• The impact of this case on ATO policy is discussed in Decision Impact Statement: Dempsey and Commissioner of Taxation (2013/4861; 2013/4862).

DEMPSEY v FC OF T

Members:
JA Logan PM
PE Hack DP
RG Kenny SM

Tribunal:
Administrative Appeals Tribunal, Brisbane

MEDIA NEUTRAL CITATION: [2014] AATA 335

Decision date: 29 May 2014

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JA Logan (Presidential Member), PE Hack (Deputy President) and RG Kenny (Senior Member)

29 May 2014

Introduction

1. The question for resolution in this case is whether the applicant, Mr Peter Dempsey, was, as that term is defined by s 6(1) of the Income Tax Assessment Act 1936 (Cth) (ITAA 36), a "resident" of Australia in each of the income years ending 30 June 2009 and 30 June 2010?

2. Mr Dempsey contends that this question should be answered in the negative. If it is, then, for the purposes of s 14ZZR of the Taxation Administration Act 1953 (Cth) (TAA), Mr Dempsey will have discharged his obligation of proving that the two amended assessments concerned, each of which was issued by the respondent Commissioner of Taxation on 12 December 2012, are excessive.

3. By those amended assessments:

• (a) in respect of the 2009 year, Mr Dempsey's assessable income was increased by $200,540.00; and,
• (b) in respect of the 2010 year, Mr Dempsey's assessable income was increased by $305,516.00.

These increases were the result of the Commissioner's inclusion in Mr Dempsey's assessable income of income derived by him from employment which he undertook in the Kingdom of Saudi Arabia during each of these income years. This had a consequential effect in the amended assessments of increasing his taxable income and the income tax payable thereon. It is not necessary to detail these consequences.

The legislation

4. The Commissioner was entitled to include this Saudi Arabian sourced income in Mr Dempsey's assessable income only if Mr Dempsey was a "resident" in each of the 2009 and 2010 income years. This flows from the operation of s 6-5 of the Income Tax Assessment Act 1997 (Cth) (ITAA 97), which materially provides:

6-5 Income according to ordinary concepts (ordinary income)

• (1) Your assessable income includes income according to ordinary concepts, which is called ordinary income .
• Note: Some of the provisions about assessable income listed in section 10-5 may affect the treatment of ordinary income.
• (2) If you are an Australian resident, your assessable income includes the *ordinary income you *derived directly or indirectly from all sources, whether in or out of Australia, during the income year.
• (3) If you are a foreign resident, your assessable income includes:
  • (a) the *ordinary income you *derived directly or indirectly from all *Australian sources during the income year; and
  • (b) other *ordinary income that a provision includes in your assessable income for the income year on some basis other than having an *Australian source.
• (4) In working out whether you have derived an amount of *ordinary income, and (if so) when you derived it, you are taken to have received the amount as soon as it is applied or dealt with in any way on your behalf or as you direct.

The term "Australian resident" found in s 6-5 is defined by s 995-1 of the ITAA 97 to mean a person who is a resident of Australia for the purposes of the ITAA 36. In this way, the definition of "resident" in s 6(1) of the ITAA is made relevant.

5. As can be seen from s 6-5 of the ITAA 97, if Mr Dempsey was not an Australian resident in the income years in question but rather a foreign resident, his assessable income will include only the ordinary income which he derived directly or indirectly from all Australian sources during those income years. Mr Dempsey prepared and lodged his income tax returns for the 2009 and 2010 years and was self-assessed on the basis that he was a foreign resident.

6. Materially, and so far as individuals are concerned, s 6(1) of the ITAA 36 defines "resident" in the following way:

resident or resident of Australia means:

• (a) a person, other than a company, who resides in Australia and includes a person:
  • (i) whose domicile is in Australia, unless the Commissioner is satisfied that his permanent place of abode is outside Australia;
  • (ii) ..

We say "materially" because neither Mr Dempsey nor the Commissioner submitted, nor are we of the view, that any other of the residency criteria found in s 6(1) arise for consideration on the facts of this case.

How should the definition be construed?

7. Though it will be necessary to consider in greater detail the submissions of the parties concerning the definition of "resident" later in these reasons, one submission made by the Commissioner with respect to that definition should be addressed at once, because of the opportunity thereby offered to indicate at the outset the approach which we have adopted in relation to the construction of that definition.

8. The Commissioner submitted that the definition of "resident" in s 6(1) of the ITAA 36 "should be accorded a wide meaning because it is used in revenue legislation for the purposes of the imposition of tax". That submission was developed by reference to, and in reliance upon, the following observation made by Deputy President Forgie in
Subrahmanyam v Commissioner of Taxation^[1] [2002] ATC 2303 at [43] . (Subrahmanyam):

[G]iven that the income regarded as assessable income under both the ITAA 1936 and the ITAA 1997 is more broadly based for a resident than for a non-resident, it can be presumed from the fact that it is income tax legislation that Parliament intended that the word "reside" should be given its broadest ordinary meaning rather than any narrower meaning. That is so because it is its broadest meaning that leads to the greatest pool of assessable income upon which income tax is assessed.

9. We reject the Commissioner's submission. To the extent that it relies upon the passage quoted from Subrahmanyam, we respectfully disagree that there is any presumption of the kind there described.

10. That a purpose of the ITAA 36 and the ITAA 97 is to detail the criteria by which liability to income tax is to be determined and thus that they are statutes by which public revenue is to be raised may be accepted. So, too, may it be accepted that the effect of s 6-5 of the ITAA 97 is that the sources of income which constitute the ordinary income of an Australian resident are broader than those which constitute the ordinary income of a foreign resident.

11. It does not, with respect, at all follow from this that the broadest possible meaning of defined terms such as "resident" is to be preferred. To view each of these statutes through such a prism is apt to distract attention from their text and the context in which that text is found. These are the primary reference points for the construction of any statute.

12. The error in the Commissioner's submission and the basis for our disagreement with the authority relied upon is as stated by Hayne, Heydon, Crennan and Kiefel JJ in
Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue^[2] (2009) 239 CLR 27 , 47-48, [51] . (Alcan) and in the observations made by Gleeson CJ in
Carr v Western Australia^[3] (2007) 232 CLR 138 , 143 [6] . , cited by their Honours:

Fixing upon the general legislative purpose of raising revenue carried with it the danger that the text did not receive the attention it deserves. This danger was adverted to by Gleeson CJ in
Carr v Western Australia … when he said:

[I]t may be said that the underlying purpose of an income tax assessment act is to raise revenue for government. No one would seriously suggest that s 15A of the Acts Interpretation Act has the result that all federal income tax legislation is to be construed so as to advance that purpose . Interpretation of income tax legislation commonly raises questions as to how far the legislation goes in pursuit of the purpose of raising revenue. In some cases, there may be found in the text, or in relevant extrinsic material, an indication of a more specific purpose which helps to answer the question. In other cases, there may be no available indication of a more specific purpose. Ultimately, it is the text, construed according to such principles of interpretation as provide rational assistance in the circumstances of the particular case, that is controlling.

[Footnote reference omitted; emphasis added]

13. It is neither necessary nor appropriate to consider what support, if any, there was in authority at the time for the approach to construction advocated in Subrahmanyam. It is enough that there has been an emphatic later pronouncement to the contrary by the High Court. Neither we nor, in light of the submission which we have rejected, the Commissioner, are entitled to disregard such pronouncements. Under our system of government, the importance to the assessment and collection of tax according to law of subservience by officers of the Executive to pertinent and binding judicial authority cannot be over-emphasised. This is a necessary corollary of the Australian constitutional position that no law with respect to taxation is valid unless it makes provision for recourse to an exercise of judicial power to challenge a determination by an officer of the Executive Government of a person's liability to taxation^[4] Deputy Commissioner of Taxation v Brown (1958) 100 CLR 32 at 40 ; Giris Pty Ltd v Commissioner of Taxation (1969) 119 CLR 365 at 378-379 ; MacCormick v Commissioner of Taxation (1984) 158 CLR 622 ; Commissioner of Taxation v Futuris Corporation Ltd (2008) 237 CLR 146 at [8] . .

The issues

14. It was common ground that Mr Dempsey was domiciled in Australia in each of the 2009 and 2010 income years. In light of this, and having regard to the material part of the definition of "resident" in s 6(1) of the ITAA 36 and the administrative review role of the Tribunal, the questions to be resolved become:

• (a) did Mr Dempsey "reside" in Australia in those years; and
• (b) given that he was domiciled here in those income years, are we (standing in place of the Commissioner) satisfied that his permanent place of abode in those years was outside Australia?

The facts

15. To answer these questions it is first necessary to refer to the evidence and to set out our findings of fact in light of that evidence. As it happens, the evidence, although not the conclusions to draw from that in respect of whether Mr Dempsey falls within the definition of "resident", is largely uncontroversial.

16. Mr Dempsey is a building and construction industry project manager and superintendent. He was born in 1947. He has had a long career in the building and construction industry both in Australia and overseas.

17. In June 2007, Mr Dempsey received an email from a London based employee of a multi-national construction industry group of companies known as "Fluor". That email drew attention to an employment opportunity in Saudi Arabia with "Fluor". By which entity within the Fluor group of companies Mr Dempsey came subsequently to be employed is not completely clear.

18. On 27 August 2007 Mr Dempsey signed a contract, headed "Terms and Conditions of Assignment in Saudi Arabia for Expatriates from the US, UK, Australia, South Africa, Canada and the Netherlands" (the Saudi employment contract). This was signed on behalf of the "employer" the following day. On the face of the contract the "employer at assignment location" is specified as "Saudi Kayan". This, on the evidence, is the name of the construction project and its location, not the name of the employer. The project contractor there, having regard to Mr Dempsey's business card and source of later credits to his bank account (evidenced by bank statements), was Fluor Arabia Ltd. The extrinsic evidence points to Mr Dempsey's employer in Saudi Arabia being Fluor Arabia Ltd. This accords with his oral evidence, which was that he was employed by the Fluor group's Saudi, rather than Australian, subsidiary company.

19. This conclusion is supported by the fact that it is the Saudi employment contract which makes detailed provision in respect of Saudi Arabian housing, ground transport, removal and repatriation. This is in contrast with the terms of an unsigned form of agreement between Fluor Australia Pty Ltd and Mr Dempsey in respect of employment on that same project (the Australian draft contract) which was also in evidence.

20. Mr Dempsey did not depart Australia for Saudi Arabia to commence employment until 5 September 2007. Given the dates when the Saudi employment contract was signed, that contract was inferentially signed in Australia by or on behalf of each party.

21. Notably, the Saudi employment contract is of indefinite duration.

22. The following further findings concerning the Saudi Kayan project and the circumstances of Mr Dempsey's employment and lifestyle in Saudi Arabia are based on his oral evidence and his written statement which he adopted in the course of his oral evidence. Mr Dempsey gave what we thought was a frank, matter of fact account on these subjects as well as in respect of his activities on visits to Australia and his intentions in relation to his future employment following the completion of the Saudi Kayan project. In some aspects, for example the identity of his employer, his evidence was, as we have noted, corroborated (bank statement entries and business card). In other aspects, notably his motivation for keeping up unoccupied rather than renting or selling, a home which he owned on the Gold Coast (of which more shortly), his evidence was inherently plausible and likely. All in all, we consider that we are able to rely on his evidence, subject to some understandable lapses of memory as to his precise holiday movements.

23. The Saudi Kayan project was located at Al Jubail in Saudi Arabia. Al Jubail is a city in Saudi Arabia's Eastern province. It is located on the Persian Gulf Coast of Saudi Arabia. It is the largest industrial city in the Middle East.

24. The project entailed the construction of the world's largest petrochemical plant. As at 2007, the expected duration of the project was 3 years. At that time, the Fluor group of companies (inferentially, the local subsidiary, Fluor Arabia Ltd) also had a contract for the construction of a large bauxite plant and aluminium refinery in the west of Saudi Arabia.

25. At the time when he signed the Saudi employment contract and also the following month when he first journeyed to Saudi Arabia, Mr Dempsey's expectation was that, upon the completion of the Saudi Kayan project, he would move on with the Fluor group to another large construction project such as the bauxite plant and aluminium refinery. His further expectation was that this work would be performed under a separately negotiated contract which would, amongst other things, entail rates of pay different from those specified in the Saudi employment contract.

26. As to this, it is a feature of the Saudi employment contract that, though it is of indefinite duration, provision is made under the heading "Assignment Completion" for its termination by the employer upon 30 days' notice^[5] Clause XII, item B. . From an employer's point of view, this gave the employment arrangement an inherent flexibility whereby the term of service of an employee could be tailored to the actual duration of the project, rather than being fixed in advance by reference to an anticipated project completion time which may or may not have proved accurate.

27. Mr Dempsey had prior experience in his career in the building and construction industry of project specific work. That experience included earlier work within the Fluor group of companies on a project in China. Apart from work within the Fluor group, it also included project work in Cape York in Australia.

28. On the Saudi Kayan project, Mr Dempsey had 12 engineers who reported directly to him. In the course of the project, he came to be in charge of approximately 800 employees. He reported directly to the Project Manager, a Mr Mal Noe. The Saudi Kayan project involved construction work over a 640 acre site. It was technically demanding with very limited margins for error. Mr Dempsey described it as, and we accept that it was, "one of the most professionally challenging projects that I have worked on over a long career".

29. One inference which we draw from Mr Dempsey's description of the project, his responsibilities and the continuum of his employment on that project, is that he must be a very competent building and construction superintendent. It is inherently unlikely that he would have been retained in that role by the Fluor group of companies and Fluor Arabia Ltd in particular were he not. That his interest in undertaking such a role was canvassed by the Fluor group in the first place is inferentially likely to have been related to his earlier work for that group in China and his having acquired a related reputation for competency. The point of all this is that it lends substance and credibility to Mr Dempsey's evidence of an expectation on his part of further work, including further work with the Fluor group, in Saudi Arabia, once the Saudi Kayan project finished.

30. In Saudi Arabia, Mr Dempsey lived in an apartment in a secure residential compound built and maintained for the use of various companies' senior staff from developed countries. He lived in two such apartments; one for nine months, the other for the balance of the term of his employment by Fluor Arabia Ltd. Each apartment which he occupied was rented by Fluor Arabia Ltd for his use. Each was furnished but Mr Dempsey was able to and did acquire such additional items as he deemed necessary to suit his needs. To that end, he acquired an additional refrigerator. Mr Dempsey also supplied his own cutlery, crockery, bedding, linen, towels and the like. He also engaged and paid for local cleaners to clean the apartment three times a week.

31. Meals were Mr Dempsey's responsibility. Preferentially, he self-catered in his apartment, acquiring the requisite groceries and beverages himself. Occasionally, he dined at his own expense in a restaurant in the compound. He both provided and brought with him to the work site his own lunch or ordered and paid for lunch pursuant to on site catering arrangements.

32. Each apartment was equipped so that Mr Dempsey could undertake his own washing and ironing. He did this on occasion for his work clothes but found it convenient and cost effective to send them out to be washed and ironed and delivered back to him. He washed his undergarments at his apartment.

33. Apart from the restaurant, a gym, swimming pool and tennis court were located within the residential compound where the apartment which he occupied was situated.

34. The resultant standard of living for an expatriate such as Mr Dempsey was, to use his words, "similar [to] … that you would associate with living in any modern city". By "living" we took Mr Dempsey to mean "apartment living". The evidence related also shows that, for the duration of his occupancy, each apartment the use of which he enjoyed while employed in Saudi Arabia was, in effect, his to call his own both in terms of exclusivity of occupancy and as to any additional furnishing. That exclusivity of occupancy continued over his periods of leave.

35. The provision of accommodation by the employer was a feature of the Saudi employment contract. Even had Mr Dempsey wished to acquire his own apartment, this would not have been possible as, under Saudi Arabian law, foreigners are not permitted to own real property in the Kingdom. This has the consequence that it is usual for employers of expatriate professional and managerial staff such as Mr Dempsey to provide them with suitable apartments. Further, so far as expatriates were concerned, the security situation in Saudi Arabia was such that these apartments were located in secure compounds.

36. This living arrangement prevailed for the whole of the period from September 2007 to May 2010 in which Mr Dempsey was in Saudi Arabia. He did not have to, and did not, share either of them with anyone.

37. Mr Dempsey worked long hours on the Saudi Kayan project. His typical working week was of six 12 hour days' duration with Friday being a rest day. Occasionally, in periods of peak demand in the progression of the project, he also worked on Friday. A typical working day for Mr Dempsey in Saudi Arabia commenced at approximately 4:30 am when he left for work and concluded at about 6:00 pm when he returned home. He drove to work in a Fluor Arabia Ltd vehicle supplied for his exclusive use in company with at least one other passenger. It was a company requirement that he drive with at least one other person at all times. This was because it was not unknown in the Kingdom for persons travelling alone to be attacked. Because he was supplied with a vehicle by his employer, there was no need for him to acquire a vehicle himself.

38. To enable him lawfully to drive within the Kingdom, Mr Dempsey obtained and, for the duration of his time there, maintained a Saudi Arabian driver's licence.

39. On his Fridays off, Mr Dempsey's occasional practice was to travel to Bahrain, which is a relatively short drive from Al Jubail, connected by a causeway to the Kingdom. One advantage of this was that, whereas the consumption of alcohol was illegal in the Kingdom, it was possible, discretely, to enjoy alcoholic beverages at the Sheraton Hotel in Bahrain. For this purpose, Mr Dempsey maintained a membership of the Sheraton Club for the duration of his employment in Saudi Arabia. There he was able to and did meet and socialise, both with work colleagues and with other expatriate residents from the residential compound in which he lived. Here, he often met up with Mr Noe and his wife. Sometimes, in the middle of a working week, Mr Dempsey drove with work colleagues to Bahrain so as to relax, enjoy a drink and listen to live music, staying there overnight in a hotel before returning to the Kingdom.

40. To work in the Kingdom, Mr Dempsey required a particular class visa which permitted employment. These were renewable every 12 months. His experience during the Saudi Kayan project was that his visa was readily renewed. In light of that experience, there is reason to conclude that, had it ultimately proved to be the case that his services were required by Fluor Arabia Ltd on a successor bauxite and alumina project or by some other employer on some other major project, that there would not have been any difficulty with the granting or renewing of a further work visa.

41. Mr Dempsey received two weeks holiday every eleven weeks. He received a holiday travel allowance in addition to his salary. It would have been possible for him to spend his holidays at his apartment in the residential compound but this would have entailed remaining within the compound. It was not possible, for example, for him to use his apartment there as a base for local touring within the Kingdom because such touring was not permitted. Unsurprisingly, he chose to take his holidays abroad. Fluor Arabia Ltd imposed no restriction as to where he might travel using his travel allowance. An analysis of the duration and location of his holiday travel over the duration of his employment in Saudi Arabia discloses that he favoured two destinations, Thailand and Australia, with the greater time being spent in Thailand.

42. The further detailing of Mr Dempsey's holiday movements overseas is, given the issues in the case, best undertaken against the background of understanding his personal circumstances and his property ownership in Australia during the period in which he was employed in Saudi Arabia.

43. In 2004, Mr Dempsey purchased a house in a residential compound at Mudgeeraba on the Gold Coast. The Mudgeeraba house was then in a reasonably new condition, having been built in 2002. It had had but one previous owner. Mr Dempsey purchased the house with the assistance of a loan, secured by a mortgage over the property.

44. By 2007 when he left for Saudi Arabia, the loan balance in respect of Mr Dempsey's housing loan had reduced to the extent where the repayments were $450.00 per month (the loan balance has since been further reduced with a commensurate reduction in monthly repayments). Though he was able, Mr Dempsey chose, while abroad, not to pay off the housing loan. It suited him instead to have ready access to some capital.

45. Prior to leaving for overseas, Mr Dempsey cleaned the house, cleaned and emptied his refrigerator, made the beds and put sheets as dust covers over his furniture. To add extra security, he put wooden dowels in the tracks of sliding windows and doors at the house and, in addition, he drilled holes in the sides of his garage door and its surrounds so as to secure that door with bolts which would prevent it being forced up. Mr Dempsey turned off his hot water and mains power but not power to household lighting. He put a timer on the household lights for security reasons. He also made an arrangement with a neighbour whereby, in return for a payment of $300 to $400 every six months, that neighbour agreed to mow the lawn and to cut the hedge at the house.

46. Mr Dempsey left in his garage a Mercedes Benz motor car. He prepared this for extended immobilisation. During one of the holiday visits which he made to Australia, Mr Dempsey acquired a late model, well equipped four wheel drive vehicle. This, too, he kept in his garage at the house. Unlike the Mercedes Benz, the four wheel drive had electronics which required that it be stored with the vehicle electrics connected. He placed this vehicle on trickle charge, leaving a power circuit on for this purpose. He kept up the registration on each vehicle.

47. Mr Dempsey chose not to sell the Mudgeeraba house while he was employed in Saudi Arabia. Since his return to Australia at the end of that employment, that house is where he has lived.

48. Initially, Mr Dempsey's decision to retain the house was grounded in an uncertainty on his part as to what he would encounter when he took up his employment in Saudi Arabia. His reasons for retaining the house changed once he found that he enjoyed the employment. He could not put a precise time as to when this occurred but the reasons why he retained the house did change. They became a combination of just not being bothered and the lack of an attractive alternative financial return. Related to the latter was also the impact on house prices of the 2008 "Global Financial Crisis". Nonetheless, the longer that Mr Dempsey stayed in Saudi Arabia, the more the possibility of selling that house loomed in his thinking. Had prospective successor employment there come to pass, he believes that he would have sold it in the course of that term of employment.

49. Mr Dempsey also made a deliberate decision not to rent out the Mudgeeraba house while he was in Saudi Arabia. He had had the earlier experience of renting out a house which he owned in Nerang while engaged for a year on project work in Cape York. He had found this to be "a waste of time financially", quite apart from the wear and tear on the property. This experience also intruded on his decision not to rent out the Mudgeeraba house. On his calculation, the benefit which he would derive from renting out the property would be about $50.00 to $60.00 per week by the time that he deducted agent management fees, rates and water charges, property maintenance costs and the costs of alternative storage for his furniture and vehicles. This was not to mention the anticipated wear and tear on the property. All in all, he decided that it was not worth the trouble.

50. Mr Dempsey's reasons for retaining and not renting the Mudgeeraba house while he was in Saudi Arabia make perfect sense to us. In expressing this view, we have also taken into account that Mr Dempsey could well afford to make such a choice. He was well paid. He had neither need nor ability to purchase accommodation in Saudi Arabia. He did not need the capital tied up in the house for any other purpose. He had ready access to other capital to satisfy his other wants of life, as indicated by his being able to deploy a substantial sum for the advantageous purchase of the four wheel drive vehicle or to purchase weapons and equipment associated with his hobby of shooting. Mr Dempsey also did not need the relatively modest net additional income which it might generate if rented.

51. As to this hobby, Mr Dempsey maintained a diverse collection of pistols and rifles and related equipment in a secure armoury at the Mudgeeraba house. He enjoyed range shooting. At the time when he first left for Saudi Arabia, he held both the requisite weapons licences under Queensland legislation as well as a membership of the Gold Coast Gun Club. He kept each of these current for the duration of the time when he was in Saudi Arabia.

52. At least so far as Mr Dempsey's pistols (which we infer were concealable weapons) were concerned, Queensland residency was a relevant consideration in relation to the operation of the concealable weapon licencing provisions of the Weapons Act 1990 (Qld)^[6] See s 18B of that Act. . That Mr Dempsey must have put forward to Queensland authorities that he was a Queensland resident in order to hold or renew such a licence was a feature of the submissions made to us in defence of the amended assessments and related objection decision. We address that submission and others like it based on statements in tax returns and incoming and outgoing passenger cards below.

53. We infer from Mr Dempsey's hobby and his reference to storage costs being one consideration telling against his renting out the Mudgeeraba house that the existence of his home armoury and the apprehended cost of alternative, legislatively compliant weapons storage was included in his decision not to rent out the property.

54. On those occasions when he visited the Gold Coast when he decided to make Australia a leave destination, Mr Dempsey stayed at his Mudgeeraba house. On such visits, he took the opportunity to pursue his hobby by using his firearms on a range.

55. At the time when he first left for Saudi Arabia and for the whole of the period of his employment there, Mr Dempsey was a single man. His parents were by then deceased. Though he had siblings, they and he did not keep in contact with one another.

56. In 1987, when he was living in Canberra, Mr Dempsey met and formed an intimate relationship with a woman. Out of respect for her privacy we shall call her Ms C. Though they never lived together, the relationship produced two children, a son born in 1988 and a daughter born in 1991. The intimate relationship ceased about a year after the daughter's birth. It was then that Mr Dempsey moved to the Gold Coast, acquiring the Nerang property already mentioned. Ms C remained in Canberra with the children, together with a child from an earlier relationship of hers. Thereafter, Mr Dempsey provided financial assistance to Ms C for the education and living expenses of his two children. He also, in 1994, bought a car in his name but which was used by Ms C in Canberra. He kept up the registration of that car until recently.

57. Until about 1996, relations between Mr Dempsey and Ms C were, as he put it, "strained". Since then, they have become and remain good friends, though they have not resumed an intimate relationship.

58. After Mr Dempsey moved to the Gold Coast in 1992, it became his habit to visit Canberra for a fortnight about every six months to see the children with them, and Ms C, in turn, visiting him at the Nerang property on the Gold Coast about every six months. In the interval between when he acquired the Mudgeeraba house in 2004 and when he first left for Saudi Arabia, Ms C visited Mr Dempsey there on three occasions, twice with the children and once by herself for about three weeks in the course of a return journey by her from Malaysia to Canberra.

59. By 2008, Mr Dempsey's son was in Melbourne studying at university and his daughter had commenced studies at university in Canberra.

60. Mr Dempsey lived by himself when he was employed in Saudi Arabia. He did not receive visits there from either Ms C or his children. Saudi Arabia is not, as he put it, a good place for a tourist, especially a female tourist, to visit.

61. Having set out our findings in respect of Mr Dempsey's personal circumstances and Australian home ownership, we proceed now to detail his overseas movements while he was employed in Saudi Arabia.

62. We had the benefit in submissions of a summary of Mr Dempsey's movements supported by references in the s 37 documents and other material before us for the purposes of the review.

63. As summarised, this material corroborates Mr Dempsey's evidence as to the taking of short-term recreational breaks from work in Bahrain and the taking of longer, overseas holidays, preferentially in Thailand in terms of time spent but also in Australia. The table set out below, which formed part of the submissions, summarises the number of days during the 2008, 2009 and 2010 income years spent by Mr Dempsey in Saudi Arabia, Thailand, Bahrain and Australia respectively.

INCOME YEAR	DAYS SPENT IN SAUDI ARABIA	DAYS SPENT IN THAILAND	DAYS SPENT IN BAHRAIN	DAYS SPENT IN AUSTRALIA
2008	253	34	7	6
2009	295	36	5	29
2010	270	28	1	6

64. The table is apt to mislead unless one recalls that Mr Dempsey did not leave Australia to take up his employment in the Kingdom until early September 2007. The days spent in Australia in 2008 include the time spent prior to his departure. It is further necessary to recall that, when Mr Dempsey returned to Australia on 2 May 2010 and left Australia for Thailand on holidays on 17 June 2010 for the balance of the 2010 income year, he had finished what he then expected would be an initial term of employment in Saudi Arabia with further employment there, so he then thought, in prospect. Yet further, as Bahrain, not Saudi Arabia, was the location from which Mr Dempsey flew off for his holidays, the total days spent in Bahrain include what appear to us (and we find) to be overnight transit stops.

65. The position summarised in the table also confirms that this case is not one in respect of which the threshold ("actually been in Australia, continuously or intermittently, during more than one-half of the year of income") elsewhere in the definition of resident in s 6(a)(ii), ITAA 36 is met.

66. Mr Dempsey took his first holiday leave in December 2007. He was away for a fortnight, spending 12 days in Pattaya in Thailand. He went there with work colleagues but they stayed at different hotels. Mr Dempsey chose to stay at the Palm Garden Hotel. This became his preferred hotel there.

67. For his next period of holiday leave, in March 2008, Mr Dempsey chose to come to Australia for a week (his recollection, unassisted by passport and immigration records, that the visit was for 12 days is mistaken). Short stays in Thailand preceded and followed this visit. Though Mr Dempsey's unassisted recollection as to precisely when and where he spent holiday leave is not completely accurate, we remind ourselves that, at the time he took this leave, he had no particular reason to think that, some years later, it would be necessary for him to give such precision to his movements. We have more confidence in his recollection of his activities in various locations, because it seems to us inherently more likely that he would remember these in contrast to precise dates.

68. Mr Dempsey flew into Brisbane and then proceeded by train and taxi to his house at Mudgeeraba. There, he spent a lot of time catching up on sleep. He also went shopping, for a drive and caught up with the neighbour who undertook his garden maintenance. On the third day after his arrival, Mr Dempsey flew to Canberra for a few days. There he caught up with Ms C, his children (his son flying up from Melbourne for this purpose) and friends. He stayed at Ms C's residence. At the end of this Canberra visit, Mr Dempsey returned to the Mudgeeraba house where he again put the house in mothballs (dust covers on furniture, cleared refrigerator and all electricity save that for security lights off) before departing from Australia.

69. Mr Dempsey's next leave fell in June 2008. He chose to spend that at his preferred hotel in Pattaya in Thailand.

70. November 2008 was when Mr Dempsey next took holiday leave from his employment in the Kingdom. His unassisted recollection was that this leave was spent in Australia. Passport records disclose, and we find, that in fact he spent this leave in Thailand. Inferentially, the leave was spent at his preferred hotel.

71. Leave in late February/early March and also July 2009 was spent by Mr Dempsey in Thailand, again at his preferred hotel and on each occasion for about a fortnight.

72. In May 2009, Mr Dempsey took his holidays in Australia for 14 days. The places where he stayed and his activities were much the same as his earlier Australian holiday visits.

73. Mr Dempsey did not return to Australia until November 2009. He divided his fortnight's leave between a week in Thailand and a week in Australia. A particular reason for his return to Australia was so as to visit Canberra for his son's 21^st birthday. He spent three days there for that celebration with the balance of his time in Australia being equally split, before and after, at his Mudgeeraba house.

74. Mr Dempsey spent his fortnight's leave in January 2010 at his preferred hotel in Thailand. He returned there in mid-June 2010 for about three weeks. This later holiday in Thailand followed his return to Australia in early May 2010 following the conclusion of his work in the Kingdom on the Saudi Kayan project.

75. On this closer scrutiny of Mr Dempsey's holiday destinations, it can be seen that, for the duration of his employment in the Kingdom, he never spent more than a few days at a time at his Mudgeeraba house.

76. Before departing from the subject of Mr Dempsey's international movements and turning to the means by which Mr Dempsey was paid and how he managed his financial and other affairs while employed in Saudi Arabia, it is convenient to detail how he described his status when he came to fill out incoming and outgoing passenger cards upon each entry to or departure from Australia during and at the end of that period.

77. Australia's incoming passenger card makes provision for one of three sections, A, B or C to be selected by an entrant:

A - Migrating Permanently to Australia

B - Visitor or temporary entrant

C - Resident returning to Australia

78. On each of his visits, Mr Dempsey selected and further completed section C on the incoming passenger card. He explained in evidence that insofar as he gave it thought at all, he thought that, as an Australian citizen, this was the section to select.

79. The outgoing cards offer a similar choice at items D, E and F to that found on the incoming card:

D - Visitor or temporary resident departing

E - Australian resident departing temporarily

F - Australian resident departing permanently

Mr Dempsey selected option E. Once again, Mr Dempsey's evidence was that he selected this option because, insofar as he gave any thought at all to the options, the one he selected was the one he thought he ought, given that he was an Australian citizen.

80. The options presented by the incoming and outgoing passenger cards, if one is versed in the law with respect to residency, do embrace the situation of a citizen who is a resident of Australia returning after a temporary absence or departing temporarily. Equally though, they do not separately and expressly address the situation of a person who holds citizenship but is leaving Australia to live and work abroad indefinitely or returning temporarily but not intending to give up living and working abroad indefinitely.

81. Mr Dempsey was not required to and did not open a bank account in Saudi Arabia for the purpose of receiving his salary and other payments from Fluor Arabia Ltd. This would have entailed his being paid in Saudi riyal. This apart, the payment of interest on bank accounts was, he explained, forbidden under Saudi Arabian law. Further, Saudi exchange controls were such that it could take three to six months to get money out of the country if held in a local bank account. A warning about the latter had featured in advice given to him by work colleagues.

82. Mr Dempsey retained his Australian bank account into which his salary was paid in Australian dollars. Whenever Mr Dempsey had need of local currency when in Saudi Arabia he was able to do this at automatic teller machines (of which there many in the kingdom) using a card keyed to his Australian bank account. Other financial transactions Mr Dempsey was able readily to manage from Saudi Arabia via internet banking access to his Australian account.

83. Mr Dempsey's remuneration package also included the making of superannuation contributions by his employer. These were made into a superannuation fund established for him at the commencement of his employment. That fund was administered in Australia.

84. Initially, Mr Dempsey arranged and paid for a re-direction service to forward to him mail addressed to him at his Mudgeeraba house. He did not find this very successful. Later, on a couple of occasions, he paid for accumulated mail to be couriered to him. His recollection was that there was not much mail on either occasion.

85. Mr Dempsey did not inform the Australian Electoral Commission of his departure for Saudi Arabia and that he was living there. We infer from this that he remained on the electoral roll for the Federal, State and local government electorates in which his Mudgeeraba house was situated.

86. Mr Dempsey's income tax returns for the 2008, 2009 and 2010 income years are in evidence. Noteworthy features of each of these are that:

• a. each was prepared with the assistance of a tax agent;
• b. an affirmative answer has been given in response to the question, "Are you an Australian resident?";
• c. the Mudgeeraba house has been specified both as Mr Dempsey's home address and that for the service of notices;
• d. save for the 2008 year where what we infer was Australian sourced wage and salary income derived prior to his departure for Saudi Arabia is declared, the only income declared is interest; more particularly, none of the income from Fluor Arabia Ltd is declared.

87. Mr Dempsey's belief, which we accept was an honest one, was that, on each occasion, he was only lodging and only obliged to lodge an income tax return for his Australian sourced income. The controversy about whether his Saudi Arabian employment sourced income is amenable to Australian income tax apart, there is no suggestion in this case that Mr Dempsey has done other than faithfully declare the whole of what on any view is Australian sourced income.

88. Mr Dempsey consulted a tax agent (Income Tax Professionals - ITP) in respect of the preparation of his tax returns. He had been attending at the Robina Shopping Centre ITP shopfront for this purpose since 2004 and did so again in respect of each of the 2008, 2009 and 2010 returns. Each appointment was about 15 to 20 minutes. He saw a different person each year. He accepts that he signed a completed version of the returns. He stated (and we accept) that he did not pay attention to the assigning of an affirmative response to the residence and to the home address questions. The agent fee was a modest one, which accords with Mr Dempsey's recollection of the consultation time and with what is on the face of each, an uncomplicated return. Our conclusion is that the assignment of the affirmative response with respect to residency and the specification of the Mudgeeraba house as his home address were the result of inadvertence, probably shared with the tax agent, not a considered manifestation of his intention as to residency.

Consideration

89. In
Federal Commissioner of Taxation v Miller^[7] (1946) 73 CLR 93 (Miller) and in the context of the ITAA 36, the following statement of Viscount Cave LC in
Levene v Inland Revenue Commissioners^[8] [1928] AC 217 at 222 . (Levene) as to the meaning of the word "resides" were regarded as authoritative:

… the word 'reside' is a familiar English word and is defined in the Oxford English Dictionary as meaning 'to dwell permanently or for a considerable time, to have one's settled or usual abode, to live in or at a particular place.' No doubt this definition must for present purposes be taken subject to any modification which may result from the terms of the Income Tax Act and Schedules; but, subject to that observation, it may be accepted as an accurate indication of the meaning of the word 'reside.' In most cases there is no difficulty in determining where a man has his settled or usual abode, and if that is ascertained he is not the less resident there because from time to time he leaves it for the purpose of business or pleasure.

In another case decided on the same day as
Levene,
Inland Revenue Commissioners v Lysaght^[9] [1928] AC 234 , the House of Lords adopted this same approach to the interpretation of that word.

90. At the time when Miller was decided, the definition of "resident" in s 6of the ITAA was in similar, though not identical form to the definition as it stood in the 2009 and 2010 income years. Notably, it was then, as now, cast in a "means and includes" format. Neither party to the review submitted, nor do we consider, that the differences raise any issue as to the meaning to afford the word "resides" in the definition. In
Miller, Latham CJ^[10] 73 CLR at 99. prefaced his quotation of this passage from Viscount Cave's speech in Levene with the following observations:

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.

Having quoted Viscount Cave's speech, Latham CJ continued^[11] 73 CLR at 100. :

In
Cesena Sulphur Co. Ltd. v. Nicholson, 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, the decision in the Cesena Sulphur Co. Case 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.

[Footnote references omitted]

91. In Miller, Rich J^[12] 73 CLR at 100-101. likewise emphasised that the word "resides" was "not a term of art denoting a field with precisely defined boundaries" and "is an ordinary English word extending over a field the boundaries of which constitute a broad limbo with blurred edges". His Honour^[13] 73 CLR at 101. and Dixon J^[14] 73 CLR at 103. were of the view that the meaning of the word "resides" being so understood, the question as to where someone resided entailed questions of degree and was one of fact.

92. Miller, and hence the guidance offered by Viscount Cave LC in Levene remains authoritative in Australia as to the meaning of "resides" in the ITAA 36. That guidance also remains authoritative in the United Kingdom on that same subject^[15] R (Davies and anor) v Revenue and Customs Commissioners [2011] 1 WLR 2625 at 2632-2633 per Lord Wilson JSC, Lord Hope of Craighead DPSC and Lords Walker of Gestingthorpe and Lord Clarke of Stone-cum-Ebony JJSC agreeing. .

93. The settled position at ultimate appellate level has thus long been that, as used in the definition in s 6 of the ITAA 36, "resides" bears its ordinary English meaning, which is "to dwell permanently or for a considerable time, to have one's settled or usual abode, to live in or at a particular place".

94. Miller provides no warrant for adopting some broad meaning of the word "resides" (whatever that may be), much less any broad application of that word. Even were we at liberty to depart from the meaning given to the word in Miller, and neither we, nor before us the Commissioner, enjoy any such liberty, neither the text of the definition nor its context lead to any conclusion other than that the word "resides" bears its ordinary meaning, not some broad meaning. Adopting and applying what was said in Alcan as to the approach to statutory construction should put any contrary notion firmly and finally to rest.

95. Adopting that ordinary meaning of "resides" does not mean that a conclusion on the facts that an individual "resides" in one location precludes a conclusion on the facts that he also "resides" in another. That has long been settled. As Dixon J observed in respect of cognate expressions, and by reference to earlier authority in
Gregory v Deputy Federal Commissioner of Taxation^[16] (1937) 57 CLR 774 at 777 . (Gregory), "The well settled interpretation of the words includes in their application a man who resides in two or more places."^[17] See also Robertson v. Federal Commissioner of Taxation (1937) 57 CLR 147 at 163 . So much formed the foundation of one alternative case advanced by the Commissioner before us, which was that, even if, contrary to his primary submission, Mr Dempsey did reside in Saudi Arabia during the income years in question, such a conclusion did not preclude a conclusion that in either or each of those income years he also resided in Australia.

96. Also long settled is that the reaching of a conclusion as to where a person "resides" entails the consideration not just of physical elements but also intention. Dixon J proceeded on just such a basis in Gregory^[18] (1937) 57 CLR 774 at 778 . .

97. In
Koitaki Para Rubber Estates Ltd v Federal Commissioner of Taxation^[19] (1941) 64 CLR 241 . (Koitaki Para Rubber Estates), a case which concerned where a company was to be regarded as "resident" for the purposes of the ITAA 36, Starke J observed that, "It is unnecessary for me to traverse again the 'weary road of the tax cases'." This recalled a lamentation by Viscount Sumner in
Egyptian Delta Land and Investment Company Limited v Todd^[20] [1929] AC 1 at 18 . as to that necessity in relation to the case law concerning the residence of corporations. Apart from reference to Miller, we were taken down many a road, particularly in the Commissioner's submissions, not just that of tax cases but also other cases decided under other statutes in which the notion of "residence" or its cognates had been considered and then applied to particular facts. We mean no disrespect to the industry evident in these submissions in observing that, in its application to particular facts, and the whole of an individual's or corporation's circumstances as disclosed on the evidence must be considered, questions of degree will, in particular cases, arise. Once this is appreciated, particular care is required not to elevate particular applications of the definition as so understood into questions of principle governing or putting some gloss on the meaning of the word.

98. Further, in considering the outcome in some of the cases, it is necessary to bear in mind the nature of the jurisdiction which was exercised. Though the meaning of "resides" was considered and explained in both Levene and Lysaght, the outcome in those cases turned on whether, that meaning so understood, there was evidence to support the finding of fact as to residence to which the Inland Revenue Commissioners had come. Neither case is authority for the proposition that the particular conclusion was the only one which might have been reached on such facts, only that the question being one of degree and there being evidence to support the particular conclusion, it ought not to be disturbed. Miller is an Australian illustration of this same point. Dixon J^[21] 73 CLR 93 at 103. frankly confessed to a doubt as to whether he would have reached the same conclusion on the facts as had the Board of Review, but recognised that the question was one of degree and that the Board's view of the facts was not, on the ordinary meaning of the word "resides", a legal impossibility. Understanding this is one reason why not all outcomes on particular facts on the subject of residency are readily reconcilable.

99. Even aside Subrahmanyam and others which have adopted its erroneous approach to the construction of the ITAA and the word "resides", there is little purpose served by a rehearsal of these many cases and their outcomes. When, for example, Williams J in
Koitaki Para Rubber Estates^[22] 64 CLR 241 at 249. observed in passing with respect to the residence of an individual,

The place of residence of an individual is determined, not by the situation of some business or property which he is carrying on or owns, but by reference to where he eats and sleeps and has his settled or usual abode. If he maintains a home or homes he resides in the locality or localities where it or they are situate, but he may also reside where he habitually lives even if this is in hotels or on a yacht or some other place of abode: See Halsbury's Laws of England, 2nd ed., vol. 17, pp. 376, 377.

his Honour was not thereby seeking to convey that the word "resides" (and cognates) in the ITAA should bear anything other than its ordinary English meaning, as his very choice of words, "usual abode" testifies. Beyond this, his Honour's use of the alternatives "home or homes" in the observation entails recognition of the proposition, already evident from Gregory, that a person may "reside" in more than one location.

100. The same may be said of the remarks made by Wilcox J in
Hafza v Director-General of Social Security^[23] (1985) 6 FCR 444 at 449-450 . (Hafza):

Physical presence and intention will coincide for most of the time. But few people are always at home. Once a person has established a home in a particular place - even involuntarily: see
Commissioners of Inland Revenue v Lysaght [1928] AC 234 at 248 and
Keil v Keil [1947] VR 383 - a person does not necessarily cease to be resident there because he or she is physically absent. The test is whether the person has retained a continuity of association with the place -
Levene v Inland Revenue Commissioners [1928] AC 217 at 225 and
Judd v Judd (1957) 75 WN (NSW) 147 at 149 - together with an intention to return to that place and an attitude that that place remains "home": see
Norman v Norman (No 3) (1969) 16 FLR 231 at 236. It is important to observe firstly, that a person may simultaneously be a resident in more than one place - see the facts of Lysaght (supra) and the reference by Williams J to "a home or homes" - and, secondly, that the application of the general concept of residence to any particular case must depend upon the wording, and underlying purposes, of the particular statute in relation to which the question arises. But, where the general concept is applicable, it is obvious that, as residence of a place in which a person is not physically present depends upon an intention to return and to continue to treat that place as "home", a change of intention may be decisive of the question whether residence in a particular place has been maintained.

Justice Wilcox does not, in Hafza, expressly refer to Miller, which is the pertinent Australian authority at ultimate appellate level, but it is, with respect, patent from his Honour's references to Levene and Lysaght in relation to the "general concept", that he was not promoting a view contrary to Miller. We do not regard Hafza as supporting any conclusion other than that, in s 6 of the ITAA 36, the word "resides" carries its ordinary meaning.

101. In
Iyengar v Federal Commissioner of Taxation^[24] [2011] AATA 856 . Senior Member Walsh developed from earlier cases a non-exhaustive list of criteria which she regarded as relevant to the determination of whether or not an individual was a resident of Australia for the purposes of the definition in s 6 of the ITAA 36. That list has gained some later currency in the Tribunal. However useful such checklists may be, they are no substitute for the text of the statute and the recollection that ultimate appellate authority dictates that the word "resides" be construed and applied to the facts according to its ordinary meaning.

102. This apart, one of the criteria which appears in the checklist is nationality. With respect, we consider that the adoption of this criterion as one indication of whether a person "resides" in Australia is apt to mislead. Nationality is pertinent to the determination of domicile, which is a separate legal concept from residence. Nationality doubtless confers a right of residence but whether or not that right is exercised in circumstances that admit of the conclusion that a person is a "resident", as opposed to a lawful visitor, is quite another thing. Further, it has been observed that a person may become a resident "completely against his will"^[25] Lysaght at 248 per Lord Buckmaster. .

103. It is not necessary in the circumstances of the present case to delve into whatever subtleties may be entailed in reconciling Lord Buckmaster's observation with the notion that both intention and physical presence are relevant to residence. Is, for example, an asylum seeker in an off-shore detention facility in one country, who has abandoned his home in his country of former habitual residence but remains a national of that country and who wants to live in Australia, still to be regarded, because of nationality, as a resident of that abandoned country or is he a resident of the country in which the detention facility is situated, even though his intention is not to reside there at all? At the margin, where other factors signal no certain outcome as to where a person resides, nationality might have a determinative role to play. That is not this case.

104. Mr Dempsey's presence in Saudi Arabia was hardly casual or passing. So far as intention is relevant, Mr Dempsey had, at the time when he first left Australia for the kingdom, a reservation as to whether he would make Saudi Arabia his home for the duration of the Saudi Kayan project and beyond. He wanted to see whether or not he enjoyed the work there. We did not, when he gave this evidence, understand him to mean wholly the physical work, as opposed to the undertaking of that work under the conditions of employment prevailing there, which necessarily included all that attended living in Saudi Arabia. Over time, he found that he enjoyed the work. From his description of the project and his responsibilities, his employment must have been both demanding and challenging but at the same time fulfilling. At the same time, he settled into the lifestyle entailed in deriving that fulfilment in that place.

105. It would be difficult, if not impossible, to assign a precise day on which Mr Dempsey formed an intention to make Saudi Arabia his home for the duration of the Saudi Kayan project and beyond, but form such an intention he did. Mr Dempsey was being completely candid in relating that an initial reason why he kept the Mudgeeraba house was because he wanted to see whether or not he enjoyed the work in Saudi Arabia. By the commencement of the 2009 income year at the latest, we infer that he had a settled intention to make Saudi Arabia his home for the duration of the Saudi Kayan project and beyond into the indefinite future.

106. That inference is readily drawn from his application to a very demanding employment, sustained by then for a period of some eight months. Mr Dempsey had by then settled into a lifestyle in which Australia and the Mudgeeraba house in particular no longer played the part of an immediately available, alternative place for him to live in the event that his employment in Saudi Arabia, with all that entailed, was not to his liking. At the time, he had an expectation of follow-on employment at the end of the Saudi Kayan project.

107. By the commencement of the 2009 income year, the Mudgeeraba house had become but a convenient place for Mr Dempsey very briefly to visit in transit on holidays from his settled home in Saudi Arabia and a convenient way in which to store part of his capital. The Mudgeeraba house was by then no longer his usual place of abode. He was able to, and did, indulge himself on his occasional, holiday visits opportunistically either with a weapons purchase or the acquisition, at what he saw as a keen price, of the four wheel drive vehicle. Likewise on these holiday visits, the continued currency of his licencing and club membership enabled him to indulge himself in what must on the evidence have been an abiding interest in recreational range target shooting. However, the principal purpose of his visits to Australia was not to resume residency in the Mudgeeraba house but rather to catch up with his children and Ms C in Canberra. Those visits did not, during these years, make him "resident" in Canberra.

108. What was treated as a "home base" for the purposes of the administration of the Saudi employment contract does not mean that Mr Dempsey continued to "reside" in Australia in the 2009 and 2010 income years.

109. In the 2009 and 2010 income years, Mr Dempsey was a free agent, both in terms of the transferability internationally of his skills and his personal circumstances. When he left to take up his employment in Saudi Arabia, he left no family at the Mudgeeraba house. Like his Nerang house before it, the Mudgeeraba house had never been anything other than a place temporarily visited by his children and Ms C. Their home base had always been at a house in Canberra. This Canberra house had never been Mr Dempsey's home base. As can be the way of things, by the 2009 and 2010 income years, there were emerging signs that Canberra might not in the future be the home base for both Ms C and Mr Dempsey's children. His son had chosen to pursue tertiary education in Victoria but had not by those years severed all residential ties with Canberra. Mr Dempsey had and retained a particular bond with his children and with Ms C, but he had never, on the evidence, usually cohabited with them. This bond drew him sometimes to visit Canberra on his holidays for but a few days biannually. It never persuaded him either not to live and work in Saudi Arabia or even, preferentially, to spend the greatest part of his holidays in Canberra.

110. By the 2009 and 2010 income years, Mr Dempsey's visits to Australia had become casual and fleeting, not only relative to the time he spent in Saudi Arabia but also, so far as holidays were concerned, when compared with Thailand. When one analyses, in detail, Mr Dempsey's holiday travel, the location where he repeatedly spent the most time on his holidays was his preferred hotel in Thailand.

111. Mr Dempsey's visits to Bahrain were an incident of his choosing to live and work in Saudi Arabia. They underscore, rather than detract from, a conclusion that he had a settled place of abode in the Kingdom in the 2009 and 2010 income years. Bahrain was for him and for other expatriates living in Al Jubail a short term, recreational destination. This was part of the lifestyle assumed when living in Al Jubail for an expatriate such as Mr Dempsey. That was the whole point of Mr Dempsey's taking and keeping up Sheraton Club membership.

112. A useful way of illustrating by analogy the position which, in this regard, Bahrain had in the life of Mr Dempsey and other expatriates resident in Saudi Arabia is to recall a time in Australia when gambling on poker machines was illegal in Queensland but not in New South Wales. Many who lived and worked in South East Queensland who had an interest in such wagering as a form of recreation or just in the shows and other entertainment which NSW licenced clubs were able to offer because the income stream poker machines provided to licensed clubs, ventured across the border to, for example, Tweed Heads. Some stayed overnight there. These brief, cross-border ventures did not mean that they ceased being resident in Queensland. They were just an incident of living in Queensland under the conditions prevailing at the time.

113. Bahrain was also a place through which one transited when going to or from one's home in Al Jubail on wider international travel. Al Jubail, it seems, did not offer the same international airline connections as does Bahrain.

114. When these purposes for visiting Bahrain are understood, it is but a distraction, in relation to deciding whether Mr Dempsey had ceased to "reside" in Australia, that Bahrain has separate sovereignty from Saudi Arabia.

115. Mr Dempsey did not need to have a Saudi Arabian bank account in order to be a resident of that country. Indeed, there were good reasons not to have an account in that country. The ability readily to attend to all of his banking needs both in Saudi Arabia and elsewhere by the maintenance of an Australian bank account is but one example of the way in which the internet increasingly renders national borders less significant.

116. Perhaps Mr Dempsey should have changed his electoral enrolment. He does not appear to have turned his mind to that subject. Viewed against the whole of the evidence, we do not infer from the absence of change that the absence of a change was reflective of a settled intention to continue to reside in Australia and at the Mudgeeraba house.

117. Mr Dempsey kept up his Australian occupational licences. There was no evidence that so doing entailed any great cost to him. His evidence was not that he never intended ever to return to Australia, only that he had left for what he anticipated would be an indefinite period during which he would live in Saudi Arabia. It is hardly novel in any calling for a person who has settled abroad to work to keep up a professional or occupational membership in the person's country of origin. This factor is but part of an overall factual matrix which must be considered as a whole.

118. In Mr Dempsey's notice of objection it is stated that he intended to return to Australia to live at the end of his contract but that there was no definite time for his return. We regarded this as consistent with his written and oral evidence.

119. The statements which Mr Dempsey made on his income tax returns and on his incoming and outgoing passenger cards are relevant but not determinative. Were the Commissioner possessed, for example, of nothing more than an affirmative answer to a residency question and an Australian address specified as a home address on an income tax return, there would be nothing unreasonable in his reaching a conclusion that the taxpayer concerned was a resident of Australia. But it is the whole of the facts and circumstances which the Commissioner, and now we in his place, must consider. If, as here, the whole of the facts and circumstances contradict a conclusion which one might otherwise reach looking at these documents alone, then it is the conclusion reached on the whole of the evidence which must prevail.

120. Our conclusion is that Mr Dempsey resided in Saudi Arabia in the 2009 and 2010 income years. When Mr Dempsey returned to Australia in May 2010 it was in the expectation that he would shortly be off again to Saudi Arabia. His intention then was not again to take up residence here. It is noteworthy that, at the end of June, he again left Australia for Thailand, his preferred holiday destination as a Saudi Arabian resident. As it happened, circumstances changed in relation to follow-on employment in Saudi Arabia. With that, Mr Dempsey's intention changed. He again made Australia his settled place of abode.

121. It is, of course, possible, for a person to have more than one place of residence. On the findings which we have made, Mr Dempsey was, during the 2009 and 2010 income years only a resident of Saudi Arabia, not of both that country and Australia. In those years, he was, intentionally, but a casual visitor to Australia, visiting from his usual place of abode, Saudi Arabia.

122. There was an endeavour in the Commissioner's submissions to draw parallels between Mr Dempsey's circumstances and that of a fly in/fly out worker or that of a person whose home and family is in one location, who leaves that temporarily to undertake work in another location. These cases are, as the cases emphasise, ones of degree. It is sufficient in respect of this particular endeavour by the Commissioner to record that the present is a case degrees away from these other situations posited by the Commissioner. We readily accept that the facts of this case are not all one way, but the long and the short of it is that, viewing them as a whole, the correct or preferable conclusion is that Mr Dempsey, as a matter of deliberate choice, made Saudi Arabia his home for the duration of the Saudi Kayan project and, so he thought, beyond. His home there took the form it did because that is the form of home permitted to expatriates in Saudi Arabia. When he moved from his apartment at the end of the Saudi Kayan project it was in the expectation that he would have shortly another with the expected successor work. His apartments in Saudi Arabia were neither transient nor temporary accommodation. They were where he could and did settle as a matter of deliberate choice. It was Mr Dempsey who retained the right of exclusive occupancy. On the evidence, no-one else could or did occupy the apartment either during his brief recreational visits to Bahrain or during his holidays abroad.

123. A conclusion that Mr Dempsey did not "reside" in Australia in the 2009 and 2010 income years is not, in itself, sufficient to decide this case in his favour. As noted, he concedes (quite properly) that he remained domiciled in Australia in each of these income years. Are we satisfied that his "permanent place of abode" was outside Australia?

124. In
Applegate v Federal Commissioner of Taxation^[26] [1978] 1 NSWLR 126 at 134 . Sheppard J stated with respect to the definition of "resident" in s 6(1) of the ITAA 36 that:

"permanent" is used in the sense of something which is to be contrasted with that which is temporary or transitory. It does not mean everlasting. The question is thus one of fact and degree.

His Honour had earlier stated^[27] At 131. that the word 'permanent' is used in a comparative sense. An appeal by the Commissioner against the judgement of Sheppard J was dismissed^[28] Federal Commissioner of Taxation v Applegate (1979) 38 FLR 1 . . His Honour's view as to the meaning of permanent was endorsed by the members of the Full Court.

125. Mr Dempsey's presence in Saudi Arabia was not intended by him to be everlasting but, after he found that the employment there and all that it entailed in terms of lifestyle suited him, it was intended by him to be of an indefinite duration. That intention, as we have held, was formed by no later than the start of the 2009 income year. Accepting as we do his evidence as to the prospect of follow on work, his expectation was that that he would reside in Saudi Arabia into the indefinite future. Prior to Mr Dempsey's forming that intention, his retention of his Mudgeeraba house was something of an insurance policy for him. Thus, even though he lived in Saudi Arabia before the commencement of the 2009 income year, we should, had it fallen to us to decide the point, have had greater difficulty in being satisfied that at that stage his permanent place of abode was in that country.

126. That same difficulty does not attend the 2009 and 2010 income years. By then he had made a settled employment, lifestyle and residence choice for the indefinite future. He had no immediate need upon the making of that choice to dispose of the Mudgeeraba house. Not only did he have understandable financial reasons derived from market conditions, availability of alternative housing in Saudi Arabia and relative affluence not then and there to sell it but it is by no means uncommon for those who have no pressing need, financial or otherwise, to dispose of a property, and other calls on their time derived from a demanding employment, to postpone making a disposal decision. We readily accept Mr Dempsey's evidence that he probably would have disposed of the Mudgeeraba house some time in the course of anticipated successor employment in Saudi Arabia after the end of the Saudi Kayan project. By the 2009 and 2010 income years, the Mudgeeraba house had ceased to be his usual or habitual place of abode. That was in Saudi Arabia. That place of abode was neither temporary or transitional but rather expected to continue into the indefinite future. Mr Dempsey claimed no more. His statement that he would return to Australia was no more than an expression of an intention to be fulfilled at some time in the indefinite future. In the meantime, he intended to make his home in Saudi Arabia.

127. Of course Mr Dempsey's retention of the Mudgeeraba house is relevant to our deciding whether we are satisfied that that his permanent place of abode is outside Australia. It is likewise relevant to the more general question as to whether he continued to "reside" in Australia after taking up his Saudi Arabian employment. It is just that, for reasons which we have explained above, which are peculiar to Mr Dempsey's circumstances, that intention, when weighed with other considerations, neither persuades us that he continued to reside in Australia in the 2009 and 2010 income years nor that his permanent place of abode was other than outside Australia in those years.

128. For these reasons, we are satisfied that, though Mr Dempsey was domiciled in Australia in the 2009 and 2010 income years, his permanent place of abode was outside Australia. It was in Saudi Arabia. Our reasons, in effect, entail an acceptance of those made on behalf of Mr Dempsey. No useful purpose would therefore be served by a mechanical rehearsal of those submissions.

129. The Commissioner's submission also drew attention to the absence of any liability of Mr Dempsey to taxation in Saudi Arabia on the income when he derived there from his employment. It was common ground that there was no such liability in Saudi Arabia. There was something of an element of a cri-de-coeur about this aspect of the Commissioner's submission. If so, we must be deaf to it. So far as Australia was concerned, Mr Dempsey's obligation was to pay the Australian income tax he was required to pay under Australian law, no more and no less. As a non-resident of Australia in the 2009 and 2010 income years, he was not obliged to make a donation to Australian consolidated revenue in respect of income derived from non-Australian sources just because that income was not subject to taxation abroad. Nor was he obliged to make such a donation because he retained Australian citizenship.

130. Mr Dempsey has proved that each amended assessment was excessive by virtue of the inclusion in his assessable income of income which he, as a non-resident, had derived from employment outside Australia. The objection decision in respect of the amended assessments must be set aside. In lieu thereof, Mr Dempsey's objection in respect of the amended assessments will be allowed in full. It is for the Commissioner to issue the requisite amended assessments once our decision has, for the purposes of the TAA, become final.