McCleary, Grant v Commissioner of Taxation of the Commonwealth of Australia [1997] FCA 182

CATCHWORDS INCOME TAX - application under s39B of Judiciary Act 1903 (Cth) to restrain Commissioner from recovering income tax - whether notice of assessment tentative or not made bona fide - application dismissed. Income Tax Assessment Act 1936, ss167, 175, 177 Judiciary Act 1903, S39B Jurisdiction of Courts (Cross-Vesting) Act 1987 (WA) s5(1)

The Federal Commissioner of Taxation v S Hoffnung & Company Limited (1928) 42 CLR 39, F J Bloemen Pty Limited v The Commissioner of Taxation (1980-81) 147 CLR 360, Federal Commissioner of Taxation v Stokes (1996) 97 ATC 4001 Deputy Commissioner of Taxation v Richard Walter Pty Ltd (1994-95) 183 CLR 168 R v Hickman; Ex parte Fox & Clinton (1945) 70 CLR 598 R v Commissioner of Taxation (WA); Ex parte Briggs (1986) 12 FCR 301 Darrell Lea Chocolate Shops Pty Ltd v Federal Commissioner of Taxation (1997) 141 ALR 713 GRANT McCLEARY v THE COMMISSIONER OF TAXATION OF THE COMMONWEALTH OF AUSTRALIA WAG140 OF 1996 HILL J PERTH 25 MARCH 1997

IN THE FEDERAL COURT) OF AUSTRALIA ) WESTERN AUSTRALIA ) DISTRICT REGISTRY ) GENERAL DIVISION ) NO. WAG140 OF 1996 B E T W E E N: GRANT McCLEARY Applicant and THE COMMISSIONER OF TAXATION OF THE COMMONWEALTH OF AUSTRALIA Respondent MINUTE OF ORDER JUDGE MAKING ORDER: HILL J DATE OF ORDER: 25 MARCH 1997 WHERE MADE: PERTH THE COURT ORDERS THAT:

1. The application be dismissed; and 2. The applicant pay the respondent's costs. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT) OF AUSTRALIA ) WESTERN AUSTRALIA ) DISTRICT REGISTRY ) GENERAL DIVISION ) NO. WAG140 OF 1996 B E T W E E N: GRANT McCLEARY Applicant and THE COMMISSIONER OF TAXATION OF THE COMMONWEALTH OF AUSTRALIA Respondent CORAM: HILL J DATE : 25 MARCH 1997 PLACE: PERTH REASONS FOR JUDGMENT The applicant, Mr Grant McCleary applies to the Court under s39B of the Judiciary Act 1903 (Cth) to restrain the respondent Commissioner of Taxation from recovering income tax purportedly assessed to Mr McCleary in respect of the 1993 year of income. In contest is the validity of the notice of assessment for that income tax year, which issued to Mr McCleary on 5 September 1994 and required payment of the sum of $383,410.05 in tax and additional tax after allowance of rebates and other credits. In the meantime, the Commissioner commenced proceedings in the Supreme Court of Western Australia to recover from Mr McCleary the tax so notified. Those proceedings were, by order of that Court made on 19 September 1996 transferred to this Court pursuant to s5(1) of the Jurisdiction of Courts (Cross-Vesting) Act 1987 (WA). By agreement of the parties they have been adjourned pending judgment in the present proceedings. The case for Mr McCleary is that the assessment was tentative, or non definitive in the sense in which those words have been used in cases such as The Federal Commissioner of Taxation v S Hoffnung & Company Limited (1928) 42 CLR 39, F J Bloemen Pty Limited v The Commissioner of Taxation (1980-81) 147 CLR 360 and most recently Federal Commissioner of Taxation v Stokes (1996) 97 ATC 4001. It was also said that the assessment was not made bona fide and should for that reason be set aside. When particulars of the lack of bona fides were requested, counsel for the applicant specified two matters, individually or cumulatively, namely that the Commissioner in making the assessment had relied upon material gleaned from the Australian Federal Police and further had made no enquiries, either of Mr McCleary himself, or his tax agent Mr Popham. The case for Mr McCleary consisted of the affidavit and oral evidence of Mr Popham and a tender of a document entitled "Audit Report" dated 19 August 1994 and prepared by a Mr Fairs who was, it would seem, in charge of investigating Mr McCleary's affairs and which report, it may be inferred, led to the assessment issued to Mr McCleary.