Broken Hill Pty Co Ltd v Commissioner of Taxation [1999] FCA 1628

FEDERAL COURT OF AUSTRALIA

Broken Hill Pty Co Ltd v Commissioner of Taxation [1999] FCA 1628 TAXATION AND REVENUE – Income Tax(Cth) – allowable deduction – whether amount paid pursuant to share purchase agreement is interest or in the nature of interest – conditional contract for share sale and purchase – delay between vendor's loss of enjoyment and payment of the purchase price – foreign law of the contract not the subject of expert testimony – whether power to issue assessments or amended assessments – whether imposition of additional tax valid.

Income Tax Assessment Act 1936 (Cth), s 51(1), s 80(2) s 170 Evidence Act 1995 (Cth), s 69, s 135

Codelfa Construction Pty Ltd v State Rail Authority of New South Wales (1982) 149 CLR 337 applied JB Chandler Investment Company Ltd (in liq) v Commissioner of Taxation (1993) 47 FCR 588 applied Compafina Bank v Australian and New Zealand Banking Group Ltd [1982] 1 NSWLR 409 referred Ritz Hotel Ltd v Charles of the Ritz Ltd (1987) 14 NSWLR 116 referred Esquire Nominees Ltd v Commissioner of Taxation (1973) 129 CLR 177 cited Brookton Co-operative Society Limited v Commissioner of Taxation (1981) 147 CLR 441 cited Colonial Mutual Life Assurance Society Ltd v Federal Commissioner of Taxation (1953) 89 CLR 428 cited Commissioner of Taxation v South Australian Battery Makers Pty Ltd (1978) 140 CLR 645 cited Cliffs International Inc v Commissioner of Taxation (1979) 142 CLR 140 cited NM Superannuation Pty Ltd v Young (1993) 41 FCR 182 cited Commissioner of Taxation v Orica Ltd (1998) 194 CLR 500 referred Australian and New Zealand Savings Bank Ltd v Commissioner of Taxation (1993) 42 FCR 535 referred Tallerman & Co Pty Ltd v Nathan's Merchandise (Victoria) Pty Ltd (1957) 98 CLR 93 applied Perri v Coolangatta Investments Pty Ltd (1982) 149 CLR 537 applied Thorby v Goldberg (1964) 112 CLR 597 referred Stern v McArthur (1988) 165 CLR 489 referred Commissioner of Taxation v Woolcombers (WA) Pty Ltd (1993) 47 FCR 561 cited Wood Preservation Ltd v Prior [1969] 1 WLR 1077 referred Kern Corporation Ltd v Walter Reid Trading Pty Ltd (1987) 163 CLR 164 referred International Railway Company v Niagara Parks Commission [1941] AC 328 cited Public Trustee v Schultz (1964) 111 CLR 482 cited In re Hewitt's Contract [1963] 1 WLR 1298 cited Harvela Investments Ltd v Royal Trust Company of Canada (C.I.) Ltd [1986] 1 AC 207 discussed Sun Newspapers Ltd v Federal Commissioner of Taxation (1938) 61 CLR 337 cited Re: Farm Security Act 1944 (Sask.) [1947] SCR 394 referred Commissioner of Taxation v Myer Emporium Ltd (1987) 163 CLR 199 cited Consolidated Press Holdings Ltd v Commissioner of Taxation (1998) 98 ATC 5009 cited Century Yuasa Batteries Pty Ltd v Commissioner of Taxation (1997) 97 ATC 4299; aff'd (1998) 82 FCR 288 cited Chevron Petroleum (UK) Ltd v BP Petroleum Development Ltd (1981) 57 TC 137 discussed Federal Wharf Co. Ltd v Deputy Federal Commissioner of Taxation (1930) 44 CLR 24 discussed Riches v Westminster Bank Ltd [1947] AC 390 cited Inland Revenue Commissioners v Pullman Car Co Ltd [1954] 2 All ER 491; [1954] 1 WLR 1029 referred Federal Commissioner of Taxation v Midland Railway Co of Western Australia Ltd (1952) 85 CLR 306 referred Whitaker v Federal Commissioner of Taxation (1998) 153 ALR 334 distinguished Commissioner of Taxation v Northumberland Development Co Pty Ltd (1995) 59 FCR 103 distinguished Texas Co (Australasia) Ltd v Federal Commissioner of Taxation (1940) 63 CLR 382 cited Australian National Hotels Ltd v Commissioner of Taxation (1988) 19 FCR 234 cited Steele v Deputy Commissioner of Taxation (1999) 161 ALR 201 followed National Australia Bank Ltd v Federal Commissioner of Taxation (1997) 151 ALR 225 cited Wharf Properties Ltd v Commissioner of Inland Revenue [1997] AC 505 discussed Lloyd Werft Bremerhaven GmbH v Owners of the Ship "Zoya Kosmodemyanskaya" (1997) 79 FCR 71 followed National Mutual Holdings Pty Ltd v Sentry Corporation (1989) 87 ALR 539 followed Allstate Life Insurance Co v Australia and New Zealand Banking Group Ltd (No. 33) (1996) 137 ALR 138 cited Bumper Development Corp Ltd v Commissioner of Police of the Metropolis [1991] 4 All ER 638 cited Federal Commissioner of Taxation v Ryan (1998) 82 FCR 345 referred Batagol v Commissioner of Taxation (1963) 109 CLR 243 referred Austin Distributors Pty Ltd v Federal Commissioner of Taxation (1964) 13 ATD 429 referred MIM Holdings Ltd v Federal Commissioner of Taxation (1997) 97 ATC 4420 referred Danmark Pty Ltd v Federal Commissioner of Taxation (1944) 7 ATD 333 referred Restatement, 2d, Contracts, § 224 cited Ley v Fred T Ley & Co 65 N.Y.S.2d 843 (N.Y. App. Div. 1946), aff'd 296 N.Y. 956, 73 N.E.2d 266 (1947) cited Matter of Uraga Dock Co 179 N.Y.S.2d 474 (N.Y. App. Div. 1958), aff'd 6 N.Y.2d 773, 159 N.E.2d 212 (1959) cited Merritt Hill Vineyards Inc v Windy Heights Vineyards Inc 61 N.Y.2d 106 at 113, 460 N.E.2d 1077 (1984) cited Pollack v Nemet Motors, Inc 561 N.Y.S.2d 457 (N.Y. App. Div. 1990) cited Oppenheimer & Co v Oppenheim, Appel, Dixon & Co 86 N.Y.2d 685, 660 N.E.2d 415 (1995) cited Hicks v Bush 10 N.Y.2d 488, 180 N.E.2d 425 (1962) cited Kapson Construction Corp v ARA Plumbing and Heating Corp 642 N.Y.S.2d 701 (N.Y. App. Div. 1996) cited Federal Deposit Insurance Corporation v Commissioner of Taxation and Finance 594 N.Y.S.2d 447 (N.Y. App. Div. 1993), aff'd 83 N.Y.2d 44, 628 N.E.2d 1330 (1993) cited American Express Co v Tax Appeals Tribunal 597 N.Y.S.2d 485 (N.Y. App. Div. 1993), leave den. 82 N.Y.2d 663, 632 N.E.2d 461 (1993) cited