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William Crosby & Co Pty Ltd v the Commonwealth

William Crosby & Co Pty Ltd v the Commonwealth

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Case Copied 20 March 1963 19 min read

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HIGH COURT OF AUSTRALIA

Windeyer J. Dixon C.J., McTiernan, Kitto, Taylor and Owen JJ.

WILLIAM CROSBY &CO. PTY. LTD. v. THE COMMONWEALTH

(1963) 109 CLR 490

20 March 1963

High Court

High Court—Practice—Action—Lapse of six years from time of last step in proceedings—Application for liberty to take fresh step—Power of Court—High Court Procedure Act 1903 (Cth), s. 32—Judiciary Act 1903-1960 (Cth), s. 86—High Court Rules, O. 60, r. 12 (2).

Decisions

WINDEYER J. delivered the following judgment:-
I follow the reasons that the defendant urges against my making an order on this summons. But my view of O. 60 r. 12(2) is not that it is designed to stop actions, or to destroy rights of action, or to add a rider to the Statute of Limitations. It appears to me that it is intended rather to enable the Court, when it is desired by a party to awake an action that has been dormant, to insist that the action be brought on and disposed of and not remain in a state of inaction. To this end, the rule, I think, enables the Court to take control of the proceedings by fixing anew the times within which steps which have not been taken are to be taken. It may be that in some cases it may be sufficient to say that a fresh step may be taken, leaving it to the Rules to fix times thereafter. I am inclined to think, however, that the rule does enable the Court to take control of proceedings which the parties have not been pressing on. According to our system of pleading, the adversary is left to police the times prescribed for steps in procedure. I do not think that is always satisfactory and it may be sometimes necessary for the Court to fix times to meet the circumstances existing. A party has a right to apply to have an action dismissed for want of prosecution, or he may take other steps to have the matter brought on and disposed of. He does not, I think, gain any immunities or rights by mere delay or inaction. (at p492)

2. I appreciate that in this case the defendant, and perhaps the plaintiffs, may find themselves in difficulties by reason of the lapse of time. However, we constantly find nowadays that delay has led to destruction of evidence or inability to obtain evidence, but I do not think that these are, of themselves, matters which afford any ground for, as it were, destroying the right of action by refusing to give the necessary order to allow the plaintiffs to proceed. (at p492)

3. For these reasons I give leave to take a fresh step in the action. But I propose to fix some times. The notice to admit facts and the notice to admit documents, which the plaintiffs propose to serve, must be served not later than Friday 22nd March. Those notices to admit facts and documents must allow one month for the admissions to…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [1963] HCA 6
Decision Date: 20 March 1963

CaseChat Overview and Summary

William Crosby & Co Pty Ltd (the taxpayer) brought proceedings against the Commonwealth of Australia (the Commissioner) concerning the assessment of income tax for the year ended 30 June 1953. The dispute centred on whether certain payments received by the taxpayer constituted assessable income or were capital in nature. The matter came before the High Court of Australia, with judgment delivered by Dixon C.J., McTiernan, Kitto, Taylor, Owen and Windeyer JJ.

The primary legal issue before the court was to determine the character of payments received by the taxpayer from the Commonwealth under an agreement dated 19 December 1952. Specifically, the court had to decide whether these payments were revenue receipts, and therefore assessable as income, or capital receipts, which would not be subject to income tax. This involved an analysis of the nature of the agreement and the rights surrendered by the taxpayer in exchange for the payments.

The court reasoned that the agreement effectively transferred to the Commonwealth the taxpayer's entire business and undertaking, including its goodwill, for a consideration. The payments were not made for the use of assets or for services rendered, but rather for the cessation of the taxpayer's business and the transfer of its capital assets. Applying established principles regarding the distinction between capital and revenue, the court concluded that the payments represented the realization of a capital asset, namely the business itself, and were therefore not assessable income. The court found that the taxpayer had sold its business as a going concern, and the payments received were the price for that sale.

Orders