Milne v. Federal Commissioner of Taxation.

Judges: Barwick CJ
McTiernan J
Gibbs J
Stephen J

Murphy J

Court:
Full High Court

Judgment date: Judgment handed down 11 February 1976.

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Murphy J.: I will not repeat the facts. Although there are some differences, the facts are sufficiently close to those in
Clowes & Anor. v. F.C. of T. (1954) 91 C.L.R. 209 that this case should not be distinguished from it. In Clowes' case this Court was evenly divided, the opinion of Dixon C.J. and Kitto J. prevailing by virtue of sec. 23(2) of the Judiciary Act 1903-1973 over the dissent of Webb and Taylor JJ. That decision has stood for more than 20 years. Parliament has not seen fit to alter the Income Tax Assessment Act 1936 (as amended) in such a way as to overcome the effect of that judgment. I see no reason to depart from Clowes' case .

It follows that the questions in the stated case should be answered:

• 1. No.
• 2. Yes.
• 3. No.
• 4. Yes.

ORDER:

The questions asked in the case stated are answered as follows:

• 1. Are the amounts received by the appellant during the year ended the 30th June 1973 from the forest company with respect to the bond and covenant or either of them held by the appellant income in the hands of the appellant and therefore assessable against the appellant under sec.

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  ATC 4007

  25 of the Income Tax Assessment Act 1936 (as amended)?
  • Answer: No.
• 2. Are the amounts received by the appellant during the year ending 30th June 1973 from the forest company with respect to the bond and covenant or either of them held by the appellant not income in the hands of the appellant and therefore not assessable against the appellant under sec. 25 of the said Act?
  • Answer: Yes.
• 3. Are the said amounts or either of them assessable income in the hands of the appellant being profits arising from the carrying on or carrying out of a profit-making undertaking or scheme under sec. 26(a) of the said Act?
  • Answer: No.
• 4. Are the said amounts or either of them not assessable income in the hands of the appellant not being profits arising from the carrying on or carrying out of a profit-making undertaking or scheme under sec. 26(a) of the said Act?
  • Answer: Yes.

Remit case to the Supreme Court of South Australia for determination in accordance with the answers given.

Commissioner to pay appellant's costs of the case stated.