Registrar of the Accident Compensation Tribunal v Federal Commissioner of Taxation [1993] HCA 1; (1993) 178 CLR 145; (1993) 117 ALR 27; (1993) 67 ALJR 922 (7 December 1993)

HIGH COURT OF AUSTRALIA

THE REGISTRAR OF THE ACCIDENT COMPENSATION TRIBUNAL v. COMMISSIONER OF TAXATION (Matter No. M50 of 1992)
F.C. 93/043
Number of pages - 35
[1993] HCA 69; (1993) 93 ATC 4835
(1993) 26 ATR 353, (1993) 117 ALR 27
(1993) 67 ALJR 922

HIGH COURT OF AUSTRALIA
MASON CJ(1), BRENNAN(2), DEANE(1), DAWSON(2) TOOHEY(1) GAUDRON(1) AND McHUGH(2) JJ

HEARING

CANBERRA, 3, 4 February 1993
20:10:1993

ORDER

Matter to stand in the list.

Parties to bring in on or before 3 November 1993 agreed minutes of order in accordance with the reasons for judgment.

If parties are unable to reach an agreement on minutes of order, written submissions as to the appropriate orders to be made to be filed and served by the parties by 10 November 1993. Parties to have liberty to file and serve within seven days of such service written submissions in reply.

DECISION

MASON CJ, DEANE, TOOHEY and GAUDRON JJ This is one of three
appeals raising the question whether the Registrar of the Accident
Compensation Tribunal ("the Registrar") is liable to pay tax, as
trustee, on money credited as interest to accounts kept by him with
respect to awards of compensation made under the Workers Compensation
Act 1958 (Vic.) which, ultimately, came to be administered by him
pursuant to that same Act. Strictly, the appeals are appeals to the
Full Court of the Federal Court of Australia. They were removed into
this Court pursuant to s.40(1) of the Judiciary Act 1903 (Cth) for the
reason that they involve a question under s.114 of the Constitution.

Factual and legislative background

2. In June 1979 an award of compensation in the sum of $23,940 was made in consequence of the death of Alexander Joseph Abela. It
is common ground that the award was made for the benefit of his
dependants - his widow (Carol Abela, now Mrs Payne) and his three
daughters (Lisa, Michelle and Tanya) - who are together referred to as
"the Abela family".

3. Initially, the compensation was paid to the Workers Compensation Board ("the Board") under s.34 of the Workers Compensation Act. At
that time, 1979, that section relevantly required that, in the case of
death and unless the Board ordered otherwise, compensation should be
paid into the custody of the Board and that, subject to the rules of
the Board and the provisions of the Act, it should be "invested
applied or otherwise dealt with ... for the benefit of the persons
entitled thereto".

4. Until 1983, the Board maintained an account of payments made to or on behalf of members of the Abela family and of interest earned
on the money held on their behalf. That account was in the name
of Carol M. Abela (later, Carol M. Payne). In 1983, the Board
apportioned compensation between Lisa and the other members of the
Abela family ((1) Seemingly, this was pursuant to s.34(2) of the
Workers Compensation Act which, in 1983, provided:
"In the case of death if the worker leaves more
than one dependant the Board having regard to the
circumstances of the various dependants and variations
in such circumstances from time to time may -
(a) apply or otherwise deal with any sum so paid
into its custody in such manner as in the
opinion of the Board will for the time
being be most beneficial to the dependants;
(b) provide for any two or more dependants
collectively;
(c) exclude any dependant from participating in
any benefit.") and transferred $16,000 to a separate
account which, despite the apportionment, was treated by all concerned
as an account for the benefit of all four members of the Abela family.

5. The Accident Compensation Act 1985 (Vic.) established a new regime with respect to accidents and diseases in the work place. It
established various new bodies, including the Accident Compensation
Commission ("the Commission") and the Accident Compensation Tribunal
("the Tribunal") ((2) ss.18 and 39, respectively.). Broadly
speaking, it required the Commission to manage the compensation scheme
then established and conferred various functions on it ((3) ss.19
and 20, respectively.), including that of administering the Accident
Compensation Fund ("the Compensation Fund") ((4) s.20(a).) into
which employers, other than self-insurers, were obliged to pay an
accident compensation levy ((5) s.187, and generally Pt VII. See
s.140 as to the exemption for self-insurers.) and from which
compensation payments were to be made ((6) s.33(3)(a).).

6. Again broadly speaking, the Accident Compensation Act, as it stood in 1985, required the Tribunal to inquire into, hear and
determine compensation claims and various other matters associated
with the compensation scheme ((7) s.40(1)(a).). It also required
the Tribunal to establish and maintain a fund called the Accident
Compensation Tribunal Fund ("the Fund") ((8) s.73.). The Fund is
separate and distinct from the Compensation Fund earlier referred to.
Various amounts were required to be paid into the Fund, including, "all
... money that the Tribunal receive(d) under or for the purposes of
this Act or any other Act" ((9) s.73(2).). The Accident
Compensation Act was amended in various respects with effect from 1
December 1987 ("the 1987 amendments"), the main consequence being that
the Fund then came under the control of the Registrar.

7. The Workers Compensation Act was amended in 1985 and again in 1987 to bring it into harmony with the new compensation arrangements
effected by the Accident Compensation Act. It is sufficient, at this
stage, to note that s.37 of the Workers Compensation Act was amended
in 1985 to provide, relevantly:

"(1) On and from the appointed day, all moneys paid
into the custody of the Board pursuant to this Division as
in force before that day shall be administered by the
Tribunal in accordance with this Act.
(2) For the purposes of sub-section (1), the moneys
shall be paid to the Tribunal or, where any of the moneys
were before the appointed day invested, the investments
shall be transferred to and vest in the Tribunal." ((10) The
"appointed day" was 31 August 1985.)

Pursuant to s.37 of the Workers Compensation Act, as then amended,
the Board transferred various moneys to the Tribunal for payment into
the Fund, including the money in the accounts kept in the names of
Lisa Abela and Mrs Payne.

8. In keeping with the apportionment made by the Board in 1983, the Tribunal and, following the 1987 amendments, the Registrar kept
a separate account in the name of each of Lisa J Abela and
Carol M. Payne ("the Payne account"). Again, the Payne account seems
to have been treated as an account for the benefit of all four members
of the Abela family.

9. On 10 July 1987, an amount of $2,718.69 was credited to the Payne account as "interest" for the period 1 July 1986 to 30 June 1987. It
is common ground that that "interest" was or was calculated on the
basis of a proportionate share of income earned by the Fund in the
year ended 30 June 1987.

10. In 1990, the Commissioner of Taxation ("the Commissioner") issued a notice assessing the Registrar, as trustee for the Abela family, to
tax on the basis that the sum of $2,718 was income of a trust estate
for the year ended 30 June 1988. It seems that there was another and
alternative assessment levied on the Tribunal, on the basis that it
was income for the year ended 30 June 1987. It is not entirely clear
what has happened to that alternative assessment but it has at all
stages been treated as an assessment having effect in the event that
the sum of $2,718 is found to be income for that tax year, rather than
the year ended 30 June 1988. The Registrar lodged an objection to
the 1988 assessment but it was disallowed. He then appealed to the
Federal Court. The appeal was dismissed by Jenkinson J, the appeal
to the Full Court of the Federal Court was then instituted, and later
removed into this Court.

Legislative provisions

11. It was common ground in this Court that the case could conveniently be approached on the basis of the provisions of the
Workers Compensation Act and of the Accident Compensation Act as they
stood following the 1987 amendments. Thus, reference will be made to
earlier provisions only if significantly different.

12. The Workers Compensation Act and the Accident Compensation Act were extensively amended in 1992 when the Tribunal was abolished ((11)
By operation of s.64(1)(a)(iii) of the Accident Compensation
(WorkCover) Act 1992 (Vic.) the Tribunal ceased to exist on 1 December
1992.). The 1992 amendments have no bearing on this case. It is
convenient, therefore, to proceed as if both Acts continue in the terms
in which they stood following the 1987 amendments and as if the
Tribunal, the Registrar and the Fund continue in existence in
accordance with their then provisions.

Composition of and payments out of the Fund

13. The composition of the Fund appears from s.73(2) of the Accident Compensation Act which provides that there is to be paid into the
Fund:

"(a) the contributions payable under section 74 by the
Commission and self-insurers;
(aa) payments of compensation made to the Registrar under
section 130;
(ab) payments made under section 34 of the Workers
Compensation Act 1958;
(ac) amounts borrowed by the Registrar under section 51C;
(b) any income from the investment of any money credited to
the Fund and the proceeds of the sale of any
investment;
(c) all other money that the Tribunal receives under or for
the purposes of this Act or any other Act; and
(d) any other money required or permitted to be paid into
the Fund by or under any other Act".

14. It is common ground that, at all relevant times, the major part of the Fund has consisted of, or has been referable to, compensation
payments made under the Workers Compensation Act or under the Accident
Compensation Act and paid into it under s.73(2)(aa) and (ab) or,
earlier, under s.73(2)(c) of the Accident Compensation Act ((12)
Paragraphs (aa) and (ab) were inserted into s.73(2) in 1987. Prior to
that, it seems, compensations moneys were paid into the Fund under
s.73(2)(c) and, perhaps, par.(d).). Indeed, its balance sheet for the
year ended 30 June 1987 indicates that "Beneficiary Fund Investments"
then constituted more than 95% of its total assets.

15. Section 73(3) of the Accident Compensation Act authorizes the following payments out of the Fund:

"(a) payments directed by order of the Tribunal to be
paid out of the Fund under this Act or the Workers
Compensation Act 1958;
(aa) any amounts payable in respect of money borrowed under
section 51C;
(ab) any payment authorised under section 131 or 132;
(ac) any payment authorised under section 35 or 36 of the
Workers Compensation Act 1958;
(b) any payment required or authorized to be made or
which is for or towards the costs and expenses of or
incidental to the performance of the functions or the
exercise of the powers of the Tribunal or staff of the
Tribunal;
(c) any other costs and expenses incurred by the Tribunal
or Registrar under this Act or any other Act;
(d) any amounts payable in respect of remuneration,
allowances and pensions under section 45 or 50A and
any other payment required or permitted to be paid out
of the Fund by or under any other Act; and
(e) any payment required or authorized to be made out of
the Fund by sub-section (4) or (5)".

Other provisions of the Accident Compensation Act bearing on the Fund

16. Other provisions of the Accident Compensation Act bearing on the Fund are s.73(4), (5), (6) and (7) which are as follows:

"(4) The Registrar may -
(a) invest any money in the Fund in any manner which
is approved by the Treasurer; and
(b) take, purchase, lease, hold, sell and dispose of
real and personal property for the purpose of
enabling the Tribunal to perform its functions
and exercise its powers under this Act.
(5) The Registrar shall be indemnified from the Fund
against any liability or claim arising under sub-section
(4).
(6) For the purposes of this section, the Registrar may
open and maintain one or more accounts in the name of the
Registrar or the Tribunal with any bank or banks.
(7) If any money is invested under sub-section (4) in
the purchase of any land or the construction or alteration
of any buildings, the whole or part of the land or buildings
may be used by the Tribunal in connection with its powers,
duties or functions under this Act." ((13) This sub-section is

substantially repeated in s.131(3); and see fn.(16).)

Legislative provisions bearing on compensation payments paid into the Fund

17. The Workers Compensation Act continues to govern compensation moneys awarded under that Act but paid into the Fund established
and maintained under the Accident Compensation Act. The relevant
provisions of the Workers Compensation Act, ss.35 and 36, mirror
ss.131 and 132 of the Accident Compensation Act which apply to
compensation awarded under that latter Act.

18. Section 35 of the Workers Compensation Act is as follows:

"(1) Except as otherwise provided in section 34 ((14) Section
34(1) provides that certain payments of compensation are to be paid

to

and administered by the Registrar, notably compensation in the case

of

death and, also, under par.(c), in cases where the Tribunal

considers

that that is in the best interests of the worker concerned.
Section 34(2) empowers the Tribunal to impose any conditions,
restrictions or limitations on the duration and termination of
an administration with respect to compensation to be paid to the
Registrar under s.34(1)(c) if, as indicated, it considers that
that would be in the best interests of the worker.),
any amount of money administered by the Registrar under
this Act may be invested, applied or otherwise dealt with
in any manner that the Registrar thinks fit for the benefit
of the person entitled to that money.
(2) The Registrar shall not in administering any
amount of money under this Act be bound by any law relating
to the administration of trust funds by trustees but shall
act in good faith.
* * * * * * *
(4) If the amount of money administered by the
Registrar on behalf of any person becomes less than an
amount of money determined by the Registrar the amount
shall be paid out to that person.
(5) All expenses ((15) Section 131(5) of the Accident
Compensation Act, which otherwise mirrors this provision, is

subject to

an exception in the case of expenses paid under s.51A of that Act

to a

"funds management agent".) incurred by or on behalf of the
Registrar in the administration of any amount of money
under this Act shall be paid by the Registrar out of the
(Fund)." ((16) Section 131 of the Accident Compensation Act

contains

a provision, namely s.131(3), which repeats s.73(7) of that Act
and which is not replicated in s.35 of the Workers Compensation
Act.)

19. Section 36 of the Workers Compensation Act provides:

"(1) The Registrar may on the application of any
person on whose behalf any amount of money is administered
under this Act determine any dispute in relation to the
administration.
(2) If a deceased worker leaves more than one
dependant the Registrar after having regard to the
circumstances of the various dependants and any variations
in the circumstances from time to time may determine to -
(a) apply or otherwise deal with any money
administered by the Registrar in a manner which
the Registrar considers will for the time being
be most beneficial to the dependants;
(b) make a payment to any dependant;
(c) provide for any two or more dependants
collectively; or
(d) exclude any dependant from participating in any
benefit.
(3) If on an application to the Registrar by an
interested party it appears to the Registrar that because
of -
(a) the neglect of any children by the spouse of the
deceased worker or of a relative standing in the
place of a parent in relation to any children of
the deceased worker under the age of 16 years;
(b) a variation in the circumstances of the various
dependants; or
(c) any other sufficient cause -
a determination as to the apportionment between several
dependants of any amount of compensation or as to the
manner in which any amount of compensation payable to
any dependant is to be invested, applied or otherwise
dealt with should be varied, the Registrar may make any
determination for the variation of the previous
determination as the Registrar in the circumstances of the
case considers appropriate.
* * * * * * *
(5) Any person who objects to any determination made
by the Registrar may appeal to the Tribunal which may make a
new determination."

Is the Registrar a trustee?

20. The Registrar has been assessed to tax under Pt III, Div.6 of the Income Tax Assessment Act 1936 (Cth). So far as Pt III, Div.6 is
concerned and subject to other questions of a more general nature
which will be considered later, it was accepted that, if the Registrar
was at relevant times a trustee of the money in the Payne account,
then Pt III, Div.6 subjects income earned on that money to tax "as if
it were the income of an individual ... and were not subject to any
deduction" ((17) See s.99(2)-(3) of the Income Tax Assessment Act.).
The primary question that arises in relation to Pt III, Div.6 is, thus,
whether the Registrar was for the purposes of the Income Tax Assessment
Act a trustee of that money. If he was, there is a subsidiary question
whether the sum of $2,718.69 credited to the Payne account in July 1987
was income earned by the Tribunal in the tax year ended 30 June 1987,
or by the Registrar in the tax year ended 30 June 1988.

21. By s.6(1) of the Income Tax Assessment Act, "trustee" is defined as follows:

"'trustee' in addition to every person appointed or
constituted trustee by act of parties, by order, or
declaration of a court, or by operation of law, includes -
(a) an executor or administrator, guardian, committee,
receiver, or liquidator; and
(b) every person having or taking upon himself the
administration or control of income affected by any
express or implied trust, or acting in any fiduciary
capacity, or having the possession, control or
management of the income of a person under any legal or
other disability".

22. It is to be remembered that the question in this case is whether the Registrar is a trustee of the balance of the compensation awarded
in consequence of the death of Alexander Joseph Abela and standing in
the Payne account ((18) Note, the Commissioner is apparently content
to treat the moneys in the Lisa J Abela account as subject to a
separate trust. Assuming there is a trust, the question whether that
approach is correct in the light of the Registrar's wide discretion
with respect to apportionment under s.36 of the Workers Compensation
Act does not arise.), and not whether he is trustee of the Fund. It
is in that context that it was argued on behalf of the Commissioner
that the Registrar is a trustee by operation of law, alternatively a
trustee under par.(b) of the extended definition of "trustee" in
s.6(1) of the Income Tax Assessment Act. It was put that he came
within the extended definition because he had the administration or
control of income affected by an implied trust (which was identified
in the argument as a "trust for statutory purposes" ((19) See, as to a
"trust for statutory purposes", Fouche v. The Superannuation Fund Board
[1952] HCA 1; (1952) 88 CLR 609, per Dixon, McTiernan and Fullagar JJ at p.640;
Harmer v. Federal Commissioner of Taxation [1991] HCA 51; (1991) 173 CLR 264, at
p.274.) ), or because he was acting in a fiduciary capacity in relation
to the moneys in the Payne account.

23. The primary submission made on behalf of the Registrar was that the intention to be discerned from the Workers Compensation Act and
the Accident Compensation Act is not that the Registrar should be
subject to trust obligations in respect of compensation moneys, but,
rather, that they are to be dealt with on a governmental or
administrative basis.

24. In the submissions made on behalf of the Registrar, reliance was placed on the fact that the Workers Compensation Act does not
expressly constitute the Registrar a trustee of compensation moneys
but, on the contrary, s.35(2) of that Act and s.131(2) of the Accident
Compensation Act expressly provide that he is not "bound by any law
relating to the administration of trust funds by trustees".
Additionally, it was put that the obligations imposed by the Workers
Compensation Act and the Accident Compensation Act are imposed on the
Registrar in his official capacity and not on him personally; that the
Registrar has a wide discretionary power to apportion between
dependants under s.36 of the Workers Compensation Act and s.132 of the
Accident Compensation Act; that the moneys are to be paid into the
Fund, a mixed fund, incorporating not only other compensation payments
but moneys which would seem intended to defray the costs associated
with the general work of the Tribunal and the Registrar; and, that
the Registrar has power to invest moneys in the Fund in any manner
approved by the Treasurer.

25. The legislative provisions on which the Registrar relies are to be approached, according to the argument, in the light of the
principle in Kinloch v. Secretary of State for India ((20) (1882) 7
App Cas 619.). That principle requires clear words before an
obligation on the part of the Crown or a servant or agent of the Crown,
even if described as a trust obligation, will be treated as a trust
according to ordinary principles or, as it is sometimes called, a "true
trust" ((21) Tito v. Waddell (No.2) (1977) Ch 106, per Megarry V.-C.
at pp.211, 216-219. See also Kinloch v. Secretary of State for
India (1882) 7 App Cas, per Lord Selborne LC at pp.625-626;
Town Investments v. Department of Environment [1977] UKHL 2; (1978) AC 359,
per Diplock LJ at p.382.); rather,
in the absence of clear words, the obligation will be characterized as
a governmental or political obligation, sometimes referred to in the
decided cases as a trust "in the higher sense" ((22) Kinloch v.
Secretary of State for India (1882) 7 App Cas, per Lord Selborne LC
at pp.625-626; Tito v. Waddell (No.2) (1977) Ch, per Megarry V.-C. at
pp.216-217, 219.) or "a political trust" ((23) Hogg, Liability of the
Crown, 2nd ed. (1989), pp.186-188. See also New South Wales v. The
Commonwealth (No.3) [1932] HCA 12; (1932) 46 CLR 246, per Rich and Dixon JJ at
pp.260-261, per Starke J at p.268; Tito v. Waddell (No.2) (1977) Ch,
per Megarry V.-C. at p.211.).

26. It is convenient to note, at this stage, that Kinloch does no more than state a rule of construction to be applied in ascertaining
whether an intention to create a trust according to ordinary
principles is to be discerned from the language of the instrument
involved ((24) See Kinloch v. Secretary of State for India (1882) 7
App Cas, per Lord Selborne LC at p.626; Tito v. Waddell (No.2)
(1977) Ch, per Megarry V.-C. at pp.215, 216; Brisbane City Council v.
Attorney-General (1979) AC 411, at pp.421-422; Aboriginal
Development Commission v. Treka Arts (1984) 3 NSWLR 502,
per Priestley JA at p.519.). However, subject-matter and context
are also important and, in some cases, may be more revealing of
intention than the actual language used ((25) See Tito v. Waddell
(No.2) (1977) Ch, per Megarry V.-C. at p.216; Aboriginal Development
Commission v. Treka Arts (1984) 3 NSWLR, per Priestley JA at
p.519.).

27. The second matter to be noted in relation to Kinloch is that there is no rule of law or equity to prevent the imposition of
ordinary trust obligations on a person who is, in other respects, a
servant or agent of the Crown ((26) See Kinloch v. Secretary of State
for India (1882) 7 App Cas, per Lord Selborne LC at pp.625-626;
Civilian War Claimants Association v. The King (1932) AC 14, per
Atkin LJ at p.27; Town Investments v. Department of Education (1978)
AC, per Diplock LJ at p.382; Aboriginal Development Commission v.
Treka Arts (1984) 3 NSWLR, per Priestley JA at p.519.).
Moreover, it is not entirely helpful to approach cases in which it is
claimed that there is a trust in the ordinary sense on the basis that
the person who owes the obligation in question is a servant or agent of
the Crown. As will later be made clear, that is because, in some
circumstances, that person may bear that character in relation to some
functions, but not those associated with the obligation in question.
That may be illustrated by reference to the present case. If the
Registrar's duty in relation to the money in the Payne account is
merely to invest it and to hold the investments it represents and
accrued income until finally distributed to the Abela family, it is
difficult to see that that function involves any Crown or governmental
interest. And, if that is the case, the function is not easily
described as a Crown or governmental function or as a function
performed for or on behalf of the Crown, even if, for other purposes,
the Registrar is the servant or agent of the Crown ((27) See the
discussion to similar effect in Bank voor Handel en Scheepvaart N.V. v.
Administrator of Hungarian Property (1954) AC 584, per Reid LJ at
p.618. See also Wynyard Investments Pty. Ltd. v. Commissioner for
Railways (N.S.W.) [1955] HCA 72; (1955) 93 CLR 376, per Kitto J at p.393.). It
is thus preferable to approach cases such as the present on the basis
that the person concerned holds a statutory office and has a number of
functions, not all of which are necessarily governmental in nature.
And on that basis, little, if any, significance attaches to the fact
that the obligation is imposed on a statutory office holder, or, as was
put in the course of argument, on a person "in his official capacity".

28. There is a third matter to be noted in relation to Kinloch. The mere fact that the person on whom the obligation is cast is a
statutory office holder cannot, of itself, require the question
whether he or she is a trustee in the ordinary sense to be approached
on the basis of a presumption to the contrary. As with the question
whether a person is a servant or agent of the Crown, and leaving
aside any question of prerogative power, there can be no basis for
an approach of that kind unless it appears that there is some
governmental interest or function involved.

29. Of course, the matters which can be said to involve some governmental interest or function are not confined to closed
categories. The question whether a governmental interest is involved
depends very much on the law as it stands from time to time ((28) See,
generally, Committee of Direction of Fruit Marketing v. Australian
Postal Commission [1980] HCA 23; (1980) 144 CLR 577, per Gibbs J at p.580.).
Even so, and acknowledging that the administration of compensation
moneys awarded to or for the benefit of workers or, in the case of
death, their dependants ((29) See s.34 of the Workers Compensation
Act, and see fn.(14).) is a matter of considerable public importance,
it is not a function that is ordinarily perceived as governmental in
nature or as involving the interests of government. That being so, the
question in this case is simply whether or not the relevant provisions
of the Workers Compensation Act and the Accident Compensation Act,
considered in context and having regard to their subject-matter, reveal
an intention that the Registrar be subject to a trust obligation in the
ordinary sense. Accordingly, it is unnecessary to consider the extent
to which the strength of the presumption recognized in cases such as
Kinloch has been undermined by altered attitudes to the vulnerability
of the Crown to curial proceedings and remedies, including the remedies
available in cases of unjust enrichment.

30. As already indicated, ss.35 and 36 of the Workers Compensation Act govern the administration of the compensation moneys involved in
this case. However, it is clear from a comparison of those provisions
with their Accident Compensation Act counterparts, namely ss.131 and
132, that compensation moneys paid into the Fund have precisely the
same status no matter which of those Acts applies.

31. It is to be noted that the statutory provisions which govern the administration of compensation moneys are separate and distinct from
those which govern the administration of the Fund. And, although
various costs and expenses associated with the Tribunal and the
Registrar are to be paid from the Fund ((30) See s.73(3)(b)-(d) of the
Accident Compensation Act.) and certain of its investments may be used
for the purposes of the Tribunal ((31) See s.73(7) of the Accident
Compensation Act.), there is nothing in the Accident Compensation Act
or in the Workers Compensation Act to suggest that the Registrar
acquires any beneficial right or interest in compensation moneys paid
to him, even when paid into the Fund.

32. There is now no provision in either the Workers Compensation Act or the Accident Compensation Act which is as explicit as the direction
previously found in s.34 of the Workers Compensation Act, namely, that
certain compensation payments should be paid "into the custody of the
Board" and "invested applied or otherwise dealt with ... for the
benefit of the persons entitled thereto". However, there are
provisions in both Acts which point strongly in the same direction.
Thus, as already noted, s.35(1) of the Workers Compensation Act
provides:

"any amount of money administered by the Registrar under
this Act may be invested, applied or otherwise dealt with in
any manner that the Registrar thinks fit for the benefit of
the person entitled to that money". (emphasis added) ((32) See
also s.131(1) of the Accident Compensation Act.)

And s.35(4) requires that, an "amount of money administered ... on
behalf of any person (which) becomes less than an amount of money
determined" by the Registrar should "be paid out to that person" ((33)
See also s.131(4) of the Accident Compensation Act.).

33. A trust may be created without use of the word "trust" ((34) See In re Kayford Ltd. (1975) 1 WLR 279, per Megarry J at p.282; Tito v.
Waddell (No. 2) (1977) Ch, per Megarry V.-C. at p.211. See also
Brisbane City Council v. Attorney-General (1979) AC, at p.421.).
And, unless there is something in the circumstances of the case to
indicate otherwise, a person who has "the custody and administration
of property on behalf of others" ((35) Taylor v. Davies (1920) AC
636, at p.651.) or who "has received, as and for the beneficial
property of another, something which he is to hold, apply or account
for specifically for his benefit" ((36) Cohen v. Cohen [1929] HCA 15; (1929) 42
CLR 91, per Dixon J at p.100.) is a trustee in the ordinary sense.
In circumstances of that kind and in terms of s.6(1) of the Income Tax
Assessment Act, if there is no "act of parties" appointing or
constituting the Registrar trustee, he is a trustee "by operation of
law".

34. Given that no special words are necessary to create a trust in the ordinary sense, the statutory provisions which were last
discussed, namely s.35(1) and (4) of the Workers Compensation Act,
would, in the absence of some provision to the contrary, suffice
to constitute the Registrar a trustee, in the ordinary sense, of
compensation moneys paid to him pursuant to the Workers Compensation
Act. They would suffice because they indicate that he has or holds
that money for the benefit of the person or persons entitled to the
compensation involved.

35. The legislative provisions on which the Registrar relies for the argument that there is, or was, no trust in the ordinary sense fall
into two distinct categories. There are those which relate to the
Fund and those which directly relate to the administration of
compensation moneys.

36. It clearly appears from the provisions governing the Fund that it is a general fund of a kind not ordinarily identified as a trust fund.
It is sufficient to refer to the different moneys to be paid into the
Fund ((37) See s.73(2) of the Accident Compensation Act.); to the
payment out of expenses associated with the work of the Tribunal and
the Registrar ((38) See s.73(3)(b)-(d) of the Accident Compensation
Act.); and, to the power to use land and other buildings in which the
moneys of the Fund are invested for the purposes of the Tribunal ((39)
See s.73(7) of the Accident Compensation Act.). However, and as
already pointed out, this case is not directly concerned with the
status of the Fund, but with the nature of compensation moneys paid to
the Registrar for payment into that Fund.

37. Notwithstanding that the Fund is a general fund of the kind indicated, the statutory requirement that compensation moneys be paid
into the Fund is not inconsistent with those moneys being trust moneys
in the ordinary sense. Much was made in the argument on behalf of the
Registrar of his power under s.73(4)(a) of the Accident Compensation
Act to invest moneys in the Fund "in any manner which is approved by
the Treasurer". However, that is far from decisive for, in context,
the clear effect of s.73(4)(a) is that the Registrar has no power to
invest other than in a manner approved by the Treasurer. And it is
not to be supposed in relation to s.73(4)(a) that the Treasurer would
authorize investments which might be imprudent or speculative, or in
some way inconsistent with the sound management of compensation moneys
awarded for the benefit of injured workers or, in the case of death,
their dependants ((40) See fn.(14).). Accordingly, in our view, the
intention of the legislature with respect to the Registrar's holding of
compensation moneys must be discerned not from the provisions which
bear on the Fund, but from those which bear directly on the
administration of such moneys.

38. So far as the provisions which bear directly on the administration of compensation moneys are concerned, it is convenient
to deal first with s.36 of the Workers Compensation Act ((41) See also
s.132 of the Accident Compensation Act.). As earlier mentioned, s.36
confers a wide discretionary power to apportion between dependants.
That power is entirely consistent with the existence of a discretionary
trust for the benefit of the class constituted by the dependants of a
deceased worker. It does not, in our view, tell against the imposition
of an ordinary trust obligation.

39. The other provision which bears directly on the administration of compensation moneys is s.35(2) of the Workers Compensation Act which
frees the Registrar from "any law relating to the administration of
trust funds by trustees" but requires him to "act in good faith" ((42)
See also s.131(2) of the Accident Compensation Act.). It is
significant that s.35(2) does not, in terms, deny the existence of a
trust of compensation moneys in the ordinary sense. Rather, it
proceeds on the basis that there is, or would otherwise be, a trust of
that kind to be administered in accordance with the general law of
trusts. It then proceeds to exclude not the entire body of that law,
but only laws "relating to the administration of trust funds by
trustees". The limited terms of s.35(2) assume particular significance
when it is appreciated that neither the Workers Compensation Act nor
the Accident Compensation Act makes provision as to distribution of
income referable to compensation moneys paid into the Fund, nor do they
make provision, save in the case where the money involved falls below
some fixed amount ((43) See s.35(4) of the Workers Compensation Act;
s.131(4) of the Accident Compensation Act.), as to the final
distribution of compensation money to the person or persons for whose
benefit it is administered.

40. Workers compensation is a matter of legal entitlement, not charitable subvention. That being so and given the limited terms of
s.35(2) of the Workers Compensation Act, it must be concluded that
compensation moneys paid to the Registrar are trust moneys in the
ordinary sense. They are held by the Registrar in trust for the
persons entitled to the compensation involved and, subject to the
applicable legislative provisions, must be administered by the
Registrar in accordance with the general law of trusts. Accordingly,
the Registrar holds such moneys as trustee in the strict sense and
there is no need to consider the alternative arguments based on
the extended definition of "trustee" in s.6(1) of the Income Tax
Assessment Act.

Is the Registrar a public authority for the purposes of s.23(d) of the Income Tax Assessment Act?
41. It was argued by the Solicitor-General for South Australia, intervening in support of the Registrar, that the Registrar was not
liable to tax on the income earned on the money in the Payne account
by reason that s.23(d) of the Income Tax Assessment Act exempts "the
revenue of a municipal corporation or other local governing body or of
a public authority constituted under any Act or State Act, or under
any law in force in a Territory being part of Australia" from income
tax. It was put that the Registrar is a "public authority" for the
purposes of that sub-section.

42. Whatever may be the position of the Tribunal, there is considerable difficulty in categorizing the Registrar as a statutory
office holder whose functions are mainly administrative, as "a public
authority" in the sense that that expression is used in s.23(d) of the
Income Tax Assessment Act ((44) As to the meaning of "public
authority" see Renmark Hotel Inc. v. Federal Commissioner of Taxation
[1949] HCA 7; (1949) 79 CLR 10, per Rich J at p.18; Western Australian Turf Club
v. Federal Commissioner of Taxation [1978] HCA 13; (1978) 139 CLR 288, per Stephen
J at pp.295-299; Re Anti-Cancer Council (Vict.); Ex parte State
Public Services Federation [1992] HCA 53; (1992) 175 CLR 442, at pp.450-451.).
That aside, the income on money held in trust by the Registrar, which
is to be administered in accordance with the general law of trusts,
simply is not the revenue of the Registrar. Nor for that matter was it
revenue of the Tribunal in the period prior to the 1987 amendments.

43. In the context of s.23(d) of the Income Tax Assessment Act, the expression "revenue" signifies annual or other periodic income from
which operating expenses for that period are to be paid ((45) See, for
an example of the constituents of revenue, Western Australian Turf Club
v. Federal Commissioner of Taxation (1978) 139 CLR, per Stephen J
at p.298.). The income received from the investment of compensation
moneys by the Registrar is, in equity, the income of the persons
entitled to the benefit of those compensation moneys. That income is
not income available to defray the operating costs of the Fund. Nor
has it been treated as such. According to the agreed statement of
facts, apart from financial institution duty, bank charges and
commissions paid on mortgage investments, the costs and expenses of the
Fund are not paid out of the compensation moneys.

Is the Registrar bound by the Income Tax Assessment Act?

44. It was argued that the Registrar is not bound by the Income Tax Assessment Act because, properly construed, it taxes the Crown only
where the Crown is expressly made liable to tax ((46) See, for
example, ss.218, 221C, 255 of the Income Tax Assessment Act which
expressly extend the reach of that Act so as to apply to the
Commonwealth, a State, a Territory, or, an authority thereof.). It
was put that the Income Tax Assessment Act must be construed on the
basis that general words such as "person" in s.17 ((47) Section 17
provides:

"Subject to this Act, income tax at the rates
declared by the Parliament is levied, and shall be paid
... upon the taxable income derived during the year of
income by any person, whether a resident or a
non-resident."

Note, "person" is defined in s.6(1) to include a company.) or
"trustee" in Pt III, Div.6 do not extend to the Crown, its servants or
agents and that, in consequence, the Registrar is not subject to tax,
notwithstanding that he has received income by virtue of his being a
trustee in the ordinary sense.

45. There are two answers, each involving a slightly different approach, to the submission that the Income Tax Assessment Act must be
construed so as to exclude the Registrar from its operation. The
first approach involves asking whether the Registrar, in his capacity
as trustee, is properly to be regarded as the Crown, its servant or
agent. The second is to ask whether there is any basis for reading
down the relevant provisions of the Income Tax Assessment Act, namely,
s.17 which, subject to that Act, subjects "taxable income derived ...
by any person, whether a resident or a non-resident" to tax and the
provisions of Pt III, Div.6 which apply to tax the income of trusts in
the hands of "trustees", as defined in s.6(1).

46. So far as the first approach is concerned, there can be no doubt that certain of the Registrar's functions are functions which are
performed on behalf of the government of Victoria and, to that extent
and in that sense, the Registrar can be described as the servant
or agent of the Crown. The Registrar's functions relating to the
administration of the Tribunal are clearly performed on behalf of the
Victorian government. And the same may be true of the functions
involved in administering the Fund. But the functions involved in
administering the ordinary trusts constituted by payment of
compensation money "for the benefit of the person entitled to that
money" ((48) s.35(1) of the Workers Compensation Act; s.131(1) of the
Accident Compensation Act.) are of a different kind. The trusts thus
constituted are trusts for private citizens and the duties involved are
owed to individual beneficiaries, notwithstanding that the trusts arise
under the Workers Compensation Act rather than as the result of the
acts of individuals.

47. Clearly, it is or will often be inappropriate to describe a person or a statutory office holder as the servant or agent of the
Crown in relation to some functions and not others. As a general
rule, it will be the overall nature of the functions and duties
involved which determines whether he or she is to be categorized
as a servant or agent of the Crown, no matter for what purpose that
classification is or becomes necessary ((49) See Administrator of
Austrian Property v. Russian Bank for Foreign Trade (1931) 48 TLR
37; Bank voor Handel en Scheepvaart N.V. v. Administrator of Hungarian
Property (1954) AC, per Reid LJ at p.619.). But there may be
cases where there are discrete functions which involve no interest or
purpose of the Crown and which are separate and distinct from other
functions which serve a Crown purpose.

48. It is clear that the classification of a person as a servant or agent of the Crown, whether generally or in relation to particular
functions, does not depend on there being some benefit to or some
financial or other interest on the part of the Crown or the government
involved ((50) See Bank voor Handel en Scheepvaart N.V. v.
Administrator of Hungarian Property (1954) AC, per Reid LJ at
p.618. See also Wynyard Investments Pty. Ltd. v. Commissioner for
Railways (N.S.W.) (1955) 93 CLR, per Kitto J at p.393.). However,
there may be cases where there is no Crown interest or purpose to be
served at all or, in the case of discrete functions, no Crown interest
or purpose to be served by those particular functions.

49. By reason and to the extent that the Registrar is a trustee for private individuals, no governmental interest or purpose whatsoever
attends or is served by the functions associated with those trust
obligations; in no sense are those obligations performed for or on
behalf of the Crown. Thus, there is no basis for categorizing the
Registrar, in his capacity as a trustee for private individuals, as a
servant or agent of the Crown. He is a trustee, pure and simple.
That being so and even if the relevant provisions of the Income Tax
Assessment Act do not bind the Crown, its servants or agents, they
bind the Registrar in his separate capacity as trustee for private
individuals.

50. The alternative approach is to ask whether there is any basis for reading down the general words of the Income Tax Assessment Act so as
not to include the Crown, its servants or agents. It does not matter
whether the reading down is said to be necessary because some of its
provisions expressly bind the Crown and, on ordinary principles, the
others should be construed as not binding the Crown or because of a
presumption against the Crown being bound, save by express words or by
"necessary implication", in the sense explained in Bropho v. Western
Australia ((51) [1990] HCA 24; (1990) 171 CLR 1, per Mason CJ, Deane, Dawson,
Toohey, Gaudron and McHugh JJ at pp.16-17.).

51. Whatever may have been the situation in earlier times, it is clear from Bropho that the presumption that general words do not bind
the Crown is one that must now yield to "the circumstances (involved),
including the content and purpose of the particular provision and
the identity of the entity in respect of which the question of the
applicability of the provision arises" ((52) ibid., at p.23.). It is
axiomatic that those circumstances include the way in which the
provision in question would operate and, in particular, whether it
would operate to bind "servants or agents of the ... government ... in
relation to acts which they do or property which they own or occupy
exclusively in that capacity" ((53) British Broadcasting Corporation
v. Johns (1965) Ch 32, per Diplock LJ at p.81; Bropho v. Western
Australia (1990) 171 CLR, per Mason CJ, Deane, Dawson, Toohey,
Gaudron and McHugh JJ at p.16.), or, as it is sometimes put, whether
it would "apply to servants of the Crown acting in the course of their
duties as such" ((54) Bropho v. Western Australia (1990) 171 CLR,
per Mason CJ, Deane, Dawson, Toohey, Gaudron and McHugh JJ at p.21.).
Given the purposes which, historically, were served by the
assumption that the Crown is not bound by statute ((55) See ibid., at
p.18.), there is now no basis, if there ever was any, for applying a
presumption that the Crown is not bound unless the provision or
provisions in question would operate so as to have some effect upon the
"interests or purposes of the Sovereign" ((56) Wynyard Investments
Pty. Ltd. v. Commissioner for Railways (N.S.W.) (1955) 93 CLR, per
Kitto J at p.393.) or, more accurately, the government concerned
((57) Note that that approach is implicit in the speech of Lord Reid in
Bank voor Handel en Scheepvaart N.V. v. Administrator of Hungarian
Property (1954) AC, at p.618, where his Lordship said, in the context
of a taxing statute which did not bind the Crown, that he was "prepared
to assume that if ... it was the duty of a Crown servant merely to hold
property with accruing income for a period and then pay it to some ...
private person, it would be held that tax is payable on the incoming
accruing ... because ... payment of tax could not possibly prejudice
any Crown interest or purpose".).

52. Similarly, because the provisions of the Income Tax Assessment Act which are expressed to bind the Crown operate in areas in which
Crown interests are involved, they provide no basis for reading down
general provisions in circumstances where their application has no
effect on the interests or purposes of the Crown.

53. As already indicated, there is no Crown or governmental interest in the performance by the Registrar of the trust obligations which
he owes to private individuals. Thus, there is no basis, either by
reason of a presumption that general words do not bind the Crown or by
reason that certain other provisions of the Income Tax Assessment Act
are expressed to bind the Crown, for reading down the word "person"
in s.17 or the definition of "trustee" in s.6(1) so as to exempt the
Registrar, in his capacity as a trustee, from tax under Pt III, Div.6.

Questions arising under the Constitution

54. As earlier indicated, this appeal and its two companion appeals were removed into the Court because they were seen to raise a question
under s.114 of the Constitution. So far as presently relevant, s.114
forbids the Commonwealth from "impos(ing) any tax on property of any
kind belonging to a State".

55. In substance, Pt III, Div.6, in its application to this case, taxes income which, in equity, is the income of the private citizens
who are the beneficiaries of the trust constituted by payment to the
Registrar of compensation to which they are entitled. In form, it
taxes the income of the Registrar, in his capacity as trustee.
Accordingly, neither in substance nor in form can it be said that,
in the circumstances of this case, Pt III, Div.6 taxes any property
belonging to the State of Victoria.

56. It was also argued that, in its application to the Registrar in relation to trusts of compensation moneys, Pt III, Div.6 of the Income
Tax Assessment Act infringes the implied constitutional prohibition
against Commonwealth laws which discriminate against a State or
interfere with its ability to carry out its functions ((58) See
Melbourne Corporation v. The Commonwealth [1947] HCA 26; [1947] HCA 26; (1947) 74 CLR 31; Victoria
v. The Commonwealth [1971] HCA 16; (1971) 122 CLR 353; Queensland Electricity
Commission v. The Commonwealth [1985] HCa 56; (1985) 159 CLR 192.). Because
Pt III, Div.6, in its application in this case, subjects the Registrar
to tax in his capacity as trustee for private citizens and does not
affect any interest or purpose of a State, it does not offend either
limb of that prohibition.

The year of income

57. As earlier indicated, the "interest" credited to the Payne account in July 1987 represented a proportionate share of the income
earned by the Fund in the tax year ended 30 June 1987. It was
suggested in argument that it might, for the purposes of the Income
Tax Assessment Act, be income of the 1987 tax year and not of the 1988
tax year which is the tax year involved in this appeal.

58. Although the registrar appealed against the determination of Jenkinson J in the Federal Court on the ground that, if the interest was assessable income, it was incorrectly included in the assessment in respect of the 1988 tax year, that ground of appeal, although mentioned in the Registrar's written outline of argument, was not developed in oral argument. No doubt, the reason was that, in a context where the Commissioner has, as already indicated, issued an alternative assessment treating the relevant interest as income of the 1987 tax year, the identity of the correct tax year was seen as being of little practical significance.

59. As has been seen, the Registrar holds the compensation moneys paid to him on trust for the benefit of the persons entitled to those
moneys. He is empowered to invest, apply or otherwise deal with the
moneys in the Fund in any manner he thinks fit for the benefit of
those persons ((59) s.35(1) of the Workers Compensation Act; s.131(1)
of the Accident Compensation Act.). Any income from the investment of
those compensation moneys is, therefore, referable to the trust at the
time of receipt. It is irrelevant that the actual allocation of the
income does not occur until some later tax year.

60. The method adopted by the Registrar, and by the Tribunal prior to the 1987 amendments, for the allocation of income accorded with that
income being received as trust income. After deducting related costs
and expenses, overall income received on investments was allocated
between the accounts of different dependants or groups of dependants.
While the actual allocation of the net investment income to the credit
of particular accounts in the books of the Fund was not effected until
after the commencement of the 1988 tax year, the respective amounts
which were so credited were ascertained, on a "pro rata" basis, by
reference to the monthly amounts held to the credit of the various
accounts during the 1987 tax year. Thus, the $2,718.69 credited to
the Payne account on 10 July 1987 was calculated by reference to the
monthly balances standing to the credit of that account during the
year in which the relevant income was received, that is, the 1987 tax
year. There was some discussion during the course of argument as
to whether the beneficiaries of the various accounts were, in fact,
entitled to a pro rata allocation of the moneys each year. It is not
necessary to decide that question because, even if there was no such
entitlement, the Registrar's and, prior to the 1987 amendments, the
Tribunal's statutory duty to invest the moneys for the benefit of the
persons entitled means that the discretion to deal with the moneys as
thought fit had to be exercised for the benefit of those persons ((60)
cf. Flannery v. Secretary, Department of Social Security (1987) 78
ALR 431; Melbourne v. Secretary, Department of Social Security
(1988) 20 FCR 496, where the relevant legislation specifically
provided that "(i)nvestments made from moneys forming part of the
Common Fund shall not be made on account of or belong to any
particular" estate, trust or person. (emphasis added)).
Thus, a proportionate share of the moneys would, at all times, be
referable to each individual account. The income received was,
therefore, derived as income at the date at which it was earned,
regardless of when it was actually allocated in the books. This was
so notwithstanding the fact that the compensation moneys had been
mixed in a common fund with other compensation moneys, borrowings,
money for the general expenses of the Tribunal and income from
investments.

61. It follows that the Registrar and, earlier, the Tribunal derived income on compensation money at the date on which that income was
earned by the mixed fund, and not on the date on which the relevant
proportion of the income was formally allocated to the particular
account. That means that the income involved in this case was earned
in the financial year ended 30 June 1987, notwithstanding the fact
that it was not actually credited to the Payne account until July
1987.

Conclusion

62. As earlier indicated, the present appeal in relation to the assessment for the 1988 tax year was listed for hearing together with
two companion appeals by the Registrar relating to two other accounts
administered by him. The Court was informed that the parties should
be able to reach agreement in relation to those other appeals once the
Court had dealt with the questions involved in this appeal.

63. In the present appeal, the Commissioner has succeeded on each of the grounds of appeal relied on by the Registrar, with the exception of the ground relating to the correct income. As has been seen, we consider that the notice of assessment involved in this appeal was erroneous because it treated the $2,718.69 as income derived by the
Registrar as trustee for the Abela family during the 1988 tax year
whereas it was income derived by the Tribunal during the 1987 tax
year. The reasoning which leads to our conclusion in that regard may,
no doubt, also lead to the conclusion that some other amount was
derived as income, of the Registrar for the 1988 tax year, but was
wrongly included in an assessment in respect of some subsequent year.

64. In all the circumstances, the appropriate course is to order that this appeal and the companion appeals stand in the list to enable the
parties to confer with a view to reaching agreement about the orders
to be made in the light of the reasons expressed in this judgment. If
the parties are unable to reach such agreement, it will be necessary
to afford to them an opportunity to make written submissions in
relation to the appropriate orders. We would indicate that, as at
present advised, we consider that the Registrar should pay the
Commissioner's costs of the appeal to this Court and of the
proceedings in the Federal Court.

BRENNAN, DAWSON AND McHUGH JJ Trust is the creature of equity. It
is of the essence of a trust that it is cognizable by a court of
equity ((61) Sturt v. Mellish [1743] EngR 82; (1743) 2 Atk 610, at p.612 [1743] EngR 82; (26 ER 765,
at p.766); Burgess v. Wheate [1757] EngR 5; (1759) 1 Eden 177, at pp.218, 223
[1757] EngR 5; (28 ER 652, at pp.668, 670); In re Williams; Williams v.
Williams (1897) 2 Ch 12, at p.19.). A relationship which obliges one
person to pay money or to transfer property to another may exhibit the
features of a trust for the benefit of the other, but there is no such
trust unless the obligation is enforceable in equity. In our opinion,
the rights of dependants of a deceased worker to receive money
following the payment of compensation under the Workers Compensation
Act 1958 (Vic.) ("the 1958 Act") are not enforceable in a court of
equity. The remedies available to dependants are designed to enforce
the performance of statutory, not equitable, duties.

2. For reasons presently to be stated, we would hold that the Registrar of the Accident Compensation Tribunal ("the Registrar")
does not hold the money paid as compensation for the dependants of a
deceased as trustee for the dependants as beneficiaries. If there be
a trust of the fund out of which the dependants of a deceased worker
receive or are entitled to receive money, the trust is not one which
confers on those dependants an equitable interest in the fund or an
equitable right to payment out of the fund. For that reason, we would
hold that Div.6 of Pt III of the Income Tax Assessment Act 1936 (Cth)
has no application to that part of the income of the fund attributed
to the dependants of a particular deceased worker. To explain this
view, it is necessary to identify the more important of the statutory
provisions from which the nature of the rights possessed by the
dependants of a deceased worker can be ascertained. These provisions
govern the making of an award of compensation, the payment of the sum
awarded, the administration of the fund into which the compensation
awarded is paid and, to some extent, the rights of the respective
dependants to seek payment out of that fund and the payment of money
to the respective dependants in whose favour the fund is applied.

3. The relevant statutory provisions in the 1958 Act were substantially amended by the Accident Compensation Act 1985 (Vic.)
("the 1985 Act") which provided, inter alia, for an Accident
Compensation Tribunal Fund ("the Tribunal Fund") to be administered by
the Accident Compensation Tribunal ("the Tribunal"). The Accident
Compensation (Amendment) Act 1987 (Vic.) ("the 1987 Act") in turn
amended both the 1958 Act and the 1985 Act and, with effect from
1 December 1987, the Registrar of the Tribunal was substituted for the
Tribunal as the administrator of the Tribunal Fund. That substitution
explains the difference in the parties who were assessed to tax on
what the Commissioner contends to have been the income of the trust
estate of the dependants of a deceased worker, Alexander Joseph Abela:
the Tribunal was assessed to tax in respect of the income year ended
30 June 1987, the Registrar in respect of the income year ended
30 June 1988. In the following discussion, reference will be made to
the statutory provisions in force at relevant times.

The operation of the statutes in the present case

4. In consequence of the death of Mr Abela on 6 November 1977, compensation was payable under s.9(1) of the 1958 Act. His dependants
were his widow (now Mrs Payne) and three infant children. Pursuant
to an award made on 12 June 1979 by the Workers Compensation Board
constituted under the 1958 Act ("the Board") and in conformity with
s.34(1) of that Act, the sum of $23,940 was "paid into the custody
of the Board and the receipt of the registrar (was) a sufficient
discharge in respect of the sum so paid". Section 34(2) provided as
follows:

" In the case of death if the worker leaves more than one
dependant the Board having regard to the circumstances of
the various dependants and variations in such circumstances
from time to time may -
(a) apply or otherwise deal with any sum so paid
into its custody in such manner as in the opinion
of the Board will for the time being be most
beneficial to the dependants;
(b) provide for any two or more dependants
collectively;
(c) exclude any dependant from participating in any
benefit."

Sub-section (2) was deleted (a new subsection being inserted) by the
1985 Act but a power corresponding to that contained in s.34(2) was
conferred on the Tribunal by an amendment inserting a new s.36(2).
Moreover, a new s.36(3), substantially re-enacting provisions that had
been contained in s.35, empowered the Tribunal (and now empowers the
Registrar) to vary a determination as to the apportionment of moneys
among the dependants of a deceased worker where there has been neglect
of children, a variation in the circumstances of the dependants or any
other sufficient cause. Thus, the extent to which any one of two or
more dependants of a deceased worker is entitled to participate in an
amount paid to the Board under s.34(1) of the 1958 Act was in the
discretion of the Tribunal until 1 December 1987 and then came to be
in the discretion of the Registrar.

5. Presumably pursuant to the power conferred on the Board by s.34(2) of the 1958 Act, the Board ordered, on or about 20 July 1983, that
$16,000 of the $23,940 paid to the Board under s.34(1) be set aside
for Lisa Joan Abela, one of the infant daughters of the deceased.
The balance was credited to a separate account in which, it seems,
Mrs Payne and the three infant children shared (hereafter "the
account"). The account was credited with interest from time to time
and debited with payments out. It is the interest credited to the
account on 10 July 1987 which the respondent Commissioner seeks to
bring to tax by the assessment for the income year ended 30 June 1988.

6. Sub-section (1A) of s.34 of the 1958 Act provided as follows:

" (1A) All moneys paid into the custody of the Board shall
subject to the rules and the provisions of this Act be
invested applied or otherwise dealt with in such manner
as the Board thinks fit for the benefit of the persons
entitled thereto under this Act."

However, the Board's custody of the moneys in the account was affected
by a new s.37 of the 1958 Act inserted by the 1985 Act. The relevant
provisions of the new section are as follows:

" (1) On and from the appointed day ((62) 31 August 1985.), all
moneys paid into the custody of the Board pursuant to this

Division

as in force before that day shall be administered by the
Tribunal in accordance with this Act.
(2) For the purposes of sub-section (1), the moneys
shall be paid to the Tribunal or, where any of the moneys
were before the appointed day invested, the investments
shall be transferred to and vest in the Tribunal.
(3)...
(4) No right interest or claim in or with respect to any
money paid into the custody of the Board pursuant to this
Division as in force before the appointed day shall abate
or be in any way prejudicially affected by reason of this
section."

The "Tribunal" referred to in these provisions was defined to mean the
Accident Compensation Tribunal ((63) s.3(1) of the 1958 Act as
amended.). The Tribunal is the successor to the Board which ceased to
exist on the appointed day ((64) 1958 Act, ss.80, 81.).

7. Section 73(1) of the 1985 Act directed the Tribunal to establish and maintain a fund to be called the Accident Compensation Tribunal
Fund. Section 73(2) directed that there should be paid into the
Tribunal Fund the moneys received by the Tribunal under the 1985 Act
or under any other Act. The other moneys directed to be paid into
the Fund were of various descriptions, for example, contributions
payable by self-insurers and income from investments. The 1987 Act
specifically added "payments made under section 34 of the Workers
Compensation Act 1958" to the list of payments to be paid into
the Tribunal Fund ((65) s.73(2)(ab) of the 1985 Act.). The Registrar
was then substituted for the Tribunal as the authority charged with
responsibility for administration of the Tribunal Fund. The Tribunal
Fund is a mixed fund and payments into that fund lose their identity in
the mass. Included in that fund were the moneys standing to the credit
of the account.

8. The powers of the Registrar (previously the Tribunal) in relation to investment of the Tribunal Fund are set out in s.73(4) of the 1985
Act which authorizes the Registrar to invest money in the Tribunal
Fund in any manner which is approved by the Treasurer. Section 73(3)
of the 1985 Act prescribes the payments which may be made out of the
Tribunal Fund:

"(a) payments directed by order of the Tribunal to be
paid out of the Fund under this Act or the Workers
Compensation Act 1958;
(aa) any amounts payable in respect of money borrowed under
section 51C;
(ab) any payment authorised under section 131 or 132;
(ac) any payment authorised under section 35 or 36 of the
Workers Compensation Act 1958;
(b) any payment required or authorized to be made or
which is for or towards the costs and expenses of or
incidental to the performance of the functions or the
exercise of the powers of the Tribunal or staff of the
Tribunal;
(c) any other costs and expenses incurred by the Tribunal
or Registrar under this Act or any other Act;
(d) any amounts payable in respect of remuneration,
allowances and pensions under section 45 or 50A and
any other payment required or permitted to be paid out
of the Fund by or under any other Act; and
(e) any payment required or authorized to be made out of
the Fund by sub-section (4) or (5)."

The Tribunal Fund is thus available to meet any of the debts or
payments prescribed by s.73(3).

9. However, the 1958 Act specifically authorizes the Registrar to determine the application of money which, having been received by the
Board under the 1958 Act, became part of the Tribunal Fund. Section
35(1) of the 1958 Act provides:

" Except as otherwise provided in section 34, any amount
of money administered by the Registrar under this Act may
be invested, applied or otherwise dealt with in any manner
that the Registrar thinks fit for the benefit of the person
entitled to that money."

Pursuant to this provision, the Registrar can apply moneys for the
benefit of dependants by appropriating moneys in the Tribunal Fund for
payment to or on behalf of, or to be held on a particular trust for, a
dependant or group of dependants. But, unless and until money is so
applied, the assets representing compensation paid to the Board under
s.34(1) of the 1958 Act remain part of the Tribunal Fund.

10. Further provisions governing the Registrar's administration of moneys paid to the Board as compensation appear in s.35 of the 1958
Act which provides, inter alia -

" (2) The Registrar shall not in administering any amount
of money under this Act be bound by any law relating to the
administration of trust funds by trustees but shall act in
good faith.
(3) (repealed)
(4)...
(5) All expenses incurred by or on behalf of the
Registrar in the administration of any amount of money
under this Act shall be paid by the Registrar out of the
Tribunal Fund."

The terms of s.35(2) follow the provisions previously applied to the
Board by s.39 of the 1958 Act. The Registrar is governed by similar
provisions contained in s.131(2) of the 1985 Act in respect of his
administration of any amount of money being administered under the
1985 Act. The duty cast upon the Registrar is, as we shall see,
different from the duty which equity imposes on the trustees of a fund
for the benefit of beneficiaries.

11. Section 36(1) provides:

" The Registrar may on the application of any person on
whose behalf any amount of money is administered under this
Act determine any dispute in relation to the
administration."

The Tribunal nevertheless possesses a supervisory power, for s.36(5)
provides:

" Any person who objects to any determination made by the
Registrar may appeal to the Tribunal which may make a new
determination."

The scope of the disputes falling within this provision may be open to
argument but, whatever that scope may be, the sub-section provides for
the determination of disputes by a statutory authority, not by a court
of equity.

12. In this statutory context, the question is whether the statute imposes on the Registrar the character of a trustee of compensation
payments "for the benefit of the person entitled to that money" (to
adopt the language of s.35(1)), "the person" presumably comprehending,
where applicable, all the dependants of a deceased worker. Although
the language of s.35(1) might be taken to suggest that dependants are
beneficiaries of a trust, the appellant submits that the statutory
provisions imposing obligations on the Board, the Tribunal and the
Registrar create obligations of the Crown which should not be seen as
the obligations of a true trustee unless the statute clearly makes
them so ((66) Kinloch v. Secretary of State for India (1882) 7
App Cas 619; Tito v. Waddell (No.2) (1977) Ch 106, at pp.211-237; New
South Wales v. The Commonwealth (No.3) [1932] HCA 12; (1932) 46 CLR 246, at pp.262,
268; Aboriginal Development Commission v. Treka Aboriginal Arts
and Crafts Ltd. (1984) 3 NSWLR 502.). This approach is explained
by Lord Diplock in Town Investments Ltd. v. Department of the
Environment ((67) [1977] UKHL 2; [1977] UKHL 2; (1978) AC 359, at p.382.):

"(E)ven where the person to be benefited is a subject, the
use of the expression 'in trust' to describe the capacity
in which the property is granted to an officer of state is
not conclusive that a trust in private law was intended;
for 'trust' is not a term of art in public law and when
used in relation to matters which lie within the field
of public law the words 'in trust' may do no more than
indicate the existence of a duty owed to the Crown by the
officer of state, as servant of the Crown, to deal with
the property for the benefit of the subject for whom it is
expressed to be held in trust, such duty being enforceable
administratively by disciplinary sanctions and not
otherwise".

This approach to the construction of a statute may be valid even where
the duty is imposed on an officer who is not an "officer of State". A
statute which imposes a duty on a public authority charged with the
performance of public functions and holding and administering property
may not give rise to a trust for the benefit of the individuals who
will profit from performance of the duty, whether or not the authority
is an emanation of the Crown ((68) Skinners' Co. v. Irish Society
(1845) 12 Cl. and F.425, at pp.488-489, 490 (8 ER 1474, at pp.1500,
1501); Swain v. The Law Society (1983) 1 AC 598, at p.618.). In the
end, however, the question is one of statutory construction: if the
statute vests property or provides for the vesting of property in one
person and requires that person to apply the property for the benefit
of another or for the benefit of a class, does the statute intend the
property to be held in trust for the other or for the class? A
statutorily created trust may not necessarily exhibit all the features
of a trust for beneficiaries created by a settlor of property ((69)
Ayerst v. C. and K. (Construction) Ltd. (1976) AC 167, at p.178.),
but the statutory intention to create a trust must nevertheless appear
in the terms of the statute. In our opinion, the relevant statutory
provisions in this case are inconsistent with the notion of a trust for
the dependants as beneficiaries. There are several indicia which lead
to this conclusion.

13. Section 34 itself reveals the policy underlying the provisions governing administration of compensation payments. In the form
introduced by the 1985 Act, compensation payments must be paid to the
Tribunal (now to the Registrar) when, inter alia, the person entitled
is under the age of 18 years or, in the case of compensation for a
worker's death, the person is over the age of 18 years (unless the
Tribunal otherwise determines) or, in any case, where the Tribunal
"considers that it would be in the best interests of the worker". The
purposes of requiring administration by the Tribunal (now by the
Registrar) seem to be the protection of the person or persons entitled
against improvidence on their part or against the incursions of
creditors and, where compensation payments are to be allocated amongst
two or more dependants, the determination of the amount and manner of
application of the money available for distribution. The scheme of
the provisions following s.34(1) is that compensation payments are not
within the disposition of a dependant or class of dependants until the
Registrar applies the Tribunal Fund by paying money to, or by creating
a trust for the benefit of, that dependant or class of dependants.
The Registrar is not required to pay money into the hands of a
dependant; the money may be applied by defraying the cost of services
to a dependant, for example, by paying school fees. In that way, the
protective purposes of s.34 may be met ((70) See In re Coleman; Henry
v. Strong (1888) 39 ChD 443, at p.451; In re Bullock; Good v.
Lickorish (1891) 60 LJ Ch 341.). Family disputes can be resolved by
determinations made by the Registrar, or by the Tribunal on appeal, as
to whom money should be paid, how much and when. At the same time,
dependants are in a position to seek judicial review of a refusal by
the Registrar to pay them their "entitlements" when payment is
appropriate in exercise of the statutory discretion which the Registrar
possesses.

14. If it were right to regard the Registrar as holding compensation payments in trust for beneficiaries being those entitled under the
1958 Act, a court of equity would control the investment of the
compensation payments, requiring the Registrar to exercise his
investment powers "in the best interests of the present and future
beneficiaries of the trust, holding the scales impartially between
different classes of beneficiaries" ((71) Cowan v. Scargill (1985)
Ch 270, at pp.286-287.). The limitations which equity would place on
the exercise of a trustee's power to invest are inconsistent with the
broad discretion conferred on the Registrar by s.35(1) of the 1958 Act
and s.73(4) of the 1985 Act. If it were right to regard the Registrar
as holding compensation payments in trust for those entitled under the
1958 Act, the jurisdiction of equity would extend to the enforcement of
their respective entitlements. If the Registrar were a true trustee of
a compensation payment, it would be the duty of the Registrar as
trustee to pay or apply on demand the amount to which a dependant was
or the dependants as a class were entitled provided the dependant was
or all the dependants in the class were sui juris and all consented
((72) In re Marshall; Marshall v. Marshall (1914) 1 Ch 192; In re Smith;
Public Trustee v. Aspinall (1928) Ch 915.). But that would nullify
the effect of s.34(1) which, as it now stands, contemplates that all
compensation payments in respect of the death of a deceased worker
will be administered by the Registrar. Presumably, if the Registrar
were a true trustee, the powers of the Registrar under s.36(2) and (3)
would be construed as trust powers, so that the dependants would be
entitled equally to the compensation payment in default of any
exercise by the Registrar of the power to apply the compensation
payment in some other way ((73) Queensland Trustees Ltd. v.
Commissioner of Stamp Duties [1952] HCA 52; (1952) 88 CLR 54, at p.63.). Or a
dependant, complaining of a failure by the Registrar to exercise his
discretion under s.36(2) or (3), could apply to a court of equity for
an order directing the Registrar to consider an exercise of the power
or an order appointing a new trustee or, perhaps, an order directing
the distribution of compensation payments among the dependants of the
particular deceased worker according to the court's selection after
inquiry ((74) See McPhail v. Doulton [1970] UKHL 1; (1971) AC 424, at p.457.). The
existence of such an equitable jurisdiction seems quite inconsistent
with the creation of a right of appeal to the Tribunal from any
determination made by the Registrar under s.35 of the 1958 Act.

15. Moreover, s.35(2) of the 1958 Act expressly releases the Registrar from "any law relating to the administration of trust funds". It is
difficult to construe the 1958 and 1985 Acts as intending to create a
trust when the foundation of any trust - the law which imposes the
duties of a trustee - is thus removed. Section 35(2) exposes the true
character of the Registrar's discretionary powers: they are statutory
powers amenable to judicial review but not amenable to control by a
court of equity. It is immaterial that the Registrar, though
compensation payments are paid to or are under the control of or are
vested in him, has no beneficial interest in those moneys. As the
Privy Council said in Commissioner of Stamp Duties (Qld) v.
Livingston ((75) [1964] UKPC 2; (1965) AC 694, at p.712.) in reference to assets in
the hands of an executor of an unadministered estate:

"When the whole right of property is in a person, as it is
in an executor, there is no need to distinguish between the
legal and equitable interest in that property, any more
than there is for the property of a full beneficial owner.
What matters is that the court will control the executor in
the use of his rights over assets that come to him in that
capacity; but it will do it by the enforcement of remedies
which do not involve the admission or recognition of
equitable rights of property in those assets. Equity in
fact calls into existence and protects equitable rights and
interests in property only where their recognition has been
found to be required in order to give effect to its
doctrines."

It is erroneous to conclude that, because property is held by one
person but the fruits are ultimately to be enjoyed by others, there
is a relationship of trustee and beneficiary between the holder of
the property and those who will ultimately receive it ((76) Ayerst v.
C. and K. (Construction) Ltd. (1976) AC, at pp.177- 178.). When
the remedies of those entitled to benefit from property are statutory,
equity does not need to call an equitable interest into existence to
control the administration of the property by the person in whom it is
vested.

16. The dependants of a deceased worker are not without remedy against the Registrar if the Registrar unjustifiably refuses to pay money
to which, under the 1958 Act or the 1985 Act, the dependants are
"entitled". The scheme of both Acts is to provide administrative
machinery for the payment of compensation, for the investing of
compensation payments until the time for payment arrives, for the
distribution among dependants of the sums available for distribution
and for the payment of the respective amounts to which dependants are
entitled. The administrative character of the scheme is manifested
by the making ((77) pursuant to s.80 of the 1985 Act.) of the
Accident Compensation Tribunal (Workers Compensation) Rules 1986 which
apply to compensation paid under the 1958 Act. Regulation 53 provides,
inter alia:

" (1) Where a payment is made into the Tribunal Fund in
the case of the death of a worker -
...
(d) if the Tribunal has apportioned the award moneys
between dependants, the respective amounts must
be separately recorded and administered by the
Tribunal; and
(e) any person entitled to share in the award moneys
or having an interest as guardian or the like in
relation to a dependant may apply to the Tribunal
giving at least five days notice in writing to all
others concerned, for an order to vary or create or
otherwise deal with an apportionment of the moneys
between the dependants; and
(f) any application for apportionment or variation of
apportionment must be made on reasonable notice to
all persons who might be affected thereby.
(2) Where money has been paid into the custody of the
Tribunal, the Registrar must pay it out to or on behalf of
the person entitled to it in such manner and circumstances
as the Tribunal may direct pursuant to section 35 of the
(1958) Act.
(3) Any person entitled to share in the award moneys may
apply informally for payment out of any part of the money,
giving such particulars as will enable the Tribunal to
exercise its discretion in the proper administration of the
moneys and, subject to compliance with such requirements,
by way of security or other safeguards, as the Tribunal may
stipulate for the protection of the interests of any other
dependants, the Tribunal may grant such an application.
(4)...
(5) Moneys in the custody of the Tribunal standing to
the credit of a person who has not made application for any
payment therefrom for a period of at least ten years, and
has not been in communication with the Tribunal during that
time, may be transferred out of the name of that person
and into a fund known as the Unclaimed Moneys Fund to be
maintained by the Tribunal and invested in like manner to
the other monies administered by the Tribunal; provided
that if at any later time the person concerned communicates
with the Tribunal with satisfactory proof of identity, the
Tribunal must transfer out of the Unclaimed Moneys Fund to
the credit of that person the appropriate sum plus accrued
interest, to be administered in the usual manner."

In addition to these provisions, a specific duty is imposed on the
Registrar to pay out a dependant where only a small amount remains to
be administered. Section 35(4) of the 1958 Act provides:

" If the amount of money administered by the Registrar on
behalf of any person becomes less than an amount of money
determined by the Tribunal the amount shall be paid out to
that person."

A dependant may apply for payment in accordance with these Rules but,
irrespective of the procedure prescribed by the Rules, the only
opening through which money may lawfully pass from the Tribunal Fund
to a dependant is the Registrar's exercise of the powers conferred on
him by s.35(1) ((78) The powers conferred by s.36(2) and (3) may
supplement or, perhaps, be the relevant powers in particular cases.).
According to the circumstances, the Registrar may be under a duty to
exercise those powers by paying money to a person entitled but that
duty is not imposed by equity. The duty flows from the purpose for
which the powers were conferred, namely, to benefit those who are
entitled to the compensation paid. And, if there be any dispute in
relation to administration of money being administered under the 1958
Act, s.36 prescribes the forum by which that dispute is to be
determined. Provided the powers conferred on the Registrar and the
Tribunal are exercised bona fide for the purposes for which they were
conferred, no jurisdiction other than that created by the 1958 Act and
the 1985 Act can be invoked to enforce a dependant's entitlement ((79)
cf. Barraclough v. Brown (1897) AC 615, at p.622; Stevens v. Jeacocke
(1848) 11 QB 731, at p.741 [1848] EngR 314; (116 ER 647, at p.652); Reg. v. County
Court Judge of Essex (1887) 18 QBD 704, at p.707.). If the powers
are not so exercised, mandamus and certiorari lie. But a dependant has
no entitlement to payment from the Tribunal Fund outside the 1958 and
1985 Acts.

The allocation of interest to the account

17. The balance sheet of the Tribunal as at 30 June 1987 shows that the total assets of the Tribunal were $118,577,200, of which
$114,878,200 consisted of "beneficiary fund investments". The income
and expenditure account for the year ended 30 June 1987 shows that the
income in respect of beneficiary fund investments was $15,848,100, all
of which was available for distribution. However, the statement of
agreed facts in this case reveals that some expenses "were paid from
the income from the Compensation Moneys prior to any distribution of
that income to the beneficiaries".

18. The statement of agreed facts shows that, on 10 July 1987, the moneys derived from investments during the year ended 30 June 1987
were allocated to the accounts of beneficiaries "pro rata in
accordance with the following practice:

(i) The total amount so allocated was divided into 12
equal parts one for each month of the first year.
(ii) In respect of a part attributed to a particular month
that part was distributed pro rata amongst the
accounts of the persons in respect of whom the
Compensation Moneys had been received by the Tribunal,
each account taking a share proportionate to the
minimum balance standing to the credit of that account
during the month."

The amount so allocated to the account was $2718.69.

19. The respondent Commissioner assessed the Tribunal to tax in respect of the sum of $2718 as tax upon income derived during the
income year ended 30 June 1987. Subsequently a further assessment
was made, assessing the Registrar to tax for the income year ended
30 June 1988 in respect of the sum of $2718, this assessment resting
upon the allocation of a portion of the investment income of the
Tribunal Fund to the account on 10 July 1987. The assessments are
intended to be alternative, not cumulative. Objections to both
assessments were disallowed and an appeal was brought to the Federal
Court. Jenkinson J upheld the assessment of the Registrar to tax in
respect of the year ended 30 June 1988 but allowed the appeal and set
aside the assessment of the Tribunal to tax in respect of the year
ended 30 June 1987. The Registrar appealed to the Full Court of the
Federal Court against his Honour's judgment in so far as it dismissed
his appeal in relation to the 1988 assessment. That appeal was
removed into this Court.

The Income Tax Assessment Act and its application

20. Jenkinson J held that the amount allocated on 10 July 1987 was assessable income in respect of which the Registrar was liable to pay
tax pursuant to the provisions of Div.6 of Pt III of the Income Tax
Assessment Act. The "amounts of compensation" - which we take to be
a shorthand description of the amounts standing to the credit of the
account from month to month on which interest was calculated and
apportioned - were said to be a "trust estate" within the meaning of
that expression in that Division.

21. For the purposes of the Income Tax Assessment Act, s.6(1) defines the term "trustee" as follows:

"'trustee' in addition to every person appointed or
constituted trustee by act of parties, by order, or
declaration of a court, or by operation of law, includes -
(a) an executor or administrator, guardian, committee,
receiver, or liquidator; and
(b) every person having or taking upon himself the
administration or control of income affected by any
express or implied trust, or acting in any fiduciary
capacity, or having the possession, control or
management of the income of a person under any legal
or other disability".

A "trust estate" for the purposes of Div.6 of Pt III of the Income Tax
Assessment Act must bear a corresponding meaning, that is, property
of any kind held or controlled by a trustee in one or other of the
capacities prescribed by the definition. In Manning v. Federal
Commissioner of Taxation ((80) [1928] HCA 9; (1928) 40 CLR 506, at p.509.), Knox
CJ said in reference to the definition of "trustee" in the Income Tax
Assessment Act 1922-1925 (Cth):

"Wide as this definition is, it requires at least as an
essential ingredient in the position of 'trustee' under the
Act the existence of a fiduciary obligation towards some
other person. The existence of a fiduciary obligation to
another person must, I think, always involve a liability to
account at the instance of that other person, and if I am
right in thinking that the gift of income to the appellant
involves no such liability it seems to me to follow that
she is not a trustee of the income within the meaning of
the Act."

The applicability of this observation to the Income Tax Assessment Act
1936 must be tested, of course, by reference to the entirety of that
extensive legislation. But we see no reason to treat the observation
as inapplicable to the present definition of "trustee". The opening
words of the definition speak of a trustee in the ordinary sense of a
person who holds property on trust. Paragraph (a) comprehends persons
who, whether or not they hold the relevant property, have control over
it and owe a fiduciary duty to another in exercising that control.
Paragraph (b) also comprehends persons who owe a fiduciary duty, but
the duty must relate to the administration or control of relevant
property.

22. The trust which Jenkinson J held to exist and to attract the application of Div.6 of Pt III of the Income Tax Assessment Act was
not a trust for the benefit of the dependants. His Honour held it
was a trust for statutory purposes, having the same character as the
money which was described in Harmer v. Federal Commissioner of
Taxation ((81) [1991] HCA 51; ; (1991) 173 CLR 264.) as being held on a trust for
statutory purposes. In Harmer, the Court referred to Fouche v. The
Superannuation Fund Board ((82) [1952] HCA 1; (1952) 88 CLR 609, at p.640.) as a
precedent for attributing that character to the fund in question.

23. In this Court, the Commissioner has placed some reliance upon Fouche and Harmer in order to characterize the compensation payments
being administered by the Registrar as trust estate of which the
Registrar was the trustee. The notion of a trust for statutory
purposes needs some analysis and it gives rise to the question whether
the trustee of such a trust is a "trustee of a trust estate" for the
purposes of Div.6.

24. The relevant claim in Fouche was a claim by the Superannuation Fund Board against individuals who had previously been members of the
Board and who, in breach of their duty, had authorized the laying out
of the Board's money on a hazardous investment. The question was
whether the Board could seek an equitable remedy against former
members on the footing that the administration of a trust fund was
involved. The Court resolved that question in favour of the Board.
But the Court said ((83) ibid.):

"We do not think it necessary to consider ... the question
whether the individual corporators were, in any sense or
for any purpose, to be regarded as trustees. Nor do we
think it relevant to inquire whether they owed any and what
duty to the contributors to the fund, whom the learned
Chief Justice regarded as beneficiaries under the trust.
We do not think, indeed, that the contributors are
beneficiaries in the proper sense: they have, of course,
an interest in the trust fund which would probably give
them standing in a court of equity, but they have not such
a beneficial interest in the fund as has an ordinary cestui
que trust. The trust is not a trust for persons but for
statutory purposes."

In using the term "trust for statutory purposes", their Honours
were concerned to identify the terms on which the Board held the
Superannuation Fund. The fiduciary duties of the Board were stated
in reference to the Fund as an entirety but not in reference to the
amounts received from or in respect of individual contributors and
paid into the Fund. Although the contributors did not acquire the
beneficial interest of a cestui que trust in the Fund, their Honours
thought that the contributors' interest in its proper administration
might give them standing to invoke the jurisdiction of equity if
the Board misapplied the Fund by disbursing money from it without
authority. The Board had a fiduciary duty to perform in administering
the Fund, similar to the duty of a trustee. That duty was stated to
be "a duty of reasonable care - the care which an ordinary prudent man
of business would take" ((84) ibid., at p.641.). In the present case
the Legislature, perhaps conscious of the decision in Fouche, released
the Registrar in relation to the administration of "any amount of money
under this Act" (that is, the 1958 Act) from the duties imposed by the
law relating to the administration of trust funds and imposed on him
merely a requirement to act in good faith: s.39 of the 1958 Act,
s.35(2) of the 1958 Act as amended by the 1985 Act and s.131 of the
1985 Act as amended by the 1987 Act. Whether or not this provision
left the Registrar under a fiduciary duty in relation to the
administration of the Tribunal Fund, it is clear from this provision
and the other statutory provisions to which reference has already been
made that the Registrar was under no fiduciary duty in relation to
compensation moneys paid under s.34(1) of the 1958 Act. The duty to
invest and the duty to apply compensation moneys for the benefit of
dependants were governed exhaustively by statute.

25. In Harmer, the question in issue was the character of moneys paid into court by a debtor in an action between competing creditors and
paid out to solicitors as trustees to invest the moneys pending the
determination of the competing claims. The Court said ((85) (1991)
173 CLR, at p.274.):

"The moneys paid into court were not themselves the subject
matter of dispute but were held to satisfy any order,
including any order for costs, made by the court consequent
upon its determination of those conflicting claims and
counterclaims. Once the moneys were deposited with the
Building Society in the names of the appellants holding as
trustees, the moneys were held by them in that capacity to
be dealt with in accordance with the order of the court and
not otherwise. It is unnecessary to consider whether the
contingent interests of the claimants in the moneys paid
into court could be aggregated into a totality of
beneficial ownership or whether the powers of the Supreme
Court to make orders affecting the moneys, including orders
as to costs, meant that one of the elements of an ordinary
non-purpose trust was lacking. It suffices to say that
the trust upon which the moneys were held was a trust for
statutory purposes ((86) See Fouche v. Superannuation Fund Board
(1952) 88 CLR, at p.640.) and that the legislative
provisions, including Rules of Court, applicable to govern
the payment of the moneys into court and their subsequent
application effectively overrode any need of that element."

The fact which attracted the description of a trust for statutory
purposes was that the trustees were to deal with the moneys "in
accordance with the order of the court and not otherwise". In New
South Wales v. The Commonwealth (No.3) ((87) (1932) 46 CLR, at
p.268.) Starke J was unwilling to regard a court as a fiduciary in
respect of moneys paid into court by suitors. But in Harmer it was
accepted that the money which had been paid out to solicitors "as
trustees" to invest was held on a trust of some kind, the only question
being whether there was no beneficiary "presently entitled" for the
purposes of s.97(1) of the Income Tax Assessment Act.

26. The question in the present case is not whether the Registrar holds the Tribunal Fund on trust for statutory purposes or is under a
fiduciary duty in respect of that Fund but whether the Registrar holds
a compensation payment in trust for the dependants of a deceased
worker or is under a fiduciary duty to those dependants in respect of
that money. The assessments against the Tribunal and the Registrar
fasten on the income attributed to the amounts appearing in the books
of the Tribunal from time to time as standing to the credit of the
account. For the reasons stated, we are unable to regard that income
as "income of a trust estate" because we do not regard the amounts
standing to the credit of the account as a "trust estate" for the
purposes of Div.6, the dependants' rights being statutory. There
being no trust estate of the kind on which the Commissioner has
relied, the interest attributed to the amounts standing to the credit
of the account is not "income of a trust estate" within the meaning of
that term in Div.6.

27. We were invited to say whether, if the allocation to individual accounts of the accretion from investment of the Tribunal Fund were
not assessable income falling within Div.6, the aggregate of the
accretion might itself be assessable income in the hands of the
Tribunal (in the 1987 year) or the Registrar (in the 1988 year). That
invitation must be declined. If the Tribunal Fund were held by the
Registrar as a fiduciary or "on trust for statutory purposes", the
Registrar's equitable duty would be to apply the Tribunal Fund in
accordance with the Act and, in particular, in accordance with s.73(3)
of the 1985 Act. Even if dependants were held to have a sufficient
interest to enforce such an equitable duty, they would not be held to
have any beneficial interest in the Tribunal Fund ((88) Like the
members of a company being wound up: In re Calgary and Edmonton Land
Co. Ltd. (1975) 1 WLR 355, at p.359.). It would then be a question
of some difficulty whether the provisions of Div.6 (or at least the
provisions of ss.99 and 99A) apply to the income of purpose trusts as
distinct from the income of trusts for the benefit of beneficiaries.
That question was not argued. In practice, of course, the income of
valid purpose trusts would often be exempt income under s.23(e) or (j)
and the occasions when Div.6 might apply to the income of a purpose
trust do not appear to have arisen for consideration. We would not
answer the question whether the receipt of income from the entirety of
the Tribunal Fund is assessable in the hands of the Registrar. That is
an issue which ought to be determined only when it is necessary to
decide it.

28. We would set aside the assessment in respect of the 1988 year because it is not founded on income of a trust estate within the
meaning of that term in s.99. Accordingly we would allow the appeal,
set aside the judgment of Jenkinson J and in lieu thereof allow the
Registrar's appeal against the Commissioner's refusal to allow the
Registrar's objection to the assessment in respect of the income year
ended 30 June 1988.

29. It is unnecessary to consider the arguments based on s.23(d) of the Income Tax Assessment Act and on s.114 of the Constitution that
were advanced to challenge the assessments. Nor do we find it
necessary to determine whether, if the Registrar were a trustee of
compensation payments for the persons entitled thereto, the Registrar
might be outside the reach of the Income Tax Assessment Act on the
ground that he is an emanation of the Crown.