On 13 October 2011 the Commissioner lodged a Notice of Discontinuance of Appeal in his appeal of the decision of Emmett J in Reglon Pty Limited v Commissioner of Taxation [2011] FCA 805.

In this case, the Court found that no taxable supply was made by the taxpayer by reason of a Supreme Court judgment for conversion of scaffolding owned by the taxpayer.  As noted by the Court (at [26]) “The effect of the payment in full by Citidel of the judgment in conversion against it was to vest in Citadel the ownership of the Taxpayer’s scaffolding.  However, the mere obtaining of judgment in conversion against a defendant does not of itself affect the ownership of the coverted goods.  Nor does the formal entry of judgment.  It is the satisfaction of the judgment that effects a transfer to the defendant of property in the goods that were the subject of the conversion.” and further (at [32]) “The payment made in satisfaction of that judgment resulted in ownership and was triggered by the payment of the judgment sum by Citadel.  That payment did not depend upon any action of the Taxpayer.  I do not consider that, in those circumstances, the Taxpayer may be said to have made a supply.  There was no taxable supply by the Taxpayer.”