Cole, S.J. v Commissioner of Taxation

[1990] FCA 67

IN THE FEDERAL COURT OF AUSTRALIA	)
1
NEW SOUTH WALES DISTRICT REGISTRY	) NO. G588 of 1989
1
GENERAL DIVISION	1

On appeal from a single judge of

the Federal Court

BETWEEN:  STANLEY JAMES COLE

Appellant

AND :  COMMISSIONER OF TAXATION

Respondent

CORAM:	DaQies, Foster & Hill JJ.
DATE :	22 February 1990
PLACE:	Sydney

MINUTES OF ORDER

EX TENPORE

THE COURT ORDERS THAT:

The appeal be dismissed with costs.

NOTE :	Settlement and entry of orders is dealt with in
Order 36 of the Federal Court Rules.
IN THE FEDERAL COURT OF AUSTRALIA	)
1
NEW SOUTH WALES DISTRICT REGISTRY	)  No. G588 of 1989
1
GENERAL DIVISION	)

eal from a single judge of

%%ha1	Court
BETWEEN:	STANLEY JANES COLE

Appellant

AND :  COMMISSIONER OF TAXATION

Respondent

CORAM :	Davies, Foster & Hill JJ.
DATE :	22 February 1990
PLACE :	Sydney

REASONS FOR JUDGMENT
EX TEMPORE

THE COURT: This is an appeal from a judgment of a single judge of this Court. The trial Judge had heard an appeal

from the Administrative Appeals Tribunal ("the AAT") in its

taxation jurisdiction. An appeal from the AAT is, by virtue

of s.44 of the Administrative Appeals Tribunal Act 1975

(Cth) ("the AAT Act"), limited to a question of law. The

trial Judge dealt with a number of questions raised in the
appeal and rejected them all. Only one point is now relied
upon by counsel for the appellant taxpayer.

Before the AAT, there were two assessments which

assessed the taxpayer to tax in respect of what was alleged
to be profit arising from the sale of properties acquired

for the purpose of profit making by sale.

The learned Senior #ember constituting the AAT

noted in his reasons the following:-

"At the hearing, there was no dispute as to the
calculation of the amount of the profits.

The basis of the applicant's objections, maintained at the hearing, was that the lands referred to in the amended assessments had not been acquired for the purpose of profit making by sale nor in carrying on or carrying out a profit making undertaking or scheme within the meaning of s.26(a) of the Income Tax Assessment Act 1936; and that the profits were not made in the course of any business carried on by the applicant and so were not assessable under s.25(1) of the Act."

It is pertinent to note that no issue was raised

before the AAT that the profits assessed had not been
derived in the years in respect of which they were assessed.
Counsel for the taxpayer, experienced in taxation matters,
did not contend that the profits assessed had been derived in other years or not derived at all. Indeed, in answer to

an early question from the learned Senior Member:-

"So the profit was made on the sale to the

company, was it?"

counsel responded:-

"Yes. "

It follows that, before the AAT, facts that may have been relevant to the question of the time of the derivation of profits, if that issue had been in question, were not

explored.

On appeal to the trial Judge, the point was raised

that there had been an error of law in the proceedings of
the AAT because, it was alleged, the evidence before the AAT
showed that the taxpayer had been merely an unpaid vendor
and had therefore not received income. Counsel for the
taxpayer relied upon evidence given by the taxpayer, in

answer to one question that:-

"I did not receive any money."

Before his Honour, counsel for the Commissioner

contended that his Honour should not enter into a

consideration of that evidence, as that raised a question of

fact, which was for the determination of the AAT, not for

the Court. Noting this objection, but without determining
the point, his Honour held that, notwithstanding that

evidence, the taxpayer had not been an unpaid vendor. His

Honour therefore dismissed the ground of appeal, holding that it had not been shown that the profits had not been derived in the years in question.

Before this Court, counsel for the taxpayer

submitted that his Honour was wrong in that conclusion.
Counsel further submitted that the Court could supplement

the facts found by the AAT. Counsel relied upon Statham &

Anor v. Federal Commissioner of Taxation (1989) 89 ATC 4070.

In our opinion, the view put by counsel for the

Commissioner was correct. It would be wrong for this Court,

limited as it is by s.44 of the AAT Act, to enter upon a

determination of the facts of the case. Stathamls case is

not authority to the contrary. The question before the

trial Judge was simply whether there was an error in the

proceedings before the AAT. In our opinion, having regard

to the way in which the matter proceeded before the AAT,

no such error has been shown. The question of derivation

was not a jurisdictional or fundamental issue which the AAT
was bound to consider for itself, whatever the approach

taken by counsel. Cf Kuswardana v. Minister for Immigration

& Ethnic Affairs (1981) 54 F.L.R. 334.

For these reasons the appeal must be dismissed with

costs.

I certify that this and the 3

preceding pages are a true copy of

the Reasons for Judgment herein of

the Court.

Associate: (ha- I W

Date:	22 February 1990
Counsel for the appellant:	Mr J.W. Greenwood Q.C.

& Mr T.C. Somers

Solicitors for the appellant:	David Worrall & Associates
Counsel for the respondent:	Mr N.R. Burns
Solicitors for the respondent:	Australian Government

Solicitor

Date of hearing:  22 February 1990

Date of judgment : 22 February 1990