Coelho & Ors v FC of T

Members:
L Hespe SM

Tribunal:
Administrative Appeals Tribunal, Sydney

MEDIA NEUTRAL CITATION: [2020] AATA 2474

Decision date: 27 June 2020

L Hespe (Senior Member)

1. These four applications were heard together. In each case, the year of income in dispute was the year ended 30 June 2017. Each applicant was assessed for income tax on the basis they were not residents of Australia. Each applicant objected, claiming they were residents of Australia. The Commissioner disallowed each objection and each applicant sought review of the Commissioner's decision disallowing their respective objection.

2. Each applicant contends that their assessment was excessive. Their objections did not contest the amount of their taxable income. Rather, and as explained further below, their objections concerned the application of the Income Tax Rates Act 1986 (Cth) in determining the amount of tax payable on that taxable income.

Statutory Context - Income Tax Rates Act 1986 (Cth)

3. The rates of income tax were provided for in the Income Tax Rates Act 1986 (Cth). That Act was amended in respect of income derived on or after 1 January 2017 to provide for an additional class of taxable income called "working holidaymaker income".

4. Relevantly, in the year ended 30 June 2017, clause 1 of Part 1 of Schedule 7 provided:

Subject to clauses 2, 3 and 4, the rates of tax on the taxable income of a resident taxpayer are as follows:

….

(b) for each part of the ordinary taxable income specified in the table, the rate applicable under the table:

Tax rates for resident taxpayers
Item For the part of the ordinary taxable income of the taxpayer that: The rate is:
1 exceeds the tax-free threshold but does not exceed $37,000 19%
2 exceeds $37,000 but does not exceed $87,000 32.5%
3 exceeds $87,000 but does not exceed $180,000 37%
4 exceeds $180,000 45%

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5. Clause 4 of Part 1 of Schedule 7 applied to assessable income derived on or after 1 January 2017. It provided:

6. Working holiday maker was defined in s 3A(1)(a) relevantly as an individual who holds at that time a Subclass 417 (Working Holiday Visa) or Subclass 462 (Work and Holiday) visa.

7. Working holiday taxable income was defined in subsections 3A(2) and (3). It was generally an individual's assessable income for the year derived from sources in Australia whilst the individual was a working holiday maker but did not include any "superannuation remainder" or "employment termination remainder".

8. The rates for non-resident taxpayers were provided for in Part II of Schedule 7. Clause 1(b) provided:

Subject to clauses 2, 3 and 4, the rates of tax on the taxable income of a non-resident taxpayer are as follows:

….

(b) for each part of the ordinary taxable income specified in the table, the rate applicable under the table:

Tax rates for non-resident taxpayers
Item For the part of the ordinary taxable income of the taxpayer that: The rate is:
1 does not exceed $87,000 The second resident personal tax rate
2 exceeds $87,000 but does not exceed $180,000 37%
3 exceeds $180,000 45%

9. Clause 4 of Part II of Schedule 7 applied to assessable income derived on or after 1 January 2017. It provided:

10. From 1 January 2017, the rates of tax on a taxpayer's working holiday taxable

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income were set out in Part III of Schedule 7 in the following table:

Tax rates for working holiday makers
Item For the part of the taxpayer's working holiday taxable income that: The rate is:
1 does not exceed $37,000 15%
2 exceeds $37,000 but does not exceed $87,000 32.5%
3 exceeds $87,000 but does not exceed $180,000 37%
4 exceeds $180,000 45%

11. Thus, from 1 January 2017, working holiday taxable income was to be taxed at the same rate, regardless of whether a taxpayer was a resident or not. Further, any working holiday taxable income would be taken into account first in determining the rate to be applied to any other taxable income derived by that taxpayer.

12. For the year ended 30 June 2017, this meant that, in so far as these applicants were concerned, the issue of residency only affected the rate of tax that applied to income derived prior to 1 January 2017.

13. For the purposes of the Income Tax Rates Act 1986 (Cth) (which incorporates and is to be read as one with the Income Tax Assessment Act 1936 (Cth)), the definition of "resident" or "resident of Australia" is found in s 6(1) of the Income Tax Assessment Act 1936 (Cth). Relevantly:

resident or resident of Australia means:

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

…..

(ii) who has actually been in Australia, continuously or intermittently, during more than one half of the year of income, unless the Commissioner is satisfied that the person's usual place of abode is outside Australia and that the person does not intend to take up residence in Australia; …

Issue

14. The essence of each applicant's claim was that in the year ended 30 June 2017, they were residents of Australia for tax purposes under paragraph (a)(ii) of the definition of "resident". They make the contention that, as they had been present in Australia for more than half the income year, their usual place of abode was inside Australia and they had the intention to take up residence in Australia as "they have been living and working in Australia for one-and-a-half years. Mr. Daubaras (as representative for each of the applicants) accepted at the hearing that the issue before the Tribunal was confined to the application of paragraph (a)(ii) of the definition and that "we are not looking at the issue of whether the client resides under the ordinary concept test".

Ms. Coelho

Facts

15. Ms. Coelho gave evidence in the form of a written statement and oral testimony.

16. She was born in Brazil in 1989. She is a dual national of Brazil and Italy.

17. She was raised in Brazil and lived with her mother and stepfather until July 2013, when she moved to an apartment which she rented. Upon moving, she purchased household items, such as a microwave and washing machine

18. In Brazil, she worked as an assistant accountant.

19. At some point prior to March 2015, Ms. Coelho decided she did not want to live in Brazil. She also decided she would like to travel to Australia, however did not have enough money at that time for a student visa.

20. In 2015, Ms. Coelho decided to move to Italy in order to gain an Italian passport. Travelling on an Italian passport would enable her to obtain an Australian Working Holiday Visa, which would allow her to stay in Australia for up to 2 years (subject to satisfying certain conditions) and was cheaper than a student visa. She gave up her lease in Brazil, sold her household items and, in March 2015, moved to stay with her parents to spend time with them prior to flying to Italy in early April 2015.

21. Ms. Coelho arrived in Italy on 8 April 2015 and commenced the process to obtain an

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Italian passport, which was issued on 3 September 2015. She rented a furnished apartment in Basseno Del Grappa which she shared with others.

22. On 4 September 2015, Ms. Coelho moved to Spain to stay with her sister. Ms. Coelho's sister rented a three-bedroom apartment in Barcelona and lived with her boyfriend. Ms. Coelho paid rent to her sister to stay in one of the bedrooms. She did not buy any furniture or sign a lease. In Barcelona, Ms. Coelho worked as a waitress to save money in order to travel to Australia on a working holiday visa. Ms. Coelho said she loved living with her sister and described Barcelona as her home at the time she left it.

23. On 4 April 2016, Ms. Coelho commenced an application for Australian Working-Holiday (subclass 417) visa. As part of applying for that visa, Ms. Coelho:

24. Ms. Coelho's evidence was that she required the assistance of her sister in completing the form as English was not her first language.

25. Her oral testimony was that she did not consider her time in Australia to be a "holiday" because she needed to work. She did not consider herself to be "on holidays" whilst in Australia because financially she could not remain in Australia without having a job to support herself whilst she was here.

26. Ms. Coelho was granted an Australian Working-Holiday (subclass 417) visa on 6 May 2016. It was a condition of her visa that she was not to work for more than 6 months for any one employer. Her visa entitled her to stay in Australia for 12 months unless she qualified for a second (and final) working holiday visa. To qualify for a second working holiday visa, the applicant must have undertaken work for a minimum of 3 months in a specified field in a designated area of regional Australia on a first Working Holiday Visa. Specified fields of work included the harvesting and/or packing of fruit and vegetable crops.

27. On 6 November 2016, Ms. Coelho departed Barcelona and travelled to Australia, arriving on 7 November 2016. She did not leave any of her possessions with her sister.

28. On her incoming passenger card (which was in Spanish), Ms. Coelho identified herself as a visitor or "residente temporal" and did not identify herself as someone permanently immigrating to Australia. She also identified herself as a resident of Spain because that was where she had been living prior to her arrival in Australia.

29. Ms. Coelho was in Australia for 236 days during the year ended 30 June 2017.

30. During her time in Australia in the year ended 30 June 2017, she stayed in the following places:

Period Location Nature of Accommodation
7 - 26 November 2016 Narrabeen Staying with friends
26 November - 9 January 2017 Collaroy Flat shared with Brazilian flatmates
9 January - 23 May 2017 Manly Backpackers hostel
23 May - 25 June 2017 Bundaberg
Noosa
Sunshine Coast		 Hostel
With friends
Hostel
25 June - 24 July 2017 Brisbane Hostel

31.

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During her time in Australia in the year ended 30 June 2017, she worked in the following roles:
Period Employer Role Location
17 November 2016 - 22 February 2017 Goose's T-shirts Aust Pty Ltd Printing T-shirts Brookvale NSW
February - May 2017 Mop Industries Cleaner (subcontractor)  
24 -26 May 2017 W&L Family Farms. Pty Ltd Farm hand Bundaberg, Qld
11 - 12 June 2017 Twistberry Pty Ltd Farm hand Sunshine Coast Qld
14 June -17 June 2017 Mandramba Harvest Pty Ltd Farm hand Yandina Qld

32. Ms. Coelho's evidence was that following her arrival in Australia on 6 November 2016, she stayed with friends in Narrabeen whilst she looked for work and a place to rent. Within 3 weeks, through an advertisement she saw online on Gumtree, she moved to a furnished house in nearby Collaroy which she shared with 2 others, one from Brazil and one from Czech Republic. At the time she moved to this house on 26 November 2016, she had commenced work in nearby Brookvale, printing T shirts. Ms. Coelho did not sign a lease but paid rent on weekly basis. Ms. Coelho did not like one of her housemates and did not like the rules her housemates had imposed in relation to the house, so she moved out about 6 weeks later.

33. Upon moving out in early January 2017, Ms. Coelho decided to move to a backpacker's hostel in Manly to improve her English and to meet new people. She stayed in that hostel for about four and half months to May 2017. She had her own bedroom at the hostel, but shared kitchen and bathroom facilities. Ms. Coelho bought some kitchen utensils for her own use in the shared kitchen. Ms. Coelho enjoyed her time at the hostel because she had her own room to sleep whilst also being able to mix with different people.

34. Ms. Coelho finished her job in Brookvale in February 2017, after the Christmas and post-Christmas demand for T shirts had fallen off. Ms. Coelho took work as an independent contractor cleaner with a company called Mop Industries, cleaning the common areas in residential buildings. She was paid an hourly rate and worked between 10 and 15 hours a week. She finished in this role in May 2017.

35. When she moved to the Manly hostel, Ms. Coelho was aware she would at some point need to travel to look for farm work in order to qualify for an extension to her visa. Ms. Coelho gave a week's notice before leaving the hostel in May 2017 to move to Queensland to look for farm work in Bundaberg.

36. Ms. Coelho stayed in a hostel in Bundaberg and found farm work, initially in Bundaberg. She worked there for 2 days, packing vegetables however found the work very hard. She moved to Noosa and stayed with friends for a week whilst trying to find farm work on the Sunshine Coast as the strawberry picking season had just commenced. She secured farm work in the Sunshine Coast picking strawberries for two days and staying in a nearby hostel but did not enjoy the work. She tried work picking passionfruit for another farm for three days. Her evidence was that in each of these instances, the farm would arrange to pick up young people staying at the hostel, like herself, who had come from around the world, who would perform tasks at the farm generally in order to qualify for an extension to their visas.

37. On 25 June 2017 Ms. Coelho moved to Brisbane. At that time, she had not completed sufficient farm work to qualify for an extension

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to her visa. Again, she stayed in a hostel whilst looking for more farm work.

Events subsequent to the 2017 year of income

38. Ms. Coelho secured further farm work in Jimboomba in July 2017, assisting a family who bred dogs. Rather than receiving a wage in return for her services, Ms. Coelho received food and accommodation in the family's home.

39. Ms. Coelho filed her income tax return for the year ended 30 June 2017 on 12 July 2017 through an on-line system called "e-tax". She omitted to disclose her income from Mop Industries, in the apparent belief that she had discharged her income tax obligations when she had provided Mop Industries with her ABN.

40. Ms. Coelho returned to New South Wales in October 2017 to stay with a friend in Kingscliff.

41. On about 30 October 2017 Ms. Coelho left Australia on a return ticket and visited her parents in Brazil for her grandmother's 90th birthday. Her first Working Holiday visa was due to expire on 7 November 2017. Whilst in Brazil, she applied for a second working holiday visa, which was granted on 7 December 2017. She returned to Australia on 14 December 2017. Upon her return to Australia she marked herself on her incoming passenger card (English version) as a "visitor or temporary entrant." According to Ms. Coelho, and the Tribunal accepts, this was because her visa permitted her to stay for another 12 months. Ms. Coelho also identified her country of residence as Spain as according to her, this was the last country she lived in before arriving in Australia.

42. In May 2018 she moved in with her Australian boyfriend with whom she was living at the time of hearing.

43. Ms. Coelho's evidence was that at the time she came to Australia in November 2016 she did not intend to return to live in Brazil. In the disclosures she made on her visa application and incoming passenger card she described herself as a resident of Spain. Her evidence was that her main source of family support was her sister in Spain. Her oral evidence was that "when I go there [to Spain] for sure, I will live for a moment [in my sister's apartment] and then, we need to figure out what is the best option."

44. In her income tax return for the year ended 30 June 2017, Ms. Coelho disclosed that she was an Australian resident for income tax purposes. She did not disclose income received from Mop Industries.

45. As part of the processing of her return, the Commissioner requested further information from Ms. Coelho, including responding to a "residency questionnaire". As part of her responses, Ms. Coelho stated that:

46. By notice of assessment issued on 30 August 2017, Ms. Coelho was assessed on taxable income of $11,480. The tax payable was calculated on the basis she was a non-resident for income tax purposes.

47.

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By notice of amended assessment issued on 17 October 2017, Ms. Coelho's taxable income was reduced to $11,180.

48. By notice of objection dated 7 December 2017, Ms. Coelho objected "against the assessment of income tax payable … for the year of income ending 30 June 2017 ("the year of income") issued to by the Notice of Amended Assessment dated 17 October 2017." Briefly, the grounds of objection were that she had been incorrectly assessed because she was a resident for income tax purposes.

49. By notice dated 11 January 2018, the Respondent disallowed the objection. The reasons for decision commenced by stating "These are our reasons for decisions for [sic] your objection received on 6 December 2017 in relation to your income tax assessment for the year ended 30 June 2017 (reference number 23110336293972). The reference number cited was the reference number of the original assessment dated 30 August 2017.

Mr. Renusz

50. The evidence filed on behalf of Mr. Renusz consisted of a written witness statement. Mr. Renusz did not give oral testimony, despite being requested by the Commissioner for cross-examination. The Commissioner did not object to the tendering of the witness statement, on the basis that the statement contained largely undisputed objective facts. Where the statements made in the witness statement did not relate to objective facts, the Tribunal has attached little weight to those statements. This is particularly relevant to assertions made in the witness statement about Mr. Renusz's intentions or state of mind. As Justice Derrington warned in Harding[1] Harding v Commissioner of Taxation [2018] FCA 837 at [43] , statements about intention, particularly when they are not contemporaneous, are to be treated with caution. That warning is amplified when the statement of intention cannot be tested.

51. Mr. Renusz was born in 1988 in Canada. He held a Canadian passport and was a Canadian citizen.

52. He lived in the family home in Kitchener, Ontario Canada until December 2006 when he moved to Hamilton, Ontario to study journalism at college.

53. After graduating from college in 2008, Mr. Renusz moved to Ottawa, Ontario where he studied political science at Carleton University and worked part time at an industrial supply company.

54. After graduating in 2012 with a Bachelor of Arts, Mr. Renusz returned to Hamilton and worked full time with the industrial supply company as a sales associate. He continued to hold that position until he departed Canada in 2016.

55. On 7 March 2016 Mr. Renusz was granted an Australian working holiday visa (subclass 417).

56. Since leaving the family home in 2006, Mr. Renusz acquired some basic household items such as some furniture, electronics, food and toiletries. It appears Mr. Renusz sold his furniture prior to coming to Australia but left his car in Canada.

57. In September 2016 Mr. Renusz travelled to Australia on a working holiday visa. He chose to come to Australia because he wanted to experience a warmer climate. On his incoming passenger card, he identified his country of residence as Canada and that he was entering as a visitor or temporary entrant with an intended length of stay of 1 year.

58. From September 2016 to the end of October 2016, Mr. Renusz stayed with a second cousin in Kings Park New South Wales whilst he looked for work and for accommodation closer to the city.

59. In November 2016 Mr. Renusz moved to a share house in Enmore, New South Wales. At this time, he began working full time for a company as an Inbound Sales Specialist.

60. To qualify for a further 12 month working holiday visa, Mr. Renusz undertook farm work. He moved from the shared house in Enmore in April 2017 to Brisbane, Queensland.

61. In May 2017 Mr. Renusz moved to a backpacker's working hostel in Innisfail. The hostel arranged employment for Mr. Renusz at a banana farm. He completed his required regional work in August 2017.

Events Subsequent to 30 June 2017

62. Mr. Renusz obtained a second Working Holiday Visa following the expiry of his first visa in August 2017.

63. In September 2017 Mr. Renusz moved to Dulwich Hill in New South Wales where he

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shared a two-bedroom flat with another person. Around this time, Mr. Renusz obtained employment as customer service officer at Credit Corp Financial Services.

64. In September 2017 Mr. Renusz began a "long-distance relationship" with an Australian girl he had met when he was in Brisbane, she made several visits to Mr. Renusz.

65. Mr. Renusz finished his employment with Credit Corp Financial Services in March 2018 and travelled around Singapore, Malaysia, Cambodia and Thailand.

66. Mr. Renusz returned to Australia in April 2018 and moved to Brisbane with his Australian girlfriend. As at June 2018, Mr. Renusz was still living with his girlfriend in a committed relationship.

67. Mr. Renusz lodged his income tax return for the year of income ended 30 June 2017 on the basis that he was resident.

68. Prior to processing that return, the Australian Taxation office notified Mr. Renusz that it did not believe Mr. Renusz was a resident and requested further information. Mr. Renusz did not provide the information requested and his assessment was issued on the basis that he was not a resident for income tax purposes in the year ended 30 June 2017.

69. Mr. Renusz objected against that assessment.

Mr. Moyano

70. Mr. Moyano gave written testimony in the form of a witness statement together with oral evidence.

71. Mr. Moyano was born in 1990 in Chile. He was a Chilean national and had a Chilean passport.

72. Prior to coming to Australia, he lived with his parents in their house in Santiago, Chile.

73. He applied for and obtained a working holiday visa 462 on 2 August 2016. Mr. Moyano expected to work to support himself whilst in Australia and to enable him to have money to travel on short trips on days when he was not working.

74. He travelled to Australia arriving on 5 October 2016. Upon leaving for Australia, he cancelled his mobile phone contract in Chile, but other than the clothes and mobile phone that he brought with him to Australia, he left his remaining possessions at his parent's home (including clothes, his bed, television and laptop).

75. Upon his incoming passenger card, he stated that his intention was to stay in Australia for 12 months. He identified his usual occupation as an engineer and his country of residence at Chile. At the time he arrived in Australia, there was no option for Chilean citizens to apply for a Work and Holiday visa for a second year.

76. After his arrival in Australia, Mr. Moyano stayed in the Green House Hostel in Melbourne for 3 weeks. At the hostel he slept in a room with four beds. He shared the room with friends and paid for the room on weekly basis.

77. On 20 October 2016, Mr. Moyano moved to a furnished two bedroom flat in Melbourne which he shared with four other friends, one of whom had leased the flat until February 2017. He paid to stay in the flat on a weekly basis.

78. In November 2016, whilst staying in Melbourne, Mr. Moyano commenced work as a labourer, cleaning construction sites. He worked as a labourer between 14 November 2016 and about 15 March 2017, aside from the Christmas period between 29 December 2016 and 8 January 2017.

79. Sometime after December 2016, Mr. Moyano became aware that it was possible for him to apply for a second Work and Holiday Visa for a second year if he completed rural work.

80. In March 2017 Mr. Moyano ceased his work as labourer and moved (with his belongings) to Queensland to look for rural farm work in order to qualify for an extension to his visa. He stayed at a caravan park in what he described as "a kind of small flat with furniture inside, with bathroom, with kitchen" in Mareeba Queensland between the end of March 2017 and 23 August 2017. He shared that accommodation on a week to week basis with his then partner. Whilst in Queensland he undertook farm work.

81. Mr. Moyano worked his first rural job in at a farm in Dimbulah for about a week. He left the farm because he disliked the owner.

82.

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In May 2017, he then found another farm job at a banana and avocado farm in Mareeba, where he worked until August 2017.

Events subsequent to year ended 30 June 2017

83. In August 2017, Mr. Moyano returned to Chile and stayed with his parents. His evidence was that:

Counsel for the Commissioner: It's fair to say it's because while you were in Australia travelling your parents' home in Chile is home?

Mr. Moyano: -- I don't know. I call like that to where are the people that I really want, so yes, you can call home to that place. I don't know if you are talking to me about something, a physical place, because I don't have like a physical place that is own, or I owner of that place in Chile. 20 I don't have a house in Chile, like, that is under my name. If you are asking to me where I can sleep in Chile, yes, maybe it's my parents' house. I have a friend where I can sleep maybe as well. But if you are asking to me that like, concept, yes. Home is where I live with my parents. Or that means that for me, at least.

84. Whilst in Chile, Mr. Moyano applied for a Work and Holiday Visa for a second year. Mr. Moyano returned to Australia on 20 October 2017. Upon his return, Mr. Moyano noted on his incoming passenger card that he intended to stay in Australia for 12 months. This was consistent with the terms. of his visa. He identified his occupation as agronomist and his country of residence as Chile.

85. On 21 October 2017 Mr. Moyano travelled to Longford Tasmania where he shared a house with a flatmate until 23 December 2017. Mr. Moyano had arranged a farm job in Tasmania after applying for his second Work and Holiday visa.

86. On 25 December 2017 Mr. Moyano moved to Plenty Tasmania, where he again shared a house with a flatmate, where he stayed until 1st June 2018.

87. Whilst in Tasmania Mr. Moyano engaged in farm work.

88. Mr. Moyano then moved to Jindabyne New South Wales where he stayed in a four-bedroom furnished apartment which he shared with four others. Whilst in Jindabyne Mr. Moyano worked at the Mid Station Perisher Centre in Perisher Valley.

89. Mr. Moyano's evidence was that if he had not travelled to Australia, he would still be living with his parents in Chile.

90. Mr. Moyano lodged his income tax return for the income year ended 30 June 2017 on the basis he was a resident. Prior to processing his return, the Australian Taxation Office notified Mr. Moyano that it believed Mr. Moyano was not a resident and requested further information. Mr. Moyano provided additional information. Upon further review, the Australian Taxation Office determined Mr. Moyano was not resident for the year ended 30 June 2017 and issued a notice of assessment on that basis. Mr. Moyano objected against that notice of assessment.

Mr. Mundaca

91. The evidence filed on behalf of Mr. Mundaca consisted of a written witness statement. Mr. Mundaca did not give oral testimony.

92. The reason given for Mr. Mundaca's non-attendance (whether in person, by phone or by video) was the view of his representative Mr. Daubaras being that ""I thought that having two applicants here, two applicants out of the country, would give a good balance"; the reason is misconceived. It was explained to Mr. Daubaras that Mr. Mundaca bears the onus of demonstrating his assessment is excessive. His non-attendance meant Mr. Mundaca was not available for cross-examination and as such, his testimony could not be tested affecting the weight which could be given to his witness statement, particularly in the absence of corroborating evidence.

93. The following findings are made on the basis of statements of objective fact set out in the written statement.

94. Mr. Mundaca was born in 1988 in Santiago, Chile. He was a Chilean citizen and travelled on a Chilean passport.

95. He lived with his parents in Chile and worked as a civil engineer.

96. Mr. Mundaca applied for and was granted an Australian Work and Holiday visa (Subclass 462) in July 2016. He wanted to

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travel to Australia to improve his English and experience a better lifestyle than what he was accustomed to in Chile.

97. Mr. Mundaca travelled to Australia on 23 September 2016. Prior to departing for Australia, Mr. Mundaca cancelled his mobile phone contract and gym membership, resigned from his job and sold his car and television. He kept a bank account in Chile with a $6000 balance.

98. After arriving in Australia Mr. Mundaca stayed in a hostel in Sydney until 4 October 2016. On 4 October 2016, he moved to an apartment that he shared with his partner and two other flatmates.

99. Whilst in Sydney Mr. Mundaca worked as a warehouse worker; he opened a bank account in Australia.

100. On 27 February 2017 Mr. Mundaca moved to Queensland where he stayed in a caravan park with his partner until 9 September 2017. Whilst in Queensland Mr. Mundaca undertook farm work.

101. Between 9 September and 16 October 2017, Mr. Mundaca took a holiday to Cairns, Bali and New Zealand.

102. On 16 October 2017 Mr. Mundaca was granted a second Work and Holiday visa.

103. On 16 October 2017 Mr. Mundaca returned to Australia and stayed in a flat in Brunswick which he secured through Airbnb.

104. On 26 October 2017 Mr. Mundaca moved to accommodation in Mitcham which he secured through Airbnb, where he stayed until 3 November 2017

105. From 4 November 2017 to 23 December 2017 Mr. Mundaca stayed with his partner in a caravan park in Longford, Tasmania. It is entirely unclear whether Mr. Mundaca met his partner in Australia or came to Australia with his partner or whether his partner followed him to Australia.

106. From 26 December 2017 to 3 March 2018 Mr. Mundaca and his partner stayed in a share house in Tasmania.

107. Whilst in Tasmania Mr. Mundaca undertook farm work

108. On 6 April 2018 Mr. Mundaca and his partner moved to Mareeba Queensland.

109. Whilst in Australia Mr. Mundaca owned 2cars (2003 Hyundai Santa Fe and a Holden Commodore).

110. On 16 June 2018 Mr. Mundaca departed Australia and has not returned.

111. Mr. Mundaca lodged his income tax return for the year ended 30 June 2017 on the basis he was a resident of Australia. Prior to processing that return, the Australian Taxation Office notified Mr. Mundaca that it believed he was not a resident for income tax purposes in that year of income and requested further information. Mr. Mundaca did not provide the requested information. Mr. Mundaca was issued with a notice of assessment, assessing him to tax on the basis that he was not a resident of Australia. Mr. Mundaca objected against that assessment.

Applicants' contentions

112. Each applicant contended they were resident in Australia by reason of paragraph (a)(ii) of the definition of resident in s 6(1) of the Income Tax Assessment Act1936 (Cth).

113. It was not disputed that each applicant was physically present in Australia for more than 183 days during the year ended 30 June 2017. As such, each applicant will be resident of Australia unless the exclusion in paragraph (a)(ii) applied. The exclusion will apply if the Tribunal is satisfied that the applicant:

114. On behalf of each applicant, it was contended that in the year of income ended 30 June 2017 each applicant had their usual place of abode in Australia because they were intentionally physically present in Australia. They ate, performed their daily activities and slept in accommodation in Australia. Because they were working, they were not behaving like tourists on holiday whilst they were in Australia. Furthermore, because they were intentionally eating, sleeping and continuing their "normal behaviour" in Australia, they intended to take up residence in Australia. The applicants each submitted that the intention to take up residence required no more than an intention to move into a place of

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accommodation and start living there rather than an intention to take up citizenship or obtain a permanent visa.

115. There are a number of difficulties with the submissions made on behalf of the applicants.

116. First, whilst it is true that each applicant was physically present in Australia for more than one half of the year in the year of income ended 30 June 2017 and indeed, they intended to be so present, neither of these matters (either alone or together) determine the issue of whether their usual place of abode was outside of Australia. Under subparagraph (a)(ii) an individual can be physically present in Australia for more than 183 days in a year and nonetheless have their usual place of abode outside of Australia. The statutory language recognizes that a person may have their "usual place of abode" in a place even though in any given year, they may not be physically present in that place for more than 50% of the year. The contention made on behalf of the applicants would render the first limb of the exclusion in paragraph (a)(ii) otiose because on that construction, a person physically present in Australia for 183 days could not have their usual place of abode outside of Australia. Such a construction would not accord meaning and effect to the words of the statute as required:
Project Blue Sky v ABA (1998) 194 CLR 355 at [71]. The Tribunal does not accept the contention made on behalf of each applicant that a person's usual place of abode is determined by whether a person is physically present at that place during the relevant year; a place of abode does not cease to be a usual place of abode because a taxpayer is away from it for a time. As has been recognised, few people are always at home.[2] Hafza v Director-General of Social Security [1985] FCA 164 ; (1985) 6 FCR 444 per Wilcox J at 449-450.

117. Second, on their application for review before the Tribunal, each applicant has the burden of proving that their assessment is excessive and what that assessment should have been: s 14ZZK of the Taxation Administration Act 1953 (Cth). Each applicant has been assessed on the basis the Commissioner was satisfied that their usual place of abode was outside of Australia. The question is not whether the Tribunal is satisfied that each applicant had their usual place of abode inside Australia but whether it is satisfied that, each applicant did not have their usual place of abode outside of Australia, having regard to the burden of proof.[3] Commissioner of Taxation v Executors of the Estate of Subrahmanyam (2001) 116 FCR 180 at [31] . The difference is, even if the Tribunal is satisfied that each applicant did not have their usual place of abode inside Australia they will nonetheless be a resident of Australia unless the Tribunal is satisfied they had their usual place of abode outside of Australia. In the present case, this means that having been assessed on the basis that the Commissioner was satisfied the taxpayer had their usual place of abode outside of Australia, the taxpayer bears the onus of showing that the Tribunal ought to be satisfied, on the balance of probabilities, their usual place of abode was not outside of Australia.

118. Third, following the decision of the Full Court in Harding,[4] Harding v Commissioner of Taxation (2019) 269 FCR 311 at [40] . properly construed, a "place of abode", in the context of the definition of resident in s 6(1), does not refer to an identified house or flat or other dwelling but town or country where a person resides. A usual place of abode is determined by identifying the place, being the town or country, which is a person's home or residential base. It is the place where ordinarily they may be expected to dwell "in the ordinary course of events" or habit of life, having regard to the totality of a person's life and circumstances.[5] Reid v Inland Revenue Commissioners 1926 S.L.T. 365 per Lord President Clyde. The word "usual" in this context stands in contrast to a place of abode that is casual or temporary.[6] Lysaght v Inland Revenue Commissioners [1928] AC 234 , though in the context of the phrase “ordinarily resident”.

119. Fourthly, the exception to a person being a resident provided for in s 6(a)(ii) does not use the term "tourist" or "on holiday" but "usual place of abode outside of Australia". To demonstrate that a person did not behave like a "tourist" whilst in Australia (whatever that might mean) does not address the issue of whether the taxpayer had their usual place of abode outside of Australia. The Full Court in Harding at [39] said:

…what is described in the Notes as the third test in subpara (ii) is, initially, concerned with a person who is physically present in Australia for most of a given year of income. The exception to it probably applies to a person who is physically present in Australia for the required number of days but who would not be considered to be an Australian because he or she is only a

ATC 8911

temporary visitor of this country for a period of time. That period might even extend to a term of years.

120. The exclusion is intended to exclude persons who are temporary visitors, irrespective of whether they are "tourists" or consider themselves to be "on holiday".

121. Fifthly, the exception to a person being a resident provided for in s 6(a)(ii) of the Income Tax Assessment Act 1936 (Cth) requires not only the Tribunal be satisfied that each applicants' usual place of abode was outside of Australia, but they did not intend to take up residence in Australia. It was contended on behalf of each applicant that each applicant intended to take up residence in Australia because they intended to eat, sleep and perform their daily activities in a in a place that had bedding, cooking facilities, a bathroom, laundry and lounge. But whether a person intends to take up residence in Australia is not determined by the attributes of the accommodation in which they choose to stay; whether their accommodation has a laundry, kitchen or lounge is not relevant. What is relevant is their intention to make Australia their settled home. To have an intention to make a place a home requires more than having an intention to stay in a dwelling that has bedding, cooking facilities, a bathroom, laundry and lounge.

122. So too whether a person has a usual place of abode outside of Australia is not determined by whether a person, whilst present in Australia, stays in accommodation that has a laundry, kitchen or lounge. It is not the attributes of the accommodation that a person chooses to stay in that is relevant in determining a person's usual place of abode but the person's relationship with a place. That relationship is not determined solely by identifying a dwelling where, for a time, a person ate, slept, cooked a meal, did their laundry or performed their daily activities.

123. Where an applicant prior to coming to Australia had a settled home outside of Australia, the issue is whether whilst in Australia, that place continued to be their usual place of abode having regard to their intention to return, their continuity of association[7] Levene v Inland Revenue Commissioners [1928] AC 217 at 225 and Judd v Judd (1957) 75 WN (NSW) 147 at 149 . and whether they had an attitude that place remained home.[8] see Norman v Norman (No 3) (1969) 16 FLR 231 at 235 : Hafza v Director-General of Social Security [1985] FCA 164 ; (1985) 6 FCR 444 at 449 – 450 , cited more recently with approval in Stockton, Harding. as Derrington J said in Harding , the ordinary concept of where one “resides” and that of a permanent [or usual] place of abode overlap. Factors such as a physical home, a family unit, possessions, relationships with people and institutions are all relevant.

124. The Commissioner contended that each applicants' usual place of abode was outside of Australia because in the case of each applicant there was a dwelling outside of Australia that was available for them to go to if they were not in Australia; the Tribunal does not accept this submission. There is nothing surprising about one family member telling another family member the door to their house remains open to them as a last resort if they should ever need it. That does not make one family member's home the usual place of abode of the other family member.

125. The Tribunal accepts that although the test of intention to take up residence is not necessarily determined by the nature of a taxpayer's visa, the intention referred to is an intention to live in Australia in a way that makes Australia home, not simply to be physically present in Australia. Whilst not determinative of the issue of residence, the nature of a taxpayer's visa may provide context to that taxpayer's presence in Australia.

126. The applicants correctly contended that the issue is whether they were a resident of Australia for the year of income ended 30 June 2017; not before or after. However, events before and after the year of income may sometimes shed light on a person's intention in the year of income.[9] Gregory v Deputy Federal Commissioner of Taxation 1937) 57 CLR 774 at 778 ; Stockton v Commissioner of Taxation [2019] FCA 1679 at [36]. In particular, where a person has their usual place of abode is determined by context in the "continuous story"[10] Levene v Inland Revenue Commissioners [1928] AC 217 at 227 per Viscount Sumner. of a person's life.

127. It is against this background that the facts and circumstances of each applicant is considered.

Ms. Coelho

Preliminary issue

128. The Tribunal has power to review a decision on objection. In the absence of a valid objection and a valid objection decision, the Tribunal does not have power.

129. Where an amended assessment is concerned, a taxpayer has a limited right of objection. Section 14ZV of the Taxation Administration Act 1953 (Cth) provides:

If the taxation objection is made against a taxation decision, being an assessment or

ATC 8912

determination that has been amended in any particular, then a person's right to object against the amended assessment or amended determination is limited to a right to object against alterations or additions in respect of, or matters relating to, that particular.

130. The issue raised in these proceedings concern the determination of the tax payable on Ms. Coelho's taxable income; the amount of that taxable income is not in dispute. The issue does not relate to the particular amended in the notice of amended assessment, which reduced the taxpayer's taxable income by $300.

131. The parties agreed that the Tribunal should proceed to determine the matter. However, the parties cannot confer power on the Tribunal if it does not otherwise have power.[11] Commissioner of Taxation v Executors of the Estate of Subrahmanyam (2001) 116 FCR 180 at [36]; Roberts v Repatriation Commission [1992] FCA 642 ; (1992) 111 ALR 436 at 441

132. Whether the Tribunal has power to determine the issue in this proceeding depends on whether, on a proper construction, Ms. Coelho objected against the original assessment. While that objection referred to the 'Notice of Amended Assessment', Ms. Coelho's grounds of objection related solely to the determination of the tax payable on her taxable income. None of the grounds of objection related to the $300 reduction in Ms. Coelho's taxable income. The Commissioner's notice of objection decision treated the objection as relating to the original assessment and made no reference to the amended assessment. The reasons for decision focused entirely on the issue of residency. Ms. Coelho sought review of this objection decision and at no stage prior to the potential issue being identified by the Tribunal raised any issue as to the validity of her objection. Whilst the parties cannot confer on the Tribunal jurisdiction it does not have, the Tribunal has considered all the circumstances and is of the opinion that when construed as a whole, the taxpayer's objection was an objection against the original assessment. These reasons proceed on the basis that the Tribunal has power to review the decision on objection.

Application of paragraph a(ii) of the definition of the resident

133. Ms. Coelho's case was that she did not have a usual place of abode outside of Australia because her usual place of abode was in Australia, based on the fact that she ate, slept and enjoyed a "normal life" while present in Australia.

134. The Tribunal does not accept that contention on the basis that it is not consistent with the law or with the facts.

135. The applicant's contention is not supported by the statutory language; it is inconsistent with the statutory definition of resident. The definition recognises that a person may be physically present in Australia continuously or not for more than 183 days and still have a usual place of abode outside of Australia. The concept of usual place of abode cannot be equated with mere physical presence. It is also inconsistent with authority which has recognised that a place may be a person's usual place of abode even though they may at times be absent from it.

136. The contention is also not supported by the evidence and the facts. Her time in Australia in the year ended 30 June 2017 was marked by a series of temporary and transient accommodation arrangements and, consistent with the terms. of her visa, temporary employment. Her accommodation arrangements were transient, in the nature of week to week, largely with people with whom she had no prior connection. She had no family ties here. She had come to Australia as an experience, which when she arrived, she expected would last between 12 to 24 months.

137. The emphasis given to Ms. Coelho enjoying a "normal life" was also misplaced. It was based on statements made in the decision of the Tribunal in
Subramanian and Commissioner of Taxation [2001] AATA 405 . The issue of residency is not resolved by isolating a single factor from one case but is an issue resolved by examining the totality of the circumstances: Stockton v Commissioner of Taxation at [26].

138. As identified above at [14], the issue is whether the Tribunal is satisfied that Ms. Coelho had her usual place of abode outside of Australia in the year of income ended 30 June 2017. A finding that her usual place of abode was not in Australia does not address the statutory question.

139. The evidence does not support a finding that Ms. Coelho's usual place of abode

ATC 8913

in the year ended 30 June 2017 was her parent's house in Brazil. Ms. Coelho had moved out of that house in 2013 and, notwithstanding she stayed there for about a month prior to moving to Europe after she gave up the lease on her own apartment, the evidence does not support a finding she intended to resume living there for anything more than a transitory period. The Tribunal accepts Ms. Coelho's evidence that although she stayed with her mother and stepfather prior to moving to Italy, she had not "lived" with them since she had moved out of home some two years before. Her testimony was she had no intention to return to live in Brazil. Her parents place was one she could return to live if she had nowhere else to go. "It's like if I have no opportunity to - I could live there, but I don't want to live in Brazil. So, it's like my first option if I'm not living here, I will go to Europe." This is consistent with the disclosure made in her visa application where she did not describe herself as a resident of Brazil or give a residential address in Brazil. Her evidence was "I'm not consider Brazil to residence."

140. The Tribunal accepts that when Ms. Coelho left Brazil in 2015, she did and intended to abandon Brazil as her usual place of abode. She had no desire to live in Brazil and no desire to return to live there. She sold her few possessions and moved to Europe. Although she returned briefly to Brazil at the end of the October 2017, the Tribunal finds she did not do so with an intention to resume settling or living in Brazil, but only to visit her parents and celebrate her grandmother's birthday.

141. The evidence led on behalf of Ms. Coelho in relation to her time in Spain was far from satisfactory. For example, it is not known whether she had a driver's license, had opened a bank account, applied for any or obtained any rights of residence that allowed her to remain in Spain. The Tribunal infers that Ms. Coelho had a bank account whilst she was in Spain as she was working full time and seeking to save money.

142. Bearing in mind it is Ms. Coelho who bears the onus of proving her assessment is excessive, Ms. Coelho has failed to demonstrate that the Tribunal should not be satisfied that prior to coming to Australia, and notwithstanding she had only been there for just over 6 months, Ms. Coelho had settled in Spain and that Spain had become her usual place of abode. As soon as she had qualified for her Italian passport, Ms. Coelho left Italy for Spain because her sister, with whom she had a close relationship, lived in Spain. Her living arrangements in Spain were based on her family ties, notwithstanding she made a financial contribution to the rental obligations of her sister. Although not her first language (which was Portuguese), she could speak Spanish fluently. Ms. Coelho's presence in Spain was not casual and she appears to have identified Spain as home.

143. It was put to Ms. Coelho that because she had applied for a "Working Holiday Visa" she must have known that she was here for a "holiday". Ms. Coelho rejected that contention. To her, a Working Holiday Visa provided her with an ability to come to Australia for a year and entitled her to work in Australia for the purposes of supporting herself whilst she was here. By completing her farm work, she was able to stay for an additional year. Her working holiday visa was an opportunity for her to come to Australia and whilst in Australia she wanted to "just see what I can do". Aside from her farm work, Ms. Coelho did not travel around Australia.

144. Evidence of whether or not Ms. Coelho subjectively considered herself to be on holiday whilst in Australia does not address the statutory question of whether her usual place of abode was outside of Australia. The issue is not whether Ms. Coelho came to Australia for a "holiday" but whether the Tribunal is satisfied that, notwithstanding her presence in Australia for more than one half of the year of income, her usual place of abode was outside of Australia and she did not intend to take up residence in Australia. This issue is not determined by the fact that whilst in Australia Ms. Coelho worked (see for example Stockton[12] Stockton v Commissioner of Taxation [2019] FCA 1679 ).

145. The Tribunal is not satisfied based on the evidence before it that Ms. Coelho did not have her usual place of abode in Spain.

146. In the year ended 30 June 2017, her closest ties of association remained with Spain - she had loved living with her sister and could

ATC 8914

speak the language fluently. Her oral testimony being if she were not in Australia, she would have been in Europe. Having regard to her ties of association, in the ordinary course of events in the context of her life, the Tribunal concludes that in the year ended 30 June 2017 it would be expected that she would be living in Spain. Her sister was in Spain and the Tribunal concludes that as matters stood in the year ended 30 June 2017, she expected to return to live in Spain when she was no longer permitted under the terms of her visa to be in Australia.

147. It is true that she did not leave much in the way of possessions behind in Spain but that seems. to be because she did not have much in the way of possessions at all. Her oral testimony was that she had her "own stuff with me at the moment." She had bought some furniture before she moved out of her parents' home in Brazil which she did not take with her when she moved out in 2013, but instead she left it with her parents. The belongings she had left with her parents were furniture she no longer sought to possess. The Tribunal accepts this evidence. Her ties of association are not determined by the place of her possessions but by reference to other factors.

148. The Tribunal is satisfied that her usual place of abode in the year ended 30 June 2017 was in Spain.

149. Ms. Coelho was also cross-examined on the answers given on her arrival and departure passenger cards and in particular, on the fact that on those cards she did not identify herself as a resident. Ms. Coelho's evidence was that she gave her responses on those cards to match the terms. of her visa. Her evidence was that she did not identify herself as immigrating permanently to Australia because she "didn't have a visa for permanently".

150. The issue of whether Ms. Coelho was a resident of Australia as defined in s 6(1) is not determined by the answers given on her passenger cards but rather in light of the whole of the circumstances. The objective facts include that at the time Ms. Coelho came to Australia and during the relevant year of income, Ms. Coelho had a visa that entitled her to stay in Australia for 12 months and that visa could be extended for another 12 months, notwithstanding farm work. The evidence is that during the year ended 30 June 2017 Ms. Coelho was aware of the duration of her visa and did not intend to stay beyond the term of her visa. Her evidence was that in the year ended 30 June 2017, she was in Australia as an experience that she expected to last for no more than two years. The evidence of her living arrangements during the year ended 30 June 2017 does not demonstrate that in the year ended 30 June 2017 Ms. Coelho intended to settle in Australia. She chose accommodation that was temporary and transient in nature that would enable her to constantly meet new people, rather than settle. As permitted by her visa, Ms. Coelho worked in temporary employment for a number of different employers, each employment not lasting more than 6 months. It is Ms. Coelho who bears the onus of proof and based on the material before it the Tribunal is satisfied that in the year ended 30 June 2017 Ms. Coelho did not intend to take up residence in Australia.

151. Although it is not a matter before it, the Tribunal notes that based on the limited evidence, it is quite possible that Ms. Coelho's intentions changed at some point in the following income year. It appears that during that year she formed a relationship that resulted in her moving in with her boyfriend in Australia. However, it is also for this reason the Tribunal is wary about Ms. Coelho's statements relating to her intentions. It is unclear to the Tribunal whether in making those statements Ms. Coelho is referring to her intentions in the year ended 30 June 2017, or to her intentions as they stood at the time of hearing

152. Having regard to the limited material with which it has been provided, the Tribunal is satisfied that in the year ended 30 June 2017, Ms. Coelho's usual place of abode was Spain and she did not intend to take up residence in Australia. Accordingly, notwithstanding she was present in Australia for more than half of the year ended 30 June 2017, she was not a resident of Australia within the definition of s 6(a)(ii).

153. There is a further complicating issue in respect of Ms. Coelho arising as a result of the non-disclosure of income. The Tribunal is unable to determine the extent of that non-disclosure based on the evidence before it. In

ATC 8915

submissions filed on her behalf after hearing, Ms. Coelho was said to have acknowledged she was paid $1,441 by Mop Industries in the year ended 30 June 2017 but produced no supporting documents. In these circumstances, even if Ms. Coelho were to be regarded as a resident, it is far from clear that Ms. Coelho would have discharged her onus of proving that her assessment was excessive and what her assessment should have been.

Mr. Renusz

154. Like Ms. Coelho, Mr. Renusz's case was he did not have a usual place of abode outside of Australia because his usual place of abode was in Australia. He contended he was present on the basis that he ate, slept and enjoyed a "normal life" in Australia.

155. The Tribunal does not accept that contention on the basis it is not consistent with the law or with the facts. It is not consistent with the law for the reasons set out above, in particular at [116] - [123] and [135] of these reasons for decision.

156. The very limited evidence does not support a finding of fact that Mr. Renusz's usual place of abode was in Australia in the year ended 30 June 2017. During that year, whilst in Australia, Mr. Renusz undertook two temporary jobs in unrelated industries and lived in two transient forms of accommodation. His car remained in Canada. His closest relationships were with his family in Canada. His living and employment arrangements were consistent with the limited rights he had to stay and work in Australia for no more than 2 years. Australia had not become his settled or habitual home in the year ended 30 June 2017. The limited evidence does not support a conclusion that on the balance of probabilities, Mr. Renusz had his usual place of abode in Australia in the year ended 30 June 2017.

157. The evidence does however support a conclusion that on the balance of probabilities in the year ended 30 June 2017 Mr. Renusz usual place of abode was in Canada. As mentioned above, his car remained in Canada as did his closest friends and family. He had arrived from Canada and the evidence does not support a conclusion that he had abandoned it as his home in the year ended 30 June 2017.

158. The evidence of his living and employment arrangements during the year ended 30 June 2017 does not demonstrate that in the year ended 30 June 2017 Mr. Renusz intended to settle in Australia. He lived in temporary accommodation in quite different settings; in the inner suburbs of Sydney and in rural Queensland. The pattern of his time in Australia was not marked by the settled habitual pattern of his life in Canada. As permitted by his visa, Mr. Renusz worked in temporary employment for different employers, each employment not lasting more than 6 months. Bearing in mind that Mr. Renusz bears the onus of proof, the Tribunal is satisfied that in the year ended 30 June 2017, Mr. Renusz did not intend to take up residence in Australia.

159. Although it is not a matter before this Tribunal, the Tribunal notes that based on the limited evidence, it is quite possible that Mr. Renusz's intentions changed at some point in the following income year. It appears that during that year he entered into a committed relationship with an Australian citizen living in Queensland and moved in with her in the context of that committed relationship.

160. Having regard to the limited material with which it has been provided, the Tribunal is satisfied that in the year ended 30 June 2017, Mr. Renusz's usual place of abode was Canada and he did not intend to take up residence in Australia. Accordingly, notwithstanding he was present in Australia for more than half of the year ended 30 June 2017, he was not a resident of Australia within the definition of s 6(a)(ii).

Mr. Moyano

161. The Tribunal does not accept the contention Mr. Moyano did not have a usual place of abode outside of Australia. because his usual place of abode was in Australia. His contention is based on the notion that whilst present in Australia he ate and slept in Australia and enjoyed a "normal life"; the contention is not consistent with the law for the reasons set out above, in particular at [116] - [123] and [135].

162. The evidence supports a conclusion that on the balance of probabilities, in in the year ended 30 June 2017 Mr. Moyano's usual place of abode was in Chile. His possessions, to the extent he did not require them

ATC 8916

whilst in Australia, remained in Chile. His parents remained in Chile; Chile remained home.

163. The evidence of his living and employment arrangements during the year ended 30 June 2017 does not demonstrate that in the year ended 30 June 2017, Mr. Moyano intended to settle in Australia. He lived in temporary accommodation on transient week to week terms. He moved between temporary jobs across the country. At the time he arrived in Australia, he expected to stay for no more than 12 months and during the course of the year ended 30 June 2017 became aware he could extend that stay for another 12 months, but no longer. There is no evidence Mr. Moyano formed an intention to settle in Australia. It is Mr. Moyano who bears the onus of proof; the Tribunal is satisfied that in the year ended 30 June 2017 Mr. Moyano did not intend to take up residence in Australia.

164. Accordingly, notwithstanding he was present in Australia for more than half of the year ended 30 June 2017, he was not a resident of Australia within the definition of s 6(a)(ii).

Mr. Mundaca

Difficulty with the Objection Decision

165. The Reasons accompanying the notice of decision on Mr. Mundaca's objection contained highlighted passages that evidence conclusions of fact that bear no relationship to Mr. Mundaca's evidence or to the immigration records. For example, it records Mr. Mundaca as being a French citizen and that his usual place of abode was Livry Gargan France. The Tribunal is concerned that the Commissioner in this case has cloned the reasons for decision of a different taxpayer's objection and did not have regard to the facts and circumstances of Mr. Mundaca.

166. Like Ms. Coelho, Mr. Mundaca 's case was that he did not have a usual place of abode outside of Australia because his usual place of abode was in Australia. The contention is made on the basis that he ate, slept and enjoyed a "normal life" in Australia.

167. The Tribunal does not accept that contention on the basis that it is not consistent with the law or with the facts. It is not consistent with the law for the reasons set out above [in particular at [116] - [123] and [135] of these reasons for decision.

168. The very limited evidence does not support a finding of fact that Mr. Mundaca's usual place of abode was in Australia in the year ended 30 June 2017. During that year whilst in Australia Mr. Mundaca undertook two temporary jobs in unrelated industries and lived in two transient forms of accommodation. His living and employment arrangements were consistent with the limited rights he had to stay and work in Australia for no more than 2 years. Although he purchased 2 cars whilst in Australia, it is not clear whether he owned the cars in the year ended 30 June 2017 or whether he had an intention to retain ownership of those cars for anything more than a short period of time. The Tribunal is not satisfied that Australia had become his settled or habitual home in the year ended 30 June 2017.

169. The evidence does support a conclusion that on the balance of probabilities in the year ended 30 June 2017 Mr. Mundaca's usual place of abode was in Chile. He had left a significant part of his funds in Chile. His parents remained in Chile. He intended to return to Chile.

170. The evidence of his living and employment arrangements during the year ended 30 June 2017 does not demonstrate that in the year ended 30 June 2017 Mr. Mundaca intended to settle in Australia. He lived in temporary accommodation and enjoyed two quite different experiences - city life and rural life. The pattern of his time in Australia was not marked by the settled habitual pattern of his life in Chile. As permitted by his visa, Mr. Mundaca worked in temporary employment for different employers, each employment not lasting more than 6 months and the work he undertook was unrelated to his professional qualifications and experience as a civil engineer. He departed Australia prior to the end of the following income year and has not returned. Based on the limited evidence before it, the Tribunal is not satisfied that on the balance of probabilities in the year ended 30 June 2017 Mr. Mundaca intended to take up residence in Australia.

171. Having regard to the limited material with which it has been provided, the Tribunal is satisfied that in the year ended 30 June 2017, Mr. Mundaca's usual place of abode was Chile and he did not intend to take up

ATC 8917

residence in Australia. Accordingly, notwithstanding he was present in Australia for more than half of the year ended 30 June 2017, he was not a resident of Australia within the definition of s 6(a)(ii).

172. For the above reasons, the Tribunal affirms the decision under review in respect of each application.

Footnotes

[1] Harding v Commissioner of Taxation [2018] FCA 837 at [43]
[2] Hafza v Director-General of Social Security [1985] FCA 164 ; (1985) 6 FCR 444 per Wilcox J at 449-450.
[3] Commissioner of Taxation v Executors of the Estate of Subrahmanyam (2001) 116 FCR 180 at [31] .
[4] Harding v Commissioner of Taxation (2019) 269 FCR 311 at [40] .
[5] Reid v Inland Revenue Commissioners 1926 S.L.T. 365 per Lord President Clyde.
[6] Lysaght v Inland Revenue Commissioners [1928] AC 234 , though in the context of the phrase “ordinarily resident”.
[7] Levene v Inland Revenue Commissioners [1928] AC 217 at 225 and Judd v Judd (1957) 75 WN (NSW) 147 at 149 .
[8] see Norman v Norman (No 3) (1969) 16 FLR 231 at 235 : Hafza v Director-General of Social Security [1985] FCA 164 ; (1985) 6 FCR 444 at 449 – 450 , cited more recently with approval in Stockton, Harding. as Derrington J said in Harding , the ordinary concept of where one “resides” and that of a permanent [or usual] place of abode overlap.
[9] Gregory v Deputy Federal Commissioner of Taxation 1937) 57 CLR 774 at 778 ; Stockton v Commissioner of Taxation [2019] FCA 1679 at [36].
[10] Levene v Inland Revenue Commissioners [1928] AC 217 at 227 per Viscount Sumner.
[11] Commissioner of Taxation v Executors of the Estate of Subrahmanyam (2001) 116 FCR 180 at [36]; Roberts v Repatriation Commission [1992] FCA 642 ; (1992) 111 ALR 436 at 441
[12] Stockton v Commissioner of Taxation [2019] FCA 1679

 

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