Saxby v The Queen [2011] HCATrans 209 (12 August 2011)

Last Updated: 15 August 2011

[2011] HCATrans 209

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
Hobart No H2 of 2011

B e t w e e n -

MARK ANTHONY SAXBY

Applicant

and

THE QUEEN

First Respondent

Application for special leave to appeal

HEYDON J
BELL J

TRANSCRIPT OF PROCEEDINGS

FROM CANBERRA BY VIDEO LINK TO MELBOURNE

ON FRIDAY, 12 AUGUST 2011, AT 12.28 PM

Copyright in the High Court of Australia

MR D. GRACE, QC: If the Court pleases, I appear with MS M.A. MAHADY and MR J.G. KORMAN, for the applicant. (instructed by The Office of David Grace QC)

MR T.A. GAME, SC: If the Court pleases, I appear with my learned friend, MS R.J. SHARP, for the respondent. (instructed by Director of Public Prosecutions (Cth))

HEYDON J: Yes, thank you, Mr Grace.

MR GRACE: Thank you, your Honour. This application, your Honours, raises for consideration two primary contentions. The first is that in the context of the notices of objection lodged with the commissioner paragraph 4b cannot be viewed in isolation, it is part of a series of conditional and alternative statements. The second is that the statements contained in an unsworn notice of objection contain no more than a statement of grounds to be relied upon by a taxpayer. The statements do not amount to an assertion or belief in the correctness of the facts stated. The grounds should be treated akin to pleadings in civil judicial proceedings, and as such they cannot amount to representations.

If I could deal with the first contention? The assertions made in each of the notices of objection were all equally weighted, in our submission. Contrary to the Crown case, those assertions that preceded and included paragraph 4b did not have primacy. If I could take your Honours to page 120 of the application book where your Honours will see the common form notice of objection that was the subject of the counts on the indictment? If you see paragraph 1 – there is a preamble, of course, before paragraph 1 which claims that:

the assessment should be set aside in whole or in part or alternatively that the taxable income shown thereon should be reduced by an amount of $57,200.00 or some lesser or other amount –

and issues about Medicare levy and penalties and interest and so on. Then paragraph 1 refers to the amount that is claimed in the adjustment sheet issued by the commissioner. Paragraph 2 asserts that:

No part, or some lesser part, of the alleged understated amount was income earned –

Paragraph 3 refers to:

Further, or alternatively, neither the alleged understated amount, nor any part thereof, should be included or deemed to be included in my assessable income –

Then we get to paragraph 4 which has a preamble, “Without limiting the generality of the foregoing”. What is the foregoing? A further or alternative statement. Then we get to 4b. Then if you look at paragraphs 5 to 9 you will see preamble words, “Alternatively, and without prejudice to the generality of the foregoing” in 5. In 6, “Further, and alternatively”. In 7, “Alternatively, without prejudice to the generality of the foregoing”. In 8, “Further and alternatively”. In 9, “Further and alternatively” again. So they are all statements of conditions and alternatives which are all contingent and interrelated. The learned trial judge, in his directions to the jury at application book page 28, encapsulated the point that is sought to be agitated in this first contention. At line 2 on page 28, his Honour says this:

So the Crown is saying that the words in 4(b), even if the document was – even though the document was created by accountants and lawyers that Mr Saxby signed it and adopted it. The Crown is saying that the words of 4(b) are assertions that the Tax Office was intended to regard as true and believe. Now what’s a representation? A representation is a formal and serious statement of facts that’s made with a view to effecting some change. In this case the Crown says that Mr Saxby and the accountants and lawyers assisting him – or Mr Saxby with the assistance, I should say – Mr Saxby, with the assistance of accountants and lawyers, was putting forward what’s said in 4(b) as true facts intending to get his tax assessment for the relevant year changed for the better and therefore what was said in 4(b) amounts to a representation. Now you need to consider another possibility.

This is what I wanted to focus upon, your Honours:

If the notice of objection was just a list of possible arguments and a decision was going to be made at some stage in the future as to which grounds of objection were going to be relied on and which ones were going to be abandoned well if that was the position you might conclude that 4(b) didn’t amount to a representation at all, that it wasn’t a formal and serious statement of facts made with a view to effecting some change. If I say to someone, “Look, I’d like to check whether my facts are correct and whether the information that I’ve got is right, but one possible argument is this, the weekly sales sheets fully recorded all of the income and so did the tax returns”, well if I say that I’m not actually saying that – I’m not actually saying anything at all. I’m not making a representation, I’m just saying, “Here’s a proposition and I might rely on that when the time comes”.

It goes on to discuss other possibilities.

BELL J: The trial judge left to the jury, as a matter of fact, whether the assertion at 4b in the notice of objection had been established by the Crown beyond reasonable doubt to be put forward by the applicant as true facts that the ATO should accept as true and act upon in assessing his application for a revised assessment. Now, what is wrong with treating the matter as a question of fact and giving the jury the ample directions that the trial judge gave?

MR GRACE: Our primary proposition is that the statement in 4b cannot amount to a representation at law. It should be treated, in the context of the document as a whole, as a contingent or alternative argument to that posited before or after the statement in 4b; after all, your Honour, if you look at paragraph 3 for instance, at page 121, there it is asserted that:

Further, or alternatively, neither the alleged understated amount, nor any part thereof, should be included or deemed to be included in my assessable income –

and that follows on from paragraph 2, which says that:

No part, or some lesser part, of the alleged understated amount was income earned, received or derived –

So every single paragraph in the statement of grounds from paragraph 1 to 9 inclusive are all contingent and alternative, and we say that a close analysis of the whole of the document would reveal that paragraph 4b cannot be viewed in isolation. There must be in any conditional or alternative series of statements there must be a first statement that the other statements can relate to independently. The order is not significant, the order of the alternative contentions is usually driven by the intended desirability of outcome; it has nothing to with whether the assertions are true or are representations at all. They are simply a statement, we would say, of a serious of grounds of the case for the taxpayer, they are no more than that. The notice of objection, if it is considered as a whole, and in the context in which it was written by the draftsman, clearly indicates an intention on the part of the draftsman to have a series of qualified and conditional statements.

BELL J: The notice of objection is submitted to the ATO with a view to inviting the commissioner to withdraw the assessment earlier made and issue an amended assessment favourable to the taxpayer, is that not right?

MR GRACE: That is correct, your Honour, but there is an additional part of that, if I may say, and that is this. The taxpayer bears the burden and onus of proof of satisfying the commissioner that the statements contained within the grounds can be borne out. It is not the commissioner simply accepting holus-bolus what the taxpayer may say, and if you look at this document particularly there are so many alternatives and contingencies that are apparent on the face of the document that it cannot amount, we would say, to a representation in paragraph 4b or anywhere else within that document, that is, a representation at law that would be contrary to the criminal law.

BELL J: Does that mean that the notice was inadmissible? If it was not capable of supporting a conclusion that it contained an assertion of fact in paragraph 4b, what was the purpose of its admission?

MR GRACE: Well, we would say that – I mean, that was not a point that was argued, I must concede, either in the court below or in the trial court - - -

BELL J: Might that be because it was a matter of fact whether the jury were satisfied beyond reasonable doubt that notwithstanding the form of the document, the statement in 4b was a statement amounting to a representation that “the total amount of income earned, received or derived by the Trust” had been properly and accurately recorded in its weekly sales sheets?

MR GRACE: We say that is obviously how the jury came to its conclusion beyond reasonable doubt. However, what we say is that there is an anterior question, and that anterior question is whether what is stated in 4b can amount in law to a representation.

BELL J: If it could not the document should not have been in.

MR GRACE: Yes, that is probably correct, your Honour. At the conclusion of the Crown case there was a lengthy application to the effect that there was no case to answer because what was contained in 4b could not, on the evidence that was presented, amount to a representation contrary to the criminal law. Perhaps, your Honour, the matter might become more clear if I take your Honours to the second contention, and that is perhaps highlighted by the decision of this Court in the case of Laws [1990] HCA 31; (1990) 170 CLR 70, and could I take your Honours to page 85 in Laws? Your Honours may recall that this was a case involving an allegation by Laws that the Australian Broadcasting Tribunal was biased against him, and one of the matters relied upon was a defence that was pleaded by the tribunal and the contents of that defence. At page 85 Chief Justice Sir Anthony Mason and Justice Brennan said this at about the seventh line with the sentence commencing with the word “First”:

First, as the defence was not verified on oath and was not required to be so verified, it does not amount to an assertion of belief in the correctness of the facts pleaded.

Then there is reference to the 1848 English decision of Boileau v Rutlin and a quotation from Baron Parke is set out there and Baron Parke said this:

“It would seem that [bills in equity], as well as pleadings at common law, are not to be treated as positive allegations of the truth of the facts therein, for all purposes, but only as statements of the case of the party, to be admitted or denied by the opposite side, and if denied to be proved, and ultimately submitted for judicial decision.”

Then if I could move to page 86 and to the penultimate paragraph on page 86 commencing with the words, “The suggestion”. There their Honours say this:

The suggestion that pleadings should be treated in the same way as any other form of admission fails, in our view, to take account of the function and object of pleadings, when they are not required to be verified, in outlining the party’s case and defining the issues to be tried. Especially is this so in the case of pleading defences. A defendant is entitled to put a plaintiff to proof of his or her cause of action and to raise alternative matters of defence which may possibly answer the plaintiff’s claim, without asserting in an absolute sense the truth or correctness of the particular matters pleaded. Accordingly, we do not regard the defences filed by the Tribunal as constituting admissions on the part of the Tribunal or, for that matter, on the part of its individual members.

Now, three years later, in the case of Jamieson and Brugmans v The Queen [1993] HCA 48; (1993) 177 CLR 574, at page 578, Justices Deane and Dawson said at the bottom of the page:

The sole question in each appeal, therefore, can be formulated in abstract terms.

Could I just digress for a moment, your Honour, to indicate that what was at issue in this case was whether a statement made by an insured person to an insurer in a claim for damages for personal injury, which contained false statements of fact, whether that could amount to attempting to dishonestly obtain money by deception? If I could continue with the quotation from Justices Deane and Dawson:

It is whether the mere service upon a defendant, by (or with the authority of) the plaintiff, of an unverified statement of claim filed in an action for damages for personal injury can of itself constitute the actus reus of the criminal offence of attempting to obtain money by deception if, to the knowledge of the plaintiff, the statement of claim contains a false material assertion.

Then if I could move down about eight lines:

It is that, in the absence of contrary provision in some applicable statutory instrument or rule of court (and none has been relied upon in these appeals), the mere service upon a defendant of an unverified statement of claim does not, at least in so far as criminal liability is concerned, of itself constitute an express or implied positive representation by the plaintiff that the individual allegations of fact or of law which the statement of claim contains are objectively true or correct. Indeed, to characterize the factual assertions in a plaintiff’s unverified pleading as positive representations of the truth of their content would be to misunderstand or ignore the traditional nature and function of a declaration, statement of claim or bill. The traditional nature of such an unverified pleading was not that of a representation or warranty of the objective accuracy of the assertions of fact which it contained. It was that of a written identification and communication of the extent of the plaintiff’s claim. Its traditional function was not an evidentiary one. It was to identify the issues of fact which would, in the absence of admissions, arise for determination at the trial by defining the outer limits within which the plaintiff’s case would be confined.

Then if I could go to page 580, in the middle of the page, there is a reference to the “unexaminable brothers-in-law Doe and Roe” and “their distant cousin Goodtitle”, and then after that, their Honours say:

the development of both the common law and the jurisdiction of common law courts was, to a significant extent, dependent upon practices and fictions which were completely inconsistent with the proposition that the plaintiff in a common law action personally warranted, under pain of liability for fraud or misrepresentation, the accuracy of the various assertions of fact contained in her initiating process or pleading.

Then there is footnote (32), and halfway down that footnote you will see after the reference to Blackstone, their Honours say:

And note the commonly accepted practice of including alternative claims or assertions of fact in a declaration or other unverified pleading such as a statement of claim –

and then their Honours go on to say –

It follows that the mere service upon the G.I.O. as defendant of an unverified statement of claim containing an intentionally false assertion about the identity of the driver did not, of itself, constitute the making of a fraudulent representation sufficient to constitute the actus reus of the offence with which each appellant is charged.

That is why we say that statements of grounds in a notice of objection - - -

HEYDON J: What about the next couple of sentences? Justices Deane and Dawson say that “there could be circumstances in which a statement of claim” might be - - -

MR GRACE: Yes, they are talking there about a course of conduct that is followed by a defendant, or a plaintiff as the case may be, where the filing of a statement of claim is part of another offence, or part and parcel of a conspiracy or an extortion or a course of action that involves numerous other acts or actus reus, so that it could not solely be related to what is contained within the statement of claim, but here the Crown’s case was simply what was contained within 4b. We say that statements in notices of objection in the manner in which they were described and set out in this notice should be treated as akin to pleadings because they define the outer limits – to use the words spoken about in Jamieson – within which the taxpayer’s case would be confined. The existence of section 8K of the Taxation Administration Act, in our submission, does not convert the statements in the notices of objection into a form or version of verified pleading and that is because there is no requirement for a taxpayer to verify on oath that the facts upon which each ground is stated are true. An income tax return is a prime example of a declaration as to truth and there is no declaration on this document. Those are the matters. I notice my time is up.

HEYDON J: Mr Game, we need not trouble you.

In our opinion, there are insufficient prospects of success in the appeal were special leave to be granted. Accordingly, the application for special leave is to be dismissed.

Please adjourn the Court to 2.15 pm on Monday, 22 August 2011, in Canberra.

AT 12.50 PM THE MATTER WAS CONCLUDED