Goodfellow v. Federal Commissioner of Taxation1

Date01 December 1977
AuthorK. T. Allen
DOI10.1177/0067205X7700800404
Published date01 December 1977
Subject MatterCase Notes
CASE NOTES
GOODFELLOW
v.
FEDERAL
COMMISSIONER
OF
TAXATIONl
Income tax -
Exempt
income -Invalidity benefit payments made to
ex-naval officer -Whether payments
of
asimilar nature to those
specified in
s.380(2)
of
the Inconle Tax
Act
1952 (U.K.) -Income
Tax
Assessment
Act
1936-1972 -Former SSt 23(k), 23(kaa), 23(kab).
The decision of the Full High Court of Australia in this case will be
of particular interest to many readers of the Federal Law Review
because of their association with the appellant during his time
as
a
student
at
the Law School of the Australian ,National University.
The judgment does not by any means represent one of the more
important recent pronouncements of the High Court on Australian
income tax law but it
is
notable principally for two reasons.
It
reflects
the results that may be achieved if ataxpayer who
is
convinced of his
case under the terms of the Income
Tax
Assessment Act 1936 (here-
after referred to
as
"the Assessment
Act")
presses his claim to the
fullest extent possible under the objections and appeals provisions of
Part
Vof that Act.
It
is
also another reminder of the strict legalistic
attitude of the High Court to the interpretation of taxation statutes.
The appellant in the action was aformer member of the Defence
Forces, Lieutenant Commander
Fred
Goodfellow, who was badly
injured at the Naval Base at Nowra, New South Wales, in 1969, while
flying an aircraft in the course of (peace-time) duty in the Royal
Australian Navy Fleet Air Arm. He was left aparaplegic as the result
of the accident and was discharged from the Navy
as
physically unfit
for further service. Having been acontributor to the Defence Forces
Retirement Benefits Fund during his service with the Defenc,e Force,
and being retired because of a60 per cent
or
more incapacity for
civilian employment, he was awarded afull rate (Class
A)
invalid
pension under the D.F.R.B. scheme.
It
is, of course, firmly established that apension
or
like payment
comes within the ordinary concept of income and
is
assessable income
under the Assessment Act except where aspecific provision of the Act
provides otherwise. The issue before the High Court, therefore, was
whether particular provisions of the
Act-section
23
(kaa)
or
section
23(kab)-operated
to exempt from income tax the D.F.R.B. pension
derived by Goodfellow.
So
far as
is
relevant, section 23
(kaa)
provided
exemption for payments which, in the opinion of the Commissioner of
Taxation, were
"of
asimilar nature" to pensions specified in section
23(k)
of the Assessment Act (these pensions included disability
pensions payable under Commonwealth repatriation legislation), while
section 23
(kab)
provided exemption for wounds and disability pensions
1(1977)
13
A.L.R. 203;
77
A.T.C. 4086. High Court
of
Australia; Barwick C.J.,
Jacobs and Aickin JJ.
489

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