mdroth/huggingface-course_section-5_zst huggingface dataset:
Case: Chong v Commissioner of Taxation [2000] FCA 635 ; (2000) 101 FCR 134
Outcome: cited
purpose of a DTA is to avoid the potential for the imposition of tax by both of the Contracting States on the same income. It is appropriate to say that the Contracting States achieve their objective by "allocating" as between themselves the right to bring to tax a particular item to one Contracting State while the other State agrees to abstain from doing so ( Lamesa at 600, Chong v Commissioner of Taxation [2000] FCA 635 ; (2000) 101 FCR 134 at [24] - [27] ). A DTA does not give a Contracting State power to tax, or oblige it to tax an amount over which it is allocated the right to tax by the DTA. Rather, a DTA avoids the potential for double taxation by It is the Income Tax Act 1986 (Cth) that imposes "income tax". Section 5(1) of that Act provides that income tax is imposed in accordance with that Act and at the relevant rates declared by the Income Tax Rates Act 1986 (Cth). Section 12(1) of the latter Act provides that the rates of tax are those set out in Schedule 7 to that Act. Section 7 of the Income Tax Act 1986 provides, relevantly, that the tax imposed by s 5(1) is levied, and shall be paid, for the financial year commencing on 1 July 1986 and for all subsequent financial years.
Case: Commissioner of Taxation v Lamesa Holdings BV (1997) 77 FCR 597
Outcome: cited
Full Federal Court in McDermott Industries (Aust) Pty Ltd v Commissioner of Taxation [2005] FCAFC 67 ; (2005) 142 FCR 134 at 143 (Hill, Sundberg and Stone JJ) summarised the principles applicable to the construction of DTAs in this way: Double tax treaties are bilateral treaties entered into between two states. As such they are to be interpreted in accordance with the requirements of the Vienna Convention on the Law of Treaties (23 May 1969, entered into force on 22 January 1974) (the Convention) and in particular Art 31 of the Convention. The application of the Convention has been discussed by McHugh J in Applicant A v Minister for Immigration and Ethnic Affairs [1997] HCA 4 ; (1997) 190 CLR 225 and in Thiel v Commissioner of Taxation (Cth) [1990] HCA 37 ; (1990) 171 CLR 338 , the latter case being concerned with the interpretation of the double taxation agreement between Australia and Switzerland. The leading authority in this Court on interpretation of double taxation agreements is [ Commissioner of Taxation v Lamesa Holdings BV (1997) 77 FCR 597]. It is unnecessary here, to set out again what is there said. The following principles can be said to be applicable: Regard should be had to the "four corners of the actual text". The text must be given primacy in the interpretation process. The ordinary meaning of the words used are presumed to be "the authentic representation of the parties' intentions": Applicant A . The courts must, however, in addition to having regard to the text, have regard as well to the context, object and purpose of the treaty provisions. The approach to interpretation involves a holistic approach. International agreements should be interpreted "liberally". Treaties often fail to demonstrate the precision of domestic legislation and should thus not be applied with "taut logical precision". Authority for resort to extraneous materials of the kinds referred to may be found in Thiel at 344 (per Mason CJ, Brennan &amp; Gaudron JJ), 349 (per Dawson J), 357 (per McHugh J); Unisys Corporation Inc v Federal Commissioner of Taxation 2002 ATC 5146 at [44]; and Commissioner of Taxation v Lamesa Holdings BV (1997) 77 FCR 597 ( Lamesa ) at 604.
Case: Fernando v Commissioner of Police (1995) 36 NSWLR 567 
Outcome: discussed
writing what appears at [68]-[80] above, I have become aware that the issue of comity has been the subject of considerable judicial discussion to which the parties did not refer. In Fernando v Commissioner of Police (1995) 36 NSWLR 567 ( Fernando ) the New South Wales Court of Appeal (NSWCA) considered the matter. The question was whether the NSWCA should follow a decision of the Full Court of the Supreme Court of South Australia in R v Franklin (1979) 22 SASR 101 ( Franklin ) on a statutory provision in substantially identical words to those of the relevant New South Wales statute. All three members of that Court thought that the South Australian Full Court's construction of the provision had been wrong. Priestley JA described (at 584) the "rule of comity" as a "sound one for most purposes", such that the NSWCA "usually follows the decisions of courts of like position in other Australian jurisdictions on similar points". Priestley JA said (also at 584) that the reasons favouring the construction of the provision which his Honour thought to be right, were "so strong" that an exception should be made to the "rule of comity". Powell JA was of a similar view, going as far as to describe the South Australian decision as "clearly wrong" (at 593). However, Clarke JA, while also preferring the construction favoured by Priestley JA and Powell JA, considered (at 591) that the question was one on which minds could reasonably differ and that Franklin was not "plainly wrong". Applying as a matter of comity a rule that the NSWCA should follow a decision of another Australian intermediate appellate court on the construction of the substantially identical statutory provision unless "it is convinced that the earlier decision is clearly wrong or that considerations of justice require the court to decline to apply the decision of the other court" (at 589-590), his Honour decided that Franklin should be followed. In R v Dyson (1997) 68 SASR 156 ( Dyson ) the Supreme Court of South Australia Court of Criminal Appeal was specially constituted as a bench of five members to consider the conflict between Franklin and Fernando . Bollen J distinguished Fernando . All other four judges, and Bollen J in the alternative, considered that Franklin was correct and Fernando incorrect.
Case: La Macchia v Minister for Primary Industries and Energy (1992) 110 ALR 201
Outcome: cited
do not see the approach taken by the Western Australian Court of Appeal in Mustac to be in conflict with the practice to which Lander J and French J (and I) referred. Clearly, and inevitably, their Honours accepted that an earlier decision of a court of coordinate authority is not required, as a matter of binding judicial precedent, to be followed. Moreover, French J quoted the following passage from the judgment of Burchett J in La Macchia v Minister for Primary Industries and Energy (1992) 110 ALR 201 at 204: ... the authorities illustrated that [the approach of usually following a decision of another judge as a matter of judicial comity] may be influenced, either towards or away from an acceptance of the earlier decision, by circumstances so various as to be difficult to comprehend within a single concise formulation of principle ... (my emphasis)
Case: Lamesa Holdings BV v Federal Commissioner of Taxation (1997) 98 ATC 4229
Outcome: referred to
Lamesa Holdings BV v Federal Commissioner of Taxation (1997) 97 ATC 4229 , which, like the Second Proceeding, concerned the Netherlands Agreement, the primary judge accepted (at 4,237), on the basis of expert evidence, that the supplementary material relevant to construction of the Netherlands Agreement was the 1977 OECD Model Double Taxation Convention on Income and Capital which included as Annex I "Model Convention for the Avoidance of Double Taxation with respect to taxes on Income and Capital" (Model Convention) and as Annex II "Commentaries on the Articles of the Model Convention) (Model Commentary) because they had been "largely formulated and published" before the conclusion of the Netherlands Agreement. Neither party submitted that the Model Convention or the Model Commentary was not able to be taken into account as relevant to the construction of the Netherlands Agreement, and indeed, the Commissioner submitted that the Netherlands Agreement must be construed in light of these documents.
Case: McDermott Industries (Aust) Pty Ltd v Commissioner of Taxation [2005] FCAFC 67 ; (2005) 142 FCR 134
Outcome: cited
Full Federal Court in McDermott Industries (Aust) Pty Ltd v Commissioner of Taxation [2005] FCAFC 67 ; (2005) 142 FCR 134 at 143 (Hill, Sundberg and Stone JJ) summarised the principles applicable to the construction of DTAs in this way: Double tax treaties are bilateral treaties entered into between two states. As such they are to be interpreted in accordance with the requirements of the Vienna Convention on the Law of Treaties (23 May 1969, entered into force on 22 January 1974) (the Convention) and in particular Art 31 of the Convention. The application of the Convention has been discussed by McHugh J in Applicant A v Minister for Immigration and Ethnic Affairs [1997] HCA 4 ; (1997) 190 CLR 225 and in Thiel v Commissioner of Taxation (Cth) [1990] HCA 37 ; (1990) 171 CLR 338 , the latter case being concerned with the interpretation of the double taxation agreement between Australia and Switzerland. The leading authority in this Court on interpretation of double taxation agreements is [ Commissioner of Taxation v Lamesa Holdings BV (1997) 77 FCR 597]. It is unnecessary here, to set out again what is there said. The following principles can be said to be applicable: Regard should be had to the "four corners of the actual text". The text must be given primacy in the interpretation process. The ordinary meaning of the words used are presumed to be "the authentic representation of the parties' intentions": Applicant A . The courts must, however, in addition to having regard to the text, have regard as well to the context, object and purpose of the treaty provisions. The approach to interpretation involves a holistic approach. International agreements should be interpreted "liberally". Treaties often fail to demonstrate the precision of domestic legislation and should thus not be applied with "taut logical precision".
Case: Mutual Pools &amp; Staff Pty Ltd v Commissioner of Taxation (Cth) [1992] HCA 4 ; (1992) 173 CLR 450
Outcome: cited
IIIA of the ITAA 1936 (dealing with capital gains) was inserted into that Act by the Income Tax Assessment Amendment (Capital Gains) Act 1986 (Cth) (No 52 of 1986) with effect from 24 June 1986 but operating in respect of assets acquired after 20 September 1985. The result, which is now produced under the ITAA 1997, is to include net capital gains in the assessable (and therefore taxable) income of a taxpayer (currently by s 102- 5 of the ITAA 1997, formerly by s 160ZO of the ITAA 1936). Taxable income is calculated by reducing the assessable income by "deductions" (s 4 - 15 of the ITAA 1997, s 48 of the ITAA 1936 (which used the expression "allowable deductions")). The so-called "capital gains tax" is not a separate tax. The applicants submit, and the Commissioner does not dispute, that if it were, the Income Tax Act 1986 would offend s 55 of the Constitution , which requires that laws imposing taxation deal with one subject matter only: cf Mutual Pools &amp; Staff Pty Ltd v Commissioner of Taxation (Cth) [1992] HCA 4 ; (1992) 173 CLR 450. The Commissioner assessed to tax the net capital gains made by the First Applicant and the Second Applicant under what I will, for convenience, call the " Pt IIIA r&eacute;gime" even though, in fact, it was the ITAA 1997 that applied in the year ended 30 June 2001. As will be already clear, both the UK Agreement and the Netherlands Agreement were entered into before the Pt IIIA r&eacute;gime was introduced.
Case: R v Dyson (1997) 68 SASR 156 
Outcome: referred to
R v Dyson (1997) 68 SASR 156 ( Dyson ) the Supreme Court of South Australia Court of Criminal Appeal was specially constituted as a bench of five members to consider the conflict between Franklin and Fernando . Bollen J distinguished Fernando . All other four judges, and Bollen J in the alternative, considered that Franklin was correct and Fernando incorrect. The issue of comity as between intermediate appellate courts was again discussed by the NSWCA in Tillman v Attorney-General for the State of New South Wales (2007) 70 NSWLR 448 ( Tillman ). Tillman was decided on 26 November 2007, not longer after Muscat which had been decided on 21 June 2007. The judgments in Tillman do not refer to either Dyson or Muscat .
Case: R v Franklin (1979) 22 SASR 101 
Outcome: referred to
writing what appears at [68]-[80] above, I have become aware that the issue of comity has been the subject of considerable judicial discussion to which the parties did not refer. In Fernando v Commissioner of Police (1995) 36 NSWLR 567 ( Fernando ) the New South Wales Court of Appeal (NSWCA) considered the matter. The question was whether the NSWCA should follow a decision of the Full Court of the Supreme Court of South Australia in R v Franklin (1979) 22 SASR 101 ( Franklin ) on a statutory provision in substantially identical words to those of the relevant New South Wales statute. All three members of that Court thought that the South Australian Full Court's construction of the provision had been wrong. Priestley JA described (at 584) the "rule of comity" as a "sound one for most purposes", such that the NSWCA "usually follows the decisions of courts of like position in other Australian jurisdictions on similar points". Priestley JA said (also at 584) that the reasons favouring the construction of the provision which his Honour thought to be right, were "so strong" that an exception should be made to the "rule of comity". Powell JA was of a similar view, going as far as to describe the South Australian decision as "clearly wrong" (at 593). However, Clarke JA, while also preferring the construction favoured by Priestley JA and Powell JA, considered (at 591) that the question was one on which minds could reasonably differ and that Franklin was not "plainly wrong". Applying as a matter of comity a rule that the NSWCA should follow a decision of another Australian intermediate appellate court on the construction of the substantially identical statutory provision unless "it is convinced that the earlier decision is clearly wrong or that considerations of justice require the court to decline to apply the decision of the other court" (at 589-590), his Honour decided that Franklin should be followed. In R v Dyson (1997) 68 SASR 156 ( Dyson ) the Supreme Court of South Australia Court of Criminal Appeal was specially constituted as a bench of five members to consider the conflict between Franklin and Fernando . Bollen J distinguished Fernando . All other four judges, and Bollen J in the alternative, considered that Franklin was correct and Fernando incorrect.
Case: Re McKean (unreported, Federal Court of Australia, 16 April 1996)
Outcome: cited
in Re McKean (unreported, Federal Court of Australia, 16 April 1996), Burchett J pointed out that in the circumstances of a particular case, other considerations may prevail over considerations of comity.
Case: South Australia v The Commonwealth [1992] HCA 7 ; (1992) 174 CLR 235
Outcome: discussed
J decided (at [31]) that the expression "the Australian income tax" in subpara (1)(a) of Art 2 of the Swiss Agreement meant income tax as assessed under the ITAA 1936, and (at [49]) that the expression included tax on net capital gains under the Pt IIIA r&eacute;gime. His Honour referred (at [44]) to several examples of capital gains that were already included in assessable income under the ITAA 1936 when the Swiss Agreement was signed in 1980, as showing that income tax under the ITAA 1936 was not limited to tax on income in accordance with ordinary concepts. His Honour also referred to observations made in Resch v Federal Commissioner of Taxation [1942] HCA 2 ; (1942) 66 CLR 198 ( Resch ) and South Australia v The Commonwealth [1992] HCA 7 ; (1992) 174 CLR 235 ( South Australia v Commonwealth ). In my view it is not to the point that s 26AAA was not introduced into the ITAA 1936 until 1973, and therefore did not form part of that Act when the UK Agreement was signed. Edmonds J referred to s 26AAA only as one of several illustrations of the inclusion of capital gains in assessable income. His Honour's adoption (at [44]) of the examples given in the submissions (noted at [38]) supported a proposition that rested on the reasons for judgment in Resch of Rich J at 210-211 and Dixon J (as Dixon J then was) at 224-225, and the reasons of the majority joint judgment in South Australia v Commonwealth at 251. (I refer to Resch at [94]-[97] below and to South Australia v Commonwealth s at [100] below). Edmonds J stated (at [45]) that Pt IIIA was introduced into the ITAA 1936 as part of the same legislative scheme and history as were referred to by Dixon J in Resch and by the majority in South Australia v Commonwealth . In South Australia v Commonwealth at 251, Mason CJ, Deane, Toohey and Gaudron JJ, after referring to Dixon J's statement in Resch that the ITAA 1922 did not maintain the distinction between profits of a capital nature and profits in the nature of income in the true sense, observed as follows: "Income" is a generic term which, in the United States, has been regarded as wide enough to include capital gains for purposes of income tax .... Nonetheless, it is correct to say of [the ITAA 1936], as Starke J. said of the Income Tax Assessment Act 1922, that income tax "is not a tax upon everything that comes in whether as income receipt or a capital receipt" [ New Zealand Flax Investments Ltd v Federal Commissioner of Taxation [1938] HCA 60 ; (1938) 61 CLR 179 at 197].
Case: Tillman v Attorney-General for the State of New South Wales (2007) 70 NSWLR 448 
Outcome: referred to
issue of comity as between intermediate appellate courts was again discussed by the NSWCA in Tillman v Attorney-General for the State of New South Wales (2007) 70 NSWLR 448 ( Tillman ). Tillman was decided on 26 November 2007, not longer after Muscat which had been decided on 21 June 2007. The judgments in Tillman do not refer to either Dyson or Muscat . In Tillman , Giles and Ipp JJ A, in a joint judgment, declared themselves (at [110]) in favour of following a decision of the Victorian Court of Appeal in TSL v Secretary to the Department of Justice (2006) 14 VR 109 ( TSL ) because it was not "plainly wrong". Mason P took a different approach. The learned President recognised that the Victorian legislation in question was relevantly indistinguishable and was not convinced that the Victorian decision was plainly wrong, yet departed from it in favour of his own firmly preferred different interpretation (at [19]). His Honour appears to have been content to accept the "not plainly wrong" or "not clearly wrong" formulation. He acknowledged (at [25]) that there was "a rule of precedent obliging intermediate appellate courts not to depart from decisions in intermediate appellate courts in another jurisdiction [but only] on the interpretation of (a) Commonwealth legislation or (b) uniform national legislation or (c) the common law of Australia unless convinced of plain error". The statutory provisions before the Victorian and NSWCA in TSL and Tillman respectively were State enactments that were not part of a uniform national scheme. Interestingly, in their joint judgment in Tillman , Giles and Ipp JJ A stated (at [110]): The place now occupied by the Federal Court in the Australian legal system adds to its unity, and to the desirability of consistency in the interpretation of substantially similar non-national legislation. In the light of such a statement, it would be a most unwelcome irony if single judges of this Court did not respect the strong desirability of consistency in their decision making. I note that the applicants did not suggest that I am relieved by considerations of judicial comity of the necessity of embarking on a full consideration of the parties' submissions with a view to arriving independently at my own conclusion, and in my view, I am obliged to do so. The sole issue in dispute is whether Art 5 of the UK Agreement prohibits the taxation in Australia of the capital gain made by the First Applicant. In order for Art 5 to have that effect, the tax that would otherwise be levied on the capital gain must be a tax covered by the UK Agreement according to its Taxes Covered Article, Art 1.
Case: TSL v Secretary to the Department of Justice (2006) 14 VR 109
Outcome: referred to
Tillman , Giles and Ipp JJ A, in a joint judgment, declared themselves (at [110]) in favour of following a decision of the Victorian Court of Appeal in TSL v Secretary to the Department of Justice (2006) 14 VR 109 ( TSL ) because it was not "plainly wrong". Mason P took a different approach. The learned President recognised that the Victorian legislation in question was relevantly indistinguishable and was not convinced that the Victorian decision was plainly wrong, yet departed from it in favour of his own firmly preferred different interpretation (at [19]). His Honour appears to have been content to accept the "not plainly wrong" or "not clearly wrong" formulation. He acknowledged (at [25]) that there was "a rule of precedent obliging intermediate appellate courts not to depart from decisions in intermediate appellate courts in another jurisdiction [but only] on the interpretation of (a) Commonwealth legislation or (b) uniform national legislation or (c) the common law of Australia unless convinced of plain error". The statutory provisions before the Victorian and NSWCA in TSL and Tillman respectively were State enactments that were not part of a uniform national scheme.
Case: Unisys Corporation Inc v Commissioner of Taxation 2002 ATC 5146
Outcome: cited
for resort to extraneous materials of the kinds referred to may be found in Thiel at 344 (per Mason CJ, Brennan &amp; Gaudron JJ), 349 (per Dawson J), 357 (per McHugh J); Unisys Corporation Inc v Federal Commissioner of Taxation 2002 ATC 5146 at [44]; and Commissioner of Taxation v Lamesa Holdings BV (1997) 77 FCR 597 ( Lamesa ) at 604.