CATCHWORDS Income Tax - Commissioner's powers of access - access to banking records concerning the applicant's affairs - records sought in course of investigation as to assets of companies in liquidation owing large tax debts - whether access sought for any purpose of the Income Tax Assessment Act 1936 - whether recovery of tax a purpose of the Act - information obtained by taxation officers communicated to liquidator for use in public examination - whether communication of the information in the performance of any duty as an officer Income Tax Assessment Act 1936, ss 16, 263 Corporations Law, s 478 Industrial Equity Ltd v Deputy Commissioner of Taxation (1990) 170 CLR 649 discussed Canadian Pacific Tobacco Co. Ltd v Stapleton (1952) 86 CLR 1 applied O'Reilly and Others v The Commissioners of the State of Victoria and Others (1982-1983) 153 CLR 1 Re W. Carter Smith; ex parte The Commissioner of Taxation (1908) 8 SR (NSW) 246 James v Deputy Commissioner of Taxation (1957) 97 CLR 23 Saunders v Federal Commissioner of Taxation (1988) 88 ATC 4349 Consolidated Press Holdings Ltd & Others v Federal Commissioner of Taxation and Anor (1995) 95 ATC 4231 Matter No. SG 57 of 1995 SIMIONATO HOLDINGS PTY LTD v THE COMMISSIONER OF TAXATION OF THE COMMONWEALTH OF AUSTRALIA VON DOUSSA J DARWIN (heard in Adelaide) 7 NOVEMBER 1995 IN THE FEDERAL COURT OF AUSTRALIA ) ) SOUTH AUSTRALIAN DISTRICT REGISTRY ) ) GENERAL DIVISION ) No. SG57 of 1995 BETWEEN: SIMIONATO HOLDINGS PTY LTD Applicant AND: THE COMMISSIONER OF TAXATION OF THE COMMONWEALTH OF AUSTRALIA Respondent MINUTES OF ORDER JUDGE MAKING ORDER : VON DOUSSA J PLACE : DARWIN (heard in Adelaide) DATE : 7 NOVEMBER 1995 THE COURT ORDERS THAT: The application for order of review be dismissed with costs. NOTE: Settlement and entry of Orders is dealt with by Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA ) ) SOUTH AUSTRALIAN DISTRICT REGISTRY ) ) GENERAL DIVISION ) No. SG57 of 1995 BETWEEN: SIMIONATO HOLDINGS PTY LTD Applicant AND: THE COMMISSIONER OF TAXATION OF THE COMMONWEALTH OF AUSTRALIA Respondent REASONS FOR JUDGMENT Coram: von Doussa J. Place: Darwin (heard in Adelaide) Date : 7 November 1995 This application seeks orders of review under the Administrative Decisions (Judicial Review) Act 1977 ("the AD(JR) Act") of decisions and conduct of the respondent, the Commissioner of Taxation, and his officers Geoffrey Ivan Merritt ("Mr Merritt") and Bruce Lindsay Harper ("Mr Harper"). The impugned decisions and conduct led to the respondent by the two officers accessing documents relating to the affairs of the applicant in the possession of the applicant's bankers, the Commonwealth Bank of Australia ("Commonwealth Bank") and Monte Paschi Australia Ltd ("Monte Paschi") on various dates in July and August 1995, and then communicating certain of the information contained in those documents, and providing copies of some of them, to Peter Ivan Macks ("Mr Macks") in his capacity as liquidator or provisional liquidator of nine companies which had hitherto been members of the Emanuel Group of Companies for use by him and his counsel, Mr Douglas Meagher QC, in the Supreme Court of South Australia in the conduct of examinations of former officers of those companies, and others, pursuant to Part 5.9 of the Corporations Law. The Statement of Reasons given pursuant to s.13 of the AD(JR) Act by Mr Merritt for the decisions, each made by him, which lead to these events indicate that the respondent and his officers in accessing the documents in the possession of the two banks purported to act in exercise of the power contained in s.263 of the Income Tax Assessment Act 1936 ("the ITA Act"). Section 263(1) relevantly provides: "263(1) 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." It is contended on the applicant's behalf that the purposes for which the respondent and his officers accessed the documents held by the two banks were not within the statutory requirement that access be "for any of the purposes of the Act". Information acquired by an "officer" (as defined) respecting the affairs of any other person disclosed or obtained under the provisions of the ITA Act is subject to the secrecy provisions of s.16 of the ITA Act. Subsection 16(2) provides: "16(2) Subject to this section, an officer shall not either directly or indirectly, except in the performance of any duty as an officer, and either while he is, or after he ceases to be an officer, make a record of, or divulge or communicate to any person any information respecting the affairs of another person acquired by the officer as mentioned in the definition of 'officer' in subsection (1)." It is further contended on the applicant's behalf that the disclosure by Mr Merritt of information gained by him either directly, or through Mr Harper, in purported exercise of power under s.263(1) was communicated to Mr Macks and Mr Meagher in contravention of s.16(2) as the communication by him was not "in the performance of any duty as an officer". When these proceedings were commenced on 28 August 1995 the applicant and its advisers did not have the advantage of the disclosure of facts and reasons subsequently made in Mr Merritt's Statement of Reasons. The application and supporting affidavit sought to challenge the decisions and conduct of the respondent and his officers on numerous grounds. On 19 September 1995 Branson J by interlocutory injunction restrained the further use and disclosure by the respondent of information obtained from the banks pending trial, and gave directions. The provision of the Statement of Reasons and affidavits by Mr Merritt, and by other affidavits filed on the respondent's behalf under those directions have served to confine the issues. At trial, save on one issue, the applicant did not seek to challenge the factual material deposed to by the respondent's witnesses or the findings on material questions of fact made by Mr Merritt. The only grounds argued in support of the application for an order of review were the two grounds which I have already stated arising under ss.263(1) and 16(2) of the ITA Act. All other grounds advanced in the application (as amended), whilst not supported by argument, were not unequivocally abandoned. In my opinion the other grounds found no support in the facts made known by the Statement of Reasons and by the respondent's affidavits, and I do not propose to make further reference to them. The factual background against which the decisions and conduct now under challenge occurred is complex. The following is a brief outline. A more complete picture is given in Mr Merritt's Statement of Reasons. The Emanuel Group of Companies comprised close to 70 companies. On 29 January 1991 seven of those companies were placed into voluntary liquidation by the members and Timothy James Cuming ("Mr Cuming") was appointed liquidator. On 20 November 1993 and 1 December 1993 income tax assessments were issued by a Deputy Commissioner of Taxation to various companies in the Emanuel Group. As at March 1995 the amount of tax due and payable to the Commonwealth by those companies was approximately $50 million. On 9 January 1995 at the request of the Commonwealth as a creditor, one of the seven companies in the members' voluntary winding up, Emanuel Investments Pty Ltd ("Emanuel Investments"), was converted to a creditors' voluntary liquidation and Mr Macks replaced Mr Cuming as liquidator. On 23 March 1995 45 companies in the Emanuel Group, including those with a taxation debt due and payable, went into administration under Part 5.3A of the Corporations Law, and Bruce James Carter ("Mr Carter") was appointed administrator. On 29 March 1995 Hendon Industrial Park Pty Ltd ("Hendon"), another company in the group, went into administration and Mr Carter was appointed administrator. Mr Merritt states as a finding on a material question of fact: "The affairs of each of the companies in the Emanuel Group of Companies appeared interwoven as amongst other matters, one company under administration acted as banker for the whole group". That the affairs of the companies were interwoven appeared also from the fact that at the various meetings of creditors of the companies under administration which were attended by Mr Merritt, the administrator admitted Lorelle Joy Tomkinson ("Mrs Tomkinson") (formerly the wife of Giuseppe Emanuele) as a creditor in the sum of $3,172,174.00 for each company for the purpose of voting at each of the meetings. The proof of debt for one company stated that the claim was in respect of companies of the "Emanuel Group" concerning "marriage settlement per deed" and was "unsecured". Giuseppe Emanuele was a director of each of the companies under administration. He is also the father of Rocco Emanuele, another of the directors. In view of the size of the debt claimed by Mrs Tomkinson, and because the debt was claimed against each company the respondent decided to investigate the debt. On 22 May 1995 the administrator published his report to creditors pursuant to s.439A of the Corporations Law. The report disclosed the existence of a document called a Deed of Forbearance and Release ("DOFR"). The report, however, did not release the DOFR to creditors, and it was not released at subsequent meetings of creditors, as the administrator claimed the DOFR was the subject of a confidentiality agreement, which the parties would not waive. On 24 May 1995 Hendon was placed in provisional liquidation by order of the Federal Court of Australia, and Mr Macks was appointed provisional liquidator. The order was made on the application of the Commonwealth which claimed as a creditor in respect of approximately $3 million unpaid tax. Meetings of creditors of the companies under administration were held on 30 May 1995, 31 May 1995, 2 June 1995, 21 June 1995 and 6 July 1995. At the meetings a deed of company arrangement was proposed. The arrangement proposed was to be supported by a payment to be received under the DOFR in the sum of $650,000. The moneys available to support the proposed arrangement were, it seems, to be shared by way of equal dividend between all the unsecured creditors of the companies in the group. The anticipated dividend payable to the Commonwealth on its debts totalling approximately $50 million varied with the administrator advising revised proposed dividends as one meeting followed another, as follows: Proposed Dividend Date Dividend (cents/$1) Original Report 22/5/95 0.30920 Revised Report 30/5/95 0.23236 Revised Report 13/6/95 0.19294 Revised Meeting 21/6/95 0.18206 Revised Meeting 6/7/95 0.12113 The low proposed dividend was considered by the respondent to be a "derisory dividend" to the Commonwealth. There was concern also about the genuineness of a number of creditors including Mrs Tomkinson. It was decided that it would be in the best interests of the Commonwealth for the companies to be placed in liquidation and the Commonwealth proposed accordingly at the meetings of creditors. Except in the case of one company, Establishment Holdings Pty Ltd ("Establishment Holdings"), resolutions proposed to wind up each of the companies in which the Commonwealth was a creditor for tax, was not carried because a group of other persons admitted to vote as creditors (including Mrs Tomkinson) voted as a block to defeat the resolution. In the cases of those companies where the resolution to wind up failed, a resolution that the company enter into the proposed deed of company arrangement was carried in 16 companies, and was not carried in 7 companies. As it was the Commonwealth's objective to wind up each of the tax debt companies in the Emanuel Group, steps were taken by the respondent on behalf of the Commonwealth to have those 7 companies compulsorily wound up in insolvency; and orders accordingly were made on 13 and 20 June 1995 and Mr Macks was appointed liquidator in each case. At this point Mr Macks was already the liquidator of Emanuel Investments, and the provisional liquidator of Hendon. Enquiries conducted by Mr Merritt and Mr Harper in April and May 1995 disclosed that Mrs Tomkinson granted a mortgage in 1994 for $700,000 on a property registered in her name in South Australia, and that in April 1995 a payment of $700,000 on a mortgage on the same property had been made by the applicant Simionato Holdings Pty Ltd. A search of this company showed its directors to be Robert Simionato and Alesandro Caruso, two nephews of Giuseppe Emanuele. On 8 May 1995 Mr Macks had informed creditors at a meeting of creditors of Emanuel Investments that he proposed to conduct an investigation into the affairs of the company utilising the public examination procedure in Part 5.9 of the Corporations Law and sought an indemnity from creditors. The Commonwealth agreed to indemnify Mr Macks for the conduct of the public examination on the basis that Mr Douglas Meagher, who was then acting as senior counsel for the Commonwealth in all Emanuel Group related matters, conduct the examination. Before entering into this agreement the respondent had obtained legal advice that there was no legal impediment to this course as the public examination was to be undertaken for the purpose of maximising the return to creditors including the Commonwealth, and that information obtained by use of the power in s.263 of the ITA Act could be made available to Mr Macks in accordance with s.16(2) provided it was for the purpose of maximising return to creditors. Mr Merritt regularly attended the public examinations which by July were being conducted by Mr Macks in his capacity as liquidator or provisional liquidator of the nine companies then in his control. On 13 July 1995 on the application of the respondent in proceedings in the Federal Court to set aside the deeds of company arrangement entered into by those companies whose meetings of creditors had resolved in favour of the proposed arrangement, it was ordered that the DOFR be released to parties to the litigation. The document confirmed information already learnt by Mr Merritt from other enquiries that the DOFR had been executed on 17 March 1995, and that the parties were companies comprising the EFG Group of the one part and 29 companies of the Emanuel Group of the other part. By 13 July 1995 28 of the 29 Emanuel Group companies were either in administration or subject to deeds of company arrangement. Under the DOFR the EFG Group was to pay $650,000 to the Emanuel Group. As the result of evidence given in the course of the examination of Giuseppe Emanuele on 19 July 1995 about a deposit of $110,000 into an account of Mrs Tomkinson, an account in the name of the applicant company with the Commonwealth Bank became known to Mr Merritt. He made a decision as an authorised officer of the Commissioner to access that account pursuant to s.263(1) of the ITA Act. This is one of the decisions now under challenge. An examination of the entries in the applicant's account at the Commonwealth Bank disclosed a deposit of $3.3m made on 17 March 1995. The coincidence of the dates between this deposit and the DOFR, and the relationship of the applicant to the Emanuel Group, caused Mr Merritt, so he says in the Statement of Reasons, to believe that information in the records of the Commonwealth Bank would be "at least relevant if not critical to the recovery of taxation revenue or the raising of further assessments". He considered the source of deposits into the applicant's account with the Commonwealth Bank was important to know. On 21 July 1995 Mr Merritt made decisions to obtain details of deposits and withdrawals on that account, and to access any loan account files held by the Commonwealth Bank regarding the applicant. Those decisions are challenged by these proceedings. Documents obtained from the Commonwealth Bank disclosed that the applicant is the trustee for the Emanuel Family Trust; that on 17 July 1995 $350,000 was deposited into the applicant's account with the Commonwealth Bank being "loan proceeds" transferred from Liddan Pty Limited (a company related to the applicant); and that Monte Paschi was agreeable to releasing two properties from a floating charge held by it which were registered in the name of Giuseppe Nominees Pty Limited (a company under administration owing a tax debt and said to be a trustee of the Emanuel Family Trust). This information led Mr Merritt to believe there must exist a loan or mortgage between Monte Paschi and an entity, possibly an associate of the Emanuel Group companies under administration, and that information contained in the banking records of Monte Paschi would be "relevant to the recovery of taxation revenue or the raising of further assessments". On about 16 August 1995 Mr Merritt made a decision to access loan account files held by Monte Paschi regarding the applicant, and did so on 21 August 1995. This decision is challenged. In the meantime on 31 July 1995 Hendon had been wound up in insolvency and Mr Macks had been appointed liquidator; and on 15 August 1995 Mr Macks had been appointed liquidator of Establishment Holdings in place of Mr Carter. Information and documents gained by Mr Merritt from the bank were communicated by him or at his direction to Mr Macks for use by him and his counsel Mr Meagher in the public examinations then being conducted. In an affidavit sworn in these proceedings on 19 September 1995 Mr Merritt deposed that the deposit of the sum of $3.3m about which he learned from the records of the Commonwealth Bank led on to enquiries that disclosed that the EFG Group had paid that sum to the applicant under a "collateral agreement" dated 17 March 1995 (the date of the DOFR). He deposed that: "The payment of the $3.3m was kept secret from the creditors". His affidavit continued: "All of the documents which I accessed or arranged to be accessed under section 263 of the Act were accessed for the purposes of the Act, that is for the purposes of collecting the tax debt owed by twenty six companies of the Emanuel Group sixteen of which were participating in the Deeds of Company Arrangement. The documents were accessed for the purpose of collecting the said tax debt whether through the public examinations conducted by the liquidator for the benefit of the creditors of the Emanuel Group of Companies or by the use of these documents otherwise, for example in the several proceedings launched in this Honourable Court by the Commonwealth (the Deputy Commissioner of Taxation) in order to attack the genuiness (sic) of the various creditors of the Emanuel Group, to overturn the Deeds of Company Arrangement, and to wind up each of the Emanuel Group of Companies that owed a tax debt." In the Statement of Reasons Mr Merritt expressed his reasons for his decisions as follows: "(72) I was concerned that the dividend proposed did not represent the full extent of the amount which could be paid in respect to the outstanding tax debt due by the companies under administration; (73) The access to banking records was necessary to ascertain the amount of the dividend properly payable by the companies in administration; (74) The documents were accessed for the purpose of assisting the collection of the said taxation debt either by use of these documents in the public examinations or in any other way. (75) The information obtained may be used in auditing the taxable incomes returned by Simionato Holdings when taxation returns are lodged for the years in question and for the purpose of auditing others." The sole issue of fact challenged by the applicant before this Court concerned Mr Merritt's findings and reasons in the Statement of Reasons that the purposes for which documents were accessed under s.263 of the ITA Act were for the purpose of "recovery of taxation revenue or the raising of further assessments". The applicant contended upon the facts disclosed to the Court, in particular that the purported exercises of power under s.263 occurred whilst the public examinations were underway, upon the statement of purpose deposed to in the passage from the affidavit set out above, and upon Mr Merritt's cross-examination on the hearing of this application, that the Court should hold that the conclusion that the purposes included "the raising of further assessments" and the purposes stated in paragraph (75) above were not supportable. It was submitted that the purpose of raising further assessments, and the paragraph (75) purposes, were no more than theoretical possibilities arising as a consequence of the respondent having come into possession of the information in the course of an investigation for another purpose, namely the recovery of revenue. I accept this submission. In my opinion the evidence shows that the purpose which motivated Mr Merritt to proceed under s.263 was the same purpose which resulted in the respondent indemnifying the liquidator against his costs of the public examination, namely to maximise the return to creditors including the Commonwealth. It appears that the possibility that information gained about the applicant and from the records at the banks might later become relevant to the raising of further assessments and audits was an afterthought, not a purpose or one of the purposes that caused the decisions and conduct under challenge to be made and put into effect. At the hearing before Branson J the application for interlocutory relief was argued on the basis that Mr Meagher was an "officer" of the respondent under the definition of that expression in s.16(1) as extended by s.16(1A) of the ITA Act because he had been briefed as senior counsel to act for the Commonwealth and the respondent in all Emanuel Group related matters; that the information gained from the banks under the purported exercise of power under s.263 had been communicated to Mr Meagher in his capacity as an officer; and that he was the officer, or one of the officers, who communicated that information to a third party, namely Mr Macks, contrary to s.16(2). However, upon the hearing before me the parties were agreed that the matter should be decided on the basis that Mr Meagher, in the conduct of the public examinations, was acting for Mr Macks; that the information was given by Mr Merritt to Mr Macks; and that Mr Macks then instructed Mr Meagher. I accept that as a proper analysis of the facts, although the outcome of the application does not turn on the difference between the two situations. The history of s.263 of the ITA Act, and general issues concerning its operation are discussed by French J in Federal Commissioner of Taxation v Citibank Limited (1989) 85 ALR 588 at 609 and following. It is well established that the statutory power in s.263 must be used bona fide for the purposes for which it is conferred: O'Reilly and Others v The Commissioners of the State of Victoria and Others (1982-1983) 153 CLR 1 at 48; Industrial Equity Ltd v Deputy Commissioner of Taxation (1990) 170 CLR 649 at 659. It is not disputed that Mr Merritt sought to use the power in good faith, but it is contended that to use the power for the purposes of collecting tax owed by those companies in the Emanuel Group which had tax debts, and in particular for the purpose of using the information gained through the exercise of that power in public examinations undertaken for the purpose of maximising the return to creditors of the companies including the Commonwealth, was not for the purposes of the ITA Act. The applicant contends that, as the title of the ITA Act suggests, the purpose of the Act is the assessment of tax; it is said that the recovery of tax is a separate matter which is not a purpose of the ITA Act, but one left to the general law. The applicant seeks to make good this proposition by drawing attention to the scheme of the ITA Act and its provisions for the assessment of tax discussed in the joint judgment of Mason CJ, Brennan, Deane, Dawson, Toohey and McHugh JJ in Industrial Equity Ltd v Deputy Commissioner of Taxation. In that case the Court had to decide whether a document, purportedly given under s.263, authorising access to premises and notices requiring production of documents relating to the affairs of a taxpayer were for any of the purposes of the ITA Act when the purpose was to conduct an audit of the taxpayer's affairs where the taxpayer had been selected for audit merely because it fell within the category of the top one hundred companies and where its selection was in that sense random. The documents and notices were upheld as valid exercises of power. In their judgment, their Honours said at 659-660: "The question whether a purpose is a purpose of the Act should be considered in the context of s.17. That section provides for the levy of tax upon the taxable income of a person derived during a year of income and it is by reference to this primary purpose that all other purposes of the Act are to be determined. Section 8 charges the Commissioner with the general administration of the Act which includes the due making of assessments to tax (s.169) and the recovery of tax payable by taxpayers pursuant to the Act (Pt VI, Div.1). Sections 263 and 264(1) each confers on the Commissioner a power to enable him to perform his functions under the Act. Therefore, the power 'must be circumscribed by reference to this purpose': Smorgon's Case (1979) 143 CLR at 535. The scope of 'purpose' in this context is illustrated by Southwestern Indemnities Ltd v Bank of New South Wales (1973) 129 CLR 512 at 519 where Barwick CJ said: 'In my opinion, an examination of the applicant's affairs to test its assertions as to residence and income source is within the purposes of the Act.' ........ The expression 'tax audit' does not appear in the Act. The Shorter Oxford English Dictionary defines 'audit' as 'make an official systematic examination of (accounts)'. Such an examination, where a taxpayer's affairs are involved, will be for the purposes of the Act where it is directed to ascertaining the taxable income of a taxpayer. The examination is relevant to the process of assessment and to the further consideration of an assessment, once raised." and later, at 661: "Inevitably, there will be a random aspect to those who are finally selected for closer examination; but the Commissioner will still be acting for the purposes of the Act so long as he is endeavouring to fulfil his function of ascertaining the taxable income of taxpayers." Having regard to the issues for decision, it is readily understandable that their Honours said that an audit "will be for the purposes of the Act where it is directed to ascertaining the taxable income of a taxpayer", and the Commissioner is acting for the purposes of the ITA Act "so long as he is endeavouring to fulfil his function of ascertaining the taxable income of taxpayers". It does not follow from these passages or the decision that the Commissioner will be acting for the purposes of the ITA Act only where the function performed by him is directed to ascertaining the taxable income of a taxpayer. As the members of the Court who joined in the majority judgment pointed out in the first of the passages set out above, the question whether a purpose is a purpose of the ITA Act should be considered in the context of s.17. That section provides not only that income tax is levied upon the taxable income derived during a year of income, but also that the income tax "shall be paid". The payment of tax is as much part of the primary purpose of the ITA Act as the levy of tax, although in Industrial Equity Ltd v Deputy Commission of Taxation this was not an aspect of the primary purpose that it was relevant to emphasise. After an assessment of tax has been made and notice thereof given to the taxpayer, the tax assessed becomes due and payable under s.204; by s.208(1) tax due and payable is a debt due to the Commonwealth and payable to the Commissioner; and by s.209(1) any tax unpaid may be sued for and recovered in any Court of competent jurisdiction by the Commissioner or a Deputy Commissioner suing in his official name. The intent of s.209 is to clothe the Commissioner or a Deputy Commissioner with power to resort to a court to assist in recovering amounts that are due and payable: Re W. Carter Smith; ex parte The Commissioner of Taxation (1908) 8 SR (NSW) 246 at 248-250. That power authorises proceedings in bankruptcy for recovery of the tax: James v Deputy Commissioner of Taxation (1957) 97 CLR 23 at 35. By parity of reasoning the power authorises proceedings to wind up a corporation for recovery of tax. The ITA Act recognises that power in Part VI Division 8, sub-division D, and Division 10. The recovery of tax is a matter included in the general administration of the ITA Act vested in the Commissioner. The making of the assessment and the recovery of tax so assessed are, so to speak, the two sides of the same coin. The effective raising of revenue under the ITA Act requires that both functions be fulfilled. If further evidence for this proposition is needed, it is to be found in the detailed provisions of Part VI - Collection and Recovery of Tax which cover some three hundred sections of the ITA Act. The collection and recovery of tax is plainly one of the purposes of the ITA Act: Saunders v Federal Commissioner of Taxation (1988) 88 ATC 4349 at 4359. In the present case the collection and recovery of tax was the purpose of the exercises of power by Mr Merritt under s.263. In my opinion the fact that Mr Merritt was seeking to gather information in an investigation aimed at "maximising the return to creditors including the Commonwealth" of the companies in liquidation does not change the purpose. When the companies were placed into liquidation, the Commonwealth became an unsecured creditor in the liquidation, along with any other unsecured creditors. Rights under the general law to otherwise recover the tax debts were superseded by the right to prove in the liquidation as an unsecured creditor, and to share in the dividends, if any, paid in the liquidation to unsecured creditors. The duty to get in assets of the companies then lay with the liquidator: s.478 of the Corporations Law, as did the obligation to investigate the existence and extent of the assets: Peter J. Keenan, "Investigation by External Administrators" (1995) 13 Company and Securities Law Journal 368 at 375. Steps taken to maximise the return to creditors including the Commonwealth by assisting the liquidator were proper and appropriate steps for the Commonwealth to improve the recovery of revenue from the liquidations. The conclusion that the exercises of power under s.263 in the circumstances of this case were for the purposes of the ITA Act gains support from the decision of the High Court of Australia in Canadian Pacific Tobacco Company Ltd and Anor v Stapleton (1952) 86 CLR 1. In that case, the Commissioner of Taxation, upon a judgment for a tax debt, had successfully petitioned for the bankruptcy of the taxpayer. The Commissioner was the only creditor who proved in the bankruptcy. In the bankruptcy, motions were successfully brought to set aside many transactions. An appeal was brought against those judgments. One judgment against a company was stayed upon an undertaking not to dispose of assets. An officer of the Commissioner as part of an investigation inquiring into transactions which were in breach of the undertakings obtained evidence in exercise of an authority given under s.263, and then provided an affidavit deposing to that evidence (which included admissions) to the trustee to use on a motion to have the company and one of its directors adjudged guilty of contempt. The admissibility of the evidence was challenged on the ground that the communication of the evidence to the trustee and to the Court was in breach of s.16(2) of the ITA Act. That challenge gave rise to the question, under the definition of "officer" in s.16(1), whether the evidence deposed to in the affidavit had been "disclosed or obtained under the provisions of this Act...". Dixon CJ expressed the view that it had been, saying at 5-6: "A very wide meaning should be given to those words, because of the policy of s.16(1). Having regard to the fact that the authority was produced, to the terms of s.232 which are very wide and to the fact that the end in view, the end result so to speak, of the proceedings is the vindication of the revenue and the collection of the sums owing, I am disposed to think that the definition is sufficiently fulfilled" Dixon CJ went on to hold (at 6) that the words "except in the performance of any duty as an officer" in s.16(2) should also receive a wide interpretation, and that the communication of the information in the affidavit provided to the trustee was not made in breach of s.16(2). An appeal to the Full High Court was dismissed. The decision is more directly relevant to the second of the grounds of challenge now raised by the applicant, but the conclusion that the requirements of s.16(1) were fulfilled because the proceedings under contemplation had the end in view of vindicating the revenue and the collection of tax supports the view that the exercises of power in the present case were for the purposes of the ITA Act, as the end in view was not materially different. In my opinion the first contention of the applicant fails. The decisions and conduct under challenge were for the purposes of the ITA Act. The second ground argued by the applicant is that the communication of the information by Mr Merritt to Mr Macks was not "in the performance of any duty as an officer". Counsel for the applicant asked rhetorically, "What duty under the Income Tax Act is the officer who handed the material to Mr Meagher performing when he handed the documents to him?" This, counsel says, is the crucial question. To adopt the words of Dixon CJ in Canadian Pacific Tobacco Co. Ltd v Stapleton the short answer, in my opinion, is "the vindication of the revenue and the collection of sums owing" by the companies in liquidation. The Chief Justice, in considering the proper interpretation of s.16(2) said at 6: "...I think that the words 'except in the performance of any duty as an officer' ought to receive a very wide interpretation. The word 'duty' there is not, I think, used in a sense that is confined to a legal obligation, but really would be better represented by the word 'function'. The exception governs all that is incidental to the carrying out of what is commonly called 'the duties of an officer's employment'; that is to say, the functions and proper actions which his employment authorizes." On appeal McTiernan J said at 10: "I agree with the construction which the Chief Justice placed upon the section. That is expressed in the judgment which his Honour delivered at the hearing of the motion, after the argument upon the objection, founded upon s.16, to the admission of Mr. Tobin's affidavit. He was an 'officer' within the meaning of s.16 of the Act. Having regard to the proceedings out of which the motion arose, the exception in sub-s.(2) of s.16 applied to the affidavit, because the furnishing of the information which it contained for use as evidence in the motion, was connected with the office in which Mr. Tobin was employed by the Commonwealth. The furnishing of this information for use as evidence in the motion was done in performance of Mr. Tobin's duty as an officer." Williams and Kitto JJ expressed their agreement with the judgment of McTiernan J. The passage from the judgment of Dixon CJ concerning the concept of "duty" in s.16(2) has been adopted and applied in later cases, most recently by Lockhart J in Consolidated Press Holdings Ltd & Others v Federal Commissioner of Taxation and Anor (1995) 95 ATC 4231 at 4234. Under that interpretation I consider that the communication of the information obtained by Mr Merritt in exercise of power under s.263 was in the performance of a duty as an officer, because maximising the return to creditors in the liquidations - of which the Commonwealth was one for large amounts - was a function and duty which Mr Merritt's employment as an officer authorised. In my opinion the application for an order of review should be dismissed with costs. I certify that this and the preceding pages are a true copy of the Reasons for Judgment of Mr. Justice von Doussa Associate: Dated: Counsel for the applicant : Mr J G Larkins QC and Mr E J Power Solicitors for the applicant : Lempriere Abbott McLeod Counsel for the respondent : Ms S Maharaj and Mr R Chryaszcz Solicitors for the respondent : Australian Government Solicitor Date of hearing : 12 October 1995