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Saunders v. Federal Commissioner of Taxation

Judges:
Northrop J

Court:
Federal Court

Judgment date: Judgment handed down 29 April 1988.

Northrop J.

The applicant is seeking an injunction under sec. 39B of the Judiciary Act 1903 restraining the respondent (``the Commissioner''), an officer of the Commonwealth, from exercising or enforcing the power conferred on him by sec. 263 and 264 of the Income Tax Assessment Act 1936 (``the Tax Act'') in relation to the affairs of the applicant and certain named companies. In addition, the applicant is seeking consequential relief. On 3 March 1988 the Court, constituted by Lockhart J., granted an ex parte interim injunction against the Commissioner until 5 p.m. on Monday 7 March 1988 or until further order. On Monday the parties requested the Court to treat the claim for an interlocutory injunction as the trial of the action. The Court agreed to adopt that course. After hearing submissions, the Court reserved its decision but with the consent of the parties continued the injunction until the determination of the application.

The only relevant power the Commissioner exercised, and sought to exercise, was that conferred by sec. 263 of the Tax Act. That section is set out:

``The Commissioner, or any officer authorized by him in that behalf, shall at all times have full and free access to all buildings, places, books, documents and other papers for any of the purposes of this Act, and for that purpose may make extracts from or copies of any such books, documents or papers.''

There is no need to make further reference to sec. 264 of the Tax Act.

The factual background of the application can be stated briefly. On 7 March 1985, the applicant was charged with conspiracy to defraud the Commonwealth and conspiracy to prevent or defeat the execution or enforcement of a law of the Commonwealth, namely, the Tax Act: see para. 86(1)(b) and 86(1)(e) of the Crimes Act 1914. On 23 December 1987, the committal proceedings against the applicant in the Melbourne Magistrates' Court were completed, and the applicant was ordered to stand trial in the Supreme Court of Victoria. A hearing date for the trial has not yet been fixed.

In addition, the applicant has contested a number of assessments of income tax made by the Commissioner with respect to the applicant. The present status of these objections can be summarised. On 22 December 1987, the applicant received from the Commissioner notices informing him that his objections to amended assessments of income tax for the years ended 1976, 1977, 1978 and 1979 had been disallowed. On 15 February 1988 the applicant formally requested the Commissioner in writing to refer those decisions to the Administrative Appeals Tribunal for review (collectively, ``the A.A.T. requests''). The applicant had previously lodged objections to the initial assessments for the years ended 1977, 1978 and 1979. Those objections were disallowed by the Commissioner and the applicant requested that those decisions be referred to a Board of Review. Those requests are currently before the Administrative Appeals Tribunal awaiting a hearing date.

On 22 December 1987 the applicant also received notices from the Commissioner informing him that his objections to assessments of income tax for the years ended 1980, 1981 and 1982 had been disallowed. On 15 February 1988 the applicant formally requested the Commissioner to refer those decisions to the Federal Court of Australia (collectively, ``the Federal Court requests'').

Between 21 January 1988 and 2 March 1988, various officers from the Australian Taxation Office (``the tax officers'') called on the applicant at his business premises in Melbourne seeking access under sec. 263 of the Tax Act to the records of various companies in order to inspect and photocopy those records. In many of these instances the applicant produced the records in response to the request. However, on one occasion the applicant, with the knowledge of the tax officers, recorded the conversation which took place between himself and those officers. This conversation has been transcribed and is in evidence before this Court.

It appears that the companies the subject of the above requests fell into two categories. First, there were companies which were involved directly or indirectly with the tax minimisation scheme which formed the basis of the criminal charges against the applicant. Second, there were companies which were relevant to the applicant's private income tax concerns, for example, Perissa Holdings Pty. Ltd. Some of the records of the companies had

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been tendered as evidence by the prosecution during the course of the committal proceedings.

The submissions made on behalf of the applicant at the hearing of the application were threefold.

First, counsel for the applicant contended that the Commissioner's actions constituted a contempt of the objection proceedings before the Administrative Appeals Tribunal and the Federal Court in which the applicant and the Commissioner are parties.

Second, it was argued that the Commissioner's actions constituted a contempt of the criminal proceedings against the applicant.

Third, it was contended that the Commissioner's use and proposed use of the information obtained pursuant to sec. 263 constituted a breach of the secrecy provisions of the Tax Act contained in sec. 16. Counsel expressly conceded that no claim was made that the Commissioner had not exercised the power under sec. 263 bona fide for the purposes of the Act. I propose to deal with each of these arguments in turn.

Contempt of Administrative Appeals Tribunal and Federal Court proceedings

The substance of the applicant's allegation that the Commissioner's actions constituted a contempt of the Administrative Appeals Tribunal and Federal Court proceedings was that the Commissioner was improperly using a coercive power to obtain material which would not otherwise be available to him under normal court processes. Counsel for the applicant conceded that the Commissioner's powers under sec. 263 are extremely wide and made no attempt to read down or restrict the expansive interpretation given to that section by the High Court in
O'Reilly v. Commrs of the State Bank of Victoria 83 ATC 4156; (1983) 153 C.L.R. 1 where Gibbs C.J., Wilson and Dawson JJ. In discussing the nature of the power conferred by sec. 263 said at ATC p. 4158; C.L.R. p. 41:

``That section grants to the Commissioner, and to any authorized officer, `full and free access' to, inter alia, all buildings and documents, for any of the purposes of the Act. The ordinary dictionary meaning of `access' is `a way or means of approach'. The words `shall have' in the section obviously cannot indicate mere futurity; they are used to confer a right. The words of the section, considered as a whole, confer upon the Commissioner a right to enter buildings and look at documents for the purposes of the Act. The right is to be `full and free', which means, in effect, that it is unrestricted, except, of course, by the requirement that it may only be exercised in good faith for the purposes of the Act.''

However, counsel argued that it was because of their very width and coercive nature that the sec. 263 powers should not be able to be exercised when litigation was current or pending. It was contended that once judicial or quasi-judicial proceedings involving the Commissioner had commenced, the Commissioner is precluded from issuing sec. 263 notices and acting pursuant thereto and must restrict himself to the avenues open to him through the procedures of the Court or the Tribunal, as the case may be. To do otherwise, so it was argued, would give the Commissioner an unfair advantage over the applicant, particularly in the context of discovery, including interrogatories, which, when obtained through the normal processes of the Court, is limited by factors such as relevance and legal professional privilege.

It is clear that sec. 263 does not empower the Commissioner to engage in conduct amounting to contempt of court in the sense of improperly interfering with judicial proceedings in a court: see
Commercial Bureau (Aust.) Pty. Ltd. v. Allen; Ex parte F.C. of T. 84 ATC 4198; (1984) 1 F.C.R. 202. Counsel for the applicant relied upon principles illustrated by
Brambles Holdings Limited v. Trade Practices Commission (1980) ATPR ¶40-179; (1980) 44 F.L.R. 182. In that case, the Trade Practices Commission commenced proceedings against a number of corporations for the imposition of penalties under the Trade Practices Act 1974. The Commission could not seek discovery or interrogatories in these proceedings. When the proceedings were almost ready for trial the Commission gave notice under sec. 155 of the Trade Practices Act requiring the corporations to answer questions relevant to the proceedings pending in the Court. The answers to the questions could secure to the Commissioner an advantage in the proceedings which it could not have obtained otherwise. The Court held that the giving of the notice constituted a contempt of court. However, it should be noted that the

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High Court has held that the existence of legal proceedings between parties other than the Trade Practices Commission does not prevent the Commission from taking action under sec. 155 of the Trade Practices Act; see
Pioneer Concrete (Vic.) Pty. Ltd. v. Trade Practices Commission (1982) ATPR ¶40-320; (1982) 152 C.L.R. 460. Where a notice is given after proceedings have been commenced between parties other than the Commissioner, the question of contempt would need to be decided on the reason or purpose for which the Commissioner is seeking the information and the use to which that information was to be put; see Gibbs C.J. at ATPR p. 43,932; C.L.R. pp. 467-468 and Mason J. at ATPR pp. 43,936-43,937; C.L.R. pp. 473-474.

In the present case, in order to come within those principles, the applicant must establish that the actions of the Commissioner and the tax officers constitute a contempt in that they are seeking material to use in pending proceedings by methods not available to them through the normal processes of the Tribunal or the Court. Contempt is criminal in nature and the onus of proof placed on an applicant seeking to prove a contempt of this nature is the criminal standard. These proceedings are civil in nature but it is not necessary for me to determine whether, in these proceedings, the applicant carries the onus of proving his case on this aspect beyond reasonable doubt. On the civil onus, as will appear, the applicant has failed to establish his claim based on contempt of court.

In the present case, in order to establish a contempt, the applicant sought to show that the Commissioner exercised the powers under sec. 263 of the Tax Act to obtain material to be used in the proceedings pending in the Tribunal and in the Court in circumstances where he could not have obtained the material according to the normal processes of the Tribunal or the Court. Counsel contended there were three possible uses to which the material so obtained could be put:

  • 1. the Commissioner might use the information in relation to the criminal proceedings against the applicant;
  • 2. the Commissioner might use the information in relation to the objection proceedings in the Administrative Appeals Tribunal and the Federal Court; or
  • 3. the Commissioner might use the information to aid the Director of Public Prosecutions (``the D.P.P.'') to take civil remedies against the applicant for the recovery of amounts of taxation.

The transcript of the conversation between the applicant and the tax officers is the only evidence before the Court. Counsel for the applicant contended that inferences to be drawn from those conversations show the use the Commissioner intends to make of the material obtained. It appears that the primary purpose of the inspection of the documents was to investigate the affairs of the companies whose records were sought and in particular Danis Pty. Ltd. One of the tax officers admitted that the material obtained could overlap with the applicant's personal affairs. He conceded further that the records of another company. Perissa Holdings Pty. Ltd., related to the personal assessments of the applicant. He conceded further that material obtained would be conveyed to the D.P.P. for the purpose of seeking civil remedies against the applicant. He denied expressly that the material was being sought to obtain information for use by the D.P.P. with respect to the criminal proceedings pending in the Supreme Court. The relevant parts of the conversation are set out:

``Applicant: I have, over the last two or three weeks, made available to you the records of several companies - these have included Danis, Morla, Shuto, Syat and Twenty-Seventh Meteor - can you tell me if those records were also required in respect of my affairs.

Tax Officer: At the time, no Barry, they were all required in respect of the affairs of Danis. Now if there is any - there could be some overlapping - I would have to agree - I'd have to say - well I couldn't deny that there would be any overlapping as far as into your affairs as well. Precisely what, I couldn't say at this stage....

Applicant: You've also said on an earlier occasion that the tax office was taking advice from the D.P.P. in connection with my tax affairs. Is that correct?

Tax Officer: Only in respect of, only as far as civil remedies function is concerned. They are purely, it's an advisory role, they're acting for us.

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Applicant: Have they asked you to obtain further information for them on which to base their advice?

Tax Officer: No. Apart from - what - for them personally or for us? What are you talking about?

Applicant: Well, you have said that the D.P.P. is advising you in respect of the civil remedies aspect of my tax matter and I just wonder whether in giving that advice, they have asked you to obtain further details or further particulars for them in respect of my affairs.

Tax Officer: As far as obtaining information for the D.P.P., no. All the information we're obtaining, as I have said all along, is for income tax purposes....

Applicant: As I advised you earlier, in the proceedings today, I've taken further advice on it, the advice I have is that there is a strong view that there is an ulterior motive in your enquiries, whether you're a party to that or not and that if I was of the view that material was being made available to the Director of Public Prosecutions after I've been committed for trial and before my trial. I should refuse you access. I am of that view and I am very concerned about my situation, and rather than refuse access, I'd ask, perhaps, if you could allow me to get some further advice as a result of our discussion this morning and I'd reconsider the matter tomorrow morning.

Tax Officer: Tomorrow morning?

Applicant: Yes.

Tax Officer: All right. Fair enough. Look, I'll state it now, Barry, that we are not gathering, and I've said it before, we are not gathering information for D.P.P. to use in whatever matters they're dealing with, in other words, with criminal matters. The records of Perissa Holdings which we have asked for relate to your personal assessments and to be more precise, they relate to the recovery aspect from an income tax point of view. In other words, tracing through.

Applicant: All right. I understand what you're saying. It concerns me that other people who are provided with the information may have another view of it.

Tax Officer: We're not handing the information over to the D.P.P. as such. They may be party to joint discussions, we have discussions with A.G.S. as well. The Australian Government Solicitor is acting in this matter as well, all right? The D.P.P., the civil remedies section there or one person from there, purely in an advisory role. That is the only role they play and we're not gathering information for them or any other. We do all analysis, we analyse the records, they don't leave our office.

Applicant: I find it difficult to understand how the D.P.P. could advise you on the matter if you don't give them some information on which to give you advice.

Tax Officer: We give them information, yes - right - we'll process information, we'll process these records, we'll analyse them for processing and may be put in a report from or whatever, whatever form it may be but the information is not being gathered for the D.P.P.'s use as such and in other words in the matter that you're referring to.''

A preliminary question arises as to whether there are ``proceedings'' before the Federal Court in respect of the 1980, 1981 and 1982 years of income, and if not, whether it is possible to be in contempt of contemplated proceedings which have not been commenced.

Part V. Div. 2 of the Tax Act deals with reviews and appeals. Pursuant to this Division, a taxpayer who is dissatisfied with an assessment may lodge a written objection against the assessment: sec. 185. The Commissioner is required to consider the objection and may either disallow it, or allow it in part or in full: sec. 186. If a taxpayer is dissatisfied with the Commissioner's decision under sec. 186 he ``may, within 60 days after service on the taxpayer of notice of the decision, lodge with the Commissioner, in writing, either'' a request to refer the decision to the Tribunal or a request to refer the decision to the Federal Court: sec. 187. The Commissioner is required to comply with a request lodged under sec. 187: sec. 189(1). If he fails to comply with a request within 60 days, the taxpayer may give notice in writing to the Commissioner requiring him to do so and the Commissioner shall, within 60 days after receipt of such written notice, comply with that request: sec. 189A(1). However, sec. 189A(3)

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gives the Commissioner power to require the taxpayer to give information relating to the objection within 60 days after receipt of the request under sec. 187, and further provides that the Commissioner does not have to comply with the request until the expiration of 60 days after the receipt of this information. Presumably, if the information is not provided by the taxpayer, the Commissioner is not required to comply with the request at all. The Act does not provide what is to happen where no request for information is made by the Commissioner and the Commissioner fails to refer the matter to the Tribunal or Court. Possibly, the taxpayer could obtain a prerogative writ against the Commissioner requiring him to do so.

Subsections 189(2) and (3) are important and are set out in full:

``(2) The referral of a decision on an objection to the Tribunal shall, for the purposes of the Administrative Appeals Tribunal Act 1975, be deemed to constitute the making by the taxpayer of an application to the Tribunal for review of the decision.

(3) The referral of a decision on an objection to the Federal Court constitutes the instituting by the taxpayer concerned of an appeal against the decision.''

Turning to the facts, the requests to have the Commissioner's decisions with respect to the 1980, 1981 and 1982 years of income referred to the Federal Court were made by the applicant on 15 February 1988. At the time this application was issued on 3 March 1988, the Commissioner had not referred the requests to the Federal Court. The initial 60-day period referred to in sec. 189A(1) had not elapsed. Indeed, if the Commissioner requests information pursuant to sec. 189A(3) and that information is not provided by the applicant, the requests may never be referred to the Federal Court. It is clear under sec. 189(3) that it is the referral by the Commissioner that constitutes the institution of proceedings. No decisions have been referred to the Federal Court by the Commissioner. Therefore, there are no proceedings pending in the Federal Court.

The applicant argued that notwithstanding that there are no proceedings before the Court, it is nevertheless possible to be in contempt of contemplated proceedings. I do not accept that contention. In
James v. Robinson (1963) 109 C.L.R. 593 the High Court held that the publication of matter likely to affect a criminal trial is not punishable as a contempt if at the time of publication there are no proceedings commenced in any court. Especially see what was said by Kitto, Taylor, Menzies and Owen JJ. at p. 607. See also
Viner v. Australian Building Construction Employees' and Builders Labourers' Federation (No. 1) (1981) 56 F.L.R. 5. 1 adopt that reasoning in the present case and reject the applicant's contention that the exercise by the respondent of its powers under sec. 263 constitutes a contempt of this Court.

With respect to the Tribunal proceedings, it was not disputed that the 1976, 1977, 1978 and 1979 assessments are in the list of matters currently awaiting a hearing date and that proceedings have therefore commenced. In determining whether the Commissioner's actions amount to a contempt of the Tribunal, it is necessary to have regard to the nature and functions of the Tribunal.

The function of the Tribunal is to review a decision on its merits, not to determine the correctness in law of that decision. For this purpose, the Tribunal substitutes itself for the primary decision maker and may exercise all the powers and discretions conferred upon the decision maker in order to determine what decision should have been made under the enactment: Administrative Appeals Tribunal Act 1975 sec. 43(1). To assist it in reaching a decision, the Tribunal has before it all the material that was before the decision maker and any additional material that is placed before it. A decision of the Tribunal is deemed to be a decision of the decision maker; sec. 43(6). This is explained by Kitto J. in
Mobil Oil Australia Pty. Ltd. v. Commissioner of Taxation (1962-1963) 113 C.L.R. 475 at p. 502 where his Honour said, in the context of a Board of Review that:

``... its function is merely to do over again (within the limits of the taxpayer's objection) what the Commissioner did in making the assessment - not to give a decision affecting the taxpayer's legal situation, but to work out, as a step in administration, what it considers that situation to be. The Board is `in the same position as the Commissioner himself', as

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the Privy Council said in
Shell Co. of Australia Ltd. v. Federal Commissioner of Taxation (1930) 44 C.L.R. 530, at p. 545. It is `only another executive body in an administrative hierarchy':
Jolly v. Federal Commissioner of Taxation (1935) 53 C.L.R. 206 at p. 214 per Rich and Dixon JJ.''

These comments are equally applicable to the Tribunal which exercises administrative functions, not the judicial power of the Commonwealth. Nevertheless the Tribunal is required to act in accordance with the requirements of natural justice.

Viewed in this light, it is not surprising that the procedures of the Tribunal differ greatly from court proceedings. For example, there is no provision for the filing of pleadings nor for discovery or inspection of documents. Nor is the Tribunal bound by the rules of evidence. Provision is made for there to be ``parties'' to the proceedings (sec. 30) but in a reference such as this the parties are not adversaries in the strict sense, and any argument they present constitutes material which assists the Tribunal in deciding what decision should be made. The decision of the Tribunal is not in the nature of a judgment for or against a particular party. Therefore it is, in my view, inappropriate to regard the Commissioner as having gained an unfair advantage as a result of his use of the sec. 263 powers. The Tribunal is in the shoes of the Commissioner and may use any material put before it in reaching its decision. The applicant would be entitled to be informed of material so obtained. Therefore, it is quite permissible for the Commissioner to obtain material pursuant to its sec. 263 powers for the purpose of placing such material before the Tribunal, if indeed this was a purpose of obtaining the information. In so doing, he is not in contempt of the Tribunal.

It is also necessary in this context to consider the effect of sec. 63 of the Administrative Appeals Tribunal Act, although that section was not referred to by counsel for either party. It provides:

``63. A person shall not -

  • (a) insult a member in or in relation to the exercise of his powers or functions as a member;
  • (b) interrupt the proceedings of the Tribunal;
  • (c) create a disturbance, or take part in creating or continuing a disturbance, in or near a place where the Tribunal is sitting; or
  • (d) do any other act or thing that would, if the Tribunal were a court of record, constitute a contempt of that court.

Penalty: $1,000 or imprisonment for 3 months.''

The effect of subsec. 63(d) is to treat the Tribunal as though it were a court of law for the purposes of determining what constitutes a contempt. The Tribunal has no power to punish for contempt. The section creates a criminal offence. However, it cannot be supposed that the section requires a court to ignore the nature and functions of the Tribunal when considering whether the actions of the Commissioner amount to a contempt. The Commissioner is entitled to rely upon the fact that the Tribunal is an administrative body standing, as it were, in his shoes, and is entitled to take advantage of the right conferred upon him by sec. 37(1)(b) of the Administrative Appeals Tribunal Act to lodge with the Tribunal every document in his possession or control that he considers to be relevant to the review of the decision by the Tribunal. Section 63(d), whatever its effect, does not remove or hamper that right.

Contempt of Supreme Court

The next contention of counsel for the applicant was that the exercise by the Commissioner of his powers under sec. 263 of the Tax Act constituted a contempt of the criminal proceedings for conspiracy for which the applicant has been committed to stand trial in the Supreme Court of Victoria.

Again, the substance of the contempt allegation is that by exercising his powers under sec. 263 the Commissioner improperly obtained a form of discovery not otherwise available to him and which, if communicated to the prosecution, would place the prosecution in a position it would not otherwise enjoy.

As a preliminary issue, counsel for the Commissioner argued that irrespective of the merits of this argument, the Federal Court is not the proper forum to hear allegations concerning contempt of pending Supreme Court proceedings, it being for the Supreme Court to determine whether a contempt of its proceedings has occurred. I reject that

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contention. This application was properly brought under sec. 39B of the Judiciary Act, which empowers the Federal Court to restrain an officer of the Commonwealth. At present, the only link between the applicant and the Supreme Court is that a Magistrate has ordered the applicant to stand trial in the Supreme Court. The Federal Court is a proper forum to hear and determine the application. Support for this conclusion is to be found in
Hammond v. Commonwealth of Australia (1982) 42 A.L.R. 327, where the High Court had no hesitation in determining that the Commonwealth would be in contempt of County Court proceedings if it required the plaintiff to answer questions before a Royal Commission designed to establish that he was guilty of an offence with which he had been charged in the County Court. In that case, the County Court was exercising federal jurisdiction. In the present case, the Supreme Court will be exercising federal jurisdiction.

To support his allegation that the Commissioner's actions constituted a contempt of the Supreme Court proceedings, counsel relied upon Brambles' case above. It may be that the principles laid down in Brambles' case are applicable to criminal proceedings, where neither discovery nor interrogatories are available, but in the event, it is not necessary for me to decide this issue. It is equally clear that an attempt to obtain by administrative means of a coercive nature information to support a pending criminal proceeding may amount to a contempt of court.

Counsel relied also upon Hammond's case. In that case, two Royal Commissions had been established to inquire into possible malpractices in the handling of meat. Shortly thereafter, Hammond was charged with conspiracy to export a prohibited export. Hammond was then called to give evidence before the Commission. He objected, primarily on the ground of self-incrimination, but it was also alleged that his examination before the Royal Commission and the making of a report by the Commission would constitute a contempt of the County Court before which the criminal proceedings against Hammond were pending. The Court found that if Hammond were required to answer questions designed to establish that he was guilty of the offence with which he had been charged before the County Court, there would be a real risk that the administration of justice would be interfered with, even though his answers could not be used at the criminal trial.

In my opinion, this is the question which I am required to answer, namely, whether the actions of the Commissioner were such that there was a real risk as regards the criminal proceedings, that the administration of justice would be interfered with.

On the facts, I am not satisfied that the administration of justice will be interfered with by the Commissioner so as to constitute a contempt of the pending Supreme Court proceedings. I am not satisfied that the Commissioner exercised his powers under sec. 263 of the Tax Act in order to obtain information for use against the applicant in the criminal proceedings. It appears from the transcript that the information would be conveyed to the D.P.P. for the purposes of obtaining civil remedies only. There is no evidence to support a finding that the information would be used against the applicant in the pending criminal proceedings against him. In fact, the tax officer expressly denied that the information would be used for this purpose. In my opinion, this factor distinguishes this case from that in Brambles' case and Hammond's case where there was a real risk that the information obtained by the Trade Practices Commission and the Royal Commission respectively, would be used against the respective applicants in pending proceedings.

Breach of secrecy provisions

The final contention was that the Commissioner's actions were in breach of the secrecy provisions contained in sec. 16 of the Tax Act. This allegation gives rise to two questions: to whom did the Commissioner disclose and intend to disclose the information obtained by the exercise of the powers conferred by sec. 263 and secondly, to whom does sec. 16 permit the Commissioner to disclose that information?

As has already been mentioned, the only relevant evidence before the Court is a transcript of a conversation between the applicant and the tax officers on 1 March 1988. During the course of that conversation, a tax officer conceded on several occasions that material the subject of the sec. 263 notices was being made available to the D.P.P.

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The applicant contends that the ``cross-pollination of information'', as it was described at the hearing, constituted a breach of sec. 16 of the Tax Act. It is noted that the applicant did not contend that the examination of the documents and the making of copies of them by the Commissioner constituted a breach of sec. 16. Section 263 authorises access by the Commissioner to books and documents ``for the purposes of the Act''. It is clearly a purpose of the Act that the Commissioner will defend proceedings taken to challenge an assessment and that the Commissioner will take steps to recover moneys owing under the Act. So irrespective of whether the documents were being sought in relation to the objection proceedings before the Tribunal or the civil recovery proceedings, the sec. 263 power was exercised ``for the purposes of the Act''.

Nor did the applicant contend that the information was obtained on behalf of the D.P.P. What was objected to was that although information was not being gathered at the behest of the D.P.P., a collateral purpose was that the D.P.P. could obtain the information. This, it was alleged, constituted a breach of sec. 16.

Section 16 is a lengthy section and need not be fully reproduced. Subsection 16(2) contains the general prohibitions against divulging information. It provides:

``16(2) Subject to this section, an officer shall not either directly or indirectly, except in the performance of any duty as an officer, and either while he is, or after he ceases to be an officer, make a record of, or divulge or communicate to any person any information respecting the affairs of another person acquired by the officer as mentioned in the definition of `officer' in sub-section (1).''

An ``officer'' is defined in subsec. 16(1) to mean:

``... a person who is or has been appointed or employed by the Commonwealth or by a State, and who by reason of that appointment or employment, or in the course of that employment, may acquire or has acquired information respecting the affairs of any other person, disclosed or obtained under the provisions of this Act or of any previous law of the Commonwealth relating to income tax.''

Section 16 enumerates persons and bodies to whom the Commission is authorised to communicate information without being in breach of sec. 16(2). The D.P.P. is not amongst those enumerated bodies as an authorised recipient of information except in the context of a Royal Commission: see para. 16(4A)(ba) and subsec. 16(4FA). Strangely, officers of the Australian Government Solicitor are not among those authorised to receive information. Therefore, prima facie, the information obtained by the Commissioner ought not to have been divulged to the D.P.P.

However, counsel for the Commissioner relied upon the phrase ``except in the performance of any duty as an officer'' contained in sec. 16(2), to argue that the tax officers were acting in the performance of their duties in communicating such information to the D.P.P. and that, as a result, they were not in breach of sec. 16.

The Court was referred to several cases in which this phrase has been interpreted and applied. In
Canadian Pacific Tobacco Company Ltd. v. Stapleton (1952) 86 C.L.R. 1 Dixon C.J. said at p. 6:

``But, in any case, I think that the words `except in the performance of any duty as an officer' ought to receive a very wide interpretation. The word `duty' there is not, I think, used in a sense that is confined to a legal obligation, but really would be better represented by the word `function'. The exception governs all that is incidental to the carrying out of what is commonly called `the duties of an officer's employment'; that is to say, the functions and proper actions which his employment authorizes.''

See also Mobil Oil Australia Pty. Ltd. v. F.C. of T. (1962-1963) 113 C.L.R. 475. In
F.C. of T. v. Nestle Australia Ltd. 86 ATC 4760; (1986) 69 A.L.R. 445, a Full Court of the Federal Court, Bowen C.J., Lockhart and Sheppard JJ., said at ATC p. 4764; C.L.R. p. 450 that the duty of an officer:

``extends beyond the performance of work of an administrative nature such as processing returns, making assessments, considering and dealing with objections, conducting investigations into the affairs of taxpayers and matters of this nature. It includes the occasions on which he is required by the judicial process to produce

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documents or give evidence in courts, by affidavit or viva voce, concerning the affairs of some other person which he has acquired as an `officer', where the proceedings are referable to the imposition, assessment or collection of revenue. These include appeals to courts under Pt V of the Assessment Act, proceedings for the obtaining of revenue, applications challenging decisions of the Commissioner pursuant to sec. 39B of the Judiciary Act 1903 and applications for review of decisions of the Commissioner under the Judicial Review Act with which this case is concerned. This approach is consistent with what was said by Kitto J. in Mobil Oil Australia Pty. Ltd. v. F.C. of T. (1962-1963) 113 C.L.R. 475 at p. 500.''

See also
Australian Institute of Marine and Power Engineers v. Secretary, Department of Transport (1986) 71 A.L.R. 73 per Gummow J., at pp. 83-85.

In applying these principles to the facts before me, I am of the opinion that the tax officers have acted and would be acting in the performance of their duties in disclosing information to the D.P.P. It is plainly part of the duty of the tax officers to assist the revenue to recover moneys owing to the Commonwealth and for this purpose it is permissible to instruct the D.P.P. Indeed, sec. 6(1)(fa) of the Director of Public Prosecutions Act 1983 makes it a function of the Director to take or supervise the taking of civil remedies on behalf of and in the name of the Commonwealth and authorities of the Commonwealth. Further, it is noted that sec. 16 does not in express terms authorise tax officers to disclose information to the Australian Government Solicitor for the purpose of receiving legal advice or action. Information so disclosed would not be in breach of sec. 16 of the Tax Act.

I make no comment as to whether it is the duty of an officer to divulge information to the D.P.P. for use in criminal proceedings, since the evidence does not suggest that the information was to be used for this purpose: compare the Pioneer Concrete case (supra), per Gibbs C.J. at p. 468.

In the result, I would dismiss the application with costs.


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