Downie v Thomas - [1924] HCA 52

DOWNIE (DEPUTY FEDERAL COMMIS-

SIONER OF TAXATION FOR TAS- MANIA) THOMAS

RESPONDENT. DEFENDANT,

ON APPEAL FROM THE SUPREME COURT OF Income Tax-Action to recover tax-Action in Local Court of Tasmania--What

constitutes cause of action-Making of assessment-Notice of assessment- Failure to pay-Noneut--Local Courts Act 1896 (Tas.) (60 Vict. No. 48), secs. 33, 34 Income Tax Assessment Act 1915-1918 (No. 34 of 1915-No. 18 of 1918), secs. 31, 36, 41, 44-Income Tax Regulations 1917 (Statutory Rules 1917, No. 280-1918, No. 95). regs. 30, 41A.

35 CLR 300

In an action brought in the Local Court of Tasmania at Hobart by the Deputy Federal Commissioner of Taxation for Tasmania, to recover from the defendant, who resided and carried on business at Latrobe in Tasmania, Federal income tax alleged to be due by him, the assessment having been made in, and the notice of assessment having been sent from, Hobart,

Held, that the cause of action arose partly in Hobart, and, therefore, the Local Court had jurisdiction, under sec. 33 of the Local Courts Act 1896 (Tas.), (TAS.)

to entertain the action, and the defendant was not entitled to a nonsuit under

Decision of the Supreme Court of Tasmania (Full Court) reversed.

APPEAL from the Supreme Court of Tasmania.

An action was brought in the Local Court at Hobart by Henry Edmonds Downie, the Deputy Federal Commissioner of Taxation for Tasmania, against Joscelyn Langdon Thomas, a farmer who resided and carried on business at Latrobe, to recover Federal income tax alleged to be due by him for the years 1915-1918 and certain sums alleged to be recoverable as additional tax. Crisp J., before whom the action was heard, found a verdict for the plaintiff subject to a reference to the Full Court of the Supreme Court of the question whether the plaintiff should not be nonsuited by reason of secs. 33 and 34 of the Local Courts Act 1896 (Tas.).

The Full Court held that the plaintiff must be nonsuited because, as the defendant might under the Income Tax Regulations have paid the sums in respect of which the action was brought at any branch of the Commonwealth Bank, his failure to pay, which was the cause of action, did not arise in Hobart.

From that decision the plaintiff now, by special leave, appealed to the High Court.

Brissenden K.C. (with him Keith Ferguson), for the appellant. The Supreme Court was wrong in determining that the respondent's failure to pay was the cause of action. A cause of action consists of every material fact which the plaintiff must prove if his right to recover is denied (Read v. Brown 1; Payne v. Hogg 2 ). The making of the assessment and the notices of assessment were essential parts of the cause of action (Income Tax Assessment Act 1915-1918, secs. 31, 36, 41, 44; Income Tax Regulations, reg. 41A).

1(1888) 22 Q.B.D. 128. 2(1900) 2 Q.B. 43, at p. 51.

35 CLR 301

Those essential parts of…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Downie v Thomas

Details

AGLC: Downie v Thomas [1924] HCA 52
Case: [1924] HCA 52
Decision Date: 5 December 1924

CaseChat Overview and Summary

The Deputy Federal Commissioner of Taxation for Tasmania (the appellant) appealed to the High Court of Australia from a decision of the Supreme Court of Tasmania. The dispute concerned the jurisdiction of the Local Court of Tasmania at Hobart to hear an action brought by the appellant to recover Federal income tax from the respondent, Joscelyn Langdon Thomas, who resided and carried on business at Latrobe. The Supreme Court had held that the appellant should be nonsuited.

The legal issue before the High Court was whether the Local Court at Hobart had jurisdiction to entertain the action, or if the respondent was entitled to a nonsuit. This turned on the determination of where the cause of action arose, in accordance with sections 33 and 34 of the Local Courts Act 1896 (Tas.). The respondent argued that his failure to pay the tax, which was the cause of action, did not arise in Hobart, as he had the option to pay at any branch of the Commonwealth Bank.

The High Court found that the Supreme Court had erred. It reasoned that a cause of action comprises all material facts a plaintiff must prove if their claim is disputed. In this instance, the assessment of the tax and the dispatch of the notice of assessment from Hobart were essential components of the cause of action. As these elements arose, at least in part, in Hobart, the appellant was entitled under section 33 of the Local Courts Act to commence the action in the Local Court at Hobart. Furthermore, the Court held that the cause of action did not wholly arise at a place nearer to Latrobe than to Hobart, meaning section 34 of the Act, which provided for nonsuit in such circumstances, did not apply. Consequently, the appeal was allowed, the Supreme Court's judgment was set aside, and the verdict for the plaintiff was reinstated.

Orders