Commissioner of State Revenue v Royal and Sun Alliance Insurance Australia Ltd

SUPREME COURT OF VICTORIA

COURT OF APPEAL

No. 4415 of 2002

COMMISSIONER OF STATE REVENUE
	Appellant
v.
ROYAL AND SUN ALLIANCE INSURANCE AUSTRALIA LTD.
	Respondent

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JUDGES:	ORMISTON, BATT and CHERNOV, JJ.A.
WHERE HELD:	MELBOURNE
DATE OF HEARING:	24-26 February 2003
DATE OF JUDGMENT:	14 November 2003
MEDIUM NEUTRAL CITATION:	[2003] VSCA 177

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REVENUE – Stamp duties – Stamp duty payable by general insurer pursuant to former Stamp Duties Act 1958 – Meaning of “premium” and “gross premiums” – Whether those expressions included amounts calculated as referable to GST (paid by insurer) paid and payable by insured in consideration of grant or renewal of insurance policies – Whether separate designation of GST on some renewal notices and the like took those sums outside “premiums” – Penalty.

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APPEARANCES:	Counsel	Solicitors
For the Appellant	Ms A. Richards Q.C. Mr P. Solomon	Solicitor for Commissioner of State Revenue
For the Respondent	Mr R.F. Edmonds S.C. Mr M. Richmond	Price Waterhouse Coopers Legal

ORMISTON, J.A.:

This appeal arises out of a notice of an assessment made by the Commissioner of State Revenue on 25 January 2001 served on the respondent Royal & Sun Alliance Insurance Australia Ltd. (“the insurer”), which is said to be an “estimated assessment” made pursuant to s.33 of the Stamps Act 1958 (“the Act”) in respect of stamp duty payable under s.97(2) of the Act by the insurer for the period 1 August 1999 to 31 December 2000. The assessment stated that the duty payable was the sum of $19,454,019.23, of which $1,752,614.32 was said to be “outstanding stamp duty”, upon which a penalty tax at the rate of 10 per cent was added pursuant to s.97(3) of the Act, making a total payable of $1,927,875.75. The insurer lodged a notice of objection pursuant to s.33A of the Act on 23 March 2001. Objection to the assessment was allowed in part on 23 July 2001, whereby the assessment of outstanding or underpaid stamp duty was reduced to $895,097.61 and the penalty was reduced to $90,366.50, making a total payable of $985,464.11. On 17 September 2001 the insurer requested the Commissioner to treat its objection to the assessment as an appeal and to cause it to be set down for hearing in the Supreme Court. That appeal was heard by Byrne, J. who allowed the appeal and set aside the assessment, directing the question of stamp duty and penalty be remitted to the Commissioner for further assessment according to law. It is from that judgment that the Commissioner has appealed to the Court of Appeal.

The issue raised by the appeal may be simply stated, though the background to the appeal is highly complex, in that the Commissioner contends that, upon their proper construction, the words “premiums” and “gross premiums”, as they appear in sub-division 11 of Division 3 of Part 2 of the Act, should be treated as including the amount payable in respect of goods and services tax by the insurer in respect of the supply of “services” under all relevant policies issued by the insurer during the stated period. The first complication arises out of the fact that the relevant monthly returns required pursuant to s.97(2) of the Act covered a period which only partly included a period after the commencement on 1 July 2000 of A New Tax System (Goods and Services Tax) Act 1999 (the “GST Act”) , as well as A New Tax System (Goods and Services Tax Imposition – General) Act 1999, together with a number of related Acts, as they are so confusingly and inconveniently described, whereby the Goods and Services Tax (“GST”) was imposed.[1] A further complication arises from the fact that reliance is placed by the insurer upon the form of certain of its policies and renewal notices, but they were not described in the preliminary documentation, nor have they been provided in full to the Court for the purpose of these appeals. Much evidence was called but little of it was directed, to the extent that it was relevant, to the consequences flowing from the use of the various policies and renewal notices. In the absence of full documentation, the Court has found it exceptionally difficult to reach conclusions as to these matters and that appears to be one reason why the matter was remitted by the trial judge to the Commissioner. As a result this Court has had to consider each form and possible permutation of the forms provided to the Court in their incomplete state.
[1]To add to the confusion policies issued or renewed prior to 1 July 2000 were made subject, in advance, to the payment of the GST in respect of periods of cover as from 1 July 2000: see A New Tax System (Goods and Services Tax Transition) Act 1999.

This appeal was seen to be urgent, but no attempt was made to treat any part of it as a test case or to separate out particular policies or renewal notices for consideration separately from the other business of the insurer. As a result, what was intended to run for one day, ran for three full days in this Court, with extensive submissions dealing with every conceivable issue. While the Court was considering its decision, a bill was introduced into the Victorian Parliament and quickly passed, namely the State Taxation Acts(Miscellaneous Amendments) Act 2003, which dealt retrospectively with the question of the chargeability with stamp duty of the “GST component” of insurance premiums with retrospective effect under both the Act, and the subsequent Duties Act 2000, which has in fact effectively repealed the provisions relating to stamp duty on both insurance policies and generally, with the sole exception that the amending “clause” is stated not to affect “the rights of the parties in the Supreme Court” in the present proceeding: see s.18(4) of the amending Act. In general terms, however, by s.18 of that Act, it is provided that “in ascertaining, for the purposes of the provisions of the … Act … the value of anything or the consideration or premium paid for anything, there is to be no discount for the amount of GST (if any) payable on the supply of that thing”.[2] That amending provision is stated to apply and “must be taken always to have applied” from 1 July 2000[3], so that in effect the amending Act covers the whole of the period from the introduction of the GST to the time when the Stamps Act was repealed on 30 June 2001 and the Duties Act commenced on 1 July 2001. Section 14 of the amending Act amended s.177 of the Duties Act by stating that the word “premium” “also includes any amount in respect of GST on supply to which the insurance relates”. That section, by reason of s.2(2) of the amending Act is “deemed to have come into operation on 1 July 2001”. The consequence is that for all other relevant purposes and for all other parties the word “premium” under both the Act and the later Duties Act is taken to include amounts payable by way of GST. The case is therefore no longer of general interest, nor otherwise relevant to the administration by the Commissioner of either Act. No doubt it is still of significance to the parties to the present proceeding inasmuch as a relatively significant sum of money is in dispute, but, as will be seen, it is now difficult to say that matters of general significance arise in the present proceeding.
[2]That provision forms now sub-clause 1 of clause 19 of Schedule 2 to the Duties Act 2000, which generally contains transitional provisions relating to stamp duties under the Act.
[3]See sub-clause 3 of the inserted clause 19 to Schedule 2 of the Duties Act.

I should explain this a little more, as in the circumstances I do not think it appropriate or necessary for the Court to examine the various complex arguments of the parties in the same detail as would be required if the outcome of this appeal had more general application. In the first place, Parliament has intervened retrospectively to give a meaning to the relevant provisions of the Act which would support the Commissioner’s stance in any other case. The words “premium” and “gross premiums” have each been examined by the parties in great detail, but in circumstances which I find unsatisfactory. The elaborate expert evidence often seems to me to have been directed to limited issues and ones which provide no general assistance in interpreting the language of the Act, although I would not wish to criticise the various witnesses, for it seems that their attention, for better or for worse, was directed to very limited issues. In particular, as will be seen, the expression “gross premiums” has been examined on a very narrow basis, such that the learned judge found it of little assistance, though he has been criticised by the respondent for this conclusion. I am inclined to the view that a careful examination of the history of the section, especially when it was introduced in its original form in 1879 and even when it was reintroduced in not significantly different form in 1978, may well have shown that those drafting the provisions had some specific issue clearly in mind. The expression is commonly used by insurers for a variety of purposes[4]. I mention only the “gross premiums statutes” passed in most states of the United States to tax foreign insurance companies on their income, some of which go back, to my (limited) knowledge, to 1849 in New York.[5] Secondly, the case involves a consideration of GST payable in the period 1 July to 31 December 2000, the first six months of the operation of the GST Act. Since that time there have been, as I would calculate it, some eighteen amending Acts producing a table of amendments which spreads from p.429 to p.445 of the latest print.
[4]On Google website, for example, I obtained “about 20,000” hits for the expression. It is used in the legislation of many countries and it is used for various other purposes and in numerous contexts, but all (it would seem) relating to insurance.
[5]It may be that the 1849 statute did not refer to gross premiums but the 1896 tax laws of that state certainly did: People Ex Rel. Provident Savings Life Assurance Society v. Miller 85 N.Y.S. 468 at 471, 88 App. Div. 218.

There is a further complication. Before Byrne, J. the insurer’s principal arguments as to the meaning of premium and gross premium were rejected not only on the basis of the proper interpretation of those expressions in the Act but on the alternative basis whereby it was contended that the words had a special or trade meaning in the insurance industry which would exclude the GST from the computation of either premiums or gross premiums. The final basis for the respondent’s arguments before his Honour was the only basis upon which the insurer was successful. It depended upon a view of the relevant documents that the insurer had charged a separate amount for GST, which the judge assumed to be the case because of the form of the renewal notices, albeit that no invoices or other relevant documents were tendered. The learned judge sought to apply two recent High Court cases and one Federal Court decision to justify the conclusion that the GST component of its income separately identified in the renewal notices was not part of the gross premiums received for the purposes of the calculation of stamp duty: see the judge’s reasoning at para.[63] and Roxbrough v. Rothmans of Pal Mall Australia Ltd.[6]; Commissioner of State Revenue (Vic.) v. Royal Insurance Australia Ltd.[7] and Commissioner of Taxation v. Century Yuasa Batteries Pty. Ltd.[8] However, on the hearing of this appeal, the respondent insurer did not seek to support the learned judge’s reasoning on this issue but rather, pursuant to a notice of contention, sought to challenge the judge’s findings as to the general and trade meaning of the relevant expressions in the Stamps Act. Consequently, it was the appellant who sought to justify the reasoning of his Honour on these more general issues and it was unnecessary for the appellant to do more than outline the reasons why the judge’s reasons based on the separate designation of GST should not be accepted.
[6](2001) 208 C.L.R. 516.
[7](1994) 182 C.L.R. 51.
[8](1998) 82 F.C.R. 288.

It is necessary then to turn to the matters raised on the appeal and to outline in brief terms the factual basis for it, which is most fully and adequately set out at the beginning of the judge’s reasons.

In the period 1 August 1999 to 31 December 2000 the insurer was registered under s.96 of the Act as a company carrying on assurance or insurance business in Victoria and was accordingly subject to the requirement to lodge returns pursuant to s.97 of the Act. During that period it issued many policies of insurance to persons in respect of property located in, or events occurring within, Victoria. The insurer, in one form or another, introduced into evidence copies of three kinds of insurance policies and renewal schedules said to have been issued during the relevant period, namely the Secure Householders Plain Language Insurance Policy, the Secure Motor Plus Plain Language Insurance Policy and the Secure Business Policy. More will have to be said later about those documents but the following will suffice for the present.

Each of the policies produced was merely a pro forma without completed schedules or the like. In the Secure Householders Plain Language Insurance Policy and the Secure Motor Plus Plain Language Insurance Policy there were clauses said to be representative of the relevant wording used in all policies of the insurer during the relevant period other than in their Secure Business Policies. In the contract between the parties it was provided:

“In the [insurance] contract[9] between you (the insured) and us (Royal and Sun Alliance Insurance Australia Ltd.):
[9]The word “insurance” appeared only in the Secure Householders Plain Language Insurance policies.
§We agree to provide you with the insurance you select, which is shown in your schedule, and in return
§You agree to pay us:
·     Your premium, and
·     Any relevant government charges.
§These two amounts add up to the total amount you must pay.
§You must pay this total amount:
·     When you first take out your policy[10]; and
·     Each year when you accept any offer we may make to renew your policy[11] with us.
·     This is because a renewal is a new contract with us.
·     Please note, your insurance only starts when you pay this total amount unless we agree you can pay by instalments. If you have not paid, you have no insurance.”

In addition and significantly each policy contained a definition of “premium” as meaning “the amount you must pay us for the Insurance you select”.

[10]“Policies” in the Secure Householders Plain Language Insurance Policy.

[11]“Policies” in the Secure Householders Plain Language Insurance Policy.

The Secure Business Insurance Policy form was somewhat different and contained a clause representative of the wording used in the insurer’s policies of that kind during the relevant period, under the heading “Amount To Be Paid”, to the following effect:

“You must pay the amount to Us when You first take out Your Policies and each year when the Policies are renewed. This amount is made up of:
1.       Premium calculated by Us, plus
2.       Fire service levy, if applicable, plus
3.       Statutory charges imposed by Government.”

No definition of “premium” appeared in this policy. There was also evidence of the schedule to the Secure Business Insurance Policy which provided that the particulars of the insurance should include three items being the “premium”, the “F.S.L.” (which is a reference to the fire services levy) and “stamp duty”, with a line thereunder and a figure representing the “TOTAL” payable under the policy. There was no evidence of any similar schedule in the other two policies.

In addition there was evidence before the Court of copies of actual renewal schedules or notices forwarded by the insurer to various named insured parties in relation to each of the three kinds of policy to which I have referred. More often than not they were called “renewal schedules”, but they were in effect notices calling for payment of premiums in return for another year of cover. The first two were accompanied by letters dated 18 April 2002[12], but the subject of both the letter and the renewal schedule in each case were policies which expired during July 2000 and to which the insured was invited to renew their policies commencing in dates in July 2000 and expiring in July 2001. In the renewal schedule for the Secure Householders Extra Policy[13] the amounts payable were designated at the foot of the first page by listing the relevant amounts payable under the categories “Premium”, “Fire Services Levy”, “Goods and Services Tax” and “Stamp Duty”, which is followed by a total “Annual Amount Payable”. In the case of the Secure Motor Plus Policy the request for payment took a similar form except that it also included a reference to no claims bonus and discount and there was, necessarily, no sum included for Fire Services Levy, the total amount being described as the “Annual Premium Payable”. On the second page of each of these schedules, under the heading “Important Information”, this note appeared: “The premium payable under the proposed contract of insurance, inclusive of government charges is the PREMIUM PAYABLE shown”. The renewal schedule for the Secure Business Policy, also put in evidence, was similar on its front page, also excluding any reference to the Fire Services Levy and listing the total as the “Amount Payable”, but the second page was not the same, excluding the “information” about the premium. This obviously was different from the manner in which the policy was designated in the schedule to the Secure Business Policy but the inconsistency was not explained in evidence, and it seems that this was one reason why Byrne, J. remitted the matter to the Commissioner for further assessment.
[12]The only explanation for the inconsistent dates must be that the letters have been stored on a computer and printed out with a modern date, about two months before the hearing before the judge.
[13]It is not entirely clear whether this was a different kind of policy from the other Householders Policy to which I have referred.

The Court was asked to assume that these policies, renewal notices and the like covered the whole range of policies issued or renewed by the insurer during the relevant period. In accordance with the requirements of s.97 of the Act the insurer, as a company registered as carrying on insurance business pursuant to s.96 of the Act, lodged monthly returns with the Commissioner in respect of its insurance business written over that period. However, for reasons which were sought to be explained by several of the insurer’s employees in the course of evidence, it took the view that gross premiums, within the meaning of s.98(1)(a), did not include the amount payable by it as GST with respect to the supply of services under each policy, so that the amounts returned as premiums received excluded the GST element in the price charged for issue or renewal of policies. In due course the Commissioner issued the amended assessment to which I have referred and the various steps took place which led to this appeal coming before the Court.

There was a considerable amount of other evidence both written and oral as to the practices adopted by the insurer with relation to the fixing of premiums and the manner in which it charged those who desired to take out insurance cover and there was also other expert evidence called as to insurance practices generally. It is sufficient at the present stage to describe only a little of that evidence, for much of it seemed directed to accountancy practices and the extent to which expenses such as GST, fire services levy and stamp duty should be included within “premium income” for accounting and taxation purposes. Of the other evidence I should mention that of Mr Brett Ward, the chief actuary of the insurer, who gave an example of the way in which the insurer calculated its premiums and in particular gave an example for a motor vehicle policy. He said that the risk premium was based on two principal factors. The first factor was the claim frequency, expressed as a percentage and based on the chances of claims being made during the policy year. The second factor was the average claim size, calculated in monetary terms. Those two factors were multiplied to give the base risk premium which was the expected cost of small claims under the policy. Then, in calculating what was called the “total risk premium”, monetary factors were ordinarily added for both a large claim allowance and a catastrophe allowance, arising out of events such as hail storms and earthquakes. To this total risk premium there were several loadings added, ordinarily expressed in terms of a percentage, namely one for brokerage, the second for insurer’s expenses, a third for the net cost of reinsurance and the fourth was a profit loading assessed in the example at 5 per cent. When these loadings were added together a figure was produced which Mr Ward described as the “gross premium”. Thereafter, for reasons which were not entirely clear, he redescribed that as the “basic premium” and said that there was added to that stamp duty and the fire services levy, if required, and a sum for GST to produce the total amount payable by the insured.

Another witness gave evidence as to the types of policies, renewal schedules and the like which were issued by the insurer, although for reasons which were unexplained, no invoices were produced. Other expert witnesses who were called, who had experience with other insurers over the years up to the time of their giving evidence, included Robert John Buchanan, Ronald John Farrell and, on behalf of the appellant, Clive Ernest Amery. Strangely, neither the original affidavits and statements of Mr Buchanan and Mr Farrell dealt with the question of “gross premiums” but concentrated on what could properly be described as “premiums” or “premium income”. It was only in two brief supplementary affidavits that they turned to the question of “gross premiums”, as they did also in oral evidence. I shall have to return to their evidence in due course but, at the risk of oversimplifying what they said, they each worked upon the assumption that, as both stamp duty and GST had to be remitted to the relevant taxation authority, each should be excluded from any definition of premiums or gross premiums. Their evidence was also largely directed to what was required by the accounting standards which had been issued by the relevant authority over recent years. For that the judge criticised them, but in turn the respondent has criticised the judge’s assessment of that evidence in the course of their submissions to this Court. A further witness called by the appellant, Professor Clive Graham Peirson, was also criticised by the respondent because he had no relevant experience in the insurance industry, but, as the judge pointed out, he gave careful evidence as to the nature of the various accounting standards and the purposes they were intended to serve.

The issues raised – The Stamp Duties Act provisions relating to insurance

Because the sections have been repealed effectively upon the coming into operation of the Duties Act 2000 and because of the limited significance of the present case, I shall do no more than refer to the principal provisions so as to make some sense of the subsequent discussion. The relevant provisions are more than adequately set out in the judgment of Byrne, J.[14], as is the history of the legislation since 1879 when insurers were first made liable under Heading IV to the Stamp Duties Act 1879 and when duty was levied on the annual licence obtained under the Act based on the total of gross premiums charged during the preceding year. Under the final version of the Stamps Act (Reprint No. 16) stamp duty was not charged pursuant to s.17 of the Act and any heading in what was by then the third Schedule, but under the provisions contained in subdivision 11 of Division 3 of Part 2 of the Act. Insurance companies still had to be registered under s.96 of the Act, but their returns and payments of duty were imposed and controlled in the first place by s.97. By sub-s.(2):
[14][2002] VSC 345.

“A registered company shall … each calendar month after July 1985 –
(a)lodge with the Comptroller of Stamps [deemed then to be the Commissioner] a return in the prescribed form verified in the prescribed manner showing the total amount of all premiums chargeable with stamp duty under this subdivision received[15] by that company during the last preceding calendar month, and
[15]“Received” included “credited or charged” (scil. in the books of account): see s.98(1)(b).
(b)pay in cash to the [Commissioner] as stamp duty on the return an amount equal to 10 per centum of the amount of all premiums chargeable with stamp duty under this subdivision received[16] by that company, during the last preceding calendar month.”
[16]Ditto.

For the purposes of s.97, s.99(1) provided that “the premiums chargeable with stamp duty are all premiums for assurance or insurance business[17] either applicable to –
[17]That expression was defined in s.95 in wide terms, with certain exceptions.
(a) property in Victoria; or
(b)a risk, contingency or event concerning an act or omission that, in the normal course of events, may occur within or partly within Victoria”.

More importantly, premiums were defined for the purposes of the subdivision by s.98, in the following terms:
“(1) For the purposes of this subdivision –
(a)a reference to premiums is a reference to the gross premiums including any commissions or any fire service levies paid or payable in connection with insurance or by an insurer or any other person; …” (Emphasis added.)

It is also useful to note that by sub-s.(2) of s.98:
“A registered company may in a notice or document relating to a premium due or to be paid in respect of any policy –
(a) set out as a separate part of the amount required to be paid –
…..
(ii) in relation to any other premium[18] -
an amount designated as stamp duty being an amount not exceeding 10 per centum of the premium payable; or
[18]Other than premiums for workers’ compensation insurance, as defined. See sub-para.(i) of sub-s.(2)(a).
(b)include in the amount required to be paid an amount on account of stamp duty being an amount not exceeding –
….
(ii)in relation to any other premium[19] –

an amount on account of stamp duty being an amount not exceeding 9.091 per centum of the amount or premium payable –
[19]Other than premiums for workers’ compensation insurance, as defined. See sub-para.(i) of sub-s.(2)(b).
and any amount designated as stamp duty or being amount not greater than 3.382 per centum or 9.091 per centum, as the case may be, of the amount of the premium shall not regarded as part of the premium chargeable with duty under this subdivision.”

The respondent drew attention to the provisions of s.110A which, though not applicable in the case of the insurer itself, provided that the insured was obliged to pay stamp duty on the premium of any insurance policy taken out with an insurance company outside the jurisdiction.
The GST legislation

Before dealing with the judge’s reasons and the parties’ contentions, it is necessary to set out briefly what appears to have been the structure and operation of the GST legislation, especially in the period 1 July to 31 December 2000.[20] On 1 July 2000 that conceptually complex and convoluted legislative scheme came into force, the principal statute for present purposes being the GST Act, although there were some eight other Acts which came into operation at that time including the brief A New Tax System (Goods and Services Tax Imposition - General) Act 1999, as required by s.55 of the Constitution. Although I have a limited understanding of the totality of the scheme, there would seem little doubt that the GST tax was imposed on those who supplied goods and services, rather than on those who purchased or otherwise received them, in contrast to the sales tax payable in various states of the United States of America which is imposed on the purchaser. On the contrary a person who acquires goods, services and the like may in fact obtain a benefit described as an “input tax credit” if the acquirer makes what is called a “creditable acquisition” which in turn requires that a “thing” has been acquired for what is (remarkably) called a “creditable purpose”: see ss.11-20, 11-5 and 11-15.
[20]I shall describe the provisions in operation at that time.

Nevertheless the critical taxing provision, or more precisely the provision which prescribes the obligation to pay, is s.9-40 which states: “You[21] must pay the GST payable on any taxable supply that you make.” The word “supply” is very widely defined in s.9-10 as including not only the supply of goods and of services but also acts such as the provision of information, the grant or transfer of real property or of any other right and even “an entry into … an obligation … to do anything …”. Remarkably, other than saying that the word “supply” is “any form of supply whatsoever”, it is otherwise conceptually undefined. What saves many suppliers from the GST is that it is applicable only to “taxable” supplies, which are defined by s.9-5 to include only supplies for consideration which are “connected with Australia”, in turn defined by s.9-25.
[21]As an example of the convoluted thinking in the legislation this disarmingly simple word “you” is defined in s.195 of the Act in the sense that it says that, if a provision uses that word, “it applies to entities generally unless its application is expressly limited”. But to add confusion to the difficulty the word “entity” is further defined by the section, but not within the section, for it says that it has “the meaning given by s.184-1”, which in turn over a page and a half defines the term by referring to various classes of person, most of which are themselves defined. To add further mystery the definition of “you” contains a footnote to the effect that that word “is not used in provisions that apply only to entities that are not individuals”!

A further critical provision is s.9-70 which provides that the GST payable on a taxable supply “is 10 per cent of the value” of that supply, “value” being further defined in s.9-75 as being the “price” multiplied by 10/11. The word “price” is also defined therein as effectively the amount of any money consideration and/or the market value of any non-money consideration, but “without any discount for the amount of GST (if any) payable on the supply”. In turn “consideration” is defined in s.9-15 as any payment in connection with the supply of anything or in response to or for the inducement of a supply of anything. Clearly enough, then, in the case of the supply of services constituted by an agreement to grant insurance cover, the consideration would be the price payable, at least commonly called the premium, which is payable for the grant of cover or the issue of a policy, excluding, as s.9-75 provides, the amount of GST payable. In addition there is a specific section, substituted as s.78-5 and passed retrospectively in Act No. 177 of 1999, which provides that the value of a taxable supply of an insurance policy should be “worked out as if the price of the supply was reduced by the amount of any stamp duty payable”.

The burden is placed on the taxpayer (“you”) to put in a return pursuant to s.31-5 on a monthly basis (see s.31-10), in a form prescribed under s.31-15 and appearing in regulation 29-70.01(4) of the GST Regulations 1999. But those obliged to pay the GST are entitled to include in their return relevant claims for creditable acquisitions which are called “input tax credits”: see s.11-20. There are complex rules for attribution but, in order to assist those entitled to claim input tax credits, the GST Act requires that “tax invoices” for every taxable supply must be given to every recipient setting out in relevant detail information which the recipient may use in making its own returns: see s.29-70. In consequence, as s.31-5(2) recognises, a return may produce a zero net amount owed by the supplier. It is unnecessary to examine these provisions further other than to say that it by no means follows, therefore, that a supplier in fact pays over to the Commissioner the whole or even a significant part of GST “payable” under the Act, even though that liability must be accounted for in working out the net figure payable. It must also be added that there is no obligation under the GST Act to remit the GST component of any price paid to a supplier, except in the manner I have attempted to describe, and there is therefore no question of any specific sums being held either on trust or in a form which requires GST moneys to be held separately for the purpose of accounting to the Commissioner of Taxation. It should again be noted that there was no evidence that the respondent rendered to each insured party a tax invoice within the meaning of the Act, although properly it should be added that there was nothing to suggest that the respondent insurer had failed to comply with its statutory obligations.

Decision of trial judge

The main issue before Byrne, J. was the meaning to be given to the words “premiums” and “gross premiums” in the relevant sub-division having regard to the definition in s.98(1) of the Act and the context in which those words appear therein and, in particular, whether an amount representing the GST component charged on the grant of insurance cover should properly be treated as included in the value of premiums for the purposes of the Act. His Honour rejected two arguments put forward by the insurer as to the proper interpretation of those words. In the first place it was contended that the word “premium” and “gross premium” had what was described as a trade meaning within the general insurance industry which in substance confined premiums to the amounts which insurers charged for accepting risk under policies but excluded government charges levied on insurance transactions that insurers were required to pay to government. It was thus said that stamp duty should only be levied or charged on the net amount retained or applied by an insurer for its own benefit from the premium and that tax and duty charges should be excluded. There was considerable evidence led on these matters, as I have noted, but the judge found that that evidence was sufficiently inconsistent for him to conclude that there was “no accepted industry meaning” for the words “premiums” or “gross premiums”.

The insurer’s second argument in the Trial Division was that, in any event, on the proper construction of the terms “premiums” and “gross premiums” as appearing in the Act, they should be interpreted as excluding those elements of the premium representing taxes and premiums, and GST in particular, especially having regard to “accepted terminology and usage in [the insurance] industry”. Byrne, J. carefully examined the legislative history of sections imposing stamp duties on insurers since 1879 and the language of the Act as it stood immediately prior to its repeal in the year 2000. Again he found no specific benefit in looking at practice and usages within the industry for this purpose and concluded that on the plain meaning of the terms in question, “premiums” should properly be construed as the price payable for the issue or renewal of an insurance policy or cover without any deduction for the GST component.

Thirdly, the insurer made a submission based upon its having in fact charged insured parties separate amounts for GST. As has already been noted, there was by no means consistency in the documents produced by the insurer but, to the extent that some of them at least appeared to divide the sum sought by way of consideration for the grant or renewal of insurance cover, his Honour concluded that the division of the price charged in this way by the insurer was sufficient to entitle him to reach the conclusion that the other sums stated, in particular that in respect of GST, ought not in the circumstances to be considered as forming part of either premiums or gross premiums. Notwithstanding that the judge found that, if an insured paid only the premium component and not government charges such as GST, the insurer might refuse cover, he nevertheless held that, because the GST component of the amount payable was separately designated, it was not part of the gross premiums received by the insurer and therefore was not subject to stamp duty. For this purpose his Honour relied upon two decisions in particular, Commissioner of Taxation v. Century Yuasa Batteries Pty. Ltd.[22] and Roxborough v. Rothmans of Pall Mall Australia Ltd.[23] It is sufficient to say that in the first the question for the Full Federal Court was whether a payment or part thereof was “an amount in the nature” of interest, where one component in a payment was a sum equal to withholding tax which the borrower was obliged to deduct for tax purposes. Effectively the exercise in characterisation necessarily had to look at the component parts of payments received by a non-resident lender in order to ascertain income tax liability. Similarly, the decision in Roxborough related to a claim in restitution arising out of the unconstitutional imposition of a licence fee on suppliers of tobacco products and the issue was as to what extent the payer of the licence fee could seek repayment on the ground of unjust enrichment. The High Court, perhaps not unsurprisingly, held that an argument that the price paid was a composite figure for which there was no total failure of consideration should not avail the person holding the relevant funds, so that the component representing the illegal licence fee could be recovered.
[22](1998) 82 F.C.R. 288.
[23](2001) 208 C.L.R. 516.

Although the insurer in the present case was able to persuade the learned judge that these decisions were analogous and thus could be applied so as to sever the GST component from the balance of the premiums, it changed its stance in this Court and thought better of seeking to persuade us that that critical part of his Honour’s reasoning, so far as the insurer was concerned, was correct and, apart from making some passing reference to the reasoning in Century Yuasa Batteries, it did not seek to uphold the judgment below on that ground. I shall refrain from commenting on the propriety of those tactics and assume, because of the complexity of those cases, that the advancing of the argument was a mere error of judgment. The consequence, however, is that, in order to uphold the judgment of Byrne, J., the respondent insurer found itself in the position of having to overturn his reasoning on the first two principal issues, serving a notice of contention to that end. I should add that there is a further issue relating to the remission of penalty. Notwithstanding that the judge found in favour of the insurer, he expressed himself tentatively in favour of the Commissioner, if there had been a failure to make a full return, so that on this appeal the respondent seeks, if it be unsuccessful, to reverse those tentative conclusions and to have the penalty remitted or reduced to 5 per cent of the unpaid duty.

The respondent’s contentions as to the meaning of “premiums” and “gross premiums”

The four grounds relied upon by the insurer in its amended notice of contention may be summarised in this way. It said first that the learned judge erred in finding that there was “no accepted industry meaning” of the words “premiums” and “gross premiums” in the insurance industry, so that it further contended that those words have had a “trade meaning” in the general insurance industry “being the amount received and retained by the insurer for its own benefit in consideration for undertaking insurance”. In consequence it said that this trade meaning did not comprehend amounts “paid by the insured” in respect of taxes such as the GST for which the insurer was liable in respect of the transaction where those amounts were separately designated by the contract of insurance. The alternative contention of the insurer was that the expression “gross premiums” in the Act meant “the true actuarially established premiums for the risks being assumed by the insurer”. If accepted, that likewise should lead to the conclusion that the expression did not include an amount paid by the insured in respect of taxes such as GST, where those amounts were separately designated by the contract. I have already mentioned that the independent argument based on the separate designation of premium and GST, as accepted by the trial judge, was effectively abandoned on appeal and, although the respondent prayed in aid of its conclusions the fact that ordinarily, so far as the relevant documents showed, GST was separately designated, it seemed to me that their general argument as to the proper meaning of the words “premiums” and “gross premiums” did not depend primarily on separate designation.

The learned judge chose to deal with the accepted trade or industry meaning argument first, before examining the language of the section in greater detail for the purpose of the second argument, and the respondent has likewise taken that course in its argument. I am by no means sure that that is the correct approach, although no doubt it was convenient for the judge to deal with it in that way, for his conclusion was that there was no such trade meaning. Preferably one should see whether the language of the statute was such as to require or permit an investigation of the trade meaning and then, if that be the correct approach as a matter of construction, to see whether there was any such accepted meaning. Moreover, some examination of potential trade meanings may be necessary to see whether such an enquiry is feasible or appropriate, for if it is not the Court will be compelled to look solely to the language of the statute. The difficulty most frequently will arise where words are equivocal.

The insurer insists that the words “premiums” and “gross premiums” were trade or technical terms and as such were to be given the meaning “understood in the trade to which the statute applies”, as required by the High Court in Collector of Customs v. Agfa-Gevaert Ltd.[24] Such an approach was said by the High Court[25] to be favoured “when construing revenue statutes that utilise trade or technical terms”. However the Court conceded[26] that such a “presumption” does not deny the possibility that words in revenue statutes may also be understood “in their ordinary meaning”. The expression the High Court was construing in Agfa-Gevaert was “silver dye bleach reversal process”, as appearing in a tariff concession order. Although each word had an ordinary meaning, it is not difficult to see why, in considering that order and words of that kind, one would look naturally to see what the expression meant to those in the relevant industry. But it does not follow that, merely because the presently disputed words appeared in a Stamps Act, they cannot be treated as having had an understood, conventional meaning according to law.
[24](1996) 186 C.L.R. 389 at 398.
[25]Ibid.
[26]At 399.

Taking first the word “premiums” then, at least by the time the 1879 Act was passed and certainly by the time the 1978 amendments were passed, that word had an accepted meaning in the law of insurance[27], a meaning not in reality different from that in the trade, nor in any way different from what ordinary members of the public as represented by members of Parliament would have understood the word to have. If in Agfa-Gevaert and cases like it one could readily understand that the legislature (namely, the rule-making authority) would be seeking to comprehend a process known to a relatively small group of people, equally one could conclude that the legislature in the present case intended to deal with a well known concept, one which had a generally understood meaning. If “premiums” had a more limited meaning in the insurance industry, one would still need to be confident that Parliament intended to accept that meaning when its ordinary meaning must have been familiar to those who drafted the legislation and to all who participated in the passing of the statute, whether in 1879 or 1978. I cannot reach a conclusion that its meaning was limited in the present case. One has only to read the Parliamentary Debates at the relevant times to have a realisation of what was understood by members in 1879 and one could have greater confidence that by 1978 the conventional meaning was intended.[28] It is perfectly apparent that, for better or worse, Parliament was choosing to impose the duty on the total amount of premiums received rather than on any lesser figure more closely related to an insurer’s net income.
[27]See e.g. the meaning given in the 1^st ed. of Porter on The Laws of Insurance (1884) at pp.72-73.
[28]I have read the whole of these debates, both in the Ways and Means Committee and while the new Bill was before each House. I should add that one cannot assume that the U.K. legislation was being copied, for, although insurance had been subject to stamp duties since 1694, it had always, to my knowledge, been imposed on the value of the property insured or on policies as such: see Bunyan: Law of Fire Insurance (1^st ed., 1867) Ch.II.

As ordinarily understood, a premium is the consideration, usually in the form of a monetary obligation, paid or payable by the insured for the grant or renewal of insurance cover or of other rights under a policy of insurance: cf. Lion Mutual Marine Insurance Association Ltd. v. Tucker[29]; Sutton: Insurance Law in Australia[30]; Malcolm A. Clarke: Law of Insurance Contracts[31]. There is no reason here to give the word other than its legal meaning. One must, of course, look to the context in which the word appeared inasmuch as what was sought to be achieved was a description of a sum or sums of money upon which stamp duty was to be levied. That sum was made up of premiums “received”, “credited or charged” (see ss.97(2) and 98(1)(b) of the Act) and, although the word “received” may have looked only to actual receipts, its expanded meaning, including premiums “credited or charged”, looked to the legal obligations severally owed by insured persons in those cases, perhaps relatively small in number, where cover was granted before payment of the premium. I find it hard to accept that Parliament intended to tax something less than the actual amounts paid or payable by way of premiums, except to the extent that it made clear in specific terms what it wished to exclude.
[29](1883) 12 Q.B.D. 176 at 187.
[30]3^rd ed. p.582 para.7.1.
[31]3^rd ed. para.1-1F. See also the first three definitions cited in Commissioner of State Taxation v. Wesfarmers Insurance Ltd. (1989) 89 A.T.C. 4806 at 4807, although I disagree with Wallace, J.’s conclusions at 4808 (assuming that the W.A. legislation was substantially the same as the Victorian Act).

Moreover the artifice of designating some of the consideration as fire services levy, stamp duty or GST, though acceptable in practice (and indeed in law), could not detract from the fact that cover would not be granted unless the whole of the stipulated sums had been paid, whether called premiums, GST or whatever. The insured was denied any right to claim under the policy unless the total was paid timeously. The total amount to be paid was (and still is) in fact the premium, unless by law it can otherwise be characterised or understood.

Counsel for the insurer sought to invoke a definition, or rather a meaning, of the word “premium” taken from a leading case decided many years ago by the House of Lords which is certainly still treated as a principal source of the law relating to insurable interest. However in the course of the judges’ advice to their Lordships, Lawrence, J. referred to the premium as a sum which the insured “gives as the price of the risk with which he is charged” and then proceeded to refer to the payment of “a premium equivalent to the hazard”, finally describing an insurance contract as one entered into “in consideration of a price paid to him adequate to the risk”: Lucena v. Craufurd[32]. It is sufficient to say that this descriptive analysis, which cannot be truly equated to a definition, has rarely been relied upon[33] subsequently, for good reason. For example, in many editions of MacGillivray on Insurance Law[34] the description is dismissed as “presumably a reference to insurance practice rather than to legal requirements”[35],and even by 1884 Porter in his Laws of Insurance was even more scathing.[36] One would find it hard to believe that the respondent insurer would be prepared to grant cover or pay on a claim where an insured chose to pay only that part of the premium which could be described as “adequate to the risk”, especially having regard to its method of calculation of premium set out earlier in this judgment. Of course, Parliament might choose to impose stamp duty on some lesser sum but, as I have previously said, this is not a statutory provision in which one should assume that the legislature was intending to describe only the concept of premium as might technically be understood in the industry.
[32](1806) 2 Bos. & Pul. (N.R.) 269 at 282; 127 E.R. 630 at 642.
[33]Except in Wesfarmers, at 4807.
[34]See now MacGillivray on Insurance Law, 10^th ed. para.7.2.
[35]Cf. also Clarke: Law of Insurance Contracts, ibid.
[36]At pp.72-73.

In any event, as will be seen[37], even having regard to what was treated as the insurer’s primary contention at the hearing before the trial judge, I am by no means persuaded that there was or is a consistent view in the insurance industry that the amount of a premium or of total premiums received or credited is to be confined to some lesser sum or sums, excluding components such as the GST and other like imposts. In the first place, I would again find it difficult to believe that wherever in insurance policies an obligation to pay the premium is laid down as a condition of cover, insurance companies generally would accept the payment of a lesser sum as satisfying that obligation. Careful drafting might overcome the difficulty but even the documents put forward in evidence, such as they are, by the respondent company are not consistent in this regard, as will also be seen below. Secondly, it is a quite different matter what an insurer chooses, or is required by law, to treat as premiums for accounting or actuarial purposes.
[37]See paras.[34] ff. below.

In so far as the insurer purported to claim stamp duty, fire services levy and GST as such from the insured, it had no right to do so in the sense that it was the only person upon whom a legal liability rested to pay the duty, the levy or the tax (as the case may be): see, as to the duty, s.97(2). Nobody can lawfully claim, without specific authorisation, to be paid a tax or impost which does not rest on the person upon whom the demand is made. With great respect, it is wrong to suggest, as Wallace, J. did in Wesfarmers[38], that the insurer, in separating out the government charges, required the insured to pay those charges, including the stamp duty “so as to enable it to discharge its statutory obligation”. Perhaps an insurance contract may contain a term whereby the insured should indemnify the insurer against certain liabilities if and when they be paid, but that was not the case in Wesfarmers or in the present case. There has merely been a division of the consideration into a number of parts, so that all the parts made up the “consideration” which the insurer demanded should be paid to it, and not to any other party, as the price for granting cover to the insured. So in both Wesfarmers and the present case the insurer had no legal right to claim from the insured payment of government taxes or charges, the burden of which rested solely on the insurer, nor was there any relevant exception, at least in the present case. So far as stamp duty was concerned, there were explicit powers given in this state by s.98(2) of the Act to “set out as a separate part of the amount required to be paid … an amount designated as stamp duty”, or under s.98(2)(b) “to include [such an amount] in the amount required to be paid”. That was a special concession, largely to relieve insurers of the opprobrium which might fall upon them if the insurer’s obligation to pay stamp duty was not properly acknowledged. But it was only intended as a means of making clear how much stamp duty in fact would be borne by the insurer pursuant to the Act and neither that provision, nor any other provision, placed any further legal obligation on the insurer to account for such sums or in any way separately to retain them so that they might otherwise be characterised as not forming any part of the premium payable in respect of cover granted by the insurer.
[38]At 4808.

More importantly, neither in the Act nor in the GST Acts was there any provision which placed a separate burden on the insured or made provision for the insurer to account for GST received or to treat it separately in its books of account, such as to deny its character as part of the consideration for the grant of insurance cover. There was again a concession to those seeking payment for goods and services inasmuch as they were entitled to designate separately the amount of GST directly incurred by reason of the provision of such goods and services, but that in no way changed the legal obligations of the parties to such transactions.

For this purpose one may draw attention also to s.110A of the Act which imposes the liability to pay stamp duty on the insured, not the insurer, in cases where the insured effects or renews insurance outside Victoria or with an insurer which is not registered for the purposes of the Act. Sub-section (2) of that section makes the insured liable to stamp duty at the rate of 10 per cent of the amount of any “premium”, which is said for the purposes of the section to be “the gross premium paid or payable … including any commission or discount allowed”. The respondent placed some reliance on the slight difference in language between this section and s.98(1) but in each section the same terms are used in an inclusive sense and no party sought to explain the reference to the inclusion of “discounts”, nor to place any significance on that reference. The object of the section is clear, namely, to ensure that stamp duty is paid in respect of premiums covering risks in Victoria but effected with insurers outside the state or which otherwise are unregistered. It would be surprising in the scheme of things if the meaning of “premiums” and “gross premiums” for the purposes of that section, which imposes the duty on the payer, should be different from the meaning where duty is levied on the insurer. In s.110A the reference must be to that which is paid by way of premium and could not be to some subset or lesser sum calculated as the “true” premium by the relevant insurer, because that would not be known to the insured or to the Commissioner. It may be possible to distinguish government charges and the like but that would only be if it were the invariable or at least general practice for those sums to be stated separately from the “premium”, an assumption which would be difficult to make having regard to the fact that policies might be taken out with insurers not only in other states, but also, for example, in the United Kingdom, the United States, Europe or Japan.

Trade or industry meaning of “premiums”

I turn next to the arguments put by the respondent to the effect that the words “premiums” and “gross premiums” had a trade or industry meaning which excluded government imposts such as stamp duty and, in particular, GST. I have already suggested why the word “premiums” ought to have been given its ordinary meaning, one which coincides with the proper legal understanding of that term. The expression “gross premium” has posed greater difficulties in that it suggests, even if it does not necessarily connote, a usage in the industry which might conceivably be different from its more obvious meaning, namely, an inclusive premium without deductions or, more likely, in the plural, the total of all premiums received or receivable. The significance of this expression obviously escaped the advisers to the respondent in the first place, for the original affidavits filed on its behalf barely made reference to the expression and it was only in brief supplementary affidavits filed a few days before the trial that the question was directly addressed by the expert witnesses. I shall return to that expression in due course.

In both its written outline and oral submissions the insurer referred in some detail to what it described as factual errors by the learned trial judge. There may be substance in a few of those contentions, such that I would not endorse the whole of his Honour’s reasoning on this issue, but they were in my opinion, with one possible exception, largely matters of detail and not critical to his ultimate conclusion that there was in the insurance industry “no accepted industry meaning of the word ‘premium’ or ‘gross premiums’”.

There was, if I may say so, a good deal of asseveration in the insurer’s experts’ evidence and not a great deal of reliable supporting material. I shall turn in a moment to their reliance on accounting practices, but there was one simple matter upon which there was no proved consistency. The insurer chose, in order to establish industry practice, to produce only policies and renewal notices relating to some of its own policies and failed to produce, as his Honour pointed out, any relevant invoice statements. Notwithstanding that it called an expert in the industry, Robert Andrew Buchanan, who had not been employed by the insurer at any time and who was the part author of a well-known textbook on insurance practice, it did not seek to adduce through him examples of policies, renewal notices or invoice statements issued by other insurance companies. More telling, however, was the fact that, although one witness employed by the insurer (Catherine Shevlin) was so bold as to say that the renewal schedules produced by her were representative of all renewal schedules issued by the insurer during the relevant period, there was not even consistency in those renewal schedules or in the policies likewise produced. Much reliance was placed by various witnesses on the fact that in a number of renewal schedules the sum payable by the insured was notified by a table at the foot of the first page which ordinarily included one item described as “premium”, then several items including stamp duty and GST, as well as the fire services levy where applicable, and then a total at the foot of the page which was in many cases described as the “annual amount payable”. Whatever may have been the significance of the tabulation (to which reference has already been made), at least one could understand the way in which the experts were pointing to that tabulation as suggesting that “premium” was merely a component of the sum payable to obtain cover. Unfortunately in one of the three examples produced, namely the renewal schedule applicable to the insurer’s “Secure Motor Plus” policies, the table, although including the word “premium” halfway down, concluded at the foot of the page by describing the total as the “Annual Premium Payable”, an unfortunate oversight, to say the least, in a very common policy, if its contention were correct. The difficulty was emphasised when one read on the second page of that renewal schedule the following “IMPORTANT INFORMATION” relating to “Premium Payable”, which read: “The premium payable under the proposed contract of insurance, inclusive of government charges, is the PREMIUM PAYABLE shown”, a clear reference to what appeared at the foot of the preceding page.

It is remarkable, therefore, that the renewal schedule or notice for the “Secure Motor Plus” policy containing the demand for the “Annual Premium Payable”[39], with the subsequent notation relating to the “Premium Payable”, should have been described in paragraph 28 of Mr Buchanan’s report in these terms: “The renewal notice contained in Annexure C follows normal industry practice in this respect”, unless he was referring only to the “standard practice” of showing premium, stamp duty and GST as separate items. Undoubtedly the items making up the total separate items were set out, but the matters to which I have just referred seem inconsistent, to put it at its lowest, with the general thesis of Mr Buchanan’s expert evidence as to industry practice. I should add that in the other renewal schedule (for the Secure Householder’s policy) forming part of Annexure C the total was in fact designated as the “Annual Amount Payable”, but the notation, “IMPORTANT INFORMATION” as it was again described, contained the advice about the “Premium Payable” expressed in exactly the same terms as appeared in the “Secure Motor Plus” policy. For this policy this might be seen as adding an element of ambiguity rather than clarification, until one realises that, by reason of the terms of that notation, the “Premium Payable under the proposed contract of insurance” was specifically stated to be “inclusive of government charges”. To add to the confusion as to what Mr Buchanan is fairly to be taken to be describing as industry practice, in the one other insurance document prepared by the insurer and annexed to his affidavit, a “Secure Householders Plain Language Insurance Policy”, one finds in the definitions appearing therein at p.70 that “premium” defined as meaning “the amount you must pay us for the insurance you select”, although on the second page the policy says that, “in return” for providing insurance cover, “you agree to pay us:

· Your premium, and
· Any relevant government charges”,

which were said to “add up to the total amount you must pay”[40]. Again, this can hardly be treated a ringing endorsement of the insurer’s claim to consistency, let alone to consistency within the industry [p.A30].

[39]A somewhat desperate attempt was made in oral evidence to distinguish between “premiums” and “premiums payable”, on the ground that the latter was not relevant to an insurer’s receipts. The word “payable” in the context clearly means only that the stated premium is what the insured has to “pay”.

[40]The policy also required the insured to “note”: “Your insurance only starts when you pay this total amount unless we agree you can pay by instalments. If you have not paid, you have no insurance.”

The same two renewal schedules are exhibited to the affidavit of Ms Shevlin as being “representative of all renewal schedules issued by the appellant during the relevant period” and there is also exhibited to her affidavit the same householders’ policy, together with copies of the “Secure Motor Plus” policy and a “Secure Business” policy. The wording in the policies was said by the deponent to be “representative” of wording in all of the insurer’s policies other than the “Secure Business” policy, although, perhaps, the deponent had concentrated only on the amount payable by the insured and failed to observe the definition of “premium”, which appears on p.70 of the householders’ policy and, expressed in identical terms, on p.34 of the “Secure Motor Plus” policy. The copy of the “Secure Business” policy, and a renewal notice relating to such a policy, were exhibited as representative of those used in all the insurer’s commercial policies. It contained no definition of premium and the policy simply commences: “In return for the amount you have paid us we will insure you in accordance with the policies listed in the schedule …”, and then the amount to be paid is simply described as being made up of the “premium calculated by us”, together with the fire services levy and “statutory charges imposed by government”. On the other hand a “Secure Business” schedule, presumably being a true schedule to the policy produced, was also included which set out in bald terms what had to be paid in terms of “premium”, “FSL” and “stamp duty”, but made no reference to GST.

Another witness, Ronald John Farrell, an expert with general experience in the insurance industry likewise swore an affidavit exhibiting a report in support of the respondent’s case. He also had annexed to his report the “Secure Householders” policy and the two renewal notices applicable to that policy and the “Secure Motor Plus” policy, stating that those forms of renewal notice were “of the kind customarily used in the insurance industry”. I confess I have not again trawled through the transcript of cross-examination to see whether the witnesses were able to explain these inconsistencies, but so far as I could see they did not do so, except to suggest that it was “a bit of a marketing exercise”. It is possible that these examples, unfortunately used by the insurer, were mere aberrations and that there is greater consistency in the industry generally, but that is a far cry from being able to conclude, on this evidence as to usage, that the word “premium” had a trade or industry meaning.

The second general matter which to my way of thinking shows a misconception in the minds of the insurer’s expert witnesses relates to the basis upon which they concluded that the term “premium” was “the amount which an insured charges for accepting the risk under the policy, excluding government charges …”, as was stated by Mr Buchanan [at A10]. The vice in the contention can be seen in the words immediately following that conclusion, which infected almost the whole of his report and supplementary report, and which proceeded to qualify the expression “government charges” in these terms: “which the insurer is required to remit to the taxation authority, such a stamp duty and GST” (emphasis added). It is in the concept of there being an obligation “to remit” that I see a fundamental error which has nothing to do with the witness’s undoubted expertise in the insurance industry. The witness proceeded to explain the so-called requirement by immediately embarking on a description of then current Australian accounting standards and in particular standards AASB1023 and AAS26, as well as certain proposed international standards. He said that a distinction was drawn between levies and charges “levied upon the insurer, which it may, but need not, pass on to the insured”, which is required to be “included in premium revenue”, and, on the other hand, stamp duty, and therefore the GST, levied on the insurance contract and calculated on the sum insured, the premium or numbers of policies, “which the insurer is required to collect and pass on to the taxing authority” which is not included in premium revenue. Again to be fair to the witness, the source of this opinion lies directly in those accounting standards. Paragraph 4.1.2, dealing with insurance premiums and certain government levies and charges, such as licence fees and fire brigade levies, states blandly:

“Such levies and charges are expenses of the insurer, rather than government charges directly upon those insured. The insurer is not acting simply as a collector of these levies and charges. Although not compelled to collect these amounts from those insured, the insurer is entitled to include in premiums an amount to cover the estimated amount of the levies and charges. The insurer is usually responsible for paying the levies and charges at a later date.”

So the standard says that the amounts so collected are to be treated as the insurer’s revenue. The accounting standard in para.4.1.3 then draws a contrast with stamp duties in particular:
“In most states, stamp duty is charged on individual insurance policies and is separately identified by insurers on policy documents. The insurer normally is required to collect and pass on to the government an equivalent amount. Because such stamp duty is a tax collected on behalf of a third party and there is no choice on the part of the insurer but to collect the duty from the insured, it is not revenue of the insurer.”

From what I have said already those are clearly legal misconceptions and very unfortunate misconceptions so far as the insurance industry is concerned, however correct they may be as a matter of accounting practice. Taking first paragraph 4.1.3 it is simply not true that stamp duty was charged on individual insurance policies in this state, except to the extent that s.110A provided for duty on policies granted by foreign insurers. Though it is correct to say that by s.98(2) the insurer was permitted to identify the stamp duty on policy documents such as premium renewal notices, it was not the law that the insurer merely collected the amount of duty so as to pass it on to the government. It was not “a tax collected on behalf of a third party”, and it is irrelevant that there was no choice whether or not to collect the duty from the insured, for the fact of the matter is that in Victoria (and I believe in most other states) the obligation to pay stamp duty rested on the insurer. To what extent insurers chose to build that compulsory charge into its premiums was a matter for each insurer (subject to s.98(2)), although doubtless they liked to make clear[41] that they had calculated (as most insurers did) an appropriate premium and then added their burden for stamp duty on top to produce the actual premium to be paid. Likewise the contrast in paragraph 4.1.2 with charges for which the insurer is “acting simply as a collector” is quite invalid as a matter of legal analysis and in particular, so far as those accounting standards were concerned, inasmuch as the law in this state imposed the obligation to pay stamp duty on insurers.
[41]As a number of the insurer’s witnesses were prepared to concede in evidence.

Mr Buchanan proceeded to extrapolate from the propositions in AASB1023 the principle that premiums did not include those government charges which an insurer “is required to collect and pass on to the taxing authority”, stating that the analogy between GST and stamp duty was clear. GST had not been dealt with by a published standard at the time, but he referred to Abstract 31, which was a paper put out by an issues group, which asserted that the GST component of a transaction price is not revenue in the hands of the vendor “because the transaction gives rise to a present obligation to remit the amounts of the tax collected to the taxation authority”. The paper referred to another part of AASB1024 being paragraph 15.1.1 relating to revenues generally which stated: “Amounts collected on behalf of third parties such as sales taxes, goods and services taxes and value added taxes are not economic benefits which flow to the entity and do not result in increases in equity. Therefore, they are excluded from revenues.” Again it seems that Mr Buchanan rested his primary proposition on the fact that GST, like stamp duty, was in fact collected on behalf of a third party. He regarded these accounting standards as “authoritative”, so leading naturally to his stated conclusion. Again, perhaps, it is difficult to blame him, but GST is not collected on behalf of third parties. It is not collected at all in the conventional sense by the insurer, because the liability rests not on the purchaser, but on the provider of services and is based on what the provider, in this case the insurer, charges for the provision of those services, from which an obligation thereby rests on the insurer to pay the tax levied upon it to the Taxation Commissioner, who is the true “collector”. The fact that it is entitled, indeed obliged, to recognise and state the GST component has nothing to do with liability. There is no question that, if, say, an insurer failed to pay the GST, the Taxation Commissioner could look to the purchaser of the services, whether or not that purchaser has paid the premium. Nor is it a case where the legislative scheme makes clear that the payment received from an insured or other purchaser of services must be kept separate and remitted to the Commissioner on the basis that it is in effect held on trust for the Commissioner, a practice adopted in relation to certain revenue liabilities.

Thus the accounting standard, in two short paragraphs[42], was the basis upon which Mr Buchanan reached the conclusion that in the general insurance industry the word “premium” was understood to mean the amount charged for the risks undertaken but to exclude government charges of the kind imposed by way of stamp duty and GST. It is unnecessary to examine his answers to these further questions for it is apparent from a reading of his report that each rested on the same premise. In one answer he referred to an issues paper prepared for an international committee, but again it relied, wrongly for reasons already stated, on the assertion that “amounts collected on behalf of third parties such as [the GST] are not economic benefits”, which are “received … on its own account”.[43]
[42]See para.[40] above.
[43]The witness also referred to pp.25 and 26 of the 4^th edition of his own textbook, but that again relied on the accounting standards.

I should add that I can well see why, in economic terms, an insurer might not choose to place great significance on the amounts payable by it and designated in this way for the purpose of determining what its effective revenues have been, nor for the purposes of determining how profitable its business has been or will be in the future in order to calculate an economic premium to be charged thereafter. Doubtless the insurer would realise that from its revenue generally it would be under a legal obligation, at the times prescribed by either the Act or by the GST legislation, to pay the stamp duty and GST referable to its premium revenue. But there is no obligation to “retain” or set aside the GST, nor an immediate obligation to pay, so one can say that, in purely financial terms, the whole of what is received by the insurer, including the GST “component”, is available, if only for a period of a month or less, either to reduce its overdraft or other borrowings and accordingly its interest bill or to lay out, on the short-term money market or otherwise, to earn income in the meantime. I do not understand that, either in respect of stamp duty or GST, any such benefit must be directly accounted for, except to the extent that it might affect the income tax liability of the insurer. Moreover, as stated above, the insurer’s obligation to pay GST, though it involves accounting for the whole sum charged, is not as a matter of practice one which obliges it to pay over the whole of the GST, for it is entitled to claim the inputs referable to the relevant transactions so as to calculate a net figure to remit each month to the taxation commissioner.

The other principal expert witness called for this purpose by the insurer, Mr Farrell, reached almost identical conclusions to those reached by Mr Buchanan. Not only that, but he reached them essentially for the same reasons. He asserted that the meaning of the term “premium” in the general insurance industry was the amount received from the insured “to provide risk protection excluding taxes levied on insurance transactions which the insurer passes on to the insured and then remits to the government”. The succeeding paragraphs of his report made clear that he likewise reached that conclusion in reliance upon the relevant provisions in the AASB1023 and AASB1004, which I have already discussed. Thereby he asserted that on the one hand the fire service levy could be considered “an integral element of the premium”, whereas both stamp duty and GST are to be treated as “taxes collected on behalf of a third party”, which the insurer “passes on to the insured and then remits to the government”. I have already described the essential defects in his reasoning, dependent as it was on what he perceived to be correct accounting practice.

The learned judge correctly observed that neither of these witnesses, nor indeed any called on behalf of the insurer, professed any true expertise in accounting, so that they could not even directly express an opinion about the treatment of GST in the insurer’s accounts. They were thus speaking only with second-hand knowledge of accountancy rules and practice. It is therefore not surprising that the learned judge placed some reliance on the expert called by the appellant, Clive Graham Peirson, Professor of Accounting in the Faculty of Business and Economics at Monash University, although that reliance was heavily criticised by the insurer. The judge said rightly that Professor Peirson, who had been a member of the Accounting Standards Board and involved in the preparation of AASB1004, was able to explain the significance of those passages in the standards upon which the insurer’s non-accounting experts placed such reliance. As the judge pointed out, Professor Peirson observed accurately that what the standards were concerned with was the calculation and statement of premium “revenue” for accounting purposes. I would not necessarily agree with the legal basis behind the statements in the standards, as I have already attempted to analyse them, but those standards are promulgated for the purposes of the preparation of accounts and other like accounting issues. They do not seem to me to add anything to what fairly may be described as trade or industry practice, for they represent only the way in which accountants should deal with the receipt of premiums.

Counsel for the insurer subjected the learned judge’s findings as to the meanings of the terms “premiums” and “gross premiums” to stringent criticism. In particular they pointed to a conclusion by his Honour that the insurer’s expert witnesses “would all exclude from the expression what was called the ‘fire service levy’”. Counsel said that these experts had consistently drawn a distinction between the relevant two paragraphs of the accounting standards, to which I have already referred, by firmly espousing the view that the fire services levy could properly be included within the term “premium”, on the one hand, whereas both stamp duty and GST should be excluded in accordance with those standards. As counsel conceded, his Honour had already pointed this out at para.[19] of his judgment. It may be that his Honour did misunderstand what those witnesses said in the course of what I am bound to say was rather confusing oral evidence. However I believe that what the judge was referring to, so it would seem at paras.[22], [34] and [40], was not the theoretical distinction which they had made in their affidavits and generally, but the manner in which they sought to describe and justify the way in which the charging of the fire service levy, in particular, was set out in the various renewal schedules, in particular those relating to the secure householders and secure business policies. The witnesses had each said that insurers were obliged or at least entitled to treat as premium income that which was “received” by way of the fire services levy, but they had been cross-examined as to why, if that was so, those schedules (or other calculations of premium) had identified the fire services levy separately from the “premium” on a number of occasions. The witnesses had, as it seemed to me and doubtless as it seemed to the learned judge, accepted that logically the fire services levy should not have been so separately designated, at least if those calculations were to be consistent with the accounting theory relied upon.

Nevertheless the criticism seems arguably to have been a valid one, the witnesses each appearing then to justify the schedules by reference to the desire to show the insured what burden they had to bear. Again the learned judge was criticised for reaching the conclusion that there was no consistent use of the word “premiums” or “gross premiums”. What appears above is sufficient to show why it was at least open to the judge to reach the conclusions he did on that question and so as to the trade meaning of the expressions. It seemed from all of the witnesses’ evidence that in the industry there were a large number of usages of the term, each of which depended upon the context in which the word was to be found. The natural conclusion is that the ordinary plain or legal meaning of the expression ought to be preferred in the circumstances. There was some additional criticism that particular witnesses were unable to speak of the meaning of these words as at 1978, but there seemed to be no real suggestion that there had been any change in their meaning over the last quarter of a century and, I am inclined to think, for many years before that.

Consequently I have not been satisfied that it has been shown that the learned judge erred in his ultimate and correct conclusion that the word “premium” had no accepted trade meaning.

Meaning of the expression “gross premiums”

It was said, furthermore, that the learned judge wrongly failed to accept the uncontroverted evidence of the insurer’s witnesses as to the meaning of the expression “gross premiums”, and had generally given it too wide a meaning. In the first place I am by no means satisfied that that evidence was uncontroverted, although there was, perhaps, comparatively little separate cross-examination on the contents of the second, late filed affidavits on the subject sworn by Mr Buchanan and Mr Farrell. More importantly I do not consider that the judge has been shown to be wrong in taking the approach he did. These latter affidavits added very little to the discussion in that, when dealing with the expression “gross premiums”, they merely asserted that the expression was used in relation to premiums “before deduction of reinsurance premiums and charges which are not accounted for as expenses, but not including GST and stamp duty …”. However, both of the witnesses seemed again to proceed, in Mr Buchanan’s case explicitly, on the basis of the treatment of these various items “for accounting purposes”. The only additional factor was that Mr Buchanan said that in the industry net premiums were calculated by deducting “reinsurance earned premiums and charges which are not accounted for as expenses”. To this Mr Buchanan added “but not including GST and stamp duty which are not regarded as either part of premium reserve or as expenses for accounting purposes”. The latter qualification, however, merely reiterated (as is obvious) the witness’s understanding of the applicable accounting concepts. The excluded items would otherwise be items “not accounted for as expenses”, which should be added to net premiums so as to produce the gross premiums. There was thus no independent basis for his conclusion.

There can be little doubt that a distinction may fairly be drawn between “gross premiums” and “net premiums”, but I am not sure that anything the witnesses said made clear what was relevantly to be deducted. I am inclined to the belief that historically the use of the word “gross” had a significance which may be seen in the American usage[44], but which was not examined by any of the witnesses, perhaps because there was little material on the subject from industry sources available to them. In the end I believe the judge was right in finding nothing in the expert evidence to show that the word “gross” had anything other than its ordinary accepted meaning, as indicating a total of the relevant subject matter before making deductions. In those circumstances there is no good reason to conclude that the trade meaning of the expression was different for the purposes of interpreting the Stamps Act at the relevant time.
[44]See above para.[4] and below para.[53].

There remains only the question whether on the proper construction of the Act, unaffected by any trade meaning, “gross premiums” should bear the meaning contended for by the insurer, namely that it is a “subset” of the total consideration paid by the insured, being the true actuarially established premium for the risk assumed by the insurer, that is, “the amount charged for accepting risk under the policy net of any transaction taxes”. This contention again relied on the judgment of Lawrence, J. in the early decision of Lucena, whereby the insurer contended that it should be confined to the amount paid to compensate an insurer for undertaking the risk in question. I cannot accept that the expression can properly be so confined. In this respect I see no error in the learned judge’s findings. Conceptually that which is “gross” must be something that is greater than some other item, either because a series of items are added up to produce a total which is a “gross” figure or because individual items have something added to them which might be excluded for other purposes. With premiums, or things akin thereto, the natural comparison is between a net premium and a gross premium. It may be hard to be certain what the legislature intended in this case, but it is not so difficult to be confident that it did not intend to make the distinction here drawn on behalf of the insurer, unless an industry practice had been established whereby the expression “gross premiums” ought to be given a limited meaning in the sense contended for by the insurer.

It may be that, when the sections relating to the payment of stamp duty on insurance companies were first introduced in 1879, the concept of “gross premiums” was intended to make clear that items such as commissions and, in particular at the time, reinsurance premiums should not be excluded. I have already referred[45] to the commonly enacted “gross premiums statutes” in the various United States first passed during the nineteenth century, although I would not feel qualified to express any conclusion as to their precise significance: see generally Appleman on Insurance Law and Practice[46]. The issue of gross premiums seems to arise rarely in Anglo-Australian law except in the fields of reinsurance and broker’s commission. In reinsurance the concept of “net/gross premiums” is of significance in proportional reinsurance: see O’Neill and Woloniecki: The Law of Reinsurance in England and Bermuda[47] and, in relation to both reinsurance and the liabilities of brokers, see Re Palmdale Insurance Co. (No. 2)[48]. Another English work, Reinsurance in Practice by Robert Kiln (1981), written by an underwriter, also refers to the concept of gross premium[49], stating at one stage that “gross” means “before deduction of original costs; agents commissions, brokerage, taxes, overheads and any other charges or costs”[50]. (Emphasis added.) Of course such statements could not be treated as authoritative for present purposes: they are merely examples of the expression being used in the widest sense.
[45]See para.[4].
[46]Revised ed. vol. 19B published 1982 (with updated cumulative supplements) and in particular chapter 367A, especially paras.10937-10940 on the “gross premium statutes”. The earlier volumes of that work have now been published in a new edition under the name Holmes’ Appleman on Insurance 2d: see fn. 51.
[47](1998) paras.1-10 and 5-79.
[48][1982] V.R. 921. It is interesting to note that in a reinsurance treaty referred to in Mercantile Mutual Holdings Ltd. v. International Management Pty. Ltd. (S.C. of N.S.W., Needham, J., 4^th July 1990, unreported except in BC9002264) Article 7 defined “premiums” for the purposes of the treaty in the following way: “Net premiums are understood to mean original gross premiums, less original discounts, brokerages, commissions, taxes, exchange commission and/or other deductions necessary in obtaining the business and, after deduction of retrocession and/or reinsurance premiums due but excluding any costs accruing for the account of IRM.” (Emphasis added.) Although only an example in a reinsurance treaty, it is not apparently unknown in this country for “gross premiums” to be described as including a component for taxes.
[49]At pp.34, 159, 161 and 318.
[50]At p.161. See also at p.34.

On the other hand in the United States, largely because of the extensive fiscal legislation directed to the subject, a good deal more has been said about gross premiums. In Appleman, in introducing the subject of premiums in Chapter 24, it is said “The total premium (net premium plus administrative costs) charged each policyholder/insured is customarily called gross premium”.[51] Moreover, although it may merely reflect the particular statutory regime relating to federal income tax, especially on life insurance companies, the following general statement was made by Stevens, J. on behalf of the Supreme Court of the United States in Commissioner of Internal Revenue v. Standard Life and Accident Insurance Co.[52]:

“The amount charged a policyholder – the ‘gross premium’ – includes two components. Under state law, the company must add part of the premium to its reserves to ensure that it will have sufficient funds to pay death benefits. … The rest of the gross premium is called ‘loading’, and covers profits and expenses such as salesman’s commissions, state taxes, and overhead.” (Emphasis added.)

I would not suggest that such a statement, expressed in another jurisdiction and for different purposes, should be treated as any way binding in this country but it again indicates that the concept of including taxes in what are described as “gross premiums” ought not to be seen as unusual.[53] Nevertheless, if the expression had been adopted from the “gross premiums statutes”[54] passed in the U.S., the meaning there given seems not to have been a narrow one.[55] Only to that negative extent are these observations of assistance.

[51]See at p.2 of Vol. 5 of Holmes’ Appleman on Insurance 2d. (1998).

[52]433 U.S. 148 at 150; 53 L. Ed. 2d 653 at 657 (1977).

[53]So far as I have been able to ascertain, the statutory provisions there under consideration contained no definition of “gross premiums”: see ss.800-820 of the Internal Revenue Code: Title 26 USC §§.801-820, as inserted by the Life Insurance Company Income Tax Act of 1959 (73 Stat. 112). The sections in that form have subsequently (1984) been repealed and recast. However I speak with diffidence about U.S. law on this subject, which is said even in that country to be “obscure” and “arcane”.

[54]See also para.[4] fn. 5.

[55]None of the meanings given in Words and Phrases (West 1956) Vol. 18A or in its Cumulative Supplement (2002) suggest the contrary.

In the absence of any reliable indication in the statute or elsewhere as to the meaning of “gross premiums”, one should accept, as the learned judge did, that the expression bore its natural meaning. In other words it was intended to denote the total of all sums received by way of premium, howsoever described, in consideration of the granting or renewal of insurance cover. The word “gross” was intended only by way of contrast with a word such as “net”, which, of its nature, would indicate the deduction of some sum from that which would otherwise be described as “premiums”. It would be strange if the word “gross” was intended to signify something less than the total of the relevant subject matter, unless there were clear indications to the contrary, either in the relevant statute or by reason of accepted usage in law or in practice. The most one knows is that from time to time the calculation of premiums for duty purposes excluded items such as reinsurance premiums and commissions, so that the purpose of the legislature was, in my opinion, to make clear that no items should be deducted in working at a total of premiums received or receivable unless that had been explicitly stated by the Parliament. For present purposes there was no indication to the contrary so far as taxes were concerned and certainly none so far as GST was concerned, so that the expression should be treated as including anything which might be characterised as having a component for GST, wheresoever the burden for payment of GST in fact lies. The fact that the burden for paying GST lies on the provider of the services, and did so at the relevant time, only serves to emphasise that it should not have been deducted for the purpose of calculating “gross premiums” under the Act.

Conclusions

It follows that neither the word “premium” nor the expression “gross premiums” should be construed so as to exclude the component said to be included by way of GST, either as calculated by the insurer or as calculable by it in respect of the provision of services by way of the grant or renewal of insurance policies. Both the word and the expression should thus be treated as comprehending the whole of the sum received or receivable from an insured by the insurer, for the purpose of calculating the amount on which stamp duty was to be assessed at the relevant time. A separate designation on certain documents of the GST payable by the insurer was not relevant to determining what premium (or gross premium) was paid but, in any event, whether separately designated or not, it should not have been deducted from the amount returned by the insurer for the purpose of the assessments here in question. The Commissioner’s appeal should therefore be allowed and the orders of the learned judge made on 6 September 2002 setting aside the “estimated” assessment should themselves be set aside. There is therefore no reason to remit the question of stamp duty to the Commissioner for further assessment according to law, as directed by the judge’s second order.

Penalty

It remains to consider that aspect of the order whereby the penalty was remitted to the Commissioner for further consideration according to law. By its amended notice of contention the insurer sought also to have set aside the Commissioner’s decision not to remit the penalty of 10 per cent which was imposed at the time of the amended assessment. Although the learned judge allowed the insurer’s appeal, he also expressed his opinion as to the Commissioner’s decision about remission of the penalty, stating that he was not satisfied that the Commissioner had erred, albeit that that was on the assumption that the insurer’s return was for too low a sum and that the Commissioner was entitled to increase the duty by way of reassessment. His Honour analysed with some care the way in which the Commissioner had approached the question of penalty, noting as he did some errors in what the Commissioner had said, but he nevertheless reached the conclusion that there would have been no basis, upon the Commissioner’s assumptions, to set aside his decision as to the remission of penalty. Of course, his Honour pointed out correctly that in fact the substratum of that decision was in his own view then incorrect, so requiring the Commissioner to reconsider the penalty in the light of the judge’s conclusions. The essence of his decision, nevertheless, was that there was otherwise no substance in the insurer’s complaint on that score.

The result of the orders that I propose that this Court should make on appeal is, necessarily, that the Commissioner’s assessment should be wholly restored. It would follow that under s.97(3) of the Act that an amount of 10 per cent of the amount due would be recoverable by the Commissioner by way of penalty, unless the Commissioner thought fit to mitigate or remit that penalty under s.97(3A), each of which provisions are set out in the learned judge’s reasons. A penalty of 10 per

cent would not on its face seem an undue penalty where there has been a significant non-payment of duty but it was suggested, and some authority was cited making indirect reference to it, that there was a publicised practice of the Commissioner to the effect that 5 per cent would be remitted if the dispute related to an arguable matter. It is not clear to me that the learned judge was referred to that practice and that decision, so that, notwithstanding my general agreement with the judge’s expression of opinion on the matter, I think it appropriate that his order in this respect should remain untouched, namely that the question of penalty should be remitted to the Commissioner to be dealt with appropriately in all the circumstances of the case. Doubtless if there is such a practice, the penalty should be mitigated to the extent of 5 per cent, for I would indicate further that, notwithstanding that I have not accepted the basis of any of the insurer’s contentions, the matter in general might be characterised as having been at least arguable. Order No. 2 made by the learned judge should be varied, therefore, only so far as necessary as to give effect to the conclusion previously stated at para.[56] that the assessment be restored.

BATT, J.A.:

I agree with Ormiston, J.A.

CHERNOV, J.A.:

I have had the advantage of reading in draft the reasons of Ormiston, J.A. in this case. I agree that, for the reasons given by his Honour, the word “premium” and the term “gross premium” in ss.96 to 98 of the Stamp Duty Act 1958 (“the Act”) should be given their ordinary or conventional meaning so as to include, inter alia, the goods and services tax applicable to the amount charged by the respondent for the insurance cover provided by it under the policies and renewals examined by his Honour. I also agree that the legal liability to pay such goods and services tax rests on the respondent notwithstanding that it has sought to recoup it from the insured as part of its total charge for the provision of cover. Thus, in this case, the whole sum received or receivable by the respondent was liable to stamp duty. It follows that the Commissioner’s appeal should be allowed and disposed of as his Honour proposes. This includes remitting the question of penalty to the Commissioner to be dealt with having regard to the circumstances of this case.

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[2003] VSCA 177

14 November 2003