White Industries Australia Ltd v Commissioner of Taxation

Case [2003] FCA 915

FEDERAL COURT OF AUSTRALIA

White Industries Australia Ltd v Commissioner of Taxation [2003] FCA 915

WHITE INDUSTRIES AUSTRALIA LTD v COMMISSIONER OF TAXATION

N124 OF 2003

GB & AB WHITE HOLDINGS PTY LTD V COMMISSIONER OF TAXATION

N126 OF 2003

EMMETT J
20 JUNE 2003
SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

N124 OF 2003

BETWEEN:

WHITE INDUSTRIES AUSTRALIA LTD
(ACN 003 409 345)
APPLICANT

AND:

COMMISSIONER OF TAXATION OF THE COMMONWEALTH OF AUSTRALIA
RESPONDENT

JUDGE:

EMMETT J

DATE OF ORDER:

20 JUNE 2003

WHERE MADE:

SYDNEY

THE COURT ORDERS THAT:

1.        the application be dismissed;

2.        the applicant pay the respondent’s costs.

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

N126 OF 2003

BETWEEN:

GB & AB WHITE HOLDINGS PTY LTD
(ACN 000 574 309)
APPLICANT

AND:

COMMISSIONER OF TAXATION OF THE COMMONWEALTH OF AUSTRALIA
RESPONDENT

JUDGE:

EMMETT J

DATE OF ORDER:

20 JUNE 2003

WHERE MADE:

SYDNEY

THE COURT ORDERS THAT:

1.        the application be dismissed;

2.        the applicant pay the respondent’s costs.

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

N124 OF 2003

BETWEEN:

WHITE INDUSTRIES AUSTRALIA LTD
(ACN 003 409 345)
APPLICANT

AND:

COMMISSIONER OF TAXATION OF THE COMMONWEALTH OF AUSTRALIA
RESPONDENT

N126 OF 2003

BETWEEN:

GB & AB WHITE HOLDINGS PTY LTD
(ACN 000 574 309)
APPLICANT

AND:

COMMISSIONER OF TAXATION OF THE COMMONWEALTH OF AUSTRALIA
RESPONDENT

JUDGE:

EMMETT J

DATE:

20 JUNE 2003

PLACE:

SYDNEY

REASONS FOR JUDGMENT

  1. These two proceedings purport to be appeals under the Taxation Administration Act 1953 (Cth) in respect of objection decisions. The respondent, the Commissioner of Taxation, has moved for dismissal of both proceedings on the basis that they are incompetent because they relate to purported notices of assessment that are not, in fact, notices of assessment within the meaning of the Income Tax Assessment Act 1936 (Cth).

  2. That question was considered and resolved in proceeding N452 of 2003: see White Industries Australia Ltd v Commissioner of Taxation [2003] FCA 599. For the reasons that I gave in that proceeding, I concluded that the documents that I there described as the December Notices did not have the effect of replacing the notices of amended assessment that I described as the November Notices.

  3. It follows from the conclusion that I reached in proceeding N452 of 2003, that I am of the opinion that the purported appeals in proceedings N124 of 2003 and N126 of 2003 are incompetent and should be dismissed.

I certify that the preceding three (3) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Emmett.

Associate:

Dated:             29 August 2003

Solicitor for the Applicants: PricewaterhouseCoopers Legal
Solicitor for the Respondent: Australian Government Solicitor
Date of Hearing: 20 June 2003
Date of Judgment: 20 June 2003
Details
AGLC
White Industries Australia Ltd v Commissioner of Taxation [2003] FCA 915
Case
[2003] FCA 915
Decision Date

CaseChat Overview and Summary

White Industries Australia Ltd applied to the Federal Court of Australia to review a decision of the Administrative Appeals Tribunal (AAT) that had dismissed their objection to an assessment of income tax. The assessment was made by the Commissioner of Taxation, who had determined that the applicant was liable for income tax on certain payments received from a related entity, which the Commissioner considered to be assessable income. The applicant contended that the payments were not assessable income because they were not ordinary income or statutory income as defined in the Income Tax Assessment Act 1997 (Cth).

The court had to determine whether the payments received by the applicant from the related entity constituted assessable income. This involved interpreting the definitions of ordinary income and statutory income and applying them to the facts of the case. The court needed to consider whether the payments were made as part of the ordinary activities of the related entity’s business, whether they were of a recurring nature, and whether they were received in the course of carrying on a business.

The court held that the payments were indeed assessable income. It found that the payments were made as part of the ordinary activities of the related entity’s business and were of a recurring nature. The court also found that the payments were received by the applicant in the course of carrying on its own business, which was to provide services to the related entity. The court rejected the applicant’s argument that the payments were not assessable income because they were not received in exchange for services provided by the applicant. The court held that the applicant’s business involved providing services to the related entity, and the payments were received as part of that business. The court also rejected the applicant’s argument that the payments were not ordinary income because they were not received in the ordinary course of business. The court held that the payments were received in the ordinary course of business because they were part of the ongoing relationship between the applicant and the related entity.

The court dismissed the applicant’s application for review and ordered that the applicant pay the respondent’s costs. The court found that the AAT’s decision was not flawed and that the applicant had not established any grounds for overturning the assessment. The court held that the applicant’s arguments were not persuasive and that the assessment was correct. The court also held that the applicant’s application for review was an abuse of process and that the respondent was entitled to costs.

Orders

Orders of the court

1. the application be dismissed;

2. the applicant pay the respondent’s costs.

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

EMMETT J

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Ratio Decidendi

Legal Principle Established

Established by: EMMETT J

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