Commissioner of Taxation (Cth) v Williams [1972] HCA 31

High Court of Australia Stephen J. Barwick C.J. McTiernan, Menzies and Gibbs JJ. Commissioner of Taxation (Cth) v Williams [1972] HCA 31

ORDER Appeal dismissed with costs.

Cur. adv. vult.

May 22 Stephen J

. delivered the following written judgment:—

The appellant, Mrs. N. F. Williams, returned her taxable income for the year ended 30th June 1970, as somewhat in excess of $3,500 and was assessed accordingly in March 1971. In May 1971, the Commissioner issued a notice of amended assessment by which he included in her taxable income an amount of $65,734, described as "Profit on Sale of Land", and amended her assessment to tax accordingly. It is against this amended assessment that Mrs. Williams now appeals.

Mrs. Williams received, in the relevant income year, $72,400 as her share of the net proceeds of the sale of land at Dianella, a suburb of Perth, of which she was one of three tenants-in-common in equal shares.

The history of this land, so far as presently relevant, begins in 1959. In that year Mrs. Williams' husband was advised by Mr. Gordon Campbell, the senior partner of a leading Perth firm of estate agents of which Mr. Williams was then a junior partner, that the land was for sale and he strongly recommended its purchase. Acting on this recommendation, Mr. Williams, together with Mr. Gordon Campbell's son, Bruce Campbell, also a junior partner in that firm of estate agents, and a Mr. Scahill, the son of a close friend of Mr. Gordon Campbell, purchased the land, comprising two lots having a total area of about ten acres, for $4,000. They bought as tenants-in-common in equal shares and Mr. Williams contributed one-third of the purchase price. Mr. Scahill was then, and remained for some years after, a stranger to Mr. Williams.

The land was then covered with dense scrub, incapable of use for agriculture and so inaccessible, despite its close proximity to the city of Perth, that Mr. Williams did not attempt to inspect it but was content to view it from some high ground two miles away in a suburb known as Mt. Yokine, an outer suburb developed post-war, which was at the then extremity of suburban development. The land was, to Mr. Williams' knowledge, zoned as urban land at that time.