Slade, D.N. v Commissioner of Taxation

[1993] FCA 315

315 1993

JUDGMENT No. ........ .....,.... I ........ ..,

I

i	'IN THE FEDERAL COURT OF AUSTRALIA	)
)

NEW SOUTH WALES DISTRICT REGISTRY )	No G 0022 of 1993
GENERAL DIVISION

ON APPEAL FROM THE ADMINISTRATIVE APPEALS TRIBUNAL

BETWEEN:  DAVID NELSON SLADE
Applicant

CORAM :	nlbh c)
PLACE :	SYDNEY
DATED :

The applicant, Mr David Nelson Slade, appeals

against the decision of the Administrative Appeals Tribunal

("the Tribunal") constituted by a deputy president on 23

December 1992 in respect of the years of income 1982 to 1986 inclusive. The respondent Commissioner has moved the court for orders that the notice of appeal be struck out as incompetent. The Commissioner says that the notice of appeal does not disclose a question of law.

by the Commissioner with the Tribunal within 90 days of a	request by the taxpayer. The orders sought by Mr Slade are
that the assessments "be found not enforceable and no further action be taken agalnst him". He seeks also a refund of moneys paid on the appeal and what is described in the notlce of appeal as money taken on account.
The notice of appeal under the heading "grounds" discloses that the appeals against assessments were lodged with the Australian Taxation Office in 1988, but that these had not been referred to the Tribunal until late 1991, far outside the 90 day stipulation to which Mr Slade refers. The documents before the Tribunal disclose that notices of assessments, being amended assessments, were issued by the Commissioner on 5 February 1988.
Mr Slade objected to the amended assessments on 5 April 1988. His objections raised essentially the issue whether certain amounts referred to in them, which had been added back to Mr Slade's assessable income, were indeed his
disallowed. The "T" documents, tendered in the Tribunal, do income in the relevant tax year. These objections were
not disclose the date of the notice of disallowance. Mr Slade from the bar table suggests that this was sometime in 1988.
It is clear that this must be so because in a letter dated 11 October 1989, which was tendered before me by Mr Slade, addressed to the Deputy Commissioner of Taxation and which, at least for the purposes of the present proceedings, I
will assume was sent, indicates that there had been a conference in the previous December, that is to say, in December 1988 relating to the fees for referral to the Tribunal. The letter of 11 October 1989 is in the following
terms :

Unfortunately Mr Slade appeared for himself before the Tribunal and has appeared before me to argue the notice of motion. He has apparently been unable to afford legal representation. The notice of appeal as presently framed states the question of law to be that appeals are to be lodged

"Further to our conference of 20 December last and payment of appeal fees, the dispute does not appear to have been referred to the Administrative Appeals Tribunal. Could this be rectified as soon as possible?"

Mr Slade relies upon that letter as a notice given by him pursuant to the provisions of s.189A of the Income Tax Assessment Act 1936. That section, repealed in 1991, provided in sub-sec.(l) as follows:

"Subject to subsections (2) and ( 3 ) , if, wlthin 60 days after receiving a request under s.187 in relation to a decision on an objection, the Commissioner does not comply with the request, the taxpayer may

give notice in writing to the Commissioner	requiring the Commissioner to do so and
the Commissioner shall, within 60 days after receiving the notice, comply wlth
the request. "

The Commissioner can request further information from the taxpayer within 60 days of the receipt of the request for reference. Sub-section 3 of S. 189A makes it clear that the Commissioner's obligation to comply with the taxpayer's request does not arise until 60 days after receipt of

information from the taxpayer. At present there is nothing before me to suggest that the Commissioner did request further information within that 60 day period. I do not, of course, at this stage decide any questions of fact on that matter. Mr Slade relies upon the letter of 11 October 1989 as being a

notice given by him under s.189A. That is arguably correct.

The question of law which may well arise in these circumstances is whether, once a notice under s.189A has been given and the Commissioner has failed to refer the appeal to the Tribunal in time and the consequences of the time delay are such that the taxpayer is no longer in a position to adduce evidence because that evidence has in the meantime been destroyed, failure to take that matter into account may constitute a denial to the taxpayer of natural justice.

I do not decide at this stage whether that argument is correct or not, and indeed, there may be difficulties with

attention to the Commissioner's failure in the present case to	it in the present case unless Mr Slade drew the Tribunal's
comply with his request. The point, I think, is, however, that it cannot be said on matters as they appear at this stage without evidence being adduced that no question of law could arise in the appeals. I should say that it is well established that if there has been a denial by the Tribunal of natural justice to a taxpayer, that denial itself would ordinarily constitute an error of law investing the Court with jurisdiction to deal with the appeal.
It is true that the taxpayer's notice of appeal does not quite raise the issue of law as I have pronounced it, but the genesis of the idea is there even if not expressed in legal language. There is another matter raised by Mr Slade before me which is not presently covered by his notlce of appeal. I take his raising it with me as an application to amend his notice of appeal. This other matter concerns only the year of income ended 30 June 1982, and an amount of $52,000 which the Commissioner had included in Mr Slade's assessable income in that year. The reasons for decision make it clear that there was before the Tribunal a bank statement from the Rural Bank of New South Wales confirming a deposit of $68,061.60 on 13 March 1981, that is to say, outside the years of income that were in dispute before the Tribunal.
Also before the Tribunal was a debit entry of $65,000 to the same account on 10 April 1981. Mr Slade apparently had said to the deputy President that this amount had been placed on deposit. It is not clear to me at this stage what evidence in fact was actually given about this by Mr Slade. What is however clear is that the Tribunal appears to have taken the view, at paragraph 13 of its reasons, that the $52,000 was "funded in part by the $68,061".
Notwithstanding this conclusion by the Tribunal, the Tribunal included the whole of the $52,000 in the 1982 year of income. It may very well be that thls was a mistake on the part of the Tribunal, but in terms of the provisions of s.43 of the Administrative Appeals Tribunal Act 1975, this clearly constitutes an error of law. It must be wholly contrary to a conclusion that part of the $52,000 at least came from a bank deposit that that $52,000 in whole was assessable income of Mr Slade.
It follows that I would permit Mr Slade to amend his notice of appeal to raise a ground to the effect that it was not open to the Tribunal, on the evidence before it, to conclude that the whole or any part of the $52,000 included in the assessable income of Mr Slade in 1982 income tax year was assessable income of that year, having regard to the Tribunal's finding in para.13.
Mr Slade raised other matters such as the Tribunal's not accepting his evidence that certain deposits came from his salary which had already been included as assessable income through group certificates, and that the Tribunal had not accepted his evidence that certain amounts deposited had come from relatives. No question of law, however, arises in respect of these matters, as a perusal of the Tribunal's reasons makes quite clear. The Tribunal rejected Mr Slade's evidence and did not regard him as a truthful witness.
It did so because of an explanation that Mr Slade had given that a certain witness, referred to in the Tribunal's reasons as M1, was to come to Australia and would arrive some time prlor to May 1992. Ultimately Mr Slade apparently advised that M1 had died in a car accident on the way to the airport where he was to have boarded a plane to come to Australia. Evidence was then adduced to the Tribunal that made it clear that this explanation was totally untrue.
In the result the Tribunal's failure to accept Mr Slade's evldence did not involve any question of law. Mr Slade in particular made no attempt to adduce evidence in corroboration of what he had said. Given the matter concerning M1, it is perhaps not surprising that the Tribunal did not accept Mr Slade's evidence. It follows however that I would not dismiss the appeals and I will accordingly make directions for their further disposition.
In the 1986 year Mr Slade wishes to argue that the inclusion in assessable income of the sum of $2,900 was not warranted by the evidence. Mr Slade says that before the Tribunal there was a bank statement which shows that on 1 November 1984 there was a deposit of $2,900 followed by a debit to the account of $3,000. Mr Slade submits that the Tribunal erred in concluding this deposit was assessable lncome and that its conclusion was contrary to the evidence and not open to the Tribunal.
There is no doubt that so put that involves a question of law, although whether it will ultimately succeed is a matter that would require examination of what evidence was in fact before the Tribunal and I make no comment on it. I would allow Mr Slade to amend his grounds of appeal to deal also with that matter, clearly involving as it does an issue of law.
I will at this stage stand over the notice of motion to be dealt with at the hearing of the case finally when such evidence as has then been adduced will enable whoever hears the matter to determine whether a question of law ultimately arises. I would reserve costs.
I will direct the applicant to file and serve any affidavit upon which he proposes to rely on or before the 21 April and the Commissioner to file and serve any affidavits upon which he proposes to rely in reply on or before 5 May. I
will stand the matter over then until the 19 May for further directions.
I certify that this and the preceding seven (7) pages are a true copy of the Reasons for Judgment herein of his Honour Mr Justice Hill.
Associate: 'l ~%{--L
Date :

18 MAY r Y Q 3

Mr D N Slade appeared for himself.

Solicitors for Respondent:	Australian Government Solicitor
Date of Hearing:	7 April 1993