Reynolds, David Malcolm v The Deputy Commissioner of Taxation [1984] FCA 297

Reynolds, David Malcolm v The Deputy Commissioner of Taxation [1984] FCA 297

Paragraph 252(1)(j) of the Income Tax Assessment Act 1936 did not authorize the taking of criminal proceedings against Reynolds, as director, for Fairlin Pty Limited’s default in remitting tax instalment deductions. Criminal liability can only be imposed if the statute specifically and clearly imposes relevant obligations on the director, which was not the case. As such, convictions under s.221F(11) against Reynolds could not stand, and the orders for payment under s.21B of the Crimes Act 1914 were also invalid given the absence of a valid conviction.

Parties
Appellant/respondent: David Malcolm Reynolds; Respondent/appellant: Deputy Commissioner of Taxation; Company: Fairlin Pty. Limited
Jurisdiction
Australia
Judgment Date
26 September 1984
Procedural Posture
Appeal / Judgment on Appeal From the Supreme Court of the Australian Capital Territory
Outcome
Appellant’s appeals allowed; convictions and penalties against David Malcolm Reynolds quashed and set aside. Deputy Commissioner's appeals dismissed.
Legal Topics
Directors' Liability, Offences by Companies, Tax Collection Obligations, Interpretation of S.252(1)(j) Income Tax Assessment Act 1936, Criminal Liability for Company Defaults
Income Tax Law Criminal Law Statutory Interpretation Directors' Liability Offences by Companies Tax Collection Obligations Interpretation of S.252(1)(j) Income Tax Assessment Act 1936 Criminal Liability for Company Defaults

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Parties

David Malcolm Reynolds

Appellant/respondent

Deputy Commissioner of Taxation

Respondent/appellant

Fairlin Pty. Limited

Company

Procedural Posture

Appeal / Judgment on Appeal From the Supreme Court of the Australian Capital Territory

Legal Issues

  1. 1 Whether para.252(1)(j) of the Income Tax Assessment Act 1936 authorises the taking of criminal proceedings against a director or officer of a company in respect of the company's default in remitting amounts deducted from employees’ wages to the Commissioner of Taxation.
  2. 2 Whether a director or officer can be made personally liable to pay amounts deducted by the company but not remitted.
  3. 3 Whether s.21B of the Crimes Act 1914 empowers the court to order a director or officer to pay the outstanding tax instalment deductions.

Ratio Decidendi

Paragraph 252(1)(j) of the Income Tax Assessment Act 1936 did not authorize the taking of criminal proceedings against Reynolds, as director, for Fairlin Pty Limited’s default in remitting tax instalment deductions. Criminal liability can only be imposed if the statute specifically and clearly imposes relevant obligations on the director, which was not the case. As such, convictions under s.221F(11) against Reynolds could not stand, and the orders for payment under s.21B of the Crimes Act 1914 were also invalid given the absence of a valid conviction.

Court Disposition

Appellant’s appeals allowed; convictions and penalties against David Malcolm Reynolds quashed and set aside. Deputy Commissioner's appeals dismissed.

Orders

  • The appeals by David Malcolm Reynolds are allowed.
  • The orders of the Supreme Court of the Australian Capital Territory as dismissed the appeals and confirmed the convictions and penalties set aside.