Hookham v The Queen

High Court of Australia|1994-07-01|Before: Gaudron JJ, Brennan J

This matter came before the Court of Criminal Appeal of New South Wales by way of case stated.

The appellant was convicted, on his plea of guilty, of nine offences against s. 221F(14) of the Income Tax Assessment Act 1936 Cth ("the Assessment Act"). Section 221F(14) provides that a person shall not contravene sub-s. (5) by virtue of par. (a) of that sub-section. At the relevant time s. 221F(5)(a) required a group employer, in respect of income tax deductions made by the employer from the salary or wages of employees, to pay to the Commissioner of Taxation, not later than the seventh day of the month next succeeding a month in which the employer has made deductions, the amount of the deductions so made.

(1) Where a corporation does or omits to do an act or thing the doing or omission of which constitutes a taxation offence, a person (by whatever name called and whether or not the person is an officer of the corporation) who is concerned in, or takes part in, the management of the corporation shall be deemed to have committed the taxation offence and is punishable accordingly.

(2) In a prosecution of a person for a taxation offence by virtue of subsection (1), it is a defence if the person proves that the person -

(a) did not aid, abet, counsel or procure the act or omission of the corporation concerned; and

(b) was not in any way, by act or omission, directly or indirectly, knowingly concerned in, or party to, the act or omission of the corporation.

The charges on which the appellant was convicted alleged that he was a person who was concerned in, or took part in, the management of the Markham Boat Company Pty Ltd which as a group employer omitted to pay deductions from the salary and wages of employees as required by the Assessment Act. The appellant was a director of the corporation.

The appellant lodged notices of appeal against his convictions. A judge of the District Court of New South Wales dismissed each of the appeals. A question then arose as to the power of the judge to accede to an application by the Crown that, in addition to the imposition of a penalty, the appellant be ordered in each case to make reparation to the Commonwealth pursuant to s. 21B of the Crimes Act 1914 Cth. Section 21B provides that where a person is convicted of an offence against a law of the Commonwealth, the court may, in addition to the penalty, if any, imposed upon the person, order the offender:

(c) to make reparation to the Commonwealth by way of money payment or otherwise, in respect of any loss suffered, or any expense incurred, by the Commonwealth by reason of the offence.

His Honour held that, in the circumstances of each case, he had no power to order reparation by the appellant. At the request of the Crown he stated a case for determination by the Court of Criminal Appeal which included the following question of law: "Upon the true construction of section 21B of the Crimes Act 1914 and section 8Y of the Taxation Administration Act 1953, do I have jurisdiction to order the appellant to pay reparation?" The Court of Criminal Appeal (Priestley J.A., Wood J. and Sully J.) answered the question "Yes". From that answer the appellant appeals to this Court.

Although the question posed speaks of the jurisdiction of the judge of the District Court, it is clear that it is the powers of the Court that are in issue. Jurisdiction is the authority which a court has to decide matters litigated before it; in the exercise of that jurisdiction a court has certain powers, whether express, implied or inherent [5] . Strictly speaking, the issue is whether s. 21B(c) applied to the appellant in the circumstances. The appellant's contention was that s. 8Y(1) of the Administration Act made him "punishable", that is, liable to a penalty but not to an order for reparation.

Harris v Caladine (1991), 172 C.L.R. 84, at p. 136.

In the present case the Markham Boat Company Pty Ltd, in failing to pay deductions to the Commissioner, omitted to do something in circumstances where that omission constituted a taxation offence [6] . By reason of s. 8Y(1), a person who is concerned in, or takes part in, the management of the corporation is deemed to have committed the offence and to be punishable accordingly. Section 8Y(2) provides a defence to a prosecution under sub-s. (1) if the defendant proves the matters mentioned therein. The appellant did not prove those matters. The effect of a deeming provision such as s. 8Y(1) is that the person concerned is deemed to have committed the offence which the corporation itself committed [7] .

"Taxation offence" is defined in s. 8A(1) of the Administration Act. 2. Parker v Churchill (1986), 9 F.C.R. 334, at pp. 346-347.

Section 5 of the Crimes Act provides that any person:

who aids, abets, counsels, or procures, or by an act or omission is in any way directly or indirectly knowingly concerned in, or party to, the commission of an offence against any law of the Commonwealth shall be deemed to have committed that offence and shall be punishable accordingly. The essential difference between s. 5 and s. 8Y is that the former casts the onus of proving involvement on the Crown whereas the latter, through s. 8Y(2), offers the person charged a defence in certain circumstances. It is relevant to refer to s. 5 because the authorities make it clear that a person convicted by the operation of that section is convicted as a principal participating in an offence [8] . Likewise, a person convicted of an offence against the Companies (Western Australia) Code by reason of the deeming provision in s. 38(1) of the Companies and Securities (Interpretation and Miscellaneous Provisions) (Western Australia) Code is convicted as a principal [9] . The point of this discussion is to emphasize that the appellant, though caught by a deeming provision, was convicted as a principal participating in the offence committed by the Markham Boat Company Pty Ltd 1. Walsh v Sainsbury (1925), 36 C.L.R. 464, at p. 477; Mallan v Lee (1949), 80 C.L.R. 198, at pp. 215-216; R. v Crossley (1948), 48 S.R. (N.S.W.) 494, at p. 495. 2. Hamilton v Whitehead (1988), 166 C.L.R. 121.

It follows that the appellant is a person convicted of an offence against a law of the Commonwealth within the language of s. 21B of the Crimes Act. He is therefore liable, in addition to the penalty prescribed by that law, to a reparation order "in respect of any loss suffered by the Commonwealth by reason of the offence".

The appellant argued that the Commonwealth had not suffered any loss by reason of his offence. Rather, the Commonwealth had suffered loss by reason of the omissions of the corporation. The effect of the deeming provision in s. 8Y(1), it was said, is to create a statutory fiction, namely, that the appellant committed each offence but that the provision does not deem the appellant to have omitted to do something which the corporation omitted to do or deem there to have been a loss suffered by reason of the appellant's offence when the loss was suffered by reason of the offence committed by the corporation.

However, the answer to this argument is that the appellant stands convicted of an offence against s. 221F(14) of the Assessment Act and therefore stands convicted of a contravention of s. 221F(5)(a), that is, of omitting to pay the deductions to the Commissioner. He stands convicted of an offence against a law of the Commonwealth and he is therefore an offender to whom s. 21B applies. He is also liable to make reparation because the loss suffered by the Commonwealth was suffered by reason of the offence of which he was convicted, namely, a failure to pay deductions to the Commissioner.

In Murphy v H.F. Trading Co. Pty Ltd [10] Gibbs J. said that, in the absence of argument, he was not prepared to hold that a customs agent who was convicted of offences under the Customs Act 1901 Cth was also liable to make reparation under s. 21B of the Crimes Act. But the relevant section of the Customs Act only deemed the agent to be the owner of the goods in question and to be personally liable for any penalties recoverable under the Customs Act as if he were principal. The case is clearly distinguishable from the present one where the appellant is deemed to have committed the offence as a principal.

The words "punishable accordingly" in s. 8Y(1) are in no sense words of limitation, confining the deemed offender to the penalty provisions only of the Assessment Act. The same expression is used to make clear that a person convicted by the operation of s. 8Y(1) or s. 5 is convicted as a principal so that provisions applicable to the actual offender are applicable to that person [11] . This also seems to have been the view taken by the Full Court of the Supreme Court of Western Australia in Vlahov v Federal Commissioner of Taxation [12] .

Mallan v Lee (1949), 80 C.L.R., at pp. 211-212. 2. (1993) 26 A.T.R. 49.

The appeal must therefore be dismissed. The respondent filed a notice of contention which arose in the following way. In the course of answering the question asked of the Court of Appeal, Priestley J.A., with whom Wood and Sully JJ. agreed, found the decision in Vlahov "doubly useful". The first respect was that already adverted to. The second respect in which his Honour found the decision useful was a statement by White J. [13] , with whose judgment Franklyn and Ipp JJ. agreed, that:

I am of the opinion that the court has a discretion whether or not to make a reparation order. That discretion is, of course, to be exercised judicially. In the exercise of that discretion, the court may have regard to the personal circumstances and means of the offender. The respondent accepted that the court has a discretion whether or not to order reparation but it wished to challenge the proposition that the personal circumstances and means of an offender were relevant considerations in the exercise of that discretion. In effect, the respondent sought to confine relevant considerations to those going to culpability. 1. ibid., at p. 55.

There is a difficulty in dealing with the notice of contention because it does not fall within any answer to the question asked in the case stated. Nor is it a matter that admits of an answer in the abstract. In particular, personal circumstances is a term of wide import and, conceivably, could intrude into matters of culpability. In the circumstances the Court should not deal with the notice of contention, other than to draw attention to the following passage from the judgment of Mason J. in Minister for Aboriginal Affairs v Peko-Wallsend Ltd. [14] :

In the context of judicial review on the ground of taking into account irrelevant considerations, this Court has held that, where a statute confers a discretion which in its terms is unconfined, the factors that may be taken into account in the exercise of the discretion are similarly unconfined, except in so far as there may be found in the subject matter, scope and purpose of the statute some implied limitation on the factors to which the decision-maker may legitimately have regard. 1. (1986) 162 C.L.R. 24, at p. 40.

High Court of Australia Brennan, Deane, Dawson, Toohey and Gaudron JJ. Hookham v The Queen [1994] HCA 52

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