The Shell Company of Australia Limited v Commissioner of State Revenue - [2011] VSC 147

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMERCIAL AND EQUITY DIVISION

COMMERCIAL COURT

LIST F
No. 4590 of 2010
No. 4591 of 2010

THE SHELL COMPANY OF AUSTRALIA LIMITED (ACN 004 610 459)	Appellant
v
COMMISSIONER OF STATE REVENUE	Respondent

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JUDGE:	Davies J
WHERE HELD:	Melbourne
DATE OF HEARING:	16 March 2011
DATE OF JUDGMENT:	14 April 2011
CASE MAY BE CITED AS:	The Shell Company of Australia Limited v Commissioner of State Revenue
MEDIUM NEUTRAL CITATION:	[2011] VSC 147

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TAXATION – Whether Fire Service Levies paid by an insured directly to the Country Fire Authority and Metropolitan Fire and Emergency Services Board are dutiable under s 179 of the Duties Act 2000 (Vic) – Construction of Part 2, Chapter 8 of the Duties Act 2000 (Vic) – Definition of “premium” and “premium paid” – Country Fire Authority Act 1958 (Vic) s 80A – Metropolitan Fire Brigades Act 1958 (Vic) s 44A – ss 175 - 181, 184, 190 - 191 Duties Act 2000 (Vic).

STATUTORY CONSTRUCTION – “premium”, “premium paid” – Part 2 of Chapter 8 of the Duties Act 2000 (Vic) ss 177 – 181.

WORDS AND PHRASES – “means” and “includes”, ”premium”, “premium paid”.

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APPEARANCES:	Counsel	Solicitors
For the Appellant	Mr. M Flynn	Mallesons Stephen Jaques
For the Respondent	Mr. P J Hanks QC with Dr. J E Jaques	The Solicitor for the Commissioner of State Revenue

HER HONOUR:

Introduction

The respondent (“the Commissioner”) has assessed the appellant (“Shell”) to duty under s 179 of the Duties Act 2000 (Vic) (“the Act”) on amounts that Shell paid to the Country Fire Authority (“CFA”) and the Metropolitan Fire and Emergency Services Board (“MFESB”) as “contributions”[1] in the income years ended 30 June 2005 and 30 June 2006 (“the income years”). Shell objected to the assessments, which the Commissioner disallowed. This proceeding is Shell’s appeal against the disallowance pursuant to s 106 of the Taxation Administration Act 1997 (Vic).
[1]Country Fire Authority Act 1958 (Vic) s 80A and Metropolitan Fire Brigades Act 1958 (Vic) s 44A.

The sole issue for determination in the appeal[2] is whether these “contributions” were “premium[s] paid” for the purposes of s 179 of the Act. Section 179 is found in Part 2 of Chapter 8 of the Act which charges duty on “premium[s]” in respect of “general insurance”. Section 179 prescribes as follows:

The amount of duty chargeable on the premium paid in relation to a contract of insurance is 10% of the amount of the premium.

[2]Shell was assessed to duty on other amounts as well but these other amounts are not the subject of this appeal. Shell was also assessed to penalty tax in respect of the duty on the FSL for each of the income years, which Shell contested. At the hearing of the appeal, the Commissioner agreed that the penalty tax on the duty referable to the FSL should be reduced to nil and that the Court should make orders accordingly.

Shell, in…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

AGLC: The Shell Company of Australia Limited v Commissioner of State Revenue [2011] VSC 147
Case: [2011] VSC 147
Decision Date: 14 April 2011

CaseChat Overview and Summary

The Shell Company of Australia Limited challenged the Commissioner of State Revenue over the applicability of the Fire Service Levies it paid to the Country Fire Authority and the Metropolitan Fire and Emergency Services Board, arguing these levies were not dutiable under section 179 of the Duties Act 2000 (Vic). The matter was heard in the Supreme Court of Victoria. The dispute centred on whether these levies, paid directly to the fire authorities, constituted a "premium" or "premium paid" as defined in Part 2, Chapter 8 of the Duties Act 2000 (Vic). The definitions and the scope of the statutory provisions were central to the case.

The court was required to interpret the meaning of "premium" and "premium paid" within the context of the statutory scheme and determine whether the levies in question fell within these definitions. The analysis involved examining the definitions provided in sections 177 to 181 of the Act, as well as the legislative intent behind the imposition of the duty. The court also considered relevant provisions in the Country Fire Authority Act 1958 (Vic) and the Metropolitan Fire Brigades Act 1958 (Vic), particularly sections 80A and 44A respectively, which provided statutory authority for the imposition of the levies.

The Supreme Court of Victoria concluded that the Fire Service Levies paid directly to the Country Fire Authority and the Metropolitan Fire and Emergency Services Board were not "premiums" or "premiums paid" as defined in the Duties Act 2000 (Vic). The court found that the statutory definitions of "premium" and "premium paid" did not encompass the levies in question, which were legislatively mandated charges rather than voluntary payments for insurance. Therefore, these levies were not subject to the duty under section 179 of the Act. The Commissioner of State Revenue’s decision to impose duty on these levies was deemed incorrect, and the levies were found to be non-dutiable.

The court ordered that the Fire Service Levies paid by The Shell Company of Australia Limited to the Country Fire Authority and the Metropolitan Fire and Emergency Services Board were not subject to the duty under section 179 of the Duties Act 2000 (Vic). The Commissioner of State Revenue was directed to refund any amounts previously collected as duty on these levies.

Orders