Esquire Nominees Ltd v Commissioner of Taxation: 1971

(High Court of Australia) The company had directors who lived on Norfolk Island, but also had close connections with an Australian firm of accountants (WBBC), which evolved and implemented a tax scheme for an Australian family. The company acted as Trustee of a Trust which was established as part of the scheme. The Norfolk Island directors did not take actions on their own initiative, but only at the instigation of WBBC.
Held: The company was resident in Norfolk Island and not in Australia: ‘As I have already indicated, it is obvious that what the appellant did in relation to the Manolas Trust was done in the course of carrying out a scheme formulated in Australia and that Messrs WBBC not only communicated to the appellant particulars of the scheme but advised the appellant in detail of the manner in which it should be carried out. But if it be accepted that the appellant did what Messrs WBBC told it to do in the administration of the various Trusts, it does not follow that the control and management of the appellant lay with Messrs WBBC. That firm had no power to control the directors of the appellant in the exercise of their powers. . . The firm had power to exert influence, and perhaps strong influence, on the appellant, but that is all. The directors in fact complied with the wishes of Messrs WBBC because they accepted that it was in the interests of the beneficiaries, having regard to the tax position, that they should give effect to the scheme. If, on the other hand, Messrs WBBC had instructed the directors to do something which they considered improper or inadvisable, I do not believe that they would have acted on the instruction. It was apparent that it was intended that the appellant should carry on its business of Trustee company on Norfolk Island. It was in my opinion managed and controlled there, none the less because the control was exercised in a manner which accorded with the wishes of the interests in Australia. The appellant was, in my opinion, a resident of Norfolk Island.’ (Supported on appeal)


Gibbs J


(1971) 129 CLR 177, 46 ALJR 345, (1972) 72 ATC 4,076, [1973] HCA 67, (1972) 3 ATR 105






AppliedUnit Construction Co Ltd v Bullock HL 30-Nov-1959
The UK parent company owned subsidiaries incorporated in East Africa and carried on trading activities there. The managing director of the parent company concluded that ‘the situation of the African subsidiaries was becoming so serious that it was . .

Cited by:

CitedWood v Holden (Inspector of Taxes) ChD 8-Apr-2005
The parties had entered into complex share transactions for the sale of their trading business, and sought to avoid liability for capital gains tax.
Held: Gains on disposals between members of a non-resident group of companies were exempt. The . .
Lists of cited by and citing cases may be incomplete.


Updated: 17 May 2022; Ref: scu.224774