Purvis v Commissioner of Taxation

REASONS FOR JUDGMENT 1 This is one of three matters heard together, because the issues are relevantly the same. The principal reasons for decision have been given in Bond v Commissioner of Taxation [2015] FCA 245 (Bond). It is not necessary to repeat them. I made an order on 19 March 2015 dismissing this appeal. These are my reasons for doing so. 2 Mr Purvis was employed by Qantas Airways Ltd as an airline pilot. He had worked for Qantas since 1987. His contract of employment is, of course, different from that of Mr Bond, but not in any material respect. 3 In February 2008, he was diagnosed with "Idiopathic Parkinson's" disease. In about March 2008, he had some discussion with an officer of Qantas about the prospect of an alternative position with Qantas, as he realised his licence would be cancelled. He decided not to continue to explore that option (statement, para 25). On 3 April 2008, his licence was cancelled by the Civil Aviation Safety Authority, so he could no longer work as an airline pilot. 4 On 8 April 2008, Mr Purvis applied for "the full capital benefit" under his Loss of Licence Insurance. On 15 April 2008, he was informed that his claim had been approved, and the Deed of Release would be sent to him. He says his employment terminated about 18 April 2008. He received formal confirmation in writing from Qantas by letter of 16 April 2008. As the procedure anticipated (see Bond at [78]), he received at that time the Deed of Release for execution, details of staff travel benefits for medically retired employees, and information about the Qantas Superannuation Disability scheme. The letter set out the capital lump sum benefit. 5 Mr Purvis signed the Deed of Release on 5 May 2008. It was relevantly in the same terms as that applicable to Mr Bond. It clearly required the termination of his employment with Qantas. Indeed, as his statement makes clear, once he decided not to explore alternative work with Qantas, he knew his employment would terminate for medical reasons. He says he was not happy to sign the Deed of Release because of the Final Termination Pay (see cl 2.4), but he did so. He does not say he formally raised his concern with any relevant officer of Qantas. 6 He subsequently received from Qantas on about 2 May 2008 a payment for accrued annual leave and long service leave, and on about 25 June 2008 the capital lump sum for Loss of Licence insurance, showing a gross amount and tax. He received the net amount. 7 His appeal concerns the question of whether tax was payable on the Loss of Licence capital payment as an Employment Termination Payment. The Commissioner assessed that payment as taxable on 21 November 2008, and following consideration of the objection on 29 June 2011, that decision was affirmed by the Administrative Appeals Tribunal in its decision given on 4 February 2013. 8 Counsel for Mr Purvis and the other two pilot officers of Qantas whose cases were heard together helpfully provided separate written submissions for each. In the case of Mr Purvis, the applicable agreement is the Qantas Airways Limited Flight Crew (Long Haul) Certified Agreement 2005-2006 (LHCA). The relevant insurance policy is the Scottish Re Policy, common to all claims. I have not discerned any relevant provision of the LHCA which is materially different from the agreement applicable to Mr Bond's appeal. Counsel did not suggest any material difference. 9 For the reasons given in Bond, I conclude that this appeal should also be dismissed. In short, in the particular circumstances, the receipt of the loss of pilot's licence capital payment was "in consequence of the termination of" his employment under s 82-130(a)(i) of the Income Tax Assessment Act 1997 (Cth). Again, I will hear the parties as to costs. I certify that the preceding nine (9) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Mansfield.