Hepples v Commissioner of Taxation [1991] HCA 39

High Court of Australia Mason CJ, Brennan, Deane, Dawson, Toohey, Gaudron and McHugh JJ Hepples v Commissioner of Taxation [1991] HCA 39

ORDER Orders I agree with the orders proposed by Mason CJ.

Cur. adv. vult.

Mason CJ

The provisions of s 160M(5), (6)and (7) of the Income Tax Assessment Act 1936 (the Act) and provisions to which they are related are extraordinarily complex. They must be obscure, if not bewildering, both to the taxpayer who seeks to determine his or her liability to capital gains tax by reference to them and to the lawyer who is called upon to interpret them.

After some hesitation, I have come to the conclusion that the appeal should be allowed and that paras (a)and (b) of the first question referred for the opinion of the Full Court of the Federal Court should be answered in the negative. I agree with the reasons given by McHugh J for concluding that the provisions of s 160M(5)(c)and (6) of the Act have no application to the facts of this case. I agree also with the reasons given by Brennan J in so far as those reasons support the conclusion that the asset referred to in s 160M(7)(a) is an asset which exists when the act or transaction in relation to it takes place or the event affecting it occurs. I further agree with his Honour that the appellant's entry into the deed containing the covenant did not relate to the then existing assets of Hunter Douglas Ltd.

The form of question (A) in the special case referred by the Administrative Appeals Tribunal to the Federal Court presents a difficulty in the formulation of an answer which would give effect to the conclusions reached by the majority of justices with respect to the application of s 160M(6) and s 160M(7) respectively. Instead of asking separate questions in relation to the application of each of those provisions, the special case asks a more general question, the answer to which would not reflect the majority opinion of the court in relation to separate questions. In these circumstances the parties should be given the opportunity of presenting submissions to the court as to the form of the orders which should be made.