Watson and Commissioner of Taxation (Taxation)

[2018] AATA 3915

Watson and Commissioner of Taxation (Taxation) [2018] AATA 3915 (16 October 2018)

Division:Taxation and Commercial Division

File Numbers:         2017/3540-2017/3541

Re:GRAEME WATSON

APPLICANT

AndCOMMISSIONER OF TAXATION

RESPONDENT

DECISION

Tribunal:Deputy President S A Forgie

Date:16 October 2018  

Place:Melbourne

The Tribunal:

1. affirms the objection decisions made by the respondent on 23 May 2017 disallowing the applicant’s objections to the respondent’s assessment of the applicant’s liability to pay Division 293 tax under the Income Tax Assessment Act 1997 in respect of taxable contributions made in the 2014 and 2015 income years.

   [sgd]

   S A FORGIE

   Deputy President

TAXATION – DIVISION 293 TAX – applicant had “same rank, status and precedence as a Judge of the Court” being the Federal Court in the years of income – whether applicant not required to pay tax by reason of being “a justice or judge of a court created by the Parliament” within the meaning of s 293-190 of the Income Tax Assessment Act 1997 – decisions affirmed.

Legislation

Acts Interpretation Act 1901 s 15AA

Administrative Appeals Tribunal Act 1975 ss 3(1), 8(1), 13(1), 16, 18(1), 37 and 60(1)

Anti-Discrimination Act 1991 ss 4 and 7(1)

Commonwealth Conciliation and Arbitration Act 1904 ss 7(1), 11, 12(1), 14, 29 and 29A

Commonwealth Conciliation and Arbitration Act 1926

Commonwealth of Australia Constitution Act ss 51(xix), 51(xxxviii), 71, 72, 72(iii) and 122

Conciliation and Arbitration Act 1956 ss 6, 7, 7(2), 7(3), 7(4), 7(5), 7(6) and 8(1)

Conciliation and Arbitration Act 1958 ss 5, 7(5), 8 and 11A

Conciliation and Arbitration Act 1973 s 73

Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 ss 2, 2(1), 3, 4(1), 6(1), 575, 606(2), 619(2), 626(1), 626(2) and 626(3)

Fair Work Act 2009 ss 575, 580, 633(1), 635, 637 and 644(1)

Federal Court of Australia Act 1976 ss 5, 6(1)(a), 6(1)(b), 6(2), 6(5), 6(6), 6(7), 7, 8, 9 and 11

Income Tax Assessment Act 1997 ss 280-1(2), 293-15, 293-20, 293-105, 293-115, 293‑150(3), 293-175, 293-175(2), 293-190, 293-190(1), 293-195, 293-195(2), 293-200 and 995-1(1)

Income Tax Assessment Regulations 1997

Industrial Relations (Consequential Provisions) Act 1988 s 3

Industrial Relations Act 1988 ss 4(1), 8, 9(1), 9(2), 9(3), 11, 16(1) and 22

Judges’ Pensions Act 1968 ss 4(1), 6, 6A(2), 6B and 6B(2)

Judiciary Act 1904 ss 35, 35(1)(a) and 35(3)

Matrimonial Causes Act 1899 s 4

Migration Act 1958 s 501(2)

Superannuation Act 1976

Superannuation Act 1976 s 28

Superannuation Act 1990

Superannuation Act 1990

Superannuation Contributions Tax (Assessment and Collection) Act 1997 s 16

Tax and Superannuation Laws Amendment (Increased Concessional Contributions Cap and Other Measures) Act 2013 ss 2 and 3

Workplace Relations Act 1996 ss 4(1), 61, 63, 63(1), 63(2), 63(3), 63(4), 64, 64(1)(b), 64(2), 65, 70, 70(1)(b),71, 71(1), 71(2), 71(3), 72(1), 72(3), 76, 79, 79(4), 79(12), 80, 80(1), 80(2), 80(3), 80(4), 81, 82, 93 and 97

Cases

Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue [2009] HCA 41; (2009) 239 CLR 27; 260 ALR 1

Cabell v Markham (1945) 148 F(2d) 737

CIC Insurance Ltd v Bankstown Football Club Ltd [1997] HCA 2; (1997) 187 CLR 384; (1997) 141 ALR 618

Daniel v Daniel [1906] HCA 74; (1906) 4 CLR 563

Halloran and Sealark Pty Ltd and Ors v Minister Administering National Parks and Wildlife Act 1974 [2003] NSWLEC 69; (2003) 125 LGERA 342

Harris v Caldane (1991) 172 CLR 84
Lend Lease Real Estate Investments Ltd & v GPT RE Ltd [2006] NSWCA 207
Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28; (1998) 194 CLR 355; 153 ALR 490

Re Ho (1975) 10 SASR 250; 24 FLR 305

Re Mount Isa Mines Limited [1997] 1 QdR 249

Re Queensland Electricity Commission; Ex parte Electrical Trades Union of Australia [1987] HCA 27; (1987) 72 ALR 1
Residual Assco Group Ltd v Spalvins [2000] HCA 33; (2000) 202 CLR 629
Sea Shepherd Australia Limited v Commissioner of Taxation [2013] FCAFC 68; (2013) 212 FCR 252

Shanks v Shanks [1942] HCA 6; 65 CLR 334

Shaw v Minister for Immigration and Multicultural Affairs [2003] HCA 72; (2003) 218 CLR 28; 203 ALR 143; 77 ALD 251

The Queen v Kirby; Ex parte Boilermakers’ Society of Australia [1956] HCA 10; (1956) 94 CLR 254
Thiess v Collector of Customs [2014] HCA 12; (2014) 250 CLR 664; 306 ALR 594
Waterside Workers’ Federation of Australia v JW Alexander Ltd [1918] HCA 56; (1918) 25 CLR 434

Secondary Materials

“The Removal of Justice Staples – Contrived Nonsense or Matter of Principle?” 2 Australian Bar Review 1

Chambers 21st Century Dictionary (1999, reprinted 2004)

Commonwealth of Australia, Special Gazette, S206, 5 October 1982, AGPS, Canberra

Explanatory Memorandum to the Tax and Superannuation Laws Amendment (Increased Concessional Contributions Cap and Other Measures) Act 2013

Review into Australian Industrial Relations Law and Systems Canberra, Australian Government Publishing Service, 1985

REASONS FOR DECISION

Deputy President S A Forgie

1. The Hon Graeme Watson is a former Vice President of the Australian Industrial Relations Commission (AIRC) where he had the “same rank, status and precedence as a Judge of the Court” being the Federal Court.  In respect of the 2014 and 2015 income years, the Commissioner of Taxation (Commissioner) decided that Mr Watson was liable to pay “Division 293 tax” under the Income Tax Assessment Act 1997 (ITAA97) because he had “taxable contributions” exceeding $300,000 in each of those years.  Those who come within the description of “a justice or judge of a court created by the Parliament” for the purpose of applying s 293-190 are exempt from the Division 293 tax but the Commissioner took the view that Mr Watson did not. Mr Watson has submitted that he does by virtue of his having “… the same rank, status and precedence as a Judge of the Court” being the Federal Court by virtue of s 63(2) of the Workplace Relations Act 1996 (WR Act). I have decided that s 63(2) relates to Mr Watson’s professional and social place in the community but does not bring him within the description set out in s 293-190. Therefore, I have affirmed the Commissioner’s decision.

BACKGROUND

1. The parties have agreed on the facts that form the background to the issues that I must decide and I will set them out in this section of my reasons together with, where appropriate, references to the documents lodged under s 37 of the Administrative Appeals Tribunal Act 1975 (T documents).  On 1 June 2006 and acting under the authority of ss 63(1) and 71(1) of the WR Act, the Governor-General appointed Mr Watson to be a Vice President of the Australian Industrial Relations Commission (AIRC).[1]  Mr Watson held that position until he resigned his commission with effect from 28 February 2017.

   [1] T documents; T18 at 164

1. During the years of his appointment from 2006 to 2017, Mr Watson was, and held a defined benefit interest in, the Judges’ Pension Scheme established under the Judges’ Pensions Act 1968 (JP Act).  On 11 March 2015, the Commissioner received a Member Contribution Statement (MCS) from the Judges’ Pension Scheme in respect of Mr Watson.  The MCS identified defined benefit contributions in the amount of $104,022.13 received for Mr Watson in the year ended 30 June 2014.[2] 

   [2] T documents; T3 at 35-38

1. Following his receipt of the MCS, the Commissioner sent a Division 293 tax notice of assessment[3] under cover of a letter in which he advised Mr Watson:

   “In 2013 there was a change to the concessional tax rate on super contributions for people with incomes greater than $300,000.  Additional tax of 15% is charged on the taxable super contributions above this threshold.

   For the 2014 financial year, as your income is above $300,000 we’ve calculated a Division 293 assessment for you of $15,603.30.  As this is in relation to your defined benefit account the payment has been deferred.

   Enclosed is a notice of assessment for the deferred amount and a release authority for each deferred account.  The release authority allows your super fund to make a voluntary payment on the deferred debt for you.  You can also pay from your own funds using the payment options on your assessment.

   …

   The deferred debt is automatically deferred until you take your end benefit, so you don’t need to pay this now.  The debt will incur end of year interest at the long-term bond rate but you can minimise this by making voluntary payments at any time.

   We’ve calculated the tax based on the income and super contribution figures in the enclosed notice of assessment.  If you disagree with your contributions amount, contact your super fund as it reports these amounts to us.  If you disagree with your income amount, please review your tax return.

   …”[4]

   [3] T documents; T7 at 79-82

   [4] T documents; T6 at 77

1. On 27 November 2015, the Commissioner received a further MCS from the Judges’ Pension Scheme in respect of Mr Watson. The MCS identified defined benefit contributions amounting to $100,992.24 as having been received for Mr Watson for the year ended 30 June 2015. The Commissioner wrote a letter dated 15 April 2016 to Mr Watson regarding additional tax on super contributions. It was written in terms similar to the Commissioner’s earlier letter and enclosed a Division 293 tax notice of assessment for the year ended 30 June 2015 in the amount of $15,148.80.[5]

   [5] T documents; T12 and T13 at 137-141

1. Mr Watson lodged objections to the Division 293 tax assessments for each of the years ended 30 June 2014 and 2015. He did so on 17 March 2017[6] shortly after he had resigned his commission on 28 February 2017.  On 23 May 2017, the Commissioner wrote to Mr Watson advising him that he had not allowed either of his objections.  He enclosed his reasons for his decision.[7] 

   [6] T documents; T16 and T17 at 151-162

   [7] T documents; T1 at 11-16 and T2 at 29-34

1. On 5 June 2017, the Commissioner wrote to Mr Watson advising him that, now that he had taken an end benefit from the Judges’ Pension Scheme, he now had a Division 293 tax debt account discharge liability. On the Commissioner’s calculations, the Division 293 tax debt account amount amounted to $31,555.92. The end benefit cap amount was $255,617.00. Payment was due by 27 April 2017.[8]  On 9 June 2017, Mr Watson applied to the Tribunal for review of the Commissioner’s decisions.[9]

   [8] T documents; T19 at 165-166

   [9] T documents; T1 at 1-28

DIVISION 293 OF ITAA97

1. Superannuation is regulated by a suite of legislation regulating matters such as the prudential and operating standards under which the providers of superannuation must operate and employers must provide a minimum level of superannuation contributions for their employees. Part 3-30 of ITAA97 provides for the tax treatment of contributions to, investment in and benefits from superannuation. Tax concessions provided for in that Part:

   “… are intended to encourage Australians to save in order to make provision for their retirement, recognising that superannuation investments, and the income from them, are quarantined for retirement.”[10]

   [10] ITAA97; s 280-1(2)

1. Division 293 reduces the concessional tax treatment of certain superannuation contributions made for very high income individuals. It does this by providing that a taxpayer who has “taxable contributions for an income year” has a Division 293 tax.[11]  What is meant by the expression “taxable contributions” is explained in s 293-20.  If the sum of a taxpayer’s income for surcharge purposes for an income year[12] and low tax contributions for the corresponding financial year exceeded $300,000, he or she had taxable contributions.  The amount of those taxable contributions is an amount equal to the lesser of the low tax contributions and the amount of the excess.[13] 

[11] ITAA97; s 293-15 Division 293 was inserted in ITAA97 by the Tax and Superannuation Laws Amendment (Increased Concessional Contributions Cap and Other Measures) Act 2013 with effect from 28 June 2013; ss 2 and 3, Schedule 3, Item 1.

[12] “Income for surcharge purposes” is, subject to qualifications that are not relevant in this case, the sum of a person’s taxable income, reportable fringe benefits, reportable superannuation contributions and total net investment loss for the income year less any tax offset under s 301-20(2) for that year: ITAA97; s 995-1(1).

[13] ITAA97; s 293-20

1. For those taxpayers who are members of a defined benefit scheme, the amount of the low tax contributions is worked out according to s 293-105.  It takes into account low tax contributed amounts to the extent that they do not relate to a defined benefit interest and subtracts from that amount a taxpayer’s excess concessional contributions, if any, for the financial year.  To the resulting figure is added the defined benefit contributions for the financial year in respect of the taxpayer’s defined benefit interest or interests.  A taxpayer has a “defined benefit interest” to the extent that his or her entitlement to superannuation benefits is payable by reference to his or her (or another’s) salary or allowance in the nature of salary at a particular date or averaged over a period, a specified amount or specified conversion factors or by reference to more than one of these factors.[14]  The “defined benefit contributions” for a financial year in respect of a defined benefit interest are determined by regulation.[15] The relevant regulations are found in Division 293 of the Income Tax Assessment Regulations 1997.

   [14] ITAA97; s 291-175 and see also exclusions in s 291-175(2)

   [15] ITAA97; s 293-115

1. Subdivision 293-F of ITAA97, however, modifies the provisions of Division 293 in respect of contributions made by certain persons to a defined benefit interest established under the JP Act. It begins by identifying in s 293-190 the persons to whom it applies:

   “(1)     This Subdivision applies to an individual if the individual is a Justice of the High Court, or a justice or judge of a court created by the Parliament, at any time or after the start of the individual’s 2012-2013 income year.

   (2)Nothing in this Subdivision limits section 6 of the Superannuation (Sustaining Superannuation Contributions Concession) Imposition Act 2013.

   Note:Section 6 of the Superannuation (Sustaining Superannuation Contributions Concession) Imposition Act 2013 provides that Division 293 tax is not imposed in relation to a person if the imposition would exceed the legislative power of the Commonwealth.”

1. The way in which the provisions of Division 293 are modified for a “Justice of the High Court, or a justice or judge of a court created by the Parliament” in respect of defined benefit contributions is set out in s 293-195.  For the purposes of working out the amount of the individual’s low tax contributions for any financial year under s 293-105, his or her defined benefit contributions for that year for a defined benefit interest in a superannuation fund established under the JP Act are nil.[16] That is so despite ss 293-115 and 293-150(3) of ITAA97.[17]  Section 293-200 is concerned with high income threshold:

   “(1)     For the purpose of working out the extent (if any) to which the sum mentioned in subsection 293-20(1) for the individual exceeds the $300,000 threshold mentioned in that subsection, disregard s 293-195.

   (2)To avoid doubt, the effect of subsection (1) is that the amount of the individual’s *taxable contributions for an income year is the lesser of:

   (a)the excess (if any) mentioned in subsection 293-20(1) (worked out disregarding section 293-195) for the income year; and

   (b)the individual’s *low tax contributions for the corresponding *financial year (worked out having regard to section 293-195).” 

   [16] ITAA97; s 293-195(2)

   [17] Section 293-150(3) is concerned with low tax contributions for State higher level office holders who do not pay Division 293 tax in respect of contributions to constitutionally protected funds unless those contributions are part of a salary package.

APPOINTMENTS TO CERTAIN PUBLIC OFFICES

The Commonwealth Constitution

1. Section 72 of the Commonwealth of Australia Constitution Act provides:

   “Judges’ appointment, tenure and remuneration

   The Justices of the High Court and of the other courts created by the Parliament:

   (i)shall be appointed by the Governor-General in Council;

   (ii)shall not be removed except by the Governor-General in Council, on an address from both Houses of the Parliament in the same session, praying for such removal on the ground of proved misbehaviour or incapacity;

   (iii)shall receive such remuneration as the Parliament may fix; but the remuneration shall not be diminished during their continuance in office.

   The appointment of a Justice of the High Court shall be for a term expiring upon his attaining the age of seventy years, and a person shall not be appointed as a Justice of the High Court if he has attained that age.

   The appointment of a Justice of a court created by the Parliament shall be for a term expiring upon his attaining the age that is, at the time of his appointment, the maximum age for Justices of that court and a person shall not be appointed as a Justice of such a court if he has attained the age that is for the time being the maximum age for Justices of that court.

   Subject to this section, the maximum age for Justices of any court created by the Parliament is seventy years.

   The Parliament may make a law fixing an age that is less than seventy years as the maximum age for Justices of a court created by the Parliament and may at any time repeal or amend such a law, but any such repeal or amendment does not affect the term of office of a Justice under an appointment made before the repeal or amendment.

   A Justice of the High Court or of a court created by the Parliament may resign his office by writing under his hand delivered to the Governor-General.

   Nothing in the provisions added to this section by the Constitution Alteration (Retirement of Judges) Act 1977 affects the continuance of a person in office as a Justice of a court under an appointment made before the commencement of those provisions.

   A reference in this section to the appointment of a Justice of the High Court or of a court created by the Parliament shall be read as including a reference to the appointment of a person who holds office as a Justice of the High Court or of a court created by the Parliament to another office of Justice of the same court having a different status or designation.”

Appointment as a Judge of the Federal Court of Australia

1. Section 5 of the Federal Court of Australia Act 1976 (FCA) creates a federal court to be known as the Federal Court of Australia (Federal Court).  The Federal Court is a superior court of record and a court of law and equity consisting of a Chief Justice and of such other Judges as from time to time hold office in accordance with the FCA.  The Chief Justice is the senior Judge of the Court and other Judges have seniority according to the dates on which their commissions took effect or, if the same date, according to the precedence assigned to them by their commissions.[18]  Whenever the Chief Justice is absent from Australia or from duty or there is a vacancy in the office of Chief Justice, the next senior Judge who is in Australia and who is able and willing to do so shall perform the duties and may exercise the powers of the Chief Justice.[19]

   [18] FCA; s 8

   [19] FCA; s 7

1. A Judge is appointed by the Governor-General by commission but shall not be appointed unless he or she has been a Judge of a prescribed court or of a court of a State or has been enrolled as a legal practitioner of the High Court or of the Supreme Court of a State or Territory for not less than five years.[20]  A “prescribed court” means a court (other than the Federal Court) created by Parliament or the Supreme Court of the Northern Territory or of the Australian Capital Territory.[21]  A Judge of the Federal Court other than the Chief Justice may hold office at any one time both as a Judge of that court and as a Judge of one or more prescribed courts.[22]

   [20] FCA; ss 6(1)(a) and (2)

   [21] FCA; s 6(7)

   [22] FCA; s 6(5)  A “prescribed court” means a court (other than the Federal Court) created by the Parliament and a Supreme Court of the Northern Territory, the Australian Capital Territory or of a State: FCA; s 6(7).

1. Section 6(1)(b) provides that a Judge:

   “shall not be removed except by the Governor-General, on an address from both Houses of the Parliament in the same session, praying for his or her removal on the ground of proved misbehaviour or incapacity.”

1. Before proceeding to discharge the duties of office, a Judge must take an oath or affirmation in accordance with the form set out in the Schedule to the FCA and must do so before either the Governor-General or another Judge of the Court, a Justice of the High Court or a Judge of the Supreme Court of a State or Territory.[23]  The form of oath of office, with the words of the affirmation of office shown in square brackets is:

   “I, ........................................... , do swear that [do solemnly and sincerely promise and declare that] I will bear true allegiance to Her Majesty Queen Elizabeth the Second, Her Heirs and Successors according to law, that I will well and truly serve Her in the Office of Chief Justice [or Judge] of the Federal Court of Australia and that I will do right to all manner of people according to law without fear or favour, affection or ill will. So help me God! [last sentence omitted]”

   [23] FCA; s 11

1. A Judge or former Judge is entitled to be styled “The Honourable”.[24]  The Chief Justice and other Judges receive salary, annual allowances and travelling allowances at such rates as are fixed from time to time by Parliament.  Salary and annual allowances accrue from day to day and are paid monthly.  The remuneration of a Judge shall not be diminished during his or her continuance in office.[25]

   [24] FCA; s 6(6)

   [25] FCA; s 9

Appointment as Vice President to the Australian Industrial Relations Commission

1. The AIRC was established by s 61 of the WR Act.  It consisted of a President, two Vice Presidents and such number of Senior Deputy Presidents, Deputy Presidents and Commissioners as from time to time hold officer under the legislation.[26]  Each was appointed by the Governor-General by commission and held office as provided by the WR Act.[27]  Section 64 set out the qualifications for appointment.  For the President, they mirrored those required by s 6(2) of the FCA for appointment as a Judge of the Federal Court but went further by requiring that:

   “in the opinion of the Governor-General, the person is, because of skills and experience in the field of industrial relations, a suitable person to be appointed as President.”[28]

   [26] WR Act; s 61

   [27] WR Act; s 63(1)

   [28] WR Act; s 64(1)(b)

1. For appointment as a Vice President, a Senior Deputy President or Deputy President, s 64(2) of the WR Act also required a person to have skills and experience in the field of industrial relations[29] in addition to one or more of the following qualifications:

   [29] WR Act; s 64(2)

   “(a)     the person has been a Judge of a court created by the Parliament or a court of a State or Territory, or has been enrolled as a legal practitioner of the High Court, or the Supreme Court of a State or Territory, for at least five years;

   (b) the person has had experience at a high level in industry or commerce or in the service of:

   (i)a peak council or another association representing the interests of employers or employees; or

   (ii)a government or an authority of a government; or

   (c)the person has, at least 5 years previously, obtained a degree of a university or an educational qualification of a similar standard after studies in the field of law, economics or industrial relations, or some other field of study considered by the Governor-General to have substantial relevance to the duties of a Vice President, a Senior Deputy President or a Deputy President;

   …”

1. Before proceeding to discharge the duties of office, s 76 required each member of the Commission to take an oath or affirmation of office before the Governor-General or another Judge of the Court, a Justice of the High Court or a Judge of the Supreme Court of a State or Territory.  The form of oath of office, with the words of the affirmation of office shown in square brackets is:

   “I, ........................................... , do swear that [do solemnly and sincerely promise and declare that] I will bear true allegiance to Her Majesty Queen Elizabeth the Second, Her Heirs and Successors according to law, that I will well and truly serve Her in the Office of (insert name of office) and that I will faithfully and impartially perform the duties of the office. So help me God! [last sentence omitted]”

1. A “Presidential Member” is defined in s 4(1) of the WR Act to mean “… the President, a Vice President, a Senior Deputy President or a Deputy President.” Sections 63(2), (3) and (4) make specific provision for Presidential Members:

   “(2)     Each Presidential Member has the same rank, status and precedence as a Judge of the Court.

   (3)A Presidential Member or former Presidential Member is entitled to be styled ‘The Honourable’.

   (4)A person is not entitled to be styled ‘The Honourable’ merely because the person is acting, or has acted, as a Presidential Member.”

1. Section 71 provides the tenure of Commission members. The general rule is that a member of the Commission holds office until he or she resigns, is removed from office or attains the age of 65 years. That is set out in s 71(1). Section 71(2) relates to the tenure of the first President of the AIRC and s 71(3) to the tenure as a member of the AIRC of a person who is a member of a prescribed State industrial authority. The position of the President is the subject of further provisions. Section 70 provides that:

   “(1)     The appointment of a Judge of a court created by the Parliament as the President, or service by such a Judge as President, does not affect:

   (a)the Judge’s tenure of office as a Judge; or

   (b)the Judge’s rank, title, status, precedence, salary, annual or other allowances or other rights or privileges as the holder of his or her office as a Judge.

   (2)For all purposes, the Judge’s service as the President is to be taken to be service as a Judge.”

1. Remuneration and allowances payable to Presidential Members were the subject of s 79.[30]  A Vice President was to be paid a salary at an annual rate of 103% of the annual rate of salary payable to a Judge of the Court and such other travelling allowances determined by the Remuneration Tribunal for travel within Australia and such other allowances determined by regulation.[31]  The salary of Presidential Members accrued from day to day and were payable monthly.[32]

   [30] Remuneration and allowance of Commissioners were the subject of s 81 of the WR Act.

   [31] WR Act; s 79(4)

   [32] WR Act; s 79(12)

1. Section 80 of the WR Act was concerned with the JP Act.  It provided that the JP Act did not apply in relation to a Presidential Member if, immediately before being appointed, he or she was an eligible employee for the purposes of the Superannuation Act 1976 or a member of the superannuation scheme established by deed under the Superannuation Act 1990 and he or she did not make an election under s 80(2) of the WR Act to cease being an eligible employee or member as the case might be.  If a Presidential Member made the election within three months of the Presidential Member’s appointment and did so by notice in writing to the Minister, the JP Act applied to him or her.  It was taken to have so applied immediately after he or she was appointed as a Presidential Member.  At the same time, he or she is taken to have ceased to be an eligible employee for the purposes of the Superannuation Act 1976 or a member of the superannuation scheme established by deed under the Superannuation Act 1990.[33]

   [33] WR Act; ss 80(3) and (4)

1. During any period when the President is absent from duty or from Australia or is, for any other reason, unable to perform the duties of the office of President, or there is a vacancy in the office, the Governor-General may appoint a person who is qualified to be appointed as the President to act in that office.[34]  For that purpose only, a person is not disqualified from appointment as President merely because the person has reached the age of 65 years.[35]

   [34] WR Act; s 72(1)

   [35] WR Act; s 72(3)

1. Section 82 of the WR Act provided that:

   “The Governor-General may remove a Presidential Member from office on an address praying for removal on the grounds of proved misbehaviour or incapacity being presented to the Governor-General by both Houses of the Parliament in the same session.”

1. Section 97 is concerned with the protection of Commission members in the performance of their functions:

   “A member of the Commission has, in the performance of functions as a member of the Commission, the same protection and immunity as a Judge of the Court.”

The word “Court” was defined in s 4(1) to mean the Federal Court.

1. The general rule was that matters were decided according to the opinion of the majority of members sitting on the AIRC.  If they were divided in opinion, s 93 provided for the way in which matters were to be decided.  In the first instance, that depended on determination of the most senior person based on the position held be it that of President, Vice President, Senior Deputy President, Deputy President or Commissioner.  If two or more persons held the most senior position, the opinion became that of the person who had seniority under s 65.

The Fair Work Act 2009

1. Fair Work Australia (FWA) was established by s 575 of the Fair Work Act 2009 (FW Act) with effect from 26 May 2009.[36] It consists of its President, such number of Deputy Presidents and Commissioners as, from time to time, hold officer under the FW Act and, at the time it was established, a minimum of three but no more than six Minimum Wage Panel members.[37]  An FWA Member is appointed by the Governor-General by written instrument.[38]  The instrument must specify whether the FWA Member is the President, a Deputy President, a Commissioner or a Minimum Wage Panel Member.[39]  It must also assign a precedence to the FWA Member if the FWA Member and one or more other FWA Members are appointed as Deputy Presidents on the same day.[40]  Precedence or seniority has relevance because the FWA Member on a Full Bench of the FWA is responsible for managing the Full Bench in performing functions and exercising powers of the FWA.[41]

   [36] FW Act; s 2, Item 4

   [37] FW Act; s 575

   [38] FW Act; s 626(1)

   [39] FW Act; s 626(2)

   [40] FW Act; s 626(3)

   [41] FW Act; s 619(2) and see also 606(2)

1. The Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (FW Transitional Act) amended laws and dealt with transitional matters in connection with the FW Act. The provisions of Schedule 18 commenced with effect from 1 July 2009.[42] Item 1 of Schedule 18 provided for the appointment of a person holding appointment in the AIRC to hold appointment in the FWA as set out in the Table in Item 1(1). In so far as it relates to a Vice President of the AIRC, item 1(1) provided:

   “An appointment that is:

   (a)to an office of the Commission mentioned in a table item below; and

   (b)in force immediately before the commencement time for the table item;

   is taken, after that time, to be an appointment, under section 626 of the FW Act, to the office of FWA mentioned in the table item.

   Note:The person continues to be appointed to the Commission (see subitem (3)).

   [42] FW Transitional Act; s 2(1); Item 5

Appointments to FWA
Column 1	Column 2	Column 3
Item	Office of the Commission	Office of FWA	Commencement time
1	…	…	…
2	Vice President of the Commission	Deputy President of FWA	The first day proclaimed for the purposes of item 3 of the table in subsection 2(1) of the FW Act.
3-5	…	…	…”

The first day proclaimed for the purposes of Item 3 of the Table in s 2(1) of the FW Act is 26 May 2009.

1. Despite any provision of the WR Act or of the FW Act, a person who was taken to have been appointed as an FWA Member under Item 1 of Schedule 18, as was a Vice President, continues also to hold office under the WR Act. That is consistent with the fact that the AIRC established under the WR Act continued in existence until 31 December 2009 by virtue of Item 2 of the table in Item 7(1) of Schedule 18. That meant that a person appointed as Vice President of the AIRC would continue to hold that position until 31 December 2009 while, from 26 May 2009, also holding the position of Deputy President of the FWA.

1. The terms and conditions of a person who is taken to have been appointed an FWA Member under Item 1(1) of Schedule 18:

   “(a) holds office under the FW Act on the same terms and conditions as attach, or attached, to his or her appointment under the WR Act (including under subsections 63(2) and (3) of that Act); and

   (b)is entitled to the same designation as he or she is, or was, entitled to in relation to his or her appointment under the WR Act (including the designation the person has, or had, because of subsection 80(2) of the Industrial Relations (Consequential Provisions) Act 1988).”

1. To avoid doubt, Item 2(2) provides that Item 2(1) has effect despite ss 633(1) and 644(1) of the FW Act. Item 2(2) also provides that Item 1(1):

   “continues the application of the Judges’ Pensions Act 1968 in relation to a person taken to have been appointed under item 1 of this Schedule and to whom that Act applied as a member of the Commission.”

1. For the purposes of determining the remuneration of a person who is taken to have been appointed as an FWA member under Item 1 of Schedule 18, ss 635 and 637 of the FW Act do not apply. Sections 79 and 81 of the WR Act apply, and continue to apply on and after the WR Act repeal day in relation to the person’s appointment as both an FWA Member and as a member of the AIRC. The “WR Act repeal day” means the day on which the WR Act repeal commenced.  That repeal commenced with the repeal of specific provisions by s 3 and Schedule 1 to the FW Transitional Act.  That Schedule commenced operation on 1 July 2009.[43] 

   [43] FW Transitional Act; s 2(1), Item 2

1. Section 580 of the FW Act provides that:

   “An FWA Member has, in performing his or her functions or exercising his or her powers as an FWA Member, the same protection and immunity as a Justice of the High Court.”

   THE JUDGES’ PENSION ACT 1968

2. For the purposes of this case, it is enough to note that the JP Act provides that, where a Judge (who is not a Papua New Guinea Judge) has the attained the age of 60 years and retires after serving as a Judge for no fewer than ten years, he or she is entitled to a pension in accordance with ss 6A(2) or 6B(2).[44]  That pension is an amount of 60% of the appropriate current judicial salary that would have been paid but for the retirement[45] unless it is reduced by a surcharge debt account in debit under s 6B.

   [44] JP  Act; s 6(1)

   [45] JP Act; s 4(1)

1. The word “Judge” is defined in s 4(1) of the JP Act to mean:

   “(a)      a Justice or Judge of a federal court (other than the Federal Magistrates Court);

   (b)a person who, by virtue of an Act, has the same status as a Justice or Judge of a court referred to in paragraph (a); or

   (ba)a person who was a Judge of the Supreme Court of the Australian Capital Territory immediately before the commencement of the A.C.T. Supreme Court (Transfer) Act 1992; or

   (c)a Papua New Guinea Judge.”

2. As a Vice President appointed under the WR Act, Mr Watson had, by virtue of s 63(2) of that legislation, the same status as a Judge of the Federal Court. Therefore, the JP Act applied to him and continues to apply to him. When he was appointed to the FWA as a Deputy President, he continued to hold office on the same terms and conditions as he had held office under the WR Act. That is the effect of Item 1(1) of Schedule 18 to the FW Transitional Act, which makes specific reference to including the terms and conditions provided in ss 63(2) and (3) of the WR Act.

BROAD OUTLINE OF SUBMISSIONS

1. Central to Mr Watson’s submission is that his appointment as a Vice President of the AIRC conferred on him the same rank, status and precedence as a Judge of the Federal Court. By virtue of Item 2(1), he continued to have that rank, status and precedence after his appointment as a Deputy President of the FWA even though that was not accorded to those who have been appointed as Deputy Presidents of the FWA but who had not previously been Presidential Members of the AIRC. The status of a person is an index to his or her legal rights and duties and powers and disabilities. By virtue of his status as a Federal Court Judge and having fulfilled the conditions in s 6 of the JP Act, he has an entitlement to a pension under the JP Act. Section 293-190 of ITAA97 must not be considered in isolation and regard must be had to s 63 of the WR Act, which conferred on him the same rank, status and precedence as a Judge of the Federal Court. The word “status” must be considered in the context of legislative history.  It has legal effect and requires the application of the laws to a person having the status of a Judge of the Federal Court “as if” the person were a Judge of that Court.  The fact that a Presidential Member of the AIRC was not in fact a Judge is not to the point.  Therefore, at all relevant times, his defined benefit contributions were Nil.

1. On behalf of the Commissioner, Mr Hanks QC with Mr Young submitted that s 293-190 of ITAA97 must be given its natural and ordinary, and so literal, meaning. Taxing statutes are no different from other statutes and are subject to the ordinary rules of statutory construction. Historical considerations relating to particular appointments to particular bodies cannot displace those rules. Section 293-190 applies “if the individual is a Justice of the High Court, or a justice or judge of a court created by the Parliament.” Such a person is appointed in accordance with s 72 of Chapter III of the Constitution. Section 72(iii) of the Constitution provides that Justices of the High Court and of other courts created by Parliament receive such remuneration as is determined by Parliament and prevents their remuneration being reduced during their period in office. The principle set out in s 72(iii) underpins s 293-190 which, in turn, reflects it in its choice of language. It uses language requiring the person to be a Justice of the High Court or a justice or judge of a court created by Parliament and does not extend to a person having the status of a person who holds such a position. Whatever meaning is to be given to the word “status” in s 63(2) of the WR Act, it does not of itself confer equivalence between the position of a Presidential Member of the AIRC with that of a Judge of the Federal Court. Such a person was not entitled to sit as a Judge in the Federal Court or of any other court and his or her tenure was not extended from 65 years of age to 70. Section 63(2) did not of itself entitle a Presidential Member of the AIRC to a pension under the JP Act. That came about by virtue of paragraph (b) of the definition of “Judge” in s 4(1) of the JP Act when read with s 63(2) of the WR Act conferring the same status as a Judge of the Federal Court and so of a federal court other than the Federal Circuit Court.

CONSIDERATION

The meaning of “status”

1. The ordinary meaning of the word “status” is:

   “… 1 rank or position in relation to others, within society, an organization, etc □ social status.  2 legal standing, eg with regard to adulthood, marriage, citizenship, etc.  3 a high degree or level of importance; prestige □ Her huge salary reflects the status of the job. ‘ 19c; Latin, meaning ‘the state in which’.”[46]

   [46] Chambers21st Century Dictionary (1999, reprinted 2004) (Chambers)

2. In earlier times, s 35(1)(a) of the Judiciary Act 1904 (Judiciary Act) provided that:

   “The appellate jurisdiction of the High Court with respect to judgments of the Supreme Court of a State shall extend to the following judgments whether given or pronounced in the exercise of federal jurisdiction or otherwise and to no others, namely:

   (a)Every judgment, whether final or interlocutory, which -

   (1)is given or pronounced for or in respect of any sum or matter at issue amounting to or of the value of Three thousand dollars; or

   (2)involves directly or indirectly any claim, demand, or question, to or respecting any property or any civil right amounting to or of the value of Three thousand dollars; or

   (3)affects the status of any person under the laws relating to aliens, marriage, divorce,* bankruptcy, or insolvency;

   but so that an appeal may not be brought from an interlocutory judgment except by leave of the Supreme Court or the High Court-

   …”

1. In Daniel v Daniel,[47] a Judge of a Supreme Court had awarded a petitioning husband custody of a child of the marriage. He had done so under s 4 of the Matrimonial Causes Act 1899 in a suit for dissolution of marriage.  One of the issues before the High Court was whether an appeal lay as of right to it under s 35 of the Judiciary Act.  Griffith CJ, with whom Barton and Isaacs JJ concurred, answered the question in this way:

   “…The question at issue in this case is merely whether the father or the mother should have the custody of the child.  How can that be said to be a question of status?  Without pretending to give an exhaustive definition, I apprehend that the term ‘status’ means something of this sort: a condition attached by law to a person which confers or affects or limits a legal capacity of exercising some power that under other circumstances he could not or could exercise without restriction.  That definition, as I have said, may not be exhaustive, but it indicates, at any rate, the sort of thing that is meant.  The answer to the question whether an infant ought to be placed in the custody of his father or his mother does not affect the capacity of the child or of anybody else to do anything, and therefore I do not think that this is a question of status at all.  The instances given by the section itself serve to show what the words mean, that is to say, such questions as whether a person is legally married or not, or is a bankrupt or not.  Those are very different matters from this. In my opinion, therefore, an appeal does not lie in this case as of course.”[48]

   [47] [1906] HCA 74; (1906) 4 CLR 563; Griffith CJ, Barton and Isaac JJ

   [48] [1906] HCA 74; (1906) 4 CLR 563 at 566-567

1. Mr Watson also drew my attention to Shanks v Shanks,[49] which also focused on s 35(3) of the Judiciary Act.  Mr Shanks petitioned for divorce on the grounds that his wife had committed adultery.  The trial Judge found that Mrs Shanks had not committed adultery but made a decree of judicial separation on the basis of Mrs Shanks’ petition in which she alleged that her husband had been cruel to her.  Mr Shanks appealed to the High Court, which considered whether the judgment had affected the status of Mr and Mrs Shanks under the laws relating to marriage within the meaning of s 35(3) of the Judiciary Act.  The flavour of the reasoning in the judgments on this point is found in that of Starke J:

   “ Marriage is a status. A decree dissolving a marriage is a judgment upon status. It is said, however, that a decree refusing a dissolution of marriage is not a judgment within the meaning of the Judiciary Act 1903-1940, sec. 35, "which affects the status of any person under the laws relating to ... marriage," because it does not modify, change, or destroy the status of marriage. But it relates to, or affects that status, because it pronounces upon the question whether that status should or should not be dissolved.”[50]

   [49] [1942] HCA 6; 65 CLR 334; Rich, Starke, McTiernan and Williams JJ

   [50] [1942] HCA 6; 65 CLR 334 at 336 and see also Rich and Williams JJ at 335-336 and McTiernan J at 337

1. Since then, the word “status” has been used in other legislation and considered by the courts.  Consistently with the careful and confined meaning given in Daniel v Daniel, Shepherdson J of the Supreme Court of Queensland decided that the expression “marital status” had to be given its literal meaning when s 7(1) of the Anti-Discrimination Act 1991 (AD Act) prohibited discrimination on the basis of “marital status”. In so far as it was relevant to the case, s 4 defined “marital status” as meaning “… whether a person is – (b) married; or … (f) a de facto spouse. …”.  His Honour decided that:

   “          The fact that a particular employee of the appellant happens to be married to or to be the de facto spouse of another employee of the appellant is an incident of each employee’s marital status and has no bearing on the attribute of ‘marital status’ as defined in the Act.”[51]

   [51] Re Mount Isa Mines Limited [1997] 1 QdR 249 at 259

1. In Halloran and Sealark Pty Ltd and Ors v Minister Administering National Parks and Wildlife Act 1974[52] (Halloran), for example, the issue concerned the “status of the decision” given by a judge at an earlier stage in the matter.  Cowdroy J concluded that the status of the decision was that of an interlocutory decision.  It was not decisive of the suit and he could set it aside if he considered it necessary and expedient to do so. 

   [52] [2003] NSWLEC 69; (2003) 125 LGERA 342; Cowdroy J

1. The word “status” is used in the context of statutory provisions relating to “refugee status” and to status as to nationality.  The case of Re Ho[53] is an example of the latter.  Rule 5 of the South Australian Admission Rules provided as a criterion for admission that the applicant should be a British subject.  Mr Ho was not a British subject but the term was defined so that a “‘British subject’ shall be deemed to include and always to have included a person having the status of a British subject”.  Rule 46 permitted the Supreme Court to exempt a person from the requirements of, or compliance with, the Admission Rules either entirely or partially if, under special circumstances, it thought fit to do so.  For over a century, the practice of the Court had been to require an applicant for admission to take the oath of allegiance as a condition precedent to enrolment.

   [53] (1975) 10 SASR 250; 24 FLR 305; Bray CJ Walters and Wells JJ

1. Mr Ho was born in Brunei but not recognised by the law of the State of Brunei as being a citizen of that country.  He had not become a citizen of any other country.  When he came to Australia in 1968, he had been issued with a British passport by the British High Commissioner for the State of Brunei.  That passport recorded his national status as "British Protected Person, State of Brunei".  The case turned on the exercise of the discretion not to require strict compliance with the Admission Rules but also on the fact that, owing no allegiance to any other country, Mr Ho could take an oath of allegiance in the terms required.  As for his status as a British subject, the following passage from the judgment of Bray CJ, with whom Walters and Wells JJ were in general agreement, summarises the dilemma that the Full Court found itself in:

   “          The probable result of all this is that the applicant is neither a British subject nor, for many purposes anyhow, an alien. He is, as his counsel Mr. Gordon said, in a grey area. Another way of putting it is to say that he possesses some, but not all, of the status of a British subject.  He possesses at least so much of it as results from his not being an alien for the purposes of the nationality legislation. And it has been said by an eminent authority that "for the purposes of international law the distinction between 'British subject' and 'British-protected person' is irrelevant" (D. P. O'Connell, International Law, (1965) vol. 2, p. 736).”[54]

   [54] (1975) 10 SASR 250; 24 FLR 305 at 254; 309

1. A more recent example of consideration of a person’s status as a “British subject” is to be found in Shaw v Minister for Immigration and Multicultural Affairs[55] (Shaw). The principal issue was whether s 51(xix) of the Constitution conferring powers on the Parliament to make laws with respect to “naturalization and aliens” supported s 501(2) of the Migration Act 1958. Section 501(2) provides that the Minister may cancel a visa granted to a person if he or she reasonably suspects that the person does not pass the character test and does not satisfy the Minister that he or she does so pass it. Mr Shaw contended that he was a British subject who had not been an alien either when he was born in the United Kingdom in 1972 or when he entered Australia in 1974. Nothing had changed to make him an alien.

   [55] [2003] HCA 72; (2003) 218 CLR 28; 203 ALR 143; 77 ALD 251; Gleeson CJ, Gummow, Hayne and Heydon JJ; McHugh, Kirby and Callinan JJ dissenting

1. In his judgment, Callinan J began by saying that Mr Shaw’s entitlement to permanent residency in Australia is a matter of “status”.  His Honour referred to the passage from Daniel v Daniel and continued:

   “In Ford v Ford Latham CJ said this ... [(1947) 73 CLR 524 at 529]:

   "A person may be said to have a status in law when he belongs to a class of persons who, by reason only of their membership of that class, have rights or duties, capacities or incapacities, specified by law which do not exist in the case of persons not included in the class and which, in most cases at least, could not be created by any agreement of such persons. An alien, for example, as distinct from a subject of the Crown, a married person as distinct from an unmarried person, a bankrupt as distinct from other persons generally, are all persons who have a particular status."

   Courts have long been reluctant to alter the status of a person without a compelling reason to do so. In In re Selot's Trust … [[1902] 1 Ch 488 at 492], Farwell J expressed the need for caution in making such an alteration or reaching a conclusion about it. His Lordship said …: ‘the onus is on the person asserting that there has been a change in status to prove it ...’.”[56]

   [56] [2003] HCA 72; (2003) 218 CLR 28; 203 ALR 143; 77 ALD 251 at [147]-[148]; 77; 179; 287

1. The High Court rejected Mr Shaw’s argument. It considered his status as a British subject and the acknowledgment in the Constitution of the possibility of change in the relationship between Australia and the United Kingdom, whose Parliament had enacted the Constitution as part of the Commonwealth of Australia Act following agreement among, at that stage, five States to unite in a Federal Commonwealth. Reference was made to the power to alter qualifications for elections and for the power given to the Parliament under s 51(xxxviii) to legislate on matters at the request of the States. Once it was decided that the text of the Constitution contemplated changes in the political and constitutional relationship between the United Kingdom and Australia, it was impossible to read the legislative power with respect to “aliens” as subject to some implicit restriction protective from its reach those who are not Australian citizens but who entered as citizens of the United Kingdom.[57] 

   [57] [2003] HCA 72; (2003) 218 CLR 28 at [26]-[30]; 42

1. These cases provide examples of circumstances in which the word “status” has been considered.  They show that care needs to look first to the context in which the word is being used so that the interpretation does not extend beyond the boundaries contemplated by Parliament.  Daniel v Daniel is an example of that and so too is Re Mount Isa Mines Limited.  The cases of Re Ho and Shaw are examples of the way in which a court will examine the circumstances of an individual and the application of the law to that individual in those circumstances to determine his or her rights and duties, powers and obligations and so on in order to determine his or her legal standing and so status.  The same is true of the consideration of the circumstances in which the judgment had been written in Halloran in order to determine its legal standing and so status as well as in Shanks when considering what effect granting a petition for divorce would have on the parties to the marriage. 

Principles of statutory interpretation

1. If this is the way in which the word “status” is to be understood when it is used in a provision such as s 63(2) of the WR Act, each Presidential Member of the AIRC would have the same rights and duties, powers and obligations and so on as a Judge of the Federal Court. To move immediately to that conclusion would be to ignore three things. The first is that cases such as these have considered the word “status” qualified by an adjective or adjectival phrase. They have not considered the meaning of the word when it appears grouped with other words as it does in s 63(2). The second is that to consider only one of the ordinary meanings of the word “status” would be to ignore the first meaning given in Chambers’ definition i.e. “rank or position in relation to others, within society, an organization, etc □ social status” and the third i.e. “a high degree or level of importance; prestige”.  The cases, to which I have referred in the previous section of my reasons, are concerned with the meaning of “legal standing”. 

1. The third thing that would be overlooked would be some fundamental principles of statutory interpretation.  Among them is the underlying principle as set out in the judgment of the plurality in CIC Insurance Ltd v Bankstown Football Club Ltd[58] (CIC Insurance):

   “          It is well settled that at common law, apart from any reliance upon s 15AB of the Acts Interpretation Act 1901 (Cth), the court may have regard to reports of law reform bodies to ascertain the mischief which a statute is intended to cure …. Moreover, the modern approach to statutory interpretation (a) insists that the context be considered in the first instance, not merely at some later stage when ambiguity might be thought to arise, and (b) uses ‘context’ in its widest sense to include such things as the existing state of the law and the mischief which, by legitimate means such as those just mentioned, one may discern the statute was intended to remedy …. Instances of general words in a statute being so constrained by their context are numerous. In particular, as McHugh JA pointed out in Isherwood v Butler Pollnow Pty Ltd …, if the apparently plain words of a provision are read in the light of the mischief which the statute was designed to overcome and of the objects of the legislation, they may wear a very different appearance.  Further, inconvenience or improbability of result may assist the court in preferring to the literal meaning an alternative construction which, by the steps identified above, is reasonably open and more closely conforms to the legislative intent ….[59]

   [58] [1997] HCA 2; (1997) 187 CLR 384; (1997) 141 ALR 618; Brennan CJ; Dawson, Toohey and Gummow JJ; Gaudron J dissenting

   [59] [1997] HCA 2; (1997) 187 CLR 384; (1997) 141 ALR 618 at 408; 634-635 (citations omitted)

1. The focus in CIC Insurance was on the context in which words are used but the High Court has made it clear that the language chosen by Parliament is no less important than its context.  This is apparent in a passage from the joint judgment of Hayne, Heydon, Crennan and Kiefel JJ in Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (Northern Territory):[60]

   “          This Court has stated on many occasions that the task of statutory construction must begin with a consideration of the text itself .... Historical considerations and extrinsic materials cannot be relied on to displace the clear meaning of the text .... The language which has actually been employed in the text of the legislation is the surest guide to legislative intention .... The meaning of the text may require consideration of the context, which includes the general purpose and policy of a provision ..., in particular the mischief ... it is seeking to remedy.”[61]

[60] [2009] HCA 41; (2009) 239 CLR 27; 260 ALR 1; French CJ, Hayne, Heydon, Crennan and Kiefel JJ

[61] [2009] HCA 41; (2009) 239 CLR 27; 260 ALR 1 at [47]; 46-47; 16-17 (citations omitted)

1. French CJ expressed the principle in this way:

   “          The starting point in consideration of the first question is the ordinary and grammatical sense of the statutory words to be interpreted having regard to their context and the legislative purpose.  That proposition accords with the approach to construction characterised by Gaudron J in Corporate Affairs Commission (NSW) v Yuill … as: ‘dictated by elementary considerations of fairness, for, after all, those who are subject to the law's commands are entitled to conduct themselves on the basis that those commands have meaning and effect according to ordinary grammar and usage.’  In so saying, it must be accepted that context and legislative purpose will cast light upon the sense in which the words of the statute are to be read.  Context is here used in a wide sense referable, inter alia, to the existing state of the law and the mischief which the statute was intended to remedy … [CIC Insurance].”[62]

   [62] [2009] HCA 41; (2009) 239 CLR 27; 260 ALR 1 at [4]; 31; 3 (citations omitted)

2. The necessary interweaving of the two strands of language and context are illustrated in the passage from the joint judgment of McHugh, Gummow, Kirby and Hayne JJ in Project Blue Sky Inc v Australian Broadcasting Authority:[63]

   “          The primary object of statutory construction is to construe the relevant provision so that it is consistent with the language and purpose of all the provisions of the statute ...  The meaning of the provision must be determined ‘by reference to the language of the instrument as a whole’ ... In Commissioner for Railways (NSW) v Agalianos ..., Dixon CJ pointed out that ‘the context, the general purpose and policy of a provision and its consistency and fairness are surer guides to its meaning than the logic with which it is constructed’.  Thus, the process of construction must always begin by examining the context of the provision that is being construed ...

   A legislative instrument must be construed on the prima facie basis that its provisions are intended to give effect to harmonious goals ...”[64]

   [63] [1998] HCA 28; (1998) 194 CLR 355; 153 ALR 490; McHugh, Gummow, Kirby and Hayne JJ; Brennan CJ dissenting

   [64] [1998] HCA 28; (1998) 194 CLR 355; 72 ALJR 841; 153 ALR 490 at [69]- [70]; 381-382; 509

1. The interweaving of language and context may mean that words used in a particular context may not be intended to have their literal or grammatical meaning and should not be interpreted as having that meaning.  The plurality explained:

   “          However, the duty of a court is to give the words of a statutory provision the meaning that the legislature is taken to have intended them to have.  Ordinarily, that meaning (the legal meaning) will correspond with the grammatical meaning of the provision.  But not always.  The context of the words, the consequence of a literal or grammatical construction, the purpose of the statute or the canons of construction … may require the words of a legislative provision to be read in a way that does not correspond with the literal or grammatical meaning.  In Statutory Interpretation …, Mr Francis Bennion points out:

   ‘… Unhappily, this state of being able to rely on grammatical meaning does not prevail in the realm of statute law; nor is it likely to.  In some cases the grammatical meaning, when applied to the facts of the instant case, is ambiguous.  Furthermore, there needs to be brought to the grammatical meaning of an enactment due consideration of the relevant matters drawn from the context (using that term in its widest sense).  Consideration of the enactment in its context may raise factors that pull in different ways.  For example the disability of applying the clear literal meaning may conflict with the fact that this does not remedy the mischief that Parliament intended to deal with.’ (footnotes omitted)”[65]

   [65] [1998] HCA 28; (1998) 194 CLR 355; 153 ALR 490 at [78]; 384; 511 (citations omitted); French CJ, Hayne, Kiefel, Gageler and Keane JJ

1. In a similar vein, the High Court drew upon s 15AA of the Acts Interpretation Act 1901 (AI Act) as a statutory reflection of the same principle when it decided Thiess v Collector of Customs.[66] Section 15AA provides that:

   [66] [2014] HCA 12; (2014) 250 CLR 664; 306 ALR 594; French CJ, Hayne, Kiefel, Gageler and Keane JJ

   “In interpreting a provision of an Act, the interpretation that would best achieve the purpose or object of the Act (whether or not that purpose or object is expressly stated in the Act) is to be preferred to each other interpretation.”

It went on to quote from Cabell v Markham,[67] which had been quoted by Kirby J in Residual Assco Group Ltd v Spalvins.[68]  I will set out the full passage from Cabell v Markham as quoted by Kirby J and his reflection on it:

“… In construing a statutory provision, we should always keep in mind what Judge Learned Hand said in Cabell v Markham …:

‘Of course it is true that the words used, even in their literal sense, are the primary, and ordinarily the most reliable, source of interpreting the meaning of any writing: be it a statute, a contract, or anything else.  But it is one of the surest indexes of a mature and developed jurisprudence not to make a fortress out of the dictionary; but to remember that statutes always have some purpose or object to accomplish, whose sympathetic and imaginative discovery is the surest guide to their meaning.’

Moreover, legislation ‘must not be read in a spirit of mutilating narrowness’ ….  If the choice is between reading a statutory provision in a way that will invalidate it and reading it in a way that will not, a court must always choose the latter course when it is reasonably open. …”[69]

[67] (1945) 148 F(2d) 737 at 739 per Judge Learned Hand

[68] [2000] HCA 33; (2000) 202 CLR 629; Gleeson CJ, Gaudron, McHugh, Gummow, Kirby, Hayne and Callinan JJ cited at [2014] HCA 12; (2014) 250 CLR 664; 306 ALR 594 at [23]; 672; 599-600

[69] [2000] HCA 33; (2000) 202 CLR 629 at [27]; 644

1. A further illustration of the same principle is found in the judgment of Gordon J in Sea Shepherd Australia Limited v Commissioner of Taxation[70] (Sea Shepherd):

   “2.       The task is not to pull apart a provision, or composite phrase within a provision, into its constituent words, select one meaning, divorced from the context in which it appears, and then reassemble the provision …  Indeed, it is rare that resort to a dictionary will be of assistance in searching for the legal meaning of a provision in a statute …

   3.As Gleeson CJ said in XYZ v Commonwealth …:

   There are many instances where it is misleading to construe a composite phrase simply by combining the dictionary meanings of its component parts.

   …”[71]

   [70] [2013] FCAFC 68; (2013) 212 FCR 252; Besanko, Gordon and Dodds-Streeton JJ

   [71] [2013] FCAFC 68; (2013) 212 FCR 252 at [34]; 261

Meaning of “status” in section 63(2) of the WR Act

1. Consistent with the principles of statutory interpretation that I have set out, I will begin with an outline of the legislation that has regulated industrial relations disputes since 1904 and the High Court cases that have considered that legislation.

   A.        An outline of dispute resolution in industrial relations jurisdiction since 1904

1. Mr Watson outlined the history of the regulation of industrial conflict and labour conditions beginning with the Commonwealth Conciliation and Arbitration Act 1904 (CCA Act).  Section 11 of the CCA Act established the Commonwealth Court of Conciliation and Arbitration (CCCA) as a Court of Record consisting of a President.  The President was appointed by the Governor-General from among the Justices of the High Court for a seven year term.[72]  Section 14 gave the President power to appoint any other Justice of the High Court or any Judge of a Supreme Court of a State to be his deputy in any part of the Commonwealth.  By 1955, the constitution of the CCCA was differently constituted and the CCA Act had been amended.  Section 29 gave the CCCA power to order compliance with an order or award and to enjoin a person from committing or continuing any contravention of the CCA Act.  Section 29A conferred on the CCCA the same power to punish for contempt of its powers and authorities, judicial or otherwise, as is possessed by the High Court in respect of contempt of that court.

   [72] CCA Act; s 12(1)

1. The High Court considered the seven year appointment of the President in Waterside Workers’ Federation of Australia v JW Alexander Ltd[73] (Alexander’s case) together with the enforcement power given to the CCCA. As to the enforcement power, a majority held that the power to enforce awards made under it is part of the judicial power of the Commonwealth within the meaning of s 71 of the Constitution. As such, it could only be vested in a court mentioned in s 71.[74] Section 72 of the Constitution required that every Justice of the High Court and every justice of any other court created by the Parliament be appointed for life.[75]  As the President had been appointed for a seven year term only, the provisions of the CCA Act conferring judicial power to enforce awards were not valid.[76]  Those provisions were regarded by the majority as severable from the CCA Act.[77] 

   [73] [1918] HCA 56; (1918) 25 CLR 434

   [74] Griffith CJ, Barton, Isaacs, Powers and Rich JJ

   [75] Griffith CJ, Barton, Isaacs, Powers and Rich JJ

   [76] Barton, Isaacs, Powers and Rich JJ

   [77] Isaacs, Higgins, Powers and Rich JJ

1. Parliament amended the CCA Act to take account of Alexander’s case and further amended it by the Commonwealth Conciliation and Arbitration Act 1926.[78]  The office of President was abolished and replaced with a Chief Judge and of other judges with tenure and a fixed remuneration.  The court was now known as the Arbitration Court but, as the majority were to say later in The Queen v Kirby; Ex parte Boilermakers’ Society of Australia (Boilermakers’ case): “… It was the same court; a new court was not created but the composition of the old one was changed. …,”[79]  Furthermore, it “… remained a tribunal established and equipped primarily and predominantly for the work of industrial conciliation and arbitration.”[80]

   [78] Act No. 22 of 1926

   [79] [1956] HCA 10; (1956) 94 CLR 254 at 285

   [80] [1956] HCA 10; (1956) 94 CLR 254 at 286

1. Further amendments to the CCA Act followed.  Those amendments were considered together with Alexander’s case in the Boilermakers case.  The majority, Dixon CJ, McTiernan, Fullagar and Kitto JJ noted that an assumption appeared to underlie the earlier case.  It was an assumption that the office of President of the CCCA was not incompatible with the exercise of his duties as a judge.  What Alexander’s case had decided was that the function of an industrial arbitrator was completely outside the realm of judicial power and was of a different order.  The essence of the view reached by the majority in the Boilermakers case is summarised in the following passage from their judgment:

   “… Chap. III does not allow the exercise of a jurisdiction which of its very nature belongs to the judicial power of the Commonwealth by a body established for purposes foreign to the judicial power, notwithstanding that it is organized as a court and in a manner which might otherwise satisfy ss. 71 and 72, and that Chap. III does not allow a combination with judicial power of functions which are not ancillary or incidental to its exercise but are foreign to it.”[81]

   [81] [1956] HCA 10; (1956) 94 CLR 254 at 296

1. The CCA Act was amended in 1956 by the Conciliation and Arbitration Act 1956[82] (CA Act 1956).  One effect of the amendments was to abolish the Arbitration Court and to establish the Commonwealth Conciliation and Arbitration Commission (CCAC) and the Commonwealth Industrial Court.  The CCAC comprised a President, not fewer than two Deputy Presidents, a Senior Commissioner and not fewer than five Commissioners.[83] Section 7(1) of the replaced Part II of the CCA Act provided that a person could not be appointed as a presidential member unless, immediately before the commencement of the section, he was a Judge of the CCCA or a barrister or solicitor of the High Court or of the Supreme Court of a State of not less than five years standing. A Deputy President had seniority according to the date of his commission or, if he had immediately before his appointment been a Judge of the CCCA, according to the date of his commission of appointment as a Judge of that Court.[84]  Section 8(1) provided for remuneration of the President of the CCAC and of the Deputy Presidents who were not Judges of the CCCA in the same terms as a Judge of the previous CCCA.[85]  A Judge of the CCCA who was appointed as a presidential member of the CCAC did not thereby cease to be a Judge.[86]  Those presidential members who had been Judges of the CCCA held office until resignation or death although those newly appointed as Presidential Members of the CCAC held office until attaining the age of 70 years or on any earlier resignation.[87]  Newly enacted s 7(4) provided that:

   “A presidential member of the Commission shall not be removed from office except in the manner provided by this Act for the removal from office of a Judge of the Court.” 

   [82] Act No. 44 of 1956

   [83] CA Act 1956; s 7 inserting new s 6 as part of new Part II

   [84] CA Act 1956; s 7 (2)

   [85] CA Act 1956; s 7 inserting new s 8(1) as part of new Part II

   [86] CA Act 1956; s 7 inserting new s 7(6) as part of new Part II

   [87] CA Act 1956; s 7 inserting new s 7(3) as part of new Part II

1. Section 7(5) was included in the new Part II inserted by the CA Act 1956 and it read:

   “Subject to this Act and to any other Act, a presidential member of the Commission shall have the same status and precedence as a Judge of the Court.”

The reference to the “Court” was a reference to the Commonwealth Industrial Court created by the CA Act 1956.  Section 7(5) was amended by s 5 of the Conciliation and Arbitration Act 1958[88] when it added the words “rank, designation” before the word “status”.  The old CCAC was abolished in 1973 with the enactment of the Conciliation and Arbitration Act 1973.[89] 

[88] Act No. 30 of 1958

[89] Conciliation and Arbitration Act 1973; s 73

1. In his dissenting judgment in Re Queensland Electricity Commission; Ex parte Electrical Trades Union of Australia[90] (QEC), Deane J described the CCAC and its role:

   “The Commission is not some sort of super legislative or administrative institution with an untrammelled mandate to pursue what it sees as the national interest.  It is a statutory tribunal established for the resolution, by the processes of conciliation and arbitration, of disputes of a particular kind. Its jurisdiction is not consensual in its nature; it may be invoked by one party to a dispute against the wishes of another.  While, for constitutional reasons, the Commission is not entrusted with the exercise of the judicial power of the Commonwealth, it possesses many of the attributes of a court.  In particular, in dealing with disputes between parties, the Commission is bound to act judicially. Its jurisdiction is properly to be seen as an important part of the overall jurisdiction of the courts and other public tribunals to which recourse may be had, as a matter of right, for the resolution of disputes.  In that regard, and ignoring constitutional considerations, the emphasis upon conciliation which is a characteristic of the exercise of the jurisdiction of industrial tribunals in this country provides no warrant for the perception of a dichotomy between the processes of industrial justice and the processes of the ordinary courts.  To the contrary, there is much to be said for the view that the processes of the ordinary courts of law and equity are open to legitimate criticism on the ground that they place insufficient emphasis upon the element of conciliation (see, e.g. Jacob, ‘The Case for a Major Review of the Civil Process’, in Access to Justice and Civil Litigation in Northern Ireland (1985) p10 and ‘Access to Justice in England’ in Cappelletti and Garth (eds.) Access to Justice, vol.I, book 1 (1978) at pp.461-462).

   The right to invoke the jurisdiction of the courts and other public tribunals of the land carries with it a prima facie right to insist upon the exercise of the jurisdiction invoked.  That prima facie right to insist upon the exercise of jurisdiction is a concomitant of a basic element of the rule of law, namely, that every person and organization, regardless of rank, condition or official standing, is ‘amenable to the jurisdiction’ of the courts and other public tribunals (cf. Dicey, An Introduction to the Study of the Law of the Constitution, 10th ed. (1959), p.193).  In the rare instances where a particular court or tribunal is given a broad discretionary power to refuse to exercise its jurisdiction on public interest grounds, the necessary starting point of a consideration whether such a refusal would be warranted in the circumstances of a particular case in which its jurisdiction has been duly invoked by a party must ordinarily be the prima facie right of the party who has invoked the jurisdiction to insist upon its exercise (cf. per Higgins J., Merchant Service Guild of Australasia v Commonwealth Steamship Owners' Association (No. 1) [1920] HCA 40; (1920) 28 CLR 278, at p 281). That position is a fortiori in a case where no other court or tribunal, Commonwealth or State, possesses jurisdiction fully to deal with the particular dispute. Were it otherwise, effective access to the courts and other public tribunals would be not a right which could be denied in an exceptional case on the grounds of extraordinary considerations of public policy but an uncertain privilege which could be withheld at any time on unconfined and largely unexaminable discretionary grounds (see, generally, Friedman, ‘Access to Justice: Social and Historical Context’ in Cappelletti and Weisner (eds.) Access to Justice, vol.II, book 1 (1978) pp.5ff.; Raz, The Authority of Law, (1979), at p.217).”[91]

   [90] [1987] HCA 27; (1987) 72 ALR 1; Mason CJ, Wilson and Dawson JJ; Brennan and Deane JJ dissenting

   [91] [1987] HCA 27; (1987) 72 ALR 1 at 12-13

1. Mr Watson referred to the Review into Australian Industrial Relations Law and Systems[92] completed in 1985 by a Committee of Review chaired by Professor KJ Hancock (Hancock Committee).  Among the recommendations that the Hancock Committee made and that the Government accepted was a recommendation there a new Australian Industrial Relations Commission should be established.  The Hancock Committee rejected a proposal that Presidential Members and Commissioners of the proposed Commission should be appointed for fixed terms.  Its reasons are reproduced and summarised by the then Kirby J in a paper entitled “The Removal of Justice Staples – Contrived Nonsense or Matter of Principle?”:[93]

   “Term appointments would be inconsistent with the notions of impartiality and independence which are central to the effective operation of the Commission.  Members of the Commission should be, and be seen to be, free from external influences in discharging their responsibilities.  Mr Deputy President Isaac has put the position succinctly: ‘the security of tenure of arbitrators up to retiring age removes any concern about re-appointment being a factor in the arbitrator’s decisions’. …[Vol 2 at 401-402]

   The second reason was that such a provision would lead to two classes of Presidential Member because of the proposal that some such members would be judges of the Labour Court.  Indeed the committee stressed the importance of avoiding ‘distinctions within the Commission between those members who also hold judicial appointments and other Deputy Presidents.’.”[94]

   [92] Canberra, Australian Government Publishing Service, 1985.

   [93] 2 Australian Bar Review 1

   [94] 2 Australian Bar Review 1 at 19-20

1. The Industrial Relations Act 1988 (IR Act) was enacted together with the Industrial Relations (Consequential Provisions) Act 1988 (IRCP Act).   The latter statute repealed the CCA Act and its amending legislation.[95]  In doing so, the CCAC was abolished and the AIRC was established under the IR Act.  Section 8 of the IR Act established the AIRC with a President and such number of Deputy Presidents and Commissioners who might hold office from time to time.  They were appointed by the Governor-General by commission.[96]  “Presidential Members”, who were the President and Deputy Presidents,[97] had the same rank, status and precedence as a Judge of the Court, being the Federal Court.[98]  A Presidential Member, whether current or former but not a person who has acted only in the role, was to be styled “The Honourable”.[99]  Presidential Members had seniority according to the following order of precedence: President, Deputy Presidents according to the days on which their commissions took effect or to the precedence assigned to them if on the same day and Commissioners on the same basis.[100]  A member of the AIRC held office until the member either resigned, was removed from office or attained the age of 65 years.[101]  Section 22 of the IR Act provided for those Presidential Members who were, immediately before their appointment, eligible employees for the purposes of the Superannuation Act 1976.  Under s 28:

   “(1)      The Governor-General may remove a Commissioner from office on an address praying for removal on the grounds of proved misbehaviour or incapacity being presented to the Governor-General by both Houses of the Parliament in the same session.

   (2) The Governor-General shall terminate the appointment of a Commissioner who:

   (a) becomes bankrupt, applies to take the benefit of a law for the relief of bankrupt or insolvent debtors, compounds with creditors or makes an assignment of remuneration for their benefit;

   (b) is absent from duty, except on leave of absence granted by the President, for 14 consecutive days or for 28 days in any 12 months; or

   (c) engages in paid employment outside the duties of the office in contravention of section 25.”

   [95] IRCP Act; s 3 and Schedule 1

   [96] IR Act; s 9(1)

   [97] IR Act; s 4(1)

   [98] IR Act; s 9(2) and s 4(1)

   [99] IR Act; ss 9(3) and (4)

   [100] IR Act; s 11

   [101] IR Act; s 16(1)

1. Similar provisions appear in the WR Act when it was enacted in 1996. In particular, s 63(2) provides that:

   “Each Presidential Member has the same rank, status and precedence of a Judge of the Court.”[102]

   [102] The “Court” is the Federal Court: WR Act; s 4(1)

1. What is relevant about the historical context in this case is that, once Parliament realised after the Boilermakers’ case in 1956 that it could not vest administrative powers in a court, it was faced with a situation in which it needed two different bodies if its legislation were to be valid.  At the same time, it is clear from the amendments that it made in CA Act 1956, that it did not want different classes of person sitting on the CCAC.  At one level, this was inevitable.  A person who had been a Judge of the CCCA and who was appointed as a presidential member of the CCAC would not thereby cease to be a Judge but would sit next to another presidential member who had not previously been a Judge of the CCAC.  The way around the issue was to give the latter the same tenure, the same remuneration and the same status and precedence as a Judge of the Industrial Court created by CA Act 1956.  That legislation gave those who had not been Judges of the CCAC most of the trappings of office of a Judge but not the office itself.  I say “most” because the CA Act 1956 did not give the group the same protection and immunity as that enjoyed by judges in the performance of their duties.  That protection followed in 1958[103] together with the addition of the words “rank, designation” before the word “status” in s 7(5) provided that “Subject to this Act and to any other Act, a presidential member of the Commission shall have the same status and precedence as a Judge of the Court.”

   [103] Conciliation and Arbitration Act 1958; s 8 inserting s 11A

1. A similar provision appeared in the IR Act and then in the WR Act. The history of s 63(2) of the WR Act leads me to conclude that it was initially founded on a desire to ensure that there were no divisions among members of the CCAC based on their holding, or not holding, judicial office. That did not continue to be the basis under the WR Act for then only the President could be a serving Judge. A person who had been a Judge could be appointed as a Presidential Member, be it as a Vice President, Senior Deputy President or Deputy President, but not a person who still held that office. The basis of provisions such as ss 63(2) and (3) could arguably be seen to have shifted slightly to notions of equality within the body exercising the conciliation and arbitration powers to notions of equality of the body itself with the body, being the Federal Court, which exercises the judicial power in industrial relations. If that were correct, it would reflect a view that both conciliation and arbitration powers and judicial powers are of equal importance in the jurisdiction and that those who exercise them should be on the same level in so far as the Constitution permits.

B.Differences between a Presidential Member and a Judge of the Federal Court

1. That said, the WR Act did not place Presidential Members entirely on the same footing as Judges. A notable exception related to the term of their appointments as all members of the Commission were appointed for terms that ended on their attaining the age of 65 years. The President would not seem to have been excluded from s 71(1), which achieves that outcome although his or her appointment as a Judge would not have come to an end until the age of 70 years. That was underlined by s 70(1)(b) when it provided that appointment as President did not affect “the Judge’s rank, title, status, precedence, salary annual or other allowances or other rights or privileges as the holder of his or her office as a Judge.”

1. A second difference of note arises out of the application of the JP Act to Presidential members and to Judges to whom it applies.  The JP Act entitles a Judge to a pension.  The base qualification for that pension is that he or she has served ten years as a Judge and has attained the age of 60 years.  Some provision is made for those who serve fewer years and pensions are payable to dependants if the Judge should die.  The rate of pension to which a Judge is entitled on retirement is reduced only if that Judge’s surcharge debt account is in debit when the pension becomes payable.[104]  A “surcharge debt account” is an account kept under s 16 of the Superannuation Contributions Tax (Assessment and Collection) Act 1997.  To this point, the entitlement of every Presidential Member to a pension is the same as that of a Judge of the Court.

[104] JP Act; s 6B

1. Where entitlement to a pension under the JP Act may differ between a Presidential Member of the AIRC and a Judge of the Court arises if the Presidential Member was an eligible employee for the purposes of the Superannuation Act 1976 or a member of the superannuation scheme established by deed under the Superannuation Act 1990.  Unless the Presidential Member makes an election within three months of appointment to cease to be an eligible employee or a member of the superannuation scheme as the case may be, the JP Act does not apply to him or her.[105]  If he or she does make that election, the JP Act is taken to have applied immediately after appointment and he or she is taken to have ceased being an eligible employee or a member of the superannuation scheme, as the case may be, immediately before appointment.[106]  This qualification does not apply to a person appointed as a Judge of the Federal Court.  It is a qualification that might not have applied to any Presidential Member of the AIRC but that does not detract from the fact that it is a qualification to which a Judge of the Federal Court would not be subject at all.  The rights of Presidential Members are qualified even if that qualification did not apply in every, or even any, case and certainly did not apply in Mr Watson’s circumstances.

   [105] WR Act; ss 80(1) and (2)

   [106] WR Act; s 80(4)  This qualification to entitlement

1. If having the status of a Judge meant that Presidential Members of the AIRC had the accoutrements, or rights and entitlements of a Judge of the Federal Court, there would be no need to include a provision, such as s 97 of the WR Act, affording the same protection and immunity as a Judge of the Court in the performance of their functions.

1. Finally, in this section of my reasons, I note that Mr Watson submitted that:

   “The applicant is not literally a Judge of the Federal Court.  However, the Applicant has the status of a Judge of the Federal Court and as such belongs to a class of persons who, by reason only of their membership of that class, have rights or duties, capacities or incapacities, specified by law.  Therefore, giving effect to his status for the purposes of s. 293-190, he is ‘a judge of a court created by parliament’.”

1. If Mr Watson means that a Presidential Member has the same rights or duties and capacities or incapacities of a Judge as specified by law, I respectfully disagree.  The Boilermakers’ case made it clear that, regardless of the way in which a body is organised even if it be as a court, the judicial power of the Commonwealth could not be exercised by a body established for a purpose that is foreign to such a power.  That is not to say that a court may not delegate judicial power to officers of the court who are not judges but it must supervise and control that exercise.  If the court were to decline to do that, it would be acting in error.[107]

   [107] Harris v Caldane (1991) 172 CLR 84; Mason CJ, Deane, Dawson, Gaudron and McHugh JJ; Brennan and Toohey JJ dissenting

C.“… rank, status and precedence as a Judge of the Court”

1. I have set out the ordinary meanings of the word “status” at [42] above and have noted its three meanings. It does not sit alone in s 63(2) and I have turned to the other two words by which it is flanked in s 63(2): “rank” and “precedence”.  The ordinary meanings of the word “rank”, when used as a noun, include:

   “… 3. A position of seniority within an organization, society, the armed forces, etc. … 5 high social position or status. …”[108]

Those of “precedence” include:

“… 2 the fact of preceding, in order, rank, importance, etc. 3 the right to precede others. …”[109]

[108] Chambers

[109] Chambers

1. I have looked at the words “rank” and “precedence” that are used in s 63(2) together with “status” because of a general principle of statutory interpretation that the meaning of a word can be understood from the words with which it is associated.  In Lend Lease Real Estate Investments Ltd & v GPT RE Ltd,[110] Spiegelman CJ, with whom McColl and Basten JJA agreed, said:

   “          The general principle of the law of interpretation that the meaning of a word can be gathered from its associated words – noscitur a sociis – has a number of specific sub-principles with respect to the immediate textual context.  The most frequently cited such sub-principle is the ejusdem generis rule. The relevant sub‑principle for the present case is the maxim propounded by Lord Bacon: copulatio verborum indicat acceptationem in eodem sensu – the linking of words indicates that they should be understood in the same sense.  As Lord Kenyon CJ once put it, where a word ‘stands with’ other words it ‘must mean something analogous to them’. (Evans v Stevens [1791] EngR 1347; (1791) 4 TR 224; 100 ER 986 at 987. See also W J Byrne (ed) Broomes Legal Maxim (9th ed) Sweet and Maxwell, London (1924) pp373-374.)

   However, as Lord Diplock put it in Letang v Cooper [1964] EWCA Civ 5; [1965] 1 QB 232 at 247:

   ‘The maxim noscitur a sociis is always a treacherous one unless you know the sosietas to which the socii belong.’”[111]

   [110] [2006] NSWCA 207; Spigelman CJ and McColl and Basten JJA

   [111] [2006] NSWCA 207 at [30]-[31]

1. In the case of s 63(2) of the WR Act, the “sosietas”, to which the words “rank” and “precedence” belong is that describing the seniority or social position or importance in a group of people or in the broader community.  Of themselves, they do not signify that a person to whom they attach has any particular legal or other entitlements, rights or authority.  They signify the same sorts of concepts as are conveyed by the first and third meanings given by Chambers to the word “status”.  They do not carry with them any notion of legal standing.  Those cases in which the word “status” has been found to be concerned with legal status are cases in which the word “status” has been qualified by an adjective or an adjectival phrase.[112]  The words “status”, “rank” and “precedence” are not qualified. 

[112] See [42]-[53] above

1. The differences that I have outlined between Presidential Members and Judges of the Court, may be small but those differences provide the background to s 63(2). So too does the historical context of which s 63(2) of the WR Act is a part as its continuation in relation to Presidential Members such as Mr Watson. The use of three words having, with one exception in relation to one meaning, associated and overlapping meanings leads me to conclude that Parliament meant those words to denote the seniority, professional and social position that Presidential Members would hold. It was the seniority, professional and social position of a Judge of the Federal Court but that was all that s 63(2) conferred. It did not confer the legal standing of a Judge upon Presidential Members or, except to the extent provided for in the WR Act and the JP Act, any rights, duties, powers and responsibilities conferred on a Judge of the Court. Consistent with having the rank, status and precedence of a Judge of the Federal Court, the Table of Precedence for the Commonwealth of Australia places them at:

   “21.     Other Judges of Federal Courts and the Deputy President of the Australian and Conciliation and Arbitration Commission according to the respective dates of first appointment to any of those offices.”[113]

   [113] Commonwealth of Australia, Special Gazette, S206, 5 October 1982, AGPS, Canberra

1. Contrary to Mr Watson’s submission, I do not accept that such an interpretation would be to deprive the legislative conferral of judicial status of any meaning or significance and so be contrary to the principles of statutory interpretation. Their being accorded the same rank, status and precedence as a Judge of the Federal Court gave Presidential Members of the AIRC a place on the Table of Precedence which their colleagues at the AIRC, the Commissioners, did not have. To some, the order of precedence at official functions may be of little consequence but it should not be assumed that it is of no consequence. Parliament has acknowledged that in ss 63(2) and (3) of the WR Act and preserved the precedence that Deputy Presidents would have been accorded had it not been for the separation of powers inherent in the Constitution.

Division 293 of ITAA97

1. My conclusion that s 63(2) of the WR Act, whose operation is preserved by the FW Transitional Act, means that Mr Watson’s having the same status as a Judge of the Federal Court does not bring him within s 293-190(1) of ITAA97. That section provides that Subdivision 293-F applies to an individual if the individual is, for the purposes of this case, a Judge of the Federal Court being a court created by the Parliament. The clear requirement of s 293-190(1) is that the “… individual is a Justice of the High Court, or a justice or judge of a court created by the Parliament …” (emphasis added). Mr Watson is not a Justice of the High Court nor a justice or judge of a court created by Parliament and, to be fair, he does not claim to be. His having the same rank, status and precedence as a Judge of the Federal Court does not change that situation. He is not and was not a Judge and his being so is the clear requirement that must be met before Subdivision 293-190 will operate, for all practical purposes, to alleviate him from the imposition of the Division 293 tax.

1. Apart from the important difference of being accorded the same rank, status and precedence of a Judge of the Federal Court and the position and deference that is accorded to him as a consequence, I respectfully suggest that Mr Watson is in no different position from any Deputy President of this Tribunal who was appointed before the repeal of s 16 of the AAT Act and to whom the JP Act applied.[114]  A full-time Deputy President had tenure to the age of 70 years[115] and, as is still the case, a member had, in the performance of duties as a member, the same protection and immunity as a Justice of the High Court[116] and could only be removed by the Governor-General on an address praying for removal on the ground of proved incapacity or misbehaviour by each House of Parliament in the same session.[117] In relation to such a person, s 16 provided at the time of its repeal that the JP Act has “… effect as if a presidential member were a Judge for the purposes of that Act.”  The reference to a “Judge” is a reference to a Judge of a court created by Parliament or “a person who has the same designation and status as a Judge of a court created by Parliament.”[118]  A “designation” is a “… name or label …”. It would draw in a person appointed to a Territory court created by Parliament under s 122 of the Constitution in addition to a person appointed to a court created by Parliament under s 72. That person must be named a judge and have the status of a judge. There is a distinction of substance between having the same designation and status as a judge and having the same rank, status and precedence as a Judge of the Court. Without the designation, a person is not a judge.

   [114] The JP Act did not apply to a Deputy President who, immediately before appointment, was an eligible employee for the purposes of the Superannuation Act 1976 or a member of the superannuation scheme established by deed under the Superannuation Act 1990 and who had not made an election within three months of appointment to cease to be an eligible employee or member as the case might be.

   [115] AAT Act; s 8(1)

   [116] AAT Act; s 60(1)

   [117] AAT Act; s 13(1)  The grounds are now proved misbehaviour or that the member is unable to perform the duties of office because of physical or mental incapacity.

   [118] Definition of “Judge”: AAT Act; s 3(1)

1. An examination of the AAT Act as initially enacted and for many years following shows an intention to place at least the Deputy Presidents on a footing similar to that of judges in their tenure, remuneration and protection.  When the AAT Act was first enacted, the wording was different but the outcome no different.  The word “Judge” was defined in the same terms and s 18(1) provided that:

   “Subject to this section, the Judges' Pensions Act 1968-1974 has effect as if a presidential member had the status of a Judge of the Australian Industrial Court.” (emphasis added)

This was effectively a deeming provision for a very particular purpose. Parliament did not make them judges and, in light of the separation of powers under the Constitution, could not do so. Aligning their entitlements and the like and applying the JP Act “as if” the Deputy President were a Judge does not make the Deputy President a Judge. An historical excursion of the way in which their roles were viewed does not change the outcome in my view just as an historical examination of the workplace relations legislation cannot make a Presidential Member of the AIRC a justice or judge of a court created by Parliament of s 293-190 of ITAA97.

1. The wording of s 293-195 carefully reflects that of s 72 of the Constitution. Section 293-195 specifically provides that it applies to an individual if that individual “is a Justice of the High Court, or a justice or judge of a court created by Parliament …” (emphasis added). Section s 72 of the constitution is concerned with “Justices of the High Court and of other courts created by the Parliament”. The final clause of s 72 ensures that this description includes “a reference to the appointment of a person who holds office as a Justice of the High Court or of a court created by the Parliament to another office of Justice of the same court having a different status or designation.”  That is to say, it would include a person who is a Justice of the High Court or of a court created by the Parliament and who is then appointed as the Chief Justice of that court.  The office of Chief Justice would be “another office of Justice of the same court having a different status or designation” i.e. a status or designation different from that of “Justice”. The final clause of s 72 would not draw into s 72 a person who has not been appointed as a Justice of the High Court or of a court created by Parliament but who has the same rank, status and precedence as a Judge of a court created by Parliament under s 72. That person would not possess the fundamental qualification of being a Justice of the court even though having a different status or designation.

1. The Explanatory Memorandum to the Tax and Superannuation Laws Amendment (Increased Concessional Contributions Cap and Other Measures) Act 2013, which inserted Division 293, supports an interpretation limiting the application of s 293-195 to those who hold appointments as Justices or Judges under Chapter III of the Constitution. It explained:

   “Commonwealth justices and judges

   4.73 Section 72(iii) of the Constitution provides that the remuneration of justices of the High Court, and justices and judges of other courts created by Parliament shall be fixed by the Parliament and this remuneration shall not diminished whilst they are in office.

   4.74     The imposition of Division 293 tax may in effect in some cases constitute a diminution of judicial remuneration where certain defined benefit pension entitlements form part of their remuneration.

   4.75     As part of the changes to address these limitations, defined benefit contributions for a defined benefit interest in a superannuation fund established under the Judges’ Pensions Act 1968 are not included in the low tax contributions and therefore not subject to Division 293 tax. This is achieved by treating the amount of such contributions as nil. These special rules only apply to justices and judges that have a defined benefit interest in a superannuation fund established under the Judges’ Pensions Act 1968. …

   4.76     However, while there may in some cases be constitutional restrictions on taxing defined benefit contributions for a defined benefit interest in a superannuation fund established under the Judges’ Pensions Act 1968, no such limitations apply to other contributions made to benefit Commonwealth justices and judges.  Accordingly, contributions made by other employers after a justice or a judge leaves office are potentially included in low tax contributions.”

DECISION

1. Mr Watson did not suggest that he was not liable to pay Division 293 on any other basis. Therefore, I affirm the objection decisions made by the Commissioner on 23 May 2017 affirming that he was liable to pay that tax in the 2014 and 2015 years.

I certify that the preceding ninety one (91) paragraphs are a true copy of the reasons for the decision herein of Deputy President S A Forgie

........[sgd]................................................................

Personal Assistant

Dated:  16 October 2018

Heard:

1 December 2017

Applicant:

Counsel for the Respondent:

Self represented

Mr  Peter Hanks QC
Mr Christopher Young

Solicitor for the Respondent:

Mr Ross McClure
Australian Government Solicitor