Federal Commissioner of Taxation v Perkins

[1993] FCA 401

Q - , I c\q3

JUDGMENT NO. ..... .,.,.. ..... ........ -

IN THE FEDERAL COURT OF AUSTRALIA	)
NEW SOUTH WALES DISTRICT REGISTRY	) No NG 151 of 1993
GENERAL DMSION

BETWEEN:  COMMISSIONER OF TAXATION

Applicant

AND:

- RONALD G. PERKINS

Respondent

Coram:	Davies, French & Heerey JJ.
Date:	21 May 1993
Place:	Sydney  1% J U N 1993

AUSTRALIA

REASONS FOR JUDGMENT

EX TEMPORE

income. The Tribunal said in its reasons for decision at paragraph 14:-

Davies J.: This is an appeal from a decision of the Administrative Appeals Tribunal. By

virtue of s.44 of the Administrative Ameals . Tribunal Act 1975 (Cth), the appeal is

limited to a question of law.

The issue before the Tribunal was whether or not the taxpayer, Mr Ronald

G. Perkins, had made a full and true disclosure of aU material facts in his return of

"In the present appeal the Commissioner ralsed onlv one lssue wth which the applicant

was required to deal and that was that the appl~cant had failed to make a true disclosure

of one material fact necessary for hi assessment. The Commissioner identified this one

matenal fact as be~ng that $127,469 of the $263,908.67 he had received following his retirement had been an excessive benefit within the meaning of sectlon 26AFk" (the ernphasls 1s m~ne)

The Tribunal rejected the contention that the taxpayer had failed to make a full and true disclosure by failing to note in his return that the sum received upon retirement had

included an excessive benefit. Mr Perkins' return had included all the particulars

required by the return including the receipt of the sum on retirement, the amount of the roll-over, the period of service prior to 1 July 1983 and the period thereafter and Mr Perkins' date of birth. The reg. 33A form was signed by Mr Perlans and by the trustee

of the fund. The Commissioner had, of course, full particulars of Mr Perkins' earnings. Mr Perkins was unaware that any part of the sum which he received might be regarded

as an excessive benefit for the purposes of s.26AFA of the Income Tax Assessment Act

1936 (Cth)("the M).

In the course of this appeal, Dr H.R. Sorensen, counsel for the Commi sioner of 7

Taxation, abandoned the contention which he had put to the Tribunal that a full

disclosure required that he disclose that the sum received on ret~rement	had included an
excessive benefit.	Therefore, the Court does not have to deal with the reasons of the

Tribunal in that respect.

However, although I have not considered the matter in any detail, I should say that there appear to be grounds which support the Tribunal's conclus~on. The identification and quantification of an amount as an excessive benefit is a computation

which involves elements of discretion. In the first instance there is the discretionary

element in ~.23F(2)(h)(iv). In that section, the matters to be considered include not only matters such as the remuneration paid to the employee, the period of service and the totality of benefits received but "any other matters that the Commissioner considered relevant". Section 26AF itself contains one specific discretionary element in that it requires the Commissioner to be satisfied of the matters which are set out in s.26AFA(l)(c). Moreover, the identification and quantification of an amount leadlng to its characterisation as an excessive benefit is one which is not a matter of primary fact but of computation, assessment and judgment. Therefore, there is much to support the Tribunal's view that the $127,469, which was identified as an excessive benefit and quantified in amount well after the return was lodged and after the first assessment had

issued, was not a fact which Mr Perlans should have disclosed.

However, having abandoned that contention, Dr Sorensen turned his attention to

paragraphs 4(b) and 4(c) of the grounds of appeal, which read as follows:-

The Tribunal erred m law in decidmg the matter on the basis that 'the

"(b)	Commissioner's case was that there was only one material fact necessary for his assessment of whch the taxpayer tailed to make true dlsclosure'.
(c)	The Tnbunal erred in law in d e c ~ d i g thc matter on the bass that the amount of the
excessive benefit was the sole matcnal fact necessary for the taxpayer's assessment of which
the Respondent had faded to make a full and true dlsclosure."

Dr Sorensen submitted that a fact which the Tribunal should have taken into account was

one which he described in these terms:-

"The failure to disclose the payment from the number two lund was a matenal fact wh~ch
would impact on thc exercise of a dscretion as to what if any part 01 the moneys was an

excessive benefit"

The point of the reference to the No.2 fund was that this fund held moneys which had

been Identified by the trustee as excessive benefits. That fund held moneys which had

been transferred from the No. 1 fund, which fund had been accepted by the

Commissioner to be an exempt fund under section 23F of the Income Tax Assessment

-Act. The No. 2 fund was not so exempt. In Mr Perkins' case, his moneys were m the No. 1 fund at the tlme of his retirement. However, payment of the total sum of

$263,908.67 was made by a payment horn the No. 1 fund to Mr Perkins of $116,018.49

and by the transfer to the No.2 fund of $147,890.20 and the immediate payment thereof

to Mr Perkins.

If the fact upon which Dr Sorensen sought to rely m th~s appeal had been brought

to the Tribunal's attention as the matenal fact for its consideration, the Tribunal would no doubt have had to turn its attention to the question, which would have arisen in Mr Perkins's case, as to whether the trustee had been ent~tled after Mr Perkins' retirement

to make the transfer of moneys from the No. 1 to the No. 2 fund. Without suggesthg that the trustee was not so entitled, I s~mply make the point that that lssue was not considered by the Tribunal and the evidence before the Tribunal disclosed no more than the rather strange circumstance that, after retirement, there was a transfer from one fund to another and an immediate transfer from that other fund to Mr Perkins.

These matters, as contained in the submission which Dr Sorensen put to this

Court, were not brought to the Tribunal's attention as matters for its decision.

Therefore, it is not appropriate for me to make any observation upon them.

I am of the vlew that no error of law has been demonstrated in the manner in

which the Tnbunal dealt with the matter. It was the role of the Trlbunal to decide questions of fact and, before the Tribunal, counsel for the Commissioner identified one

fact alone as the cruclal fact which had not been disclosed.	No other fact was so
identified or relied upon.	The Tribunal did not err m law in failing to regard as a

material fact a fact which counsel for the Commissioner failed in his submissions to the

Tnbunal to contend was matenal.

Accordingly, in my view, there was no error of law in the decision of the Tribunal

and grounds 4(b) and 4(c) of the appeal have not been established.

In the circumstances, the appeal must be dismissed with costs.

French J.:	I agree with the reasons given by the presiding Judge.
Heerey J.:	I agree.

I certify that this and the preceding 4 pages

are a true copy of the Reasons for Judgment of the Honourable Mr Justice Davies and of the Honourable Mr Justice French and

the Honourable Mr Just~ce Heerey.

Date:  21 May 1993