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Case W124

Members:
PM Roach SM

Tribunal:
Administrative Appeals Tribunal

Decision date: 22 November 1989.

P.M. Roach (Senior Member)

The applicant is a person who describes himself as a child evangelist with a mission to ``teach, preach and share the Gospel of Jesus Christ with young people in Australia''. It is a substantially full-time ministry and commits the applicant to substantial personal expense. The applicant probably also has another distinction: one not known to him until the day of hearing. It seems likely that he is the first person to bring forward for independent adjudication a dispute with the Commissioner as to the implementation of the ``substantiation provisions'' of the Income Tax Assessment Act (``the Act'').

2. That is a matter of no little significance to a vast number of taxpaying citizens who, like the Commissioner, are bound to strict compliance with those ``substantiation provisions'' of the Act. Amounts which taxpayers are not entitled to claim as tax deductions, the Commissioner is not empowered to allow as tax deductions.

3. The applicant is able to provide for the support of himself and his family by occasional casual work and through the generosity of his fellow Christians. During the year of income ended 30 June 1987 casual earnings from engagements unrelated to his ministry generated an assessable income of $3,407. The balance of his assessable income ($15,460) was contributed by his fellows. Considering himself to be ``employed'' by the fellowship he took the step of remitting tax instalment deductions to the Commissioner. His action in doing so is indicative of his honesty of spirit and of his unsophisticated approach to matters fiscal. In cross-examination he declined to accept a description of himself as ``meticulous'' but, in light of the findings yet to be made, it would seem that in fact he was a person given to preserving an extensive range of records of small transactions. The original records and, in particular the receipts which he had been able to produce to officers of the Commissioner when called on, were extensive. For instance I accept that he even obtained receipts from the Australian Post Office on effecting small purchases of postage stamps. His requests for such receipts were not a problem to APO officers or irksome to the persons queued behind him as they might be if the practice became widespread. As is appropriate to his calling, I find him to have been completely honest.

4. During the year of income, in the course of deriving his ministerial income as an evangelist, he incurred many expenses: motor vehicle expenses were among them. The applicant was aware in general terms that new standards of record-keeping had come to be required of all taxpayers but he had no detailed awareness of what those requirements were. He had not read the substantiation provisions of the Act. Nor had he read any of the publications of the Commissioner. In October 1987 he presented to the Commissioner his return of income to 30 June 1987. The return had been prepared and typed for him by an accountant friend. It had not been prepared for reward. Before presenting his return he signed it and in doing so declared:

``that the particulars shown in this return and in the accompanying documents are true and correct in every detail...''

But it seems probable that before lodging the return he failed to sign a second declaration

ATC 978

which was called for because he had affirmatively answered the question:

``Have any claims been made in this return for work, car or travel expenses''

Having answered affirmatively, it was required of him that he should complete a declaration in the following terms:

``TAXPAYER'S DECLARATION - I declare that I have the necessary receipts or other records that substantiate the claim(s) I have made for work, car and travel expenses in this return. The total of these expenses is...''

5. But whether he signed before lodgment, or only after it was presented to him subsequently for completion of the declaration, he made the required declaration. I am well satisfied that he believed it to be in all respects true.

6. It was suggested in the course of the hearing that the year of income ended 30 June 1987 was a year in which the Commissioner ``trusted'' people to assess their own tax liability. I do not understand the ``self-assessment'' system to be the product of the Commissioner's newly-acquired recognition that taxpayers are trustworthy. Rather I had understood that the basis for ``self-assessment'' was that it was to be the more efficient method of administering the fiscal system. Instead of a cursory annual check, most taxpayers will be subjected to ``audits'' covering several years at a time. That circumstance is of some relevance in considering what the Parliament sought to provide for by the ``substantiation provisions''. Be that as it may, the applicant was not quite ``trusted'' to the point of his income being assessed as returned. Instead of assessing the return at that point, the Commissioner wrote to the applicant. The letter stated (inter alia):

``In accordance with Section 82KZA of the Income Tax Assessment Act 1936 you are requested to produce documentary evidence to substantiate the items listed below that were claimed as deductions in your return of income for the year ended 30 June 1987.''

7. There followed a list of items said to have been claimed and of the amounts said to have been claimed. He was provided with a set of ``Approved Substantiation Schedules'' for completion.

8. The applicant responded and provided what might be thought to be an impressive range of supporting documentation - impressive, that is, if the applicant was a truthful person. But impressive though it might have been, it was not enough to persuade the Commissioner to allow all of the claims as to which he had made his requisitions, although it was sufficient to cause some of the claims to be allowed in full. In order to place the unresolved issues in their proper context I propose to itemise the queries; the applicant's responses and supporting materials; and to identify the acceptance or rejection of the claims made.

9. (a) CLAIM: Reference book - $20

The applicant completed the relevant approved substantiation schedule with the words:

``Do not understand this one.''

The response was not unreasonable because he had not claimed any deduction of $20 for a reference book. What had happened was that in a schedule to his return he had claimed a deduction as follows: 

      "Depreciation Library:

      $1,118 at 15%                 $168

      New book purchased during year $20)"

10. When the assessment later issued the adjustment sheet which attended it incorporated the advice: 

      "Library depreciation -- claim of $168
      reduced to $165 as book purchased during
      year not substantiated                  $3"

The applicant did not associate this information with the earlier query.

11. The applicant did not object to the adjustment despite the fact that he might fairly have replied that he had never been called on to substantiate the expenditure on additions to the library. Nor did the confusion end there. When the Commissioner's officers prepared for submission to the Tribunal a ``statement of findings on material questions of fact, evidence and reasons for decision'' as required by sec. 37(1)(a) of the Administrative Appeals Tribunal Act 1975 (``the AAT Act''), ``reference books $3'' appeared under the heading findings as one of ``the unsubstantiated claims made by applicant''. At the commencement of the hearing the error was acknowledged.

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12. (b) CLAIM - Conferences - $531

During the year of income the applicant had attended three ``overseas'' conferences: one each in the U.S.A., the Philippines and Tasmania. The $603 claimed comprised a variety of items such as air fare to Tasmania - $222; conference fees - Tasmania $148; cost of travellers cheques U.S.A. - $10; Philippines - $6; departure tax from Australia (2 x $20), and from the U.S.A. ($20) and the Philippines ($16); meals ($28) and conference tapes ($16) in the Philippines; and passport photographs ($7). In all there were 13 items and it seems that he was able to produce 11 receipts however improbable it might seem that the applicant would have been able to obtain receipts (or equivalent) for items such as departure tax and passport photos. In any event, whatever it might have been that he produced, he persuaded the Commissioner that the claims should be allowed, even though according to the substantiation schedule one item of $148 would appear to have been incurred in an earlier year of income. (At this point it should be mentioned that the applicant did not produce at the hearing any of the receipts. He assumed that the only concern of the Tribunal would be the transactions which were either not receipted or not receipted to the satisfaction of the Commissioner. It seems that he did not foresee that difficulties could arise in identifying precisely the claims which had been allowed by the Commissioner - cf. post.)

13. (c) CLAIM - Telephone - $288 and Electricity - $23

The applicant had claimed 50% of telephone expenses ($288) and 10% of electricity expenses ($23) as deductions and he was able to produce receipts to account for the gross expenditure. As to the matter of apportionment, he acknowledged that his apportionments were simply estimates. As such they were ``unsubstantiated''. Despite that they were estimates which the Commissioner accepted and those claims were allowed. That they should have been allowed to that extent was not unreasonable if the applicant was accepted as an honest person. But, if he was not to be considered honest in his claims, nothing in the production of receipts lent any support to his claim.

14. (d) CLAIM - Courses - $30

The applicant with other members of the fellowship attended an educational course. It cost him $30 to attend. To effect the payment he drew a cheque and marked the cheque butt in his cheque book to record the details of and the purpose of the expenditure. His cheque was passed on to be added to others to be paid to the conference organisers. So far as he is aware no receipt was ever written in relation to his enrolment alone. The evidence so produced was insufficient to persuade the Commissioner to allow the claim and the adjustment sheet accompanying the notice of assessment recorded:

``Course claim of $30 reduced to nil as cheque butt is not accepted as a receipt.''

Since I know of no right in a payer to force a payee to provide a receipt it is interesting to speculate as to what steps would have been necessary to enable the applicant to have a deduction for the expense he incurred. Neither the oral evidence of the conference treasurer acknowledging the receipt nor the production of the cheque accompanied by the banking records of the conference confirming the honouring of the cheque and the crediting of its proceeds to the conference nor the oral testimony of all other delegates confirming his attendance would seem to have been sufficient.

15. (e) CLAIM - Literature, magazines - $54

In his return of income the applicant had claimed a deduction for $76 but when he completed the approved substantiation schedule he only claimed two items as follows: 

      Literature for Scripture                    $30
      Two years subscription for ETC
      Magazine by cash in USA (no receipt
      given) enclosed is a subscription for
      $43                                         $43
                                                  ---
                                                  $73
                                                  ---

16. What then happened is unclear. Departmental officers marked the sheet to seemingly indicate that they had sighted seven receipts, six relating to the $30 item and one relating to the $43 item. But the result was that the claim was only partially allowed and the adjustment sheet accompanying the notice of assessment stated: 

            
      "Literature and Magazine claim
      of $76 reduced to $22 to reflect
      amounts substantiated                  $54"

17. Although in referring documents to the Tribunal the Commissioner identified this item as a matter in dispute, it had not been referred to in the notice of objection. That being so, upon the hearing the Commissioner's representative correctly submitted that the Tribunal had no authority to review the decision. As the applicant did not protest that, it will not be necessary to refer further to the item.

18. (f) CLAIM - Stationery - $123

In his return of income the applicant had claimed an item as follows: ``Stationery, postages, prayer letters - $218''. In his approved substantiation schedule he analysed the items as 

      Postage                             $80
      Prayer letter                       $60
      Envelopes, pens, miscellaneous      $78
                                         ----
                                         $218
                                         ----

What the Commissioner did in relation to this claim for $218 was to acknowledge that he had sighted 11 receipts to a total value of $95. That sum he allowed: ``to reflect amount substantiated''. The claim to deduct the balance of $123 remains to be resolved.

19. In his objection the applicant said:

``Another area of objection is my stationery claim also being reduced. As mentioned to your... when I rang her, the work that I am involved in is concerned with children, and consequently we purchase things like glue, cardboard and miscellaneous items like these each week from Franklins etc. I find it hard to believe that we would have to substantiate an expenditure of around about $2.20 a week for such items. Again, I believe this is a true and honest record, and possibly an understated expense.''

The concern of the applicant is readily understandable. At this point it is worth noting that among the submissions which were made in the course of the hearing in relation to the matter of postage stamps is one that, as an alternative to obtaining receipts, sufficient ``substantiation'' might have been made if the taxpayer had maintained a diary in which he recorded the stamp purchases, provided that such ``substantiation'' would only have been acceptable in relation to purchases of stamps if such purchases did not exceed $10; and provided that the total to be so substantiated, whether in relation to stamps or any other items, did not exceed $200 for the year. It was suggested for the Commissioner that a correct construction of the Act might be that, under that alternative system, a deduction might have been allowed for, say, single purchases of a $5 stamp on each of four occasions; but not for a purchase of four $5 stamps on the one occasion.

20. (g) CLAIM - Motor vehicle expenses - $1,708

The applicant used an 8-seater Mitsubishi L 300 manual van, engine capacity 1497cc in the course of his ministry. He was aware that, by reason of the ``substantiation'' provisions, it would be appropriate to maintain a log-book for a period of twelve consecutive weeks. A friend provided him with a ``fringe benefit tax'' form designed for recording ``business usage and fuel purchases''. He commenced maintaining the record on 1 July 1986 and continued it to 27 September 1986. The record purports to exhaustively account for all kilometres travelled in that period from 86,888 to 92,827 km - a total of 5,939 km. No criticism was made of the adequacy or completeness of the record as a record of things done or of its accuracy. It is not disputed that the record showed that in that period of nearly three months the vehicle travelled 3,902 km on income-earning or income-related journeys. On that basis the percentage of ``business'' use in the quarter was calculated at 65.7%.

21. When the return of income was prepared, the measured business use in the quarter was projected to an annual rate of 15,608 km which was then applied to what was represented to be total kilometres travelled during the year 18,756. That gives a percentage ``business-use'' rate of 83.2% for the year. The soundness of the calculation was not challenged. Nor was its appropriateness. (However, I note that, if the measured ``private'' use for the quarter (5,939 - 3,902 = 2,037) had been projected for the year (2,037 X 4 = 8,148) and then deducted from the gross figure to determine ``business usage'' (18,756 - 8,148 = 10,608), the business use

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percentage would have fallen from the 65.7% measured in the quarter to 56.5% for the year.)

22. The percentage of 83.2% so determined was then applied to total expenses of $3,416 to result in a claim of a deduction of $2,843. The elements of the gross expenses were as follows: 

                                      $
      Depreciation                  1,028
      Registration                    336
      Insurance                       382
      NRMA                             25
      Registration inspection          14
      Fuel                            920
      Maintenance                     711
                                   ------
                                   $3,416
                                   ------

When called on to ``substantiate'' the applicant was able to produce evidence of registration and insurance identifying himself; six receipts relating to maintenance; and 84 receipts relating to the supply of petrol and oil. It may be that some of the receipts for maintenance more or less precisely identified the applicant, but it is not suggested that any of the receipts for petrol and oil went beyond recording the identity of the service station; the date of the transaction; the amount; and the fact of petrol and/or oil being supplied. If his assertions were honestly made, the receipts help confirm their accuracy. But if the assertions were dishonestly made, they remain so despite the receipts. From the substantiation schedule it seems that the gross expenses claimed were only accepted by the Commissioner at $3,408 as receipts for petrol and oil were less by $11 than the amount originally claimed although those for maintenance exceeded by $3 the amount originally claimed.

23. The Commissioner's response was to substantially disallow the claim ``motor vehicle expenses''. By the adjustment sheet which accompanied the notice of assessment, the adjustment was identified as:

``Motor vehicle expenses of $2,843 reduced $1,708 to $1,135.

NOTE: Your log-book could not be accepted for substantiation purposes as it was not signed by you against entries made to record distances. Nor was the log-book identified as belonging to you. In the circumstances 33-⅓% of total costs (including depreciation) has been allowed. Only receipts in taxpayer's name are acceptable.''

Three reasons for disallowance were thereby advanced:

  • (a) only receipts identifying the taxpayer (not the payer) are acceptable;
  • (b) the log-book, although wholly in the writing of the taxpayer, did not bear his name; and
  • (c) the entries in the log-book, although wholly in the handwriting of the applicant, were not ``signed''.

24. At the hearing submissions were only made in support of the latter proposition. It was contended that, although the applicant had in every respect satisfied the requirements for deductibility expressed in sec. 51(1) of the Act, his claim failed for the simple reason that, although the log-book had been wholly maintained by the taxpayer by his own handwriting, it was not open to the Commissioner to accept it as satisfying the statutory provisions as to recording by log-book because the applicant had not in relation to each journey completed the entries which he had made in his own handwriting by adding his signature.

The principles of substantiation

25. Subdivision F (``Substantiation of Certain Expenses'') was introduced to Div. 3 of Pt III of the Act by Act No. 173 of 1985. The distinguishing feature of the subdivision was that it required in relation to certain expenses, not only that the taxpayer should satisfy the substantive requirements of other provisions of the Act (such as sec. 51) and bear the burden of proving his claim in doing so (sec. 190(b)), but also that the evidence to be relied on in support of his claim must be in specific form. The subdivision comprises only 27 sections, but they occupy nearly 50 pages of standard text. The provisions are particularly intricate in relation to claims touching upon motor vehicle expenses.

26. Some introductory comments are appropriate. The substantiation provisions have been enacted in terms which emphasise form above substance and which tend to concentrate the attention of those required to enforce the rules on questions of form and to distract attention from the more basic question as to

ATC 982

whether what is represented on the forms is true, in the sense of being both honestly stated and accurate. Under such circumstances it is likely that the only persons at risk of being disadvantaged by the ``substantiation provisions'' will be the honest.

27. Statements are not true simply because they are recorded in writing. The point has been repeatedly made in cases large and small. By way of illustration only, I refer first to Case V38,
88 ATC 325; a case involving claims to deductions exceeding two million dollars. Documentary accounting records were produced in evidence but no witness came forward to give evidence on oath or affirmation as to any events giving rise to the claim, or as to the matters recorded, or even as to the writing up of those records. I referred to those records (at p. 334) as a record of:

``what was done by unknown hands at unknown times, working under direction of persons unknown, and/or in accordance with unknown criteria. What is presented upon the financial records before us does not, in my view, establish the facts and events which those accounting records purport to record and which the methodology of accountancy processes is designed to reflect.''

In that instance, it was the Commissioner who refused to give credit to statements in documents not verified by persons.

28. But one of the Commissioner's officers took a different view of the value of documentation in Case V130
88 ATC 827; a case in which he caused assessments to issue against a taxpayer because he believed that what was recorded in the accounting records of another taxpayer was true. In that case it was said (at pp. 833-834):

``The investigator made enquiries of the company and examined the documents produced. He determined that the amounts recorded as so paid represented the gross amount to which the applicant was entitled by way of remuneration. He believed as true what he learnt from discussions with representatives of the company and the examination of its books. He believed it without providing the applicant with an opportunity to express her view. In so acting, he put aside the possibility that the neatly presented and internally consistent accounting records might be untrue; he ignored the possibility that his informants might have been incorrect; he ignored the possibility that his informants might have been lying. However, having formed the view that the information he had gathered was correct, he considered the matter to be so clear-cut that he recommended the issue of assessments against the applicant - a person who was thereby judged unheard to be a tax evader - a person whose evidence and personal merits had neither been taken into account nor considered.

21. In short, the evidence of what the investigator saw in the books of account and heard from others did no more to advance the case for the Commissioner than did the mere production of accounting records assist the taxpayer in Case V38.''

29. I also refer to the decision of the Tribunal in NT86/8869-72 - an unreported decision of the Tribunal of 20 January 1989. It was a small investigation case in which the taxpayer, an unsophisticated tow-truck operator, was unable to produce any documentary records. I said:

``In his words, he `had no evidence', as if his own testimony was of no account. The same view seems to have been held by the Commissioner in relation to some matters. Written records are, of course, very important. Few complicated transactions could be effectively implemented without them. But written records are not essential to ensure successful completion of many transactions. Further, it needs to be remembered that written records - including those maintained by sophisticated computers are no more reliable than the persons responsible for their composition. Errors may be as easily recorded in writing as expressed orally. Lies may be as readily told in writing as spoken. For those reasons no record is credible of itself. It is no more worthy of credit than the person who made it. But the existence of a record may add greatly to the weight to be attributed to the evidence of the person.''

30. When those principles are applied in circumstances such as these, it must be recognised that, for example, the production of a receipt marked for $25 purporting to be for a cab fare from a suburban address to an airport

ATC 983

does not of itself establish that the amount for which the receipt issued was actually paid. Nor does it establish that the journey as described was undertaken. Nor does it identify who incurred the expense. Nor does it establish that there was any entitlement to an income tax deduction. The possibilities for deception by the dishonest through the use of such documents are almost without limit.

Substantiation generally

31. In these paragraphs I propose to confine my consideration to expenses not more specifically provided for in the Act. I will therefore not consider matters described as ``car expenses'', ``travel expense'', or eligible expense in relation to ``travel allowance'' or ``overtime, meal or travel allowance''.

Section 82KZA(1) of the Act provides: (immaterial parts omitted)

``Where a taxpayer fails to retain for the retention period in relation to an expense incurred by the taxpayer -

  • ...
  • (a) in the case of any other expense - documentary evidence of the expense;
  • ...

a deduction is not allowable, and shall be deemed never to have been allowable, under this Act in respect of the expense.''

The section goes on to provide that the Commissioner may require production of the documentary evidence within a period of not less than 28 days. Section 82KZA (3) then states: (immaterial words omitted)

``Where -

  • (a) this sub-section applies, in relation to a notice served on a taxpayer under sub-section (2) in relation to an expense incurred by the taxpayer; and
  • (b) at the time when the notice is so served, the retention period in relation to the expense has not ended,

then, unless the taxpayer -

  • ...
  • (c) in the case of any other expense - produces to the Commissioner, within the period specified in the notice or such longer period that the Commissioner allows, documentary evidence of the expense;
  • ...

a deduction is not allowable, and shall be deemed never to have been allowable, under this Act in respect of the expense.''

32. A person is not guilty of an offence by reason only of failing to comply with a notice under sec. 82KZA(2) (sec. 82KZA(4)). The section goes on to provide for what is to occur when records have been ``lost or destroyed''. Those provisions are not relevant to the present case.

33. The concept of ``documentary evidence'' is central to the subdivision. Section 82KU(2) makes special provision in relation to depreciation of property, but sec. 82KU(1) sets the general definition. With immaterial parts omitted, it reads as follows:

``A reference in this Subdivision to documentary evidence of an expense incurred by a taxpayer is... a reference to a document, being a receipt, invoice or similar document, that -

  • (a) sets out -
    • (i) in any case - in the English language; or
    • (ii) in a case where the expense was incurred outside Australia - in a language of the country where the expense was incurred;

    particulars of -

    • (iii) the date on which the expense was incurred;
    • (iv) unless sub-paragraph (v) applies - the name of the person who supplied the goods or services to which the expense relates;
    • (v) if the goods or services to which the expense relates were supplied in the course of a business carried on by a person - the name of the person or the business name under which the person carries on the business;
    • (vi) the amount of the expense expressed in the currency in which the expense was incurred;
    • (vii) the nature of those goods or services; and

      ATC 984

    • (viii) the date on which the document was made out;
  • (b) is supplied by or on behalf of a person referred to in sub-paragraph (a)(iv) or (v), as the case may be; and
  • (c) is obtained by or on behalf of the taxpayer at, or as soon as reasonably practicable after, the time when the expense is incurred.''

34. The section goes on to recognise that ``receipts'' are not always provided. Section 82KU(3) deals with suppliers of goods or services who carry on business. It provides:

``Where the person carrying on a business does not, in the ordinary course of the business, supply a receipt, invoice or similar document constituting documentary evidence of -

  • (a) an expense... that was incurred by a taxpayer and relates to goods or services that were supplied in the course of the business; or
  • ...

sub-section (1) or (2), as the case requires, applies in relation to such as expense as if a reference in that sub-section to a receipt or invoice included a reference to a statement or certificate.''

It is to be noted that the draftsman has assumed that all business transactions carried on by persons carrying on business do include the provision of ``statements or certificates'': a most doubtful proposition. I instance cash purchases, even on a large scale, in primary production markets.

35. Section 82KU(4) addresses a slightly different problem and provides:

``Where a person supplies, otherwise than in the course of a business -

  • (a) goods or services to which an expense incurred by a taxpayer relates; or
  • ...

sub-section (1) or (2), as the case requires, applies in relation to the expense as if a reference in that sub-section to a receipt or invoice included a reference to a statement or certificate.''

36. From the foregoing it would seem that if one of two owners of adjoining rented properties was to pay $1,000 to the other as his contribution to a liability for $2,000 incurred by that other in their common interest to repair a fence, and did so on no more than an assurance given orally by his neighbour, then that taxpayer would not be entitled to a deduction for fencing repairs, unless he obtained a receipt or acknowledgement from his neighbour; and, in addition, did so promptly. Proving the payment to the neighbour; proving the fact of the fencing; proving the neighbour's payment to the fencer; proving the fencer's receipt in favour of the neighbour for the payment made; proving the payment by a receipt from the neighbour issued long after the outlay, following a demand from the Commissioner for documentation; and proving the payment by the oral testimony of the neighbour and the taxpayer would not suffice. The claim of the contributing taxpayer to a deduction would be defeated. But the unjustifiable claim of his neighbour to a deduction for $2,000, supported by the production of a piece of paper in the form of a receipt or acknowledgement for $2,000, might well have ensured to him a deduction substantially in excess of his entitlement.

37. Section 82KU of the Act goes on to deal with what it refers to as ``undocumentable expenses''. It identifies those expenses and provides for a system of vouching involving certification by the taxpayer rather than documentary verification through his payee. The section provides for two classes of ``undocumentable expense''. Section 82KU provides that:

``(7) For the purposes of sub-section (6), where -

  • (a) a taxpayer claims as a deduction in respect of the year of income an expense (in this sub-section referred to as a `relevant expense') -
    • (i) that was incurred by the taxpayer during the year of income; and
    • (ii) the amount of which does not exceed $10... and
  • (b) the total of the amounts of the relevant expenses claimed by the taxpayer as deductions in respect of that year of income does not exceed $200...

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the expense referred to in paragraph (a) shall be deemed to be, and always to have been, an undocumentable expense.

(8) For the purposes of sub-section (6), where the Commissioner is satisfied, having regard to the nature of an expense incurred by a taxpayer, that it would be unreasonable to expect the taxpayer to have obtained documentary evidence of the expense, the expense shall be deemed to be, and always to have been an undocumentable expense.''

38. Having so identified an ``undocumentable expense'', the section provides by subsec. (6) that substantiation of such an expense may be by a different method. That subsection provides that:

``Where, at, or as soon as reasonably practicable after, the time when the taxpayer incurs an expense that, by virtue of sub-section (7) or (8), is an undocumentable expense -

  • (a) an entry setting out -
    • (i)... the particulars that would be set out in documentary evidence of the expense (other than particulars of the date on which the documentary evidence was made out);
    • (ii)...; and
    • (iii) particulars of the date on which the entry is made and the name of the person making the entry,

    is made in the English language by or on behalf of the taxpayer, in a diary or similar document; and

  • (b) the diary or similar document is signed, in relation to the entry, by the person making the entry,

then, for the purposes of this Subdivision -

  • (c) the taxpayer shall be deemed to have obtained documentary evidence of the expense; and
  • (d) so much of the diary or similar document as sets out those particulars shall be deemed to be documentary evidence of the expense.''

The stationery claim

39. I commence by applying those principles to the matter of the stationery claim. It was made at $218; it was allowed at $95; and the balance in dispute is $123. I accept that the residue of the claim which is in dispute essentially reflects an estimate by the applicant; I accept that the estimate was honestly and reasonably made; I accept that no item in relation to which the claim was made gave rise to a claim which of itself exceeded $10 and that the total of the amounts so claimed did not exceed $200 in that year of income. I also accept that it would have been unreasonable to have expected the taxpayer to have obtained documentary evidence of each of those items of expense. More than that, had the items in question been purchased at any store with unsophisticated ``check-out'' procedures, it is completely unreasonable to have expected that the customer would have been able to obtain documentary evidence from the store with all the precision expected by the prescriptions of the Act.

40. I am satisfied that the further sum of $123 would be allowable pursuant to the provisions of sec. 51(1) of the Act, provided only that the requirements of sec. 82KU(6) are satisfied. Section 82KU(6) calls for some documentary record (``diary or similar document'') and, moreover, a documentary record meeting certain specifications. In relation to this aspect of the claim there is no suggestion that there is any record such as might satisfy the requirements of the subsection. Indeed, I am satisfied that, had a record of such small purchases been produced whether in the form of a diary, or receipts or other documentation, in the absence of judging the applicant to be meticulous in his recording habits even to the point of near obsession, one would have suspected the record as a fabrication. But as the law stands, the present applicant cannot be granted any relief. The law is unreasonable, but the Parliament has so provided and it is the duty of the Tribunal to give effect to the law so enacted.

41. It is instructive to consider the significance of that conclusion and I do so by considering claims in relation to such ordinary items as ``postage stamps'' as typical of a wide range of very ordinary items in common use. Taxpayers claiming deductions for postage stamps could have obtained (as the present taxpayer did), receipts and, subject to limits of $10 on each purchase and $200 per annum, could have vouched the purchases by maintaining a ``diary or similar document''.

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Had any taxpayer followed either course, none of the documentation so produced would have established his entitlement to the deduction claimed or, indeed, to any deduction. There would be no entitlement to a deduction unless the provisions of sec. 51(1) of the Act were satisfied. Whether those provisions were satisfied would depend upon the honesty and the accuracy of the assertions of the taxpayer. Yet despite that circumstance of fundamental importance, the honesty and accuracy of the taxpayer is not sufficient to make allowable a claim such as the present claim to stationery. Ordinarily testimony will only be true if it is honestly given and is accurate. Documentation is a substantial aid to ``accuracy''; but rarely demonstrates ``honesty'', although it may help in the discernment of ``dishonesty''.

The course fees claim

42. I am satisfied that it would be unreasonable to have expected the taxpayer to have obtained documentary evidence of the expense. That being so, it is ``an undocumentable expense'' within the meaning of sec. 82KU(8) and will be allowable if the expense is allowable by force of sec. 51(1) of the Act, but only if the substantiation requirements of sec. 82KU(6) are satisfied. That the requirements of sec. 51(1) have been satisfied is not disputed. As to the latter point, the claim differs from the claim in relation to stationery by reason of only one circumstance: the fact that, having drawn his cheque for $30 in payment of the conference fees, the applicant in his own handwriting prepared a cheque butt. Although the cheque butt was not produced in evidence, no objection was taken to that circumstance and in all the circumstances I am satisfied that the cheque butt was written in the hand of the applicant; that it recorded the date and amount of the cheque; the identify of the conference organisers; and the nature of the payment as conference fees.

43. That being so the elements of sec. 82KU(6) which remain to be considered are whether the cheque butt constituted:

``an entry setting out... the name of the person making the entry (and) is made... by or on behalf of the taxpayer, in a diary or similar document;''

and, secondly, whether it was

``signed, in relation to the entry, by the person making the entry...''

A diary or similar document

44. I proceed to address the question as to whether the cheque butt might constitute ``the diary or similar document''. The Shorter Oxford English Dictionary defines ``diary'' as:

``1. A daily record of events or transactions, a journal, specifically, a daily record of matters affecting the writer personally.

2. A book prepared for keeping a daily record; also, applied to calendars containing daily memoranda.''

But those formal definitions are hardly adequate to bring to mind the wide variety of documentary records referred to in ordinary speech as ``diaries''. A diary may be a bound volume or loose pages. It may be printed with dates assigned to pages; it may be a volume of undated sheets of writing paper. It may be kept as a detailed and continuous record in the manner of the log of a ship or the journal of an explorer. It may be kept as a journal recording the private thoughts and actions of the writer. It may be kept as a business record evidencing things done or as a financial record of costs, charges and disbursements. It may be kept as a record of future obligations and appointments. It may be a continuous record with each entry immediately following the preceding entry. It may be that the record for each day commences on a new page. It may be maintained daily or nearly so. It may be used to record only intermittently. It may be the only diary maintained by its author, or it may be one of several diaries concurrently maintained. It may be a nearly complete continuous record such as the works of the famous diarists Samuel Pepys and Anne Frank. It may be limited in range of matters recorded and only contain occasional, spasmodic and irregular entries.

45. A diary may be said to constitute an author's record of some things done. The significance of it is that access to it enables the reader to determine what it is that the author has chosen to record of things done. However, the prudent reader of any diary would bear in mind the counsel of Megarry J. (as he then was) when his Honour made comment upon the comparison between tombstones and autobiographies (in
Re Flynn (1968) 1 All E.R.49

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). (The learned Judge was commenting on the value of an autobiography as providing an insight into the affairs of the deceased person. The volume in question was entitled ``My Wicked Wicked Ways''. It was an autobiography of a celebrated, if notorious, Tasmanian: the late Errol Flynn.) I adapt to the circumstance the words of his Honour by substituting ``diary'' for autobiography. His Honour said:

``The resemblance between a tombstone and a diary may not be very close; but just as in lapidary inscriptions a man is not upon oath, so many diaries... fail accurately to convey the truth, the whole truth and nothing but the truth, as the author knows it.''

From the nature of the case his Honour did not have an opportunity to hear the sworn evidence of Errol, or to hear him cross-examined. It is not so here. It is the testimony of the applicant which persuades me that the expense was incurred and, subject to the compliance with the substantiation provisions, was allowable.

46. That being so, I am well satisfied that the cheque butt recorded not only what the applicant determined to record for his own convenience and for the information of such others as would have occasion to inspect the record, but that it was an accurate record of things done. The cheque butt in my view did form part of his record of his life as maintained by him. He was no Pepys but it is not required of him that he should have been so. Indeed, since Pepys maintained his diary in a form of shorthand, that famous diary might be said to have failed the tests of sec. 82KU(6) on the basis that it was not ``made in the English language''. I am satisfied that the cheque butt constituted ``a diary or similar document''.

The name of the person

47. I next turn to consider the requirement that the entry should set out (inter alia) ``the name of the person making the entry''. The requirement appears to be quite remarkable, particularly considered in the context of a diary, or other documentary record maintained by the diary's author and no other. At first impression one conjures up the image of Pepys inserting into his diary an entry reading:

``This day - the twenty sixth day of January 1988 - I purchased two $5 postage stamps from Australia Post Office for use to post manuscript to publishers. My name is Samuel Pepys. (Signed) Sam Pepys.''

48. Where the volume is the product of two or more hands it might be reasonable to require that the identity of each person making entries should be capable of being established. However why that could only be achieved by recording in the volume the name of the person making each entry escapes me. Further, I can comprehend no reason why, in a volume wholly maintained in the handwriting (whether in English or shorthand) of the author, there should be a need in relation to each entry relating to an undocumentable expense to record the name of the author. I am satisfied that where the volume is maintained under a single hand, as with the diaries of Pepys or the cheque book of the present applicant, it is sufficient that the identity of the person maintaining the volume should be discernible from the volume. As there is no suggestion that the cheque book of the applicant was in any other than standard form incorporating cheque forms and deposit forms both recording the name of the applicant I am persuaded that the requirements as to ``the name of the person making the entry'' were satisfied.

Signed by

49. The final requirement is that:

``the diary or similar document is signed, in relation to the entry, by the person making the entry.''

I shall defer consideration of that requirement until considering a similar problem in relation to motor vehicle expenses.

Motor vehicle expenses

50. Fortunately the argument as to motor vehicle expenses falls within a narrow compass. It is therefore not necessary to consider in extenso the intricate provisions of Div. 3, Pt III of the Act in that regard.

51. The substantiation provisions allow for several different methods of claiming and ``justifying'' motor vehicle expenses. The result may be that upon honestly and accurately complying with some of the methods a taxpayer will be allowed a deduction in excess of the maximum allowable pursuant to the provisions of sec. 51(1) of the Act. Dishonest taxpayers whose dishonesty is not detected and corrected may also gain deductions in excess of what

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would probably be their entitlement. But for many honest taxpayers the effect of the substantiation provisions may be to deny them deductions to which they would otherwise be entitled pursuant to sec. 51(1) of the Act. That, according to the Commissioner, is the result for this applicant. The reason, it is said, is simply that, despite having recorded all relevant details of travel in a log-book, and despite having done so in his own handwriting, and despite being the only person to record information in that log-book, he failed to ``sign'' each entry.

52. The obligation to do so is said to arise from the concept of log-book records as defined in sec. 82KT of the Act which provides:

``In this Subdivision, unless the contrary intention appears -

  • ...
  • `log book records', in relation to a car held by a taxpayer, in relation to a period, means a daily log book or similar document in which, in respect of each journey:
    • (a) that is undertaken in the car during the period in the course of producing assessable income of the taxpayer; and
    • (b) that the taxpayer, or a person acting on behalf of the taxpayer, chooses to record in the document for the purposes of demonstrating the pattern of use of the car during the period;

    an entry setting out particulars of:

    • (c) the date on which the journey began and the date on which it ended;
    • (d) the respective odometer readings of the car at the beginning and end of the journey;
    • (e) the number of kilometres travelled by the car in the course of the journey;
    • (f) the purpose or purposes of the journey;
    • (g) the name of the person, or the names of the persons, driving the car on that journey;
    • (h) the date on which the entry is made; and
    • (i) the name of the person by whom the entry is made;

is made in the English language at, or as soon as reasonably practicable after, the end of the journey, and that, in relation to each such entry so made, is signed, at the time when the entry is made, by the person who made the entry.''

(I note that multi-culturalism seems to have no place in relation to the language requirements of the ``substantiation provisions''.) I accept that all of the entries appearing on the log-book sheets were made in the handwriting of the applicant; and that they were made and completed in relation to one entry before commencement of the entries for any succeeding day.

53. It might have been contended that the records were deficient in a number of respects. For example, instead of identifying ``the purpose or purposes of the journey'' the log-book recorded destinations. The contention that the travel was claimed to be for an income-related purpose has to be inferred from the circumstance that in relation to some journeys the distance is noted under a heading ``Bus. Kms. Travelled''. Then again, the identity of the person driving the car is not recorded in relation to any journey, even though I accept completely the evidence of the taxpayer that he alone drove the vehicle. Thirdly, although the date of each journey is recorded there is no separate entry to record ``the date on which the entry is made''. Upon the evidence before me, commonly the date upon which the entry was made was the date of the journey but it was not always so. Fourthly, the name of the person by whom the entry was made is not recorded. Upon the evidence it was of course always made by the applicant. Any person familiar with the handwriting of the applicant could have given testimony to that effect and an expert in handwriting could almost certainly have said that the entirety of the handwriting appearing on the document was the handwriting of the applicant. Be that as it may, the Commissioner's contention is limited to an allegation that the log-book was deficient in that it failed the test that:

``in relation to each such entry so made, is signed, at the time when the entry is made, by the person who made the entry.''

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(I note that there is no requirement that the signatory be able to substantiate what it is that the entry purports to record.)

Signed?

54. Of the several definitions of ``signature'' appearing in the Shorter Oxford English Dictionary those most relevant are:

``(a) The name (or special mark) of a person written with his or her own hand as an authentication of some document or writing;

(b) The action of signing one's name, or of authenticating a document by doing so.''

Other definitions seem to have no present relevance. The term ``sign'' is also a word of many meanings, embracing concepts of gesture and signalling; of devices and emblems; of omens and portents. But the concepts most relevant to present purposes are those defined as:

``(v) 2. To place some distinguishing mark upon (a thing or person; to mark with a sign or to attest or confirm by adding one's signature; to affix one's name to a document etc.''

The meaning to be attributed to such terms will vary according to circumstance. In order hopefully to reduce confusion in what follows, I propose to use phrases which for present purposes I will define as follows:

``Conventional signature'': The handwriting of a person intended to represent his name and usually presented in a distinctive manner meant by its very form to identify him as the author of the signature. Such a conventional signature is commonly by way of some combination of initials or given names and surname. It is quite often illegible and indecipherable, not following any conventional method of representing the letters of the alphabet. In some instances it is so far removed from alphabet representation as to be more accurately described as a ``sign'': that is as a distinguishing mark rather than a writing. A signature so presented is sufficiently distinctive to be readily identifiable as the signature of the writer to those familiar with his writing and to be capable of identification and analysis by persons specially trained in the analysis of handwriting.

``Mark'' or ``Sign'' - the means which of necessity are used by those incapable of writing their own names to serve the function of a ``signature'' in the conventional sense. Such ``marks'' ordinarily lack clearly distinguishing features and are now rarely to be seen.

``Facsimile signatures'': A representation having the form of a conventional signature but differing from it in that it is a reproduction of that signature (as for example by a rubber stamp) which does not require any actual writing or marking on the part of the person whose signature it represents. Such a facsimile may be affixed by any person, with or without the knowledge of the person whose signature it represents. Analysis of a facsimile signature cannot give any indication of the identity of the person reproducing the signature in that form. In contrast, analysis of a conventional signature and analysis of handwriting are both capable of providing strong evidence indicating the identity of the person responsible for the representation by way of signature or writing.

55. Applying those provisions to the question of the conference expenses said to be ``substantiated'' only by a cheque butt in the handwriting of the taxpayer, the questions to be addressed will be whether the cheque butt in the handwriting of the taxpayer in the circumstances satisfies the requirement of being ``signed, in relation to the entry, by the person making the entry...''. In relation to the log-book the question will be whether the distinctive handwriting of the applicant satisfies the requirement that the entries be ``signed''.

56. The question as to what constitutes a sufficient ``signature'' in particular circumstances is not new to the law. It is a question which has arisen in a great variety of circumstances. Nor is the notion new that legislation should be enacted to make mandatory particular forms of proof. No better example can be provided than arose with the enactment in 1677 of 29 Car. 2, c. 3 commonly referred to as the ``Statute of Frauds''. (``An Act for prevention of Frauds and Perjuryes. For prevention of many fraudulent practices which are commonly endeavoured to be upheld by perjury and subornation of perjury be it enacted...''.) Section 4 of that statute provided that certain classes of contract, among them guarantees and contracts for the sale of land and interests in land, would not be enforced

ATC 990

``unless the agreement upon which such action shall be brought, or some memorandum or note thereof, shall be in writing and signed by the party to be charged therewith or some other person thereunto by him lawfully authorised.''

Section 17, which related to contracts for the sale of goods, incorporated words to similar effect.

57. But the rule came to be as much a cause of injustice as it was preventive of it. Persons could escape liability for want of commitment in appropriate form. Wilmott J. in
Simon v. Motivos (1766) 96 E.R. 347 at p. 348 said:

``Had it always been carried into execution according to the letter, it would have done ten times more mischief than it has done good, by protecting, rather than preventing, frauds.''

58. In Australia in
Charlick v. Foley Bros. Limited (1916) 21 C.L.R. 249 (at p. 252) Isaacs J. said that it was ``distinctly dishonourable'' for great mercantile firms to repudiate transactions on the basis that their customers had been simple enough to place reliance on anything short of a written undertaking duly signed. His Honour went on to say:

``And, in my opinion, it is not the duty of any legal adviser to compromise the honour and reputation of such a client, contracting in those circumstances, by placing on the record a defence of that nature (under the Statute of Frauds) without fully explaining it and pointing out its full meaning and effect, and the probable consequences of the defence in case the event turns on a question of credibility.''

59. Such were the concerns of the courts to prevent a statute directed against fraud becoming a means to fraud that they adopted a very broad concept of what would suffice to satisfy the test of a note or memorandum ``in writing and signed''. Something of the range and diversity of problems which have been addressed in considering that and other statutes can be seen on considering the text ``Signed; Signature'' appearing in Stroud's Judicial Dictionary, (Fifth ed. pp. 2431-2437).

60. Consistently with that approach of construing the term according to its context, the High Court of Australia has held that the requirement of a money-lending statute that there be a ``note or memorandum in writing made and signed personally by the borrower'' has no application where the borrower is a body corporate (
Motel Marine Pty. Limited v. I.A.C. (Finance) Pty. Limited (1964) 110 C.L.R. 9.

61. As I have said, one question to be addressed in the present circumstances is whether the fact that all of the writing on the cheque butt and in the log-book was in the hand of the applicant can constitute those documents as something ``signed'' by the applicant. The concept of ``signature'' does not invariably mean a conventional signature: a person writing his own given names and surnames in a personalised, individualistic and distinctive fashion. Abbreviations may suffice. It can be sufficient that initials be used and, at least in the case of an illiterate, the signature may be only by the making of a mark. It may even be that the making of the ``signature'' or the maker of the ``sign'', whatever it may be, be guided by another: necessary for a person unable alone to ``sign'' by reason of illness or other disability.

62. It has been held pursuant to the Ecclesiastical Dilapidations Act (1871 U.K.) that the signature of a bishop might be made by a similitude of his signature impressed by a stamp; and so too with the signature of a town clerk printed on a notice under the Public Health Act (1875 U.K.). Such conclusions are similar in effect to reg. 62(2) of the Income Tax Regulations which provides:

``A certificate, notice or other document bearing the written, printed or stamped name (including a facsimile of the signature) of a person who is, or was at any time, the Commissioner, a Second Commissioner, a Deputy Commissioner or a prescribed delegate of the Commissioner in lieu of that person's signature shall, unless it is proved that the document was issued without authority, be deemed to have been duly signed by that person.''

63. In determining whether a log-book in the format of the log-book presented in evidence before me satisfies the requirements of the substantiation provisions, it is necessary to have regard to the diversity of that wide range of authority and in particular to have regard to the immediate objectives of the legislation.

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64. A convenient starting point is to recognise that a document presented in compliance with reg. 62(2) of the Income Tax Regulations incorporating a facsimile reproduction by stamp or printing of a signature of the Deputy Commissioner does nothing to identify the document as a document adopted personally by the Deputy Commissioner whose name it bears. That is so even though it plainly identifies him as the person said to be responsible for the matters certified to by the document. Such a document is to be presumed worthy of credit and an accurate representation of the matters presented primarily by reason of the identity of the persons producing it. A typewritten log-book composed on word processing or computer facilities would similarly lack on the face of it any identification with the person responsible for bringing the record into existence. Nor would such a document on the face of it point to the identity of the person who actually brought it into existence, if it bore only the facsimile reproduction of a stamped or printed ``signature'' which might have been affixed to the document by anyone. However, such a document would bear on the face some accrediting identification, if it bore in addition to the typewritten legend some marking imposed by hand, whether in the form of a ``conventional signature'' (including at least initials of given names and surname in full, and whether legible or not); or whether in the form of a distinctive marking by way of ``initials'' or by the undistinguished and unremarkable affixing of the mark of a near illiterate. (In the latter case the problem would be to know how the ``marksman'' knew what his mark was verifying.)

65. Examination of the log-book as presented before me clearly shows that the writings appearing thereon are very probably by the same hand and, according to the evidence of the applicant (which I accept) are in fact all in the same hand; and were composed upon a multitude of occasions, often with different pens being used. Once that handwriting is found to be the handwriting of the applicant it presents as a more readily credible and more probably contemporaneous record maintained by the applicant (and no other) than any other document which had been composed by machine and which merely had his ``signature'' (however, broadly or narrowly defined) appended to each entry. In so far as the presentation of a document can itself lend support on the aspect of credibility, the log-book does so far more effectively than much neater documents machine-composed with ``conventional signatures'' affixed. By that standard the document before me more completely satisfies the criteria of ``substantiation'' than many another.

66. However, one should not lightly pass by the circumstance that there will be a vast number of circumstances in which such a log book is not wholly composed by the hand of a single individual. In such cases one can readily imagine that something in the way of a ``signature'' (as that term is commonly used) would be appropriate to identify the persons responsible for particular entries. But the presence of signatures of two or more such persons would not of themselves do anything to ``substantiate'' the accuracy of the record. Nor in many cases would it assist the Commissioner to identify the maker of the statement, except with the assistance of the taxpayer and/or his staff. If there is one characteristic common to many ``signatures'' it is that they are illegible, although, for all that, therefore readily identifiable as the work of a particular individual to all who are familiar with that particular ``signature''.

67. I have set out the foregoing at some length in order to lay a foundation for a decision as to just what it was that the Parliament intended should be the result in this case in consequence of the legislation it enacted. The matter is of very great importance because, if the substantiation provisions are to be construed as strictly as the Commissioner contends, then neither the Tribunal nor the Commissioner has the power to act according to any other standards. If a claim is not allowable by the Tribunal, it is not allowable by the Commissioner. In this instance, the Parliament has not conferred any discretion on either the Commissioner or the Tribunal. Either claims such as the present are allowable or they are not allowable. If they are not allowable, and that circumstance is known to the Commissioner, then he has a duty to disallow the claim. He has no discretion authorising him to waive non-compliance. Indeed, if the Commissioner had a discretion to waive non-compliance with the ``substantiation

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provisions'', the Tribunal would have authority to exercise that power.

68. In the circumstances of this case I would have no hesitation in exercising such a power, if it existed. But, in my view, the power does not exist. That being so it may not be claimed by the Tribunal.

69. In determining the interpretation intended by the Parliament it is appropriate to seek an interpretation which produces a result which accords with common sense. An interpretation which will produce just results is always to be preferred to one producing unjust results, assuming that both constructions are reasonably open.

70. In determining the interpretation to be adopted, I have had regard (inter alia) to the following matters:

  • (a) that the substantiation provisions bind everyone: Commissioner and taxpayer alike;
  • (b) that taxpayers are not entitled to deductions which are not substantiated to the standard required by the substantiation provisions;
  • (c) that the Commissioner may not allow any deductions known not to be substantiated to the standard required by the substantiation provisions;
  • (d) that taxpayers should commonly need to have recourse to documentation in the compilation of their claims to deductions is to be expected;
  • (e) that taxpayers should not invariably need to have recourse to documentation under their control to make their claims to deductions;
  • (f) that human memory, being what it is, dependence upon documentation is likely to increase with the passage of time;
  • (g) that documentation is an aid to accuracy in recollection rather than a proof of honesty in expression;
  • (h) that the variety of records sufficient to enable accurate recall is likely to be as diverse as the persons presenting the claims and the circumstances giving rise to them;
  • (i) that records sufficient to substantiate claims need not originate with or be maintained by the claimant;
  • (j) that records, whether originating with third parties or taxpayers, are not self-evidently accurate in their representations;
  • (k) that records which are accurate in the representations that they make do not of themselves establish any eligibility to tax deductions;
  • (l) that documentary representations are made credible (if at all) by the testimony of persons;
  • (m) that records in the handwriting of an individual are not made any the more credible by the appending of a signature of that person;
  • (n) that there is nothing unreasonable in a requirement that expenditure should be substantiated by appropriate documentation, wherever it is reasonable to expect documentary support to be available and in the absence of any reasonable explanation for its absence; and
  • (o) that there is nothing unreasonable in requiring substantiation by documentation when documentation might reasonably be available, provided the requirements as to the form and content of that documentation are not themselves unreasonable.

71. Such considerations point to the construction favoured by the Commissioner being too narrow. Historical considerations would suggest so too - hence reference to the Statute of Frauds. But on the other hand, unlike the Statute of Frauds, this legislation did not simply call for documentary confirmation to be provided by third parties or as contemporaneous writings of taxpayers and their associates. It is far more particular, albeit unreasonably so.

72. In fact it is so particular and detailed and so comprehensive that I cannot ignore the distinction repeatedly made between an entry and the signing of an entry. But for that I would have held that to make an entry by handwriting was itself a ``signing''. In the circumstances I can only conclude that despite the unreasonableness of the result, the applicant must fail. The convenience of administrators prevails to result in injustice to individuals. Form prevails over substance. To compound the matter, the fee of $300 required of the applicant in order to mount his challenge to the

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demands unreasonably made of him by the community is forfeit to the community. In face of those circumstances I can only conclude by expressing my regret at the result and my disappointment that the Parliament has not found it possible to provide a more appropriate set of requirements as to ``substantiation'' of claims honestly made and a more just procedure for mounting a reasonable challenge to a decision of the Commissioner on a matter of substantial importance to a very large number of citizens.

73. The order of the Tribunal will be that the determination of the Commission upon the objection under review shall be confirmed.


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