Adelaide Stevedoring Co Ltd v Commissioner of Taxation (Cth) [1961] HCA 68

Adelaide Stevedoring Co Ltd v Commissioner of Taxation (Cth) [1961] HCA 68

Section 105 (4) (b), in its post-1948 context, is concerned with shareholding structure and an existing capacity to control on the last day of the year of income, not with proof of actual de facto control. Because John Darling & Son Proprietary Limited and Elder Smith & Company Limited together beneficially owned...

Source-derived case information.

Jurisdiction
Australia
Procedural Posture
Income Tax Appeal / Appeal on Statement of Agreed Facts
Outcome
Appeal dismissed with costs.
Legal Topics
['income Tax Assessment' 'private Company' 'subsidiary of a Public Company' 'beneficial Ownership of Shares' 'capacity to Control' 'de Facto Control']
['taxation Law' 'company Law'] ['income Tax Assessment' 'private Company' 'subsidiary of a Public Company' 'beneficial Ownership of Shares' 'capacity to Control' 'de Facto Control']

Source-derived case record

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Procedural Posture

Income Tax Appeal / Appeal on Statement of Agreed Facts

Legal Issues

  1. 1 ['Whether the appellant was on 31st July 1958 a "subsidiary of a public company" within the meaning of s. 105 (4) (b) of the Income Tax and Social Services Contribution Assessment Act 1936-1957 Cth.' 'Whether s. 105 (4) (b) required actual de facto control by one or more non-private companies, or whether an existing capacity to control by reason of beneficial ownership of shares was sufficient.']

Ratio Decidendi

Section 105 (4) (b), in its post-1948 context, is concerned with shareholding structure and an existing capacity to control on the last day of the year of income, not with proof of actual de facto control. Because John Darling & Son Proprietary Limited and Elder Smith & Company Limited together beneficially owned 43,334 of the taxpayer's 65,000 shares and neither was a private company on the relevant date, they had the capacity to control the taxpayer, making it a subsidiary of a public company for the purposes of the assessment.

Court Disposition

Appeal dismissed with costs.

Orders

  • ['Appeal dismissed with costs.']