TRUSTEE OF THE BALMAIN TRUST v FC of T

Judges:
Davies J

Court:
Federal Court

Judgment date: 29 April 1998

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Davies J

This is an appeal from a decision of the Administrative Appeals Tribunal (``the Tribunal''), given on 4 April 1997, in which the Tribunal, constituted by J Block, Senior Member, and P Greenwood, Member, affirmed decisions of the Commissioner of Taxation on the objections lodged by the taxpayer for the years of income ending 30 June 1983 to 30 June 1987 [reported at Case 31/97,
97 ATC 334]. As these appeals are brought under s 44 of the Administrative Appeals Tribunal Act 1975 (Cth), they raise only questions of law.

The assessments of tax related to certain rents which had been paid by the lessee of premises at 62 Darling Street, Balmain, which comprised a bakery which was used as a restaurant and bar, and a residential flat. The property had been purchased by a Mr Colin Ward on 17 December 1982. There are indications which I shall later mention that the property was purchased by him as trustee of a trust called ``the Balmain Trust''. The transfer to Mr Ward was dated 22 February 1983 but was not lodged for registration until early 1988. Also in 1988, Mr Ward, purporting to be acting as trustee of the Balmain Trust pursuant to a deed of settlement dated 17 December 1982, appointed Banalij Pty Ltd (``Banalij'') as

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ATC 5336

trustee in his place and, by an appropriate instrument, effected a transmission of the property to Banalij. During the subject years of income, no books were kept for the Balmain Trust or, at least, none have been disclosed. Neither Mr Ward nor any other person lodged any taxation return disclosing relevant trust income. The rent paid during the years period increased from $10,479 in the year ended 30 June 1983 to $17,972 for the year ended 30 June 1987.

The Commissioner formed the view that assessments should issue for the rental income and for additional tax for non-disclosure of income. Being undecided as to whether or not a trust existed during the relevant years, the Commissioner issued two sets of assessments. One set of assessments assessed Mr Ward to tax on the rental income on the footing that it was derived by him during the years of income. The other assessments assessed the Trustee for the Balmain Trust under s 99A of the Income Tax Assessment Act 1936 (Cth) (``the Assessment Act'').

Section 99A of the Assessment Act is not in terms discretionary except in the circumstances to which sub-sections 99A(2) and (3) apply; yet the object of the section is to enable the Commissioner to assess trust income at a rate fixed by the Parliament for the purposes of s 99A, which for many years has been the top marginal rate of tax. Section 99A(4) relevantly provides:

``(4) Where there is no part of the net income of a resident trust estate:

• (a) that is included in the assessable income of a beneficiary of the trust estate in pursuance of section 97;
• (b) in respect of which the trustee of the trust estate is assessed and liable to pay tax in pursuance of section 98; or
• (c) that represents income to which a beneficiary is presently entitled that is attributable to a period when the beneficiary was not a resident and is also attributable to sources out of Australia;

the trustee shall be assessed and is liable to pay tax on the net income of the trust estate at the rate declared by the Parliament for the purposes of this section.''

Section 99A(4A) makes analogous provision where only a part of the income comes within s 97 or s 98 or was derived by a non-resident beneficiary. The subject income had a source in Australia. There was no evidence before the Tribunal, or no reliable evidence, as to how it was applied.

Another provision which was relevant to the proceedings before the Tribunal was s 14ZZK of the Taxation Administration Act 1953 (Cth) (``the Administration Act'') which provided, inter alia:

``On an application for review of a reviewable objection decision:

• (a) the applicant is, unless the AAT orders otherwise, limited to the grounds stated in the taxation objection to which the decision relates; and
• (b) the applicant has the burden of proving that:
  • (i) if the taxation decision concerned is an assessment... the assessment is excessive;...''

The taxation objections were drafted in an uninformative manner. Each provided, inter alia:

``(1) The Commissioner in raising the Assessment did not take into account expenses (including interest) as a deduction pursuant to Section 51 of the Income Tax Assessment Act or some part thereof.

...

(3) It is contended that if a Taxable Income was derived, then such income was distributed by the Trustee in accordance with the terms of the Trust Deed.

(4) It is also contended that any distribution made in the year of income to Beneficiaries should have been assessed pursuant to Sections 95A, 97, 98 or 99B and not Section 99A of the Income Tax Assessment Act.

...

(6) The Assessment of Taxable Income made by the Commissioner was made arbitrarily and capriciously and without proper regard to the facts and circumstances of the taxpayer, or to the assessable income and allowable deductions of the taxpayer for the year of income.''

When the matter came before the Tribunal, all the assessments were in issue, those assessing Mr Ward personally and those assessing the Trustee of the Balmain Trust. The evidence in one case was taken to be evidence

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in the other. The documents in Mr Ward's case consisted of four volumes containing nearly 2,000 pages. The documents in the Balmain Trust case contained nearly 300 pages. In addition, a large number of exhibits were tendered by both parties. During the second day of the hearing and before Mr Ward's cross- examination had been completed, Mr Ward withdrew the whole of his application and the Trustee for the Balmain Trust withdrew all claims made for the deduction of interest. Mr Ward did not further attend.

The Tribunal held that the evidence that Mr Ward had given was entirely unreliable. The Tribunal said [at 340]:

``... The Tribunal considers, in all the circumstances, that W is completely untrustworthy and unscrupulous, and that none of his evidence (or for that matter any of the evidence procured by him) is worthy of any credit.''

The Tribunal also said [at 340]:

``... Some of the WT Documents (and in particular WT Document 38) relate to a shadowy world in which events are often strange or do not admit of rational explanation, where documentary evidence may not be genuine, or which may not have been produced on the dates indicated.''

I need not elaborate on these points. The evidence before the Tribunal showed, inter alia, that search warrants executed by the Australian Federal Police had found stamps, including a Taxation Office stamp, a Federal Court of Australia stamp and an Australia Post stamp, to be in Mr Ward's possession and that Mr Ward had later been charged with false testimony, fabrication of evidence, forging a document, receiving stamps and possessing a prohibited weapon.

Evidence was given by a Mrs Helen Thomas and a Ms Lynette Ross. Mrs Thomas had been the settlor of the Balmain Trust under a deed dated 16 October 1982. She said that that trust deed was later shelved in favour of a new deed of settlement dated 17 December 1982 of which Ms Ross was the settlor. Mrs Thomas had been employed by Mr Ward in a secretarial capacity. The Tribunal found her evidence to be untruthful. The Tribunal said [at 345]:

``... T was plainly prepared to give untruthful evidence in support of W's interests; it may be that as suggested by Mr McGovern, W was the puppeteer' and she was merely one of the puppets.''

The deed of settlement of 16 October 1982 settled a sum of $10 on usual discretionary trusts. The trustee was Mr Ward. The Specified Beneficiaries were the descendants of Mr Ward and/or Robin Ward, whom I assume was his wife, and also included Ms Ross. The General Beneficiaries were specified to be any blood relatives of Mr Ward or of Robin Ward and any blood relative of Ms Ross. Also included as General Beneficiaries were corporations in which any one or more of the beneficiaries may have had interest and the trustee of any trust in which any of the beneficiaries may have had interest. The name of the trust was ``Balmain Trust''.

Ms Ross, who described her position as administrator for Mr Ward, gave evidence that she was the settlor of a deed of settlement of the Balmain Trust dated 17 December 1982. On its face, the deed was a standard, discretionary trust deed providing for the settlement of a sum of $10. Under this deed, the trustee was Mr Ward. The Specified Beneficiaries were the descendants of Mr Ward. The General Beneficiaries were a wider class of relatives and included any corporation in which any one or more of the important beneficiaries had an interest and the trustee of any trust in which any one or beneficiaries had an interest. The name of the trust was ``Balmain Trust''.

In her evidence, Ms Ross explained that the second deed had come about because Mrs Ward had not wished her, Lynette Ross, to be a beneficiary. Ms Ross said, inter alia:

``... I know that that particular incident of making up the second trust was because Mrs Ward didn't want me in the first trust.

...

I can remember that incident. It was very clear in my mind because I wasn't allowed to go into the first trust.

...

Mr Ward and I were friends and I don't think Mrs Ward at that stage was very happy.''

The trust deed had the name of Raeburn Smith & Co Pty Limited, solicitors, on its facing page. Like the earlier deed, the deed of 17 December 1982 had what appeared to be a

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stamp impress such as would be placed by the Stamp Duties Office on a copy.

The Tribunal considered the evidence of Ms Ross to be unreliable. The Tribunal said [at 345]:

``The evidence of R was also untruthful.''

The Tribunal dismissed the objections on the ground that the Trustee had not satisfied the onus of proof cast upon him by s 14ZZK of the Administration Act to show that the assessments were excessive. The Tribunal said, inter alia [at 348-351]:

``8. (a) As is so often the case in this matter, some of the surrounding circumstances are distinctly odd.

(b) The Property was purchased at a mortgagee sale in December 1982, and the vendor executed a transfer in favour of W on 22 February 1983. A copy of the contract of sale (annexed to Exhibit A5) indicates that W was the purchaser (and an inserted reference to him as trustee was deleted, although the words `as trustee' follow his signature).

(c) The T Documents in relation to the Trust contain references which would tend to indicate that there was a trust; however there are other references in the T Documents which tend to indicate the contrary....

(d) T19 is the transfer in respect of the Property. It was executed by the parties constituting the transferor, whose precise identities are irrelevant for the purposes of these Reasons, in favour of W. It was signed by W as trustee of the B Trust; W's signature as transferee was witnessed by T.

(e) T18 is the Certificate of Title in respect of the Property. It indicates that the Property was transferred to W on 11 March 1988 and on the same day transferred to B Company in accordance with an application....

...

(i) T24 is a management agency agreement between W and a firm of estate agents; there is a reference in it to the Trust; page 72 of the T Documents indicates that although the contract was originally framed on the basis that statements and cheques would be sent to W, that reference was altered so as to refer to the B Trust.

(j) T25 relates to an application to a trading bank in respect of the opening of a bank account in the name of the B Trust and in respect of which W had signing powers. That bank is referred to as the `First Bank'. Page 76 of the T Documents indicates that that account was opened in March 1983.

...

(p) There is only one reasonable inference to be drawn in relation to the Property. The original price was furnished by W himself, and his withdrawal of the W Case supports this inference. Moreover the mortgage moneys ex the Hong Kong Company were appropriated by him for his own use....

...

(r) The Tribunal does not accept that the various resolutions, (in some respects contradictory), in respect of the B Trust previously referred to were executed on the dates indicated. It is likely in the view of the Tribunal that they were prepared and signed after the assessments were issued....

...

(v) As set out previously in these Reasons, the Tribunal did not receive any original stamped deeds. Assuming that they were duly executed on the dates appearing in them, they would have been stamped at those times, or perhaps later but in the latter event with penalties for late payment. In the absence of original stamped deeds, the Tribunal has very real doubt as to whether these documents were executed when indicated, and considers that there is a very real possibility of their later execution and conceivably after the issue of the assessments.

9. (a) The verbal evidence before this Tribunal consisted only of that given by W, T and R all of whom were unreliable and untruthful witnesses, whose evidence cannot be accepted.

(b)... Another extremely odd omission relates to the books of the B Trust. W was a practicing accountant;...

10. (a) Section 14ZZK(b) of the Taxation Administration Act 1953 provides that the burden of proof is on the party applying for review of a reviewable objection decision. The Applicant bears the burden of proving

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that the assessment is effective. Section 14ZZK(b) effectively (as the Respondent contends) creates a rebuttable presumption that an assessment is not excessive; (See
McCormack v. FC of T 79 ATC 4111; (1979) 143 CLR 284). The Applicant must rebut that presumption and there is no onus on the Respondent to show that the assessment is correct; (
Gauci & Ors v. FC of T 75 ATC 4257; (1975) 135 CLR 81;
Macmine Pty Ltd v. FC of T 79 ATC 4133). There is no requirement that an assessment be sustained by evidence (
Politis v. FC of T 88 ATC 5029 at 5032).

...

(e) The Applicant has clearly not discharged the onus on it. Having submitted quantities of written evidence, the Applicant called (in relation to this matter) only T and R both of whom were untruthful and unsatisfactory.

...

As set out previously in these Reasons there is (conflicting) evidence before the Tribunal as to the existence of a trust; it is not inconceivable, in the view of the Tribunal, that there was from the time of the purchase of the Property, some intention that it would be held on trust, but that W did not attend to the creation of the trust until a later time; that later time might be when the transfer was first registered and when the assessments in this matter had been issued. The evidence in this case is so unsatisfactory that the Tribunal, while it does not consider it appropriate to make a finding of sham, is equally unable to find that it has been demonstrated that the B Trust was established on the terms of the First Deed or the Second Deed in 1982, or thereafter during the relevant years.''

If the issues which were raised for the consideration of the Tribunal were issues for determination by this Court, I think I would not approach the consideration of those issues in the same way, laying heavy emphasis as the Tribunal did upon the onus of proof and the unreliability of witnesses called. Issues such as those before the Tribunal should be determined on the probabilities if that can be done. It is sufficient for a taxpayer's success if, although the decision-maker considers the witnesses to be unreliable, the decision-maker is satisfied that, on the facts established on the probabilities of the case, the assessment under challenge is excessive. A taxpayer is not precluded from receiving a correct assessment by reason of his untruthfulness, if the material discloses facts which show that the assessment was wrong.

This point was made very clear by Walsh J in
Krew v FC of T 71 ATC 4213. His Honour was hearing an appeal from a decision of Board of Review No 2 in Case A64,
69 ATC 367, in which much of the taxpayer's claim had been rejected on the basis that he was untruthful. Walsh J allowed the claims in part. At 4219, his Honour said:

``At the outset I am bound to say that I cannot accept the appellant himself as a reliable witness. I shall not try to set out all my reasons for that conclusion but I indicate some of them. As the members of the Board of Review recognised, his account of the manner in which he used the money in the safe for betting, particularly in 1949 when he had several big wins at the races, is inconsistent with facts which appear clearly enough, although he would not admit this, from entries in his bank account. Again, it was proved beyond question in this Court that evidence which the appellant gave before the Board of Review concerning an inheritance in 1950 was not true. Having mentioned an inheritance of some £4,500 whilst he was being cross-examined before the Board, he adhered to this on the following day. That evidence caused the Board to decide that an adjustment in favour of the appellant in respect of that sum of £ 4,500 should be made. In this Court his evidence about this matter was entirely unsatisfactory. It is difficult to suppose that this could be attributed to faulty recollection. If it could, then all evidence which depends on his recollection must be regarded as worthless. But my view of his testimony does not depend solely on any such specific matters as those which I have mentioned but also upon my general impressions of his evidence in this Court and upon my perusal of the evidence which he gave before the Board of Review. That view of his testimony is very damaging to the appellant's case. But it would be wrong to treat it as leading necessarily to the conclusion that his appeal must fail. A witness upon whose word one cannot rely

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ATC 5340

may yet give evidence which is true in part.''

(emphasis added)

In the present case, there is much to be said in favour of the view that a trust deed was executed at the relevant time. There is the deed of 16 October 1982, which, on its face, seems a perfectly genuine deed. There does not appear to be anything suspicious about the date of that deed. Then there is the explanation for the execution of the second deed, namely, that Mrs Ward did not wish Ms Ross to be a beneficiary. Again, there seems nothing suspicious about that. Indeed there does not seem to be any reason to doubt it. There are the two deeds and the evidence of Ms Ross provides a credible explanation of how this came about. What may be questionable about the second deed is whether it was executed on the date which appears, 17 December 1982, which was the day of the auction at which Mr Ward purchased the property at Balmain. But the precise date is not important. The issue was whether Mr Ward received the rents in his capacity of trustee.

Then there is the fact that the deposit of $17,500 for the purchase of the property was paid into the account of Richardson & Wrench, Real Estate Agents, at the Westpac Banking Corporation at Burwood, the deposit slip showing that the sum was paid in by ``Balmain Trust''. Then, on 22 February 1983, the Balmain Trust sought bank cheques in respect of four persons. Those bank cheques, when issued, were paid over in settlement of the balance of the purchase price of the Balmain property. Subsequently, on 31 March 1983, Mr Ward opened an account with the National Bank in the name of the Balmain Trust.

The transfer of 22 February 1983 was signed by Mr Ward adding the words ``as trustee for Balmain Trust''. The words ``as trustee'' in the description of the transferee was crossed out, presumably for stamp duty purposes. These references on the document to Mr Ward's capacity as a trustee support the view that Mr Ward acquired the property as trustee for the Balmain Trust. The contract of 17 December 1982 also had the words ``as trustee'' after the name of Mr Ward as purchaser crossed out but was signed by Mr Ward ``as Trustee.''

A management agency agreement dated 5 September 1983 between Mr Ward and Andrew Bell Real Estate Pty Limited, the rental agents for the subject property, provided originally for statements and cheques to be forwarded to Mr Ward but his name was crossed out and the name of the Balmain Trust was subsequently inserted. The Tribunal did not make any finding as to when that occurred. The returns of Andrew Bell Real Estate for the rental period November 1983 and thereafter through to 1987 with respect to 62 Darling Street, Balmain were in the name of the Balmain Trust. The rent collected by Andrew Bell Real Estate was therefore received by it on behalf of the Balmain Trust and was accounted for to the Balmain Trust.

We also have the knowledge that, in 1988, shortly after the transfer was registered, the property was put into the name Banalij as trustee of the Balmain Trust under the deed of 17 December 1982.

On these facts, it would have been open for the Tribunal to have found that the Balmain Trust was established prior to or about the time of the acquisition of the property at 62 Darling Street, Balmain, that the terms of the Trust were set out in one of the two deeds which were in evidence before the Tribunal, probably the deed of 17 December 1982, and that the income which was assessed to the Balmain Trust was trust income.

Indeed, it is surprising that the Tribunal did not make those specific findings. The Tribunal considered that there was a very real doubt as to whether the two deeds of settlement had been executed on or about the dates which they bore and considered that there was a very real possibility of their later execution, conceivably after the issue of the assessments. For my own part, I would have thought it very unlikely that, after the assessments had been issued, Mr Ward would have concocted the two deeds of trust with differing dates and differing beneficiaries and much more likely that, as the purchase moneys were paid in the name of the Balmain Trust and as the rents were received in the name of the Balmain Trust, the deeds of trust came into existence at about the time of the purchase of the property and in the circumstances explained by Ms Ross.

However, the present proceeding is not similar to that in Krew where the appeal to the High Court of Australia from the decision of the Board of Review involved a rehearing on the merits of a matter which ``involves a question of law''. See s 196 of the Assessment Act as it then read. An appeal from a decision of the Administrative Appeals Tribunal under s 44 of

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the Administrative Appeals Tribunal Act is limited to a question of law. The relevant question of law appears to me to be whether the decision of the Tribunal is invalid by reason of being a decision to which no reasonable decision-maker could have come, within the Wednesbury principle. See
Associated Provincial Picture Houses Ltd v Wednesbury Corporation [1948] 1 KB 223 at 229-230.

It does not seem to me that the evidence before the Tribunal was so overwhelming that it was not open to the Tribunal to come to the decision it did. The Tribunal considered that the evidence of Mrs Thomas and of Ms Ross was untruthful. There were grounds for that view. Moreover, it is clear that neither Mrs Thomas nor Ms Ross had any clear recollection of executing the deeds on a specific day. To this must be added the fact that, although Mr Ward was an accountant, no books of account of the Balmain Trust were produced and no acceptable records of the Balmain Trust were before the Tribunal. No taxation returns were lodged on behalf of the Balmain Trust or of any beneficiary and there was no information as to what had been done with the income of the Trust. In these circumstances, I consider that it was open to the Tribunal to conclude, as it did, that it could not be satisfied that the subject income was related to any specific, identifiable terms of trust.

Accordingly, the decision of the Tribunal was not void on the ground of unreasonableness.

If the Tribunal made an error in its findings of fact, that error was not an error of law. As Brennan J said in
Waterford v The Commonwealth (1987) 163 CLR 54 at 77:

``A finding by the A.A.T. on a matter of fact cannot be reviewed on appeal unless the finding is vitiated by an error of law. Section 44 of the A.A.T Act confers on a party to a proceeding before the A.A.T. a right of appeal to the Federal Court of Australia `from any decision of the Tribunal in that proceeding' but only `on a question of law'. The error of law which an appellant must rely on to succeed must arise on the facts as the A.A.T. has found them to be or it must vitiate the findings made or it must have led the A.A.T. to omit to make a finding it was legally required to make. There is no error of law simply in making a wrong finding of fact.''

Mr DKL Raphael of counsel, with whom Ms P Conway of counsel appeared for the applicant, next submitted that, as a matter of law, the Tribunal should not have affirmed the Commissioner's assessments without first coming to a positive view that the subject income was income of a trust estate and what the terms of the trust were. In my opinion, the approach taken by the Tribunal in this respect was correct.

The assessments against the Trustee of the Balmain Trust and against Mr Ward had been issued as alternative assessments. The Tribunal was not required to be satisfied in each case that the assessments were correct. The onus was on the taxpayer in each case to show that the assessments were wrong and excessive. The Tribunal was entitled to take the view that the Trustee of the Balmain Trust had not satisfied the onus of proof cast upon it if the Tribunal was not satisfied as to what the facts of the case were. The principle to be applied is that stated by Brennan J in
DFC of T v Richard Walter Pty Ltd 95 ATC 4067; (1995) 183 CLR 168 where his Honour said at ATC 4083; CLR 201-202:

``The fact that a tax liability remains outstanding against two taxpayers pending the ascertainment of the taxpayer truly liable is no bar to the exercise of the power to assess both to tax in respect of the same income. As Dixon J. observed in
Richardson v. FC of T (1932) 2 ATD 19 at 24; (1931-1932) 48 CLR 192 at 207 when upholding the validity of an assessment to tax against a second person while the first person's assessment remained on foot and unamended:

`it was not unnatural that [the Commissioner] should delay relieving one of two persons whom he considered culpable until the liability of the other was established.'

The co-existence of tax liabilities in two or more taxpayers in respect of the same income is, as Dixon J. observed at ATD 24; CLR 207, attended with difficulty. Sometimes the difficulty will be removed by the objection, review and appeal procedures where the taxpayer will establish the facts in order to establish that the assessment is excessive.

The raising of concurrent assessments of two or more taxpayers to tax in respect of

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the same item of income has not hitherto been regarded as beyond the powers of the Commissioner.. The appropriateness of alternative assessments to tax of two taxpayers in respect of the same item of income was recognised in a dictum of this Court in
DFC of T v Moorebank Pty Ltd 88 ATC 4443 at 4448; (1997-1988) 165 CLR 55 at 67. And the courts, if not the Commissioner, can diminish the difficulty of concurrent assessments by ensuring that there is no double recovery of tax (
DFC of T v Faint [1988] 2 Qd R 494 at 497-498).''

As his Honour pointed out, it is not necessary that the decision-maker, the Commissioner or the Tribunal, should be positively satisfied of the taxpayer's liability before raising an assessment or affirming it. Alternative assessments may be issued where the Commissioner is uncertain as to which taxpayer is liable. The obligation then is on each taxpayer who has been assessed to satisfy the onus of proof cast upon a taxpayer by s 14ZZK of the Administration Act to show that the assessment was excessive. It would be wrong, of course, for the Commissioner to recover two amounts of tax. The Commissioner should ensure that there is no double recovery of tax. As Brennan J said, that is an obligation which the courts would enforce, although I assume that they would never need to do so.

Mr Raphael also raised an issue relying upon the decision of Tadgell J in
FC of T v Marbray Nominees Pty Ltd 85 ATC 4750, where his Honour dismissed an appeal from a decision of a Board of Review in which the Board had set aside an assessment under s 99A of the Assessment Act on the ground that, resolutions of the trustee having been made out of time, that is to say after the end of the relevant years of income, the default provisions in the relevant trust deed took effect so that the relevant income vested in a Specified Beneficiary. In the present case, both deeds contained default provisions similar to those considered in Marbray Nominees. Simon Ward, the son of Mr GC Ward, was a Specified Beneficiary who would have been entitled under the terms of the deed of 16 October 1982 and those of 17 December 1982 to take in default had there been no distribution or accumulation.

The Tribunal did not deal with this point because it was not satisfied as to what were the terms of the trust, if any, on which the trust moneys were held. That is perhaps the principal distinction between the present case and that of Marbray Nominees. In Marbray Nominees, the facts were known. In the present case, the facts were not known. The Tribunal was not satisfied as to what were the terms of the trust and was not satisfied as to what had happened to the income after it had been received. Accordingly, it could not have found that the default provisions of either of the deeds in evidence took effect. I should perhaps add that the point raised by Mr Raphael was not raised by the notices of objection which allege that any income received was distributed in accordance with the terms of the trust.

Mr Raphael further submitted that the Tribunal failed to provide procedural fairness in that, so it was submitted, Mrs Thomas and Ms Ross were not cross-examined in relation to their evidence as to the settling of the two trusts. He referred to the rule in
Browne v Dunn (1893) 6 R 67. I am satisfied, however, that in the proceedings before the Tribunal counsel for the Commissioner made it plain that he did not accept that the terms of any relevant trust were set out in the deeds of trust of 16 October 1982 and 17 December 1982. Counsel for the Commissioner went on to cross-examine both Mrs Thomas and Ms Ross on a wide range of subjects and did so so successfully that the Tribunal concluded that they were both untruthful and that their evidence could not be relied upon. In the course of the cross- examination, counsel challenged Ms Ross' recollection of the execution of the deed of 17 December 1982. Counsel summarised the points which he was making about Ms Ross' evidence in this way at the end of the cross- examination:

``You and Mr Ward have a relationship, do you not? - We have, yes.

...

I want to suggest that you just do not remember anything at all of the events of 17 December 1982 and you have signed a document [her witness statement] because Mr Ward told you to? - Well, I can actually really remember the auction. I can really remember the auction and I can remember the day that I was taken out of the trust and put in on the second trust. And counting the money and those are the things - the main things I remember.''

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As can be seen, Ms Ross' recollection of events was quite limited. Her written statement of evidence could not be taken at its face value.

In my opinion, the cross-examination adequately challenged the evidence given by Mrs Thomas and Ms Ross.

For these reasons, I accept the submissions of Mr DG McGovern, counsel for the Commissioner, that no error of law in the Tribunal's decision has been established. The issues set out in the notice of contention do not arise on the facts as found by the Tribunal.

The application will be dismissed with costs.

THE COURT ORDERS THAT:

The application be dismissed with costs.