Federal Commissioner of Taxation v. Maddalena.

Judges: Barwick CJ
Menzies J
Windeyer J
Owen J

Walsh J

Court:
High Court (Full Court)

Judgment date: Judgment handed down 31 August 1971.

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Walsh J.: The Board of Review's decision in the matter to which this case stated relates was based upon a conclusion that for the purposes of the definition of ``business'' in sec.6 of the Income Tax Assessment Act, the respondent was not an ``employee'' of the Club for which he played in the year 1966 or of the Newtown District Rugby League Football Club for which he played subsequently. In reaching that conclusion the Board of Review found strong support for it in a judgment of Hardie J. in the Supreme Court of New South Wales in
Elford v. Buckley (1969) 2 N.S.W.R. 170 . But in that case the Court was concerned primarily with the relationship which existed between the plaintiff in the suit, on the one hand, and the New South Wales Rugby Football League, on the other hand, and with the nature of the obligations imposed upon the plaintiff by the rules of that body. The present case is concerned only with the relationship between the respondent and his Club created by the contract under which he agreed to play football when called on by the Club to do so. It is true that in his agreement with the Newtown Club the respondent agreed to observe and be subject to the rules of the New South Wales Rugby Football League. It is true also that he was a member of the Club and as such had the rights and obligations which were conferred or imposed upon its members by its rules. But such circumstances as these are, in my opinion, extraneous to the question which calls for decision. Although the relationship of the respondent to the New South Wales Rugby Football League and the relationship between him and his Club as a member were associated with the contract which regulated his engagement as a professional player, I am of opinion that they did not affect the nature of the relationship created by that contract which, as a player, he had with the Club. It is on that point that I differ with respect from the Board of Review, whose members thought that the relevant relationship of the respondent to his Club was not to be characterised simply by reference to the same criteria as are usually applied in distinguishing a contract of service from a contract for services. In my opinion the question whether the respondent, when rendering his services as a professional footballer, was occupied ``as an employee'' is to be determined by the same considerations as are ordinarily applied in deciding whether or not the relationship of master and servant exists.

If the respondent was engaged as an employee in playing football and if in consequence he cannot be held to have been carrying on a business, I am of opinion that the argument submitted to this Court that the respondent was entitled nevertheless, under the first limb of sec.51(1) of the Act, to have allowed the deductions which are in dispute, should not be accepted.

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ATC 4164

On the question whether or not the respondent was an employee of his Club and on the further question to which I have just referred I agree with the reasons given by Menzies J., whose judgment I have had the advantage of reading, for answering both questions adversely to the respondent.

I am of opinion that the three questions asked in the case stated should be answered ``No''.

ORDER:

All questions asked by the case stated answered in the negative. The costs of the case stated to be paid by the appellant.