Shord v Commissioner of Taxation [2017] FCAFC 167

Shord v Commissioner of Taxation [2017] FCAFC 167

The Administrative Appeals Tribunal denied the appellant procedural fairness by making a determinative finding that he was not an employee for the purposes of s 23AG(7) of the Income Tax Assessment Act 1936 (Cth) after the Commissioner expressly abandoned reliance on that issue at hearing. Consequently, the appeal must be allowed. However, the Tribunal and the Court below were correct that the appellant failed to discharge the onus of proving entitlement to a foreign tax offset due to insufficient evidence of any such payments.

Parties
Appellant: Michael Shord; First Respondent: Commissioner of Taxation; Second Respondent: Administrative Appeals Tribunal
Jurisdiction
Australia
Judgment Date
26 October 2017
Procedural Posture
Appeal / Appeal From a Judgment of the Federal Court on a Question of Law, Against a Decision of the Administrative Appeals Tribunal Affirming the Commissioner's Objection Decision
Outcome
Appeal allowed in part
Legal Topics
Foreign Income Tax Exemption, Tax Residency, Procedural Fairness in Administrative Decisions, Foreign Income Tax Offsets, Onus of Proof in Tax Objections, Role of Model Litigant in Tax Litigation
Taxation Law Administrative Law Foreign Income Tax Exemption Tax Residency Procedural Fairness in Administrative Decisions Foreign Income Tax Offsets Onus of Proof in Tax Objections Role of Model Litigant in Tax Litigation

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Parties

Michael Shord

Appellant

Commissioner of Taxation

First Respondent

Administrative Appeals Tribunal

Second Respondent

Procedural Posture

Appeal / Appeal From a Judgment of the Federal Court on a Question of Law, Against a Decision of the Administrative Appeals Tribunal Affirming the Commissioner's Objection Decision

Legal Issues

  1. 1 Whether the appellant was engaged in 'foreign service' within s 23AG(7) of the Income Tax Assessment Act 1936 (Cth) and thereby exempt from income tax
  2. 2 Whether the appellant was entitled to tax offsets for foreign income tax paid, pursuant to s 770-10(1) of the Income Tax Assessment Act 1997 (Cth)
  3. 3 Whether the Administrative Appeals Tribunal denied procedural fairness by making a finding not pursued by the Commissioner

Ratio Decidendi

The Administrative Appeals Tribunal denied the appellant procedural fairness by making a determinative finding that he was not an employee for the purposes of s 23AG(7) of the Income Tax Assessment Act 1936 (Cth) after the Commissioner expressly abandoned reliance on that issue at hearing. Consequently, the appeal must be allowed. However, the Tribunal and the Court below were correct that the appellant failed to discharge the onus of proving entitlement to a foreign tax offset due to insufficient evidence of any such payments.

Court Disposition

Appeal allowed in part

Orders

  • The appeal is allowed on the basis that the Tribunal denied procedural fairness in finding that the appellant was not an employee.
  • The orders of the primary judge made on 29 June 2016 are set aside.