Federal Commissioner of Taxation v Australia and New Zealand Banking Group Ltd.

(1979) 143 CLR 499

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(Judgment by: Gibbs A.C.J.)

FEDERAL COMMISSIONER OF TAXATION v AUSTRALIA AND NEW ZEALAND BANKING GROUP LTD.

Court:

Judges: Stephen J

Gibbs A.C.J.Mason
Jacobs
Murphy JJ.

Judgment date: 9 NOVEMBER 1979

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Judgment by:
Gibbs A.C.J.

The Commissioner of Taxation and his officers have for some years been conducting enquiries into the affairs of eleven persons, parties to the present proceedings, who may conveniently, if inaccurately, be described as "the Smorgons", and of the very many private companies, firms and superannuation funds with which those persons are, or are believed to be, associated. In the course of this investigation officers of the Commissioner served on the Smorgons, and also on The Australia and New Zealand Banking Group Ltd. ("the Bank"), notices given in intended exercise of the powers conferred by s. 264 (1) of the Income Tax Assessment Act 1936 (Cth), as amended ("the Act"). The notices were signed by Mr. L. T. Fitzgerald, a Deputy Commissioner of Taxation, as delegate of the Commissioner of Taxation. The recipients of the notices challenged their validity and an action was brought by the Commissioner, Mr. Fitzgerald, and Mr. N. L. Peters, an officer of the Taxation Department whose connexion with the case will shortly appear, as plaintiffs, against the Smorgons and the Bank for declaratory relief and for injunctions. In the action, which came before Stephen J., three broad issues fell for decision. First there was the question of the validity of four notices which required the Bank by its appropriate officer to attend before Mr. Peters and produce all books, documents and other papers contained in four named safe deposit boxes in a branch of the Bank in Melbourne. This question was decided by Stephen J. in favour of the Bank, and the plaintiffs' action against the Bank was accordingly dismissed. From that decision the plaintiffs have appealed. The second issue was as to the validity of notices which required each of the Smorgons to attend before Mr. Peters, and give evidence before him, and produce the books, documents and other papers contained in the various safe deposit boxes. Stephen J. held that these notices were valid and effective, and made declarations accordingly.

From this part of the decision the Smorgons have appealed. The third issue was whether his Honour should have granted further relief, namely declarations that the plaintiffs were entitled to access to the documents in the boxes, and that the Smorgons should produce to Mr. Peters such of the documents referred to in the notices as were in their possession, custody or control, and an injunction restraining the Smorgons from taking possession of the documents or any other material contained in the boxes pending the production of the same to the plaintiffs. Stephen J. did not grant this relief, and the plaintiffs have cross-appealed against his refusal or failure to do so. (at p516)

It is convenient to set out the provisions of s. 263 of the Act as well as those of s. 264 (1), since the Commissioner relies on the former section as throwing light on the meaning of the latter. The two sections are as follows:

"263. 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.

264. (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." (at p517)

At the outset there arises the question whether Mr. Fitzgerald, who at the time was Deputy Commissioner of Taxation in Melbourne, was entitled to give the notices. The power granted by s. 264 (1) is conferred on the Commissioner. However, by s. 8 of the Taxation Administration Act 1953 (Cth.), as amended, it is provided, inter alia, as follows:

"(1) The Commissioner of Taxation may, in relation to a matter or class of matters, or in relation to a State or part of the Commonwealth, by writing under his hand, delegate to a Deputy Commissioner of Taxation or other person all or any of his powers or functions under this Act or an Act which is an Act with respect to taxation (except this power of delegation).

(2) A power or function so delegated may be exercised or performed by the delegate with respect to the matter or to the matters included in the class of matters, or with respect to the State or part of the Commonwealth, specified in the instrument of delegation."

On 8th December 1976 the Commissioner of Taxation, Mr. W. J. O'Reilly, delegated to the person for the time being occupying or performing the duties of the office of Deputy Commissioner of Taxation, Melbourne, such of his powers and functions under the Act specified in the Schedule to the delegation, or under those Acts as amended from time to time, as are respectively specified in the Schedule. The relevant portion of the Schedule is in the following terms:

---------------------------------------------------------------------------- ---- "ACT POWERS AND FUNCTIONS DELEGATED ---------------------------------------------------------------------------- ---- Income Tax All of my powers and functions except Assessment those under section 8, section 14, sub-Act sections (5) and (6) of section 51AA, 1936 section 55, section 136, section 147, sub-section (1) of section 160AL, section 188, section 189, section 196, section 200, sub-sections (1), (2) and (5) of section 220, sub-sections (1) and (2) of section 221S, sub-sections (1) and (2) of section 221T, section 262 and section 265B."

It was submitted in argument that this delegation was defective in two respects, viz., that, being a grant of residual powers, it was not in relation to a matter or class of matters (and it was of course not in relation to any State or part of the Commonwealth) and that it was not a delegation of existing but rather of future powers, since it refers to powers under the Acts "as amended from time to time". I cannot accept these submissions. The singular words "a matter" in s. 8 (1) must be read as including the plural (s. 23 (b) of Acts Interpretation Act 1901 (Cth) as amended). The delegation is of all the powers of the Commissioner under all the sections of the Act except those specified, and it is therefore a delegation in relation to all matters to which the powers mentioned in any section of the Act, except the specified sections, may be applicable. The delegation is one in relation to matters notwithstanding that the matters in relation to which it is made are numerous and are not specifically and individually mentioned. Further, a delegation may validly be made under s. 8 of powers under the Act "as amended from time to time". The history of the Act reveals that it has been amended very frequently, and it is likely to undergo further amendment in the future. It would be most inconvenient if a new delegation had to be made every time an amendment was made to the Act, and nothing in s. 8 suggests that the Parliament intended such a result. If it matters, s. 264 has not been amended since the delegation was made. The delegation was in my opinion a valid one. (at p518)

I may now turn to the question of substance that arises in the proceedings between the plaintiffs and the Bank. That is whether any books, documents and papers in the safe deposit boxes were in the custody or under the control of the Bank within s. 264 (1). If they were not, it is clear that there was no power to require the Bank to produce them. The Bank maintains at its branch what it calls safe deposit facilities, which are made available to any person ("the depositor") with whom the Bank chooses to enter into an agreement in a standard and familiar form. Although the notices and the pleadings refer to safe deposit "boxes", the depositor, by the agreement, is granted the use of a safe deposit "locker"; it may be surmised that the locker contains a box. Each safe deposit locker is double locked: two keys are needed to unlock it. One of those keys is held only by the Bank. The other key is made in duplicate, and the two identical keys are given to the depositor, who retains one and places the other in a sealed envelope and delivers it to the Bank which, under the agreement, is to retain it in safekeeping and use it only to replace the key held by the depositor, upon his written request, in the event of the loss or destruction of the latter key (cl. 3). The depositor is entitled under the agreement to have access to the locker during the normal hours when the safe deposit facilities are open to the public for business (cl. 5) but in case of emergency the Bank is entitled to close the facilities for such periods as the Bank shall consider reasonably necessary (cl. 6). The Bank is entitled to terminate the use of a locker at any time by notice in writing, and if it does so, and the depositor fails to remove his property from the locker, the Bank may remove the same (cl. 8). It is clear that it is within the physical power of the Bank to open any locker without the aid or concurrence of the depositor.

To do this it would be necessary for the Bank to use the duplicate key which it retains for safekeeping and if it did so, without the written request of the depositor and otherwise than in the circumstances mentioned in cl. 8, it would commit a breach of its agreement with the depositor, unless, in using the key, it was acting under the compulsion of a legal requirement which overrode its contractual duty. However, whatever may be its contractual obligations, the Bank is physically able to abstract from the locker, and produce to the authorized officer, anything movable that the locker contains. If the documents which the Bank is required to produce are kept in a box inside the locker, and the box is secured with a padlock or in some other way, the Bank would have no power to force it open, but could produce the documents by producing the box containing them. On the other hand the depositor can only obtain access to the locker if the Bank provides a key - subject to the terms of the agreement the Bank is, of course, contractually bound to do so. (at p519)

In this situation it may be a nice question whether the relationship between a depositor and the Bank is one of bailment, and whether the Bank has possession of the documents in the box in the safe deposit locker. But s. 264 does not speak of "possession"; it uses the wider, and vaguer, words "custody" and "control". The two words are sometimes used as synonyms. In Pollock and Wright: Possession in the Common Law (1888), at p. 26, a distinction is drawn between "physical control, detention, or de facto possession", which is said to be "an actual relation between a person and a thing . . . matter of fact", and "legal possession", which is "a definite legal relation of the person to the thing possessed". The learned author goes on to state that in this connexion physical control is generally called "custody". In Stephen's Digest of Criminal Law, 5th ed. (1894), p. 243, in a passage cited in Moors v. Burke (1919) 26 CLR, at p 270 , it is said: "The word 'custody' means such a relation towards the thing as would constitute possession if the person having custody had it on his own account." The meaning which the words are intended to bear in s. 264 depends, amongst other things, on the context in which they appear. The object of the section is to give the Commissioner power to require the production of documents which relate to the income or assessment of any person, and "assessment" in this provision has the wide meaning given to it in s. 6 of the Act - "the ascertainment of the amount of taxable income and of the tax payable thereon": see Smorgon v. Australia and New Zealand Banking Group Ltd. (1976) 134 CLR 475 , at p 480.

The aim is the practical one of having documents produced so that an officer of the Taxation Department can obtain from them information concerning the income or assessment of some person. The section is not concerned with the legal relationship of the person to whom the notice is given to the documents which he is required to produce: it is concerned with the ability of the person to whom the notice is addressed to produce the documents when required to do so. Therefore, in my opinion, a notice can be given under the section to any person who has physical control of the documents in question, whether he has or has not the legal possession. For example, if an employer gives his books of account to a servant to keep on his behalf, a notice under s. 264 can be given to the servant, who has physical control, although the master has the legal possession. However, "control" in s. 264 (1) is not limited to physical control, and in the example given the notice could be given to the master, who has legal control of the documents, as well as to the servant. Indeed I can see no reason why a notice cannot be given to a person who wrongfully has physical control of the documents, or to a person who has parted with possession but retains a right to legal possession: the question is, has the person to whom the notice is given such custody or control as renders him able to produce the documents? (at p520)

Stephen J. accepted that the section is concerned with the existence of the ability to produce the documents, but he held that the Bank lacks the ability to produce such documents as may be in a safe deposit box. He held that the Bank lacks physical custody of the contents of a box, because by its agreement with the depositor and by the circumstances surrounding the disposition of keys to the box it has disclaimed all power over the contents, and has thereby relinquished that degree of positive physical custody which may otherwise attach to articles situated in its premises. He further held that the agreement with the depositor and the arrangement as to the keys has effectively prevented the Bank from ever having had such control as will enable it to produce the documents to the Commissioner. With the greatest respect, I cannot share this view. In my respectful opinion the Bank has the custody, or physical control, of the documents in the lockers. The documents are in its power in fact; it holds the keys that enable it to open the locker, take out the box and produce the documents - if necessary, in the box in which they are contained. It appears to me that the physical retention of the two keys by the Bank gives it control of the documents contained in the locker to which the keys give access, and that any agreement or arrangement made by the Bank with the depositor does not affect the question whether the Bank has the documents in its control and is able to produce them. The Bank has actual custody or physical control of the contents of the locker, even if it has bound itself by contract to refrain from exercising the power which it has in fact. It can open the locker and produce its contents even if it has agreed not to do so. (at p521)

Section 264 (1) does not itself cast any duty on the person to whom the notice is given, but s. 224 of the Act provides that any person who refuses or neglects to produce any book or paper required of him by the Commissioner or any officer authorized by him shall, unless just cause or excuse for the refusal or neglect is shown by him, be guilty of an offence. There is thus a statutory duty to comply with a notice under s. 264 (1), and any contractual duty owed by the Bank to the depositor is subject to, and overridden by, this statutory duty: cf. Parry-Jones v. Law Society (1969) 1 Ch 1 , at p 9 , Brayley v. Wilton [1976] 2 NSWLR 495 , at pp 496-497 , and the discussion by Stephen J. in Smorgon v. Australia and New Zealand Banking Group Ltd. (1976) 134 CLR, at pp 486-490 . Further, in my opinion, the existence of the contractual duty provides no just cause or excuse for refusing or neglecting to produce the documents. It is likely that documents which relate to the income or assessment of a taxpayer will often be entrusted by him to another, for example, to a Bank, a solicitor or an accountant. The Parliament cannot have intended that a person whose taxation affairs were under consideration could protect his documents from disclosure simply by binding the person to whom they were entrusted to refrain from producing them. It is true that the taxpayer himself might be required to produce the documents, but in some cases it might not be possible to give notice to the taxpayer, and in any case the most effective way to obtain production might be to require the person who had the documents in his actual custody or under his physical control to produce them.

The terms of a contract made between the taxpayer and the custodian of his documents would appear quite irrelevant for the purposes of s. 264 (1), and there is nothing in the provisions of the sub-section that would support the view that the existence of a contractual duty, or an arrangement short of a contract, to refrain from producing the documents should be regarded either as having the effect that the documents were not in the custody or under the control of the person who in fact had them in his custody or under his control, or as providing just cause or excuse for failing to produce them. (at p522)

It follows from what I have said that a requirement addressed to one person is no less valid because a valid requirement might also have been addressed to another. More than one person may have the control of a document within the meaning of the section. In the present case the Bank has the physical control, whereas the Smorgons (or at least some of them) have the legal control: both may be required to produce the documents. (at p522)

It is true that a bank to whom a notice is given in circumstances such as the present may be placed in a position of considerable difficulty. In many cases the bank will have no knowledge as to what is contained in a safe deposit locker; it may not know whether it contains any documents or whether any documents that it does contain relate to the income or assessment of the person concerned. If the bank causes the locker to be opened, and finds inside it a locked box or sealed envelope, it has no right to open the box or the envelope to see what it contains. If a bank which is required to produce the documents contained in a safe deposit locker does produce the contents of the locker and it is found that they are not documents which relate to the income or assessment of the person named in the notice, the bank may be liable to the depositor for breach of contract. On the other hand, if the bank fails to produce the contents of the locker, and they are found to be documents which do relate to the income or assessment of the person named, it may be liable for a breach of s. 224. On behalf of the plaintiffs it was suggested that the Commissioner is entitled to require production of any document so that he may examine it for the purpose of discovering whether it does relate in some way to a taxpayer's income or assessment. The words of the section are not so wide. The Commissioner is given a power to require the production of books, documents and papers only of the kind described - books, documents and papers "relating thereto". I agree with the view expressed by Stephen J. in Smorgon v. Australia and New Zealand Banking Ltd (1976) 134 CLR, at p 486 that the words "relating thereto" refer back to the words "income or assessment", and not to the remoter word "evidence". The only documents that the Commissioner may require to be produced are those that relate to the income or assessment of some person, and, for reasons which I shall state later, that person must be named or otherwise indicated in the notice.

If a bank were charged with a contravention of s. 224 the burden would lie on the prosecution to establish that the documents which were not produced were of the kind mentioned in s. 264 (1) (b). If that were proved, the bank would escape conviction if it proved that it had just cause or excuse for its refusal or neglect, and it would no doubt have just cause or excuse if it had an honest belief (or at least an honest and reasonable belief) that the documents were not of that kind. In its present form the section creates practical difficulties both for the Commissioner and for a custodian of documents to whom a notice is addressed. However, for the reasons that I have given, the notice was appropriately addressed to the Bank notwithstanding that the documents mentioned in it were said to be contained in the safe deposit boxes. (at p523)

It then becomes necessary to consider an argument that was addressed on behalf of the Smorgons, and adopted by the Bank, that the power conferred by s. 264 (1) had not been properly exercised, because a necessary condition precedent had not been fulfilled. The condition precedent said to be implicit in the section was stated in several ways: that the notice can only be given if the documents required provide evidence on a particular issue as to which evidence is lacking; that the notice must be directed to an issue of fact which is existing and has been defined; that a notice can only be given if the Commissioner or his delegate has formed an opinion that evidence on a particular question is necessary; that the Commissioner or his delegate must have made an enquiry as to what matters are in dispute and must then have given notice requiring evidence about particular matters. These submissions find no support in the words of s. 264 (1), unless it is held that the power to require the production of documents is merely ancillary to the power to require a person to attend and give evidence, and that the documents to be produced are those that relate to the evidence to be given. I have already said that I agree with Stephen J. that the words "relating thereto" do not refer to the word "evidence". I agree also with his Honour's views, expressed in Smorgon v. Australia and New Zealand Banking Group Ltd. (1976) 134 CLR, at pp 485-486 , that the power conferred by the second part of s. 264 (1) (b) is independent of that conferred by the preceding words of that paragraph; as Stephen J. points out, the repetition of the words "may require" gives the paragraph two distinct limbs, each describing distinct powers. The apparent policy of the section supports this view. For the purpose of ascertaining a person's taxable income the Commissioner may need to see the documents that relate thereto, even though there is no oral evidence that can be given on the question.

There is no justification for reading into s. 264 (1) (b) a condition precedent which it does not express. There are likely to be many cases in which documents that relate to a taxpayer's taxable income will be of great assistance to the Commissioner in performing his duties under the Act, although the Commissioner is unable, before seeing the documents, to say that they are relevant to a particular issue. It would be an unwarranted limitation on the power given by the section to hold that the Commissioner can only obtain documents if he knows that they provide evidence on a particular matter. The apparent intention of the Parliament is that the Commissioner is entitled to have produced any books and documents that relate to the taxpayer's income or assessment, even if he does not know what those books and documents may reveal. A document may be required to be produced only if it in fact relates to the income or assessment of the person in question, but if it is of that description, that is enough. In other words the Commissioner is entitled to make what was described as a "roving enquiry" into the income or assessment of a particular taxpayer and for that purpose to have produced such documents as relate to that income or assessment. (at p524)

In reaching these conclusions I have not been assisted by the provisions of s. 263. That section creates problems of its own. It grants the Commissioner full and free access to, inter alia, buildings and documents. "Access" in this context, must mean the right to enter the building, and to examine the documents. It has been held in a number of cases that a statute which confers on a public officer a right to enter premises prima facie authorizes the use of reasonable force to effect the entry, since if the officer were entitled to enter only with the consent of the occupier no statutory authorization would be required: Grove v. Eastern Gas Board (1952) 1 KB 77 , at pp 82, 88-89 ; Fowler v. Taylor (1957) VR 593 , at p 596 ; Egg Marketing Board (N.S.W.) v. Cassar [1978] 1 NSWLR 90 . However the words of s. 263 are far too generally expressed to make such an interpretation possible; the right granted is to have access at all times, to all buildings and documents, and for any of the purposes of the Act, and it is not expressed to be subject to the production of any warrant or authority, or to be limited in any other way. If the section authorized the Commissioner to gain such access by force, it would bring about the most serious invasion of the ordinary rights of the subject, and the section would not be given that effect unless the clearest words required it. However in the present case counsel for the plaintiffs did not contend that the section allows the Commissioner to use force to obtain the access to which the section entitles him. It was submitted that s. 263 declares the right of the Commissioner to access, and that s. 264 provides a means by which the Commissioner can enforce that right. It is no doubt true that s. 264 does enable the Commissioner, in some cases, to achieve the access to which s. 263 refers, but this circumstance does not throw any light on the meaning of s. 264.

It is not necessary either to enlarge or to restrict the ordinary meaning of the words of s. 264 for the purpose of enabling that section to operate harmoniously with s. 263. (at p525)

The next question that arises is whether the notices given to the Bank were sufficient in form. To be valid a notice to produce documents under s. 264 (1) (b) must of necessity identify with sufficient clarity the documents which are required to be produced. However the notice must in my opinion go further: it must show the person to whom it is addressed that any document which he is required to produce is one whose production the Commissioner is entitled to require. Where a notice is addressed to a taxpayer who is required to produce documents which relate to his own income or assessment, the very description of the documents (for example, "your books of account") may be enough to show that the notice is within the power conferred by the section. Where however the notice is addressed to one person, requiring him to produce the documents of another, the notice must show that those documents relate to the income or assessment of a particular person, who must be identified. The power is confined to giving a requirement of a particular kind - a requirement to produce documents relating to the income or assessment of some person - and a notice requiring the production of documents not so related is beyond the scope of the power. Similar reasoning was applied, correctly in my opinion, by Burt C.J. in Snow v. Keating (W.A.) (1978) 19 ALR 373 ; 8 ATR 507 ; 78 ATC 4125 where the notice required a taxpayer to give evidence but did not specify the person concerning whose income or assessment the evidence was sought. (at p526)

One of the notices given to the Bank in the present case was in what has been called "the short form": it required the Bank to produce all documents in certain safe deposit boxes without showing that those documents related to the income or assessment of any person. The notice was invalid and the plaintiffs did not seek to argue to the contrary. Another notice, dated 14th February, required the Bank to attend and produce books, documents and papers before Mr. Peters in connexion with the income of and/or the ascertainment of the amount of taxable income and the tax payable thereon by certain named persons and continued, somewhat ungrammatically, with the words: "to produce at the said place and time all books, documents and other papers" located in the specified safe deposit boxes, without stating that those documents related to the income or assessment of the persons named. I need not take time in considering whether this badly worded notice did contain a sufficient indication that it required the production of documents of the kind described in s. 264 (1), since two further notices, dated 23rd February 1977, in effect replaced it. Those notices required the Bank to attend before Mr. Peters in connexion with the income of, and/or the ascertainment of the amount of taxable income and the tax payable thereon by the persons named in the Schedule, to produce: "the following books, documents and other papers in your custody or under your control relating thereto, being all books, documents and other papers located in" the named safe deposit boxes. It was submitted that there was a repugnancy between the reference to documents relating to the income or the ascertainment of the amount of taxable income and the tax payable thereon by the named persons on the one hand, and "all documents" on the other. Obviously the notices are framed on the assumption that all the documents in the safe deposit boxes are documents which relate to the income or assessment of the named persons.

If that assumption is correct the notices are valid. These notices are in my opinion sufficient in form. (at p526)

For the reasons I have given the various arguments advanced on behalf of the Bank must fail, except as to two of the notices. However it was quite frankly conceded on behalf of the plaintiffs that the Commissioner did not know if any documents of the kind described in s. 264 (1) were contained in the safe deposit lockers. The Commissioner merely suspected that the lockers contained documents of that description. By par. 7 of the statement of claim the plaintiff made the following allegations: "The said boxes or some or one of them contain or may contain documents and materials relevant to the enquiry referred to in paragraph 5 hereof." These allegations were not admitted by the Bank, and the Smorgons denied them. No evidence was given in support of the allegations. The plaintiffs sought a declaration in the following terms: "A declaration that each of the said notices referred to in paragraphs 9 and 10 hereof is and was at all times material valid pursuant to the provisions of the Tax Act." The notices referred to in par. 9 were those given to the Smorgons and the notices referred to in par. 10 were those given to the Bank. The plaintiffs also sought a declaration that the Bank should produce to Mr. Peters such of the documents as are referred to in each of the notices served upon it as are in its possession, custody or control. In my opinion the plaintiffs are not entitled to obtain the latter declaration merely on the basis of suspicion that the documents described in the notices may be in a locker in the Bank. Indeed, it is open to question whether in the circumstances the plaintiffs are entitled to any declaratory relief.

However the Bank has, understandably, fully argued before Stephen J. and before this Full Court the question whether a requirement under s. 264 (1) (b) might validly be given to the Bank to produce documents contained in a safe deposit locker, and the further questions with which I have dealt, and it seems to me desirable that so much of the present protracted dispute as has been the subject of these arguments should now be determined. In these circumstances it seems to me proper to make a declaration that the two notices dated 23rd February 1977 were not invalid for the reasons suggested. However in my opinion no declaration should be made that the notices were valid, since that question depends on whether in fact the lockers did contain documents all of which relate to the income or assessment of the named persons. (at p527)

The further question that remains to be decided on the appeal brought by the Smorgons is whether the notices given to those parties were sufficient in form. Omitting immaterial words each of those notices read as follows:

". . . I, LEO THOMAS FITZGERALD, do by this Notice require you to attend . . . and give evidence before Norman Leslie Peters . . . concerning the following matters -

(a)

the income of; and/or

(b)

the ascertainment of the taxable income and the tax payable thereon by -

the persons referred to in the Schedule annexed hereto and marked with the letter 'A' for the years ended 30th June 1965 to 1976 inclusive . . . AND IN CONNECTION THEREWITH I DO FURTHER HEREBY REQUIRE YOU to produce at the said place and time all books, documents and other papers located in safety deposit box numbered . . ."

These notices do not specifically describe the documents as relating to the income or assessment of the persons named. However, they make it clear that the evidence to be given is that concerning the income or assessment of the named persons and to that extent the notices are valid and sufficient. The documents required to be produced are said to be required "in connection therewith" - i.e., in connexion with the evidence which the recipient of the notice is required to give, namely evidence concerning the income or assessment of the named persons. The form of the notices could be improved, but the notices when properly construed are in my opinion within the ambit of the power conferred by s. 264 (1). The words of the notices indicate that all the documents contained in the safe deposit boxes are connected with the evidence which is to be given and which relates to the income or assessment of the persons named, and imply that the documents themselves relate to those matters. The notices, regarded alone, are in form sufficient, but if it were proved that the boxes contain documents which have no relation to the income or assessment of the persons named the notices would of course be too wide. (at p528)

I would accordingly dismiss the Smorgons' appeal. However, for the reasons that I have given in relation to the declaration sought against the Bank, I respectfully consider that the declarations which his Honour made against the Smorgons were too wide. Those declarations were as follows:

"(i) That each of the notices given by the Secondnamed Plaintiff as the delegate of the Firstnamed Plaintiff on 14th February 1977 to each of the first nine named Defendants, and the Eleventhnamed Defendant and Twelfthnamed Defendant and referred to in paragraph 9 of the Statement of Claim herein was validly given pursuant to the provisions of Section 264 (1) of the Income Tax Assessment Act 1936;

(ii) That each of the first nine named Defendants, the Eleventhnamed Defendant and the Twelfthnamed Defendant is required to attend before the Thirdnamed Plaintiff to give evidence concerning the income or assessment of the persons referred to respectively in the said notices and to produce all such books, documents and other papers contained in the safe deposit boxes numbered 800, 1019, 1370 and 1848 which are located at the premises of the Thirteenthnamed Defendant as relate to the income or assessment of any one or more of such persons."

The notices were validly given only if in fact all the documents in the boxes relate to the income or assessment of the named persons. Similarly the Smorgons were obliged to produce all the documents in the boxes only if they related to the income or assessment of the named persons. I would substitute declarations narrower in scope. (at p529)

The final matter for decision is that which is raised by the cross-appeal of the plaintiffs. The additional relief which the plaintiffs sought against the Smorgons was rightly refused, since it has not been proved that any documents of the requisite description are contained in the lockers, or that any access to which the Bank is entitled has been denied it. It is therefore unnecessary to consider further the provisions of s. 263. (at p529)

For the reasons that I have given, I would make the following orders: (at p529)

(I)

Allow with costs the appeal by the Commissioner of Taxation and others against the Australia and New Zealand Banking Group Ltd., order that orders numbered (1) and (2) made by Stephen J. be set aside and that in lieu thereof it be ordered as follows:

(1)

Declare that two of the notices dated 23rd February 1977 and referred to in par. 10 of the statement of claim (being the notices which require the thirteenth defendant to produce certain books, documents and other papers in its custody or under its control relating to the income of and/or the ascertainment of taxable income and the tax payable thereon by the persons referred to in the schedule annexed thereto, namely all books, documents and other papers located in safe deposit boxes numbered 800, 1019, 1370 and 1848) were not invalid by reason of their form, or by reason of the fact that they require the production of books, documents and papers contained in safe deposit lockers at a branch of the thirteenth defendant, or by any insufficiency in the delegation of power to the secondnamed plaintiff.

(2)

Order that the costs of and incidental to the action against the thirteenth defendant be taxed and paid by the thirteenth defendant to the plaintiff. (at p529)

(II)

Dismiss with costs the appeal by George Smorgon and others against the Commissioner of Taxation and others, but substitute the following declarations for those made by Stephen J.:

(i)

Declare that none of the notices given by the second-named plaintiff as the delegate of the firstnamed plaintiff on 14th February 1977 to each of the first nine named defendants and the eleventhnamed defendant and the twelfthnamed defendant and referred to in par. 9 of the statement of claim was invalid by reason of its form or by any insufficiency in the delegation of power to the secondnamed respondent.

(ii)

Declare that each of the first nine named defendants, the eleventhnamed defendant and the twelfthnamed defendant is required to attend before the thirdnamed plaintiff to give evidence concerning the income or assessment of the persons referred to respectively in the said notices. (at p530)

(III)

Dismiss with costs the cross-appeal by the respondents, the Commissioner of Taxation and others. (at p530)