Federal Commissioner of Taxation v. Moody.
Members:Connolly J
Tribunal:
Supreme Court of Queensland
Connolly J.
The respondent taxpayer is a married woman living with her husband. Both however, are fully engaged in business activities. She is an importer of clothing while her husband is in the business of roof fabrication. The respondent's activities in her business involve frequent and prolonged absences from home to the extent that in any one year some six months or more may be spent away from home either interstate or overseas. In her income tax return for the year ended 30 June 1978 she claimed a rebate of $555 being the amount then allowable under sec. 159L of the Income Tax Assess-
ATC 4200
The appellant disallowed the rebate on the ground that no special circumstances existed which would make it just to allow the rebate. The respondent objected and on disallowance of the objection she required the matter to be referred to a Board of Review. The appellant gave as his reasons for disallowing the claim that the housekeepers were not wholly engaged in keeping house in Australia for the taxpayer and that in any event there were no special circumstances which would make it just to allow the rebate. The matter was heard by Taxation Board of Review No. 3 which on 7 November 1980 ordered that the assessable income of the respondent be reduced by the amount of $555, upholding her objection.
At this stage it will be convenient to set out the relevant parts of sec. 159L which, so far as is material, read as follows:
``(1) Where, during the year of income, a person (in this section referred to as a `housekeeper') is wholly engaged in keeping house in Australia for a taxpayer and in caring for -
- (a) a child of the taxpayer less than 16 years of age;
- ...
- (c) the spouse of the taxpayer, being a spouse in receipt of an invalid pension under the Social Services Act 1947-1975,
the taxpayer is entitled, in his assessment in respect of income of that year of income, to a rebate of tax ascertained in accordance with this section.
...
(4) Where a taxpayer is married and the housekeeper is not, during the year of income, engaged in caring for the spouse of the taxpayer, being a spouse in receipt of an invalid pension under the Social Services Act 1947-1975 -
- (a) he is not entitled to a rebate under this section in his assessment in respect of income of the year of income unless the Commissioner is of the opinion that, because of special circumstances, it is just to allow a rebate; and
- (b) the rebate (if any) shall be of such amount, not exceeding $555 as, in the opinion of the Commissioner, is reasonable in the circumstances.''
The appellant appeals to this Court pursuant to sec. 196(1) of the Income Tax Assessment Act which provides for appeal to a Supreme Court from any decision of the Board that involves a question of law. The questions of law said to be involved in the decision of the Board as set out in the Notice of Appeal are:
``(A) Whether each member of the Taxation Board of Review properly exercised his discretion in forming his opinion that under sec. 159L(4)(a) of the Income Tax Assessment Act 1936-1978 there were special circumstances which made it just to allow a rebate under the said sec. 159L.
(B) Whether the subject matter of the Reference was wholly settled by the decision in
F.C. of T. v. Coleman 78 ATC 4355.(C) Whether the unfortunate circumstance of respondent's son's retardation is capable of constituting special circumstances for the purposes of the said sec. 159L(4)(a).
(D) Whether the circumstance of the effect of the respondent's business commitments upon her home life or any other circumstance submitted by the respondent to the Commissioner or to the Taxation Board of Review No. 3 is capable of constituting special circumstances for the purpose of the said sec. 159L(4)(a).''
ATC 4201
It is convenient first to consider grounds (C) and (D). I should say at the outset that in my opinion it is wrong to seek to identify each aspect of the factual situation relied upon by a taxpayer as constituting special circumstances and to see whether in isolation each is capable of constituting special circumstances. It is the whole of the relevant factual situation which will or will not amount to special circumstances within the meaning of sec. 159L(4)(a). That expression is not defined so that the facts to which regard may be had in forming the opinion that the taxpayer's circumstances are special and such as fairly to call for the allowance of a rebate are at large. The argument for the appellant suggested that circumstances which are common in the Australian community cannot be special and that working parents with infant children are common features of Australian life. So they are. But so too, for example, are single parents who must work and bring up children. In my judgment, this approach is too rigid. I do not think that it is permissible to confine the expression ``special circumstances'' in this fashion. The proposition that the condition of the 14 year old boy is incapable of constituting special circumstances is founded on an analogy between the boy in question and a three year old infant on the footing that the evidence shows that he has a mental age of three. It is then said that there is nothing special about a three year old infant. Apart from the fact that on the evidence this boy is in many respects a more difficult problem than a three year old infant the more serious objection to the argument is that it seeks to categorise as wholly irrelevant a factor which is obviously central to the purpose of sec. 159L, which is to provide rebates for the cost of housekeeping where that service is required in order to care for various categories of persons in a state of dependency. One such group consists of children under 16 years of age. Now it is true that, except in the case of an invalid spouse, special circumstances must be shown in addition to the fact that the housekeeper was engaged in caring for a dependant. But there is no warrant for the proposition that the nature and degree of the dependency cannot in themselves constitute special circumstances. Indeed subsec. (4) virtually recognizes this for it is noteworthy that special circumstances are not called for where the person in need of care is an invalid spouse. To say that the dependant character of this boy is incapable of constituting special circumstances is, in my opinion, unsustainable. Again it is argued in terms of ground (D) that the fact that the respondent is away from home a great deal on business is incapable of constituting special circumstances. This is the very fact which makes it impossible for her to give to the boy the care which he needs. It cannot be regarded as an irrelevant consideration. I am concerned of course at this stage to do no more than identify the questions of law which are said to be involved if the Court is to have jurisdiction to hear this appeal. As formulated grounds (C) and (D) appear to raise questions of law although, as I have shortly indicated, they are without substance. It should be unnecessary to say that to hold that these considerations are relevant is to say no more than that severally or in combination and against the whole of the factual background they are capable of being regarded as special circumstances. Whether the tribunal of fact so regards them depends upon the emphasis which in the given case they bear. The assessment of the weight to be attached to them in each case is initially for the Commissioner and on reference to the Board of Review for that body. It is not for the Court unless the jurisdiction is enlivened by the involvement, in a relevant sense, of a question of law.
The nature of the Court's jurisdiction is not in doubt. If some question of law be involved in the decision of the Board, the whole decision and not merely the question of law is open to review. See, for example,
Ruhamah Property Co, Ltd. v. F.C. of T. (1928) 41 C.L.R. 148 at p. 151. Cf.
F.C. of T. v. Sagar (1946) 71 C.L.R. 421 at pp. 423-4;
XCO Pty. Ltd. v. F.C. of T. 71 ATC 4152 at p. 4155; (1971) 124 C.L.R. 343 at p. 348. Because the appeal under sec. 196 is an exercise of original jurisdiction it is for this Court to decide issues of fact without being constrained to accept the findings of the Board of Review. See
F.C. of T. v. Finn (1960) 103 C.L.R. 165 and
F.C. of T. v. Students World (Aust.) Pty. Ltd. 78 ATC 4040 at p. 4049; (1978) 138 C.L.R. 251 at p. 260. Here, by consent, the transcript before the Board was tendered. If the Board made findings of fact, a question I must discuss in
ATC 4202
relation to the alternative grounds of appeal, no attack has been made on those findings. The principal ground of appeal is, as I have indicated, that the circumstances relied upon by the respondent are, as a matter of law, incapable of being regarded as special. So clearly does this proposition seem to me to be erroneous that I do not believe that grounds (C) and (D) really raise a contestable proposition of law to use the language of Dixon J. inD.F.C. of T. v. Miller (1946) 73 C.L.R. 93 at p. 103. It may also be questioned whether in truth a contestable proposition in this sense was an assumption of the decision of the Board. It is perhaps timely to repeat the admonition of Windeyer J. in
Buckland v. F.C. of T. (1960) 34 A.L.J.R. 60 at p. 62.
``Whether there is any evidence of facts sufficient to justify a particular conclusion of law is a question of law. But in every case, an appellant cannot simply by posing this as the question of law involved, invite this Court to consider not whether the Board could on the evidence come to the conclusion it did, but whether the Court considers it came to a correct conclusion in fact. To approach the matter in that way would be to render nugatory the provision that only where there is a question of law involved is there an appeal from the decision of a Board.''
To understand the alternative grounds of appeal it is necessary to make a short reference to the decision of Wickham J. of the Supreme Court of Western Australia in
F.C. of T. v. Coleman 78 ATC 4355. That case also involved a claim to a deduction in relation to a housekeeper under legislation which for present purposes was identical with that which I have to consider. The Board by majority had allowed the deduction and on appeal Wickham J. held that no questions of law were really involved. The circumstances shortly were that the taxpayer was a woman senator and the evidence disclosed that the housekeeper was engaged in keeping house for her and in caring for her five year old son and the majority of the Board found that the special circumstances to be constituted by the extremely busy public life of the taxpayer and the need to maintain continuity of stable home-life for her son. On appeal, Wickham J. held that despite grounds of appeal which contended, amongst other things, that irrelevant factors had been taken into account and that the circumstances set up by the taxpayer were incapable of constituting special circumstances, no question of law was really involved in the decision. The acting chairman said of the decision of the Supreme Court and in my opinion correctly that Wickham J. must be taken to have regarded the factors taken into account as relevant and the circumstances as capable of being regarded as special by the fact finding tribunal. However, the other member of the Board described this case as wholly settled by the decision in Coleman in the facts of which No. 2 Board found there were special circumstances. This with respect cannot be correct. The only aspect of the decision which could be regarded as having any binding effect was the implicit decision of Wickham J. on the questions of relevance. Findings on the facts are not precedents and it must always be for the tribunal of fact to determine for itself what weight is to be given, in the circumstances of the case before it, to the relevant facts. Even though they may appear to resemble the facts of a decided case the latter really provides no more than an illustration, perhaps an illuminating illustration, of the application of principle to one particular set of facts. However, the second member also expressed his agreement with the conclusion of the acting chairman. I read the reasons of the latter and in particular para. 9 thereof as a specific finding that the unfortunate circumstances take the case out of the ordinary working couple situation. Indeed he says in terms that it is only because of the rather extreme distinction which takes the case out of the normal domestic type of case with married couples working that the Board has been persuaded to uphold the taxpayer's objection. I think, therefore, that the Board did in truth make its own finding of fact and that it did not, as the appellant contended, defer to the findings of fact on what it regarded as a much weaker case in the case of Coleman on the erroneous assumption that the facts of that case had in some fashion been given binding force as a precedent by the decision of Wickham J. that the appeal to him was incompetent.
I should mention a further argument which was raised by the appellant although in truth it is not covered by any of the grounds
ATC 4203
of appeal. This was to the effect that where the special circumstances set up by the taxpayer include inability to care for the dependant by reason of the taxpayer's deliberately adopting a manner of living which takes him or her out of the home it cannot be just to allow the rebate. For my part I see no warrant in reading into sec. 159L(4)(a) a restriction of this character. It seems to reflect a social attitude which is, so far as one can judge, at variance with that of the community generally. There may indeed still be those who believe that the place of a married woman with children is in the home. They would obviously not include the retail trade and particularly, retailers of motor car and household appliances and those who provide various services associated with recreation. Many people stand to gain in varying degrees from the presence of married women in the workforce. But if there is one certain beneficiary of the earnings of the working wife it is the appellant. However, it is sufficient to say that I see no warrant in the language of the subsection for this quaintly Victorian attitude. There is no indication that this point was taken before the Board of Review. It is not taken in the notice of appeal and I am unable to see that it is involved in the decision of the Board within the meaning of sec. 196(1).It follows, therefore, that in my opinion this appeal must be dismissed as not involving, in a relevant sense, any question of law.
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