Federal Commissioner of Taxation v Steeves Agnew and Co (Vic) Pty Ltd [1951] HCA 26

STEEVES

HIGH COURT [195]. [HIGH COURT OF AUSTRALIA] ~ FEDERAL COMMISSIONER OF TAXATION PLAINTIFF ;

AND

AGNEW AND COMPANY (VIC-

TORIA) PROPRIETARY LIMITED . \ DnoRENA,

H.C. ov A, Income Tax (Cth.)—Collection by instalments—Managing director of company—

1951. We

MELBOURNE, March 22, 29; June 1.

Dixon J.

Contract of service—Remuneration by share of profits—Drawings in anticipa-

tion of remuneration—No deductions on account of income tax—Drawings in

excess of remuneration—Continuing account balanced yearly—* Employee "— " Salary or wages "— In respect of any week or part thereof — In respect of a period of time in excess of one week "—* Time of making payment "— Income Tax Assessment Act 1936-1943 (No. 27 of 1936-No. 10 of 1943), 68. 2214, 2210 (1), (1a), 221n.*

The defendant was a trading company incorporated in Victoria which carried on business in Melbourne as an insurance broker. W. was the managing director of the company, although he was described as manager in the agreements under which he was employed. Throughout the financial year beginning on Ist July 1942 and ending on 30th June 1943 and for the first half of the next financial year he was employed under an agreement dated 10th May 1941. For the second half of the latter financial year he was employed under an agreement dated 12th July 1944 but expressed to

_ take effect from Ist January 1944, Under each of tho agreements his remuneration consisted wholly of a share of profits which varied according

allowances paid to any em- ployee as such, and, without limiting the generality of the foregoing, in- cludes any payments made...

*The Income Tax Assessment Act 1936-1942 (being the Act of 1936 as amended by various Acts up to and including Act No. 50 of 1942), and

also (except as otherwise indicated hereunder) the Act as of 1936-1943, provided, in Part VL, Div. 2:—By s. 2214: " 'employee' means any person who receives, or is entitled to receive, any salary or wages"; "employer" means any person who pays or is liable to pay any. salary or wages"; ' 'salary or wages' means salary, wages, commission, bonuses or