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TMI Blog1930 (12) TMI 19X X X X Extracts X X X X X X X X Extracts X X X X ..... red to make it quite clear that, as at present advised, they were not prepared to assent to the view that it was competent, either with or without legislation of the Federal Parliament, to appoint justices of the High Court, or of the other Courts created under s. 71 of the Constitution, with other than a life tenure of their office, subject to the power of removal contained in s. 72. Judgment of the High Court of Australia, 38 C. L. R. 153, affirmed. APPEAL (No. 123 of 1929) by special leave from a judgment of the High Court of Australia, dated August 25, 1926, upon a special case stated by the Supreme Court of Victoria under s. 51A of the (Federal) Income Tax Assessment Act, 1922-1925, and from a judgment of the High Court, dated October 31, 1927, affirming a judgment of the Supreme Court of Victoria, dated September 16, 1927, the two last mentioned judgments being consequent upon that of August 25, 1926. The appellant company, whose registered name at the date of the assessments hereinafter referred to was the British Imperial Oil Company, Ld., was a company incorporated in Great Britain and carrying on in Australia the business of selling oil, petrol, and petroleum pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... objections as an appeal and to forward it either to the High Court or the Supreme Court of the State. The appellants requested that their objection should be forwarded to the Supreme Court of Victoria. That Court stated a special case for the opinion of the High Court of Australia, which on August 25, 1926, delivered its judgment thereon. The Court (Isaacs, Higgins, Gavan Duffy, Rich and Starke JJ.; Knox C.J. dissenting) were of opinion that the Board of Review was not open to the same objections as had been successfully urged against the Board of Appeal. The questions raised by the special case were accordingly answered in favour of the validity of the assessment. The proceedings are reported at 38 C. L. R. 153. Consequent upon the decision the Supreme Court of Victoria dismissed the appellants, appeal under s. 50 of the Income Tax Assessment Act, 1922-1925, and that judgment was affirmed upon appeal to the High Court. The terms of the Income Tax Assessment Act, 1922-1924, relative to the Board of Appeal, and of the Act of 1925 relative to the Board of Review substituted therefor, are fully set out in the judgment of the Judicial Committee. The material provisions of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ower although it also exercises administrative power. If the Board acts administratively in deciding between taxpayers and the Commissioner, its decisions are open to debate in the Legislature, and that cannot have been intended. [Reference was made to Huddart, Parker Co. v. Moorehead ; Rex v. Macfarlane ; Royal Aquarium, etc., Society v. Parkinson ; Boulter v. Kent Justices ; Rex v. Howard ; Rex v. Woodhouse ; Attwood v. Chapman ; Co-partnership Farms v. Harvey-Smith. ] The Constitution of Australia should be adhered to strictly, more especially because, as the preamble to the Act of 1900 shows, it embodied an agreement between the Commonwealth and the States; it carefully separates judicial, executive, and legislative functions. The provisions as to the Board of Review are so interwoven with the rest of the Act of 1922-1925 that they are not severable therefrom, so that if the Board of Review is a tribunal repugnant to the Constitution the assessment is invalid: In re Initiative and Referendum Act ; Rex v. Commonwealth Court of Conciliation and Arbitration ; Osborne v. The Commonwealth. Sir John Simon K.C. and Somervell K.C. for the respondents. The decision of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pealing to the Courts. Cases referred to for the appellants show that a body may act administratively although it functions like a Court in many respects, e.g., hearing witnesses under oath, deciding between two or more contending parties. Further, a body may be administrative though it decides matters referred to it by another body, and its decision takes the place of that other body's decision: Rex v. Electricity Commissioners. The category of bodies against which a writ of certiorari can be issued is wider than that of Courts of justice: Reg. v. St. Mary Abbotts, Kensington (Assessment Committee). If it should appear that the functions assigned to the Board of Review may be regarded as either judicial or administrative, the provisions of the Act should be held to be valid rather than an infringement of the Constitution. A decision contrary to the respondent's contention upon the first point would narrow the meaning to be given to judicial power in considering the second point. [Reference was made also to Cornell v. Deputy Federal Commissioner of Taxation and Thomson v. Federal Commissioner of Taxation. ] Even if the Board of Review was an invalid body that does not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , 1929, from two judgments of the High Court of Australia, dated respectively August 25, 1926, and October 31, 1927. The judgment dated August 25, 1926, was given on a special case stated by the Supreme Court of Victoria arising out of an assessment on the appellants to Federal income tax for the financial year 1924-5. The judgment dated October 31, 1927 (following upon the decision of the case stated), dismissed an appeal of the appellants from a judgment of the Supreme Court dated September 16, 1927, which, following also upon the same decision, had dismissed outright the appeal against the assessment made by the appellants to that Court. In their appeal to His Majesty in Council against these judgments the appellants have disputed the validity of certain Federal Income Tax Assessment Acts under which they were assessed as being contrary to Ss. 71 and 72 of the Constitution of the Commonwealth which is set forth in s. 9 of the Commonwealth of Australia Constitution Act, 1900. Although the facts upon which that contention is based are undisputed they are of a complicated character and the law applicable to them is somewhat intricate, but many points raised and decided in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the judicial power of the Commonwealth can only be vested in 'Courts that is, in Courts of law in the strict sense; and that, if any such Court be created by Parliament, the tenure of office of the Justices of such Court, by whatever name they may be called, shall be for life subject to the power of removal contained in s. 72 of the Constitution. The decision in the Waterside Workers' Federation case , however, not being a decision binding on their Lordships' Board, the respondent at the hearing, as a further answer to the appeal, contested its correctness and submitted that it should now be overruled. The appellants are a company duly incorporated in Great Britain and carry on in the Commonwealth of Australia the business of selling oil, petrol and petroleum products, from which they have derived income taxable under the Income Tax Assessment Acts of the Commonwealth of Australia. Their business is controlled principally by persons resident outside Australia. The present difficulty originates in that fact, inasmuch as, in the view of the Federal Commissioner of Taxation, it brought the appellants within the exceptional taxing provisions of s. 28 of the Incom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he hearing of his appeal to the grounds stated in his objection. (7.) If the assessment has been reduced by the Commissioner after considering the objection, the reduced assessment shall be the assessment appealed from. (8.) When the appeal is to the High Court or a Supreme Court, it shall be heard by a single Justice of the Court. 51. - (1.) On the hearing of the appeal, the Court or Board of Appeal may make such order as it thinks fit, and may either reduce or increase the assessment. (2.) An order of the Board on questions of fact shall be final and conclusive on all parties. (3.) An order by the Court shall be final and conclusive on all parties except as provided in this section. (4.) The costs of the appeal shall be in the discretion of the Court or the Board, as the case may be. (5.) The Board shall, if it considers an appeal to be frivolous or unreasonable order the forfeiture of the whole or part of the amount mentioned in sub-s. 5 of the last preceding section. (6.) On the hearing of the appeal the Board shall, on the request of a party, and the Court may, if the Court thinks fit, state a case in writing for the opinion of the High Court upon any question arising in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3 assessment, and it turned mainly upon the provisions above quoted of the Income Tax Assessment Act, 1922, with reference to the status of the Board of Appeal. That Board was, they objected, a Court exercising the judicial power of the Commonwealth, and was unconstitutional in that it was composed of members appointed only for a term of years. To their objection the Commissioner made no immediate answer, and by December 1, 1925, when for the first time he did respond, the situation as it stood at the date of the objections had greatly changed. In the first place, the objections taken by the appellants to the assessment of 1922-23 were during that interval disposed of by the High Court of Australia and in the sense contended for by the appellants. (Incidentally, and to avoid confusion, it should be stated here that these objections were taken by the appellants under their then registered name of the British Imperial Oil Company, and it is under that name that the proceedings with reference to them are reported in (1925) 35 C. L. R. 422.) In that instance the appellants required their objections to the assessment then made upon them to be referred to the Board of Appeal under s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd 12, Ss. 41, 44, 50 and 51 of the Act of 1922 were so dealt with as to produce the result following:- 9. Section forty-one of the principal Act is amended - (a) by omitting from sub-s. 1 thereof the word 'Appeal' and inserting in its stead the word 'Review'; and (b) by omitting sub-s. 3 thereof and inserting in its stead the following subsection: (3.) The persons who were, prior to the commencement of this section, appointed, in relation to income tax, to be members of a Board of Appeal, shall be deemed, as from the commencement of this Act, to have been appointed to be members of a Board of Review and shall continue to hold office as such members as if appointed under this Act. 10. Section forty-four of the principal Act is repealed and the following section inserted in its stead:- 44. - (1.) A Board of Review shall have power to review such decisions of the Commissioner, Assistant Commissioner or Deputy Commissioner as are referred to it by the Commissioner under this Act and, for the purpose of reviewing such decisions, shall have all the powers and functions of the Commissioner in making assessments, determinations and decisions under this Act, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uestion of law. 51A. - (1.) Where a taxpayer has, in accordance with s. 50 of this Act, requested the Commissioner to treat his objection as an appeal and to forward it to the High Court or the Supreme Court of a State, the Commissioner shall forward it accordingly. (2.) The appeal shall be heard by a single justice of the Court. (3.) A taxpayer shall be limited, on the hearing of the appeal, to the grounds stated in his objection. (4.) If the assessment has been reduced by the Commissioner after considering the objection, the reduced assessment shall be the assessment appealed from. (5.) On the hearing of the appeal, the Court may make such order as it thinks fit, and may reduce, increase or vary the assessment. (6.) An order of the Court shall be final and conclusive on all parties except as provided in this section. (7.) The costs of the appeal shall be in the discretion of the Court. (8.) On the hearing of the appeal, the Court may, if it thinks fit, state a case in writing for the opinion of the High Court upon any question which in the opinion of the Court is a question of law. (9.) The High Court shall hear and determine the question, and remit the case with its opinion ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essment appealed against good in law? The case as so stated was argued before the High Court of Australia, judgment given upon August 25, 1926, and the answers given by the Court, Knox C.J. dissenting, were to (1.) No, and to (2.) Yes. The ground upon which the majority of the learned judges of the High Court proceeded when so answering these questions was that in their opinion, the Board of Review, if in the present case the objections of the appellants had been referred to it, would not in entertaining them have been a Court exercising the judicial power of the Commonwealth, but would have been merely a tribunal engaged in the administration of the statutes and one, therefore, quite properly constituted. The great question which has been argued on the appeal is whether the learned judges were right in that conclusion. Now, it is hardly doubtful that the Federal Legislature, accepting, as presumably it did, the correctness of the High Court's judgment of April 9, 1925, set itself by its amending Act of 1925 to get over the administrative difficulties which that judgment created. Indeed, a close examination of the sections of the new Act already set forth shows ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ely to prevent the taxpayer having a double choice instead of an alternative choice of tribunal from the Commissioner. (g) The second exception, when carefully examined, is really to negative the notion of the Board being judicial. It allows an appeal to the Court from any decision which, in the opinion of the Court, is a question of law. .... The fact that the Commissioner may appeal as well as the taxpayer only indicates that the Crown as well as the subject may invoke the Court to correct a misconstruction of the law, which would, of course, affect not merely that taxpayer but all taxpayers in a similar position. (h) The Board's decision, when given, may, by s. 51, sub-s. 4, be formalized by confirming, reducing, increasing or varying the assessment. This is form only. (i) By the next sub-section it may order the forfeiture of the deposit if it thinks the reference frivolous or unreasonable. Administrative 'orders' are numerous, and, in this instance, the exercise of the power rests, not on law, but on opinion. In any event, the sub-section is quite subsidiary. Starke J., speaking of the Board of Review, describes its position as follows: It has power to review ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ourt under sub-s. 5. But under the new s. 51, dealing with the orders of the Board of Review, there is no provision in any way corresponding to these sub-ss. 6 and 10 of s. 51A. The orders of the Board of Review are not there stated to be conclusive for any purpose whatsoever. On the other hand, under s. 51, sub-s. 2, of the Act of 1922, the orders of the Board of Appeal on questions of fact were expressly declared to be final and conclusive on all parties. The distinction is, their Lordships think, both striking and suggestive. The decisions of the Board of Review are under the amending Act made the equivalent of the decision of the Commissioner. No assessment of his, even when paid, is conclusive upon him. He retains under s. 37 the fullest power of subsequent alteration or addition, and it would appear that that power remains with him notwithstanding any decision in respect of the same assessment by the Board of Review. It is only the decision of the Court which, in respect of an assessment, is now made final and conclusive on all parties: a convincing distinction, as it seems to their Lordships, between a decision of the Board and a decision of the Court. The authorit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... An administrative tribunal may act judicially, but still remain an administrative tribunal as distinguished from a Court, strictly so-called. Mere externals do not make a direction to an administrative officer by an ad hoc tribunal an exercise by a Court of judicial power. Their Lordships find themselves in agreement with Isaacs J., where he says: There are many functions which are either inconsistent with strict judicial action .... or are consistent with either strict judicial or executive action. .... If consistent with either strictly judicial or executive action, the matter must be examined further. .... The decisions of the Board of Review may very appropriately be designated .... 'administrative awards,' but they are by no means of the character of decisions of the Judicature of the Commonwealth. They agree with him also when he says that unless .... it becomes clear beyond reasonable doubt that the legislation in question transgresses the limits laid down by the organic law of the Constitution, it must be allowed to stand as the true expression of the national will. In that view they have come to the conclusion that the legislation in this case does not t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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