mdroth/huggingface-course_section-5_zst huggingface dataset:
Case: Federal Commissioner of Taxation v Krakos Investments Pty Ltd (1996) 61 FCR 489
Outcome: cited
In determining whether an amount paid or payable to the taxpayer has the character of income, it is necessary: (a) to have regard to the quality of the amount in the hands of the taxpayer and not to the character of the expenditure to the payer : Federal Commissioner of Taxation v McNeil [2007] HCA 5 ; (2007) 229 CLR 656 at [20] and [55]; G.P. International Pipecoaters Pty Ltd v Federal Commissioner of Taxation [1990] HCA 25 ; (1990) 170 CLR 124 at 136; (b) to have regard to the whole of the surrounding circumstances or factual matrix, and not just to the contract under which the amount is paid or payable: Federal Coke Co Pty Ltd v Federal Commissioner of Taxation (1977) 34 FLR 375 at 385; Federal Commissioner of Taxation v Cooling (1990) 22 FCR 42 at 53; (c) as an elaboration of the previous paragraph, to consider the substance rather than the form of the transaction, particularly where an amount is paid as part of a wider, composite transaction: Dickenson v Federal Commissioner of Taxation [1958] HCA 62 ; (1958) 98 CLR 460 at 482, 491; Reuter v Federal Commissioner of Taxation 93 ATC 5030 at 5036 5037; Federal Commissioner of Taxation v Broken Hill Pty Co Ltd (2000) 45 ATR 507 at [50]; Macquarie Finance Ltd v Federal Commissioner of Taxation (2004) 57 ATR 115 at [61], [64] per Hill J, on appeal [2005] FCAFC 205 ; (2005) 146 FCR 77 at [109] [111] per French J, [169] [170] and [187] per Hely J, and [251] [253] per Gyles J; Customs &amp; Excise Commissioners v Diners Club Ltd [1989] 1 WLR 1196 at 1207; see also Barclays Mercantile Business Finance Ltd v Mawson [2005] 1 AC 684; and (d) to disregard the labels used by the parties: Federal Commissioner of Taxation v Krakos Investments Pty Ltd (1995) 61 FCR 489 at 495; Vincent v Federal Commissioner of Taxation (2002) 124 FCR 350 at [64] [72].
Case: Federal Commissioner of Taxation v McNeil [2007] HCA 5 ; (2007) 229 CLR 656
Outcome: cited
In determining whether an amount paid or payable to the taxpayer has the character of income, it is necessary: (a) to have regard to the quality of the amount in the hands of the taxpayer and not to the character of the expenditure to the payer : Federal Commissioner of Taxation v McNeil [2007] HCA 5 ; (2007) 229 CLR 656 at [20] and [55]; G.P. International Pipecoaters Pty Ltd v Federal Commissioner of Taxation [1990] HCA 25 ; (1990) 170 CLR 124 at 136; (b) to have regard to the whole of the surrounding circumstances or factual matrix, and not just to the contract under which the amount is paid or payable: Federal Coke Co Pty Ltd v Federal Commissioner of Taxation (1977) 34 FLR 375 at 385; Federal Commissioner of Taxation v Cooling (1990) 22 FCR 42 at 53; (c) as an elaboration of the previous paragraph, to consider the substance rather than the form of the transaction, particularly where an amount is paid as part of a wider, composite transaction: Dickenson v Federal Commissioner of Taxation [1958] HCA 62 ; (1958) 98 CLR 460 at 482, 491; Reuter v Federal Commissioner of Taxation 93 ATC 5030 at 5036 5037; Federal Commissioner of Taxation v Broken Hill Pty Co Ltd (2000) 45 ATR 507 at [50]; Macquarie Finance Ltd v Federal Commissioner of Taxation (2004) 57 ATR 115 at [61], [64] per Hill J, on appeal [2005] FCAFC 205 ; (2005) 146 FCR 77 at [109] [111] per French J, [169] [170] and [187] per Hely J, and [251] [253] per Gyles J; Customs &amp; Excise Commissioners v Diners Club Ltd [1989] 1 WLR 1196 at 1207; see also Barclays Mercantile Business Finance Ltd v Mawson [2005] 1 AC 684; and (d) to disregard the labels used by the parties: Federal Commissioner of Taxation v Krakos Investments Pty Ltd (1995) 61 FCR 489 at 495; Vincent v Federal Commissioner of Taxation (2002) 124 FCR 350 at [64] [72].
Case: Federal Commissioner of Taxation v Montgomery [1999] HCA 34 ; (1999) 198 CLR 639
Outcome: cited
Central to the concept of derivation is the proposition that there must be a gain in the sense of an amount which has 'come home' to the taxpayer, i.e. it is available for the taxpayer's separate use, benefit and disposal: Federal Commissioner of Taxation v Montgomery [1999] HCA 34 ; (1999) 198 CLR 639 at [65] and [117]-[118]; Commissioner of Taxes (SA) v Executor Trustee and Agency Co of South Australia (' Carden ') [1938] HCA 69 ; (1938) 63 CLR 108 at 155; Arthur Murray (NSW) Pty Ltd v Federal Commissioner of Taxation [1965] HCA 58 ; (1965) 114 CLR 314 at 318; Eisner v Macomber [1919] USSC 118 ; (1920) 252 US 189 at 207 applied in Montgomery at [117]. That is, receipt of itself is not sufficient to constitute a gain or an amount as income derived: Arthur Murray at 318. 79 In order to determine whether a receipt has come home the enquiry is focused upon the general understanding among practical business people as to whether the receipt has come home for the separate use, benefit and disposal of the taxpayer: Arthur Murray at 318; Montgomery at [117].
Case: Federal Commissioner of Taxation v Australian Gas Light Co (1983) 74 FLR 13 
Outcome: cited
The Commissioner submitted that it is a fundamental defect in BARM's argument that it impermissibly seeks to make derivation of the income amount (the debt/payment in respect of management services) dependent upon the capacity to recover the capital asset arising from investment of the income (the debt owing by PGF). Apart from the illogicality of the contended dependence, it is relevant to note that even if there had been an impediment to recovery of the debt on income account, that would not lead to the result that it would not have been derived as income. In Barratt at 232, Gummow J (Northrop and Drummond JJ agreeing) drew attention to the distinction between: (a) the situation where a debt has not come into existence, with the result that income will not have been derived (an example of which was Federal Commissioner of Taxation v Australian Gas Light Co (1983) 74 FLR 13); and (b) the situation where a debt has come into existence, but there is an impediment to recovery. Accordingly, statutory prohibitions against recovery of fees for medical services pursuant to s 35(2) of the Medical Practitioners Act 1938 (NSW) were only impediments to enforcement that did not lead to the result that taxpayers assessable on an accruals basis had not derived the fees as income.
Case: Henderson v Federal Commissioner of Taxation [1970] HCA 62 ; (1968) 119 CLR 612
Outcome: cited
In respect of an accruals basis taxpayer, the time of derivation will normally be the time when a recoverable debt arises: Barratt at 231.2; Henderson v Federal Commissioner of Taxation [1970] HCA 62 ; (1968) 119 CLR 612 at 650.6.
Case: Howland-Rose and Ors v Federal Commissioner of Taxation [2002] FCA 246 ; (2002) 118 FCR 61 
Outcome: referred to
In the course of its submission, BARM noted that in Howland-Rose and Ors v Federal Commissioner of Taxation [2002] FCA 246 ; (2002) 118 FCR 61 , Conti J dealt with the tax position of four participants in BPS, in what amounted to a test case for BPS and the subsequent Budplans. His Honour held that the participants were not entitled to allowable deductions under s 51(1) of the Income Tax Assessment Act 1936 (Cth) ('ITAA 1936 ' ) in respect of the 'management fees' or 'research fees' paid by them. A review of his Honour's reasons does not indicate than any issue arose in that case as to the quantum of the outgoings claimed to be incurred; only their characterisation in terms of the section of the statute. 16 BPS was established by a prospectus dated 5 December 1995 ('Prospectus') and a trust deed dated the same date between BARM, ATTORI, ARG and each participant ('the Trust Deed'), once he or she signed the 'Principal Deed' referred to below. 17 Participants in BPS executed the following documents: (1) an application form that is found at page 56 of the Prospectus ('Application Form'); (2) the Principal Deed that is found at pages 57 and 58 of the Prospectus ('Principal Deed'), to which were annexed a copy of the Budplan Syndicate Deed, at pages 46-51 of the Prospectus ('Syndicate Deed') and a Loan Agreement between PGF and the participant, at pages 52 54 of the Prospectus ('Loan Agreement'); (3) in some or all cases, an alternative loan agreement between the participant and PGF ('Alternative Loan Agreement'). 92 While the Commissioner's primary submission is that the mode of discharge of payment of the management fees is irrelevant to the issue of derivation by BARM, the mode of discharge adopted (utilising bills of exchange) had the consequence that payments in the amounts shown on the bills of exchange (i.e. full payment of the management fees instalments) are to be taken as having been made to BARM on the dates on which the bills of exchange were delivered to it: Howland-Rose at [128] [130]; Equuscorp Pty Ltd v Glengallan Investments Pty Ltd [2004] HCA 55 ; (2004) 218 CLR 471 at [44] [47].
Case: Investment Merchant Finance Corporation Ltd v Federal Commissioner of Taxation [1971] HCA 35 ; (1971) 125 CLR 249
Outcome: considered
On the other hand, contrary to the submission in [73] and [74] above, BARM's alternative (1) does require a disregard of the legal relationships created by the relevant instruments; it requires a conflation of separate transactions, albeit financially dependent separate transactions, and taxation by reference to the end economic result of that conflation. That is equally impermissible. While not directly in point, it has a resonance with the alternative argument that was put to the High Court in Investment Merchant Finance Corporation Ltd v Federal Commissioner of Taxation [1971] HCA 35 ; (1971) 125 CLR 249 where the assessment in question was sought to be upheld on the footing that the transaction, as a whole , was the carrying out of a profit-making scheme for the purposes of s 26(a) of the ITAA 1936, and that, in determining the profit derived from the scheme, the dividend received should be brought into account rather than being treated as itself, assessable income in accordance with s 44 of the ITAA 1936: in particular, see Menzies J at 262. That alternative argument was rejected by all members of the Court. 106 Of course, there will be cases where the Parliament mandates such treatment. The example that comes most readily to mind is the consolidation regime in Part III 90 of the ITAA 1997. 107 Alternative (1), rather than avoiding a 'blinkered' view of the transaction as submitted by BARM, does just that by requiring a 'closing of the eyes' to the separate transactions that took place. Contentions that alternative (1) recognises the reality of the transaction, as a whole, elides what that involves conflation of separate, albeit financially dependent, transactions, and taxation by reference to the end economic result. Like taxation by reference to economic equivalence, it must be rejected.
Case: MacFarlane v Federal Commissioner of Taxation (1986) 13 FCR 356 
Outcome: cited
A receipt will not come home where the amount received is affected by a legal or equitable restriction affecting the separate use, benefit or enjoyment of the recipient: Arthur Murray at 318; Barratt v Federal Commissioner of Taxation [1992] FCA 271 ; (1992) 36 FCR 222 at 231; RW Parsons, Income Taxation in Australia : Principles of Income, Deductibility and Tax Accounting , Law Book Company, Sydney (1985) at [11.49]. For example, where the receipt is affected by a constructive trust (see, MacFarlane v Federal Commissioner of Taxation (1986) 13 FCR 356) or where the recipient is not the beneficial object of the receipt (see The Countess of Bective v Federal Commissioner of Taxation (1932) 47 CLR 417 at 424).
Case: Macquarie Finance Ltd v Federal Commissioner of Taxation (2004) 57 ATR 115
Outcome: cited
In determining whether an amount paid or payable to the taxpayer has the character of income, it is necessary: (a) to have regard to the quality of the amount in the hands of the taxpayer and not to the character of the expenditure to the payer : Federal Commissioner of Taxation v McNeil [2007] HCA 5 ; (2007) 229 CLR 656 at [20] and [55]; G.P. International Pipecoaters Pty Ltd v Federal Commissioner of Taxation [1990] HCA 25 ; (1990) 170 CLR 124 at 136; (b) to have regard to the whole of the surrounding circumstances or factual matrix, and not just to the contract under which the amount is paid or payable: Federal Coke Co Pty Ltd v Federal Commissioner of Taxation (1977) 34 FLR 375 at 385; Federal Commissioner of Taxation v Cooling (1990) 22 FCR 42 at 53; (c) as an elaboration of the previous paragraph, to consider the substance rather than the form of the transaction, particularly where an amount is paid as part of a wider, composite transaction: Dickenson v Federal Commissioner of Taxation [1958] HCA 62 ; (1958) 98 CLR 460 at 482, 491; Reuter v Federal Commissioner of Taxation 93 ATC 5030 at 5036 5037; Federal Commissioner of Taxation v Broken Hill Pty Co Ltd (2000) 45 ATR 507 at [50]; Macquarie Finance Ltd v Federal Commissioner of Taxation (2004) 57 ATR 115 at [61], [64] per Hill J, on appeal [2005] FCAFC 205 ; (2005) 146 FCR 77 at [109] [111] per French J, [169] [170] and [187] per Hely J, and [251] [253] per Gyles J; Customs &amp; Excise Commissioners v Diners Club Ltd [1989] 1 WLR 1196 at 1207; see also Barclays Mercantile Business Finance Ltd v Mawson [2005] 1 AC 684; and (d) to disregard the labels used by the parties: Federal Commissioner of Taxation v Krakos Investments Pty Ltd (1995) 61 FCR 489 at 495; Vincent v Federal Commissioner of Taxation (2002) 124 FCR 350 at [64] [72].
Case: Permanent Trustee Co of New South Wales v Federal Commissioner of Taxation (1940) 6 ATD 5 
Outcome: distinguished
That enquiry proceeds by reference to the 'realities' that affect the taxpayer's separate use, benefit and disposal of the receipt rather than merely the legal form of, or legal entitlements arising from, the receipt itself: Permanent Trustee Co of New South Wales v Federal Commissioner of Taxation (' Prior ') (1940) 6 ATD 5 at 13.
Case: Pobjie Agencies v Vinidex Tubemakers (2000) Aust Contract R 90-112
Outcome: cited
The authorities support the proposition that an agreement may be implied from the acts and conduct of the parties even where the strictures of offer and acceptance cannot be strictly proven: see Brogden v Metropolitan Railway (1877) 2 AC 666 at 672, 678, 679, 686, 689, 698; Integrated Computer Services Pty Ltd v Digital Equipment Corp (Aust) Pty Ltd (1988) 5 B.P.R 11,110 at 11,117; Pobjie Agencies v Vinidex Tubemakers (2000) Aust Contract R 90-112 at [21]-[32]; see also Vroon v Foster's Brewing Group Ltd [1994] 2 VR 32 at 67.
Case: Reuter v Federal Commissioner of Taxation 93 ATC 5030
Outcome: cited
In determining whether an amount paid or payable to the taxpayer has the character of income, it is necessary: (a) to have regard to the quality of the amount in the hands of the taxpayer and not to the character of the expenditure to the payer : Federal Commissioner of Taxation v McNeil [2007] HCA 5 ; (2007) 229 CLR 656 at [20] and [55]; G.P. International Pipecoaters Pty Ltd v Federal Commissioner of Taxation [1990] HCA 25 ; (1990) 170 CLR 124 at 136; (b) to have regard to the whole of the surrounding circumstances or factual matrix, and not just to the contract under which the amount is paid or payable: Federal Coke Co Pty Ltd v Federal Commissioner of Taxation (1977) 34 FLR 375 at 385; Federal Commissioner of Taxation v Cooling (1990) 22 FCR 42 at 53; (c) as an elaboration of the previous paragraph, to consider the substance rather than the form of the transaction, particularly where an amount is paid as part of a wider, composite transaction: Dickenson v Federal Commissioner of Taxation [1958] HCA 62 ; (1958) 98 CLR 460 at 482, 491; Reuter v Federal Commissioner of Taxation 93 ATC 5030 at 5036 5037; Federal Commissioner of Taxation v Broken Hill Pty Co Ltd (2000) 45 ATR 507 at [50]; Macquarie Finance Ltd v Federal Commissioner of Taxation (2004) 57 ATR 115 at [61], [64] per Hill J, on appeal [2005] FCAFC 205 ; (2005) 146 FCR 77 at [109] [111] per French J, [169] [170] and [187] per Hely J, and [251] [253] per Gyles J; Customs &amp; Excise Commissioners v Diners Club Ltd [1989] 1 WLR 1196 at 1207; see also Barclays Mercantile Business Finance Ltd v Mawson [2005] 1 AC 684; and (d) to disregard the labels used by the parties: Federal Commissioner of Taxation v Krakos Investments Pty Ltd (1995) 61 FCR 489 at 495; Vincent v Federal Commissioner of Taxation (2002) 124 FCR 350 at [64] [72].
Case: Sun Insurance Office v Clark (1912) AC 443
Outcome: cited
This is illustrated by the approach to income recognition in the area of insurance. It is accepted that, in an appropriate case, the aggregate of insurance premiums received by an insurer in a year of income does not give a substantially correct reflex of that insurer's income because of the contingencies affecting those premiums: see Sun Insurance Office v Clark (1912) AC 443 at 452-4, 456 and 460, 461, approved in Ballarat Brewing and Carden .
Case: The Countess of Bective v Federal Commissioner of Taxation (1932) 47 CLR 417
Outcome: cited
A receipt will not come home where the amount received is affected by a legal or equitable restriction affecting the separate use, benefit or enjoyment of the recipient: Arthur Murray at 318; Barratt v Federal Commissioner of Taxation [1992] FCA 271 ; (1992) 36 FCR 222 at 231; RW Parsons, Income Taxation in Australia : Principles of Income, Deductibility and Tax Accounting , Law Book Company, Sydney (1985) at [11.49]. For example, where the receipt is affected by a constructive trust (see, MacFarlane v Federal Commissioner of Taxation (1986) 13 FCR 356) or where the recipient is not the beneficial object of the receipt (see The Countess of Bective v Federal Commissioner of Taxation (1932) 47 CLR 417 at 424).
Case: Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd [2004] HCA 52 ; (2004) 219 CLR 165 
Outcome: referred to
The question of whether a contract was entered into or, if so, what the terms of that contract were, is not resolved by inadmissible assertions as to subjective beliefs, intentions or desires. Questions of formation of contract are dealt with on the objective theory of contract. As was recently restated by the High Court in Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd [2004] HCA 52 ; (2004) 219 CLR 165 at 179: 'This Court, in Pacific Carriers Ltd v BNP Paribas [2004] HCA 35 ; (2004) 78 ALJR 1045 , has recently reaffirmed the principle of objectivity by which the rights and liabilities of the parties to a contract are determined. It is not the subjective beliefs or understandings of the parties about their rights and liabilities that govern their contractual relations. What matters is what each party by words and conduct would have led a reasonable person in the position of the other party to believe.' 62 The Commissioner submitted in the present case: (a) There is no evidence of any negotiations in relation to a deposit agreement. It is not self-evident what the terms of such an agreement would have been had there been any negotiation. (b) Athough Mr Lear proposed a deposit agreement (with unidentified terms), Mr Gallagher did not want to impose any 'legal restrictions as to how it uses its money'.
Case: Vroon v Foster's Brewing Group Ltd [1994] 2 VR 32
Outcome: cited
The authorities support the proposition that an agreement may be implied from the acts and conduct of the parties even where the strictures of offer and acceptance cannot be strictly proven: see Brogden v Metropolitan Railway (1877) 2 AC 666 at 672, 678, 679, 686, 689, 698; Integrated Computer Services Pty Ltd v Digital Equipment Corp (Aust) Pty Ltd (1988) 5 B.P.R 11,110 at 11,117; Pobjie Agencies v Vinidex Tubemakers (2000) Aust Contract R 90-112 at [21]-[32]; see also Vroon v Foster's Brewing Group Ltd [1994] 2 VR 32 at 67.
Case: Vincent v Federal Commissioner of Taxation (2002) 124 FCR 350 
Outcome: cited
In determining whether an amount paid or payable to the taxpayer has the character of income, it is necessary: (a) to have regard to the quality of the amount in the hands of the taxpayer and not to the character of the expenditure to the payer : Federal Commissioner of Taxation v McNeil [2007] HCA 5 ; (2007) 229 CLR 656 at [20] and [55]; G.P. International Pipecoaters Pty Ltd v Federal Commissioner of Taxation [1990] HCA 25 ; (1990) 170 CLR 124 at 136; (b) to have regard to the whole of the surrounding circumstances or factual matrix, and not just to the contract under which the amount is paid or payable: Federal Coke Co Pty Ltd v Federal Commissioner of Taxation (1977) 34 FLR 375 at 385; Federal Commissioner of Taxation v Cooling (1990) 22 FCR 42 at 53; (c) as an elaboration of the previous paragraph, to consider the substance rather than the form of the transaction, particularly where an amount is paid as part of a wider, composite transaction: Dickenson v Federal Commissioner of Taxation [1958] HCA 62 ; (1958) 98 CLR 460 at 482, 491; Reuter v Federal Commissioner of Taxation 93 ATC 5030 at 5036 5037; Federal Commissioner of Taxation v Broken Hill Pty Co Ltd (2000) 45 ATR 507 at [50]; Macquarie Finance Ltd v Federal Commissioner of Taxation (2004) 57 ATR 115 at [61], [64] per Hill J, on appeal [2005] FCAFC 205 ; (2005) 146 FCR 77 at [109] [111] per French J, [169] [170] and [187] per Hely J, and [251] [253] per Gyles J; Customs &amp; Excise Commissioners v Diners Club Ltd [1989] 1 WLR 1196 at 1207; see also Barclays Mercantile Business Finance Ltd v Mawson [2005] 1 AC 684; and (d) to disregard the labels used by the parties: Federal Commissioner of Taxation v Krakos Investments Pty Ltd (1995) 61 FCR 489 at 495; Vincent v Federal Commissioner of Taxation (2002) 124 FCR 350 at [64] [72].
Case: Andi-Co Australia Pty Ltd v Meyers [2004] FCA 1358
Outcome: cited
The Court's role is to determine whether a genuine dispute exists. That issue is determined at the time the Court hears the application: Andi-Co Australia Pty Ltd v Meyers [2004] FCA 1358 at [16] . The manner in which the Court approaches the task is also not in dispute. The Court does not resolve contested questions of fact. The Court does not determine where the merits lie in any contest: Kortz Ltd v Data Acquisition Pty Ltd [2006] FCA 1722 ; (2006) 155 FCR 556 at [40] . The Court determines whether the supporting affidavits filed and served by Ox Operations depose to facts from which the Court is able to conclude that a genuine dispute exists. As Young J said in John Holland Construction and Engineering Pty Ltd v Kilpatrick Green Pty Ltd (1994) 14 ACSR 250 at 253, something between mere assertion and the proof of the existence of the disputed debt is required.