Commissioner of Taxation v Scully [2000] HCA 6

HIGH COURT OF AUSTRALIA

GAUDRON ACJ,

McHUGH, GUMMOW, KIRBY AND CALLINAN JJ

COMMISSIONER OF TAXATION OF THE

COMMONWEALTH OF AUSTRALIA APPELLANT

AND

LYNETTE SCULLY RESPONDENT

Commissioner of Taxation v Scully [2000] HCA 6

10 February 2000

M26/1999

ORDER

1. Appeal allowed.

2. Set aside orders 1 to 4 inclusive made by the Full Court of the Federal Court on 19 June 1998 and in place thereof, order that the appeal to that Court be dismissed.

3. The appellant pay the respondent's costs in this Court according to the undertaking given in this Court on 12 February 1999.

On appeal from the Federal Court of Australia

Representation:

B J Shaw QC with J J Batrouney for the appellant (instructed by Australian Government Solicitor)

G J Davies QC with J F Goldberg and J Davies for the respondent (instructed by Coadys)

Intervener:

A Moshinsky QC with S R McCredie intervening on behalf of Victorian WorkCover Authority (instructed by Paul Tipping, Victorian WorkCover Authority)

Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports.

CATCHWORDS

Commissioner of Taxation v Scully

Income Tax – Income – Eligible termination payment – Whether lump sum payment received by member of superannuation fund for total and permanent disability "consideration ... in respect of ... personal injury".

Practice and procedure – High Court – Criteria for grant of leave to an intervener or amicus curiae.

Words and phrases – "consideration" – "in respect of".

Income Tax Assessment Act 1936 (Cth), ss 27A(1)(n), 27G.

1. GAUDRON ACJ, McHUGH, GUMMOW AND CALLINAN JJ. The sole question for determination in this appeal is whether a payment from a superannuation fund for the termination of employment on grounds of total and permanent disablement is an "eligible termination payment" within the meaning of s 27A(1) of the Income Tax Assessment Act 1936 (Cth) ("the Act"). In the circumstances of this case, determination of that question turns on whether the payment is "consideration of a capital nature for, or in respect of, personal injury to the taxpayer". If it is, it falls within the exclusion contained in par (n) of the definition of "eligible termination payment". In our opinion, the payment was not "consideration of a capital nature for, or in respect of, personal injury to the taxpayer" and was therefore an "eligible termination payment" subject to tax. The appeal should be allowed.