Perpetual Executors & Trustees Association of Australia Ltd v Commissioner of Taxation (Cth) [No 2] (Thomas' Case) [1955] HCA 66

High Court of Australia Dixon C.J. McTiernan, Fullagar, Kitto and Taylor JJ. Perpetual Executors & Trustees Association of Australia Ltd v Commissioner of Taxation (Cth) [No 2] (Thomas' Case) [1955] HCA 66

ORDER Questions in the case stated answered: (1) No; (2) and (3): These questions do not arise. Costs of the case stated to be dealt with by judge disposing of the appeal.

Cur. adv. vult.

The following written judgments were delivered:—

Nov. 29 Dixon C.J.

This case stated concerns the value at which an interest in a partnership is to be assessed for the purposes of the Estate Duty Assessment Act 1914-1942. The deceased person whose estate is under assessment is the late Frederick Charles Henry Thomas who died as long ago as 28th January 1944. At his death he was a member of a firm carrying on business under the name of Maples. The partnership consisted of seven persons and their fractional shares in the capital of the partnership were unequal. Thomas' proportion was nineteen and a half per cent. The deed of partnership contained a provision stating how the death of a partner should affect the partnership. The clause provided that the partnership should not be dissolved by the death of any of the partners, but that certain provisions which followed should apply. They consist of some rather intricate clauses but it is enough to state compendiously their purport so far as they apply in the events that happened. The clauses gave to each of five of the surviving partners options to purchase from the legal personal representatives of the deceased a specified fractional proportion of the capital. The fractions were not all identical but together they added up to nineteen and a half per cent. As the deed expressed it, the legal personal representatives should "be deemed to have given" these options "to the five respective surviving partners". On the exercise of such an option the price was to be computed according to elaborate provisions which took the balance sheet of the partnership as the basis. But it was specifically agreed and declared by the deed that in computing the amount of purchase money payable on the exercise of any option no sum should be added or taken into account for goodwill.