Commissioner of Taxation (Cth) v Card [1963] HCA 52

High Court of Australia Dixon C.J. McTiernan, Taylor, Menzies and Owen JJ. Commissioner of Taxation (Cth) v Card [1963] HCA 52

ORDER Appeal dismissed with costs.

Cur. adv. vult.

The following written judgments were delivered:—

Nov. 19 Dixon C.J.

In my opinion this appeal should be dismissed. I accept the reasons for that conclusion given by his Honour Owen J. whose judgment I have had the advantage of reading.

McTiernan J.

The Commissioner of Taxation brought this action in the Supreme Court of New South Wales against Malcolm Charles Card to recover from him the sum of £3,317 6s. 0d. He died and the action proceeded against the executrix of his will. The action was founded on s. 221P. of the Income Tax and Social Services Contribution Assessment Act 1936-1956 Cth. This section consisted of two sub-sections: "(1) Where an employer makes a deduction for the purposes of this Division, or purporting to be for those purposes, from the salary or wages paid to an employee and fails to deal with the amount so deducted in the manner required by this Division, or to affix tax stamps of a face value equal to the amount of the deduction as required by this Division, as the case may be, he shall be liable, and where his property has become vested in, or where the control of his property has passed to, a trustee, the trustee shall be liable, to pay that amount to the Commissioner. (2) Notwithstanding anything contained in any other Act or State Act, an amount payable to the Commissioner by a trustee in pursuance of this section shall have priority over all other debts, whether preferential, secured or unsecured". A third sub-section was added to these provisions by s. 24 of Act No. 35, 1959—"(3) Where a trustee, being the trustee of the estate of a bankrupt or the liquidator of a company that is being wound up, is liable to pay an amount to the Commissioner in pursuance of this section, the last preceding sub-section does not operate so as to make that amount payable in priority to any costs, charges or expenses of the administration of the estate or of the winding up of the company (including costs of a creditor or other person upon whose petition the sequestration order or the winding up order, if any, was made and remuneration of the trustee) that are lawfully payable out of the assets of the estate or of the company except where, in the case of the winding up of a company, the Crown in right of a State or any other creditor is entitled to payment of a debt by the liquidator in priority to all or any of those costs, charges and expenses and has not waived that priority".