Brady v Thornton [1947] HCA 29; (1947) 75 CLR 140 (19 August 1947)

HIGH COURT OF AUSTRALIA

Brady Informant, Appellant; and Thornton Defendant, Respondent.

H C of A

19 August 1947

Latham C.J., Rich, Starke, Dixon and McTiernan JJ.

Taylor K.C. (with him Whitlam), for the appellant.

Webb K.C. (with him St. John), for the respondent.

Taylor K.C., in reply.

The following judgments were delivered:—

Aug. 19

Latham C.J.

The respondent was charged with an offence under s. 227 of the Income Tax Assessment Act 1936-1946. Section 227 (1) provides: "Any person who makes or delivers a return which is false in any particular or makes a false answer," &c., shall be guilty of an offence. The information was in these terms:—"That on or about 31st August 1942, at Sydney ... one Nicholas Thornton (hereinafter called the defendant) hairdresser and tobacconist, at 144 Liverpool Street, Paddington did make a return of income for the twelve months ended 30th June, 1942, which said return was false in a particular to wit, the amount of £739 returned by the said defendant as total gross income from his business of a hairdresser and tobacconist was understated by an amount not less than £958, contrary to the Act in such case made and provided, whereby the said defendant has incurred a penalty," &c.

The prosecution relied upon s. 243 of the Act and called no oral evidence. Section 243 provides:—"(1) In any taxation prosecution every averment of the prosecutor or plaintiff contained in the information, complaint, declaration or claim shall be prima facie evidence of the matter averred"; sub-s. (2), "This section shall apply to any matter so averred although—(a) evidence in support or rebuttal of the matter averred or of any other matter is given, or (b) the matter averred is a mixed question of law and fact, but in that case the averment shall be prima facie evidence of the fact only."

The defendant called no evidence. The magistrate accordingly had to determine the case upon the basis of the averments made in the information. The magistrate held in accordance with s. 243 that the averments in the information were prima-facie evidence of facts only. He dismissed the information, and he stated in a special case that "as there was no oral evidence or other evidence in support of the averment contained in the said information so far as the law was concerned, a prima-facie case for the defendant to answer had not been made out." There is some difficulty in understanding the precise meaning of the statement which I have last read, but it is evidently, I think, intended to state that the magistrate regarded some of the averments as being statements of law and not of fact.

Section 243 deals with averments not only in criminal proceedings, but in proceedings generally under the Act. The words of s. 243 (1) relate to averments contained in an information, complaint, declaration or claim. Accordingly it is difficult, and it would be wrong, to apply a conception of averment derived exclusively from either criminal or civil proceedings in the courts. "Averment" must here be understood as meaning allegation contained in the information, complaint, declaration or claim as the case may be.

It is important to observe that the application of the section is not excluded because an averment contains matter of law. The section expressly provides for the case where an averment contains matter of law as well as matter of fact, and in a rather awkward phrase provides that, where the matter averred is a mixed question of law and fact, the averment shall be prima-facie evidence of the fact only. Accordingly, if an averment does contain an allegation in respect of the law, if it also contains an allegation in respect of a fact the averment is prima-facie evidence of that fact.

The information contains the following allegations: "that ... the defendant ... did make a return of income ... which said return was false in a particular, to wit, the amount of £739 returned by the said defendant therein as total gross income from his business of hairdresser and tobacconist was understated by an amount of not less than £958."

This is a statement first, that the defendant made a return in which he stated that an amount of £739 received by him in and from his business of hairdresser and tobacconist was income of the relevant year. There is a statement of fact, namely, that the defendant made that return. That is simply an allegation of fact, and the section applies. The difficulty arises in connection with the following part of the allegation which refers to the understatement of income by an amount not less than £958. It has been argued strongly by Mr. Webb that the conception of income in the Income Tax Assessment Act is a complex conception which has been explained and expounded in many decisions of the courts, that the description of any particular sum as income involves a statement of law, and that, further, the statement that the defendant understated his income is an allegation of law and therefore does not assist the prosecution under s. 243. But this statement involves a statement of fact, namely, the statement that he received an amount of £958 from his business as a hairdresser and tobacconist. That is a statement of fact.

Secondly, it involves this statement, that he did not disclose that fact in his return. That also is a statement of fact. The allegation that that amount is income is an allegation, it may be, with respect to the law, but the facts so stated, if no other facts appear, are sufficient to ground the prosecution because these facts prima facie show a non-disclosure of income.

Accordingly, in my opinion there was evidence upon which the magistrate, in the absence of any further evidence, should convict the defendant.

In my opinion the appeal should be allowed, and the case remitted to the magistrate for determination in accordance with law.

Rich J.

I agree that the averments in question justify the magistrate in proceeding with the case and I am of opinion that his determination was erroneous in point of law.

Starke J.

The word "averment" has no very definite meaning. It may include both allegations of law and allegations of fact, but under this particular section, the averment is taken to be prima-facie evidence "of the fact only." In this information here in question the allegation is entirely one of fact which involves no question of law.

Accordingly, in my opinion the magistrate was wrong.

Dixon J.

I understand the question we have to decide to be whether, within the meaning of s. 243 (2) (b) of the Income Tax Assessment Act, there is matter averred which involves a mixed question of law and fact, and whether it is averred in such a form that there cannot be disentangled sufficient allegations of fact to carry the case forward and call upon the accused for an answer.

In my opinion the material part of the information does not contain an allegation of mixed law and fact except in one small point, and in that small point it is possible to disentangle enough of the facts from the law. The allegation which is contained in the information, so far as it is material to the question before us, may be analysed thus. First, it alleges that the defendant made a return of his income. That, I think, is purely a matter of fact. It means that the defendant sent in a document which answered a well-known description which, prima facie, involves no difficulty of law. The next matter alleged is that in that return he made a statement that his total gross income from his business as a hairdresser and tobacconist was of an amount of £739. The allegation of what statement he made in his return is purely an allegation of fact. The third matter alleged is that the figure in fact was an understatement by £958. When that allegation is analysed, it means that the defendant in fact received a further sum of £958, that he in fact received that sum in connection with his business of a hairdresser and tobacconist. It further involves an allegation that the £958 answers the description of "income."

It is only in that last point I can see any possible matter of law at all, and the possibility of there being matter of law only arises from the circumstance that the word "income" has a legal meaning. In other words, the allegation may be taken as meaning that the £958 answers the description of "income" as known in law. Whether or not that does in truth involve any question of law cannot be actually known except by recourse to facts. It does not appear on the face of the information. It begins as an allegation that some money receipts had the character of income and whether or not, if the true facts were investigated, they would raise any question depending on the legal definition of that character cannot be known. However, the allegation, in my opinion, advances the case sufficiently to call upon the defendant for an answer because it only leaves doubtful the very small point as to whether any question of law arises in applying the description given by the averment's use of the word "income."

For these reasons I think that the information contained sufficient allegations of fact to carry the case forward, and the magistrate was therefore wrong.

The appeal should be allowed and the matter remitted.

McTiernan J.

I agree that the appeal should be allowed.

The word "averment" in s. 243 of the Act appears to mean an allegation. The averments in the present information, upon which the prosecutor relies, as prima-facie evidence, are, I think, allegations of fact and hence prima-facie evidence of fact. They amount to prima-facie proof of the offence. The magistrate was wrong in the view which he took of the probative effect of the averments under the section.

Appeal allowed with costs. Case remitted to the magistrate for determination in accordance with law.

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

Solicitors for the respondent, Baldick & Macpherson.