Federal Commissioner of Taxation v French
98 CLR 398(Judgment by: Dixon CJ)
Between: Federal Commissioner of Taxation
And: French
Judges:
Dixon CJMcTiernan J
Williams J
Kitto J
Taylor J
Subject References:
Taxation and revenue
Income tax
Exempt income
Whether derived 'from a source out of Australia'
Legislative References:
Income Tax and Social Services Contribution Assessment Act 1936 (No 27) - the Act
Judiciary Act 1903 - s 18
Judgment date: 18 November 1957
SYDNEY
Judgment by:
Dixon CJ
I have had the advantage of reading the judgment prepared by Williams J. and I agree both in the conclusion and the reasoning of his Honour. There are however one or two additional observations which I should like to make, observations which may in a sense be by way of reservation. In the first place it is important to notice that Mr. French does not occupy an office as for example a director may be considered to do. The case is one, at all events we are so treating it, where month by month by doing his work in this or that place the employee earns his salary. It would I think be impossible to say that an ordinary artisan does not earn his pay where he does his work. Doubtless Mr. French is by no means an artisan but it is by the same reasoning that his case should be adjudged. It is thus entirely different from such a case as Robertson v Federal Commissioner of Taxation [F1] where a governing director of a Victorian company earning a substantial salary was abroad for a considerable time. Although the commissioner conceded that during his absence the source of his remuneration was outside Australia I felt it desirable to express doubt about the correctness of the admission. [F2]
The difference is even greater of such a case as Watson v Commissioner of Taxation (W.A.) [F3] where the remuneration was earned by procuring a specified result which an accountant carrying on business in a given jurisdiction was commissioned to bring about. Because he journeyed into another jurisdiction in the course of his exertions to do so it did not follow that any part of the source of the remuneration was there located.
In the next place I wish to say that in Robertson's Case [F4] I attempted to explain the considerations upon which the English cases decided upon case V of Schedule D of the Income Tax Act 1918 (Imp.) proceed and those decided on Schedule E since the amendment by the Finance Act 1922, s. 18 (1). I adhere to the views I there expressed and I think that for the purpose of the Commonwealth Act these decisions can have little or no bearing.
In the third place I desire to say that no case for an apportionment of income according to locality appears to exist upon the facts governing Mr. French's employment and none was suggested. I would reserve the question whether in considering the application of s. 23 (q) to some particular income apportionment may ever be possible.
Finally it should be noted that we are not concerned here with the question whether within the meaning of s. 23 (q) the salary earned by Mr. French in New Zealand was exempt from income tax in New Zealand. That is not put in issue; it is a matter that is conceded.
I agree that the question in the case stated should be answered: Yes.