Bailey & Others v. Federal Commissioner of Taxation.

Judges: Barwick CJ

Gibbs J
Mason J
Jacobs J
Aickin J

Court:
Full High Court

Judgment date: Judgment handed down 4 March 1977.

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Gibbs J.: I have had the advantage of reading the reasons for judgment prepared by my brother Aickin . I agree with them and would add only a few remarks.

Broadly speaking, the argument advanced on behalf of the Commissioner is put in two ways. The first branch of the argument rests on a sound basis - namely that sec. 260 of the Income Tax Assessment Act 1936 (Cth) (as amended) is part of the law which the court must apply to the facts whether or not the Commissioner invokes its operation. That being so, it is said that any views that the Commissioner holds as to the application of the section to the circumstances of the case,

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ATC 4099

and any facts on which he bases those views, are irrelevant. It is further suggested that the administration of the revenue laws might be hampered if the Commissioner were required to give particulars, because the Commissioner might commit himself to some view of the operation of the section or of the facts when another view, more favourable to the revenue, might appear and ought to be acted upon. The second branch of the argument is that the facts in a case arising under sec. 260 are peculiarly within the knowledge of the taxpayer who, for that reason, is not entitled to particulars.

Particulars fulfil an important function in the conduct of litigation. They define the issues to be tried and enable the parties to know what evidence it will be necessary to have available and to avoid taking up time with questions that are not in dispute. On the one hand they prevent the injustice that may occur when a party is taken by surprise; on the other they save expense by keeping the conduct of the case within due bounds. These considerations are no less important in revenue cases than in other cases. A taxpayer who comes to court in a case in which it is suggested that sec. 260 applies is, as a matter of justice, entitled to know what case it is that the Commissioner intends to raise against him. The circumstance that sec. 260 must be applied to the facts whether or not the Commissioner holds any opinion on the subject provides no reason why the issues of fact arising in the case should not be defined. The fact that the taxpayer bears the onus of proving that the assessment is excessive makes it all the more necessary that he should be given particulars of the basis of the assessment - cf.
R. v. Associated Northern Collieries (1910) 11 C.L.R. 738 , at p. 741 . The Commissioner is not likely to be disadvantaged by supplying particulars. In an appropriate case no doubt particulars may be framed in the alternative and if the Commissioner's particulars prove to be too narrow or to be erroneously stated the court may allow him to depart from them if the interests of justice require such a course - cf.
Mummery v. Irvings Pty. Ltd. (1956) 96 C.L.R. 99 , at p. 110 .

The facts in a case arising under sec. 260 are not necessarily all within the knowledge of the taxpayer. However, it is a misapprehension to think that the only function of particulars is to reveal to a party facts of whose existence he is unaware. As I have indicated, particulars have the important function of informing a party of the nature of the case he has to meet and of limiting the issues of fact to be investigated by the court.

The question whether and what particulars should be ordered is one within the discretion of the court. In the present case the learned primary judge indicated that he thought that the taxpayer was morally entitled to particulars but that legally there was no power to order them to be given. In these circumstances this Court may exercise the discretion that the learned primary judge thought was not available to him.

I would allow the appeal and make an order for particulars.