Shell Company of Australia Limited v Commissioner of Stamp Duties

[1990] TASSC 41

Serial No 38/1990
List "A"

COURT:  SUPREME COURT OF TASMANIA

CITATION:   Shell Company of Australia Limited v Commissioner of Stamp Duties [1990] TASSC 41; (1990) Tas R 152; A38/1990

PARTIES:  SHELL COMPANY OF AUSTRALIA LIMITED
  v
  COMMISSIONER OF STAMP DUTIES

FILE NO/S:  M111/1990
DELIVERED ON:  20 August 1990
JUDGMENT OF:  Neasey J

Judgment Number:  A38/1990
Number of paragraphs:  11

Serial No 38/1990
List "A"
File No M111/1990

SHELL COMPANY OF AUSTRALIA LIMITED
v COMMISSIONER OF STAMP DUTIES

REASONS FOR JUDGMENT  NEASEY J

20 August 1990

1. The principal question is whether duty is payable by the applicant under the Stamp Duties Act 1931 of Tasmania (the Act), in respect of transactions conducted pursuant to a "credit card business", as defined therein. The applicant seeks, on an Originating Application, a number of declarations which if granted would determine the principal issue in its favour. Part of the applicant's commercial operation does amount to a credit card business in the ordinary sense, but the question is whether it is so within the relevant definition in the Act. "Credit card business" is defined in s60A as "the business of issuing credit cards to or at the direction of a person"; which leads the enquiry to the definition of "credit card".

"Credit card" is defined in s60A as follows:–

"'Credit card' means a card or other writing, by whatever name called, issued under an agreement under which a credit card provider agrees that, in respect of a transaction with a merchant in connection with which the card or other writing is produced, he will make payment to the merchant, or to a person nominated by the merchant for that purpose, whether or not subject to conditions."

1. This is the crucial definition. Before considering its meaning further it is necessary to go to the facts. The applicant is connected with the operation of many motor vehicle service stations throughout the country.

1. One can take judicial notice of that. These service stations are run by "Shell dealers". The applicant has a commercial operation whereby it issues to certain of its larger customers, who satisfy criteria it lays down, a "Shell Card". The card is issued pursuant to an agreement made by the applicant with its customer, which agreement appears to consist of more than one document, and wherein certain conditions and the like are laid down. I need not go into those details. The substance of the matter is that the customer's vehicle is driven to a Shell service station for the purpose of purchasing goods, usually consisting of fuel, and perhaps other goods and/or services. In order to pay for the goods and services the customer or his driver, who may also hold a Shell card issued by the applicant at the direction of the customer, produces the card, at or about the time the goods and/or services are supplied. Assuming the dealer is one who operates under the applicant's Shell card system, certain procedures are carried out with and in connection with the card, and the customer obtains his goods and/or services on credit and by direct purchase from the applicant, pursuant to his Shell card agreement.

1. The dealer's part in this is as follows. He has previously entered into a written agreement with the applicant whereby he has agreed to supply Shell customers who are card holders with Shell goods and/or services which he has in stock, according to the customer's request. Since the dealer, at the time of supply, owns the goods and services, the dealer's agreement provides in substance that the applicant shall repurchase from the dealer at the time of supply to the customer all the goods and services so supplied. The agreement further provides that the price of repurchase of that part consisting of motor fuel dispensed into the vehicle shall be in effect the price at which the dealer could have purchased fuel of that kind from the applicant at that time; whereas the price of repurchase of the other goods and services supplied is the same as the dealer charges his own customers. In respect of purchases of fuel made under the card, the applicant charges its customer according to a price which has been negotiated individually with that customer, and which depends on the commercial value of the customer to the applicant and considerations of that kind. The price of that fuel to the customer will not have any necessary connection with its repurchase price as between the applicant and the dealer. The commercial considerations which affect the two prices will be different. In respect of fuel bought by the customer under the card, in addition to the repurchase price, the applicant pays the dealer a "dispensing fee"; and in respect of goods and services other than fuel, the applicant pays the dealer a "handling fee".

1. The applicant by its argument in support of the Application makes the point that this credit card system is different from the usual arrangement, in which a financial institution provides credit for purchase by customers of goods and services bought from suppliers other than the credit provider. That is so, but the simple question remains, whether this credit card system is covered by the relevant definitions and provisions or is not. The word "agreement" in the definition of "credit card" in s60A includes the plural, pursuant to s24(d) of the Acts Interpretation Act, 1931. That is material here, because there are two agreements to be considered. I shall call them the "dealer agreement" and the "credit card agreement". The definition can be read as though it provided, in the relevant part, "....issued under agreements under which a credit card provider agrees that....". The result, in my opinion, is that the definition applies if all of its conditions are fulfilled by one agreement or the other, or both, together with the facts.

1. One thing to note about these definitions is that they are impossible to satisfy as a matter of logic, because they or the important ones are mutually interdependent.  Thus, for there to be a "credit card" there has to be a transaction with a "merchant", but there cannot be a "merchant" unless there is a "credit card"; and so on. A similar dilemma applies within the definition of "credit card" itself. However, the legislation should be given effect if it is possible by reasonable interpretation to achieve that, and I think it can and should be done by assuming the valid existence of any interdependent condition when it is necessary to do so in order to construe a definition. For example, in construing "merchant", it should be assumed there is a "credit card". It has been well said that, "the first business of the courts is to make sense of the ambiguous language and not treat it as unmeaning, it being a cardinal rule of construction that a statute is not to be treated as void, however oracular" – Craies on Statute Law, 7th edn, at p95; and see also, Maxwell on Interpretation of Statutes, 12th edn, at p45.

1. Proceeding upon that basis, "a merchant" is by definition in s60A "a person who supplies to a credit card holder goods or services or goods and services in respect of which he receives payment from a credit card provider". The participating Shell dealer fits this description, because he does supply relevant goods and/or services to a credit card holder, and receives payment from Shell, the credit card provider, "in respect of them". He receives payment for them, at the rate specified by the dealer agreement, and in addition receives the dispensing fee.

1. Reverting to "credit card", the question is whether there are agreements under which a credit card provider agrees that, in respect of a transaction with a merchant in connection with which the card or other writing is produced, he will make payment to the merchant, or to a person nominated by the merchant for that purpose. The answer is affirmative. The credit card provider, Shell, (on the assumption for the present purpose of interpretation that there is a "credit card") under the dealer agreement agrees to make payment to the merchant, who is the dealer, in respect of the transaction between the dealer and the customer, in connection with which the customer produces the credit card.

1. The only other definition which needs to be construed in order to answer the questions in the Originating Application is that of "active account", in s60A. This provides as follows:–

"'Active account', in relation to a month, means an account kept by a credit card provider for a credit card holder in respect of which the credit card provider has during the billing period in respect of that account that terminated in that month, made a payment pursuant to the agreement under which the credit card was issued to, or at the direction of, the credit card holder."

1. The expression, "active account" is used in s60C(2), the subsection of the Act which enacts the amount of stamp duty payable. It follows from the interpretations already expressed that the definition of "active account" is satisfied. There is an account kept by a credit card provider for a credit card holder in respect of which the credit card provider has during the relevant billing period made a payment pursuant to the agreements under which the credit card was issued. The payment is made under the dealer agreement, and the credit card is issued pursuant to the credit card agreement, but that is effective to bring the composite transaction within the description in the definition.

1. I therefore determine the questions raised by the Originating Summons as follows –

1Since there is, in this case, a "credit card" within the meaning of the Act, the applicant does on the facts "carry on a credit card business".

2The declaration sought by paragraph 2 is refused.

3The determinations sought by paragraph 2A are refused.

4The determination sought in paragraph 2B is refused.

5The order sought in paragraph 3 is refused.