Tax Commissioner Chris Jordan is worried that if he does not get the protected tax documents, it may open the floodgates for litigation against him. (ABC News: Mark Moore)
Tax Commissioner Chris Jordan says he should be able to access confidential taxpayer information in order to fight a defamation case against him, because if he doesn’t, other individuals in dispute with the Australian Taxation Office could launch lawsuits against him.
- ABC News has obtained court documents in relation to ATO boss Chris Jordan’s decision to take his own department to court
- Mr Jordan wants to get access to protected taxpayer information so he can mount a defence in a defamation case
- Accountant Vanda Gould commenced defamation proceedings against Mr Jordan in 2017 over comments made at the National Press Club
ABC News has obtained court documents in relation to Mr Jordan’s decision to take his own department to court as part of his defence in a defamation case brought against him by Sydney accountant Vanda Gould.
Mr Gould commenced defamation proceedings against Mr Jordan in 2017.
Mr Gould is claiming that, in comments Mr Jordan made at the National Press Club in Canberra on July 5 that year, referring to the “Hua Wang Bank” litigation, that Mr Jordan alleged Mr Gould had engaged in money laundering, insider trading and tax evasion of the “worst kind”.
Mr Jordan is now taking his deputy, second commissioner Andrew Mills, to court in a bid to access confidential documents, protected under the Tax Act, which could help him fight the lawsuit brought by Mr Gould.
In his affidavit Mr Jordan argued the Australian public was more likely to adhere to tax laws if the Tax Commissioner of the day can educate “the public about the adverse consequences for taxpayers that do not comply with those laws”.
Mr Jordan also warned that if he is denied access to confidential documents, which he believes can assist him in mounting a defence, then he may be forced to refrain from publicly speaking about ATO court wins.
He said such a hesitancy on his part could have a “detrimental impact on the administration of Australia’s taxation laws”.
“I would not be able to effectively discharge my role,” he said.
“I consider that this may open the door for other persons involved in taxation disputes to commence and prosecute other litigation against me for a perceived strategic advantage.”
Mr Jordan says he could refrain from public engagements
In August and September last year, Mr Jordan asked for access to the confidential documents, which he believes will help him in his defence.
But in November Mr Mills declined his request, saying in a letter, “I am not satisfied it would be prudent to permit disclosure of protected information in the absence of a judicial determination”.
Mr Jordan said in his affidavit that the disclosure of protected information in this case is warranted.
“If the documents were not accessible by me, I would perceive it as a not insignificant risk, in any future public commentary, for me to call on any examples, of the conduct of taxpayers who broke the law and the adverse consequences for them,” he said.
“The risk would be of exposure to other defamation proceedings in which I would not be able to rely on any protected information in control of the ATO to properly defend myself.”
He also warned there was a risk, that in future public engagements, he would “hesitate to refer to any such specific examples, even if those examples were the subject of adverse findings in published decisions of the courts”.
Mr Jordan’s counsel has also argued that allowing Mr Mills to disclose confidential taxpayer information, which is an offence under the law, should be allowed in this instance.
It, the counsel argued, would “promote transparency, accountability and integrity of the administration of the taxation laws and maintain public confidence” in the ATO.
Press Club speeches not part of the official job: QC
But prominent barrister, Geoffrey Kennett SC, who is not a direct party to the court case but has offered an expert insight, has argued against confidential taxpayer information being released so that Mr Jordan can fight his defamation case.
In a document lodged with the court, he said Mr Jordan was not performing his “duties as a taxation officer” when he gave the National Press Club address.
“If it were, it would follow that the Commissioner could lawfully make public protected information in relation to any taxpayer to the extent that he deemed it desirable in encouraging compliance with the tax laws,” Mr Kennett said.
He noted Mr Jordan sees it as important for him to promote compliance by taking on a public advocacy role, and that he believes has had the support of the executive government in this, but said he “cannot expand the statutory scope of his duties and functions”.
“Public statements by the Commissioner might not necessarily be desirable if they included defamatory statements about individuals, and those individuals could sue without the threat of their private tax affairs being disclosed,” Mr Kennett said.
“Thus, while no criticism is made here of the National Press Club Address, any reliance on a broader assertion concerning the desirability of such statements is problematic.”
Mr Kennett also said Mr Jordan’s public advocacy role is not sufficient in itself to affect the scope of the statutory concept of the Second Commissioner’s [Mr Mills] duties as a taxation officer.
He said “administering Australia’s tax laws” involved making decisions under particular provisions and enforcing particular debts, “rather than capturing anything which can be seen to assist the administration of tax laws in a general sense”.
“Defamation proceedings have a much less concrete relationship to any taxation law,” he said.
“They do not involve, for example, the interpretation of any tax law; any claim relying on a tax law; the legal effect of anything purportedly done under a tax law; or any cause of action which if successful would assist the collection of tax.”
But in a response, Mr Jordan’s counsel argued that the expression ‘related to taxation law’ needed to be “broadly construed” and it was “overly simplistic” to characterise defamation proceedings as out of scope.
“For example, if the applicant (Mr Jordan) wishes to rely on the defence of truth in the defamation proceedings, those proceedings may well involve the interpretation of, or legal effect of, taxation laws concerning ‘money laundering’, ‘tax fraud’ or ‘insider trading’,” the response said.
Making the ATO more ‘accessible’
Mr Jordan, a former cop and partner at big four accounting firm KPMG, was appointed the top job at the Australian Taxation Office in January 2013 by the then Labor Treasurer Wayne Swan.
In April 2017, then treasurer Scott Morrison announced Mr Jordan’s term as Commissioner of Taxation would be extended until April 30, 2024.
In his affidavit Mr Jordan notes that at around the time of his appointment, he had discussions with Mr Swan and former Treasury Secretary Martin Parkinson, which left him with a perception that they were “eager for me to work with the ATO staff to make the office more accessible, including by developing and improving its public communications with stakeholders”.
Mr Jordan then refers to numerous examples of media coverage, in the months and years after he was appointed, in which he discussed what he set out to do as Tax Commissioner, including his mission to raise the ATO’s public profile.
He also noted that “it has been my practice as Commissioner on occasion to issue a media statement about significant litigation or decisions in which the ATO has been involved”.
The defamation case follows a long-running legal battle between the ATO and Mr Gould.
Mr Gould and other business associates have previously been the focus of the now-defunct Wickenby Taskforce, which was famously behind the pursuit of wealthy individuals including Australian actor Paul Hogan.
The court battle Mr Gould lost
In November, 2016, Mr Gould lost a battle against the ATO in the High Court, when a series of companies he was associated with — and which were incorporated in the Cayman Islands, Bahamas and Samoa — were hit with a $16 million tax bill.
The High Court had upheld earlier judgements by the Full Court of the Federal Court and the Federal Court against Mr Gould.
The High Court also referred to the ruling, handed down in December, 2014, by Justice Nye Perram, who had sent copies of the case decision to authorities including the Commonwealth Director of Public Prosecutions, the Australian Securities and Investments Commission and the Australian Federal Police.
“The facts I have found strongly suggest widespread money laundering, tax fraud of the most serious kind and, possibly in some instances, insider trading. The conduct revealed in this case is disgraceful,” Justice Perram said in his judgment.
Mr Jordan said in his affidavit “having regard to that paragraph of the judgement in particular” that “the Hua Wang Bank matter struck me as a significant example of litigation that was necessary for the ATO to pursue in order to send a strong message to the taxpaying community that there will adverse consequences for those taxpayers who engage in unlawful activities”.
Mr Jordan said he believed it was “in the public interest” to make his views about the case known in a public forum that was broadcast on the ABC, and covered by about 24 working journalists.
Mr Gould has previously complained about his treatment at the hands of the ATO.
He told a 2014 parliamentary inquiry into tax disputes that the agency can issue someone with tax bills and that it can take “sometimes years before a taxpayer has an opportunity of having his grievance heard by a court or tribunal”.