Collis, Marion Elizabeth v Commissioner of Taxation of the Commonwealth of Australia Collis, Stephen John v Commissioner of Taxation of the Commonwealth of Australia

[1996] FCA 737

MARION ELIZABETH COLLIS v. COMMISSIONER OF TAXATION OF THE COMMONWEALTH OF AUSTRALIA

VG462 of 1994

STEPHEN JOHN COLLIS v. COMMISSIONER OF TAXATION OF THE COMMONWEALTH OF AUSTRALIA

VG463 of 1994

Jenkinson J.
Melbourne
23 August, 1996

IN THE FEDERAL COURT OF AUSTRALIA   )
VICTORIA DISTRICT REGISTRY         )  No. VG462 of 1994
GENERAL DIVISION                   ) 

On Appeal from the Administrative Appeals Tribunal constituted by Deputy President B.M. Forrest, Mr. D.L. Elsum, AM, Member and Mr. B.H. Pascoe Member.

BETWEEN:MARION ELIZABETH COLLIS

Applicant

AND:COMMISSIONER OF TAXATION OF THE COMMONWEALTH OF AUSTRALIA

Respondent

CORAM:     Jenkinson J.

PLACE:     Melbourne

DATE:     23 August, 1996

MINUTES OF ORDER

THE COURT ORDERS THAT:

1. The cross-appeal be dismissed.

1. The respondent pay the applicant's costs of the cross-appeal.

(Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.)

IN THE FEDERAL COURT OF AUSTRALIA  )
VICTORIA DISTRICT REGISTRY        )   No. VG463 of 1994
GENERAL DIVISION                  )

On Appeal from the Administrative Appeals Tribunal constituted by Deputy President B.M. Forrest, Mr. D.L. Elsum, AM, Member and Mr. B.H. Pascoe Member.

BETWEEN:     STEPHEN JOHN COLLIS

Applicant

AND:COMMISSIONER OF TAXATION OF THE COMMONWEALTH OF AUSTRALIA

Respondent

CORAM:    Jenkinson J.

PLACE:    Melbourne

DATE:     23 August, 1996

MINUTES OF ORDER

THE COURT ORDERS THAT:

1. The cross-appeal be dismissed.

1. The respondent pay the applicant's costs of the cross-appeal.

(Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.)

IN THE FEDERAL COURT OF AUSTRALIA   )
VICTORIA DISTRICT REGISTRY         ) 
GENERAL DIVISION                   ) 

On Appeal from the Administrative Appeals Tribunal constituted by Deputy President B.M. Forrest, Mr. D.L. Elsum, AM, Member and Mr. B.H. Pascoe Member.

No. VG462 of 1994

BETWEEN:MARION ELIZABETH COLLIS

Applicant

AND:COMMISSIONER OF TAXATION OF THE COMMONWEALTH OF AUSTRALIA

Respondent

No. VG463 of 1994

BETWEEN:STEPHEN JOHN COLLIS

Applicant

AND:COMMISSIONER OF TAXATION OF THE COMMONWEALTH OF AUSTRALIA

Respondent

CORAM:    Jenkinson J.

PLACE:    Melbourne

DATE:     23 August, 1996

REASONS FOR JUDGMENT

When judgment was pronounced on these appeals the cross-appeals by the respondent had been forgotten by me.

Miss McNamara of counsel for the respondent submitted that the considerations stated in the introductory clause of the penultimate sentence in the passage from the Tribunal's reasons for its decision concerning remission of additional tax (quoted in my reasons for dismissing the appeals) were irrelevant to the exercise of the power to remit.  She pointed out that there was no evidence that either of the applicants was aware of the opinion of any valuer about the value of the subject land at or before the time when the income tax returns were lodged.  And she submitted that neither difficulty in forming an opinion about that value nor differences of valuers' opinions about that value was relevant to a consideration of an applicant's culpability in omitting reference to the purchase and sale of the subject land from the income tax return.

As Miss McNamara pointed out in another submission, the court should not "construe the Tribunal's reasons for its decision minutely and finely and with an eye keenly attuned to the perception of error".  The moral culpability of each applicant would be diminished by the degree to which a conclusion by him or her that no profit had been made on the sale of the subject could be reasonably formed in his or her mind at the time the return was lodged.  The "difficulty" the Tribunal perceived "in arriving at the correct assessment of the value" could reasonably be considered by the Tribunal as likely to have had an influence that was not unreasonably allowed by an applicant to contribute to his or her conclusion that no profit was made.  It may be that no use could reasonably be made of the Tribunal's perception that there were "genuine differences of view of valuers", except to confirm the Tribunal's perception of difficulty in arriving at the correct value.  If to that extent the clause discloses illogical reasoning, there is yet not disclosed, in my opinion, error of law.  Mason C.J. observed in Australian Broadcasting Tribunal v. Bond (1990) 170 C.L.R. 321 at 355-356:

"The question whether there is any evidence of a particular fact is a question of law: McPhee v. S. Bennett Ltd. (1934) 52 W.N.(N.S.W.) 8, at p.9; australian Gas Light Co. v. Valuer-General (1940) 40 S.R.(N.S.W.) 126, at pp. 137-138. Likewise, the question whether a particular inference can be drawn from facts found or agreed is a question of law: Australian Gas Light (1940) 40 S.R. (N.S.W.) 126, at pp. 137-138; Hope v. Bathurst City Council (1980) 144 C.L.R. 1, at pp. 8-9. This is because, before the inference is drawn, there is the preliminary question whether the evidence reasonably admits of different conclusions: Federal Commissioner of Taxation v. Broken Hill South Ltd. (1941) 65 C.L.R. 150, at pp. 155, 157, 160. So, in the context of judicial review, it has been accepted that the making of findings and the drawing of inferences in the absence of evidence is an error of law: Sinclair v. Maryborough Mining Warden (1975) 132 C.L.R. 473, at pp. 481, 483.

But it is said that `[t]here is no error of law simply in making a wrong finding of fact': Waterford v. The Commonwealth (1987) 163 C.L.R. 54, at p. 77, per Brennan J. Similarly, Menzies J. observed in Reg. v. District Court; Ex parte White (1966) 116 C.L.R. 644, at p. 654:

`Even if the reasoning whereby the Court reached its conclusion of fact were demonstrably unsound, this would not amount to an error of law on the face of the record.  To establish some faulty (e.g. illogical) inference of fact would not disclose an error of law.'

Thus, at common law, according to the Australian authorities, want of logic is not synonymous with error of law.  So long as there is some basis for an inference - in other words, the particular inference is reasonably open - even if that inference appears to have been drawn as a result of illogical reasoning, there is no place for judicial review because no error of law has taken place."

Each of the cross-appeals will be dismissed with costs.

I certify that this and the 3 preceding pages are a true copy of the Reasons for Judgment of the Honourable Justice Jenkinson.

Associate

Dated:  23 August, 1996

Counsel for the Applicants       :    Mr. J.W. de Wijn

Counsel for the Respondents      :    Miss B. McNamara

Solicitors for the Applicants     :    Madgwicks

Solicitors for the Respondents    :    Australian Government Solicitor

Date of Hearing                  :    30 May, 1996

Date of Judgment                 :    23 August, 1996