Federal Commissioner of Taxation v Westgarth

The Federal Commissioner of Taxation appealed to the High Court against a decision of a Board of Review, which had upheld an objection by the administrators of the estate of Ina Mary Campbell, deceased, against an amended assessment of estate duty. The dispute concerned the valuation of a house belonging to the deceased at the date of her death.

The legal issues before the court were whether the administrators had made a full and true disclosure of all material facts necessary for the making of the assessment, and if so, whether the Commissioner's amendment of the assessment, which increased the estate's duty liability, constituted a valid correction of an error in calculation or a mistake of fact under the Estate Duty Assessment Act 1914-1942.

The administrators had returned the house at a value of £2,750, supported by a certificate from the Valuer-General of New South Wales. Subsequently, the house was sold for £3,200, and expert evidence indicated that its value at the date of death was indeed £3,200. The Commissioner argued that the initial valuation was a non-disclosure of a material fact or a mistake of fact, authorising amendment under section 20(2) or 20(3) of the Act. However, the majority of the High Court, affirming the decision of McTiernan J., held that the administrators had made a full and true disclosure by providing their honest belief of the value, supported by the Valuer-General's certificate. The court reasoned that value, in this context, was a subjective assessment at the time of disclosure, and the subsequent sale price and expert opinions did not retroactively render the initial disclosure untrue or a mistake of fact. The amendment was therefore not a correction of a mistake of fact but rather a new assessment based on later information.

The appeal by the Commissioner was dismissed.