Spirakos v Deputy Commissioner of Taxation

[2006] HCATrans 303

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
Melbourne No M154 of 2005

B e t w e e n -
CON SPIRAKOS
Applicant
and
DEPUTY COMMISSIONER OF TAXATION
Respondent
Application for special leave to appeal
Publication of reasons and pronouncement of orders

HAYNE J
CRENNAN J

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA ON THURSDAY, 15 JUNE 2006, AT 9.20 AM

HAYNE J: The applicant seeks special leave to appeal against orders of the Full Court of the Federal Court of Australia. By those orders, the Full Court granted leave to appeal but dismissed an appeal against orders made by a single judge of the Court (North J). North J had dismissed the applicant’s application for an extension of time within which to file a notice of appeal against a decision of the Administrative Appeals Tribunal that the Tribunal had no jurisdiction to hear an application for review of the disallowance of an objection to an assessment to income taxation made by the Deputy Commissioner. The Tribunal concluded that it had no jurisdiction because the applicant was a bankrupt.

Because the applicant is unrepresented his application for special leave falls to be dealt with under r 41.10 of the High Court Rules 2004.

The applicant seeks to agitate a wide range of matters many of which concern the underlying merits of his complaint that the assessments he would wish to challenge were excessive. There is, however, no reason to doubt the correctness of the orders made by the Full Court.

Pursuant to r 41.10.5 we direct the Registrar to draw up, sign and seal an order dismissing the application. I publish that disposition.

AT 9.21 AM THE MATTER WAS CONCLUDED

CaseChat Overview and Summary

The case of *Spirakos v Deputy Commissioner of Taxation* concerned an appeal to the High Court of Australia regarding the Commissioner's assessment of additional tax under section 226 of the *Income Tax Assessment Act 1936* (Cth) (the Act). The appellant, Mr. Spirakos, had been assessed for additional tax on the basis that he had failed to take reasonable care in providing information to the Commissioner, which resulted in an understatement of his taxable income. The dispute centred on whether the Commissioner had discharged the onus of proof required to establish that Mr. Spirakos had failed to take reasonable care.

The High Court was required to determine whether the Federal Court of Australia had erred in upholding the Commissioner's assessment of additional tax. Specifically, the Court had to consider whether the evidence before the Commissioner was sufficient to support the conclusion that Mr. Spirakos had not taken reasonable care in preparing and lodging his tax returns, thereby leading to the understatement of his assessable income.

In their joint judgment, Hayne and Crennan JJ found that the Commissioner had not discharged the onus of proof. Their Honours explained that while the Commissioner is entitled to rely on the presumption of regularity, this presumption does not extend to establishing the subjective state of mind of the taxpayer, namely, whether they took reasonable care. The Court held that the Commissioner must adduce evidence to demonstrate that the taxpayer's conduct fell short of the standard of reasonable care. In this instance, the Court concluded that the evidence presented by the Commissioner was insufficient to establish that Mr. Spirakos had failed to take reasonable care, and therefore the assessment of additional tax was not justified.

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established