Lloyd v Federal Commissioner of Land Tax [1933] HCA 40; (1933) 49 CLR 160 (22 August 1933)

As to the case stated by Dixon J., the Court answers the question as follows: The appellant is so liable to assessment, as if he were beneficially entitled to the lands, pursuant to sec. 33 and subject to sec. 62 (f) of the Land Tax Assessment Act.

With regard to the case stated by Judge Lukin the Court answers the questions as follows:—(1) It is within the jurisdiction of the Court of Bankruptcy to give directions or advice upon the matter. Except as aforesaid this Court is of opinion that it is unnecessary to answer this question having regard to the case stated under the land tax appeals consolidated with this case. (2) Yes. (3) Yes. (4) He is not entitled to be paid as a proving creditor of the bankrupt but as the person to whom the Official Receiver is liable under an assessment as trustee governed by sec. 62 of the Land Tax Assessment Act. (5) No—not a dividend. (6) Yes—to the extent provided by sec. 62 (f) of the Land Tax Assessment Act.

I wish to add some observations. I am unable to agree with the argument that the Bankruptcy Act is inconsistent with the operation sought to be given to the Land Tax Assessment Act. It appears to me that the scheme of the Land Tax Assessment Act works in harmony with the Bankruptcy Act. The Official Receiver takes the land, and land tax is an incident to the ownership of the land. The question relates entirely to land tax which accrues due in respect of the period of time subsequent to his acquisition of ownership. The Official Receiver answers the description of a trustee as defined in the definition clause, sec. 3 of the Land Tax Assessment Act. Accordingly sec. 33 operates upon him. Sec. 62 seems equally to apply to him. The result of sec. 62 is perhaps to limit what might otherwise be an unqualified liability imposed by sec. 33. It qualifies it to the extent at least of rendering him personally liable, only if there are assets in his hands which he parts with. As the liability to land tax is an incident of the ownership of the land which vested in the Official Receiver as a result of the bankruptcy, he has a right of recourse to the assets for its discharge. The payment of the tax forms one of the costs of administration within sec. 84 (1) and sec. 112 of the Bankruptcy Act. It is a payment which certainly falls within par. (k), if not under par. (a), of rule 127 of the Bankruptcy Rules.

The real difficulty of the case might have been considered to lie in the application of Sendall's Case[1], in what may be described as its extreme form, but, in my opinion, the observations made by the late Chief Justice, Sir Adrian Knox, and Starke J., in Hoysted's Case[2], dispose of that difficulty, and, though their Honors did form only two of a larger bench, it appears from the decision in Kuhnel's Case[3], that two other Judges of this Court were in full agreement with them and even went further. For those reasons it appears to me that where there are no beneficiaries entitled to an interest in the land, as in strictness there is none in this case, the doctrine laid down, whether right or wrong, in Sendall's Case, has no application and the owner, although a trustee, is liable to assessment upon the full unimproved value of the estate in fee simple and not in respect of a lesser interest. The Official Receiver is so liable. For those reasons I agree that the questions in the special cases should be answered as Rich J. has announced.

Solicitor for the respondent, W. H. Sharwood, Crown Solicitor for the Commonwealth.

[1] [1911] HCA 75; (1911) 12 C.L.R. 653.

[2] [1921] HCA 56; (1921) 29 C.L.R. 537.

[3] (1923) 33 C.L.R., at p. 360.

High Court of Australia

Lloyd v Federal Commissioner of Land Tax [1933] HCA 40; (1933) 49 CLR 160 (22 August 1933)

HIGH COURT OF AUSTRALIA