Federal Commissioner of Taxation v. Elton

Judges:
Davies J

Court:
Federal Court

Judgment date: Judgment handed down 6 February 1990.

---

Davies J.

This is an appeal from a decision of the Administrative Appeals Tribunal [Case W37, reported at
89 ATC 369] which allowed objections to amended assessments issued to the respondent, Brian Edwin Elton, for the years ended 30 June 1976 and 1977 and to an original assessment issued to him for the year ended 30 June 1978.

The amended assessments and assessment arose from an investigation of the activities of a number of persons including the respondent, Mr Elton, to whom the Tribunal referred in its reasons for decision as ``Dick''.

Mr Elton had himself been an investigating officer with the Taxation Office. In the course of his activities as such, Mr Elton had an association with a company which the Tribunal called ``Wal-Co''. One of the events that occurred was that Mr Elton misappropriated a taxation refund cheque for $10,620.99 issued in favour of Wal-Co. In March 1978, he was arrested and, in November 1979, he pleaded guilty to offences with which he was charged in respect of this matter.

The matters giving rise to the assessment in dispute concern not that misappropriation but more extensive activities. The Commissioner of Taxation took the view that Mr Elton and others had conspired together to defraud members of the public and the Commissioner in a number of ways, based upon the business of Wal-Co. The Tribunal recorded the following facts [at pp. 372-373]:

``The conspiracy alleged by the Commissioner flowed out of the affairs of Wal-Co. Wal-Co was a company which carried on business from Sydney. It was controlled by a New Zealander (`Suter'). Its business was to generate revenue by soliciting by mail advertising subscriptions from business houses on the promise of publishing commercial directories. It was an effective technique. Subscriptions flowed in by mail directed to a private GPO box. The conduct of the business involved the printing of materials which was carried out by a suburban printery operated by a printer (`Caxton'). The preparation of mail for despatch was carried out by a suburban typing service controlled by a lady related to Caxton. The collection and banking of subscriptions was carried out by the same lady and, possibly, the distribution of directories. Subscriptions came from all States, except Tasmania and South Australia. Subscribers included many institutions of supposed commercial acumen. A directory printed in 1978 was produced in evidence as a sample of what Dick believed to have been published. It was a poor example of the art of advertising, even to the point of being badly proof-read with obvious errors uncorrected.

6. The investigators were able to satisfy themselves that the scheme had involved some or all of the conspirators in:

• (a) obtaining access to the GPO box of Wal-Co and diverting cheques drawn in favour of Wal-Co to accounts controlled by the conspirators;
• (b) incorporation of two companies using fictitious names adopted for the purpose by at least two of the conspirators;
• (c) thereafter using those companies to carry on the business previously carried on by Wal-Co;
• (d) carrying on business in those names - one of which (Walbank) was superficially similar to the name of Wal-Co - the other (Grant-Co) was not; and
• (e) depositing moneys received thereafter to accounts in the names of Walbank and of Grant-Co; to accounts in false names controlled by Tom; and to accounts in false names controlled by Dick.''

The Tribunal came to the view that the total assessable income derived from the conspiracy was not less than $107,007. There is no challenge to that finding.

The amended assessments and the assessment were issued on the basis that each of three identified conspirators, including Mr Elton, had derived one-third of the profits of the conspiracy. The Tribunal took a contrary view, concluding [at pp. 386-387]:

``As the evidence stands, Dick has persuaded me that it is more probably true than not that the financial benefits derived by him from his association with the scheme were limited to his share of the refund cheque: and that that amount did not constitute assessable income - something

---

ATC 4081

not disputed by the Commissioner and, therefore not a matter in issue before me.

61. The applicant lent his assistance to a grossly improper scheme. For his gross misconduct as an officer of the Commissioner he has suffered the loss of the privileges of his office. However, he has persuaded me, on the balance of probabilities, that, despite his involvement in that extraordinary and reprehensible affair, he did not derive any moneys from it by way of assessable income such as has been attributed to him in the assessments before me.''

The first challenge made by counsel for the Commissioner to the Tribunal's finding is that the Tribunal misapplied the provisions of sec. 190(b) of the Income Tax Assessment Act 1936 (Cth).

Counsel submitted that the Tribunal's approach to onus of proof was wrong and that the Tribunal thus took a tainted view of the facts. Counsel submitted that, because of the provisions of sec. 177(1) of the Act, which provides that, subject to appeal, notice of assessment is conclusive evidence of the taxpayer's liability and because of the provisions of sec. 190(b), the Tribunal should have approached its task on the footing that the assessment was prima facie correct and that it remained correct until shown to be excessive in any particular. Counsel submitted that, in proceedings before the Tribunal, there is a presumption that the assessment is correct in every particular and that the effect of the Tribunal's approach was to ignore this presumption and to invert the onus and place the burden of proof upon the Commissioner.

However, the Tribunal said, in the course of its reasons [at p. 375]:

``When proceedings commence before this Tribunal, there is no presumption that the assessment made by the Commissioner is correct. The determination of the Tribunal must be founded only in the evidence presented before it. If, upon a consideration of that evidence, the Tribunal is satisfied that Dick derived no part of that taxable profit, to that extent the assessment will be set aside. If the Tribunal determines upon the evidence before it that Dick derived something less than has been attributed to him, to that extent the assessment will be set aside. If the evidence persuades the Tribunal that the assessment is sound, then the determination of the Commissioner upon the objection will be upheld. In all of those cases, the standard of satisfaction required is for the Tribunal to be persuaded `on the balance of probabilities'. Given that the Tribunal is so satisfied, it is unnecessary for the Tribunal to bring into play sec. 190 of the Act which provides that:

• `Upon every... reference...
  • (a)...; and
  • (b) the burden of proving that the assessment is excessive shall lie upon the taxpayer.'

As a result, it is only when, upon the close of the evidence, the Tribunal is not persuaded one way or the other, that the statutory direction as to the burden of proof comes into play with the result that, where neither party has persuaded the Tribunal that its contentions are more probably correct, then the applicant fails.''

In my opinion, that statement of the principle was correct.

I do not propose to discuss at length the principles applicable to sec. 190(b) and the burden of proof. While there may be minor areas left for debate, the present case does not raise any such question. The general principles have been clearly expounded in cases such as
Krew v. F.C. of T. 71 ATC 4213;
Macmine Pty. Ltd. v. F.C. of T. 79 ATC 4133 and
McCormack v. F.C. of T. 79 ATC 4111; (1979) 143 C.L.R. 284. The principles laid down in those cases were the principles stated by the Tribunal. I see no error in the Tribunal's remarks.

It is one thing to say that sec. 190(b) creates a rebuttable presumption that an assessment is not excessive, to use the words of Jacobs J. in McCormack v. F.C. of T. at ATC pp. 4127-4128; C.L.R. p. 314, it is another thing to say that, in addition to overcoming the burden of proof imposed by sec. 190(b), a taxpayer must overcome a presumption or presumptions of fact raised by an assessment, as counsel suggested. Such an approach has been clearly rejected. In Macmine Pty. Ltd. v. F.C. of T. at p. 4146, in a lengthy and considered passage, Stephen J. explained that sec. 190(b) has nothing to say about any

---

ATC 4082

particular presumption of fact concerning a taxpayer's affairs. In McCormack v. F.C. of T. at ATC p. 4121; C.L.R. p. 302, Gibbs J. explained that the taxpayer's evidence should be considered on its merits, in the light of the circumstances of the case, without any prepossession, favourable or unfavourable. At ATC pp. 4127-4128; C.L.R. p. 314, Jacobs J. explained that sec. 190(b) has only the effect of placing upon a taxpayer the onus of proving that the assessment is excessive, and does not in addition raise a presumption supplying evidence of fact upon which the assessment is based. See also the function of the Administrative Appeals Tribunal as explained in
Drake v. Minister for Immigration and Ethnic Affairs (1979) 24 A.L.R. 577 per Bowen C.J. and Deane J. at p. 589 and per Smithers J. at p. 599.

As the Tribunal took the trouble to explain its approach to the review and to the operation of sec. 190(b), I would be reluctant to hold that the Tribunal did not apply the principles which it stated. There is, in any event, no significant passage in the reasons of the Tribunal which suggests that the Tribunal did, as counsel submitted, place an onus of proof upon the Commissioner. Counsel referred to a passage in which the Tribunal said that it would not draw an inference against Mr Elton because he had not called as witnesses either ``Tom'' or ``Harry'', the other two identified co-conspirators. The Tribunal explained that, if anything, it was the Commissioner who might have been expected to call these persons as witnesses. This comment was not made in the context of a suggestion that the Commissioner ought to have called these two persons as witnesses but simply to explain that no inference would be drawn against Mr Elton because he did not call them.

Counsel for the Commissioner pointed out that the Tribunal said [at p. 386]:

``I have heard evidence from Dick denying that he participated in the scheme in such a way as to derive assessable income from it and I have heard evidence from both Dick and Ann which persuades me that, on the balance of probabilities, there was no in-flow of moneys into their home at the relevant time which cannot be explained from what has been admitted. Had the investigators examined more closely into the affairs of Dick they might have produced some evidence in support of the assessments. Had the interrogation of Dick been something other than the very limited enquiry which it was, the result might have been different. Had the Commissioner called to the stand Tom or Harry, or both of them, the result might have been different. But it is not for me to speculate about those matters.''

All the Tribunal meant by this passage was that it recognised that the true facts might be otherwise than the facts which it found but it was obliged to come to a decision upon the evidence that was before it. In this approach, the Tribunal was correct. It was not placing an onus upon the Commissioner to do anything. An Administrative Appeals Tribunal must determine a review upon the material which is before it.

Another point of challenge was that, early in his evidence, Mr Elton admitted to receiving some small sums from the companies. He said:

``During the course of this investigation no moneys were received by me, other than cash reimbursement, for incorporation costs... and some nominal cash gifts or small amounts.''

Counsel for the Commissioner submitted that this evidence constituted an admission that assessable income had been received and, accordingly, as Mr Elton had not shown how much was received or when, the assessments must stand, the taxpayer not having satisfied the onus of proof. The evidence was, however, not taken any further. The Tribunal did not discuss it.

I treat this matter as being de minimis, as apparently the Tribunal also did. Had the Tribunal or counsel for the Commissioner considered this evidence to be significant, it should have been further pursued.

The Tribunal's decision was next challenged on grounds which I need not particularise but which had two broad thrusts. First, it was submitted that the final conclusion of fact, which I have set out above, and a number of intermediate findings leading to that conclusion were unreasonable, that no reasonable decision-maker could have arrived at the findings of the Tribunal. The other way in which the matter was put was that the only

---

ATC 4083

conclusion reasonably open on the evidence was that Mr Elton had received some profits or assessable income from the conspiracy, even if he had not received one-third of the $107,007, and that, as the onus was on the taxpayer to prove not merely that the assessment was wrong but by how much it was excessive (see
McAndrew v. F.C. of T. (1956) 98 C.L.R. 263 at p. 271), Mr Elton had failed to establish that his objections should be allowed.

Counsel for the Commissioner relied upon
Edwards (Inspector of Taxes) v. Bairstow & Anor (1956) A.C. 14. I accept the principle therein stated by Lord Radcliffe at pp. 33-36 and I need not repeat it. Moreover, the federal administrative law package has emphasised the need for decision-makers to state in full their reasoning process and therefore, in this country, even greater attention can be given to the actual reasoning process. A flaw in the reasoning process, if sufficiently significant, may flaw the decision itself. It is sufficient for me to refer to my own discussion of this matter in
Independent FM Radio Pty. Ltd. v. Australian Broadcasting Tribunal & Anor (delivered 2 April 1989), in which I said:

``... recent federal legislation has emphasised the need for reasoned decision-making. See the Freedom of Information Act 1982 (Cth), sec. 13 of the ADJR Act, sec. 28(1) and 43(2B) of the Administrative Appeals Tribunal Act 1975 (Cth) and sec. 25B of the Broadcasting Act. Thus instances may be found in the cases where decisions have been set aside because, being insufficiently supported by reason, they appear to be an improper exercise of the power conferred or arbitrary or there was no evidence or other material sufficient to justify the making of the decision or the decision was so unreasonable that no reasonable person could have so exercised the power. The cases have developed, I believe, to the extent that the making or failure to make a particular finding of fact in the course of the reasoning process may be attacked on such grounds and that the taking into account of a fact found unreasonably or the failure to take into account a fact that a reasonable decision-maker must have found and taken into account provides a ground of review under sec. 5(1)(e) and 5(a) and (b) of the ADJR Act.

The point has been put in many different ways. Thus, in Singh & Anor v. Minister for Immigration and Ethnic Affairs, cited above, Forster J. said at p. 10:

• `If assertions of important facts were disbelieved without reason then I should suppose that the decision-maker would be guilty of `failing to take a relevant consideration into account'.'

In
Television Capricornia Pty. Ltd. v. Australian Broadcasting Tribunal & Ors (1986) 70 A.L.R. 147, Wilcox J. said at pp. 150-151:

• `There are also cases in which `no evidence' has been treated as an aspect of some other ground. A finding made without appropriate evidence will generally be erroneous in point of law: see
  Smith v. General Motor Cab Co. Limited (1911) AC 188 at 190. And the necessity for adequate evidence has been said to be a component of natural justice: see
  Minister for Immigration and Ethnic Affairs v. Pochi (1980) 31 ALR 666; 44 FLR 41 in which Deane J. (ALR at p. 689; FLR at pp. 63-8) adopted the statement of Diplock L.J. in
  R v. Deputy Industrial Injuries Commissioner; Ex parte Moore (1965) 1 QB 456 at 488 that natural justice requires that a decision must be based on evidence, in the sense that `it must be based upon material which tends logically to show the existence or non-existence of facts relevant to the issue to be determined, or to show the likelihood or unlikelihood of the occurrence of some future event the occurrence of which would be relevant'. This test was restated in slightly different words by Lord Diplock, as he had then become, in the judgment of the Judicial Committee of the Privy Council prepared by him in
  Mahon v. Air New Zealand (1984) AC 808 at 821:

• `The technical rules of evidence applicable to civil or criminal litigation form no part of the rules of natural justice. What is required by the first rule is that the decision to make the finding must be based upon some material that tends logically to show the evidence of facts consistent with the finding and that the

  ---

  ATC 4084

  reasoning supportive of the finding, if it be disclosed, is not logically self-contradictory.''

In
Prasad v. Minister for Immigration and Ethnic Affairs (1985) 6 F.C.R. 155 at p. 169, Wilcox J. said:

• `Under s. 5(1)(e) and 5(2)(g) the Court is concerned with the manner of exercise of the power. The power is exercised in an improper manner if, upon the material before the decision-maker, it is a decision to which no reasonable person could come. Equally, it is exercised in an improper manner if the decision-maker makes his decision - which perhaps in itself, reasonably reflects the material before him - in a manner so devoid of any plausible justification that no reasonable person could have taken this course, for example by unreasonably failing to ascertain relevant facts which he knew to be readily available to him.'

In
Western Television Ltd. v. Australian Broadcasting Tribunal & Anor (1986) 12 F.C.R. 414 at p. 429, Pincus J. said, with respect to sec. 5(3)(b) of the ADJR Act:

• `A narrower reading, which makes more practical sense, is that per (b) refers only to instances in which express findings made are plainly incorrect.'

In
Akers v. Minister for Immigration, Local Government and Ethnic Affairs (WAG 147 of 1988, delivered 22 December 1988) Lee J. said:

• `In proceeding upon an erroneous premise on a fundamental matter, the authorized officer took into account an irrelevant consideration in that it was information other than the information the American Consulate had endeavoured to convey. To proceed to a decision upon the misapprehension of matters material to the decision, may be described as an improper exercise of power (see
  Minister for Immigration and Ethnic Affairs v. Haj-Ismail (1982) 40 A.L.R. 341 at pp. 348 and 365 and
  Sezdirmezoglu v. Acting Minister for Immigration and Ethnic Affairs (1983) 51 A.L.R. 561 at pp. 572-573).
• Such a situation may be contrasted with an opinion genuinely formed upon conflicting materials placed before the decision-maker, which opinion is sought to be called into question by reference to further evidence or material (see
  Akpan v. Minister for Immigration and Ethnic Affairs (1982) 58 F.L.R. 47). Such a circumstance provides no ground for review.'

In
Khan and Ors v. Minister for Immigration and Ethnic Affairs (G159 of 1987, delivered 11 December 1987) Gummow J. said:

• `It is not for the Court to study administrative decisions too finely or precisely; they are to be regarded carefully but sensibly, and not zealously in the pursuit of error. (
  Smith v. MIEA (1984) 53 A.L.R. 511 at 544 per Lockhart J.). Nevertheless, in my opinion, on the whole of the evidence the applications in question were not each given proper, genuine and realistic consideration upon the merits.'

In the United Kingdom, similar principles are emerging. See Wade's Administrative Law, 6th ed., pp. 329-330.''

See also the discussion by Davies, Burchett and Lee JJ. in
Pashmforoosh v. Minister for Immigration, Local Government and Ethnic Affairs (delivered 28 June 1989).

In the present case, some matters which favour the Commissioner's view were either not mentioned or were not discussed in detail in the Tribunal's reasons. And some crucial findings of fact in the Tribunal's reasoning may be questioned. Certainly their cogency is not obvious.

For example, the Tribunal rejected Mr Elton's evidence that, when he engaged in the many transactions that were proved and when he transferred moneys between accounts maintained by him in fictitious names and between accounts operated by him in the names of two companies, Walbank and Grant-Co, and so on, he did so for the purpose of conducting an investigation as an officer of the Taxation Office. The Tribunal said ``I completely reject that''. And the Tribunal went on to say [at p. 380]:

``I find that he [Elton] was his own master in what he did in the way of opening accounts in fictitious names and in the selection of the names to be used. I find that

---

ATC 4085

he was a free agent in the preparation of the incorporation documents in relation to each company. I further find that, by advancing all of the disbursements necessary to effect the incorporation of the companies, he had no belief that, in doing so, he was serving in any way the interests of the Commissioner or the community.''

That being so, counsel for the Commissioner reasonably asks why Mr Elton would have entered into the transactions, which earned assessable income and profits, if it had not been for the purpose of sharing in that income and profits.

The Tribunal found in Mr Elton's favour because it though that no assets, the source of which could not be identified, could be traced to him. The Tribunal said [at p. 386]:

``Those assets might have been known, such as the new home, the new car and the new holiday cottage, but I am satisfied that they have been accounted for without reference to any scheme moneys other than the refund cheque moneys.''

The Tribunal came to this conclusion in part because Mrs Elton had won $30,000 in a lottery in February 1977 and this money assisted with the acquisition of new assets. Yet, the relevant period, unlike periods before and after, was a time when Mrs Elton did not work and a period in which a new home, a holiday cottage and a new car were acquired. So the period was one of prosperity for Mr and Mrs Elton and the quantum of the moneys alleged to have been derived from the conspiracy, $35,669, over three years of income, was not out of proportion to this prosperity.

The financial transactions of the Elton family were not fully explained. Mr Elton gave this evidence inter alia:

``So just to get it clear there were two accounts with the RSL Permanent Building Society, both in your name, but one in trust for the children and one in your own right. Is that right? - Yes, that is right.

Well, the records show, Mr Elton, that in relation to the RSL Permanent Building Society account in your own name, account number - I just cannot see the number that is stamped - there was a deposit or deposits into that account of $1000 on 18 May 1976, $500 on 27 May 1976, $1000 on 10 June 1976, a total of $2500 within the month. Can you tell us the source of all or any of those funds? - Not now, I cannot, no. It could have been from intercompany-inter account transfer.

Also moving into the 1977 calendar year, into that account there was deposited on 8 June 1988, $1000, and on 16 June 1977, $500; another $1500 within 8 days. Can you tell us anything about the source of those moneys? - Not now.

Well, you see, it seems that on 8 June 1977 you were able to deposit into the children's RSL Permanent Building Society account, $2000, and at the same time into your own account for that building society, $1000 and again on 16 June 1977 $500 went into the children's account and another $500 into your account. Can you give any explanation as to where those moneys came from? - There could have been savings from other accounts or moneys I borrowed.''

Mr Elton gave this further evidence:

``You have a look at your deposit butt book for that account and I will put a yellow sticker just to direct your attention to the relevant butt. Do you see that butt there? - Yes.

It is your handwriting, filled in by you? - That is right.

It represents a deposit of $4954.95 into that Rural Bank account in your true name? - That is right.

And the only detail you have completed at the back of that slip is the -? - Cheque butt.

Is the cheque refund amount of $954.95? - That is right.

Now, has that helped you to remember that $4000 was cash? - It would have been cash, I would say.

Well, now, where did $4000 - what was the source of that cash for you on that date or thereabouts? - I cannot answer that off the cuff directly. It could have come from another account. It could have come from my wife. It could have come from anywhere.

What was the source of the moneys that your wife had to enable her to give you

---

ATC 4086

$4000 in cash on about that date? - My wife was earning as much money as I was.

You did not have $4000 cash on that day? - No, but my wife could have had $4000 cash.''

Another passage in the evidence was as follows:

``And on 1 June 1977 you have deposited a sum of $1000 in that account? - Yes, right.

There is no entry on the back is there? - No.

Can we assume that that was cash? - That is right.

What was the source of that cash? - The same answer.

What is the same answer? - From my own savings or my wife's savings.

And 25 days later on 26 July 1977 you have deposited another $1000, have you not? - That is right, yes.

And there is no entry on the back, is there? - No, that is cash.

So that is another $1000 in cash? - That is right.

What was the source of that money? - The same answer.

Well, tell us again? - What, my savings or my wife's savings or -

Or what? - Or income I have drawn out of another account. It had to have come from some source.

What I am suggesting to you, so that there is no doubt about it, is that it came from the source, namely the enterprise of which I asked you questions about yesterday? - I still deny that. My only money from that was the tax cheque.''

Having regard to such passages, another Tribunal might not have concluded that the source of all funds received by Mr Elton was adequately explained.

The Tribunal accepted Mrs Elton as a witness of truth and accepted that she knew nothing of the source of the income alleged and that the arrest of Mr Elton came as a complete shock to her. The Tribunal also accepted her evidence that, after Mr Elton's arrest, the family was in a parlous financial state and that she had to go back to work. The Tribunal concluded from this, and its conclusion seems fully justified, that the Eltons had no hidden asset to which they could resort. Those findings do not, however, seem to address the point which was sought to be made in cross-examination that there were unexplained credits appearing in the family's bank accounts during the relevant period and that there was a significant increase in assets during that period.

The Tribunal did not discuss in detail the record of Mr Elton's interview with Detective Senior Constable R. McCloud on 15 March 1978. That record and interview records the following questions and answers, inter alia:

``A. Look I now want to say something about this matter.

Q25. What do you wish to say?

A. In retrospect of what I have already said I do know something about the companies Waldene Holdings Pty. Ltd. and Lee Worboys Pty. Ltd. I assisted in the incorporation of those companies under false names and the opening of the bank accounts at the New South Wales King and George Streets branch. I deposited moneys to this account Waldene Holdings Pty. Ltd. and made withdrawals in cash. These monies came from the issuing of invoices headed `Classified Business Directories'. This had been going on for some time before I became involved by a company called Wallis Dene Pty. Ltd., the principal of this company I believe to be called TAYLOR. The initial deposits to Waldene Holdings were in fact cheques made out to Wallis Dene which were obtained I believe from G.P.O. Box 52. When Wallis Dene operation ceased another company was set up. This was called Lee Worboys Pty Ltd. This was another company I assisted incorporating and opened bank accounts at the Commonwealth Bank, St James Branch, the Commercial Banking Company of Sydney, City Tattersall branch, and the Bank of New South Wales, Tattersall branch. Invoices were issued in the name of Lee Worboys, cheques were banked to the three accounts mentioned and cash withdrawals were made from each bank. Later on invoices were also issued in the name of Waldene Holdings and the proceeds

---

ATC 4087

from these invoices were banked to the account at the Wales King and George Streets branch.

...

Q51. I believe that a sum of about $140,000 was paid into the account of Waldene Holdings and also Lee Worboys. Would you agree with that?

A. I have no idea of the amount as I did not keep any records.

Q52. Do you know if anyone associated with the venture kept any records?

A. As far as I know they were all burnt.

Q53. Have you any idea when this was?

A. Everything was taken out about January 1978, I think.

Q54. Of that portion, I correct myself, Can you estimate the amount of profit made in connection with sending of pro-forma invoices?

A. No I would have no idea.

Q55. Could you tell me how what profit there was was distributed?

A. It was just roughly split up between the parties involved about equal portions.

Q56. Would you care at this stage to tell me who the other parties were?

A. I still do not want to say at this stage.''

In that interview, Mr Elton was recorded as saying in answer to question 55 that the profits were split equally amongst the conspirators. The Tribunal said that this interview disclosed a very limited purpose and that there was nothing in the circumstances giving rise to the interview to suggest that Mr Elton was then aware of any contention touching any matter other than the refund cheque. Nevertheless, the matters discussed went to the heart of the taxation issue and Mr Elton was recorded as saying that the profits were split equally, although he said nothing as to the extent of the profits. In his cross-examination before the Tribunal, Mr Elton denied that he would have made that statement. But of course the evidence which he gave to the Tribunal that his activities were activities as a taxation investigation officer was rejected. Once his evidence on that was rejected, his denial of the record of interview could also have been rejected.

I have now sufficiently discussed the facts and the Tribunal's reasons for decision.

On balance, I think this case is similar to Independent FM Radio Pty. Ltd. v. Australian Broadcasting Tribunal & Anor, cited above, in which I held that a decision-maker may have made errors of fact and that its decision may to that extent have been made on wrong facts, but that no error of law was demonstrated.

In the present case, as in the Independent FM Radio case, I myself find some of the reasoning to be unconvincing. The evidence suggests to me that Mr Elton engaged in his activities for the purpose of profit and that there was sufficient evidence of funds moving into and out of the Elton family accounts and a sufficient acquisition of assets to support a finding of derivation by Mr Elton of income from the conspiracy over the period.

That, however, is to say no more than that I may myself have come to a different view of the facts if I had been the decision-maker. As Brennan J. said in
Waterford v. The Commonwealth (1987) 163 C.L.R. 54 at p. 77;

``A finding by the AAT on a matter of fact cannot be reviewed on appeal unless the finding is vitiated by an error of law. Section 44 of the AAT Act confers on a party to a proceeding before the AAT 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 AAT has found them to be or it must vitiate the findings made or it must have led the AAT 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.''

See Ruangrong v. Minister for Immigration & Ethnic Affairs (cited in
Holmes & Ors v. D.F.C. of T. 88 ATC 4328 at p. 4339), in which I said:

``It is not the function of a court in judicial review proceedings to reconsider the material which was before the decision-maker and to come to its own view of the facts as disclosed by that material. As Diplock L.J. said in R. v. Deputy Industrial Injuries Commissioner; ex parte Moore (1965) 1 Q.B. 456 at p. 488:

---

ATC 4088

• If it (the evidence) is capable of having any probative value, the weight to be attached to it is a matter for the person to whom Parliament has entrusted the responsibility of deciding the issue. The supervisory jurisdiction of the High Court does not entitle it to usurp this responsibility and to substitute its own view for his.'

See also
Chief Constable of the North Wales Police v. Evans, (1982) 1 W.L.R. 1155, in which Lord Brightman said, at p. 1173:

• `Judicial review is concerned, not with the decision, but with the decision-making process. Unless that restriction on the power of the court is observed, the court will in my view, under the guise of preventing the abuse of power, be itself guilty of usurping power.'''

See also Holmes & Ors v. D.F.C. of T. 88 ATC 4906 at p. 4912; (1988) 84 A.L.R. 577 at pp. 584-585.

Having given the matter anxious attention, I am not satisfied that any relevant consideration of significance was ignored by the Tribunal or that irrelevant considerations were taken into account or that the Tribunal's decision was otherwise an improper exercise of power or that the decision should be struck down as being in whole or in part unreasonable. The Tribunal has given considered reasons for its conclusions. Its reasons were lengthy and careful. The conclusion at which it arrived was, I think, open to it. I do not consider the conclusion to be a conclusion that no reasonable decision-maker could have come to. The facts were for the Tribunal which found the facts in favour of Mr Elton. Its decision must therefore stand.

For these reasons, the applications by way of appeal will be dismissed with costs.