Superannuation Fund Investment Trust v. Commissioner of Stamps (S.A.)
Judges: Barwick CJStephen J
Mason J
Murphy J
Aickin J
Court:
Full High Court
Aickin J.: This is an appeal from the decision of the Full Court of the Supreme Court of South Australia which unanimously held that an instrument of transfer of land in South Australia from a vendor to the Superannuation Fund Investment Trust as purchaser was an instrument chargeable with ad valorem duty under the Stamp Duties Act 1923-1976 (S.A.) (``the Stamp Duties Act ''). The Superannuation Fund Investment Trust (``the Trust''), is a body corporate incorporated by the Superannuation Act 1976 (Cth.) (``the Superannuation Act ''). It purchased certain real estate in South Australia pursuant to its powers of investment and the instruments of transfer of that land were submitted to the Commissioner of Stamps pursuant to sec. 23
ATC 4444
of the Stamp Duties Act requiring him to express his opinion with reference to the question whether they were chargeable with any duty. The application for the opinion of the Commissioner of Stamps bore a request that the transfer should be marked ``not subject to duty'', but he assessed the three transfers to stamp duty amounting in all to $1,373,990.00. There was no dispute as to the quantification of the duty, but only as to whether the instruments were chargeable with duty. Section 27 of the Stamp Duties Act provides as follows:``No person whose office it is to enroll, register, or enter in or upon any rolls, books, or records any instrument chargeable with any duty, or the memorial of any instrument chargeable with any duty, shall enroll, register, or enter any such instrument or memorial, unless the instrument is duly stamped.''
Under sec. 24 of the Stamp Duties Act provision is made for a person dissatisfied with an assessment by the Commissioner of Stamps to forward to the Treasurer a statement of his grounds for objection or alternatively to appeal to the Supreme Court; if the Treasurer confirms the assessment an appeal lies to the Supreme Court. The opening words of the section are ``Any person who is dissatisfied with the assessment of the Commissioner may, on payment of duty in accordance therewith'', take the various steps which I have described. The Trust paid the amount of stamp duty and, after the Treasurer had upheld the views of the Commissioner of Stamps, appealed to the Supreme Court. The Stamp Duties Act provides that an appeal to the Supreme Court is to be by way of case stated.
The case stated submitted to the Supreme Court asked two questions which were:
``(a) Whether the instruments and each of them are chargeable with the ad valorem duty assessed by the respondent.
(b) Whether the appellant is liable to pay stamp duty.''
In the Supreme Court it was held that the second question should not be asked because it was not one which could properly be put to the Commissioner or the Court under the section, because the only questions upon which the Commissioner of Stamps may be required to express his opinion are whether the instrument was chargeable with any duty, and with what amount of duty it was chargeable. It is not now in dispute that the Supreme Court were right in refusing to answer the second question.
The contention of the Trust was that the instruments were not chargeable with duty because the Trust is or represents the Crown in right of the Commonwealth or is an instrumentality or emanation of the Crown in right of the Commonwealth and accordingly the instruments were conveyances to the Crown within the meaning of General Exemption 13b in the Second Schedule to the Stamp Duties Act, or alternatively that the amount of duty was a tax on property of the Commonwealth contrary to sec. 114 of the Constitution. A further contention was that the operation of the legislation constituted taxation of the Commonwealth by the State and was therefore invalid, or alternatively the imposition of such duty was inconsistent with the provisions of the Superannuation Act and to that extent inoperative by reason of sec. 109 of the Constitution.
Central to all but the last aspect of the argument on behalf of the Trust is the proposition that it is or represents or is an agent or emanation of the Crown. If that contention is not made out it is not necessary to consider a number of other questions which were argued concerning the meaning and operation of the Stamp Duties Act .
The scheme of the Superannuation Act differs considerably from that of its predecessor, the Superannuation Act 1922-1974 and generally speaking the former supersedes the latter, though there are some transitional provisions which continue the latter Act in operation for certain purposes. The general scheme of the Superannuation Act is to establish the office of the Commissioner for Superannuation, an officer who is to be appointed by the Governor-General, and to give to him ``the general administration of this Act, other than Part III, and the general administration of the superseded Act''. Part III provides in sec. 28 that there shall be ``a body by the name of the Superannuation Fund Investment Trust'' and by sec. 29 that the Trust is a body corporate with perpetual
ATC 4445
succession and a common seal and that it may acquire, hold and dispose of real and personal property and may sue and be sued in its corporate name. Section 30 provides that it shall consist of three members to be appointed by the Governor-General, namely, a Chairman, a member who shall be an eligible employee or a pensioner and one other member. The Chairman is to be a full-time member and the executive member of the Trust; the other two are to be part-time members. The Chairman is to be appointed for a term not exceeding 7 years and the other members for a period not exceeding 3 years. By sec. 30(5) the Governor-General in making appointments is to ensure, so far as practicable, that no person is appointed unless he has appropriate experience in the investment or management of moneys. By sec. 35 the Governor-General may terminate the appointment of a member of the Trust for misbehaviour or physical or mental incapacity. By sec. 36 the Treasurer may appoint an acting Chairman and an acting member in certain specified circumstances and the Treasurer is also to determine the terms and conditions of appointment of acting members. By sec. 40 it is provided that there shall be a ``Fund'' to be known as the Superannuation Fund and by subsec. (2) it is provided as follows:``The Superannuation Fund shall form part of the Trust Fund referred to in section 60 of the Audit Act 1901-1975, and the provisions of that Act relating to the Trust Fund (other than section 62B of that Act) shall, subject to this Act, extend to that portion of the Trust Fund which comprises the Superannuation Fund.''
By sec. 41 it is provided that the Fund shall be managed by the Trust and various powers are given to the Trust to do all things necessary or convenient in connexion with the management of the Fund and the investment under sec. 42 of the moneys standing to the credit of the Fund, including certain specified powers such as to give guarantees, to appoint agents, to engage consultants and to open and maintain accounts with the Reserve Bank or any other Bank for the time being approved by the Treasurer. Section 42(1) provides as follows:
``Moneys standing to the credit of the Fund which the Trust, after consultation with the Commissioner, is of the opinion are moneys that are not for the time being required for the purpose of making payments out of the Fund under this Act shall, so far as is practicable, be invested by the Trust in accordance with this section, but the Trust shall so manage the Fund that moneys that are from time to time required to pay benefits that are payable out of the Fund are available for that purpose.''
Section 42(2) gives a very wide power of investment, subject however to a direction in subsec. (4) to invest a required proportion of the Fund in public securities. Section 42(5) provides that income derived from the investment of moneys standing to the credit of the Fund or from the management of the Fund shall form part of the Fund and ``is not subject to taxation under a law of the Commonwealth, a Territory or a State''.
Part IV of the Act is concerned with contributions and by sec. 45 it is provided that an ``eligible employee'' shall pay fortnightly basic contributions and by sec. 48 may elect to pay supplementary contributions. By sec. 53 contributions under the Act are to be paid to the Commissioner by or on behalf of the person liable to pay and a provision is made for deduction of the contributions from the salary of the relevant employees. Subsection (3) of sec. 53 provides ``The Commissioner shall pay all contributions received by him into the Fund.''
Part V provides for benefits but the details are not material for present purposes, save to note that in relation to certain of the benefits an eligible employee may in some circumstances elect to take a lump sum benefit wholly or partly in lieu of a pension, but the primary benefit is by way of pension.
Part VI deals with benefits payable to spouses and children and Part VII contains general provisions applicable to benefits. By sec. 112 it is provided as follows:
``(1) Subject to sub-sections (3) and (4), the accumulated contributions of an eligible employee shall, upon his ceasing to be an eligible employee, be paid out of the Superannuation Fund into the Consolidated Revenue Fund.
(2) Except where otherwise provided by
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this Act, any payment of benefit shall be made out of the Consolidated Revenue Fund, which is appropriated accordingly.(3) Where a person ceases to be an eligible employee and, upon his so ceasing, a lump sum benefit of an amount equal to his accumulated contributions is payable to or in respect of him out of the Superannuation Fund, sub-section (1) does not apply in relation to him.
(4) Where a person ceases to be an eligible employee and, upon his so ceasing, a lump sum benefit of an amount equal to his accumulated supplementary contributions is payable out of the Superannuation Fund to or in respect of him, sub-section (1) does not apply in relation to him, but his accumulated basic contributions shall be paid out of the Superannuation Fund into the Consolidated Revenue Fund.
(5) Where a person to whom invalidity pension is payable in accordance with section 67 or 70 again becomes an eligible employee, an amount equal to the amount that was paid in respect of the person out of the Superannuation Fund to the Consolidated Revenue Fund upon his last ceasing to be an eligible employee shall be paid to the Superannuation Fund out of the Consolidated Revenue Fund, which is appropriated accordingly.''
By sec. 113 it is provided that pensions shall be paid in fortnightly instalments, i.e. out of the Consolidated Revenue Fund. There are certain lump sums which are required to be paid out of the Fund to eligible employees or their personal representatives - see, e.g. sec. 62, 64 and 69, and sec. 111 which deals with the death of an eligible employee in respect of whom there is no benefit payable to any person under Part VI: in such a case a lump sum benefit of an amount equal to that person's accumulated contributions is to be paid out of the Fund to his personal representatives or to such persons as the Commissioner determines. Certain other provisions provide that in some cases accumulated supplementary contributions may be payable out of the Fund - sec. 62(3), 67(5), 69(3), 70(5), 72(3), 73(3), 84(3), 87(3), 88(2), 98(3), 100(3) and 101(3) - but nonetheless the accumulated basic contributions are in such cases paid out of the Fund into the Consolidated Revenue Fund in accordance with sec. 112. The details of the circumstances in which eligible persons may elect to take these lump sums are not material. All amounts in respect of ``Age Retirement'', whether periodic or lump sum, are payable out of the Consolidated Revenue Fund. Where lump sums are otherwise payable, either alone or along with pensions, the lump sums are paid out of the Fund to the person entitled and the balance of the accumulated contributions (if any) in respect of that employee is paid by the Fund into the Consolidated Revenue Fund.
The Fund is thus to be held by the Trust upon trusts to be ascertained from the terms of the Act itself. Those trusts may be described briefly by saying that they are to hold the contributions upon trust to accumulate the income thereof until each relevant employee who makes them ceases to be an eligible employee, to hold all the contributions and the income derived therefrom as a common fund for purposes of investment and to invest the amounts in the forms of investment authorized by the Act. Upon an individual employee ceasing to be an eligible employee, the primary trust is to pay to the Commonwealth by payment into the Consolidated Revenue Fund the proportion of the fund represented by the contributions of that eligible employee and the interest or other income earned thereon during the time that he was an eligible employee (``the accumulated contributions''). In certain exceptional cases the Trust is required to pay either part or the whole of those accumulated contributions to the employee or to his dependants or personal representatives. A statutory obligation rests upon the Commonwealth to pay to each former eligible employee a pension as prescribed by the terms of the Act. That pension is to be payable out of the Consolidated Revenue Fund which is appropriated for that purpose by the terms of the Superannuation Act itself (sec. 112(2)). That statutory obligation continues throughout the life of each former eligible employee with provision in appropriate cases for payments to widows and dependants. The making of such payments out of the Consolidated Revenue Fund is not a use of the Fund either wholly or partly for that purpose, nor is it a use wholly or partly for
ATC 4447
that purpose of moneys paid into the Consolidated Revenue Fund by the Fund itself. Nor is the amount of the pension calculated by reference, direct or indirect, to the amount of an individual eligible employees' accumulated contributions to the Fund, but it is fixed by the Act itself. Lump sums are, however, related to the accumulated contributions, whether payable out of the Fund or out of Consolidated Revenue. The Consolidated Revenue Fund is from its very nature a common fund in which are blended indistinguishably all payments made to or moneys received by the Commonwealth and payments are made out of the general mass by appropriation. No statute provides for the tracing of individual amounts that are paid into the Consolidated Revenue Fund, for they are by their very nature consolidated upon payment in. If it matters, there could never be an occasion for the application of Clayton's case (1816) 1 Mer. 572, 35 E.R. 781 or the conceptions of tracing which have been developed in Equity. That which reaches the Consolidated Revenue Fund from the hands of the Trust thereby ceases to be trust moneys under the Superannuation Act or at all and becomes simply part of the general funds of the Commonwealth, consolidated together in a single fund pursuant to sec. 81 of the Constitution and the Audit Act 1901-1969 (Cth). In no sense, therefore, can it be said that the pensions are payable out of the Fund, though some lump sums are payable directly out of it. In this sense the Fund is held primarily, but not exclusively, for the purpose of making payments to the Commonwealth on the happening of the relevant events, i.e. the cessation of an eligible employee to be such.The nature of the trusts upon which the Trust holds its funds demonstrates that it is by no means a ``bare trustee'' holding property to which some beneficiary is absolutely entitled in the sense that it may call for immediate transfer of the funds. It has been held that a bare trustee who holds property on trust for the Crown is entitled to the same privileges and immunities as the Crown itself
-
see
Grain Elevators Board (Vict.)
v.
Dunmunkle Corporation
(1946) 73 C.L.R. 70
at p. 74
, per
Latham
C.J.;
Perry
v.
Eames
(1891) 1 Ch. 658
at pp. 668-669
;
Hornsey Urban Council
v.
Hennell
(1902) 2 K.B. 73
;
Launceston Corporation
v.
The Hydro-Electric Commission
(1959) 100 C.L.R. 654
at p. 658
. Although the Commonwealth is in a sense the principal beneficiary for whom the Fund is held, it cannot be said to be absolutely entitled, either now or at any particular future time, although it will from time to time become so entitled to parts of the Fund, upon occasions which are certain and to some extent predictable as to time. As such events occur the Fund will continue to grow or at least be replenished as other eligible employees make contributions to it. The Trust itself has active duties of management to perform in the interest of all who may ultimately become entitled to any part or parts of the Fund, including the Commonwealth, and under the Act in its present form those duties will continue indefinitely. In the absence of amendment of the
Superannuation Act
the Fund will continue in existence so long as the Commonwealth and its Public Service exist, and during that period there will never be a time when any person or body politic will be absolutely entitled to the Fund.
The Commonwealth has set up this body corporate, the only members of which are nominated by the executive government of the Commonwealth. They are corporators by virtue of that nomination and each ceases to be a corporator on the expiration of his term of appointment. It has no board of management other than the corporators themselves who combine the functions of corporators and directors in carrying on the sole function committed to the corporation, namely, the investment of the Fund and its management, and the payment of sums out of it, the former by exercise of its discretion, the latter by statutory direction. Neither the Trust nor its corporators have any other function and in the performance of the former function they are subject to no direction at all by the executive government. Its only contact with the executive government or its officers, apart from paying moneys into the Consolidated Revenue Fund, is that, in relation to investment of the Fund, it is required to consult with the Commissioner as to what amounts standing to the credit of the Fund are not required for the purpose of making payments out of the Fund under the Act, but not as to the mode of investment. It is required to make its
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records available to the Auditor-General (sec. 44) and to make an annual report and to deliver the report and its financial statements to the Commissioner for transmission to the Treasurer. The Trust is thus an independent body to which is committed the power and the duty to invest and manage large sums which come into its hands regularly each fortnight throughout each year. It has only very limited responsibility for the making of payments to eligible employees or those who have been eligible employees. It is empowered to engage consultants but is under no obligation to consult the executive government nor any of its officers as to the mode in which it should exercise its powers of investment, which in the nature of things would be a continuing task. The skill with which it exercises its powers of investment and reinvestment may in some degree reduce the burden on the Consolidated Revenue Fund out of which pensions must be paid. It must calculate the ``accumulated contributions'' of individual employees who reach the retiring age or otherwise cease to be members of the Fund, though it is the Commissioner who keeps the records of contributions (sec. 27).In the result it seems to me that, whichever of the various indicia which have been suggested in the many cases on this topic is used in the process of characterization, the Trust does not fall into the category of the Crown, or a servant or agent of the Crown. There is first the absence of any power to control the activities of the Trust; there is also the nature of the function of the Trust which is a limited one, though no doubt of importance. It is an investment manager having wide powers over the nature of the investments to be made and the realization and reinvestment of the Fund. It has no discretion, however, as to the manner in which the Fund is to be dispersed. There is nothing here which could be regarded as an ordinary or usual function of government, or of a means by which such functions may conveniently be performed. No doubt the provision of pensions for retired government employees is a familiar function of government and the choice of means of performing this familiar task and of financing it is a matter which falls to the executive government and the Parliament. No doubt the Trust performs a function which is inherent in the kind of pension scheme which the Parliament has chosen to establish. It does not, however, collect the contributions, but receives them in bulk from the Commissioner, who keeps the records relating thereto, and it makes no payments of pensions as such. Determinations of the entitlement of individual eligible employees are made by the Commissioner, and the Trust plays no part in dealing with disputes as to entitlement. In the present case the Parliament has chosen a system which puts the investment and the management of the invested funds by realization and reinvestment out of the hands of the Public Service and places it in the hands of three persons who are required to have experience in relation to the investment of money, but who are not answerable to the executive government, nor subject to any direction by the executive government as to the manner in which they exercise their powers.
It is only in the widest and most imprecise sense of the terms ``governmental functions'' or ``governmental purposes'' that this body could be said to be performing a function of government or carrying out a purpose of government. It is, of course, established by statute and it performs one substantial function in the total scheme for superannuation of public servants. I do not obtain any assistance in its characterization from the fact that the Trust is incorporated or the fact that the funds are legally vested in the body corporate. The situation would, I think, be no different if the legislation provided for the appointment of three commissioners who had the power to vary investments the legal title to which was vested in a custodian trustee, such as the Public Trustee.
The Trust is sui generis, bearing little resemblance to any statutory body discussed in the decided cases. The cases are important, and indeed decisive as to the relevant principles, but no analogy readily presents itself amongst the many bodies which have been the subject of decisions in relation to this aspect of their status.
I am, however, satisfied that where a body has committed to it only one narrowly defined function (i.e. the investment and management of investments) in respect of which it has any discretion at all, and the
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Parliament has provided a scheme in which in the performance of that function the executive government is precluded from the exercise of any control or influence whatever, then there is no basis for saying that the body is an organ of, part of, or an agent of the executive government, i.e. of the Crown. The mere power of appointment of the persons who will together exercise this one discretionary function does not appear to me to constitute control of the Trust or of its function, there being no power to dismiss except for misconduct or incapacity.Some reliance was placed in argument on the decision of this Court in
Goodfellow
v.
F.C. of T.
77 ATC 4086
;
51 A.L.J.R. 437
which dealt with the
Defence Forces Retirement Benefits Act
1948. It was there held that the payments made to that taxpayer were pensions and allowances ``paid'', or ``payments made'', by the Commonwealth within the meaning of sec. 23(kaa) of the
Income Tax Assessment Act
1936 (as amended). As to 80 per cent of the payments there in question it was clear that they were paid directly by the Commonwealth, though the Act provided an alternative mode of payment which would have amounted to indirect payment, i.e. by payment to the Defence Forces Retirement Benefits Board which would have been obliged immediately to pay the amount over to the person entitled under that Act. The remaining 20 per cent was paid out of or ultimately borne by the Fund to which the taxpayer along with other members of the Defence Forces had contributed. The Board had, amongst other functions, that of investing the Fund though the range of authorized investment was much narrower than in the present case. The critical provisions of that Act were those which related to the composition and functions of the Board which consisted of the President of the Superannuation Board under the
Superannuation Act
1922 (as amended), the Commonwealth Actuary, and four persons representing respectively the Minister, the Naval Forces, the Military Forces and the Air Force, who were appointed by the Governor-General after nomination by the relevant Ministers. However, all the persons other than the President of the Superannuation Board and the Commonwealth Actuary (who under their respective Acts were appointed by the Governor-General) were removable by the Governor-General whenever in his opinion it was ``desirable or necessary'' to terminate such appointment. The composition of the Board and the complete control over the appointment and removal of four out of the six members was sufficient, along with the nature of its functions which included the general administration of the whole of that Act, to demonstrate that it was the Commonwealth or an emanation of the Commonwealth. The present case differs in important respects. The first is that the Trust has not the responsibility for the general administration of the Superannuation Scheme and the Act itself, but a much more limited function, namely, the investment of the Fund and the making of direct payments to the Consolidated Revenue Fund, as well as a limited number of payments to certain eligible persons. Under this Act the basic records in respect of contributions into the Fund and payment of benefits under the Act are to be kept by the Commissioner, not by the Trust. Decisions as to amounts of pensions and entitlement are made by the Commissioner and not by the Trust, and there is an appeal from the Commissioner to the Administrative Appeals Tribunal
-
see sec. 154. It is the Commissioner who makes decisions about, for example, whether persons are entitled to invalidity pensions or having been so entitled are thereafter restored to health so as to be capable of returning to employment, and indeed all other matters concerning eligibility for pensions or other benefits and the amount thereof. All these matters comprise the general administration of the Act and the Superannuation Scheme. It is the management of investments pursuant to the provisions of Part III which alone is given to the Trust.
The segregation of the Trust from the general administration of the Act and the limited nature of its functions, together with the independence of the Trust from government control, the nature of its functions and the security of tenure of its members demonstrate very significant differences between the Trust and the Defence Forces Retirement Benefits Board in Goodfellow's case . The reasons which I have just indicated for those differences combine to show, in my opinion, that the Trust
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established under the Superannuation Act is not the Crown nor an agency or emanation thereof.It was further argued that the provisions of sec. 160(1) of the
Superannuation Act
which provides that ``The costs of the administration of this Act, including the costs of and incidental to the management of the Fund by the Trust, shall be paid out of moneys appropriated from time to time by the Parliament for the purpose'' supported the argument that the Fund was the Crown or a servant or agent of the Crown. Alternatively, it was argued that because the costs of management must be borne by the Consolidated Revenue Fund, the burden of the stamp duty fell on the Commonwealth itself, a result which was beyond the power of the State to effect. I am unable to see that there is any substance in this argument. I do not think that the stamp duty in question can properly be regarded as a ``cost of'' or ``incidental to'' the management of the Fund. No doubt it is a cost incurred by the Trust, but in my opinion, it is properly characterized as part of the cost of the purchase of the land. It has the character of a capital outgoing, and in a trust which distinguished in its terms between those entitled to income and those entitled to capital, would undoubtedly be on capital account. No doubt that analogy is not an exact one. A closer analogy is to be found discussed in
Sun Life Assurance Society
v.
Davidson
(1958) A.C. 184
which concerned the entitlement to a refund of income tax to a life assurance company under the
Income Tax Act
1918 (U.K.) which required repayment to each such company ``of so much of the tax paid by it as is equal to the amount of the tax on any sums dispersed as expenses of management (including commissions)''. The company claimed that brokerage and stamp duties incurred upon the investment and reinvestment of funds were ``expenses of management'', it being common ground that the expression ``commissions'' in that context did not include brokerage. It was held unanimously by the House of Lords that the amounts paid in respect of stamp duties were not expenses of management and (with one dissentient) that the amounts paid in respect of brokerage were not expenses of management. Lord
Reid
at p. 206 (dealing with stamp duty) said:
``It seems to me more reasonable to ask, with regard to a payment, whether it should be regarded as part of the cost of acquisition, on the one hand, or, on the other hand, something severable from the cost of acquisition which can properly be regarded as an expense of management.
If that be the true test, then I have no doubt that the sums paid for stamp duty were not expenses of management. The companies could not acquire and hold shares without making these payments and no matter of management was involved any more than it was in paying the price due to the seller. Buying the shares and paying the duty were inseparable. I do not say that no payment of duty can be an expense of management: for example, cheques are required for management and it seems to me that the cost of acquisition of cheque books must be an expense of management whether it arises from stamp duty or not. But where payment of duty is a necessary consequence of something which is not itself an expense of management, I do not see how the payment of duty becomes an expense of management.''
See also per Viscount Simonds at p. 197 and per Lord Morton at p. 202. In my opinion those considerations apply equally to the present situation.
This payment is part of the cost of the investment and not a cost of management. A fee paid by the Trust to a consultant to give advice on investment or a fee paid to a valuer of land to advise on the value of land might be an expense of management, just as would rent of office space and the salaries of employees, for the only employees which the Fund could have would be those engaged in the management of the Fund. The fact that the making of investments and reinvestments is in one sense part of the management of the Fund does not make any part of the cost of an investment part of the cost of management. It could not be contended that the cost of an investment would be a cost of the management of the Fund, any more than it was contended in the House of Lords that the price payable to the vendor of the securities was a cost of management. In my opinion, therefore, if stamp duty is payable on these instruments, it is not a cost of
ATC 4451
management to be paid out of the Consolidated Revenue Fund, but part of the cost of the purchase of the investment and, therefore, to be borne out of the Fund itself in the same manner as the amount paid or payable to the vendor. I am, therefore, of opinion that this argument does not assist in leading to a conclusion that the Trust is the Crown, nor does it show any inconsistency with any of the provisions of the Superannuation Act .Section 40(2) was also relied upon as an indication that the Trust was the Crown or an agent or emanation of the Crown. The Audit Act 1901-1969 (Cth) defines the expression ``the Commonwealth Public Account'' as follows:
```the Commonwealth Public Account' includes moneys constituting the Consolidated Revenue Fund, the Loan Fund or the Trust Fund, and all other moneys received by any person for or on behalf of the Commonwealth.''
Part VIII of the Audit Act deals with ``The Loan Fund'' and sec. 55(1) provides as follows:
``A separate account shall be kept in the Treasury of all moneys which shall be raised by way of loan upon the public credit of the Commonwealth and which shall have been placed to the credit of the Commonwealth Public Account.''
Part IX deals with ``The Trust Fund''. The material provisions are sec. 60, 61, 62 and 62A(1), (3) and (4). Section 62B, which is expressly excluded from application to the Fund by sec. 40(2) of the Superannuation Act, provides for the investment of ``The Trust Fund'' by the Treasurer in a very limited range of investments, the application of which to the Fund would directly conflict with the wide powers of investment given to the Trust by sec. 42(2) of the Superannuation Act . Moreover the Trust is given express power to open its own bank accounts with the Reserve Bank and with any other Bank approved by the Treasurer. That is the only control exercisable by the Treasurer over any dealing with the Fund by the Trust. This second scheme is completed by sec. 160(2) of the Superannuation Act which provides that:
``Moneys received and paid under this section, and the accounts in connexion therewith, shall be kept, as part of the Public Account, separately from the moneys and accounts of the Fund.''
It is clear that the application of the Audit Act to the Fund is severely limited not only by the exclusion of sec. 62B, but also by the words ``subject to this Act'' found in sec. 40(2) of the Superannuation Act .
The Trust is required by sec. 161 to furnish an annual report and financial statements to the Commissioner for forwarding to the Treasurer, and to submit its financial statements to the Auditor-General for him to report thereon to the Treasurer. By sec. 163(2) the Trust is required to furnish the Treasurer with such information relating to the management of the Fund as he may require, but no power of supervision or control is given to the Treasurer.
In my opinion these provisions do not assist in reaching a conclusion that the Trust is the Crown. The limitations on the application of the Audit Act are substantial. It might be said that they are not inconsistent with the Trust being the Crown, but they provide no positive indication that it is. The duty to report to the Treasurer involves no control by the Treasurer.
Of all the kinds of provisions that may be relevant to the determination of whether a statutory body (whether corporate or not) is the Crown, the capacity of the executive government to control its operations (whether directly by instruction or direction or indirectly by power to remove otherwise than for misconduct or incapacity those in control of its operations), and the nature of its functions are the most important. In relation to the Trust neither of these indicators point to it being the Crown, its agent or emanation.
Some consideration is also required of two specific references to the application of some taxes to the Fund and the Trust. By sec. 42(5) of the Superannuation Act it is provided that the income derived from the investment of the income of the Fund or otherwise from its management shall be exempt from taxation under any law of the Commonwealth, a Territory or a State. Part XII contains transitional provisions which include arrangements for the transfer of the assets and liabilities of the old Fund set up by the
ATC 4452
superseded Act to the Fund created under the new Act to be held by the Trust. Section 173(3) provides as follows:``(3) An instrument or document that an authorized person certifies to have been made, executed or given by reason of, or for a purpose connected with or arising out of, the operation of this Division is not liable to stamp duty or other tax under a law of the Commonwealth or of a State or of a Territory.''
Such instruments would include transfers of individual assets of the old Fund. In the case of many such assets the instruments of transfer would prima facie fall within the charging sections of the stamp duty legislation of each of the States and Territories. Such instruments would not be transfers on sale, nor would they be transfers for full, or any, consideration. It is not unnatural that the possible impact of such stamp duties on the transfer of the assets of the old Fund to its successor would call for examination and some legislative provision to be made to avoid those possibilities. The payment of stamp duty on transfers of the assets of the old Fund might well impose a severe burden on the accumulated contributions and disturb the financial expectations of both the government and the contributors. It is to be expected that some special legislative arrangement might be thought desirable to prevent the possible exaction of stamp duties on such transfers. Such transfers and the stamp duties possibly exigible thereon stand in quite a different position from the stamp duties payable on instruments created in the day to day acquisition of new investments and the variation from time to time of such investments. The latter are part of the cost of the new investments payable out of the Fund. The former have no such character.
This express exemption appears to me to constitute a legislative recognition that the Trust is not the Crown and not exempt from State and Territory taxation otherwise than by express provision. The express exemption from income tax appears to me, especially in the context of the exemption from stamp duties, to have the same significance as a recognition of the need for a special legislative provision to provide exemption.
Therefore, I do not regard these provisions as inserted merely for more abundant caution; they are inserted in my opinion because of a recognition of the nature of the statutory body created.
For those reasons I am of opinion that the Trust is not the Crown or its agent and that the imposition of stamp duty on the transfers of land now in question involves no conflict with any law of the Commonwealth, nor with the Constitution. Accordingly, the transfers are not exempt from stamp duty.
In those circumstances it is not necessary for me to consider the interesting questions with respect to the operation of the Stamp Duties Act and the Commonwealth Constitution which would otherwise arise.
I would therefore dismiss the appeal.
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