Hennessey, P.G. v The Deputy Commissioner of Taxation

[1987] FCA 772

'I

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;IUDG!viENT No. -?-!!..W-

IN THE FEDERAL COURT OF AUSTRALIA )

)

NEW SOUTH WALES DISTRICT REGISTRY	)	NOS. G3294 TO 3297 of 1987
)

DIVISION	GENERAL	)
BETWEEN :
PETER G . HENNESSY

Appellant

. m:

THE COMMISSIONER OF TAXATION

Respondent

MINUTE OF ORDER

JUDGE :	FOX J.
DATE OF ORDER:	16 DECEMBER 1987
WHERE MADE:	Sydney .
THE COURT ORDERS THAT:

1. The four appeals be dismissed and it conflrms the

Order 36 of the Federal Court Rules.

assessments in each case.

2 .    The appellant pay the respondent's costs.

Note:  Settlement and entry or orders is dealt with in

.

NOT FOR GENERAL DISTRIBUTION

IN THE FEDERAL COURT OF AUSTRALIA

1

NEN SOUTH WALES DISTRICT REGISTRY Nos. G3294 to 3297 of 1987

DIVISION	GENERAL	)
B B :

PETER G. HENNESSY

. c

Appellant

m:

.. THE COMMISSIONER OF TAXATION

Respondent

CORAM: FOX J.

- DATE: 16 DECEMBER 1988

REASONS FOR JUDGMENT

(M TEMPORE)

FOX J.

There are now before me four appeals from the refusal by

the Commissioner of Taxation	of objections to assessments to
income tax made by him. In each case, the assessments showed

credits of amounts due to the taxpayer, taxation having been paid

by him or on his behalf under the pay as you earn system. The

question which arises in each case is the same. The appellant

has appeared before me in person and has argued his	own case very
competently.

The substantial question centres around the Income Tax

Assessment Act 1936	("the Act"), s.79A and the following sections
related to zone rebates. The appellant is not himself in any	of

the zones and the assessments were prepared and have been

sustained on the basis of the other provlsions of the Act whlch have affected him. His argument is, however, to the effect that

the Commissioner in calculating his assessment has acted contrary

to two provisions of the Constitution, namely s.Sl(ii.1 and s . 9 9 .

It is not necessary to set these out or deal separately with

them. One in terms relates to not discrimlnating between States

or parts of States and the other deals	with preferences not belng
given to one.
e.

The appellant does not challenge the validity of s.79A,

but rather relied on it and related provisions, and claims that

to accord with the Constitution the concessions for which it

provides must be available more broadly. It is not said or argued that the Commissioner acted otherwise than in accordance with the Act as, in terms, it applies to the taxpayer. He does

not seek an application of s.79A itself. Put another way. the

challenge really is to the legislation under which he was

assessed, and it is a challenge of a broad nature.

The appellant has concentrated on the assessments and he

submits that they are wrong because the Commissioner should have
acted in a way which, accepting the presence (and validity) of

s.79A, would nevertheless lead to a situation in which there was

no breach of the constitutional provisions to which I have

referred. There can however be no basis on which the

Commissioner. could do as the appellant has suggested namely,

allow a rebate to the taxpayer s if he were in a zone.

.

3 .

Whichever way the matter is looked at, it does seem to

me	that the appellant is in difficulties. He based hlmself
largely on the Commissioner of Taxation v. Clvne (1958-59)	100
CLR 246.	In that case, the Commissioner sued for Income tax and

demurrers were brought leading to the argument of questions

before the full High Court. So far as concerns s.79A, the

majority of the court in that case	was prepared to assume for the
purposes of argument, but certainly did not	decide, that it was
invalid.	The taxpayer in that case, however, sought to use the
argued invalidity of s.79A to bring down the rest of the	Act, or
I.
..	at least all material parts of it.

The majority of the High Court held that, even if s.79A

were invalid, this would not bring down the rest	of the Act and
that being	so, the taxpayer in that case (he had not been

assessed under s.79A) would not have standing to argue anything

about the section. Webb 3. considered the validity of the

section and held it to be valid. The taxpayer in	Clvne’s case
was hoping for consequences to	flow, just as the appellant in the

present case is, but one was by challenge to validity, whereas

the appellant here does not challenge validity, but, on an argued

application of the Constitution, he claims a concession. This

would not only lead in effect to wholesale amendments to the Act,

but amendments which would be impossible to express or apply.

It seems to me that the taxpayer, the appellant in these

cases, does npt have a sound case in law.

I $herefore dismiss the four appeals and confirm the

assessments in each case.

I will order that the appellant pay the respondent's

costs of the appeals.

I certify that thls and the

three ( 3 ) preceding pages are
a true copy of the Reasons
for Judgment herein of his

Honour Mr. Justice Fox.

e.

Associate:  -. \L.- &&L-

Date: 16 December 1987

Counsel	for	the	Appellant:	Mr G. Hennessy
Solicitors	for	the	Appellant:	Mr G. Hennessy

Counsel	for	the	R spondent:	Mrs	R. Sharp
Solicitors	for	the	R spondent:	Australian	Government

Solicitor

Date of hearing:	Sydney: 16 December 1987
Date judgment delivered:	Sydney: 16 December 1987