Supreme Court of Tasmania|1995-07-27|Before: Wright J

Eric Robert O'Brien v M R Norton-Smith Pty Ltd [1995] TASSC 78 (27 July 1995)

Magistrates - Appeals from and control over magistrates - Tasmania - Motion to review - Sentence - Taxation offences - Complaints dismissed without proceeding to conviction - Exercise of discretion - Whether sentences manifestly inadequate or outside scope of Crimes Act 1914 (Cth), s19B.

Solicitors for appellant: Australian Government Solicitor

WRIGHT J The respondent was charged on complaint with three offences contrary to the Taxation Administration Act 1953, s8C(1)(a). The charges all arose out of the respondent's failure to furnish Fringe Benefits Tax returns to the Deputy Commissioner of Taxation as required by the notices in writing served upon the respondent by the Deputy Commissioner of Taxation. The return first mentioned in the complaint was required in respect of the year ended 31 March 1992. The Deputy Commissioner's notice dated 10 November 1994 required the lodgement of that return by 24 November 1994.

2. The second mentioned return was required in respect of the year ended 31 March 1993. The Deputy Commissioner's notice dated 26 July 1993 required lodgement of the return by 9 August 1993.

3. The third return was required in respect of the year ended 31 March 1991. The Deputy Commissioner's notice dated 18 July 1994 required lodgement of that return by 1 August 1994.

4. Non-compliance with these notices thus resulted in offences being committed by the respondent on 25 November 1994, 10 August 1993 and 2 August 1994, respectively so that chronologically speaking the second complaint was in respect of the first offence, the third complaint was in respect of the second offence, and the first complaint was in respect of the third offence.

5. The complaints came before the Court of Petty Sessions at Burnie on 23 February 1995. The respondent company, through its counsel, entered pleas of guilty to all complaints. The learned magistrate did not impose a penalty and did not convict the respondent in respect of any of these offences instead he dismissed all complaints pursuant to the provisions of the Crimes Act 1914 (Cth), s19B.

6. The prosecutor has filed a motion to review the learned magistrate's orders on two grounds, viz:

"1 That the Learned Magistrate erred in law in imposing

sentence (sic) which was manifestly inadequate in all

the circumstances.

2 That the Learned Magistrate erred in law in

exercising his discretion in application of Section

19B(1)(c) of the Crimes Act 1914 and dismissing counts

1, 2 and 3 on the complaint."

7. The learned magistrate was told by the prosecution that since the filing of the complaints on 12 December 1994 the respondent had in fact lodged the three relevant returns. The tax assessed to be payable pursuant to those returns amounted to $5,080.30 in total and was still outstanding at the time of the hearing in the Court of Petty Sessions.

8. The prosecutor correctly drew the learned magistrate's attention to the fact that as a consequence of the combined operation of the Taxation Administration Act 1953, ss8B(2), 8E and 8ZF, the available maximum penalties for these offences were $20,000, $2,000 and $4,000 respectively. (See O'Brien v ADC Sport Pty Ltd (1988) 94 FLR 239.)

9. In mitigation, counsel for the respondent claimed that his client company had been in operation for several years, it had a good reputation as an accountant and tax agent and it had committed no prior offences of any kind. He submitted that the offences had arisen from his client being overworked and having given priority to the affairs of its clients rather than its own business administration. He said that the preparation of the relevant returns was the responsibility of the holder of a senior employment position within the firm and that staffing changes had resulted in three different people holding that position within a relatively short period of time. The reasons for the staffing changes were not explained. Counsel also drew the court's attention to the fact that the respondent was charged with "failing" to furnish the relevant returns, rather than "refusing" to do so. It was also submitted that convictions for any of the offences would be "unduly harsh" as such a result would adversely affect the respondent's good reputation as an accountant and tax agent in Tasmania.

10. The Crimes Act 1914 (Cth), s19B provides as follows:

"19B (1) Where:

(a) a person is charged before a court with an offence

against the law of the Commonwealth; and

(b) the court is satisfied, in respect of that charge

or more than one of those charges, that the charge is

proved, but is of the opinion, having regard to:

(i) the character, antecedents, age, health or mental

condition of the person;

(ii) the extent (if any) to which the offence is of a

trivial nature; or

(iii) the extent (if any) to which the offence was

committed under extenuating circumstances;

that it is inexpedient to inflict any punishment, or to

inflict any punishment other than a nominal punishment,

or that it is expedient to release the offender on

probation;

the court may, by order:

(c) dismiss the charge or charges in respect of which

the court is so satisfied; or"

(The remaining provisions are irrelevant for present

purposes.)

11. In comments made at the time of announcing his decision, the learned magistrate acknowledged that the matters before him did not fall within s19B(1)(b)(ii) as the offences could not properly be characterised as trivial. His Worship also noted, correctly in my opinion, that by prosecuting the respondent, the Deputy Commissioner was precluded from seeking penalties from the company which may otherwise have been imposed by reason of the operation of the Taxation Administration Act 1953, s8ZE. His Worship also expressed the view that the Crimes Act 1914, s19B, is applicable both to companies and natural persons. As to this he was plainly correct. (See Sheen v Geo Cornish Pty Ltd (1978) 2 NSWLR 162.)

12. He referred to the respondent's prior good character and lack of previous convictions, the fact that in one form or another the business had been in operation since 1969 and, to use his words, the respondent "is a company of Tasmanian significance". He concluded by indicating that he intended to apply the Crimes Act 1914, s19B and he then proceeded to dismiss the three complaints.

13. In discussing the provisions of the Probations of Offenders Act 1973 (Tas), s7, (which in all material respects is indistinguishable from the Crimes Act 1914, s19B) Everett J in Stewart v Smith A22/1981 (available on SCALE) had cause to consider the meaning of the words "antecedents" and "inexpedient" as those words appear in the section and, as he said at 9 of his judgment, having first referred to an earlier judgment of the Chief Justice in Cole v P F Eiszele and D A Eiszele 33/1979:

"The Chief Justice dealt at some length with the

meaning of the word 'antecedents' as used in s7 of the

Act, and I am content to adopt and apply his Honour's

references to decided cases and his ultimate

conclusion, thus expressed: - 'All the events of a

defendant's history, both recent and distant, form part

of his antecedents. But it must also be borne in mind

that a court is only required to have regard to the

matters referred to in s7(1)(a), (b) and (c) insofar as

they are relevant to the formation of the opinion as to

whether it is INEXPEDIENT to inflict any punishment

...' (The emphasis is mine.)

In my opinion the effect of s7(1)(d) of the Act is that

the sentencing authority should, in the usual way,

consider all the facts and circumstances relating to

the offence, and should also, whenever it may be prima

facie appropriate to do so, consider whether any of the

bases for the application of s7(1) of the Act has been

established. The touchstone of whether or not that

provision should, in the circumstances of a particular

case, be applied is the expression 'it is inexpedient

to inflict any punishment ...' The word 'inexpedient'

is defined in the Shorter Oxford English Dictionary,

vol1, p997 as '... disadvantageous in the

circumstances, unadvisable, impolitic.' The nature and

extent of the matters which may give rise to the

inexpediency of inflicting any punishment are expressed

in paragraphs (a), (b) and (c) of s7(1) of the Act.

There may only be one such matter; there may be

several. If any one is established, the magistrate

may, in the exercise of what is obviously a wide and

special discretion, decide that it is inexpedient to

inflict any punishment."

14. In Lanham v Brake (1983) 34 SASR 578 at 583 Cox J said, in considering the meaning and scope of the word "extenuating":

"The definition of 'extenuate', appropriate for par

(b)(iii) of s 19B(1) of the Crimes Act , is 'to lessen,

or seem to lessen, the seeming magnitude of (guilt or

offence) by partial excuses' (SOED). Cf, Nitschke v

Halliday (1982) 30 SASR 119 at pp121-122."

"I realise that, if there is a reasonable basis for the

exercise of the kind of discretion that is conferred by

s 19B of the Crimes Act, it is not for an appellate

court to substitute its own view of the way in which

the discretion should have been exercised for that

taken by the court of first instance. However, I am

satisfied here that the learned Special Magistrate did

take irrelevant matters into account in deciding not to

convict the respondent. Besides, the exercise of a s

19B discretion requires more than the mere

establishment of one of the par (b) conditions. 'Its,

or their, existence must, it seems to me, reasonably

support the exercise of the discretion the statute

gives. They are not mere pegs on which to hand

lenience dictated by some extraneous and idiosyncratic

consideration': Cobiac v Liddy [1969] HCA 26; (1969) 119 CLR 257, per

Windeyer J at p 276. See also Nitschke v Halliday

(1982) 30 SASR 119 at pp122-123."

15. In Commissioner of Taxation v Wormald (1985) 81 FLR 330 Yeldham J in the Supreme Court of New South Wales took the view that the fact that the respondent company in that case was long established and had no prior convictions could not reasonably be regarded as providing sufficient ground for considering it "expedient" to refrain from convicting the respondent of taxation offences. True it is, as observed by Cox J in Maher v Hamilton A54/1990He also and by Everett J in Stewart v Smith (supra), the existence of only one of the factors provided for in s19B(1)(b) may be sufficient to justify the court in concluding that any form of punishment would be inexpedient, but in my opinion, one would normally expect substantial reasons to exist before reaching such a conclusion in the case of offences of strict liability such as are now in question before me and I refer in that connection to Ambrose v Edmonds-Wilson (1988) 19 ATR 1217.

16. It seems to me that, either singly or collectively, there were no relevant matters which the learned magistrate was entitled to accord such weight as to provide a sufficient basis for applying the ameliorating provisions of the Crimes Act 1914, s19B in the present circumstances.

17. This was not a case such as Talisco Pty Ltd v Sarney (1987) 18 ATR 420, a decision of Olsson J in the Supreme Court of South Australia, upon which counsel for the respondent placed much reliance. In that case the defendant tax payer relied upon his registered tax agent to provide information to the Commissioner. The agent did not do so. There was no personal default or neglect of any kind by the tax payer. The fault lay entirely with his agent and furthermore it was found after the relevant information had in fact been provided that the tax payer had over paid the tax which was in question and was entitled to a refund. Neither of these circumstances apply here.

18. The reasons for the staff turnover relied upon by the respondent in the present case were not explored before the learned magistrate and it cannot be inferred that the long delay between August 1993 and 21 February 1995 when the returns were in fact lodged, was outside the control of the respondent. I would imagine that oversight or neglect whether due to a heavy workload, disorganisation or pure slothfulness, are common reasons for failure to file a taxation return. In my opinion the present case could fairly be described as a "run of the mill" case to use the expression employed by Zelling J in Federal Commissioner of Taxation v Hagidimitriou (1985) 16 ATR 839 and Olsson J in Talisco Pty Ltd's case.

19. As Jacobs J observed in Kelton v Uren (1981) 27 SASR 92 at 93:

"... there must be something that clearly distinguishes

the circumstances of the offence under consideration

from the typical offence, or circumstances of an

unusual nature personal to the defendant, before that

section (ie the Crimes Act s19B) can be properly

invoked in dealing with this particular offence."

20. Whilst his Honour was there dealing with the Income Tax Assessment Act, s223(1), his comments are, in my opinion, equally applicable to the charges of the present kind.

21. Counsel for the respondent submitted that his client company could suffer more than another offender because, being a tax agent, its licence could be withdrawn by the Commissioner, if the Commissioner were to form the view that the company was not a fit and proper person to hold such a licence as a result of its convictions for these offences. It was not suggested that any steps had been taken which could lead to the conclusion that such a course was likely to be followed by the Commissioner in the present case and I must say that I would regard such an outcome, that is the outcome predicated by counsel for the respondent, as verging upon the fanciful in the circumstances.

22. This was quite a different case from McQuestin v Australian Securities Commission [1993] TASSC 118; (1993) 12 ACSR 279 where the offender suffered an automatic disqualification from being a company director or concerned in the management of a company as the direct result of his conviction. I am of the opinion that the appellant has shown that the learned magistrate erred in applying the Crimes Act 1914, s19B in the circumstances of this case and accordingly that ground 2 of the motion to review should therefore be upheld.

23. Ground 1 is a separate ground of appeal and calls in question the adequacy of the orders made by the learned magistrate irrespective of whether or not he was entitled to apply s19B. It may be open to argument that where a magistrate has been justified in applying s19B, his disposition of the complaint has nonetheless resulted in a manifestly inadequate sentence but that situation does not arise here and need not be further discussed. Nonetheless for completeness I should say that whether or not I am correct in upholding ground 2 of the motion to review, I am also of the opinion that the penalty imposed by the learned magistrate in respect of each complaint was so inadequate as to manifest error which calls for the intervention of this Court in accordance with those principles that have been discussed in House v The King [1936] HCA 40; (1936) 55 CLR 499 and Cranssen v The King [1936] HCA 42; (1936) 55 CLR 509. See also Uzmanski v Searle (1981) 52 FLR 83.

24. Accordingly, I would also uphold ground 1 of the motion to review. The penalties imposed by the learned magistrate must therefore be set aside. I think it inappropriate to remit the complaints to another magistrate for determination. In my opinion the penalties to be imposed can properly be assessed by this Court under the provisions of the Justices Act 1959, s110, but before taking that step I will invite counsel to make any further submissions as to the penalties which they consider to be appropriate.

25. The respondent will be ordered to pay the appellant's taxed costs of the appeal. A certificate under the Appeal Costs Fund Act, s8 will be granted.

26. In respect of the first matter of complaint which, as I have pointed out, was the third offence in chronological sequence, there will be a fine of $500. In respect of the second matter of complaint, which was the first offence chronologically speaking, the fine will be $100 and in respect of the final matter of complaint, which was the second chronologically speaking, I think a penalty of $200 is appropriate. So there will be fines totalling $800 which will be imposed on that basis. I give seven days to pay, I direct that those fines be paid within the Municipality of Burnie and I think it also appropriate that I should direct that the respondent pay the court costs of Court of Petty Sessions.

Probations of Offenders Act 1973(Tas)

Administration Act 1953

Eric Robert O'Brien v M R Norton-Smith Pty Ltd [1995] TASSC 78

At a glance

Court

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Judgment (36 paragraphs)

Eric Robert O'Brien v M R Norton-Smith Pty Ltd [1995] TASSC 78 (27 July 1995)

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Legislation Cited (2)

Cases Cited (10)