METROPOLITAN FIRE BRIGADES BOARD v FC of TJudges:
Wilcox, Spender and Pincus JJ
The Metropolitan Fire Brigades Board appeals from a decision of the Administrative Appeals Tribunal [reported as Case X64,
90 ATC 487]. The question is whether the appellant is a ``public benevolent institution'' within the meaning of sec. 57A(1) of the Fringe Benefits Tax Assessment Act 1986. That subsection, which in its present form was inserted into the Act by sec. 32 of the Taxation Laws Amendment (Fringe Benefits and Substantiation) Act 1987, reads as follows:
``Where the employer of an employee is a public benevolent institution, a benefit provided in respect of the employment of the employee is an exempt benefit.''
The question we have mentioned arose in relation to fringe benefits provided from 1 July 1986 to 31 March 1987. The Tribunal held, in accordance with the contentions of the respondent Commissioner, that such benefits were not made exempt by the provision which we have quoted.
The respondent has resisted the appeal on the ground that the Tribunal's decision was correct and has also urged upon us the view that the appeal is incompetent, as not raising any question of law within the meaning of sec. 44(1) of the Administrative Appeals Tribunal Act 1975. It is convenient to deal with the question of substance first.
The appellant was, at relevant times, a body constituted under the Fire Brigades Act, a statute of the State of Queensland passed in 1964, which was repealed by the Fire Service Act 1990. As originally enacted, the repealed Act provided for fire brigade boards with membership consisting of persons, some of whom were appointed by the Governor in Council, some elected by ``contributory companies'' and some representing local authorities: sec. 6(3). In the form the Act had during the relevant period (i.e. as amended to 1985), the membership comprised persons appointed by the Governor in Council and representatives of local authorities: sec. 6(3) of the Fire Brigades Act 1964-1985 (Qld); there was no private representation.
It is unnecessary to go into detail as to the contents of the Fire Brigades Act in order to make the point that the appellant was made by the relevant legislation a governmental body. The responsible Minister was given important powers to control boards. Under sec. 10(b) of the Fire Brigades Act, an appointment of a chief officer or deputy chief officer was subject to the Minister's approval and he was also given power to control many other matters pertaining to boards (see in particular sec. 23B), including budgetary control (sec. 23A(e)). Again, the Minister had power to recommend the dissolution of a board and the Governor in Council was empowered to act on such a recommendation: sec. 27. Another reflection of the board's status as an emanation of government was that it was given power to make by-laws and to impose penalties for breaches of the by-laws it made: sec. 18.
As to the source of the appellant's funds, the evidence showed that in the 1987 tax year its revenue was a little over $26m., of which more than $24m. was provided by the State Government out of its own funds or from a trust fund established under the Fire Brigades Act. Money went into the trust fund from ``contributions'' of a compulsory kind by property owners paid to local authorities: see sec. 34A and 34C. Moneys were disbursed out of the trust fund to boards and for certain related purposes (sec. 29(3)). It was argued, and seems to us plainly correct, that the so-called ``contributions'' were simply taxes imposed on property owners.
Significant amounts were earned by the appellant at relevant times from services provided, such as charges for connecting alarm systems to the brigade premises, maintaining fire extinguishers and the like. However, the great bulk of the appellant's funds came from the State Government.
As might be expected, the appellant's functions under the Act were to control and extinguish fires, protect life and property in case of fire and other related matters: sec. 9. Work of this kind has not always been regarded as a governmental responsibility; but it seems to us that, for many years now, controlling and extinguishing metropolitan fires has, in Australia, been regarded as a responsibility of government. It is true that ordinary citizens and those organised into volunteer fire brigades (the existence of such brigades being recognised in the Fire Brigades Act) do some work of the same kind, as a matter of civic duty. That does not detract from the appellant's status as a body constituted, funded and controlled by government and performing functions on behalf of government. The notion that such a body fulfils the description ``public benevolent institution'' seems a novel one.
Counsel for the appellant argued in effect that because the appellant is clearly public, being a government institution, the only question is whether it is ``benevolent''. There is authority against fragmenting the question in this way. The description ``public benevolent institution'' is to be treated as a ``compound expression'':
Public Trustee (N.S.W.) & Ors v. F.C. of T. (1934) 51 C.L.R. 75 at p. 103, per Dixon J. In considering the meaning of the rather similar term ``public charitable institution'', the majority of the High Court said in
Swinburne v. F.C. of T. (1919) 27 C.L.R. 377 at p. 384:
``We are not to pull the phrase to pieces and consider the various meanings of its component parts, but we have to read the composite expression as written...''
The significance of this point for present purposes is that the words ``public'' and ``benevolent'' are to be read together. In general, an institution does not fall within the description unless its benevolence is directed towards the public or a section of the public: In
re Income Tax Acts (No. 1) (1930) V.L.R. 211. There, the Victorian Full Court had before it the question whether a tax deduction could be claimed for a gift to a Freemason's Home, as being a ``public benevolent asylum''. The Court answered the question in the negative, on a ground sufficiently set out in the following remark of Lowe J. at p. 223, with whose reasons Irvine C.J. was in general agreement:
``I may now consider whether `the Freemasons' Homes of Victoria' is `public' in the sense I have discussed. It is clear that it is not carried on for the benefit of the public generally, and in my opinion is not shown to be carried on for the benefit of a section of the public.''
It is true that public control of an institution ``is a factor to be taken into account in determining whether it is a public institution'':
Maughan v. F.C. of T. (1942-1943) 66 C.L.R. 388 at p. 397 per Williams J., with whom Rich J. agreed (p. 395). But as Williams J. went on to point out at p. 397:
``... public control is not essential (the main criterion is the extensiveness of the class it is the object of the institution to benefit) and, in order to be of a public nature, the control need not be, in my opinion, that of some government body.''
The same significance has been attached to the word ``public'', in the same expression, in a series of decisions in New South Wales, the most recent being
Australian Council of Social Service Inc. & Anor v. Commr of Pay-roll Tax (N.S.W.) 85 ATC 4235; (1985) 1 N.S.W.L.R. 567. At ATC p. 4237; N.S.W.L.R. 568, Street C.J. quoted the following passage with approval:
``... the question as to whether a benevolent institution is public in the sense in which that word is to be read in the exempting provisions referred to is less dependent upon the particular circumstances of its constitution and domestic government than upon the character and objects of its benevolences. What are the benefits which the institution dispenses, and to whom are the benefits extended, are enquiries the answer to which must be decisive on the question of whether or not the institution in question is public in the statutory sense.''
See also per Priestley J.A. at ATC p. 4242; N.S.W.L.R. p. 575.
The connection of a body with government may, in some circumstances, assist towards a conclusion that it is a public benevolent institution. But we think a purely governmental body is hardly ever likely to satisfy the tests which the authorities contain. Section 57A(2) of the Fringe Benefits Tax Assessment Act itself suggests this. That subsection exempts benefits provided to employees whose duties of employment are exclusively performed in, or in connection with, ``a public hospital that is a public benevolent institution'', where the employer is a government body. The language chosen by the legislature clearly contemplates that some of these institutions (whose purpose is of course to alleviate people's suffering) may not be public benevolent institutions. Further, the terms of the subsection are consistent with the view that government bodies are ordinarily not thought of as public benevolent institutions.
The meaning which has been attached to the expression ``public benevolent institution'' may conveniently be approached by noting the history of the expression's use, as explained by Northrop J. in
F.C. of T. v. Launceston Legacy 87 ATC 4635 at p. 4641; (1986-1987) 15 F.C.R. 527 at p. 535 et seq. The Estate Duty Assessment Act 1914 (Cth) gave an exemption from duty upon property given for ``religious, scientific, charitable or public educational purposes'' (sec. 8(5)). The High Court held that the expression ``charitable purposes'' was used in its popular rather than its technical sense, but that was reversed by the Privy Council:
Chesterman & Ors v. F.C. of T. (1923) 32 C.L.R. 362; (1925) 37 C.L.R. 317. Then the statute was amended in 1928 by replacing the expression quoted above by one which excluded the word ``charitable'' and included the expression ``public benevolent institution''. The question soon arose as to what difference that made. Was it enough that the institution was one functioning for the benefit of the public, or did the new expression still have the same general bearing as that which it had replaced? The first case was decided three years after the amendment.
Perpetual Trustee Co. Ltd. v. F.C. of T. (1931) 45 C.L.R. 224, the question was whether the Royal Naval House, Sydney was a ``public benevolent institution in Australia'' within the meaning of sec. 8(5) of the Estate Duty Assessment Act 1914. Dixon J., while not denying it the description ``public'', said at pp. 232-233 that the House:
``... is neither promoted nor conducted for the relief of poverty, distress, suffering or misfortune...''
At pp. 233-234, his Honour later added:
``... 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., in discussing benevolent institutions, said at pp. 235-236:
``Such bodies vary greatly in scope and character. But they have one thing in common: they give relief freely to those who are in need of it and who are unable to care for themselves.
Those who receive aid or comfort in this way are the poor, the sick, the aged, and the young. Their disability or distress arouses pity, and the institutions are designed to give them protection.''
A similar view was taken in the Public Trustee case (above) 51 C.L.R. 75: see at p. 97 (Rich J.), p. 100 (Starke J.) and pp. 103, 104 (Dixon J.). We refer also to
Lemm v. F.C. of T. (1942) 66 C.L.R. 399 and to Maughan's case (above), two more decisions of the High Court in the same line.
The connection between the expression in contention and ``public charity'' becomes explicit in the decision of the Privy Council in
Ashfield Municipal Council v. Joyce (1978) A.C. 122, to which we were referred by
ATC 4056counsel for the respondent. There the Board had to apply the expression ``public hospital, public benevolent institution, or public charity'' occurring in a statute. The question was whether certain land was exempt from rates; in addition to a general exemption based on the words just quoted, the statute also contained certain specific exemptions. The Board remarked at p. 137:
``In the present case, if it may be true that some of the specific and restricted exemptions in favour of education or religious bodies would be covered by `public charity' in its legal sense, it is also hard to resist the conclusion that `public charity' in its popular sense would be almost, if not wholly, contained in the adjoining expression `public benevolent institution'. That expression, as later construed by the High Court, means an institution organised for the relief of poverty, sickness, destitution or helplessness: see Perpetual Trustee Co. Ltd. v. Federal Commissioner of Taxation (1931) 45 C.L.R. 224, which seems to leave the minimum of room for `public charity' in any of the suggested popular meanings.''
This is not to say that ``public charity'' is synonymous with ``public benevolent institution'', but the ordinary meanings of the two expressions are rather similar, in our view. It was put for the appellant that people whose buildings are being or have been destroyed by fire may be in need of urgent help and may be in personal danger, so being suitable objects of benevolence. No doubt the bulk of the recipients of the moneys disbursed by way of pension payments and other assistance to Commonwealth pensioners are in need, also, but that is not to say that the Commonwealth in making those payments is acting as a ``public benevolent institution''. It is simply, like the appellant, using government funds to exercise a function of government. We are of the view that, whatever the precise limits of ``public benevolent institution'', the appellant falls well beyond them.
As we hold the opinion that the conclusion at which the Tribunal arrived is correct, it is unnecessary to deal with the separate question raised as to whether the appeal raises a question of law.
The appeal will be dismissed with costs.
THE COURT ORDERS THAT:
1. The appeal be dismissed.
2. The appellant pay the respondent's costs of and incidental to this appeal.