Handsley v FC of T

Members:
FD O’Loughlin DP

Tribunal:
Administrative Appeals Tribunal

MEDIA NEUTRAL CITATION: [2019] AATA 917

Decision date: 17 May 2019

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FD O'Loughlin (Deputy President)

1. This application concerns the operation of the s 6 definition of resident or resident of Australia in s 6(1) of the 1936 Assessment Act^[1] The Income Tax Assessment Act 1936 (Cth). in the context of a person whose living arrangements were in a state of transition during the 2013 year.^[2] The financial year that ended on 30 June 2013.

2. This application calls for consideration of the circumstances of a man who:

• (a) spent the vast majority of his time during the 2013 year outside of Australia;
• (b) had ended his married relationship with his former wife before the start of the 2013 year;
• (c) again before the start of the 2013 year, had begun a relationship with a foreign national who did not live in Australia;
• (d) intended to secure for himself and his partner a permanent dwelling outside of Australia and live there;
• (e) had limited ongoing family and financial connections with Australia; but
• (f) had not established for himself permanent living facilities outside Australia during that year,

  and whether he was a resident.^[3] A resident or resident of Australia within the meaning of that term in s 6(1) of the 1936 Assessment Act.

3. The Respondent Commissioner^[4] Commissioner of Taxation of the Commonwealth of Australia. considered the Applicant, to be a resident for and assessed him in respect of his income earned in foreign locations for the 2013 year. He defends his objection decision on alternative bases, namely that the evidence led by the Applicant does not:

• (a) support a conclusion that he did not reside in Australia in the ordinary sense of the word in the 2013 year; and/or
• (b) disclose that the Applicant had a non-Australian domicile or that he had a permanent place of abode outside of Australia at any time during the 2013 year.

4. The Applicant disputes the objection decision, contending that he was not a resident.

THE STATUTORY TESTS IN DISPUTE

5. As is relevant to the present application, the definition of resident or resident of Australia in s 6(1) of the 1936 Assessment Act is in the following terms:

"resident or resident of Australia" means:

• (a) a person, other than a company, who resides in Australia and includes a person:

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    ATC 8033

    (i) whose domicile is in Australia, unless the Commissioner is satisfied that the person's permanent place of abode is outside Australia;

    …

6. This application concerns whether the Applicant was a resident because:

• (a) he resided in Australia; or
• (b) his domicile was in Australia and the Tribunal (standing in the shoes of the Commissioner) is not satisfied that he had a permanent place of abode outside Australia.

7. For the Applicant to succeed, he must:

• (a) show that he did not reside in Australia: and
• (b) either:
  • (i) show that he had changed his domicile to a place outside of Australia; or
  • (ii) satisfy the Tribunal that he had a permanent place of abode outside of Australia.

The primary or para (a) test - residing in Australia - relevant principles

8. A number of relevant principles to be applied in determining a person's place of residence emerge from the authorities. They include:

• (a) an individual resides where she or he lives and the process of determining that location was described by Williams J in Koitaki Para Rubber Estates Limited v The Federal Commissioner of Taxation in the following terms:

  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 habitually lives even if this is in hotels or on a yacht or some other abode^[5] (1941) 64 CLR 241 at 249 .

  and these concepts have been endorsed recently;^[6] See Harding v Commissioner of Taxation [2018] FCA 837 at [31] per Derrington J referring to Latham CJ in Commissioner of Taxation v Miller (1946) 73 CLR 93 at 99-100 who approved the observations in Levene v Inland Revenue Commissioners [1928] AC 217 , endorsed on appeal in Harding v Commissioner of Taxation [2019] FCAFC 29 (‘ Harding ’) at [24] and [57] per Davies and Steward JJ.

• (b) a person can continue to reside at, and therefore continue to be resident in, a place notwithstanding current absence from that place^[7] Hafza v Director-General of Social Security (1985) 6 FCR 444 at 449 , Wilcox J. if he or she has maintained a sufficient continuity of association or connection with that place;^[8] Hafza v Director-General of Social Security (1985) 6 FCR 444 at 449 , Wilcox J and the reference there to Levene v Commissioners of Inland Revenue [1928] AC 217 at 225 . See also Harding v Commissioner of Taxation [2018] FCA 837 at [42] to [45] per Derrington J endorsed on appeal in Harding v Commissioner of Taxation [2019] FCAFC 29 at [61] per Davies and Steward JJ.
• (c) for a person who spends significant time out of Australia, one such connection is the characterisation of that person's visits to Australia and whether they are to be regarded as return visits to the place regarded as or which was the person's home.^[9] See Harding v Commissioner of Taxation [2018] FCA 837 at [81] per Derrington J endorsed on appeal in Harding v Commissioner of Taxation [2019] FCAFC 29 at [62] per Davies and Steward JJ. If a person's return visits to Australia are not properly regarded as return visits to the place regarded as or which was the person's home, then those return visits are squarely inconsistent with the propositions that the person was returning to her or his place of residence in Australia or that he or she was residing in Australia;^[10] See Harding v Commissioner of Taxation [2019] FCAFC 29 at [62] per Davies and Steward JJ.
• (d) a person may retain some financial connections with Australia but still have abandoned residency in Australia, particularly where those financial connections are the remnants of prior residency in Australia or connected with ongoing financial responsibilities in Australia;^[11] See Harding v Commissioner of Taxation [2018] FCA 837 at [84] per Derrington J endorsed on appeal in Harding v Commissioner of Taxation [2019] FCAFC 29 at [63] per Davies and Steward JJ.
• (e) internationalisation of banking facilities and investment activities and markets causes less significance to be placed on retention of investments in stable Australian financial markets and a continued connection with Australia;^[12] See Harding v Commissioner of Taxation [2018] FCA 837 at [85] per Derrington J endorsed on appeal in Harding v Commissioner of Taxation [2019] FCAFC 29 at [63] per Davies and Steward JJ.
• (f) a person's presence in a place (and presumably absence of presence in a place) and their intentions concerning that presence or absence, are both to be considered in addressing that person's place of residence;^[13] See Harding v Commissioner of Taxation [2018] FCA 837 at [42] to [45] per Derrington J endorsed on appeal in Harding v Commissioner of Taxation [2019] FCAFC 29 at [61] per Davies and Steward JJ.
• (g) a person can have two residences, and therefore two places of residence, concurrently, and thereby attain the character of a resident of both places;^[14] Gregory v Deputy Federal Commissioner of Taxation (W.A.) (1937) 57 CLR 774 at 777–778 , Dixon J.
• (h) events occurring both before and after the period under examination may be considered as throwing light on and disclosing the significance of habits and conduct within the period under examination;^[15] Gregory v Deputy Federal Commissioner of Taxation (W.A.) (1937) 57 CLR 774 at 777–778 , Dixon J. and
• (i) whether a person is a resident is a question of degree, and therefore one of fact.^[16] Commissioner of Taxation v Miller (1946) 73 CLR 93 at 101 per Rich J.

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  ATC 8034

The para (a)(i) test - Australian domicile and non-Australian permanent place of abode - relevant principles

9. The para (a)(i) residence test has two parts:

• (a) the first whether the facts support a legal conclusion that a person has an Australian domicile; and,
• (b) if the facts support an Australian domicile conclusion, the second being the carve out for those circumstances where the Commissioner, and the Tribunal in his shoes, is satisfied that the person has a permanent place of abode outside Australia.^[17] See Harding v Commissioner of Taxation [2019] FCAFC 29 at [20] per Davies and Steward JJ.

10. A person's domicile is determined by common law rules as modified by the Domicile Act.^[18] Domicile Act 1982 (Cth). Section 3 of that Act explains that it was enacted to abolish particular presumptions and to make other reforms. One of the common law presumptions that continues is that one's domicile of origin continues until by choice, it is changed.

11. Section 10 of the Domicile Act is in the following terms:

Intention for domicile of choice

The intention that a person must have in order to acquire a domicile of choice in a country is the intention to make his or her home indefinitely in that country.

Australian domicile

12. A person's domicile is the product of the combination of common law principles and the operation of the Domicile Act.^[19] Domicile Act 1982 (Cth). Domicile is a legal concept as opposed to residence which is a question of fact.^[20] Australasian Temperance & General Mutual Life Assurance Society Ltd v Howe (1922) 31 CLR 290 at 335 per Higgins J. A person's domicile is a legal concept that is attributed to a person by applying those common law principles, as affected by the Domicile Act, to a person's personal living circumstances and his or her intentions in relation to those circumstances.

13. The concept of a person's domicile, has been expressed as:

…. that legal relationship between [the person] and a territory subject to a distinctive legal system which invokes the system as the [individual's] personal law …which arises either … from the [person] … being or having been resident in such territorial area with the intention of making it his permanent home or, … from there being or having been such a relationship on the part of some other person on whom the [person] … is for this purpose legally dependent. …^[21] Henderson v Henderson (1965) 1 All ER 179 at 180–181 , Sir Jocelyn Simon P (as his Lordship then was). See also Shekleton v Shekleton [1972] 2 NSWLR 675 at 682 , Jenkyn J.

14. Everyone must have a domicile, but it is not necessary for co-existent or contemporaneous residence - a person who might have no place of residence always has a domicile.^[22] Australasian Temperance & General Mutual Life Assurance Society Ltd v Howe (1922) 31 CLR 290 at 335 per Higgins J referring to Udny v Udny (1869) L.R. 1 H.L. (Sc.) 441 at 457 . Domicile is not lost by abandonment without replacement. Until a new domicile is inferred by the law from the combination of actions and intentions as to residence, a person's pre-existing domicile survives.^[23] See Domicile Act s 7. Historically, on abandonment of domicile of choice, domicile of origin revived – Fremlin v Fremlin (1913) 16 CLR 212 at 232 per Isaacs J referring to what Lord Westbury said in Udny v Udny (1869) L.R. 1 H.L. (Sc.) 441 at 457–458 . Section 7 of the Domicile Act altered the common law presumption but did not produce a result that a person could not have any domicile upon an abandonment of an earlier place of residence that coupled with intentions, constituted a domicile. See also Billington v Secretary, Dept of Families, Housing, Community Services and Indigenous Affairs [2013] FCA 480 at [42] per Logan J.

15. Subject to some not presently relevant modifications of common law principles made by the Domicile Act, a person can have a domicile of origin and a domicile of choice. Domicile of choice is:

… a conclusion or inference which the law derives from the fact of a man fixing voluntarily his sole or chief residence in a particular place, with an intention of continuing to reside there for an unlimited time. This is a description of the circumstances which create or constitute a domicil, and not a definition of the term. There must be a residence freely chosen, and not prescribed or dictated by any external necessity, such as the duties of office, the demands of creditors, or the relief from illness; and it must be residence fixed not for a limited period or particular purpose, but general and indefinite in its future contemplation.^[24] Fremlin v Fremlin (1913) 16 CLR 212 at 233 per Barton J referring to what Lord Westbury said in Udny v. Udny L.R. 1 H.L. (Sc.) 441 at 458 .

16. The difficulties as to its change have been noted in the following terms:

… Though the principles which govern a change in domicil are well established, they are often difficult of application, ….It is often difficult to determine whether [a person has] … settled in their new place of residence with the intention of making it [his/her] … permanent home; or whether [she/he intends] … to return at some time to live permanently in [his/her] … country of origin; or whether, thirdly, the residence is quite indeterminate in character, no clear intention as to ultimate permanent residence being formed.^[25] Henderson v Henderson (1965) 1 All ER 179 at 180–181 , Sir Jocelyn Simon P (as his Lordship then was). See also Shekleton v Shekleton [1972] 2 NSWLR 675 at 682 , Jenkyn J.

17.

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ATC 8035

For a person to change his or her domicile it is necessary both to change the fact of residence in a place, i.e. become a resident of the new place, and intend that that new place of residence be indefinite^[26] See Domicile Act s 10. - actions and intentions must co-exist.^[27] Fremlin v Fremlin (1913) 16 CLR 212 at 232 per Isaacs J referring to what Lord Westbury said in Udny v. Udny L.R. 1 H.L. (Sc.) 441 at 457–458.

18. To the extent the decisions in Applegate suggest that intention to return to Australia is relevant to whether a new domicile has been chosen,^[28] E.g. Federal Commissioner of Taxation v Applegate (1979) 27 ALR 114 at 128 per Fisher J. those suggestions need to be viewed in the context of the pre-Domicile Act law. Post the Domicile Act, attention needs to be directed to intentions concerning making a home indefinitely in a country. Accordingly, the effect of s 10 of the Domicile Act is that a person who has changed domicile and has a place of abode in that new place of domicile, will have a permanent place of abode there.

Permanent place of abode outside Australia

19. The phrase permanent place of abode outside Australia in the definition of resident or resident of Australia in s 6(1) is to be read as something less than a permanent place of abode in which the taxpayer intends to live forever or for the rest of his or her life.^[29] Federal Commissioner of Taxation v Applegate (1979) 27 ALR 114 (‘ Appelgate ’) at 117 per Franki J. To fall outside the definition of resident or resident of Australia in s 6(1), Australian domiciled people who live abroad do not need to intend never to return to Australia. The place where a person intends to live forever is his or her permanent home, and a place of abode can be a permanent place of abode as contemplated by the definition without being a permanent home.^[30] Federal Commissioner of Taxation v Applegate (1979) 27 ALR 114 at 128 per Fisher J.

20. In the Full Court in Harding,^[31] The Commissioner asserts that the decision was wrong and has sought leave to appeal to the High Court of Australia. The Commissioner asserts that it is necessary for there to be a particular place of abode within a country for there to be a permanent place of abode outside of Australia. If such an application is granted and an appeal is allowed, a reversal of the Full Court’s decision will not change the outcome in this application. Davies and Steward JJ recounted the history to the current definition of resident or resident of Australia and purpose of the paragraph (a)(i) residence test, and the carve out from that test, within it. They concluded that:

• (a) the para (a)(i) aspect of the definition is directed to:
  • (i) include in the Australian tax system Australian domiciled people^[32] The references to people should be taken to mean people and their earnings from foreign sources. Their honours were not suggesting that income from Australian sources was ever intended to be excluded from the Australian tax system by the definition of resident or resident of Australia. wherever they live; and
  • (ii) to exclude from the Australian tax system people^[33] See footnote 34. still identifying as Australians, by reason of their Australian domicile, but who had definitely abandoned their residence in Australia by way of taking up a permanent place of abode outside Australia;
• (b) a permanent place of abode is not a specific house or dwelling; and
• (c) a series of temporary places of abode in a town or region within a country can be accepted as a permanent place of abode; but
• (d) a series of temporary places of abode in multiple countries does not satisfy the test.

21. The effect of their Honours' reasoning is that the legislative scheme is intended to exclude from the Australian tax system foreign sourced earnings of people who have retained their Australian identity as reflected in their retained Australian domicile who have definitely abandoned their residence in Australia as demonstrated by establishing a place of permanent abode in a single foreign country. While there may be multiple ways of demonstrating abandonment of Australian residence in a general sense for purposes other than Australian income tax assessment, for Australian income tax purposes, that abandonment needs to be demonstrated by meeting the words of the statutory test and that requires, at a minimum, a series of temporary places of abode in a single country intended to be the place where the person lives.

22. In their reasoning their Honours observed:

• 34. "Explanatory Notes" to the 1930 Amending Act (the "Notes"), issued under the authority of the then Commonwealth Treasurer, suggest that a purpose of subpara (i) of the definition of "resident" was the taxation, for the first time, of the Australian High Commissioner in London, together with the Agents-General of the states, and their respective staff. Until the 1930 Amending Act, these individuals were not liable to pay income tax under the 1922 Act, nor British income tax. The Notes, which were not before the learned primary judge, state the following about the primary test of where a person resides:

The primary test is actual residence in Australia. If a person is in fact residing in Australia then, irrespective of his nationality, citizenship or domicile, he is to be treated as a resident for the purposes of the Act.

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ATC 8036

The result will be that the extension of the scope of the Act to income from sources outside Australia will apply not only where such income is derived by an Australian who ordinarily lives in Australia, but also where it is derived by a person of foreign origin who, though he may recognise Australia as his usual place of residence, has not yet abandoned his foreign nationality, citizenship or domicile.

• 35. The Notes record an explanation for the "second test" in subpara (i), which turns upon the "domicile" of the taxpayer, a term said to be of "strictly legal significance". The Notes state that a person in certain circumstances can be domiciled in a particular country although he or she is not actually residing there and in some cases "although he has abandoned his residence in that country and has no intention of residing there". The Notes then state:

The application of the test of domicile will cause the High Commissioners for Australia and Agents-General for the Australian States, together with the members of their staffs, to be treated as residents of Australia liable to income tax assessment on Australian and extra-Australian income as proposed for other residents.

• There is also an explanation for the exception to the second test. The Notes record:

In order that the test may not be applied to persons who have definitely abandoned their Australian residence, a condition is provided that a person whose legal domicile is in Australia is not to be treated as a resident if the Commissioner is satisfied that his permanent place of abode is outside Australia.

• 36 …

The foregoing suggests that the primary or first test of residence is largely directed at the identification of where physically a person ordinarily lives regardless of citizenship or domicile. The second test (aside from the exception to it), is not directed at a person's physical presence in Australia, but with the identification of her or his domicile in this country, regardless of where she or he lives. It thus extends to the High Commissioner living in London. The exception in subpara (i) then assumes that the person is not physically present in Australia during the year of income, but is nonetheless still domiciled here. Where it can be shown to the Commissioner's satisfaction that that person has "definitely abandoned" their Australian residence, Parliament's intention is that that person should not be subject to federal income tax. A person who ceases permanently to live in Australia, but who nonetheless considers themselves still to be an Australian might fall within this category. Such a person may not have an "intention to make his or her home indefinitely" in another country for the purposes of s 10 of the Domicile Act. That may be because, for example, there is no new country to whom that person now wishes to pledge allegiance; or it may be because, whilst physically living in a foreign country with no plan to return to Australia, there has not been a conscious relinquishment of Australian identity.

• …

• 40. In the context of the legislative history, in our view, the phrase "place of abode" is not a reference, as one might have thought, only to a person's specific house or flat or other dwelling. If that had been Parliament's intention it would have used the phrase "permanent abode" rather than "permanent place of abode". The word "place" in the context of the phrase "outside Australia" in subpara (i) invites a consideration of the town or country in which a person is physically residing "permanently". So long as the taxpayer has "definitely abandoned" his or her residence in Australia, it does not serve the function or purpose of the exception to subpara (i) to require that the taxpayer be permanently located at a particular house or flat in a particular town within a foreign country . Nor, indeed, does it serve the functional purpose of the exception to require the person to live in one particular town, suburb or village within a given country. In our view, drawing a distinction between someone who buys a singular flat

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  ATC 8037

  in a foreign country as against someone who lives in a series of temporary flats in that same country does not promote the rationale of the exception in subpara (i). That rationale is that a person domiciled in Australia is not to be made subject to federal income tax when they have abandoned in a permanent way their Australian residence. For the promotion of that rationale, it is unnecessary for the taxpayer to live outside of Australia in any particular way. It follows that the word "place" should accordingly be read as including a reference to a country or state. Having said that, we do not favour the proposition that it does not matter if the taxpayer is not permanently in one country, but moves between foreign countries . In our view, the words "permanent place" require the identification of a country in which the taxpayer is living permanently . We shall return to the concept of permanence.^[34] See Harding v Commissioner of Taxation [2019] FCAFC 29 at [40] per Davies and Steward JJ. (Emphasis added)

23. Whether the Applicant established a permanent place of abode outside of Australia requires the same or substantially the same analysis as required to determine whether he resided outside of Australia under ordinary principles.

24. Intentions concerning duration of stay abroad and its permanence are relevant factors in determining whether a person has a permanent place of abode outside Australia,^[35] Federal Commissioner of Taxation v Applegate at (1979) 27 ALR 114 at 117 per Franki J and at 128 per Fisher J. but not critical factors.^[36] Federal Commissioner of Taxation v Applegate at (1979) 27 ALR 114 at 117 per Franki J.

25. Comments in Applegate to the effect that:

• (a) to determine whether a place of abode is a permanent place of abode it is necessary to have regard to the nature and quality of the use made of that place, the continuity or otherwise of the [person's] presence, the duration of [his/her] presence and the durability of [his/her] association with the particular place;^[37] Federal Commissioner of Taxation v Applegate at (1979) 27 ALR 114 at 128 per Fisher J.
• (b) greater weight should be given to these factors than to a person's stated intentions. This is an objective analysis;^[38] Federal Commissioner of Taxation v Applegate at (1979) 27 ALR 114 at 126 and 128 per Fisher J.
• (c) a permanent place of abode is a fixed and habitual place of abode without needing to be a permanent home; and
• (d) a permanent place of abode outside Australia is not the same as a temporary or transitory place of abode outside Australia.^[39] Federal Commissioner of Taxation v Applegate at (1979) 27 ALR 114 at 123 per Northrop J.

now need to be read against the conclusion in Harding regarding temporary places of accommodation in the one country constituting a permanent place of abode.

EVIDENCE

26. The evidence led comprised a written statement and the contents of three emails from the Applicant, the Applicant's oral evidence and the T documents.^[40] The documents filed and served pursuant to s 37 of the Administrative Appeals Tribunal Act 1975 (Cth).

27. The Applicant is accepted as a witness who told the truth. He conceded where he needed to, and he did it frequently, he conceded things that were against his interest, and he was quite candid. He gave evidence of aspects of his life leading up to his departure from Australia in 2011 and his life overseas since that time. He gave evidence that in the 2013 year, he had an opportunity to work in Vietnam for a period with the Vietnam-based Jetstar Pacific Airways under a contract arranged through the Agency^[41] An Isle of Man company, Parc Aviation Services Limited. . The contract was initially for three months but was extended for almost the entire year. As part of that contract the Applicant was required to travel and remain on site in several different countries to project manage various aircraft movement matters. He spent periods of time, in aggregate a long period of time, in Vietnam, China, Singapore and Malaysia. When he could visit the Philippines to see his partner, and Australia to see his children and elderly parents for brief periods, he did. His new partner spent periods of time with him in Singapore and Malaysia. In the 2014 year,^[42] The financial year that ended on 30 June 2014. he and his new partner thought it necessary to move to Malaysia for a while as they enjoyed the lifestyle and it was a central location for the Applicant's business and work commitments. They rented a condominium-style apartment there for a term.

28. The Applicant's plans to dwell permanently in the Philippines were prevented from realisation during the 2013 year by reason of his work commitments at that time.

29. The Applicant gave evidence that his trips to Australia in the 2013 year were visits to see his family as opposed to trips returning home. For example, when asked whether the purpose of one of his visits was to spend time

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ATC 8038

with his family at home over Christmas, the Applicant's evidence in response was:

Well I don't have a home in Australia so I literally came back to Australia, my ex-wife was [happy to have a break from] … the kids and I took them up to their grandparents for Christmas. We had a short break in Queensland, I dropped them back to Melbourne then I was off, off to Malaysia.

30. Included in the T documents were two brief statements, in the form of letters, one from each of the Applicant's former wife and current partner.

31. The relevant content of the letter from the Applicant's former wife is as follows:

This is to confirm that Alexander (name deleted) Handsley and myself … were separated in July 2011. From that time until present Alex has provided child support fortnightly or monthly as part of a private arrangement. I also confirm that I have had sole care of our two children (names deleted).

After our separation, Alex resided for a short time at a friends house in East Bentleigh before moving to… Southbank and then… East Melbourne until the time he left for overseas in July 2012.

When Alex returns to Australia to visit the children he always stays in short-term rented accommodation (Hotel or Apartment) for his stays.

32. The Applicant's current partner's statement was in the following terms:

… I can confirm that my partner (the Applicant) and I have been in a relationship since 2011 and that the relationship continues today. When Alex is not working he is here in the Philippines with me at home. Address being… Caloocan City. This has been the case since 1^stAugust 2012, apart from a period away in Malaysia where we stayed together in Shar Alam, Selangor. I also confirm I am a citizen of the Philippines.

33. Notwithstanding that the Commissioner did not seek to cross-examine the makers of these statements, the Commissioner contends that little weight should be given to them because they are inconsistent with other documentary evidence and the Applicant's circumstances.

34. It is possibly the case that what the Applicant's new partner says about the Applicant spending available time when not working with her at home in the Philippines is true, excluding of course return visits to Australia. What is also true though is that those visits were infrequent and not for extended periods of time, and as a couple they spent more time together in Vietnam and Malaysia than they did in her home country, the Philippines.

35. In circumstances where the makers of these statements are not called for cross-examination, the statements are in a sense tendered in evidence by the Commissioner through their inclusion in the T documents, and where the contents of the statement are very substantially consistent with other material in evidence, namely the Applicant's own evidence and documentary evidence associated with his short-term rented accommodation stays for his visits to see his children, subject to the gloss on the evidence that the Applicant's new partner gave concerning the time spent in the Philippines noted above, these statements should be given the weight that appropriately reflects what can be accepted as accurate statements as to relevant facts.

36. Also included in the T documents were copies of the Applicant's immigration cards completed on entry to and exit from Australia. Those cards reveal that he checked the Australian resident departing temporarily and business boxes on outgoing cards and Resident returning to Australia box on incoming cards. Little weight should be given to the fact that the Applicant has ticked these options because, as correctly submitted by the Commissioner, the passenger cards don't have a box to tick that says you are a citizen who is not a tax resident. Further, it is entirely conceivable that those completing such cards take the view that they are related to immigration and entry entitlement status as opposed to tax status, and that Australian citizens resident anywhere can be presumed to proceed on the basis that for immigration purposes and in an immigration sense they are not visitors or temporary entrants entering or departing Australia.

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ATC 8039

Further, the cards themselves indicate that the information sought on them:

… is required to administer immigration, customs, quarantine, statistical, health, wildlife and currency laws of Australia and its collection is authorised by legislation.

without any express mention of taxation laws or uses.

FACTS

37. The principles set out above need to be applied to the Applicant's personal circumstances, which the evidence reveals are as follows.

• (a) The Applicant was and is an Australian citizen, was born in Brunswick, Melbourne, Australia and had lived in Australia at least until shortly after 30 June 2012.
• (b) In July 2011, the Applicant separated from his then wife of 17 years.
• (c) In late 2011, the Applicant met and commenced a relationship with his new partner, a Philippine national and opened a joint bank account in the Philippines with her.
• (d) In the 2012 year^[43] The financial year that ended on 30 June 2012. the Applicant's partner travelled once to Australia for 33 days on a visitor's visa, and the Applicant visited his partner in the Philippines on a regular basis making 12 visits to the Philippines between July 2011 and June 2012. During that time he was making plans to be together with his new partner in the longer term in the Philippines.
• (e) In June 2012 the Applicant voluntarily accepted a redundancy from his Australian job as an aircraft mechanic for Qantas, a job he had held for 17 years due to the closure of the Melbourne Qantas maintenance facility. The Applicant had options to relocate to Brisbane or possibly accept a line maintenance role at another Qantas base. He decided to leave Australia to join his partner in Asia and build a new life.
• (f) On 10 July 2012, the Applicant travelled overseas to commence work under a 3-month contract with the Agency. The Applicant was required to perform aircraft mechanic services as required at various international locations. The contract with the Agency was later extended to an 11-month contract. Under that contract the Applicant was provided with accommodation which was short-term hotel accommodation or fully furnished serviced apartments.
• (g) During the 2013 year the Applicant:
  • (i) was an Australian citizen and held an Australian passport;
  • (ii) earned US$ amounts (payslips reveal US$128,790.41 for the period 11 July 2012 to 24 May 2013), had them exchanged in to A$ amounts and deposited into an Australian bank account (AUSTRAC records reveal deposits totalling A$124,876 from 9 August 2012 to 7 June 2013) that he used for, among other things, paying child support and school fees;
  • (iii) provided services in Vietnam, Turkey, China, Singapore and Malaysia and spent the year in multiple locations for short periods as set out in the Appendix;
  • (iv) was in Australia for 50 days - the first 10 days and then he returned to Australia for 15 days from 22 December to 2012 to 5 January 2013, 2 days on 20 February 2013, 4 days on 4 May 2014 and 19 days on 12 June 2013 when his initial 3-month contract with the Agency, which was later extended to 11 months, expired. The Applicant remained in Australia for a further 7 days into the 2014 year;
  • (v) travelled on short-term visas for work purposes to Malaysia, China, Vietnam, Singapore and Turkey. The longest time the Applicant appeared to stay at any one physical place was 45 days between 6 January 2013 to 19 February 2013 in a serviced apartment in Malaysia paid for by the Agency;
  • (vi) did not have visas allowing him to stay in any overseas country apart from China for more than 90 days. The Applicant's Chinese visa was issued for the period 4 July 2012 to 4 January 2013 although the Applicant spent little time in mainland China as set out in the

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    ATC 8040

    Appendix;
  • (vii) made three visits to the Philippines, in August 2012 for 2 days, in November 2012 for 2 days and in May 2013 for 17 days, which the Applicant describes as home visits and during which he was with his new partner;
  • (viii) spent significant periods with his new partner outside the Philippines: two visits to Vietnam totalling 43 days, one visit to Singapore for 22 days; and eight visits to Malaysia totalling 127 days (in visits of 45 days, 13 days, 8 days, 14 days, 7 days, 4 days, 19 days and 17 days) during which he worked as an on-site project manager for the lease and re-delivery maintenance checking for the Vietnam based airline;
  • (ix) with his former wife (in early 2013) sold what had been a family home to complete a divorce settlement;
  • (x) did not have any place in Australia that he could call his own or in respect of which he had any long-term entitlement to return to;
  • (xi) did not own a motor vehicle in Australia;
  • (xii) retained preserved superannuation fund balances and bank accounts in Australia which comprised his only Australian assets after the sale of the former family home;
  • (xiii) had children and parents who continued to reside in Australia;
  • (xiv) used his parent's address in a suburb north of Brisbane as his contact address in Australia;
  • (xv) maintained his AFL membership with a Collingwood supporter option. There were benefits that could be enjoyed by his children through this membership. The Applicant continued to maintain that membership post the 2013 year.
  • (xvi) had not applied for a long-term visa or residency status anywhere outside Australia. Nor had he done so before the 2013 year;
  • (xvii) did not have any visa allowing him to stay in the Philippines for more than 21 days in any single visit;
  • (xviii) had not joined any social clubs or sporting clubs in either Malaysia or the Philippines nor had he acquired a driving licence from a country outside of Australia; and
  • (xix) did not have ownership or leasehold or like interest in any dwelling outside Australia.
• (h) Each time the Applicant left or entered Australia he noted on his incoming and outgoing passenger cards that he was an Australian resident departing temporarily - for business and a Resident returning to Australia as applicable to the direction of travel as noted above.
• (i) The Applicant stated he subjectively intended to leave Australia permanently in July 2012 to conduct a life predominantly in the Philippines.
• (j) On travelling to Australia in June 2013 at the end of what became an 11-month contract with the Agency, the short-stay apartment in Malaysia was vacated. The apartment was not kept aside for the Applicant.
• (k) After 30 June 2013, the Applicant treated Malaysia, and not the Philippines, as his base until at least December 2013, despite giving evidence that he intended to settle in the Philippines.
• (l) In the 2014 year, the Applicant spent 341 days outside of Australia, in the 2015 year,^[44] The financial year that ended on 30 June 2015. he spent 344 days outside of Australia and in the 2016 year,^[45] The financial year that ended on 30 June 2016. he spent 320 days outside of Australia and that trend is likely to continue.

CONSIDERATION

Was the Applicant a resident of Australia as ordinarily understood?

38. Having regard to the Applicant's circumstances, there was presence for brief periods but few other relevant connections with Australia.

39. The Applicant's connection with Australia is properly characterised as historical.

40. He had family here; namely his parents and children for whom he did not have day-to-day care. An absent parent (working overseas) who:

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  ATC 8041

  (a) is in a continuing relationship as life partner with the other parent of children living in Australia;
• (b) provides for those children; and
• (c) returns to Australia when possible,

stands in a very different position to an absent parent who:

• (i) does not have day-to-day care of his/her children;
• (ii) is formally separated or divorced from the parent who does have day-to-day care of the children of the former partnership; and
• (iii) visits Australia from time to time to see her/his children for milestone events or holiday periods.

41. Depending on other factors associated with trips to Australia, the latter can be seen as visiting and the former can be seen as coming home.

42. The Applicant's visits to Australia during the 2013 year are properly seen as trips to visit people here rather than as trips returning to his home. He was in Australia for a brief period at the start of the year, visited for brief periods, matters of days only, to visit his children for their birthdays and at Christmas to visit his parents. He also returned to Australia late in the year between contract assignments to attend to some personal matters including renewal of his passport. None of these trips were a return to any place which he could call his own or his home: hotels for his children's' birthdays and the end of year visit, and his parents' residence for the Christmas trip.

43. The Applicant has residual investments here in the form of his preserved superannuation entitlements and had an interest in his former family home until it was sold as part of a divorce settlement. These can be seen as relics of the past and not indicators of ongoing association with Australia. Modern banking and investment facilities make international investment easier to effect in modern times. Accordingly, maintenance of investments in places other than where an individual resides has less significance in the weighing process than in times past.

44. The bank account that the Applicant used was a Commonwealth Australian currency bank account. The Applicant had ongoing commitments in Australia to pay school fees and family allowance payments so the bank account can be seen as an account maintained because it was convenient for some of the Applicant's purposes and should not be seen as decisive in determining whether the Applicant was a resident of Australia for the 2013 year.

45. The Applicant's life was outside Australia. He worked outside Australia, had formed a relationship with someone outside Australia, spent vastly more time out of Australia than inside it, and had formed an intention to make his life outside Australia on an indefinite basis. While he had not established permanent living arrangements in any particular location, he no longer lived in Australia. The Applicant had not maintained a continued and significant connection with Australia in the form of a home to come back to, cars or lifestyle assets and the like. In the 2013 year, the Applicant was in a state of transition. While he may not have not done enough to constitute having taken up residence in any particular location outside Australia, notionally applying the primary Australian test of residence to places outside Australia, he but had done enough to break his residence ties with Australia.

The residence by domicile test

46. Whether the Applicant had done enough to change his place of domicile is a different question.

47. A person retains his or her place of domicile for the time being until another is adopted, as noted above.

48. The Applicant had not abandoned his Australian identity and allegiance. Late in the 2013 year, the Applicant returned to Australia for a brief period to attend to some personal matters and renew his passport.

49. In circumstances where no new place of permanent residence had been taken up and no permanent living arrangements had been established in any place, a conclusion that a new place of domicile had been taken up cannot be reached.

50. Accordingly, it is necessary to consider whether the Applicant had established a permanent place of abode outside of Australia.

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ATC 8042

Had the Applicant established a permanent place of abode outside of Australia?

51. Whilst it is not necessary to have a single place of abode, and in some circumstances a person who has multiple temporary places of abode can be accepted as having established a place of permanent abode outside of Australia so long as residential relations within Australia have been discontinued, it is necessary for the multiple places of temporary abode to be within one country as noted above.

52. The analysis of the permanent place of abode outside of Australia concept in Harding discussed the outer limits of the statutory concept and whether Mr Harding came within it. As such that discussion becomes part of the ratio of the decision and binds the outcome here.

53. Here the Applicant has shifted between a number of countries. He did not have a permanent place of abode in any of them. Notwithstanding that the Applicant might well be regarded as falling within the concept of having permanently or indefinitely terminated Australian residence, which the Court in Harding recognised as being the intended target of the exclusion from the Australian tax net, he does not fall within the exclusionary test in para (a)(i) of the definition of resident or resident of Australia.

54. Accordingly, the Applicant was a resident of Australia by reason of para (a)(i) of the definition in s 6(1) of the 1936 Assessment Act but not under the primary test and the application must be dismissed.

Resident conclusion

55. For the foregoing reasons, the Applicant was a resident within the meaning of s 6(1) of the 1936 Assessment Act for the 2013 year. That conclusion is the product of legal principles under which a person in transition between places of residence, having abandoned one but not yet done enough to take up another, is deemed to have retained his or her Australian domicile and unless a permanent place of abode outside Australia has been established, the Australian domicile will dictate Australian residence for the purposes of the Assessment Acts.

56. This conclusion may appear to be a rejection of the Applicant's personal evidence that he intended to leave Australia indefinitely. It should not be so seen. As observed by Fisher J in Applegate:

The [definition of resident] is difficult to apply particularly if the emphasis is on subjective intention. It is made doubly difficult by the indiscriminate use of the differing concepts of domicile, residence, permanent place of abode and usual place of abode. Moreover, the concept of permanence is used in a context in which it does not, and could not, bear its primary meaning of "everlasting". It would amount to a contradiction in terms to suggest that an independent person could be domiciled in Australia but with his permanent residence outside Australia, if permanent bears its ordinary meaning.^[46] Federal Commissioner of Taxation v Applegate (1979) 27 ALR 114 at 127 per Fisher J. See also Federal Commissioner of Taxation v Applegate (1979) 27 ALR 114 at 117 per Franki J.

DECISION

57. For the above reasons, the Tribunal affirms the decision under review.

Appendix
Country	City	Arrival date	Departure date	# Days in 2013 year	# Visa days	Purpose of visit	Accommodation	With Partner
Australia		15/06/2012	10/07/2012	10	N/A			No
Vietnam	Hochiminh	10/07/2012	11/08/2012	32	90	Work	Hotel	Yes
Philippines	Caloocan	11/08/2012	13/08/2012	2	21	Home visit	Family accommodation	Yes
Vietnam	Hochiminh	13/08/2012	15/08/2012	2	90	Work	Hotel	No ATC 8043
Turkey	Istanbul	16/08/2012	18/08/2012	3		Work	Hotel	No
Vietnam	Hochiminh	19/08/2012	29/08/2012	11	90	Work	Hotel	Yes
China	Shanghai	29/08/2012	19/09/2012	21	185	Work	Hotel	No
Singapore	Singapore	19/09/2012	11/10/2012	22	90	Work	Village residence	Yes
China	Shanghai	12/10/2012	24/11/2012	44	185	Work	Hotel	No
Philippines	Caloocan	24/11/2012	26/11/2012	2	21	Home visit	Family accommodation	Yes
China	Shanghai	26/11/2012	19/12/2012	23	185	Work	Hotel	No
Vietnam	Hochiminh	19/12/2012	21/12/2012	2	90	Work	Hotel	No
Australia	Brisbane	22/12/2012	5/01/2013	15	N/A	Christmas break with parents	Parent's house	No
Singapore	Singapore	5/01/2013	6/01/2013	0	90	In transit	-	No
Malaysia	Kuala Lumpur	6/01/2013	19/02/2013	45	90	Work	Serviced Apartment	Yes
Singapore	Singapore	19/02/2013	19/02/2013	0	90	In transit	-	No
Australia	Melbourne	20/02/2013	21/02/2013	2	N/A	Visit daughter for her birthday	Hotel	No
Singapore	Singapore	21/02/2013	23/02/2013	2	90	In transit	Hotel	No
Malaysia	Kuala Lumpur	23/02/2013	8/03/2013	13	90	Work	Serviced Apartment	Yes
Singapore	Singapore	8/03/2013	8/03/2013	0	90	Work	Day trip only	No
Malaysia	Kuala Lumpur	8/03/2013	16/03/2013	8	90	Work	Serviced Apartment	Yes
Singapore	Singapore	16/03/2013	17/03/2013	0	90	Work	Hotel	No
Malaysia	Kuala Lumpur	17/03/2013	30/03/2013	14	90	Work	Serviced Apartment	Yes
Singapore	Singapore	30/03/2013	31/03/2013		90	Work	Hotel	No
Malaysia	Kuala	31/03/2013	6/04/2013	7	90	Work	Serviced Apartment	Yes
Vietnam	Hochiminh	6/04/2013	8/04/2013	2	90	Work	Hotel	No
Malaysia	Kuala	8/04/2013	12/04/2013	4	90	Work	Serviced Apartment	Yes
Vietnam	Hochiminh	12/04/2013	14/04/2013	2	90	Work	Hotel	No
Malaysia	Kuala Lumpur	14/04/2013	3/05/2013	19	90	Work	Serviced Apartment	Yes
Singapore	Singapore	3/05/2013	3/05/2013	0	90	In transit		No
Australia	Melbourne	4/05/2013	7/05/2013	4	N/A	Visit son for his birthday	Hotel	No
Singapore	Singapore	7/05/2013	8/05/2013	1	90	In transit	Hotel	No
Malaysia	Kuala	8/05/2013	25/05/2013	17	90	Work	Serviced Apartment	Yes
Philippines	Caloocan	25/05/2013	11/06/2013	17	21	Home visit	Family accommodation	Yes
Australia	Melbourne	12/06/2013	6/07/2013	19	N/A	Visit children. Personal matters and passport renewal	Rented accommodation. Southbank, VIC	No