Federal Commissioner of Taxation v Silverton Tramway Co Ltd
(1953) 88 CLR 55927 ALJ 580
10 ATD 295
(Judgment by: Dixon CJ)
Between: Federal Commissioner of Taxation
And: Silverton Tramway Co Ltd
Judges:
Dixon CJWebb J
Taylor J
Subject References:
Taxation and revenue
Sales tax
Exemption
Goods for use by public transport authority
Trading company conducting public transport serice for private profit
Legislative References:
Sales Tax (Exemptions and Classifications) Act 1935 - Section 5; First Schedule; Div XI; Item 77
Judgment date: 25 November 1953
Melbourne
Judgment by:
Dixon CJ
The question raised by this case stated is whether the defendant the Silverton Tramway Co Ltd is a public transport authority within the meaning of Item 77 of Div. XI of the First Schedule of the Sales Tax (Exemptions and Classifications) Act 1935-1951 so as to be exempt from sales tax in respect of the importation of four eight-wheeled coupled locomotives and tenders imported by the defendant company at Port Pirie on 5th October 1951. Item 77 exempts goods for use (whether as goods or in some other form) by public transport authorities exclusively in, or exclusively in connection with the establishment, conduct or maintenance of, transport services. The question turns in part on the meaning to be placed upon the words "public transport authorities" and in part on the characteristics of the defendant company and the sufficiency of such characteristics to constitute it an "authority" and a "public transport authority".
The defendant company was incorporated under the law of Victoria as a trading company on 22nd December 1894. It appears to have been the successor in title to the undertaking of another company bearing the same name but then in liquidation. The undertaking is that called the Silverton Tramway. The defendant company took all the rights, powers, privileges and concessions conferred by the Silverton Tramway Act 1886-1888 (N.S.W.). As might be expected, the objects contained in the memorandum of association of the defendant company were wide, but doubtless the leading provision was one authorizing it to carry on the business formerly carried on by the old company. Another important object was to carry on the business of carriers of passengers goods and things of every kind, and cattle and livestock of every kind.
The Silverton Tramway Act of 1886 recited that the Government of South Australia was then constructing a railway to a point on the western boundary of New South Wales and that five persons, described respectively as a grazier, a broker, a gentleman, a financial agent and a merchant, were desirous of constructing a tramway from that point to Broken Hill via Silverton and, in effect, that in order to do so they required statutory powers. The recital stated that it was expedient to confer upon them legislative authority to construct maintain and use the tramway and further that it was expedient to enable them to transfer their rights, powers, authorities and liabilities under the Act to a company duly incorporated for that purpose. The Act proceeded to authorize the construction of the tramway, as it is called, the gauges being three feet six inches. Powers were given to carry it along any road or street. The Act directed that plans of the project should be prepared showing what lands were required. So far as they were Crown lands they were to be made available; so far as they were private lands they might be acquired by agreement or compulsorily, subject, of course, to the assessment of compensation. It was provided that the tramway should be open to public use upon a payment of tolls or charges, the maximum amounts of which were prescribed. The undertakers were empowered to make bylaws subject to the approval of the Governor-in-Council for certain purposes. The by-laws might regulate the conduct of officers and servants employed in connection with the tramway. They might provide for the proper management of the affairs of the tramway and for the protection of the tramway and other property of the undertakers from trespass or injury. Other purposes for which by-laws might be made were regulating the speed at which the carriages using the tramway might be moved or propelled, preserving the free course of the tramway, preventing obstructions, regulating the loading and unloading of carriages and theweights to be carried, regulating the receipt and delivery of minerals, goods, livestock and other things to be conveyed upon it, regulating the number of passengers to be carried and the occupation of the seats therein and preventing or restricting smoking or the commission of any other nuisance in or upon the carriages, and generally regulating travelling upon or the use of the tramway. The statute dealt specifically with the liability of the undertakers as carriers and provided that they should not be liable to any greater extent than, according to the laws of New South Wales, stage-coach proprietors and common carriers would be liable. An express authority to use locomotive engines was given. A provision was included requiring the tramway to carry public mails on terms to be fixed by arbitration. The Act provided for the recovery of penalties and for the mode of prosecution. In accordance with the recital full power was expressly given of assigning the rights, powers, authorities, privileges and liabilities conferred and imposed by the Act.
The contention of the defendant company is that the effect of the foregoing provisions is to give to it the character of an "authority", a public transport authority. The locomotives and tenders in respect of which sales tax is demanded were imported for use by the defendant company exclusively in or exclusively in connection with the establishment, conduct or maintenance of the transport service which it owns and operates as the Silverton Tramway. If therefore the defendant company fills the description of a "public transport authority" the goods are exempt. For the other conditions of the exemption are satisfied. Can it correctly be said, having regard to its powers, that the defendant company is a public transport authority?
For the plaintiff Commissioner of Taxation the expression "public transport authorities" in Item 77 of Div. XI, was treated as meaning public authorities for transport or public authorities for public transport. For the defendant company, however, it was said that the natural meaning of the expression was "authorities for public transport". The word "public" described the character of the transport, not the character of the authority, which might or might not be public. It may be conceded that according to ordinary English usage the position of the word "public" would make it qualify "transport" rather than "authorities". But it does not follow that the plaintiff commissioner is wrong in denying that the defendant company is a public transport authority within the exemption. His case does not depend on attaching the adjective "public" to the word "authorities" so that it adds to the connotation of the word "authorities". The word "authority" has long been used to describe a body or person exercising power or command. No doubt this has come about by a transfer of meaning from the abstract conception of power or command to the body or person possessing it. But in relation to such a public affair as public transport the use of the word "authority" as a description of a person or body implies he or it is an agency or instrument set up to exercise control or execute a function in the public interest whether as an emanation of the general government or as an adjunct of local government or as a specially constituted officer or body. The word "authority" would not readily be applied in ordinary speech to a company carrying on an undertaking for private profit, even if the undertaking were a public utility and the company had secured a grant of statutory powers to enable it to do so. The natural reading of the expression would be against such an application of it.
The draftsman of the First Schedule has lent some confirmatory support to this conclusion by the collocation he has given to the exemption. Item 77, which contains the words "public transport authorities" occurs as one of a long list of exemptions grouped in Div. XI. This particular group is headed "Goods for use by Governments, Representatives of Governments, and Public Bodies". The curious provision in s. 3 (2) forbids the use of this heading to affect the interpretation of the items in the division but the heading in any case gives very little light. The list itself gives more. A scrutiny of the list shows, it is true, that many bodies having no governmental authority are included, but they are all bodies carried on exclusively for the advantage of the public or some section of the public and not for private profit. Institutions and bodies mentioned include public hospitals, benevolent institutions, welfare centres, societies for conducting infant clinics and the like, societies or institutions established for various public purposes, religious, philosophical, educational, scientific or literary. In the list are placed diplomatic representatives of foreign countries. Throughout the whole division there appears a policy of exempting persons or bodies either because of their connection with or service of governments or for their service of the public independently of profit gained or their contribution to the public welfare or for their governmental or quasi-governmental character. The association of ideas is unfavourable to the supposition that the word "authority" was employed to cover every person or company conducting public transport for private advantage simply because it had sought and obtained statutory powers. It is true that the statutory powers conferred by the Silverton Tramway Act include power to expropriate private property, to adopt by-laws if sanctioned by the executive government and to do other things in the exercise of an authority conferred by law and affecting the public at large. The company, however, is armed with these powers for the purpose of enabling it to carry on adequately a transport undertaking and so at one and the same time fulfil duties to the public and conduct a profit-making business. The general character of the company remains that of a body constituted for profit. Statutory powers have often been sought and have often been granted in the case of commercial undertakings because the public is expected to gain an advantage from the establishment and conduct of the enterprise and because the enterprise cannot be established and conducted without special statutory privileges and powers. But because a public end is served and statutory powers are enjoyed, the commercial enterprise does not become an agency exercising control power or command for the public advantage in such a sense that it would be designated an "authority". All that can be said is that it has been granted powers, privileges and authorities for its own purposes because its own purposes enure for the public benefit.
In my opinion the defendant company does not qualify as an authority for public transport under the exemption and the question in the case stated should be answered: the defendant was not a public transport authority within the meaning of Item 77 of the First Schedule of the Sales Tax (Exemptions and Classifications) Act 1935-1951. In accordance with the agreement of the parties expressed in the special case the consequence of this answer is that judgment must be entered for the plaintiff for the sum of PD17,214 14s. 2d. and costs of action to be taxed.