Dickson v Commissioner of Taxation (NSW)
(1925) 36 CLR 48926 SR(NSW) 292
42 WN(NSW) 155
[1925] R & McG 168
31 ALR 393
(Judgment by: Isaacs J)
Between: Dickson
And: Commissioner of Taxation (NSW)
Judges:
Knox CJ
Isaacs JHiggins J
Rich J
Starke J
Subject References:
Income tax (NSW)
Judgment date: 24 August 1925
Judgment by:
Isaacs J
From the course the argument took, it is essential first to settle the limits of the jurisdiction of this Court in relation to the case stated by the Court of Review. As our jurisdiction is simply to determine whether the Supreme Court decision was right or wrong, it is necessary to inquire as to the nature of the statutory functions of the Supreme Court in such a case. Our powers of correction cannot go beyond the limits set to those of the Supreme Court. Sec. 32 of the New South Wales Income Tax (Management) Act, No. 11 of 1912, as amended to 14th November 1922, confines the jurisdiction of the Supreme Court to "decision by the Supreme Court on any question of law arising before the Court," that is, before the Court of Review.
There is no provision, as there is in some other instances of cases stated, by which the Supreme Court is empowered to draw inferences of fact and by which, therefore, this Court, on appeal, might revise those inferences. The Mount Morgan Case (1922-23) 33 CLR 76 , for example, was an instance where such a provision existed. It has been authoritatively decided by this Court in several cases that no inferences of fact can be drawn by the Supreme Court or this Court in such circumstances; among those cases are Merchant Service Guild of Australasia v. Newcastle and Hunter River Steamship Co. (No. 1) (1913) 16 CLR 591 ; Schumacher Mill Furnishing Works Pty. Ltd. v. Smail (1916) 21 CLR 149 ; Boese v. Farleigh Estate Sugar Co. (1919) 26 CLR 477 ; Mack v. Commissioner of Stamp Duties (N.S.W.) (1920) 28 CLR 373 ; Alexander v. Menary (1921) 29 CLR 371 . In the absence of explicit statement of facts, including inferences, the Court engaged in dealing with the case stated may perhaps gather the necessary facts from the construction of the case itself as stated, in the way expounded by Lord Atkinson in Usher's Wiltshire Brewery Ltd. v. Bruce [1915] AC 433 , at pp 449 450. Beyond that, the Court cannot go unless specially authorized.
I must, therefore, disclaim any attempt to find facts for myself, even by way of inference, and confine myself to such facts as I can ascertain to have been found by the Court of Review. (at p497)
In the present case a number of constituent or evidentiary facts are stated in the body of the case stated. Upon these alone the Supreme Court determined the matter and the arguments before us proceeded. If the matter rested there, there is at least one essential fact which I should be unable to find, either explicitly or, by construction of the special case, implicitly, in order to enable me to arrive at a conclusion whether any part of the profit in dispute should be brought into computation for the purposes of the New South Wales Income Tax Act. Its liability to taxation in whole or in part under that Act depends upon whether it is in law derived in whole or in part from a source in New South Wales. In the circumstances, there must be, in addition to the other facts set out in the body of the case, a finding, explicit or implied, by the Court of Review, and not by the Supreme Court or this Court, that in effect so connects the dealings before export of sovereigns with that export and its consequences as to constitute the various steps enumerated a continuously connected, though variously conducted, scheme, beginning with production at the mine, proceeding to obtaining at the Mint the Australian value of the gold, and then continuing the business activity of the gold - vicariously but effectively - in the form of sovereigns, selling it abroad, and thus obtaining its full foreign value. From that foreign value, after deducting the Australian value, already paid over, the balance is handed to the company. That connection it is necessary to find established or denied by the Court of Review as a necessary element on which as a matter of law the Court can determine the case one way or the other. It certainly does not appear explicitly. In the course of the argument I was referred to par. 6 of the case as implicitly containing it, because it states the decision that the profit was taxable income. I could not accept that "decision" as containing the inference.
But, on reading the case more closely, I now observe in par. 6 a reference to the judgment of the Court of Review, which is scheduled to the case and which I treat as part of it. In that judgment I find the necessary fact stated in favour of the Commissioner. I would suggest, in passing, that a double statement of the facts, one in the body of the case, and one in the judgment, might in some cases be embarrassing. If any material difference were found, it might lead to serious difficulty. In the present case we have, however, no difficulty in that respect, and we have some distinct statements of fact in the judgment which are absent from the facts enumerated in the body of the case. For instance, it is stated in the judgment:
"Realizing this hardship, the Commonwealth allowed the gold producer not to export his gold but still to be practically able to dispose of it in the same way. They allowed the gold producer to export sovereigns to the value of the gold produced. Then if the gold producer could sell those sovereigns at a profit that profit would be his."
Again:
"They cannot dispose of the gold itself on account of the embargo of the Commonwealth Government, but they are disposing of something else got in exchange for the gold."
And again:
"But here the Gold Producers' Association earns no profits. It cannot under its articles of association; it is merely the agent for the appellant company, the channel through which the proceeds derived from the gold produced by the appellant company passes, and the whole of such proceeds less necessary expenses go to the appellant company."
This makes the case substantially indistinguishable from the Mount Morgan Case (1). That is to say, the profits ultra the Australian price did not arise, and could not possibly arise, from the New South Wales source only. (at p499)
I accordingly answer the questions as follows: (1) No; (2) Yes; (3) Yes. (at p499)