Case P82

Judges:
MB Hogan Ch
P Gerber M
GW Beck M

Court:
No. 3 Board of Review

Judgment date: 22 September 1982.

---

M.B. Hogan (Chairman)

The facts in relation to this matter and the relevant provisions of the Income Tax Assessment Act are fully set out in the decision of my colleague, Dr. Gerber. The taxpayer in this reference was described in the return for year ended 30 June 1979, the first return for several years, as a deckhand on a prawn fishing boat operating out of Groote Eylandt. Groote Eylandt is clearly an island such as falls within para. 2 of Pt. I of Sch. 2 to the Act and falls therefore in Zone A for purposes of sec. 79A of the Act. The nice question which emerges is whether, in the

---

ATC 400

circumstances, the taxpayer was a person who resided in the area (Groote Eylandt) for more than one-half of the year of income.

2. The circumstances against which this question is to be determined are:

• (i) the taxpayer was employed for the full year as deckhand on a prawn fishing boat;
• (ii) that boat operated solely out of Groote Eylandt in the relevant year of income;
• (iii) throughout the year the taxpayer lived on board the boat on which she worked; and
• (iv) the taxpayer did not own, rent or maintain a house or other form of residence on the mainland or the island throughout the year.

The last of the ``agreed facts'' is somewhat ambiguously expressed. It states that the taxpayer ``was not physically present on the mainland, or the islands, for more than one-half of the year of income''. I take it to mean no more than that the taxpayer was not ashore, or in harbour, for more than one-half of the year of income. In this connection I note in a copy of a statutory declaration forwarded to the Deputy Commissioner, a statement by the taxpayer that ``during the prawning season that boat would have been at sea for approximately six days to each one day spent in port''. It is apparently on the basis of this admission that the taxpayer, though she could not provide exact dates on which she was in port, was prepared to concede that she was not ``physically present'' on Groote Eylandt during more than one-half of the year of income. The claim before the Board was pressed on the basis that the taxpayer qualified as being resident in Zone A under para. (a) of the definition of that word in subsec. (4) of sec. 79A. The Board was informed by the taxpayer's representative (and the statement was not challenged by the Commissioner's representative) that the taxpayer has ``for the last five years never lived anywhere but on Groote Eylandt'' - the boat being her home apart from holidays in Darwin - and now lives in a home on the island.

3. By way of a general preface to the writing of this decision, I draw attention to the views expressed by Dixon J. (as he then was) in
Gregory v. D.F.C. of T. (1937) 57 C.L.R. 774 ; in that case, his Honour was considering the question of whether the taxpayer, who owned a house in Broome in Western Australia, should be considered to be ``a resident'' of the Northern Territory for purposes of sec. 5A of the Income Tax Assessment Act 1922 as amended. At p. 777 his Honour stated:

``A question of much importance in the present case is whether the word `resident' in sec. 5A should be interpreted in the same way as similar expressions are interpreted in the British Income Tax Acts. I think that the answer is that that word should receive the same meaning and application as `person residing' and `ordinary resident' have been given in England. No technical or artificial meaning has been placed upon these expressions and parallel expressions under the British income tax law. But certain principles have been laid down by judicial decision for interpreting and applying the expressions.''

I have taken it that those views are equally applicable in determining the interpretation to be placed on the word ``resident'' in sec. 79A of the Income Tax Assessment Act 1936 as amended.

4. There have been several decisions of Courts bearing on the residence of mariners.
Re Young at (1875) 1 T.C. 57 confirmed the decisions of the Commissioners for General Purposes that the taxpayer, a master mariner, was ``chargeable to the duties granted under the [U.K.] Act as a person actually residing in the United Kingdom'' even though the term of his actual physical presence in the United Kingdom for the 1874-75 year was limited to 88 days. Captain Young, during the period of his absences overseas, maintained a residence in Glasgow at which his wife and family resided. In his decision, the Lord President quoted with approval observations from an earlier decision of Lord Mackenzie in
Brown v. M'Callum (1845) 7 D. 423 to the effect that:

``Every sailor has a residence on land. We have no persons who are born and live and die upon the water.''

(At p. 61, 1 T.C.)

The Lord President went on to observe that:

``... these views (amongst others) of the construction of the word dwelling-house

---

ATC 401

are perfectly applicable to the word `residence' under this statute [i.e. the United Kingdom income tax statute].''

The views expressed by Lord Mackenzie were again most specifically endorsed by the Lord President in
Rogers v. I.R. Commrs. (1879) 1 T.C. 225 at p. 226 . The two cases were adverted to with evident acceptance by Viscount Cave in
Levene v. I.R. Commrs. (1928) A.C. 217 at p. 223 . That case and the later decision of the House of Lords in
I.R. Commrs. v. Lysaght (1928) A.C. 234 were referred to by Dixon J. (as he then was) in the case of
F.C. of T. v. Miller (1946) 73 C.L.R. 93 when, in the course of coming to the conclusion that the decision of the Board of Review did not involve ``any question of law'', he went on to observe at p. 103, that:

``It is not legally impossible for a man to reside in a country, though he lives on a moving craft plying upon its rivers or within its territorial waters.''

That dictum echoes the decision in
Bayard Brown v. Burt (1911) 5 T.C. 667 which was advanced in argument, where Hamilton J., and, on appeal, the Court of Appeal, indicated their acceptance of a finding of the Commissioners for General Purposes that the taxpayer was a resident of the United Kingdom though his only residence for 20 years was a yacht moored in the River Colne. The particular point of the two decisions of the House of Lords, the decision of the Appeal Court and the decision of the High Court, is that they decided only that decisions as to the residential status of a taxpayer for income tax purposes, by the Commissioners in the United Kingdom cases and by the Board of Review in the Australian case, were essentially a question of fact and did not involve any question of law.

5. In arriving at a conclusion in this case, reference needs to be made to other factors to which attention was given by their Lord-ships in their findings in the cases of Levene and Lysaght (supra). Viscount Cave in Levene adopted the Oxford English Dictionary meaning of the word ``reside'' - ``subject to any modification which may result from the terms of the Income Tax Act and Schedules''; the particular meaning he quoted was:

``to dwell permanently or for a considerable time, to have one's settled or usual abode, to live in or at a particular place.''

In his reasoning he tended to concentrate on the second of the meanings listed above, indicating that ``in the case of a wanderer who, having no home in any country, spends a part only of his time in hotels in the United Kingdom and the remaining or greater part of his time in hotels abroad'' - as was the evidence in Levene's case - the question became one of ``fact and degree''.

6. Further, in Levene's case, Viscount Sumner in the following passage dealt with an attack on the Commissioners' approach when they had regard to facts in later years in determining the question of residence in earlier years (at pp. 226-227):

``It is suggested that the Commissioners misdirected themselves in point of law, because they took into account, with regard to the earlier years, conduct, which only occurred subsequently. I agree that a taxpayer's chargeability in each year constitutes a separate issue, even though several years are included in one appeal, but I do not think any error of law is committed if the facts applicable to the whole of the time are found in one continuous story. Light may be thrown on the purpose, with which the first departure from the United Kingdom took place, by looking at his proceedings in subsequent years. They go to show method and system and so remove doubt, which might be entertained if the years were examined in isolation from one another.''

A similar approach was adopted by Viscount Cave in reviewing the whole residential history of the taxpayer at p. 224, though he concluded from his review that the taxpayer could be properly found by the Commissioners to be both resident and ordinarily resident under r. 3 of the General Rules, making the point at p. 225 that:

``... the expression [`ordinary resident'] differs little in meaning from the word `residence' as used in the Acts; and I find it difficult to imagine a case in which a man, while not resident here is yet ordinarily resident here.''

7. The decision in the Lysaght case followed directly on the decision in the case

---

ATC 402

of Levene. Viscount Sumner in Lysaght at p. 244 has some observations which seem to be particularly pertinent to the circumstances of this taxpayer, vide:

``Grammatically the word `resident' indicates a quality of the person charged and is not descriptive of his property, real or personal. To ask where he has his residence is often a convenient form of inquiry but only as leading to the question `then where is he resident himself?' I think this distinction, though often pointed out, has too often been over-looked in the reported cases.''

Lysaght's case also has some bearing on the present reference in that it establishes that continuity of residence is not essential to permit a finding that a person is resident for income tax purposes; Lysaght's presence in the United Kingdom in any year consisted of a series of short visits connected with his activities as an advisory director of John Lysaght Ltd. Indeed, the whole paragraph which commences with the quotation above, and the succeeding paragraphs, read together, emphasise that a single extended visit or a series of transient visits may be sufficient to establish residence. As Viscount Cave observed in Levene at p. 225 in dealing with what may be the more limited expression ``ordinarily resides'' (about which see his Lordship's observations quoted at the end of para. 6 above):

``The suggestion that in order to determine whether a man ordinarily resides in this country you must count the days which he spends here and those which he spends elsewhere, and that it is only if in any year the former are more numerous than the latter that he can be held to be ordinarily resident here, appears to me to be without foundation.''

See also Viscount Sumner in his conclusion in the second paragraph at p. 245 in Lysaght.

8. Addressing myself then to the question posed by Viscount Sumner in Lysaght, I must determine where is this taxpayer resident herself, bearing in mind that the word resident indicates a quality of the person involved. I can accept that the taxpayer can reside in an anchored vessel in the anchorage at Groote Eylandt (vide Bayard Brown) or indeed in a moving craft upon the rivers or territorial waters of an area vide Miller). I can accept also that every sailor has a residence on land (Rogers' case supra), and that none the less so, even though he has been absent from the residence for the greater part of the year (Re Young), or indeed for the whole of the year (Rogers), because of the exigencies of his position. See also the Master of the Rolls in Bayard Brown at p. 674 where, speaking of Young's case, he observed that:

``... in a case like that a man cannot be fairly said for purposes of Income Tax to be residing elsewhere than in Glasgow because he is during portion of the year going backwards and forwards on a ship between Glasgow and the Mediterranean.''

I may also properly have regard in a first year such as this to conduct which occurred in later years, per Viscount Sumner in Levene.

9. Having regard to all of the above, I have come to the conclusion that this taxpayer was a resident of Groote Eylandt throughout the whole of the year of income and, as such, a resident of Zone A for purposes of sec. 79A of the Act. In coming to this conclusion I have had regard to the material before the Board which is commonly accepted, indicating that:

• (i) she had no quality of residential affiliation with any area other than Groote Eylandt during the year of income;
• (ii) she lived at Groote Eylandt on the trawler at all times when she was not at sea; and
• (iii) she continued to be residentially affiliated with Groote Eylandt through-out the ensuing years to the extent that she now has a home on the island itself.

To paraphrase what the Lord President said (at p. 227, (1879) 1 T.C.) in giving the decision of the Court of Exchequer in Rogers' case, she had no other residence and she must have a residence somewhere; the circumstance that she was absent from the island for the greater part of the year on her duties as a deckhand is a mere accident; she is not a bit the less a resident of the island because her duties have kept her away for a large part of the period.