Tangentyere Council Incorporated v The Commissioner of Taxes [ATR]

• Jurisdiction: Northern Territory
• Judge: Angel J.
• Judgment Date: 04 May 1990
• Court: Supreme Court
• Date: 04 May 1990
• Docket Number: No. 147 of 1986

(1990) 21 ATR 239

IN THE SUPREME COURT OF THE NORTHERN TERRITORY OF AUSTRALIA

Angel J.

No. 147 of 1986

Tangentyere Council Incorporated

and

The Commissioner of Taxes

Counsel for the Appellant: J. Larkins QC with Dr J. Scutt

Counsel for the Respondent: G. Hiley QC with R. Silva

Cases followed:

Aboriginal Hostels v Darwin CC (1985) 33 NTR 1

Lemm and Others v Federal Commissioner of Taxation (1942) 66 CLR 399

Maughan v Federal Commissioner of Taxation (1942) 66 CLR 388

Perpetual Trustee Company Limited v Federal

Commissioner of Taxation (1931) 45 CLR 224

Cases referred to:

ACO.S.S. v Commissioner of Payroll Tax (1985) NSWLR 567

Ashfield Municipal Council v Joyce (1978) AC 122

Australian Council for Overseas Aid v Federal

Commissioner of Taxation (1980) 49 FLR 278

Bennett and Fisher Ltd v Electricity Trust of SA (1962) 106 CLR 492

Borough of Leichhardt v Moran (1904) 4 SR(NSW) 361

Cadbury-Schwepps v Pub Squash Co. (1981) 1 WLR 193

Crofter Hand Woven Harris Tweed Co. Ltd. v Veitch (1942) AC 435

In re Dominion Students Hall Trust (1947) 1 Ch 183

Fender v St John Mildmay (1938) AC 1

Lochner v New York (1905) 198 US 45

McGarvie Smith Institute v Campbelltown MC (1965) 83 WN(NSW) 191

Mitchel v Reynolds (1711) 1 p Wms 181 ( 24 ER 347)

Nordenfelt v Maxim Nordenfelt (1894) AC 565

O'Connell v City of Greater Newcastle Council (1941) 41 SR(NSW) 190

O'Farrell v The Council of the Municipality of Bathurst (1923) 40 WN(NSW) 78

Pelligrini v Trikilis (1989) 63 NTR 5

Pemsel's Case (1891) AC 531

Scala Ballroom (Wolverhampton) Ltd. v Ratcliffe (1958) 1 WLR 1057

Aborigines — Aboriginal body — whether public benevolent institution

Aborigines — whether Aborigines as a class underprivileged — whether support for Aborigines benevolent

Jurisprudence — Common law attitude to differing cultures

Payroll Tax — exemption — public benevolent institution — Aboriginal body — control — status of Aboriginal community as the object of benevolence — Payroll Tax Act (1984) (NT) ss.9(a) and (c)

ORDER

Appeal allowed.

JUDGE1

1 Appeal pursuant to s.35 of the Payroll Tax Act (NT) The question arising for determination on this appeal is whether the appellant, an incorporated body, as at October 1986 was a public benevolent institution and thus exempt from payroll tax by virtue of s.9(a) of the Payroll Tax Act (1984) (NT). A subsidiary question arises namely whether the appellant was paying wages to employees exclusively engaged in public benevolent work for the purposes of s.9(c) of that Act.

2 Taxation exemptions have for many years been extended to public benevolent institutions. A substantial body of case law has evolved around that collocation of words but that case law has not, as I apprehend, absolutely defined the expression. It is true that Street C.J. in ACO.S.S. v Commissioner of Payroll Tax (1985) 1 NSWLR 567 at 568, said: ‘Those words do have an established scope’, but it is not a term of art and is to be understood in its ordinary English usage (which has no fixed meaning): Perpetual Trustee Company Limited v Federal Commissioner of Taxation (1931) 45 CLR 224 at 231, Maughan v Federal Commissioner of Taxation (1942) 66 CLR 288 at 395, and being a compound expression it is to be treated as such and not analysed word by word. As Dixon J. said in Perpetual Trustee Co Ltd v Federal Commissionerof Taxation, supra, at p 233:

‘In the present case little help is provided by dictionaries, statutory usage, or judicial decision.’

The expression is to be contrasted with “public charity” ( Ashfield Municipal Council v Joyce (1978) AC 122, 137) and “charitable institution” ( Perpetual Trustee Co Ltd v Federal Commissioner of Taxation, supra, at 231) which, in the absence of a contrary intention, are to be treated in a technical legal sense; cf. Pemsel's Case (1891) AC 531, ‘charitable purposes’.

3 In Perpetual Trustee Co Ltd, supra, Dixon J., having said “benevolent” was not to be given its general descriptive meaning, and did not merely mean “benignant”, went on to say that he was unable to place upon the expression ‘public benevolent institution’ a meaning wide enough to include organisations which did not promote the relief of poverty, suffering, distress or misfortune. Starke J. in the same case at 232 said that the expression means an institution ‘organised for the relief of poverty, sickness, destitution or helplessness’, (my emphasis). And Evatt J. said in the same case at 235:

‘Public benevolent bodies vary greatly in scope and character but give relief freely to those in need of it and unable to care for themselves’, (my emphasis).

By ‘freely’ it appears His Honour meant willingly but not necessarily without fees. And in Lemm and Others v Federal Commissioner of Taxation (1942) 66 CLR 399 at 411, Williams J. (with whom Rich and McTiernan JJ. concurred) said:

‘…relief of pain and suffering, physical disability, infirmity, or financial distress. These are benevolent objects within the meaning of the sub-section …’

and went on to speak of -

‘… homes, hospitals and institutions organized to render services of a permanent eleemosynary character to appreciable deserving but needy sections of the community.’

In that case, an institution controlled by a church property trust providing residential accommodation for 26 aged women in straitened financial circumstances was held to be a public benevolent institution.

4 In other cases various factors have been determinative one way or the other as to whether a taxpayer was a public benevolent institution. Being a compound expression which is not a term of art, it is for the court to look at the whole of the circumstances in order to reach a decision as to whether the taxpayer is or is not, in accordance with the ordinary English usage of the day, a public benevolent institution.

5 As to the public aspect of the institution, the question whether it is subject to some form of public control is a factor to be taken into account, but public control is not essential — what has been described as ‘the main criterion’ is the extensiveness of the class benefited by the institution, see per Williams J. in Maughan v Federal Commissioner of Taxation (1942) 66 CLR 388 at 397. In the present case the respondent relied on the statement of Campbell J. in O'Farrell v The Council of the Municipality of Bathurst (1923) 40 WN(NSW) 78 at 80:

‘… I am of opinion that the question as to whether a benevolent institution is public in the sense in which that word is to be read in the exempting provision referred to, is less dependent upon the particular circumstances of its constitution and domestic government, than upon the character and objects of its benevolence.

What are the benefits which the institution dispenses and to whom are the benefits extended are inquiries the answer to which must be decisive on the question of whether or not the institution in question is public in the statutory sense.’

That statement was approved by Jordan C.J. in O'Connell v City of Greater Newcastle Council (1941) 41 SR(NSW) 190 at 193 and by Street C.J. in ACO.S.S v Commissioner of Tax, supra, at 568. But it will be seen that Hardwick K.C.'s unsuccessful argument for the respondent in Lemm and Others v Federal Commissioner of Taxation, supra, included a submission that the class of women catered for was a relatively small section of the community and he cited both O'Farrell's case and O'Connell's case, to no avail. Williams J. said (at 411) that the conference of benevolence upon an appreciable needy class in the community is ‘the most important test’, not that it was the only test of what is a public institution.

6 Whether the appellant is a public benevolent institution paying wages to employees exclusively engaged in public benevolent work is, in my opinion, for the purposes of s.9(a) and (c) of the Payroll Tax Act (1984) (NT), to be determined having regard to a number of factors which include — the constitution of the appellant, the membership of the managing and governing body thereof, the sources of its monies, the public accountability of the appellant, the class or classes of recipients of its benevolence, the characteristics of the class or classes of the recipients of its benevolence, the scope and nature of the work done by the appellant, whether fees are payable by the recipients of the appellant's work or charges made by the appellant and if so the nature of those fees or charges, and whether the overall work of the appellant is beneficial to the public at large.

7 Paragraph 6 of the appellant's constitution provides that the various Aboriginal camp associations, whether incorporated or not, are member communities of the appellant. The constitution further provides that every person who is 18 years old or more and normally a resident of an incorporated member community and who is a member of such incorporated community is to be a member of the appellant. Disputes as to membership are determined by the executive which comprises persons elected by the membership. Members of housing associations are Aboriginal persons normally and permanently resident in the town camp area of the particular housing association and such further Aboriginal persons as are resolved to be members. The evidence discloses that permanent residents and visitors to the town camps fluctuate between 1,000 and 1,500 persons at any one time and that a large proportion of those persons are probably members of the associations, and in so far as it is relevant, the membership of the appellant is sufficiently large to render the appellant “public” for the purposes of being a public benevolent institution. But in the circumstances of this case I don't think it is necessary to so decide. I think it is public by reason of its membership, the people it services, the source of its finances and its public accountability. I do not...