Case H24

Judges: JL Burke Ch
RE O'Neill M

CF Fairleigh QC

Court:
No. 1 Board of Review

Judgment date: 22 June 1976,

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C.F. Fairleigh Q.C. (Member): In his return of income for the year ended 30 June 1972 the taxpayer claimed as a deduction a donation of $100 to a Sydney suburban ``Amateur Swimming and Life Saving Club (Affiliated with The Royal Life Saving Society of Australia)''. In an annexure to the return the taxpayer said that ``The question of allowable deduction(s) for taxation purposes of donations made to Life Saving Clubs affiliated with the Royal Life Saving Association of Australia has been confirmed previously by the Association with the Taxation Department.'' The Commissioner adjusted the income as returned by disallowing that deduction. The taxpayer objected thereto and the Commissioner decided to disallow the objection. That decision was referred to a Board for review. The primary question arises under sec. 78(1)(a)(ii) of the Income Tax Assessment Act 1936 (as amended), viz., gifts to ``a public benevolent institution''.

2. The Club has a long and distinguished history and the evidence before the Board is that from its inception in the 19th century ``Life Saving'' has been among its activities. At times members have received certificates for bravery from the Royal Humane Society, the National Shipwreck Relief Society of New South Wales and the Royal Life Saving Society. A remarkable number of rescues of persons in danger of drowning has been effected by Club members and inevitably there has been at least one loss of life despite the best efforts of the rescuer. A handbook issued in the 1933-1934 season (the Jubilee year) states ``In recent years such interest was taken in Life Saving work that a very big percentage of the present Club members are fully qualified and the Club has secured many pennants in the Kelso King Shield competitions conducted annually. Several members have qualified for the Award of Merit, a very exacting test, and have further repeated the test annually, gaining the Bar to the Medallion for each success.'' That handbook gives the title of the Club as an Amateur Swimming Club without the addition of the words ``and Life Saving'' in the title but it was even then (for many years it would seem) affiliated with the Royal Life Saving Society. The Rules (adopted on 10 November 1924 and amended from time to time) state the objects as being: -

• (a) The instruction and encouragement of swimming in all its branches.
• (b) The study and practice of the method of Life Saving as taught by the Royal Life Saving Society.
• (c) Instruction and practice of the game of Water-polo.
• (d) The instruction and encouragement of Diving.

3. Those Rules became the Constitution of the Club as adopted at a general meeting of members on 10 November 1924 and amended in later years. The objects are the same in all substantial respects in the Constitution as in the Rules; one distinction is that the Constitution expressly states that the Club shall be affiliated with The Royal Life Saving Society N.S.W. Branch (as well as with the N.S.W. A.S.A., the N.S.W. A.W.P.A. and the District Swimming Association).

4. The Club report for the season October 1970-September 1971 contains an entry ``Our Life Saving activities were not as strong as we would like although many of our members gained awards through their schools. It is hoped that in the future more members will take an interest in this very important part of our Club activities.'' That report shows that the Club had appointed two of its members as Royal Life Saving Society delegates.

5. The Club report for the season October 1971-September 1972 states in respect of life saving ``Here again classes were not run through lack of an instructor. But a number of members gained awards through their schools.'' That report shows that the Club had appointed one of its members as a Life Saving Instructor.

6. Some fifteen or twenty years ago the Club membership fee was five shillings a year; in 1972 it was $2 and in 1973 $3 a year. I regard these fees as nominal particularly as the member is likely to purchase a ``season'' ticket from the Council and so have the benefit of concessional entry to the swimming pool. The taxpayer said that membership is open to all with no restrictions whatever and everyone who has applied for membership has been accepted immediately without regard for clause 5(a) of the Constitution: -

``Members are those who have applied for and been granted membership, and whose fees have been paid for the current year;

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together with those declared to be Honorary Life Members under clause 6.''

It is noted that clause 38 of the Constitution is: -

``By-laws governing the duties of any or all the Club officials and/or the ramifications of any of the clauses of this Constitution, shall be made by the Management Committee; provided that notice of such intention is given at least forty-eight hours prior to such meeting.''

Clause 39 also gives the Management Committee a discretion to deal with ``anything occurring not within the scope of this Constitution''. There is only one known instance of a member being expelled from the Club and the circumstances were highly exceptional. Whenever payment of Club dues has occasioned any hardship to a member or potential member it is said that some other member has made the payment. (Swimming coaches also charge fees but this is irrelevant to the present issue.) Club membership in recent years has been about 280 (140 above 13 years and 140 at or below that age with the majority of the latter group being 7 to 9 years of age). Relying on memory the taxpayer said that in recent years about a dozen or up to 16 of a class of about 40 have gained life saving qualifications at the Club pool each year and perhaps 10 others of the class at their various school pools (some details are given in para.16 hereof); because of a dislike of ``paper work'' particulars of life saving and learn-to-swim classes are not always recorded and at times there is not ``an official secretary'' for that part of the Club's activities.

7. The taxpayer said that it is expensive to run the Club and that in the main the money comes from subscriptions and donations and similar sources and that ``We have trophies and certain things like clothing and that for the kiddies and little cups... and so on.''

8. The taxpayer put in evidence pages of newspapers, one dated 24 October 1973 and the other 14 November 1973, each to the same effect that the Club is getting into fine swing for the season and is looking for more children for their learn-to-swim campaign and that life saving classes for children are very popular and the Club would like a few Bronze medallists (i.e., even though not members of the Club) to assist on Saturday mornings.

9. The taxpayer endeavoured to give evidence of what he had been told by a member of the judiciary (since deceased) who had been a branch president of the Royal Life Saving Society and who had discussed with an officer or officers of the Taxation Department matters relevant to the present issue some years prior to the issue arising in the present form. This was objected to on the grounds of hearsay and the taxpayer rejoined that it was not hearsay. As the taxpayer has raised the point I consider that I am bound to show what effect I give to such part of the contentious matter as is before the Board (cf.
Smith v. The Queen (1878) 3 App. Cas. 614 at p. 625 ).

10. The taxpayer may be correct in denying that he was putting in hearsay evidence because what is known as to the purpose of the interview carries the implication that the late judge was authorized by the officer or officers of the Department to inform persons associated with ``affiliated clubs'' of the current understanding of the Department as to the entitlement to a deduction; otherwise a general inquiry would be pointless. It so happens that the taxpayer is not at a disadvantage by failing upon objection to give the evidence which he set out to give because he had included it in his letter to the Department requesting the reference to a Board of Review. That letter was in the file of documents sent by the Commissioner to the Board of Review. That letter was in the file of documents sent by the Commissioner to the Board and the file became an exhibit without any objection or exception being taken to any document or to any part of any document therein. Frequently Boards of Review do take as an exhibit ``as of course'' (without any formal tendering of it by either party) the file which is held by the Board's executive secretary. Counsel oft-times take objections (cf.
Cipryk v. F.C. of T. 70 ATC 4102 at p. 4103 ) notwithstanding the recognition of the Board's powers to admit documentary and other evidence in circumstances where a Court would act otherwise (
Mobil Oil Australia Pty. Ltd. v. F.C. of T. 13 A.T.D. 135 ). Counsel usually do bear in mind that a party may not be permitted (without the leave of the appellate court) to resile from a concession made before the primary tribunal (
Bryanston Finance Ltd. v. de Vries (No. 2) (1976) 1 All E.R. 25 at p. 35 ). It seems to me that the Board must take cognisance of every part of every exhibit, to which objection has not been taken and upheld, (cf.
Tout v. Commr. of I.R. (N.Z.) (1970) 1 A.T.R. 705 at p. 709 ). What probative weight is to be given to a document contained in the ``file of documents'' is a matter of some complexity and there are observations on this subject in

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Case H14,
76 ATC 92 at pp. 109-110. To these I add a reference to what was said concerning evidence in
F.C. of T. v. Becker (1951-1952) 87 C.L.R. 456 at p. 458 by Fullagar J. and in
Dent v. Moore (1919) 26 C.L.R. 316 at pp. 322 and 325 by Barton, Isaacs and Rich JJ., as a general proposition and independent of State revenue legislation.

11. The passage in the letter as above referred to is this: -

``I had been assured by the late Judge...that the matter of allowable tax deduction had been checked with the Taxation Department and he had been assured that Clubs such as my Club were recognised as organisations to which tax free donations may be made and in this respect of a similar status to the head body The Royal Life Saving Society Australia.''

That statement falls into the category of an assertion which calls for an answer from the other party, here the Commissioner.

12. " The reasoning which pervades the judgment of the Privy Council in
Davenport v. The Queen 47 L.J. P.C. 8 leads... to the conclusion that in the opinion of the Court of Appeal the act of any subordinate officer of the Government if done in the ordinary discharge of his duty is binding upon the Government in whose service he is, unless perhaps it be distinctly repudiated at the time " (per Lutwyche J.
MacDonald v. Tully (1879) 1 Q.L.J. supp. 21 ). In some circumstances what is known to officers of the Government will be binding on the Government (
Fisher v. Tully (1878) 3 App. Cas. 627 at p. 640 ). In
Cudgen Rutile (No. 2) Ltd. v. (Sir Gordon) Chalk (1975) 2 W.L.R. 1 at p. 8 Lord Wilberforce on behalf of the Privy Council said: -

``Further if the contract is one made with a public body with a duty to act and decide according to a recognised principle the Court may be willing to find an obligation which requires that body to reach a decision in accordance with that principle as a matter left to its discretion in the contract itself and so find an enforceable contract where one might not be found as between private parties.''

13. However what is fatal to reliance on the disputed evidence in the present case is that it is not an instance of the Commissioner being ``satisfied'' pursuant to a statutory provision and so not being able to resile therefrom (cf.
Kolotex Hosiery (Australasia) v. F.C. of T. 75 ATC 4028 at p. 4032 ). The advice or ruling was not given on the specific matter which now arises. I have some difficulty in regarding the advice given to the late judge as amounting only to what Sir Garfield Barwick has called ``anticipatory comments''
(Wade v. Burns (1966-1967) 115 C.L.R. 537 at p. 555 ; or, as the Privy Council said at p. 8 in Cudgen Rutile (supra): -

``... when a statute prescribes a mode of exercise of the statutory power that mode must be followed and observed; and if it contemplates the making of decisions, or the use of discretions, at particular stages of the statutory process those decisions must be made, and the discretions used, at the stages laid down. From this in turn it must follow that the freedom of the Minister or officer of the Crown responsible for implementing the statute to make his decisions, or use his discretions, cannot validly be fettered by anticipatory action; and if the Minister or officer purports to do this by contractually fettering himself in advance, his action in doing so exceeds his statutory powers.''

Compendiously, it may be said that no conduct on the part of the Commissioner or of his officers could operate as an estoppel against the operation of the Act (
F.C. of T. v. Wade (1951) 84 C.L.R. 105 at p. 117 ). This brings one back to the rest of the evidence.

14. Apparently one major interest of Club members is water polo and another is competition swimming though each of the objects is undertaken conscientiously. Swimming in all its branches and diving are clearly essential for anyone who sets out to be proficient in life saving. So, also, though less obviously, is water polo: the evidence is that it strengthens the leg muscles so that a swimmer is able to raise the trunk of his body out of the water by treading water and thus has his hands free to assist someone who is in danger of drowning. Assiduous practice at water polo will enable a swimmer to have the strength to support a drowing person in deep water. Furthermore the Manual of Water Safety and Life Saving as issued by the Royal Life Saving Society Australia sets out that for anyone to obtain the Water Safety Certificate (which must be held by all candidates before they are examined for any other awards of the Society) proficiency must be shown in tossing underarm a large inflated ball or similar object into a circle three feet in diameter which is twenty feet

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distant from the thrower. The Manual also makes many references to the need for skill in diving.

15. During daytime sessions at the pool which is used by the Club, the manager and his assistant, both council employees, have the responsibility of ensuring that no one in the pool is left in danger. These employees of the council are required to be qualified life savers. Thus there is no need for the Club to provide such a person in the daytime. However the pool is large and additional supervision is desirable and youthful Club members who are competent swimmers (without life savers' qualifications) act as monitors on a roster system. For two or three nights a week in the summer season water polo is played by the Club teams at the pool. On those nights the pool is also open to the public and as council employees are not in attendance the Club as required by the council provides qualified life savers to patrol the pool (as well as staff to collect entrance fees from the public).

16. In response to a request from the Board to supply to it and to the Commissioner (to adopt the taxpayer's understanding of the request) a more detailed return of the Life Saving Instruction and Learn-to-Swim activities of the Club over a ten year period the taxpayer sent a letter to the Board in which he said that he had checked these activities with members of the Club who have carried out the actual work. In substance that letter is as follows: -

• By the early nineteen-sixties (and this has prevailed to the present) almost all the senior members of the Club down to 12 years, and even 10 years of age, possessed life saving certificates and awards. Many held 3 or 4 certificates and some even more.
• Accordingly, the present day students for instruction are very young and to instruct them to the required standard and carry out the examinations for the appropriate awards requires a lot of time, patience and effort. A Club Member who was the Life Saving Instructor and Baths Patrol Captain in 1962 and did the job without outside assistance for this one year estimated it required of him 20 to 25 hours work each week and he would not carry on the next year. That member instructed 17 pupils, who gained 97 awards, being 68 of the `early' certificates, 16 Intermediate Stars, 11 Bronze Medallions and 2 Instructor Certificates. While the Baths Patrol Captain is usually another person, that member had asked for this extra job. However it constituted only a small part of his total duties.
• Any Life Saving Club to exist and retain a reasonable membership, must offer to its members competitive swimming (which in many cases includes match water polo). These activities, of course, require training work, also coaches and various other officials. This depletes the `pool of members' available for other club duties, including the most important tasks of the `Learn to Swim' Committee and `Life Saving' instruction.

Shortly after that member's tour of duty a Sports Master of a nearby School, who was also a senior official of the Royal Life Saving Society, became friendly with some of the Club's officials. He was training pupils at his school in life saving and was desirous of having, as large a number, as possible, put through the examinations at his school. He was able to arrange for examiners to attend at his school and offered to put the Club members, who were pupils at his school, through at the same time as his own group. D, the Club Captain and Delegate to the Royal Life Saving Society, whose home is near that school, introduced that sports master to the Club and the proposal was favoured by those concerned in the Life Saving work. They took the view that as long as the young children were instructed in life saving, they had no objection to them being examined in that school group and so swelling the school return. The Club Captain led the instruction work at the Club for about six years and was assisted by S, B and some afternoons, after school hours, by that sports master. When that sports master was succeeded by another as sports master at that school after about 5 years the same arrangement continued.

The result of the above is that all new members desiring life saving instruction - not only the young children but some older swimmers - have received instruction in the Club. The matter has been well advertised - by word of mouth, notices in the schools and reports in local newspapers.

Similar means have been taken to advertise the `Learn to Swim Committee' classes, which are ranked as in equal importance at least, as the Life Saving Classes. The work of these two

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activities is very demanding on the instructors. The Life Saving Instructors have a lot of theory and technique to revise and then have to teach by explanation and demonstration. A great deal of repetition is required for the very young.

The `Learn to Swim' instructors have a lesser amount of theory to revise but are required to be proficient in life saving, resuscitation etc. While the Life Saving instructors do a lot of the work out of the water, the `Learn to Swim' instructors spend the major part of their time waist deep in water, which becomes very cold work, after a short time.

However, calls for assistance in both tasks have resulted in former members coming to help, as well as new people. Many of them join the Club and also bring along children as new members.

With regard to Life Saving instruction, it might be noted that many of the candidates aim to qualify for two, three or four certificates in the one year. The syllabus for each - even the early ones - is extensive to some degree - but more so as the award becomes higher.

The Certificates and Awards are: - (1) Water Safety Certificate (2) Resuscitation Certificate (3) Safe Swimmer Certificate (4) Survival Certificate (5) Elementary Certificate (6) Proficiency Certificate (7) Intermediate Star (8) Intermediate Star - Bar (9) Bronze Medallion (10) Bronze Medallion - Bar (11) Bronze Cross (12) Bronze Cross - Bar (13) Instructor's Certificate (14) Award of Merit (15) Award of Merit - Bar (16) Distinction Award (17) Reel and Line Medallion (18) Reel and Line Instructors (19) Diploma Award (20) Senior Resuscitation Certificate.

Most Club activity through the years has centred on the Certificates and Awards numbered (1) to (9), (11) and (13). Then follow numbers (10), (12) and (14). The others occur much less rarely.

Number of Pupils Trained in Last Ten Year Period

(with name and address of Chief Instructor given)



      1965-66   Life Saving     18

                Learn to Swim   52

      1966-67   Life Saving     15

                Learn to Swim   85

      1967-68   Life Saving     16

                Learn to Swim   57

      1968-69   Life Saving     12

                Learn to Swim   52

      1969-70   Life Saving     32

                Learn to Swim   55

      1970-71   Life Saving     20

                Learn to Swim   58

      1971-72   Life Saving     12

                Learn to Swim   89

      1972-73   Life Saving     14

                Learn to Swim  110

      1973-74   Life Saving     16

                Learn to Swim   53

      1974-75   Life Saving     12

                Learn to Swim   75
      

The Chief Instructor, `Life Saving', usually had two assistants while the Chief Instructor `Learn to Swim' usually had three or four assistants but had up to eight for a big year like 1972-73.

17. The taxpayer has stressed the charitable activities of the Club. It is more correct to say that many members of the Club have a high sense of social obligation and exercise charity to those in need. As the funds of the Club are not devoted to that purpose, and the objects do not embrace such a purpose, those acts of charity are not those of the Club. He further says that the Club performs work in the interests of young members of the community akin to that performed by Police Boys' Clubs and all work by Club members is on a voluntary basis. However the evidence is such that the claim to a deduction can only be tested by consideration of what is a ``public benevolent institution'' and by reference to the Royal Life Saving Society and then by discussion of the effect of affiliation with that Society.

18. In
Public Trustee (N.S.W.) v. F.C. of T. (1934) 51 C.L.R. 75 the Commissioner had conceded that the four named Church of England Homes for children may be ``public benevolent institutions'' within the meaning of those words in sec. 8(5) of the Estate Duty Assessment Act (per Dixon J., as he then was, at p. 103). Notwithstanding this concession Starke J. said (at p. 100) that these were private organizations conducted by or in connexion with the Church of England in Australia and are not founded, organized or maintained by or under or in connexion with any public authority or managed by its representatives. There is nothing in any of the other judgments to restrict the meaning of ``public benevolent institutions'' in the way set out in the obiter dicta of Starke J. Therefore I would proceed on the basis that there is no requirement that the

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institution be founded, organized or maintained by or under or in connexion with any public authority or managed by its representatives for it to be a ``public benevolent institution'' within the meaning of the words in that statute. I would not approach this problem by considering separately the words ``public and benevolent'' as it seems to me that the institution must be one of ``public-benevolence'' as distinct from one which is public and is also benevolent; this is but another way of saying that rather than follow the obiter dicta of Starke J. as above I understand the course adopted by the majority in that case to be that ``public benevolent institution'' is to be regarded as a compound expression.

19. The phrase ``public benevolent institution'' as occurring in sec. 8(5) of the Estate Duty Assessment Act 1914-1928 was considered by the High Court in
Perpetual Trustee Company Ltd. v. F.C. of T. (1931) 45 C.L.R. 224 . In the context as in that Act Starke J. held that the meaning is ``an institution organized for the relief of poverty, sickness, destitution or helplessness''. Thereupon he said that the Royal Naval House has none of these characteristics: it is organized for the accommodation and recreation of the naval forces of (the Crown) and its hospitality is also extended to the naval forces of other countries. Dixon J. (as he then was) had regard to the history of the legislation and to other considerations and concluded that he was ``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. gave instances of societies which readily answer the description of ``benevolent institutions'' and said a characteristic of most of these is the absence of any charge for services or the fixing of a purely nominal charge; that whilst such bodies vary greatly in character and scope 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; that 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; thereupon Evatt J. held that whilst the Royal Naval House had a sufficiently ``public'' character it is a social institution rather than a benevolent institution. McTiernan J. also held that the Royal Naval House has the characteristics which entitle it to be described as public. He further considered that the meaning of the expression ``public benevolent institution'' should not be construed by piecing together the respective meanings of the three words of which it is composed. He said that he did not think that the Legislature intended strictly to confine the exemption of 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 or distress or misfortune occasioned by poverty. Thereupon McTiernan J., dissenting, held in favour of the Royal Naval House being a public benevolent institution.

20. It is to be noted that the judgment of McTiernan J. is the only one of the five which imposes the qualification ``occasioned by poverty'' and, with respect, the qualification if intended to refer to both ``distress'' and ``misfortune'' does not seem justifiable as the closing words in sec. 8(5) of the Estate Duty Assessment Act are ``or for the relief of persons in necessitous circumstances in Australia.'' Several of the other expressions in the judgments, e.g., helplessness, misfortune, distress are appropriate for those in danger of drowning.

21. Craies on Statute Law (chapter title ``Interpretation of Words'') cites Lord Coleridge C.J. in
Jay v. Johnstone (1893) 1 Q.B. 25 at p. 28 that there is a well-known principle of construction that where the Legislature uses in an Act a legal term which has received judicial interpretation it must be assumed that the term is used in the sense in which it has been judicially interpreted. As that reference is to a legal term (``judgment'') it may be as well to set out the citation which Craies makes from
Barras v. Aberdeen Steam Trawling & Fishing Co. Ltd. (1933) A.C. 402 where Lord Buckmaster at p. 411 said in respect of the word ``wreck'': -

``It has long been a well-established principle to be applied in the consideration of Acts of Parliament that where a word of doubtful meaning has received a clear judicial interpretation the subsequent statute which incorporates the same word or the same phrase in a similar context must be construed so that the word or phrase is

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interpreted according to the meaning that has previously been ascribed to it.''

22. Subsequent to the decision in the Church of England Homes case (supra) and in the Royal Naval House case (supra) the Income Tax Assessment Act 1936 was enacted and the exemption was granted in sec. 78(1) thereof to gifts to a ``public benevolent institution''. I give to that expression in that Act the same meaning as given by the majority in those cases to the same expression in the Estate Duty Assessment Act. I do not regard the ``Boys' Brigade'' case (
Maughan v. F.C. of T. (1942) 66 C.L.R. 388 ) as being pertinent to the present inquiry.

23. So far as it is presently necessary to do so I would hold that the Royal Life Saving Society is an ``institution'' within the meaning given to that word in
Stratton & Ors. v. Simpson & Ors. (1970) 125 C.L.R. 138 per Windeyer J. at p. 145 and Gibbs J. at p. 158. I would also hold that the Club is similarly an institution, see particularly
The Young Men's Christian Association of Melbourne v. F.C. of T. (1926) 37 C.L.R. 351 . The Club seems to me to be as open to members of the public as the Y.M.C.A. I see no analogy with a group which consists mainly of the employees (and their relatives) of a large industrial corporation as in
Trustees of Wernher's Charitable Trust v. I.R. Commrs. (1937) 21 T.C. 137 which was relied on by the Commissioner.

24. The representative of the Commissioner has expressed his own understanding that the Department regards the Royal Life Saving Society as being a public benevolent institution within the meaning of sec. 78(1)(a)(ii) of the Act but he has not, on behalf of the Commissioner, made any concession in that regard. To have a public character the institution must provide a benefit for the public or a sufficiently large class of the public (Stratton's case 125 C.L.R. at p. 159 per Gibbs J.).

25. Gifts for providing a lifeboat or to the Royal Lifeboat Institution are charitable (
Johnson v. Swann (1818) 3 Madd 457 ;
Thomas v. Howell (1874) L.R. 18 Eq. 198 ;
Re Richardson , Shuldham v. Royal National Lifeboat Institution (1887) 56 L.J. Ch. 784 ;
Re David , Buckley v. Royal National Lifeboat Institution (1889) 41 Ch.D. 168 , appd. 43 Ch.D. 27 ), i.e., they are for ``purposes beneficial to the community'' (
Commissioners for Special Income Tax v. Pemsel (1891) A.C. 531 at p. 583 ). It seems to me that the Royal Life Saving Society is an institution which is within the concept of charity according to the principles upon which a Court of Chancery would act; though see
Swinburne v. F.C. of T. (1920) 27 C.L.R. 377 .

26. I would hold on the evidence before the Board that a gift to the Royal Life Saving Society is a gift to an institution which is of public-benevolence and so it is a gift to a ``public benevolent institution'' within the provisions of sec. 78(1)(a)(ii) of the Income Tax Assessment Act 1936 as amended (cf. the reasons of the member Mr. G. Thompson in Case F30,
74 ATC 162 at p. 168 et seq.). I do so without recourse to the principle stated by Lord Ellenborough in Warrington v. Furbor (1807) 8 East 242 that the cases to which a duty attaches ought to be fairly marked out and a liberal construction ought to be given to words of exception confining the operation of the duty. (On the same principle see
Sherwood Services Pty. Ltd. v. F.C. of T. (1974) 5 A.T.R. 95 at p. 97; 490 at p. 491 per Barwick C.J.;
Canwan Coals Pty. Ltd. v. F.C. of T. 74 ATC 4231 at p. 4234 ;
Amalgamated Zinc (de Bavay's) Ltd. v. F.C. of T. (1934) 54 C.L.R. 295 at pp. 303-304 per Latham C.J. in respect of the benevolent interpretation of sec. 51(1) of the Income Tax Assessment Act 1936. Doubtless the liberal construction often increases the burden of taxation for other taxpayers.)

27. The Manual of Water Safety and Life Saving (5th Ed.) issued by the Royal Life Saving Society Australia (forwarded to the Board by the taxpayer with his letter, para. 16 hereof) states the Society's Aim and Objectives thus: -

``(a) Promoting technical education in water safety, life-saving and resuscitation of the apparently drowned.

(b) Stimulating public opinion in favour of the general adoption of swimming and life-saving as a branch of instruction in schools, colleges, clubs and other organizations.

(c) Encouraging all aspects of swimming and aquatics which would be of assistance to a person endeavouring to save life.

(d) Arranging and promoting public lectures, demonstrations and competitions and forming classes of instruction in order to inculcate a thorough knowledge of the principles which underlie the art of natation.

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(e) Initiating research within the field of water safety and life-saving.

Interpretation of the aim and objectives of this Society indicates that its principal activity is to arrange for the instruction and subsequent examination of candidates in approved life-saving techniques.''

28. The last paragraph of the ``Aim and Objectives'' can be understood to mean that the functions of the Society are (a) to encourage all persons to learn to swim and then to become competent swimmers; (b) to encourage competent swimmers to undergo a course of training by those who have achieved a sufficient level of competence as trained life savers (perhaps the award of the Bronze Medallion) in rescue and resuscitation work; (c) to conduct examinations for those who undertake that course of training; (d) to grant certificates, medallions and higher awards on the basis of proficiency to those who succeed upon examination; (e) to encourage its ``graduates'' to give their time on a voluntary basis to patrol swimming areas where persons may be in danger of drowning; (f) to make awards of distinction to those who have carried out rescue operations with bravery; (g) to have as members of the Society (as well as executives and patrons) persons who are so well trained in this work that they are able and willing at all times to undertake any river, lake or sea rescue operation at a moment's notice.

29. The taxpayer is correct in saying that the Club is not simply a swimming club or a water polo club (whether or not one adds ``diving'' to that); as to the derivation of pleasure by the members, cf. the cases collected in the reasons of Mr. G. Thompson op. cit. para. 25. The Club carries out some of the functions of the Society, e.g., as in para. 28(a), (b), (c) and (e). Having regard to the situation of the Society's headquarters in the city it can be said that the Society could not carry out its functions unless its affiliates (this Club and similar organizations) have members with the proficiency obtained from competitive swimming, water polo and diving who will conduct learn-to-swim classes and life saving classes. Whilst it seems that those classes are not as well organized as is theoretically possible it must be remembered that all the work is voluntary and there is not the slightest suggestion that at any time anyone who has had the desire to join a learn-to-swim class or a life saving class has found that none is available from this Club. It seems that the Club has done all that is practicable (apart from onerous or at least distasteful ``paper-work'') to carry out both these activities. In respect of such temporal breaks as have occurred I would apply the dictum of Barwick C.J. in
A.G.C. (Advances) Ltd. v. F.C. of T. 75 ATC 4057 at p. 4066 that it is a ``very narrow view that a business is not relevantly continuing if it has had any substantial break in its continuity.''

30. The Aim and Objectives of the Royal Life Saving Society as summarized by the Society are that ``its principal activity is to arrange for the instruction and subsequent examination of candidates in approved life-saving techniques.'' Whilst this is not the predominant activity of this affiliated Club it is one of its major activities. Furthermore the objects of this Club both in its Constitution and in practice are much the same as several of those (with verbal distinctions) of the Royal Life Saving Society's Aim and Objectives and there is no conflict between one and the other. Doubtless the privilege of affiliation is not lightly granted by the Society.

31. I would hold that the Commissioner's decision on the objection was in error and the assessment should be amended so as to allow the taxpayer a deduction for the donation of $100.

Claim disallowed