Commissioner of Taxation (Cth) v Cappid Pty Ltd [1971] HCA 79

High Court of Australia Menzies J. Barwick C.J. McTiernan, Windeyer and Owen JJ. Commissioner of Taxation (Cth) v Cappid Pty Ltd

ORDER Appeal allowed with costs. Assessment set aside. Usual order with respect to exhibits. Appeal allowed with costs. Order of Menzies J. allowing the taxpayer's appeal set aside and in lieu thereof order that the taxpayer's appeal be dismissed with costs.

Cur. adv. vult.

1970, Nov. 9 Menzies J . delivered the following written judgment:—

This appeal from an assessment to tax under Div. 7 of Pt III of the Income Tax Assessment Act 1936-1965 Cth, hereinafter called "the Act", in respect of income of the year ended 30th June 1966, turns, subject to a preliminary matter, upon a decision whether or not the taxpayer was a private company in relation to the year of income. It was assessed to the tax in question as a private company, but has claimed throughout that it was a public company by virtue of s. 103A (2) (c) of the Act, which provides, in effect, that a company is a public company in relation to a year of income if:

(c) the company has not, at any time since its formation, been carried on for the purposes of profit or gain to its individual members and was, at all times during the year of income, prohibited by the terms of its constituent document from making any distribution, whether in money, property or otherwise, to its members or to relatives of its members.

In order to allow the appeal I must be satisfied about two elements stated in par. (c); the first relating to the whole period since the taxpayer's formation, the second relating to the whole of the year ended 30th June 1966.

The parties have entered a special case for argument before the court pursuant to O. 35 r. 5 of the High Court Rules. The questions of law for my opinion are: