Oliver and Commissioner of Taxation - [2001] AATA 155

DECISION AND REASONS FOR DECISION [2001] AATA 155

ADMINISTRATIVE APPEALS TRIBUNAL )

) No VT1999/375

TAXATION APPEALS DIVISION )
           Re      STEPHEN OLIVER
  Applicant
           And    COMMISSIONER OF TAXATION
  Respondent

DECISION

Tribunal Mr J. Handley, Senior Member

Date19 February 2001
PlaceMelbourne

Decision      1. The decision under review being Notices of Decision on Objection for the 1993, 1994 & 1995 income years are affirmed in so far as it was decided that payments made to or received by the applicant were salary and wages and were not fringe benefits. 2. The application is otherwise remitted to the respondent in accordance with these reasons.
   .....Sgd. Mr J. Handley.....
  Senior Member
CATCHWORDS
Taxation – Professional AFL football player – Club intended to disguise payments to avoid AFL salary cap – whether disguised payments were fringe benefits or salary and wages – decision affirmed.
Income Tax Assessment Act 1936 s.19, 221A
Fringe Benefits Tax Assessment Act 1986 s.136(f)
Temples Wholesale Flower Supplies Pty Ltd & Federal Commissioner of Taxation 1991 99 ALR 479

REASONS FOR DECISION

19 February 2001 Mr J. Handley, Senior Member

The applicant applies to review assessments made by the respondent for the 1993, 1994 and 1995 years of income. The amended assessments which have given rise to these proceedings were issued on 19 March 1998.
The respondent indicated prior to the commencement of the hearing that it no longer relied on the amended assessment for the 1993 year. By its Statement of Facts and Contentions it indicated that it will amend the assessment for that year by excising the amounts added to the original assessment. That is, it will restore the original assessment.
The application concerns the characterisation of monies received by the applicant which arose out of his employment as a professional Australian Rules footballer with the Carlton Football Club Ltd ("CFC").
At the hearing, Mr Baring appeared on behalf of the applicant and Mr Murphy appeared on behalf of the respondent. Evidence was given by Peter Jess, an accountant and player manager, Stephen Gough the former Manager of CFC and the applicant. A number of documents were received into evidence, which will be referred to in these reasons.
During the relevant years, CFC – and other clubs affiliated with the ("AFL") – were subject to restrictions in the amount of money which was payable to registered players. This phenomenon is known as the 'salary cap'.
During the hearing it was learnt that a number of clubs – CFC was no exception – paid monies to its players in excess of the salary cap.
In an attempt to disguise the total amount it paid its players, CFC disclosed only the standard Australian Football League player contract, which recorded the amount it purported to pay a player. CFC separately entered into another contract with players (which was not disclosed to the AFL) which recorded the amount which in fact would be (& was) paid. These amounts were greater than the amounts disclosed in the AFL player contract.
In the present case the monies paid to the applicant which were in excess of the amounts disclosed to the AFL were paid by CFC to Secureinvest Pty Ltd ("Secureinvest") of which the player agent Peter Jess was a Director. Secureinvest in turn paid the monies to the applicant. Those monies were treated by CFC and by Jess as fringe benefits, and not attracting income tax.
Some time later the AFL granted a moratorium to clubs with respect to player payments. CFC made a disclosure of the total amount of payments that it had made. It also acknowledged that the monies that it had paid Secureinvest, with respect to the applicant, should be properly accounted for, as the applicant's salary and wages. (refer proof of evidence of Stephen Gough dated 1 November 2000).
In the present application, the applicant maintains that the monies paid to Secureinvest were a fringe benefit.
Mr Oliver gave evidence in these proceedings. I found him to be honest and candid. He did not attempt to evade any questions or embellish his answers. He was 19 years of age when he first contracted with the CFC. He put his trust in the officials of CFC & Jess & relied on them to advise him and manage his affairs. Unfortunately, although in hindsight, his trust was misplaced. For reasons which will follow, the advice was erroneous and has caused him detriment. In addition to the income tax payable by these reasons, he will incur penalties by force of the legislation.
The evidence heard in the present application is summarised as follows-
Peter William Jess
Mr Jess is an accountant and a football player agent. He estimated that he has managed between 300-400 players since the late 1970's, 40 of whom have been players with CFC.
Mr Jess said that he had discussions from time to time with CFC concerning salary cap matters. He said the club sought advice from him specifically "for the purpose of disguising payments from the football payments commissioner". He said his responsibility was to achieve "the maximum that I could for my player" but that he "didn't care about the salary cap. That was the clubs problem; they had to deal with it". During the time that he was representing football players Mr Jess was the Director of a company called Secureinvest Pty Ltd. That corporation was the trustee of a trust called the Secureinvest Unit Trust No. 1 Trust ("the Trust"). It is a unit trust comprising 120 units, the majority of which were held by Mr Jess. One Unit was issued to Mr Oliver and was held on trust for him by Mr Jess for so long as he played football with Carlton. CFC paid monies into the trust being the monies that were not disclosed to the football payments commissioner.
In each playing year, Mr Oliver completed a standard AFL playing contract (which was disclosed) and also signed a letter written by an officer of CFC (which was not disclosed), and which recorded amounts payable in a sum greater than the sums recorded in the AFL contract.
For the 1993 playing year, the AFL player contract disclosed that Mr Oliver would receive a sum of $2,500 per senior match, $700 for each Victorian State Football league match and $250 for each pre-season match (T-38.23). With respect to the same playing year, the terms of engagement were recorded in a letter dated 25 January 1992 (sic) which record the entitlement to a motor vehicle supplied by the club, a base payment of $30,000 to be paid in four instalments of $7,500 on 30 April, 30 June, 31 August and 31 October, match payments of $250 for pre-season competition, $2,500 for senior matches and $700 for reserve matches (T-9.1).
With respect to the 1994 playing year, the AFL contract records the payments to Mr Oliver of $2,000 per senior match, $250 for Victorian State Football League matches, $250 for pre-season matches and certain payments described as "incentives – senior best and fairest" (T-38.15). A letter dated 30 March 1994 signed by a representative of the CFC and Mr Jess as agent for Mr Oliver, records the contractual payments for the 1994 playing year as being a "base payment of $70,000 after tax", a motor vehicle and match payments of $2,000 for senior games and $250 for state football league games.
With respect to the 1993 playing year it is noted that the four payments of $7,500 were to be paid in the 1993 and 1994 financial years. The respondent has accepted that two payments of $7,500 (total $15,000) were not paid prior to 30 June 1993.
With respect to the 1994 playing year payments, Jess said that the sum of $70,000 was paid by CFC by instalments. The following passage from the transcript is illustrative of the agreement between CFC & Jess.
"Mr Jess, just generally though, what was the arrangement that Secureinvest had with the CFC? – generally sums that weren't to be shown in the salary cap were payments that were made to Secureinvest.
Can you tell me how that would work? – I would raise an invoice.
Take me through a typical player. What would happen? – I would first negotiate a total amount under the contract in some cases, or in parts. It depended on the nature of the player. And the figures that could not be fitted into the salary cap would generally come through Secureinvest.
So, Mr Jess, what you are saying is that the club would make an off contract payment to Secureinvest? – we would raise an invoice and they would pay various sums of money to Secureinvest.
And how did that help the club, Mr Jess, from a salary cap perspective? – purely from the point of view, well, from cash flow and also salary cap.
How would it help them from a salary cap perspective? – at that time the payments, the Commissioner was very vigilant, and it would have meant that clubs would not have been able to employ players unless they were able to have sums off the salary cap".
The above arrangement seems to be memorialised in a letter dated 11 June 1997 completed by Mr James Sutherland, the Finance Manager of CFC Ltd. (Exhibit 4). It refers to eight payments of varying sums paid between 30 March 1994 and 31 January 1995 in the total sum of $70,000. The letter refers to invoices received. Copies of the invoices are attached to the affidavit of Mr Gough (Exhibit B). The invoices are addressed to the "General Manager CFC", are numbered, are produced on Secureinvest letterhead and recite the following information.
"Re Secureinvest Pty Ltd
To the provision of employment packages, analysis of funding, cashflow/employer cost analysis, detailed forward planning etc.
Fees as per agreement..."
The amounts variously invoiced were four sums of $10,000, three sums of $7,000 and one sum of $9,000. Having regard to the letter from Mr Sutherland, it would appear that $17,000 was paid in the 1994 financial year and the sum of $53,000 was paid in the 1995 financial year.
With respect to the amounts actually received by Mr Oliver from the Secureinvest Trust, Mr Jess was taken to some documents that he said he prepared (Exhibits 5 and 6). The documents are each entitled Secureinvest Pty Ltd – Receipts and Payment Summary and relate to the 93/94 and 94/95 years. These documents purport to record the receipts of monies from CFC and the payments to the applicant.
The summary for the 93/94 year was said by Mr Jess to record that the sum of $10,000 was paid to Mr Oliver by two payments each of $5,000. With respect to the 1994/95 year Mr Jess said that the summary records the total payments made to Mr Oliver were $47,500.
Mr Jess said that $70,000 was paid to Secureinvest for the year's 1994/1995 but on the above analysis only $57,500 was paid to Mr Oliver ($10,000 in 1994 and $47,500 in 1995). He said that Secureinvest did charge fees to Mr Oliver and when asked to explain the discrepancy between the sum of $57,500 actually paid to Mr Oliver and $70,000 actually received by Secureinvest Mr Jess said that the discrepancy "could well be" explained by fees charged. He said he did not "ever seek permission of the applicant, Mr Oliver, before remitting him an amount less than the amount that Carlton paid Secureinvest" and said that permission was not ever sought because "it was never discussed".
In cross-examination Mr Jess said that he could not recall whether he was approached by Mr Oliver to be his agent or whether Mr Oliver was introduced to him by CFC. Additionally he could not recall whether first contact was by telephone or personally.
With respect to the sum of $70,000 payable for the 1994 playing year, it appears that sum was negotiated directly between Mr Oliver and Mr Collins, the previous Director of CFC. Mr Jess said that his responsibility – being mindful of the salary cap limitations imposed upon football clubs, was to "package it in a manner that it could get done". Mr Jess agreed that $17,000 was paid prior to 30 June 1994 and $53,000 was paid in the 1995 Financial Year. It followed therefore that the total sum of $70,000 was paid to Secureinvest, by CFC.
Mr Jess was taken to the invoices that he prepared and sent to CFC (refer earlier). He said that Secureinvest did have an agreement with CFC to provide employment packages, analysis of funding, cash flow advice and other services as recorded in the invoice. When asked to provide copies of the documents relating to the services provided to the Club, Mr Jess said that his agreement was "probably more than likely being verbal because of, you know, the nature of the dealings that I had". He said that employer cost analysis and cash flow advice was provided and payment for that advice would have been included in the amounts that were invoiced to Carlton in order to secure payments to Mr Oliver. It followed therefore, on his evidence, that part of the monies received from Carlton on account of Mr Oliver would have been his fees for services to the club.
When pressed on this issue by Mr Murphy, Mr Jess said that CFC did pay Mr Oliver the total sum of $70,000 and that that sum was paid to Secureinvest. He said that CFC did not pay him any amount in addition to the sum of $70,000 in relation to Mr Oliver and whilst agreeing that the Club did honour its obligations to Mr Oliver by paying that sum, he agreed that if Secureinvest had undertaken and completed work for CFC it would receive payment for that in addition to the sum of $70,000.
With respect to the sum of $70,000, only $63,000 was paid to Mr Oliver by Secureinvest. Mr Jess agreed that the sum of $7,000 (10%) was retained by him "for expenses and costs". He said – referring to his witness statement – that the sum of $63,000 "was distributed from the company to Oliver from time to time". So far as Mr Jess was aware, all monies payable to Mr Oliver by the Club had been received and all monies payable to Mr Oliver by Secureinvest had been paid.
In his witness statement, Mr Jess said that the "net payments constituted a fringe benefit and therefore the player would not be liable to pay tax on same". When asked what the fringe benefit was Mr Jess replied "my definition of a fringe benefit is a payment that is received net by the player and the primary tax is payable by the club, so that amount, therefore, would be net". There continued to be questions by Mr Murphy of Mr Jess with respect to this issue and the following extract from the Transcript (page 33) is illustrative-
"So, what you are saying is the fringe benefit – you have a fringe benefit anytime when the club is likely to pay the tax? – no, specifically where it is not group tax.
Oh, specifically, yes, I am sorry, I am excluding group tax? – Yes, where the player receives a payment that is not included in his group certificate.
…….
And you understand that fringe benefit tax is a tax applied to fringe benefits provided to employees? – Yes.
And obviously you have got to have a fringe benefit before you have a tax. My question is, what precisely was the fringe benefit that was provided to Mr Oliver? – it was a sum of money net of tax.
……. Yes. But you can't identify anything which was provided to Mr Oliver which might be a fringe benefit, apart from the cash? – well the definition of fringe – you know – benefit does include cash.
…….
So because he receives cash net of tax he has therefore had a fringe benefit. Is that what you are really saying? – that is what I have just said to you".
In re-examination Mr Jess said that another benefit received by Mr Oliver was a payment from the trust.
With respect to the receipts and payments summary he referred to in his evidence in chief, Mr Jess was reminded that he said that $57,500 was paid in total to Mr Oliver, yet in answer to questions from Mr Murphy he said that $63,000 was paid. In order to explain the difference between these two sums Mr Jess said that he did charge accounting fees and whilst he could not recall how those fees were paid he said "they may have been deducted from those sums".
Mr Jess also said that Secureinvest did receive payments from CFC "over and above what was paid in relation to players". Whilst no fees were paid by the club "for establishing this arrangement" ("the arrangement" to make player payments to Secureinvest) Mr Jess said that he was paid monies by Carlton "in some cases, yes, when I did work for them".
stephen gough
Mr Gough was previously the Chief Executive Officer of CFC. He completed a witness statement dated 1 November 2000, which Mr Murphy relied on. There were no questions asked of him in examination in chief, and the witness statement is accordingly re-produced as follows-
"1. Since December 1993 I have been the Chief Executive Officer of the Carlton Football Club ("CFC") and, as such, I am generally responsible for the negotiation of player contracts. The contracts in relation to the applicant for the 1994 and 1995 football seasons were negotiated by my predecessor, Mr Ian Collins. I was not responsible for the actual payments made under the contract; they were handled by Mr James Sutherland, CFC's finance manager.
"2. I did not deal with the applicant personally but dealt with his agent, Mr Peter Jess. There was little negotiation between CFC and the applicant in relation to the agreements. The agreements for the 1994 and 1995 seasons negotiated in relation to Mr Oliver took into account the salary cap restraints imposed by the Australian Football League ("AFL") on all clubs. A copy of those agreements are attached and marked "A". The agreements submitted to the AFL in relation to the applicant for those years are attached and marked "B".
3. At Mr Jess's direction, the amounts CFC had agreed to pay the applicant were paid to Mr Jess's company, Secureinvest Pty Ltd. I have been shown various invoices purportedly rendered by Secureinvest Pty Ltd to the Carlton Football Club. These invoices are attached and marked "C". Whilst CFC paid those invoices, the payments were for the Applicant in accordance with the CFC's agreement with him. CFC did not engage Secureinvest Pty Ltd to provide the services set out in the invoices nor did Secureinvest Pty Ltd provide such services to CFC.
4. Following the AFL's inquiry into alleged breaches of the salary cap by various clubs CFC reviewed its respective arrangements with the players. In particular, in the case of the Applicant, it concluded that the monies which were paid to Secureinvest Pty Ltd should be properly accepted for as the Applicant's salary and wages. Since CFC had not made, nor remitted to the Respondent, any tax instalment deductions in respect of these payments, CFC paid the Respondent $23,189.05 by way of tax instalments deductions on account of the payments made to the Applicant under the Agreements as set out in the letter dated 15 October 1989 from Phillip Nunn, CFC's public officer. A copy of this letter is attached and marked "D"."
In cross-examination Mr Gough said that the contracts which were negotiated between CFC and Mr Oliver were conducted through Ian Collins, the previous Chief Executive Officer. Mr Gough said that the terms of the contracts were communicated to him upon Mr Collins departure.
With respect to the AFL inquiry into breaches of salary caps by AFL clubs, Mr Gough said that CFC reviewed its "arrangements" with players and following advice received from a firm of accountants. It then acknowledged that errors had been made and that all payments to players should be regarded as salary and wages. CFC then issued revised group certificates and made appropriate taxation payments to the Australian Taxation Office. Mr Gough denied that the Club paid taxation and issued group certificates after the ATO commenced an audit.
With respect to the sum agreed to be paid to the applicant, and the manner in which it was to be paid, Mr Gough was asked a number of questions which – together with his answers – should be reproduced from the transcript (page 45) as follows-
"Well, Mr Gough did you agree to pay $70,000 after tax to Oliver? Or did you agree to pay $70,000 after tax to Secureinvest? – I think that if I could just sort of summarise where we are. We are saying we owed Stephen Oliver an amount of paying. (sic) To avoid the salary cap implications later it was paid through Secureinvest.
But at that point ….. ? – in its eyes its met what it owes Mr Oliver and the relevant tax instalment deductions.
But at the time it was quite convenient Mr Gough wasn't it to pay the $70,000 to Secureinvest? – well I think it's stated. It's a salary cap issue. It was disclosed some one year later".

STEPHEN WAYNE OLIVER

Mr Oliver completed a proof of evidence prior to the hearing which was received into evidence as Exhibit 8. With respect to the 1994 playing year, Mr Oliver said he understood that he had received $63,000 from Secureinvest but that documents received into evidence purported to indicate that $57,500 only had been paid to him. He said he was unable to explain the discrepancy, that he was "happy" with what he had received, that accounting fees were charged to him by Mr Jess and were paid from the monies Secureinvest received from the CFC.
With respect to the 1993 playing year Mr Oliver said that the AFL Contract did not disclose the base payment of $30,000 which was separately agreed. It was his belief that that sum was included in the group certificate issued to him by CFC and that he had paid tax on that sum.
With respect to the 1994 playing year Mr Oliver said that he negotiated his contract with Mr Collins who was then the Chief Executive Officer at CFC. He acknowledged that the AFL Contract recorded that he was not to receive any base payment but the contract he separately entered into with CFC recorded a base payment payable of $70,000 "net of tax".
That contract is contained within a letter dated 30 March 1994 on the letterhead of Peter W Jess & Associates Pty Ltd and signed by Mr Gough on behalf of CFC and Mr Jess as "agent for Steve Oliver". (T10.1). Mr Oliver said he first saw that letter "probably two years ago". He said at 30 March 1994 Mr Jess was not authorised to sign "any legally binding agreements" and that at that date he did not believe that he had ever met Mr Jess. His recollection was that an official at CFC had indicated that Mr Jess had been approached to "look after these or this matter".
Mr Oliver said he first became aware that he was to receive his player payments from Secureinvest after he approached CFC for payments and was referred to Mr Jess. He said he was told by CFC that all payments would be paid through Mr Jess who would be "looking after my affairs". Mr Oliver said he received a cheque within about two weeks of that inquiry from Secureinvest who he had not heard of at that time and queried the identity of this corporation. Mr Oliver said he rang Mr Jess and was told "it wasn't for me to worry about, that it was legal and above board and that this was how it was going to be paid". Thereafter he said he received payments throughout the 1994 playing season and some payments in early 1995.
Mr Oliver said that he was never told by CFC or Jess why monies were paid to Secureinvest. He said he did not disclose that sum in his 1994/95 income tax return because "as far as I was concerned it was a net of tax payment and I was never issued group certificates".
With respect to payments associated with the running of a motor vehicle Mr Oliver said that the sum of $3,359.00 paid by CFC for the year ended 30 June 1994 was associated with fuel costs incurred in travelling three or four times per week from Castlemaine to Melbourne to train and to play football. Mr Oliver said he would present invoices to CFC who would in turn pay the fuel supplier directly.
In cross-examination Mr Oliver was taken to his witness statement where (first paragraph of the third page) Mr Oliver in part said:
"The club advised me that Jess would be structuring my package with the club so as to ensure that I receive the agreed sum net of tax. I was assured by Jess that a structure was in place that was legal and proper and would ensure that I would receive the benefit of the agreed sum. I agreed and understood that Jess was to take control of the contract payments from Carlton".
Mr Oliver said that Jess did not ever explain what the structure was but told him that he "didn't need to worry about it". In fact Mr Oliver said the first time he heard of Secureinvest was when he received his first cheque. At that time he was told that payments of the $70,000 would be staggered and that he would receive six or eight or ten payments in total. Mr Oliver said that he thereafter believed that the staggered payments would eventually total $70,000 and that those payments were made because of the agreement that he had negotiated directly with CFC. Mr Oliver acknowledged that a total of $63,000 only was paid to him by either Mr Jess or Secureinvest and that the sum of $7,000 was fees charged to him by Jess.
With respect to the 1993 playing year payments Mr Oliver said that the base payment of $30,000 disclosed in the AFL Contract was paid to him but not through Secureinvest. He acknowledged that that sum was paid and he has no dispute with the club that that sum was in fact paid to him.
With respect to reimbursement of fuel costs, Mr Oliver said that the sum of $3,359 in the 1994 year was associated only with the motor vehicle used to travel between Castlemaine and Carlton for the purposes of training or playing games.
In re-examination Mr Oliver said the sum of $30,000 paid to him for the 1993 playing year was disclosed to the ATO as assessable income. With respect to the difference between the $70,000 payable to him for the 1994 playing year and the sum of $57,500 allegedly received from Mr Jess or Secureinvest, Mr Oliver said that from time to time he did pay accounting fees to Jess but he could not be more specific.
After Mr Oliver completed his evidence he was recalled to answer some further questions with respect to the issue of motor vehicle expenses. It appeared from his 1994 income tax return that the sum of $9,811 was claimed as "work related motor vehicle expenses". When pressed on this sum Mr Oliver said that he was travelling to Melbourne three or four times per week from Castlemaine but he thought that he or his fuel dealer had been reimbursed for fuel costs. He said Mr Jess completed his 1994 Income Tax Return. Mr Oliver said he recalled having a log book for about three months but was unable to recall whether Mr Jess claimed this sum on account of kilometres travelled or having regard to the contents of his log book. At that time he was driving a Fairmont motor vehicle made available to him by CFC which he relinquished at the end of the 1994 year when he ceased to play football. Mr Oliver said that he did meet with Mr Jess prior to the 1994 return being completed but he said it was "fairly briefly" and that he had provided him with his group certificates from Castle Bacon where he was employed in Castlemaine. Mr Oliver said that the tax return was sent to him for signing and that he would not have queried any of the figures recorded in the document.
conclusion and reasons for decision
These proceedings arise out of the payments made and the manner of payment to Mr Oliver, by CFC and Secureinvest. Monies were payable to the applicant as a result of him playing football for CFC. The years of income did not coincide with the playing years and necessarily the applicant's years of income for 1993, 1994 and 1995 are in issue in these proceedings.
In the 1993 year of income Mr Oliver returned taxable income of $21,133. The respondent took objection to that return and issue an amended assessment and deemed taxable income as $36,133. The difference of $15,000 between both assessments relate to monies payable to the applicant by the CFC in the 1993 playing year. The respondent is apparently satisfied that the sum of $15,000 was not paid before 30 June 1993 and is content to amend its notice of amended assessment by deleting the sum of $15,000 imposed by it as additional income and reinstating the sum declared initially by Mr Oliver, namely $21,133 as taxable income for that year. The respondent apparently makes this concession having regard to a letter received from the Finance Manager of the CFC Limited dated 13 May 1998 found at T22.1. That letter says that no payments were made to Mr Oliver for the year ended 30 June 1993 (& his group certificate was not issued). The sum of $15,000 apparently relates (by inference) to payments which were supposed to have been made each at $7,500 in the month of May and June of 1993.
The representative for the applicant submitted that the payments relevantly made to the applicant by CFC were not income but were fringe benefits. It was submitted that s136 of the Fringe Benefits Tax Assessment Act 1986 (the "FBT Act") applied with respect to the definition "fringe benefit" which is reproduced as follows:
""fringe benefit," in relation to an employee, in relation to the employer of the employee, in relation to a year of tax, means a benefit:
(a) provided at any time during the year of tax; or
(b) provided in respect of the year of tax;
being a benefit provided to the employee or to an associate of the employee by:
(c) the employer;
(d) an associate of the employer;
(e) a person (in this paragraph referred to as the "arranger") other than the employer or an associate of the employer under an arrangement between:
(i) the employer or an associate of the employer; and
(ii) the arranger or another person;
in respect of the employment of the employee, but does not include:
(f) a payment of salary or wages or a payment that would be salary or wages if salary or wages included exempt income for the purposes of the Income Tax Assessment Act 1936;
(g) – (p) ….."
It was submitted that for the purposes of this definition, CFC was the "employer", Mr Oliver was the "employee" and Secureinvest Pty Ltd was the "associate".
It was submitted that the monies paid constituted a "benefit" which was paid "in respect of the employment of the employee" however the monies paid ("the benefit") were exempt from income tax, because they were a payment of cash to the trust, being an associate of the employee.
Counsel for the applicant also submitted that the monies paid by CFC to Mr Oliver could not be "salary or wages" as those words are found at s.136(f) of the FBT Act and defined at s221A of the Income Tax AssessmentAct 1936 (the "Tax Act") which reads as follows:
" "salary or wages" means salary wages commission bonus or allowances paid (whether at piece work rates or otherwise) to an eligible person …."
It was submitted having regard to the evidence heard in this application, that monies were not paid to Mr Oliver ("the eligible person") but were paid to Secureinvest Pty Ltd. It followed, on this analysis, that the monies paid were not "salary or wages".
Counsel for the respondent submitted that the monies paid by the CFC to Secureinvest Pty Ltd were "income" in the form of salary or wages. Mr Murphy relied on the provisions of s19 of the Tax Act which says:
"Income or money shall be deemed to have been derived by a person although it is not actually paid over to him but is reinvested, accumulated, capitalised, carried to any reserve, sinking fund or insurance fund however designated, or otherwise dealt with on his behalf or as he directs".
Whilst acknowledging that s23L of the Tax Act exempted income derived if it was a fringe benefit within the meaning of the FBT Act, Mr Murphy submitted that the monies paid were not a fringe benefit, they were derived by the applicant and it was "income".
In the present application I am satisfied that for the 1993 and 1994 playing years – which ultimately affected the 1993, 1994 and 1995 years of income – the applicant agreed to play football with CFC. As a consequence of playing football with CFC he was entitled to remuneration. I am therefore satisfied that:

CFC was the employer;
The employee was Mr Oliver, the applicant in these proceedings;
In each of the two playing years, two agreements were entered into between the applicant and CFC, but only one agreement in each year was disclosed to the AFL payments commissioner;
The agreements not disclosed referred to payments which, if known to the AFL, would have breached the salary cap.

Whilst this application in part was concerned with the amounts actually received by Mr Oliver (I will return to this later) the substantial argument was whether the payments made under the agreement which was not disclosed to the AFL constituted a fringe benefit or whether it was income.
I am satisfied and find as a fact that the payments made to Mr Oliver were paid as a result of playing football for CFC. The documents specifically record that a payment is to be made because he has agreed to play football and because CFC has agreed to engage him as a football player. Nowhere in any of the documents are the payments described as being for any other purpose. Save that the letters of 25 January 1992 (T9.1) and 30 March 1994 (T10.1) refer to the provision of a fully maintained motor vehicle, none of the remaining payments are recorded or described (even by implication) as being in the nature of a "benefit" arising out of or in respect to the employment of Mr Oliver by the employer. In reaching these conclusions I am mindful of the provisions of s137, 138A and 138B of the FBT Act 1986.
The difficulties faced by the applicant have their origin in him being prepared to allow CFC to make certain payments which he knew were being made in a manner designed to avoid either being disclosed to or detected by the AFL. In so doing he allowed CFC to enter into an arrangement with Mr Jess and Secureinvest Pty Ltd. This involved payment of monies to Secureinvest Pty Ltd upon the provision of an invoice by Mr Jess and – subject to deduction of certain fees – the monies were eventually paid to the applicant.
Whatever might be said or inferred concerning the collusion between CFC and Jess with respect to payments made to Mr Oliver (and to other players) to avoid the limits imposed by the AFL salary cap, the relationship between the AFL and CFC is not a matter for determination by these proceedings.
CFC eventually made a disclosure to the AFL that it had been in breach of its salary cap obligations. It also obtained advice from senior accountants and financial managers and accepted the advice that it eventually received that the monies which had otherwise been described as a fringe benefit were at all times salary and wages. When it learnt of this advice it made a disclosure to the ATO, it issued an amended group certificate which included the amounts which were previously described as being fringe benefit payments and it paid monies to the ATO as income tax as per the amended group certificate.
During the proceedings the suggestion was put to Mr Jess that the arrangements that he had entered into with CFC amounted to a "sham". I have no doubt that the arrangements which did exist between Jess and CFC not only amounted to a "sham" but were a deliberate and contrived intent to avoid the scrutiny of the AFL.
It was said that Mr Oliver was entitled to a payment from the Secureinvest Pty Ltd Trust because he was a unit holder, but the monies were only payable to the Trust when Mr Jess forwarded an invoice to the CFC. The invoices made no reference whatsoever to the applicant, to his contract with CFC, or to him playing football for CFC. The invoices refer only to Secureinvest Pty Ltd and to its provision of "employment packages, analysis of funding, cash flow/employer cost analysis, detailed forward planning etc". In return CFC made a payment to Secureinvest Pty Ltd with the knowledge that it was making a payment arising out of the agreement with Mr Oliver which was not (then) disclosed to the AFL. It was believed that these invoices and the payments in respect of the invoices would not attract the scrutiny of any AFL audit. This is not hard to imagine because the actual payments by CFC were described (internally when a cheque was requested) as being with respect to "Raffle" and cheques were often paid to Secureinvest Pty Ltd on the Carlton Football Club Raffle Trust Account (T37).
In coming to these conclusions I am not satisfied that the CFC were intending to delude the ATO by describing the payments as being a fringe benefit but were more intent to avoid the scrutiny of the AFL. Indeed it appears that on some occasions invoices were presented to and eventually recorded in the books of account of CFC with respect to "repairs and maintenance" and not under the ledger column of player payments (T29). In reaching these conclusions I am also satisfied that CFC did not intend, when it entered into arrangements with Mr Jess, that the payments would be a fringe benefit. (In a letter to the Australian Taxation Office of 24 March 1998 (T21) Mr Sutherland, the Finance Manager, records that "… we confirm that payments made to Secureinvest Pty Ltd … were never intended to be subject to fringe benefits tax).
That letter confirms, in my view, the findings made above, namely that the payments agreed to be paid to the applicant by CFC in respect of its relationship with Oliver as employer and employee were never described, either on the face of the document or by implication, as being anything other than a payment of salary and wages and therefore income. The payments were not ever intended as being payments as a fringe benefit. In so far as the 1994 playing year was concerned, CFC paid $70,000 to Secureinvest Pty Ltd because of its obligation to do so under the contract with Mr Oliver and because this arrangement permitted it to avoid the scrutiny of the AFL.
It was suggested by Mr Jess in his evidence that the payments made to Mr Oliver were a fringe benefit because they were a payment "of cash". I know of no authority for this proposition and it would seem to be contrary to the provisions of s.25 of the Tax Act. Having regard to the definition of "benefit", at s.136 of the FBT Act I can find nothing to support this contention. Benefit is defined as-
"benefit" includes any right (including a right in relation to, and an interest in, real or personal property), privilege, service or facility and, without limiting the generality of the foregoing, includes a right, benefit, privilege, service or facility that is, or is to be, provided under:
(a) an arrangement for or in relation to:
(i) the performance of work (including work of a professional nature), whether with or without the provision of property;"
(ii) the provision of, or of the use of facilities for, entertainment, recreation or instruction; or
(iii) the conferring of rights, benefits or privileges for which remuneration is payable in the form of a royalty, tribute, levy or similar exaction;
(b) a contract of insurance; or
(c) an arrangement for or in relation to the lending of money;"
It was submitted that a number of payments, usually made as a cash payment, were specifically excluded as a fringe benefit under s.136, yet, in the present case, the trust was an "associate" of the applicant and the payment of cash fell within the primary definition of "fringe benefit". This submission attracts little merit yet it was acknowledged that if the payments were "salary or wages" they would be excluded under s.136(f) as being a fringe benefit and it would be conceded that the payments would be assessable as income (transcript p. 69).
At the conclusion of the submissions by both representatives I asked Mr Baring on a number of occasions to tell me what was the "benefit" obtained by Mr Oliver in receiving the payments that he did from Secureinvest. Having reflected upon the evidence and again read the transcript of the proceedings I am not satisfied that there was any benefit within the meaning of the FBT Act nor could it be said that the payments made to Mr Oliver were of the nature or character of payments contemplated by that legislation as being a fringe benefit.
It was also suggested by Mr Jess that the payments made to Mr Oliver were a fringe benefit because they were paid by reason of him being a beneficiary of the trust. The fact is however that the trust was no more than a contrivance to avoid salary cap obligations of CFC. It was the vehicle recommended to Carlton by Jess to permit it to pay players sums of money which were in breach of salary cap obligations.
The only benefit that could have been received by the applicant is a payment in return for his services playing football for CFC. This payment is more correctly construed as being salary and wages, which is not a fringe benefit. It is expressly excluded under s.136(f) of the FBT Act. Oliver received no more than what he was lawfully entitled to receive arising out of the contract of employer and employee. That is not a "benefit" which is on or at the "fringe" of the employment. The benefit of CFC arranging to circumvent the salary cap restrictions is not a benefit provided to the applicant and it is not a fringe benefit. It was unclear at the hearing what counsel for the applicant alleged to have been the fringe benefit and on the evidence of Mr Jess, I am disturbed to say that he was also unclear.

Insofar as it was alleged that the monies paid to Oliver were a fringe benefit because they were monies paid to a trust, I am not satisfied that this proposition is sound nor am I satisfied that in fact a trust truly existed.
In order to constitute a trust three "certainties" must exist. There must be certainty of intention to establish a trust, certainty of the subject matter of the trust and certainty of the object of the trust.
In the present case Secureinvest Pty Ltd is the Trustee of the Secureinvest Unit Trust No. 1 Trust. The unit holder is P W Jess and Associates Pty Ltd who is also the trustee for the P W J Unit Trust. The P W J Unit Trust purports to hold units on behalf of the applicant, the beneficiary.
Certainty of intention to form a trust has been fulfilled however I think it is doubtful that the trust has certainty of subject and object.
I am not satisfied that there was certainty as to who was intended to receive benefits from the trust so as to satisfy certainty of object. It would appear that Carlton did pay $70,000 to the trust with respect to the 1994 playing year, yet whilst there is some doubt as to how much the applicant actually received from the trust, it is clear that it was less than $70,000. The basis for payment by the trust to Oliver of an amount less than he had contracted with Carlton is not to be found in the trust and the authority of the trust to withdraw or deduct fees is not apparent. Indeed, CFC only paid to the trust when Jess produced a fictitious invoice, which had no resemblance to Oliver.
I am also satisfied that no trust exists by reason of lack of certainty of subject indeed, I am satisfied that certainty of subject was absent. On the evidence heard Mr Oliver had never heard of Secureinvest until such time as he received a cheque on its account and queried Mr Jess about it. On the evidence heard Mr Oliver also said that he was unsure how much money he had in fact received and how much had been paid – from his monies – to Jess. If this was certain there would have been, I would have thought something in writing or at least understood. I am inclined to the view that the "trust" was a contrivance or a sham deliberately created to allow CFC – on the advice of Jess – to meet its contractual obligation to Oliver to pay him $70,000 tax free.
With respect to the monies paid I am satisfied that they were 'derived' (s.19) by Oliver from CFC and may be properly characterised as salary and wages. These monies are also "income".
For the purposes of s.221A of the Tax Act the monies paid by CFC to Secureinvest Pty Ltd were salary and wages of Oliver. I have reached this conclusion for a number of reasons. That the monies were paid to Secureinvest Pty Ltd – and not Oliver – does not of itself change the character of the monies. The monies were paid by CFC only because Oliver played football and there was an agreement to pay for his services. That CFC only paid when Jess sent an invoice is an irrelevance. This was no more than the pretence Jess devised with CFC to attempt to hide these monies from the AFL (refer proof of evidence of James Sutherland) and represent to the respondent – if it ever learnt of the existence of the payments – that they were a fringe benefit.
I am also not satisfied that s.19 and s.221A are inconsistent. The monies paid by CFC were "not actually paid over to him" (Oliver) but were "dealt with on his behalf" (s.19). The monies were therefore "income". S.221A is concerned with "salary and wages …… paid to an eligible person". One section deals with income and the other with salary and wages. The CFC monies were in the present case both salary and wages and income yet if other circumstances applied a distinction may exist. Put simply "income" may not only be confined to encapsulating salary and wages. Nonetheless in the present case the CFC monies were "derived" (s.19) by Oliver. Unlike the circumstances in Temples Wholesale Flower Supplies Pty Ltd & Federal Commissioner of Taxation 1991 99 ALR 479 which affirmed pre-existing Australian Law that a credit entry in journals and books of account do not amount to a "payment", in the present case there were monies drawn by CFC, paid to Secureinvest Pty Ltd and then paid after deduction of fees to Oliver. The derivation of this income from CFC by Oliver was obvious. CFC paid it only because of its contractual obligation. Unlike Temple it actually made a payment of money. The money was "not actually paid to (Oliver)" but was "dealt with on his behalf". It was derived income within the meaning of section 19. It was not a fringe benefit.
The payments of money by Carlton for and on behalf of Oliver were as a result of him playing football for CFC. The nexus between the monies paid by Carlton and eventually being received by Oliver should not be obscured by the arrangement made by Jess with CFC to forward an invoice before monies were paid. This was merely a device to camouflage the true essence of the applicant's payments from the AFL salary cap auditor and has no bearing on the true nature of the payments.
The payments made by Carlton were incidental to its employment of the applicant, were periodic and it was clearly the belief of Mr Oliver (the wage and salary earner) that Carlton had a liability to pay him the monies because when his first payment was delayed he telephone CFC.
Assessments
The evidence in relation to the amounts of money variously received and the amounts of money declared was most unsatisfactory. For reasons which will follow, I regret that I am unable to complete this review and have no choice but to remit the matter.
In relation to the 1993 year of income the applicant declared the sum of $23,393 as the football income. (The income tax return found at T3.4 does not recite the name of the employer who paid this sum as income, however for the purposes of these reasons I assume it was paid by CFC). Another sum of $625 is separately recorded as income and I have assumed for these purposes that that sum was paid by another employer of the applicant in that year, namely Castle Bacon. The respondent issued an amended assessment and added to the sum of $23,393 declared the sum of $15,000 being monies that it said the applicant received under the 1993 agreement with the CFC. That agreement provided for a base payment of $30,000 payable by four instalments each of $7,500. Two of those payments – if the payments were made – would have been payable in the 1993 income year. Prior to the hearing the respondent conceded that it no longer relied on the amended assessments of the 1993 income year and that it would amend the assessment by removal of the additional sum imposed as income namely, $15,000.
In relation to the 1994 income year the sum of $36,609 was declared as income from CFC. In its notice of amended assessment the respondent imposed an additional sum of $35,359 as income being $17,000 not declared under the 1994 agreement with CFC, the sum of $15,000 under the 1993 agreement with the CFC and the sum of $3,359 for expenses associated with the applicant's motor vehicle. An analysis of these three sums comprising the total sum of $35,359 needs to be explained.
The expenses of $3359 appears to have been assessed by the respondent having regard to information it received from CFC. It appears that the applicant incurred fuel costs in travelling to Melbourne in the 1994 playing year. He travelled to Melbourne in a motor vehicle made available to him by CFC and pursuant to the agreement that he had with the club. In evidence the applicant said that he did not pay these expenses and was therefore not re-imbursed. He said he presented invoices to the club and the club paid the fuel supplier directly. (Transcript p. 55). In fact the applicant claimed the sum of $9,811 for "work related motor vehicle expenses" but was unable to explain this sum because he said that he engaged Mr Jess to complete his tax return and was unaware whether that sum related to an amount based on distance travelled "or a log book basis". When pressed on the issue of how this sum was calculated, Mr Oliver said he "wouldn't know" (transcript p. 61).
In relation to the sum of $3,359 it would appear that the applicant was not re-imbursed that sum however it appears that it was an amount of money paid directly by the club to the fuel supplier. There is nothing to indicate that that sum should be added to the applicant's income for the 1994 year and insofar as that sum forms part of the amended assessment it should be excised.
In relation to the remaining part of the amended assessment of $32,000, it appears that this sum is made up of the remainder of the 1993 contract payments of $15,000 and $17,000 payable in the 1994 year of income under the 1994 playing year agreement.
The respondent led no evidence in relation to the sum of sum of $15,000 payable as an off contract payment for the 1993 playing year. It conceded this sum was not paid before 30 June 1993 but does not concede that payments were not made in the 1994 income year.
Whilst most of the hearing was focussed on the $70,000 payable to Secureinvest, the sum of $30,000 was payable to Mr Oliver directly. It was a sum agreed and payable, before Mr Oliver was introduced to Jess. Despite Jess asserting in the 1993 & 1994 Notices of Objection (T6.1 & 6.2) that this sum was a fringe benefit, I am satisfied it was not. It was salary and wages according to ordinary concepts. It is ridiculous to suggest otherwise, yet the issue that troubles me most, in the context of assessment of taxation liability, is whether this, or any part of this sum, was ever paid.
Mr Oliver said in evidence that it was paid. The applicant's solicitor in his Statement of Facts and Contentions said the sum was paid and returned in the 1994 income tax return. But there is some doubt whether it was ever paid.
In a letter from Mr Grimes the applicants' his current accountant, to the ATO on 18 March 1998, it is stated that Jess had advised the monies were never received (T 20.1). CFC in its letter to Jess on 13 May 1998 said it did not make any payments to Oliver before 30 June 1993 (T22.1). Jess wrote to the ATO on 14 May 1998 and said 'the remaining' $15,000 had not been paid (T 23.1). The summary of payments made by CFC in the 1994 income year (T 24.1) contains no reference to any payments of $7,500 yet the total gross amount recorded is the same sum declared by Oliver in his 1994 income tax return (T 3.17). In July 1998 the ATO wrote to CFC and asked if the sum of $30,000 was paid (T25.1) & CFC replied that it was 'not aware of this second contract & cannot say if this payment was made' (T 26.1). In an interview with CFC officials, an ATO officer referred to 'confusion' surrounding a 'single payment' in respect of the 1993 contract. Mr Sutherland is reported to have replied that he believed all payments had been made (T 29.4).
If the applicant did receive $30,000 from CFC after 1 July 1993 and did declare it in his 1994 return, only $6,609 of the declared sum could be referable to player payments for games played after 1 July 1993 and before 30 June 1994. This riddle may be explained if the applicant played mainly in VSFL games or was predominantly injured and did not play. Research at CFC or the AFL would unearth his playing record. Additionally, or alternatively, the financial records of CFC must be explored. The sum of $30,000 is not insignificant. If it was paid, there would be a record of it and some certainty can be added to the assessment process. If there is no record, I would be inclined to the view, subject to the above, that it was not paid and the 1994 assessment should be reviewed. It might also provide Mr Oliver with a cause of action against CFC.
Having regard to the letter from CFC of 13 May 1998 that there were no payments to Mr Oliver for the year ended 30 June 1993 and 'no group certificate was issued' (T22.1), I am disturbed about the sum of $23,393 returned in the 1993 return. The name of the employer is not recorded (T3.4) and it has been assumed that this sum was paid by CFC.
In conclusion, in so far as the payment of $30,000 is concerned, I regard the evidence as unsatisfactory and I am unable to make any finding of fact. It follows that this part of the review should be remitted for further investigation by the respondent. I regard the need for further inquiry to be critical because a significant part of the assessment notices takes account of the sum of $30,000, believed to have been paid.
The remaining component of the amended assessment of the respondent was the sum of $17,000. This sum appears to relate to payments made by the CFC under the 1994 agreement. The letter from Mr Sutherland of 11 June 1997 (Exhibit 4) refers to a payment of $10,000 and a payment of $7,000 to Secureinvest on 21 March 1994 and 29 April 1994 which sums were respectively paid to the applicant (according to the letter) on 30 March 1994 and 29 April 1994. An additional sum was invoiced of $7,000 on 21 June 1994 but it appears that it was not paid to Secureinvest until 8 July 1994. It follows – according to these documents – that $17,000 only was paid under the 1994 contract in the 1994 year of income. Accordingly the respondent assessed additional income with respect to the 1994 playing year against the applicant in the sum of $17,000. However a document apparently prepared by Mr Jess and received into evidence as exhibit 6 records amounts of money which are described under the sub-heading of "Fees Received from Football Club". The applicant's name is referred to on the list, which records under a separate sub-heading of "Player Amount", 2 sums each of $7,000 received on 31 March 1993 (sic) and 28 April 1994 (total $14,000). Additionally there is a separate column entitled "PWJ Fees Account" again under the sub-heading of "Fees received from Football Club" which refers to two payments each of $3,000 (total $6,000).
On the one hand this sheet would indicate that a total of $20,000 was received from CFC in the two payments made on 31 March 1994 and 28 April 1994 yet the amount disclosed by the club as having been paid on these dates totals $17,000 being one payment of $10,000 and one payment of $7,000. On the same sheet (Exhibit 6) the amount actually paid by Mr Jess to Mr Oliver was the total sum of $10,000 being made up of two payments each of $5,000, on 16 May 1994 and 7 June 1994. It was acknowledged by Mr Oliver that he paid fees to Mr Jess and it was acknowledged by Mr Jess that he charged fees. The amount of fees levied against Mr Oliver and the amount of fees paid by him is difficult to reconcile according to this sheet in this year of income. The accounting methodology adopted by this sheet is like nothing I have ever seen before and I doubt its accuracy. I prefer the documentation from CFC in relation to the amounts that it actually paid. It is the amounts paid to Secureinvest which I regard as income (and not a fringe benefit) and against which income tax is payable. I am therefore satisfied and find as a fact, that the sum of $17,000 as assessed by the Commissioner was paid in the 1994 year and should be included in the amended assessment. Whether fees were paid to Mr Jess which are properly and lawfully deductable in this year I am – on the documents – unable to say.
In relation to the 1995 year of income the applicant declared income from CFC of $1,666, however the Commissioner assessed an additional sum of income at $53,000. This sum appears to relate to the remaining payments payable under the 1994 playing year agreement. That is, it appears to relate to payments made after 1 July 1994 and before 30 June 1995. Because CFC was obliged to pay the sum of $70,000 under the playing agreement not disclosed to the AFL, and because it had paid $17,000 in the previous financial year, the sum of $53,000 was payable in the 1995 Income Year. This sum appears to have been paid in various instalments. This is confirmed by the correspondence from CFC of 11 June 1997 and 23 September 1997 but appears also to be confirmed by exhibit 5 which is another document completed by Mr Jess recording payments made to Secureinvest by CFC on behalf of Mr Oliver.
In his proof of evidence lodged prior to the commencement of the hearing Mr Oliver said that he received $63,000 from Mr Jess being $70,000 paid by the CFC less the sum of $7,000 paid to Mr Jess as his agent being 10% of the "contract sum". Mr Oliver also confirmed in evidence (transcript page 53) that $63,000 was received.
I am unable to find any reference to the sum of $7,000 having been deducted by Mr Jess or Secureinvest in the 1995 year from the payments received in that year from CFC, however I note that the respondent conceded during the hearing that the sum of $7,000 is properly claimed as a deduction. I am unable to conclude in which year the sum of $7,000 was deducted or whether part of it was deducted in each of the 1994 and 1995 years and if so in what amounts.
Whilst Mr Jess was giving evidence it emerged, on the calculations made by counsel for the applicant, that the summary of receipts and payments made by Secureinvest as prepared by Mr Jess purported to record a total sum of $57,500 paid to Mr Oliver in the 1994 and 1995 Income Years. (Transcript page 24 and 47). On closer analysis, I am unable to arrive at that sum. It appears from the sheets prepared by Mr Jess (Exhibit 5 & Exhibit 6) that the total amounts paid to Mr Oliver by Secureinvest were $10,000 in the 1994 year (refer earlier) and $44,500 in the 1995 year (being two payments of $5,000, one payment of $5,500, one payment of $9,000, and two payments each of $10,000). This would suggest that $54,500 was paid of the sum of $70,000 to Mr Oliver but I am not confident of this. As I have recorded above I have reservations as to the accuracy of the sheets completed by Mr Jess. I certainly would have grave doubts whether the balance, being $15,500, could be claimed properly as a deduction for work undertaken by Mr Jess on behalf of Mr Oliver. This is because the 1994 terms with CFC were negotiated directly with Mr Oliver and before a point in time that Mr Jess was known to Mr Oliver. The only other work as I understand Mr Jess completed on behalf of Mr Oliver was the completion of his 1993, 1994 and 1995 income tax Returns. It is inconceivable that Mr Jess could claim (and be entitled to retain) the sum of $15,500 on account of fees and charges. In his proof of evidence, Mr Jess stated that "$63,000 was distributed ….. to Oliver …". Perhaps Mr Oliver may now seek to have Mr Jess properly account to him for these monies. As I have indicated above – in any event – the amount paid by CFC is the amount over which income tax should be levied, not the amount paid by Secureinvest to Oliver. The respondent concedes that $7,000 is a proper deduction being 10% of the total sum of $70,000. That sum of $7,000 is 10% of the total payment, which appears to be the standard fee payable to player agents. I would be prepared to allow that as a proper deduction, subject to the reservations I have – and referred to earlier – as to the year of income in which that sum can be claimed.
Having reviewed the off-contract payments for the 1994 year I am not satisfied in fact that Oliver has received the monies to which he contracted with CFC to receive. This is because the "base payment" is recorded as "$70,000 after tax". I understand this to mean that Mr Oliver was to receive $70,000 net of tax. That is, the gross amount payable by Carlton to Oliver was more than $70,000. On the evidence heard Carlton has paid $70,000 only. Income tax has been levied by the Commissioner on this sum. This would mean that Mr Oliver will not receive $70,000 net of tax from Carlton.
With respect to the motor vehicle expenses claimed in the 1994 Income Tax Return of $9,811, I have not referred to this sum in these reasons. That sum was not part of the amended assessments being the decisions under review. This was an issue which emerged during the hearing. Because the respondent has not made a "decision" with respect to this sum, there is nothing capable of being reviewed in this decision.

In all of the circumstances, I have decided that this application be remitted to the respondent for issue of new assessment notices in accordance with these findings. I acknowledge that remittal of this application will not necessarily bring the matter to an end and might provoke further notices capable of review. I also acknowledge that would be most undesirable, yet, for the reasons given earlier, I have no alternative
With respect to the amounts imposed as additional tax and whether those sums should be remitted I note that $4,084.41 was imposed in the 1993 year. That sum must necessarily lapse because of the concession by the respondent that the additional sum of $15,000 imposed in the amended assessment for that year of income will be excised and the original assessment will stand.
With respect to the additional tax imposed in 1994 and 1995 I note that the sums of $9,480.45 and $12,324.75 were respectively calculated and imposed by the respondent. The amounts imposed as additional tax represent approximately 25% of the income assessed by the respondent as not having been declared. I can see no reason why those assessments should be disturbed. It probably would be fair to label the applicant as being naive, however he was in the relevant years of income a young man concerned only with playing football and who placed his trust in the affairs of other persons. He did not contrive with Carlton and Jess to delude the AFL nor did he alone represent himself to the respondent as having received monies as fringe benefit which properly should have been characterised as income. He must however accept some consequence. Mr Oliver did sign income tax returns and was aware that Carlton was making payments to him to avoid the AFL but in turn also to avoid the scrutiny of the taxation commissioner. The amended assessments relate to years of income, which ceased between 5 and 6 years ago. Mr Oliver has had the benefit of the monies not declared to the tax office in that period of time. The decision made by the respondent with respect to additional tax is appropriate.
I certify that the 109 preceding paragraphs are a true copy of the reasons for the decision herein of Mr J. Handley, Senior Member
Signed:         ..........Carolyn Irons...........................................
  Secretary
Date/s of Hearing  11 December 2000
Date of Decision  19 February 2001
Counsel for the Applicant        Mr L. Barins
Solicitor for the Applicant         Maddock Lonie & Chisholm
Counsel for the Respondent    Mr Murphy
Solicitor for the Respondent    Australian Government Solicitor