Priest, Phillip --- "Commonwealth places and state revenue" [1997] LawIJV 49; (1997) 71(2) The Law Institute Journal 53

• Worker's compensation and disease.
• Fact finding by appellate court.
• Stamp duty levied by one state on another.
• Perjury and inconsistent verdicts.
• Tax and dominant purposes of a scheme.

COURTS AND TRIBUNALS (HIGH COURT JUDGMENTS)- Commonwealth places and state revenue

by PHILLIP PRIEST

 Allders International Pty Ltd v Com¬missioner of State Revenue (unreported, 14 November 1996, FC 96/035).

Section 52(i) Constitution provides:

"52. The Parliament shall, subject to this Constitution, have exclusive power to make laws for the peace, order and good government of the Commonwealth with respect to:

(i) The seat of government of the Com¬monwealth, and all places . . . acquired by the Commonwealth for public purposes."

In 1961 the Commonwealth of Australia acquired land for use as the Melbourne Airport (Tullamarine). The Federal Airports Corporation Act 1986 established the Federal Airports Corporation (the FAC) and vested the relevant land in the FAC to be held "for and on behalf of the Com¬monwealth". Thus it is a "place acquired by the Commonwealth" for a public pur¬pose within s52(i).

Allders, a private corporation, took an eight year lease from the FAC to operate a duty free store. The lease was presented to the respondent for stamping at nominal duty. However, the respondent took the view that the lease was fully dutiable under the Stamps Act 1958 (Vic).

Section 4(1) Commonwealth Places (Application of Laws) Act 1970 (Cth) applies the law of a state to commonwealth places within the state, but that sub-section is expressed not to "have effect so as to impose any tax" (see s4(5)(a)).

By an originating motion in the Sup¬reme Court Allders sought a declaration that the lease was not dutiable by reason of s52(i). Harper J dismissed the claim, concluding that the Stamps Act was not a law with respect to the "land itself' i.e. the commonwealth place. Before an appeal could be heard the matter was removed to the High Court under s40(1) Judiciary Act 1903 (Cth).

A preliminary point concerning the correctness of the High Court's previous decision in Worthing v Rowell and Muston Pty Ltd [1970] HCA 19; (1970) 123 CLR 89 was disposed of by the Court refusing leave to argue that Worthing was wrongly decided.

The respondent argued that the proper characterisation of the Stamps Act was that it was not a law with respect to a place at all, but a law with respect to instruments. This argument was rejected by the major¬ity (Brennan CJ and Gaudron J separately, and McHugh, Gummow and Kirby JJ jointly; Dawson and Toohey JJ separately dissenting). It was held that the lease by the FAC to the appellant did not mean those leased premises ceased to be a place "acquired by the Commonwealth for public purposes". The state Act purported to regulate conduct within a commonwealth place. Therefore, although it might thus arguably be a law with respect to both places and instruments, "the Stamps Act is a law `with respect to' a Commonwealth place, so far as it purports to levy duty on an instrument by reference to the features of that place". The appeal was accordingly allowed.

Worker's compensation and disease.

 Zickar v MGH Plastic Industries Pty Ltd (unreported 14 November 1996, FC96/036).

On 15 October 1987 the appellant collapsed at work. A cerebral aneurism (a congenital weakness) had ruptured, result¬ing in severe brain damage. It is unlikely he will return to work.

A claim for compensation was made under the Workers Compensation Act 1987 (NSW). In the NSW Compensation Court it was held that an injury had occurred in the appellant's brain when the aneurism ruptured, and that the rupture was not a disease. Compensation was awarded without deciding whether there was any causal relationship between the appellant's employment and the rupture. It was sufficient that it had occurred at work.

By a majority the NSW Court of Appeal allowed an appeal to that Court. The High Court, however, restored the decision of the Compensation Court.

It was held that the appellant had suffered "injury" within the meaning of s4(a) of the Act, in that he had suffered "personal injury arising out of or in the course of employment". Before he was entitled to compensation the appellant did not have to bring himself within s4(b) of the definition of "injury" which includes "(i) a disease which is contracted by a worker in the course of employment and to which the employment was a contri¬buting factor; and (ii) the aggravation, acceleration, exacerbation or deterioration of any disease, where the employment was a contributing factor to the aggravation" etc.

Fact finding by appellate court.

 Zuvela v Cosmarnan Concrete Pty Ltd (unreported, 8 November 1996, FC 96/037).

The action the subject of this appeal concerned injury suffered by the appellant at work. Of critical importance to the question of liability was the appellant's understanding of instructions he had been given as to how he was to perform his duties.

In this case the High Court held that when an appellate court "is reviewing by way of rehearing the findings of fact made by a trial judge who has had the advantage of hearing and observing the witnesses, the Court of Appeal should not treat the appeal as a hearing de novo". If a relevant fact is an inference to be drawn from the established facts, then "the Court of Appeal may be in as good a position as the Judge at trial". However, in this case the appel¬lant's relevant understanding "was convey¬ed by his oral testimony and the demean-our he exhibited - including the gestures and expressions accompanying the oral testimony". The trial judge had an advantage in viewing the witness that the NSW Court of Appeal did not.

Stamp duty levied by one state on another.

 State Authorities Superannuation

Board v Commissioner of State Taxation (WA) (unreported, 21 November 1996, FC 96/038).

The State Authorities Superannuation Board (the SASB) was constituted under Superannuation Administration Act 1987 (NSW). By s4(2) of that Act the SASB "is, for the purposes of any Act, a statutory body representing the Crown". According to the Interpretation Act 1987 (NSW) the refer¬ence to "the Crown" is a reference to the Crown in right of New South Wales, and "Act" means an Act of the NSW legislature.

In 1991 the SASB entered a contract to purchase an undivided half interest in a Perth property. The Commissioner of State Taxation (WA) levied stamp duty on the agreement under the Stamp Act 1921 (WA). In question on this appeal was the validity of that assessment of stamp duty. The SASB argued that the WA Stamp Act did not, as a matter of construction, apply to it because it represents the Crown in right of New South Wales. In rejecting the SASB's appeal, the majority (Brennan CJ, Dawson, Toohey and Gaudron JJ, with whom McHugh and Gummow JJ agreed in the result) said:

"Whether or not the SASB is the Crown for the purpose of determining liability for the payment of stamp duty under the Stamp Act is immaterial because, even if it is, the provisions of the Stamp Act bind it, save for any relevant exemptions ...

Perjury and inconsistent verdicts.

Mackenzie v R (unreported, 3 December 1996, FC 96/039).

Mackenzie, a solicitor, was tried and convicted on two counts of perjury under s327 Crimes Act 1900 (NSW). He was acquitted of two alternative counts under

s328. It was submitted that the verdicts were inconsistent, resulting in convictions that were unsafe and unsatisfactory. Addit¬ionally, the appellant complained of lack of proper direction by the trial judge con¬cerning the difference between evidence which is knowingly false and that which is mistakenly false. The appellant failed on the first point, but succeeded on the second.

Gaudron, Gummow and Kirby JJ, in dealing with inconsistent verdicts, spoke of "the respect due to the jury as the `constitutional' tribunal for resolving dis¬puted factual questions". Their judgment is noteworthy because they isolate six general propositions that can be drawn from the cases dealing with the topic of in-consistent verdicts. They came to the conclusion here that although "at first sight, the differentiation between the jury's verdicts appears a little difficult to understand", nevertheless they were "not convinced that the verdicts are so repug¬nant and irreconcilable that they invite, or require, intervention".

Concerning the trial judge's directions with respect to perjury, the Court said of a redirection:

"It did not come to grips with the simple point which was raised . . . This was, that the jury should have been told, with proper reference to the evidence, that the prosecution had to establish that the statements made were false and that, when made, the accused knew that they were false or at least did not believe them to be true. The jury should then have been told that, if they concluded that the statements had been made mistakenly, but genuinely believing them to be true, the prosecution would not have established an essential ingredient of the offences charged."

Tax and dominant purposes of a scheme.

Commissioner of Taxation v Spotless Services Ltd (unreported, 3 December 1996, FC 96/040).

In this case the Court examined Part IVA of the Income Tax Assessment Act 1936 (Cth). Spotless had money on deposit in the Cook Islands and, since withholding tax had been paid to the Cook Islands, Spotless claimed to be exempt from pay¬ment of income tax on interest earned.

Whether income tax was leviable depend¬ed on whether the "dominant purpose" of the scheme by virtue of which the money was invested on deposit was to obtain a "tax benefit". The Court concluded that the dominant purpose here was to obtain a tax benefit. Hence tax was payable on interest earned. 

Phillip Priest is a member of the Victorian Bar.