O'Reilly
31 In O'Reilly two officers of the Australian Taxation Office, Mr Cornell and Mr Hughes, were investigating the financial affairs and dealings of Mr Lawson, the fourth defendant, members of Mr Lawson's family, and companies and trusts which were connected with Mr Lawson.
32 Mr Hughes served a notice on Mr Lawson pursuant to s 264 of the Income Tax Assessment Act 1936 (Cth) ("s 264") ("ITAA 1936") which at the material time provided:
(1) The Commissioner may by notice in writing require any person, whether a taxpayer or not, including any officer employed in or in connexion with any department of a Government or by any public authority:
(a) to furnish him with such information as he may require; and
(b) to attend and give evidence before him or before any officer authorized by him in that behalf concerning his or any other person's income or assessment, and may require him to produce all books, documents and other papers whatever in his custody or under his control relating thereto.
(2) The Commissioner may require the information or evidence to be given on oath and either verbally or in writing, and for that purpose he or the officers so authorized by him may administer an oath.
(3) The regulations may prescribe scales of expenses to be allowed to persons required under this section to attend.
33 At the foot of the notice a facsimile signature of the Deputy Commissioner had been affixed by Mr Holland, who at that time was the Chief Investigation Officer in the Australian Taxation Office. The Deputy Commissioner had purported on 23 September 1980 to authorise the Chief Investigation Officer to perform certain functions. The authorisation was said to be:
In the exercise of the powers and functions delegated to me by the Commissioner of Taxation.
34 It purported, inter alia, to authorise the Chief Investigation Officer to:
(1) "Authorise issue of notices other than notices requiring the giving of information or evidence on oath";
(2) "Imprint facsimile of my signature upon such notices"; and
(3) "Examine addressees and receive evidence, books, documents and papers".
35 The notice required Mr Lawson to furnish information to, and to attend and give evidence before, Mr Cornell.
36 Mr Cornell, in his capacity as Supervisor, Investigation Section, was also mentioned in the purported authorisation of 23 September 1980 as being authorised in the same three respects as Mr Holland, the only difference being that Mr Cornell's authorisation to issue notices was said not to extend to notices requiring "attendance to give evidence or to produce books, documents and other papers".
37 It appears that the Deputy Commissioner himself had no knowledge of the notice served on Mr Lawson until after 15 April 1981. It had been Messrs Holland, Hughes and Cornell in conjunction who decided that the notice should be delivered. Mr Lawson did not comply with the s 264 notice.
38 The primary question for decision was whether the giving of the notices was a valid exercise of the power given by s 264. It was not in dispute that:
section 264 in terms conferred power only on the Commissioner;
the delegation by the Commissioner to the Deputy Commissioner was valid;
the Deputy Commissioner had no power of sub-delegation.
39 On behalf of the defendants it was submitted that the authorisation given by the Deputy Commissioner on 23 September 1980 was an invalid sub-delegation or, alternatively, that the Deputy Commissioner had no power to authorise anyone else to exercise the power on his behalf.
40 By majority (Gibbs CJ, Murphy and Wilson JJ, Mason J dissenting) the High Court held that that the powers conferred by s 264(1) were not intended to be exercised only by the Commissioner or his delegate but might be exercised through a properly authorised officer.
41 Gibb CJ said that the question whether s 264 required that the Commissioner (or his delegate) should personally sign the notice in writing was one of construction (at p 10). Further at pp 11-12 his Honour continued:
It would serve no useful purpose for me to canvass all the authorities in which questions of this kind have been considered in relation to the exercise of statutory powers; they are discussed in de Smith's Judicial Review of Administrative Action, 4th ed., pp. 303-309. The answer to the question whether the statute requires the power to be exercised personally by the person designated depends on the nature of the power and all the other circumstances of the case: cf. Re Reference under Ombudsman Act, s. 1145, per Brennan J. However, I should mention the line of authorities which commenced with Carltona Ltd. v. Commissioners of Works and which are discussed in In re Golden Chemical Products Ltd. Those authorities established that when a Minister is entrusted with administrative functions he may, in general, act through a duly authorized officer of his department. This result depended in part on the special position of constitutional responsibility which Ministers occupy, and in that respect these authorities are distinguishable from cases such as the present. However, they also rest on the recognition that the functions of a Minister are so multifarious that the business of government could not be carried on if he were required to exercise all his powers personally. Ministers are not alone in that position. This has been judicially recognized. In Commissioners of Customs and Excise v. Cure & Deeley Ltd, it was said that the Commissioners in that case were in a position parallel to that of Ministers, and in Ex parte Forster; Re University of Sydney, the Senate of a University was regarded as being in a similar situation. I can see no reason why, in construing sections of the Act which confer powers on the Commissioner, it should not be proper to consider the undoubted fact that the Commissioner could not possibly exercise all those powers personally.
(Footnotes omitted.)
42 His Honour continued at pp 12-13:
Section 264 confers on the Commissioner a power whose exercise will be likely adversely to affect rights of individuals. This is a reason for inclining in favour of the view that it must be exercised personally. On the other hand, that section, and a number of other sections of the Act, confer on the Commissioner powers which may be expected to be exercised in myriads of cases. Those other sections include ss. 166-169, 170 and 174, which give power to make and amend assessments and to serve notice of assessments. Since there are literally millions of taxpayers (according to Year Book Australia 1982, p. 577, there were over 5.6 million individual taxpayers in the year 1979-80) it would reduce the administration of the taxation laws to chaos if the powers conferred by those sections could be exercised only by the Commissioner or a Deputy Commissioner personally. It can not be supposed that the Parliament intended such a result. By s. 13 of the Act any reference in the Act to the Commissioner is deemed to include, in respect of matters as to which a Deputy Commissioner has exercised any power or function conferred upon him by delegation, a reference to that Deputy Commissioner. The power of delegation conferred by s. 8(1) of the Taxation Administration Act 1953 (Cth), as amended, enables the Commissioner to make a delegation "to a Deputy Commissioner of Taxation or other person". In Re Reference Under Ombudsman Act, s. 1150, Brennan J. said that "The practical administrative necessity which warrants an authority's exercising his power by the acts of another disappears when the authority is empowered to delegate all of his powers and functions to that other." The existence of a power to delegate is of course an important consideration in deciding whether the designated authority may act through an authorized agent. However, the fact that the Act itself contemplates that the delegation will be to a Deputy Commissioner only (notwithstanding that s. 8(1) of the Taxation Administration Act confers a wider power of delegation) suggests that it was not intended that there should be a wholesale delegation of powers to comparatively minor officials. But in any case it would hardly be practicable to make a delegation of that kind, and it seems to me that there exists, as the Parliament must have known, a practical necessity that the powers conferred on the Commissioner by the Act should be exercised by the officers of his Department who were acting as his authorized agents. On the whole I have reached the conclusion that the powers conferred by s. 264 were not intended to be exercised only by the Commissioner or his delegate personally but may be exercised through a properly authorized officer. This is consistent with the decision in Lee v. Federal Commissioner of Taxation, where it was held that the acts of the Commissioner's officers (no doubt acting within the course of their authority) in performing duties under other sections of the Act were the acts of the Commissioner for the purposes of the Act. In opposition to this view reliance was placed on the fact that express reference to officers authorized by the Commissioner is made in ss. 263 and 264, and this, it was said, indicated an intention to exclude action by authorized officers in other cases. Section 263, which refers to "the Commissioner or any officer authorized by him", is concerned with rights, whereas s. 264 is concerned with powers; one may conclude that a power may be exercised through an agent more readily than that a right is conferred upon an agent. The reference in s. 264(1)(b) to "any officer authorized by him" may be explained by the fact that in the context of that provision it is necessary to specify the officer before whom the recipient of the notice is required to attend. The fact that authorization is expressly mentioned in these provisions does not assist the conclusion that s. 264 otherwise excluded any possibility of authorization.
(Footnotes omitted.)
43 Murphy J agreed with the reasons given by the Chief Justice.
44 At p 32 Wilson J observed:
The question is whether the existence of the power of delegation requires that the Commissioner or his delegate must direct his mind personally to the exercise of every power or function vested in him. Stated in that way, in my opinion, the question admits only of one answer. The practical administrative necessity to allow a Deputy Commissioner to exercise the powers delegated to him by the actions of officers authorized by him is evident. The opposing argument would oblige the Commissioner himself to delegate his powers, not only to the Deputy Commissioners, but to a host of departmental officers throughout Australia, rendering each of them a Commissioner in his own right. It would be wholly destructive of any semblance of administrative order and efficiency.