Commissioner of Taxation v Miller [1946] HCA 23; (1946) 73 CLR 93 (15 August 1946)

This is an appeal from a decision of a Board of Review constituted under the Income Tax Assessment Act 1936-1943, s. 178, upholding the claim of the respondent, Herbert Miller, that the Act does not apply to certain income derived by him. Section 7 of the Act is in the following terms:—

The Board held that Miller was, during the period 12th December 1942 until 30th September 1943, a resident of the Territories of New Guinea and Papua and therefore that the Act did not apply to income derived by him during that period from sources within those Territories. The question in this proceeding arises with respect to the income derived by the respondent during the twelve months ended 30th June 1943. It was agreed by the parties that the evidence given before the Board should be treated as evidence given before the Court, and neither party adduced any further evidence.

The facts established by the evidence are that the respondent Miller owned a fishing boat which he used in Queensland waters. From August 1940 he lived with his wife on the boat. The boat was impressed for service with the United States Small Ships Section Transportation Service, and Miller was employed as master of the vessel, first under an oral agreement, and later under two written agreements each relating to six-monthly periods, the first commencing on 1st October 1942, and the second on 1st April 1943. Under these agreements, he was employed at a salary of £85 6s. 9d. a month and Cairns in Queensland was described as his home port. He went on the boat to New Guinea and arrived in Milne Bay on 12th December 1942. He discharged his duties in the territorial waters of Papua and New Guinea. Except during a period of 27 days' leave which he spent in Queensland, from 12th December 1942 until 1st October 1943, he did not land. It has not been disputed that the money which he earned as his pay was derived from a source within the Territories. Miller's wife remained in Queensland, living first at Cairns and then at Brisbane, but spending some time with relatives at another place, Wooloowin, in Queensland. Upon these facts, the Board held that the respondent was a resident of the Territories of Papua or New Guinea continuously from 12th December 1942 to 30th September 1943.

There is an appeal to this Court from a decision of a Board of Review only if the decision of the Board involves a question of law: Income Tax Assessment Act 1936-1943, s. 196 (1). It has frequently been said that residence is a question of fact: See, e.g., De Beers Consolidated Mines Ltd. v. Howe[1], per Lord Loreburn: "This" (the question of place of residence) "is a pure question of fact." In American Thread Co. v. Joyce[2], however, Lord Haldane L.C., with the concurrence of four learned lords, after referring to certain facts found by the Inland Revenue Commissioners, said: "The only other question—the question of law—is that of residence." The distinction between questions of law and questions of fact is not always easy to draw: See, e.g., Farmer v. Cotton's Trustees[3], per Lord Parker of Waddington:—

In Inland Revenue Commissioners v. Lysaght[4], it was said that a decision on a question of residence was a finding of fact and that, where review was limited to questions of law, such a decision "cannot be reviewed unless it is made out to be based on some error in law, including the absence of evidence on which such a decision could properly be founded." In the present case, it is contended for the appellant that there was no evidence upon which a decision that Miller was resident in Papua could properly be founded. The decision of the Board that there was such evidence involved a question of law: See Morley v. Lawford & Co.[5]; Federal Commissioner of Taxation v. Broken Hill South Ltd.[6]. When a question of law is involved, there is a right of appeal, not merely a discretionary power in the Court to entertain an appeal: Section 196 (1). In hearing the "appeal," the Court is exercising original and not appellate jurisdiction: Federal Commissioner of Taxation v. Munro[7], and on appeal[8]. When the "appeal" comes before the Court, the whole decision of the Board of Review, and not merely the question of law, is open to review: Ruhamah Property Co. Ltd. v. Federal Commissioner of Taxation[9]. In that case, Isaacs J.[10] agreed with the other four members of the Court that, if the decision of the Board involved a question of law, "then the whole case is within the original jurisdiction of the Court." But he proceeded to say: "If the Board's decision, on examination, be found to be unaffected by any erroneous view of the law—as, for instance, if it be found that the question of law has been correctly apprehended, then, in my opinion, on a true construction of the sub-section, it is the duty of this Court to abstain from altering the Board's conclusion of fact." It may become necessary upon an appropriate occasion to consider whether this view of the effect of the provision for appeal to the Court is consistent with the express statement in the majority judgment that "the whole decision of the Board and not merely the question of law is then" (i.e. upon an appeal) "open to review." There are, I think, difficulties in construing s. 196 (1) as meaning that, if the Board was right in its law, the Court is precluded from considering any questions of fact, but that if the Board was wrong in its law, the Court should, or may, consider all questions of law and fact, giving due weight, doubtless, to the decision of the administrative body on questions of fact. It should be remembered that the evidence before the Court may be different from that which was given before the Board, and further, that s. 196 (2) provides a procedure whereby, upon a reference by the Board, the Court may determine questions of law and questions of law only. But I do not find it necessary to determine these questions in the present case, because I am of opinion that the decision of the Board was right upon both questions of law and questions of fact.

It has been contended that the respondent was not resident in the Territories because he did not voluntarily choose the Territories as a place of residence. He went there because he was directed to go there under his contract of employment. It appears to me that the same thing might be said of many millions of people in the world who reside in a particular place only because they have to do their work at or near that place. But, if voluntary choice is to be regarded as an important element in determining residence, I see no reason why it should not be said that the respondent, in entering into an agreement to serve in such places as might be specified, voluntarily ordered his life so as to reside from time to time in those places as required by the exigencies of his duties.

Next, it was said that his residence was in Australia because he left his wife there. But whether or not a husband must be held to have a home wherever his wife may happen to be from time to time, that fact is immaterial in the present case. It is well established that an individual may have two residences: See the cases cited by Dixon J. in Gregory v. Deputy Federal Commissioner of Taxation (W.A.)[11].

I should have thought that there was no doubt that a man resided where he lived, and I do not think that there is any interpretation of the word "reside" by the courts which makes it impossible to apply the ordinary meaning of the word "reside" in the present case. In Levene v. Inland Revenue Commissioners[12], Viscount Cave L.C. said:—

In Cesena Sulphur Co. Ltd. v. Nicholson[13], Huddleston B. said: "There is not much difficulty in defining the residence of an individual; it is where he sleeps and lives." In De Beers Consolidated Mines Ltd. v. Howe[14], the decision in the Cesena Sulphur Co. Case[15] was referred to as a decision which had been acted upon for many years, and in applying the conception of residence to a company by analogy to the case of an individual it was said: "A company cannot eat or sleep, but it can keep house and do business. We ought therefore to see where it really keeps house and does business." An individual person can eat and sleep as well as keep house and do business. In the present case, Papua and New Guinea were the places where the respondent, during the relevant period, ate and slept and worked. In my opinion there is not yet any decision which requires the Board of Review or this Court to hold that he did not reside at the place where he lived for a period of over nine months.

In my opinion, the decision of the Board was right and the appeal should be dismissed.

The present appeal is brought from a decision of the Board of Review by virtue of a section which allows such an appeal only where the decision "involves a question of law." It has been held that this means that when a question of law is involved in the decision, the appeal lies not merely upon the question of law but from the whole decision. In view of the differences of opinion which are apt to arise as to whether a decision of the Board does involve a question of law, I think it would be desirable that in future a practice should be adopted which is applied in cases where an appeal lies upon questions of law only, that is, to insist that the question of law suggested to be involved should be distinctly taken before the Board and the ruling of the Board obtained upon it: Smith v. Baker & Sons[16]. The practice of lying by, obtaining a decision upon what is, on the face of it, a pure question of fact, and then resorting to every means which ingenuity suggests to endeavour to make out that some question of law lies concealed behind the decision, is undesirable. It has been deprecated in relation to the Workmen's Compensation Act in England (Herbert v. Samuel Fox & Co. Ltd.[17]; Slater v. Maconochie[18]) and leads to much confusion and uncertainty.

The decision of the Board which is challenged in the present case is that one Miller, during a relevant period, was a resident in the territories of New Guinea and Papua. The word "resident" is not a term of art denoting a field with precisely defined boundaries. Like the word "negligent," it is an ordinary English word extending over a field the boundaries of which constitute a broad limbo with blurred edges. In many cases, including most of those which become subjects of litigation, the question whether a person is a resident of a place, like the question whether he has been negligent, depends not upon the applicability of some definite rule of law, but upon the view taken by a tribunal of whether he comes within a field which is very loosely defined. The question is ordinarily one of degree, and therefore of fact. There are, however, cases (in litigation, exceptional) in which, upon the facts deduced from the evidence of the tribunal no other conclusion is possible than that the propositus is within or without the field, as the case may be, ill-defined though it is. In these cases, the question whether propositus is necessarily within or necessarily without the field is regarded as one of law: Cf. Noble v. Southern Railway Co.[19]. It is not necessary to multiply authorities on the point, because they have recently been collected by the Supreme Court of New South Wales in the cases of Australian Gas Light Co. v. Valuer-General[20] and Dennis v. Watt[21]. There is nothing in the present case to suggest that any question was raised before the Board as to whether it necessarily followed from such of the evidence as the Board accepted that Miller was or was not resident in the relevant locus. True, it was argued before us that there was no evidence upon which it could be found that he was so resident; and this is in form a question of law. But it is, in my opinion, necessary, in order to bring a case within s. 196, that a question of law should be really, and not merely colourably, involved: Cf. Hopper v. Egg & Egg Pulp Marketing Board (Vict.)[22]. If this were not so, it would follow that, by alleging before the Board or before this Court that there was no evidence of some essential fact, an appeal could be maintained in every case. This is manifestly not the intention of the legislature.

There is, in my opinion, nothing in the present case to suggest that the question whether Miller was a resident is other than one of degree and therefore of fact. In these circumstances, there is nothing to justify our entertaining the appeal. This, of course, presents no obstacle to our dismissing it with costs: Carr v. Stringer[23]; In re J. H. Robertson's Application for Letters Patent[24].

This is an appeal by the Commissioner from a decision of the Board of Review and we must, therefore, be satisfied that it is a decision which involves a question of law. For an appeal does not lie to this Court from the Board of Review except from a decision which involves a question of law: Section 196 (1) of the Income Tax Assessment Act 1936-1943.

The question submitted to the Board for decision was whether the taxpayer, during a period falling within the year of income ended 30th June 1943, was a resident of Papua. The question arose under s. 7 (1) which provides that the Assessment Act shall extend to the Territories of Papua, Norfolk Island and New Guinea, but shall not apply to any income derived by a resident of those Territories from sources within those Territories. The Board decided that the taxpayer was a resident of Papua during the period in question. The facts upon which the finding depends are within a short compass. The taxpayer, whose domicile was Australian, had lived in Townsville with his wife. His occupation appears to have been that of a deep-sea fisherman. A deep-sea fishing vessel of about 14 tons was built for him in Brisbane and in August 1940, when it was completed, he and his wife gave up their habitation in Townsville and proceeded to live on the boat, which they worked up and down the Queensland coast.

In July 1942 they put into Mackay and at that port their vessel was requisitioned on behalf of the American Army. It was taken into the Small Ships Section of the Services of Supply of the United States Army. That command appointed him master of the craft at a monthly salary and directed him to take her to Cairns. There his wife took up her abode. On 1st October 1942 he signed a formal agreement with the Small Ships Section by which he agreed to serve for six months as master of the craft in question or any other vessel operated by the Small Ships Section to which he might be assigned. The agreement, which contained elaborate provisions, was renewed for a second six months, but, at the end of that time, the taxpayer left the American service and returned to Australia. His vessel remained under requisition.

Under the terms of his agreement of employment, the Small Ships Section engaged to furnish him free of charge with quarters and subsistence aboard the ship to which he was assigned. In fact he lived on the craft during the whole period of the agreement. His wife continued to live at Cairns, which was described as his home port, and there she enjoyed an allotment of part of his salary. From 12th December 1942 until he left the service in October 1943, the craft was based at Milne Bay, Papua, and, with the exception of a run north-east up to Oro Bay and another to Normanby and Ferguson Islands, she worked in Milne Bay. She was engaged in carrying supplies and plying between ships at anchor and the shore. During that period the taxpayer did not go ashore and at no time, it is said, did his vessel go outside the three mile limit. His only absence was during a short period of leave which he spent in Queensland.

On these grounds, he claimed that from 12th December 1942 until 30th June 1943, the end of the year of income, his salary was derived from a source within Papua and he was a resident of Papua.

The first proposition was not denied and the second was decided in his favour by the Board of Review.

We are, I think, at liberty to take judicial notice of the fact that in 1942 and 1943 Milne Bay was nothing but a military base and that it was only in the last week of August and the first week of September 1942 that the heavy engagement bearing that name had been fought there.

Having regard to the character of the place, I do not think that, had I been in the Board's place, I should have regarded the facts I have stated as leading to the conclusion that the taxpayer was a resident of Papua. But I am not satisfied that their decision involved any question of law. It is not legally impossible for a man to reside in a country, though he lives on a moving craft plying upon its rivers or within its territorial waters. Nor is it legally impossible for a man to reside at a military base, even a forward one.

The two cases of Levene[25] and of Lysaght[26] are as striking as they are decisive in illustrating the way in which the question of "resident" or "not resident" has become a "question of degree and therefore of fact"[27]. Lord Buckmaster said[28]:—"It may be true that the word reside or residence in other Acts may have special meanings, but in the Income Tax Acts it is, I think, used in its common sense and it is essentially a question of fact whether a man does or does not comply with its meaning. It is, of course, true that if the circumstances found by the Commissioners in the special case are incapable of constituting residence their conclusion cannot be protected by saying that it is a conclusion of fact since there are no materials upon which that conclusion could depend."

Lord Warrington said[29]: "I have reluctantly come to the conclusion that it is now settled by authority that the question of residence or ordinary residence is one of degree, that there is no technical or special meaning attached to either expression for the purposes of the Income Tax Act, and accordingly a decision of the Commissioners on the question is a finding of fact and cannot be reviewed unless it is made out to be based on some error in law, including the absence of evidence on which such a decision could properly be founded."

As the Board of Review is an administrative body it may be doubted whether a decision by it can be said to involve a question of law because it is based on insufficient evidence. But, no doubt, if the facts coming before the Board were incapable of the legal complexion placed upon them, that would involve a question of law and the difference is not great.

Our jurisdiction is a peculiar one. It is not appellate but original jurisdiction and, once the proceeding is properly before us, then, apart from the use of materials by consent, the facts must be proved in the ordinary way. As Order LIa rule 13 says, the appeal is then by way of original hearing. But the appeal is not properly before us unless the decision of the Board involves a question of law.

The Board have given their reasons and no misapprehension of the meaning of the provision in question is disclosed and no misconception appears as to what amounts to "residence" as a general proposition. No proposition of law appears to have been in contest and no contestable proposition of law appears to have been assumed. It all seems to me to come back to the so-called question of fact. I am, therefore, not satisfied that the appeal lies.

Solicitor for the appellant, H. F. E. Whitlam, Crown Solicitor for the Commonwealth.

[1] (1906) A.C. 455, at p. 458.

[2] (1913) 108 L.T. 353, at p. 354.

[3] (1915) A.C. 922, at p. 932.

[4] (1928) A.C. 234, at pp. 249, 250.

[5] (1928) 14 Tax Cas. 229, at pp. 241, 242.

[6] [1941] HCA 33; (1941) 65 C.L.R. 150.

[7] [1926] HCA 58; (1926) 38 C.L.R. 153, at p. 181.

[8] (1931) A.C. 275.

[9] [1928] HCA 22; (1928) 41 C.L.R. 148, at p. 155.

[10] (1928) 41 C.L.R., at p. 151.

[11] [1937] HCA 57; (1937) 57 C.L.R. 774, at pp. 777, 778.

[12] [1928] UKHL 1; (1928) A.C. 217, at p. 222.

[13] (1876) L.R. 1 Ex. D. 428, at p. 452.

[14] (1906) A.C. 455, at p. 458.

[15] (1876) L.R. 1 Ex. D. 428.

[16] [1891] UKHL 2; (1891) A.C. 325, at p. 333.

[17] (1916) 1 A.C. 405, at pp. 413, 414.

[18] (1920) 123 L.T. 185.

[19] [1940] UKHL 1; (1940) A.C. 583, at pp. 599, 600.

[20] (1940) 40 S.R. (N.S.W.) 126, at pp. 137, 138; 57 W.N. 53, at p. 55.

[21] (1942) 43 S.R. (N.S.W.) 32; 60 W.N. 7.

[22] [1939] HCA 24; (1939) 61 C.L.R. 665, at pp. 673, 677.

[23] [1858] EngR 586; (1858) El. Bl. & El. 123 [120 E.R. 454].

[24] (1930) 1 Ch. 186, at p. 193.

[25] [1928] UKHL 1; (1928) A.C. 217.

[26] (1928) A.C. 234.

[27] (1928) A.C., at p. 249.

[28] (1928) A.C., at p. 247.

[29] (1928) A.C., at pp. 249, 250.

High Court of Australia

Commissioner of Taxation v Miller [1946] HCA 23; (1946) 73 CLR 93 (15 August 1946)

HIGH COURT OF AUSTRALIA