F.C. IN THE MATTER TAX ACTS AND . and always retrospective operation. The words, "is Stumm K.C. and Real, for the Commissioner of Income Tax : The appellant's contention amounts to a de'ction of "and it is hereby declared that the same always has been a declaration of dividend" in s. 5 (x.) (b). Compare the words in the section and the words in Harding v. Commissioner of Stamps for Queensland (5). They referred to The Income Tax Act of 1902, s. 7 (iv.), s. 8; The Income Tax Amendment Act of 1914, S. 5 (iv.); s. 3, "dividend." Under the Acts in force before 1915, this debenture stock is taxable. By the Amendment Act of 1915, the liability to taxation is made clearer s. 5 (viii.), (ix.). (x.). They referred to the Acts Shortening Act, s. 2; Commissioner of Income Tax v. Brisbane Gas Co. (6), Beal, Cardinal Rules of Legal Interpretation 2nd Ed., pp. 374-5 and 425-6; Taylor v. Corporation of Oldham (7), Dryden v. Overseers of Putney (8), Sir Pope Cooper v. Commissioner of Income Tax (9). (1) [1898] A.C. 769. (2) [1892] 3 Ch. 402, at p. 421. (3) 1875, 1 Ch. D.. 182, at pp. 188-189 (4) 1884, 9 A.C. 448. (5) [1898] A.C. 769, at p. 775. (7) 1876, 4 Ch.D. 395, at p. 410. The judgment of the Court was delivered by SHAND J. Contrary to our first impressions, we have, on further consideration, come to the conclusion that the transactions, in respect of which income tax was claimed by the Commissioner in this case, would have amounted to the "declaration and distribution of a dividend" by the appellants, the South Brisbane Gas and Light Co. Limited, even if The Income Tax Amendment Act of 1915 had never been passed. Prior to the end of 1914, the appellants' assets, as represented by the plant employed in their undertakings, had been largely increased, mainly, we understand, by the purchase and laying down of such new gas pipes as were needed to meet the requirements of their growing business. Consequently, on a re-valuation of their assets prior to the 31st December, 1914, the value, as shown in the appellant's balance sheet of that month, exceeded the value shown in the balance sheet of June, 1914, by the sum of £101,154 18s. 8d. This sum, if represented by cash, could, we apprehend, have been lawfully distributed amongst the appellants' shareholders in the manner in which dividends were ordinarily distributed. But, as it was not represented by cash, the greater portion of it -namely £100,000-was, in December 1914, distributed amongst the shareholders in another manner-that was to say, pursuant to a resolution of the appellants' shareholders, passed on the 14th December, 1914, it was allocated to them in the form of debentures, carrying interest. By this means, the appellants were able to give their shareholders the benefit of sums of money (which could only be given to them at all on the assumption that such sums of money constituted profits divisible amongst shareholders) without realising the assets by which these sums of money were represented. 66 Now, by s. 3 of The Income Tax Act of 1902, as amended by s. 3 of the Amendment Act of 1906, the term dividend" is defined to include "all sums of money allocated by a company to or amongst its shareholders as such, by whatever name called "; and s. 7 of The Income Tax Act of 1902, as amended by s. 5 of the Amendment Act of 1904, provided that there should be charged, collected, levied, and paid, an income tax in respect of the annual amount of the income of all persons at the rates thereinafter prescribed. Subsection (iv.) of that section went on to provide that the tax on the incomes F.C. IN THE MATTER OF THE INCOME AND LIGHT Shand J. F.C. IN THE MATTER TAX ACTS AND Shand J. of all companies should be 1s. in each and every £; and then followed two provisoes in these terms, "Provided that the income, subject to the tax, of every company having its head office or chief place of business in Queensland, shall be assessed at not less than the amount of the dividends declared by the company during the year in respect of which the assessment is made. Provided further that when any of the profits of the company remain undistributed amongst the shareholders, then, upon such undistributed profits, only 6d. in each £1 shall be payable as income tax, and should any part of such undistributed profit be afterwards distributed as dividends, the amount already paid as tax shall be allowed for in computing the amount of tax payable on such dividend." Having regard to these enactments, we think that under the law, as it existed before the Act of 1915 was passed, the transaction to which we have referred amounted to a declaration and distribution of dividends to and amongst the appellants' shareholders, in respect of which income tax became payable at the rate of 1s. in the £1. We are glad to be able to come to this conclusion because, if we were forced to come to a contrary conclusion, we should, we fear, be compelled to decide that the Commissioner's right to succeed depended on the provisions of an Act of Parliament for which, so far as we have been able to discover, and as we are glad to believe, no precedent could be found in the statute book of any other British community; that was to say an Act of Parliament which made a tax payable in respect of past transactions, not otherwise taxable, by falsely declaring that previous enactments had always meant something which they never meant. The provisions of subsec. (x.) (b) of s. 5 of the Act of 1915, so far as material, are in these terms: When the assets of any company are re-valued, and on such re-valuation, such assets are increased in value and debentures, representing the whole or any part of such increase are issued to its shareholders as such, then the issue of such debentures to the amount of the sum stated or alleged to be secured thereby, and the payment of interest from time to time accruing on such debentures shall be, and it is hereby declared that the same always has been a declaration of dividends, and a distribution of dividends within the meaning of the two last preceding subsections," and therefore, necessarily, as it seems to us, within the meaning of previous enactments to the same effect-namely, the proviso to subsec. (iv.) of s. 7 of the Act of F.C. 1902, as amended by the Act of 1904, of which the terms had IN THE MATTER already been set out. In our opinion, the meaning of these provisions of s. 5 of the Act of 1915, although perhaps not very happily expressed, are plain and free from ambiguity. In our opinion, they can only be construed as declaring that, apart from any amendment of the law made by the Act of 1915, transactions such as those to which they had referred must be regarded as having always constituted a declaration and distribution of dividends. These provisions of s. 5 do not purport to be an amendment of the law; they purported to be an authoritative interpretation of the law which was in force before the Act of 1915 was passed, as well as of the law which is now in force. And although, so far as the Act of 1915 purports to introduce amendments of the law, its retroactive operation may be limited to the general provisions of s. 2, the specific declaratory provisions of s. 5, to which we have referred, do not seem to us to be affected by this limitation. We are therefore glad to be able to come to the conclusion that these declaratory provisions are in accordance with the true facts. It follows that, in our opinion, the questions should be answered: 1. The company is liable to income tax as assessed by the Commissioner. 2. Yes. 3. The company should pay to the Commissioner his costs of this special case. Questions answered accordingly. Solicitors for appellants: Atthow & McGregor. OF THE INCOME AND LIGHT Shand J. 1917. February 13, 17. Cooper C.J. Shand J. [IN THE FULL COURT.] R. v. GILLAM, Ex parte KELLY AND OTHERS. Local Authorities-Election-Notice of election-Erroneous and misleading statements of fact in notice-Invalidity of election— Ouster from office-The Local Authorities Acts, 1902-1913, s. 17, Third Schedule, Clause 3. One of three councillors was compelled to retire from office by rotation. The Returning Officer published a public notice of election by advertisement, which stated that he would receive nominations for an election to fill the place of A., who retired in accordance with the provisions of the Act. In fact and law B., and not A., was the councillor who should have retired from office. A. made protest, pointing out that his term of office had not expired, but the Returning Officer proceeded with the election. The nomination of C. was the only nomination received, and the Returning Officer declared C. elected. A. wrote to C., requesting him to disclaim the office. On application for an order to oust C. from office, Held, that the election had been held unduly and contrary to the statute, and that the order for ouster of C. should be made absolute with costs. Held, the notice required by Clause 3 of the Third Schedule, so far as it contains statements of fact, must correctly state the facts. ORDER NISI FOR OUSTER UNDER The Local Authorities Acts, 1902-1913. By an Order-in-Council, dated 20th January, 1915, and published in the Government Gazette, the Governor-in-Council made certain changes in the boundaries and divisions of the Clifton Shire, and, inter alia, directed an election of Shire Councillors. The election was duly held, and for Division 3 of the Shire, Duncan, Gallagher, and Moar were elected to the offices for the year 1915. Moar retired by rotation-s. 17— but was re-elected without opposition at the annual elections early in 1916. During the year 1916 Gallagher attended eleven meetings of the Council and Duncan attended ten meetings. At the meeting of the Council held in December, 1916, the Clerk declared that certain members would retire under the provisions of s. 17, and he named Gallagher as the retiring member for Division 3. The Clerk was appointed Returning Officer for the election, and he advertised in local newspapers that he would receive up to a certain specified time "nomination papers of candidates in place of John Gallagher, Division No. 3, who (retires) in accordance with the provisions of the Local |