Issue 1: Did Fyna have a "tax-related liability" within the meaning of s 255-1(1)?
33 The first issue is only relevant to the Other Notices.
34 The Commissioner contended that non-compliance with a s 260-5 notice gives rise to a "tax-related liability" within the meaning of s 255-1(1) such that there was a "debt" on the part of Fyna as "debtor" to the Commonwealth under s 260-5(1)(a). That "tax-related liability" could support the issue of further s 260-5 notices to persons who owe or might late owe money to Fyna.
35 In fact, the Commissioner went further. The definition of "tax-related liability" in s 255-1(1) includes "a liability the amount of which is not yet due and payable". The Commissioner confirmed that, on his construction of the provisions, immediately upon service of a s 260-5 notice on a "third party" (B) who owed or might later owe money to a "debtor" of the Commonwealth (A), and without there being any breach of the notice by B and even before B's time for compliance had arrived, the Commissioner could serve a valid notice on a person (C) who owed or might later owe money to the third party (B). C would be a "third party" using the terminology in s 260-5 and B (although a "third party" in relation to A) would be a "debtor" (like A) even before the time for compliance by B had arrived. Further -without any breach by C - the Commissioner could immediately issue a further notice on another party (D) who owed or might later owe money to C, and so on.
36 The Commissioner observed that he can sue in debt to recover an amount that is required to be paid by a s 260-5 notice when the time for payment of the relevant amount as specified in the notice has arrived and the amount has not been paid to the Commissioner: Barnes at [35] (Gilmour J). The Commissioner argued that "this is no different to any other tax-related liability which is due and payable, and to which s 255-5 applies".
37 The question is not whether the ability to enforce compliance with a s 260-5 notice by an action in debt is or is not different to the statutory right, provided by s 255-5, to recover a "tax-related liability" as a debt. The question is whether Fyna's admitted non-compliance with the obligation imposed on it by s 260-5 gave rise to a "tax-related liability" within the meaning of s 255-1. Section 255-5 only operates where there is a "tax-related liability" within the meaning of s 255-1. Section 255-5 provides that, where there is a "tax-related liability" within the meaning of s 255-1 which is due and payable, it is a debt due to the Commonwealth, payable to the Commissioner. Section 255-5 does not say that any debt due to the Commonwealth is a "tax-related liability" or that a statutory obligation enforceable by action in debt is a "tax-related liability".
38 The Commissioner submitted that "the liability created by a s 260-5 notice is a liability to the Commonwealth, payable to the Commissioner and recoverable by the Commissioner (or a Second Commissioner or Deputy Commissioner) in his or her official name". That may be accepted. However, the question is whether it is a liability which falls within the definition of "tax-related liability" in s 255-1. For it to be such, it must be "a pecuniary liability to the Commonwealth arising directly under a taxation law (including a liability the amount of which is not yet due and payable)".
39 A similar argument as made by the Commissioner in the present case was made in Barnes. The Commissioner issued two notices to the respondent, Barnes Development Pty Ltd, in relation to tax-related liabilities of two of its then directors, Mr and Mrs Barnes. One issue was whether the Commissioner could recover for non-compliance with the notices. The Commissioner put his case in two ways:
(1) His "primary submission" was that an action in debt arose by implication on the proper construction of s 260-5 of Sch 1: at [17], [18]. Where an Act creates a duty or obligation to pay money, an action will lie for its recovery, unless the Act contains "some provision to the contrary": Mallinson v Scottish Australian Investment Company Ltd (1920) 28 CLR 66, 70.
(2) His "alternative submission" was that the amounts due to the directors by the company were a "tax-related liability" (within s 255-1) which might be sued for as debts under s 255-5 of Sch 1: at [17].
40 As to the "primary submission", the respondent argued that s 260-20 provided a sanction for non-compliance under the criminal law, which also empowered the criminal court to order payment of an appropriate sum to the Commissioner, with the effect of denying the Commissioner's right to pursue civil recovery proceedings that would otherwise arise by implication from s 260-5. That argument was rejected, his Honour saying at [22]:
As to s 260-20, there is no general principle that the availability of civil remedies is excluded by provision for a criminal sanction with a discretionary power to order payment of monies due. I do not consider that the Parliament intended the criminal sanctions in s 260-20 to be the exclusive means of enforcing a notice.
41 The respondent also argued that s 255-5, which provides an express recovery regime, but which did not extend to amounts arising under s 260-5, was also a "provision to the contrary". Gilmour J rejected this argument on the basis that the existence of an affirmative provision dealing with recovery did not override the principle in Mallinson. His Honour stated at [26]:
The respondent further submits that s 255-5, which provides for an express regime of civil recovery but does not extend to amounts arising under s 260-5, is also "a provision to the contrary". This seeks, in effect, to apply the maxim expressio unius est exclusio alterius as an aid to construction. It is an aid which must be used with caution: Houssein v Under Secretary, Department of Industrial Relations and Technology (NSW) (1982) 148 CLR 88 at 94; Barratt v Howard (1999) 92 IR 350; 165 ALR 605 at [45] per Hely J. If applied in this case it would bring about a result which I doubt the Parliament intended: Ainsworth v Criminal Justice Commission (1992) 175 CLR 564 at 575. The existence of affirmative provisions elsewhere in the Act does not, in my opinion, override the principle articulated in Mallinson.
42 Gilmour J held that s 260-5 created an obligation which was enforceable by an action in debt: at [27], [34], [35]. His Honour did not expressly deal with the Commissioner's "alternative submission" that non-compliance with s 260-5 itself gave rise to a "tax-related liability" within s 255-1. It is noted, however, that in the first sentence of the passage set out above, his Honour recorded the respondent's submission that s 255-5 did not extend to amounts arising under s 260-5 and proceeded to deal with the point being made by the respondent without stating that the submission that s 255-5 did not extend to amounts arising under s 260-5 was incorrect.
43 Fyna contended that its breach of the Fyna Notice did not give rise to a "tax-related liability" within the meaning of s 255-1(1). There was no "debt" as contemplated by s 260-5(1) which could support notices issued to entities which owed or might later owe money to Fyna as "debtor" to the Commonwealth.
44 Fyna's principal argument was that a liability arising under a s 260-5 notice is a liability to "pay to the Commissioner", not to the Commonwealth: s 260-5(4). Fyna observed that s 255-1 speaks of a "pecuniary liability to the Commonwealth", not to the Commissioner. It was submitted that, for the purposes of s 255-1(1), the Commissioner was not to be identified with the Commonwealth.
45 I reject that submission. Subdivisions 255-A and 260-A do not draw the distinction Fyna suggests. This is made clear by s 260-5(1). The chapeau indicates that the section applies where an amount (referred to as a "debt"), which includes "an amount of a tax-related liability" (paragraph (a)), is "payable to the Commonwealth". Section 255-5(1), however, provides that "tax-related liabilities" are debts due to the Commonwealth, payable to the Commissioner. If the legislature intended to draw a sharp distinction between the Commissioner and the Commonwealth, then s 260-5(1) would be a nonsense because, according to s 255-5(1), tax-related liabilities are debts due to the Commonwealth, payable to the Commissioner.
46 Nevertheless, for the reasons which follow, in my view Fyna's breach of the statutory obligation created by s 260-5 did not give rise to a "tax-related liability" within the meaning of s 255-5(1). When s 255-5(1) and s 260-5 are read in context, including in the context of the limited operation of the statutory indemnity in s 260-15, the better construction is that non-compliance with a s 260-5 notice does not give rise to a tax-related liability capable of supporting a s 260-5 notice. This conclusion is also supported by the legislative history of the provision.
47 The question is whether Fyna's (B's) admitted breach of the s 260-5 notice, in paying money to Pladmira (A) rather than to the Commissioner, gave rise to a "tax-related liability" within the meaning of s 255-1 of Fyna such that there was an amount payable to the Commonwealth by Fyna within s 260-5(1)(a) capable of supporting notices issued to third parties (C) who owed or might later owe money to Fyna (B).
48 A "tax‑related liability" is a "pecuniary liability to the Commonwealth arising directly under a taxation law": s 255-1(1).
49 As to the meaning of "taxation law", s 2(1) of the TAA provides that the phrase has the meaning given in the ITAA 1997 (but note also s 2(2) of the TAA). Section 995-1(1) ITAA 1997 includes:
taxation law means:
(a) an Act of which the Commissioner has the general administration (including a part of an Act to the extent to which the Commissioner has the general administration of the Act); or
(b) legislative instruments made under such an Act (including such a part of an Act); or
(c) the Tax Agent Services Act 2009 or regulations made under that Act.
50 The Commissioner has the general administration of the taxation laws, including the TAA: s 8 ITAA 1936; s 1-7 ITAA 1997; s 3A TAA; s 356-5 of Sch 1. Accordingly, s 260-5 is a "taxation law".
51 The word "directly" is included in the definition of "tax-related liability" and must have some meaning. A "pecuniary liability to the Commonwealth arising … under a taxation law" is a pecuniary liability created or established (Rana v Google Inc (2017) 254 FCR 1 at [18]) by a "taxation law". The word "directly" must narrow the scope of the phrase "pecuniary liability to the Commonwealth arising directly under a taxation law" as compared to the meaning of that phrase without the word "directly" in it - see: Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 at [71].
52 The High Court in Deputy Commissioner of Taxation v Broadbeach Properties Pty Ltd (2008) 237 CLR 473 at [28] stated:
An amount of a "tax-related liability" that is due and payable as indicated by the tables in s 250-10, is a debt due to the Commonwealth and payable to the Commissioner (s 255-5(1)), and may be sued for recovery in a court of competent jurisdiction (s 255-5(2)). The phrase "tax-related liability" means a pecuniary liability to the Commonwealth "arising directly" under a statute of which the Commissioner has the general administration (s 2(1) of the Administration Act and s 5-1 in Sch 1 of that statute; s 995-1 of the 1997 Act). The consequence is that liabilities for income tax and GST are within the scope of these provisions.
53 In Bruton at [12], the High Court further observed:
A notice under s 260-5 gives the Commissioner the right to recover from a third party an amount that the third party owes or may later owe to a taxpayer who is indebted to the Commonwealth for tax. It is established that the remedy given to the Commissioner by s 260-5 is available in respect of revenue obligations, which are given the character of "debts" by force of the Administration Act itself [citing Broadbeach at [26]-[29]] and without prior curial determination.
54 The present issue was not raised or considered in Bruton or Broadbeach.
55 The direct operation of s 260-5 is to create statutory obligations on the recipient of the notice (B), including to create obligations on B to pay money (a debt) which B owes to A to the Commissioner, rather than to A. That statutory obligation may be enforced by the Commissioner by an action in debt when the time for payment has arrived: Barnes at [27], [34], [35]. However, the statute does not, at least directly, create a debt on the part of B to the Commissioner or the Commonwealth. B's default is required before the Commissioner could enforce the obligation to pay by action in debt.
56 Of course, the question is not whether s 260-5 creates a debt; it is whether it gives rise to a "tax-related liability", namely a "pecuniary liability" of the kind described in s 255-1. The failure by B to comply with its statutory obligation - to pay money owed to A to the Commissioner instead of A - has the consequence that, upon default, the recipient of the notice could be sued in debt for recovery of a monetary amount. That is a liability which arises because of s 260-5 but it is not a liability which arises independently of the giving of a notice, or until there has been a breach of that which is required by the terms of the particular notice issued. It is therefore not a liability "arising directly" under s 260-5. The liabilities which arise "directly" under a taxation law are those, as the tables in s 250-10 show, which arise by direct operation or force of the statute. Those liabilities generally give rise, even before ascertainment by assessment, to a liability for tax, interest or penalties: Commissioner of Stamps (WA) v West Australian Trustee, Executor and Agency Company Ltd (1925) 36 CLR 98; Re Mendonca; Ex parte Federal Commissioner for Taxation (1969) 1 ATR 571 at 573-574; 15 FLR 256 at 259, per Gibbs J. A liability to pay an amount for breach of s 260-5 does not arise directly by operation of the statute in the same way as liabilities for tax, interest and penalties. There can be no potential liability absent the giving of a notice and it is then default or non-compliance which triggers the Commissioner's ability to recover in an action in debt.
57 If B is issued with a notice which, for example, requires B to make payment to the Commissioner immediately B's debt to A is due for payment, B remains liable in debt to A up until the time for payment arises. The Commissioner could not successfully sue B in debt to enforce compliance because the time for B to pay has not arrived. B has an obligation, imposed by statute, to pay the debt it owes A at the appropriate time to the Commissioner instead of A. The statute does not create a second debt on the part of B (namely a debt to the Commissioner); it operates to redirect payment of a particular debt. It creates, in this example, what is capable of being described as a "pecuniary liability" in the sense that there is an obligation on B to pay to the Commissioner at the appropriate time B's liability or debt to A. Payment by B to the Commissioner of the amount B owed A will result, by force of the statute, in a discharge by A of B's debt to A: s 260-15. The liability of B to A then ceases and B has performed its statutory obligation to pay that amount to the Commissioner instead of A. In this example, the present obligation on B to pay to the Commissioner amounts owed by B to A immediately after the amounts would otherwise become payable to A is not captured by the concept of a "pecuniary liability to the Commonwealth arising directly under a taxation law (including a liability the amount of which is not yet due and payable)".
58 The direct effect of s 260-5 is to create statutory obligations on the recipient of a notice (B) to pay to the Commissioner liabilities B owes to a "debtor" of the Commonwealth. Section 260-5 creates an obligation which has the effect of redirecting payment of B's debt to the Commissioner instead of A. In my view, and accepting that a contrary conclusion is open on the statutory language, this obligation is not captured by the phrase "pecuniary liability to the Commonwealth arising directly under a taxation law (including a liability the amount of which is not yet due and payable)".
59 This conclusion is supported by other aspects of the statutory language and context. Section 260-15 provides that payment to the Commissioner of an amount which a third party owes the "debtor" is taken to have been authorised by the debtor and any other person entitled to the amount, and the third party is indemnified for the payment. Assume A (Pladmira) is the tax "debtor", B (Fyna) is the "third party" who owes or might later owe money to A and C is a "third party" who owes or might later owe moneys to Fyna (B). Fyna (B) is a "third party" so far as concerns the notice issued to it in relation to A's tax debt, but also the "debtor" to the Commonwealth so far as concerns the notice issued to C in relation to B's breach of the obligation imposed on it by s 260-5. If C pays an amount to the Commissioner in compliance with a notice issued to C on the basis of a debt owed by B to the Commonwealth arising from B's breach of the notice issued to B, then C's payment to the Commissioner is taken to have been authorised by B (the "debtor" referred to in s 260-15). The consequence of the statute deeming the payment to be authorised by the "debtor" is that the debt owed by C to B is extinguished: Burness; In the matter of Denward Lane Pty Ltd (in liq) [2009] FCA 893; 259 ALR 339 at [45] (Gordon J); Bruton at [13]. The Commissioner would apply the amount received from C in reduction of the tax A owed the Commissioner. The Commissioner would do so because B's obligation (which was breached and founded the notice to C) was to pay to the Commissioner amounts B owed A. The notice issued to B was based on A's tax debt and any amount received from B would have had to be applied to that tax debt. Although the money received from C would have to be applied by the Commissioner to reduce A's tax debt and A has therefore received the benefit of money owed by C to B, B still owes a debt to A whilst having C's debt to it (B) extinguished. B's debt to A is not extinguished by s 260-15.
60 To answer this analysis, the Commissioner contended that s 260-15 had "successive operation" with the consequence that, in the scenario just posited, B's debt to A was also extinguished because s 260-15 operated a second time to deem A to have authorised B's payment to the Commissioner.
61 However, the payment by C to the Commissioner is not "[a]n amount that the third party [B] pays to the Commissioner" within the meaning of s 260-15. B "pays" no amount to the Commissioner unless C is to be treated as B's agent. The statute does not deem C to be B's agent. Section 260-15 is not to be read in the "successive" way contended. If it was intended to have such an operation, other and clearer language would have been employed. Indeed, as stated above, the language in s 260-15 indicates that s 260-5(1)(a) and s 255-1 do not have the operation contemplated by the Commissioner in issuing the Other Notices.
62 If the Commissioner did apply the amount paid by C to satisfy or reduce A's tax liability (and it is difficult to see how he could do otherwise), then the Commissioner would need to notify B of that fact and B's obligation under its s 260-5 notice would be reduced by the amount so paid from that point in time - see: s 260-5(7). However, that would not alter the fact that B had failed to comply with the s 260-5 notice served on it. The criminal consequences of that non-compliance would remain. Further, as noted above, s 260-15 does not operate to extinguish B's debt to A, notwithstanding A's tax liability was satisfied or reduced by moneys actually owed to B. It may be that A would have difficulty actually recovering the debt owed to it by B in the example just postulated (see: Mason K, Carter JW, Tolhurst G, Mason and Carter's Restitution Law in Australia (3rd ed, LexisNexis Butterworths, Chatswood, 2016) at [847]), but that is not a reason to read the statute as operating to extinguish the debt in the absence of clear words to that effect.
63 The construction of s 260-5(1)(a) as not authorising the issue of a s 260-5 notice founded upon a breach of a s 260-5 notice is also supported by the absence in s 250-10(2) of a reference to s 260-5 in the "index of each tax-related liability" arising under various Acts, including the TAA. Section 250-10(2), although part of a "Guide", can be used in the limited way identified at paragraph [12] above. It is also relevant to note that s 260-5 is contained in the collection and recovery provisions of Pt 4-15: "Collection and recovery of tax-related liabilities and other amounts".
64 The conclusion reached is also supported by a consideration of the legislative history, recognising that legislative history and extrinsic materials cannot displace the meaning of the statutory text and their examination is not an end in itself. As the High Court observed in Federal Commissioner of Taxation v Consolidated Media Holdings Ltd (2012) 250 CLR 503 at [39]:
This Court has stated on many occasions that the task of statutory construction must begin with a consideration of the [statutory] text" [citing Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (2009) 239 CLR 27 at 46 [47]]. So must the task of statutory construction end. The statutory text must be considered in its context. That context includes legislative history and extrinsic materials. Understanding context has utility if, and in so far as, it assists in fixing the meaning of the statutory text. Legislative history and extrinsic materials cannot displace the meaning of the statutory text. Nor is their examination an end in itself.
65 Further, s 260-5 is to be construed according to its terms and not according to the terms of the provisions it replaced - cf: Federal Commissioner of Taxation v Hart (2004) 217 CLR 216 at [51]; Federal Commissioner of Taxation v Spotless Services Ltd (1996) 186 CLR 404 at 415.
66 Section 260-5 of Sch 1 replaced a number of other provisions in the taxation law. To name a few, s 260-5 replaced former s 218 of the ITAA 1936, former s 99 of the Fringe Benefits Tax Assessment Act 1986 (Cth), former s 34 of the TAA (dealing with GST, wine equalisation tax and luxury car tax) and former s 74 of the Sales Tax Assessment Act 1992 (Cth). Section 260-5 brought together, in the one place, the power to issue notices in respect of all tax-related liabilities.
67 Section 260-5 is cast in different terms to these earlier provisions. However, despite the different terms, the underlying object is evidently the same.
68 It is sufficient to use former s 218 of the ITAA 1936 by way of example. That section was brought to an end with effect from 1 July 2000 by the A New Tax System (Tax Administration) Act 1999 (Cth). It was ultimately repealed in 2006. Prior to its repeal, s 218 relevantly provided:
(1) The Commissioner may at any time, or from time to time, by notice in writing (a copy of which shall be forwarded to the taxpayer at his last place of address known to the Commissioner), require:
(a) any person by whom any money is due or accruing or may become due to a taxpayer;
(b) any person who holds or may subsequently hold money for or on account of a taxpayer;
(c) any person who holds or may subsequently hold money on account of some other person for payment to a taxpayer; or
(d) any person having authority from some other person to pay money to a taxpayer;
to pay to the Commissioner, either forthwith upon the money becoming due or being held, or at or within a time specified in the notice (not being a time before the money becomes due or is held):
(e) so much of the money as is sufficient to pay the amount due by the taxpayer in respect of tax or, if the amount of the money is equal to or less than the amount due by the taxpayer in respect of tax, the amount of the money; or
(f) such amount as is specified in the notice out of each payment that the person so notified becomes liable from time to time to make to the taxpayer until the amount due by the taxpayer in respect of tax is satisfied;
and may at any time, or from time to time, amend or revoke any such notice, or extend the time for making any payment in pursuance of the notice.
(2) Any person who refuses or fails to comply with any notice under this section is guilty of an offence.
Penalty: $1,000.
(3) Where a person (in this subsection referred to as the "convicted person") is convicted before a court of an offence against subsection (2) in relation to the refusal or failure of the convicted person or another person to comply with a notice under this section, the court may, in addition to imposing a penalty on the convicted person, order the convicted person to pay to the Commissioner an amount not exceeding the amount or the aggregate of the amounts, as the case requires, that the convicted person or the other person, as the case may be, refused or failed to pay to the Commissioner in accordance with the notice.
(4) Any person making any payment in pursuance of this section shall be deemed to have been acting under the authority of the taxpayer and of all other persons concerned and is hereby indemnified in respect of such payment.
(5) If the Commissioner receives any payment in respect of the amount due by the taxpayer before payment is made by the person so notified he shall forthwith give notice thereof to that person. …
69 Section 218 permitted recovery of "tax" from third parties owing money to the "taxpayer". The object of the provision was to facilitate recovery of taxes from persons owing money to the "taxpayer" without having to proceed to judgment and issue execution. Former s 218(6B) contained definitions relevant to former s 218 including "tax" which was defined to include:
(a) additional tax under Part VII;
(ab) the general interest charge under a provision of this Act;
(b) an amount that a person is liable to pay to the Commissioner under Division 1AAA, 1AA, 1A, 1B, 1C, 2, 3, 3A, 3B, 4, 8 or 9;
(ba) an amount of interest that a person is liable to pay to the Commissioner under section 102AAM;
(c) a judgment debt or costs in respect of:
(i) tax;
(ii) additional tax under Part VII;
(iia) the general interest charge under a provision of this Act;
(iii) an amount that a person is liable to pay to the Commissioner under Division 1AAA, 1AA, 1A, 1B, 1C, 2, 3, 3A, 3B, 4, 8 or 9; or
(iv) an amount of interest that a taxpayer is liable to pay to the Commissioner under section 102AAM;
(d) any fine or costs imposed by a court in respect of:
(i) an offence against this Act or the regulations; or
(ii) any other taxation offence within the meaning of Part III of the Taxation Administration Act 1953 that relates to this Act or the regulations; or
(e) any amount ordered by a court, upon the conviction of a person for an offence of a kind referred to in paragraph (d), to be paid by the person to the Commissioner; …
70 Section 218(6B) defined "taxpayer" in terms linked to the definition of "tax":
taxpayer includes a person who is liable to pay an amount to the Commissioner under Division 1AA, 1A, 1B, 1C, 2, 3, 3A, 3B, 4, 8 or 9.
71 Section 218 did not operate to permit a s 218 notice to be issued to recover amounts from entities (fourth parties) which owed money to third parties who defaulted under a s 218 notice; it could not be contended that a debt arising by the default of a third party in relation to a s 218 notice was a "tax". I was not taken to any case in which a s 218 notice or a notice under any of the equivalent provisions which existed before the introduction of s 260-5 was contended, or held, to permit such a course.
72 Section 260-5 now revolves around concepts including amounts which constitute a "tax-related liability" (rather than "tax" in s 218) payable (rather than "due" in s 218) by an "entity" (rather than a "taxpayer"). However, this change in language does not suggest the new provision is to be understood as extending the previously well-understood scope of such provisions.
73 I was not taken to any extrinsic material which would suggest that s 260-5 was intended to effect such a significant departure from the pre-existing regime to permit recovery from "fourth" (and subsequent) parties in respect of non-compliance with a notice by a third party. I note that the Commissioner in Barnes submitted that former s 218 was substantially to the same effect as s 260-5 and s 260-20 taken together: at [27]. I also note that re-written provisions of the ITAA 1936, appearing in either the ITAA 1997 or Sch 1 to the TAA, are not to be taken to be different merely because they express the same idea using different words: s 1-3 of the ITAA 1997, read with the definition of "this Act" in s 995-1(1); s 15AC of the Acts Interpretation Act 1901 (Cth); Power v Deputy Commissioner of Taxation [2013] NSWSC 428; 96 ATR 912 at [26]-[27] (per Emmett JA, with whom Ward JA agreed).
74 To the limited extent extrinsic material was of assistance, it confirmed that the new provision did not depart from the operation of s 218 in the substantial way contemplated by the facts of this case. Paragraph 2.32 of the Explanatory Memorandum to the A New Tax System (Tax Administration) Bill 1999 (Cth) stated (emphasis added):
New Subdivision 260-A will enable the Commissioner to continue to recover outstanding tax-related liabilities of a taxpayer by giving a notice to an entity (a third party) who owes or may later owe money to the taxpayer. Section 218 is the relevant section in the ITAA 1936 and the Finding tables in Section 3 of this explanation show the similar provisions in other taxation laws that are being standardised.
75 This is consistent with the High Court's observations in Bruton at [12] (extracted at [53] above) in relation to the operation of s 260-5.
76 In my view, non-compliance with a s 260-5 notice does not give rise to a "tax-related liability" within the meaning of s 260-5(1)(a) and s 255-1(1). Accordingly, the Other Notices have no operative effect and should be set aside.