Casuarina Pty Ltd v Commissioner of Taxation (Cth)

High Court of Australia Windeyer, J Casuarina Pty Ltd v Commissioner of Taxation (Cth)

ORDER Order In matter No 40 of 1969—Appeal allowed. Assessment set aside. Matter remitted to the Commissioner with liberty to assess tax payable by the taxpayer on the basis that it was in the year in question a public company. In matter No 5 of 1970—Appeal allowed. Assessment set aside. The Commissioner to pay the taxpayer's costs taxed on the basis that the matters were heard together. Usual order as to exhibits. Windeyer, J

Casuarina Pty Ltd, a company which I shall for convenience call simply "Casuarina" or "the taxpayer", appeals against the Commissioner's assessments of income tax payable by it in respect of the year of income which ended on 30 June 1968. The question is how far, if at all, its tax liability was avoided by its playing a part in a scheme devised originally to enable others to escape tax. The scheme was as ingenuous as it was ingenious. There was in it nothing hidden or dishonest or in any strict sense of law sham or false. It was based upon competent legal advice and was carried out according to the tenor of that advice. The evidence I heard leaves no doubt as to its purpose and the mode of its execution. The only question before me is as to its legal consequences for Casuarina.

It is, I think, convenient at this point to list the dramatis personae before explaining the parts they were called upon to play and played. To adhere for the moment to theatrical metaphor, the producer was a firm of accountants, Wilson, Bishop and Henderson of Melbourne. The composition of this firm changed after the period with which this case is concerned, and they became known as Wilson, Bishop, Bowes and Craig: but, whoever were the members of the firm at relevant times, I shall in this judgment for convenience refer to them as "the accountants" or "the firm". Two senior employees of theirs were G F Sheehan and B G Jacobson. They gave evidence before me and in each case candidly and helpfully. Sheehan worked in the accountants' Melbourne office. Jacobson in 1967 worked in a branch or associated office at Burnie in Tasmania.