In doing so, the court dismissed the trustee’s argument that the failure was due to his longstanding accountant’s failure to lodge the returns and that the sentence would serve no purpose with respect to either personal or general deterrence.
In the case of Schmidt v The King [2026] SASC 101, 1 July 2026 the appellant ,Herbert Hans Schmidt, was appealing against a decision that recorded a conviction after he failed to comply with administrative obligation, under section 8C(1)(a) of the Taxation Administration Act 1953, and a fine of $3891 as a result of not lodging SMSF annual returns (SAR) for the 2021, 2022 and 2023 financial years.
The facts of the case were that Schmidt in the financial years 2020-21, 2021-22 and 2022-23, failed to submit the annual income tax return of a self-managed superannuation fund maintained by him.
He had previously engaged the services of a registered accountant to lodge the tax returns of the SMSF. The accountant failed to do so on these three occasions. Subsequently, Schmidt pleaded guilty to offences contrary to s 8C(1)(a) of the Taxation Administration Act 1953 (Cth) and was sentenced by a Magistrate to pay a fine of $3,891.00 and a conviction was recorded.
Schmidt acknowledged that the failure to file the annual income tax returns for a SMSF that he maintained is an offence of absolute liability. However, he stated he should have been discharged without conviction or penalty.
He argued the magistrate erred in applying the test under s 19B of the Crimes Act 1914 (Cth) by failing to take into account he could not have completed the outstanding tax returns himself, that the reasons for imposing the conviction were inadequate, and that the sentence imposed was manifestly excessive.
In response the court stated that the magistrate gave sufficient reasons in regard to the relevant considerations, and that the appellant had not demonstrated that the sentence was unreasonable or plainly unjust.
In the appeal, the court heard that the factual background of the offending was not in dispute.
This included that Schmidt was at all relevant times the director, trustee and beneficiary of Ageguild Superannuation Nominees Pty Ltd, a SMSF established in 2007. Prior to the offending, Schmidt had engaged the services of a registered accountant, Mr Canova to lodge his personal, business and SMSF tax returns, which he had done for the last 10 years.
Between 2020 and 2023, the SMSF failed to file its income tax returns. Between 2022 and 2024, Schmidt received several phone calls advising him to file the SMSF tax returns. He contacted his accountant on each occasion and was advised that the tax returns would be lodged.
On 23 August 2024, pursuant to s 162 of the Income Tax Assessment Act 1936 (Cth), Schmidt was issued a notice in writing, requiring him to give the Commissioner of Taxation an income tax return in the approved form (“the notice”). The notice advised him that the SMSF tax returns had not been lodged and required the SMSF to file its tax returns for the following periods:
- The financial year from 1 July 2020–30 June 2021;
- The financial year from 1 July 2021–30 June 2022; and
- The financial year from 1 July 2022–30 June 2023.
The notice required that the SMSF file the tax returns by 18 October 2024. None of the tax returns were filed in time. Consequently, on 18 September 2025 an information was laid, and Schmidt was charged with a count of the offence contrary to s 8C(1)(a) for each financial year, being three counts in total. This is an offence of absolute liability.
On 23 January 2026 Schmidt appeared before the Magistrates Court and pleaded guilty to each count, and submissions were made by the parties on the sentence. The facts of the offending were explained, and a number of affidavits were filed which outlined the circumstances in which the offences were committed. The material was not disputed and the Magistrate convicted the appellant of each offence and imposed a fine in the amount of $3,891.00.
In his appeal, Schmidt said a critical aspect of this matter is that he could not complete the returns himself, both because of their complexity but, more importantly, because under the relevant legislation, returns relating to SMSFs must be completed by an accountant.
In her ruling Justice Katrina Bochner said that in her opinion, it was clear that the magistrate had taken “all relevant matters into consideration” when handing down the original ruling.
“He set out in broad terms the nature of the offences, noted that affidavits had been filed on behalf of the applicant which explained the circumstances of the offending and said that he has had regard to the contents of those affidavits. I have no reason to doubt that this is the case,” she said.
“When the magistrate’s remarks are read as a whole, it becomes, in my view, abundantly clear that he took all relevant matters into consideration,” Bochner said.
“He set out in broad terms the nature of the offences, noted that affidavits had been filed on behalf of the applicant which explained the circumstances of the offending and said that he has had regard to the contents of those affidavits.”
“[At] the end of the day, Mr Schmidt’s tax responsibilities are his. And that the offences occurred over a long enough period of time for him to have made some additional enquiries of his accountant, and perhaps engaged an alternative accountant. I do not find that the offence is trivial but I am prepared to find that it is one certainly at the lower end of the scale.
“These words indicate that, while he took into account the fact that the appellant could not have filed his returns himself, he nonetheless formed the view that the ultimate responsibility for the returns rested with the appellant.”
