COLGATE PALMOLIVE PTY LIMITED v FC of T

Judges:
Sackville J

Court:
Federal Court

Judgment date: 7 July 1998

Sackville J

The applicant (``Colgate'') for many years has carried on the business of manufacturing and selling household and personal care products by wholesale to various retailers, including Woolworths Ltd (``Woolworths''). Colgate is liable under the Sales Tax Assessment Act 1992 (Cth) (``STA Act'') to pay sales tax in respect of goods sold by it to retailers. The effect of the legislation, in the case of a wholesale sale by a manufacturer of goods in Australia, is that the seller is liable to pay sales tax on the dealing assessed by reference to ``the price (excluding sales tax) for which the goods were sold'': STA Act, Sch 1, Table 1.

During the period 1 August 1996 to 31 January 1997 (the ``relevant period''), Colgate paid Woolworths a ``co-operative allowance'' in relation to goods purchased by Woolworths from Colgate in New South Wales. The sole question in this case is whether the co-operative allowance paid by Colgate to Woolworths during that period, reduced ``the price... for which the goods were sold'' for the purposes of the STA Act. Colgate seeks declaratory orders to this effect. Except for costs, Colgate seeks no other relief. The jurisdiction of the Court arises under the Judiciary Act 1903 (Cth), s 39B(1A)(c); see also Federal Court of Australia Act 1976 (Cth), s 21.

Co-operative allowances are common in the supermarket industry. It was said in the course of argument that the issue is therefore of general importance in the industry. However, each case must depend on its own facts and not all co-operative allowances necessarily have the same features. Accordingly, it is necessary to consider carefully the circumstances in which Colgate paid the co-operative allowance to Woolworths.

The legislation

The general scheme of the sales tax legislation, both in its present and earlier form, is that sales tax is ordinarily levied on the last wholesale sale of goods, with the goods being taxed at their full wholesale value:
Brayson Motors Pty Ltd v FC of T 85 ATC 4125 at 4127; (1985) 156 CLR 651 at 657, per curiam;
CCA Beverages (Sydney) Pty Ltd v FC of T 97 ATC 4213 at 4223; (1997) 143 ALR 212 at 222-223 (FCA/FC), per Lehane J.

Table 1 in Schedule 1 to the STA Act sets out all assessable dealings that can be subject to sales tax: STA Act s 16(1). The general rules for calculating the taxable value of an assessable dealing are also set out in Table 1: STA Act, s

ATC 4750

34(1). Part A of Table 1 applies to dealings in goods that have been manufactured in Australia: see definition of ``Australian goods'' in STA Act, s 5.

Table 1, so far as relevant to this case, is as follows:

+----------------------------------------------------------------------------+
|                         Part A: Australian goods                           |
|----------------------------------------------------------------------------|
| [1] No. | [2] Assessable         | [3] Person | [4] Time   | [5] Normal    |
|         | dealing                | liable     | of dealing | taxable value |
|----------------------------------------------------------------------------|
| AD1a    | wholesale sale by a    | seller     | time of    | the price     |
|         | person who manufactured|            | sale       | (excluding    |
|         | the goods in the course|            |            | sales tax) for|
|         | of any business        |            |            | which the     |
|         |                        |            |            | goods were    |
|         |                        |            |            | sold          |
+----------------------------------------------------------------------------+

The facts

At all material times, Colgate manufactured and sold a range of products which it grouped into categories. These were ``oral care'' products (such as toothpaste and dental floss); ``personal care'' products (such as toilet soaps and hair shampoos); ``hard surface care'' products (such as dishwashing liquids and surface cleansers); and ``fabric care'' products (such as laundry detergents and fabric softeners). Its customers included Woolworths, which had (and still has) a large number of supermarkets.

Vendor trading terms

The dealings between Colgate and Woolworths during the relevant period were governed by a document headed ``Vendor Trading Terms'' (``Vendor Terms''). Both Colgate, identified as ``the Vendor'', and Woolworths were party to the Vendor Terms. The document was dated 23 October 1996, but was expressed to have an ``effective date'' of 9 November 1995, and to operate until further notice. The Vendor Terms applied to dealings between Colgate and Woolworths throughout Australia, although the dispute in the present case relates only to the co-operative allowance paid by Colgate to Woolworths in respect of goods sold in New South Wales.

The first page of the Vendor Terms, which was in tabular form, set out a number of allowances and rebates, each of which has a percentage figure attached to it. The percentage figures are commercially confidential, and, for that reason, I do not reproduce them in this judgment.

The allowances and rebates, referred to in the Vendor Terms, were explained by Mr Eastick, a senior officer employed by Colgate. The allowances and rebates applicable to dealings between Colgate and Woolworths were these:

• Warehouse Allowance. Colgate made this allowance by reason of Woolworths agreeing to accept delivery of Colgate's products into a central warehouse (as distinct from requiring Colgate to deliver products to individual Woolworths outlets). The Warehouse Allowance was calculated as a percentage of the list price shown on Colgate's sales invoices. The allowance was ``off-invoice'': that is, it was directly deducted from the list price shown on Colgate's invoices. It was referred to in the invoices as a ``Trade Discount'', in conjunction with the ``Quantity Buy Allowance''.
• Quantity Buy Allowance. Colgate provided this allowance in return for Woolworths ordering and taking delivery of Colgate's products in full truckloads. Like the Warehouse Allowance, the Quantity Buy Allowance was off-invoice.
• Ullage Allowance. Colgate provided the Ullage Allowance because Woolworths agreed to bear the cost of damaged stock. It was calculated at a percentage of the net invoice value, including sales tax. The Ullage Allowance was ``off-remittance'': that is, Woolworths calculated the amount of the allowance and deducted it from its remittance for the goods supplied by Colgate.
• Co-operative Allowance. Mr Eastick described the co-operative allowance as one made by Colgate in relation to anticipated sales of goods by it to Woolworths. As the evidence made clear, the allowance was paid by Colgate in accordance with agreed arrangements that provided for Woolworths

ATC 4751
to undertake certain promotional activities relating to goods purchased by it from Colgate. I shall describe later in more detail the manner in which the co-operative allowance was calculated and paid, and the promotional arrangements that were associated with the allowance.
• State Volume Rebate. Colgate provided this rebate by reason of the volume of goods purchased by Woolworths from Colgate in New South Wales. The rebate was off- remittance.
• National Volume Rebate. This rebate was similar to the State Volume Rebate, except that it related to the volume of goods purchased by Woolworths nationally.
• Settlement Discount. The Settlement Discount was allowed where Woolworths paid any invoice rendered by Colgate within fourteen days. The discount was calculated as a percentage of the invoice total and was off-remittance.

The Commissioner accepted that all these rebates and allowances, with the exception of the co-operative allowance, should be deducted from the invoice price of goods sold by Colgate to Woolworths, for the purpose of determining ``the price... for which the goods were sold''.

The Commissioner took this view regardless of whether the rebate or allowance was off- invoice or off-remittance. In the case of the co-operative allowance, however, the Commissioner's position was that the allowance did not affect the price for which the goods were sold.

The Vendor Terms included printed ``terms and conditions'' on its reverse side. Section I of the terms and conditions defined ``Goods'' to mean:

``[A]ny item sold by the Vendor to Woolworths, including its contents package and labelling.''

Section II of the terms and conditions included the following provisions:

``7(a) The Vendor agrees to comply with, observe, perform, enter into (as the case may be) and be bound to the terms and conditions contained in the following documents or forms used by Woolworths with respect to the purchase of Goods from the Vendor:

(i) Purchase Order/Purchase Order Change;

(ii) Goods Receiving Note;

(iii) Buying Advice Packaging Details;

(iv) Adjustment Note;

(b) The Vendor warrants it has inspected, understood and approved the documents specified in Clause 7(a).

...

10. Title to the Goods passes to Woolworths on delivery. Until title passes, the property and risk in the Goods shall remain with the Vendor.''

The Terms contained the following ``VENDOR TRADING CATEGORY COMMENTS'':

``- ULLAGE/CO-OP/STATE VOLUME AND NATIONAL VOLUME REBATES ARE CALCULATED ON NET INVOICE VALUE INCLUDING TAX (NOT REDUCING BALANCE).

- CO-OP - MINIMUM AS NEGOTIATED AND PAID AT STATE LEVEL (MARKDOWNS ARE ADDITIONAL).''

It was common ground that the Vendor Terms were intended to specify a minimum percentage for the co-operative allowance. As will be seen, that minimum percentage was exceeded during the relevant period. Because of the confidentiality considerations to which I have averted, I shall refer to the minimum percentage co-operative allowance, specified on the first page of the Vendor Terms, as ``x''.

The proposed promotional programs

The Vendor Terms did not identify either the final amount of the co-operative allowance during any particular period, nor the details of any particular promotions to be undertaken by Woolworths. These matters, as the ``Category Comments'' in the Vendor Terms suggest, had to be negotiated between Colgate and Woolworths. It is therefore necessary to consider the further dealings between the parties relating to the co-operative allowance during the relevant period.

On 4 April 1996, Mr Van der Reyden of Woolworths' New South Wales office, wrote to Colgate as follows:

``In order to plan my promotional activity for the second half of 1996, would you please forward to me by 08th May 1996, your proposed promotional programs,

ATC 4752
covering the period 29th July 1996 to 26th January 1997 inclusive.

...

Before planning your proposals, please note especially the following guidelines:-

METHOD OF SUBMISSION

Promotional programs will be accepted only on the completed Woolworths/FFL forms ...

PROMOTIONAL RATES

A twenty percent (20%) surcharge will apply on all Co-Op charges for four (4) weeks commencing 2nd December 1996...

...

ADVERTISING

Press advertising will be solely at the discretion of Woolworths dependent on product and promotional price .

MARKDOWNS

All suppliers should note that the minimum markdown on any promotion with the exception of Ad Packs and Majors is [x]% and must be strictly adhered to...''

(Emphasis in original.)

Colgate responded by preparing proposed promotional programs for the second half of 1996. These proposals, which were dated 3 May 1996, covered, respectively, Woolworths New South Wales household products and Woolworths New South Wales personal care products. Colgate stated that each of the proposed programs was ``targeted at increasing Colgate's Sales with Woolworths NSW by 10% on Second Half 1996, for the period July 1996 to February 1997''.

It should be noted the form of the documentation relating to promotional programs was settled by Mr Hunt, now a Senior Merchandise Manager for Woolworths, in 1987. At that time, according to Mr Hunt, Woolworths had no formal system in place to properly manage the promotional activities it undertook. In consequence, as he explained, promotions sometimes took place for competitive products at the same time within the same stores. There were also clashes between Woolworths and other retailers promoting products of the same supplier. As Mr Hunt said:

``This in turn resulted in both Woolworths and the relevant suppliers not maximising their sales volume.''

It is necessary only to consider the program for household products prepared by Colgate, since there was no material difference between that program and the personal care products program suggested by Colgate. The household products proposal specified a series of suggested promotions to be undertaken by Woolworths during the relevant period. Each particular promotion suggested by Colgate was to be implemented for a specified number of weeks (ranging from one to four) and related to nominated sub-categories of products sold by Colgate to Woolworths.

The particular promotions proposed by Colgate took one of a number of forms. These included the following:

• ``Special Promotion'' (S/P), whereby Woolworths reduced the price of products subject to the promotion and placed a ticket on the shelves on which the products were displayed indicating that the prices had been reduced. Tickets were not placed on the goods themselves. Woolworths ascertained the prices to be charged to its customers at the point of sale by scanning the relevant item electronically; any adjustments to the regular price of any particular item were recorded electronically. The price reduction envisaged by the Special Promotion was determined by Woolworths, and was not the subject of negotiations with Colgate, although (as Mr Eastick explained) Colgate expected that a reasonable price reduction would be made.
• ``Floor Stack'' (F/S), under which goods were displayed on the floor of Woolworths stores, in a position considered suitable for display purposes. Colgate staff generally set up the display in the relevant area. Woolworths usually reduced the price of the goods covered by the Floor Stack promotion, although this was a matter for it and not Colgate to determine.
• ``Gondola End'' (G/E), under which products were stacked and displayed in prime positions within the store, usually located at the end of corridors. Depending upon the arrangements in force for a particular promotion, the products might be displayed in one or more of the prime positions in a given store.

ATC 4753
• ``Huge Grocery Sale'' (HGS), whereby Woolworths undertook a special promotion for a particular store. The promotion normally involved special advertising or displays within the store and often (but not always) external advertising. Again, Woolworths would usually reduce prices, but the nature and extent of any price reductions was a matter for it.

The specific promotions suggested by Colgate's proposed household products program, with some exceptions, each had a dollar amount allocated to it. For example, an entry in the proposed program suggested the following arrangements for the week commencing 2 September 1996:

+--------------------------------------------------------------------------+
| Date W/C    | Product      | Promotional Type   | ... | Co-Op      | ... |
|--------------------------------------------------------------------------|
| 2 September | Dynamo/Cold  | 2 week Gondola End | ... | [$ amount] | ... |
|             | Power 1.5 lt |                    |     |            |     |
|             | [and others] |                    |     |            |     |
+--------------------------------------------------------------------------+

The proposal recorded by this entry was that Woolworths should provide a Gondola End promotion covering the nominated products, for a two week period from 2 September 1996. Colgate was proposing that it should pay an allowance of a specified dollar amount to Woolworths in respect of that particular promotion.

As I have said, not all specific promotions suggested by Colgate had a dollar amount allocated to them. Some, such as a ``4 Week S/P'' (that is, a Special Promotion), which was expressed to operate for four weeks from 16 September 1996, had a notation in the proposed promotions program as ``No Charge''. This meant that, although Colgate proposed that Woolworths should conduct a Special Promotion during the nominated period, Colgate would not be required to make any payment to Woolworths in respect of that promotion.

The approved promotional programs

Colgate's proposed promotional programs were the subject of discussion and negotiations with Woolworths. On 15 July 1996, Ms Cowden of Woolworths approved Colgate's promotional program for the relevant period. In its approved form, the program contained some variations from that submitted by Colgate. However, the approved program was very similar to that submitted by Colgate and included a series of specific promotions of the kind referred to earlier.

The charges recorded in the approved programs for particular promotions (Gondola Ends, Floor Stacks and the like) reflected charges determined by Woolworths. Colgate clearly followed those charges in preparing its proposed programs, the terms of which were ultimately adopted, with some variations, in the approved programs. Mr Hunt gave evidence that he set the charges himself. He did so at levels designed to control the sort of activity Woolworths wanted in its business and to ensure that ``we have some way of actually receiving the amounts'' paid by suppliers such as Colgate.

A summary page attached to the approved program recorded a total dollar figure for the co-operative allowance. This figure was the sum of the individual amounts allocated to each of the particular promotions embodied within the program. That total (some hundreds of thousands of dollars for the household products promotional program) was also expressed as a percentage of the predicted sales of Colgate products by Woolworths during the relevant period. In the case of the household products program, the percentage was (x + 0.1), reflecting the fact that the approved program provided for payments by Colgate slightly in excess of the minimum percentage allowance (x per cent) specified in the Vendor Terms. The estimated sales figure (some millions of dollars), by reference to which the percentage allowance was calculated, was also recorded in the summary sheet; this estimate was somewhat higher than the estimate that had been made by Colgate in its original proposal. In the case of the personal care products program the percentage was exactly the minimum specified in the Vendor Terms (that is, x per cent).

Of course, the percentage co-operative allowance for the relevant period, ascertained by reference to actual sales, could be calculated precisely only after the end of the relevant period. There was evidence that the actual percentage co-operative allowance paid by

ATC 4754

Colgate for the relevant period was (x + 0.7), calculated as a percentage of the net invoice value (including sales tax) of actual sales made by Colgate during that period. While this percentage figure appears to relate to all Colgate's promotional programs with both Woolworths and an associated trading entity known as Flemings, it is clear enough that the percentage co-operative allowance ultimately paid by Colgate to Woolworths for the relevant period was greater than the minimum percentage specified in the Vendor Terms. The documentary evidence showed that this was also the position for each of the two six month periods immediately preceding the relevant period.

The reasons for the variation between the minimum percentage co-operative allowance specified in the Vendor Terms and the actual percentage allowance paid by Colgate to Woolworths was not explicitly addressed by any of the witnesses. However, the principal reason seems to be clear enough. The approved promotional program for household products for the relevant period included a number of handwritten annotations. Each of these annotations recorded an agreement by the parties that a promotion should be undertaken by Woolworths, over and above the arrangements included in the approved program. In general, the annotations recorded that Colgate would pay Woolworths specified amounts in respect of each additional promotion.

The result of the variations to the approved program, of course, was that the total paid by Colgate to Woolworths during the relevant period was greater than that contemplated in the approved program in its original form (there being no deletions from that program). Unless the percentage increase in actual sales for the relevant period (compared with the predicted sales figure contained in the approved promotional program) was greater than the percentage increase in the co-operative allowance actually paid by Colgate (compared with the dollar figure specified in the approved promotional program), the result would be that the percentage promotional allowance actually paid (calculated by reference to actual sales) would be greater than the percentage recorded in the approved promotional program (calculated by reference to predicted sales).

The documentary evidence, although incomplete, included material shedding light on the process by which the parties reached agreement on extra promotions within the relevant period. For example, on 17 October 1996, Ms Lawless of Colgate faxed Ms Cowden of Woolworths a confirmation as follows:

``I would like to confirm acceptance of 2 slots in Dec:

9/12 F/S to 92 stores [$ amount specified] Spree 1.5 kg
                                           Spree Ultra 750g
                                           Spray N Wipe range

23/12 GE 6B 54 stores [$ amount specified] Fab/Cold Power 1 kg
                                           Ultra Fab/C/Pwr/Dyn 750g
                                           Ult C/Pwr/Dyn liq 700 ml''

The confirmation related to two specific promotions. These were, first, a Floor Stock operating for the week of 9 December 1996 in 92 stores at a cost to Colgate of the specified amount and, secondly, a Gondola End for the week of 23 December 1996 in 54 stores at a cost to Colgate of the specified amount.

On 30 October 1996, Ms Cowden sent to Ms Lawless the following proposal:

``An opportunity has come up for activity on wk 9.12.96. Gondola End 1A is available if you are interested. You have slotted extra activity for 9/12 on FS2 with Spree 1.5 kg/750g Ultra & Spray & Wipe.

The Spree 1.5kg & 750 Ultra would be well suited being displayed on a Gondola End. Are you interested? At this stage I have not offered the end to anyone else.

Co-Op is [$ amount specified].

Your [sic] on your own that week with no other Soap Powders on ends or displays.''

ATC 4755

The approved promotional program for the relevant period incorporated, by way of handwritten annotations, both of the extra promotions referred to in Ms Lawless' confirmation of 17 October 1996. There is nothing to indicate that Ms Cowden's offer of a Gondola End during the week of December 1996 was accepted by Colgate. However, the offer illustrates the nature of the promotional opportunities that could arise from time to time and the fact that Woolworths saw its suppliers as potential purchasers of those opportunities.

It should be noted that, in theory at least, Colgate might have been required to make additional payments at the end of a given period in order to bring the co-operative allowance up to the minimum percentage specified in the Vendor Terms. If, for example, sales for a particular period were very much greater than predicted, the allowance paid might turn out to be less than the minimum percentage (which was to be calculated by reference to net invoice value, including sales tax). However, this theoretical possibility did not eventuate during any of the periods covered by the evidence.

Case and scan deals allowances

In practice, in addition to the rebates and allowances for which percentages were specified in the Vendor Terms, Colgate and Woolworths negotiated from time to time discounts known as ``case deals'' and ``scan deals''. During the relevant period, case deals, calculated as a fixed amount per case or other standard packing unit, were allowed in respect of goods sold by Colgate to Woolworths in conjunction with the promotional arrangements set out in the approved promotional program. Case deal allowances were only provided in respect of goods which were the subject of particular promotions and were ``off-invoice''. The amount of a particular case deal allowance was usually agreed between Woolworths and Colgate approximately six weeks before the commencement of each promotion. The case deal allowance usually applied during the three week period immediately preceding the date of commencement of the particular promotion and during the currency of the promotion.

Scan deal allowances were also provided by Colgate during the relevant period in respect of goods which were the subject of a particular promotion. The scan deal allowances were calculated as a fixed amount per unit scanned at the point of sale in each Woolworths store during the period in which the goods were actually promoted in Woolworths stores. Until December 1996, scan deal allowances were paid by Colgate to Woolworths by way of cheque, in much the same manner as co- operative allowances were paid. From December 1996, however, scan deal allowances were treated as ``off remittance''.

Payment and accounting treatment of co-operative allowance

The practice during the relevant period was that Colgate would forward to Woolworths a document setting out details of particular promotions to be implemented in the forthcoming weeks. The document included details of the case deal allowances. Woolworths, in turn, sent to Colgate its ``confirmation of promotional activity''. This document also recorded the details of the promotional activity and the co-operative allowance, as well as specifying the case deal allowances in respect of each product subject to the promotion.

In the ordinary course of business, Colgate invoiced Woolworths on or about the date of delivery in respect of goods delivered. When the goods were the subject of a particular promotion for which an amount had been agreed in the approved promotion program (or by a subsequent arrangement), Woolworths sent to Colgate an ``Adjustment Note''. This form, which was usually generated by Woolworths shortly after the date of delivery of the goods, contained a promotion number and identified both the particular form of promotion (for example, Floor Stack) and the products covered by the promotion. It also specified the sum which Colgate was to pay Woolworths in respect of the particular promotion, that being the amount previously agreed. Colgate ordinarily paid Woolworths by cheque the specified amount within fourteen days of receipt of the adjustment note. Scan deal allowances were also the subject of adjustment notes prepared by Woolworths and were paid by Colgate usually within fourteen days of receipt of the adjustment note.

Advertising

At one stage in the proceedings, Colgate suggested that the co-operative allowance was paid by it in return for a commitment by Woolworths to include products within any given promotion in its external advertising

ATC 4756

(such as State-wide and local newspaper advertisements). However, the evidence showed that no such commitment was given by Woolworths to Colgate (or, indeed, any other supplier). As Mr Van der Reyden said in the letter of April 1996, press advertising was to be solely at Woolworths' discretion.

According to Mr Hunt, whose evidence was uncontradicted, the selection of products for inclusion in newspaper advertisements was a process entirely internal to Woolworths. The process was a continuing one and involved consultations between Category Managers and the State Promotion Manager. Woolworths' external advertising was designed to promote its own business. Mr Hunt said that the price of a product, including the impact of any case deals negotiated with the supplier, was an important, but not determinative, factor in deciding whether a product would be included in an advertisement. The fact that goods were the subject of a co-operative allowance was not relevant to a decision to advertise (or not advertise) those products. Sometimes, when Woolworths considered it necessary that the price of a product to be advertised should be reduced further and a case deal was already in place, Woolworths might renegotiate a greater case deal allowance. But it is clear on the evidence that an agreement by a supplier to pay a co-operative allowance carried with it no commitment by Woolworths to undertake any external advertising of the relevant products.

Woolworths took the co-operative allowance received from Colgate (and from other suppliers) into account in setting its gross profit budget, for goods sold by the particular product division. Similarly, Woolworths treated the co- operative allowance as a purchase adjustment for the purposes of calculating gross profit. The grocery division, for example, recorded the co- operative allowance as a component of ``DEFRD DISC & DEALS'' (deferred discounts and deals), in assessing gross profit before charges. Other allowances and rebates were treated in the same manner.

For its part, Colgate deducted co-operative allowance paid by it, whether to Woolworths or any other customer, as a deduction from ``full potential sales'' to reach a figure for ``reported sales''. Other discounts and allowances were dealt with in the same way.

Monitoring of compliance with the program

Colgate's staff monitored Woolworths' compliance with the approved promotional program. The responsibilities of sales staff included checking whether promotional activities had been undertaken in accordance with the program. If not, the staff member would speak to a Woolworths representative and, in the ordinary course, complete a ``Promotional Non-Compliance'' form for submission to Colgate's account manager. Depending on the significance of Woolworths' failure to comply, the manager would then take the matter up with the Woolworths' buyer and, in Mr Eastick's words, would ``be looking for something to recover the lost sales''.

Mr Forbes' evidence

Since the Commissioner placed considerable reliance upon the evidence of Mr Forbes, it is convenient to deal with that evidence here. Mr Forbes has had considerable experience within the Australian food industry, particularly in relation to the wholesale and retail of foods. He has acted as a consultant to Woolworths. His affidavits were read in Colgate's case and Mr Forbes was not cross-examined.

Mr Forbes said that, in his experience, co- operative allowances have long been a feature of dealings between large supermarket retailers and their suppliers. He said that manufacturers are concerned to maximise the sale of their products. For this reason, large manufacturers of product lines typically stocked in supermarkets want their products included in promotions conducted by the major supermarket retailers in their stores. Mr Forbes made the following observation:

``I am also able to say that a large manufacturer of any of the product lines which traditionally have co-op allowances attached to them cannot expect, in my experience, to have products supplied by it promoted and sold at special prices in the stores of large supermarket retailers without making arrangements for the payment to those retailers of case deals and co-op allowances.''

Submissions

Colgate's contentions

Colgate submitted that the ``price'' for which Colgate sold the goods to Woolworths was to be determined by reference to the particular relationship between the parties, taking into

ATC 4757

account ``the ordinary parlance of commercial life'':
Toyota Motor Sales Australia Ltd v Collector of Customs (1991) 28 FCR 27 at 29 (FC). In substance, the co-operative allowance was paid by Colgate in respect of retail advertising by Woolworths. The essential object of the payment was to sell more goods at retail level. It was therefore a payment which, as a matter of commercial reality, effected a reduction in the price of the goods sold by Colgate to Woolworths.

Mr Robertson SC, who appeared with Mr Gageler for Colgate, relied on a number of considerations to support the proposition that the payment of the allowance was in diminution of the price and was not collateral to Woolworths' purchase of the goods. The considerations he identified were these:

• the co-operative allowance had been the subject of express provisions in the contract of sale (that is, the Vendor Terms);
• the allowance was calculated as a percentage of sales;
• Colgate and Woolworths were at arm's length and the arrangement between them was purely commercial;
• the co-operative allowance was expressed in the Vendor Terms as a minimum percentage of actual sales and was not conditional on the carrying out of any or any specific promotional activities;
• any external advertising carried out by Woolworths was solely at its discretion;
• the promotional activities in fact carried out by Woolworths pursuant to the promotional program related solely to the goods sold during the relevant period by Colgate to Woolworths;
• the promotional activities did not benefit the sale of Colgate's goods generally, but only sales by Woolworths;
• there was no relationship between the amount of the co-operative allowance and the cost to Woolworths of the promotions;
• both Colgate and Woolworths accounted for the allowance as part of the net price of the goods sold; and
• the object of the allowance was to generate increased sales volumes for both Colgate and Woolworths.

The Commissioner's contentions

The Commissioner contended that the arrangements pursuant to which Woolworths undertook promotional activities were, in essence, collateral to the contracts for the sale of goods by Colgate to Woolworths. The allowances for which Colgate had made itself contractually liable bore no relationship to the price of the goods. The promotional programs agreed between Colgate and Woolworths were arrangements for the provision of promotional services by Woolworths. The promotional activities were identified and were not dependent on the exercise of a favourable discretion by Woolworths.

Mr Bennett QC, who appeared with Mr Gibb for the Commissioner, submitted that the key to the case lay in the unchallenged evidence of Mr Forbes. That evidence showed that Colgate was prepared to pay the co-operative allowance in order to obtain the advantage of the promotional opportunities provided by Woolworths. Colgate was not concerned to confine the allowance to the minimum (x per cent) specified in the Vendor Terms. It agreed to purchase additional promotions, even though the effect was to increase the co-operative allowance as a percentage of actual sales to Woolworths.

In substance, Woolworths was selling and Colgate was buying services. Woolworths was probably contractually obliged to comply with the terms of the approved promotional programs. But even if there were no contractual commitment, the parties expected and acted upon the basis that the arrangements embodied in the programs would be implemented. This was shown by the compliance mechanisms employed by Colgate to ensure that it received the agreed benefits from Woolworths. It followed that the co-operative allowance was collateral to the sale of goods by Colgate to Woolworths and that the price of the goods for sales tax purposes should not be reduced to take account of the allowance.

Reasoning

The STA Act and the 1930 Act

The sales of goods by Colgate to Woolworths were assessable dealings within Item AD1a of Table 1 of Schedule 1 to the STA Act. Thus the ``normal taxable value'' of the dealing is ``the price (excluding sales tax) for which the goods were sold'': STA Act, s 34(1); Schedule 1, Table

ATC 4758

1. The expression ``price... for which the goods were sold'' is not defined in the legislation.

Reference was made in the course of argument to authorities construing the now repealed Sales Tax Assessment Act (No 1) 1930 (Cth) (the ``1930 Act''). Section 18(1)(a) of the 1930 Act provided that the sale value of goods, where the goods were sold by wholesale, was ``the amount for which the goods are sold''. Mr Robertson submitted that the substitution of ``price'' for ``amount'' in the statutory language was not intended to achieve any substantive change. Rather, it simply reflected an intention to simplify the legislation and recast it in ``plain English'': Explanatory Memorandum to the Sales Tax Assessment Bill 1992 [and Related Legislation], at 6. Mr Robertson pointed out that the Explanatory Memorandum to the ``streamlined'' legislation identified the changes to be made to the sales value provisions of the 1930 Act, yet did not suggest that the formula in the STA Act for calculating the normal taxable value of a wholesale sale of goods was intended to change the earlier law.

The Commissioner's written outline suggested, albeit somewhat cryptically, that the language adopted in the STA Act was intended to restrict the circumstances in which the contract price for a wholesale sale of goods could be reduced for the purpose of calculating the taxable value of the goods. The written outline did not develop the submission and Mr Bennett made no reference to it in his oral argument.

It is not necessary for the purposes of this case to determine whether the formula in the STA Act (Item AD1a of Table 1 of Schedule 1) bears precisely the same meaning as that contained in s 18(1)(a) of the 1930 Act. Having regard to the slight change in the statutory language and the considerations referred to by Mr Robertson, it is enough to say that, in my opinion, the earlier authorities continue to provide useful guidance as to the proper construction of the formula employed by the STA Act.

The authorities

In
Commonwealth Quarries (Footscray) Pty Ltd v FC of T (1938) 59 CLR 111, the question was whether the ``amount for which goods were sold'' included the cost of delivery, where the taxpayer made a single charge for the goods sold and delivered at a particular place. The High Court unanimously held that it did. Dixon and McTiernan JJ said (at 121) that the statutory language appeared ``necessarily to mean the contract price''. However, their Honours accepted that, under a contract pursuant to which a party undertakes for a single lump sum to do various things, including transfer property in the goods, the entire contract price cannot necessarily be regarded as the amount for which the goods are sold. Part of the consideration may have to be allocated to other acts or things to be done by the seller. They continued:

``... But delivery is so essential to a sale of goods that it cannot be distinguished... from the sale as a separate and independent act or service to which part of the consideration forming the selling price must be allocated.''

See also at 116, per Latham CJ; at 118, per Starke J; at 123, per Evatt J.

In
EMI (Australia) Ltd v FC of T 71 ATC 4112; (1971) 45 ALJR 349 (H Ct/Windeyer J), the taxpayer agreed to press and sell to World Record Club Pty Ltd (``WRC'') all the latter's requirements of records at fixed pressing prices. The invoice price did not include royalties payable to the copyright owners. Under an agreed arrangement, the taxpayer paid the royalties and was periodically reimbursed by WRC. Had the royalties not been paid, the taxpayer would have infringed copyright. As Windeyer J saw it (at ATC 4118; ALJR 353):

``... the payments made to the taxpayer by [ WRC]... ought to be taken into account as part of `the amount for which the goods are sold'. The word `amount' of itself connotes a sum total to which items amount up... [ A]s used in the Assessment Act, `the amount' for which a thing is sold means... the sum total of all moneys that the buyer promises, expressly or tacitly, to pay to, or for, the seller in order that he, the buyer, may get a good title to goods that he has agreed to buy.''

EMI was considered in
RCA Ltd v FC of T 77 ATC 4275; (1977) 137 CLR 583. There the purchaser of records paid a single amount to the taxpayer for the supply of records and separate amounts to the copyright owners in the belief (which the majority thought might well have been mistaken) that the separate payments would ensure that neither the purchaser nor the taxpayer infringed copyright. In these

ATC 4759

circumstances, EMI was said to be distinguishable. The purchaser did not make royalty payments to the copyright owners as agent for the taxpayer. Nor was any amount paid or payable in respect of royalties by the purchaser to the taxpayer: at ATC 4281-4282, 4283; CLR 596, 598, per Aickin J, with whom Gibbs CJ and Mason J agreed.

In
Queensland Independent Wholesalers Ltd v FC of T 91 ATC 4492; (1991) 29 FCR 312 (FC), the taxpayer carried on business as an independent wholesaler and distributor of groceries and other merchandise. Its principal customers were proprietors of small, independently owned stores. In the relevant years, no customer of the taxpayer was eligible to receive a rebate unless the customer was signatory to a rebate agreement and held shares in the taxpayer's parent company. Under the rebate agreement the taxpayer was permitted, but without any obligation to do so, to grant a rebate to the customer on the normal wholesale selling price of goods purchased by the customer. The agreement also provided that the taxpayer could pay a portion of the rebate in cash and credit the balance to the customer's ``special rotating levy fund account''. Moneys in those accounts were to be applied to the payment of additional shares for which the customer had subscribed. Subject to this, the moneys were to constitute a loan to the taxpayer's parent, with interest payable at such rate as the taxpayer's board determined.

The taxpayer granted a rebate to eligible customers, at a specified percentage of the selling price of nominated products. Half of the rebate was paid in cash to the customers; half was credited to their respective accounts. The question was whether the rebate, or some portion of it, should be deducted from the invoiced price of the goods purchased by customers.

Hill J, with whom Lee and Davies JJ agreed, approached the case on the basis that none of the customers could legally require the taxpayer to grant a rebate, at least until a resolution was made to pay or credit the rebate. His Honour reasoned as follows:

(i) Commonwealth Quarries stood for the proposition that, in the ordinary case, the amount for which the goods are sold will be the sale price of the goods (at ATC 4497; FCR 319). However, EMI established that the statutory language could not be confined to the contract price.
(ii) The legislation is directed at business people and employs terms which are in common use (at ATC 4498; FCR 320).
(iii) The amount for which the goods are sold is a question of fact to be determined in each case. Usually this will be the contractual price, arrived at between buyer and seller, but this will not invariably be the case (at ATC 4498; FCR 321).
(iv) The arrangement in the present case was reached between parties at arm's length, and was a purely commercial arrangement (at ATC 4499; FCR 321).
(v) The object of the taxpayer's rebate scheme was to increase or maintain sales to member retailers against competition from other wholesalers. The rebates ``reflected market imperatives to be obeyed by the [ taxpayer] if it wished to retain or expand its custom'' (at ATC 4499; FCR 322).
(vi) The fact that
- ``... rebates were deferred and were discretionary would not prevent them being taken into account in determining the amount for which goods were sold provided that the nature and manner of payment of the rebate remained sufficiently proximate to and connected with the sale transactions to allow them to be accounted for in that way .'' (at ATC 4499; FCR 322) (Emphasis added.)
(vii) The factual circumstances must be such that the rebate ``does effect a reduction in the sale price as a matter of commercial reality'' and ``is not directed at some other end'' (at ATC 4500; FCR 322).

Hill J considered that the cash component of the rebate satisfied the test stated in (vii). However, the other portion of the rebate was not a mere rebate against the price, but was directed to another end, namely, providing a mechanism for ensuring an additional capital injection for the parent company. Thus there was to be no reduction in the contract price for the portion of the rebate credited to the levy fund account.

The language used by Hill J, perhaps unavoidably, leaves room for considerable uncertainty in a particular case. For example, it may be very difficult to determine whether a

ATC 4760

particular rebate or allowance can be said to be ``sufficiently proximate to and connected with the sale transaction''. Doubtless in some instances, such as the granting of a cash rebate based on the volume of purchases, the position will be clear. Other rebates or allowances, especially those granted in return for promotional activities carried out by the purchaser, are likely to be less clearcut. Similarly, the test of ``commercial reality'', although helpful in emphasising that attention is not to be confined to contractual or other legally enforceable arrangements, does not necessarily provide close guidance in any given case.

The approach taken in Queensland Independent Wholesalers is similar to that adopted in cases considering whether there has been a ``rebate of, or other decrease in'' the price of goods in assessing customs duty (see Customs Regulations, reg 126(1)(g)). In
Toyota Motor Sales Australia Ltd v Collector of Customs (1991) 28 FCR 27 (FC), the Court was concerned with payments received by an importer of vehicles from its Japanese parent in satisfaction of claims made by retail customers in respect of defects in imported vehicles. The importer argued that the payments were rebates or reductions in the prices paid for the vehicles. The Court rejected this claim, using language similar to that of the sales tax cases (29-30):

``[W]e do not think that in the ordinary parlance of commercial life the reimbursements can fairly be said to be rebates of, or decreases in, the prices of the relevant vehicles accruing to Toyota Australia by reason of faults or defects in those vehicles. They were payments made to Toyota Australia under arrangements essentially collateral to the purchase of the motor vehicles pursuant to which Toyota Australia was entitled to claim reimbursement in respect of at least some of the expense incurred in meeting its warranty obligations to owners of Toyota vehicles.''

(Emphasis added.)

Toyota was discussed and applied in
Hyundai Automotive Distributors Australia Pty Limited v Australian Customs Service (1 April 1998, unreported, FCA/FC). In Hyundai, the importer remedied defects in imported vehicles while they were in bond and claimed reimbursement from the manufacturer in South Korea. The factual differences between this case and Toyota were held not to result in any legal distinction. The Court said (at 12) that

``` Price ' in its ordinary meaning is concerned with the amount which a vendor obtains from a purchaser under a contract of sale... That amount will usually be ascertained by reference to the contractual obligations of the parties, including any variations of those obligations.''

The Court observed that the importer had contracted to pay a price for vehicles of merchantable quality and continued (at 13):

``Hyundai was reimbursed for the cost of remedying the defects. The price in no way varied; there was no rebate of it given by the Manufacturer. In the result, for the price initially agreed, Hyundai obtained the vehicle in good condition... [The payments] were `collateral to' the price just as, in a different factual setting, they were in Toyota.''

Did the co-operative allowance reduce the price?

In the present case, as both Mr Robertson and Mr Bennett accepted, the Vendor Terms were clearly intended to have contractual force. They provided for Colgate to pay a minimum percentage co-operative allowance, calculated by reference to net invoice value, including sales tax, of the goods supplied by Colgate to Woolworths. For reasons that have been explained, the percentage allowance ultimately paid by Colgate to Woolworths, calculated by reference to the net invoice value of actual sales, could be determined only at the end of the relevant period.

The Vendor Terms explicitly contemplated that the parties would negotiate detailed promotional programs during the relevant period. The parties clearly understood and acted on the basis that these programs would specify in detail the particular promotions that were to be undertaken by Woolworths. As has been seen, the approved programs also allocated dollar amounts to each specific promotion (except those designated as ``No Charge''). These amounts were to be paid by Colgate to Woolworths in respect of each promotion, such as a Gondola End or Floor Stock. The dollar amounts allocated to each specific promotion in the approved programs were not arbitrary figures. They were prices set by Woolworths for particular classes of promotions with the

ATC 4761

intention, as Mr Hunt said, of controlling the activity Woolworths wanted and ensuring that it actually received the amounts to be paid by suppliers by way of co-operative allowance.

It follows from what has been said that neither Colgate nor Woolworths intended that the co-operative allowance would be calculated and paid as a simple percentage of the invoice value of Colgate products sold to Woolworths, although Colgate was obliged to pay a minimum percentage co-operative allowance. While the proposed promotional programs were framed with an eye carefully fixed on the minimum percentage specified in the Vendor Terms, the percentage co-operative allowance ultimately paid was greater than the minimum, reflecting the variations to the programs negotiated during the relevant period. The fact that the percentage co-operative allowance, calculated by reference to actual sales, could be ascertained only after the relevant period provides one point of distinction between that allowance and the other rebates and allowances specified in the Vendor Terms.

However, there is another, more significant, distinction. The co-operative allowance was made up of a series of payments by Colgate to Woolworths, in return for Woolworths agreeing to provide particular promotional services in respect of nominated Colgate products. Woolworths made available to Colgate particular marketing opportunities that only Woolworths could provide. These included, for example, the provision of particularly advantageous store space to display Colgate's products; special displays within the Woolworths stores of Colgate products; and the ticketing of price reductions applicable to Colgate products. The amounts payable by Colgate reflected ``prices'' set by Woolworths for particular promotional services provided by it. In other words, Woolworths made commercially valuable opportunities available to Colgate for a price. Subject to the minimum percentage specified in the Vendor Terms, it was a matter for Colgate to decide how many of the particular promotional opportunities offered by Woolworths it took up. The inevitable inference from Colgate's decision to spend more than the minimum co-operative allowance during the relevant period is that it considered there was a commercial advantage to purchasing the marketing opportunities offered by Woolworths. If reinforcement for this conclusion is needed it is provided by Mr Forbes' evidence.

The marketing opportunities provided by Woolworths to Colgate, in return for the co- operative allowance, gave Colgate a marketing advantage over competitors supplying goods to Woolworths. As Mr Hunt acknowledged, it was undesirable to have promotions for competitive products within the same stores at the same time. From Woolworths' point of view, as Ms Cowden's proposal of 30 October 1996 illustrates, it was in the retailer's interests to sell the use of valuable space to its suppliers. While it may well be that Woolworths preferred one supplier rather than another to use a particular space at a particular time, it is clear from the offer (as one would expect) that Woolworths' main interest was in deriving revenue from the promotional opportunity it was able to provide, in that instance a Gondola End.

There was some discussion in argument as to whether Woolworths was contractually obliged to provide either the promotional opportunities specified in the approved program or those subsequently agreed between the parties. It is obvious that a relatively minor dispute between a large manufacturer/wholesaler and a large retailer which have hitherto enjoyed a mutually beneficial relationship is not likely to find its way to court. I think the better view, nonetheless, is that both parties undertook contractual obligations, although there may be room for debate as to whether the commitments undertaken by Woolworths were too vague in certain respects to be enforced.

But I do not think that this matters. There were clearly carefully formulated commercial arrangements between the parties, and a mutual expectation that those arrangements would be fulfilled, as indeed they were. The compliance mechanism adopted by Colgate demonstrates that, viewed in commercial terms, Woolworths' agreement to provide promotional opportunities was not a purely optional arrangement. As a practical matter, Woolworths was obliged to implement its commitments. It would be unrealistic, and contrary to the approach in cases like Queensland Independent Wholesalers, to view the co-operative allowance simply as a payment by a supplier to a retailer without taking into account what the supplier was to receive in return.

What I have said largely answers one of the submissions made by Mr Robertson, namely,

ATC 4762

that the promotional activities contemplated by the approved programs were to be undertaken at the discretion of Woolworths. I do not think that this is a correct analysis of the arrangements between the parties. It is true that price reductions were commonly a feature of particular promotions and that Woolworths determined the extent of price reductions applicable to products the subject of promotions. But this does not detract from the conclusion that Woolworths undertook to provide specific promotional advantages to Colgate in return for payment of the co- operative allowance.

In any event, the price reductions effected by Woolworths were obviously associated, in many if not all instances, with the case and scan deal allowances. As I have already explained, Colgate provided these additional allowances in association with the agreed promotional arrangements. The evidence did not establish the precise correlation between case and scan deal allowances and any price reduction for specific products. However, it is clear enough that the case and scan deals influenced the pricing practices of Woolworths and provided an incentive for the retailer to promote Colgate products. In other words, Woolworths' pricing practices in relation to products the subject of promotional arrangements was not solely, or perhaps even primarily, the result of the co- operative allowance itself. Rather, the pricing practices were heavily influenced by the case and scan deals operating in association with the promotional arrangements. As Mr Forbes said, a manufacturer could not hope to have product lines sold at special prices without making arrangements for co-operative allowances and case deals.

I should make several additional comments concerning Colgate's submissions. First, the manner in which Colgate and Woolworths accounted for the co-operative allowance is a relevant, but not determinative, factor in assessing the price for which Colgate's products were sold to Woolworths. The assessment must be based on the substance of the arrangements between the parties and cannot be controlled by their accounting practices. Secondly, the fact that the transaction was at arm's length is not of itself of great significance in a case such as the present, where there is no suggestion, for example, that the invoice price did not truly reflect the arrangements between related parties. The critical question is the effect of the admittedly arm's length arrangements on the price for which Colgate sold its products to Woolworths. Thirdly, while it is true that one object of the co-operative allowance was to increase sales volumes to both Colgate and Woolworths, this was by no means its sole purpose. From Woolworths' perspective in particular, one major objective was to derive revenue from the marketing opportunities it could offer suppliers with little or no marginal cost to it.

The other allowances and rebates

I have referred to some differences between the co-operative allowance and the other allowances or rebates provided by Colgate to Woolworths. It is not necessary in this case to decide whether the Commissioner was correct in accepting that the price of the goods supplied by Colgate had to be adjusted to take account of the other rebates and allowances. However, each of these rebates and allowances is different in significant respects from the co-operative allowance. It may be useful to point out the major differences.

• The warehouse and quantity buy allowances were provided because Woolworths agreed to accept delivery at a central warehouse and in full truckloads. At that point property in the goods passed (see Vendor Terms, cl 10). This agreement presumably produced cost savings for Colgate, which passed on some or all of the savings to Woolworths by reducing the invoice price. As Commonwealth Quarries illustrates, transportation costs included in the sale price of goods to be delivered to the premises of the purchaser are not to be deducted from the ``amount for which the goods are sold'', since they are costs necessarily incurred by the seller to enable it to pass property in the goods at the point of delivery. In the present case, Colgate was permitted to deliver goods at central warehouses and in full truckloads, thus relieving it of obligations it otherwise would or might have assumed (that is, to deliver its products at individual Woolworths' stores). In return for this concession, Colgate reduced the price for which it sold its goods. The warehouse and quantity buy allowances were different from the co-operative allowance, which was paid in return for Woolworths providing specific promotional

ATC 4763
advantages after delivery of Colgate's products.
• The rationale for deducting the volume rebates from the price for which the goods were sold is clear enough. From a commercial perspective, the rebates simply constituted a reduction in the negotiated price for the goods, having regard to the quantities purchased. This was so regardless of whether they were off-invoice or off- remittance. I think it likely that the same can be said about the scan and case deal allowances. Again, they were different from the co-operative allowance.
• The ullage allowance reflected a contractual arrangement whereby Wool-worths agreed to bear the cost of damaged stock. This allowance was different from the reimbursement to the importer of vehicles in Hyundai, because Woolworths, unlike the importer in Hyundai, agreed to accept Colgate products in the condition in which they were delivered. Colgate, in effect, charged a reduced price for the goods in return for being relieved of the obligation to replace defective products.
• The settlement discount was simply an allowance by the seller for early payment by the purchaser. The price received by Colgate for its products depended on whether or not Woolworths elected to pay within the fourteen day period. While Colgate received a commercial advantage by reason of the early payment, it was not in the form of specific services provided by Woolworths in return for an agreed payment for each such service. In commercial terms, it is very difficult to see how the price for which the goods were sold could be anything other than the amount actually paid by Woolworths after deduction of the discount for early payment.

United States cases

Mr Robertson referred to a series of cases in the United States which have considered a variety of rebates and allowances in the context of the Internal Revenue Code 1939. Section 3443 of the Code permitted credits in respect of excise taxes, where the price of the goods on which the tax had been based was readjusted by ``a bona fide discount, rebate or allowance''. The rebates and allowances considered by the courts include rebates by the manufacturer of advertising expenses incurred by the retailer under co-operative advertising plans (
General Motors Corporation, Frigidaire Division v United States 277 F 2d 929 (1960) (US Ct of Claims);
Waterman-Bic Pen Corporation v United States 332 F 2d 711 (1964) (US Ct of Appeals, 2nd Circuit);
General Telephone & Electronics Corporation v United States 364 F 2d 853 (1966) (US Ct of Claims)); reimbursement by the manufacturer of extra commissions paid by dealers to sales persons under bonus plans for increasing automobile sales (
General Motors Corporation v United States 339 F 2d 648 (1964) (US Ct of Claims)); ``promotional'' expenses, such as prize trips for dealers (General Telephone, above); and reimbursement to dealers of portion of the costs incurred in maintaining demonstration vehicles for customers (
General Motors Corporation v United States 709 F 2d 1476 (1983) (US Ct of Appeals, Fed Cir)).

In my opinion, these cases are of limited assistance to the present problem. As Mr Robertson readily accepted, the legislative framework in the United States is different. Moreover, the reasoning in the various judgments is far from uniform and different tests have been proposed at different times (see the dissenting judgment of Skelton, Senior Circuit Judge, in GMC v US (1983) at 1484-1486). In any event, the allowances and rebates considered in the United States cases differ in important respects from the co- operative allowance at issue here. It is not clear, for example, what result would be produced in the present case if the test formulated by the majority in GMC v US (1983) (that is, whether the program pursuant to which reimbursement of dealers' expenses was made was controlled by the manufacturer) were to be applied.

Conclusion

Colgate's application for declaratory relief must be dismissed. Colgate must pay the Commissioner's costs.

THE COURT ORDERS THAT:

1. The application be dismissed.

2. The applicant pay the respondent's costs.

Disclaimer and notice of copyright applicable to materials provided by CCH Australia Limited

CCH Australia Limited ("CCH") believes that all information which it has provided in this site is accurate and reliable, but gives no warranty of accuracy or reliability of such information to the reader or any third party. The information provided by CCH is not legal or professional advice. To the extent permitted by law, no responsibility for damages or loss arising in any way out of or in connection with or incidental to any errors or omissions in any information provided is accepted by CCH or by persons involved in the preparation and provision of the information, whether arising from negligence or otherwise, from the use of or results obtained from information supplied by CCH.

The information provided by CCH includes history notes and other value-added features which are subject to CCH copyright. No CCH material may be copied, reproduced, republished, uploaded, posted, transmitted, or distributed in any way, except that you may download one copy for your personal use only, provided you keep intact all copyright and other proprietary notices. In particular, the reproduction of any part of the information for sale or incorporation in any product intended for sale is prohibited without CCH's prior consent.