mdroth/huggingface-course_section-5_zst huggingface dataset:
Case: Heather v P-E Consulting Group Ltd [1973] Ch 189
Outcome: referred to
By and large, the parties were not in disagreement about the governing legal principles. The disagreement, however, came in the characterisation called for by those principles. At times, there appeared to be a difference between the parties based on the posited distinctions, first, between legal form and business substance, and secondly, between the loan or non-loan character of the Debenture. Neither such distinction is determinative. The relevant distinction is in the words of s 8-1: capital or in the nature of capital (juxtaposed against the contrary concept inherent in the context of s 8-1(2): that of revenue outgoing). Ultimately, however, the difference between the parties can be found in the process of characterisation of the legal relationship created among the parties, set in the full business and legal context of that relationship. Minds may differ in the conclusions reached in that exercise. That is almost inevitable in such a process of characterisation when the facts are not sufficiently obvious as to answer the question themselves: cf Heather v P-E Consulting Group Ltd [1973] Ch 189.
Case: Inland Revenue Commissioner v Europa Oil (NZ) Ltd [1971] AC 760
Outcome: referred to
It is also essential to recognise that the above analysis of characterisation requires "both a wide survey and an exact scrutiny of the taxpayer's activities": Western Gold Mines (NL) v Commissioner of Taxation (WA) [1938] HCA 5 ; (1938) 59 CLR 729 at 740. That is, one examines the whole business context of what was done: BP Australia 112 CLR at 399; National Australia Bank Limited v Commissioner of Taxation (1997) 80 FCR 352 at 362; Commissioner of Taxation v Cooling (1990) 22 FCR 42 at 52-53 (Hill J); and Macquarie Finance Limited v Commissioner of Taxation [2004] FCA 1170 ; (2004) 210 ALR 508 (Hill J) at [64]. Relevant also here is the close interconnection of all the constituent documents in the integrated international commercial transaction: cf Inland Revenue Commissioner v Europa Oil (NZ) Ltd [1971] AC 760 at 774-775.
Case: John Fairfax &amp; Sons Pty Limited v Commissioner of Taxation [1959] HCA 4 ; (1959) 101 CLR 30
Outcome: referred to
There was no issue about s 8-1(1). It should be noted at the outset that this concession by the Commissioner did not provoke an argument on behalf of SGB that this led to the satisfaction of s 8-1(2). There was no debate or discussion as to the true nature of the "negative limbs" of s 8-1(2) and whether they operate only by way of contradistinction to illustrate what is not included, from the outset, in the "positive limbs" of s 8-1(1), or as true exceptions: Macquarie Finance Ltd v Commissioner of Taxation [2005] FCAFC 205 ; (2005) 146 FCR 77 at [104] : SA Battery Makers Pty Limited v Commissioner of Taxation (1976) 28 FLR 451 at 463; and Parsons, RW Income Tax in Australia (1985, Law Book Co Sydney) at [5.12]. The argument proceeded, in substance, on the basis that s 8-1(2) was a true exception, an approach which has judicial support: Steele v Deputy Commissioner of Taxation (1999) 197 CLR 459 at 468 [24] and John Fairfax &amp; Sons Pty Limited v Commissioner of Taxation [1959] HCA 4 ; (1959) 101 CLR 30 at 34, and which accords more with a plain reading of the text of the statute.
Case: Macquarie Finance Limited v Commissioner of Taxation [2004] FCA 1170 ; (2004) 210 ALR 508
Outcome: discussed
It is also essential to recognise that the above analysis of characterisation requires "both a wide survey and an exact scrutiny of the taxpayer's activities": Western Gold Mines (NL) v Commissioner of Taxation (WA) [1938] HCA 5 ; (1938) 59 CLR 729 at 740. That is, one examines the whole business context of what was done: BP Australia 112 CLR at 399; National Australia Bank Limited v Commissioner of Taxation (1997) 80 FCR 352 at 362; Commissioner of Taxation v Cooling (1990) 22 FCR 42 at 52-53 (Hill J); and Macquarie Finance Limited v Commissioner of Taxation [2004] FCA 1170 ; (2004) 210 ALR 508 (Hill J) at [64]. Relevant also here is the close interconnection of all the constituent documents in the integrated international commercial transaction: cf Inland Revenue Commissioner v Europa Oil (NZ) Ltd [1971] AC 760 at 774-775. 64 Before examining the relevant aspects of the overall arrangement to answer this question, it is necessary to say something about the submissions about interest and deductibility. The expression of views by the judges in cases as to the usual approach to interest in this context should be seen for what they are, and are not. They are the discussion of the kinds of consideration discussed by Dixon J in Sun Newspapers and Hallstroms Case in the context of interest on a loan. Thus, it can be accepted that, ordinarily, interest will be an allowable deduction under s 8-1, if incurred in the course of an income-producing activity or business: Texas Co (Australasia) Ltd v Federal Commissioner of Taxation [1940] HCA 9 ; (1940) 63 CLR 382 at 468 and Steele v Deputy Commissioner of Taxation 197 CLR at 469-70 [27]. This acceptance does not lay down some independent rule to be engaged and analysed beyond the characterisation enquiry discussed earlier. Rather, interest is usually deductible because, usually, it is a recurrent or periodic payment securing an advantage not of an enduring kind, but the use by the borrower of money during the term of the loan: Steele v Deputy Commissioner of Taxation 197 CLR at 469-470 [27]. But, as was noted in the same paragraph, "there may be particular circumstances where it is proper to regard the purpose of interest payments as something other than the raising or maintenance of the borrowing and thus, potentially, of a capital nature." To this passage there was footnoted Parsons RW op cit [6.11]. The possibilities referred to by Professor Parsons in that paragraph do not form an exhaustive universe of non-deductible interest. See also the discussion by Hill J at first instance in Macquarie Finance Limited v Commissioner of Taxation 210 ALR at [47].
Case: Macquarie Finance Ltd v Commissioner of Taxation [2005] FCAFC 205 ; (2005) 146 FCR 77
Outcome: discussed
There was no issue about s 8-1(1). It should be noted at the outset that this concession by the Commissioner did not provoke an argument on behalf of SGB that this led to the satisfaction of s 8-1(2). There was no debate or discussion as to the true nature of the "negative limbs" of s 8-1(2) and whether they operate only by way of contradistinction to illustrate what is not included, from the outset, in the "positive limbs" of s 8-1(1), or as true exceptions: Macquarie Finance Ltd v Commissioner of Taxation [2005] FCAFC 205 ; (2005) 146 FCR 77 at [104] : SA Battery Makers Pty Limited v Commissioner of Taxation (1976) 28 FLR 451 at 463; and Parsons, RW Income Tax in Australia (1985, Law Book Co Sydney) at [5.12]. The argument proceeded, in substance, on the basis that s 8-1(2) was a true exception, an approach which has judicial support: Steele v Deputy Commissioner of Taxation (1999) 197 CLR 459 at 468 [24] and John Fairfax &amp; Sons Pty Limited v Commissioner of Taxation [1959] HCA 4 ; (1959) 101 CLR 30 at 34, and which accords more with a plain reading of the text of the statute.
Case: Mount Isa Mines Limited v Commissioner of Taxation [1992] HCA 62 ; (1992) 176 CLR 141
Outcome: referred to
It is clear that the character of the advantage sought by the making of the expenditure is the chief, if not critical, factor in determining the character of what was paid: The Colonial Mutual Life Assurance Society Limited v The Federal Commissioner of Taxation [1953] HCA 68 ; (1953) 89 CLR 428 at 454; GP International Pipecoaters Pty Limited v Commissioner of Taxation [1990] HCA 25 ; (1990) 170 CLR 124 at 137; Mount Isa Mines Limited v Commissioner of Taxation [1992] HCA 62 ; (1992) 176 CLR 141 at 147-149; Commissioner of Taxation v CityLink Melbourne Limited [2006] HCA 35 ; (2006) 228 CLR 1 at [1] , [3], [76], [77] and [148]; and BP Australia 112 CLR at 394 and 398.
Case: National Australia Bank Limited v Commissioner of Taxation (1997) 80 FCR 352
Outcome: referred to
It is also essential to recognise that the above analysis of characterisation requires "both a wide survey and an exact scrutiny of the taxpayer's activities": Western Gold Mines (NL) v Commissioner of Taxation (WA) [1938] HCA 5 ; (1938) 59 CLR 729 at 740. That is, one examines the whole business context of what was done: BP Australia 112 CLR at 399; National Australia Bank Limited v Commissioner of Taxation (1997) 80 FCR 352 at 362; Commissioner of Taxation v Cooling (1990) 22 FCR 42 at 52-53 (Hill J); and Macquarie Finance Limited v Commissioner of Taxation [2004] FCA 1170 ; (2004) 210 ALR 508 (Hill J) at [64]. Relevant also here is the close interconnection of all the constituent documents in the integrated international commercial transaction: cf Inland Revenue Commissioner v Europa Oil (NZ) Ltd [1971] AC 760 at 774-775.
Case: SA Battery Makers Pty Limited v Commissioner of Taxation (1976) 28 FLR 451
Outcome: referred to
There was no issue about s 8-1(1). It should be noted at the outset that this concession by the Commissioner did not provoke an argument on behalf of SGB that this led to the satisfaction of s 8-1(2). There was no debate or discussion as to the true nature of the "negative limbs" of s 8-1(2) and whether they operate only by way of contradistinction to illustrate what is not included, from the outset, in the "positive limbs" of s 8-1(1), or as true exceptions: Macquarie Finance Ltd v Commissioner of Taxation [2005] FCAFC 205 ; (2005) 146 FCR 77 at [104] : SA Battery Makers Pty Limited v Commissioner of Taxation (1976) 28 FLR 451 at 463; and Parsons, RW Income Tax in Australia (1985, Law Book Co Sydney) at [5.12]. The argument proceeded, in substance, on the basis that s 8-1(2) was a true exception, an approach which has judicial support: Steele v Deputy Commissioner of Taxation (1999) 197 CLR 459 at 468 [24] and John Fairfax &amp; Sons Pty Limited v Commissioner of Taxation [1959] HCA 4 ; (1959) 101 CLR 30 at 34, and which accords more with a plain reading of the text of the statute.
Case: Steele v Deputy Commissioner of Taxation (1999) 197 CLR 459
Outcome: discussed
There was no issue about s 8-1(1). It should be noted at the outset that this concession by the Commissioner did not provoke an argument on behalf of SGB that this led to the satisfaction of s 8-1(2). There was no debate or discussion as to the true nature of the "negative limbs" of s 8-1(2) and whether they operate only by way of contradistinction to illustrate what is not included, from the outset, in the "positive limbs" of s 8-1(1), or as true exceptions: Macquarie Finance Ltd v Commissioner of Taxation [2005] FCAFC 205 ; (2005) 146 FCR 77 at [104] : SA Battery Makers Pty Limited v Commissioner of Taxation (1976) 28 FLR 451 at 463; and Parsons, RW Income Tax in Australia (1985, Law Book Co Sydney) at [5.12]. The argument proceeded, in substance, on the basis that s 8-1(2) was a true exception, an approach which has judicial support: Steele v Deputy Commissioner of Taxation (1999) 197 CLR 459 at 468 [24] and John Fairfax &amp; Sons Pty Limited v Commissioner of Taxation [1959] HCA 4 ; (1959) 101 CLR 30 at 34, and which accords more with a plain reading of the text of the statute. 64 Before examining the relevant aspects of the overall arrangement to answer this question, it is necessary to say something about the submissions about interest and deductibility. The expression of views by the judges in cases as to the usual approach to interest in this context should be seen for what they are, and are not. They are the discussion of the kinds of consideration discussed by Dixon J in Sun Newspapers and Hallstroms Case in the context of interest on a loan. Thus, it can be accepted that, ordinarily, interest will be an allowable deduction under s 8-1, if incurred in the course of an income-producing activity or business: Texas Co (Australasia) Ltd v Federal Commissioner of Taxation [1940] HCA 9 ; (1940) 63 CLR 382 at 468 and Steele v Deputy Commissioner of Taxation 197 CLR at 469-70 [27]. This acceptance does not lay down some independent rule to be engaged and analysed beyond the characterisation enquiry discussed earlier. Rather, interest is usually deductible because, usually, it is a recurrent or periodic payment securing an advantage not of an enduring kind, but the use by the borrower of money during the term of the loan: Steele v Deputy Commissioner of Taxation 197 CLR at 469-470 [27]. But, as was noted in the same paragraph, "there may be particular circumstances where it is proper to regard the purpose of interest payments as something other than the raising or maintenance of the borrowing and thus, potentially, of a capital nature." To this passage there was footnoted Parsons RW op cit [6.11]. The possibilities referred to by Professor Parsons in that paragraph do not form an exhaustive universe of non-deductible interest. See also the discussion by Hill J at first instance in Macquarie Finance Limited v Commissioner of Taxation 210 ALR at [47].
Case: Texas Co (Australasia) Ltd v Federal Commissioner of Taxation [1940] HCA 9 ; (1940) 63 CLR 382
Outcome: referred to
Before examining the relevant aspects of the overall arrangement to answer this question, it is necessary to say something about the submissions about interest and deductibility. The expression of views by the judges in cases as to the usual approach to interest in this context should be seen for what they are, and are not. They are the discussion of the kinds of consideration discussed by Dixon J in Sun Newspapers and Hallstroms Case in the context of interest on a loan. Thus, it can be accepted that, ordinarily, interest will be an allowable deduction under s 8-1, if incurred in the course of an income-producing activity or business: Texas Co (Australasia) Ltd v Federal Commissioner of Taxation [1940] HCA 9 ; (1940) 63 CLR 382 at 468 and Steele v Deputy Commissioner of Taxation 197 CLR at 469-70 [27]. This acceptance does not lay down some independent rule to be engaged and analysed beyond the characterisation enquiry discussed earlier. Rather, interest is usually deductible because, usually, it is a recurrent or periodic payment securing an advantage not of an enduring kind, but the use by the borrower of money during the term of the loan: Steele v Deputy Commissioner of Taxation 197 CLR at 469-470 [27]. But, as was noted in the same paragraph, "there may be particular circumstances where it is proper to regard the purpose of interest payments as something other than the raising or maintenance of the borrowing and thus, potentially, of a capital nature." To this passage there was footnoted Parsons RW op cit [6.11]. The possibilities referred to by Professor Parsons in that paragraph do not form an exhaustive universe of non-deductible interest. See also the discussion by Hill J at first instance in Macquarie Finance Limited v Commissioner of Taxation 210 ALR at [47].
Case: Ure v Federal Commission of Taxation (1981) 34 ALR 237
Outcome: referred to
At times, the submissions put on behalf of SGB appeared to combine the undoubtedly correct (at least at a sufficient level of generality) propositions that the contractual and legal rights must be analysed and that the separateness of corporate entities must be recognised: The Federal Coke Company v Federal Commissioner of Taxation (1997) 15 ALR 449 at 459 per Bowen CJ and Commissioner of Taxation v Asiamet (No 1) Resources Pty Ltd [2004] FCAFC 73 ; (2004) 137 FCR 146 at [148] - [165] , in aid of a different objective, that is to have the interest payable under the Debenture analysed by reference primarily, if not wholly, to the rights and obligations created under the Indenture, without regard to the whole of the surrounding arrangement. Such an approach is impermissible. It ignores the essential requirement to view the legal rights and obligations created by the parties, and payments and outgoings made thereunder, in their whole legal and commercial context, in order that the characterisation, from a business and practical point of view, of the payment or outgoing by reference to the relevant legal relationship can be undertaken. Legal form is the subject of the characterisation; it is not the sole source of the answer to that process of characterisation: cf Parsons RW op cit [2.421]-[2.422]. The requirement to look at the whole legal and business context is not denied by what was said by Deane and Sheppard JJ in Ure v Federal Commission of Taxation (1981) 34 ALR 237 at 249, as appeared to be put by SGB.
Case: Western Gold Mines (NL) v Commissioner of Taxation (WA) [1938] HCA 5 ; (1938) 59 CLR 729
Outcome: applied
It is also essential to recognise that the above analysis of characterisation requires "both a wide survey and an exact scrutiny of the taxpayer's activities": Western Gold Mines (NL) v Commissioner of Taxation (WA) [1938] HCA 5 ; (1938) 59 CLR 729 at 740. That is, one examines the whole business context of what was done: BP Australia 112 CLR at 399; National Australia Bank Limited v Commissioner of Taxation (1997) 80 FCR 352 at 362; Commissioner of Taxation v Cooling (1990) 22 FCR 42 at 52-53 (Hill J); and Macquarie Finance Limited v Commissioner of Taxation [2004] FCA 1170 ; (2004) 210 ALR 508 (Hill J) at [64]. Relevant also here is the close interconnection of all the constituent documents in the integrated international commercial transaction: cf Inland Revenue Commissioner v Europa Oil (NZ) Ltd [1971] AC 760 at 774-775.
Case: Munn (for and on behalf of the Gunggari People) v Queensland (2001) 115 FCR 109 ; [2001] FCA 1229
Outcome: applied
requirement must be construed in the context of the Act as a whole and in conformity with the purpose of the Act. The Act provides for mediation and ultimate agreement as the primary means for resolving native title applications. Thus, the main concern of the Court when considering an application under s 87 and s 87A is whether there has been a genuine agreement which was made freely and on an informed basis: Nangkiriny v State of Western Australia (2002) 117 FCR 6 ; [2002] FCA 660 at [14] . A relevant consideration on this aspect will be whether the parties have had independent and competent legal representation and, in the case of State parties, whether they have given appropriate consideration to the claims of the applicants: Munn (for and on behalf of the Gunggari People) v Queensland (2001) 115 FCR 109 ; [2001] FCA 1229 at [29] .
Case: Nangkiriny v State of Western Australia (2002) 117 FCR 6 ; [2002] FCA 660
Outcome: applied
requirement must be construed in the context of the Act as a whole and in conformity with the purpose of the Act. The Act provides for mediation and ultimate agreement as the primary means for resolving native title applications. Thus, the main concern of the Court when considering an application under s 87 and s 87A is whether there has been a genuine agreement which was made freely and on an informed basis: Nangkiriny v State of Western Australia (2002) 117 FCR 6 ; [2002] FCA 660 at [14] . A relevant consideration on this aspect will be whether the parties have had independent and competent legal representation and, in the case of State parties, whether they have given appropriate consideration to the claims of the applicants: Munn (for and on behalf of the Gunggari People) v Queensland (2001) 115 FCR 109 ; [2001] FCA 1229 at [29] .
Case: Radaich v Smith [1959] HCA 45 ; (1959) 101 CLR 209
Outcome: applied
think it is quite clear that the bankrupt's possession of the property beyond completion of the contract was as a licensee of, and not as a tenant from, the applicants and that that situation did not change at any time before the date of bankruptcy. My reasons for being of this view are as follows: (1) The circumstances in which the right of possession was granted as a vendor, from the purchaser, of the property where the common intention of the parties, so far as it can be discerned from the relevant terms of the contract, was to allow the vendor time (six months) to remove his chattels from the property; hence the nominal 'rent' of $50 per week. True, there was no evidence as to what a market rent would be, but having regard to the purchase price of the property ($850,000), the improvements and the business being carried on from the property, 'rent' of $50 per week could not be characterised as anything but 'nominal'. (2) The terms of Special Condition 5 (see [10] above), in particular: (i) The use of the word 'rent' in the first sentence has no characterisation consequences of its own; for example, many chattel bailments use the word 'rent' to describe the consideration payable for the bailment when, strictly speaking, it is a hiring charge. The first sentence is totally neutral in indicating whether what is granted is a licence or a lease. (ii) More importantly, the right of the purchaser (the applicants) to enter onto the property is unlimited as to the purpose, frequency and time of entry. It is inconsistent with any claim or entitlement of the vendor (the bankrupt) to exclusive possession, which is the point of distinction between a licensee and a tenant: see Radaich v Smith [1959] HCA 45 ; (1959) 101 CLR 209 at 222 per Windeyer J; Street v Mountford [1985] UKHL 4 ; [1985] AC 809 at 827A E per Lord Templeman with whom the other of their Lordships agreed. (iii) The third sentence, which provides that if the vendor does not vacate the property 'at the expiration of six months (following settlement) the rental shall increase to $1,000 per week plus GST', informs the purpose of allowing the vendor to remain in possession beyond completion time in which to remove his chattels from the property and an ongoing weekly penalty if that task is not completed within six months of completion of the contract. These are the words of license, not demise and no covenant for quiet enjoyment could be implied.