FEDERAL COURT OF AUSTRALIA

Holland v Commissioner of Taxation [1999] FCA 1125

ADMINISTRATIVE LAW – TAXATION – reviewable objection decision – appeal from decision of Administrative Appeals Tribunal – whether Tribunal erred in making finding of fact in absence of evidence – whether Tribunal erred in making finding of fact that lacked a rational connection with evidence – whether appeal on question of law.

Administrative Appeals Tribunal Act 1975 (Cth) s 44

Taxation Administration Act 1953 (Cth) s 14ZZK

Lombardo v Federal Commissioner of Taxation (1979) 40 FLR 208 cited

Telstra Corporation Ltd v Razmovski (1994) 36 ALD 22 cited

Reg v Hillingdon London Borough Council; Ex parte Puhlhofer [1986] AC 484 cited

Broadbridge v Stammers (1987) 16 FCR 296 cited

Australian Conservation Foundation v Forestry Commission (1988) 19 FCR 127 cited

Minister for Immigration and Multicultural Affairs v Eshetu (1999) 162 ALR 577 cited

Edwards (Inspector of Taxes) v Bairstow [1956] AC 14 cited

Blackwood Hodge (Australia) Pty Ltd v Collector of Customs (NSW) (1980) 47 FLR 131 cited

Repatriation Commission v Thompson (1988) 44 FCR 20 cited

ROBERT JAMES HOLLAND v COMMISSIONER OF TAXATION

WG 136 OF 1998

LEE J

PERTH

13 JULY 1999

THE COURT ORDERS THAT:

The appeal be dismissed.

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

REASONS FOR JUDGMENT

1                     This matter is an “appeal” from a decision of the Administrative Appeals Tribunal (“the Tribunal”) on a reviewable objection decision of the respondent (“the Commissioner”) which disallowed an objection against an amended assessment of the applicant’s liability to income tax made by the Commissioner.  Two reviewable objection decisions were brought before the Tribunal for review under the Taxation Administration Act 1953 (Cth), being decisions of the Commissioner to disallow objections to amended assessments made by the Commissioner of the applicant’s liability for income tax for the 1996 and 1997 years of income.  Each matter before the Tribunal turned on the same question of fact, namely whether the applicant had received more income than disclosed in taxation returns filed for the respective years.  The Tribunal set aside the decision to disallow the objection to the amended assessment for the 1996 year of income but affirmed the decision to disallow the objection in respect of the amended assessment for the 1997 year of income.

2                     The applicant “appeals” from the latter decision of the Tribunal.  Although described as an “appeal” it is in the original jurisdiction of this Court.  Under s 44 of the Administrative Appeals Tribunal Act 1975 (Cth) (“the Act”), an “appeal” to this Court is on a question of law.

3                     Amended assessments were issued by the Commissioner after he received advice from the applicant’s former employer that during the 1996 and 1997 years of income $300 in cash per week had been paid to the applicant in addition to the wages stated by the employer in the Group Certificates it issued to the applicant.  The respective assessments were amended by adding the amount of $15,600 to the taxable income of the applicant.

4                     The applicant gave evidence before the Tribunal and called several witnesses.  The Commissioner adduced evidence from Mr Rogers, the controller of the corporation that employed the applicant in the relevant years, and from Ms Impson, who had been the payroll clerk in the latter of those years. 

5                     The Tribunal gave no weight to the evidence of Mr Rogers and was satisfied that the applicant had complied with the requirements of s 14ZZK of the Taxation Administration Act by proving that the assessment was excessive for the 1996 year of income.  The Tribunal accepted the evidence of Ms Impson and was not satisfied that the applicant discharged that onus in respect of the amended assessment for the 1997 year of income.

6                     The notice of appeal sets out three issues said to be the questions of law on which the appeal is brought, namely:

“(a)     Whether the Tribunal could draw the inference that the applicant received cash payments after discounting the evidence of the respondent’s chief witness Rogers.

 (b)      Whether it was competent for the Tribunal to make its findings based on the evidence of the respondent’s witness Impson when she failed to establish that any cash payments were made to the applicant.

 (c)       Whether the Tribunal was entitled to draw the inference that the applicant received cash payments in the year 1997 when it found that he had received no cash payments for the year 1996.”

7                     The question of law intended to be raised by the first issue appears to be “Did the Tribunal err in law in making a finding of fact in the absence of evidence?”  A finding of fact made without evidence to support it involves an error of law.  (See: Lombardo v Federal Commissioner of Taxation (1979) 40 FLR 208 per Bowen CJ at 210; Telstra Corporation Ltd v Razmovski (1994) 36 ALD 22 per Sackville J at 27.)  However, no error of law arises if there is some evidence upon which a Tribunal may make a finding notwithstanding that the conclusion of the Tribunal is barely conceivable on the relevant material.  (See:  Reg v Hillingdon London Borough Council; Ex parte Puhlhofer [1986] AC 484 per Lord Brightman at 518; Broadbridge v Stammers (1987) 16 FCR 296 at 301; Australian Conservation Foundation v Forestry Commission (1988) 19 FCR 127 at 132.)

8                     Counsel for the applicant conceded that if the Tribunal attached no weight to the evidence of Mr Rogers there was other evidence upon which the Tribunal could find that the applicant received payments by way of income that were not included in the applicant’s tax return for the 1997 year.  It follows that no error of law, as contended in the first question, was involved in the Tribunal’s finding of fact.

9                     The second issue stated in the notice of appeal as a question of law can be read as intending to raise the following: “Was there a lack of rational connection between the evidence of Ms Impson and a finding of fact based on her evidence?”

10                  It may be accepted that a review conducted by the Tribunal under the Act is intended by that Act to be a rational process, based on probative material and logical grounds.  (See: Minister for Immigration and Multicultural Affairs v Eshetu (1999) 162 ALR 577 per Gummow J at par 145).

11                  Counsel for the applicant conceded that the content of Ms Impson’s evidence permitted the inference relied upon by the Tribunal to be drawn and, therefore, no error of law as alleged in the second question occurred in the Tribunal’s finding of fact.

12                  The third question, in terms, appears to raise the first question again, or a combination of the first and second questions, namely, “Was there an absence of probative material or lack of logical grounds for the findings made by the Tribunal”.  Again, review of the material before the Tribunal demonstrates that there was some evidence to support the finding of the Tribunal and no want of logical grounds for the finding.  Therefore, no error of law was committed by the Tribunal. 

13                  The issue before this Court is not whether other findings that may have been made by the Tribunal, or whether an alternative finding was more probable than the conclusion drawn by the Tribunal.  An “appeal” from the Tribunal is not a rehearing of the matter.  The Court has jurisdiction only if the “appeal” is on a question of law and may only interfere with the decision of the Tribunal if an error of law is established.  (See:  Edwards (Inspector of Taxes) v Bairstow [1956] AC 14 per Lord Radcliffe at 38; Blackwood Hodge (Australia) Pty Ltd v Collector of Customs (NSW) (1980) 47 FLR 131 per Fisher J at 146; Repatriation Commission v Thompson (1988) 44 FCR 20 at 25).

14                  It has not been shown that the findings of the Tribunal involved any error of law.  The appeal must be dismissed.

Associate:

Dated:              13 July 1999