DEPUTY COMMISSIONER OF TAXATION v. TRIMCOLL PTY. LIMITED [2005] NSWSC 1324 | Case summary | Zoe

NSWNSWSC

DEPUTY COMMISSIONER OF TAXATION v. TRIMCOLL PTY. LIMITED [2005] NSWSC 1324

[2005] NSWSC 1324

Supreme Court of NSW|2005-09-15|Before: Hall J

View original source

At a glance

Source facts

Court

Supreme Court of NSW

Decision date

2005-09-15

Before

Hall J

Source

Original judgment source is linked above.

Judgment (93 paragraphs)

[1]

CITATION : DEPUTY COMMISSIONER OF TAXATION v. TRIMCOLL PTY. LIMITED [2005] NSWSC 1324

[2]

DECISION : Order made pursuant to s.169(1) of the Evidence Act 1995 (NSW) that the defendant is to call as witnesses persons specified as believed to be concerned in the production or maintenance of specified documents. Leave granted to the parties to make any submissions on the question of costs of the application.

[3]

CATCHWORDS : Requests made under s.167 Evidence Act - plaintiff requested the defendant call as a witness certain persons who had made previous representations in particular documents - defendant refused to compy with request - plaintiff seeking an order that the evidence to which the request is made is not to be admitted in evidence - plaintiff would alternatively accept an order directing that persons believed to be concerned with production of specified documents be called as witnesses at the hearing - authenticity or admissibility of the documents in issue - defendant did not wish to tender the documents as evidence of the truth of the representations - documents annexed to affidavits contained previous representations - annexed documents included payment declaration forms and invoices for work undertaken by sub-contractors - the request procedures under s.167 of the Evidence Act - whether plaintiff's requests made under s.167 of the Evidence Act reasonable - the preconditions to be met by a requesting party - matters relevant to determining whether a request under s.167 a reasonable request - whether defendant's refusal to comply with request made without reasonable cause - matters to be considered in the exercise of the power to make orders under s.169.

[12]

(i) The subject matter of the proceedings arising under relevant provisions of the Income Tax Assessment Act 1936 ("ITA Act") 3 The Deputy Commissioner (the plaintiff) commenced proceedings by way of a default statement of claim filed on 31 July 2003. By that pleading, the plaintiff alleges that Trimcoll, in the period 1 June 1994 to 30 June 1999 failed to deduct what are referred to in the ITA Act as prescribed payment deductions from what the Act terms prescribed payments as required by and in accordance with s.221YHDA. 4 By reason of the alleged failure to deduct such payments, the plaintiff claims that Trimcoll became liable to pay penalties pursuant to s.221 YHH(1) of the Act and to pay general interest charged pursuant to Item 93 of Schedule 2 of the A New Tax System (Pay As You Go) Act 1999, s.221YHH(3) of the ITAA Act and Division 1 of Part IIA of the Taxation Administration Act 1953. The plaintiff accordingly contends that the defendant is indebted to the Commonwealth of Australia in the sum of $3,750,567.89 in respect of penalties for failure to make prescribed payment deductions and for additional charges for late payment, particulars of which are set out in the statement of claim. 5 In order to understand both the nature of the proceedings in greater detail and the issues arising, it is necessary to refer to the particular provisions of the ITAA Act. 6 The liability to deduct as abovementioned arises under s.221YHD(2) where a payee declaration made by the payee to the eligible paying authority (not being a householder) is in force when the payment is made. 7 Section 221YHB provides for the making of payee declarations. It provides in s.221YHB(1) that the payee may give a payee declaration form to an eligible paying authority, an expression defined in s.221YHA(4) to include a person who is a paying authority in relation to a prescribed payment. This expression would include Trimcoll. 8 A pay declaration form is in force from the time it is made until it ceases to be in force under s.221YHB(5) to (8). In accordance with s.221YHB(3), a "pay declaration form" is a document, in a form approved by the Commissioner for the purposes of the subsection, inter alia, that:-

[15]

(ii) to state a deduction exemption certificate number. 9 Section 221 YHB(1) of the ITAA Act provides that, subject to subsection (2), a payee who become entitled to receive a prescribed payment from an eligible paying authority may, for the purposes of that section, at any time before the payment is made, give a payee declaration form, completed and signed, to the eligible paying authority. 10 Section 221YHB(4) provides that if the payee gives the form to the eligible paying authority, the payee is said to make a "payee declaration" to the eligible paying authority. 11 The amount of the required deduction is a percentage of the prescribed payment, namely, the "ordinary percentage" (20%) in accordance with s.221YHD(2), or if a deduction variation certificate number and deduction variation certificate percentage are stated in the payee declaration form and the eligible paying authority reasonably believes that the deduction variation certificate is in force, then that percentage. The Commissioner, pursuant to s.221YHP, may issue a deduction variation certificate of that kind. 12 Section 221YHDA provides for an obligation to deduct where no payee declaration is in force when the payment is made: s.221YHDA(1)(a). In those circumstances, the eligible authority must deduct the non-declaration percentage of the payment. It appears that the prescribed rate of deduction varied during the period in question at about 48% of the amount of the payment. 13 The liability In Trimcoll which the Deputy Commissioner alleges in the present proceedings and for which it seeks liquidated damages, is said to arise under s.221YHH(1). That section provides:- "(1) Penalties Where an eligible paying authority other than a Government body refuses or fails, at the time of making a prescribed payment to a payee, to deduct from the payment the amount required to be deducted under this Division, the eligible paying authority is liable to pay to the Commissioner, by way of penalty:- (a) an amount (in this sub-section referred to as the ' undeducted amount ") equal to the amount that the eligible paying authority failed to deduct; and (b) an amount equal to 16% per annum of so much of the undeducted amount as remains unpaid …" 14 The Deputy Commissioner has identified, by way of particulars, 86 payments relied upon in the proceedings totalling $3,545,622.70. The claimed penalty corresponds in each case to the non-declaration percentage. 15 There is one final matter to be mentioned at this point. Section 221YHA(1) - Interpretation - sets out relevant definitions employed in Division 3A, subdivision B, and includes a definition of the term "payments":- "Payments Means a payment that is made, or is liable to be made, under a contract the performance of which, in whole or in part, involves the performance of work (whether or not by the person to whom the payment is made or is liable to be made), but does not include:- (a) a payment of salary or wages within the meaning of s.221A …; (b) a payment of exempt income; or (c) a payment made to or by a trustee, being the trustee of the estate of a bankrupt or the liquidator of a company that is being wound up;"

[28]

(iii) The requests made by the Deputy Commissioner pursuant to s.167 of the Evidence Act 26 The requests under s.167 of the Evidence Act 1995 were a response to the service of the affidavits of Mr. Liam O'Gorman, Mrs. Patricia O'Gorman and Mr. Roth. They specifically raised the existence of prescribed payment declaration forms and invoices purportedly relating to work undertaken by sub-contractor entities. The plaintiff seeks to invoke the procedures under Part 4.6 of the Evidence Act upon the basis that, upon the face of the documents, both express and implied "previous representations" arise from their terms as provided by specified persons to Trimcoll and which Trimcoll Relies upon in the proceedings. 27 The plaintiff's notice of motion for an order under s.169 was filed on 30 June 2005. An order was sought pursuant to s.169(1)(c), in these terms: "an order that the evidence in relation to which the request is made is not to be admitted in evidence". At the hearing of the motion, senior counsel for the plaintiff, Mr. D.B. McGovern, SC., stated that in the alternative the plaintiff would seek and accept an order directing Trimcoll's compliance with the request pursuant to s.169(1)(a). The plaintiff specifically relied upon the affidavits of Mr. Peter Douglass sworn 29 June 2005 and filed on 30 June 2005 in this application. 28 On 23 May 2005, the ATO General Counsel made the requests under s.167 in a letter addressed to Mr. Roth, solicitor for Trimcoll. In it reference is made to the affidavits served on the plaintiff, being the abovementioned affidavits of Mr. Liam O'Gorman, Mrs. Patricia O'Gorman and Mr. Roth. 29 The requests relate to named and unnamed persons referred to in 14 paragraphs of the letter of 23 May 2005. The requests are prefaced with the statement:- "Pursuant to s.167 of the Evidence Act, the Plaintiff requests that the Defendant call as a witness at the trial in this matter the following persons for the purpose of determining questions that relate to either the previous representations made by those persons, or, the authenticity, identity or admissibility of particular documents:-" 30 It is sufficient for purposes of discussion and analysis to set out paragraph 1 of the letter which is in the following terms:- "Mr. John Finbarr O'Neill, being:- 1. the maker of the previous representation contained in the document exhibited to the affidavit of Liam O'Gorman and marked LOG1, namely, the representations in that document that the payee's deduction variation/exemption certificate number is V1800506T and that the varied rate is 0%; and 2. the person who created the document exhibited to the affidavit of Liam O'Gorman and marked LOG3, or if Mr. John Finbarr O'Neill was not that person, then the person or persons who:- 3. made the previous representation contained in the document exhibited to the affidavit of Liam O'Gorman and marked LOG1, namely, the representations in that document that the payee's deduction variation/exemption certificate number is V1800506T and that the varied rate is 0%; and 4. created the document exhibited to the affidavit of Liam O'Gorman and marked LOG3." 31 The letter requested advice as to whether Trimcoll would comply with the requests by 5.00 pm on 20 June 2005. It foreshadowed that, in the event that the defendant failed to comply with the requests, then the plaintiff would be at liberty to make application to the Supreme Court under s.169 of the Evidence Act and seek an order that the documents that are the subject of the requests contained in the letter not be admitted into evidence at the trial. 32 On 28 May 2005, Mr. Roth responded to the letter of request stating, inter alia:- "In order that we may give proper consideration to your request, would you please identify, in relation to each of the separate numbered requests in your letter, the particular question or questions for determination which caused you to make the request. Whatever may otherwise be the case, we consider that your requests are clearly unreasonable without this information. …" 33 Counsel for the ATO replied to Mr. Roth's request for particulars by letter dated 3 June 2005. The letter raises a number of matters, including the following:-

[33]

• In the event that, in accordance with the request, the persons identified are called to give evidence then the plaintiff would cross-examine them on the issue of the identity and authenticity of the documents that were purportedly produced by the witnesses for the purpose of seeking an order that the documents not be admitted into evidence. 34 Mr. Roth wrote a letter dated 6 June 2005 enclosing a schedule of documents for discovery and requested the plaintiff's consent to discovery. 35 The ATO General Counsel replied by letter dated 8 June 2005 stating, inter alia, that the belated request for discovery had no bearing on the s.167 requests of 23 May 2005 and that the request for discovery should not delay a reply to the latter request. I am of the opinion that the question of discovery was a quite separate issue. 36 On 18 June 2005, Mr. Roth wrote to the ATO. In that letter Mr. Roth wrote:- "… We note that you base your requests on the assumption that our client will tender the documents which you have identified as business records within the meaning of the Evidence Act. We understand this is a reference to section 69 of the Act which creates an exception to the hearsay rule in relation to the tender of evidence of a previous representation contained in a business record as evidence of the truth of that representation in the circumstances set out in the section. We advise that our client does not propose to tender the documents referred to in your letter dated 23 May 2005 as evidence of the truth of the representations which you have identified. The business records exception to the hearsay rule is therefore irrelevant to your request" 37 The letter then went on to address specific requests by number which I extract below (I note that the reference to requests numbered 1 to 13 is intended to read 1 to 12 and the reference to request numbered 14 is intended to relate to request numbered 13):- "By your requests numbered 1 to 13, you ask our client to call as witnesses the persons who made certain representations identified in your letter and who created certain documents. As to the first category, none of those representations were made by a person engaged in our client's business or under our client's control. As to the second category, the documents in question were not those of our client and the persons who created them were not engaged in our client's business or under our client's control. By your request numbered 14, you ask our client to call as witnesses the person(s) who created certain invoices and work dockets, copies of which were in evidence in the AAT proceedings as annexures to Mr. O'Gorman's statement. Those documents were not created by anyone engaged in our client's business or under its control. As part of Exhibit CGR3 to the writer's affidavit in the previous proceedings, they are not intended to be tendered as proof of the truth of previous representations, but as evidence of the nature of the proceedings and the matters in issue before the AAT. In any event, the invoices and dockets referred to are all outside the period relevant to the present proceedings." 38 The letter went on to refer to the request concerning a Mr. Paddy Saunders. I do not need to detail that aspect. I will, however, deal with this aspect later. 39 Mr. Roth concluded his letter by saying that in the circumstances set out in his letter "our client will not accede to the requests in your letter of 23 May 2005".

[48]

(c) the authenticity, identity or admissibility of a document or thing (s.167). 45 The phrase "relates to" involves a nexus of a broad nature: O'Grady v. Northern Queensland Co. Limited (1990) 92 ALR 213; 226; Nordland Papier v. Anti-Dumping Authority (1999) 161 ALR 120 at 126 and Jennings Constructions v. Workers Rehabilitation & Compensation Corporation (1998) 71 SASR 465 at 480-482). 46 There is no criteria specified by which a request may be determined to be a reasonable one. 47 One matter that bears upon the determination as to whether a request is reasonable will be whether there is a genuine dispute about a representation contained in the particular document or record. 48 A court will doubtless have regard to the issues in the proceedings, in particular legal and factual issues arising on the pleadings and to any relevant evidential issues arising from the evidence sought to be adduced in determining whether a question relates to one or other of the matters set out in paragraphs (a), (b) and/or (c) of s.167. 49 The provisions of Division 1 are directed fundamentally to ensuring that documentary evidence, things or representations which one party wishes to tender or adduce and rely upon against the other can in particular circumstances be subjected to testing. 50 In so providing, Division 1 affords a measure of protection against documents or other records being accorded the evidential significance that they may otherwise carry on their face where the circumstances of the supply of information contained within them or attending the making of them or both (or the representations they evidence) indicate a reason to question or dispute what the records would otherwise establish or tend to establish. 51 The specific mechanism under Division 1 involves a request procedure whereby the persons who supplied the information in a particular record or who made the entries in it may be called and be questioned on the making of the record and/or the source(s) for the information contained within it. 52 The procedure is not available as of course, but depends upon the request being a reasonable one and is one that relates to the matters in s.167(a), (b) and (c). 53 A request, inter alia, may, inter alia, require the calling "as a witness" of:-

[50]

(b) a person who made a previous representation in a document or record. 54 The expression previous representation as a matter of Dictionary definition in the Act includes, inter alia, previous representations that are express and implied, whether oral or in writing or to be inferred from conduct (see definition of the term "representation". 55 The class or categories of circumstances that may constitute reasonable cause for a party not complying with a s.166 request are, of course, not limited or closed. They will include the known unavailability of the person the subject of the request to be called as a witness. They will also include a case where there is no cogent reason for the request, as, for example, where the existence and contents of the document are not in issue in the proceedings in question. The phrase "in issue" in s.169(4)(b) may be taken to mean "in question": see, for example, Re Walsh (1971) VR 33 (Vic. SCFC). 56 The matters specified in s.169(5) which the court is required to take into account are directed to matters such as the authenticity and accuracy of documents (or their contents) and the role, relevance or importance of the documents or of representations in or arising from them to the proceeding and/or a matter in dispute in the proceeding and/or the accuracy of other representations or evidence on which they may be based. 57 The making of an order under s.169 is dependent upon the court determining that the party to whom the request has been made has without reasonable cause, failed or refused to comply with the request. If the court is so satisfied then it may make one or other of the orders set out in s.169(1)(a), (b) (c) or (d). The question of an absence of reasonable cause is one to be made having regard to, but not limited by, the circumstances referred to in s.169(4). 58 The power to make an order within s.169(1) is fundamentally a discretionary one which the court may exercise by taking into account the matters set out in paragraph (a) to (h) in s.169(5), but not only those matters.

[52]

(a) The issues in the proceedings 59 In determining in the present proceedings whether the requests made by the plaintiff are both requests and reasonable requests within the meaning of ss.166 and 167 of the Act, the court is entitled and indeed should, in my opinion, consider whether and if so how they relate to a previous representation(s) or to the authenticity, identity or admissibility of a document(s) or thing(s). In some circumstances it is possible to envisage that the issue of the reasonableness of a request may also require consideration of matters such as the manner and form of a request including its specificity or lack of specificity. 60 In the present case, the request made on behalf of the plaintiff on 23 May 2005 was specific in its terms and it identified particular documentation, including that said to contain specified previous representations. 61 It was contended by senior counsel on behalf of Trimcoll, Mr. A. Robertson, SC., that the request was not a reasonable one, inter alia, upon the basis that it was not shown to relate to an issue or issues defined by the pleadings. In order to deal with this contention, it is necessary to say something briefly about the pleadings. 62 The penalties imposed are said to be referrable to liability arising from the alleged failures of Trimcoll to deduct amounts from prescribed payments as required by the provisions of s.221YHDA(1) (see paragraph 4 of the default statement of claim). Although not pleaded as an issue, it was contended in submissions on behalf of the plaintiff that the payments in question were made under contracts for the performance of work, in circumstances where no payee declarations made to the defendant were in force, thus requiring the defendant to deduct the non-declaration percentage of the payments (paragraph 1 of the plaintiff's written submissions in reply). 63 Trimcoll's Notice of Grounds of Defence includes only one affirmative defence to which I have previously referred, namely, that pleaded in paragraph 6 which raises the contention, in essence, that it was not obliged to make deductions from payments made by it under contracts for the performance of work because each of the named third party payees were payees who became entitled to receive prescribed payments from the defendant as an eligible paying authority and which, before the initial payment was made, had been given payee declaration forms completed and signed by the respective payees to it stating in each case a declaration exemption certificate number. 64 Mr. Robertson, SC. developed the argument upon the basis that, in essence, what the plaintiff seeks to do is to go behind documents such as LOG1, LOG2 and LOG3 and assert that they do not relate to what Mr. McGovern, SC., on behalf of the plaintiff, referred to as genuine transactions. 65 The nature of the factual issue which the plaintiff seeks to rely upon in answer to the defence of Trimcoll does not appear from the pleadings. It is plain in my view that a document or previous representation referred to in s.167 must, in order to justify itself as a request under s.167, in some way relate to a matter in issue in the proceedings in question. There is a necessity, accordingly, in the present case to identify the matter or matters in issue to which the plaintiff's requests relates. That "matter", in my opinion, includes a previous representation(s) contained within relevant classes of documents. I will elaborate on this point below. 66 The plaintiff's request essentially relates to two classes of documents. The first concern payee declarations, copies of which are exhibited to Mr. O'Gorman's affidavits. They contain specific information supplied by the payee and Trimcoll as earlier discussed. The second concerned invoices by payee entities addressed to Trimcoll which are also exhibited to his affidavits. In relation to these two classes of documents, Mr. McGovern, SC. in submissions (12 September 2005 at p.8) stated:- "The central issue is whether or not payments which were made by the defendant were in respect of a genuine sub-contracting services provided by particular companies which were the payee entities. The further question is whether or not the named particular companies were providing actual and genuine contracting services or whether the actual services were provided by third party contractors, whether named particular entities were bodgie entities, as referred to in the Commissioner's statement." 67 Mr. McGovern indicated that the Deputy Commissioner's case in relation to Trimcoll's reliance in its defence upon payee declarations and invoices is sought to be challenged on two bases. 68 The first, that there was said to be an arrangement with what were termed "bodgie companies". Trimcoll's contention that sub-contracting entities with which it was dealing had provided nil variation certificates and that it was entitled to rely upon such certificates and not make any deductions at all, is challenged by the plaintiff upon the basis that documents including, in particular, invoices provided to Trimcoll, do not reflect the true contracting arrangements and the monies paid under or in respect of them. In this respect, the argument for the Deputy Commissioner was expressed as follows:- "The substance of the Deputy Commissioner's case suing to recover penalties is that the amounts paid in respect of which the defendant should have made prescribed payment deductions, were payments to so-called (and this will appear in the materials) 'bodgie' hire companies. In other words, bodgie companies were companies that obtained variation certificates to nil and were companies that provided things such as, in this instance, the defendant with invoices showing services were provided such as labour or plant hire where such services were not provided but the mechanism enabled the payer companies to absorb the payment of cash wages to what I might refer to as its natural sub-contractors" (transcript 12 September 2005 at p.3). 69 Accordingly, on this basis, it was contended on behalf of the plaintiff there is a question as to whether or not the invoices and payee declarations relied upon by Trimcoll were manifestations of or were related to actual or genuine business dealings. Mr. McGovern, in his written submissions in this respect, further stated:- "The Deputy Commissioner will allege that the true contracting services were performed by other entities and not by the entities that provided the invoices. The Deputy Commissioner will allege that the invoices do not accurately record business transactions that actually occurred and that the actual transactions occurred between the defendant and third parties." (written submissions 15 September 2005, paragraph 6) 70 The second basis relied upon in support of the requests made related to the authenticity or admissibility of each document, the contention being that each of these was in issue. In this respect, it was argued on behalf of the plaintiff that the authenticity of the document involves the establishment of the genuineness of each of them, that is to say, whether or not the documents have their supposed character and are not shams or facades (plaintiff's written submissions, paragraph 14).

[84]

• whether the discretion should be exercised in favour of doing so. 83 The above analysis of the documents in question, I believe, establishes that they potentially may constitute admissible evidence for a number of non-hearsay purposes. Accordingly, the fact that Trimcoll does not rely upon the hearsay exception is not in itself determinative of the issue under s.167 or the question as to whether an order should be made under s.169 of the Evidence Act. 84 At this point, it is necessary to refer to the question of onus of proof in the proceedings. As discussed earlier s.255-50 of the Taxation Administration Act renders all statements in the statement of liquidated claim as prima facie evidence of the matters alleged. Additionally, in accordance with the provisions of s.255-50(1) of the Tax Administration Act, the certified copy of a certificate about a matter in the plaintiff's claim is prima facie evidence that may be relied upon to establish the claim, cf: s.177(1) Income Tax Assessment Act 1936 (whereby in a recovery proceeding, a certified copy of a notice of assessment is conclusive evidence of the due making of the assessment and that the amount of the claim is correct). 85 The effect of the s.255-50(1) provision is to effectively shift the burden or onus to the defendant as it will be for the defendant to adduce evidence sufficient to displace the prima facie evidence of the plaintiff. In seeking to do so, Trimcoll in the present matter puts forward an evidentiary case based in part upon the payee declarations and invoices. In seeking to do so, it seeks to go behind the imposition of the penalties to establish particular factual circumstances which, if accepted, would assist it in establishing that there was no obligation in Trimcoll to make the prescribed payment deductions in question. In proposing to do so, it is open to Trimcoll to place reliance upon express representations made by various payees (previous representations) and, as well, as upon implied representations to the effect that such documentation:-

[87]

(c) The exercise of the power under s.169 89 There are two general matters concerning the making of orders under s.169(1). The first is that there must have been a failure or refusal, without reasonable cause, to comply with a request under s.167. The second concerns the discretionary basis for the making of an order on the assumption that the first of these two matters has been established. 90 Mr. Robertson, SC. submitted on behalf of the defendant that whatever may fall within the scope and reach of s.167, it is not for a court on an application under s.169 to make orders which would require a party to run a case which is different to that which that party wishes to conduct. The submission is relevant to the question of the reasonableness of the request and the reasonableness of the failure or refusal to comply with it in light of what a party to proceedings (in this case the defendant) has said as to how it proposes to put its case and how it proposes to use particular evidence to support that case. 91 In this respect, Mr. Robertson contended that at the heart of the plaintiff's submissions was the proposition that the exhibits to the affidavits, in particular, the payee declaration forms and the invoices, were to be used by reference to the business records exception to the hearsay rule (s.69). 92 In his letter of 18 June 2005 addressed to the Australian Taxation Office, Mr. Roth confirmed that Trimcoll did not propose to tender the documents referred to in the letter from the ATO General Counsel to him dated 23 May 2005 as evidence of the truth of the representations identified in that letter. Mr. Roth stated that "the business records exception to the hearsay rule is therefore irrelevant to your request." 93 It was made clear that Mr. Roth's statement on behalf of his client to the effect that the business records exception in s.69 would not be relied upon was advanced as justifying Trimcoll's refusal to comply with the plaintiff's s.167 requests. 94 Although the defendant has stated through its solicitor that Trimcoll does not propose to rely upon the payee declarations and invoices as evidence of the truth of the representations identified, it remains a fact not to be disregarded that the defendant proposes to rely upon the documents for a purpose that is material to its defence in the proceedings. Whilst a particular document may not be relied upon to prove the truth of any facts asserted or contained within a representation, it may be relevantly adduced for a non-hearsay purpose. Accordingly, apart from the truth of particular data contained within the documents in question, they may be relied upon:-

[88]

(b) evidence of an agreement or the terms of an alleged agreement or contract: eg., Regina v. Macraild (NSWCCA, unreported 18 December 1997 - Sully, Dunford and Simpson, JJ.). 95 In addition, as I understood the argument, the affidavit evidence of Mr. O'Gorman in part endeavours to establish at a precise or particular time or date, the existence and operation of the identified payee declaration forms (the issue of timing of payee declarations). In other words, it is sought to establish that such declaration forms were in place and in force at the time the first payments were made by Trimcoll to each payee. It is, in my opinion, arguable that the payee declarations, insofar as they evidence the fact that they existed and were in force and were used in relation to sub-contracts at a relevant time or times, can be used or relied upon as evidence of implied representations, as to the existence of underlying contracts as Trimcoll claims in fact existed and under which actual services are said to have been provided. Implied representations to that effect, of course, fall within the expression in the Evidence Act previous representations. Arguably, such prospective evidentiary use of the documents could provide a further justification for the making of the requests concerning such documents under s.167. 96 As earlier observed, the plaintiff also sought to support its request as a reasonable one under s.167 upon a second basis, namely, in relation to the authenticity, identity or admissibility of the documents in question. 97 In this respect, the plaintiff relied upon the proposition that the requests under s.167 were, in part, directed to the authenticity of the payee declarations and invoices. Mr. Robertson, SC. contended that there was no basis for reliance upon s.167(c) for the Deputy Commissioner's argument was premised upon a proposition that the documents did not evidence what were termed the genuine transaction under which actual services were provided. Accordingly, so the argument went, this was not a basis which went to the question of the authenticity of documents within the meaning of the section. 98 I am of the view that the point was well taken in this respect on behalf of Trimcoll. In general terms, the authenticity of a document is concerned with the proposition that a document is in fact what it purports to be and may be proved by evidence of a person who made it (or one of the persons who made it) or a person who was present when it was made, or in the case of a business record, a person who participates in the conduct of the business and compiled the document, or found it among the business' records, or can recognise it as one of the records of the business: National Australia Bank v. Rusu (1999) 47 NSWLR 309. The distinction made in that case by Bryson, J. between a question of authenticity and a question as to the relevance of documents need not here be discussed. The question of authentication of documents was also the subject of extensive consideration by Austin, J. in ASIC v. Rich (2005) 53 ACSR 752. In that case, Austin, J. stated (at [118]):- "Authentication is about showing that the document is what it is claimed to be, not about assessing, at the point of the adducing of the evidence, whether the document proves what the tendering party claims it proves." 99 As I understand the fundamental argument raised on behalf of Trimcoll, there is not involved here a question of authentication in terms of showing that the documents are what they are claimed to be (namely, payee declaration forms or invoices). Rather, it is whether those documents in fact relate to particular dealings in respect of which prescribed payments were made by Trimcoll. 100 I accordingly do not consider that the plaintiff has established an issue of authentication as a basis for the requests made under s.167. 101 In these circumstances, accordingly, there are at least one and possibly two bases upon which the requests can be supported under s.167 and that is the basis (express and implied representations) already discussed at some length above and, at least, to a limited extent possible issues concerning the identity of a document or documents. In my view, each such basis or bases is/are adequate to support the requests under that section as reasonable. 102 There is one further matter which need only be dealt with briefly. The question of admissibility of the declaration forms and invoices would not necessarily be established or concluded merely by the evidence of Mr. O'Gorman that he was the recipient of the documents. Their relevance may need to be established by other evidence. If, in fact, for example, the plaintiff can demonstrate that the sub-contract work in relation to individual dealings was not performed by the nominated payees, but was performed under unrelated contracts with other entities, that in itself would, then, at least raise a question as to the relevance of the declarations and invoices. In such circumstances, it would seem open to contend that the documents could not and would not support the defence as pleaded.

[89]

(d) Was the defendant's refusal to comply with the s.167 request without reasonable cause? 103 I have outlined above the submission made on behalf of Trimcoll that it does not seek to rely upon the business record provisions to establish the truth of the contents of the documents (the declarations and invoices). It was argued that, in those circumstances, it was entitled to refuse to comply with the plaintiff's requests. 104 It follows from what has been stated above on this aspect of the matter that given the issue raised by the plaintiff as to whether the documents evidence genuine transactions, the disclaimer by Trimcoll that it does not rely upon s.69 of the Evidence Act cannot in itself provide reasonable cause for a refusal to comply with the request, given that the defendant plainly relies upon the documents in its defence if only for non-hearsay purposes. Insofar as the documents are relied upon by Trimcoll to advance and support its defence in the proceedings, namely, that there was no basis for the imposition of the penalties by the plaintiff, the express and implied representations in and arising from the documents themselves in circumstances where Trimcoll says that they were provided to it by sub-contractors points to the fact that the plaintiff's requests were reasonably made. Accordingly, subject to some matters concerning particular documents referred to in paragraphs [109] to [113], I am of the opinion that the defendant has failed to establish that it had reasonable cause to refuse the plaintiff's requests under s.167. 105 In summary, the fact that Trimcoll does not rely upon s.69 of the Evidence Act is not, in my view, determinative of the reasonableness of the plaintiff's s.167 requests or of the refusal by the defendant to comply with the requests. The facts as to the existence of each relevant sub-contract, including the identity of the parties to each contract together with the question as to whether work was performed under the relevant contracts are matters of potential relevance to the defence raised in Trimcoll's notice of grounds of defence (paragraph 6). The s.167 requests accordingly, in my opinion, relate to matters referred to in s.167(a) and/or (c) and in terms of s.167(5) relate to matters of importance in the proceedings and as to the accuracy of the representations to which I have earlier referred. 106 It was submitted on behalf of Trimcoll that the pleadings themselves do not reveal an issue to which the s.167 requests can be related. It was also contended on its behalf that no reply had been filed formally raising any ground or species of fraud, a matter which the rules would require to be specifically pleaded. 107 In relation to these pleading points, it is to be observed that the proceedings in this case are not what might be termed conventional proceedings in that the plaintiff's allegations set out in the statement of claim constitute, by virtue of the statutory provisions discussed above, prima facie evidence in support of its claim. In order to meet such prima facie evidence, it is for the defendant to both plead and prove grounds of defence, which establish that there was no basis in law for the imposition of penalties. Trimcoll's defence in this respect has raised factual issues which, of course, the plaintiff is entitled to dispute. The basis upon which the plaintiff proposes to contest the documentary evidence relied upon by Trimcoll was made plain in submissions. In other words, the issues against which the present application is to be examined are not merely the matters recorded in the pleadings, but those which also arise in the context of the evidentiary issues which underpin or are subjacent to those issues. Whether or not those are matters for special pleading by way of a reply (about which I have some doubt) the parties are well aware of the basis upon which the plaintiff proposes to dispute Trimcoll's defence.

[90]

(i) Section 167 requests excluded from s.169(1) orders 108 In determining precisely what orders should be made under s.169(1) of the Evidence Act, it is necessary to identify those document included in the request made on 25 May 2005 in respect of which no order should be made and those that should be made the subject of such orders. 109 In relation to requests 4(ii) and 4(iv) in the letter to Mr. Roth from the ATO General Counsel (which relate respectively to LOG10 and LOG11 to the affidavit of Liam O'Gorman affirmed on 5 May 2005), I do not consider that it is appropriate to make an order under s.169(1). LOG10 is not a document that purports to relate to a contract for the performance of work or work performed under a contract. It is a copy of a Tax file number application or enquiry by Mike's Machine Hire Pty. Limited to the plaintiff dated 12 August 1998. LOG 11 is a copy of an application for registration, prescribed payments to the plaintiff by Mike's Machine Hire Pty. Limited also dated 12 August 1998. These two documents do not bear upon the issues identified in the plaintiff's submissions. Accordingly, I do not consider that the requests in relation to them were reasonable requests within the meaning of s.167. Alternatively, I find that the defendant had reasonable cause within s.169(1) for refusing to comply with such requests. 110 In relation to request 13 in the letter of 25 May 2005 from the ATO General Counsel concerning Exhibit CGR3 to Mr. Roth's affidavit affirmed on 5 May 2005, I note that CGR3 is a 28 page sworn statement of Liam O'Gorman (though styled a witness statement) with annexures principally being copies of tax invoices and work sheets of Territ Pty. Limited created in the years 2001 and 2002. 111 Mr. Roth, in his letter to the Australian Taxation Office dated 18 June 2005, resisted the request made under s.167 of the Evidence Act in relation to CGR3 upon the basis that the documents constituted an affidavit not intended to be proof of previous representations but only as evidence of the nature of the proceedings and matters in issue before the AAT. Additionally, the invoices and work documents included in Exhibit CGR3 fell outside the period relevant to the proceedings. I note that Liam O'Gorman has in fact made and filed an affidavit (on 5 May 2005) in these proceedings and if relied upon that affidavit will render him susceptible to being required for cross-examination. 112 Accordingly, I do not consider the plaintiff's request was a reasonable one within the meaning of s.167. Alternatively, I consider that the refusal to respond to the request in respect of the documents in CGR3 was, at least for reasons articulated in Mr. Roth's letter, made on grounds that constituted reasonable cause. 113 Exhibit CGR4, comprises a sworn three-page statement by Mr. Paddy Saunders of Territ Pty. Limited and annexures, including a copy of the Profit and Loss Statement of Territ Pty. Limited for the year ended 30 June 2000 (which refers to a number of undated invoices by number) and payee declarations relating to Territ Pty. Limited. In his letter of 18 June 2005, Mr. Roth observed that it was not intended to tender the documents as evidence of their truth, but as evidence of the nature of the proceedings and the matters in issue before the AAT. I also consider that the refusal to comply with the request in relation to documents within Exhibit CGR4 to have been reasonable as it has not been shown to be relevant to a fact in issue between Trimcoll and a particular contractor or a third party with respect to the performance of work under a contract with Trimcoll and as relevant to the plaintiff's claim.