Gorton v Commissioner of Taxation (Cth) [1965] HCA 1

High Court of Australia McTiernan J. Barwick C.J. Taylor and Windeyer JJ. Gorton v Commissioner of Taxation (Cth) [1965] HCA 1

ORDER Appeal allowed with costs. Order of 22nd January 1965 set aside. In lieu thereof order that the appeal be allowed and the assessment set aside. Respondent to pay the costs of the appeal in the first instance.

Cur. adv. vult.

1965, Jan. 22 McTiernan J . delivered the following written judgment:—

The Commissioner of Taxation in this appeal claims that certain arrangements entered into on 19th May 1960 amounted to a gift within the meaning of s. 4 (1) of the Gift Duty Assessment Act 1941-1957 Cth by Frances Beatrice Eliza Abel to her nephews Richard and Thomas Crebbin in that by virtue of these arrangements the value of certain shares held by Richard Crebbin in a company called Leba Pty. Ltd. and by Thomas Crebbin in another company called Batnors Pty. Ltd. was increased by £269,964 and the value of Mrs. Abel's estate was diminished by the same amount. Two days later, on 21st May 1960, Mrs. Abel died. The executors of her estate objected to an amended assessment of gift duty of £72,309 17s. 2d., made by the Commissioner on 24th August 1962. The Commissioner disallowed the objection and the executors under s. 34 (1) of the Act requested the Commissioner to treat their objection as an appeal and forward it to this Court.

Section 4 (1) of the Act defines a gift as "any disposition of property which is made otherwise than by will" without any or any adequate consideration. A disposition of property is defined in the same section as meaning "any conveyance, transfer, assignment, settlement, delivery, payment, or other alienation of property and, without limiting the generality of the foregoing, includes— (f) any transaction entered into by any person with intent thereby to diminish directly or indirectly the value of his own property and to increase the value of property of any other person". The dispute here is whether the arrangements made on 19th May 1960 fall within the meaning of par. (f) of the definition of "disposition of property". The appellants called in evidence, Richard and Thomas Crebbin, Mrs. Abel's accountant and her solicitor. The Commissioner called no witnesses to rebut their evidence. The appellants also called a Mr. Stevens to give expert evidence on whether the Commissioner's valuation of the shares immediately after the transaction was correct. The Commissioner called a Mr. Osborne, the assessor of duty in this case to rebut Mr. Steven's evidence.