Deputy Federal Commissioner of Taxation v. D.T.R. Securities Pty. Limited

Judges:
Mason CJ
Brennan J
Deane J
Dawson J
Gaudron J

Court:
Full High Court

Judgment date: Judgment handed down 9 June 1988.

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Mason C.J., Brennan, Deane, Dawson and Gaudron JJ.

This appeal from the Court of Appeal of the Supreme Court of New South Wales [reported at 87 ATC 4156] was heard with the appeal in
D.F.C. of T. v. Moorebank Pty. Limited [reported at 88 ATC 4443]. It raises the question whether the effect of sec. 64 of the Judiciary Act 1903 (Cth) is to apply the bar imposed by sec. 18 of the Limitation Act 1969 (N.S.W.) upon the bringing of an action for a penalty after the expiry of a period of two years (calculated from the date on which the cause of action first accrued) to an action brought by a Commonwealth Deputy Commissioner of Taxation in the Supreme Court of New South Wales for the recovery of ``additional tax'' payable under the provisions of the Income Tax Assessment Act 1936 (Cth) (``the Assessment Act''). The learned trial Judge (Lee J.) held that sec. 64 did not have that effect. An appeal from his decision in that regard was upheld by a majority (Glass and McHugh JJ.A.; Samuels J.A. dissenting) of the Court of Appeal. The result of the decision of the Court of Appeal was that the judgment in the Commissioner's favour was reduced (from $132,965.28 to $93,710.52) by excluding therefrom the amount representing additional tax which had become due and payable more than two years before the institution of the action.

As in Moorebank, we are prepared to assume (without deciding) that an action to recover additional tax would, for relevant purposes, be an action to recover a ``penalty''. On that assumption, the reasoning which led us to conclude in Moorebank that sec. 64 of the Judiciary Act did not have the effect of applying a provision of the Limitation of Actions Act 1974 (Qld) to limit the time in which a Deputy Commissioner might institute proceedings for recovery of additional tax due under the Assessment Act applies to require a corresponding conclusion in the present case. It follows that we would allow the appeal and restore the judgment and orders of the learned primary Judge. In accordance with the conditions pursuant to which special leave to appeal was granted, the orders made for costs in the Court of Appeal should not be disturbed and the appellant should pay the respondent's costs of the appeal to this Court.