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\rsid3801541\rsid3881453\rsid4350285\rsid8009349\rsid8023722\rsid10953989\rsid11940453\rsid11953476\rsid13062346\rsid16534680\rsid16547015}{\*\generator Microsoft Word 11.0.5604;}{\info{\author blake_r}{\operator hamilton_l} {\creatim\yr2010\mo5\dy31\hr13\min10}{\revtim\yr2011\mo9\dy29\hr12\min4}{\version8}{\edmins140}{\nofpages3}{\nofwords1333}{\nofchars7600}{\*\company scims}{\nofcharsws8916}{\vern24689}}\paperw11906\paperh16838\margl1440\margr1440 \widowctrl\ftnbj\aenddoc\noxlattoyen\expshrtn\noultrlspc\dntblnsbdb\nospaceforul\subfontbysize\hyphcaps0\formshade\horzdoc\dghspace120\dgvspace120\dghorigin1701\dgvorigin1984\dghshow0\dgvshow3 \jcompress\viewkind4\viewscale150\pgbrdrhead\pgbrdrfoot\nolnhtadjtbl\rsidroot8023722 \fet0\sectd \linex0\sectdefaultcl\sftnbj {\*\pnseclvl1\pnucrm\pnstart1\pnindent720\pnhang {\pntxta .}}{\*\pnseclvl2\pnucltr\pnstart1\pnindent720\pnhang {\pntxta .}} {\*\pnseclvl3\pndec\pnstart1\pnindent720\pnhang {\pntxta .}}{\*\pnseclvl4\pnlcltr\pnstart1\pnindent720\pnhang {\pntxta )}}{\*\pnseclvl5\pndec\pnstart1\pnindent720\pnhang {\pntxtb (}{\pntxta )}}{\*\pnseclvl6\pnlcltr\pnstart1\pnindent720\pnhang {\pntxtb (} {\pntxta )}}{\*\pnseclvl7\pnlcrm\pnstart1\pnindent720\pnhang {\pntxtb (}{\pntxta )}}{\*\pnseclvl8\pnlcltr\pnstart1\pnindent720\pnhang {\pntxtb (}{\pntxta )}}{\*\pnseclvl9\pnlcrm\pnstart1\pnindent720\pnhang {\pntxtb (}{\pntxta )}}\pard\plain \qc \li0\ri0\nowidctlpar\faauto\adjustright\rin0\lin0\itap0\pararsid8009349 \fs20\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 {\b\fs24\lang2057\langfe1033\langnp2057\insrsid11940453\charrsid8009349 IN THE HIGH COURT OF FIJ}{ \b\fs24\lang2057\langfe1033\langnp2057\insrsid8009349\charrsid8009349 I \par }{\b\caps\fs24\lang2057\langfe1033\langnp2057\insrsid11940453\charrsid8009349 Court of Review \par }\pard \ql \li0\ri0\nowidctlpar\faauto\adjustright\rin0\lin0\itap0\pararsid8009349 {\fs24\lang2057\langfe1033\langnp2057\insrsid8009349 \par }\pard \qc \li0\ri0\nowidctlpar\faauto\adjustright\rin0\lin0\itap0\pararsid8009349 {\fs24\lang2057\langfe1033\langnp2057\insrsid11940453\charrsid8009349 Appeal No. 3 of 1989 \par }\pard \ql \li0\ri0\nowidctlpar\faauto\adjustright\rin0\lin0\itap0\pararsid8009349 {\fs24\lang2057\langfe1033\langnp2057\insrsid8009349 \par }\pard \qc \li0\ri0\nowidctlpar\faauto\adjustright\rin0\lin0\itap0\pararsid8009349 {\fs24\lang2057\langfe1033\langnp2057\insrsid11940453\charrsid8009349 Between}{\fs24\lang2057\langfe1033\langnp2057\insrsid11953476 :}{ \fs24\lang2057\langfe1033\langnp2057\insrsid11940453\charrsid8009349 \par }\pard \ql \li0\ri0\nowidctlpar\faauto\adjustright\rin0\lin0\itap0\pararsid8009349 {\fs24\lang2057\langfe1033\langnp2057\insrsid8009349 \par }\pard \qc \li0\ri0\nowidctlpar\faauto\adjustright\rin0\lin0\itap0\pararsid8009349 {\b\fs24\lang2057\langfe1033\langnp2057\insrsid11940453\charrsid8009349 ELIMA P SKYES}{\b\fs24\lang2057\langfe1033\langnp2057\insrsid8009349\charrsid8009349 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid11940453\charrsid8009349 Appellant}{\fs24\lang2057\langfe1033\langnp2057\insrsid11940453 \par }\pard \ql \li0\ri0\nowidctlpar\faauto\adjustright\rin0\lin0\itap0\pararsid8009349 {\fs24\lang2057\langfe1033\langnp2057\insrsid8009349\charrsid8009349 \par }\pard \qc \li0\ri0\nowidctlpar\faauto\adjustright\rin0\lin0\itap0\pararsid8009349 {\fs24\lang2057\langfe1033\langnp2057\insrsid11940453\charrsid8009349 - and - \par }\pard \ql \li0\ri0\nowidctlpar\faauto\adjustright\rin0\lin0\itap0\pararsid8009349 {\fs24\lang2057\langfe1033\langnp2057\insrsid8009349 \par }\pard \qc \li0\ri0\nowidctlpar\faauto\adjustright\rin0\lin0\itap0\pararsid8009349 {\b\fs24\lang2057\langfe1033\langnp2057\insrsid11940453\charrsid8009349 THE COMMISSIONER OF }{\b\fs24\lang2057\langfe1033\langnp2057\insrsid8009349\charrsid8009349 INLAND REVENUE \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid8009349 Respondent}{\fs24\lang2057\langfe1033\langnp2057\insrsid11940453 \par }\pard \ql \li0\ri0\nowidctlpar\faauto\adjustright\rin0\lin0\itap0\pararsid8009349 {\fs24\lang2057\langfe1033\langnp2057\insrsid8009349\charrsid8009349 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid11940453\charrsid8009349 Mr N S Arjun}{\fs24\lang2057\langfe1033\langnp2057\insrsid8009349 }{\fs24\lang2057\langfe1033\langnp2057\insrsid11940453\charrsid8009349 for the Appellant \par Mr G A Keay}{\fs24\lang2057\langfe1033\langnp2057\insrsid8009349 }{\fs24\lang2057\langfe1033\langnp2057\insrsid11940453\charrsid8009349 for the Respondent \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid8009349 \par }\pard \qc \li0\ri0\nowidctlpar\faauto\adjustright\rin0\lin0\itap0\pararsid8009349 {\b\fs24\ul\lang2057\langfe1033\langnp2057\insrsid8009349\charrsid11953476 JUDGMENT}{\b\fs24\ul\lang2057\langfe1033\langnp2057\insrsid11940453\charrsid11953476 \par }\pard \ql \li0\ri0\nowidctlpar\faauto\adjustright\rin0\lin0\itap0\pararsid8009349 {\fs24\lang2057\langfe1033\langnp2057\insrsid8009349 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid11940453\charrsid8009349 The appellant is a daughter of Sir Hugh Ragg who in 1951 caused to be formed a family company called Petrie Ltd. which owned several family properties among them, Natadola near Sigatoka, Wairua in Tamavua and Malaqereqere also near Sigatoka. Sir Hugh had four}{\fs24\lang2057\langfe1033\langnp2057\insrsid8009349 daughters and to each of them}{\fs24\lang2057\langfe1033\langnp2057\insrsid11940453\charrsid8009349 he gave as a gift a one-eighth share in Petrie Ltd. There was an outside company which was interested in acquiring Natadola with a view t o developing it and building a hotel. The daughters were however opposed to this although other shareholders in Petrie Ltd were in favour. A compromise was worked out whereby the daughters transferred their interest in Natadola receiving in return the int erests of other share}{\fs24\lang2057\langfe1033\langnp2057\insrsid8009349\charrsid8009349 -}{\fs24\lang2057\langfe1033\langnp2057\insrsid11940453\charrsid8009349 holders in Wairua and Malaqereqere. \par \par Later part of Wairua comprising a house in which the appellant's stepmother, Lady Ragg, had resided was sold to the First National Bank for $130,000. The area of 2 }{\fs24\lang2057\langfe1033\langnp2057\insrsid1602155 \'bd}{ \fs24\lang2057\langfe1033\langnp2057\insrsid11940453\charrsid8009349 ac sold to the Bank was cut off by subdivision and 7 }{\fs24\lang2057\langfe1033\langnp2057\insrsid13062346 \'bd }{\fs24\lang2057\langfe1033\langnp2057\insrsid11940453\charrsid8009349 ac principally gully was left. A new title was issued for }{\fs24\lang2057\langfe1033\langnp2057\insrsid8009349 this area to the four daughters}{\fs24\lang2057\langfe1033\langnp2057\insrsid11940453\charrsid8009349 or their representatives. No tax was levied on the $130,000 which was divided among the daughters. There were a number of squatters in the gully and when the Suva City rates went up from $475 to $1461 and the income was minimal the daughters decided to sell. The proposed sale was placed in the hands of an agent and eventually after quite a deal of }{ \fs24\lang2057\langfe1033\langnp2057\insrsid16534680 negotiation and fresh surveys th}{\fs24\lang2057\langfe1033\langnp2057\insrsid11940453\charrsid8009349 e }{\fs24\lang2057\langfe1033\langnp2057\insrsid16534680 property was }{ \fs24\lang2057\langfe1033\langnp2057\insrsid11940453\charrsid8009349 sold}{\fs24\lang2057\langfe1033\langnp2057\insrsid16534680 }{\fs24\lang2057\langfe1033\langnp2057\insrsid11940453\charrsid8009349 in }{ \fs24\lang2057\langfe1033\langnp2057\insrsid16534680 1986 to Ocean Shores Estates for $80,000 of which after sale expenses had been allowed the appellant}{\fs24\lang2057\langfe1033\langnp2057\insrsid11940453\charrsid8009349 became entitled to $18,751 upon which the Commissioner has assessed duty.}{\fs24\lang2057\langfe1033\langnp2057\insrsid11940453 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid8009349\charrsid8009349 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid11940453\charrsid8009349 The Malaqereqere land was also subdivided, and divided among the four daughters and the appellant received Lots 2 & 3 and 14 to 18 both inclusive. These are all small farms occupied by tenants protected by the Agricultural (Landlord & Tenant Act) Cap. 270 . The appellant sold lots 2 & 3 to the occupancy tenants for $18}{\fs24\lang2057\langfe1033\langnp2057\insrsid16534680 ,}{\fs24\lang2057\langfe1033\langnp2057\insrsid11940453\charrsid8009349 650 and $20}{ \fs24\lang2057\langfe1033\langnp2057\insrsid16534680 ,}{\fs24\lang2057\langfe1033\langnp2057\insrsid11940453\charrsid8009349 000 respectively in 1987. The amounts received both from Wairua and from Malaqereqere have been treated as profit by the Commissioner and he has assessed them for duty under Section 11(e) of the Income Tax Act 201.}{ \fs24\lang2057\langfe1033\langnp2057\insrsid11940453 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid16534680\charrsid8009349 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid11940453\charrsid8009349 The appellant's notice of appeal as filed treated the matter as a case of inheritance but that was a mistake cured by the statement of agreed facts put in and no amendm}{ \fs24\lang2057\langfe1033\langnp2057\insrsid16534680 ent was necess}{\fs24\lang2057\langfe1033\langnp2057\insrsid11940453\charrsid8009349 ary. In any event, the law is precisely the same whether the issue is gift or inheritance. In the case of a gift }{ \fs24\lang2057\langfe1033\langnp2057\insrsid11940453\charrsid13062346 Williams v Federal Commission of Taxa}{\fs24\lang2057\langfe1033\langnp2057\insrsid13062346 tio}{\fs24\lang2057\langfe1033\langnp2057\insrsid16534680\charrsid13062346 n}{ \fs24\lang2057\langfe1033\langnp2057\insrsid11940453\charrsid13062346 (}{\fs24\lang2057\langfe1033\langnp2057\insrsid11940453\charrsid8009349 1972) 3 ATR 283 is applicable in the case of inheritance }{ \fs24\lang2057\langfe1033\langnp2057\insrsid11940453\charrsid13062346 McClelland v Federal Commissioner of Taxation }{\fs24\lang2057\langfe1033\langnp2057\insrsid11940453\charrsid8009349 (1970) 120 CLR 487 (1971) WLR 191. These cases have been followed in Fiji in }{\fs24\lang2057\langfe1033\langnp2057\insrsid11940453\charrsid13062346 Commissioner of Inland Revenue v Woodward }{\fs24\lang2057\langfe1033\langnp2057\insrsid11940453\charrsid8009349 in the Fiji Court of Appeal No. 27 of 1987 and }{\fs24\lang2057\langfe1033\langnp2057\insrsid11940453\charrsid13062346 Commissioner of Inland Revenue v Ferguson}{\fs24\lang2057\langfe1033\langnp2057\insrsid11940453\charrsid8009349 Civil Appeal No. 17 of 1986 a decision of Byrne J in the High Court. Both these were}{\fs24\lang2057\langfe1033\langnp2057\insrsid2585203 }{\fs24\lang2057\langfe1033\langnp2057\insrsid11940453\charrsid8009349 cases of inheritance. Mr Arjun for the appellant relied very strongly on }{\fs24\lang2057\langfe1033\langnp2057\insrsid11940453\charrsid13062346 Woodward's }{\fs24\lang2057\langfe1033\langnp2057\insrsid11940453\charrsid8009349 case the facts in which closely resemble the present appeal, save that this is a case of gift. Mr Keay for the Commissioner sought to find help from an earlier case, }{\fs24\lang2057\langfe1033\langnp2057\insrsid11940453\charrsid3801541 Inland }{ \fs24\lang2057\langfe1033\langnp2057\insrsid11940453\charrsid13062346 Revenue Commissioner v. Weller }{\fs24\lang2057\langfe1033\langnp2057\insrsid11940453\charrsid8009349 another}{\fs24\lang2057\langfe1033\langnp2057\insrsid2585203 }{ \fs24\lang2057\langfe1033\langnp2057\insrsid11940453\charrsid8009349 decision of the Fiji Court of Appeal, No. 75 of 1981 submitting that appellant had engaged in business in Fiji and thus brought herself within section 11(e) of the Act.}{ \fs24\lang2057\langfe1033\langnp2057\insrsid11940453 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid2585203\charrsid8009349 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid11940453\charrsid8009349 It is now desirable that I should set out the section in issue. Section 11 reads}{\fs24\lang2057\langfe1033\langnp2057\insrsid2585203 : \par \par }\pard \ql \li720\ri0\nowidctlpar\faauto\adjustright\rin0\lin720\itap0\pararsid2585203 {\fs24\lang2057\langfe1033\langnp2057\insrsid8009349\charrsid8009349 "}{\fs24\lang2057\langfe1033\langnp2057\insrsid11940453\charrsid8009349 11. For the purpose of this Act }{\fs24\lang2057\langfe1033\langnp2057\insrsid8009349\charrsid8009349 "}{\fs24\lang2057\langfe1033\langnp2057\insrsid11940453\charrsid8009349 total income}{ \fs24\lang2057\langfe1033\langnp2057\insrsid8009349\charrsid8009349 "}{\fs24\lang2057\langfe1033\langnp2057\insrsid11940453\charrsid8009349 means the aggregate of all sources of income including ...... \par }\pard \ql \li0\ri0\nowidctlpar\faauto\adjustright\rin0\lin0\itap0\pararsid8009349 {\fs24\lang2057\langfe1033\langnp2057\insrsid2585203 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid11940453\charrsid8009349 Then it lists a number of sources which however are not relevant to this case, following which is a proviso reading }{ \fs24\lang2057\langfe1033\langnp2057\insrsid8009349\charrsid8009349 "}{\fs24\lang2057\langfe1033\langnp2057\insrsid11940453\charrsid8009349 Provided that without in any way affecting the generality of this section, total income for the purpose of this Act shall include ..... and thereafter follow no fewer than twenty-eight matters of which (e) reads:}{ \fs24\lang2057\langfe1033\langnp2057\insrsid11940453 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid2585203\charrsid8009349 \par }\pard \ql \li720\ri0\nowidctlpar\faauto\adjustright\rin0\lin720\itap0\pararsid2585203 {\fs24\lang2057\langfe1033\langnp2057\insrsid8009349\charrsid8009349 "}{\fs24\lang2057\langfe1033\langnp2057\insrsid11940453\charrsid8009349 (e) In the case of a person residing or having his he}{\fs24\lang2057\langfe1033\langnp2057\insrsid2585203 ad office or principal place of }{\fs24\lang2057\langfe1033\langnp2057\insrsid11940453\charrsid8009349 business outside Fiji, but carrying on business in Fiji, either directly or through or in the name of any other person, the net profit or gain arising from the business of such person in Fiji.}{ \fs24\lang2057\langfe1033\langnp2057\insrsid8009349\charrsid8009349 "}{\fs24\lang2057\langfe1033\langnp2057\insrsid11940453\charrsid8009349 \par }\pard \ql \li0\ri0\nowidctlpar\faauto\adjustright\rin0\lin0\itap0\pararsid8009349 {\fs24\lang2057\langfe1033\langnp2057\insrsid2585203 \par }\pard \ql \li720\ri0\nowidctlpar\faauto\adjustright\rin0\lin720\itap0\pararsid2585203 {\fs24\lang2057\langfe1033\langnp2057\insrsid11940453\charrsid8009349 Provided that any person normally residing outside Fiji}{ \fs24\lang2057\langfe1033\langnp2057\insrsid2585203 }{\fs24\lang2057\langfe1033\langnp2057\insrsid11940453\charrsid8009349 who engages in the sale or other disposition either directly or by the sale of options to purchase or by any other means whatsoever of any land in Fiji or any estate or interest}{\fs24\lang2057\langfe1033\langnp2057\insrsid2585203 }{ \fs24\lang2057\langfe1033\langnp2057\insrsid11940453\charrsid8009349 in any such land shall be deemed to be carrying on business in Fiji and any profit or gain derived from the carrying on or carrying out of any undertaking or scheme connected}{ \fs24\lang2057\langfe1033\langnp2057\insrsid2585203 }{\fs24\lang2057\langfe1033\langnp2057\insrsid11940453\charrsid8009349 with the disposition either directly or indirectly of any land in Fiji or any estate or interest in any such land, including schemes involving the interposition of a company, entered into or devised for the purpose of making a profit shall be deemed to be total income for the purpose of this Act}{ \fs24\lang2057\langfe1033\langnp2057\insrsid8009349\charrsid8009349 "}{\fs24\lang2057\langfe1033\langnp2057\insrsid11940453\charrsid8009349 .}{\fs24\lang2057\langfe1033\langnp2057\insrsid11940453 \par }\pard \ql \li0\ri0\nowidctlpar\faauto\adjustright\rin0\lin0\itap0\pararsid8009349 {\fs24\lang2057\langfe1033\langnp2057\insrsid2585203\charrsid8009349 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid11940453\charrsid8009349 Now it is conceded that the appellant was at all material times residing outside Fiji. She engaged in the sale of land, and is therefore deemed to be carrying on business in Fiji.}{ \fs24\lang2057\langfe1033\langnp2057\insrsid8009349 }{\fs24\lang2057\langfe1033\langnp2057\insrsid11940453\charrsid8009349 But there has also to be a profit or gain.}{\fs24\lang2057\langfe1033\langnp2057\insrsid8009349 }{ \fs24\lang2057\langfe1033\langnp2057\insrsid8009349\charrsid8009349 "}{\fs24\lang2057\langfe1033\langnp2057\insrsid11940453\charrsid8009349 Gain}{\fs24\lang2057\langfe1033\langnp2057\insrsid8009349\charrsid8009349 "}{ \fs24\lang2057\langfe1033\langnp2057\insrsid11940453\charrsid8009349 as used in the section is }{\fs24\lang2057\langfe1033\langnp2057\insrsid2585203\charrsid8009349 analogous}{\fs24\lang2057\langfe1033\langnp2057\insrsid11940453\charrsid8009349 to profit. The Commissioner equates it with 'surplus'. But this is impermi}{\fs24\lang2057\langfe1033\langnp2057\insrsid4350285 ssible, as is indicated by the j}{\fs24\lang2057\langfe1033\langnp2057\insrsid11940453\charrsid8009349 udgement of the English Court of Appeal, delivered by the Vice-Chancellor, Sir Nicolas Browne}{\fs24\lang2057\langfe1033\langnp2057\insrsid8009349\charrsid8009349 -}{\fs24\lang2057\langfe1033\langnp2057\insrsid11940453\charrsid8009349 Wilkinson in }{ \fs24\lang2057\langfe1033\langnp2057\insrsid11940453\charrsid4350285 Customs & Excise Commissioners v Bell Concord Educational Trust Ltd }{\fs24\lang2057\langfe1033\langnp2057\insrsid11940453\charrsid8009349 (1989) 2 WLR 679; 2 All ER 217 where the Customs & Excise failed in an attempt to tax a surplus. Rooney J in the Supreme Court on the hearing of }{\fs24\lang2057\langfe1033\langnp2057\insrsid11940453\charrsid4350285 Woodward's}{ \fs24\lang2057\langfe1033\langnp2057\insrsid11940453\charrsid8009349 appeal from this Court, cited a long discussion by Fletcher Moulton LJ in }{\fs24\lang2057\langfe1033\langnp2057\insrsid11940453\charrsid4350285 In re Spanish Prospecting Co. Ltd }{ \fs24\lang2057\langfe1033\langnp2057\insrsid11940453\charrsid8009349 (1911) 1 Ch 92 on the meaning of profit, but Byrne J in the High Court in }{\fs24\lang2057\langfe1033\langnp2057\insrsid11940453\charrsid4350285 Ferguson's}{ \fs24\lang2057\langfe1033\langnp2057\insrsid11940453\charrsid8009349 case (Civil Appeal No. 17 of 1986) relied on}{\fs24\lang2057\langfe1033\langnp2057\insrsid2585203 }{\fs24\lang2057\langfe1033\langnp2057\insrsid11940453\charrsid8009349 a much simpler definition from the shorter Oxford Dictionary.}{\fs24\lang2057\langfe1033\langnp2057\insrsid11940453 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid2585203\charrsid8009349 \par }\pard \ql \li720\ri0\nowidctlpar\faauto\adjustright\rin0\lin720\itap0\pararsid2585203 {\fs24\lang2057\langfe1033\langnp2057\insrsid8009349\charrsid8009349 "}{\fs24\lang2057\langfe1033\langnp2057\insrsid11940453\charrsid8009349 The pecuniary gain in any transaction the excess of returns over the outlay of capital.}{\fs24\lang2057\langfe1033\langnp2057\insrsid10953989 " \par \par }\pard \ql \li0\ri0\nowidctlpar\faauto\adjustright\rin0\lin0\itap0\pararsid10953989 {\fs24\lang2057\langfe1033\langnp2057\insrsid11940453\charrsid8009349 Byrne J also cited two passages from the judgment of Barwick CJ in }{ \fs24\lang2057\langfe1033\langnp2057\insrsid11940453\charrsid4350285 Williams v Federal Commissioner of Taxation }{\fs24\lang2057\langfe1033\langnp2057\insrsid11940453\charrsid8009349 (1972) 3 ATR 283 which would seem pertinent to this enquiry. First, \par }\pard \ql \li0\ri0\nowidctlpar\faauto\adjustright\rin0\lin0\itap0\pararsid8009349 {\fs24\lang2057\langfe1033\langnp2057\insrsid2585203 \par }\pard \ql \li720\ri0\nowidctlpar\faauto\adjustright\rin0\lin720\itap0\pararsid10953989 {\fs24\lang2057\langfe1033\langnp2057\insrsid8009349\charrsid8009349 "}{\fs24\lang2057\langfe1033\langnp2057\insrsid11940453\charrsid8009349 Also having had the benefit of the argument in this case, including conside}{\fs24\lang2057\langfe1033\langnp2057\insrsid2585203 ration of the advice of their Lo}{\fs24\lang2057\langfe1033\langnp2057\insrsid11940453\charrsid8009349 rdships}{ \fs24\lang2057\langfe1033\langnp2057\insrsid2585203 }{\fs24\lang2057\langfe1033\langnp2057\insrsid11940453\charrsid8009349 in }{\fs24\lang2057\langfe1033\langnp2057\insrsid11940453\charrsid3801541 McClelland v Federal Commissioner of Taxation (1970) 120 CLR 487 I remain of the opinion t}{\fs24\lang2057\langfe1033\langnp2057\insrsid11940453\charrsid8009349 hat the realisation of a gift, however elaborately made, can neither yield a profit}{ \fs24\lang2057\langfe1033\langnp2057\insrsid2585203 }{\fs24\lang2057\langfe1033\langnp2057\insrsid2585203\charrsid8009349 nor in itself,}{\fs24\lang2057\langfe1033\langnp2057\insrsid2585203 }{ \fs24\lang2057\langfe1033\langnp2057\insrsid2585203\charrsid8009349 be a profit making scheme", and again "in the}{\fs24\lang2057\langfe1033\langnp2057\insrsid2585203 }{\fs24\lang2057\langfe1033\langnp2057\insrsid2585203\charrsid8009349 first place it}{ \fs24\lang2057\langfe1033\langnp2057\insrsid2585203 }{\fs24\lang2057\langfe1033\langnp2057\insrsid2585203\charrsid8009349 is impossible in my opinion to discover a}{\fs24\lang2057\langfe1033\langnp2057\insrsid2585203 }{ \fs24\lang2057\langfe1033\langnp2057\insrsid2585203\charrsid8009349 profit made by}{\fs24\lang2057\langfe1033\langnp2057\insrsid2585203 }{\fs24\lang2057\langfe1033\langnp2057\insrsid2585203\charrsid8009349 the respondent by this realisation. There}{ \fs24\lang2057\langfe1033\langnp2057\insrsid2585203 }{\fs24\lang2057\langfe1033\langnp2057\insrsid2585203\charrsid8009349 was no cost to}{\fs24\lang2057\langfe1033\langnp2057\insrsid2585203 }{ \fs24\lang2057\langfe1033\langnp2057\insrsid2585203\charrsid8009349 her of her asset".}{\fs24\lang2057\langfe1033\langnp2057\insrsid2585203 \par }\pard \ql \li0\ri0\nowidctlpar\faauto\adjustright\rin0\lin0\itap0\pararsid2585203 {\fs24\lang2057\langfe1033\langnp2057\insrsid2585203\charrsid8009349 \par }\pard \ql \li0\ri0\nowidctlpar\faauto\adjustright\rin0\lin0\itap0\pararsid8009349 {\fs24\lang2057\langfe1033\langnp2057\insrsid11940453\charrsid8009349 I have no doubt that the Fiji Court of Appeal decision in}{ \fs24\lang2057\langfe1033\langnp2057\insrsid11940453\charrsid3801541 Woodward's }{\fs24\lang2057\langfe1033\langnp2057\insrsid11940453\charrsid8009349 case governs this one, and I must hold myself bound to follow it. In}{ \i\fs24\lang2057\langfe1033\langnp2057\insrsid11940453\charrsid3801541 }{\fs24\lang2057\langfe1033\langnp2057\insrsid11940453\charrsid3801541 McClelland's}{\i\fs24\lang2057\langfe1033\langnp2057\insrsid11940453\charrsid3801541 }{ \fs24\lang2057\langfe1033\langnp2057\insrsid11940453\charrsid3801541 ca}{\fs24\lang2057\langfe1033\langnp2057\insrsid11940453\charrsid8009349 se, Lord Donovan delivering the advice of the Privy Council (1971) 1 WLR 191, 199 said }{ \fs24\lang2057\langfe1033\langnp2057\insrsid8009349\charrsid8009349 "}{\fs24\lang2057\langfe1033\langnp2057\insrsid11940453\charrsid8009349 In }{\fs24\lang2057\langfe1033\langnp2057\insrsid11940453\charrsid3881453 California Copper Syndicate v Harris }{ \fs24\lang2057\langfe1033\langnp2057\insrsid11940453\charrsid8009349 (1904) 5 T}{\fs24\lang2057\langfe1033\langnp2057\insrsid3881453 }{\fs24\lang2057\langfe1033\langnp2057\insrsid11940453\charrsid8009349 C 159, the Lord Justice Clerk formulated the question which must be asked in cases like the present. }{\fs24\lang2057\langfe1033\langnp2057\insrsid8009349\charrsid8009349 "}{\fs24\lang2057\langfe1033\langnp2057\insrsid11940453\charrsid8009349 Is the sum of gain that has been made a mere enhancement of value by realising a security or is it a gain made in}{\fs24\lang2057\langfe1033\langnp2057\insrsid2585203 }{\fs24\lang2057\langfe1033\langnp2057\insrsid11940453\charrsid8009349 an operation of business in carrying out a scheme for profit making}{\fs24\lang2057\langfe1033\langnp2057\insrsid8009349\charrsid8009349 "}{\fs24\lang2057\langfe1033\langnp2057\insrsid11940453\charrsid8009349 . I think that here there was merely a realisation of the asset. \par \par Mr Arjun raised a final point namely that he must succeed by virtue of the words in Section 11 }{\fs24\lang2057\langfe1033\langnp2057\insrsid8009349\charrsid8009349 "}{\fs24\lang2057\langfe1033\langnp2057\insrsid11940453\charrsid8009349 including the income from, but not the value of property acquired by gift, bequest devise or descent}{\fs24\lang2057\langfe1033\langnp2057\insrsid8009349\charrsid8009349 "}{\fs24\lang2057\langfe1033\langnp2057\insrsid11940453\charrsid8009349 . At first sight the Fiji Court of Appeal in }{\fs24\lang2057\langfe1033\langnp2057\insrsid11940453\charrsid3881453 Woodward's}{\fs24\lang2057\langfe1033\langnp2057\insrsid11940453\charrsid8009349 case might appear to have agreed with Mr Arjun, but their words are somewhat ambivalent and in }{\fs24\lang2057\langfe1033\langnp2057\insrsid11940453\charrsid3881453 Weller's }{\fs24\lang2057\langfe1033\langnp2057\insrsid11940453\charrsid8009349 case Appeal No 75 of 1981 at p.6 the same Court, somewhat differently constituted, says }{\fs24\lang2057\langfe1033\langnp2057\insrsid8009349\charrsid8009349 "}{\fs24\lang2057\langfe1033\langnp2057\insrsid11940453\charrsid8009349 For the reasons advanced by Mr Scott we are of the view that the exception only relates to persons who fall}{\fs24\lang2057\langfe1033\langnp2057\insrsid11940453 within the ambit of Section 11}{ \fs24\lang2057\langfe1033\langnp2057\insrsid11940453\charrsid8009349 (a) and does not apply to a person who is }{\fs24\lang2057\langfe1033\langnp2057\insrsid8009349\charrsid8009349 "}{\fs24\lang2057\langfe1033\langnp2057\insrsid11940453\charrsid8009349 deemed}{\fs24\lang2057\langfe1033\langnp2057\insrsid8009349\charrsid8009349 "}{\fs24\lang2057\langfe1033\langnp2057\insrsid11940453\charrsid8009349 to carry on business within the context of Section 11(e)}{ \fs24\lang2057\langfe1033\langnp2057\insrsid8009349\charrsid8009349 "}{\fs24\lang2057\langfe1033\langnp2057\insrsid11940453\charrsid8009349 .}{\fs24\lang2057\langfe1033\langnp2057\insrsid11940453 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid16547015\charrsid8009349 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid11940453\charrsid8009349 Mr Keay as I have said sought to find from }{\fs24\lang2057\langfe1033\langnp2057\insrsid11940453\charrsid3881453 Weller's }{ \fs24\lang2057\langfe1033\langnp2057\insrsid11940453\charrsid8009349 case evidence of the appellant's engaging in business within the meaning of that phrase in section 11(e). Weller was held not to have engaged in business. The question did not arise in}{ \fs24\lang2057\langfe1033\langnp2057\insrsid11940453\charrsid3881453 Woodward's }{\fs24\lang2057\langfe1033\langnp2057\insrsid11940453\charrsid8009349 case, but the Fiji Court of Appeal clearly thought that he had. But it did not disentitle him to succeed. To a similar extent probably did the appellant. She likewise must succeed. The appeal will be allowed. The appellant will have her costs. I understand that she came from Perth, prepared to give evidence. In the event the facts were agreed . No allowance will therefore be made for the appellant's evidence. \par \par }\pard \qc \li0\ri0\nowidctlpar\faauto\adjustright\rin0\lin0\itap0\pararsid11940453 {\b\caps\fs24\lang2057\langfe1033\langnp2057\insrsid11940453\charrsid11940453 Court of Review \par }\pard \ql \li0\ri0\nowidctlpar\faauto\adjustright\rin0\lin0\itap0\pararsid8009349 {\fs24\lang2057\langfe1033\langnp2057\insrsid11940453\charrsid8009349 25th July 1991. \par }}