Melkman, Charlotte v Commissioner of Taxation

[1988] FCA 334

I

L

i .

CATCHWORDS

Whether a pension	is paid by the Netherlands Government under
leuislation comuensatina victims	of Nationalist Socialist

peisecution was-exempt income under the Income Tax Assessment Act
prior to the introduction of S. 23(kca) - operation of S. 23(kc) bf the Income Tax Assessment Act in conjunction with 6 . 10 of the

Racial Discrimination Act	- whether pension paid by the
Netherlands Government was exempt	income as a payment of the kind
referred to in S. 23AD(3)(c) of the Income Tax Assessment	Act.

Administrative Appeals Tribunal Act 1975	(Cth) S .	44
Income and Corporation	Taxes Act 19	70 (Imp) S. 365
Income Tax ASSeSSment Act 1936	i	Cth) ss. 23(kc), 23AD(3)

Injuries in War (Cornpenration) Act 1914 (U.K.) Injuries in War (Compensation) Act 1915 (U.K.)

Racial Discrimination Act 1915	(	Cth) ss. 3, 10
war Compensation Act	1914	(Session 2) (U.K)

CHARLOTTE HELKKAN as executor of the estate of NICO HELKMAN

Deceased v COMISSIONER OF TAXATION

No. G495 of 1987

CORN¶: DAVIES, LOCKEART	AND GUMMOW JJ.
PLACE: SYDNEY.
DATE :	8 JULY 1988

IN THE FEDERAL COURT OF AUSTRALIA	)
1
NEW SOUTH WALES DISTRICT REGISTRY	) No. G495 of 1987.
1
GENERAL DIVISION	)
On appeal from a single Judge of the Federal Court of Australia

BETWEEN:  CHARLOTTE MELKPLRN
as executor of the
estate Of NICO MELKNAN
Deceased

Appellant

AND :  COMMISSIONER OF TAXATION

Respondent

CORAM:	DAVIES, LOCKHART AND GUMHOW JJ.
PLACE:	SYDNEY.
DATE :	8 JULY 1988

HINUTE OF ORDERS

THE COURT ORDERS THAT:

1. The appeal be dismissed.

2.         There be no order as to the costs of the appeal.

Note :	Settlement and entry of orders is dealt with by Order
36 of the Federal Court	Rules.

IN THE FEDERAL COURT	OF AUSTRALIA	) )
NEW SOUTH WALES DISTRICT REGISTRY	)	No. G495 of 1907
)
GENERAL DIVISION	1

On appeal from a slngle

Judge of the Federal Court

of Australia

BETWEEN:	CHARLOTTE MELKMAN
as executrix of  the
estate of NICO MELKMAN Deceased

Appellant

AND :  COMMISSIONER OF TAXATION

Respondent

CORAM:	DAVIES, LOCKHART AND GUMMOW JJ.
PLACE :	SYDNEY.
DATE :	8 JULY 1980

REASONS FOR JUDGMENT

THE COURT:

Introduction:

This is an appeal from a decision from a single Judge

of this Court (Fox J.) dismissing an appeal brought on

questions of law pursuant to S. 44 of the Administrative

Appeals Tribunal Act 1975. The appellant is the widow and

executrix of the estate of Nico Melkman who died in January

1985. She seeks to have treated as exempt income under the

Income Tax Assessment Act 1936 ("the Assessment Act") a pension paid to her late husband by the Government of the Kingdom of

. -

.- 2.

Netherlands pursuant to a law of that country entitled Benefit

Payments to Victims of Persecution	1940-1945	("the Benefits
-
Act").

On 10 March 1981, the respondent ("the Commissioner")

disallowed an	objection against the treatment as assessable
income of the pension received	by Mr. Melkman in respect of the
year of income ended 30 June 1978.	Assessments were made also

in relation to the years of income ended 30 June 1977, 1979,

1980, 1981 and 1982. These five assessments raised the same

issues as the assessment in relation to the year of income

ended 30 June 1978. All these assessments were the subject of

requests for review by the Administrative Appeals Tribunal

("the Tribunal"). The respondent was successful before the

Tribunal, and, as we have indicated, before his Honour.

We refer first to the facts found by the Tribunal. Mr. Melkman was born in the Netherlands in	1922.	He was a
Dutch national; he had	four Jewish grandparents and	regarded
himself as, and was regarded	by others as, a Jew.	When the
German armed forces	invaded and occupied the Netherlands	in
1940, he became subject to the restrictions imposed on Jews	and

later he was arrested. At that time he was engaged to be

married to the woman who is now his widow. Mrs. Melkman gave

evidence before the Tribunal of her husband's possible

connection with the Underground and that she believed her

husband's arrest came in the course of his clandestine

activities in circulating an Underground newspaper. In

September 1942, Mr. Melkman was placed in a concentration camp.

.- 3.

The evidence before the Tribunal	included his written account
of his privations and vicissitudes in the following years.	He

survived the ordeal. After several years' service in the

Dutch Navy, he and his wife settled in Australia.

From the late 1940.6, Mr. Melkman suffered from

epilepsy.	This was accepted by his medical advisers as having
been occasioned by	head injuries suffered in a concentration
camp.	From the mid-1950's he supported his family by working

as a kitchen hand in a public	hospital.	Although qualified
for higher duties, his health was	not good enough to enable	him

to secure advancement and to hold that advancement. BY

September 1976, he was mentally unfit to continue work and his

condition was attributable to the atrocities he had observed

and the injuries he had suffered during the captivity that	had
commenced in 1942.

The appellant's case was put on two bases before us.

Section 23 (kc) of the Assessment Act and S. 10 of the Racial

Discrimination Act

The appellant relied upon S. 23 (kc) of the Assessment Act in conjunction with 6. 10 of the Racial Discrimination Act

m5 ("the Racial Discrimination Act"].

Section 23 (kc) of the Assessment Act provides:

23.	The following income shall	be exempt	from
income tax:

(kc) pensions, annuities and allowances paid as or by way of compensation . . .

by a State

of	the	Federal	Republic	of	Germany
under	the	laws	of	that	Republic

relating to compensation of victims	of
National Socialist persecution;	. . .

. 4.

As we have observed, the pension in question in these

proceedings was paid by the government of the Kingdom of

the Netherlands and not by any State of the Federal Republic of

Germany. Section 23 (kc) identifies certain legislation in

force in the Federal Republic of Germany. The law in question

in the present proceedings is that entitled (in translation)

Federal Compensation for Victims National-Socialist of

Persecution Amendment Act 1953. This law confers an

entitlement to compensation on persons who were persecuted

during the period 30 January 1933 to 8 May 1945 by National

Socialist acts of violence because of their political

conviction of opposition to National Socialism, their race, creed or religious belief and who thus suffered damage to life, body, health, liberty, property, assets or to their

professional or economic advancement. The persons upon whom

is conferred an entitlement to compensation under the law of the Federal Republic are described in terms which include (but are not limited to) those who died, emigrated, were deported or expelled before 1 January 1947, and had (in translation) their

"last native residence" or permanent residence in the

geographic area of Germany in which the law of the Federal

Republic is expressed to operate. The expression "last native

residence" was treated	in these proceedings	as identifying
German national origin.

Sub-sections (1) and (2) of S. 10 of the Racial

Discrimination Act are as follows:

.- S .

10.   (1) If, by reason of, or of a provision of, a law of the Commonwealth or of a State

or Territory, persons of a particular

race, colour or national or ethnic origin do not enjoy a right that is enjoyed by persons of another race, colour or national or ethnic origin, or enjoy a right to a more limited extent

than persons of another race, colour or

national or ethnic origin, then,

notwithstanding anything in that law, persons of the first-mentioned race,

colour or national or ethnic origin

shall, by force of this section, enjoy

that right to the same xtent as

person8 of that other race, colour or

national or ethnic origin.

(2) A	reference in sub-section (1) to a
right includes a reference to a right of a kind referred to in Article S of the Convention.

Sub-section 3 (1) of the Racial Discrimination Act provides

that in the Act, unless the contrary intention appears:

"Convention" means In ernational the

Convention on the Elimination of All Forms of Racial DisCriPlinatiOn that was opened for

signature on 21 December 1965 and entered

into force on 2 January 1969, being the

Convention a copy of the English text of which is set out in the Schedule.

Article 1 of the Convention includes the following:

1.1 In this Co vention, term the "racial

discrimination" shall mean any distinction,

exclusion, restriction or preference based on race, colour, descent, or national or ethnic origin which has the purpose or effect of

nullifying or impairing recognition, the

enjoyment or exercise, on an equal footing, of

human	rights	and	fundamental	freedom in the
political,	economic,	social,	cultural	or any

other field of public life.

1.2	This Convention shall not apply to distinctions, exclusions, restrictions or preferences made by a State Party to this Convention between citizens and non-citizens.
1.3	Nothing in this Convention may be interpreted as affecting in any way the legal provisions of
States Par ies conc rning nat onality,
citizenship or naturalization, provided that such
provisions do not discriminate against any
particular nationality.

Articlo 2 provides that the States Parties condemn racial

discrimination. They undertake to pursue policy a of

eliminating racial discrimination in all its forms. Article 5

is in the following terms,	so far as	is relevant to the case
put by the appellant:

5. In compliance with fundamental th

obligations laid down in article 2 of this

Convention, States Parties undertake to

prohibit and to eliminate racial

discrimination in all its forms and to

guarantee the right of everyone, without

distinction as to race, colour, or national

or ethnic origin, to equality before the

law, notably in the njoyment of the

following rights:

(a) . . .

(b) . . . (c) . . .

(d) Other civil rights, in particular:

. . .

(v)  The right to own property alone as well as in association with others;

. . .

( e ) Economic, social and cultural rights, in

particular:

. . .

. -

l .

(iv) The right to public health, medical

care, social security and social

services; . . .

The appellant submitted that, by reason of S. 23 (kc)

of the Assessment Act, and within the meaning of sub-s. 10 (1)

of the Racial Discrimination Act, persons of a particular

national origin (i.e. persons such as the appellant who are not of German origin) do not enjoy right6 that are enjoyed by persons of another national origin (that is to say German

origin) or their enjoyment of such rights is limited. As the

submis6ion proceeded, the denial of an exempt character to the

income derived by Mr. Melkman led ( i ) to his failure to enjoy

several right6 within the meaning of sub-s. 10 (1) of the

Racial Discrimination Act, namely the	right to own property and
the right to public health, medical	care, social security and

social services, or ( i i ) to the curtailment of those rights. The appellant's submission was that, by force of sub-s. 10 (1) of the Racial Discrimination Act, and notwithstanding anything

in the Asressment Act, persons such as Mr. Melkman shall enjoy

those rights to the same extent as persons of German national

origin. The result is, according to the appellant, that the

payments of the pension in question are exempt income.

whatever the difficulties with interpretation of S. 10

of the Racial Discrimination Act,	we	are of the opinion	that
this provision does not have the operation	for	which	the
appellant contended in this case.

. .

. - 0 .

Section 10 of the Racial Discrimination Act is a

provision both of importance and some complexity. We have set out the text of article 1.1 of the Convention which contains a definition of the term "racial discrimination", but it may be noted that the term "racial discrimination" does not appear in

S. 10 of the Racial Discrimination Act. In Gerhardy v - Brown

(1985) 159 CLR 70 at 99, Mason J. (as he then was) said:

Section 10 makes no reference to racial

discrimination; nor does it make any

reference, as S. 9 (1) does, to the elements

of the definition of "racial discrimination"

in Art. 1.1 of the Convention. Instead

S. 10 is expressed to operate where persons of a particular race, colour or origin do not en o a right that is enjoyed by persono

der race, colour or origin, or do not	enjoy that right to the same extent. some
question as to the validity of S. 10 might
be thought to arise because it fails to
follow the language of Art. 2 of the
Convention. The exclusion of persons of a race, colour or origin from the enjoyment of
a relevant right by reason of a law does not
necessarily involve "racial discrimination" in that it may not amount to a distinction, exclusion, restriction or preference "which
has the purpose or effect of nullifying or
impairing the recognition, enjoyment or
exercise' of the right "on an equal
footing". Consequently, S. 10 should be
read in the light of the Convention as a
provision which is directed to lack of enjoyrent of a right arising by reason of a
law whose purpose or effect is to create racial discrimination.

We draw particular attention to the	last sentence in this
extract from his	Honour's judgment.
In the e a w judgment, Mason 99, 101-102) that (a) in any event, the Convention does	J. pointed out ( s u p r a at

not

. - 9 .

concern itself with the precise content	of any particular right
or freedom, and (b) as	a concept, human rights and freedoms are

fundamentally different from specific or special rights as generally understood in our law and as enforced in our courts

in actions between individuals or between individuals and

governments. Gibbs C.J. ( W at 86) also observed that the

Convention is not	concerned	with	rights	that are	purely
private.

Consistently with what was said by Mason J. in

Gerhardy v ( r u p r a at 99-100), it is necessary for the

appellant to establish both that the prejudice of which

complaint is made arises by reason of statutory provisions
(i.e. S. 23 (kc) of the Assessment Act) whose purpose or effect
is to create racial discrimination, and also that that
prejudice amounts to an exclusion from an impairment of a human
right or fundamental freedom, or a right of a kind referred to

in article S of the Convention.

The appellant has identified the right or rights in

respect of which the alleged discrimination occurs; as we have

observed, the appellant points to para. (d) (v) and (e) (iv) of

article S of the Convention, that is to say, to the right to

own property and to	the right to public health, medical care,
social recurity and social services.	But what is the content
of those rights? In Gerhardy v Brown	( W at 102), Hason J.

characterised the concept of freedom of movement as extending,

generally speaking, to movement without impediment throughout

the State concerned, but subject to compliance with regulations

. .

.. 10.

legitimately made in the public interest, such as traffic laws

and subject to the private and property rights of	others.
Likewise, in our view, the content	of the rights on which the
taxpayer relies in this care would	not ordinarily be understood

as	conferring or requiring	freedom or immunity	from the
operation of any law which provided	for	the imposition	and

collection of taxes where the purpose	or effect of that law was
not to create racial discrimination.

Were it not for S. 23 (kc) of the Assessment Act,

sub-6. 25 (1) of that Act would bring in, as assessable income,
both the receipt of the deceased's penaion and the receipt of
any pension which satisfied the description in S. 23 (kc).
Considered at that stage, none of the relevant provisions of

the Assesament Act would have the character of a law "whose

purpose or effect [was] to create racial discrimination" within

the sense of the parsage we have quoted from the judgment of

Maron J. in Gerhardy v Brown.

Section 23 exemption upon income which satisfies a particular (kc) of the Assessment Act confers an

description.

That description define6 the exemption by reference to the

character of the income (namely, pensions, annuities and

allowance.), the aource of the income (a State of the Federal Republic of Germany) and the character of the law of the State by which the payment is made (as a law relating to compensation

of victims of National-Socialist persecution).

.. 11.

These criteria do not take as their points of

reference	the race, colour,	descent or national or ethnic
origin of the taxpayer, and do	not have	as their purpose or

effect the creation of racial discrimination. This is so even

though a German law	that answers one	of the criteria for	the
operation of	S. 23 (kc) (viz. the 1953 law which	-	we have

described) is so drawn that	(i) not all persons who were
subjected	to National Socialist persecution necessarily will
qualify for a pension under	that law, and (ii) one of the
classes of beneficiaries under the law	is defined by reference

to German nationality. Neither the purpose	nor the effect	of
s. 23 (kc) of the Assessment Act	is	to discriminate between

taxpayers in receipt of income by way of pension, annuity and allowances on grounds going to race, colour or national or

ethnic origin. The provision applies to persons within its

sphere of application uniformly, regardless	of	their	race,
colour, descent or national	or ethnic origin;	-	cf. Conroy v

Carter (1968) 118 CLR 90 at 100-101;	Fulcher v Hilt (1985) 61
ALR 359 at 367.

Am we have earlier stated, we believe that the content

of the rights on which the taxpayer relies in this case would

not ordinarily be understood as conferring	or requiring any
freedom or irmunity from the operation of taxation laws of	the

character we have described. The operation of those laws

would not amount to an exclusion from enjoyment of the human

rights or fundamental freedom6	relied on by the appellant	in
this case.

. .

. - 12.

Accordingly, we reject the submission that the pension received by the late Mr. Melkman from the Dutch Government is to be treated as if it had been exempt income by virtue of S. 23 (kc) of the A8sersment Act operating in conjunction with S.

10 of the Racial Discrimination Act. It should be noted, in

this context, that the introduction of 6. 23(kca) into the

ASSO8SBent Act by 8 . 4(1) of the Income Tax Assessment

Amendment Act (No. 4) 1982, Act No. 76 of 1982, which applies

to penmionm derived on or after 3 March 1982, allows a specific

exemption for pensions of the kind received by the appellant in

so far as entitlements under the pension were derived on or

after that date.

Paragraph 23AD ( 3 ) (c) of the Assessment Act

We turn how to consider the other basis of the case

for exemption.

It was argued on behalf of the appellant that the

payments of pension made to Mr. Melkman by the Netherlands

Government under the Benefits Act were exempt from Australian

income tax on	the ground that they were payments	of the	kind
referred to in para. 23AD(3)(c) of the	Assessment	Act.

Sub-section 23AD(3) provides, in its form prior to amendments

pursuant to S. 5(1) of the Taxation Laws Amendment Act	(NO. 4)
1985, Act No. 173 of 1985:

" ( 3 ) The following payments are exempt from income

tax :

(a) payments (other than excepted payments) of

pensions and attendants' allowances, and payments (other than excepted payments) of a like nature,

made under the Repatriation Act 1920-1973, the

Repatriation (Far East Strategic Reserve) Act

- 3 , th e Re atriation (Special Overseas

Service) Act 1 9 d 1 9 7 3 or the Seamen's War

Pensions and Allowances Act 1940-1973;

(b) payments of pensions and allowances, and

other payments, made by the Government of Australia or the Government of the United Kingdom

of Great Britain and Northern Ireland, being

payment. that, in the opinion of the Commissioner,

are of a similar nature to payments (other than
excepted payments) referred to in paragraph (a);

(c)	payments of wounds and disability pensions
of the kinds specified	in sub-section 365(2) of

the Imperial Act known as the Income and

Corporation Taxes Act 1970, other than payments
that, in the opinion of the Commissioner, are of a

similar nature to excepted payments; and

(d)	payments (other than excepted payments)	by
way of:

(i ) pension, allowance, endowment or

benefit under the Social Services Act

1947-1973;

(ii)     allowance under the Tuberculosis Act

1940; and

(iii) domiciliary nursing care benefit

under Division 58 of Part	V of the National
Health Act 1953-1973."

The expression "excepted payment" has the meaning

given it in sub-s. 23AD(l). Nothing turns for the purpose of

the prerent proceedings upon that definition, the position

being that if the pension in question otherwise falls within

the description in para. 23AD(3)(c), it does not, on any basis,

fall within any of the xceptions.

Paragraph 23AD(3)(c) refers to sub-section 365(2) of the Imperial Act known as the Income and Corporation Taxes Act

1970.   Section 365 provides:

- .

.. 14.

"(1)	Income from wounds and disability pensions
to which this subsection applies shall be	exempt

from	income	tax	and shall not be reckoned in
computing income for	any of the purposes	of	the
Income Tax Acts.

(2)	Subsection (1) above applies to -
(a) wounds pensions granted	to members of the
naval, military and air forces of the	Crown,

(b) retired pay of disabled officers granted on

account of medical unfitness attributable to or

aggravated by naval,	military	or	air-force
service,

(c) disablement or disability pensions granted

to members other than commissioned officers of the

naval, military or air forces of the Crown on

account of medical unfitnoss attributable to or

aggravated by naval,	military	or	air-force
service,

(d) disablement pensions granted to persons who have been employed in the nursing services of any of the naval, military or air forces of the Crown on account of medical unfitness attributable to r aggravated by naval, military or air-force service, and

(e) injury and disablement pensions payable under any scheme made under the Injuries in War

(Compensation) Act	1914,	the	Injuries	in	War
(Compensation) Act	1914	(Session	21 ,	and	the

Injuries in War (Compensation) Act 1915, or under

any War Risks Compensation Scheme for the

Mercantile Marine:

Provided that, where the amount of any such

retired pay or pension to which subsection (1)

above applies is not solely attributable to

disablement or disability, the relief conferred by the said subsection (1) shall extend only to such part as is certified by the Secretary of State for

Social Services, after consultation with the

appropriate Government Department, to be

attributable to disablement or disability."

It was argued on behalf of the appellant that

paragraph (e) applies to the pension in question. It was not

argued that any other paragraph of sub-s. 3 6 5 ( 2 ) applied.

The first question which arises centres on the meaning

and application of the words "of the kinds" appearing in paragraph (c) of sub-section 23AD(3) of the Assessment Act.

The comparison to	be made is between the particular pension
which Hr. Melkman received	and the kinds of pension specified
in sub-s. 365(2) of	the Income and Corporation Taxes Act 1970
(Imp.	1 .

In Goodfellow v. The Commissioner of Taxation of the

Commonwealth of Australia (1976) 76 A.T.C. 4199 the Supreme

Court of New South Wales, Administrative Law Division (Sheppard
J.), said at 4211 that paragraph 23(kab) of the Assessment Act
in its then form (which in all respects was of the same effect

as paragraph 23AD(3)(c)) did not embrace only pensions exempt

from English income tax under the Imperial Act, but also other

wounds and disability pensions of the same kind payable from

sources outside the United Kingdom. On appeal to the High

Court, (1977) 5 1 A.L.J.R. 437, Jacobs J. expressed agreement at

438 with the reasons of Sheppard J. on this point. Jacobs J.

said that he was content to adopt his Honour's reasons on the

point, but took a different view on the question whether the

pension of the appellant in that case answered the description

of a pension of the kind specified in S. 380(2) of the Income

Tax Act 1952 (Imp.). Barwick C.J. and Aickin J., who were the other two members of the High Court in Goodfellow's Case,

expressed no views on this question.

- .

.. 16. .-

The question has also come before Income Tax Boards of

Review in Australia and the reasons	of the members	of the
Boards reflect divergent views:	see Case N45, 81 A.T.C.	220;

Case P29, 82 A.T.C. 136; Case T2, 86 A.T.C. 107; and Case u66,

87 A.T.C. 424 . The question was considered by Spender J. in

Federal Commissioner of Taxation v. Verzyden (1988) 88 A.T.C.

4205 at 4209-4210, now on appeal to a ?ull Court of this Court.

At one end of the scale it is said that para.

23AD(3)(c) exempts only the pensions particularised in sub-6.

365(2) of the Income and Corporation Taxes Act 1970. This view

gives an effect to the words "of the kinds specified in"

similar to that given to the words "of a kind specified in"	in
6.30	of the Compensation (Commonwealth Government Employees)

Act - 1971 (Cth) and regulation 12 of the Compensation

(Commonwealth Government Employees) Regulations	by Mason C.J.,
Brennan and Toohcy JJ. in -	Bird v. Commonwealth of Australia

(delivered 20 Hay 1988). The view is also supported by the use

in para. 23AD(3)(b) of the different term "of a similar nature to". A wider view is that the exemption extends to pensions payable by Governments other than the Government of the United

Kingdom provided they answer the description "of the Crown' for

the purposes of sub-S. 365(2). At the other end of the scale

it is said that the exemption extends further to include

similar pensions payclble by any Governments, including

Governments	formerly at war	with	the	United	Kingdom	and
Australia.

.. 17.

For reasons which appear later it is not necessary for us to decide this question and we think it inappropriate to do

so. The question was not argued before us and only arose

incidentally when raised by the Bench in the course of

argument. Further, the correctness of the views expressed by Sheppard J. and by Jacobs J. in Goodfellow's Case was assumed by counsel for both parties. Nor, as we said earlier, were we

referred to any of the relevant Orders in Council or Royal

warrants pursuant to which schemes were made under the Acts

mentioned in paragraph (e) of sub-s. 365(2) of the Income	and
corporation Taxes Act	1970.

Paragraph (e) of sub-s. 365(2) of the Imperial Act

refer6 to English Acts which we shall examine in turn. Before

doing so, however, it is necessary to note that there was no

material before the trial Judge or us identifying schemes

framed under any of the English Acts. whether it is possible to apply paragraph 23AD(3)(c) without reference to the schemes themselves is open to question; but we shall approach the case

on the assumption that this is possible because, for reasons

which appear later, the pension payable to the deceased could

not fall within the description of any of the pensions

mentioned in any of the English Acts specified in paragraph (e) and a fortiori could not fall within the description of

pensions payable under any of the schemes made thereunder.	We
leave open the correctness of this	assumption.

The first Act mentioned in paragraph ( e ) is the

Injuries in War (Compensation) Act 1914 which authorises His

d .

.. 18.

Majesty by Order in Council to "frame a scheme as to the

pension and grants, and other allowances in the nature thereof, to be paid" to certain persons "in respect of injuries suffered

by them whilst employed afloat ... in connexion with warlike

operations in which His Majesty is engaged, and in case of

their death to widows and other dependants".

The pension paid under the Benefits Act to Hr. Helkman

was not airilar to those payable under the terms of the

Injuries in War (Compensation) Act 1914. The evidence does not

establish that Hr. Helkman was employed in connection with

warlike operation. or that the pension	was payable to him by
reason of his employment in connection with warlike	operations.

There is some evidence in the form of the belief of the

appellant, his widow, of his "possible connection with the

Underground". The trial Judge rejected the submission that

Hr. nelkman, rhilrt living in Europe and having been persecuted

by the authoritier in the Netherlands, including being sent to

concentration camps because he war possibly engaged in

"clandestine activities circulating in an underground

newspaper", rhould be treated in some way as a person covered

by the legirlation in question. The trial Judge was, in our

opinion, correct in his conclurion that the disability which

affected Mr. HelkMn was not incurred whilst he was engaged "in

connexion with warlike operations"	and that he did not receive
the pension on that ground.	In any case, the disability which

affected Mr. Helkman was not incurred in circumstances

connected with any employment afloat so as to fall within the
terms of the Injuries in War (Compensation Act) 1914.

- .

.. 19.

The second Act mentioned in para. 365(2)(e) is the War Compensation Act 1914 (Session 2 ) . This Act also provides for

the framing of schemes as to pensions, grants and other allowances in the nature thereof to be paid to certain persons

"whilst employed on shore out of the United Kingdom ... in

connection with warlike operations in which H i 6 Majesty is engaged, and, in the case of their death, to their widows or other dependants". ?or the reasons expressed above, we agree

with the conclusion	of the trial Judge	that the disability
which affected Hr.	Melknan was	not incurred "whilst employed

... in connection with warlike operations"	nor was the pension
granted for that cause.

The third Act mentioned in para. 365(2)(e) is the

Injuries in War (Compensation) Act 1915 which was	not relied on
in argument. The short title	to that Act reads:

"An Act to provide for the grant of pensions and other allowances to certain persons in respect of

disablement due to causes arising	out of the
operations of the present	war, whilst they are
employed afloat	in connexion with the telegraph
8nd postal services, and to their dependants,	and

for purposes connected therewith."

Plainly the pension payable to	Hr. Helkman does not fall within
that description.

There remains the "War Risks Compensation Scheme for

the Mercantile Marine". It was common ground before the trial

Judge and this Full Court that this Scheme applies to

..	.
..	20.

members of the mercantile marine serving on British ships	and
that the Scheme is not relevant for present purposes.

On no view of the facts of this case or of the law

could the pension paid to Mr. Melkman answer the description	of
a disability pension "of the kinds" specified in paragraph	(e)

of sub-s. 3 6 5 ( 2 ) of tho Inco8e and Corporation Taxes Act 1970.

The schemes mentionod in paragraph (e) refer to English Acts which select as their criteria for entitlement to pensions the suffering of injuries either whilst employed "in connection

with warlike operations" whether afloat or on shore, or whilst

employod afloat "in connection with the telegraph and postal

services". The pension payable to Mr. Melkman by the

Netherlmds Govcrnmant was paid pursuant to the Benefits Act which providad for payments of pensions to persecuted persons who, because of sicknem or disability occasioned or aggravated

by or in connection with their persecution	by the "occupying
enemy forces" on the ground of "race, belief	or world view" are

unable to earn income equal to the amount calculated under a

specified formula.	The criteria selected	by the Benefits Act
for entitlomont	to payment	of benefits thereunder have no
relation to the criteria selected	in the English Acts mentioned

in paragraph (e) of S. 365 of the Imperial Act to which

reference has already been made. We leave aside the fact that

the pension was paid to Mr. Melkman by the Government of	the
Kingdom of the Netherlands and	not the Government of the United

Kingdom or of any other member of the British Commonwealth.

Notwithstanding that there may be some degree of elasticity in the meaning of the phrase "of the kinds" it cannot be stretched

t

I .

,. 21. ..

to render comparable in any relevant way pensions paid under the Benefits Act to the pensions mentioned in paragraph (e) of

S . 365 of the Imperial Act.

In the result the pension paid to Mr. Melkman is not

exempt from income tax under paragraph 2 3 ~ ~ ( 3 ) ( c ) of the

Assessment Act.

The appeal should be dismissed. Counsel for the

respondent informed us that, if the appeal should be dismissed,

the respondent did not seek an order for costs. Hence there

shall be no order as to the costs of the appeal.

I certify that this and the preceding

twenty ( 2 0 ) pages are a true copy of

the reasons for judgment herein of	the
Court.
Asaociate EIIBhdp
-	Date: 8 July 1988

Counsel for the Appfillant:	Mr. T. Robertson
Solicitor for the	Appellant:	Anthony Woods, Aingsford Legal Centre

Counsel for the Respondent:	Mr. S.W. Olbb with Mr. J.P. Reynolds
Solicitor for the Reapondent:	Australian Government,  Solicitor
Date of Hearing:	30 May 1988
Date of Judgment:	8 July 1988