The case concerned the application of s 60 of the Partnership Act 1892 (NSW) to taxation liabilities of a partnership imposed on limited partners.
The taxpayers were limited partners in a limited partnership. The partnership had an RBA deficit debt of $354,246.04, and this liability was imposed jointly and severally on the partners under s 444-30 of Schedule 1 to the Taxation Administration Act 1953 (TAA). The taxpayers contended that, under the terms of the partnership deed and s 60(1) of the Partnership Act 1892 (State Act), they were not liable for the amount of the debt.
The Court held that s 60(1) of the State Act did not apply to the liability in these proceedings. It found that s 60(1) applies to liabilities incurred by the general partner of the partnership as agent of the partnership. Section 444-30, on the other hand, imposes liabilities directly on the partners. The Decision Impact Statement states that this is consistent with the Commissioner's submissions to the Court.