The Federal Court has held that the Taxation Commissioner Chris Jordan be allowed access to information that one of his Second Commissioners was holding as “protected information” about the tax affairs of Sydney accountant Vanda Russell Gould.
Gould had claimed he was defamed in comments made by Jordan at the National Press Club in July 2017 in a speech delivered not long after his re-appointment as FCT. A part of his speech centred on actions of money laundering, tax evasion and insider trading that Gould claimed were identifiable as referring to himself, and so he commenced legal proceedings.
Commissioner Jordan later applied to ATO Second Commissioner Andrew Mills (who he had himself appointed to manage “protected information” for the ATO) to release documents that were protected under s 355-30 in Schedule 1 of the Tax Act to help with Jordan’s defence. This was refused — hence the latest Federal Court (FC) case.
The defamation case is another twist in a series of long-running legal stoushes between Gould and the ATO, some of which started under the now expired Project Wickenby. In the latest case, Mills was named the “first respondent”, with the second respondent being Gould.
In the latest decision, which orders the release of relevant information to Jordan and was recorded by the Federal Court, the court re-stated the part of Jordan’s speech that got him into hot water, as follows:
“So, you know, it intrigues me – if I can give another example – this Hua Wang Bank case. It was a Wickenby case. It involved one promoter with over $350 million we’ve collected. They formed this Samoan bank and did all these transactions to hide profits. And you have the principal of that scheme appearing before the House of Reps Committee on tax disputes, giving evidence and being cited, saying how difficult and awful, and the Tax Office (sic).
“You had his barrister appearing on one of the major radio stations in Sydney saying they’re like the Gestapo, the whole lot should be sacked and sent out, and the Federal Court says, it was the most disgraceful behaviour they’d ever seen, they referred the matter for money-laundering, insider trading and tax evasion of the worst kind, confirmed by the Full Federal Court, confirmed by the High Court.
“So here’s one – so, they are actually going to have the gall to appear before an inquiry to say how bad we are in terms of the way we handle disputes. The other side is the Court found it was the most disgraceful behaviour they’ve ever seen involving money-laundering, tax fraud and insider trading of Australian shares. So, you know, sometimes there’s two sides to a story, and I can’t always tell the other side.”
Gould in his defamation case alleges that listeners would have understood Jordan’s reference to “the principal of that scheme” to be a reference to himself and would have understood Jordan’s words to convey defamatory meanings.
The Federal Court’s Justice White said that the Taxation Commissioner’s role would necessarily include making public statements about the enforcing of the tax law. “I am willing to accept, for the purposes of this judgment, that the functions of the Commissioner may extend to the promotion of public confidence in the administration of the taxation laws for which he or she is responsible. I am also willing to accept that the Commissioner’s promotion of public confidence function may extend to the education of taxpayers, and those advising them, about the practices adopted by the ATO in administering and enforcing the taxation laws, to highlighting the consequences of non-compliance, and to making public statements (including speeches) about those matters.”
White added that Jordan’s solicitors were required to request Second Commissioner Mills with access to the relevant materials “because Mr Jordan had delegated to him the Commissioner’s powers and functions under the TA Act, the Income Tax Assessment Act 1936 (Cth) (the ITAA 1936) and the Income Tax Assessment Act 1997 (Cth) (the ITAA 1997) with respect to the making of any decision on the disclosure of ‘protected information’ concerning Mr Gould in relation to the Defamation Proceedings.”