Case M43

Judges:
HP Stevens Ch
CF Fairleigh QC
JR Harrowell M

Court:
No. 1 Board of Review

Judgment date: 15 July 1980.

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H.P. Stevens (Chairman) and C.F. Fairleigh Q.C. (Member)

By an amended assessment the Commissioner adjusted the taxable income for the year ended 30 June 1977 as previously assessed by disallowing the taxpayer a sole parent rebate of $350 as the Commissioner considered that she did not have the ``sole care of the dependant'', her son. The taxpayer objected thereto and the Commissioner decided to disallow the objection. That decision was referred to the Board for review.

2. The taxpayer is and has been at all material times an unmarried woman. Her child was born on 28 March 1962 in her homeland in Europe. She migrated to Australia in 1964, and was naturalized in 1969. The child was left with her parents in Europe when the taxpayer came to Australia and from time to time she has remitted moneys from Australia and intended it to be for the maintenance of the child. The child's grandparents were subsisting on a pension and were receiving a modest amount from the government in their homeland as child endowment with respect to the child.

3. The taxpayer visited the child and lived with the boy in the home of her parents in Europe for 6 to 8 months in 1969 calendar year, so also in 1975 and in 1979 calendar years. In 1978 calendar year she also did so for a period of some 7 or 8 weeks. During those periods it can be accepted that the taxpayer had the care of the child as that is the nature of her evidence. This does not necessarily mean sole care nor does it decide the issue for a later year. She has deposed also that during those periods she bought food and clothing for the child.

4. At all other relevant times the child's grandparents purchased food and clothing for the child, as well as providing a home for the child. The child attended a public day school. Doubtless the child's grandparents honoured the trust that resulted from the remittance of moneys to them, and they expended that money for the maintenance of the child including the provision of food and clothing.

5. The remittances by the taxpayer to her parents were irregular, presumably due to the exigencies of her financial situation and employment. That is of little moment. It appears that a net amount of about $690 was so remitted during the period here in issue.

6. The child has never lived in or visited Australia.

7. We accept that at all material times the taxpayer contributed to the maintenance of the child within the meaning of sec. 159J of the Income Tax Assessment Act 1936.

8. The question is whether the taxpayer has brought her case within sec. 159K. The introductory phrases in the four subsection of sec. 159K are these:

• (1) Where, during the whole of the year of income, a taxpayer has the sole care of a dependant...
• (2) Where, during part only of the year of income, a taxpayer has the sole care of a dependant...
• (3) Where the taxpayer is the spouse of another person...
• (4) Where, during any period, a man and a woman have lived together as husband and wife...

9. The taxpayer admittedly does not come within sec. 159K(3) or (4), and the issue is whether she comes within sec. 159K(1) or (2).

10. There is no evidence as to the law of the taxpayer's homeland but it can be assumed in her favour that she has had legal custody of the child from the time that it was born to the present time. This assumption is made because from the moment of the child's birth she can be taken to have had legal custody, and there is no evidence of any

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law or judgment altering that position (cf. Halsbury 4th ed. vol. 17 Evidence para. 92 et seq.).

11. Her representative has submitted that she has not lost the care of the child by being in Australia while the child is in Europe.

12. As the taxpayer was in Australia throughout the whole of the year 1 July 1976 to 30 June 1977 she gains no present advantage from the periods when she was living in Europe with her parents and the child. Of course, this is not the occasion to make any finding as to sole care or part or joint care of the child whilst the taxpayer is living with the child and her own parents in Europe.

13. If the taxpayer is to succeed it is because it can be concluded that during the whole of the 1976-1977 financial year she had the sole care of her son. Thus the question is as to the meaning of the expression ``sole care'' in sec. 159K.

14. The fulfilment by the parent of the duty to cause a child to receive efficient full-time education suitable to the child's age ability and aptitude (cf. Halsbury 3rd ed. vol. 21 para. 435 p. 197) does not mean that the parent does not have the custody care and control of the child; even though the school authority may pro tem (ibid. para. 426 p. 192) have some degree of care and control of the child (cf.
Geyer v. Downs and another (1978) 52 A.L.J.R. 142 ).

15. Halsbury (ibid. para. 450 p. 203) says that a person may be the guardian of an infant either (i) by nature; (ii) by custom; (iii) for nurture; (iv) naturally or by parental right; (v) by parental appointment; (vi) by appointment by a court of competent jurisdiction; or (vii) by appointment by the infant. A guardian may be either of the person or of the estate of the infant or both (ibid. para. 451). Guardianship by nature in its original and strict sense is that of a father over his infant heir-apparent of either sex, until the infant attains full age and is exercisable only over the person of the infant (ibid. para. 452 p. 204). A father, and after his death a mother, has the guardianship for nurture of an infant child to the age of 14 years (ibid. para. 204). Under English common law an illegitimate child was not encompassed by the rule (
Dickinson v. North Eastern Rail Co. (1863) 2 H. & C. 735 ). Generally, in the absence of a contrary intention, express or implied, and unless it is more consonant with the object of the statute to include illegitimate children, all statutory provisions respecting children refer exclusively to legitimate children (ibid. para. 307 pp. 136-137; cf.
Minister of Home Affairs and another v. Collins MacDonald Fisher and another (1979) 2 W.L.R. 889 ). The presently relevant sections of the Income Tax Assessment Act include both classes of children.

16. No question of a de facto relationship (even platonic) need be considered, but for completion of reference mention is made of
Joram Developments Ltd. v. Sharratt (1978) 2 All E.R. 948 at p. 953 ;
Lesiw v. Commr. of Succession Duties (S.A.) 79 ATC 4246 ; and
In the Marriage of Grist and Ford (1978) FLC ¶ 90-515 at p. 78, 234; (1978) 35 F.L.R. 314 ; as to a non-custodial parent being unable to contribute to the maintenance of a child,
In the Marriage of Park (1978) FLC ¶ 90-509 at p. 78,434; (1978) 35 F.L.R. 366 ; as to an adult assuming responsibility for the maintenance of another adult, Re Beaumont (deceased) ;
Martin v. Midland Bank Trust Co. Ltd. (1980) 1 All E.R. 266 - whatever is maturity by the law of that European country.

17. The parents may agree that they have joint legal custody of a child and that one only of those parents has the care and control of the child (see the direction of the President of the Family Court made with the concurrence of the Lord Chancellor as recorded in (1980) 1 W.L.R. 301).

18. The form of the order which is commonly made in divorce proceedings i.e. that custody care and control of a child is given to one parent (
Bawden v. Bawden (1978) 3 All E.R. 1216 ) indicates that those three functions at a particular point of time may be in the power of one person or may be separated so as to be held by two or three persons. This is emphasised by the (United Kingdom) Children Act 1948, 11 and 12 Geo. VI c. 43.

19. In
Jones v. Jones (1978) 3 All E.R. 1222 Orr L.J. speaks of a local authority continuing de facto to care for a child, and Stamp L.J. refers to an instance where a person, with no legal right to have the care of a child, is looking after the child and may be

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said to have the care of the child. The (United Kingdom) Children Act 1908, 8 Edw. 7 c. 67 s. 38(2) contains a provision that any person who is the parent of a child shall be presumed to have the custody of the child. It was not possible under that legislation for a parent to get rid of the legal presumption of custody by any voluntary agreement (
Blount v. Blount) (1923) 1 K.B. 257 ; Halsbury 3rd ed. vol. 21 para. 430 p. 195).

20. Upon the death of the father (or where there is not a lawful father) the mother has a common law right to the custody of a child of tender years as natural guardian or guardian for nurture, unless she has forfeited it by misconduct ( Halsbury ibid. para. 431 p. 196).

21. As to the phrases ``custody of'' and ``maintains at his own expense'' see
Robertson v. Walton and Commr. of I.R. (1976) 51 T.C. 241 where the children were living in a de facto family unit with the children being maintained partly by the wages of the man with whom the children's mother was living, and partly by contributions from the children's father. Templeman J. held that legal custody was not relevant for the purposes of the Act which he had to consider as the section dealt with a claimant who had no status but assumed responsibility for an infant. Templeman J. said ``Child relief is not an award for status but a deduction for presumed or proven responsibilities and expense''. The distinction was drawn between legal custody and factual custody; and the children being in one sense in the charge of their mother, and being in another sense in the charge of her de facto husband who had usurped some of the functions of a father in charge of the children.

22. Wallace J. (
Semple v. Semple (1964) 5 F.L.R. 144 ) has expressed a doubt as to a division between care and control on the one hand, and custody on the other hand. Yet it is clear that he (or she) who has legal custody does not necessarily have the care and control of the child; for example the person with custody may be absent from the country where the child resides, for lengthy periods, perhaps continually. In
Capodice v. Capodice (1967) 12 F.L.R. 129 at pp. 135-136 Crawford J. indicates his view that control seems to mean the right to give reasonable directions to a child, including the right of chastisement or of the use of other means of discipline to enforce the control.

23. The taxpayer's representative has submitted that his client whilst in Australia could exercise such control by directions given to her parents by telephone or correspondence.

24. ``Care'' has been said (
Re D.J.M.S. (a minor) (1977) 3 All E.R. 582 at pp. 588-589 ) to apply to the physical well-being of a child, his means and his comfort at home, and also to his proper education.

25. Once again the taxpayer's representative says that all such matters could be attended to by the taxpayer by telephoning to or writing to her parents overseas.

26. Whilst the taxpayer's representative is correct in his submissions (as in para. 23 and 25 hereof) that does not show that during the year in issue the taxpayer had the care of the child. On the contrary the conclusion is that the taxpayer's parents had the sole care of the child during the year in issue. Of course that does not imply that the taxpayer abandoned the child to them; but she did entrust the child to her parents knowing that they would care for the child with the assistance of her financial aid, and with her personal attention whenever she was able to spend time in her parents' home.

27. The decision on the objection is to be upheld and the amended assessment is to be confirmed.