The response in more detail of the taxpayer applicants IEL Finance Limited, Queensland Trading & Holding Limited and Spassked Pty Limited to the Commissioner's application for summary judgment - the asserted prevalence of English authority as to the operation of estoppels in fiscal contexts
50 The response of the taxpayer applicants' case to the Commissioner's application for summary judgment was very comprehensive and well researched. I will identify at least the majority of the submissions of the taxpayer applicants in the present segment of my reasons for judgment, but will not do so exhaustively, since certain of the submissions of the taxpayer applicants are conveniently addressed in the course of my lengthy segment of conclusions. The essence of response of the taxpayer applicants at the outset was to the effect that what was determined by the Federal Court in the earlier Spassked proceedings, at first instance and on the subsequent appeal to the Full Court, related solely to the 1992 fiscal year, and in the light of the weight of high authority of the United Kingdom invoked by the taxpayer applicants, and its subsequent recognition in Australia, did not and could not in law thereby create an estoppel. What was described as the cornerstone of the Commissioner's submissions in relation to issue estoppel was an assertion that the doctrine of issue estoppel applies to so‑called 'revenue proceedings', being a description said to misstate the law, and to be contrary to 'a long line of authority'. I will later examine in detail authority related to or conceivably related to that question. I was referred to the material filed in Court in the context of those earlier concluded Spassked proceedings, and to matters stated to the Court in the same context by senior counsel for Spassked, at first instance and on appeal, to the effect that the central issue in those proceedings related to the 1992 fiscal year alone. Moreover in the course of Spassked's subsequent application for special leave to appeal to the High Court, the following appears in the transcript of the hearing of that application (as in the present proceedings, Mr Shaw QC being leading counsel for Spassked and Mr Davies SC being leading counsel for the Commissioner on that application), upon which the taxpayer applicants placed at least threshold reliance:
'McHugh J: … is this case a test case for all the years between 1987 and 1994?
Shaw: No, your Honour, it only relates to 1992.
…
Davies: My learned friend pointed out that the total capitalised interest was in the vicinity of 3.7 billion over years between 1989 [sic, 1988] through to 1994. This year concerns only the 1992 year. After the Full Court delivered its judgment, proceedings were commenced in the Federal Court by other members of the group raising the same issue in relation to other years. As I understand it, the 1991 year, the 1994 year and, I think, the 1997 year are presently before the Full Court. I say the 1997 year because Spassked continued to transfer out tax losses right through until 1998. In those proceedings, the taxpayers contend that the other years have factual differences which mean the result in this case is not applicable. Those matters, as I understand, have now been set down for a three week trial before Justice Conti next September on the basis that there are factual differences'.
51 Whether any such 'factual differences' are of ultimate significance remains for present consideration. As I have foreshadowed, the taxpayer applicants submitted that the issue the subject of the earlier concluded Spassked proceedings was limited to the deductibility of interest in respect of the 1992 fiscal year. Indeed that could only have been the case at that stage, so the taxpayer applicants pointed out, given that by the time of that application for special leave, '…the Commissioner had not determined any objections other than those made by the three taxpayers in the earlier Spassked proceedings against their assessments for 1992', and accordingly by then 'no other company in the IEL Group could have commenced proceedings under Part IVC of the Administration Act or become a party to the earlier Spassked proceedings' (those three taxpayers were of course Spassked, Stanley Park Pty Ltd and IEL, as I have earlier recorded).
52 The taxpayer applicants' case in the present proceedings therefore was that it is enough for the taxpayer applicants to point to the circumstance, and the implications thereof according to law, that any such perception that the earlier concluded Spassked proceedings was of the nature of a test case based on the 1992 fiscal year could not elevate the decision to cover matters which were not before the Court as part of the proceedings, referring thereby to any significance of the earlier proceedings in relation to the 1991, 1993, 1994 and 1996 fiscal years. There has not been distilled however by the taxpayer applicants any materially differentiating factor involved in relation to those other fiscal years, other than the per se factor they propound as to a different fiscal year (ie 1992). In making that observation, I do not overlook the observation of Hill and Lander JJ in the Spassked appeal (at [77]), which I have earlier extracted, that '[i]ncome tax is an annual tax [and] [h]ence the question whether interest was incurred in gaining or producing assessable income or in carrying on a business the purpose of which was the gaining of assessable income is a question which is required to be determined from year to year'. What is not to be also overlooked, in my opinion, are the findings of the Full Court on appeal, and the significance thereof, concerning the events and circumstances of what were the continuing business operations of the IEL corporate group both antecedent to and following upon the 1992 fiscal year, in line and consistently with those of the 1992 fiscal year, and concerning relevantly IEF and QTH as well as Spassked as members of the IEL corporate group.
53 The taxpayer applicants maintained nevertheless the contention that identification of the issue before the Federal Court in the earlier concluded Spassked proceedings, relating of course to the 1992 fiscal year, was 'fundamental' to determining the existence and scope of operation for instance of the operation of issue estoppel, since the ultimate issue before the Court for resolution in the earlier concluded Spassked proceedings was confined in law to deductibility of interest at the instance of Spassked alone, and in relation to the 1992 year of income alone. The taxpayer applicants maintained that issue estoppel may only be raised by or applied against parties who were in controversy at the time when an issue being subsequently pursued was first determined, whether in their favour or adversely to them (as the case may be), and further that if a moving party was not involved in any earlier litigation of that issue, either because it was not a matter the subject of issue between that moving party and the other party to the proceedings, or because the moving party had not been a party at all, then that moving party is not affected by an estoppel, and nor can an estoppel be raised against it. 'Likewise a party's presence [then] or subsequently cannot affect the right of other parties to raise or rely upon issue estoppel as between themselves', so the taxpayer applicants' submissions asserted, reference being made to this Court's decision in Taylor v Ansett Transport Industries Ltd (1987) 18 FCR 342 at 358, where Fisher J observed:
'It seems clear to me that issue estoppel can only be raised by or applied against parties who were in "controversy" at the time when the issue was first determined, either in their favour or adversely to them. If a party was not involved in the litigation of that issue, either because it was not an issue between him and another party to the proceedings, or because he was not a party at all to the proceedings at the time of resolution, then he is not affected by nor can he raise an estoppel. Likewise his presence initially or subsequently can not affect the right of other parties to raise or rely upon issue estoppel as between themselves. If the contrary was the case, the public interest in not having the same matters relitigated could with ease be bypassed.'
Those observations, in particular in relation to the scope of the notion of 'controversy' and 'party… involved', need to be read and applied in the light of the more comprehensive exegesis in Blair v Curran earlier extracted in these reasons.
54 The taxpayer applicants' further case, and as matters evolved, their primary case, was that the Commissioner's proposition, to the effect that the doctrine of issue estoppel applies in relation to revenue proceedings, is contrary to 'a long line of authority', and therefore 'misstates the law', in so far as the revenue proceedings the subject of present focus relate to different fiscal years for assessment to that fiscal year to which issue estoppel is sought to be attributed by the Commissioner. In explanation or furtherance of that contention, it was said by the taxpayer applicants that the decisions on income tax, land tax and local government rating assessments constitute exceptions, in that a dispute which is determined by curial decision in respect of one year of taxation is limited to one subject only, being in the case for instance of income tax the amount of the taxable income and the tax payable by the taxpayer in respect of that fiscal year. The taxpayer applicants contended further that because what is decided in disputes about income tax, as well about land tax and other annual fiscal or rating assessments, is inherently limited in that way, even the determination of something essential to the conclusion reached as to the proper amount of assessment for a fiscal year in question is not to be regarded as creating an estoppel for the purposes of an assessment for a different proximate year, which would usually relate to a later year (though not always, as in the case of the 1991 year here in dispute). In support of those broadly framed submissions, reliance was placed by the taxpayer applicants upon several authorities of the Privy Council and the House of Lords, and which were said to stand inconsistently with earlier Privy Council authority, being that of course of Hoysted.
55 One of the later authorities principally relied on by the taxpayer applicants, which may be conveniently next addressed for reasons that will shortly emerge, was the decision of the Privy Council in Mohamed Falil Abdul Caffoor, The Trustees of the Abdul Gaffoor Trust v Commissioner of Income Tax, Colombo [1961] AC 584. The difference in spelling of the appellant's surname from that of the designation of the Trust appears incidentally in the report. The conclusion was there reached that the Commissioner of Income Tax of Ceylon was not estopped by a decision of the board of review constituted under the Income Tax Ordinance of Ceylon, being a decision made in respect of the fiscal year 1949‑1950, from challenging the trustees' claim to exemption from income tax for subsequent fiscal years and in particular the 1950‑1951 year, upon the footing that an issue of liability to income tax for one year was to be treated as inherently different from that of liability for another year, even though there might appear to be similarity or identity in the questions of law which they respectively yield. Hence the finding by the Privy Council in that income tax context was that the principle of res judicata did not apply, albeit that both the terms of the trust and the relevant law were precisely the same in relation to the two fiscal years addressed. The Privy Council expressed the following opinions upon which the taxpayer applicants here placed strong reliance (at 598):
'The critical thing is that the dispute which alone can be determined by any decision given in the course of these proceedings is limited to one subject only, the amount of the assessable income for the year in which the assessment is challenged. It is only the amount of that assessable income that is concluded by an assessment or by a decision on an appeal against it … Although, of course, the process of arriving at the necessary decision is likely to involve the consideration of questions of law, turning upon the construction of the Ordinance or of other statutes or upon the general law, and the tribunal will have to form its view on those questions, all these questions have to be treated as collateral or incidental to what is the only issue that is truly submitted to determination …
It is in this sense that in matters of a recurring annual tax a decision on appeal with regard to one year's assessment is said not to deal with "eadem quaestio" as that which arises in respect of an assessment for another year and, consequently, not to set up an estoppel.'
56 It may be however not without significance to bear in mind that prior to the first passage cited above from Caffoor, the Privy Council had been describing at 597‑598 the purpose for which the board of review in Ceylon had been established and the nature of its functions. In the present circumstances, perhaps by way of contrast, the taxpayer's challenge to the previous litigation originated in the Federal Court, being of course a superior court of record with all the implications thereby entailed, for instance, as to prior interlocutory processes, and the admissibility and taking of evidence did not originate in an administrative or quasi‑administrative tribunal exercising at least a more limited judicial function. That may be thought in my opinion to involve one distinction of relevance. Yet what followed in the Privy Council's further reasons in Caffoor described (at 597‑598) the process of initial review as there involving '… in one sense a part of the process of assessment', in the wider context reproduced below:
'In their Lordships' opinion the question of estoppel cannot be decided merely by inquiring to what extent the Board of Review exercises judicial functions. The critical test is not the bare issue whether or not such a board exercises judicial power … What is important here is that the Board of Review is a tribunal set up under the Income Tax Ordinance for the purpose of deciding income tax appeals at a certain stage of their prosecution, and that decisions given with regard to such appeals are effective only within the limited jurisdiction that the Ordinance creates for all tribunals that deal with the matter of an appeal. All such appeals remain in one sense a part of the process of assessment since all the tribunals, including the Supreme Court, have independent power to increase or reduce the assessment under appeal. While, therefore, it is unexceptionable to say that the Board of Review when exercising its powers … is acting in a sense judicially, that the dispute which it has to determine is at any rate somewhat analogous to a lis inter partes and that the assessor who made the assessment or some other representative of the Commissioner… resembles a party hostile to the appellant, those considerations are not those that are critical to the issue of estoppel'.
The functions of that former Board of Review constituting 'a part of the process of assessment…' and having a 'limited jurisdiction' as above described, were not readily comparable to the exercise of the jurisdiction presently undertaken at first instance by a court of record, such as the Federal Court or a Supreme Court of a State or Territory in Australia, in at least an income tax appeal. Nor is readily comparable the limited jurisdiction exercisable by the present Administrative Appeals Tribunal. The process of review invoked by Spassked could have, but did not of course, involve in the first instance or at all recourse to that Tribunal, but rather to a single justice of the Federal Court as I have earlier indicated.
57 Further to the reasoning of the Privy Council in Caffoor, reference was made to the implications of the decision of the Privy Council in Broken Hill Proprietary Company Limited v The Municipal Council of Broken Hill (1925) 37 CLR 284 made on 10 November 1925 (about one month earlier than the Privy Council's decision in Hoysted, though Broken Hill was not referred to by the Privy Council in Hoysted)on appeal from the Full Court of the Supreme Court of New South Wales. Broken Hill related to the assessment of the unimproved capital value of a producing mine for the purpose of annual assessment of municipal council rates pursuant to s 153(3) of the Local Government Act 1919 (NSW), the assessment having been made on an output basis equal to 20% of the average annual saleable value of ore produced from the land over the three years preceding the assessable year. In reversing the decision of the Supreme Court in Broken Hill, which had followed an earlier decision of the High Court in The Council of the Municipality of Broken Hill v The Broken Hill Proprietary Company Limited (1922) 30 CLR 400, the Privy Council in Broken Hill made the following observation (at 289):
'It was also contended before this Board on behalf of the respondents that, having regard to the said decision of the High Court of Australia, the question raised by this appeal is res judicata as between the appellants and the respondents, and the appellants are estopped from contending that such decision of the High Court of Australia is wrong… The decision of the High Court related to a valuation and a liability to tax in a previous year, and no doubt as regards that year the decision could not be disputed. The present case relates to a new question, namely, the valuation for a different year and the liability for that year. It is not eadem quaestio, and therefore the principle of res judicata cannot apply.'
No other authority was cited by the Privy Council in Broken Hill for that thesis as to the implications of annual revenue or fiscal assessments. Given the inherently changing nature of a valuation of realty for rating purposes, even over one year or so and in particular in relation to a mine in production, the juridical basis for that approach may be perhaps more comprehensible. Once again, the reference to res judicata above, and not issue estoppel, may also be observed.
58 Returning to Caffoor, the Privy Council continued at 598-600 as follows:
'The Broken Hill decision is in itself a striking application of the principle involved, since the earlier judgment which it was sought to set up as an estoppel was one given by the High Court of Australia on a rating assessment referred to it by way of appeal under the tax procedure. It underlines the point that it is not the status of the tribunal itself, judicial or administrative, that forms the determining element for estoppel in cases of this kind but the limited nature of the question that is within the tribunal's jurisdiction. The judgment of the High Court that had been given in the earlier year was explicitly directed to the construction of a particular section of the rating Act and to the correct measurement of the liability in the light of that construction. Precisely the same point arose in the later year and was ultimately decided by this Board in a sense contrary to that which had previously been adopted.
So, on the present appeal, the earlier decision of the Board of Review governing the 1940-50 assessment was based upon a construction of section 7(1)(c) of the Income Tax Ordinance as applied to the income of the Abdul Gaffoor Trust; and the same point of construction now arises again but in respect of assessments of that income for other and later years. In their Lordships' opinion it is not possible to distinguish the principle of the Broken Hill decision from that which should prevail in the present case on any such ground as that here the earlier decision related to the taxpayer's "status" as an exempt person while in the Broken Hill case the decision "merely" related to the correct amount of the assessment; for in truth, as has been explained, in all these cases which arise under income tax or rating appeal procedure the decision is essentially as to the correct amount (if any) of the assessment, and in the one case as much as in the other the decision was based upon a question of law, the proper interpretation of one of the provisions of the taxing Act.
To apply the principle of the Broken Hill decision to the case now before theirLordships is to bring it into line with what seems to be by now the regular course of authority with regard to appeals in successive years against income tax or rating assessments … . It may be that the principles applied in these cases form a somewhat anomalous branch of the general law of estoppel per res judicatam and are not easily derived from or transferred to other branches of litigation in which such estoppels have to be considered; but in their Lordships' opinion they are well established in their own field, and it is not by any means to be assumed that the result is one that should be regretted in the public interest'.
Reference to the irrelevance of the status of the tribunal undertaking administrative review may be observed.
59 Significantly to the taxpayer applicants' case, the Privy Council in Caffoor eschewed the approach taken in principle in the earlier decision of the Privy Council in Hoysted,which as in the case of Broken Hill, also originated in Australia. As I have also mentioned, the Privy Council decision in Broken Hill was given on 10 November 1925, yet no reference was made thereto in the Privy Council's reasons for decision in Hoysted published 37 days later. The following opinion was expressed by the Privy Council in Caffoor in relation to what was seen to be inconsistency between the Privy Council decisions in Hoysted and Broken Hill:
'Unfortunately, however, the argument that the determination of an assessment for one year could not set up an estoppel upon an assessment for another year, an argument that was accepted by the Board at almost the same time in the Broken Hill case, does not appear either to have been presented to the Board or to have been noticed or adjudicated upon in the opinion which was delivered by Lord Shaw [in Hoysted]. It is not possible to explain why the matter was dealt with in this way; and it is fair to note that in the majority judgment of the High Court, which was reversed on the appeal, there is a reference, though a passing one, to the point of "eadem quaestio". In the result, however, the attention of the Board in delivering its opinion was wholly occupied with a discussion of what is quite a different issue in connection with estoppel, whether there can in law be estoppel per rem judicatam in respect of an issue of law which, though fundamental to the issue, has been conceded and not argued in an earlier proceeding.
Their Lordships are of opinion that it is impossible for them to treat Hoysted's case as constituting a legal authority on the question of estoppels in respect of successive years of tax assessment. So to treat it would bring it into direct conflict with the contemporaneous decision in the Broken Hill case; and to follow it would involve preferring a decision in which the particular point was either assumed without argument or not noticed to a decision, in itself consistent with much other authority, in which the point was explicitly raised and explicitly determined.'
60 The circumstances in Hoysted were that in respect of federal land tax assessable for a particular year upon land vested in trustees of a deceased estate, the trustees claimed seven equal deductions in respect of seven beneficiaries (effectively) upon the footing of the existence of statutory joint ownership for land tax purposes, and therefore as to deductibility depending upon the question as to how many jointownersheld original sharesfor the purposes of the Land Tax Assessment Act 1916 (NSW) notwithstanding that their beneficial entitlement stemmed from the estate of a single deceased testator. The Commissioner of Taxation had disallowed the deductions and the trustees had lodged objections, which were treated as appeals and transmitted to the High Court. The trustees' objections were upheld by the High Court and the appeal allowed. Subsequently on an appeal by the trustees in respect of an adverse assessment which issued for the ensuing fiscal year, the Privy Council reversed what had been a majority decision of the High Court, and held that the Commissioner was estopped from contending that the beneficiaries were not joint owners of the land. Although as I have recorded already, no specific reference was made by the Privy Council in Hoysted to its earlier, albeit then very recent, decision in Broken Hill, the Privy Council having been differently constituted in relation to the two proximately resolved appeals, the reasoning of the Privy Council in Hoysted indicated the undertaking of a wide survey of authority having been nevertheless the subject of submissions. I have already extracted the dictum of Dixon J in Blair v Curran which cited with apparent approval two passages from what appears in the reasons for decision of the Privy Council in Hoysted. I have also already extracted the estoppel finding made by the Privy Council at 299.
61 I have encountered difficulty with the description of the issue in Hoysted, appearing in the Privy Council's reasons in Caffoor,as involving a 'question of estoppels in respect of successive years of tax assessment', in contrast to the circumstances underpinning the issue in Broken Hill which might more readily bear that description, in that Hoysted was not concerned with realty valuations per se but the construction of fiscal legislation relating to concessional rates referrable to the extent of division of co-ownership by beneficiaries of a deceased estate. Broken Hill involved the ascertainment of the annual saleable value of a mining property to a mine owner based on iron ore product derived during the three year annual average last preceding the municipal rating year. By way of apparent contrast, the circumstance to which the passage in Hoysted was directed was the recommencement of litigation upon a different assumption of fact fundamental to an existing decision and the legal quality of that fact, and by reference to 'new views… [entertained] of the law of the case', or 'new versions… as to what should be a proper apprehension… of the legal result… of the construction of the documents or the weight of certain circumstances…', (to repeat the dicta of the Privy Council in Hoysted at 299), such fact not being in the nature of an annual recurring value requiring annual recalculation on change of value in the peculiar context I have earlier distilled. As I have foreshadowed, Hoysted related in particular to the circumstance whether or not the juridical status beneficiaries to a deceased estate, in the events which had evolved since the death of the former owner testator, were joint owners for the purpose of operation of land tax legislation. The circumstance merely that land tax was assessable annually was therefore not per se the critical factor to the ratio of the decision, as a matter of substance and reality.
62 The taxpayer applicants drew attention, next in sequence of their submissions, to Chamberlain v Deputy Commissioner of Taxation (1987) 164 CLR 502, in the context of their case seemingly to the effect that the doctrine of issue estoppel has no application in principle in relation to revenue proceedings, or referrable at least to periodic assessments or levies. The context to that litigation was that the Commissioner had brought an action for payment of income tax due by a taxpayer for specified years of income, but had caused judgment to be entered for an amount substantially less than that actually due, being an amount involving the same numerals per se, yet with one decimal point being placed out of sequence apparently by inadvertence, thereby purportedly seeking to enforce a substantially lesser impost in favour of the taxpayer. The Commissioner did not seek to have the judgment vacated, or to explain precisely how that evident mistake had occurred, but instead brought an action for recovery of the balance of the tax assessment the subject of the obvious shortfall. The High Court held that the second action was not maintainable by the Commissioner by reason that the cause of action had become merged in the earlier judgment, which the Commissioner had chosen not to impeach on account of mistake. It was observed in the joint judgment of Deane, Toohey and Gaudron JJ in Chamberlain at 510 that '… it may well be that no conduct on the part of the Commissioner can operate as an estoppel against the operation of the Act', referring in that regard to the well known principle enunciated in Federal Commissioner v Wade (1951) 84 CLR 105 at 117, being a principle not here of course in dispute. Nevertheless the broad but brief proposition that '… the Commissioner is not bound by a determination made in respect of an assessment for one year, so far as other years are concerned…' was described in that joint judgment at 510 'as equally true', Caffoor at 598-601 being cited generally in relation to that brief assertion. There was however no other discussion of that bare proposition, and in particular as to the reach thereof. There is something to be said for the view that such observation in Chamberlain was obiter, the circumstances giving rise to the issue in Chamberlain being conceptually distant from contexts at least such as here involved. Significant to that observation is the fact that no reference was made to Caffoor in the reasons for judgment in Chamberlain of both Brennan J and Dawson J. No reference was made in any of the Chamberlain judgments to Broken Hill or Hoysted or Hope.
63 The Commissioner's submission in relation to Chamberlain was to point out that in the earlier concluded Spassked proceedings, Spassked had sought and obtained a determination of facts and issues which necessarily resolved the liability of the taxpayer applicants to pay the primary tax assessed to them, and that the Federal Court's jurisdiction to prevent a re-litigation of those issues was confirmed by the Full Federal Court in its decision upon the initial appeal (Chamberlain v Commissioner of Taxation (1991) 28 FCR 21), where Davies, Ryan and Foster JJ at [26] purportedly applied the doctrine of estoppel as exemplified in Hoysted, and thereby prevented the Commissioner of Taxation from seeking to re-litigate in the Federal Court upon the basis of a mistaken assumption upon which a consent judgment had been entered earlier in the Supreme Court. Incidentally, in the course of the reasons for judgment of Deane, Toohey and Gaudron in Chamberlain at 509, therewas reproduced the first sentence of the dictum in Henderson I have earlier extracted, it being explained that 'Henderson was not concerned with res judicata in its strict sense but rather with its implications when an issue is sought to be raised which could and should have been litigated in the earlier proceedings', referring thereby to what was established by the High Court's decision in Anshun. I would add for completeness that the success of the taxpayer in the High Court in Chamberlain was seemingly treated in any event as based on res judicata: see the joint reasonsfor judgment of Deane, Toohey and Gaudron at 507, and also the reasons of Brennan J at 504 and of Dawson J at 512. However the subsequent proceedings brought by the Commissioner in the Federal Court, also resolved as above indicated in favour of the taxpayer, turned on Anshun estoppel, by reason of the omission of the Commissioner to raise the issue of mistake in the earlier High Court proceedings. In the result I do not think that Chamberlain provides the assistance, at any rate decisively, for which the taxpayer applicants' case for denial of the operation of an estoppel in the present circumstances was propounded. On the other hand and for what it may matter, I think that the taxpayer applicants were correct in their rejection of the characterisation of Chamberlain as 'revenue proceedings', in the sense of involving an issue as to liability to tax and/or as to the assessable quantification of that liability as such.
64 The applicant taxpayers next invoked as further applicable that part of the speech of Lord Radcliffe in the House of Lords in Society of Medical Officer of Health v Hope [1960] AC 551 at 562, in which the following appears in the context of discussion of the decision of a land valuation tribunal in England, arising out of a case stated by that tribunal upon an issue as to exemption from payment from payment of rates in favour of scientific societies:
'I do not think that it is possible to discuss the point raised by the present appeal simply in terms of these general phrases, or without giving full weight to the fact that what is in question is the conclusiveness for liability to one rate of a decision given with regard to another. The system of rating involves certain considerations that are special to itself. Its nearest analogy is with the system of annual personal taxation. With regard to both one has to begin by recognising that there is high and frequent authority for the proposition that it is not in the nature of a decision given on one rate or tax that it should settle anything more than the bare issue of that one liability and that, consequently, it cannot constitute an estoppel when a new issue of liability to a succeeding year's rate or tax comes up for adjudication. The question of this liability is a "new question". It is not "eadem quaestio". The "cause of action is different". "The subject-matter is a different year's tax and a different year's assessment and is not the same as the subject-matter of the previous ruling". All these things have been said with reference to rates or taxes, and the list of decisions that recognise or enforce the principle is a long one…'.
The fiscal context to that restatement of principle bears remote resemblance to the fiscal context of the earlier concluded Spassked proceedings. The authorities cited thereafter by Lord Radcliffe at 562‑563 included Broken Hill. At 563, his Lordship continued:
'It would not be at all easy for us to depart from this long line of authoritative opinion, even if we wanted to. Personally, I do not want to, because I think that, on the whole, it is more in the public interest that tax and rate assessments should not be artificially encumbered with estoppels (I am not speaking, of course, of the effect of legal decisions establishing the law, which is quite a different matter), even though in the result some expectations may be frustrated and some time wasted.'
In relation to his Lordship's observation last made, I would not think that the implications of the present proceedings continuing to trial, in the light of the factual matrix to the earlier Spasskedproceedings, recorded and addressed both at first instance and on appeal, and the nature and extent of the findings consequentially made, would readily reflect any notion as to the taxpayer applicants being here sought to be 'artificially encumbered by estoppels' at the instance of the Commissioner. What doubtless troubles the Commissioner in the present circumstances, at least for one matter, is the substantial cost and delay in resolution of protracted litigation, similar to that experienced in the earlier concluded Spassked proceedings, by what would necessarily involve a re‑run and subsequent re-appraisal of much of the evidence tendered in those earlier concluded proceedings.
65 The revenue issue arising in Hope thusrelated to the Society's claim for a continued exemption from local government rates which the Society had earlier secured by the decision of a local valuation court, and it was that decision which the House of Lords held not to create an estoppel per res judicata. The unanimous findings of the Law Lords occurred in the context of a property valuation list which became the attention of the decision. That list had come to the end of its statutory life and a new 'quinquennial valuation' list was required to be brought into existence, even though it was apparently shown, or else mutually agreed, that there had been no change of circumstances. The jurisdiction of the local valuation court there involved was significantly limited, as in the case for instance in Caffoor, its function involving decision-making upon the assessment and liability of a ratepayer for a terminable period, being circumstances bearing insignificant analogy to that of the jurisdiction of the Federal Court exercisable on income tax appeals, as exemplified by the earlier concluded Spasskedproceedings relating to the 1992 fiscal year.
66 Before moving to other observations and reasoning appearing in the advice of the Privy Council in Hope, it is material to take further into account the following additional observations of Lord Radcliffe at 563, which tend to be supportive of the view I have emphasised, by way of distinguishing the operation at least of Caffoor and Hope in terms of the nature of extent of the function undertaken by the initial review body or entity:
'To say that the issue of liability to one year's rate is not the same subject-matter as the issue of liability to another year's, or that the one cause of action is different from the other is, perhaps, rather an arbitrary way of disposing of the appellants' case. There are legal contexts, in trespass or recurring claims for rent, for example, in which much of the same might be said and yet it is not impossible for an estoppel to arise. The reason why, when you are dealing with rates and taxes, the difference of subject-matter is treated as being so important seems to lie in two considerations which, as I read the authorities, are peculiar to their particular field.
One consideration is that the jurisdiction of the tribunal to which the decision belongs by the administrative scheme is a limited one. It is limited in the sense that its function begins and ends with that of deciding what is to be the assessment or liability of a person for a defined and terminable period… For that limited purpose it is a court with a jurisdiction competent to produce a final decision between the parties before it: but it is not a court of competent jurisdiction to decide general questions of law with that finality which is needed to set up the estoppel per rem judicatam that arises in certain contexts from legal judgments…'
Moreover his Lordship continued at 565-566:
'The other main consideration which has influenced the courts in their treatment of these questions is the special position of the valuation officer, surveyor or equivalent official or committee… It is no reflection upon the responsible work carried out by the local valuation courts if I say that they are not the natural repositories of the right to decide for good such legal issues as the interpretation of statutes or general legal questions affecting ratepayers: and to hold that, subject to appeal, such decisions are to be treated as conclusive for all time would be, in my opinion, to impose a needlessly heavy burden upon the administration of rating.'
The contextual background and issues prevailing in Hope are thus to be seen to be far removed from those of the earlier concluded Spassked proceedings. Lord Radcliffe then proceeded to contrast, if not wholly distinguish, the implications of the Privy Council's decision in Hoysted, pointing out (also at 566) that '[t]he estoppel related to a question as to the nature of legal rights in property and the interpretation of the taxing statute with regard to them', and that Hoysted was therefore '… useless to illuminate the only point which is now before this House, [being] the effect on a succeeding valuation list of a decision given with regard to an earlier [decision]', and further (at 566) that '[a]t no stage of the proceedings, so far as appears, was the argument put forward on behalf of the commissioner of taxation that the assessment for 1920-21 was a new subject‑matter in relation to the assessment for 1918-1919: nor is the point noticed in the opinion of the Judicial Committee delivered by Lord Shaw'. His Lordship concluded, following further discussion as to insufficient information of relevance emerging from the decision of the Privy Council in Hoysted, more significantlyas follows (at 566-567):
'We do not know for what reason the point of "new subject-matter" was not raised in Hoystead's (sic) case. It is to be noted, however, that the decision that was set up as an estoppel was a decision of the highest legal tribunal in Australia, the High Court, arrived at by the full court upon a case stated for their opinion by a single judge of the High Court to whom there lay an appeal from the decision of the commissioner of taxation. Any objection, therefore, which was based on difference of subject-matter between the taxes for the respective years, would have to meet the puzzling question whether for the purposes of estoppel the jurisdiction of the High Court in adjudicating upon points of law arising in tax proceedings is not wider and more comprehensive than the jurisdiction of the original assessing tribunal. It is true that that aspect does not seem to have had any weight attached to it in the other decision of the Judicial Committee of the same year, the Broken Hill case. But there the point did not call for, or receive, any full attention. I say nothing more about this. It is not the point before us and, if it ever arises, it will need separate consideration.'
The jurisdictional distinction thus drawn above between the exercise of the jurisdiction of an original assessing tribunal and that of the High Court in Australia may be observed.
67 Given therefore the jurisdiction of the forum to which the taxpayer in the Spassked proceedings undertook recourse in respect of the 1992 fiscal year, being of course the Federal Court as a superior court of record exercising jurisdiction pursuant to Part IVC of the Administration Act, whatever assistance might be obtainable by the taxpayer applicants from Hope is I think of insufficient significance to the resolution of the present proceedings. It cannot be said for instance of the Federal Court that '… it is not a court of competent jurisdiction to decide general questions of law with that finality which is needed to set up the estoppel… that arises in certain contexts from legal judgments'. It is indeed a '… natural repositor[y] of the right to decide for good such legal issues as the interpretation of statutes or general legal questions affecting [taxpayers]', within the foregoing description appearing in Lord Radcliffe's speech in Hope at 563. Moreover it is the Commissioner's bureaucratic decision on a taxpayer's objection which is referred to the relevant court by a taxpayer for review, albeit that a taxpayer is dissatisfied with only part of that decision; once that reference takes place, the court is '… then seized of the decision in its entirety…', in the sense that '… the court is concerned to determine whether the amounts assessed as taxable income are excessive', in relation to which '… the Commissioner must be able to raise for the Court's determination the deductions properly to be allowed in the light of the Court's decision as to assessable income' (Federal Commissioner of Taxation v A.N.Z. Savings Bank Ltd (1994) 181 CLR 466 at 476 and 479).
68 Viscount Simonds agreed explicitly with Lord Radcliffe's comprehensive speech in Hope. Lord Cohen stated simply 'I concur', and Lord Jenkins similarly 'I agree', in both instances without distinguishing between the speech of Lord Radcliffe and that of Lord Keith who wrote the only other speech containing reasons. The speech of Lord Keith, which followed that of Lord Radcliffe, included the following process of reasoning (at 567):
'The proposition submitted… for the appellants was that where a question has been decided by a court of competent jurisdiction in a lis inter partes, these parties are estopped from reopening the same question in a subsequent suit between themselves. This submission necessarily proceeded upon the assumption, which has not been challenged by the respondent, that the facts and circumstances relevant to the appellants' exemption from rating under section 1 of the Scientific Societies Act, 1943, remained unchanged from what they were when the local valuation court on October 24, 1951, decided that the appellants' hereditament was exempted from rating under the Act of 1843. Otherwise it would not be the same question that comes up for reconsideration.
The proposition advanced, which is impeccable in circumstances in which it is permitted to operate, is, in my opinion, inapplicable to the circumstances of this case. I find it difficult to equate the procedure followed out under the statute with a proper lis inter partes, though that, of itself, might not be conclusive. Nor do I find it easy to distinguish the functions performed by assessment committees before the coming into operation of the Act of 1948 from those now performed by a local valuation court, or to think, because the new body is differently constituted and called a court, that a greater importance and effect should be attached to its decisions. The introduction of a court into the proceedings instead of a committee played some importance, if I understood aright, in the submission for the appellants.
What we are faced with here is an administrative act of a public official, the valuation officer, against which the party affected has a right of appeal to the local valuation court, with further appeals to higher courts. The valuation officer has a public duty to perform by making periodically every five years a valuation list of all hereditaments, with certain exceptions, in his rating area. He must necessarily reconsider and revise the previous valuation list. He has no personal interest in any appeals taken against his valuations, and has a duty to hold the scales as fairly as he can among the ratepayers affected, the occupiers of the various hereditaments. The general body of ratepayers is constantly changing. With each quinquennium the revaluations will affect a new body of ratepayers. I doubt if the valuation officer owing such a duty to an ever-changing body of ratepayers can be regarded as always the same party in the sense in which that expression is used for the application of the rule of res judicata. What if the appellant society changes its habitat and moves into another rating area with a different valuation officer?
I emphasise these aspects of the functions of a valuation officer under the statute, for they lead to what I regard as the true answer to the submission for the appellants, which is that a public officer in the position of the respondent cannot be estopped from carrying out his duties under the statute.'
The distinction drawn by Lord Keith between 'the procedure followed out under the statute with a proper lis inter partes' may be observed, the former being there carried out of course by 'an administrative act of a public official, the valuation officer'.
69 It may therefore be seen, for one matter, that the functions of the valuation officer the subject of the analysis undertaken by the House of Lords in Hope, for instance to 'reconsider and revise the previous valuation list',are not sufficiently comparable to the decision‑making by a Federal Court judge in addressing an appeal from the disallowance by the Commissioner of a taxpayer's objection to an income tax assessment, as in the case of course of the earlier concluded Spassked proceedings. Particularly must that be so, as in the present case, of decision‑making by a Federal Court judge upon a taxpayer's entitlement or disentitlement to income tax deductibility, in respect of outgoings or losses incurred in continuing business operations of subsequent or successive fiscal year or years, as this is necessarily or inherently 'not eadem quaestio as the issue decided in the later proceedings', to adopt Lord Radcliffe's description in Hope. Put another way, the judicial function of a Federal Court judge is hardly to be equated with the administrative function to '… reconsider and revise the previous valuation list', and probably also of a quasi administrative function. Incidentally I have of course earlier referred to the English doctrine of res judicata having a wider connotations to that prevailing in Australia.
70 Further in the speech of Lord Keith in Hope, reference was made (at 569-570) to 'much reliance' by the appellant society upon the Privy Council's decision in Hoysted, his Lordship there observing that such '… authority is not binding on this House, and the point was never taken in the case that a decision on liability to assessment to tax for one year is not conclusive of liability to assessment in a later year', and further that '[t]he judgment [of the Privy Council in Hoysted] would seem to conflict with what was said a month earlier in [Broken Hill] by a Board differently constituted, rejecting a plea of res judicata…'. His Lordship concluded by adopting a similar conclusion, as in Broken Hill, as to there not being involved the '… eadem quaestio, and therefore the principle of res judicata…'not being applicable, and by further observing the absence of what was essential to a successful plea of res judicata. For completeness I record also that Hoysted was of course decided by the Privy Council on an appeal from Australia, unlike Caffoor, and moreover Hope was a decision of the House of Lords, and that those circumstances have implications in terms of the present principles of juridical authority in operation in Australia, to which I have of course made reference. True it is of course that Broken Hill was determined by the Privy Council on appeal from Australia, but as earlier mentioned, about five weeks prior to the Privy Council's decision in Hoysted, also on appeal from Australia, yet without being apparently referred to by counsel appearing in Hoysted and nor by the Privy Council in the course of its reasons.
71 Purportedly on the basis of authority thus cited, which I have sought to record at some length in deference to and appreciation of the industry inherent in the submissions of counsel for the taxpayer applicants (as well as of counsel for the Commissioner), it was next contended on behalf of the taxpayer applicants that 'whilst Hoysted remains good law in relation to the application of issue estoppel other than to tax cases, it is clear that the decision of the Privy Council in Broken Hill is to be preferred where the issue is the effect of a decision on one year of [taxable] income on litigation over a different year'. The taxpayer applicants further asserted that '[t]he Commissioner cannot put forward any decision in which Hoysted has been cited as authority for the proposition that a decision involving the same or a similar subject matter in one year of assessment of an annual rate or tax creates an estoppel against the taxpayer in respect of another year of assessment'. Yet as I have earlier recorded, the taxpayer applicants as well as the Commissioner appeared to rely on the generality of the phraseology of Lord Shaw in Hoysted to the extent adopted by Dixon J in Blair v Curran at 532 earlier extracted in these reasons, being that 'a fact fundamental to the decision arrived at' in former proceedings and 'the legal quality of the fact', must be taken as finally and conclusively established, so long as any such fact is not subsidiary or collateral. The Commissioner would characterise as a fact fundamental to the earlier concluded Spassked proceedings the findings there made, which I have earlier recorded concerning critical circumstances and features involved in relation to the fiscal years 1988 to 1994, and the inherently consequential implications thereof to deductibility for income tax purposes in respect of the year of income 1992 the subject of resolution by the earlier concluded Spassked proceedings.
72 The taxpayer applicants asserted further that none of the authorities relied on by the Commissioner addressed what the taxpayer applicants described as the divergence of views between Hoysted and Broken Hill in relation to tax matters, save briefly in Falk v Haugh (1935) 53 CLR 163. That litigationwas concerned with relief against forfeiture, in the context of emergency legislation enacted in the depression years to address hardship arising from the consequences of default in payment of mortgage indebtedness, in circumstances where such payments as had been made by a mortgagor to a mortgagee had been received and applied by the mortgagee on account of the mortgage debt generally and thus without distinction as to principal or interest, thereby resulting in default as to payment of interest, and further where the mortgagee had entered possession and received rents and profits pursuant to a default which appeared to have differing statutory consequences, depending on whether the same relating to principal or interest. In the joint reasons for judgment of Rich, Dixon, Evatt and McTiernan JJ in Falk at 171, the following appeared:
'…The reasons of the Full Court for refusing to determine the questions reserved may be taken to be the basis of the decision by the County Court that interest had not been paid. The decision in the County Court was that interest had not at that time been paid up to a given date. The question at issue here is whether it has now been paid up to another and later date. An affirmative answer to that question involves no necessary contradiction of the County Court decision. The issues are not the same; but the decision of each issue involves a common question, namely, what, in the case of a mortgagee in possession, amounts to payment. It is this question with which the reasons of the Full Court deal. It may, therefore, be right to regard those reasons as forming only a subsidiary ground leading to the decision of the issue between the parties, and not as constituting the decision of an issue. An estoppel of this kind arises from the decision inter partes of an ultimate issue identical with one of the ultimate issues that are again raised. But it does not arise from the adoption of a process of reasoning in the decision of the issue, although the same process may be applicable in the decision of a second and different issue. It is upon this ground, if at all, that the decision of the Privy Council in [Broken Hill] is to be reconciled with its decision in [Hoysted].'
The Commissioner had contended that the foregoing dicta in Falk was to the effect that 'the advices of the Privy council in Broken Hill and in Hoysted were capable of being reconciled upon the basis that an estoppel does not arise merely by reliance upon the process of reasoning in an earlier decision', and further, that 'the High Court did not decide that Hoysted was wrong, and that Broken Hill was to be applied in Australia instead of Hoysted', and that therefore so much is the law in Australia, notwithstanding that the Privy Council itself did not treat the two decisions as consistent with each other and disavowed the authority of Hoysted'. The Commissioner's analysis in relation to Falk, so far as it goes, must be correct, and is not sufficiently answered by the circumstances that the Privy Council decided in Caffoor at 599-601 to follow Broken Hill instead of Hoysted by reason of the latter's inconsistency with the line of English authority there identified in Caffoor. Moreover there is much to be said for the view that the critical findings of the primary judge and of the Full Court in Spassked referrable to the period of time from 1988 to 1994 (both of course inclusive) which I have earlier cited, cannot aptly be described (to adopt parts of the Falk dicta)as 'only a subsidiary ground leading to the decision of the issue between the parties.' Moreover it would be at least more realistic to say that on true analysis, such findings comprised or formed part of 'the decision… of an ultimate issue identical with one of the ultimate issues that are… raised', to cite from the above passage in Falk.
73 Be all that as it may, the taxpayer applicants submitted that the reasons for judgment of the Privy Council in Caffoor at 599-601, though not binding on the Federal Court, should be afforded 'the highest respect' (Viro v The Queen (1978) 141 CLR 88 at 135 perMason J (as he then was)). I will later refer to Viro and other authority relating to Privy Council decisions. The taxpayer applicants submitted in any event that 'while Hoysted has not been specifically overruled by the High Court in relation to its application to tax matters, the High Court has referred with approval to the decision of the Privy Council in Caffoor, where the decision in Broken Hill was followed and Hoysted rejected', and I was referred again Chamberlain at 510, where the brief reference thereto was made by Deane, Toohey and Gaudron JJ and which I have earlier discussed as being at least arguably not sufficiently on point arising for present examination. The taxpayer applicants further submitted 'that whilst Hoysted remains good law in relation to the application of issue estoppel other than to tax cases, it is clear that the decision of the Privy Council in Broken Hill is to be preferred where the issue is the effect of a decision on one year of income on litigation over a different year'. In my opinion, so much is far from 'clear'. Indeed the framework of the taxpayer applicants' case was assembled by reference to authorities concerned not with particular situations involving the kind or scope of that the subject of the earlier concluded Spassked proceedings, which involved a factually comprehensive and complex enquiry as to the purpose and the objectives of application of the proceeds of borrowings in a substantial commercial context and moreover which also involved corporately related borrowers and corporately related lenders operating otherwise than at arms length, in order to determine the deductibility or otherwise for income tax purposes in relation to the years of income the subject of dispute which were immediately proximate to that year of income the subject of resolution by the earlier concluded Spassked proceedings. Of course, the purpose of application of the proceeds of borrowings by a taxpayer from a third party in one fiscal year for an income producing purpose may subsequently transpose to a non-income producing purpose to that of the proceeds of the original borrowing or of an ongoing borrowing, in either case from the same lender, whether in the course of the same or a subsequent fiscal year.
74 More recently in Orica Ltd v Federal Commissioner of Taxation (2001) 182 ALR 77, Merkel J, as a Federal Court judge at first instance, said as follows (at 87), in the context of a capital gains tax dispute, upon which the taxpayer applicants sought to place additional reliance in support of the same major theme of their present case:
'Issue estoppel has been held not to apply to a taxpayer where the previous decision relied upon as founding the issue estoppel related to a different year of income. Although there was some support for the contrary view in [Hoysted], that decision was not followed in [Caffoor]. In Caffoorthe Privy Council determined that a taxpayer is not estopped from contending it was entitled to an exemption in respect of a year of income by a decision in respect of a different year of income. More recently, in [Chamberlain] Deane, Toohey and Gaudron JJ cited Caffoor as authority for the proposition that "the Commissioner is not bound by a determination made in respect of an assessment for one year, so far as other years are concerned". It must follow that the Commissioner's issue estoppel argument also fails.'
The estoppel issue raised in Orica was in the nature of an alternative contention, and arose in the context of the 'relation back' provisions of s 160U of the capital gains tax provisions of the Tax Act and did not occupy the principal focus of attention of those proceedings. It appears that Merkel J was not provided with the substantial scope of juridical references to and analysis of authority that has been presently afforded to the Court by the parties in contest, including that analysis and debate referrable to the High Court's later decision in Queensland Trustees Limited v Commissioner of Stamp Duties (1956) 96 CLR 131, which I will shortly next discuss, or for that matter to Falk. The decision in Orica did not survive appeal (see Commissioner of Taxation v Dulux Holdings Pty Ltd (2001) 113 FCR 436), though the issues of the scope here arising did not feature in the reasons for judgment on that appeal. I will later return to Orica.
75 The Commissioner submitted that Queensland Trustees was indeed 'directly in point'. The case involved an initial assessment of stamp duty made under the Stamp Acts 1884-1940 (Qld) by the Commissioner of Stamp Duties on a transfer of real property from a company controlled by a deceased person as transferor to the trustees of a trust estate as transferees, being an assessment later upheld by the High Court (in re Sharpe (1944) QSR 26). Subsequently the trustees transferred the land to the surviving beneficiary of the trust in accordance with terms directed by testamentary provision, and the Commissioner of Stamp Duties assessed that subsequent transfer to succession duty under the The Succession and Probate Duties Acts 1892-1952 (Qld). The High Court held by majority that the claim by the Commissioner of Stamp Duties should fail on the ground of issue estoppel. It was asserted by the Commissioner of Stamp Duties that it was fundamental to the High Court's decision, which upheld the assessment of stamp duty, that the transferee beneficiary's title derived from the terms of the settlement and not from the will of the testator, the High Court having accepted the Commissioner of Stamp Duties' contention 'that the testator at his death had no interest in the land and no power to compel its transfer to his trustees.'
76 The taxpayer applicants submitted conversely that Queensland Trustees was of no assistance, being '… simply not a tax of one year… and tax under the same Act in another year', but was instead 'tax under two different statutes', one relating to stamp duty in relation to a settlement and the other in relation to death duty, albeit statutes involving the same revenue commissioner; I do not think that so much is of any decisive significance. The taxpayer applicants contended further that Queensland Trustees stands outside the 'directly relevant authorities', being authorities to which I have referred earlier in these reasons and which dealt with annual assessments of income tax, land tax and other duties. Rather Queensland Trustees was said by the taxpayer applicants to have been decided upon the basis that the existence of an issue estoppel had been determined by the Privy Council decision in Hoysted, without reference to the 'contrary decision in Broken Hill', and further that after the decision in Queensland Trustees, 'Caffoor decisively rejected Hoysted and adopted Broken Hill'. It was acknowledged by the taxpayer applicants that Queensland Trustees was not referred to in Caffoor or Hope, though neither case had of course originated in Australia. The taxpayer applicants further argued on that footing that the decision in Queensland Trustees was not directly in point, and could only 'stand with the line of authority running from Broken Hill to Chamberlain'on the basis that, unlike those cases, it was not concerned with annual assessments of tax, and further that '[i]n the light of the other decisions, … including the adoption of Caffoor by the High Court in Chamberlain', Queensland Trustees should not be regarded as persuasive in the context of a Part IVC appeal on annual income tax assessment. I have of course emphasised the context involved in relation to Chamberlain and the relative briefness of reference made therein to Queensland Trustees.
77 The Commissioner rejoined that although neither Dixon CJ nor McTiernan J made reference in Queensland Trustees for instance either to Hoysted or to Broken Hill in particular, Webb J held that '… the Crown is estopped from questioning the decision in these proceedings between the same parties', citing at 144 in that regard Hoysted generally. Moreover in the remaining judgment, being that of Kitto and Taylor JJ jointly, the Commissioner asserted that a similar finding was made at 151 as to the operation of estoppel, in the following terms:
'The principle of law which is relied upon is that for which [Hoysted] is the leading authority in the Privy Council. If the Crown is so estopped, the assessment of succession duty cannot stand, for the nomination and schedule was an instrument which operated inter vivos, and the trusts which it stated in favour of the sons were expressed without reference to the death of any person.
The case therefore turns upon a question of issue‑estoppel.'
The conclusion of Kitto and Taylor JJ at 152 was as follows:
'For this reason it must be held that the Crown is estopped by the judgment it obtained in the former proceedings from asserting that the absolute vesting… was the taking effect of a succession conferred by the testator's will. The claim for succession duly must therefore fail.'
The Commissioner submitted that the principles of estoppel apply not only to the administration by the Crown of one species of taxation, but to the administration by the Crown generally of all taxes imposed by it. The Commissioner further submitted that the doctrine 'can certainly apply to attempts to re-litigate issues arising under one species of taxation, and in particular, a revenue enactment concerned with annual assessments of tax', and emphasised in that latter context that the Crown in Queensland Trustees was held estopped, in respect of its administration of both the Queensland stamp duty legislation and the Queensland probate legislation.
78 The taxpayer applicants responded by pointing principally to what may be described as the distinction between the single or confined revenue circumstances involved in Queensland Trustees, being revenue in the form of ad valorem stamp duty or instruments or transactions, from those of successive annual (or other periodic) revenue circumstances involving the incidence of income tax or analogous revenues addressed for instance in Broken Hill, Caffoor and Hope. The critical issue presented by the taxpayer applicants consequently was whether or not taxing or rating systems of annual (or other periodic) assessments or exactions allowed room for the operation of issue or similar estoppels in the determination of successive years of income tax.
79 At this point of my review of submissions on authorities it is appropriate to address more closely the taxpayer applicants' contentions upon the theme generally as to the binding authoritative operation of decisions of the House of Lords and the Privy Council in Australia, irrespective of the Commissioner's contentions to the effect that the taxpayer applicants' reliance upon the leading English decisions of Broken Hill, Caffoor and Hope were in any event misplaced. Additionally however to what I have earlier cited in relation to Viro, my attention was drawn by the taxpayer applicants to the later decision of the High Court in Cook v Cook (1986) 162 CLR 376 at 390, where Mason, Wilson, Deane and Dawson JJ jointly discussed the implications of the circumstance that the Judicial Committee of the Privy Council was no longer the ultimate court of appeal or one of the ultimate courts of appeal in Australia, and said as follows:
'The history of this country and of the common law makes it inevitable and desirable that the courts of this country will continue to obtain assistance and guidance from the learning and reasoning of United Kingdom courts just as Australian courts will benefit from the learning and reasoning of other great common law courts. Subject, perhaps, to the special position of the House of Lords given in the period in which appeals lay from this country to the Privy Council, the precedents of other legal systems are not binding and are useful only to the degree of the persuasiveness of their reasoning.'
The dicta would seem to have marginally modified the earlier authority of Skelton v Collins (1966) 115 CLR 94, where Kitto J said at 104 as follows:
'The position of this Court in relation to decisions of the House of Lords does not seem to me to need clarification. The Court is not, in a strict sense, bound by such decisions, but it has always recognized and must necessarily recognize their peculiarly high persuasive value'.
The taxpayer applicants for their part also cited at 135 (per Mason J as he then was) and Hawkins v Clayton (1986) 5 NSWLR 109 at 136-137 (per McHugh JA as he then was). The taxpayer applicants asserted that the decision of the House of Lords in Hope was one of those cases referred to in Cook as being in a 'special position'. Whether in any event of course, the speeches in Hope provide the applicant taxpayers with the extent of assistance sought to be invoked is a further matter for their concern.
80 Faced in any event with the hurdle presented by the Commissioner that contrary to the earlier concluded Spassked proceedings, Caffoor and Hope did not purport in any event to deal with a year or years of income that was or were the subject of subsequent proceedings, whereas the earlier Spassked proceedings did so, in the light in particular as to the findings relevantly prevailing in relation to the six fiscal years 1988 to 1994, the taxpayer applicants asserted that for reasons already explained (and which I have sought to summarise in these reasons), '... the earlier Spassked proceedings did not, and could not determine the tax payable in any year other than the 1992 year'. In further pursuit of that theme, the taxpayer applicants pointed out, in reliance upon Hope in particular, that 'what is under review is the Commissioner's decision on the taxpayers' objections', referring thereby to ss 14ZY and 14ZZ of the Administration Act. I was referred by the taxpayer applicants again to ANZ Savings Bank (at 476 and 479), where discussion occurred concerning an appeal relating to an objection decision, 'albeit that a taxpayer may be dissatisfied with only of that decision', and to the Court's task to determine whether the amount assessed as taxable income is excessive.
81 The taxpayer applicants asserted in context that despite the width of the powers in s 199 of the Tax Act and s 14ZZP of the Administration Act, the same can only be exercised in relation to the objection decision and the assessment before the court. Consequently it was said that the objection decision and the excessiveness of the assessment to which it relates define the Court's jurisdiction in a Part IVC appeal, and reference was made in that context of the taxpayer applicants' submissions to what appears in the course of Lord Radcliffe's speech in Hope at 563, which I have earlier extracted. As I there indicated, so much tended however on close analysis to be supportive of the commissioner's case rather than the case of the taxpayer applicants; I am unable to comprehend why the same can sensibly be said to exclude in principle or otherwise the imputation of an estoppel otherwise appropriate according to law.