Renmark Hotel Inc v Commissioner of Taxation [1949] HCA 7

High Court of Australia Rich J. Latham C.J. McTiernan and Webb JJ. Renmark Hotel Inc v Commissioner of Taxation [1949] HCA 7

ORDER Appeal dismissed with costs.

Cur. adv. vult.

March 29 Rich J . delivered the following written judgment:—

This is an appeal against an assessment to income tax on the ground that the appellant falls within the exemption expressed in s. 23 (d) of the Income Tax Assessment Act 1936-1947. The exemption is expressed in the following words—"the revenue of a municipal corporation or other local governing body or of a public authority constituted under any Act or State Act or under any law in force in a territory being part of the Commonwealth."

The appellant is a body called the Renmark Hotel Incorporated. It is incorporated under the Associations Incorporation Act 1929-1935 of South Australia. It conducts a community hotel at Renmark and it has been assessed in respect of income produced by that hotel. The appellant claims that it is a public authority constituted under a State Act. The history of the establishment of the hotel and of the constitution of the body is from a legal point of view unusual. Renmark falls within an area of land in South Australia called Chaffey Bros. Irrigation Area, which was the subject of a special agreement confirmed by and scheduled to The Chaffey Brothers Irrigation Works Act 1887 S.A. No. 397.

By The Licensed Victuallers Amendment Act 1891 S.A., s. 40, it was provided that no publican's licence or wine licence should be granted to any person in respect of premises situated in that portion of the province of South Australia comprised in the schedule to The Chaffey Brothers Irrigation Works Act 1887 S.A.. By s. 47 of The Licensed Victuallers Further Amendment Act 1896 S.A. a limited power to grant a licence in that area was conferred upon the Licensing Bench. A condition laid down by the section was that a petition should be presented to the Bench signed by not less than a majority of the householders resident within a mile of the site of the proposed licensed premises praying that the publican's licence should be granted. It was necessary that the petition should pray that it should be granted subject to certain conditions. Then the authority of the Bench arose to grant a licence if it thought fit in respect of premises for which the licence was applied for, but only under and subject to the conditions. The conditions required were (1) that the business should be vested in a committee in trust for the purposes set out in the petition and approved by the Treasurer; (2) that the business should be managed by a committee of management, the first members of which should be nominated by the householders in the petition aforesaid and the mode of appointing members subsequently should be set out in the petition. The licence when granted should not issue until the Treasurer of the province had been satisfied that the proper arrangements had been made for carrying the conditions into effect and until he had approved of the purpose to which any profits were to be applied. Pursuant to this provision, on 3rd March 1897 a licence was granted to one Jane Meissner of the premises on which the appellant's hotel now stands. The documents relating to the original licence were not put in evidence, but it is not in doubt that the conditions prevented the profits being applied otherwise than in acquiring the site of the hotel, improving, adding to and equipping the hotel and then for local purposes for the benefit of the whole irrigation settlement of Renmark and not for private profit.