Hughes v Phillips

High Court of Australia|1948-07-01|Before: Williams JJ, Davidson J, Street J, O'Bryan J

High Court of Australia Latham C.J. Starke, Dixon, McTiernan and Williams JJ. Hughes v Phillips [1948] HCA 1

ORDER Appeal allowed. Order of the Supreme Court set aside. Order nisi discharged. Conviction restored. Appellants to pay respondent's costs of appeal in accordance with undertaking. No order as to costs in the Supreme Court.

This is an appeal from a decision of the Full Court of the Supreme Court of New South Wales making absolute an order nisi for statutory prohibition in respect of the conviction of the respondent to this appeal in proceedings for an offence against s. 227 of the Commonwealth Income Tax Assessment Act 1936-1946.

Section 227, sub-s. (1), provides: "Any person who makes or delivers a return which is false in any particular, or makes a false answer, &c. shall be guilty of an offence."

The information upon which the respondent was convicted alleged that the respondent made a return of income derived from all sources in and out of Australia during the twelve months from 1st July 1942 to 30th June 1943, "which said return was false in a particular, to wit, the amount of £226 returned by the said defendant therein as net income from his business of a motion picture exhibitor and commissions, was understated by an amount of not less than £722, contrary to the Act in such case made and provided."

The prosecutor relied upon the averment contained in the information - Income Tax Assessment Act 1936-1946, s. 243.

The information was put in evidence and the defendant put in his income tax return. This return showed a net income of £226 from the two sources mentioned, that is, the business of a motion picture exhibitor and commissions, and no other income. It contained a declaration that the particulars shown disclosed without reservation or exception a full and complete statement of the total income derived from all sources, both in and out of Australia, by the taxpayer.

Upon the hearing before the magistrate it was objected on behalf of the defendant that the information was bad in that it disclosed no offence, in that it did not charge falsity in any particular, and in that it did not sufficiently indicate particulars of the alleged falsity in a particular. The same objections were raised to the summons founded upon the information.

The magistrate overruled the objections and fined the defendant.

Upon appeal to the Full Court, the learned Chief Justice was of opinion that the information was bad for duplicity. The other members of the Bench, Mr. Justice Davidson and Mr. Justice Street did not agree with this view. It is true that the charge contained in the information might have been established by showing understatement of income in respect of either the business of motion picture exhibitor or of commissions; but this fact, in my opinion, shows only that the charge made could have been supported by more than one class of evidence and not that several charges were made.

The majority of the Full Court held that in order to support a charge under s. 227 it was necessary to establish falsity in a particular in a return and that this could not be done by establishing falsity in the statement of the total income of a taxpayer. That is to say, it was held that the statement of the total income of a taxpayer was not a particular within the meaning of s. 227, but was the result of particulars, that is, the items and the details stated in the return.

Support for this conclusion was found in the New South Wales case of Ex parte Wood; Re Williams [1] and a Queensland case, Ramm v. Gralow [2] although Mr. Justice O'Bryan came to a contrary conclusion in the Victorian case of Federal Commissioner of Taxation v. Galt [3] . In Ex parte Wood; Re Williams [1] it was held that under a substantially identical provision a mis-statement of the net amount did not amount to a falsity in a particular. Ramm v. Gralow [2] however, was not a clear decision on the same point; it was a decision that an offence had not been charged in the words of the section of the Act, and it was also held that an information was bad if it did not specify the particular or particulars in which it was false. The latter criticism of the information was based on the fact that it did not state whether the falsity related to the net income, the income from property, or the income from personal exertion, or the taxable income. In the present case the information is very different in form, because it specifies that the falsity was in the amount stated as the income derived from the sources mentioned.

(1932) 32 S.R. (N.S.W.) 177; 49 W.N. 40. 2. (1931) Q.S.R. 351. 3. (1947) 8 A.T.D. 272. 4. (1932) 32 S.R. (N.S.W.) 177; 49 W.N. 40. 5. (1931) Q.S.R. 351.

The question which has to be decided is whether the omission of an item or items from a statement of income in a return in which it is stated that the whole of the income has been returned amounts to falsity in a particular in a return.

The statement in the present return is that the whole of the income of the defendant, which was an income derived from the two sources mentioned, amounted to £226. The allegation in the information is that that income amounted to £722 more than that sum. That allegation means that the amount of £226 stated in the return as being the whole of the income of the taxpayer is a false figure, because the income of the taxpayer was in fact a larger amount. Such an allegation, in my opinion, is an allegation that the return is false in a particular.

In my opinion, for those reasons, the decision of the Full Court should be reversed, the order nisi discharged and the conviction restored. The appellants should pay the respondent's costs of the appeal in accordance with an undertaking given upon the application for special leave to appeal.

I agree. I think the case entirely depends upon the meaning of the words "false in any particular." If those words cover falsity in the final net figure given in the return, then it follows that the information sufficiently stated the charge and that no complaint can be made against the information on the ground that the false result may be produced by the falsity of one or more of the constituent items in the return. On that construction of s. 227, it would not be necessary to allege the falsity of a constituent item and it would not matter that by more than one possibility could the falsity charged in the final figure be brought about.

On the whole, I have come to the conclusion that the words "in any particular" do cover falsity in the final figure. The choice seems to be between construing those words as referring to the subordinate or constituent elements or items which go to make up the total return confining them to those constituent elements or items, and construing the words as simply meaning "in some specific or definite respect" and I think that the latter is the preferable construction to place upon them. It does not follow that, in a prosecution in which the informant avails himself of the construction which I have just assigned to those words, the magistrate may not, if the interests of justice require it, insist upon the prosecutor giving particulars of the specific items in the return the falsity of which leads to the falsity of the final figure. That is a question upon which he has a discretion which he may exercise in order to see that the defendant knows the case he has to meet and is not taken by surprise or otherwise embarrassed.

I agree. I have nothing to add to what has been said by the Chief Justice and my brother Dixon.

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Judgment (19 paragraphs)

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