A bridge too far - the prospect of a successful misfeasance claim against the Commissioner of Taxation in the wake of Futuris

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Abstract

In Commissioner of Taxation v Futuris Corporation Ltd ,1 the High Court made numerous references to the tort of misfeasance in public office. The existence of the tort was used to lend support to the conclusion that a deliberate failure to administer the tax law according to its terms would result in the validity of a tax assessment being challengeable in judicial review proceedings. This is despite the broad restrictions on availability of judicial review of tax assessments contained in s 175 and 177 of the Income Tax Assessment Act 1936 (Cth).
It is a pertinent time, therefore, to examine the prospects of a tortious claim alleging a misfeasance in public office ever being sustained against the Commissioner of Taxation. To date there have been no successful misfeasance claims against the Commissioner or his officers.
There has also been no dedicated academic commentary on this issue. This chapter aims to break the academic silence and assess whether and to what extent the tort of misfeasance in public office might constitute a viable avenue of relief for an Australian taxpayer aggrieved by act or omission of the Commissioner or one of his officers.
Specifically, in the first section of the chapter, the general characteristics of the tort are examined with a view to demonstrating any potential applicability of the tort in the tax context. The possible attractions of the action in the tax context are identified and discussed. In the second section, attention turns to the specific elements of the tort and the challenges they would pose for a taxpayer intending to bring a misfeasance action against the Commissioner or one of his officers. In this context, the cases to date in which taxpayers have commenced misfeasance actions against the Commissioner are identified and examined.
It is concluded from this examination that the prospects of a successful misfeasance claim against the Commissioner of Taxation are exceedingly slim. Consequently, the recent comments of the High Court in Futuris are more accurately characterised as a statement of the normative rights of Australian taxpayers to argue misfeasance rather than an indication of the existence of a practically useful avenue for taxpayer relief. In practical terms, in the vast majority of taxpayer claims against the Commissioner, proving the elements of the tort will simply be a bridge too far.
Original languageEnglish
Title of host publicationInternational Tax Administration
Subtitle of host publicationBuilding Bridges
EditorsJonathan Mendel
Place of PublicationSydney NSW Australia
PublisherCCH
Chapter2
Pages43-60
Number of pages18
Edition1st
ISBN (Print)9781921701290
Publication statusPublished - 2010
Externally publishedYes
EventInternational Conference on Tax Administration - Sydney NSW Australia
Duration: 7 Apr 20109 Apr 2010

Conference

ConferenceInternational Conference on Tax Administration
CitySydney NSW Australia
Period7/04/109/04/10

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