Boyded (Holdings) Pty. Limited v. Federal Commissioner of Taxation.

Judges:
Lee J

Court:
Supreme Court of New South Wales

Judgment date: Judgment handed down 22 February 1982.

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Lee J.

This is a motion by the plaintiff to extend the time for filing of a notice of appeal from a decision of the Taxation Board of Review No. 3. The decision of the Board was published and notified to the plaintiff on 11th December 1981. The copy of the decision in fact was sent to the plaintiff's accountants, Messrs. James F.J. Oswald & Company, and it came into the hands of Mr. Higgins of that firm. Mr. Higgins, although having had a good deal of experience in dealings with the Taxation Department, had had little practical experience in dealing with appeals from decisions of the Board of Review, and he had it firmly fixed in his mind at all material times, until it was too late, that a period of sixty days was allowed in which to lodge an appeal. On 18th December 1981, he telephoned Mr. Bainton of Queen's Counsel to make an appointment to discuss the matter. He was told that Mr. Bainton would be back on 18th January, and on that date he telephoned Mr. Bainton's chambers but was informed that counsel was not there and would not be available until 25th January. He was absent from Sydney on 25th January to 1st February. He made an appointment with Mr. Bainton on 5th February 1982, but it was then of course too late to lodge an appeal, and the notice of motion was filed.

In my view it is quite plain that Mr. Higgins made a mistake, but that he nonetheless, making due allowance for that mistake, acted reasonably in taking all the steps that were required to be taken. But for his mistake there is nothing to indicate that there was anything in the nature of carelessness or lack of interest in the matter on his part.

The Commissioner has not sought to contend that Mr. Higgins is not bona fide in all the matters which he asserts in his affidavit, nor that that mistake would ordinarily stand in the way of the plaintiff being allowed to appeal out of time; but he does make the claim that there is no question of law to be argued.

Section 196 permits an appeal to be made from any decision of the Board which involves a question of law.

In order to determine this matter it is necessary to state the facts briefly and in this regard I refer to the published report of the Board in Case N109,
81 ATC 620.

In the year of income ended 30th June 1974, the taxpayer company claimed a deduction for losses incurred by it in the years of income ended 30th June 1972 and 1973. There had been a complete change in the beneficial ownership of the taxpayer's shares, on 12th December 1972. If the taxpayer could show that it had ``carried on at all times (during the year ended 30th June 1974), the same business as it carried on immediately before the change'', then it would be entitled to the deductions which it sought. The facts appearing in the report were that prior to the change in shareholding the taxpayer had carried on business as a dealer in new and used cars (including a small wholesale and retail spare parts business) from an outer suburban site owned by an associated company, and a large wholesale spare parts dealership from an inner suburban site owned by the taxpayer itself. On 31st September 1972, the business carried on from the outer suburban site was transferred to the company which owned the

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site. From 1st January 1973, the business of the taxpayer, which was wholly carried on at the inner suburban site, consisted of the conduct of the large wholesale spare parts dealership, and the administration of the group's affairs. In short the company ceased to be involved at all in the sale of motor cars and restricted its dealership to dealing with spare parts. The claim was disallowed and the Board held that the nature and character of the business carried on after the change was not the ``same business'' as had been carried on immediately before the change.

The plaintiff here claims that that conclusion is erroneous - it claims that the same business was carried on after the change and that the Board should have so found.

In
Avondale Motors (Parts) Pty. Ltd. v. F.C. of T. 71 ATC 4101; (1970-1971) 124 C.L.R. 97. Gibbs J. considered the meaning of the expression ``same business'' in sec. 80F(1)(c) of the Income Tax Assessment Act 1936 as it then stood, a subsection which is in identical terms to that now set out in sec. 80E(1)(b) of the Act; and he gave to the expression ``same business'' the meaning of ``identical business'', although subject to a necessary qualification that it can be a question of degree, in some cases, whether changes in a business prevent it being said that it is still the same business. Thus the meaning in law of the expression ``same business'' in the subsection was decided by his Honour and the ambiguity in the expression thereby removed. At ATC p. 4105, C.L.R. p. 104 he pointed out that whether a company has commenced a new business or has continued an old business under different circumstances, is a question of fact.

In
Hope v. The Council of the City of Bathurst 80 ATC 4386 at p. 4389; (1980) 54 A.L.J.R. 345 at p. 347, Mason J. said:

``Many authorities can be found to sustain the proposition that the question whether facts fully found fall within the provisions of a statutory enactment properly construed is a question of law.''

and his Honour cited authority for that proposition. He went on however to make the point:

``However, special considerations apply when we are confronted with a statute which on examination is found to use words according to their common understanding and the question is whether the facts as found come within these words.''

He referred to the observation of Kitto J. in
N.S.W. Associated Blue-Metal Quarries Ltd. v. F.C. of T. (1956) 94 C.L.R. 509:

``Kitto J. observed that the question whether certain operations answered the description `mining operations upon a mining property' within the meaning of sec. 122 of the Income Tax Assessment Act 1936 (as amended) was a mixed question of law and fact (p. 511). He went on to explain why this was so: `First it is necessary to decide as a matter of law whether the Act uses the expressions `mining operations' and `mining property' in any other sense than that which they have in ordinary speech.' Having answered this question in the negative, he noted that the `common understanding of the words has... to be determined' as `a question of fact'. He continued (at p. 512):

• `The next question must be whether the material before the Court reasonably admits of different conclusions as to whether the appellant's operations fall within the ordinary meaning of the words as so determined; and that is a question of law: ibid; see also per Isaacs and Rich JJ. in
  Australian Slate Quarries Ltd. v. F.C. of T. (1923) 33 C.L.R. 416 at p. 419. If different conclusions are reasonably possible, it is necessary to decide which is the correct conclusion; and that is a question of fact: see per Williams J. in the
  Broken Hill South case (1914) 65 C.L.R. at p. 160.''

The question whether a particular set of facts comes within the description of ordinary English words is one of fact (
The Australian Gas Light Co. v. Valuer-General (1940) 40 S.R. (N.S.W.) 126 at p. 137).

In the present case, as I say, the ambit of the expression ``same business'' has been established as a matter of law by the definition given to it by Gibbs J. - it means ``identical business''. That interpretation binds this Court (Fleming v. White, Gamble

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v. Hiles N.S.W. Court of Criminal Appeal, 26th November 1981, not reported). The question in every case is, thus, whether the facts disclose a carrying on of the ``same business'' in that sense or not. Applying that definition to the full extent that its ordinary English meaning permits, it cannot be contended that it was not open to the Board to hold that the same business was not carried on after the change as before. As was stated in the decision of the Board, the capital and some seventy employees were involved in the transfer of the motor car sales side of the business. The Board has decided a question of fact and the evidence upon which that decision was made reasonably admits of the conclusion to which it came. Any contention that another view should be taken of the facts does not involve a question of law but only a question of fact.

There being no question of law to be argued, the motion is refused. The plaintiff is to pay the defendant's costs.