High Court of Australia|1931-10-01|Before: McTiernan JJ, Rich J, Starke J

For the reasons given I have come to the following conclusions of law and fact in the present case: -

All of the business operations and transactions of the respondent which terminated in money receipts from the sale abroad of its goods, were part of one business undertaking; none of them should be treated as a separate business consisting in the making of contracts of sale in England. Lovells'[130] and the two Bawra Cases[131] are quite distinct from the present.

Some part of the profits resulting from all the series of operations, which commenced in Australia and ended in the receipt of purchase-moneys in England, arose from sources within Australia.

The series of operations, which commenced with the purchase of tallow in Australia and terminated in the receipt of the proceeds of its sale in London, must be considered, because the profits of this part of the export business also arose in part from sources within Australia. Such part of the export business may, however, be separately regarded for the purpose of the division referred to in par. 8, infra.

The difference between the value of the respondent's goods at the moment they left Australian territory and the costs of producing them within Australia, is not the measure of the "actual profits arising" from "sources within Australia." This method of valuation at the territorial limits results in hypothetical profits made whilst its goods are within Australian territory, and it is, in my opinion, inconsistent with the criticism of Tindal's Case[132] by the Privy Council[133].

If such territorial valuation is the correct method, I am of opinion, having regard to (a) the evidence already set out, (b) the transactions with the bank in Australia, (c) the condition of the London market, and (d) the correspondence between prices realized in London and those anticipated in Australia, that the value of the products when they left Australia was their probable sale price in London, less the costs of getting them to that market.

Assuming, again, that such territorial valuation is the correct method, I am of opinion that the value on board ship in Australia of tallow purchased here, was the same as that of similar tallow manufactured in Australia.

The formula adopted by the Commissioner for ascertaining the amount of the respondent's profits arising from sources in Australia cannot be accepted.

In order to ascertain, with reference to the respondent's export business, the profits which arose from sources within Australia, the operations should be examined to their completion. The actual profits from the series of transactions (a) in purchased tallow and (b) in manufactured and prepared products, should be separately assessed, and a percentage of (a) and (b) should be fixed by the Supreme Court or by this Court, having regard to all the circumstances of each part of the export business.

In view, however, of the opinion of the majority of the Court, it is not necessary or desirable that I should state my own view as to what part or percentage of the actual profits arising from the export operations, is brought into charge.

It follows from what has been said that the quantum of the respondent Company's liability in respect of the tallow, manufactured by it here and sold abroad, has not been correctly measured by the learned Supreme Court Judge, who adopted the method of valuation at the territorial limits of Australia. The amount of taxation payable in accordance with such method would, I think, exceed the proper amount payable in respect of this part of the business. For this reason, a cross-appeal by the respondent against this part of the decision of the Supreme Court was justified.

The appeals should be allowed, the orders of the Supreme Court wholly discharged, and the cases remitted for the purpose of determining liability in accordance with the principles expressed in this opinion.

The judgment of my brother Dixon completely expresses the opinion which I have formed. I do not deem it necessary to add anything beyond saying that I agree that the appeals should be dismissed with costs, subject to the variation in the judgments in the Court below.

Vary the judgments appealed from by substituting the following declaration and order. Declare that in ascertaining the actual profits of the respondent's business arising in the accounting periods of twelve months ended 30th June 1918 and 1919 from sources in Australia no part of the moneys obtained by the sale in the United Kingdom or elsewhere outside Australia of commodities exported by the respondent from Australia ought to be taken into account which exceeds the value of the goods in Australia before exportation. Declare that the value of "sundries" or offal and preserved meat in Australia before exportation was not greater than the cost of production. Declare that no part of the money obtained from the resale in the United Kingdom or elsewhere outside Australia of tallow bought and not produced by the respondent and exported by it from Australia ought for the purposes aforesaid to be taken into account. Declare that the apportionment of the capital of the respondent's business made in the assessments appealed from is wrong and contrary to law. Set aside both assessments wholly and let the Commissioner be at liberty to make new assessments in lieu thereof consistent with this judgment. Otherwise dismiss the appeals. Confirm the orders as to costs. Appellant to pay the costs of the appeals to this Court.

Solicitor for the appellant, W. H. Sharwood, Crown Solicitor for the Commonwealth.

Solicitors for the respondent, Pavey, Wilson & Cohen.

[7] [1921] HCA 13; (1921) 29 C.L.R. 225.

[8] [1929] HCA 21; (1929) 42 C.L.R. 332.

[9] (1921) 3 K.B. 583, at p. 593 (and see (1922) 1 A.C. 417).

[13] [1915] HCA 34; (1915) 19 C.L.R. 568.

[14] [1923] HCA 37; (1923) 33 C.L.R. 76.

[15] [1925] HCA 29; (1925) 36 C.L.R. 489.

[17] [1918] HCA 45; (1918) 25 C.L.R. 183, at pp. 189-190.

[18] (1921) 29 C.L.R., at p. 233.

[19] [1915] UKHL 2; (1915) A.C. 1022.

[21] (1898) 19 N.S.W.L.R., at p. 302.

[27] (1925) 36 C.L.R., at pp. 500-501.

[29] [1923] HCA 37; (1923) 33 C.L.R. 76.

[34] (1904) 24 N.Z.L.R., at pp. 30, 31

[35] [1929] HCA 21; (1929) 42 C.L.R. 332.

[37] [1921] HCA 13; (1921) 29 C.L.R. 225.

[38] (1929) 42 C.L.R., at pp. 346, 348

[41] [1929] HCA 21; (1929) 42 C.L.R. 332.

[43] [1929] HCA 21; (1929) 42 C.L.R. 332.

[44] [1915] HCA 34; (1915) 19 C.L.R. 568.

[45] [1918] HCA 45; (1918) 25 C.L.R. 183.

[46] (1925) 36 C.L.R., at p. 506.

[47] [1922] HCA 9; (1922) 30 C.L.R. 198.

[48] [1925] HCA 29; (1925) 36 C.L.R. 489.

[49] (1925) 36 C.L.R., at pp. 500, 501.

[50] [1929] HCA 21; (1929) 42 C.L.R. 332.

[51] [1915] HCA 34; (1915) 19 C.L.R. 568.

[52] [1929] HCA 21; (1929) 42 C.L.R. 332.

[55] [1860] EngR 747; (1860) 5 H. & N. 711; 157 E.R. 1364.

[58] (1898) 19 N.S.W.L.R. 294 and 301.

[59] (1897) 18 N.S.W.L.R., at pp. 388, 389.

[61] (1896) A.C., at p. 336, per Lord Herschell.

[62] [1860] EngR 747; (1860) 5 H. & N. 711; 157 E.R. 1364.

[65] [1860] EngR 747; (1860) 5 H. & N. 711; 157 E.R. 1364.

[66] (1860) 5 H. & N., at p. 717; 157 E.R., at p. 1367.

[67] (1898) 19 N.S.W.L.R. 294 and 301.

[72] [1860] EngR 747; (1860) 5 H. & N. 711; 157 E.R. 1364.

[74] (1898) 19 N.S.W.L.R. 294 and 301.

[75] (1898) 19 N.S.W.L.R. 294 and 301.

[78] (1898) 19 N.S.W.L.R., at p. 301.

[80] (1898) 19 N.S.W.L.R., at p. 302.

[82] (1898) 19 N.S.W.L.R. 294 and 301.

[92] [1860] EngR 747; (1860) 5 H. & N. 711; 157 E.R. 1364.

[101] (1931) A.C., at pp. 262, 254.

[105] (1931) A.C., at pp. 262, 254.

[117] [1929] HCA 21; (1929) 42 C.L.R. 332.

[118] (1929) 42 C.L.R., at p. 345.

[119] (1929) 42 C.L.R., at p. 346.

[120] [1929] HCA 21; (1929) 42 C.L.R. 332.

[121] [1929] HCA 21; (1929) 42 C.L.R. 332.

[124] [1929] HCA 21; (1929) 42 C.L.R. 332.

Tax Assessment Act 1915

Profits Tax Act 1917

Profits Tax Assessment Act 1917

Federal Commissioner of Taxation v W Angliss & Company Pty Ltd [1931] HCA 32; (1931) 46 CLR 417 (1 October 1931)

Federal Commissioner of Taxation v W Angliss & Company Pty Ltd [1931] HCA 32;

At a glance

Court

Decision date

Before

Source

Judgment (66 paragraphs)

Parties

Legislation Cited (4)

Cases Cited (2)

Federal Commissioner of Taxation v W Angliss & Company Pty Ltd [1931] HCA 32; (1931) 46 CLR 417 (1 October 1931)