Sea Shepherd Australia Limited and Commissioner of Taxation
[2012] AATA 520
•7 August 2012
[2012] AATA 520
Division TAXATION APPEALS DIVISION File Number
2010/5323
Re
Sea Shepherd Australia Limited
APPLICANT
And
Commissioner of Taxation
RESPONDENT
DECISION
Tribunal Middleton J
F J Alpins, Deputy President
E Fice, Senior MemberDate 7 August 2012 Place Melbourne The Tribunal affirms the objection decision made by the Commissioner of Taxation on 15 October 2010.
....[sgd]....................................................................
Middleton J
TAXATION – deductible gift recipient – deductions for certain gifts or contributions – entitlement to endorsement – welfare and rights recipients – charitable institution – short-term direct care to animals – animals that have been lost or mistreated or are without owners – native wildlife – international non-profit marine wildlife conservation organisation – campaigns to protect marine wildlife
Administrative Appeals Tribunal Act 1975 (Cth) s 37
Income Tax Assessment Act 1997 (Cth) ss 30-15, 30-17, 30-45, 30-55, 30-120, 30-125
Taxation Administration Act 1953 (Cth) ss 426-5, 426-30Aid/Watch Incorporated v Federal Commissioner of Taxation (2010) 241 CLR 539
Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (2009) 239 CLR 27
Biga Nominees Pty Ltd v Federal Commissioner of Taxation (1991) 104 FLR 74
Bourne v Norwich Crematorium Ltd [1967] 1 WLR 691
Brennan v Comcare (1994) 50 FCR 555
Brookton Co-operative Society Ltd v Federal Commissioner of Taxation (1981) 147 CLR 441
Carr v Western Australia (2007) 232 CLR 138
Collector of Customs v Agfa-Gevaert Ltd (1996) 186 CLR 389
Commissioner of Taxation v Murry (1998) 193 CLR 605
Cronulla Sutherland Leagues Club Ltd v Federal Commissioner of Taxation (1990) 23 FCR 82
Damjanovic & Sons Pty Ltd v The Commonwealth of Australia (1968) 117 CLR 390
Diethelm Manufacturing Pty Ltd v Federal Commissioner of Taxation (1993) 44 FCR 450
Envestra Ltd v Federal Commissioner of Taxation (2008) 169 FCR 300
Exxon Corporation v Exxon Insurance Consultants International Ltd [1982] Ch 119
Falconer v Pederson [1974] VR 185
Federal Commissioner of Taxation v Applegate (1979) 27 ALR 114
Lorimer v Smail (1911) 12 CLR 504
M Collins & Son Pty Ltd v Bankstown Municipal Council (1958) 3 LGRA 216
Mersey Docks & Harbour Board v Henderson Bros (1888) 13 App Cas 595
Mikasa (NSW) Pty Ltd v Festival Stores (1972) 127 CLR 617
National Mutual Life Association of Australasia Ltd v Federal Commissioner of Taxation (Cth) (2008) 74 ATR 173
Ogden Industries Pty Ltd v Lucas [1970] AC 113 (PC)
Re Australian Federation of Construction Contractors; Ex parte Billing (1986) 68 ALR 416
Re Inman [1965] VR 238
R v Brown [1996] 1 AC 543
R v Refshauge (1976) 11 ALR 471
Singh v Commonwealth of Australia (2004) 222 CLR 322
Suntory (Aust) Pty Ltd v Federal Commissioner of Taxation (2009) 177 FCR 140Tax Laws Amendment (2006 Measures No. 3) Bill 2006 Explanatory Memorandum
Collins English Dictionary (9th ed, Harpercollins Publishers Ltd, 2007)
Macquarie Dictionary (5th ed, Macquarie Library, 2009)Shorter Oxford English Dictionary (6th ed, Oxford University Press, 2007)
REASONS FOR DECISION
Middleton J
F J Alpins, Deputy PresidentE Fice, Senior Member
INTRODUCTION
The issue before the Tribunal is whether the applicant, Sea Shepherd Australia Limited, is entitled to be endorsed as a deductible gift recipient for the purposes of s 30-125(1) of the Income Tax Assessment Act 1997 (Cth) (the Act). In particular, the proceeding concerns the construction of Item 4.1.6 in s 30-45 of the Act.
We have decided that the Commissioner’s decision to disallow the applicant’s objection to his refusal to endorse the applicant as a deductible gift recipient should be affirmed.
FACTS
Evidence before the Tribunal
There was no dispute about the facts before the Tribunal, save for in one respect that we will deal with later in these reasons. The documents filed by the Commissioner pursuant to s 37 of the Administrative Appeals Tribunal Act 1975 (Cth) were accepted into evidence without objection.
The applicant relied upon the evidence of three witnesses. The applicant’s main witness was Mr Jeffrey Hansen, a director and the chief executive officer of the applicant. Mr Hansen’s evidence primarily took the form of two witness statements with various annexures. The applicant relied particularly upon Mr Hansen’s supplementary witness statement, as it addressed more recent and therefore more relevant events. Mr Hansen was cross-examined; however, as explained later in these reasons, his evidence given under cross-examination and some of his other evidence became largely immaterial once common ground was reached at the hearing as to the earliest date from which any endorsement of the applicant might have effect.
Mr Jeremy Carmody, the applicant’s accountant, gave evidence by way of a witness statement to which were annexed recent financial reports he had prepared for the applicant. The applicant also relied upon the expert evidence of Mr Tony Ayling, a marine biologist, given in the form of a witness statement. Neither Mr Carmody nor Mr Ayling was cross-examined. We accept their evidence. We will address Mr Ayling’s evidence later in these reasons when dealing with the issue to which it pertains.
The applicant and its activities
The applicant was established by Sea Shepherd Conservation Society (SSCS), a company incorporated in the United States of America as an international non-profit marine wildlife conservation organisation. The founder and president of SSCS, Mr Paul Watson, is also a director of the applicant. The applicant was incorporated in January 2007, and is registered as an unlisted public non-profit company. At a meeting held in February 2010, the applicant’s board of directors resolved that the applicant would commence trading.
Clause 3.1 of the applicant’s constitution relevantly provides that the purposes of the applicant are:
“3.1.1 to advance education in the field of marine and freshwater ecology;
3.1.2to promote the conservation and preservation of marine and freshwater living organisms;
3.1.3to promote humane behaviour towards animals, particularly but not exclusively marine animals, which are in need of care and attention by reason of sickness, maltreatment, poor circumstances or ill-usage;
3.1.4 any other purposes deemed charitable …. .”
Clause 10.2 of the applicant’s constitution provides:
“In the event of the organisation being dissolved, the amount that remains after such dissolution and the satisfaction of all debts and liabilities shall be transferred to another organisation with similar purposes which is not carried on for the profit or gain of its individual members.”
Mr Hansen gave evidence about the applicant’s activities. The applicant’s main activity is the conduct of what it terms “campaigns”, which are designed to protect marine wildlife from being harmed or killed by humans. While the applicant operates independently from SSCS, the two entities collaborate in the planning and carrying out of such campaigns. To date, the applicant’s campaigns have been focused primarily on the protection of whales. The campaigns involve intercepting whaling fleets and obstructing the whalers’ activities so as to prevent the killing and injuring of whales.
The applicant’s activities also encompass the protection of other marine wildlife, by intervening so as to prevent the killing of sharks for their fins and the clubbing of seals. Furthermore, the applicant tracks and removes dolphin drift nets.
The applicant does engage in activities other than campaigns – particularly, it co-ordinates the rescue, transport and cleaning of affected wildlife during disasters. However, the evidence indicates that the applicant is primarily engaged in carrying out campaigns to protect marine wildlife as we have described.
The applicant owns a vessel registered in Australia called the “MV Brigitte Bardot” which it uses for the conduct of its campaigns. The evidence, including the applicant’s financial reports for the 2010 and 2011 financial years, indicates that the vessel was acquired some time between July and November 2010. The applicant’s vessel was launched (under its former name “Gojira”) on 29 November 2010.
Since acquiring its vessel, the applicant has carried out the following campaigns for the protection of whales. First, during the period December 2010 to March 2011, the applicant conducted a campaign called “Operation No Compromise”, using the “MV Brigitte Bardot” and two chartered vessels owned by SSCS (the “MY Steve Irwin” and the “MY Bob Barker”), in order to protect minke, fin and humpback whales in the Southern Ocean Whale Sanctuary located in the waters off Antarctica.
During the period July to August 2011, the applicant participated in a campaign called “Operation Ferocious Isles”, using the “MV Brigitte Bardot” to protect pilot whales in the waters off the Faroe Islands, situated in the North Atlantic Ocean.
The applicant then conducted a further campaign to protect whales in the Southern Ocean Whale Sanctuary. That campaign, “Operation Divine Wind”, took place between December 2011 and March 2012. For that campaign, the applicant used the same three vessels as were used in “Operation No Compromise”.
We note that, to the extent that the facts we have set out refer to activities of the applicant other than its campaigns to protect whales, they essentially constitute agreed facts. We say that because the applicant applied to the Commissioner for endorsement from the date of its incorporation, and so at the hearing, the parties were initially in dispute as to whether certain activities had been carried out by the applicant or by SSCS. This was particularly so, given that the applicant did not commence trading until February 2010 at the earliest. That issue was resolved as the hearing progressed (save for in one respect which we will address later) by the parties finding common ground as to the earliest date on which the applicant’s entitlement to endorsement might be said to have arisen, being when the applicant’s vessel was launched on 29 November 2010. The parties agreed that would be the date from which the applicant’s endorsement would have effect if the Tribunal were to decide this matter in the applicant’s favour.
Finally, and for the sake of completeness, we note that the evidence of the applicant’s activities conducted after November 2010 was largely confined to its campaigns to protect whales, although Mr Hansen gave evidence that the applicant is concerned to protect other marine life by way of its campaigns in the future, which accords with the objects expressed in the applicant’s constitution. In any event, it was accepted by the Commissioner for the purposes of the question to be considered by the Tribunal that the applicant’s activities extend to the protection of other marine life as described above. Furthermore, as is apparent from our reasons, our conclusion that the applicant is not entitled to endorsement as a deductible gift recipient pursuant to Item 4.1.6 has not turned upon the kind of marine life protected by the applicant by way of its campaigns.
RELEVANT LEGISLATION
Division 30 of the Act makes available deductions for certain gifts or contributions made by taxpayers. Section 30-15 makes available deductions for gifts or contributions made to certain recipients, including “[a] fund, authority or institution covered by an item in any of the tables in Subdivision 30-B” (Item 1 of the table in s 30-15). Section 30-17 relevantly requires that such a recipient be endorsed under Subdivision 30-BA as a “deductible gift recipient”. We note that s 30-17 does not apply to, amongst other things, “a fund, authority or institution that is mentioned by name in an item of a table in Subdivision 30-B” (s 30-17(1)(a)).
Subdivision 30-B sets out tables of recipients for deductible gifts, including both general categories of recipients and “specific” (named) recipients, in various fields of endeavour such as health, education, research and the environment. Relevantly, “welfare and rights recipients” are enumerated in the tables in s 30-45.
The table in s 30-45(1) sets out general categories of welfare and rights recipients. Item 4.1.6 of that table provides for the following category, upon which the applicant relies:
“a charitable institution whose principal activity is one or both of these:
(a)providing short-term direct care to animals (but not only native wildlife) that have been lost or mistreated or are without owners;
(b)rehabilitating orphaned, sick or injured animals (but not only native wildlife) that have been lost or mistreated or are without owners.”
Section 30-120 of Subdivision 30-BA relevantly provides that, upon application by an entity in accordance with Division 426 in Schedule 1 to the Taxation Administration Act 1953 (Cth) (the TAA), the Commissioner must endorse the entity as a deductible gift recipient if the entity is entitled to be so endorsed. Section 30-125(1) governs the entitlement to such endorsement. So far as is now relevant, the provision provides:
“An entity is entitled to be endorsed as a deductible gift recipient if:
…..
(b) the entity is a fund, authority or institution that:
(i) is described (but not by name) in item 1 …. of the table in section 30-15; and
…
(c) the entity meets the requirements of subsection (6) ….
… .”
Section 30-125(6) relevantly provides that (when read in conjunction with s 30-125(7)) the entity must be required by (amongst other things) a document constituting the entity or rules governing the entity’s activities to transfer any surplus assets upon being wound up to another fund, authority or institution that is a deductible gift recipient.
Section 426-30 in Schedule 1 to the TAA (read with s 426-5(g)) provides that endorsement of an entity as a deductible gift recipient has effect from a date specified by the Commissioner, which may be any date including, amongst other things, a date before the application for endorsement was made.
As the date from which endorsement has effect may precede the date of the application for endorsement, endorsement may therefore operate retrospectively in the sense that deductions may be made available for gifts or contributions made to a deductible gift recipient from a time such as when its entitlement to endorsement first arose.
PROCEDURAL HISTORY AND ISSUES BEFORE THE TRIBUNAL
The applicant applied for endorsement as a deductible gift recipient pursuant to s 30-120 in February 2010. The Commissioner refused to endorse the applicant, the applicant objected and the Commissioner disallowed its objection. This proceeding is an application for review of the Commissioner’s objection decision.
The applicant applied for endorsement on the basis that it is a fund, authority or institution that is described (but not by name) in Item 1 of the table in s 30-15, being covered by Item 4.1.6 in the table in s 30-45(1) setting out general categories of welfare and rights recipients.
As we have indicated, while the applicant sought endorsement from the date of its incorporation in its application to the Commissioner, at the hearing the parties agreed that the Tribunal should instead consider whether the applicant is entitled to be endorsed as from 29 November 2010, that being the earliest date the parties agreed that it might be said that the applicant’s activities satisfied the terms of Item 4.1.6.
At the hearing the parties indicated that there remains an impediment to the applicant’s endorsement even at the present date. The applicant accepted that it could not be said that its entitlement to endorsement arose in November 2010, given that the dissolution clause in its constitution does not comply with the requirements of s 130-125(6). However, the Commissioner indicated that if the Tribunal were to find that the applicant was otherwise entitled to be endorsed, he would consent to the applicant’s endorsement having effect from November 2010 upon the requisite amendment to the applicant’s constitution being made, in accordance with his administrative practice in that regard. The Tribunal considers that that course is open pursuant to s 426-30 of the TAA.
CONTENTIONS AT HEARING
It was not in dispute that the applicant is a “charitable institution” for the purposes of Item 4.1.6. The Commissioner accepted that is so given the principles set out in Aid/Watch Incorporated v Federal Commissioner of Taxation (2010) 241 CLR 539 and Re Inman [1965] VR 238. There was initially some suggestion that the applicant might seek to rely on para (b) of Item 4.1.6 in addition to para (a), despite contending that its principal activity is the protection of marine animals and accepting that it provides rehabilitation to animals infrequently. However, that alternative contention was not pressed at hearing.
As we have stated, the Commissioner accepted that the applicant’s principal activity is the protection of whales and other marine life by means of “campaigns” designed to prevent those animals being harmed or killed by humans. Essentially the parties differed in their construction of para (a) of Item 4.1.6 and the application of that provision to the facts. The applicant contended that its activities constituted the provision of “short-term direct care” to animals within the terms of para (a) of Item 4.1.6. In particular, the applicant focused on the word “care”. The applicant relied upon certain dictionary definitions. The word “care” is defined as a noun, amongst other things, to mean “protection; charge” (Macquarie Dictionary, 5th edition) and “[c]harge, protective oversight, guardianship” (Shorter Oxford English Dictionary, 6th edition).
The applicant submitted that the word “care”, according to its ordinary meaning, therefore encompasses protection from harm or death, and accordingly, in undertaking its campaigns, the applicant provided “care” within the terms of the provision. The applicant also contended that the care it provided was both “direct” and “short-term” for the purposes of the provision. The applicant further submitted that by way of contradistinction, the terms of para (b) of Item 4.1.6 (which expressly refer to, amongst other things, “sick or injured animals”) supported its contention that para (a) was concerned with the protection of animals in good health and that there was nothing in the context of that item nor the wider context of Division 30 to suggest that the word “care” did not encompass protection.
The applicant contended that its activities otherwise satisfy the terms of para (a) because the whales and other marine life protected by its campaigns are “animals …. that ….. are without owners” for the purposes of that provision. The applicant submitted that the three enumerated categories of animals should be read disjunctively, and that the phrase “without owners” had been employed so as to encompass both wildlife and abandoned animals.
The Commissioner contended that the terms of para (a) of Item 4.1.6 were to be construed as a whole. The Commissioner submitted that the phrase “short-term direct care” is to be construed as a composite phrase and means some form of direct physical assistance, such as shelter or medical care. The Commissioner contended that the paragraph is concerned with the provision of such care to categories of animals which have suffered some misfortune, and in that regard that the phrase “without owners” was concerned with animals requiring care as a result of an event which had occurred, rather than being concerned with any unowned animals (whether wild or otherwise) that might suffer some misfortune in the future. The Commissioner contended that the applicant’s principal activity of preventing wild animals from being killed or injured by humans therefore does not satisfy the terms of para (a).
The Commissioner contended further that the applicant’s activities do not satisfy the terms of para (a) in any event because all of the marine wildlife protected by the applicant are “native wildlife”. Accordingly, the applicant’s activities are expressly excluded from the compass of Item 4.1.6. The Commissioner submitted that the phrase “native wildlife” in para (a) includes migratory species naturally found in Australian waters, and that all of the marine species protected by the applicant fit that description.
The applicant contended that the phrase “native wildlife” is concerned with species indigenous to Australia and therefore it cannot be said that it only protects native wildlife as it protects animals which do not fit that description. The applicant also sought to rely upon certain evidence to show that, even if the Commissioner’s construction of the phrase “native wildlife” was accepted, as a matter of fact its activities are not confined to protecting migratory animals naturally found in Australian waters.
SECTION 30-45 – PARA (a) OF ITEM 4.1.6
“Short-term direct care”; “are without owners”
We now turn to consider the proper construction and application of para (a) of Item 4.1.6. The following general principles of statutory interpretation govern its construction. The text of the provision is to be construed in its context. In that regard, we consider that the word “care” is to be construed in the context of the composite phrase of which it forms part, being “short-term direct care”. Furthermore, it is to be construed in the context of the rest of the paragraph in which it is employed and in the wider context of para (b) of the item. The expression “are without owners” is also to be construed in the context of the rest of the provision and in its wider context.
In Collector of Customs v Agfa-Gevaert Ltd (1996) 186 CLR 389 at 397, the High Court quoted with approval the following statement by Lord Hoffman in R v Brown [1996] 1 AC 543 at 561:
“The fallacy in the Crown’s argument is, I think, one common among lawyers, namely to treat the words of an English sentence as building blocks whose meaning cannot be affected by the rest of the sentence … This is not the way language works. The unit of communication by means of language is the sentence and not the parts of which it is composed. The significance of individual words is affected by other words and the syntax of the whole.” [Emphasis added.]
Similarly, in St George Bank Ltd v Federal Commissioner of Taxation (2009) 176 FCR 424 at [28] Stone J said:
“… While words may have a stand-alone meaning or meanings which may be found in a dictionary, generally oral or verbal communication does not proceed by way of individual words but by language; by words used in conjunction with one another to express propositions or sentiments or otherwise communicate meaning. The task of a court in construing a statute is to construe the language of the statute, not the individual words. …” [Emphasis added.]
We consider that the Tribunal must undertake the same task in order to reach the correct decision concerning whether the applicant is entitled to be endorsed pursuant to s 30-125(1).
It is therefore impermissible to construe a statutory provision by disassembling it into its constituent words; selecting each word’s desired meaning, divorced from the context in which it appears; and then reassembling the provision (Lorimer v Smail (1911) 12 CLR 504 at 508-510; Biga Nominees Pty Ltd v Federal Commissioner of Taxation (1991) 104 FLR 74 at 85-86 per Southwell J, applying Bourne v Norwich Crematorium Ltd [1967] 1 WLR 691 at 696). It is also erroneous to dissect composite phrases in such a way (see Lorimer v Smail, op cit, at 510, applying Mersey Docks & Harbour Board v Henderson Bros (1888) 13 App Cas 595 at 599). The High Court in Agfa-Gevaert at 400 quoted with approval the following observation of Oliver LJ in Exxon Corporation v Exxon Insurance Consultants International Ltd [1982] Ch 119 at 144:
“But ‘original literary work’ as used in the statute is a composite expression, and for my part I do not think that the right way to apply a composite expression is, or at any rate is necessarily, to ascertain whether a particular subject matter falls within the meaning of each of the constituent parts, and then to say that the whole expression is merely the sum total of the constituent parts. In my judgment it is not necessary, in construing a statutory expression, to take leave of one’s common sense.”
Furthermore, if a word bears several different meanings and is defined in various ways in dictionaries, it is not appropriate merely to select one of those dictionary definitions and then attribute it to that word as it appears in the provision. Each word is to be construed according to the context in which it appears (R v Refshauge (1976) 11 ALR 471 at 475 per Gibbs J; Federal Commissioner of Taxation v Applegate (1979) 27 ALR 114 at 123; Biga Nominees, op cit, at 85-6). While dictionary definitions are a useful reference in statutory interpretation, they should not restrict the undertaking of that exercise (National Mutual Life Association of Australasia Ltd v Federal Commissioner of Taxation (Cth) (2008) 74 ATR 173 at [51], citing Falconer v Pederson [1974] VR 185 at 187). The question is not whether a statutory word is capable of bearing a particular meaning but rather which meaning the legislature intended it to bear. We note that the concept of legislative intention is an objective one (see Singh v Commonwealth of Australia (2004) 222 CLR 322 at [19] per Gleeson CJ).
The applicant relies upon one meaning of the word “care”. However, that word can bear other meanings. In that regard, we note that the word “care” is also defined in the Collins English Dictionary (9th edition), albeit as a verb, to mean “to provide physical need, help, or comfort (for)”. We reject the applicant’s submission that the word “care” as employed in paragraph (a) is concerned with the protection of animals from harm. First, that word must be read in the context of the kinds of animals with which the provision is concerned. We accept the Commissioner’s submission that each of the classes of animals to which para (a) refers are animals that have suffered some misfortune prior to the provision of relevant care. We consider that they constitute a group in that regard. That is indicated by the tense employed to refer to the first two classes of animals and, for the third class, by the use of the preposition “without”, read in context.
It is necessary to ascertain “the ordinary and grammatical sense of the statutory words” (Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (2009) 239 CLR 27 at 31 per French CJ; emphasis added).The tense employed by the legislature “may be a significant indicator to the proper construction of a taxation statute” (Envestra Ltd v Federal Commissioner of Taxation (2008) 169 FCR 300 at 309, citing Cronulla Sutherland Leagues Club Ltd v Federal Commissioner of Taxation (1990) 23 FCR 82 at 89 and 116, and BrooktonCo-operative Society Ltd v Federal Commissioner of Taxation (1981) 147 CLR 441 at 451, 461-469). The use of tenses in paragraph (a) seems to us to be deliberate. The provision is not anticipatory in nature – rather, it is concerned with the provision of care in the context of present consequences of events which have occurred at some indeterminate point of time in the past (cf Suntory (Aust) Pty Ltd v Federal Commissioner of Taxation (2009) 177 FCR 140 at [37] and Mikasa (NSW) Pty Ltd v Festival Stores (1972) 127 CLR 617 at 661). That is clear from the use of the present perfect tense, indicated by the expression “have been” preceding the words “lost or mistreated”.
Although the phrase “are without owners” is expressed in the present continuous tense, the reference to past events is implicit in the word “without”, construed in context. The expression, when read consonantly with the preceding classes of animals, is similarly concerned with the present consequences of past misfortune suffered by animals. The preposition “without” has various meanings. It can be used, in a neutral context, to denote mere absence of something, that is to say, as an antonym of the word “with”; however, it can also be used to denote a state of privation. For instance, in the Shorter Oxford English Dictionary (6th edition), the word “without” is defined generally as “[e]xpressing absence or privation” and more specifically to mean both ‘([i]n a state of) not having (a thing etc.) as a possession, advantage, characteristic, etc.” and “(usu. in neg. contexts), lacking some resource or quality, esp. money”. In the Macquarie Dictionary (5th edition), it is defined as meaning, amongst other things, “not with; with no; with absence, omission, or avoidance of; lacking (as opposed to with)”, “free from; excluding” and also, albeit as an adjective, as meaning “lacking means, possessions, etc.; destitute”.
In our view, the word “without” in para (a) has been employed by the legislature to import privation. We consider that the third class of animals enumerated in para (a) is concerned with animals which would ordinarily be expected to have an owner, not merely animals that literally do not have one. They are animals that have been deprived of owners at some time prior to the provision of care and are therefore unable to fend for themselves in some respect.
We reject the applicant’s submission that the animals it protects are “without owners” for the purposes of Item 4.1.6. In our view, the legislature did not intend the third class to encompass whales and other marine wildlife. One would not naturally refer to such animals as being “without owners”, because they would not ordinarily be expected to have owners.
It is apparent from the exclusionary words “but not only native wildlife” (emphasis added) that the word “animals” in para (a) can encompass wild animals. Item 4.1.6 merely requires that the activities not be confined to native wildlife. However, it is clear that the provision does require the provision of care to domesticated animals. In our view, the third category is largely concerned with stray animals. It is instructive to note that the word “stray” is defined in the Macquarie Dictionary to mean, amongst other things, “a domestic or farm animal found wandering at large or without an owner” (emphasis added). That definition tends to confirm, in a converse manner, that the phrase “without owners” naturally comprehends domesticated animals.
We note in passing that there might be particular wild animals that have had owners and have been deprived of them, such as a wild animal kept as a pet or in a zoo. We also note in passing that a particular animal might be both lost and stray. However, it is necessary to bear in mind that Item 4.1.6 is couched in terms of an institution’s activities and the kinds of animals they are directed towards, rather than the characterisation of particular animals; moreover, it is directed towards an institution’s principal activity. In any event, we are concerned with the application of para (a) to the applicant’s activities and whether the animals it protects fall within the third class of animals in the provision.
We do not accept the applicant’s contention that legislature has employed the phrase “without owners” so as to encompass both abandoned animals and wild animals. On the applicant’s contended construction, the provision of care to certain stray animals (for example, a domesticated animal born stray) would be excluded, because they were neither wild nor abandoned. In our view, the applicant’s contended construction does not accord with the legislative intention evinced by the rest of the provision.
The word “care” forms part of a composite phrase with the preceding adjectives “short-term” and “direct” and is to be construed accordingly. We reject the applicant’s piecemeal approach to the construction of that phrase. In our view that phrase confirms that para (a) is not concerned with the protection of animals from anticipated harm. Rather, it comprehends the provision of physical assistance, such as food, shelter or veterinary care, to animals with unmet needs arising from specified circumstances.
In our view, that meaning of the expression “short-term direct care” is confirmed by reading it in the context of para (b). We do not accept the applicant’s contention that para (a), read in contradistinction to para (b), is concerned with the protection of healthy animals from harm. First, the reference to “mistreated” animals in para (a) indicates that is not so. Furthermore, we consider that the reference to “rehabilitation” in para (b) indicates that para (a) is concerned with the provision of physical assistance of a shorter duration, which is of a less involved nature and has a different and more immediate objective than the kind of assistance with which para (b) is concerned.
While para (a) is concerned with the activity of stepping in to provide care designed to meet an animal’s immediate physical needs, we consider that para (b), in contradistinction, is concerned with caring for orphaned, sick or injured animals which have suffered one or more of the same misfortunes as are enumerated in para (a), with the objective of bringing or restoring them to a condition such that, in the case of domesticated animals, they are able to live a normal life or, in the case of wild animals, they are able to be returned to the wild to fend for themselves. Such care would, like para (a), involve the provision of physical assistance such as food, shelter and medical care, but on a longer-term basis. It might also encompass the provision of broader care directed towards preparing the animal for its future life, for example, socialising a domesticated animal, or teaching an orphaned wild animal what it would ordinarily have learned from its parents in order to survive in the wild. That construction accords with the meaning of the word “rehabilitation” according to ordinary usage. We note that, as is the case in para (a), para (b) requires that the care not be confined to native animals.
We consider that the applicant by its submissions is seeking to construe the word “care” and the phrase “without owners” in para (a) in a manner divorced from their context. The applicant’s contended construction does not, in our view, accord with the legislative intention evinced by the text of the provision read in its proper context. In conclusion, the applicant’s activities do not satisfy the terms of para (a) of Item 4.1.6 in s 30-45, and accordingly, the applicant is not entitled to be endorsed as a deductible gift recipient for the purposes of s 30-125(1) of the Act.
“Native wildlife”
In case we are wrong in our interpretation of para (a) and its application to the facts as we have found them, we now deal with the Commissioner’s alternative contention that the animals protected by the applicant constitute “native wildlife” for the purposes of para (a) of Item 4.1.6, such that the applicant’s activities are excluded from the terms of para (a) in any event.
We do not accept the Commissioner’s contention that the expression “native wildlife” in para (a) encompasses migratory marine species (whether indigenous to Australia or not) which can naturally be found from time to time in Australian waters. If the legislature had intended to encompass such animals, one would expect that an expression such as “wildlife in Australia” or words of similar import would have been employed. In our view, the fact that an animal is migratory is not indicative of whether it is a native animal – that depends upon whether it is indigenous to the region with which one is concerned. Both parties agreed that the expression “native wildlife” was concerned in some way with the relationship of animals to Australia. We accept the applicant’s contention that the expression “native wildlife” in the context in which it is used in para (a) is concerned with animal species indigenous to Australia. It was implicitly accepted by the Commissioner that the applicant’s protection of marine wildlife extends beyond species that are indigenous to Australia.
We consider that dictionary definitions of the word “native” support that construction. The word “native” is relevantly defined in the Macquarie Dictionary, in the context of flora and fauna, as meaning “indigenous to Australia” and in the same context as “indigenous to a particular region or country”. In a broader context, it is defined as “being the place or environment in which one was born or a thing came into being” and again as “indigenous”. The word “indigenous” is in turn defined in that Dictionary as “originating in and characterising a particular region or country; native”.
The Commissioner seized upon the apparent circularity arising from the word “indigenous” being defined as meaning “native” to suggest that the word “native” according to ordinary usage might also encompass migratory animals not originating in Australia. For the reasons we have explained, we do not consider such use of dictionary definitions to be an appropriate approach to ascertaining the ordinary meaning of the expression used in context.
The Commissioner also contended that it was relevant to bear in mind that there was no evidence of the origins of the particular marine animals protected by the applicant. However, we consider that according to ordinary usage, the concept of “native wildlife” is concerned with the origins of a species of animal, not where a particular animal was born. That accords with the fact that Item 4.1.6 is concerned with an institution’s activities, not the identity of particular animals.
The fact that the applicant has protected pilot whales in the waters off the Faroe Islands is illustrative of the flaw in the Commissioner’s reasoning in this regard. Mr Hansen, although not an expert, gave evidence that pilot whales also frequent Australian waters. On the Commissioner’s construction, it would be on that basis that pilot whales constitute “native animals” for the purposes of para (a), even though they were protected by the applicant in the North Atlantic Ocean. In our view that merely begs the question of the origin of that species.
In case we are wrong in our construction of the expression “native wildlife”, we turn now to the applicant’s alternative submission that it does not in fact confine its campaigns to the protection of marine species which frequent Australian waters.
Although the applicant accepted that the earliest date at which its entitlement to endorsement might be said to have arisen was when its vessel was launched in November 2010, it nevertheless sought to rely upon evidence of campaigns conducted prior to that time in order to demonstrate that it does not in fact confine its activities to the protection of migratory marine species found in Australian waters in any event. This remained the sole factual issue in dispute, as the Commissioner contended that those campaigns had not been conducted by the applicant.
In support of this submission, the applicant relied upon evidence of two campaigns, the first being a campaign called “Galapagos Patrol” conducted during the period July to September 2007 in the waters near the Galapagos Islands off the coast of Ecuador. Mr Hansen testified that, in the Galapagos Patrol, a stingray was released from a fishing longline and the applicant had provided Australian volunteer crew and provisions for the vessel used in that campaign. However, he acknowledged under cross-examination that the campaign was portrayed in a report on the applicant’s website as having been conducted by SSCS and another entity. We find that campaign was not conducted by the applicant, because the applicant did not commence trading until February 2010 at the earliest. Accordingly, we do not consider that the evidence supports the applicant’s submission. There is a further reason why that is so. In his witness statement, Mr Ayling said that he was unable to express a view as to what kind of species the stingray might have belonged to, although he thought it was likely that it was not one which would also be found in Australian waters, given that stingray species tend to be particular to an area. We are not able to find, given the equivocal nature of his evidence on that point, that the stingray in question was of a species that does not frequent Australian waters.
The applicant also relied upon evidence of a campaign called “Operation Blue Rage” conducted in the Mediterranean Sea from June to the beginning of July 2010, to free captured Atlantic bluefin tuna. That campaign was conducted using SSCS’s vessel “MY Steve Irwin”. In his witness statement, Mr Ayling said that Atlantic bluefin tuna are found in the Mediterranean and also the North Atlantic Ocean, but are not found in the Indian or Pacific Oceans. The applicant sought to rely upon this evidence to establish that it does in fact protect marine species which are not naturally found in Australian waters. The applicant submitted that it participated in that campaign on the basis that it provided five Australian volunteers as crew on the vessel (out of a total of 30) and furthermore because it contributed $15,506 to the campaign. However, the Commissioner contended that, as a matter of fact, the ‘Operation Blue Rage’ campaign was not conducted by the applicant but rather by SSCS.
We are not satisfied based on the evidence before us that the campaign to free the tuna was conducted by the applicant. We do not consider the fact that five Australian volunteer crew were present on the vessel used in that campaign to be determinative of the applicant’s activities. Furthermore, we do not consider the fact that the applicant contributed money (which we note was of a smaller amount than for subsequent campaigns conducted by the applicant) serves to establish that the applicant conducted that campaign. We note that the report from the applicant’s website concerning that campaign annexed to Mr Hansen’s supplementary witness statement indicates that the campaign was in fact conducted by SSCS.
Nevertheless, we consider that there is other evidence establishing that the applicant does not in fact confine its activities to the protection of marine species naturally found in Australian waters. Mr Hansen gave evidence, which was not challenged, that the applicant’s campaign in the Faroe Islands was directed to the protection of marine species in those waters irrespective of whether they also frequent Australian waters. The evidence of that campaign establishes that the applicant does in fact carry out campaigns outside Australian waters. We note that, in a sense, it is mere chance that the pilot whales protected by the applicant might also be found elsewhere.
Furthermore, as we have mentioned, Mr Hansen gave evidence that the applicant is concerned to protect marine wildlife throughout the world by means of its campaigns in the future, irrespective of whether it is indigenous to Australia or frequents Australian waters. We did not understand that statement to be made by way of contrast to its present activities. As the applicant pointed out, that evidence was not challenged on cross-examination, and we accept it. As we have also noted, it accords with the objects expressed in the applicant’s constitution.
For the reasons we have stated, we do not consider that the applicant’s activities are confined to the protection of “native wildlife” for the purposes of Item 4.1.6.
GENERAL COMMENTS
Both parties relied upon definitions contained in other legislation in support of their proposed constructions. The Commissioner did so with respect to the meaning of the expression “native wildlife” and the applicant did so, albeit less emphatically, with respect to the meaning of the word “care”. The Commissioner also relied upon an authority concerning the construction of a United States of America statute in support of its construction of the expression “native wildlife”. We do not consider that any assistance can be obtained from such sources in interpreting the Act. None of the statutes to which the parties referred is on the same subject, nor are they to be construed in the same way as the Act. In our view, the Act is to be construed according to its own terms, and not by importing definitions from other statutes (see M Collins & Son Pty Ltd v Bankstown Municipal Council (1958) 3 LGRA 216). It is also impermissible to translate judicial remarks construing one statute to the construction of another (Brennan v Comcare (1994) 50 FCR 555 at 572 per Gummow J, quoting with approval Ogden Industries Pty Ltd v Lucas [1970] AC 113 (PC) at 127; see also Damjanovic & Sons Pty Ltd v The Commonwealth of Australia (1968) 117 CLR 390 at 407-409 per Windeyer J). We consider that that is particularly so in the case of the authority to which the Commissioner referred.
The Commissioner also sought to rely upon the terms of s 30-55 of the Act in support of its construction of the expression “native wildlife”. Section 30-55 sets out a general category of “environment recipients”, being public funds on the register of environmental organisations kept under Subdivision 30-E (Item 6.1.1). The Commissioner contended that the legislature intended organisations such as the applicant to be encompassed by s 30-55 rather than by s 30-45. However, as the Commissioner accepted, the terms of ss 30-45 and 30-55 are not mutually exclusive and therefore it does not assist to have regard to the terms of the latter in construing the former. Each provision is to be construed according to its own terms, and it is only the former provision with which we are concerned. To the extent that, as the Commissioner contended, the exclusion of native animals from the terms of Item 4.1.6 indicates a relationship between the two provisions, then it is apparent that the legislature intended that the terms of Item 4.1.6 be read in a self-contained manner, in the sense that there is no need for recourse to the provisions of s 30-55 in construing that item.
Finally, the Commissioner referred to the explanatory memorandum to the Tax Laws Amendment (2006 Measures No. 3) Bill 2006, which inserted Item 4.1.6 into the tables in s 30-45 of the Act. We are not assisted by that extrinsic material. The non-exhaustive examples it contains of circumstances in which it was said that the provision might apply do not assist in the construction of the text of the provision, read in context (see Re Australian Federation of Construction Contractors; Ex parte Billing (1986) 68 ALR 416 at 420). As the High Court stated in Alcan, op cit, at 47:
“…The language which has actually been employed in the text of legislation is the surest guide to legislative intention. …”
That principle of statutory construction is particularly relevant with respect to another submission of the applicant. The applicant sought to support its contention that para (a) of Item 4.1.6 comprehends its activities by submitting that Div 30 of the Act is designed to encourage certain activities by means of the provision of deductions for gifts or contributions to certain recipients and therefore ought to be given a beneficial construction. The applicant relied upon Diethelm Manufacturing Pty Ltd v Commissioner of Taxation (1993) 44 FCR 450 at 457 and Commissioner of Taxation v Murry (1998) 193 CLR 605 at 632. We note first the subsequent observation of the High Court in Alcan that “tax statutes do not form a class of their own to which different rules of construction apply” (at 49). Moreover, in our view the applicant’s contention begs the question of the nature of the activity which the legislature intended to encourage. The answer to that question is to be found in the text of the provision, read in context, not by displacing the meaning of the text discerned according to proper principles of statutory construction (Carr v Western Australia (2007) 232 CLR 138 at 143 per Gleeson CJ, cited with approval in Alcan, op cit, at 47-8). In our view, it is apparent upon a proper construction of the text of Item 4.1.6 read in its context that the legislature did not intend for that provision to encompass activities such as those of the applicant.
CONCLUSION
As the applicant’s activities do not satisfy the terms of Item 4.1.6, the applicant is not a fund, authority or institution described in Item 1 of the table in s 30-15. Accordingly, the applicant is not entitled to be endorsed as a deductible gift recipient for the purposes of s 30-125. The Tribunal affirms the decision under review.
I certify that the preceding 71 (seventy-one) paragraphs are a true copy of the reasons for the decision herein of Middleton J, F J Alpins, Deputy President, E Fice, Senior Member ....[sgd]....................................................................
Associate
Dated 7 August 2012
Date of hearing 22 May 2012 Counsel for the Applicant Mr J Korman Solicitors for the Applicant McMullan Solicitors Counsel for the Respondent Mr M T Flynn Solicitors for the Respondent Australian Taxation Office
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