Re Commissioner of Taxation v Brambles Holdings Limited

Re Commissioner of Taxation v Brambles Holdings Limited - [1991] FCA 122 - FCA 1991 case summary — Zoe

[48]

"4.4.1 The Contractor shall supply for hire by the

Council a sufficient number of wheeled

containers to enable the efficient performance

of this contract. Such containers shall be of

120 or 240 litre capacity and shall be

constructed of moulded high density polyethelene

fitted with solid rubber tyres and an axle of

galvanised hardened steel. The colour of the

wheeled containers shall be green for

residential premises and black for commercial

premises.

4.4.2 The Contractor shall maintain in good order all wheeled

refuse containers hired by the Council for use at both

commercial and residential premises throughout the

municipality.

4.4.3 The wheeled containers hired by the Council shall be

delivered by the contractor to residential premises at least

one week prior to 6th October, 1986.

...

4.4.5 All wheeled containers supplied and delivered by the

contractor in accordance with this contract shall be

permanently marked with the contractors name, City of Knox

and be consequently numbered and show date of manufacture.

All such wheeled containers shall be embossed on the lid

with the following Warning: 'NO HOT ASHES OR CORROSIVE

MATERIAL. WASH REGULARLY.'

...

4.4.7 All wheeled containers supplied and delivered by the

contractor in performance with this contract shall be of the

specification approved by the Council.

...

4.4.10 The contractor shall at the conclusion of the contract

period cause all wheeled containers to be removed from

the premises at which they are located at that

particular time..."

...................

5.13.1 The Contractor shall provide and maintain throughout

the term of this Contract a sufficient number of motor

vehicles and all necessary plant to be approved by the

Council to carry out the works and services herein

specified in a thorough and efficient manner.

5.13.2 All vehicles used in this Contract shall be of a

compactor type of minimum full load of 18 cubic metres

and capable of a compaction ratio of two loose cubic

metres reduced to 1 compacted cubic metre and shall be

constructed in such a manner that all loading may be

carried out without recourse to the removal of any

covers, be they rigid or otherwise and the vehicle

shall be such that at no time during loading or

transporting of the garbage will rubbish, once placed

in the unit, be in any way exposed to the weather,

exposed to view or permit flies to gather thereon.

Further, on no account will the consolidation of

garbage be permitted in the vehicle other than by

mechanical means. The vehicles shall house the

collected garbage in such a manner that in the loading

and transport of the garbage, no refuse may be blown

out or dislodged from the vehicle. Each collection

vehicle shall be equipped at all times, whilst

carrying out the collection process, with a broom and

shovel of a type satisfactory to the Council.

5.13.3 All vehicles shall be kept clean and washed down both

inside and outside at least once per week. Cleansing

must be carried out at a Depot site maintained by the

Contractor and the Contractor shall state in his

Tender where such site is to be located and the method

that will be employed in the cleaning of the vehicles.

5.14.2 The Contractor shall ensure that adequate provision is

made on refuse-carrying vehicles to prevent damage to

receptacles during the emptying process. All

employees shall be instructed to ensure that care is

taken of all refuse receptacles during the whole of

the emptying process. The Contractor shall be liable

for any damage caused by him or his employees to any

refuse receptacle.

5.21 Marking of Vehicles

All vehicles used in performance with the requirements

of this Contract shall be marked near the top of the

load carrying section with the letter K in no less

than 200 millimetres in depth and shall be followed by

a number of similar size. Vehicles used shall be

numbered consecutively and such letters and numbers

shall be on the front and rear of the load carrying

section as aforesaid. Such lettering and numbering

shall be painted on the vehicles with a paint which

contrasts with that of the body and shall be to the

satisfaction of the Council."

[52]

"4. In this by-law, unless inconsistent with the context or

subject-matter -

...

'Multi User Receptacle' means a wheeled receptacle of in excess of

240 litres constructed of either high-density polyethelene or

galvanized steel having a self-closing lid capable of being

locked. Such multi user receptacle shall be fitted with not less

than four wheels and shall be able to be locked in situ. Such

receptacle shall hereinafter be described as a Multi Use MGB.

'Proprietor' means the proprietor of any premises and

includes the owner, the occupier or any person in charge or

having the management or control thereof.;

...

5. The proprietor shall use the MGB provided by the council as

defined in Clause 4 hereof and shall cause all refuse and rubbish

produced or accumulated upon such premises to be deposited in such

MGB. Provided that refuse matter of such shape size or weight

which cannot be contained in such MGB shall be excluded.

6. The proprietor of any premises shall not cause suffer or

permit any other receptacle to be used for the storage of refuse

where an MGB has been provided. However, the provisions of this

clause shall not prohibit the temporary storage of waste matter in

another container prior to transfer to such MGB or multi use MGB.

...

11. The proprietor of every premises to which the council has

supplied an MGB shall cause such MGB to be placed adjacent to the

kerb at the front of such premises or at such other place as may

from time to time be approved by council by 6 o'clock in the

morning of the day allocated for the removal of refuse.

...

14. The proprietor of every premises shall cause the MGB provided

by the council at his premises to be maintained at all times in

good order and in a sanitary condition.

15. The proprietor of premises shall on becoming aware that the

MGB provided by the council to his premises has become damaged,

developed any defect, become lost, stolen or missing, notify the

council within seven (7) days of such occurrence.

...

18. Any person who causes any MGB or Multi Use MGB to be damaged

by placing same on any carriageway or by placing hot materials or

any other material deleterious to the material from which the MGB

or Multi Use MGB is constructed shall be liable to the cost of

replacement of such receptacle."

[58]

10. Counsel for the Commissioner then sought to advance the following arguments in support of his appeal (assuming, for the purposes of his first argument, that he had leave to amend): (1) There was no bailment of the containers to the Council. They remained the property of Brambles and were delivered directly to ratepayers. The element common to all bailments is the imposition of an obligation, because the taking of possession involves an assumption of liability for the safekeeping of the goods. Actual and not merely constructive possession by a bailee is essential. Since no possession was taken by the Council, there was no bailment to it. Instead there was a gratuitous loan for use by Brambles to ratepayers. (2) (Alternatively) Even if there were a bailment of the containers to the Council, there was no use of them by the Council within the meaning of Item 78. The meaning of the word "use" depends upon its context which, in this case, is an exemption from tax on the sale value of goods sold by a manufacturer, treated by it as stock for sale by retail or applied to its own use. The imposition of the tax is in respect of physical chattels. It follows that exemption is also by reference to the physical nature of the goods, the physical user of them, or the person who physically uses them. Without physical user by the Council, there is no relevant use by it. If this were not so, there would be no need for a number of items in the First Schedule. (3) (Alternatively) The relevant questions are: (a) what is the projected use of the container? (b) does that use answer the description in Item 78? The intended and actual use of the containers was the placing of rubbish in them. The direct use of the containers for that purpose was by ratepayers and not by the Council. In point of principle, the position is the same as in the case of the trucks where it was held by the judge that there was no exemption. Another judge of the Court was of the same opinion in Otto Australia Pty. Ltd. v. Federal Commissioner of Taxation (90 ATC 4,604). (An appeal from the decision in Otto's Case has been brought and argued before us. Our decision on that appeal will be given at the time that we publish our reasons in this appeal.) (4) (A formal submission only in the light of its rejection in Stewart's Case.) Item 78 cannot apply unless a council obtains the benefit of the exemption.

[103]

"A By-Law of the City of Knox made under the provisions of

the Health Act 1958 and numbered 42 for the provision use

and control of receptacles for the storage and collection of

refuse and rubbish and prescribing the size and shape of and

the materials to be used in the construction of such

receptacles and imposing on the occupier of any premises the

duties of cleansing footways and pavements adjoining such

premises.

In pursuance of the powers contained in the Health Act 1958

and of any and every other power thereunto enabling it in

that behalf, the Council of the City of Knox makes the

following By-Law.

1. This By-Law shall be known as the Refuse Receptacles

and Refuse Collection By-Law.

. . .

4. In this By-Law, unless inconsistent with the context

or subject matter:-

. . .

`Proprietor' means the proprietor of any premises and

includes the owner, the occupier or any person in

charge or having the management or control thereof.

`Receptacle' means a container constructed of high

density polyethelene (sic) having a maximum capacity

of 240 litres, a maximum height of 1100 mm and a

maximum width of 600 mm fitted with two wheels having

a minimum diameter of 200 mm and provided with a

strong hinged lid constructed of the same materials as

the body and having a handle so fitted as to enable

easy manoeuvreability. (Such container shall

hereinafter be referred to as an MGB.)

`Refuse and Rubbish' means all waste matter (except

night soil, sewage and manure) produced or accumulated

in or about any house, building or premises including

ashes and dust, but does not include industrial or

chemical waste material.

5. The proprietor shall use the MGB provided by the

Council as defined in clause 4 hereof and shall cause

all refuse and rubbish produced or accumulated upon

such premises to be deposited in such MGB. ...

(It will be noted that the MGB is described in this

By-Law as `provided by the Council'.)

. . .

11. A proprietor of every premises to which the Council

has supplied an MGB shall cause such MGB to be placed

adjacent to the kerb at the front of such premises or

at such other place as may from time to time be

approved by Council by 6 o'clock in the morning of the

day allocated for the removal of refuse.

. . .

14. The proprietor of every premises shall cause the MGB

provided by the Council at his premises to be

maintained at all times in good order and in a

sanitary condition.

15. The proprietor of premises shall on becoming aware

that the MGB provided by the Council to his premises

has become damaged, developed any defect, become lost,

stolen or missing, notify the Council within seven (7)

days of such occurrence.

. . .

18. Any person who causes any MGB ... to be damaged by

placing same on any carriageway or ... shall be liable

to the cost of replacement of such receptacle.

. . ."

[125]

See also the remarks of Gibbs ACJ., in Ryde Municipal Council v. Macquarie University [1978] HCA 58; (1978) 139 CLR 633 at 637. Use is not confined to direct personal use, as is illustrated by the sweeping statement made by Lord Hardwicke LC. in Marshall v. Blew [1741] EngR 523; (1741) 2 Atk 217; 26 ER 534 ("She (a widow devised the use of goods for life) may ... use the goods in her own or any other person's house, alone, or promiscuously with other goods, or may let them out to hire"). Once ownership is discarded as a necessary determinant, if some clear link between the Council and the goods be required to enable an indirect use to be found, that link may be provided by the devotion of the goods to the Council's waste collection system, recognized by their marking with the name or symbol of the Council. Confirmation that a connection of this kind is sufficient for the purposes of item 78 is to be found in the application of the identical words (in item 81) to the case of goods for use by a public hospital. As is well known, public hospitals commonly have auxiliaries which function in close relationship with them and serve their purposes in various ways. I do not think parliament intended "use" to have so confined a meaning that the acquisition of goods by an auxiliary, to be put into service in the work of the hospital by a member or employee of the auxiliary, would not qualify for the exemption. On the contrary, I think the wide word "use", unlimited by any reference to the property in the goods, was plainly intended to enable the exemption to travel beyond equipment operated by servants of a hospital or council, in which the institution would normally have some property interest, so as to include cases of the kind I have mentioned. It would be unduly artificial to read the exemption by reference to the difficult distinction between contracts of service and contracts for services rather than by reference to the substance of what is done. Cf. the appeal of Hope J.A. (with whom Samuels and McHugh JJ.A. agreed) in Federal Commissioner of Taxation v. Kentucky Fried Chicken Pty Limited (1988) 88 ATC 4363 at 4370 to the importance , for the purposes of the sales tax legislation, of "looking at the substance and reality of the matter".

At a glance

Court

Decision date

Before

Source

Judgment (135 paragraphs)

Re Commissioner of Taxation v Brambles Holdings Limited (Now Known As Brambles Australia Limited) [1991] FCA 122; 91 Atc 4285 99 ALR 523 28 FCR 451 72 Lgra 284 (10 April 1991)

Parties

Legislation Cited (15)

Cases Cited (15)