IN THE FEDEPAL COURT Or AUSTRALIA VESTTRM AUSTRALTA DISTRICT REGISTRY GENERAL DIVISION PETWHOSD Ns JUDGE MAKING ORDER: DATE OF ORDER: WHERE MADE: THE COURT ORDERS THAT: On the applicant's motiun dated FRENCH J. PEPTH ANTONY GOPDAN Anplican Respondent MINUTE OF ORDER FEBRUARY 1988 4 Februar 2039 of 1937 OATFS THE COMMISSIONER OF TAXATION OF THE COMMONWEALTH OF AUSTRALIA AuISIOa NaS LEN, Wass + Viiv. 40 LUNGD T 1988: 1. That the respondent do on or before 26 February 1988 file and deliver particulars of the response in accordance with the questions 1(b)(i), 3(a)(12), 4(b), 5(a) and 6(a) in Court on 5 February 1988. of the applicant's amended request filed 2. The respondent do pay the costs of the hear~ing of the motion on the afternoon of 5 February 1988. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN TON FREDPRAL COUPT OP AUSTRALTA WESTERN AUSTPALIA DISTPICT REGISTRY GEMEPAL PIVISION we To. WAG 2939 of 197 RPE TWh Oo Ms ANTONY GORDON OATES Applicant and THE COMMISSIONVR OF TAXATION OF THF COMMONWEALTH OF AUSTRALTA Respondent CORAM: FRENCH J. 5 FERRUARY 1988 REASONS FOR JUDGMENT For the purposes of my decision on the summary judgment motion on 2 February 1988, I indicated that broadly speaking the respective pleadings filed were sufficient to inform each party in the court of the case to be made on either side. That was in the context of an attack upon the respondent's case based on the contention that his failure to provide any, or any adequate, particulars supported an inference that he could not bring to bear any evidence to support the amended assessment which is in issue. My observation was without prejudice to the debate on specific requests and answers which we have been hearing today. So far as particular requests for Further detail of the Commissioner's case are concerned, I have regard to the general principles set out in Bailey v Federal Commissioner of Taxation (1977) 136 CLR 214 and specifically what was said by Aickin J. at 227:- 2. "The purpose of particulars 1s to assist in the defining of issues and there is in my opinion no reason why in appropriate cases the Commissioner should not give particulars where they are necessary in order that both the anpellant and the court may understand the basis upon which the assessment has been made." This statement, and those of the other tudges, makes 1t clear that the need for, or sufficiency of, particulars 15 a matter of judgment according to the requirements of the case before the court. The form of the request which the applicant now advances has been amended to take account of some comments made in the course of my reasons for decision on the motion adverse to requests for the specification of "each fact, matter or circumstance relied upon" by the respondent in his various allegations. That was a form of request which, as then indicated, I regard, in the context of the questions asked, as too wide, and generally as a form of request to which I would not respond sympathetically. The applicant now seeks an order for the provision of particulars in accordance with the amended request. It was amended at fairly short notice but the matter was stood down for a few hours un order to enable the respondent to obtain instructions. I am satisfied that the substance of the request has not altered except in the sense of narrowing some of the questions, so in that sense the respondent has not been prejudiced by the recent changes to their form. Indeed, he has not contended today that he has been so prejudiced. tr 3. Whether the various particulars sought should be ordered 1S in the end a matter of judgment and evaluation and there 15 no hard and fast requirement that particulars of a %ind ordered in one case will be necessary or sufficient in another. One must look at each according to 1ts own facts. Having regard to the principles outlined in Bailey's case, whieh really do nothing more than reflect those generally anoplicable in cCeterimining whether oc not issues are sufficiently defined and particularized, I express my conclusions without elaborate reasons because in the end it 1s a matter of evaluation and judgment of sufficiency. Taking the contested requests for particulars seriatim, I turn first to question 1(1)(b). This relates to the contention in paragraph 3(1)(a) of the Commissioner's response that the profit on the sale of the share in Rowdore Pty Limited was assessable income in the financial year ended 30 June 1981 in that 1t was:- "Money received by the Appellant as gross income derived directly or indirectly from sources in Australia which was not exempt income." The particulars sought are particulars relied upon by the respondent in alleging that the money was (1) received by the applicant as income, and (ii) not exempt income. There is a wide range of possible cases left open on the bald contention that the receipt of the money was as income, and some greater definition of that assertion is required in order 4. that the applicant may know the precise case that he has to mect in that respect, an? that the cnurt may be Fully informed. Particulars will be ordered in terms of question 1(1)(b). As ta the second limb of paragraph (b), particulacs of the contention that Lhe money received was not exempt income, 1t does not seem te be the case of the applicant that the receipt was exempt income and I do not consider that particulars are necessary in that regard. Question 2(a) concerns paragraph 3(b) of the Commissioner's response, which contends that the money received from the sale of the share was profit arising from the sale by the applicant of property acquired by him for the purpose of profit making by sale, and this reflects the terms of s.26 of the Income Tax Assessment Act. The applicant asks the vrespondent to specify the particulars relied upon in alleging that the property referred to was acquired for the purpose of profit making by sale. In my opinion the applicant is sufficiently informed of the case against him by way of the allegation that the purpose was for profit making by sale. His contention obviously 1s otherwise and he knows, 1n my view, what case he has to meet in that respect. I decline to order particulars sought in question 2(a) and similarly question 2(b). 5. Turning to question 3(a), the Commissioner in 3(1)(c) of his respons? alleges, in the alternative, that the receipt of the moneys was profit arising from the applicant carryina on or carrying out a profit making undertaking or scheme. What 15 scught in 3(a) of the applicant's request ave Full particulars of the alleged profit making untlertakirg or scheme including in respect of each:- (1) Who were the parties thereto; (1i) What was the nature, substance and effect of the said undertaking or scheme; (1i1l)When the undertaking or scheme was made, created or devised; (iv) Where the said undertaking or scheme was made or created; (v) When the alleged undertaking or scheme 1s said to have been carried on or carried out; (vi) By whom the alleged undertaking or scheme 1s said to have been carried on or carried out. It is sufficient in this case that the respondent be required to provide particulars of the nature, substance and effect of the alleged undertaking or scheme. The further particulars sought go into unnecessary detail. Once the applicant knows the nature, substance and effect of the undertaking or scheme he knows the substance of the case that he has to meet in respect of that allegation. So particulars will be ordered in respect of question 3(a)(ii). Pa a. Question 4 jeals with 3(1)(4) of tEhe Commissioner's response. In that suh-naragraph the Commissioner alleges that the receipt was, in the alternative, received by the anplicant as an allowance, gratuLty, compensation, benefit, bonus and/or premium, allowed, given or granted to him in resnect of or in relation directly or indirectly to the +mrloyment of the applicant or for services rendered by the applicant, or fFor services rendered by the applicant for Bond Corporation Holdings Limited and/or to Rond Corporation Pty Limited, which amount was not an amount paid on retirement, termination or in licu of annual leave or long service leave. The first question in 4, 1s 4(a) in which the Commissioner is asked to state which of an allowance, gratuity, compensation, benefit, bonus or premium was offered, given or granted to the applicant in his receiving the sum in question. These characterizations of the payment are put in the alternative in the pleading. That 1s a position that the Commissioner is entitled to adopt. He 1s not required to elect which one of them he relies upon. The applicant faces a case in which it may be sought to characterize the receipt as any one of those items. In question 4(b) details are sought of the alleged employment or services rendered by the applicant. That allegation is obviously of critical importance to 3(d) of the Commissioner's response. The identification of the relevant employment and services to the extent sought, is reasonable in the circumstances 7. and T propose to direct that particulars be provided in accordance with 4(b). Question 5{a) relates to the Commissioner's assertion that he was authorized by s.370 of the Income Tax Assessment Act to make the amended asses a) menks, in that the apnlicant did not make a full and true disclosure of the assessable income received by him during the year ended 30 June 1981. That assertion 1s particularized, inter alla, by a statement that the applicant did not state the date of purchase and sale of the share, the profit made, and the circumstances of the acquisition of the share and its subsequent sale which gave rise to the profit of $899,999 being received by the applicant. The applicant seeks particulars of the circumstances which, 1t 1s said, ought to have been disclosed by him but which were allegedly not disclosed. He 1s entitled to that information and those particulars ought to be given. Question 6(a) is the last contested request. It relates to the mistake of fact pleading in 3(b) of the Commissioner's response. There it is alleged that if the applicant made full and true disclosure of all material facts necessary for the assessment of his income, the Commissioner was authorized to amend the assessment to correct a mistake of Fact, namely the facts and circumstances surrounding the acquisition and subsequent sale of the applicant's share in Rowdore Pty Limited at a profit of $899,999, tne eee 8. The applicant seeks identification of each of the facts and ciccumstances rveferrad to. Mr Windsor, for the Commissicner, contends that this 1S atlequately answered by the particulars provided in the answer to question 6(d) which in essence says no more than trat tht Comrmissicner Failed to tate into account the receint of $299,999. And that seeme to be 14entified as the mistake Of fact in question. Put the mistake alleged in 3(b) of the Commissioner's resyonse is a mistake as to the facts and circumstances surrounding the acquisition and subsequent sale of the applicant's share, and that 15 a rather different thing. The applicant is entitled to know which of the facts and circumstances, surrounding the acquisition and the subsequent sale, form the content of the alleged mistake of fact on the part of the Commissioner. I will order particulars to be provided in accordance with 6(a). I will therefore order particulars be provided in answer to questions 1(b)(1), 3(a)(ii), 4{b), 5(a) and 6(a) of the applicant's amended request. I certify that the preceding eight (&) nages are a true copy af the reasons for judgment of Mis Honour Justice French. ro . + Vac tes. Assoclate: »+kLv ye . Nanos co Q wpm ( Date: +? pe ST) Counsel for the applicant: Mr R. O'Connor with Mr A. Solicitors for the applicant: Parker & Parker Counsel for the respondent: Mr G. Windsor Solicitors for the respondent: Austral1ran Government Date of Hearing: 5 February 1988 Date of Judgment: 5 February 1988 Slopis Solicitor