Mutual Acceptance Co Ltd v Federal Commissioner of Taxation
69 CLR 389(Judgment by: Rich J)
Mutual Acceptance Co Ltd
v Federal Commissioner of Taxation
Judges:
Latham CJ
Rich JStarke J
Dixon J
Williams J
Subject References:
Taxation and revenue
Pay-roll tax
Collection of instalments due under hire-purchase agreements
Vehicle provided and allowance paid by employer
Liability to tax
Legislative References:
Pay-roll Tax Assessment Act 1941 No 2 - s 3
Judgment date: 4 December 1944
Sydney
Judgment by:
Rich J
The present matter came before this Court as an appeal from a decision of a Board of Review under s. 40 (5) of the Pay-roll Tax Assessment Act 1941-1942, it being contended that the Board's decision involves a question of law. The matter coming before the Chief Justice, he has stated for the opinion of the Full Court pursuant to s. 18 of the Judiciary Act 1903-1940 the following question arising in the appeal as being in his opinion a question of law, namely whether the additional payments referred to in par. 5 of the case are "wages" within the meaning of the Pay-roll Tax Assessment Act 1941-1942. It is with this question only that we are concerned, and it has been referred to us as being a question of law.
It turns upon the proper construction of that part of the definition section which deals with the word "wages" as used in the Act, and in particular upon the meaning of the word "allowances" as there appearing. A definition of this kind is not an exercise in philology. It is a mechanical device to save repetition. Its purpose is not to endow the word "wages" with a new meaning, but to enable the expression "wages, salary, commission, bonuses or allowances paid or payable," etc, to be supplied by a single word whenever it is desired to legislate in this Act for anything which is included in that expression. In ordinary parlance, wages is the term used for the remuneration paid for other than "white-collar jobs." The definition clause is employed to make it clear that, where not otherwise indicated, the Act is intended to apply to all forms of remuneration for all types of services rendered under contracts of service. What falls to be determined is whether a particular class of payment made by a particular employer to his employees is in law an allowance within the meaning of ss. 12 and 13 as expanded by s. 3. The meaning of "allowance" as an English word is a matter of fact, not of law (Girls' Public Day School Trust Ltd v Ereaut [F5] , at pp. 25, 28). The question, in which of its various meanings it is used in its present context, is one of construction and therefore of law (Binding v Great Yarmouth Port and Haven Commissioners [F6] , at p. 745). The question whether any particular payment made by an employer to an employee is an allowance is prima facie one of degree and of fact (Currie v Inland Revenue Commissioners [F7] , at pp. 335, 336, 338-341). If however, none of the relevant facts is treated as in dispute, the question whether they admit of no other conclusion than that the payment is or is not an allowance is one of law (Farmer v Cotton's Trustees [F8] , at p. 932. Ritz Cleaners Ltd v West Middlesex Assessment Committee [F9] , at p. 653).
I therefore treat the question submitted to us as asking whether the additional payments referred to in par. 5 of the case are capable of being regarded as "wages" within the meaning of the Act. Approaching it from this point of view, I think it clear that, in its context, the word "allowances" is intended by the legislature to be read with a meaning ejusdem generis with the words which precede it. That is to say, only such allowances are intended to be included as are in the nature of remuneration akin to wages, salary, commissions, or bonuses. The factor common to all these forms of remuneration is that they are payments designed to confer on the employee a substantial benefit for himself and from which he in fact obtains such a benefit. This is so whether they be for time-work or piece-work or both, and whether they be sums expressly stipulated for or paid ex gratia for specially good individual work or for increased profit to the employer from good team work. Clearly not all payments made by an employer to an employee are intended to be included. If an employee were sent on a special journey by his employer and supplied with, or subsequently recouped, the amount of his fare by taxi-cab or railway, it would be impossible to regard the payment as an allowance within the meaning of s. 3. On the other hand, if an employer maintained cottages at a holiday resort and provided his employees in rotation with funds to enable them to spend a week or two there with their families, it would be impossible to regard these payments as other than allowances. Other extreme cases could be imagined, but between extremes a multitude of possible cases could occur in which the question would be essentially one of fact, upon which the decision of a tribunal of fact could not be successfully challenged unless some question of law were involved, and this, as in the present Act, gave a right of appeal.
In the present case, the employees are by their contracts of employment required to collect money on behalf of their employer, and they are remunerated by a fixed weekly wage and a commission on the amount collected. I treat it as implied in the way in which the case is stated that they are not required by their contracts of employment to use any particular means of conveyance for the purpose of their collections, but that, if they choose to provide motor cars for the purpose, agreed sums are paid to them designed to amount to about two-thirds of the expenses likely to be incurred by each in using the car in his own collecting territory. In fact, the cost to the employee of using the car for his employer's business is greater than the payments made to him in respect of this user. It follows that an employee who uses a car in this way is a loser by the arrangement unless he is able to make increased collections and thereby gain increased commissions through the larger area which he is able to cover to an extent sufficient to make up the difference, and it is only if increased commissions more than make up the difference that he gets any benefit for himself.
If, for example, there had been evidence that all collector-employees were required to provide their own motor cars as a term of their employment, and that the allowance was an element in the weekly payment made to each, or if, though the provision by them of cars was optional, the allowance was designed to result, and in normal practice did result, in an increased remuneration by way of commission when due offset was made for outgoings on the car, the position would be different. But it does not appear from the case stated that any such case has been sought to be made out. The Board of Review has not rested its decision on any such grounds. It treats itself as being in possession of all the relevant facts, and it accepts the position that the only relevant function of the payment of the allowances is to compensate employees, but only to a limited extent, for expenses incurred by them in their employer's business. The ground on which it has treated the payments as coming within the section is that it regards the word "allowances" as uncontrolled by the words which precede it. I think this to be wrong in law as a matter of construction.
I treat the case stated by the learned Chief Justice as intended to include the whole of the facts found by him and regarded by him as relevant. Since the question submitted is submitted as one of law, I think that it should be regarded as asking whether, on the assumption that the facts stated in the case are all the relevant facts, the payments referred to are in law capable of being regarded as "wages" within the meaning of the Act. So understood, I am of opinion that the question should be answered in the negative.