Cipryk v. Federal Commissioner of Taxation.

Members:
Owen J

Tribunal:
High Court

Decision date: Judgment handed down 22 September 1970.

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Owen J.: These appeals which come from the Board of Review relate to the years ended 30 June 1965 and 1966. A preliminary objection is taken to the hearing of them on the ground that no question of law was involved in the Board's decision. It appears that the appellant came to Australia from America in September 1964 and that prior to his arrival he had had no connection at all with this country. In July 1966 a large sum of money, the equivalent of $A.24,000, mainly represented by £10 notes, was found on the appellant's person when he was arrested by the police. Following his arrest he was charged with and pleaded guilty to three offences of breaking, entering and stealing money and he asked that five other similar offences be taken into account in dealing with him. Some of the offences were committed in 1965, the others in 1966, the total amount stolen being some $9,000. He was sentenced to imprisonment and ordered to make restitution of this amount. Restitution was made and there remained an amount of some £15,000. It was this sum, spread over the years 1965 and 1966 and after various adjustments had been made, which formed the basis on which the default assessments were made.

In considering the preliminary objection it is essential to have regard to what was described as an ``informal'' notice of objection

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ATC 4103

which the Commissioner treated as a notice of objection. It was contained in a letter from the appellant's solicitors dated 16 November 1966 which by reference incorporated an earlier letter of 13 October 1966.

The letter of 16 November reads as follows:

``We refer to previous correspondence herein and wish to advise that it has today come to our notice that a claim has been made on the Commissioner of Police by you for the sum of $5,285.75 being part of certain property owned by our Client and in the possession of the Commissioner of Police.

We are rather surprised in the light of previous correspondence with you that you have seen fit to take such precipitate action.

We again reiterate to put on record that our Client does not admit the validity of your claim since you have no right to any moneys belonging to him as he had not earned or obtained such money in Australia or elsewhere under circumstances which would render him liable for Australian income tax....''

The previous correspondence to which reference is made is to be found in a letter from the appellant's solicitors to the Deputy Commissioner of Taxation of 13 October 1966 in which it was stated that-

``Our instructions are that this money was earned outside Australia by a person who was in no way associated with Australia at the time the money was earned and was brought into this country in the form of American dollars and changed into Australian money at various banks in the city area.

It is our respectful submission that this money in no way attracts the provisions of any Australian Act as to income or otherwise, as to income tax or any other tax.''

The objection raised by these letters is that the moneys upon which tax was assessed represented cash belonging to the appellant which he had brought here from America in 1964. This raised questions of fact and fact only and, if the facts were as stated in the letters, it was at all times conceded by counsel for the Commissioner that the objection should be upheld and the assessments set aside. The appellant gave evidence before the Board to the effect stated in the letters set out above but his evidence was not accepted by a majority of the Board and accordingly the assessments were confirmed. At an early stage of his final address to the Board, his counsel submitted, however, that the amount on which the tax had been assessed represented the proceeds of robberies and that such proceeds were not taxable but this is not a ground taken in the notice of objection and no evidence to support such a claim had been given on behalf of the appellant. It is true that one of the Commissioner's officers expressed the opinion when cross-examined by counsel for the appellant that the latter's business was that of robbery and it would seem from what he said that it was on this basis that the default assessments had been made. Objection was taken to the admission of this evidence and since that point was not taken in the notice of objection, I am disposed to think that it was irrelevant and I should add that it is clear that the evidence given by the officer played no part in the Board's decision. Notwithstanding his earlier submission to the Board to which I have referred, counsel for the appellant later in his address to the Board agreed that it was fundamental to the success of his case that the appellant should establish the truth of the statements in his solicitors' letters. No doubt he took this course because it was the objection and the only objection raised by those letters. The Board dealt with that issue and, by a majority, refused to accept the appellant's evidence as true.

In answer to the preliminary point taken before me, counsel for the appellant contended that a question of law was involved in the Board's decision, namely whether a person who made money by committing robberies was liable to pay tax on the proceeds. He contended that the Board should have considered and decided this question-which would of course be one of law-and that, having failed to do so, its decision was open to appeal. I do not agree. The Board was called upon to determine the objection made in the letters from the appellant's solicitors and rightly confined its attention to the question of fact thus raised.

In these circumstances I think the preliminary objection must be upheld and the appeals dismissed with costs.

ORDER:

In each case the appeal is dismissed with costs.