The Australian Council of Social Service Incorporated & Anor. v. Commissioner of Pay-roll Tax (N.S.W.).

Rath J

Supreme Court of New South Wales

Judgment date: Judgment handed down 5 August 1982.

Rath J.

The plaintiffs claim a declaration that the first plaintiff or its predecessor is a public benevolent institution within the meaning of sec. 10(1)(b) of the Pay-roll Tax Act, 1971, and was such a public benevolent institution in the years from September 1971 to June 1977. This is not the precise wording of the claim as expressed in the summons, or in the amended summons, but expresses the substance of the claim as it appeared in the course of the proceedings. There is also a claim for an order restraining the defendant from collecting pay-roll tax, but early in the hearing I indicated, at the instance of the defendant, that I did not consider ancillary injunctive relief appropriate in such a case, assuming a declaration to be made, and the claim was not further pressed. The amount of the tax liability for the period in question is $15,505.42.

The first plaintiff was incorporated in the Australian Capital Territory under the Associations Incorporation Ordinance 1953 on 8th June, 1978. This date of incorporation raises a question as to the liability of the first plaintiff for pay-roll tax in respect of an earlier date. The Ordinance contemplates that there exists prior to incorporation an association as defined (sec. 3), and by sec. 7 it is this ``association'' that is incorporated. In the case of the first plaintiff the unincorporated pre-existing association was the Australian Council of Social Service, and during the hearing the Victorian Council of Social Service (a member of both the incorporated and unincorporated associations, and itself incorporated under the Companies Act 1961 (Vic.)) was, with its consent, added as a plaintiff to represent the members of the Australian Council of Social Service in the period to which the tax claimed related. Following upon this amendment no submission was made on behalf of the defendant regarding the locus standi of the plaintiffs, and it is unnecessary to consider whether the liability (if any) of the unincorporated association for pay-roll tax has passed to the incorporated association by

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virtue of the operation of the Ordinance, or in pursuance of cl. 2(q) of its objects, or remains with former members of the unincorporated association.

The unincorporated association (``the association'') has paid no pay-roll tax. No returns were submitted by the association until 6th June, 1978. Consideration of the association's liability commenced in 1974, and correspondence on the question continued over the years. In a letter dated 6th November, 1974 to the association the defendant said that the information presently to hand indicated that the association would not qualify for exemption. On 7th April, 1977 the defendant required the association under sec. 13(2) of the Pay-roll Tax Act to furnish yearly returns. In the same month the association was registered as an employer (see sec. 12). By a notice under sec. 15 of 16th June, 1977 the defendant required a return to be furnished. The association then commenced negotiations with the Premier's Department on the matter. On 8th July, 1977 the defendant gave notice to the association requiring the furnishing of returns, for the stated purpose of enquiring into or ascertaining the liability of the association under any of the provisions of the Act.

The Pay-roll Tax Act was amended by Act No. 134, 1977 (Sch. 3(4)) by inserting a provision effecting exemption of the association (and later the plaintiff) from liability to pay-roll tax after the commencement of the amending Act (1st January, 1978 - sec. 2(3)). But representations to the Premier's Department regarding past liability were not successful, and the defendant continued to press for lodgment of returns. Returns were lodged on 6th June, 1982 showing taxable wages, and tax corresponding to the defendant's claim, except for some minor adjustments. Each of the returns, except the last, bears opposite the tax figure initials which are presumably those of an officer of the defendant. The defendant's claim is for an amount greater by fifty cents than the amount returned (as altered), and this extra fifty cents appears to be referable to the last return, where the calculation for tax is (as the form required) rounded off in dollars, omitting a calculable sum of fifty cents. Counsel for the defendant attached some significance to these details, and I shall return to the point later.

The returns also bear the handwritten word ``nil'' near the tax figure. This writing also is apparently that of an officer of the defendant, and probably represents his notation of the association's contention as to tax liability.

The defendant wrote the following letter to the first plaintiff (dated 21st November, 1978 and received on or before 8th December, 1978):

``Pay-roll Tax Act, 1971

It is noted that the above company's pay-roll tax liability of $15,505.42 for the period September 1971 to June 1977 remains unpaid and no proposal for payment has been received.

Unless the outstanding tax is paid within 21 days of the date hereof or a proposal for payment of arrears by instalments is lodged within 21 days I will have no alternative but to refer this matter to the Crown Solicitor for prosecution and recovery action.

It should be noted that any proposal should be supported by liquidity evidence in the form of:

  • (a) latest available balance sheet
  • (b) latest available profit and loss account
  • (c) income and expenditure budget for the period during which the instalments are to be made
  • (d) a letter from your bank confirming the overdraft limit
  • (e) copy of the latest available bank statements

proving the company's liquidity problem. Also the proposal for payment in the shortest possible time to avoid increased incidence of penal tax.

Also it has come to my attention that pay-roll tax returns for the period July 1977 to December 1977 are outstanding. Could you please forward these returns within 21 days of the date hereof.''

After further representations by the first plaintiff in respect of the tax the defendant by a letter dated 10th September, 1979 informed the first plaintiff that he had referred the matter to the Crown Solicitor to

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institute recovery proceedings. The Crown Solicitor by a letter of 3rd October, 1979 made a formal demand for an amount of tax which included penal tax. This letter was addressed not to the first plaintiff by its incorporated name, but to ``Australian Council of Social Services''.

Counsel for the defendant submitted that, having regard to the provisions of the Act relating to challenging a claim for tax, the Court should in the exercise of its discretion refuse declaratory relief. The relevant principle of discretion has been stated as follows:

``... in point of discretion, it is a well-settled approach in this Court that injunctive relief will not ordinarily be granted where it can be seen that there is another tribunal particularly suited to deal with the matter in issue and having the requisite power and authority to resolve the issues between the parties''

Harry M. Miller Attractions Pty. Ltd. v. Actors and Announcers Equity Association of Australia (1970) 1 N.S.W.R. 614 at p. 615).

The principle is equally applicable to the grant of a declaration (see:
Salmar Holdings Pty. Ltd. v. Hornsby Shire Council (1971) 1 N.S.W.L.R. 192 at p. 201; 126 C.L.R. 52; cp.
Forster v. Jododex Australia Pty. Ltd. (1972) 127 C.L.R. 421 at pp. 435-436;
Johnco Nominees Pty. Ltd. v. Albury-Wodonga (New South Wales) Corporation (1977) 1 N.S.W.L.R. 43 at pp. 50-51).

The liability for pay-roll tax does not depend upon any assessment of the Commissioner, but is imposed by the Pay-roll Tax Act on an employer in respect of wages (other than exempt wages) paid or payable by him at the rate set out in the Act (sec. 6, 7 and 8). The forms of return in evidence required the employer to state the wages paid, and the tax payable at the rate set out in the form. Every employer who is registered or required to apply for registration in accordance with sec. 12 is required to furnish returns in the prescribed form, and to specify the taxable wages paid (sec. 13(1) and (2)).

Section 10 makes provision for wages not liable to pay-roll tax. Section 12 (dealing with registration of employers) and sec. 13 (dealing with returns from employers who are registered or required to be registered) do not impose an obligation of registration or of furnishing returns upon an employer who pays no taxable wages; but by sec. 15 the Commissioner may, by notice in writing, call upon any person to furnish him with such return as the Commissioner requires. Thus sec. 15 enables the Commissioner to obtain information from a person (whether an employer as defined in sec. 3 or not) relating to wages paid, whether or not the person claims the wages to be exempt (see also sec. 16). But there is no provision enabling the employer to have a determination made as to whether wages paid by him are exempt or taxable. An employer is obliged to pay the tax within the time within which he is required to lodge the return ``of the wages in respect of which the pay-roll tax is payable'' (sec. 13), and he may become liable for penal tax (sec. 22).

Though the Act made no provision for a formal claim to exemption, the association made known to the defendant its claim that it paid no taxable wages. The defendant entertained but rejected the claim. It required the association to lodge returns; the returns were made, and stated amounts of taxable wages, and of tax, as the form of the return required; but it is not claimed by the defendant that in so doing the association lost any right to exemption.

But it is said that the association should have proceeded to press its claim for exemption by way of objection and appeal under sec. 32 and 33 of the Act. Section 32(1) provides:

``32(1) A person who is dissatisfied with any decision, determination or assessment made by the Commissioner under this Act, by which his liability to pay pay-roll or further tax is affected may, within sixty days after service of notice of the decision, determination or assessment as the case may be, post to, or lodge with, the Commissioner an objection in writing stating fully and in detail the grounds on which he relies.''

The Commissioner shall consider the objection, and may either disallow it, or allow it, either wholly or in part (sec. 32(3)). A person dissatisfied with a decision of the Commissioner on an objection may, within

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thirty days, appeal to the Supreme Court (sec. 33(1)). On appeal the objector is limited to the grounds stated in his objection (sec. 33(3)(a)). The fact that an appeal is pending with respect to any liability or assessment does not affect the liability or assessment, and the tax may be recovered as if no appeal were pending (sec. 34(1)). Examples of determinations or decisions made by the Commissioner under the Act are to be found in sec. 9B(7) and (8); 11A(3); 12(2); 13(2) and (3); 14(1) and (2A); 16H(1); and 16I(4) and (5). Subsections (1) and (2) of sec. 18 provide for the making of assessments by the Commissioner.

It is submitted on behalf of the defendant that the defendant did make a decision, determination or assessment within the meaning of sec. 32(1), and that his letter of 21st November, 1978 constituted notice of that decision, determination or assessment. Counsel for the defendant would not elect among the terms ``decision, determination or assessment''. Certainly the defendant made a decision to recover from the first plaintiff the amount of the tax liability claimed, but that decision cannot be said to be one (to adapt the words of sec. 32(1)) by which the first plaintiff's liability to pay pay-roll tax was affected. Counsel for the defendant submitted also that an assessment had been made under sec. 18(2). He might equally have sought to rely on sec. 18(1). The evidence for the making of this assessment (he said) was to be found in the initialling and altering of the returns by an officer of the defendant. It may well be that an officer checked the calculation of tax set out in the returns, and made some purely arithmetical corrections; but there is no other evidence of any process of assessment. It seems to me in these circumstances that the defendant has relied for the claimed liability of $15,505.42 not upon any process of assessment, but upon the provisions of the Act which impose a liability to pay-roll tax independently of any assessment.

For these reasons I do not think that there was any relevant decision, determination or assessment to which the objection and appeal provisions of the Act were applicable. Thus there is no procedure in the Act for determination of the rights claimed by the plaintiffs, and hence no ground to refuse declaratory relief if such relief is otherwise proper.

There is another difficulty in the way of the defendant's contention that was not the subject of argument before me, and I shall merely state its nature. Whatever decision, determination or assessment was made by the defendant, it apparently related to the returns furnished by the association, but the letter of 21st November, 1978 was directed not to the association or its members, but to the first plaintiff.

Even if I am wrong in my view that there has been no relevant decision, determination or assessment made by the defendant, I think that declaratory relief should be granted, if one or both of the plaintiffs can make out a case for exemption. It is conceded that the Act does not exclude the declaratory jurisdiction of the Court to determine the question of exemption; and it seems to me that its provisions in relation to claims for exemption and their determination are so obscure, so wanting in reasonable guidance to a taxpayer, that the Court should in the circumstances of this case consider that a declaration is an appropriate remedy.

I come now to the question as to whether the plaintiffs have made out a case that the association was a public benevolent institution within the meaning of sec. 10 of the Pay-roll Tax Act. It is not necessary to determine whether the first plaintiff or the association is the entity liable to the tax, if the exemption does not apply, because the activities of each is the same in kind, and their constitutions, though different in wording, provide in substance for the same objectives. As the relevant period is prior to the commencement of Act No. 134 of 1977 I shall consider the Act in its earlier form. Section 10 (so far as relevant) read:

``10. The wages liable to pay-roll tax under this Act do not include wages paid or payable -

  • ...
  • (b) by a religious or public benevolent institution, or a public hospital;''

The objects of both the association and the first plaintiff may be said to be the promotion of social welfare, with particular concern for poor and other disadvantaged

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persons. These expressions suffer from some uncertainty, but no more than is to be found in the more elaborate provisions of the constitutions. The first object of the association is:

``A. Carrying out programmes designed to contribute to the elimination of poverty and the promotion of the well-being of disadvantaged and vulnerable individuals and groups.''

Other objects deal with stimulating interest in social welfare activities, providing advice on social welfare matters, improving the organisation of social welfare services and undertaking at national level or at any other levels action which appears to be in the best interests of social welfare in Australia.

The first two objects of the first plaintiff sufficiently indicate its purposes:

``(a) To serve the Australian people by undertaking activities which promote their social well-being;

(b) To be especially concerned with the well-being of disadvantaged and vulnerable individuals and groups, and to promote their well-being through socially just policies and programmes.''

The members of the association were, and the members of the first plaintiff are, Councils of Social Service of Australian States and Territories, certain national organisations, and affiliated organisations and associates. Apart from names, there was no evidence of the constitutions or activities of any of these members. The names of some of them (e.g. Australian Medical Association) suggest that they are professional bodies. Others (such as Church of England in Australia and Methodist Church of Australia) have wide activities. The names of others suggest a connection with welfare activities (e.g. Guide Dogs for the Blind Association of Australia, The Smith Family). The activities of one of them, Young Men's Christian Association, were discussed in the case of Young Men's
Christian Association v. Sydney City Council ((1954) 20 L.G.R. 34).

The following discussion of the first plaintiff's activities is taken from an affidavit of its Secretary-General of 7th November, 1980 and may be taken as applicable to the activities of the association. The first plaintiff does not give direct relief to poverty, destitution, sickness, helplessness or distress. The first plaintiff's activities are directed towards providing indirect aid for the relief of poverty or distress by performing advisory, informative, research and advocacy functions. Its activities are directed at changing the circumstances which either create or aggravate poverty or distress. The first plaintiff does this in a number of ways, as follows. Firstly, the first plaintiff provides services to its member organisations. This takes the form of advice on social trends and needs, research assistance, providing information on Government policies, the availability of Government grants, the existence of Government legislation and the like, information on administrative changes to public instrumentalities, advice on international developments, staff development and training, advice and information on developments or innovations in other welfare organisations, advice on management related to welfare services, and an advocacy service such as representations to government or deputations to government. Secondly, the first plaintiff conducts research, such as research into particular areas of concern. An example of research carried out is research into aspects of poverty, income security, unemployment, single parents, welfare provisions, child welfare, etc. The first plaintiff has representatives on The National Consultative Council on Social Welfare, The Family Law Council, Industries Assistance Commission Consultative Group, Commonwealth Legal Aid Commission, National Health Services Advisory Committee, International Year of the Disabled Non-Government Organisations Organising Committee, Standing Inter-departmental Committee on Refugees Consultations, and The Australian Refugee Advisory Council. Thirdly, the first plaintiff produces a number of publications. The publications cover such topics as the relationship of unemployment to poverty, the results of surveys on the availability of welfare assistance of various kinds, and other publications on various areas of poverty and distress and the means of overcoming same. The emphasis in the publications is on the disadvantaged, the poverty stricken, on the problems of low income earners and the like and the means of

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providing relief. Fourthly, the first plaintiff itself conducts policy studies and has an advocacy function aimed at improving or altering the circumstances which result in poverty and distress. The advocacy function is seen by the first plaintiff as an essential part of modern social relief activity.

The present Secretary-General of the first plaintiff, Mrs. McClintock, explained the reference to ``conducts policy studies'' as follows:

``It means both research and gathering of information from low income people about their circumstances in order to put information together and influence policy, on particular policies.''

She explained an advocacy function as follows:

``It means to advocate for the needs of disadvantaged people in a number of areas; to advocate in inquiries, to Ministers, to Government departments and in fact to the community in welfare organisations generally about needs that have come to us, for the disadvantaged, the aged or for the unemployed, for instance.''

This advocacy function appears from Mrs. McClintock's evidence to have been used to advantage for the purpose of persuading various authorities to establish appeals procedure in the Department of Social Security and in the Administrative Appeals Tribunal.

Mrs. McClintock has been with the association and the first plaintiff for fourteen years, and her evidence is to be taken as relating to that period. She said that in all the Council's (that is the first plaintiff's and the association's) publications ``we emphasize that our overriding concern is for the disadvantaged, overriding any definition of welfare''. ``The aged, the poor, the unemployed,'' she said, ``are the very prime concern.'' She said that in any submission on social welfare that the plaintiff or its predecessor might make the object would be the promotion of care for the disadvantaged. She agreed that advocacy to Governments of changes in the law or decisions about appropriation of money would take up about thirty per cent or a third of the Council's energy, but qualified her answer as follows:

``though even that has to be qualified because in approaches to Government the information is collected and made available to our member organisations, to the public generally and it is the use of say a pre-Budget submission that we would put to Government about changes needed in the coming Budget, that would also be used as information by a large number of community groups and other organisations.''

There were in evidence the titles of many publications of the association, extending back to 1972, and a copy of the association's detailed evidence prepared for the Commonwealth Commission of Inquiry into Poverty (the Henderson Commission). The first main report of the Commission in 1975 makes many references to the association's evidence. Other publications of the association in evidence illustrated the advocacy function of the association, and the research required for the discharge of that function.

The annual reports of the association and the first plaintiff show their activities cover a wide area of social welfare programmes. The following statement of objectives in the 1974-75 report is typical:

``The Australian Council of Social Service is a national, non-government, non-profit organisation. The aim of the Council is the well-being of all Australians. Its goal is social justice and equity for all, recognizing that equity means giving greater attention to the most vulnerable members of our society. All of the ACOSS work reflects this bias.''

The first plaintiff's income is derived mainly (and the same was true for its predecessor) from membership fees, Commonwealth Government grants, sales of publications, donations, fees for conferences and research projects, and fund raising activities in the community.

The first plaintiff's income (and the same was true of its predecessor) is expended on the activities that have been described. The accounts show that grants have been made by the first plaintiff and the association to member bodies, for the purpose, the evidence indicates, of performing similar functions. There is no evidence of any expenditure or of any grants made for the

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purpose of direct relief to poor or other disadvantaged persons - in fact the evidence is to the contrary.

The first plaintiff employs, and the association has employed, both full-time and part-time salaried staff. In 1971 the salaried staff comprised the Secretary-General, Deputy Secretary-General and office staff. The staff has been gradually expanded to include at various times social policy officers, a policy analyst, a librarian, project officers, an executive assistant, and others. There has been a reduction in staff since 1977 due to financial constraints.

The leading authority on the meaning of the expression ``public benevolent institution'' is
Perpetual Trustee Co. Ltd. v. F.C. of T. (1931) 45 C.L.R. 224. That case, which was decided in 1931, was concerned with the meaning of the expression in an exemption section of the Estate Duty Assessment Act, 1914-1928. It was held by Starke, Dixon and Evatt JJ. (McTiernan J. dissenting) that the Royal Navy House in Sydney (which provided accommodation and recreation for petty officers and lower ratings) was not a public benevolent institution. Starke J. said (at pp. 231-232):

``Now we have to consider the expression `public benevolent institution'. It cannot be said that this expression has any technical legal sense, and therefore it is to be understood in the sense in which it is commonly used in the English language... In the context in which the expression is found, and in ordinary English usage, a `public benevolent institution' means, in my opinion, an institution organized for the relief of poverty, sickness, destitution, or helplessness.''

Dixon J. said (at pp. 233-234):

``The words `benevolent institution' are commonly used in combination to denote bodies organized for the relief of poverty or distress... For my part the application of the expression `public benevolent institution' to such organizations as Royal Navy House seems odd and inappropriate... I am unable to place upon the expression `public benevolent institution' in the exemption a meaning wide enough to include organizations which do not promote the relief of poverty, suffering, distress or misfortune.''

Evatt J. said (at pp. 235-236):

``There are... very many bodies which readily answer to the description of `benevolent institutions'. The Benevolent Society of New South Wales provides food and clothing for those in poverty and distress, the Scarba Home takes care of deserted babies, many organizations of Church and State provide for the maintenance, housing and relief of the aged poor, orphans and those suffering from bodily or mental disease...

Such bodies vary greatly in scope and character. But they have one thing in common: they give relief freely to those in need of it and who are unable to care for themselves.

Those who receive aid and comfort in this way are the poor, the sick, the aged, the young. Their disability or distress arouses pity, and the institutions are designed to give them protection.''

McTiernan J. said (at p. 241):

``While I do not think that the Legislature intended strictly to confine the exemption to gifts to an institution of a strictly eleemosynary character, yet it may be difficult to bring within the scope of the exemption which has been granted in aid of a public benevolent institution, a gift to an institution which is of a public character, but does not exist for the relief of distress or misfortune occasioned by poverty. But I am of the opinion, that the present case is one in which such a difficulty is disposed of by the facts and circumstances stated in the special case.''

McTiernan J. referred, in the immediately preceding passage, to the ``services which may be rendered by human benevolence operating through the agency of a public benevolent institution'' and had previously rejected the existence or non-existence of one element as an irrefutable test (at p. 237). None the less his concept of a public benevolent institution appears to be only marginally wider than that of the majority; and he found on the facts an element of distress, saying that if Royal Navy House was not open to the petty officers and men of

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the Royal Navy and the Royal Australian Navy ``these men would be left to their own devices when they came ashore, and they would be exposed to dangers, temptations and impositions, from which this `House' safeguards them'' (at p. 243).

This case was considered and applied in
Maughan v. F.C. of T. (1943) 66 C.L.R. 388, but there was no relevant elaboration of principle.

In the Perpetual Trustee Company case the Court was considering whether a body affording a certain sort of aid and comfort could be described as a public benevolent institution. The question therefore was whether the body, having that organisation, could be said to be organised for the purposes of a public benevolent institution. It did not have before it, as I have, a body organised to promote, but not itself to administer, aid and comfort. Let it be assumed that the aid and comfort, the promotion of which the first plaintiff (or its predecessor) is organised to achieve, can be described as the relief of poverty, or such other misfortune as the judges of the majority described. Then, on that assumption, the question for determination is whether the promoting body, as distinct from the body administering the aid, can be described as a public benevolent institution. Though this was not the question before the Court in the Perpetual Trustee Company case, it seems to me that the reasoning of the Court (including McTiernan J.) is based on the proposition that an institution, claiming the character of a public benevolent institution, must itself dispense relief to the needy. When the Judges in that case are referring to the organisation of the institution it is the organisation of aid in a direct and immediate sense that is contemplated.

With these considerations in mind it seems to me that neither the first plaintiff nor its predecessor could be called a public benevolent institution, if that expression is given the meaning it bears in ordinary English usage. A public benevolent institution requires administration, but it is not administration that the first plaintiff or its predecessor provides. Such an institution may not lose its character because in addition to its organisation for relief of poverty (or other aid) it undertakes functions, such as the first plaintiff's, for the promotion of its relief. But if the functions of promotion are vested in a separate institution, not merely for the furtherance of the objects of particular benevolent institutions, but for the purposes of the promotion of the relief of poverty generally, then I think that the separate institution has a new character of its own, and that new character does not fall within the ordinary English meaning of the expression ``public benevolent institution''.

The assumption I have made, that the first plaintiff and its predecessor have been organised to promote the relief of the relevant misfortunes, is probably not correct in fact. The relief of poverty is of paramount concern in all the activities, but this relief is sought to be achieved in the promotion of social welfare in the community generally. Thus the promotion that is the essential activity of the first plaintiff and its predecessor is seeking well-being not only for the poor but also for others that would not be objects of the bounty of a public benevolent institution. For this reason also I think that neither the first plaintiff nor its predecessor is a public benevolent institution.

The plaintiffs relied upon the decision of Connor A.C.J. in
Australian Council for Overseas Aid v. F.C. of T. 80 ATC 4575; (1980) 49 F.L.R. 278, a decision as to whether the appellant (the taxpayer) was exempt from pay-roll tax as a public benevolent institution within the meaning of sec. 13(b) of the Pay-roll Tax (Territories) Amendment Act 1971 as amended. The taxpayer, an unincorporated body, was an association whose members were predominantly givers of aid to poor persons overseas. It was conceded by the Commissioner that the members were predominantly public benevolent institutions. Even in the cases where the members were not public benevolent institutions, it seemed that the taxpayer serviced them only in respect of their activities which were involved in aid for poor people overseas. The taxpayer had been set up by its members as a co-ordinating and educating agency.

Connor A.C.J., having referred to the Perpetual Trustee Company case, said (at ATC pp. 4577-4578; F.L.R. pp. 281-282):

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``The question in the case under appeal is rather whether an institution may be `organised for' the relief of poverty, in the words of Starke J., or whether it may `promote the relief of poverty and etc.' in the words of Dixon J., even though it does not make funds or services directly available to the objects of the benevolence.

It seems that in these days overseas aid may often involve quite intricate dealings with governments at home and abroad as well as with various semi-government and other institutions both here and overseas. Difficult matters in the area of trade and transport may crop up in the course of giving aid. It would thus be surprising if a public benevolent institution could perform its role without having to rely upon various agencies. If a public benevolent institution used an agency which was itself an independent commercial organisation conducting an independent business in which it served for reward a public benevolent institution only as it would serve any of its other customers, then plainly enough such an agency would not be a public benevolent institution. The position here, however, is that the taxpayer has in effect been set up as a co-ordinating and educating agency by public institutions which are themselves in the main public benevolent institutions in order to perform tasks which they themselves could perform without losing their identity as such. The taxpayer is not a separate institution or organisation carrying on an independent business in the course of which it serves persons other than its members. It appears to me that the taxpayer and its members should be looked at as a whole enterprise which is predominantly benevolent and of which the taxpayer is an integral part. The fact that the taxpayer does not constitute the whole of the activity does not appear to me to be critical. In this practical arrangement and division of function it seems that nearly everything which the taxpayer does is done in the course of and for the furtherance of the relief of poverty even though it is done in conjunction with other institutions. I do not see anything in the Perpetual Trustee case (supra) which runs counter to the proposition that an institution may promote or be organised for the relief of poverty even though it performs only one of a number of several steps in the benevolent process, provided it is clear that the relation of that institution to the other institutions involved in the process is such as to show that they have a common benevolent purpose, albeit they contribute to it in different ways.

For the reasons I have indicated I think that is the case here; and consequently I think that the taxpayer should properly be regarded as a public benevolent institution. It carries on no independent business. It serves only the members who agreed to bring it into existence. They are, as conceded by counsel for the Commissioner, in the main public benevolent institutions and in cases where they are not it is only in their benevolent aspects that the taxpayer is involved with them.''

The concession made by the Federal Commissioner of Taxation is not made by the defendant in the present case, and there is no evidence to support an inference to the like effect as that concession. For that reason alone the case before Connor A.C.J. is essentially different from this case.

The reasoning of Connor A.C.J. has as its basis the identity of the taxpayer and its members. It is that identity which enabled him to say, looking at the taxpayer, that it was a public benevolent institution. It was such an institution because its members were public benevolent institutions, or their relevant activities had such a character; and the taxpayer had no existence apart from its members. I see no such identity between the first plaintiff and its predecessor and their members. The first plaintiff (as had the association before it) has clearly defined objects and activities which it has pursued independently, with its own separate control, staff and funds. It is not a co-ordinating body for its members. It provides its members with information and advocacy, but the dissemination of the information it gathers from its research is not confined to members, and its advocacy functions on behalf of members are not shown to be limited by the concept of benevolence. For

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these reasons also I consider that the decision in the Australian Council for Overseas Aid case is not applicable.

The proper approach to the present case is for the Court to ask itself, is the first plaintiff (or the association) a public benevolent institution? As Dixon J. said in the Perpetual Trustee Company case (above, at p. 233), in such matters one must often be guided to a great degree by one's own experience in the use of terms. Judicial explanation of the expression ``public benevolent institution'' in various contexts is of great importance and assistance, particularly when it comes from the high authority of the Perpetual Trustee Company case. But exegesis must not be substituted for the expression itself in the question that the Court asks itself. The expression is taken from ordinary English usage, and essentially it is capable in itself of being understood and applied.

I am of the opinion for these reasons that neither the first plaintiff, nor its predecessor (the association), is a public benevolent institution within the meaning of that expression in sec. 10(1)(b) of the Pay-roll Tax Act, 1971. Accordingly the plaintiffs are not entitled to the relief that they seek, and the summons, as amended, will be dismissed.

I propose to reserve consideration of the question of costs. The plaintiffs have succeeded on the issue as to whether declaratory relief is available in proceedings to determine whether wages are exempt as being wages paid or payable to a public benevolent institution. This issue occupied a considerable part of the hearing. The defendant has succeeded on the predominantly factual issue as to whether the plaintiff (or its predecessor) was a public benevolent institution. That issue also occupied a substantial part of the hearing. It may be that no order for costs should be made. I think the appropriate procedure is to give the parties liberty to apply for an order for costs on seven days' notice.

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