Herbert Adams Pty Ltd v Federal Commissioner of Taxation

(1932) 47 CLR 222
(1932) 2 ATD 31

---

(Judgment by: McTiernan J)

Herbert Adams Pty Ltd
v Federal Commissioner of Taxation

Court:

Judges: Rich J
Starke J

McTiernan JDixon J
Evatt J

Subject References:
Taxation and revenue
Sales tax
Sponge cake
Pastry

Legislative References:
Sales Tax Assessment Act (No 1) 1930 (Cth) No 25 - s 20

Hearing date: 23, 24 May (Melbourne)
Judgment date: 4 August 1932

Sydney

---

Judgment by:
McTiernan J

The learned Judge who tried the action found that the word "pastry," as a commercial term, was used in two senses. He said:"I find on the evidence that the word is quite commonly used in the trade in a much wider sense, usually along with a qualifying word such as `mixed' or `fancy,' to include all or nearly all classes of flour goods other than bread, commonly made and sold by pastry-cooks, confectioners, bakers or caterers. In the absence of any generic word applicable to so many different varieties of food, those engaged in the trade frequently use the word `pastry' in a very wide sense, certainly extending to include the sponge which is the subject of this case. This is no doubt due, to a large extent, to what is usually implied in the word `pastry-cook,' but I also find that those engaged in the trade continue to use the word `pastry' in its more limited sense where it is necessary or convenient to differentiate between different classes of goods made and sold by pastry-cooks and the like." Referring to the context in which the word "pastry" occurs in the Schedule to the Act, I think that the view which is probably correct is that the Legislature did not use the term in the limited sense. In this view the term is wide enough to include "sponge." The context is as follows: "Pastry but not including cakes or biscuits." The question now arises whether "cakes" include sponge. His Honour, having come to the conclusion that "sponge" was not "pastry," did not make any finding on the question whether "cake" is a commercial term which embraces "sponge" or not. Upon the evidence-all of which the learned Judge accepted as sincere testimony-there is a conflict as to whether the substance denoted by the word "sponge" is known as "cake" in the trade. Turning to its ordinary meaning, the word "cakes" describes numerous classes of goods, including of course light cakes. The term "sponge-cake" in its ordinary meaning denotes a light cake. This view is confirmed by a reference to the Oxford Dictionary, where "sponge" is defined to include "sponge-biscuit, a flour biscuit of a similar composition to sponge-cake." Sponge-cake is there defined as "A very light sweet cake made with flour, milk, eggs, and sugar." I think that the goods described by the appellant as "sponge" are covered by the term "cakes."

The appeal should be dismissed.