Driclad Pty Ltd v Commissioner of Taxation (Cth) [1968] HCA 91

Driclad Pty Ltd v Commissioner of Taxation (Cth) [1968] HCA 91

The deed constituted two funds, the "A" section fund and the "B" section fund, held by the same trustees and administered together with separate accounting. Taylor J was correct that the "A" section qualified under ss. 23 (j) and 66, but erred in denying the "B" section that character merely because individual accounts were kept for members and benefits depended on amounts standing to their credit or related investments. On the proved circumstances, although the deed permitted substantial loans back to contributing companies, it did not require them, and the whole fund was a superannuation or benefit fund for employees. Accordingly the income of the whole fund was exempt under s. 23 (j),...

Jurisdiction
Australia
Procedural Posture
Income Tax Assessment Appeals Concerning Superannuation Fund Deductions and Income Tax Exemption / Appeals to the Full Court From Orders of Taylor J, With Cross Appeals by the Commissioner
Outcome
Taxpayer appeals allowed with costs; Commissioner’s cross-appeals dismissed with costs; orders of Taylor J varied.
Legal Topics
['allowable Deductions for Employer Contributions to a Superannuation Fund' 'exemption of Income of a Provident Benefit or Superannuation Fund' 'whether a Deed Created One Fund or Two Funds' "security of Employees' Rights to Benefits" 'appeals From Orders Rather Than Reasons']
['taxation' 'superannuation' 'trusts'] ['allowable Deductions for Employer Contributions to a Superannuation Fund' 'exemption of Income of a Provident Benefit or Superannuation Fund' 'whether a Deed Created One Fund or Two Funds' "security of Employees' Rights to Benefits" 'appeals From Orders Rather Than Reasons']

Case Brief

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Procedural Posture

Income Tax Assessment Appeals Concerning Superannuation Fund Deductions and Income Tax Exemption / Appeals to the Full Court From Orders of Taylor J, With Cross Appeals by the Commissioner

Legal Issues

  1. 1 ['Whether the Marine Plastics Superannuation Fund deed created one fund or two separate funds described as the "A" section and the "B" section.' 'Whether contributions to the "A" section and the "B" section were allowable deductions under s. 66 of the Income Tax and Social Services Contribution Assessment Act 1936, as amended.' 'Whether income of the whole fund was exempt from income tax under s. 23 (j) of the Income Tax and Social Services Contribution Assessment Act 1936, as amended.' 'Whether loans by the trustees back to the contributing companies prevented the fund from qualifying under the relevant provisions.' 'Whether the orders made by Taylor J should be varied because they set aside assessments in toto although the reasons treated the assessments as merely excessive.']

Ratio Decidendi

The deed constituted two funds, the "A" section fund and the "B" section fund, held by the same trustees and administered together with separate accounting. Taylor J was correct that the "A" section qualified under ss. 23 (j) and 66, but erred in denying the "B" section that character merely because individual accounts were kept for members and benefits depended on amounts standing to their credit or related investments. On the proved circumstances, although the deed permitted substantial loans back to contributing companies, it did not require them, and the whole fund was a superannuation or benefit fund for employees. Accordingly the income of the whole fund was exempt under s. 23 (j),...

Court Disposition

Taxpayer appeals allowed with costs; Commissioner’s cross-appeals dismissed with costs; orders of Taylor J varied.

Orders

  • ['In matters numbered 100-109 of 1966, vary the orders appealed from by vacating so much of each order as sets aside an assessment.' 'Declare that in respect of the whole of the contributions made by the appellant in the relevant year of income to the fund referred to in the notice of cross appeal as the Marine...