document was invalidated by the act of the delegate himself (because he should have signed in the name of the Commissioner). In other words, it is submitted that, if exercising the authority that the defendant accepts was delegated to someone in Mr Zafiriou's position by the Commissioner, Mr Zafiriou had to signify either that he was a delegate of the Commissioner and signing in that capacity or (and preferably, in the defendant's submission) that he was signing in the name of the Commissioner "to signify that that was his statutory requirement") (at T 12/10/18; 9.36).
9. Fourth, that only the Commissioner had authority to issue the notice.
10. In elaboration or clarification of the second of those four points, it was said (see T 30/11/18; T 9.42-47) that: if he affixed the facsimile stamp to the document under authority, a purported authority, from the Deputy Commissioner there was no authority to, there was no power to authorise the officer to affix the facsimile signature because of the fact there was already ample delegated authority and therefore no necessity for the triggering of the authorisation from the Deputy Commissioner
11. I address those issues and the plaintiff's response thereto, as follows.

Extant 2015 Estimate Notice?

1. As adverted to earlier, the defendant contends that the 2017 Estimate Notice is invalid because an earlier estimate (contained in the 2015 Estimate Notice) had not been revoked under s 268-35, and hence continued to be "in force", at the time of the issue of the 2017 Estimate Notice, such that the Commissioner was precluded from making another estimate relating to the underlying liability, and therefore that the making of the estimate the subject of the 2017 Estimate Notice (the 2017 Estimate) was beyond power by reason of s 268-10(4) (which I have set out above).
2. The defendant notes in this regard that: an estimate is capable of generating a statutory liability, distinct from the true liability of the recipient to PAYGW (s 268-20(2)) and that liability arises when the Commissioner issues a notice of estimate (s 268-20(1)). The defendant argues that it follows that the giving of notice is an essential ingredient in the imposition of the statutory liability, noting that once the statutory liability exists, the liability is separate and distinct for all purposes (s 268-20).
3. The defendant submits that it is clear from Div 268 that: the recipient of the notice (as well as liquidators, others potentially affected by the statutory liability and the ATO officers themselves) must be able to rely upon the notice, which is required, inter alia, to set out the amount of the estimate and to explain how the amount may be reduced or the estimate revoked (see s 268-15(2)); and emphasises the need for precision of language and certainty in this context.
4. The defendant argues that the giving of a notice of revocation is necessary for the "undoing" of the imposition of statutory liability that arises from the issue of the notice of estimate and says that this is required as part of the orderly operation of the relevant provisions, the giving of the notice of revocation being the time from which the statutory liability is taken never to have arisen (s 268-55(3)).
5. By reference to Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355; [1998] HCA 28 at [91] (Project Blue Sky), the defendant argues: that the language, subject matter and objects of the TAA "do not suggest any legislative purpose to put taxpayers at any one point in the oppressive situation of multiple estimates, giving rise to multiple alternative amounts recoverable from them at the election of the Commissioner"; that the existence of multiple estimates at any one time would be productive of confusion rather than the achievement of the object of Div 268; and that the clear condition in s 268-10(4) restraining the power to make an estimate in s 268-10(4) serves the purposes of Div 268 (namely, to facilitate collection of PAYGW when the amount of the estimate is not put in dispute by information in reply to the notice as to the true underlying liability). The defendant notes that there is no mechanism within Div 268 that could be used to reconcile conflicting liabilities that would potentially arise from multiple estimates.
6. The defendant points to the fact that the TAA provides various modes of reduction and revocation and argues that it therefore does not contemplate revocation of estimates outside those modes. (Pausing here, the plaintiff does not suggest that any revocation was effected other than by exercise of the Commissioner's power under s 268-35.)
7. The plaintiff's principal submission on this aspect of the authority issue is that the 2015 Estimate Notice was revoked (and thus s 268-10(4) did not prevent the making of the estimate in the 2017 Estimate Notice) because the covering letter with which it was served satisfied the notification requirements of s 268-35(4). However, if (which is denied), there was any failure to satisfy the notification requirements of s 268-35(4), the plaintiff submits that this did not render invalid the revocation of the 2015 Estimate Notice under s 268-35(3) (and hence there was nothing to preclude the issue of the 2017 Estimate Notice) because "[t]he statutory language does not make the written notice indispensable to the validity of the revocation".

Plaintiff's principal submission that the 2015 Estimate Notice was revoked

1. As to the plaintiff's principal submission, the plaintiff contended as follows.
2. First, that the requirement of s 268-35(4)(a) (that the written notice must identify the underlying liability) was satisfied by the statement in the 2017 Covering Letter to the effect that the enclosed notice informs the recipient of the amount of the estimate made in respect of each withholding period. It is said that the terms of the first paragraph of the 2017 Covering Letter sufficiently identified the underlying liability, including by referring to each withholding period set out in the 2017 Estimate Notice (which the plaintiff accepts were the same withholding periods as had been set out in the 2015 Estimate Notice). (No issue was taken by the defendant as to compliance with the requirement under s 268-35(4)(a).)
3. Second, the plaintiff submits that the requirement of s 268-35(4)(b) (that the written notice state that the estimate has been revoked) was satisfied by the statement that the 2017 Estimate Notice "replaces" the 2015 Estimate Notice. (The defendant cavils with this proposition.)
4. Reference is made by the plaintiff in this regard to the decision of the Court of Appeal in Power v Federal Commissioner of Taxation [2013] NSWCA 428; (2013) 284 FLR 42 (Power), where consideration was given to the provisions in Div 269 of Sch 1 to the TAA (which deal with director penalty notices); in particular, to s 269-25, which provided that the relevant notice "must ... state" that the recipient is liable to pay an amount under "this Division". In Power, the notice issued by the Deputy Commissioner did not state, in express terms, that the liability was under Div 269, although the notice identified the liability as arising under s 269-15, that section being part of Div 269.
5. Emmett JA (with whom I agreed) identified the first step, in construing whether the notice complied with s 269-25, as being to identify the purpose of the provision and the second step as being to consider whether the notice achieved the legislative object and thus whether a statement that the liability was under Div 269 was part of what the provision "primarily required". His Honour identified the principal object of Div 269 as being to prompt a director of a company to ensure that the company meet its PAYGW obligations or go into voluntary administration or liquidation. His Honour considered that one way in which the legislative object was achieved was by requiring the notice to be given before the Commissioner commenced proceedings, in the expectation that this would prompt compliance with the obligation imposed by s 269-15. His Honour considered that the inclusion of a specific reference in the notice to "this Division" would not advance that object, nor was this its own separate object; indeed, that to require a reference to "this Division" would be to thwart that object. His Honour considered that there was no necessity for the notice to explain the legislative scheme of Div 269; and that it was enough that the notice "simply indicate" that the amount must be paid under a scheme created by Div 269.
6. The plaintiff submits that, in the present case, the object of Div 268 is relevantly similar, namely to prompt action by the taxpayer to whom a notice is addressed; and that, as was the case in Power, strict compliance with a particular form of words (here, an insistence on use of the verb "revoke") does not aid that object.
7. It is submitted that s 268-35 fulfils a particular role in the legislative scheme provided by Div 268; its object being to relieve the taxpayer wholly or in part of the burden of an estimate. The plaintiff notes (see s 268-35(5) to which I have referred at [67] above) that Div 268 is directed to a situation where the Commissioner does not know the precise amount of the underlying liability, so there is an inherent risk that the amount of the estimate could be wrong or liable to change in the event that new information becomes available; and thus that reduction or revocation of an estimate allows the Commissioner to vary the estimate to be, or to be closer to, the actual amount of the underlying liability (including in response to information provided by the taxpayer).
8. The plaintiff submits that insistence on a precise formulation of words would not assist that object; rather, that such an approach would potentially thwart that object if it led a taxpayer to believe that an estimate had been revoked, but it might later be argued that what otherwise appeared to be a notice of revocation (or reduction) was legally ineffective for want of compliance with a precise verbal formulation, such that the estimate would still be in force and would have continued to accrue the general interest charge under s 268-75.
9. The plaintiff notes that the alternative analysis by Emmett JA in Power was that, even leaving aside the object of the legislation, all that the notice must do was to make "sufficiently clear" that the liability was one that arises under Div 269 and "effectively calls attention" to it. His Honour considered that the reference to the specific section within Div 269 left the taxpayer no worse informed than if the notice had used the specific words "Division 269". The plaintiff also refers to the conclusion reached in that case by Barrett JA that the notice, when viewed in context, stated by "reasonable intendment" that the liability arose under Div 269. The plaintiff observes that, in respect of the provisions there under consideration, his Honour construed the word "state" as synonymous with "intimate".
10. The plaintiff argues that, by parity of reasoning, all that the notice under s 268-35(4) was required to do in the present case was to make it sufficiently clear, or effectively call attention to the fact, that the 2015 Estimate had been revoked. It is submitted that the word "replaces" in the 2017 Covering Letter performed that function - both on the natural and ordinary meaning of the word and in the statutory context of revocation of estimates.
11. As to its natural and ordinary meaning, the plaintiff submits that the word "replace" means "to fill or take the place of; substitute for"; and that use of this word would have conveyed to any reasonable reader that the 2015 Estimate had been revoked, as its place had been taken and it was substituted for by another estimate - thus the 2015 Estimate was no longer in legal existence.
12. As to the statutory context in which the word was used, the plaintiff accepts that s 268-10(4) provides that the Commissioner "cannot make another estimate relating to the underlying liability" if an earlier estimate "is in force". It is submitted that the 2017 Covering Letter identified that the 2015 Estimate had been in force until the date of the 2017 Covering Letter and that it further identified that the Deputy Commissioner was making a new estimate (to be found in the 2017 Estimate Notice). The plaintiff argues that, having regard to the circumstances that: the Commissioner had the power to revoke the existing estimate; the Commissioner's power to make a new estimate depended on the existing estimate being revoked; and the Deputy Commissioner expressed himself as making a new estimate; the only reasonable inference from the use of the word "replaces" was that the 2017 Covering Letter was revoking the 2015 Estimate (an argument, I interpose to note, that was criticized by the defendant as displaying circulatory of logic).
13. Finally, the plaintiff points to s 25C of the Acts Interpretation Act which provides that "substantial compliance" is sufficient where an Act of the Commonwealth Parliament prescribes compliance with a particular form and to the equivalent New South Wales provision (s 80 of the Interpretation Act 1987 (NSW)). The plaintiff submits that even if (which it denies is the case), the 2017 Covering Letter did not strictly comply with s 268-35(4)(b), it substantially complied with that provision as it "communicated the substance of the requisite information" to the defendant.
14. The defendant, in response, argues that there is a difference in meaning between "revoke" and "replace". It says that these words are not equivalent: that "revoke" means "annul/cancel" or make void by recalling or taking back (in other words, in effect, that the estimate ceases to exist); whereas "replace" means "interchange" or "supplant" (in other words, that there are then two estimates - first, the earlier estimate, which continues to exist and is interchanged with or supplanted by the later estimate, and, second, the later estimate itself).
15. It is submitted by the defendant that the plaintiff must show that the earlier estimate has been revoked (otherwise he has breached a constraint on the power to make a new estimate). The defendant argues that the necessary precision was not present in the documents relating to the 2017 Estimate Notice. It argues that this invalidates the purported revocation (the defendant referring here to Television Corporation Ltd v The Commonwealth; Amalgamated Television Services Pty Ltd v Postmaster-General (1963) 109 CLR 59 at 71, 83; [1963] HCA 30; King Gee Clothing Co Pty Ltd v The Commonwealth (1945) 71 CLR 184; [1945] HCA 23; and Caan's Pty Ltd v Beasley (1946) 71 CLR 210 at 227-228; [1946] HCA 5).
16. The defendant submits that the authorities show that a notice may be a nullity if it fails to meet a requirement made essential by the legislation in question or could reasonably mislead as to what is necessary to comply with the notice (referring to Kleinwort Benson Australia Ltd v Crowl (1988) 165 CLR 71 at 79; [1988] HCA 34; James v Federal Commissioner of Taxation (1955) 93 CLR 631 at 644; [1955] HCA 75), and says that the consequences here (if the recipient is in any way misled or capable of being misled or has doubt about its obligations to comply) are that the recipient is "shackled with a 'construct' liability that may be wildly inaccurate".
17. The defendant submits that the decision in Power does not assist the plaintiff in that, in Power, there was "no real uncertainty" on the information stated in the notice regarding the source of the taxpayer's liability; whereas here it is said that the statutory basis for "putting aside" (i.e., replacing) the earlier estimate was left uncertain and ambiguous by the 2017 Estimate Notice.
18. In that regard, it is submitted that the plaintiff's conduct in issuing estimates for the same periods in the same amounts on both 8 July 2015 and 16 January 2017 respectively, created the "spectre of uncertainly" for the taxpayer. The defendant says: that it was left in a "real state of uncertainty" as to precisely where it stood in relation to the earlier notice (and why); that, to the reader of the 16 January 2017 letter, the plaintiff "had just 'replaced' an old notice with a new notice which restated and refreshed precisely the same liabilities, without reaching any state of satisfaction that the earlier estimates should be revoked"; and that there is no (evidentiary) basis for the plaintiff's submissions that both the taxpayer and the Commissioner had assumed that the earlier estimate had been revoked.
19. The defendant further argues that s 25C of the Acts Interpretation Act has no application to the circumstances of this case, noting that no form is prescribed in Div 268 (and referring to Power at [42]) and argues that there has not been "substantial compliance" as the letter did not convey to the reader that the earlier notice of estimate was discharged (because that liability was just refreshed), nor that the earlier estimates were "gone as a matter of law" (as the same amounts were just restated).
20. Pausing here, I note that in reply to the submission by the defendant that s 25C does not apply because no form is prescribed, the plaintiff says that this takes too narrow a view of the operation of s 25C, referring to the decision of Einstein J in Nameless, Shameless and Legless Pty Ltd v 2 Roslyn Street Pty Ltd [2004] NSWSC 519 at [36], a case concerning the New South Wales equivalent of s 25C of the Acts Interpretation Act.

Plaintiff's alternative submission that if there was a failure to comply with s 268-35 it does not invalidate the revocation

1. As to the plaintiff's alternative argument (that if there was a failure to comply with s 268-35(4) it did not invalidate the revocation), the plaintiff points to the language of s 268-35, which it is said provides for two separate but interrelated steps in relation to the revocation of an estimate: firstly, that the Commissioner may, at any time, revoke an estimate as outlined in sub-s (3); and, second, that, if the Commissioner revokes an estimate, he or she must give written notice as there described in sub-s (4).
2. It is submitted that the plain language of s 268-35 contemplates that "revocation precedes notification" and, therefore, that the Commissioner may validly revoke an estimate without having provided the written notice to the taxpayer (or with only having provided a written notice that fails sufficiently to comply with s 268-35(4)). It is submitted that the statutory language of s 268-35 does not make the written notice indispensable to the validity of the revocation.
3. The plaintiff calls in aid, in support of the proposition that revocation can be effective under s 268-35(3) even if the Commissioner fails to give notice as required by s 268-35(4), the language used in s 268-10(5) (which contains the definition of "in force" and provides, relevantly, that the estimate continues to be in force if the estimate has not been revoked). The plaintiff argues that there is a clear juxtaposition in the language used in the latter provision - between paragraph (a), which imposes a requirement that the Commissioner has given the taxpayer a notice, and paragraph (b), where such a requirement is absent (and all that is there required is that the estimate has not been revoked); and argues that the contrast in language is deliberate and provides an important indication as to the content of the notification requirement in the former provision.
4. The plaintiff argues that the construction for which he contends (i.e., as to the two-step process for revocation) does not cause any practical difficulties arising from any possible gap in time between the revocation of the estimate and the giving of a written notice to the taxpayer because s 268-55(3) provides that the effect of a revocation is that the estimate "is taken never to have been made". It is submitted that, therefore, even if there is a gap in time between revocation and notification, the estimate is taken never to have been made so there is no anomaly that would arise such as from accrual of the general interest charge during that gap in time.
5. I interpose here to note that, in response, the defendant reiterates its argument that an essential ingredient of undoing the imposition of the statutory liability arising from an estimate notice is the giving of notice upon which the recipient (and others potentially affected by the statutory liability) may rely. The defendant reiterates its submission that the clear intent of the legislature is that, at any one point in time, there may only be one estimate in force so that those potentially affected by the statutory liability have certainty and may make decisions or take action in relatively short timeframes to discharge the liability or seek to reduce/revoke it.
6. Returning to the plaintiff's submissions, the plaintiff relies on what was said by the plurality in Project Blue Sky Inc at [91] to the effect that whether breach of a condition relating to a statutory power means that a purported exercise of the statutory power is invalid and of no effect depends on whether such a result is consistent with the legislative purpose, to be determined having regard to the language, subject matter and objects of the legislation. Reference is made to the decision in Minister for Immigration and Citizenship v SZIZO (2009) 238 CLR 627; [2009] HCA 37 where failure by the Refugee Review Tribunal to comply with a notice requirement under the provisions of the Migration Act 1958 (Cth) did not invalidate the Tribunal's decision, it there being said (at [34]) that "the manner of providing timely and effective notice of hearing" was not an end in itself (in circumstances where all six applicants in fact appeared at the hearing and it was admitted that there was no procedural unfairness caused by the non-compliance to any of them).
7. The plaintiff also refers to the decision of the Federal Court in Maritime Union of Australia v Minister for Infrastructure and Regional Development (2015) 238 FCR 464; [2015] FCAFC 187 at [67], [76] and to the decision of the Court of Appeal in Roads and Maritime Services (NSW) v Desane Properties Pty Ltd [2018] NSWCA 196, in both of which a failure to comply precisely with the respective legislative requirements did not result in invalidity.
8. The plaintiff maintains that the issue is whether the use of the language of "replace", in the context of the 2017 Covering Letter as a whole, conveyed or drew to the attention of the recipient that the earlier notice was no longer relied upon; and says that here it did.
9. As to the legislative purpose of s 268-35(4), the plaintiff submits that there are two purposes of the provision: to inform the taxpayer of the revocation and to relieve the taxpayer of the liability arising from an estimate. (The defendant accepts that those are the purposes of a notice of revocation but argues that the 2017 Covering Letter failed to fulfil those purposes, arguing that, in context, the letter did not "relieve the taxpayer of the liability arising from an earlier estimate" - rather, the notice restated the liability in precisely the same amount; an argument that, with respect, seems to me to beg the question here to be answered). The plaintiff says, further, that the purpose of the revocation notice is one that is beneficial to the taxpayer (see T 30/11/18; 28.46).
10. The plaintiff submits that it would be inconsistent with the object of s 268-35(4) if the failure of the 2017 Covering Letter to use the word "revoke" were to render the revocation of the 2015 Estimate invalid and of no effect (noting that the plurality in Project Blue Sky (at [97]) considered it unlikely that an act done in breach of a statutory condition would render a purported exercise of power invalid if this would result in "public inconvenience". It is submitted that if the construction of s 268-35 advanced by the defendant were correct, technical non-compliance with sub-s (4) would produce the consequence that a purported revocation was ineffective, and thus that an estimate assumed by both the taxpayer and the Commissioner to have been revoked would still be in existence.
11. In that regard, the plaintiff says that, in the present case, the parties have proceeded so far as to reach a hearing in this Court before the "spectre of invalidity". The plaintiff argues that the suggestion that there was any uncertainty or ambiguity by reason of the 2017 Covering Letter is belied by the objective conduct of the parties: there being no suggestion by the taxpayer that the 2015 Estimate remained in force or that the revocation of the 2015 Estimate Notice was ineffective until the hearing on 12 October 2018 when the revocation issue was first articulated in oral argument. It is submitted that the parties have objectively proceeded on the basis that the 2017 revocation was effective and the 2015 Estimate was no longer in force. Thus, the plaintiff says there is no basis for any submission by the defendant of uncertainty or ambiguity (and no evidence that anyone within the taxation office was actually uncertain as to the position).
12. In summary, the plaintiff argues that the defendant's construction of s 268-35(4) should be resisted, since it would require the Court to attribute to Parliament an intention to bring about invalidity, and thus produce public inconvenience and disrupt the efficient administration of Div 268, contrary to the objects of that Division.
13. For its part, the defendant argues that the use of precision in language ameliorates the operation of notices of reduction or revocation, rather than creating uncertainty; and submits that, when confronted with the 2017 Covering Letter, it was "left uncertain as to precisely where it stood as regards the earlier notice and why". It is submitted that, contrary to the plaintiff's submissions, there is no "public inconvenience" in holding that the earlier estimate has not been revoked; rather, that such a result promotes the use of precision in language so that those potentially affected by the statutory liability have certainty in relation to the estimate. The defendant also says that it is not a "public inconvenience" to enforce against the Commissioner the requirements of the TAA (a proposition which, while hardly contestable, seems to me to beg the question as to what those requirements, properly construed, are or require to be done as a practical matter in any particular case).

Determination

1. As noted above, where a notice of estimate has been issued under Div 268, s 268-10(4) provides that while an estimate "is in force" the Commissioner cannot make another estimate relating to the underlying liability. What is meant by "is in force" is set out in s 268-10(5) by reference to three criteria (each of which must be satisfied); relevantly, for present purposes, one of which being that the estimate "has not been revoked" (see s 268-10(5)(c)).
2. There are various ways in which provision is made in the TAA for an estimate to be revoked. Relevantly, s 268-35 deals with how the estimate may be revoked (or reduced) by the Commissioner; and this is the power here relied upon by the plaintiff. Section 268-35(3) empowers the Commissioner to revoke the amount of the estimate at any time (though the Commissioner is not obliged to consider whether or not to do so) and s 268-35(4) provides that if the Commissioner revokes the amount of the estimate under sub-s (3) then the Commissioner "must" give the taxpayer a written notice that: (a) identifies the underlying liability and (b) "states that the estimate has been revoked" (my emphasis).
3. As to the outset, I accept that s 268-35(4) in its terms distinguishes between the act of revocation and the act of notification. It provides that "[i]f the Commissioner revokes …" then he or she must give a written notice identifying the underlying liability and stating that the estimate has been revoked. In that sense, the giving of a notice is predicated on the Commissioner exercising the power of revocation; i.e., the section contemplates that there is, first, a revocation and then a written notification of the revocation (the two-step process referred to by the plaintiff).
4. I accept that, logically, there must be a decision to revoke anterior to the issue of the relevant notice (even if that decision was not made until the very point of putting pen to paper, so to speak). However, it is conceivable that an act of revocation could occur by the act of issuing of the notice in question (say, for example, a notice that stated "I hereby revoke" or "the estimate is hereby revoked"), without any formal decision process initiated beforehand.
5. What I do not accept (nor did I understand this to be the plaintiff's position) is that an uncommunicated decision to revoke would satisfy the requirements of s 268-35 (i.e., a decision to revoke or a revocation made in the absence of the giving of the notice required by the statute to be given to the taxpayer). An internal decision to revoke an estimate notice, without communication of that decision to the taxpayer, would clearly not serve one of the accepted purposes of s 268-35(4), namely of informing the taxpayer of the revocation. In the present case, however, that is a moot point, since Mr Zafiriou made clear that there was no formal decision or internal consultation as to the decision to issue the 2017 Estimate Notice (at T 30/11/18; 11.42; 11.45).
6. The words "[if] the Commissioner revokes the estimate" contained in s 268-35(4) are, read in context, better understood as meaning "if the Commissioner decides to revoke the estimate". In this way, the language used in s 268-35(3) and 268-35(4) can be read congruently (and effect can still be given to the use of the mandatory "must" in relation to the giving of the written notice).
7. There was no express statement in the 2017 Covering Letter that the 2015 Estimate "has been revoked". Rather, the 2017 Covering Letter uses the language of replacement in that it states that the 2017 Estimate "replaces" the 2015 Estimate. Hence the dispute between the parties as to whether a notice stating that an estimate has been "replaced" satisfies the requirement in s 268-35(4)(b) that the Commissioner "must give" a written notice stating that the estimate has been "revoked" (and, if it does not, whether that invalidates the impugned "revocation" notice and means that the earlier notice remained in force and there was no power to issue a fresh notice). This gives rise to the question as to what is meant by "revoked" in this context.
8. The modern approach to statutory interpretation, as articulated in CIC Insurance Ltd v Bankstown Football Club Ltd (1997) 187 CLR 384; [1997] HCA 2, requires consideration of context (used in its widest sense as including the mischief the statute was intended to remedy), in the first instance, not merely at some later stage when ambiguity might be thought to arise (see the plurality judgment at 408); though one must always begin by focussing on the text of the relevant provision (see Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (2009) 239 CLR 27; [2009] HCA 41(Alcan) (at [47]); Saeed v Minister for Immigration and Citizenship (2010) 241 CLR 252; [2010] HCA 23 at [33]-[34]; Baini v The Queen (2012) 246 CLR 469; [2012] HCA 59 at [14]; Certain Lloyds' Underwriters subscribing to Contract No IH00AAQS v Cross (2012) 248 CLR 378; [2012] HCA 56 at [23]).
9. In SZTAL v Minister for Immigration and Border Protection [2017] HCA 34; (2017) 91 ALJR 936, the position was summarised in the High Court by Kiefel CJ, Nettle and Gordon JJ as follows (at [14]): The starting point for the ascertainment of the meaning of a statutory provision is the text of the statute whilst, at the same time, regard is had to its context and purpose [citing Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 at 381-382 [69]-[71]; [1998] HCA 28; Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (2009) 239 CLR 27 at 46-47 [47]; [2009] HCA 41]. Context should be regarded at this first stage and not at some later stage and it should be regarded in its widest sense [citing CIC Insurance Ltd v Bankstown Football Club Ltd (1997) 187 CLR 384 at 408; [1997] HCA 2]. This is not to deny the importance of the natural and ordinary meaning of a word, namely how it is ordinarily understood in discourse, to the process of construction. Considerations of context and purpose simply recognise that, understood in its statutory, historical or other context, some other meaning of a word may be suggested, and so too, if its ordinary meaning is not consistent with the statutory purpose, that meaning must be rejected.
10. In the present case, the text of the relevant provisions at first blush poses little difficulty - an estimate "continues in force" if, among other things, the estimate "has not been revoked"; and, if the Commissioner revokes the amount of the estimate, then a written notice "must be" given that identifies the underlying liability and "states that the estimate has been revoked". I would accept that, as was the outcome in Power, the requirement for such a statement might be able to be satisfied in a particular case by a statement that clearly and unambiguously conveys to the ordinary reader that the estimate has been revoked without using that precise word. However, the real question for present purposes is whether the documents in the present case did convey that meaning.
11. The first question is what is meant by "revoked" in the context of Div 268 and, in particular, s 268-35(4).
12. There has been some judicial consideration of the meaning of "revoke" in the revenue context (see Re Australian Post-Tel Institute Pty Ltd v Commissioner of Pay-Roll Tax [2001] 2 Qd R 8; (1998) 40 ATR 91) (Re Australian Post-Tel Institute), although there the Court was dealing with a different statutory provision (namely, s 16B(3) of the Payroll Tax Act 1971 (Qld)) and addressing a different issue (namely, the time at which revocation was to take effect). The relevant provision in that case was as follows: The Commissioner may at any time, by order in writing served on the person or persons excluded from a group, revoke an order made under section 16C, 16D, 16DA or 16E.
13. Chesterman J said (at 15): Ordinarily, revocation does not carry the connotation of annulling or setting aside from inception. "Revoke" normally means to act so as to take away some right or power prospectively. The revocation of the Edict of Nantes provides perhaps the best historical example. A more commonplace one is the revocation of an agent's authority. This does not operate so that the agent never had authority to transact business on his principal's behalf. It deprives him of authority after the revocation. (emphasis added)
14. In a non-revenue context, in Port Philip Scallops Pty Ltd v Minister for Agriculture (Vic) [2018] VSC 589, Cavanough J said at [112]: [I]n their ordinary English meanings, the noun 'revocation' relevantly means annulling something, the cancellation of a decree or similar matter, and the transitive verb 'to revoke' means to annul, repeal or cancel.
15. Similarly, in Formosa v Police [2001] SASC 139; (2001) 33 MVR 239, Prior J said (at [8]) that to revoke "means [to] annul, repeal, rescind or cancel".
16. In the United Kingdom (somewhat inconsistently with the view expressed in Re Australian Post-Tel Institute as to whether revocation operates prospectively or retrospectively), in Re Greaves; Public Trustee v Ash [1954] 2 WLR 557, Evershed MR said at 562: In our judgment a power to revoke an appointment means what it says -that is, that the appointor can wholly recall what he has done and place himself in all respects in the same position as if he had never made any appointment.
17. Here, the issue as to the retrospective or prospective operation of an act of revocation is not relevant (since s 268-55(3) makes clear that where an estimate is revoked it is taken never to have been made). Rather, what I take from the passage extracted above is that the concept of revocation may, at least in certain circumstances, be understood as involving a complete recall of what has been done (in that case, the appointment of a trustee).
18. Finally, as a matter of interest, I note that a similar meaning as has been given in the Australian cases, was attributed to "revocation" in at least one case in the United States of America (Glenram Wine & Liquor Corp v O'Connell 295 NY 336 (1946)), a case dealing with the revocation of a liquor licence. There, Thacher J said (at 341) that: "Cancellation" and "revocation" are very closely synonymous. To cancel means to deface or obliterate a writing by drawing lines across it latticewise and with reference to legal documents it means to annul, render void or invalid by so marking. Similarly, to revoke means to recall, and, with reference to privileges, "to annul, repeal, rescind, cancel" (Oxford Dictionary). In Bouvier's Law Dictionary "cancellation" is defined as the act of crossing out a writing; the manual operation of destroying a written instrument, and "revocation" as meaning the recall of a power or authority conferred or the vacating of an instrument previously made.
19. In my opinion, in ordinary parlance there is a relevant distinction between the concept of "revocation" and that of "replacement": namely, that the former involves taking away (whether at inception or prospectively) that which is revoked (akin to a cancellation, repeal, annulment or rescission), whereas the latter, in its ordinary meaning, involves a substitution (or standing in the place) of something for that which is being replaced (and might, perhaps, in some circumstances encompass a variation of some earlier instrument or document - say, where a clause is "replaced" by later amendment or agreement). Of course, this is not to say that, in certain instances, where something is "replaced" it may not also simultaneously be "revoked". However, in the ordinary course I consider that the natural and ordinary meaning of "revoke" is to be understood as a "taking away" or cancellation of that which is being "revoked" or set aside; rather than as a substitution (of an estimate, for present purposes).
20. In my opinion, the context in which "revoke" or "revoked" is used in Div 268 supports that conclusion, particularly where the legislation provides that once an estimate is revoked the liability is taken as never having arisen (which carries with it the notion of a complete setting aside or taking away, as in the concept of rescission ab initio).
21. As to the legislative purpose of the notification requirement in s 268-35(4), both parties accept that it is twofold: both to inform the recipient of the revocation and to relieve the recipient of the liability that arose on the making (and notification) of the estimate in the first place.
22. I am not persuaded that the object of s 268-35 is served by notification that the Estimate Notice is being "replaced" (as opposed to "revoked"). I read Power as a very different kind of case. There, the impugned notice referred to a particular statutory provision but not to the particular division in the legislation in which that provision was located. Logically, by referring to a provision that is contained within a particular statutory division, one is referring to a provision under or in that division. Hence, the conclusion in that case that it was enough for the impugned notice to indicate that the liability in question was one that arose "under" the said provision without express reference to the relevant division (because it necessarily drew attention to the division of the Act in which the provision was to be found). Here, notification that an Estimate Notice is replacing an earlier such notice does not necessarily convey that the former notice has no further effect or is as if it had never been made.
23. I do not accept the plaintiff's argument that insistence on words that make it clear that what is being done is a revocation of an earlier estimate would thwart the object of the revocation provisions - particularly where one object of s 268-35 is accepted as being the notification to the taxpayer that the estimate has been revoked. Rather, such a requirement would facilitate the very object of informing the taxpayer of that fact. I also note in this regard that the estimate regime provides four different modes by which an estimate notice may be revoked (one of which being s 268-40). It might reasonably be expected that if revocation could occur simply by the issue of a new 'replacement' notice, this would have been made clear in the legislation.
24. Concern was expressed by the plaintiff as to the potential thwarting of the other accepted object of the provision (an object beneficial to the taxpayer) of relieving the taxpayer of liability (in whole or in part), if specific reference to revocation were required to be made in the relevant notice. However, there seems nothing particularly difficult about the requirement for inclusion in a notice issued by the plaintiff under s 268-35(4) of an express statement that an estimate or estimate notice either has been or is thereby being revoked. I accept the defendant's submission that certainty is important in this regard (not just for the recipient of a notice but for others who may rely thereon).
25. Thus having regard both to the text and context of s 268-35(4), and its legislative purpose, I consider that what was here required was a notice clearly conveying to the recipient that the 2015 Estimate Notice had been revoked in the sense of cancelled, set aside or taken away.
26. Did the 2017 Estimate Notice, notwithstanding use of the verb "replaces", do so? In my opinion, it did not.
27. True it is that that 2017 Estimate Notice in terms made clear that the amount of each estimate contained therein was due and payable from the giving of the notice to the taxpayer (and did not suggest that interest charges were continuing to accrue from the date of the 2015 Estimate Notice). However, I consider that use of the language of replacement, rather than revocation, did give rise to the scope for (or spectre of, to use the plaintiff's words) uncertainty in this regard, particularly where there was reference elsewhere in the 2017 documents issued by the plaintiff to revocation as such. It should also be noted that elsewhere in the correspondence and notices issued by the plaintiff there was specific use of the terms "revoked" and "revocation" (so, for example, in the letters responding to both the 2015 and 2017 Statutory Declarations there was the statement that the estimate "will not be revoked"; and the 2017 Estimate Notice and Covering Letter made clear that there was a process that the taxpayer could invoke to seek the revocation (not replacement) of the notice). Moreover, it is relevant to note that the identification and estimate of the underlying liability was identical in both the 2015 and 2017 Estimate Notices.
28. Whether there was in fact uncertainty in the present case was a matter of dispute. I have noted above the conflicting submissions on that issue. It is, however, not necessary to delve into the extent of any such uncertainty and I do not consider that it takes the question of construction very far. The fact that the issue was only raised at the time of the hearing before me might, for example, be explicable by reference to an assumption (without due consideration) on the part of the defendant as to the validity of a notice issued by the plaintiff. Suffice it to note, for what it is worth, that Mr Lowe in the 2017 Statutory Declaration (at [6]) professed a degree of uncertainty as to the 2017 Estimate Notice.
29. I need not here address the evidence given by Mr Zafiriou (set out earlier) as to his understanding of what was being done at the time of issue of the 2017 Estimate Notice (namely, that he understood replacement of this earlier notice to amount to a revocation - as referred to at [45] above), because the subjective intention of the person issuing the notice is not relevant when construing the requirements of the relevant provision under or relating to which it is issued; rather the question turns on the form or content of the notice. Counsel for the plaintiff referred to Goodin v Federal Commissioner of Taxation (2002) 50 ATR 220; [2002] VSC 241 at [14], which was cited in Pintarich v Deputy Commissioner of Taxation [2018] FCAFC 79 at [147], and see Commissioner of Taxation v Prestige Motors Pty Ltd (1994) 181 CLR 1 at14; [1994] HCA 39. The question of validity of the notice is to be addressed by reference to the content of the notice rather than the subjective state of mind of the person who issued or received it. Subject to any contrary indication contained in the relevant statute, the content of a notice is ordinarily to be assessed by reference to what it would convey to a reasonable reader in the recipient's position.
30. As to the submission that there was substantial compliance (and that this was sufficient), it is not necessary here to enter into a debate as to the application of s 25C of the Acts Interpretation Act in the present context because I am not persuaded that the reference to replacing the notice in question was sufficient to make clear to the recipient the effect of what was there being done, particularly where the 2017 Estimate Notice did not simply use the language of replacement but was also for precisely the same amount, containing estimates of liability for precisely the same withholding periods. It was not as if the replacement Estimate Notice was for different periods or in different amounts (from which it might have been concluded that the earlier notice must implicitly have been revoked).
31. I have considered whether there might be said to have been an implied revocation of the 2015 Estimate Notice by the issue of the replacement notice but, on balance, I am of the view that it cannot here be said that this was the case (particularly given the history of the disputes between the parties). It might, for example, have been thought that the replacement was simply to refresh the earlier notice (which by then had been the subject of the litigation that was resolved by the withdrawal or setting aside of the 2015 statutory demand). The objective of informing the taxpayer of the revocation of an earlier estimate notice (which I accept is an important and mandatory step in the step of undoing the imposition of the statutory liability) was not in my opinion unambiguously achieved by a notice of the kind that was issued. Given that the requirement in the legislation is that the notice in question "must" contain a statement as to the revocation of the relevant estimate, reliance on an implied revocation by the conduct of issuing a new 'replacement' notice seems to me to be problematic. As noted earlier, I accept that the clear intent of the legislature evidenced by s 268-10 (and, in particular, s 268-10(4)), is that there will only be one estimate in force for any particular withholding period at any one time.
32. Turning then to the plaintiff's alternative submission as to whether the failure to state that the earlier notice had been revoked operated to invalidate the "revocation" (or, perhaps more precisely, the revocation that the plaintiff intended to effect by reason of the issue of the 2017 Estimate Notice), both parties relied upon the principles articulated in Project Blue Sky but contended for the opposite conclusion based upon the application of those principles in the present case.
33. Having regard to: the text and context of the revocation provisions to which I have referred above (particularly s 268-10(4)); what the parties accepted (in my view, correctly) are the objects of s 268-35; and the subject matter of the provisions in Div 268 (in particular, the imposition of statutory liability consequent on the service of an estimate notice as a separate and distinct liability to the underlying liability and the fact that on revocation the liability is taken never to have arisen), I consider that it is consistent with the purpose of the estimate regime for which the TAA provides to conclude (and I do so conclude) that failure to issue a notice of estimate of liability that in terms states it is revoking an earlier estimate (or otherwise sufficiently clearly makes that known to the taxpayer) has the effect that the purported revocation of that earlier estimate does not comply with s 268-35(4) and is, therefore, ineffective. It follows that in the present case the 2015 Estimate Notice continued in force as at 16 January 2017 and hence there was no power for the issue of the 2017 Estimate Notice.
34. Accordingly, I would answer question 5 as follows: 5. The notice of estimate dated 16 January 2017 is invalid and ineffective by reason of the fact that it was issued in breach of s 268-10(4) at a time when an earlier notice of estimate (the 2015 Estimate Notice) continued in force.
35. Pausing here, it would seem that the obvious course now open to the Commissioner would be to proceed either formally to revoke the 2015 Estimate Notice (and perhaps, for avoidance of doubt, the 2017 Estimate Notice, although on the conclusion I have reached it would strictly not be necessary as it has no effect) and then to commence the process afresh (by making a new estimate), as it was effectively conceded by the defendant it would be open to the plaintiff to do (see T 12/10/18; 6.45), or to establish the actual underlying liability in the present or fresh proceedings, as the defendant also seemed to accept it would be open to the plaintiff to do.

Balance of arguments on authority point

1. The conclusion I have reached above is sufficient to dispose of question 5. However, for completeness, and in the event that I were to be incorrect in my conclusion that the 2017 Estimate Notice was issued without power (by reason of the fact that the 2015 Estimate Notice continued at that time to be in force), I will briefly address, collectively, the balance of the defendant's arguments on the authority issue (i.e., the second to fourth points outlined at [80]-[84] above).
2. At the outset, it should be noted that the defendant accepts that the Commissioner may delegate his functions and powers under Div 268 and that the Commissioner's Delegation encompassed Mr Ravanello, as Deputy Commissioner (see T 30/11/18; 24.48; 25.5) (an argument that is difficult to reconcile with the fourth of the defendant's points on the authority issue). However, as noted earlier, the defendant says that for the notice to have been validly issued under that delegation it must be demonstrated to have been given by the Commissioner (i.e., either that it was signed by or in his name or that it referred to the Commissioner as the person who gave the notice). At T 30/11/18; 25.8-15, it was submitted that the significant consequences attached to the giving of the notice meant that it must be able to be shown "beyond argument" that the Commissioner was giving the notice (albeit by the plaintiff pursuant to the Commissioner's Delegation if that be the delegation relied upon).
3. In this regard, the defendant says that the position is analogous to that considered in Sharp v Deputy Commissioner of Taxation (1988) 18 FCR 475 (Sharp) (albeit that there what was the subject of consideration were warrant authorisations). There a Deputy Commissioner had signed documents authorising certain tax officers to exercise the Commissioner's powers under s 263 of the TAA. The documents appeared on their face to have been signed in exercise of powers and functions delegated to the Deputy Commissioner by the Commissioner in accordance with s 8 of the TAA. It was submitted by the appellant in that case that the delegation under s 8 did not authorise the Deputy Commissioner to sign in his own name a document that was required to be signed by the Commissioner; rather, that any authority conferred on the Deputy Commissioner was an authority to sign such a document in the Commissioner's name or on the Commissioner's behalf. Although the Full Court of the Federal Court did not express a final view on the point (the Court there being concerned with an appeal from an exercise of a trial judge's discretion to refuse an interlocutory injunction and, therefore, principally with whether there was a serious question to be tried), the Court did appear sympathetic to the view that an authority conferred on the Deputy Commissioner was one to sign the relevant document in the Commissioner's name.
4. The defendant here raises a similar argument, noting that pursuant to s 268-10 of Sch 1 to the TAA the power to estimate the unpaid and overdue amount of a liability under s 16-70 is given to the Commissioner; that the amount of the estimate must be what the Commissioner thinks is reasonable (s 268-10(2)); and that, pursuant to s 268-15(1), the Commissioner must give written notice of the estimate.
5. On this aspect of the argument, it should be noted that the 2017 Estimate Notice made clear that it was issued by the Deputy Commissioner in his capacity as "Deputy Commissioner and Delegate of the Commissioner". The evidence establishes that the Deputy Commissioner is, and was in January 2017, an Officer in the Senior Executive Service employed by the Australian Taxation Office, namely, an SES Band 2 officer. Accordingly, the plaintiff submits that the Deputy Commissioner had delegated authority under the Commissioner's Delegation to make the estimate and give the written notice of estimate under s 268-15 of the TAA. (The authority so delegated by the Commissioner was not, however, able to be sub-delegated by the Deputy Commissioner (see s 8 of the TAA).)
6. The defendant submits that, as the 2017 Estimate Notice was not issued by Mr Zafiriou in the name of the Commissioner, but in the Deputy Commissioner's name, the 2017 Estimate Notice was not made pursuant to s 268-10 and the 2017 Estimate Notice was not issued pursuant to s 268-15 of Sch1 to the TAA.
7. The plaintiff's submission in this regard is that the 2017 Estimate Notice was properly given by the Deputy Commissioner as the authorised delegate of the Commissioner under s 8 of the TAA (and that it is not necessary to rely upon the authority Mr Zafiriou was given under the Deputy Commissioner's General Authorisation).
8. As to the execution by Mr Zafiriou, the defendant accepts, as I understand it, that the Commissioner's Delegation encompassed someone at the level of authority of Mr Zafiriou (though the defendant says that, if the 2017 Estimate Notice was to be validly issued by Mr Zafiriou as delegate of the Commissioner, it should have been signed in the name of the Commissioner or otherwise signify the capacity in which Mr Zafiriou was signing as being as delegate of the Commissioner). The defendant accepts that Mr Ravanello and Mr Zafiriou were such officers, but notes that the Commissioner's delegation did not encompass the power of further delegation in s 8 of the TAA.
9. Further, insofar as the 2017 Estimate Notice is signed by Mr Zafiriou in the name of the Deputy Commissioner (with the additional description "Delegate of the Commissioner"), the defendant argues that what the Deputy Commissioner was delegating (under the Deputy Commissioner's General Authorisation) was the power to execute powers and functions delegated to him - arguably, inconsistently with the prohibition on sub-delegation - and that, since the Commissioner's Delegation did not delegate anything to the "office" of Deputy Commissioner (as such), there was nothing for the Deputy Commissioner to delegate.
10. The defendant's submission in this regard is that what is authorised to the authorised officer by the Deputy Commissioner's Authorisation are the powers and functions delegated to the "office of Deputy Commissioner" and since there are no powers and functions delegated to the "office" of Deputy Commissioner, it means that there is nothing to authorise and "[i]t is, as it were, still born" (see T 30/11/18; 26.8). Thus, it was submitted that Mr Zafiriou was not authorised to give the notice by authority of the Deputy Commissioner (this is apart from the argument that even if he were so authorised, it would have to be shown that the Commissioner was the one giving the notice). The defendant also points out, as noted above, that the Commissioner's Delegation excluded the power of further delegation (see s 8 of the TAA).
11. The defendant submits that it cannot be implied that Mr Zafiriou was authorised by the Deputy Commissioner to issue the notice because, having regard to the scope and extent of delegation from the Commissioner (which included SES officers, of whom Mr Zafiriou was one), it was not open to the Deputy Commissioner to appoint Mr Zafiriou as an agent to act on his behalf to exercise the statutory powers and to make an estimate.
12. Reliance was placed on the decision in O'Reilly v Commissioners of State Bank of Victoria (1983) 153 CLR 1; [1983] HCA 47 (O'Reilly) in that regard. The defendant says that since the power is likely adversely to affect the rights of individuals, that is a reason for it being required to be exercised personally, but that even if the principle in Carltona Ltd v Commissioners of Works [1943] 2 All ER 560 (Carltona) would otherwise apply, it cannot be relied upon because there is such an ample delegation of authority, noting that Mr Zafiriou acknowledged that he was himself authorised by the Commissioner by delegation. Lord Greene MR, speaking of the functions given to Ministers, said in Carltona at p 563, in a passage cited in O'Reilly, that they: ... are functions so multifarious that no minister could ever personally attend to them. To take the example of the present case no doubt there have been thousands of requisitions in this country by individual ministries. It cannot be supposed that this regulation meant that, in each case, the minister in person should direct his mind to the matter. The duties imposed upon ministers and the powers given to ministers are normally exercised under the authority of the ministers by responsible officials of the department. Public business could not be carried on if that were not the case. Constitutionally, the decision of such an official is of course, the decision of the minister. The minister is responsible. It is he who must answer before Parliament for anything that his officials have done under his authority ....
13. The defendant submits that if Mr Zafiriou was authorised by the Commissioner by delegation (and thus, had his own delegated authority) he was required to issue in the name of the Commissioner; and that if he was acting as delegate (of the Commissioner) in signing in the name of the Deputy Commissioner, (i.e., intending to exercise the Commissioner's powers, but in fact exercising those powers in the name of the Deputy Commissioner), then the attempted exercise of his own delegated power miscarried (because the estimate notice was given in the name of the Deputy Commissioner). The defendant says that by so doing, Mr Zafiriou purported to deny the power he had himself been delegated by the Commissioner.
14. The plaintiff notes that the evidence establishes that Mr Zafiriou is an Executive Level 2 Officer who performs duties in the Service Delivery division and, at the time of the preparation of the 2017 Estimate Notice in January 2017, was acting as an Assistant Commissioner (within the Service Delivery business line). The plaintiff says that Mr Zafiriou was authorised by the Deputy Commissioner under the Deputy Commissioner's General Authorisation and thus was an officer in the Senior Executive Service.
15. It is submitted by the plaintiff that, as an Executive Level 2 Officer, Mr Zafiriou was authorised to exercise all powers and functions delegated by the Commissioner to the Deputy Commissioner under the Commissioner's Delegation (other than those exceptions identified in Sch 2 of the Deputy Commissioner's Authorisation, noting that such exceptions are not relevant to the power of the Commissioner under s 268-10).
16. Further, the plaintiff submits that, in his capacity as acting Assistant Commissioner and thus an officer in the Senior Executive Service, Mr Zafiriou was also authorised to exercise all powers and functions of the Commissioner delegated to such officers under the Commissioner's Delegation and that this included all powers and functions of the Commissioner under the TAA, subject to the exceptions identified in column B of Appendix 1 of the Commissioner's Delegation (none of which is here relevant).
17. Accordingly, it is submitted by the plaintiff that there was no relevant absence of authority for the giving of the notice either revoking the 2015 Estimate or making the 2017 Estimate.
18. The plaintiff submits that the reliance sought to be placed by the defendant on Sharp is inapt, since that case concerned a written authorisation to inspect premises under s 263 of the ITAA which required the authority to bear the signature of the Commissioner rather than that of a Deputy Commissioner in circumstances where s 263 expressly required "an authority in writing signed by the Commissioner". The plaintiff points out that, while each of s 268-15 and s 268-35(4) provides that the Commissioner must "give" the taxpayer a written notice, neither provision requires that the notice be "signed" by the Commissioner nor is there any such requirement in s 268-10. The plaintiff submits that, in any event, the Deputy Commissioner had delegated authority under s 8 of the TAA to give the notice and thus was authorised to sign it as delegate of the Commissioner.
19. The plaintiff argues that any alleged failure to use any particular method to affix the Deputy Commissioner's signature to the 2017 Estimate Notice or to the 2017 Covering Letter could not invalidate either document. Reference is made in this context to reg 45(2) of the Taxation Administration Regulations (which I have extracted earlier at [73]); and that even if it were necessary for the s 268-15 notice or the s 268-35(4) notice to be signed, the placement of the Deputy Commissioner's name, without any signature, on the notice was sufficient (reference there being made to Deputy Commissioner of Taxation v Roche [2013] WASC 302; (2013) 95 ATR 652 at [13]).
20. The defendant in response to this says that where a delegate is exercising the power delegated to him or her, he or she may validly exercise that power in his or her own name (Owendale Pty Ltd v Anthony (1967) 117 CLR 539 at 562, 611; [1967] HCA 20) but that, according to the 2017 Estimate Notice, Mr Ravanello was purporting to exercise a delegation of power to him in personam. Thus, it is submitted that the delegations that Mr Ravanello, as Deputy Commissioner had made of the powers attaching to his office (as Deputy Commissioner), are irrelevant and there is a question whether or not Mr Ravanello made the estimate validly under delegation in personam by relying upon the actions of Mr Zafiriou.
21. In reply submissions in relation to the question of authority, the plaintiff says that there are two separate sources of the authority on the part of both the Deputy Commissioner and Mr Zafiriou to take the steps that were taken and that it would be sufficient to answer question 5 in favour of the Commissioner that the Commissioner's Delegation authorised both the Deputy Commissioner and Mr Zafiriou to prepare and to issue the notice of estimate (and hence unnecessary for the plaintiff to rely upon the Deputy Commissioner's General Authorisation) because Mr Zafiriou was the Acting Assistant Commissioner in January 2017. It is submitted that the present case differs from Sharp's case because there the statute in question in terms required that the notice be signed by the Commissioner, whereas in the present case there is no requirement in these provisions for the notice to be signed by anyone; it simply being a requirement that written notice be given by the Commissioner. It is submitted that the Commissioner has, by a valid instrument made under s 8 of the TAA delegated these functions both to the Deputy Commissioner and to Mr Zafiriou as the Acting Assistant Commissioner. (The plaintiff notes that the 2017 Estimate Notice expressly identified that it was being issued by the Deputy Commissioner of Taxation as delegate of the Commissioner.)
22. As to the submission by the defendant by reference in the Deputy Commissioner's General Authorisation to the exercise of powers and functions delegated to the office of the Deputy Commissioner of Taxation, it is submitted (and I accept) that the words should be given a sensible construction; that the Deputy Commissioner of Taxation is within the office of the Deputy Commissioner; and that therefore the powers and functions which were delegated by the Commissioner's instrument onto the Deputy Commissioner were not still borne.
23. In any event, the plaintiff submits that it is sufficient to support the delegated authority of both the Deputy Commissioner and Mr Zafiriou that they were exercising functions which had been validly delegated upon them by the Commissioner's Delegation.

Determination as to the above authority issues

1. In essence, the argument for the defendant is put at a number of different levels (and not necessarily in the following order): first, that the power to make or revoke estimates was one that was required to be exercised personally by the Commissioner; second, that although the Commissioner had the power to delegate this power (and the defendant accepts he did so both to the Deputy Commissioner and to an officer at the level of Mr Zafiriou), if the delegated power was to be validly exercised then it had to be done in a manner that identified that the power being exercised was as a delegate of the Commissioner; third, that there was no power for the delegate (be that the Deputy Commissioner or the relevant officer, here Mr Zafiriou) to sub-delegate that power; fourth, that (assuming this to be a power that the Deputy Commissioner could otherwise have delegated - i.e., that there was no impermissible sub-delegation) that what was done under the Deputy Commissioner's General Authorisation was not sufficient because it delegated powers and functions delegated to the "office" of Deputy Commissioner and the Commissioner had not delegated any powers to the "office" of Deputy Commissioner; and, finally, that there was no implied power to delegate incidental or administrative functions under the Carltona principle because there was already ample power of delegation (Mr Zafiriou being an officer to whom the relevant powers had already been delegated by Commissioner).
2. Section 8(1) of the TAA has been set out as above at [76]. In Dooney v Henry [2000] HCA 44, (2000) 74 ALJR 128 (Dooney v Henry), Callinan J acknowledged the need for such a provision, stating (at [16]) that: [I]t would be impossible for the Commissioner, or indeed all of the Deputy Commissioners, to carry out personally the functions which have to be carried out in order to give the Act effective operation.
3. While s 8(1) (in the "interests of administrative efficiency") operates to delegate substantially all of the powers and functions of the Commissioner (see O'Reilly at 32;), the provision makes clear that the power to delegate the Commissioner's powers or functions under a taxation law or any other law of the Commonwealth or a Territory, remains with the Commissioner alone. Consequently, sub-delegation by the Deputy Commissioner or any other person of powers vested by the Commissioner is prohibited under the TAA.
4. The prohibition on sub-delegation was recognised in Dooney v Henry and Deputy Commissioner of Taxation v Jetbird Holdings Pty Ltd [2004] WASC 66; (2004) 183 FLR 448. In O'Reilly, Wilson J noted (at 30) that a clear distinction is to be drawn between the delegation (and further sub-delegation) of a power and the exercise of that power through servants or agents.
5. It is clear that who signs a notice or authority (and how it is signed) is a relevant consideration only if the particular statutory provision in the Act means that a personal signature (by, for example, the Commissioner himself) is required fully to comply with the Act.
6. In R v Justices of Kent (1873) LR 8 QB 305 at 307, Blackburn J said: No doubt at common law, where a person authorizes another to sign for him, the signature of the person so signing is the signature of the person authorizing it; nevertheless there may be cases in which a statute may require personal signature
7. Quain J added at 307: We ought not to restrict the common law rule, qui facit per alium facit per se, unless the statute makes a personal signature indispensable.
8. In In Re Whitley Partners Ltd (1886) 32 Ch D 337 at 340-341, Bowen LJ said: In every case where an Act requires a signature it is a pure question of construction on the terms of the particular Act whether its words are satisfied by signature by an agent. In some cases on some Acts the Courts have come to the conclusion that personal signature was required. In other cases on other Acts they have held that signature by an agent was sufficient.
9. Similarly, Gibbs CJ in O'Reilly said at 10: The question whether s 264 requires that the Commissioner (or his delegate) should personally sign the notice in writing is simply one of construction.
10. Later, his Honour remarked at 12: Section 264 confers on the Commissioner a power whose exercise will be likely adversely to affect rights of individuals. This is a reason for inclining in favour of the view that it must be exercised personally.
11. In Sharp (as relied upon by the defendant in these proceedings), s 8(1) of the TAA was referred to as part of an argument raised regarding whether the respondents had a right of access to records of fax messages pursuant to s 263(2) of the ITAA. As noted above (at [163]), the appellants in that case submitted that s 263(2) required the authority to be signed by the Commissioner, and not the Deputy Commissioner who had in fact signed the authority. In granting the interlocutory relief sought and, while not expressing a final view on the matter, the Full Court (Bowen CJ, Sheppard and Burchett JJ) held that the submission raised a "question of substance" (at 484) but expressed no final view on the matter. The Court noted (at 481) that: The powers conferred by s 263 were extremely wide. They enabled the Commissioner to invade private premises and have access to books, documents and other papers […] Such a provision ought not be given any but a strict construction and those seeking to rely on its operation should be required to show that the provisions of the section had been fully complied with.
12. There are several cases in the context of the winding up of insolvent companies that have considered this issue.
13. In Dooney v Henry, the Deputy Commissioner caused to be served on the respondents, as company directors, statutory notices of demand under s 459E of the Corporations Act 2001 (Cth) for income tax payable by the companies. The Deputy Commissioner's facsimile signature had been affixed to the notices. The respondents argued that the statutory notices were defective because the notices were not issued by the Deputy Commissioner personally or by a person under a lawful delegation to do so. Relying upon O'Reilly (and the cases there referenced), Callinan J held that the notices were not defective.
14. Further, in Deputy Commissioner of Taxation v Jetbird Holdings Pty Ltd it was argued that a statutory demand under s 459E(2)(f) of the Corporations Act 2001 (Cth) was defective because it was not signed "by or on behalf of the creditor" as the signature of the Deputy Commissioner of Taxation had been affixed by a rubber stamp. The application was dismissed. Newnes M stated that if a statute requires that a document has to be signed personally, the duty of signing it cannot be delegated to a third person. However, it was held that s 459E(2)(f) did not necessitate a personal signature by the Deputy Commissioner. The Court also rejected the defendant's submission that an unlawful sub-delegation had occurred.
15. In Commissioner's discretion under the tax act (1989) 24 Taxation in Australia 302, Sharp v DCT is discussed. The author there opines (at 303): I must admit that I have some doubt as to the correctness of the tentative decision reached by the Full Federal Court. It seems to be that it is permissible for the Commissioner to delegate a power to the Deputy Commissioner and for the Deputy Commissioner himself to authorise the exercise in the Deputy Commissioner's name of a power delegated to him by the Commissioner […] [I]t is definitely the case that, provided the necessary formalities are complied with, the powers can be exercised by a delegate of the Commissioner.
16. As to the delegation to the "office of", I note that s 21 of the Acts Interpretation Act ("Meanings of commonly used words and expressions") provides that "office includes position". "Position" is not further defined. The meaning in the Interpretation Act, though not directly relevant, supports the notion that "office of" encompasses the officer holding the office in question.
17. In my opinion, there is nothing in the relevant provisions to warrant the conclusion that the Commissioner was required personally to exercise the powers in relation to the making (and revoking) of estimates of liability under Div 268 and to sign personally the relevant written notices. I accept that the consequences of an exercise of the powers of the Commissioner in this regard may have adverse effects on a taxpayer but in O'Reilly, that consideration (though relevant) was not of itself determinative (see at 12). The statute permits delegation by the Commissioner of various manifestations of his powers and functions (including the power to make and revoke estimates of liability under Div 268) and does not preclude delegation of the relevant powers and functions in the present case. In O'Reilly, what was of relevance was the distinction between the language of s 263 and s 264 of the Act. No relevant distinction of language was here identified by the defendant.
18. Where there has been a delegation of a power that requires (for its valid exercise) that there be a written notice signed by the Commissioner, that which is delegated must logically include the power to sign the relevant notice or authority (in the absence of anything to point to the contrary).
19. Therefore, I consider that where the power to make and issue an estimate notice was delegated to the Deputy Commissioner it would be sufficient for the relevant notice to be signed in the delegate's own name, making clear that the document was signed in the Deputy Commissioner's capacity as delegate of the Commissioner. The fact that Mr Zafiriou was authorised under the Deputy Commissioner's General Authorisation to affix the Deputy Commissioner's signature to such a document is not in my opinion a breach of the prohibition against sub-delegation; rather, the affixing of a signature is of an administrative act of the kind that the authorities referred to above make clear can be delegated.
20. What is more problematic here is that, insofar as the plaintiff relies on the 2017 Estimate Notice as having been issued by him as delegate of the Commissioner, it is clear from Mr Zafiriou's evidence that the plaintiff had no involvement in the decision to issue, or preparation of, the 2017 Estimate Notice. The evidence makes clear that the exercise of the power in question was not one that was carried out by the plaintiff himself.
21. Thus, reliance needs to be placed by the plaintiff on the Commissioner's Delegation to officers in the position of Mr Zafiriou, who I accept was empowered to act as delegate to do what he did (i.e., to make the estimate and issue the estimate notice).
22. The difficulty then is that Mr Zafiriou signed not in his own name as delegate of the Commissioner but in the name of the Deputy Commissioner's name (as delegate of the Commissioner). Thus, the problem is that Mr Zafiriou had the necessary delegated authority but purported to exercise it in the name of the Deputy Commissioner (who also had delegated authority but could not sub-delegate it to Mr Zafiriou).
23. Does that mean that, as the plaintiff contends, by his own act Mr Zafiriou's exercise of the power miscarried? Reliance was placed by the defendant on Re Reference under Section 11 of Ombudsman Act 1976 (1979) 2 ALD 86. There, an applicant for social service benefits sought a reconsideration of a refusal to grant benefits. The relevant letter had been signed by a senior officer of the Social Security Department stating that he had reviewed the applicant's case but, not being satisfied that all requirements for eligibility for benefit had been complied with, the earlier decision not to pay benefits was upheld. The letter was signed in the name of the Director-General of the Social Security Department and the author of the letter had placed his own initials against that signature. It was agreed that the Director-General had taken no part in the reconsideration of the applicant's claim. It was said (at 94) that: It is often difficult to ascertain whether a given act is one which the authority may authorize another to perform on his behalf (see de Smith, Judicial Review of Administrative Action, 3rd ed, pp 268-72), and if an act is not one which may be so authorized, it cannot be effective to exercise the statutory power: Jeffs v New Zealand Dairy Production and Marketing Board [1967] 1 AC 551. Where the relevant power is not delegable, the only acts by which the power can be exercised are the acts of the authority and acts which, having regard to the nature of the power, the authority may authorize another to perform on his behalf and which have been so authorized. But where the relevant power is delegable and has been delegated, the delegate may - without further authorization - act in effective exercise of the power. His acts are not treated as acts vicariously done by the authority. He is not an agent to exercise the authority's power; he may validly exercise the power vested in him. The distinction is brought out by Scott LJ in Blackpool Corporation v Locker [1948] 1 KB 349 at 377 … . There is a confusing similarity between the exercise of an authority's power by the authorized acts of another, and the exercise by an authority's delegate of the power delegated to him. In either case the act - whether the act of the authorized person or the act of the delegate - is a valid exercise of power. Nonetheless, the sources of validity are different, though it must be said that the term "delegation" has frequently been used to describe either case without distinguishing between them. For some purposes, a distinction must be made. Where an authority has not delegated his power but he has authorized another to act in exercise of his power, the act is to be done in the name of the authority: London County Council v Agricultural Food Products Ltd [1955] 2 QB 218 per Romer LJ at 224. But where a delegate is exercising the power delegated to him, he may validly exercise that power in his own name: Owendale Pty Ltd v Anthony (1967) 117 CLR 539 at 562, 611. May a departmental officer to whom the Director-General's powers and functions are delegated under s 12 of the Social Services Act elect whether to act as a delegate of power (in his own name), or an officer exercising the power of the Director-General (in the name of the Director-General)? In principle, there seems to be no reason why an attempted exercise of power should not be supported on either of the bases which would give validity to his act (Moore v Attorney-General for the Irish Free State [1935] AC 484 at 498; R v Bevan; Ex parte Elias and Gordon (1942) 66 CLR 452 at 487), but that approach assumes that the officer has a dual character - one who may exercise his own power and one who may exercise the like power vested in another.
24. It was concluded that the senior officer in question must have acted in exercise of the powers delegated to him; and that, where the departmental practice, consequent upon a delegation of power to the senior officer, had cast upon him the function of determining whether an earlier decision should be reviewed, "it would be fanciful to regard him as exercising" the Director-General's powers rather than his own. (Here, as noted above, it is clear that Mr Zafiriou must have been exercising powers delegated to himself, given the prohibition on sub-delegation of powers delegated to the Deputy Commissioner.)
25. Turning then to the question in that case as to the validity of the exercise of the senior officer's powers, it was said that, on the footing that the letter itself constituted a purported review and affirmation, the signature of the Director-General was not the signature of the person whose power was exercised by the writing of the letter; that the senior officer's power was intended to be exercised, but it was exercised in the name of the Director-General and (at 95) that: The attempted exercise by a delegate of his own power miscarries when the very act of exercise purports to deny the power which gives validity to his act.
26. It was said (at 95) that if the letter had merely evidenced an act earlier done by the senior officer "the letter might not destroy the validity of the antecedent act: yet as a matter of administration the letter would be defective" in that it would on its face mislead the applicant into believing that the Director-General had dealt with his case and had exercised his powers adversely to him and, relevantly, that if the applicant had been aware of his appeal rights under the legislation "he might have been misled into thinking that he could not appeal to any higher official".
27. Accordingly, it was held that the letter in question, written by the senior officer in the Department of Social Security, and signed by him in the name of the then Director-General constituted a purported review and affirmation of a determination pursuant to s 14 of the Social Services Act 1947 (Cth) and that that purported review and affirmation was an "attempted but invalid" exercise of the senior officer's delegated powers.
28. In O'Reilly, where the relevant provision (s 264 of the TAA) provided that the Commissioner might by notice in writing require a person to do certain things, and the Commissioner's powers under that section were delegated to Deputy Commissioners by a delegation made under s 8(1) of the TAA, the question arose whether notices bearing a facsimile of the signature of a Deputy Commissioner that had been stamped on the document by a person who held and occupied the position of Chief Investigation Officer were validly issued. In that case, the Deputy Commissioner had no personal knowledge that the said officer intended to issue the notice but had authorised officers occupying or performing the duties of Chief Investigation Officer to exercise powers and functions that included the issue of notices, other than notices requiring the giving of information or evidence on oath, and to imprint a facsimile of the Deputy Commissioner's signature upon such notices.
29. The Court said (at 10) that the question whether s 264 required that the Commissioner (or his delegate) personally sign the notice in writing was simply one of construction (citing In re Whitley Partners Ltd (1886) 32 Ch D 337 at 340-341 per Bowen LJ; and referring to the line of authorities which commenced with Carltona and which were discussed in In re Golden Chemical Products Ltd [1976] 26 All ER 543).
30. The Court held that the officer in question was authorised to exercise, on behalf of the Deputy Commissioner, the power to issue notices under s 264 (but ultimately that the notices were invalid, the power in question being a power the exercise of which involved a substantial issue of discretion and which could not be entrusted to a subordinate in the absence of a great deal of control by the authority - see at 19).
31. In the present case, had it been necessary to decide, I would have concluded that if Mr Zafiriou was exercising the power validly delegated to him by the Commissioner to make and issue the 2017 Estimate Notice (as it seems to me he must have been, noting that his evidence is that the plaintiff had no involvement at all in the process) then the fact that he signed the letter in the name of the Deputy Commissioner as delegate of the Commissioner (rather than in his own name as delegate of the Commissioner) would not of itself amount to a miscarriage of the power - since, despite the significant consequence to the taxpayer of the issue of an estimate, no relevant right of appeal or consequence flowed from whether the notice was issued by Mr Zafiriou as delegate for the Commissioner or by the Deputy Commissioner as delegate for the Commissioner. However, it is not necessary to form a concluded view on this issue given my conclusion that at the time of the issue of the 2017 Estimate Notice there was an earlier estimate notice that had not been revoked and that this had the result that there was no power to issue the 2017 Estimate Notice.

Is the statutory declaration dated 23 January 2017 referred to in the affidavit of Aris Zafiriou sworn 10 May 2018 a statutory declaration that answers the description in, and satisfies the requirements of, ss 268-40 and 268-90 of Schedule 1 to the TAA?

1. Question 1 concerns the operation of ss 268-40 and 268-90. The construction of the combined operation of ss 268-40 and 268-90 was considered by Robertson J in Transtar Linehaul Pty Ltd v DCT (2011) 196 FCR 271; [2011] FCA 856 (Transtar Linehaul).
2. In Transtar Linehaul, the taxpayer submitted that it had filed an affidavit which satisfied the requirements of s 268-90(2)(a)(i) and 268-90(3), with the consequence that the estimate was revoked under s 268-40(4) and deemed never to have existed (see at [44]). Robertson J said (at [78]) that: In the present case, in my opinion, to enliven s 268-40(4) it was necessary to do more than assert in affidavits, without reference to primary facts or to primary documents which must have existed, that during the period 1 January 2010 to 31 March 2011, no amounts on account of PAYG withholding were withheld from payments made to any person or that Transtar Linehaul had no employees receiving salary or wages, and paid no amount as salary or wages or at all to any person as an employee, from which it might have withheld an amount on account of PAYG or that during that period Transtar Linehaul withheld no amount on account of a PAYG obligation of any description or that Transtar Linehaul had no liability to withhold amounts on account of PAYG withholding obligations and the business of Transtar Linehaul was arranged to that end.
3. His Honour went on to say at [79]: Put differently, this material dealt in a summary way with matters which were by no means pure questions of fact. In addition it dealt with those matters in such a rolled up and conclusory way that it did not in my view verify facts sufficient to prove that the underlying liability, to pay to the Commissioner the amount that Transtar Linehaul withheld, never existed.
4. His Honour, at [83] referred to the non-curial or administrative path to reduction of the amount of the estimate or revocation of the estimate by means of a statutory declaration and said that there should be a "broad consistency" between the effect of the two paths, while bearing in mind that one is administrative and the other is curial.
5. At [85]-[88], his Honour observed, as to the requirements of a statutory declaration compared to those of an affidavit in this context, that: In my view there is an equivalence to the requirement that the affidavit "verifies facts sufficient to prove" in that, in the case also of a statutory declaration, a merely formal statement without substantiation would not always answer that requirement and would not do so in a matter of any complexity. In my view the expression "to the effect that" directs attention to the substance of the statutory declaration rather than to its form. In my opinion, as with the affidavit, the statutory declaration need not in every case contain the entirety of the relevant material. Further, in my view, the recipient of the statutory declaration may evaluate it in order to assess its substance or effect, although in the case of dispute it would ultimately be for a court to decide whether the statutory declaration was to the effect required by the statute. (emphasis added) Thus there is a broad similarity in the present context between what is required of a statutory declaration and what is required of an affidavit. This construction is confirmed by s 268-90 which applies in the same terms to a statutory declaration given or an affidavit filed for the purposes of s 268-40.

Submissions as to the proper approach/question to be answered

1. The defendant contends that, textually, the scheme of the legislation is that the "reductive" effect of a statutory declaration complying with ss 268-40 and 268-90 is automatic; contrasting this with revocation or reduction at the discretion of the Commissioner (which is separately provided for in s 268-35). In that regard, the defendant points to the decision in Australia DIS Pty Ltd v Deputy Commissioner of Taxation [2012] VSC 331; (2012) 268 FLR 184 (at [20]) (Australia DIS v DCT) as suggesting that the amount of the estimate is reduced automatically.
2. While the plaintiff accepts that the practical effect of the statutory scheme is that the reduction or revocation of the estimate may be said to be "automatic", it is submitted that this is only if the statutory declaration, upon examination, satisfies the requirements of the statute (relevantly, for present purposes, the requirements of ss 268-40 and 268-90) (a caveat with which I do not understand the defendant to cavil, albeit that the defendant submits - for the reasons below - that the statutory scheme strongly indicates the "reductive effect" of the statutory declaration does not by implication also entail that it withstand testing as would occur in a judicial process).
3. The plaintiff points to the observation of Ferguson J (as her Honour then was) in Australia DIS v DCT at [20]: ... The estimate is revoked if the statutory declaration is to the effect, or the affidavit verifies facts sufficient to prove, that the underlying liability never existed. If this process is followed and as a consequence the estimate is reduced or revoked after a statutory demand has been served by the Commissioner, then the statutory demand is changed accordingly and is taken to have effect as changed from the time the demand was served. (emphasis added)
4. In other words, the mere service of a statutory declaration does not bring about a revocation or reduction of the estimate under the statutory scheme. Rather, the Commissioner may evaluate the statutory declaration in order to assess its substance or effect and, in the case of dispute, the plaintiff submits it is for the court to determine whether the statutory declaration is in conformity with the statutory requirements.
5. The defendant notes that an estimate is not amenable to objection and review rights under Part IVC of the TAA, so that the statutory declaration is intended as the mechanism for contesting liability, referring to what was said in Plutus Payroll per Brereton J, as his Honour then was, at [26]-[29]. There, his Honour found (at [26]) that the statutory declaration did not disclose facts upon which the underlying liability to pay never existed and, as a matter of substance, the statutory declaration was not to the effect that Plutus Payroll's liability never existed (see also Ferella Pty Ltd v DCT [2013] VSC 573 at [27] referring to the decision in Australia DIS v DCT ).
6. The defendant argues that the overall regime demonstrates that the statutory declaration must be provided within a very short timeframe of the date of the estimate (seven days period from the date of the estimate notice) and submits in light of that timeframe and given that the content for the statutory declaration is prescribed, that the intention of the legislature may reasonably be inferred to have been that the prescribed content should be set out in general terms.
7. As to this submission (and the defendant's further submissions - see below) to the effect that the prescribed content of the statutory declaration should give "a general idea", the plaintiff submits that this imposes a gloss upon the statutory language and that the question for the court is whether or not the requirements of ss 268-40 and 268-90 are satisfied.
8. The defendant submits, by reference to s 268-40(2), that the sole question is whether the statutory declaration is "to the effect" that a specified lesser amount is the unpaid amount of the underlying liability (the phrase "to the effect", it says, being here used for giving a general idea (or referring to the general meaning of something written or spoken)). (I note that the plaintiff cavils with the proposition that this is the sole question, pointing to s 268-90(2) which requires that the statutory declaration "verify the following facts", i.e., those in paras 268-90(2)(a) and (b).)
9. The defendant notes that (in the circumstances contemplated by Item 1 in the table), at the time of the receipt of the estimate there will be no court proceedings on foot and that the court has no power to extend the time for swearing of the statutory declaration; and that the estimate recipient cannot avail itself of relevant information held by third parties as it might be able to if court proceedings were on foot. It is argued that these matters tend to support the conclusion that to comply with s 268-40 and s 268-90 the statutory declaration does not need to provide all the evidence as if the matter were a "full-scale trial" on the estimate (referring to Transtar Linehaul at [76]); and that it does not need to contain the entirety of the relevant material (see Transtar Linehaul at [86]).
10. The plaintiff does not dispute the submission that the statutory declaration need not contain "the entirety of the relevant material" in order to comply with ss 268-40 and 268-90. However, it notes that in Transtar Linehaul, the Court's criticism was that the affidavit in question "... dealt with those matters in such a rolled up and conclusory way that it did not in my view verify facts...". The plaintiff submits that, while any statutory declaration need not be akin to that deployed in a "full-scale trial", it must comply with the statute and that scrutiny of the instrument is necessary in order to determine whether, in the particular case, the statutory declaration conforms to the requirements of Div 268.
11. The defendant accepts that the maker of the declaration must ensure that the contents are correct (and that a liability accrues for making a false declaration), but emphasises that the question is what, as a matter of substance, the statutory declaration discloses (the plaintiff would emphasise "verifies" facts upon which the underlying liability to pay never existed (Transtar Linehaul at [85]-[86])).
12. As noted above at [218], it is noted by the plaintiff that, in Transtar Linehaul at [83], Robertson J distinguished a revocation or reduction arising from the provision of a statutory declaration as arising by an "administrative" (or "non-curial") path from a revocation or reduction arising from the filing of an affidavit in arising by a "curial" path. (That distinction was that, in the curial path, the court may, in its discretion, extend the time in which to file the affidavit (s 268-40(1), item 2); in the ordinary process of the court, the affidavit is to be admissible according to the rules of evidence (Transtar Linehaul at [74]) and a standard of proof (being that there must be facts sufficient to prove the matter on the balance of probabilities in a civil case) is applied (Transtar Linehaul at [75]); and the function of the court may extend to resolving judicially the underlying liability in certain proceedings (Transtar Linehaul [77]), but that the "administrative" path does not involve the ordinary process of the court as regards extensions of time, rules of evidence, standard of proof and may subsequently involve the Commissioner exercising quite a number of administrative functions. Thus, it is submitted by the plaintiff that, even if it is accepted that the declaration arises in the "administrative" path, the Commissioner is likely to evaluate the statutory declaration in order to assess its "substance or effect" (see Transtar Linehaul at [86]).

Submissions as to whether the 2017 Statutory Declaration complies with TAA

1. The defendant submits that the 2017 Statutory Declaration is plainly "to the effect" that the underlying liability is nil; and that it complies with the requirements in ss 268-40 and 268-90.
2. The plaintiff argues that it does not, by reference to the following matters.
3. First, the plaintiff notes that the 2017 Statutory Declaration itself contains admissions that payments were made from the defendant's bank account to employees of the CAP Accounting business in respect of which no amounts were withheld by the defendant in respect of those payments.
4. In this regard, in written submissions the plaintiff pointed to the following matters (appearing from [21], 23, [38] and Sch 1 of the 2017 Statutory Declaration): that, throughout the period 1 July 2009 to 30 October 2013, the defendant had operated a particular account for the CAP Accounting business with St George Bank (to which I will refer as Account A), that contains "lists of payments by financial year drawn from the above bank statements to .... other CAP Accounting staff [named across the header in the right hand columns of the tables] in the 2010-2012 years"; that the defendant "did not withhold from payments made ... to other CAP Accounting staff summarised in Schedule 1". (Sch 1 identified, by employee name, wages paid to employees "out of Armstrong Scalisi Holdings Pty Ltd's Bank Account".)
5. The plaintiff submits that in this respect the 2017 Statutory Declaration falls into the same category as that considered in Plutus Payroll. There, the statutory declaration incorporated, by reference, an objection which contained an admission to the effect that the first defendant had paid wages and superannuation to employees on behalf of other defendants (at [28]) and the first defendant had contended that it was not liable to pay PAYGW amounts in relation to those payments, because it was providing the payments as a service to the other defendants. Brereton J observed that the obligation under s 12-35 to withhold falls upon the entity making the payment to the employee, regardless of whether or not it is the employer (at [29]). His Honour concluded that the statutory declaration in Plutus Payroll did not disclose facts "to the effect" that the underlying liability to pay PAYGW amounts never existed. This was because, "as a matter of substance", the statutory declaration, did not "disclose facts" that the first defendant's PAYGW liability never existed (at [29]).
6. The plaintiff submits that this reasoning equally applies in the present case. It is submitted that, by reason of the admissions contained in the 2017 Statutory Declaration, it does not disclose facts upon which the defendant's underlying liability to pay PAYGW amounts never existed; and, as a matter of substance, is not "to the effect" that the defendant's PAYGW liability never existed. Rather, it is said that the admissions contained in the 2017 Statutory Declaration indicate that the defendant paid wages "to an individual as an employee (whether of that or another entity)" and thus attracted a withholding liability under s 12-35 which it has not discharged.
7. In response to this, the defendant notes that the payments to staff of the CAP Accounting business were listed in Sch1 of the 2017 Statutory Declaration and drawn from the bank account records which were exhibited by the deponent and that the 2017 Statutory Declaration says at [38] that the defendant did not withhold from the payments. The defendant submits that the requirement pursuant to s 268-90(2) to verify facts including "the sum of all amounts you withheld under Division 12 during the relevant period, or the fact that you did not withhold any such amounts during the period" (my emphasis) is satisfied by the explanation of the deponent that the defendant did not withhold from the particular payments there identified.
8. The defendant argues that the plaintiff's submissions confuse, on the one hand, a failure to withhold; and, on the other hand, a withholding but failure to remit the amount to the Crown. The defendant points to the specific provisions for failure to withhold if (which it does not admit) there was an obligation so to do referring to s 16-25 of Sch 1 and says that the plaintiff's remedy for such a failure is not collection via the estimates provisions, as estimates are only concerned with the "unpaid and overdue amount" of a liability under s 16-70 (the requirement to pay to the Commissioner amounts withheld under the PAYGW rules) (referring to s 268-10(1)(a)).
9. The defendant argues that there is no analogy with Plutus Payroll, distinguishing that as a case concerning s 268-40(4) (i.e., where the statutory declaration is to the effect that the underlying liability has been discharged in full and, therefore, the unpaid amount of the liability is nil). The defendant notes that the 2017 Statutory Declaration (at [38]-[40]) states that there was some withholding by the defendant; there was reporting of this withholding through the BAS statements; and payments were made to the Integrated Client Accounts for the defendant in its own capacity and subsequently in its capacity as trustee of the ASH Trust. Thus the defendant argues it follows that the 2017 Statutory Declaration is not saying that an underlying liability never existed (my emphasis). (Pausing here, the pleaded case is, however, precisely to that effect - see [4] above.)
10. The second matter which the plaintiff raises in this context is the fact that the 2017 Statutory Declaration does not address a second account held by the defendant with St George Bank (an account to which I will refer as Account B), the statements of which are exhibited to Mr Zafiriou's affidavit (see Exhibit AZ-13). The plaintiff notes that there is no reference to these statements which it argues were an obvious source of potentially relevant information to any individual preparing a statutory declaration for the purposes of Div 268 in the 2017 Statutory Declaration.
11. The plaintiff notes that the Account B Statements: are in the name of "Armstrong Scalisi Holdings trading as CAP Accounting"; contain repeated references to "wages", "pay", "payroll" and "PR" (which it sees as being of some significance as some or all of such payments would constitute amounts that ought to have been withheld and, therefore, were required to be the subject of verification under s 268-90(2)); and are for an account into, or from, which regular refunds from, or payments to, the plaintiff were made (said also potentially to be relevant to the matter required to be verified under s 268-90(2)(b), namely what has been done to comply with the defendant's obligations to remit amounts to the plaintiff under Div 16). The plaintiff notes that the Account B Statements contain numerous debits and credits involving the "ATO" (with what appears to be a Running Balance Account reference to an "effective date") and "tax refunds". The plaintiff submits that, given the complete silence in the 2017 Statutory Declaration as to the Account B Statements, it is impossible for the plaintiff or the Court to determine, on the face of the 2017 Statutory Declaration, whether the 2017 Statutory Declaration verifies the facts required to be verified under s 268-90(2).
12. The defendant, in response, says that Account B is manifestly a trust account (pointing to the bank statements which show that this account is styled "Armstrong Scalisi Holdings P/L T/A CAP Accounting - Trust A/C).
13. It is submitted (though I was taken to no evidence as to this; it seemingly being a matter that the Court is asked to infer from the title of the account) that the trust account is money held on behalf of clients and dealt with only in accordance with their instructions; and that payments therefrom satisfy the obligations of the defendant as a trustee and have the character of trust dispositions, whether or not they are paid to or at the direction of the client (drawing an analogy between the position of a trustee and that of a bank honouring a direction from an employer in relation to the payment of the employer's staff). The defendant argues that the operator of a trust account does not have a withholding obligation under s 12-35 for the following reasons.
14. First, that the amounts paid take their character from the terms of the trust or the bank accounts, and are not in the character of "salary, wages, commission...". Second, that they are not payments "'to an individual as an employee"; rather that they are payments to their beneficiary and account holder respectively; (it is said that, applying s 11-5(1) of Sch 1 of the TAA, in determining whether the trustee has paid an amount to its beneficiary, and when the payment is made, the amount is taken to have been paid to the beneficiary when the trustee applies or deals with the amount in any way on the other's behalf or as the other directs). Third, that the law recognises that the beneficial owner of the money in the account has the liability, although the account is held in the name of another (referring to Transtar Linehaul at [101], where employees were paid out of a particular account with money beneficially owned by Transtar Linehaul). Fourth, that there is no analogy between the position of a trustee (or bank) to its "client" with the position of Transtar Linehaul (as payer) to Transtar Express (as employer), since the Transfer entities were related companies and Transtar Linehaul (payer) was receiving payment for the services Transtar Express' employees were providing (referring to Transtar Linehaul at [100]).
15. As to the complaint made by the plaintiff that the 2017 Statutory Declaration did not deal with Account B the defendant points to the statement in the Statutory Declaration (at [6]) by Mr Lowe that he was "unable so much as to guess as to how the Deputy Commissioner came to his estimates". The defendant argues that there is nothing obvious about the need for the matter of the 2017 Statutory Declaration to cover not only the defendant's position in relation to the staff of CAP Accounting, but also in relation to its clients' staff and submits that it is unlikely that the operator of a trust account would have to hand within seven days the evidence required to be included in the statutory declaration as regards the staff of its clients. Further, it says that there is no obligation to disclose.
16. The third matter noted by the plaintiff is that, while the relevant period commenced on 1 July 2009, the 2017 Statutory Declaration deals principally with a period commencing on 1 July 2011. It is submitted that, in important respects, the 2017 Statutory Declaration is silent as to the period 1 July 2009 to 30 June 2011 (see at [14] and [19]). Noting that the defendant's position is that, prior to 1 July 2011, the defendant had only one employee (as pleaded in its defence at [9]), the plaintiff nevertheless points to the numerous references in the Account B Statements to "wages" in the period from 1 July 2009 to 30 June 2011.
17. In response, the defendant says that this is a misstatement of the effect of the 2017 Statutory Declaration, which it says explains the treatment of CAP Accounting staff starting from 2009 at various points (referring, by way of example, to [19(a)(ii)], [25]-[26], [41]-[45], [46]-[48], [53]-[54]).
18. Fourth, the plaintiff submits that the absence of detail with respect to the period from 1 July 2009 to 30 June 2011, and the absence of any reference to the Account B Statements for the entire period, calls into question whether the maker of the 2017 Statutory Declaration was sufficiently knowledgeable with respect to the defendant's affairs to be able properly to verify the matters described in sub-ss 268-90(2)(a) and (b), or to give the declaration to the effect required by sub-ss 268-40(2) and (4). It is noted that: Mr Lowe was only appointed a director on 1 March 2016 (2017 Statutory Declaration at [1]), while the Relevant Period was 1 July 2009 to 31 October 2013; Mr Lowe stated that his services were contracted to the defendant as a manager commencing in about October 2011 (2017 Statutory Declaration at [3]), more than two years after the Relevant Period commenced (and it is submitted that it is not clear what knowledge, if any, Mr Lowe had of the defendant's operations prior to October 2011); and that the 2017 Statutory Declaration is silent as to what steps, if any, Mr Lowe took to obtain all the relevant information necessary to inform himself of the defendant's affairs during the Relevant Period.
19. Insofar as the plaintiff here calls into question whether the maker of the 2017 Statutory Declaration was sufficiently knowledgeable, the defendant points out that it was not free to choose who made the statutory declarations this being prescribed by s 268-90(3), and that Mr Lowe is both the defendant's director and public officer (see statutory declaration at [1]-[2]). The defendant also notes that Mr Lowe explains the basis on which he has made the declaration (see at [13]) and that it is supported by a collation of 11 volumes of relevant exhibits.
20. The defendant emphasises the difference in language in s 268-40, namely, the use of the phrase "to the effect" with reference to a statutory declaration, compared to the phrase "verifies sufficient facts to prove" with reference to an affidavit. The defendant submits that the fact that, where there is an affidavit, the affidavit must verify "sufficient facts to prove" the matters referred to in the section is something which reflects the curial nature of the affidavit (in discharge of the functions of the court, including that a standard of proof must be applied on the balance of probabilities in a civil case), referring to what was said in Transtar Linehaul at [75]); in contrast with the non-curial context in which a statutory declaration may be given.
21. The defendant submits that the fact that s 268-90 requires specific facts to be "verified" in the context of a statutory declaration dealing with other general matters, does not operate to heighten the standard to be applied to the statutory declaration. It emphasises the difference between the curial and non-curial paths to the revocation or reduction of an estimate under Div 268, as recognised in Transtar Linehaul.
22. The defendant accepts that "in certain isolated instances" (around 30 transactions) Sch 1 to the 2017 Statutory Declaration discloses the fact that there was no withholding by it of relevant amounts referable to payments made by it to various individuals (see T 30/11/18; 19.4; 22.1). Senior Counsel for the defendant said, in the course of final submissions at T 30/11/18; 19.13-22: We agree that the statutory declaration and exhibits in substance included indications of amounts which were paid from the bank account in the isolated instances where there was no withholding of any amount but the schedule demonstrates and explains that were payments in respect of which there was no withholding and it identified those payments. In short, it does not detract from the statutory declaration being to the effect that a lesser amount is the unpaid amount of the liability because the question is looking at the non remitted amount which was required to be withheld on the one hand and the looking at amounts which were withheld and whether they were remitted or not.
23. The defendant again emphasises that there is no obligation under the TAA for the taxpayer to explain why it was that any amounts disclosed as not having been withheld were not withheld.
24. The defendant's position was that (see from T 30/11/2018; 19.24-50): There is a clear distinction in the language of the section starting at section 12 particularly moving through to section 16. For example, under section 16‑25 subsection (2) an entity must not fail to pay to the Commissioner an amount required to be paid. Under section 16‑25 subsection (1) an entity must not fail to withhold an amount required by division 12 and then an offence is created being an offence of strict liability under section 16‑25 subsection (3) where there is a failure to withhold. In relation to what we call the isolated instances as identified in that schedule 1 they don't prove that we failed to satisfy the requirements of section 268‑90 rather and in truth, we actually satisfied the provision because we've not only identified the amounts in respect of which there has been no withholding but in the case of Mr David Cassaniti which is the employee that we accept was the subject of withholding and remittal that in his instance there was withholding and remittals to the Commissioner. In short, we are not required we submit by legislation to disclose why there was no withholding and put, positively, we have disclosed the withholding in relation to David Cassaniti and what happened in relation to that withholding in terms of division 16. We understand there is no contest as to those facts which were disclosed in the statutory declaration. If those facts are accepted, it becomes an evaluative process required by section 268‑40 subsection (2) or subsection (4) as the case may be to determine whether the statutory declaration or the affidavit verifies facts sufficient to prove that there was no unpaid amount of underlying liability that was not remitted to the Commissioner or that the underlying liability never existed.
25. Ultimately as to the "around 30 transactions", in respect of which the defendant accepts there was no withholding, it says that it did not have to do anything other than disclose that those amounts were not withheld. It is submitted that "if they were considered as somehow falling afoul the provisions and therefore demonstrating that there were admissions that there were amounts that should have been remitted under Division 16 and have been withheld, then it is only those amounts that would be the amounts that would be taken into account as part of the estimate liability that would be able to be maintained by the Commissioner" (T 30/11/18; 22.2). (Pausing here, the argument that simply to disclose that amounts were not withheld is sufficient for the purposes of s 268-90 does not address the ultimate question as to whether s 268-40(2) or (4) is satisfied.)
26. As to the bank records disclosing payment to the third party labour hire companies, it was said (T 30/11/18; 20.1-14): The second category is the bank records disclosing payments made to labour hire entities. My friend's submission is, in effect, that because the defendant company is the ultimate economic payer of the money that is sufficient to require some explanation and statement in the affidavit or statutory declaration as the case may be. The banking records disclose that the defendant made payments to third party entities and we've heard today from Mr Zafiriou that in relation to third party entities that are referred to as third party entities have a series of employees. There is simply no evidence that the employees directed that the defendant company to pay via the third party entities rather than the evidence discloses payment summaries and payment records of third party entities consistent with the fact that third party entities were the employers. It's the third party that have the obligation to withhold from wages or salaries.
27. It is submitted in relation to this that (T 30/11/18; 21.1-14): In any event, the real question is how far the section 268‑40 required a defendant to go. Section 268‑40 contemplates a study of the statutory declaration to see if it can be said that there are facts sufficient to prove ‑ in other words, of an adequate quality to satisfy the proposition that the underlying liability is less than the estimate or nil. As Robertson J said in the Transtar Linehaul case it is similar in a sense to a prima facie case. You are looking at the evidence also conditioned by the terms of the notice. So that the notice, which is required to identify the underlying liability, if it said: We say the underlying liability is your payments that have been made to UltraNova or Alexandra or the like, that might be that particularity of detail would condition a response that may or may not cause a taxpayer in a particular case to be alert to the need to disclose the facts that will establish that there was no obligation to withhold or to remit. Whereas here, of course, it is perfectly general and we submit that the facts that are disclosed are sufficient to satisfy section 268‑40.
28. As to the existence of the trust account (Account B), reliance is placed on Transtar Linehaul. It is said that (T 30/11/2018; 21.38-42) : … Transtar Linehaul that was said to have had the PAYG withholding and the obligations. We say that case supports the contention we put that no mention at all was made of the trust account because none of the transactions pertaining to that account could relate to an obligation of the defending company to withhold and to remit.
29. It was submitted that the approach of Mr Zafiriou in "interpreting a number of transactions" was a matter of speculation and that, while this might be material in a contest as to the actual underlying liability, it is not sufficient to detract from the fact that the 2017 Statutory Declaration satisfies s 268‑90 and in turn that, on an evaluation of that material, it is sufficient to satisfy s 268-40.

Determination

1. The only issue of construction that arises in regard to question 1 for present purposes is as to the meaning of the phrase "to the effect" (in the context of s 268-40), i.e., that the requisite statutory declaration is to the effect either "that a specified lesser amount is the unpaid amount of the underlying liability" (if reliance is placed on s 268-40(2)) or "that the underlying liability never existed" (if reliance is placed on s 268-40(4)).
2. Pausing here, the 2017 Statutory Declaration does not, in terms, declare that some specified lesser amount is the unpaid amount of the underlying liability (in the words of s 268-40(2)). Rather, what Mr Lowe declares (at [10]) is that there is no amount of PAYG relating to the Notice Period that ought to have been and/or was withheld by the defendant and has not been remitted to the Deputy Commissioner. The defendant's position (at least up until the concession in oral submissions as to the so-called "isolated transactions") was that it was never liable to withhold PAYG amounts for staff other than Mr Cassaniti. It is, therefore, somewhat surprising that, in submissions in response to the plaintiff's submissions, the defendant cast this as a case falling under s 268-40(2) and not s 268-40(4). However, ultimately nothing turns on this so I need not explore that disconformity further.
3. The relevance of the question of construction is as to what is required to satisfy the statutory requirement of a statutory declaration for the purposes of s 268-40 in the present case.
4. The phrase "to the effect" must be construed in light of the fact that s 268-90(2) provides that, in a case covered by paragraph (a) of s 268-10(1), the statutory declaration "must verify" the facts there set out. The juxtaposition of a statutory declaration "to the effect" specified in s 268-40 with the requirement in s 268-90 that the statutory declaration "verify" certain facts is not particularly helpful, but it is tolerably clear that what is there contemplated is that the statutory declaration be akin to an affidavit "verifying" certain facts, i.e., that the person making the statutory declaration attest (in the manner required for the making of a statutory declaration) in that way to the truth of the facts stated in the declaration.
5. In my respectful opinion, Robertson J in Transtar Linehaul was correct in observing that there is an equivalence in the requirement that the affidavit verify facts "sufficient to prove" and the requirement that the statutory declaration be "to the effect … that" the underlying liability never existed or some lesser specified sum was unpaid; and that the requirement in relation to the statutory declaration directs attention to the substance of the statutory declaration rather than to its form.
6. In common parlance, something is "to the effect" of something else if it is, in substance, the same as (though not necessarily identical to) that other thing. Commonly, when referring to something written or said, it is a phrase used to paraphrase or summarise the relevant content of what was written or said (such as the common formulation in affidavits that "words to the following effect" were said, which makes clear that what follows is not necessarily a verbatim account). (Whether the maker of the statutory declaration has correctly "verified" or declared the relevant fact is, of course, a different issue.) Logically, something will not be "to the effect" of A if it is better viewed as, or also consistent with being, to the effect of B, in circumstances where A and B are mutually exclusive.
7. A declaration "to the effect" that a state of affairs never existed (i.e., the underlying liability) or that a "specified" lesser sum was unpaid requires the maker of the declaration to attest to facts which would be sufficient, if accepted in a contested dispute, to establish that state of affairs or that specified lesser sum. By "sufficient", I mean that, accepting the substance of the declared fact is true, the conclusion which would, on balance, follow is that some specified lesser sum is unpaid or that underlying liability never existed. The defendant's position seems to be that, while acknowledging that a mere statement (or conclusion) without reference to the underlying facts would be insufficient, it is required to do no more than provide a declaration setting out facts showing what has been withheld and (by the omission of facts as to any other withholding) that no other sums have been withheld.
8. I accept that the 2017 Statutory Declaration (by verifying in that sense that particular amounts were withheld during the relevant period) must implicitly be taken to be "verifying" (in the sense of attesting to the truth of) the converse, i.e., that it is not the fact that the defendant "did not withhold any such amounts during the period" (see s 268-90(2)(a)(ii)). Therefore, I accept that the 2017 Statutory Declaration in that sense verifies the facts required by s 268-90(2) to be verified. However, the 2017 Statutory Declaration goes further and declares, in effect, that there was no liability to withhold any other amounts. That is made clear from the statement in the 2017 Statutory Declaration (at [10]) that there is no amount of PAYG relating to the Notice Period that "ought to have been … withheld" by the defendant (and "has not been remitted").
9. I am not satisfied that the 2017 Statutory Declaration is "to the effect" that the underlying liability "never existed". On the face of the Table in Sch 1 to the 2017 Statutory Declaration, payments were made, described as wages, to identified members of CAP Accounting staff (other than Mr Cassaniti) and the declaration makes clear the defendant's position that no amounts were withheld by the defendant in relation to those payments.
10. Therefore, whatever may be the case as to the extent to which the plaintiff could properly test the 2017 Statutory Declaration by reference to other material (such as the Account B statements), and whatever might be said as to whether the defendant has properly complied with its obligations to remit amounts to the plaintiff under Div 16 or whether the maker of the 2017 Statutory Declaration was ultimately proven correct as to the facts so verified (see s 268-90(2)(b)), I consider that the plaintiff has established that the 2017 Statutory Declaration does not disclose facts upon which it can be concluded (and is as a matter of substance not to the effect) that the underlying (PAYGW) liability never existed.
11. I accept that the legislation does not impose a positive obligation on the taxpayer to disclose why it was that any particular amount disclosed (implicitly or otherwise) by the statutory declaration (or affidavit) not to have been withheld was not withheld. However, at a practical level, if a taxpayer is attesting to facts to the effect (or sufficient to prove, in the case of an affidavit) that the underlying liability never existed or that a specified lesser amount of the liability is unpaid (in this case said to be nil) and, on the material provided by the taxpayer, there is some doubt arising as to the characterisation of particular payments, then it may well be that there is a need for the taxpayer to verify facts to dispel what would otherwise be an available inference that amounts ought to have been but were not withheld. In the present case, that issue potentially arises in relation to amounts disclosed in the 2017 Statutory Declaration as paid out of the defendant's Account A to the various third party entities (from which there was no PAYGW) but in respect of which the bank statements record descriptions such as "wages", "Pay" and "Payroll" (see [23] of Mr Zafariou's 10 May 2018 affidavit and Ex AZ-5 thereto; bank statements in Volume 1 of the volumes exhibited to the 2017 Statutory Declaration).
12. The verified facts in the present case disclose at the very least that amounts (described as wages) were paid by the defendant to individuals out of Account A, from which payments no amounts for PAYG tax were withheld. The defendant effectively conceded that this was the case in relation to the so-called "isolated transactions". Thus, the 2017 Statutory Declaration does not verify facts to the effect that the underlying liability "never existed". Nor am I persuaded that the 2017 Statutory Declaration discloses facts upon which it can be concluded (and thus I consider that as a matter of substance it is not to the effect) that the "specified" lesser amount unpaid of the underlying liability is nil. Since the only specified lesser amount in the 2017 Statutory Declaration is "nil", it is apparent from the information in Table A on its face demonstrates that this is incorrect. Therefore, I cannot accept that the 2017 Statutory Declaration is to the effect that the amount unpaid of the underlying liability is nil (that being the position for which the defendant, at least in the declaration and in its pleading in these proceedings, though not perhaps in its final submissions, has contended).
13. Insofar as the defendant argues that there is no evidence that the payments made to third parties (i.e., the labour hire entities) were payments in the nature of wages or salaries to employees of those labour hire companies (and hence that the fact those payments are disclosed does not mean that the statutory declaration was not "to the effect" for which the defendant contends), the bank statements relating to Account A give rise to an inference to the contrary (there being numerous descriptions of payments to those entities as "wages").
14. The defendant's submission, as noted earlier, was in effect that it could be assumed that those were payments under a contract for services (i.e., not payments having the necessary character of payments to an employee in the course of an employment relationship - whether that employee be an employee of the third party or otherwise). The difficulty is that no contracts for services were exhibited to the 2017 Statutory Declaration, so one is left with a statutory declaration verifying that certain payments were made (described in the bank statements accompanying the statutory declaration as wages) to entities described in the statutory declaration as labour hire entities (from which one might equally infer that the payments were in respect of the provision of labour for which wages would be payable to an employee providing the services in question).
15. As to the existence of the trust account (Account B), this seems to me to be more problematic. The fact that material extraneous from that which was exhibited to the 2017 Statutory Declaration reveals payments out of a trust account to persons that might (or might not) have the character of payments of wages or salary to employees does not mean that the facts verified by the statutory declaration are not to the effect that the underlying liability never existed or that there was a specified lesser amount of liability that was unpaid. This raises the question as to the extent to which the plaintiff may have resort to other sources of information when assessing the substance or effect of the statutory declaration. As stated by Robertson J in Transtar Linehaul (at [85]) the expression "to the effect of" directs attention to the substance of the statutory declaration (rather than its form) and (at [86]) it is for the recipient of the statutory declaration to evaluate it in order to assess its substance or effect. I am inclined to the view that this enables the content of the statutory declaration to be assessed but does not necessarily enable its effect to be tested by reference to extraneous material. In such a case, where the underlying liability is disputed it would, as Robertson J noted (at [86]) be for a court to decide whether the statutory declaration was to the effect required by the statute (and hence for the existence and quantum of the disputed liability to be determined on a contested hearing). However, it is not necessary to make any concluded finding on this issue.
16. That said, by reference to the "isolated transactions" and the payments to third party entities described in the bank statements as "wages", had I been satisfied that the 2017 Estimate Notice was validly issued I would have answered question 1 in the negative.

If yes to 1, is the consequence of the service of the statutory declaration on the plaintiff within 7 days after the Notice of Estimate was given to the defendant, that the estimate was thereby revoked pursuant to s 268-40(4) of Schedule 1 to the TAA or reduced to a specified lesser amount pursuant to s 268-40(2) of Schedule 1 to the TAA?

1. The plaintiff's submission is that Question 1 should be answered "No"; and says that it follows that Question 2 should be answered "Does not arise".
2. The defendant's submission is that the estimate was reduced to nil by s 268-40(2).

Determination

1. As is clear from the discussion in relation to question 1, had I concluded the 2017 Estimate Notice was validly issued, I would have answered this question "Does not arise" for the reasons as set out above, including my conclusion that the 2017 Estimate Notice was not validly issued. Questions 3 and 4
2. As noted earlier, these questions do not arise for determination in the present case.

Conclusion

1. For the above reasons, I will answer the separate question as there indicated. That leaves two matters to be dealt with: costs and what directions are to be made for the proceedings as a whole.
2. As to costs, in the ordinary course they would follow the event unless either party wishes to make submissions on costs. I will so order.
3. As to the remaining conduct of the proceedings, to the extent that the plaintiff's claim is predicated on the validity of the 2017 Estimate Notice as giving rise to a separate and distinct liability enforceable as a debt, it may be that the proceedings should now be dismissed. However, I will list the matter for directions to determine the appropriate course to be followed in that regard. It might be, for example, that the plaintiff will want to amend his claim in order now to seek to establish the actual liability for PAYGW amounts.

Orders

1. For the reasons set out above I make the following orders: 1. Grant leave to the defendant to raise an additional question for separate determination, identified as Question 5, as follows: "Was the notice of estimate dated 16 January 2017 invalid by reason of an absence of delegated authority to issue it?" 2. Answer the questions reserved for separate determination as follows: 1. Question 1: Does not arise in light of the answer to question 5 but, had question 1 arisen, the answer would have been that the 2017 Statutory Declaration is not to the effect that the underlying liability never existed (within the meaning of s 268-40(4) of Sch 1 to the TAA) nor that a specified lesser amount is the unpaid amount of the underlying liability (within the meaning of s 268-40(2) of Sch 1 to the TAA). 2. Question 2: Does not arise in light of the answer to question 5 (nor, had question 2 arisen, in light of the answer which would have been given to question 1). 3. Question 3: Does not arise for determination in this case. 4. Question 4: Does not arise for determination in this case. 5. Question 5: The notice of estimate dated 16 January 2017 is invalid and ineffective by reason of the fact that it was issued in breach of s 268-10(4) of Sch 1 to the TAA at a time when an earlier notice of estimate (the 2015 Estimate Notice) continued in force (that notice not having been validly revoked in accordance with the requirements of s 268-35(4) of Sch 1 to the TAA). 1. The plaintiff is to pay the defendant's costs of the determination of the separate questions.

Amendments 25 February 2019 - Typographical errors to [27], [72], [83], [123], [187], [192], [193], [211], [238], [276] DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 25 February 2019