Hill J

Federal Court

Judgment date: Judgment handed down 10 November 1995

Hill J

Before the Court are two applications each commenced in the High Court of Australia and remitted to this Court. In matter number NG 190 of 1994 the applicants are Pepsi Seven- Up Bottlers Australia Pty Ltd as first applicant and New Generation Beverages Pty Ltd as second applicant. In matter number NG 189 of 1994 the applicant is Pepsi Seven-Up Perth Pty Ltd. To each of the applications the Commissioner of Taxation is respondent. Each application raises the same issue, namely whether cans or bottles containing soft drink, if sold through what may compendiously be referred to as ``fast food outlets'', fall within Item 18 of the Third Schedule to the Sales Tax (Exemptions and Classifications) Act 1935 (Cth) (``the Exemptions and Classifications Act''). The two applications were by consent heard together and evidence in the one treated as evidence in the other. In each case there is sought a declaration that the cans or bottles in which soft drinks are sold by retail through vending machines or purchased for resale through take-away food outlets or other retail outlets between 1 June 1992 and 31 December 1992 were within Item 18(c), so as to be taxable at the rate of ten percent of the sale value of those cans or bottles.

A substantial body of evidence was filed and read on behalf of the applicant. Except so far as that evidence was concerned with the meaning of words used in Item 18(c), the evidence was non-controversial and indeed self-evident. It amounted to no more than this; that in establishments throughout Australia that would commonly be understood to sell take-away food, there are sold cans or bottles of soft drink to purchasers who take those cans or bottles away with them or consume the contents on the premises. It is further established by the evidence that it is commonplace for cans or bottles of soft drink manufactured or sold by the applicants to be advertised for sale and sold in retail sales by purveyors of fast food together with what would ordinarily be understood as take-away food, be that hamburgers, pizzas or

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the like, for a composite price to be taken away by the customer or consumed by the customer on the premises.

The evidence discloses that purveyors of fast food may be franchises of the large chains such as Pizza Hut, an establishment associated with the applicants, or small businesses such as suburban hamburger stores, sandwich shops, convenience stores open twenty-four hours a day, or stores operated in association with service stations. Such purveyors of fast food thus operate from a large diversity of premises. Many of them advertise the sale of take-away foods. Their advertising may also extend to advertising the soft drink of the applicants or its principal competitors.

While approximately fifty-five percent of the total sales of the applicants of canned and bottled products were to grocery stores rather than to purveyors of fast food, eleven to fourteen percent of the total sales of cans and bottles were, however, onsold by the grocery stores to customers such as milk bars and similar shops. This arose because the larger grocery stores were able to purchase soft drinks at prices less than the ordinary wholesale price available to smaller establishments. Thus, approximately twenty percent of the sales to grocery retailers were in fact for onsale to customers which might be described as outlets for take-away food.

It is common ground between the parties that the soft drinks (that is to say, the contents of the cans or bottles with which the present case is concerned) manufactured and sold by the applicants during the relevant period attracted the standard rate of sales tax applicable in the period, namely the rate of twenty percent. It is also common ground, for the purposes of the present proceedings, that each soft drink sale by wholesale attracting a liability for sales tax was to be treated for the purposes of the sales tax legislation as a sale for a single price of two separate goods, namely the bottle or can, on the one hand, and the contents of the bottle or can, on the other. Since the contents of the can were agreed to be liable to tax at the rate of twenty percent, the significance of the question at issue was whether the can or bottle, as the case may be, was to be treated as subject to tax at the same rate or was subject to a rate of ten percent by virtue of falling within Item 18(c), which Item is relevantly in the following terms:

``18. Containers (within the meaning of the First Schedule) used or for use in marketing:

  • ...
  • (c) take-away beverages or foodstuffs (whether for consumption on the premises from which they are sold or elsewhere).''

It is common ground also that the cans or bottles are ``containers'' within the meaning of the definition in the First Schedule and that they are used for marketing the soft drinks which they contain. The real issue between the parties is whether those soft drinks can be described as ``take-away beverages'' within Item 18(c) where sold from fast food outlets.

As I pointed out in my judgment in
EMI Australia Pty Ltd v FC of T 94 ATC 5008, the sales tax legislation as originally enacted in 1930 did not deal with containers at all. However, the legislation was early amended to do so.

The general scheme of the legislation became that when goods were sold in containers for a composite price in taxable circumstances, liability for sales tax would arise at the same point of time both on the goods and the containers at the same rate of sales tax unless the goods contained were within a relevant exemption item in the First Schedule to the Exemptions and Classifications Act. If the goods in question fell within an exemption item, then the container was likewise to be exempt. This general scheme was brought about in the following way so far as concerned transactions by manufacturers registered as such consisting of sales of goods by wholesale. It is unnecessary to trace parallel provisions applicable where goods were imported into Australia or where other taxable circumstances arose.

Section 12 of the Sales Tax Assessment Act (No. 1) 1930 (``the No. 1 Assessment Act''), required a registered person to quote a certificate in the circumstances prescribed. A manufacturer as defined was required to register: s 11(1). Regulation 12 of the Sales Tax Regulations then required a registered person to quote a certificate, inter alia, in respect of the purchase of containers: reg 12(3). Thus, for example, a manufacturer of goods to be sold in a container would acquire the container on quotation of a certificate with the result that no

ATC 4749

sales tax was payable until that manufacturer sold the finished product by wholesale.

When the finished product was sold by wholesale, there was a sale not merely of the contents but also of the container with the consequence that the taxing point was then reached simultaneously, both in respect of the container and the goods contained. If the goods to be contained were exempt then the container was, at the time of the taxing point, also exempt having regard to the provisions of Item 91 of the First Schedule in circumstances where the property in the container passed to the purchaser. If the goods fell within the Second Schedule of the Exemptions and Classifications Act and were thus taxable at a rate applicable to the goods itemised in that Schedule, the container for them was likewise taxable at the same rate by force of Item 63 of the Second Schedule of the Exemptions and Classifications Act. In respect of goods the subject of the ten percent rate, that is to say the goods to which the Third Schedule of the Exemptions and Classifications Act applied, the containers for the goods were likewise subject to the same rate of ten percent. The most recent Item in that Schedule bringing that result about was Item 17 which was subject to the exception contained in Item 18.

There was no special provision for containers in Schedules 4 and 5 of the Exemptions and Classifications Act, the goods classified in those Schedules being unlikely to be contained. The Sixth Schedule to the Exemptions and Classifications Act, however, similarly ensured that containers for goods covered by an Item in that Schedule were to be liable to the same rate of tax as applicable to the goods described in that Schedule.

Item 18 of the Third Schedule thus represents an exception to the general rule. A container operating as an exception to Item 17 of the same Schedule and falling within Item 18 attracts duty at ten percent even if its contents attract duty at a different rate (or would have been exempt under Item 91(1) of the First Schedule to the Exemptions and Classifications Act). The Item was inserted into the Exemptions and Classifications Act by Act No 89 of 1988 effective as of 23 August 1988. The amendment came about as its timing would suggest and the Second Reading Speech to the legislation confirms, following the decision of the New South Wales Court of Appeal in
FC of T v Kentucky Fried Chicken Pty Ltd & Anor 88 ATC 4363; (1988) 12 NSWLR 643, judgment in which was handed down on 20 May 1988. That case concerned, inter alia, paper serviettes, refresher towels and plastic spoons packed with the containers in which the products of Kentucky Fried Chicken were marketed. It was held that each of the items fell within the definition of ``containers'' in cl 1(1) of the First Schedule to the Exemptions and Classifications Act by virtue of being accessories to the food products sold, with the consequence that they, like the food products themselves, were exempt from sales tax. That consequence was brought about by the operation of Item 91(1) of the First Schedule to the Exemptions and Classifications Act which exempted containers if the goods they contained were exempt.

In consequence the Exemptions and Classifications Act was amended, first by excluding from the operation of Item 1(1) of the First Schedule items falling within Item 17 of the Third Schedule, and second by inserting Item 18 into the Third Schedule substantially in the form it presently is.

The evidence makes it clear, and indeed it is conceded, that the expression ``take-away'' used as an adjective to describe food or beverage in the Item is not an expression having any technical or trade meaning. At least in the context of ``take-away food'' it is an expression of general usage. It seems also to be common ground that it is not common usage to refer to a ``take-away beverage''. The expression ``take- away'' is also commonly used for an establishment which sells take-away food. It was agreed, however, that the expression ``take- away beverage'', while not an expression in common usage fell to be interpreted by analogy to the expression ``take-away food''.

Although the evidence made it clear that there existed at all relevant times what may be described as ``a take-away food industry'' in the sense of a large variety of retail establishments which sold food which could be described as ``take-away food'', it was properly conceded by senior counsel for the applicants that not every item of food or drink sold in an establishment properly part of this industry could be referred to as ``take-away food'' or a ``take-away beverage''. A few random examples will suffice to explain why this is so. A hamburger store may properly be described

ATC 4750

as ``a take-away'' and a hamburger properly described as ``take-away food'', but if a hamburger store were to sell a packet of potato crisps or an item of confectionery such as a ``Mars Bar'', it would not be a correct usage of English to refer to those potato crisps or that ``Mars Bar'' as being ``take-away food''. Thus the character of take-away food is not to be derived solely from the character of the establishment from which it is sold. The adjective ``take-away'' in the context of food expresses something about the food itself as well as the fact that it is available to be taken away by the customer for consumption later.

For the Commissioner it was submitted that the expression ``take-away'' in the context of food meant food prepared on the premises from which the food sold was to be taken away. By analogy, therefore, ``take-away beverages'' were confined to beverages prepared on the premises from which the beverage was sold to be taken away. It was acknowledged that for the purpose of the Item it was irrelevant whether the food or beverage was in fact consumed on the premises or away from it.

With respect to this submission, there is no particular reason in my view why take-away food need be prepared on the premises from which the food is sold. A store might sell meats or salads to take-away. It would not disqualify that meat or salad as take-away food that it was initially prepared at some other establishment. It would still be within the meaning of ``take- away food'' if sold for the purpose of being taken away.

Reference was made to dictionary meanings. Thus the Macquarie Dictionary, Second Revision, defines ``takeaway'' as follows:

``n. 1. a hot or cold meal purchased for consumption elsewhere. 2. a place where takeaway food is sold. -adj. 3. of or pertaining to such a meal or the place where it is sold.''

The Oxford English Dictionary, Second Edition 1989, contains the following relevant definition of the expression as an adjective:

``adj. 1. That may be taken away; spec. designating cooked food sold to be eaten away from the premises of sale. 2. Of, pertaining to, or characterised by the selling of cooked food to be taken away.''

The usages given in the Oxford Dictionary illustrate ``Chinese take-away''. No doubt the advent, at least in Australia, of establishments purveying burgers, hot-dogs, pizzas and ethnic foods of all varieties represents a more modern development of culinary lifestyle as well as reflecting the multi-cultural aspects of modern Australian living.

In my view, when in ordinary parlance one speaks of ``take-away food'' one refers to food which has been prepared for consumption away from the premises where it is sold, irrespective of the place where the food itself is prepared. Such take-away food is to be distinguished from items such as crisps or confectionary, to which reference has already been made, because it is (at least in comparative terms) freshly prepared for virtually immediate consumption. Packaged crisps or confectionary, on the other hand, while no doubt intended for consumption away from the place where there [ sic] are sold, do not fall within the ordinary usage of the word ``take-away'' because they are not freshly prepared for virtually immediate consumption, but rather intended to be kept, subject to any shelf-life restriction, until the purchaser desires to consume them. When I use the expression ``freshly prepared'' I intend to include cases where food may have been prepared some time before consumption but is heated up at the time of purchase.

If, as I think correct, the expression ``take- away beverage'' must be construed by analogy, it must thus refer to a beverage which is freshly prepared for almost immediate consumption. It would not refer to a pre-packaged can or bottle used for containing the beverage for consumption at such time as the purchaser should desire to consume the contents. So construed the exemption item would cover coffee or tea sold to customers to take away, as well as milk shakes or soft drinks dispensed through post-mix dispensing machines to be taken away in cups, but not to bottles or cans of soft drink, or for that matter cartoned milk.

Had I been of a different view, a further question of difficulty would have arisen. It is clear law that the Exemption Item must be applicable as at the time the relevant goods pass the taxing point:
DFC of T v Stewart & Anor 84 ATC 4146; (1984) 154 CLR 385, that being the time when the liability to sales tax attaches (see at ATC 4154; CLR 400 per Deane J). A question which must arise where goods are manufactured and sold by wholesale in circumstances where the goods are not of a

ATC 4751

character necessarily adapted to serve a purpose expressed in an Exemption Item is whether the goods meet the criteria set out in the Exemption Item at the time of the last wholesale sale. It may be possible, as suggested in the Kentucky Fried Chicken case, to determine the percentages of goods sold which are actually used in the way contemplated by the Exemption Item, even if it would (at the time it passed the taxing point) be otherwise impossible, in respect of any particular item of goods, to show that it would be used in that way. Thus if twenty percent of the sales to grocery establishments ultimately went to small fast food stores (or ``route stores'' as the evidence referred to them as) for sale, the cans or bottles in question could be described as being for sale by those route stores at the time of the wholesale sale. However, in light of the decision I have reached as to the inapplicability of Item 18(c), it is unnecessary to come to a conclusion about this matter.

Accordingly I am of the view that none of the cans or bottles containing soft drink manufactured or sold by the applicants fell within Item 18(c) of the Third Schedule to the Exemptions and Classifications Act, and I would make a declaration to that effect. It follows that the applications should be dismissed with costs.

There remains to be dealt with a further and important matter which arose during the course of the hearing.

Evidence was sought to be led from various witnesses engaged in what might be described as ``the fast food trade'' going to the use of the words ``take-away'' in the context of food in that industry. An example of the evidence objected to is to be found in the evidence of Mr Berg, a marketing consultant in the service station and convenience stores industry. Mr Berg deposed:

``In my experience in the service station and convenience store industry the phrase `take- away food' is commonly used to refer to any food or drink sold in a condition immediately ready for consumption and would include certain confectionery products and snack foods. The phrase `take- away beverage' is not one which in my experience is commonly used in the industry referred to above.

... Cans and bottles of soft drink sold from outlets such as milk bars, convenience stores, fast food outlets and traditional take- away food shops such as fish and chip shops and hamburger shops are in my experience commonly referred to as take-away foods within the industry.''

One witness only gave evidence of having heard the expression ``take-away beverage''. That was Mr Chapman who was at the time he swore the affidavit Market Manager for Pizza Hut. He deposed in his affidavit as to the meaning of both ``take-away beverage'' and ``take-away food''. Although no specific objection was taken to Mr Chapman's evidence, this was probably because by the time it was sought to be read I had disallowed the objection to the evidence of Mr Berg. I would take the objection made to Mr Berg's evidence as covering similar evidence sought to be adduced from other witnesses, including Mr Chapman.

I indicated, when permitting the evidence to be read, that I would give my detailed reasons for that conclusion when delivering judgment on the merits of the application. I now do so.

Sales tax, as in force at the relevant time, was primarily a tax imposed on the last wholesale sale of goods by persons who, at least generally, carried on the business of manufacturing or selling by wholesale those goods. The tax was imposed at varying rates, depending upon the particular goods falling within a particular classification item in the Exemptions and Classifications Act. Similarly a transaction in the goods would attract no sales tax if the goods were of a kind described in an item in the First Schedule to the Exemptions and Classifications Act.

Because the sales tax legislation is legislation directed to persons dealing in goods in the course of trade or commerce, many Exemption or Classification Items use language in a sense only capable of being understood by those engaged in the course of trade or commerce in particular goods. That is to say, Exemption or Classification Items are often framed by reference to trade usage. Without evidence from those in the trade, these Items would be unintelligible to a lay person. Other Items use language which to the lay person might or might not have a special or trade meaning and in such circumstances, it will be necessary to investigate usage in the trade to determine whether there was some special trade usage

ATC 4752

current at the time the relevant item was enacted.

There may, perhaps, even be said to be a presumption that words in legislation such as the sales tax legislation, directed to persons in particular industries, are used in a special trade sense. But, irrespective of whether it is correct to say that there is such a presumption, it may certainly be said that in the context of items in the Exemptions and Classifications Act, words will more readily be treated as being used in accordance with trade usage. See, for example, in the context of customs tariff classification:
Chandler v Collector of Customs (1907) 4 CLR 1719 at 1727 and proposition (ix) enunciated by Gummow J in
Agfa-Gevaert Ltd v Collector of Customs (1994) 124 ALR 645 at 648-649. This might be expected, as Dixon J (with whose judgment Rich J agreed) observed in
Herbert Adams Pty Ltd v FC of T (1932) 2 ATD 31 at 33; (1932) 47 CLR 222 at 227 in the context of sales tax because:

``A revenue law directed to commerce usually employs the descriptions and adopts the meanings in use among those who exercise the trade concerned.''

It is a well established principle of the common law that the courts will refuse to admit evidence for the purpose of interpreting a word used in a statute (or for that matter a document) in accordance with its ordinary English meaning. Thus, in a passage often quoted, Jordan CJ in
Australian Gaslight Co v The Valuer-General (1940) 40 SR (NSW) 126 at 137 said:

``The question what is the meaning of an ordinary English word or phrase as used in the Statute is one of fact not of law;... The question is to be resolved by the relevant tribunal itself, by considering the word in its context with the assistance of dictionaries and other books, and not by expert evidence.... although evidence is receivable as to the meaning of technical terms... and the meaning of a technical legal term is a question of law;....''

Examples of cases where courts have refused to admit such evidence are to be found in
Bendixen v Coleman (1943) 68 CLR 401;
Scott v Moses (1957) 75 NSW WN 101;
Brisbane City Council v AG of Queensland (1978) 19 ALR 681; and
FC of T v Hamersley Iron Pty Ltd 80 ATC 4509; (1980) 33 ALR 251.

However, it is equally well established that evidence may be led as to the meaning of a word used in a statute where that word is used in a trade or technical sense and that usage differs from the ordinary English meaning of the word:
Marquis Camden v Inland Revenue Commrs [1914] 1 KB 641 at 650 and Herbert Adams at ATD 33; CLR 227.

General Accident Fire and Life Assurance Corporation Ltd & Anor v Commr of Pay-Roll Tax (NSW) 82 ATC 4407 at 4409; [1982] 2 NSWLR 52 at 55, Lord Keith, delivering the advice of the Privy Council observed:

``It is not possible to construe any statute entirely in the air. Like any written document, it must be viewed against a background of surrounding circumstances, and this commonly emerges upon proof of the factual situation to which the statute is sought to be applied.''

An apparent exception to these principles would, at first sight, seem to be the admission of evidence as to what constituted ``mining'' to assist in the interpretation of the phrase ``mining operations'' in s 122(1) of the Income Tax Assessment Act 1936 (Cth) where the expression ``mining operations'' fell to be construed in accordance with its ordinary English meaning: see
North Australian Cement Ltd v FC of T 69 ATC 4077 at 4080-4083; (1969) 119 CLR 353 at 359-363 per Menzies J; and
FC of T v ICI Australia Ltd 71 ATC 4253 at 4258 and 4261-4262; (1971-1972) 127 CLR 529 at 538 and 544-545 per Walsh J. In the passage last cited Walsh J said:

``There has been some debate as to the proper use to be made of the evidence of experts and of conclusions based upon it as to their usage of the words whose meaning I have to determine. I have no doubt that such evidence and conclusions may be taken into account. I think that they may be of much importance, especially in a situation where there has not been in fact any occasion for a widespread adoption or development by the general public of a terminology to describe the particular processes under review. At the same time I think that use may be properly made of such knowledge as is available to the Court concerning more general usage. In F.C. of T. v. Broken Hill South Limited (1941) 65 C.L.R. 150, at p. 160, Williams J. referred to `the vernacular of mining men'. In North Australian Cement Limited v. F.C.

ATC 4753

of T.
(1969) 69 ATC 4077; (1969) 119 C.L.R. 353 at p. 362, Menzies J. referred to `an informed general usage'. But those statements do not suggest to me that the Court is restricted to a consideration of the usage adopted by `mining men'. Indeed, it seems plain from his judgment that Menzies J. did not think it was so restricted. In Waratah Gypsum Proprietary Limited v. F.C. of T. (1965) 112 CLR 152, at p. 160, McTiernan J. referred to literature which showed how the mining profession described the winning of gypsum and then he referred also to `common parlance'. With respect, I am of the opinion that his Honour was right in taking both into account.''

This apparent exception can be put on one of two bases. Either, it can be said, as Walsh J seems to suggest in the passage quoted, that the particular operation sought to be classified as ``mining'' was not commonly known or spoken about in common parlance, so that the Court could inform itself of usage in the particular industry. Alternatively, it can be said, that his Honour was entitled to inform himself about the industry of mining to understand the context of the legislation under consideration concerned as it was with ``mining''.

The view that evidence of usage or the meaning of words in a particular trade may be admitted to explain the context in which the legislation speaks, although not as such to control the meaning of ordinary English words, probably explains the acceptance of evidence of usage in the building trade to determine whether particular goods fell within the classification ``builders' hardware'' by Kitto J in
DFC of T v Precision Plastics Pty Ltd (unreported, 22 March 1956), and the subsequent admission of such evidence by Lockhart J in
Feltex Commercial Interiors Pty Ltd v FC of T 90 ATC 4925.

In the case of
Magna Stic Magnetic Signs Pty Ltd & Anor v FC of T 91 ATC 4216, Davies J, presiding in the full court on appeal, lamented the lack of expert evidence in that case as to the meaning of the expression ``builders' hardware'' or going to the question whether the goods there in question fell within the relevant item. His Honour said (at 4217-4218):

``Very little evidence was given to the trial Judge to assist him in determining whether the goods fell within the classification. I would therefore pause to observe that, in a classification case, it is better to have too much rather than too little information. Evidence as to the relevant industry and as to the use therein of language provides a judge with a background against which and with relevant information on which he may make a decision. Lockhart J. in Feltex at p. 4936 and the trial Judge held that the term `Builders' hardware' carries the meaning which it has in ordinary language. The contrary has not been contended in the appeal. But that is not to say that evidence as to what goods are understood in the building and hardware trades to be builders' hardware would not be relevant and helpful. The term `Builders' hardware' is not one of general application but refers to goods dealt with in the trades. Evidence by persons experienced in the building or hardware trades that certain goods were or were not understood to be builders' hardware and were or were not sold as such by merchants of builders' hardware would be evidence tending to demonstrate the character of those goods.... A judge would be hesitant to hold that goods were not builders' hardware if they were so regarded in the building and hardware trades. And a judge would be reluctant to hold that goods were builders' hardware if they were not understood to be so in those trades. No evidence of that type was given in this present case.''

The remaining members of the Court merely noted that the absence of expert evidence meant that there had been no attempt to prove a common commercial or trade usage in relation to the goods: see per Beaumont and O'Loughlin J at 4222.

The general principle and apparent exceptions can be expressed in the following propositions which, to some extent, overlap. In construing a statute, evidence may be given of the meaning and usage of a word in a trade:

In the present case I am of the view that the words ``take-away food'' and ``take-away beverage'' are ordinary English words so that the evidence could ultimately not be admissible under the first of the propositions set out above. The admission of the material could, however, in the present circumstances be justified under both propositions (4) and (5) above. Ultimately I have not found the evidence to be of any assistance and have made no use of it.

It is clear from the evidence that the words ``take-away food'' and ``take-away beverage'' have no particular trade meaning differing from any ordinary meaning. Indeed, the critical expression ``take-away beverage'' does not appear to be used in ordinary speech at all. A customer might ask for a particular soft drink ``to take away'', but as the cross-examination of the witnesses demonstrated, no customer would be likely to ask for a ``take-away Pepsi''.

While it is now too late to call into question the basis for the common law rule that evidence can not be given as to the meaning of an ordinary English word used in a modern statute, the logic underlying the rule is not compelling. It is unquestionable that the meaning of an ordinary English word is a question of fact and not law. Evidence is ordinarily to be admitted to determine questions of fact. Yet evidence is to be excluded where the fact to be established is the ordinary meaning of words. One may well ask why? The question is not satisfactorily answered by reference to the principle that the construction of a statute, being a matter of law, is a matter for the judge and not a jury, cf
Brutus v Cozens [1973] AC 854 at 861. The distinction between questions of law and questions of fact is itself far from transparent.

There seem to have been two possible explanations. The first is that the judge, whose task it is to interpret the statute, is presumed to know the English language. Given the wealth of the English language and the ever changing usage of words, that presumption may be questioned. Indeed the difficulty facing a judge is acknowledged in the rule that the Court is entitled to inform itself as to the meaning of words by consulting a dictionary, or by reference to works displaying the usage of the word. The judge is entitled to take judicial notice of such sources. But what is a dictionary if it is not the explanation of a word, usually on etymological principles, prepared by an expert in language or usage? If the dictionary may be used, why not may the compiler of that dictionary not give evidence?

The second explanation is that if evidence be given as to the meaning of an ordinary English word as used in a statute, that would be to give evidence on the very matter which it is the task of the judge to decide. The rationale of this rule presumably is that the function of the tribunal is not to be usurped by a witness (cf Phipson on Evidence, 14th Ed at 830, Cross on Evidence, 4th Australian Ed, at para 29105). The learned authors of Cross suggest that there has in recent times been a greater willingness to allow opinion evidence going to the issue to be determined than was previously the case.

Evidence as to the meaning of a word can be characterised as opinion evidence, as that expression has commonly been understood in the law of evidence, for it rests upon the drawing of an inference from the usage of words as to the meaning of them. Evidence as to usage of language is not, however, opinion evidence as such, but rather evidence of the fact of usage, either by the witness personally or of usage heard by the witness. Where the question of admissibility of evidence of usage of language has arisen in the cases, however, no attempt has been made to draw a distinction between opinion evidence, strictly so called, and evidence of usage. Both have been subsumed in the general rule that evidence is

ATC 4755

not to be received as to the ordinary English meaning of a word used in a statute.

The Australian Law Reform Commission, when considering reform of the law of evidence leading to the introduction of the Evidence Act 1995, took the view that an exclusionary rule for opinion evidence should be maintained, notwithstanding the difficulty of drawing a satisfactory distinction in each case between evidence of a fact and evidence of an opinion; (see Interim Report ALRC No 26 at para 738). That recommendation ultimately translated into s 76 of the Evidence Act 1995 which is in the following terms:

``Evidence of an opinion is not admissible to prove the existence of a fact about the existence of which the opinion was expressed.''

There may be room for argument whether the rule so expressed would necessarily operate to exclude evidence as to the meaning of ordinary words. That need not detain us here. It clearly could have no application to evidence of usage. The general rule is subject to the exceptions contained in ss 77-79, the last of which permits opinion evidence being given by persons with specialised knowledge, if that evidence is wholly or substantially based on that knowledge. That exception restates the general law position concerning the admissibility of expert testimony and assures that that testimony is limited to matters covered by the expert's specialised knowledge.

Section 80 of the 1995 legislation then provides:

``Evidence of an opinion is not inadmissible only because it is about:

  • (a) a fact in issue or an ultimate issue; or
  • (b) a matter of common knowledge.''

Section 80 was the subject of a recommendation of the Australian Law Reform Committee in its Interim Report. At para 743 the Commission noted that the exclusion of expert testimony on matters of common knowledge had proved unsatisfactory. The Commission wrote:

``Excluding evidence because the `ordinary man' has some knowledge about the area is entirely fallacious and ought not to be part of evidence law. Clearly, if the matter about which the expert is seeking to testify is patent and known to all, the court's time would be wasted by its presentation. A relevance discretion is quite capable of excluding such material. An expert, however, may still be of assistance to the court even in an area about which most people know something. An expert purports to have `special' skill and knowledge about something over and above that of the ordinary man.''

Writing of the ultimate issue rule the Commission said (para 743, page 413):

``The popular justification for the rule, that it prevented the expert or lay witness from usurping the function of the jury, is misconceived. There is no usurpation... It is proposed... that the ultimate issue rule be abolished.

This... should not significantly increase the volume of testimony...

The issue remains, however, whether any other restrictions should be imposed....''

Ultimately the Commission decided not to recommend other restrictions, taking the view that exclusionary discretions were sufficient to guard against the dangers of permitting expert evidence being adduced in such circumstances. If the evidence is relevant, then it should be admissible, even if it goes to the issue which the Tribunal has to decide. It may well be that experience will lead to s 80 being given a restrictive interpretation, but that is not a matter which need be considered here; cf
Westpac Banking Corporation v Jury (New South Wales Supreme Court, unreported Rolfe J, 17 October 1995).

No doubt the 1995 Act operates to widen the circumstances in which expert testimony may be proffered. With both the common knowledge rule and the ultimate issue rule abolished, there would seem to be but two relevant obstacles to the admission of evidence going to the meaning of words as used in a statute. These would be (assuming the evidence is properly to be characterised as within the opinion rule enunciated by s 76), whether the testimony is relevant to the issue to be determined, that is to say the meaning of the particular word in the statute, and whether the witness does have specialised knowledge based on training, study or experience to support the opinion evidence he or she is to give.

Generally the only special experience which a witness could have to give evidence as to the ordinary English meaning of a word would be

ATC 4756

linguistic study. Experience in a trade or industry in which the word is used would not suffice as appropriate expertise. The witness would still be no more qualified than any other person to give the evidence. Thus whether or not it would now be permissible for an expert linguist to give evidence as to the meaning of an ordinary English word, a question I have no need to decide here, the relaxation of the rules relating to expert evidence as contained in the 1995 Act do not have the consequence of making evidence of non linguists admissible.

However, the 1995 Evidence Act does not represent a code of the law of evidence. Particularly, it would not preclude the admissibility of evidence of usage where that evidence was relevant to an issue in the case. But nor would it permit evidence of usage to be given if that evidence were precluded by the common law of evidence. Thus I do not see the conclusion to which I have come as in any way affected by the 1995 Act.


(1) The containers sold by the applicants to purchasers for resale through:

during the relevant period are not within Item 18 of Third Schedule of the Sales Tax (Exemptions and Classifications) Act 1935 (Cth) and are not taxable at the rate of ten percent of the sale value.


(1) The application be dismissed.

(2) The applicant pay the respondent's costs.


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