8/77 Io[4 IN THE FEDERAL COURT OF AUSTRALIA Loti. nn i nt a ae en ) ) WESTERN AUSTRALIA DISTRICT REGISTRY) W.A.G. No.Gzo of 1% ~) GENERAL DIVISTON ) IN THE MATTER OF AN APPLTCATZON FOR LEAVE TO APPLAL AGAINS. THE DeCts' PENDING IN [il SUPREME COURT OF WESTERN AUSTRALIA. BETWEEN: DANTE LOMBARDO Appellant AND: THF CIVMISSTONEP OF Tax TELAT OF THe COMMON, WEALTII Gr oa Respondent 3 March 1979. REASONS FOR JUDGMENT TOOHEY J. : The taxpayer seeks leave to appeal against a decision of the Supreme Court of Western Australia dismissing his appeal fron a decision of a Board of Review confirming assesstcnts of jnconie tax made 1 respect of the years ended 30 June 1968, 1969 and 1972. Wickham J. held that he had no jurisdicticn to entertain the appeal, adding: "... that should I be wrong iu that conclusion, I haic beard the cvidence of the partius and their witnesses eid T an im a pesttion to iake a decision ... should the case go any further en] be recurned cto me for that purres-". 2. Section 25(2) of the Federal Court of Australia Act 1976 enables an application for leave to appeal to be heard and determined by a single Judge or by a Full Court. The application came before me as a single Judge. This has some implications that I shall mention in these reasons. The merits of the application were canvassed at some length by counsel for the taxpayer and the Commissioner and in view of the relative novelty of the application I reserved my decision. Section 196(5) of the Income Tax Assessment Act 1936, that makes leave to appeal necessary, docs not define the circumstances in which leave may be given nor does it prescribe any criteria to be applied. Nevertheless there are provisions in the Act which throw some light upon the exercise of this discretionary power. Section 196(5) itself contrasts the "lcave" "special required to appeal to the Federal Court with the leave" required to appeal to the High Court. Similar expressions appeared in s.35 of the Judiciary Act 1903, as it stood until 1976, although the reference to leave to appeal was in relation to interlocutory judyments where otherwise an appeal would lie as of right. For that reason the judgment in Ex parte Bucknell (1936) 56 C.L.R. 221 is not entirely in point. But in thc course of a joint judgment the Court emphasised that in the case of an application for special leave, "there must be special circumstances in the case in order to justify the granting of the application. ... But, in the case of orders from which an appeal does not Lie without leave gibi dorner]Toosl yy, 1s ele fron fee teot.. of Lie section that the cvistesees of special circuustnces is not made necessary in order to justify the grant of leave tu appeal" (at p.224). 3. Likewise, although it may be at best a negative consideration, the existence of special circumstances is not necessary before leave to appeal Lo the Federal Court may be granted. Section 196(i1) of the Income [fax Assessment Act provides for an appeal to a Supreme Court from any decision of a Board "that involves a question of Jaw". The meaning of that expression has been canvassed in a number of decisions. See for instance Krew v. Federal Commissioner of Taxation (1971) 45 A.L.J.R. 325, (1971) 71 A.T.C. 4212. It 1s not necessary to refer to them; the point is that the involvement of a qucston of law is all that is necessary to ground an apncal from a Board to a Supreme Court. To appeal from a Supreme Court to the Federal Court leave is required. The conclusion is inevitable that the existence of a question of law is not of itsclf cnough to warrant thet leave. Something else is required. <A question of law that 1s important or of general application is, no doubt, sufficient but there may be other considerations that justify leave. The notice of appeal to the Supreme Court identified the questions of law involved in Lhe decision of the Board in this way: "1, The proper construction of Section 26(a) of the Income Tax Assessment Act 1936. 2. Whether the Appellant acquired his iterest in the properties referred to in the decision of the Board of Review as "Helm Street" and "Clay Lands" for the purpose of profit wakuin., hu -Qlal! Bs chs 4. Before the Supreme Gourt the Commissioner submittcd that no question of Jaw was involved. Wickham J. reserved decision on that question until he had heard the evidence; in the end he accepted the submission. Although several questions of law were claimed by the taxpayer to be at least potentially involvcd in the decision of the Board, the "important question" said to warrant leave was whether a taxpayer, assessed under the provisions of s.26(a) of the Income Tax Assessminent Act, can appeal to a Supreme Court against a a Fh atet awn or. D wD NE NaAari ce Ten omer ara ees thin ane ay ECLiSion G a poara oft ncvicw,. an My Vicw tne Gucec.o7 wo a cannot be proffered in that wide form. There may be decisions of a Board concerning an asscssment under s.26(a) that incontestably involve a question of law, hence are appealable. Decisions turning on the meaenine of "acquired", "purpose™ and "profit inaking by sale" fall into this category. On examination, it appcared that what the tury "22 was really saying was Lhat the application of a statutory provision such as s.26(a) to the facts as found wll always involve a question of law, cven when the co. 7. falls short of saying that there was no evidence on itl! the Board might reasonably have reached its conclusi-: Wickham J. did not accept Lhis. He tock as his startits point a passage from the judgment of Fullagaur J. in Hayes v. Federal Commisevuncr of Taxation (1956) fF Clin. 47 at p.St: "Where the factun probandun involves a term used in & slatutie, the questiou whether the meer ot re sr ache . t ' ' 7 t Ll can sce, always - ue a question of Lav". 5. Wickham J. was ef the view Lhat Pullogar J. was simply restating what had been said by Latham C.J. in Gommissioner of Taxation v. Miller (1946) 73 C.L.R. 93 at 97 and what had been said earlier by Lord Parker in Farmer v. Cotton's Trustees (1915) A.C. 922 at p.933. There is a difference of language involved; the earlier cases expressly introduced the element of construction "the provisions properly construed of by speaking of some statutory enactment". Whether in the cnd the three Judges were applying the same test may be arguable. Sitting as a single Judge, hearing an application for leave to appeal, I do not think it is for me to try to resolve that argument. My inquiry should be directed io the existence of an arguable question, the implications of that question for the case in hand and, if urged as a reason for leave, 1ts wider implications. The correctness or otherwise of the decision challenged may be a relevant consideralion when Lhe application is before a Full Court. Fredericls v. May (1973) 47 A.L.J.R. 362. Sitling as a single Judze, particularly when the correctness of the decision wes not Lully argued, tne situation 1. different. IF Tease is granted, the Full Court 1s not bound by any vicw «f the law T take, but 1t seems Lo me undesirable that « single Judge should srant leave on the basis that the decision of the Supreme Court was wrong. That 1s a matter for the Full] Court. If leave is granted and the appcal is upheld, the matter will be remitted to Wickham J. It may be that from his Honour's decision leave to appeal will again be sought, either by Lhe taxpayer or the Commissioner. That should not stand in Lhe way of this applicalion. for this taxpayer substantial sutis of income tax are involved, not only in respect of the years assessed but, I am told, in regard to later years for which assessments will be raised arising out of the same transactions. The taxpayer's reference to the Board was heard jointly with those of his father and brother. Their assessments were confirmed aud the compelency of their appeals, perdi. in the Supreme Court, will be affected, if nol deternais. by a decision on an appeal by this taxpayer. In my view these are good reasons for grantin, leave to appeal, especially as there is a question of law to be argued, the answer Lo which may throw litt on the scope of appeals from Boards of Review to Superime Courts. There will be leave to the taxpayer to appes! At the request of the parties I reserve the quéstimn os costs. If there is any other matter arising from the ¢ reasons, requiring directions or any procedural vrdcer. either party may apply within 14 days. fas ec .