Morris, G.O. v Commissioner of Taxation

[1990] FCA 423

JUDGMENT No. ..%a.%..f?..~?

LIMITED DISTRIBUTION

CATCHWORDS

ADMINISTRATIVE LAW - Motion to set aside a notice of appeal from the Administrative Appeals Tribunal on the ground that it is incompetent - whether a preliminary ruling by the Tribunal was a "decision of the Tribunal" within the meaning of S. 4 4 ( 1 ) of

the Administrative A D D ~ ~ ~ s	Tribunal Act	1 9 7 5 .
Administrative A D D ~ ~ ~ S	Tribunal Act	1975: S. 4 4 ( 1 )

Income Tax Assessment Act 1936: S. 177

GRAEME ORIEL MORRIS v COMMISSIONER OF TAXATION

QG44 of 1990

LOCKHART, NEAVES and RYAN JJ.
25 JULY 1990
BRISBANE

LIMITED DISTRIBUTION

IN THE FEDERAL COURT OF AUSTRALIA	) )
QUEENSLAND DISTRICT REGISTRY	1 No. QG 44 of 1990
1
GENERAL DIVISION	)

ON APPEAL FROM THE ADMINISTRATIVE APPEALS TRIBUNAL. TAXAT ION APPEALS DIVISION

BETWEEN:  GRAEME ORIEL MORRIS

Appellant

AND:  COMMISSIONER OF TAXATION

Respondent

COURT	:	LOCKHART, NEAVES and RYAN JJ.
DATE :	25 JULY 1990

PLACE :  BRISBANE

MINUTE OF ORDER

THE COURT ORDERS THAT:

1. The notice of appeal filed in this matter on 23 April 1990

be set aside.

1. The costs of the Commissioner of Taxation of the motion and of the appeal be paid by Graeme Oriel Morris, including any reservqd costs.

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

LIMITED DISTRIBUTION

IN THE FEDERAL COURT OF AUSTRALIA	) )
QUEENSLAND DISTRICT REGISTRY	1 No. QG 44 of 1990
1
GENERAL DIVISION	)

ON APPEAL FROM THE ADMINISTRATIVE APPEALS TRIBUNAL, TAXATION APPEALS DIVISION

BETWEEN :  GRAEME ORIEL MORRIS

Appellant

AND :  COMMISSIONER OF TAXATION

Respondent

COURT :	LOCKHART, NEAVES and RYAN JJ.
DATE :	25 JULY 1990
PLACE :	BRISBANE

REASONS FOR JUDGMENT

LOCKHART J.

The Court has before it this morning an appeal from the

decision of the Administrative Appeals Tribunal, TaxationAppeals

Division constituted by M r Justice Purvis made on 19 February	1990 and a motion of The Commissioner of Taxation that the notice
of appeal filed in this matter be set aside on the ground that it is incompetent.
The appellant claimed a deduction from his assessable income for the year of income ended 30 June 1982 of $150,044 as representing his individual interest in the loss of a partnership known as Film Production (Limited), Partnership Number 170. The Commissioner disallowed the deduction.
The notice of assessment was accompanied by an adjustment sheet which contained the following statement:

" I t has been de termined f o r t h e purposes o f

s u b - s e c t i o n 1 7 7 F ( i ) t h a t t h e whole o f t h e

d e d u c t i o n o t h e r w i s e a l l o w a b l e t o you for

your	i n d i v i d u a l	i n t e r e s t	i n t h e n e t	l o s s o f
Film	Product ion	( L i m i t e d	P a r t n e r s h i p )	N o .

170 s h a l l n o t be a l l o w a b l e a s a deduc t ion . ' '

The appellant objected against the assessment and the Commissioner disallowed the objection. The appellant in July 1985 requestedthe Commissioner to refer his decision disallowing the objection to a Board of Review for review. The matter in due course came before the Administrative Appeals Tribunal on 19

February 1990. That tribunal having, in the meantime, been

substituted for the Taxation Boards of Review.

The appellant raised before the Tribunal as a preliminary

issue, the validity of the assessment and of the determination

made under S. 177F to which reference was made in the adjustment

sheet already mentioned. The Tribunal heard argument on the

preliminary issue on the morning of 19 February and after the luncheon adjournment, the Tribunal then ruled, as a preliminary ruling, that S. 177 of the Income Tax Assessment Act (1936) precluded the appellant from challenging the validity of the assessment in the proceeding for review before the Tribunal. The learned Deputy President, Purvis J., then continued to hear the application for review. Having given his ruling, his Honour heard the case for the appellant and, subject to one matter to which it is unnecessary to refer, the appellant closed his case.

The Commissioner opened his case.

At that point, the hearing was adjourned until a date to be fixed because Purvis J. had allowed one week for the hearing of the matter which had by then expired. The proceeding before the Tribunal was subsequently fixed to recommence on 4 June. That date was vacated because in the meantime, the appellant had filed the notice of appeal in this Court which is before us this morning.

It is from the Tribunal's ruling to which I have referred that this appeal is brought. The question that arises on the motion of the Commissioner is whether there is a properly constituted appeal before the Court. This raises the question whether the proceeding by way of appeal to the Court is an appeal on a question of law from a decision of the Tribunal within the

meaning of S. 44 (1) of the Administrative ADDealS Tribunal Act	(1975).
The meaning of the expression, "decision of the tribunal," was considered by a Full Court of this Court, differently constituted, in the Director-General of Social Services v Chanev
(1980) 31 ALR 571. The Court by a majority, Deane J. and Fisher
J., Northrop J. dissenting held that, in the language of Deane J. at 593:

"The c o n c l u s i o n which I h a v e reached i s t h a t

s u b j e c t t o the q u a l i f i c a t i o n s m e n t i o n e d

b e l o w , a n appea l u n d e r S . 44 ( 1 ) o f the A c t

l i e s only from a d e c i s i o n o f the T r i b u n a l

which c o n s t i t u t e s the e f f e c t i v e d e c i s i o n or d e t e r m i n a t i o n o f the a p p l i c a t i o n f o r r e v i e w . O r d i n a r i l y , s u c h a d e c i s i o n w i l l be the

f i n a l d e c i s i o n f o r m u l a t e d i n accordance w i t h

the p r o v i s i o n s o f S . 4 3 o f the A c t . The

q u a l i f i c a t i o n s r e f e r r e d t o a r e an appea l

p u r s u a n t t o S . 4 4 ( 2 ) from a d e c i s i o n t h a t

the interests o f a per son	a r e not	a f f e c t e d
by a p a r t i c u l a r	d e c i s i o n and	the c a s e where

the p r o c e e d i n g before the T r i b u n a l c a n

p r o p e r l y be d i v i d e d i n t o two or more

s e p a r a t e p a r t s i n r e s p e c t o f which

i n d e p e n d e n t	' d e c i s i o n s '	may	p r o p e r l y	be
g i v e n . "

The judgment of the Court in Chanev was followed by another Full Court in this Court, again differently constituted from both Chaney and this Court, in Federal Commissioner o f Taxation v Swiss Aluminium Australia Limited (1986) 86 ATC 4200. The passage from Deane J.'s judgment, which I have quoted, was expressly approved by all members of the Full Court in Swiss Aluminium.

The proceeding before the Tribunal is one to review the Commissioner's decision disallowing the appellant's objection to the assessment of his income for the 1982 tax year. That proceeding is still pending. The decision under challenge, which is the subject of the appeal, is not one which in my opinion answers the description of a decision which constitutes the effective decision or determination of the application for review, again to adopt the language of Deane J. in Chanev.

In particular, in my opinion, the decision of the Tribunal is not one that answers the description of an independent decision which falls within the second qualification of Deane J. in the passage from Chanev already quoted. The order appealed from is in truth a ruling on a preliminary question which did not dispose of the application for review before the Tribunal. It is somewhat curiously couched in different language, namely, as an order dismissing what is described as the application to set aside the assessment. In all the circumstances I take that simply to mean the Tribunal's conception of its ruling on the preliminary question which was before it, and argued as such at the request of counsel appearing for the appellant before the Tribunal.

The ruling did not dispose of the application for review before the Tribunal. The Tribunal was then required to continue the hearing of the review as indeed it did. As I have said it is still part heard. It is not a case which can be divided into

properly be given. The ruling of the Tribunal did not affect or	separate parts and in respect of which independent decisions may
determine the rights of either party to the review and that is the nub of the matter before us this morning.
In my opinion, the motion of the Commissioner to set aside the appeal should succeed on the basis that the appeal is incompetent.
In the opinion of the Court the appropriate order for costs is that the Commissioner's costs of the motion and of the appeal should be paid by the appellant.

The order of the Court is made pursuant to Order 9 Rule 7,

this being within the Court's original jurisdiction.

Accordingly, the order of the Court is:

1.    that the notice of appeal filed in this matter on 23 April 1990 be set aside:

2.   that the costs of the Commissioner of Taxation of the motion and of the appeal be paid by Graeme Oriel Morris, including reserved costs, if any.

NEAVES J: I agree

RYAN J: For the reasons given by the learned presiding judge

I would allow the motion and set aside the notice of appeal filed on 23 April 1990.

I certify that this and the preceding five (5) pages are a true copy of the reasons for judgment herein of the Honourable

Mr. Justice Lockhart.

Associate al&&

Dated:  25 J U ~ Y 1990

Counsel for the Appellant	J. Muir Q. C. and R. Bain
Solicitors for the Appellant :	Feez Ruthning
Counsel for the Respondent	G. Fryberg Q.C. and
C. Newton
Solicitors for the Respondent:	Australian  Government
Solicitor
Date of Hearing	25 July 1990
Date of Judgment	25 July 1990