Visbord v Federal Commissioner of Taxation [1943] HCA 4

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THE FEDERAL COMMISSIONER OF TAXA-

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HIGH COURT (1943.

(HIGH COURT OF AUSTRALIA.]

VISBORD . Z i 2 : : 2 p APPELLANT ;

AND

TION .. : } RESPONDENT.

H.C. or A. Income Tax (Cth.)—Assessment—Capital or income—Moneys due under mortgage

1943. ee)

MeELBouRNE, March 11;

SypNey, April 15.

Latham C.J., Rich, Starke and Williams JJ.

{for principal and interest Appointment of receiver—Income of mortgaged property accumulated in hands of receiver—Appropriation to payment of principal— Property Law Act 1928 (Vict.) (No. 3754), 8s. 101, 109, 110—Income Tax 'Assessment Act 1922-1934 (No. 87 of 1922—No. 51 of 1934), s. 19—Income Tax Assessment Act 1936-1937 (No. 27 of 1936—No. 5 of 1937), s. 19.

The receiver appointed by a second mortgagee paid moneys collected by him into a trust banking account opened by the second mortgagee. Upon the appellant's becoming transferee of the first mortgage she informed the receiver that she did not require any payments for the time being out of moneys held by him, Subsequently the appellant became the transferee of the second mortgage and the balance in the trust account was transferred into a banking account in the name of the receiver; thereafter the receiver, at the appellant's direction, paid moneys which he collected into the last- mentioned account. Nothing was paid by the receiver to the appellant until the appellant sold the mortgaged property in exercise of her power of sale. Thereupon, there being a deficiency of principal, the receiver, at the appellant's direction concurred in by the mortgagor, paid the balance in the banking account to the appellant on account of principal.

Held, by Rich, Starke and Williams JJ. (Latham C.J. dissenting), that moneys

collected by the receiver were assessable income of the appellant to the extent, in each year, of the interest which the appellant was entitled to be paid thereout.