Western Australian Capital Investment Co. Ltd v Commissioner of Taxation

[1988] FCA 443

WESTERN	AUSTRALIA	1
DISTRICT	REGISTRY	)

GENERAL DIVISION ) Nos. WAG 2049 and 2050 of 1987

B E T W E E N :	WESTERN AUSTRALIAN CAPITAL	I .
INVESTMENT CO. LTD	i

Applicant

and

THE COMMISSIONER	OF TAXATION	!
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Respondent

NOS. WAG 2052, 2054 and 2055 of 1987

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B E T W E E N :  GRANT HEATON JOHNSTON

Applicant

and !

THE CONMISSIONER	OF TAXATION	r
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Respondent

MINUTE OF ORDER ! .

JUDGE MAKING ORDER: FRENCH J.

FEDERAL COURT OF

DATE OF	ORDER:	12 MAY 1988	AUSTRALIA
PRINCIPAL

REGISTRY

WHERE MADE:	PERTH
THE COURT ORDERS	THAT:

2.	No order as to costs.
On the applicants' motion filed 5	May	1988 with respect to Nos.

WAG 2049, 2050, 2052, 2054 and 2055 of 1987:-

1. The respondent is to file and deliver on or before 19

Play 1988 particulars of the date on which he considered

the s.l8(l)(b) matter and when he formed the opinion

that vendors recoupment tax was likely to become

payable.

On the respondent's motion filed 11 May 1988 with respect to No.

WAG 2049 Of 1987:-

1. The applicant do on or before 19 May 1988 provide an

answer to request 3 of the respondent's request for

further and better particulars	of amended points of
claim dated 9 February 1988.

2 .         No order as to costs.

Note: Settlement and entry of orders is dealt with in

Order 36 of the Federal Court Rules.

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IN THE FEDERAL COURT ) LIMITED DISTRIBUTION

OF AUSTRALIA	1
WESTERN AUSTRALIA	1
DISTRICT REGISTRY	)

GENERAL DIVISION ) Nos. WAG 2049 and 2050 of 1987

B E T W E E N :  WESTERN AUSTRALIAN CAPITAL
INVESTMENT CO. LTD

Applicant

and

THE COMMISSIONER OF TAXATION

Respondent

Nos. WAG 2052, 2054 and 2055 of 1987

B E T W E E N :  GRANT HEATON JOHNSTON

Applicant

and

THE COMMISSIONER OF TAXATION

Respondent

CORAM: FRENCH J.

1 2 MAY 1988

EX TEMPORE REASONS FOR JUDGMENT

ON PROVISION OF PARTICULARS

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There are before the Court this morning, five motions

seeking, from the Commissioner of Taxation, further particulars in

connection with appeals 2049, 2050, 2052, 2054 and 2055 of 1987.

The applicants are Western Australian Capital Investments Co. Ltd

I in respect of 2049 and 2050, and Grant Heaton Johnston in respect

of 2052, 2054 and 2055.

The appeals all relate to notices of assessment served

on the applicants pursuant to the provisions of the Taxation

(Unpaid Company Tax) Assessment Act ("TUCTA Act").

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In each case, and pursuant to the	power of the Court Lo	,,
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give directions for the purpose of defining the issues, I had

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directed in these proceedings that points	of claim and a response
be filed by the parties.	This was done. Subsequently, the points

of claim were amended and a response to the amended points of

claim was filed by the Commissioner.

In their points of claim, the applicants have alleged,

inter alia, that at no time, prior to the issue of the TUCTA Act

assessments, did the Commissioner address his mind to the matters

set out in sub-para.l8(l)(b) of the TUCTA Act and was therefore

not in the position to, and did not, in fact, form the opinion

that vendors recoupment tax was likely to be payable by any person

or persons.

Sub-section 18(1) of the Act provides:-

"Where -

(a) under the Assessment Act, the Commissioner is

required or permitted to serve anotice of

assessment on acompany in relation to the

liability of the company to pay ordinary company

tax or undistributed profits tax in relation to	a
year of income; and

(b) vendors recoupment tax is payable, or the

Commissioner is of the opinion that vendors

reecoupment tax is likely to become payable, by	a
person or persons in relation to ordinary company	;
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tax or undistributed profits tax, as the case may	!
be, that is	payable or may become payable by the

company in relation to that year of income,

the notice shall, notwithstanding section	174 of the
Assessment Act,	be served on the company by being served
on -
(c)	where the vendors recoupment tax is payable, or in
the opinion of the Commissioner, is likely to
become payable, by only one person - that person; and
(d) in any other case	- any of the persons referred to

in paragraph (b),

and, where the notice is served in accordance with

paragraph (a), the Commissioner shall serve	a copy of
the notice on each person (other than	the person on whom

the notice was erved) who is included in the

representative class in relation to the vendors

recoupment tax. "

On the face of it, the deemed service is subject to

conditions	precedent,	specified	in,	inter	alia,	sub-para.
18(1) (b)	-

The Commissioner has denied the allegation that he

failed to address his mind to the matters set out in sub-para.

(b), and accepts that, by that denial, he impliedly asserts that

he did address his mind to them. The request for further

particulars of that response seeks particulars of:-

" ( i) the date on;

(ii) the place at; and

(iii) the manner in,

which the respondent considered the Section 18(l)(b)

matters."

And further asks:-

"(b) When did the respondent form the opinion that the

vendors recoupment tax was likely to become payable?"

and

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"(c)	Set out the grounds relied upon by the respondent in	t.,
forming such opinion."
By his answer, the Commissioner objected to providing

the particulars requested on the basis that the request was in the

nature of a request	f o r evidence rather than for particulars of
material facts.

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The object of the exercise of providing points of claim ! I

and response, and particulars thereof, is to define the issues

between the parties. It is not to extract evidence, or assist a

fishing expedition. In my opinion, the request is legitimate,

insofar as it seeks particulars of the times at which the relevant

opinions were formed - that being, in truth, an elaboration of the

implied assertion contained in para.4 of the Commissioner's

response.

AS to the manner in which the respondent considered the

s.l8(l)(b) matters and the grounds relied upon by him in forming

his opinion, these seem to me to be matters of evidence, and not

by way of elaboration of the implied assertion and not	necessary
for defining the issues	as between the parties.

I will, therefore, be prepared to make an order

requiring particulars of the date on which the Commissioner

considered the matters under para.l8(l)(b) and when he formed the

opinion that the vendors recoupment tax	was likely	to become
payable.

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As to para.3 of the request for particulars, in all but

Appeal 2052, the request is directed to determining whether the

Commissioner relies only upon the deemed service under s.18(1) as

found in liability, or whether he alternatively or additionally

relies upon actual service on the company itself.

Mr Windsor, for the Commissioner, has today made clear ..

to the Court that the Commissioner relies upon, and only upon, the
deemed service under sub-s.l8(1) in each case. Having regard to

that statement, there is no need to direct the particulars sought

under para.3 of the request, and that is conceded by the

applicant.

I certify that this and the preceding

four ( 4 ) pages are a true copy of the

Ex Tempore Reasons for Judgment of

his Honour Justice French.	i
Associate: M
Date:	12.c. %g

Counsel f o r the Applicants: Mr S .	Paterniti
Solicitors for the Applicants: Messrs. Parker	& Parker

Counsel for the Respondent:  M r G.J. Windsor

Solicitors for the Respondent: Australian Government Solicitor

Date of Hearing: 12 May 1988

Date of Judgment: 12 May 1988

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