Federal Commissioner of Taxation v. Brian Hatch Timber Co. (Sales) Pty. Ltd.

Judges: Barwick CJ
Menzies J

Windeyer J
Owen J

Court:
High Court (Full Court)

Judgment date: Judgment handed down 7 January 1972.

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Windeyer J.: I have read the judgment of my brother Owen. I agree in his Honour's conclusion and in his reasons. I add only a few quotations from judgments, which seem to me to emphasise that the question in cases such as this is not whether a discretion was properly exercised. The question is whether a fact existed. Did the company satisfy the Commissioner of beneficial ownership of shares as prescribed by sec. 80A? Was the Commissioner duly satisfied in fact? That is the essential question: not was his dissatisfaction justified.

In
Lloyd v. Wallach (1915), 20 C.L.R. 299 - a case which turned on whether a Minister had ``reason to believe'' something as to a person - Isaacs J. said that the power of determining that question was conferred on the Minister; and (at p.309) that ``laying aside possibilities so extreme as to be outside real consideration, the only means of disproving the essential fact in this case is the testimony of the Minister himself; and that is subject to the recognised rules of evidence''. Higgins J. in the same case said (at p.313): ``The material issue is not actual guilt or innocence, but the Minister's belief, and (perhaps) whether he has any reason which induces that belief''.

In Ex parte Walsh and Johnson; In
re Yates (1925), 37 C.L.R. 36 , Knox C.J. said (at p.67):

``When the operation of a law is made conditional upon the opinion, as to certain matters, of some person named or described, or on proof of certain matters to his satisfaction, the question whether his opinion is justified, or whether he should have been satisfied on the materials before him, is not examinable by the Courts. The only question which can be examined is whether, acting bona fide, he formed the opinion or was satisfied with the proof.''

This passage was quoted by Fullagar J. in
The Australian Communist Party case (1951), 83 C.L.R. 1 at p.257 . It is presently pertinent, although as a general statement it is now too far-reaching. It must be qualified in relation to a determination of the Commissioner of Taxation by what Dixon J. said in
Avon Downs Pty. Ltd. v. F.C. of T. (1949), 78 C.L.R. 353 at p.360 . His Honour, after pointing out that in a case such as the present one it was for the Commissioner, not for this Court on an appeal from him, to be satisfied of the relevant facts, went on -

``His decision, it is true, is not unexaminable. If he does not address himself to the question which the sub-section formulates, if his conclusion is affected by some mistake of law, if he takes some extraneous reason into consideration or excludes from consideration some factor which should affect his determination, on any of these grounds his conclusion is liable to review. Moreover, the fact that he has not made known the reasons why he was not satisfied will not prevent the review of his decision. The conclusion he has reached may, on a full consideration of the material that was before him, be found to be capable of explanation only on the ground of some such misconception.''

I add to these references the remarks of Starke J. in
Boucaut Bay Company Limited (in liquidation) v. The Commonwealth (1927), 40 C.L.R. 98 at p.101 - observing, however, that that was a case where a ``belief'' founded a discretion, whereas here a ``satisfaction'' is a condition of a right. I would emphasise that the passage from the judgment of Dixon J. that I have quoted seems to me to show that it is the material that was before the Commissioner that this Court has to consider, to see whether it can be said that in failing to be satisfied by that material he must have been moved by some misconception of it or by some extraneous consideration. It is not easy to see how that could be established without evidence from the Commissioner himself of what material was before him or perhaps from some one of his officers who had advised him in the particular matter.

I would allow the appeal.

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ATC 4011