Healius Ltd v Commissioner of Taxation [2019] FCA 2011

FEDERAL COURT OF AUSTRALIA

Healius Ltd v Commissioner of Taxation [2019] FCA 2011 File numbers: NSD 1750 of 2018 NSD 1752 of 2018 NSD 1753 of 2018 NSD 1754 of 2018 NSD 1755 of 2018

Judge: PERRAM J

Date of judgment: 29 November 2019

Catchwords: TAXATION – deductibility of lump sum payments made to doctors in respect of contracts to conduct their practice at medical centres operated by Applicant for a certain period – where doctors would then pay a proportion of billings from patients to Applicant in exchange for use of premises and administrative services – whether lump sum outgoings of capital or of a capital nature under Income Tax Assessment Act 1997 (Cth) s 8-1(1)(a) – character of advantage sought – means by which advantage to be used, relied upon or enjoyed – means adopted to obtain advantage CONTRACTS – interpretation of contracts – clause purporting to involve sale of doctors' practices and goodwill to Applicant – where Applicant itself unable to conduct a doctor's practice and where doctors would continue to practice at Applicant's medical centres – where goodwill inseparable from practice – where finding of clause being void for uncertainty would frustrate entire agreement and related agreement – consideration of relevant principles

Legislation: Income Tax Assessment Act 1997 (Cth) Pt 3-90, s 8-1 Taxation Administration Act 1953 (Cth) s 14ZZ

Cases cited: Allied Mills Industries Pty Ltd v Commissioner of Taxation (1989) 20 FCR 288 Associated Portland Cement Manufacturers v Kerr [1946] 1 All ER 68 AusNet Transmission Group Pty Ltd v Commissioner of Taxation [2015] HCA 25; 255 CLR 439 Box v Commissioner of Taxation [1952] HCA 61; 86 CLR 387 BP Australia Ltd v Commissioner of Taxation (1965) 112 CLR 386 Broken Hill Theatres Pty Ltd v Commissioner of Taxation (1952) 85 CLR 423 CityLink Melbourne Ltd v Commissioner of Taxation [2004] FCAFC 272; 141 FCR 69 Colonial Mutual Life Assurance Company Ltd v Commissioner of Taxation (1953) 89 CLR 428 Commissioner of State Revenue (WA) v Placer Dome Inc [2018] HCA 59; 93 ALJR 65 Commissioner of Taxation v CityLink Melbourne Ltd [2006] HCA 35; 228 CLR 1 Commissioner of Taxation v Murry [1998] HCA 42; 193 CLR 605 Commissioner of Taxation v Sharpcan Pty Ltd [2019] HCA 36; 93 ALJR 1147 Commissioner of Taxation v South Australian Battery Makers Pty Ltd [1978] HCA 32; 140 CLR 645 Commissioner of Taxation v Star City Pty Ltd [2009] FCAFC 19; 175 FCR 39 Council of the Upper Hunter Country District v Australian Chilling & Freezing Co Limited [1968] HCA 8; 118 CLR 429 Geraghty v Minter [1979] HCA 42; 142 CLR 177 GP International Pipecoaters Pty Ltd v Commissioner of Taxation [1990] HCA 25; 170 CLR 124 Hallstroms Pty Ltd v Commissioner of Taxation [1946] HCA 34; 72 CLR 634 Handbury Holdings Pty Ltd v Commissioner of Taxation [2009] FCAFC 141; 179 FCR 569 Heavy Minerals Pty Ltd v Commissioner of Taxation [1966] HCA 60; 115 CLR 512 Idameneo (No 123) Pty Ltd v Angel-Honnibal [2002] NSWSC 1214 Idameneo (No 123) Pty Ltd v Gross [2012] NSWCA 423; 83 NSWLR 643 Kelsall Parsons & Co v Commissioner of Inland Revenue (1938) SC 238 Magna Alloys and Research Pty Ltd v Commissioner of Taxation [1980] FCA 150; 49 FLR 183 National Australia Bank Ltd v Commissioner of Taxation (1997) 80 FCR 352 Primary Health Care Ltd v Commissioner of Taxation [2010] FCA 419; 186 FCR 301 Sidameneo (No 456) Pty Ltd v Alexander [2011] NSWCA 418 Sun Newspapers Limited v Commissioner of Taxation (1938) 61 CLR 337 Symbion Medical Centre Operations Pty Ltd v Alexander [2010] NSWSC 1047 Tyco Australia Pty Ltd v Commissioner of Taxation [2007] FCA 1055; 67 ATR 63 Western Gold Mines NL v Commissioner of Taxation (WA) [1938] HCA 5; 59 CLR 729 Zahedpur v Idameneo (No 123) Pty Ltd [2016] QCA 134