Clark v Inglis [2010] NSWCA 144

New South Wales Court of Appeal

CITATION: Clark v Inglis [2010] NSWCA 144

HEARING DATE(S): 6 May 2010

JUDGMENT DATE: 29 June 2010

JUDGMENT OF: Allsop P at 1; McColl JA at 56; Macfarlan JA at 57

1. Grant leave to appeal from the orders of the Equity Division on 7 July 2009. DECISION: 2. Direct a notice of appeal be filed within seven days substantially in the form in the White Books filed adding to that notice the parties joined to the application on 6 May 2010. 3. Dismiss the appeal. 4. Order that the appellants pay the respondents' costs of the appeal, including the application for leave to appeal.

CATCHWORDS: TRUSTS AND TRUSTEES – discretionary trust – powers of trustees – legitimacy of accounting approach – trustee entitled to treat unrealised gain on investments as "income" – permissible practice according to commercial accounting standards and principles – trustee validly determined to treat unrealised gain as "income" – acquiescence in annual financial accounts - WORDS AND PHRASES – construction of trust deed – "income"

LEGISLATION CITED: Income Tax Assessment Act 1936 (Cth) Div 6 & s 97 Trustee Act, 1925 (NSW) s 63

CATEGORY: Principal judgment

Commissioner of Taxation v Bamford [2010] HCA 10; 246 ALR 436 Commissioner of Taxation (Cth) v Sun Alliance Investments Pty Ltd (In Liq) [2005] HCA 70; 225 CLR 488 Commissioner of Taxes (SA) v Executor Trustee and Agency Co of South Australia Ltd (Carden's Case) [1938] HCA 69; 63 CLR 108 QBE Insurance Group Ltd v Australian Securities Commission (1992) 38 FCR 270 CASES CITED: Re Spanish Prospecting Co Ltd [1911] 1 Ch 92 Ronpibon Tin NL and Tongkah Compound NL v Federal Commissioner of Taxation [1949] HCA 15; 78 CLR 47 McBride v Hudson [1962] HCA 5; 107 CLR 604 Sun Insurance Office v Clark [1912] AC 443 Wood v Inglis [2008] NSWSC 1147; 68 ACSR 420 Wood v Inglis [2009] NSWSC 601