Income Tax Assessment Act 1936 (Cth), s 162

Taxation Administration Act 1953 (Cth), ss 8B, 8C, 8E

Crimes Act 1914 (Cth), ss 1A, 1B, 4AA, 16A, 19B

Crimes (Sentencing) Act 2005 (ACT), s 17

Magistrates Court Act 1930 (ACT), s 214, Pt 3.10, Div 3.10.2

Judiciary Act 1903 (Cth), s 68

Christopher Bullock, The Cobbler of Preston (1710)

Daniel Defoe, The Political History of the Devil (1726)

Compania General de Tabacos de Filipinas v Collector of Internal Revenue [1927] USSC 178; 275 US 87, 100 (1927)

Cummins v Duck [2009] ACTSC 20

Commissioner of Taxation v Baffsky [2001] NSWCCA 332; (2001) 122 A Crim R 568

Raiser v Sladic (1995) 125 FLR 252

R v Mirkovic [1966] VicRp 51; [1966] VR 371

Oancea (1990) 51 A Crim R 141

Australian Securities Commission v Marlborough Gold Mines Ltd [1993] HCA 15; (1993) 177 CLR 485

Farah Constructions Pty Ltd v Say-Dee Pty Ltd [2007] HCA 22; (2007) 230 CLR 89

Goundar v Goddard [2010] ACTSC 56; (2010) 240 FLR 176

Commissioner of Taxation v Doudle [2005] SASC 442; (2005) 195 FLR 76

Kelton v Uren (1981) 27 SASR 92

Commonwealth Director of Public Prosecutions v Kent (CCV, Hoath CCJ, 11 May 2001, unreported)

Federal Commissioner of Taxation v Hagidimitriou (1985) 16 ATR 839

Viney v Greaves (1987) 19 ATR 859

R v Abbott [2007] VSCA 32; (2007) 170 A Crim R 306

Freeman v The Queen [2011] VSCA 214

R v Hooper [2008] QCA 308

Jones v Morley (1981) 29 SASR 57

Cobiac v Liddy [1969] HCA 26; (1969) 119 CLR 257

Federal Commissioner of Taxation v Wormald International Australia Pty Ltd (1985) 81 FLR 330

Lanham v Brake (1983) 34 SASR 578

ON APPEAL FROM THE MAGISTRATES COURT OF THE AUSTRALIAN CAPITAL TERRITORY

ON APPEAL FROM THE MAGISTRATES COURT OF THE AUSTRALIAN CAPITAL TERRITORY

2. The convictions entered in the Magistrates Court be confirmed.

3. The fines and other orders imposed by the Magistrates Court be set aside.

4. In lieu, Warren Keith Harrex be fined as follows:

(viii) for charge CC41171 of 2010, the sum of $550;

6. That the fine and court costs be paid within three months of the date of this order.

1. In a letter to Jean-Baptiste Leroy written in 1789, Benjamin Franklin wrote "Things as certain as death and taxes, can be more firmly believed", though similar sentiments had earlier been expressed by Christopher Bullock in The Cobbler of Preston (1710), Edward Ward in The Dancing Devils (1724) and Daniel Defoe in The Political History of the Devil (1726).

2. The rationale for the certainty of taxation in a modern society is, however, well expressed by Oliver Wendall Holmes Jnr, when as an Associate Justice of the Supreme Court of the United States of America, he said in Compania General de Tabacos de Filipinas v Collector of Internal Revenue [1927] USSC 178; 275 US 87, 100 (1927) "Taxes are what we pay for civilized society."

3. Despite that substantial justification for taxation, most people find the payment of taxation, and the associated preparation of tax returns, as uncongenial. Thus, legislation provides for sanctions for those who fail to comply with their obligations. Nevertheless, some refuse, some procrastinate.

4. In this case, the appellant, Keith Warren Harrex, is a medical practitioner who failed to submit tax returns for the 11 taxation years from that which ended on 30 June 1999 to that which ended on 30 June 2009.

5. These failures were the basis for the prosecutions commenced by the Deputy Commissioner of Taxation in the Magistrates Court. They are the background to the penalties imposed on Dr Harrex in that court on those prosecutions and from which he has appealed. The obligation that actually gives rise to a sanctionable failure, however, only occurs when those obliged to complete and file income tax returns are required to do so by notice under s 162 of the Income Tax Assessment Act 1936 (Cth).

6. Once such a notice is served, the failure to file a completed return as required by and within the time specified in the notice constitutes an offence against s 8C(1)(a) of the Taxation Administration Act 1953 (Cth). Section 8E of that latter Act provides that the penalty for a first offence (after 24 September 2007) is 20 penalty units, that is $2,200 by virtue of s 4AA(1) of the Crimes Act 1914 (Cth) (Commonwealth Crimes Act) which defines a penalty unit as $110. The maximum penalty for a second or subsequent offence is 40 penalty units or a fine of $4,400. Under s 8B of the Taxation Administration Act, a second or subsequent offence can be one for which a person is convicted, though not more than five years after the earlier offence, but also on the same day and at the same sittings of the court at which he or she is convicted of the earlier offence.

7. Dr Harrex is an occupational physician in private practice in Canberra. He is also a part-time senior medical adviser to the Department of Veterans Affairs.

8. He was a regular member of the Royal Australian Air Force for 26 years, rising to the rank of Air Commodore before he left in 1998 as a result of a redundancy but he then joined the Air Force Reserve.

9. His family moved five times in six years before settling into their own home in Canberra in 1997. In 1998, his father, then living in Hobart, developed cancer and died the following year. During this period, Dr Harrex made several trips to Hobart to support his mother at the same time as trying to establish his medical practice.

10. Around this time, he sought advice from an accountant about the organisation of his tax affairs and in 2000 managed to arrange his record-keeping and administration satisfactorily for management of his obligations in relation to the Goods and Services Tax and preparation of his Business Activity Statements.

11. In addition to his professional practice, he was clearly heavily involved in various activities between 1999 and 2009. These included:

• senior committee membership of the Aviation Medicine Society;

• difficulties in his marriage, necessitating marital counselling;

• professional assistance to the Australian Greenhouse Office;

12. Some of these were of particular value to the community, some urgent and requiring immediate attention. No matter how worthy, and many were particularly so, none actually prevented him from attending to his social responsibility to prepare and furnish his tax returns.

13. Everyone has to balance various demands on their time and needs to prioritise commitments so that the important as well as, or even instead of, the urgent can be performed.

14. Dr Harrex also suffered from a mental disorder. It was diagnosed by a psychiatrist, to whom his general practitioner referred him, as chronic Post Traumatic Stress Disorder, particularly as a chronic anxiety disorder. It appears to have had its origin in his service in the Air Force in 1997 and was exacerbated by his service in East Timor in 2003. His psychiatrist assessed that it had a significant contribution to his difficulty in facing the need to file his income tax returns. Instead, the disorder made him feel he had to handle other people's problems and that he was overloaded with paperwork.

15. His psychiatrist also diagnosed him with Bruxism and a Major Depressive Order as a consequence of his Post Traumatic Stress Disorder. He was prescribed anti-depressant medication and underwent Cognitive Behavioural Therapy with a psychologist.

16. The allegations were that on 25 November 2009, Dr Harrex was served with 11 notices under s 162 of the Income Tax Assessment Act requiring him to furnish to the Commissioner of Taxation by 20 January 2010, income tax returns for each of the years ended 30 June 1999 to 30 June 2009 respectively and he failed to do so. It is not necessary to refer to the associated procedural allegations.

17. Dr Harrex, through his lawyer, admitted these allegations by pleading guilty to each of them.

18. It was noted that the returns were ultimately furnished to the Commissioner on 29 November 2010 and that the total tax liability disclosed was $583,000. All of that amount had been paid by the date of the hearing in the Magistrates Court.

19. In mitigation, Dr Harrex's lawyer referred to the matters recounted to above (at [7] to [15]), most of which were contained in a letter from Dr Harrex, tendered by his counsel. His counsel also tendered two references and a report from his psychiatrist.

20. The references were from medical practitioners who had known Dr Harrex for many years, both having met him while they were in the Royal Australian Air Force.

21. They described him as having a fine reputation as an occupational physician and as "patient focussed, caring and hard working". He was "well-regarded by both patients and staff and ... well respected for his expertise". His professional integrity was undoubted and his contribution to the profession was applauded. He had brought up his children to be "responsible, polite, independent, capable and friendly". He contributed to professional education activities. He was also described as "unfailingly courteous and utterly honest and trustworthy."

22. His psychiatrist confirmed the diagnosis referred to above (at [14]).

23. The letter from Dr Harrex noted that when he received the notices from the Australian Taxation Office, he was already "working on [his] tax affairs" but that matters intervened to delay completion.

24. These matters were that he was a part-time carer for his grandson, for his daughter and grandson had moved back home and his wife was posted to work in the Northern Territory for three months. His mother also became severely ill with pneumonia and hospitalised in Hobart requiring him to attend to her affairs and transition her into high dependency care.

25. Dr Harrex's lawyer also submitted that it was clear that Dr Harrex did not intend to shirk his taxation responsibilities for he had duly submitted all his Business Activity Statements. He submitted that a non-conviction order was appropriate especially as a conviction would "create difficulties ... [as] he [would] need to report [them] to the Medical Board and there [was] some suggestion that he may need to resign his commission in the Air Force Reserve".

26. The officer of the Australian Taxation Officer who appeared pointed to the number of returns outstanding, that there were "a significant number of letters ... since 2003" that had been sent to Dr Harrex by his Office regarding the returns before formal action was taken and that the returns were only lodged after prosecution action had been commenced, indeed 18 days after the summonses had been served. The tax debts had been outstanding for some time.

27. The Learned Magistrate considered what he described as "the Supreme Court pronouncement in this area that non-conviction bonds are not appropriate in taxation matters". His Honour clearly had not recalled or had his attention drawn to Cummins v Duck [2009] ACTSC 20, where I had substituted non-conviction orders for fines imposed in the Magistrates Court.

28. His Honour had also clearly not recalled the decision of the New South Wales Court of Criminal Appeal in Commissioner of Taxation v Baffsky [2001] NSWCCA 332; (2001) 122 A Crim R 568 (Baffsky), where the court had upheld non-conviction orders made when the respondent had been prosecuted for failing to furnish two income tax returns.

29. His Honour, however, referred to an unidentified decision he said Miles CJ had delivered to the effect that in the case of regulatory offences, where a prosecution of the kind before his Honour was such an offence, non-conviction bonds are inappropriate. This may have been Raiser v Sladic (1995) 125 FLR 252. If so, it did not really decide that, though it may be said to have regarded them as likely to be rare.

30. His Honour considered the time that the returns had been outstanding and the amount of tax involved and said "I decline to accede to the request to give the benefit of s 17" (presumably of the Crimes (Sentencing) Act 2005 (ACT)), namely the power to make a non-conviction order, though, of course, that legislation was not the relevant or correct legislation. His Honour then imposed a fine of $750 on each charge and made an order for costs of $111.

31. Dr Harrex appeals from those orders. The grounds of the appeal were as follows:

(a) The learned Magistrate erred in law by applying the provisions of the Crimes (Sentencing) Act 2005 (ACT) rather than the Crimes Act 1914 (Cth) to each of the matters appealed from.

(b) The learned Magistrate erred in holding that the discretion conferred by section 17 Crimes (Sentencing) Act 2005 (ACT) did not apply in matters concerning section 8C Taxation Administration Act 1953 (Cth) and by extension, even if the Magistrate had applied the Crimes Act 1914 (Cth) would have erred in holding that section 19B of that Act also did not apply.

(c) The learned Magistrate has failed properly to exercise his discretion to not record a conviction in relation to each charge in that he:

• (i) failed to have sufficient regard to the evidence of the particular circumstances of the Appellant;
• (ii) gave excessive weight to fact [sic] that each charge was brought pursuant to section 8C Taxation Administration Act 1953 (Cth);
• (iii) failed to consider the application of the sentencing factors in section 17 Crimes (Sentencing) Act 2005 (and by extension section 19B Crimes Act 1914 (Cth)) to this particular appellant but rather applied them generally to a person prosecuted pursuant to section 8C Taxation Administration Act 1953;
• (iv) the sentences imposed for each charge is manifestly excessive in the circumstances.

32. The grounds are, in the circumstances quite meaningful, though drafted in an interesting way. After all, in relation to grounds (a), (b) and (c)(iii), his Honour did not apply the provisions of s 17 of the Crimes (Sentencing) Act and applying its provisions is an error, but the identification of where the errors are said to have occurred is clear enough.

(a) That the appeal from each of the matters be allowed.

(b) That each of the convictions recorded be quashed; and

(c) and [sic] that this Honourable Court impose whatever order is appropriate in each of the matters.

34. This court has power under Pt 3.10 of the Magistrates Court Act 1930 (ACT), to hear and determine appeals from the Magistrates Court, Div 3.10.2 regulates appeals in criminal matters such as this appeal. In this case, these provisions apply by virtue of s 68 of the Judiciary Act 1903 (Cth).

35. I have described in Cooper v Corvisy (No 2) (2010) 5 ACTLR 151 the principles surrounding such appeals. I apply them in this case.

36. The sentences imposed in the Magistrates Court are not to be set aside simply because I, on hearing the appeal, conclude that I might have imposed a different sentence. I may uphold the appeal and substitute a sentence for the original sentence if I am satisfied that the exercise of the sentencing discretion in the Magistrates Court was affected by a specific error, but only if I, in re-exercising the sentencing discretion, consider that a different sentence is appropriate, and that I am not merely tinkering.

37. Specific errors may be errors of law, errors of fact, taking account of irrelevant or extraneous considerations or failing to take account of relevant or material considerations. If I find specific error but the original sentence, nevertheless, appears to be appropriate, I should dismiss the appeal rather than allow the appeal and reimpose the same sentence. Even if I cannot identify a specific error I may uphold the appeal and substitute another sentence for the original sentence if I find the sentence to be manifestly excessive, unreasonable, plainly unjust or plainly wrong.

38. The respondent conceded that the Learned Sentencing Magistrate had erred in apparently relying on s 17 of the Crimes (Sentencing) Act and in deciding that a sentence by way of a non-conviction order was not within the discretion of the court.

39. That was a perfectly proper submission to make. Despite the application of Territory procedure to the prosecution of Commonwealth offences and appeals from the decisions on such prosecutions, the provisions relating to sentencing offenders in respect of Commonwealth offences which are set out in Parts 1A and 1B of the Commonwealth Crimes Act, constitute a code, thereby ousting Territory provisions, except so far as they are expressly applied: R v Mirkovic [1966] VicRp 51; [1966] VR 371 (at 372); Oancea (1990) 51 A Crim R 141.

40. The relevant provision was s 19B of the Commonwealth Crimes Act, the provision which authorises a court to impose a non-conviction order, and which is very similar to, but not identical with, s 17 of the Crimes (Sentencing) Act. As in the equivalent provision in New South Wales, s 17(4) permits the Court to consider a wider range of matters when determining whether to exercise the discretion: Baffsky (at 572; [12] to [13]).

41. That the New South Wales Court of Criminal Appeal had in Baffsky held expressly (at 580-1; [70] to [77]) that an order under s 19B of the Commonwealth Crimes Act is available as assistance for such prosecutions as these meant that effectively his Honour was effectively bound by that decision. I do not consider that, properly construed, the decision of Raiser v Sladic is inconsistent with this decision; if so, I should follow Baffsky.

42. In Australian Securities Commission v Marlborough Gold Mines Ltd [1993] HCA 15; (1993) 177 CLR 485 (at 492) a unanimous High Court said that:

Uniformity of decision in the interpretation of uniform national legislation such as [the Corporations Act] is a sufficiently important consideration to require that an intermediate appellate court - and all the more so a single judge - should not depart from an interpretation placed on such legislation by another Australian intermediate appellate court unless convinced that that interpretation is plainly wrong.

43. This approach was repeated in Farah Constructions Pty Ltd v Say-Dee Pty Ltd [2007] HCA 22; (2007) 230 CLR 89 (at 151-2; [135]).

44. To refuse to consider that option because his Honour considered it was not available, when at law it was, was an error of law. That requires the Court to re-sentence Dr Harrex unless it is considered that the same sentence should be imposed, in which case I should dismiss the appeal as noted above (at [37]).

45. The appellant submitted that I should proceed under s 19B of the Commonwealth Crimes Act; the respondent submitted that the sentence imposed was not only within range, it was proper and that the appeal should therefore be dismissed.

46. Mr G Blank, who appeared for the appellant on the appeal, though he had not appeared before the Learned Sentencing Magistrate, submitted that I should re-sentence and proceed under s 19B of the Commonwealth Crimes Act.

47. Mr Blank referred to the good character of Dr Harrex which was attested to by his referees. This was, of course, not merely an absence of prior criminal conduct, but positive good character: Goundar v Goddard [2010] ACTSC 56; (2010) 240 FLR 176 (at 184; [45] to [47]). This included strong community involvement and professional reputation.

48. In addition, Mr Blank referred to Dr Harrex's mental health, attested to by Dr White, who said that it "had a significant contribution to his difficulty in facing the need to put in his income tax returns."

49. Finally, Mr Blank submitted that the offences were committed in extenuating circumstances. I have outlined the matters on which he relied earlier in these reasons (at [7] to [15]) above).

50. In addition, Mr Blank tendered a letter from a psychologist who had been treating Dr Harrex for depression since December 2010. Mr D Berents, who appeared for the respondent, objected to the admission of the letter. There was then, a lengthy discussion about whether I could receive it under s 214 of the Magistrates Court Act and, if so, whether under sub-section (3) or (4).

51. On reflection, this discussion was irrelevant for, the appeal having been conceded, it was necessary to re-sentence and I could, of course, receive any material that it was proper to receive on sentence without regard to s 214 and the various pre-conditions it imposed. I received the letter.

52. It showed that Dr Harrex had been seen by the psychologist on six occasions since December 2010. His psychologist reported that Dr Harrex had suffered from a previously undiagnosed condition of Post Traumatic Stress Disorder and from, since the mid 1990's, a Major Depressive Disorder. He opined that Dr Harrex had "been able to continue functioning professionally through maintaining routine professional tasks". He further opined that Dr Harrex had "been severely compromised in his ability to complete his tax affairs through the effort of functioning professionally with" these disorders.

53. Mr Berents had indicated that he wished to cross-examine the psychologist. The psychologist, however, was unavailable. That did not deprive the letter of admissibility, but did mean that the weight I could attach to it was more limited. It was, however, broadly consistent with the report of Dr Harrex's psychiatrist, which had been tendered without opposition in the Magistrates Court proceedings.

54. As a result of this material, Mr Blank submitted that the offences committed by Dr Harrex were not accurately to be characterised as "run of the mill" versions of the offence as described by Debelle J in Commissioner of Taxation v Doudle [2005] SASC 442; (2005) 195 FLR 76 (at 80; [16]). See also Talisco Pty Ltd v Sarney (1987) 87 ATC 4343 (at 4346).

55. Mr Blank also submitted that one of the difficulties was that, as the years passed and the returns were not lodged, the task became more difficult because Dr Harrex had to start at the beginning before he could move forward. That is to say, he could not, for example, simply take up the task say at 2005 without going back to 1999.

56. He emphasised, however, that Dr Harrex had complied with his obligations to furnish his Business Activity Statements. He also ensured that his mother's tax returns had been furnished, when Dr Harrex undertook that task.

57. Finally, Mr Blank referred to the question of whether convictions would affect the likelihood of Dr Harrex retaining his commission in the Air Force Reserve. There was, however, no evidence about that matter.

58. Mr D Berents, who appeared for the respondent, suggested that there was an inconsistency in the appellant's submissions which relied on the mental disorders to show Dr Harrex could not attend to his tax affairs yet it did not stop him engaging in his profession, additional and high level other professional commitments and community activities. There was, too, he submitted, a further inconsistency. Dr Harrex, he submitted, could deal with some taxation matters but not others.

59. Indeed, he further submitted that since Dr Harrex was able to submit 11 years of returns a few days more than a year after the notice was served, Dr Harrex must have been working on them for quite some time. Indeed, Dr Harrex said in his letter that at the time of the service of the summons he was "well advanced and had almost completed all the required returns".

60. Mr Berents also noted, as set out in Kelton v Uren (1981) 27 SASR 92, that the offence is not the furnishing of returns simpliciter but the failure to comply with the notice. As Jacobs J said (at 93):

No doubt the offence ... may not in itself be a serious offence, compared with other offences punishable by law, but that is not the test of triviality. There must be something which clearly distinguishes the particular breach of the section under consideration from what may be regarded as a typical breach of the section. In applying that test, it must be remembered that the substance of the offence is not the failure to furnish a return, for the Act does not impose a general obligation to furnish a return. It imposes that obligation only upon notice, and it is non-compliance with the notice that constitutes the offence.

61. This, he submitted, meant that the circumstances of the failures to furnish returns from 1999 to 2009 were irrelevant for the offences were only committed on 20 January 2010, the relevant period being 25 November 2009 to that date.

62. Mr Berents also asked me to infer from the facts that Dr Harrex had only complied with his obligation because he was served with summonses. This seemed to me inconsistent with the earlier submission that Dr Harrex had been working on the returns for some time, which not only came from what Dr Harrex said in his letter but was used as a fact that was said to be inconsistent with the submission that his mental disorder was a relevant contribution to the offences.

63. Mr Berents also submitted that the offences were designed to ensure compliance with tax obligations which, like other judges, I described in Cummins v Duck as a "social responsibility."

64. Mr Berents submitted that the offences were, as referred to above (at [54]), "run of the mill cases", which should be treated as such. He acknowledged that Dr Harrex was of good character but submitted that this factor did not weigh heavily for such offences were often committed by people of good character. Certainly, they are often committed by those with no prior convictions: Commissioner of Taxation v Doudle (at 80; [15]).

65. Next, Mr Berents referred to the issue of mental disorder. He submitted that the disorder was not causally connected with the commission of the offences, or, at least there was limited evidence of such connection, especially with no detailed information as to the nature and severity of the symptoms. In this case, I note, the evidence was certainly much thinner than, for example, in Cummins v Duck.

66. Again, Mr Berents pointed out that while the report of the psychologist was that Dr Harrex could not face completing the returns, the fact was that, at the time, he was actually working on them, including completing his mother's return.

67. Mr Berents referred to the decision of the County Court of Victoria in Commonwealth Director of Public Prosecutions v Kent (CCV, Hoath CCJ, 11 May 2001, unreported), where Hoath CCJ said (at 9; [25]) in words that, he submitted, were opposite here:

It has been suggested in some of the testimonials that [the offender's] commitment to others provides a reason for [the] failure [to furnish the tax returns]. Other commitments (no matter how worthy some of them may have been) cannot properly give rise to a claim that the offences were committed under extenuating circumstances where the failure to furnish the returns has continued over a number of years and the returns still remained outstanding for over a year after the Taxation Office served the respondent with the notices on which the present charges are based.

68. Mr Berents also drew my attention to what Debelle J said in Commissioner for Taxation v Doudle (at 84; [29]), about the meaning of extenuating circumstances as mentioned in s 19B, namely that "[e]xtenuating circumstances are circumstances which excuse in some appreciable degree the commission of the offence". That, he submitted, was not present here.

69. Finally, Mr Berents submitted that in Federal Commissioner of Taxation v Hagidimitriou (1985) 16 ATR 839, Zelling J set out what was effectively a tariff for such offences when his Honour said (at 842):

However I make it clear ... that hereafter magistrates should, for a first offence, where the offence is a run-of-the-mill offence, in order to keep some correlation with penalties in other States, and also to give effect to the manifest policy of the 1984 Act, impose in what I might call run-of-the-mill cases of first offenders a fine of something between $240 to $500. That is not intended to fetter the discretion of magistrates. There will obviously be some cases both below and above that figure, but a figure of that magnitude should be regarded as a starting point from which one either increases or reduces the fine because of the circumstances of the particular case.

...

Where the defendant is convicted of two offences which are relevant offences under s 8B, then the penalty range should be of the order of $1000 to $2000.

I express no opinion where more than two relevant offences fall for consideration under s 8B because there is not sufficient material before me to enable me to be able to express a competent opinion on the subject. Such offences would however obviously attract a higher penalty than those in the three ranges that I have just referred to.

70. I do note, however, that this has not been universally accepted. In Viney v Greaves (1987) 19 ATR 859, Johnston J accepted (at 874) the suggested range for a first offence, but in respect of a second offence said:

I would respectfully suggest also that Zelling J's range for a second offence is rather arbitrary. It seems to me that if his range for a first offender is approached as a starting point, the courts involved will be able to approach a second offence (whether it be what I might call a traditional second offence, or a second offence of the sort made possible by s 8B) in the manner in which the courts normally approach prior convictions, but bearing in mind the specific provisions of s 8E. In my experience it is rare, if ever, that a court sets even a very general tariff for a second offence.

71. Nevertheless, Mr Berents submitted I should follow what Zelling J stated, with an appropriate inflator for the passage of time. I have to say that I prefer the comments of Johnston J to those of Zelling J and, unless required to do so, would follow them. As to an inflator, I note that the maximum penalties have, since 1985, only been increased by 10% and, if that is what the legislature sees fit to do, then that should be the maximum by which the courts should inflate any sentences.

72. The principle I have noted above, (at [37]), that if, despite the agreed error, the sentence was the appropriate one, I should dismiss the appeal, is an aspect of the policy of judicial restraint enunciated by Maxwell P (with whom Eames JA and Habersberger AJA agreed) in R v Abbott [2007] VSCA 32; (2007) 170 A Crim R 306 (at 309; [14]), that "sentencing is for judges and magistrates at first instance. Sentencing is not the task of appellate courts, except where clear error is shown." See also Freeman v The Queen [2011] VSCA 214 (at [5] to [8]).

73. In this case, however, clear error has been shown and I should re-sentence unless I am satisfied that the sentences of the Learned Magistrate were appropriate.

74. The first question is whether a non-conviction order should be imposed. As set out in Baffsky (at 572; [10]), this requires me to proceed through two stages. In the first place, I should identify a factor or factors of the kind set out in subparagraphs 19B(1)(b)(i), (ii) or (iii) of the Commonwealth Crimes Act. Such factors must, of course, be relevant to the discretion (Commissioner of Taxation v Doudle (at 80; [13])) or "operative" (R v Hooper [2008] QCA 308 (at [18])).

75. While the matters, especially in subparagraph 19B(1)(b)(i), are very general (i.e. everyone is of some age and so on), as King CJ pointed out in Jones v Morley (1981) 29 SASR 57 (at 63), there must be some mitigating aspect arising from one or more of the matters which would "provide a sufficient ground for a reasonable man to hold that it would be expedient to extend the leniency which the statute permits" (Cobiac v Liddy [1969] HCA 26; (1969) 119 CLR 257 (at 276) per Windeyer J).

76. In this case, the character and antecedents (as interpreted widely in accordance with Jones v Morley and Baffsky) of Dr Harrex and his mental condition would clearly fall into this category.

77. I note that it is very widely held that offences of this character cannot be considered trivial: Kelton v Uren (at 93), Federal Commissioner of Taxation v Wormald International Australia Pty Ltd (1985) 81 FLR 330 (at 332).

78. The issue as to whether there were extenuating circumstances is a little more complicated. It seems to me that during the period between 25 November 2009 and 20 January 2010, which is the relevant period, there was no extenuating circumstances.

79. The carer obligation, to which reference was made (see [24] above), only started in "early 2010" and only became relevantly problematic when Dr Harrex's wife was posted to the Northern Territory, which did not occur until April 2010. Similarly, his mother did not become ill until May 2010.

80. His mental disorder was apparently present during the relevant period, but it did not prevent him from attending to his tax returns, though it made attention to them difficult.

81. I do not find that the offences were committed under extenuating circumstances.

82. It is, then, necessary to determine, whether, having regard to the relevant factors, especially the antecedents of Dr Harrex and his mental health, and all matters relevant to sentencing, especially as set out in s 16A of the Commonwealth Crimes Act, it is inexpedient to inflict any punishment.

83. The matter of good character is relevant to sentence but, as noted above (at [64]) has generally been given limited weight in sentencing for such offences as these.

84. The pressures on Dr Harrex of family and profession were significant, but many were self-imposed and I do not consider they overwhelm the other factors that militate against a non-conviction order. It was necessary for him to organise his affairs so that he could comply with his statutory obligations. That these were worthwhile activities means that there is no aggravating feature, but there is no mitigation in this.

85. The mental health issue was relevant. Taking it at its highest, however, it was mitigatory, for the unchallenged evidence was that it had "significantly contributed" to his failure. It was also clear that it was not actually preventing him from attending to his affairs, to be contrasted with the description of the psychological effect on Mr Cummins in Cummins v Duck (at [17]), but only limiting or restrictive of his attending to his obligations.

86. Dr Harrex did take steps to address the disorder, and that is not only to his credit, but mitigatory, but not, in my view, overwhelming.

87. I am not currently persuaded that Dr Harrex necessarily had to complete the returns sequentially. It may be so, but no evidence or argument was adduced that satisfied me of that. In any event, Dr Harrex, unlike Mr Cummins, had the experience of employing, and the means to retain, an accountant to assist him in his taxation affairs.

88. On the other side of the coin are the facts of the offence, which, in this case, show that there were 11 years of returns not filed, a substantial amount of tax unpaid, namely $593,000, and that the returns were not furnished until ten months after the offences were committed.

89. It is clear that general deterrence is relevant to these offences, as noted in Baffsky (at 583; [93]), where the court cited with approval the statement of Case J in Lanham v Brake (1983) 34 SASR 578 (at 585) that "[t]his is an area, in my view, in which considerations of deliveries must predominate". See also Raiser v Sladic (at 256).

90. In my view, these matters do predominate and overwhelm the matters that, it was urged by Mr Blank, justify a non-conviction order. I do not consider that it is appropriate to exercise my discretion to proceed under s 19B of the Commonwealth Crimes Act.

91. Nevertheless, it seems to me that the fines imposed by the Learned Sentencing Magistrate were not appropriately set, at least initially. Even allowing for inflation, moderated by the legislature's view of an appropriate inflation for the maximum penalties, the penalties seem to me not to take into account the good character and mental disorder of Dr Harrex and the absence of aggravating factors, such as would be relevant were the returns still outstanding, or the tax due had not been paid.

92. In that sense, the offences would not properly be characterised as "run-of-the-mill" offences, though not sufficiently different to such offences to justify non-conviction orders.

93. In my view, taking into account Dr Harrex's plea of guilty and the other matters relevant to the assessment of the culpability and criminality, I consider that for the first offence a fine of $200 should be imposed with court costs of $111. For the second offence, the fine should be $450. For each of the other nine offences, the fine should be $550.

94. I will, accordingly, make orders to give effect to these findings.

I certify that the preceding ninety-four (94) numbered paragraphs are a true copy of the Reasons for Judgment herein of his Honour, Justice Refshauge.

Solicitor for the respondent: Commonwealth Director of Public Prosecutions