Virgin Blue Airlines Pty Limited v Commissioner of Taxation

In the case of Virgin Blue Airlines Pty Limited v Commissioner of Taxation, the primary issue before the court was whether car parking facilities provided 1.9 to 2 kilometres by road from the primary place of employment were considered to be "at, or in the vicinity of" that place under section 39A(1)(f) of the Fringe Benefits Tax Assessment Act 1936 (Cth). The court was required to interpret the phrase "in the vicinity of" and determine if the distance between the car parking facilities and the primary place of employment was sufficient to constitute a fringe benefit for which fringe benefits tax (FBT) should be imposed.

The court examined the statutory context of section 39A(1)(f), noting that while Parliament had specified a distance requirement for one relevant factor, it had not done so for the proximity of the car parking facilities to the primary place of employment. The court found that the phrase "in the vicinity of" meant "near", "proximate" or "close" and that the statutory condition could not be reduced to an absolute measure of distance. Instead, the court held that the sufficiency of the proximity required an assessment of the distance between the two places in the particular factual context. The court also considered the physical context of the objects in issue and the relevance of what is located between and around those two places.

The court concluded that the distance between the car parking facilities and the primary place of employment, while necessary and important, was not the exclusive consideration. The court found that the distance between the Melrose Car Park and Terminal 3, where the primary place of employment was located, was not within the vicinity of the primary place of employment. The court allowed the appeal, set aside the orders made by the primary judge, and disallowed the objection made by the appellant against the assessments of fringe benefits tax for the years ended 31 March 2006, 31 March 2007, and 31 March 2008. The court also ordered that the respondent pay the appellant's costs both before the primary judge and on the appeal.