Perkins v Commissioner of Taxation [2006] NTSC 66

PARTIES:	PERKINS, Jennifer Fay

	v

	COMMISSIONER OF TAXATION

TITLE OF COURT:	SUPREME COURT OF THE NORTHERN TERRITORY

JURISDICTION:	SUPREME COURT OF THE TERRITORY EXERCISING APPELLATE JURISDICTION

FILE NO:	JA 14 of 2006 (20502684)

DELIVERED:	30 August 2006

HEARING DATES:	30 August 2006

JUDGMENT OF:	MARTIN (BR) CJ

CATCHWORDS:

CRIMINAL LAW

Criminal Law – Appeal – Justices Appeal – guilty plea – appeal against sentence – recording of conviction sentence manifestly excessive – appeal allowed – appellant discharged without conviction

Crimes Act 1914 (Cth) s 16A, s 19B

HPS Transport Pty Ltd v Australian Taxation Office (unreported, South Australian Supreme Court, delivered 12 December 2003); applied
Commissioner of Taxation v Baffsky (2001) 192 ALR 92; followed

REPRESENTATION:

Counsel:
	Appellant:	T Aickin
	Respondent:	A Cooper

Solicitors:
	Appellant:	Central Australian Aboriginal Legal Aid Service
	Respondent:	Commonwealth Director of Public Prosecutions

Judgment category classification:	C
Judgment ID Number:	Mar0618
Number of pages:	10

IN THE SUPREME COURT
OF THE NORTHERN TERRITORY
OF AUSTRALIA
AT DARWIN

Perkins v Commission of Taxation [2006] NTSC 66
No. JA 14 of 2006 (20502684)

	BETWEEN:

	PERKINS, Jennifer Fay
	Appellant

	AND:

	COMMISSIONER OF TAXATION
	Respondent

CORAM:	MARTIN (BR) CJ

REASONS FOR JUDGMENT

(Delivered 30 August 2006)

Introduction
[1]	The appellant pleaded guilty to five counts of failing to furnish to the Commission of Taxation a GST return for five quarterly periods between 1 April 2003 and 30 September 2004.  The learned Magistrate convicted the appellant of each offence and imposed a single fine of $3550.  The appellant appealed against the sentence on the sole ground that insofar as a conviction was recorded, the sentence is manifestly excessive, but on the appeal relied upon error by the learned Magistrate as to the applicable range of penalties.
[2]	At the conclusion of the hearing of the appeal I allowed the appeal and set aside the orders of the Magistrate recording a conviction and imposing a fine.  I ordered that the appellant be discharged without conviction on entering into a bond in the amount of $1000 to be of good behaviour for a period of two years from 30 August 2006.  I now set out my reasons for allowing the appeal and imposing that penalty.
Facts
[3]	The appellant was born in Alice Springs and was aged 38 years at the time of sentence.  She attended school in Alice Springs and Adelaide to year 12 level.  For 10 years the appellant was employed in clerical and administration work and was subsequently employed by Telstra.
[4]	The appellant returned to Alice Springs after her mother died in 2000 and, after discussions with her cousin, purchased a franchise business in Alice Springs jointly with her cousin.  Each contributed $7500 and the appellant obtained a loan of $240,000.
[5]	This was the appellant’s first attempt at operating a business.  Within a week of the business opening in 2001 the appellant’s cousin walked out of the partnership and moved interstate leaving the appellant to operate the seven day a week business on her own.  The appellant found herself working from the early hours of the morning to late in the evening.  The business never made a profit and in late 2004 was sold for half the purchase cost.
[6]	For the first 12 months of the business the appellant had the support of an accounting firm that was sponsored and paid for by ATSIC.  When that support was withdrawn, the appellant engaged a local bookkeeper to take care of the accounting side of the business, including taxation responsibilities.  Until about two weeks before the complaint was issued, the appellant believed that the bookkeeper was lodging the returns required to comply with the taxation responsibilities of the business.  After becoming aware of the failures and impending prosecution, the appellant wrote to her bookkeeper requesting immediate contact so that the appellant could advise the Tax Office when the statements would be filed.
[7]	The amounts involved were not large.  The Magistrate was provided with details of three returns lodged for the quarters ending 30 June 2003, 31 December 2003 and 31 March 2004 showing a total GST debt for those three quarters of $7915 and total PAYG tax withheld of $5166.
[8]	At the time of sentence the appellant had lodged the two further returns, but there is no information as to the liabilities contained in those returns.  At the time of sentencing in March 2006 a total in unpaid liabilities and penalties of $31,848.81 was owed.  That amount may have been reduced because the business was sold at a loss.
[9]	As I have said, a total fine of $3550 was imposed.  The appellant’s capacity to pay the fine and to meet the outstanding liability to the Taxation Office is severely limited.  At the time of sentence the appellant was earning $150 per week for part time work in the operation of a crèche.
Error
[10]	The respondent admitted on the appeal that the prosecutor before the Magistrate misled his Honour in connection with the appropriate range of penalties.  Relying upon an authority concerned with failure to lodge tax returns, the prosecutor submitted that the appropriate range of penalty for the first offence was between $350 and $700 and for the subsequent offences between $800 and $1200, thereby providing a minimum penalty for the five offences of $3550.  The prosecutor later submitted that the range was a guideline and that the amount of penalty was a matter of discretion for the magistrate.  
[11]	The respondent conceded on the appeal that the Magistrate relied upon the range given by the prosecutor.  His Honour said:
“Suffice to say on the information that’s been provided to me by Mr Sheldrake the minimum fine that is available to me under the provisions of the legislation having regard to the maximum penalties provided for first, second and subsequent offences is $3550.”
[12]	Three errors are immediately apparent.  First, there is no minimum penalty prescribed by the legislation.  Secondly, the range suggested in the authorities relied upon by the prosecutor was a range applicable to failure to lodge tax returns and there is no authority suggesting an appropriate range for the offences committed by the appellant. 

[13]	Thirdly, and importantly, even if a range, often misleadingly called a “tariff”, is suggested by the authorities, the range of penalties available to the Magistrate is not confined to that range or tariff.  The range is provided by the legislation.  Suggestions in authorities as to a range or tariff are guidelines only and it is an error to approach the question of sentence on the basis that the minimum fine “available” is the bottom of the range or tariff nominated.  The minimum is determined by the statute and a guideline provided by authorities is not a prescriptive range.
[14]	It was in these circumstances that counsel for the respondent properly conceded that the sentencing discretion, including the decision to record a conviction, had miscarried.  This is not a case in which a minor aspect of a sentencing order was erroneous, but had no effect upon the balance of the sentencing order.  It was a single exercise of the sentencing discretion and it was tainted by significant error resulting in the entire sentencing discretion miscarrying.
[15]	Had it been necessary to determine whether the discretion miscarried on other grounds, I would have found in favour of the appellant.  In my opinion the Magistrate erred in his application of the authority of HPS Transport Pty Ltd v Australian Taxation Office (unreported, South Australian Supreme Court, delivered 12 December 2003) and in finding that the appellant’s case was not “unusual”.  These errors led to the ultimate erroneous finding that the discretion to discharge without conviction was not “enlivened”.
Re-sentencing
[16]	I was required to re-sentence the appellant in the independent exercise of my sentencing discretion.  The appellant submitted that I should exercise the powers contained in s 19B of the Crimes Act 1914 (Cth) and discharge the appellant without conviction.  The respondent contended that the appellant’s offending was, in substance, a “run of the mill” case which did not justify the exercise of the discretion conferred by s 19B.  
Crimes Act – Section 19B
[17]	Section 19B of the Crimes Act 1914 (Cth) provides that a court may decline to record a conviction if certain conditions are met:
“19B Discharge of offenders without proceeding to conviction
(1)	Where:
(a)	a person is charged before a court with a federal offence or federal offences; and
(b)	the court is satisfied, in respect of that charge or more than one of those charges, that the charge is proved, but is of the opinion, having regard to:
(i)	the character, antecedents, cultural background, age, health or mental condition of the person;
(ii)	the extent (if any) to which the offence is of a trivial nature; or
(iii)	the extent (if any) to which the offence was committed under extenuating circumstances;
that it is inexpedient to inflict any punishment, or to inflict any punishment other than a nominal punishment, or that it is expedient to release the offender on probation;
the court may, by order:
(c)	dismiss the charge or charges in respect of which the court is so satisfied; or
(d)	discharge the person, without proceeding to conviction in respect of any charge referred to in paragraph (c), upon his giving security, with or without sureties, by recognizance or otherwise, to the satisfaction of the court, that he will comply with the following conditions:
(i)	that he will be of good behaviour for such period, not exceeding 3 years, as the court specifies in the order;
(ii)	that he will make such reparation or restitution, or pay such compensation, in respect of the offence or offences concerned (if any), or pay such costs in respect of his prosecution for the offence or offences concerned (if any), as the court specifies in the order (being reparation, restitution, compensation or costs that the court is empowered to require the person to make or pay):
(A)	on or before a date specified in the order; or
(B)	in the case of reparation or restitution by way of money payment or in the case of the payment of compensation or an amount of costs – by specified instalments as provided in the order;
(iii)	that he will, during a period, not exceeding 2 years, that is specified in the order in accordance with subparagraph (i), comply with such other conditions (if any) as the court thinks fit to specify in the order, which conditions may include the condition that the person will, during the period so specified, be subject to the supervision of a probation officer appointed in accordance with the order and obey all reasonable directions of a probation officer so appointed.
………………………… ”
[18]	The Magistrate considered the operation of s 19B.  His Honour expressed the view that the matter was not distinguishable from the facts of HPS Transport and was of the view that the matters identified by the Judge in HPS Transport were equally applicable to the case of the appellant.  His Honour indicated his agreement with the submission on behalf of the Australian Taxation Office that the appellant’s case was not unusual and found that on the material before him his discretion was “not enlivened to proceed pursuant to s 19B”.
[19]	As I have said, in my opinion his Honour was in error in respect of these issues.  The circumstances of the offender in HPS Transport and the background to the offending were quite different and lacked the extenuating circumstances accompanying the appellant’s offending.  Secondly, in my view the Magistrate was in error in finding that the appellant’s case was not “unusual” and that the discretion was not “enlivened”.  His Honour appears to have overlooked the significance of the combination of circumstances which put the offending in a different category from the “run of the mill” case of an average business person merely relying upon an accountant.
[20]	The first step in considering the operation of s 19B is to determine whether I am satisfied of the existence of a factor or factors specified in s 19B(1)(b).  If I am so satisfied I must then determine whether it is inexpedient to inflict any punishment or to inflict any punishment than a nominal punishment, or whether it is expedient to release the offender on probation:  Commissioner of Taxation v Baffsky (2001) 192 ALR 92.
[21]	The respondent does not contest the existence of factors identified in s 19B(1)(b).  The appellant is a person of prior good character.  She is a 38 year old Aboriginal woman who has never previously offended against the law.
[22]	In addition, the appellant’s antecedents and the extent to which the offence was committed under extenuating circumstances are relevant at this first stage.  The appellant had no prior experience in business.  This was her first attempt at operating a business.  At an early time she found herself without a partner and sponsored financial services were withdrawn.  The appellant then secured the services of a bookkeeper in an endeavour to meet with her obligations.  She worked very long hours seven days a week and in difficult and stressful circumstances.  It was in this context that the appellant relied entirely upon her bookkeeper and was, until shortly before the summons was issued, unaware of her defaults.
[23]	The factors to which I have referred are also relevant at the second stage of the process when determining the question of “expediency” or “inexpediency”.  In addition, as discussed in Baffsky, I am required to have regard to the matters identified in s 16A of the Crimes Act (Cth) including the appellant’s plea of guilty and the prospect of rehabilitation.  In this process I must also have regard to issues such as general deterrence and punishment.
[24]	For the reasons I have identified, in my opinion the appellant’s offending was not the run-of-the-mill case and I was satisfied that having regard to all the matters I have identified it was expedient to release the appellant on probation.
__________