Superannuation Fund Investment Trust v Commissioner of Stamps

I am unable to agree, however, that the Parliament by this Act has subjected the Crown in right of the Commonwealth and its property to taxation by the States, except in relation to income tax upon the income of the fund which income is, in my opinion, quite clearly the property of the Crown in right of the Commonwealth.

Quite apart from the effect of the federal nature of the Constitution, a legislative intention to subject the Crown and its property to taxation must be found in the legislation in express words or by necessary implication. That is the established position at common law. Bearing in mind our federal structure, a legislative intent on the part of the Parliament to subject the Crown in right of the Commonwealth to taxation by a legislature of a State must, in my opinion, be unambiguously discoverable in the language of the Parliament, considered in the light of the subject matter of its legislation and the evident policy it discloses. This is so, in my opinion, quite apart from the presence and operation of of s. 114 of the Constitution.

There is nothing in the nature of the subject matter of the Act or its policy of providing financial benefit to its employees and such other persons who may be included within its ambit, which in the least suggests to my mind any reason why the Parliament should have subjected the Crown or its property to State taxation. The legislative purpose is, if anything, the augmentation of the fund rather than benefaction to the State Treasuries. The subject matter and the policy of the Act, in my opinion, tell against the implication of any such intent of the Parliament.

Can an implication of any such intent be made from the presence in the Act of s. 42 (5)? And, in particular, is that a necessary implication, or does the presence of the section involve an unambiguous expression of such an intent?

Section 42 (5) purports to exempt the income of the fund not only from State taxation upon income but from Territorial taxation upon income. The idea that but for s. 42 (5) the income of the fund, being the property of the Crown, would have been liable to income tax under a law of a Territory of the Commonwealth surely must indicate the ultra-cautious and unnecessary nature of the provision. Quite apart from the provisions of s. 42 (5) of the Act, neither a State nor a Territory of the Commonwealth could, in my opinion, subject that income to taxation. The presence of s. 42 (5) in the Act must, in my opinion, be attributed to an abundance of caution, rather than as an expression of intent that the Crown in right of the Commonwealth and its property should otherwise be subject to taxation by the States and by the Territories: or perhaps to some uncertainty on the part of the draftsman as to whether or not the Trust was a manifestation of the Crown. But, if so, that uncertainty would not justify the conclusion that there was a legislative intention to subject the property of the fund, if it did represent the Crown, to State taxation. To take from that section and its presence in the Act a positive indication that the Crown in right of the Commonwealth was to be in other respects subject to taxation by the States is, to my mind, an unwarranted conclusion. Expressions of judicial opinion in the decided cases are not wanting which would, at least, discourage inferring a positive intent to subject the Crown and its property to taxation merely from the presence in a statute of such a provision as s. 42 (5): see, e.g., Mayor of Weymouth v. Nugent [40] ; Coomber v. Berkshire Justices [1] ; Hornsey Urban District Council v. Hennell [2] .

1. (1865) 6 B. & S. 22, at p. 35 [122 E.R. 1106, at p. 1111]. 2. (1883) 9 A.C. 61, at p. 66. 3. [1902] 2 K.B. 73, at pp. 80-81.

I find myself quite unable to infer from the provisions of s. 42 (5) of the Act that the Parliament intended that the Crown, and its property other than the income of the fund acquired for the purposes of the fund, should be subject to taxation by the States and the Territories. Certainly I would find it impossible to think that there was a necessary implication in that sense to be found in that provision or elsewhere in the Act, there being no express words in the Act subjecting the Crown or its property to taxation by the States and Territories.

If stamp duty were payable it would be payable by the Commonwealth. It is an exaction falling on the Commonwealth. Further, in form it is a tax upon the document by which the Commonwealth acquires the land to which the instrument relates. It falls upon the document when the document has itself become the property of the Commonwealth. Unless the document is stamped, i.e., the tax upon it paid, its function as a document is largely, if not indeed entirely, stultified (see s. 27 of the Stamp Duties Act, 1923-1976 S.A.). Thus, even in the most technical sense, the duty, in my opinion, is a tax upon the property of the Commonwealth. It falls squarely, in my opinion, within the operation of s. 114, which is expressed in universal terms, "any tax on property of any kind".

Section 114 requires the consent of the Parliament to the imposition of a tax by a State upon Commonwealth property. All that I have said in relation to the implication of an intent to subject the Crown in right of the Commonwealth to State taxation applies equally, if not more forcefully, to my inability to find in the Act a consent by the Parliament to the taxation by the State of its property.

Thus, whether we were considering the matter as under the general law alone, or having in mind the federal structure of the Constitution or in relation to s. 114, the stamp duty would not, in my opinion, be exigible in this case.

In my opinion, the proper conclusion in this appeal is that the Stamp Duties Act does not apply to instruments of transfer accepted by the Superannuation Fund Investment Trust of property acquired for the purposes of the fund.

The Superannuation Fund Investment Trust is a body corporate constituted under the Superannuation Act 1976. It consists of a chairman and two members appointed by the Governor-General and its function is to manage the Superannuation Fund created by that Act, for that purpose attending to investment of the moneys of the fund.

The Trust, by way of investment of moneys of the Fund, purchased from separate vendors three parcels of land in South Australia, on each of which was erected a shopping centre or supermarket. In March 1977 three instruments of transfer of these properties to the Trust were submitted to the Commissioner of Stamps (S.A.) for his opinion as to whether they were chargeable with any and, if so, what amount of duty. The Commissioner was asked to denote the instruments as not chargeable with any duty but he instead assessed them to duty in a total amount of $1,373,990, being the sum of the ad valorem duty which would be payable on the instruments as conveyances or transfers on sale under the Stamp Duties Act 1923-1976 S.A. if they were in fact dutiable instruments under that Act.

The Trust objected to this assessment and, being dissatisfied with the State Treasurer's subsequent confirmation of the Commissioner's assessment, appealed to the South Australian Supreme Court, requiring the Commissioner to state a case accordingly. It had meanwhile paid the duty as assessed, that being a statutory condition of its right to object to the assessment.

(a) Whether the instruments and each of them are chargeable with the ad valorem duty assessed by the respondent.

(b) Whether the appellant is liable to pay stamp duty.

The Full Court refused, in my view correctly, to answer the second of these questions on the ground that only the dutiability of an instrument and the amount of any duty might properly be made the subject of questions in a case stated under the Act. On this appeal no complaint was made of this refusal. To the first question, whether the instruments were indeed chargeable as assessed, the Full Court answered "Yes". Hence the present appeal by the Trust, which contends that this question should have been answered "No".

The Trust's contention is that the instruments attract no duty at all, and this not because of any quality of the instruments themselves or of the transactions to which they give effect but solely because it is the Trust which is in each instance the transferee. The argument runs in this fashion: it is common ground that the instruments are conveyances or transfers on sale and that the Stamp Duties Act renders documents of that description liable to stamp duty at ad valorem rates; nevertheless these particular instruments are not liable to stamp duty, either because they fall within an exemption in the Stamp Duties Act in favour of conveyances to "the Crown" or because to subject them to a State stamp duty would be to tax property of the Commonwealth without its consent or otherwise unconstitutionally to subject the Commonwealth to a State impost.

Each of these submissions involves, as its first step, the proposition that the Trust be equated to the Crown in right of the Commonwealth. Each submission fails at the outset unless this proposition be made good. The majority in the Full Court of the Supreme Court rejected this initial proposition. They were, in my view, correct in doing so.

Both the Trust's first submission and its alternative submissions, if followed through to their conclusion encounter interesting and difficult questions of law. However, none of these call for any decision by me since, on the view which I have formed, the Trust has failed to make good its initial proposition that it should be equated to the Crown in right of the Commonwealth.

Before considering the Trust's initial proposition the relevant provisions of the Stamp Duties Act must be briefly noticed: they provide the particular context in which the character of the Trust becomes relevant. By the interaction of a charging section, s. 5 (1), and of the Second Schedule to the Act, duty is imposed on a variety of documents, including conveyances or transfers on sale of any property. The Second Schedule also describes a wide variety of exempt instruments, some exemptions being applicable only to particular classes of dutiable instruments others appearing in a list of general exemptions from all stamp duties. Only in the list of general exemptions do any exemptions appear which apply to conveyances or transfers on sale. One of these is item 13 (b), which exempts conveyances "to the Crown". The Trust seeks to take advantage of this exemption. It asserts that the three transfers to it are conveyances to the Crown in right of the Commonwealth within the meaning of the exemption.

Any consideration of this initial proposition must take account of the fact that what is here in question is the exercise by the Trust of its function of investing moneys of the Superannuation Fund and the possible application of a State's stamp duty legislation to a document coming into existence in the course of the Trust's exercise of that function. Although I find the proposition to be erroneous when applied to that function as affected by that legislation it does not necessarily follow that in my view the proposition is equally inapplicable to the Trust in all other circumstances: the impact of other legislation or other rules of law upon the Trust, for instance, the effect of the landlord and tenant legislation upon premises acquired by the Trust for use as its offices, might be found to give rise to quite different considerations. That this might be so appears from what was said by the Full Court of the Supreme Court of Victoria in Victorian Railways Commissioners v. Herbert [3] and also by a member of that Full Court, Fullagar J., when he sat as a member of this Court in Rural Bank of New South Wales v. Hayes [4] , and again in The Commonwealth v. Bogle [5] : to the same effect are the observations of Kitto J. in Wynyard Investments Pty. Ltd. v. Commissioner for Railways (N.S.W.) [6] .

1. [1949] V.L.R. 211, at pp. 213-214. 2. (1951) 84 C.L.R. 140, at p. 153. 3. (1953) 89 C.L.R. 229, at p. 267. 4. (1955) 93 C.L.R. 376, at pp. 394-395.

The Superannuation Act 1976, the legislation to which the Trust owes its origin and from which it takes its particular character, replaced the Superannuation Act 1922, as amended, and in doing so made quite radical changes to the general legislative scheme established under that earlier Act for the superannuation of Commonwealth public servants. It is only with aspects of those changes that relate to the present Trust that I am concerned. Under the 1922 Act there was no equivalent to the present Trust. The general administration of the statutory scheme was in the hands of a Superannuation Board which exercised such discretionary powers as the scheme provided for and only one of whose functions it was to invest moneys of the Fund. The 1976 Act introduces a new concept: the general administration of the Act, other than Pt III, is given to a Commissioner for Superannuation, but by Pt III, entitled "The Investment Trust and the Fund", the Trust is established as a body corporate, its membership and proceedings are provided for, a Superannuation Fund is constituted and to the Trust is assigned its management.

There is, then, in the 1976 Act a separation of functions between Commissioner and Trust, the latter being concerned exclusively with management of the Fund. The Trust is, by s. 41 (2), empowered to do all that is necessary or convenient for "the management of the Fund and the investment under s. 42 of moneys standing to the credit of the Fund". The Trust plays no other part in the general statutory scheme of superannuation; it has no concern with contributories, the receipt of contributions or their rate, with payments out of the Fund, the extent of benefits or the like.

It is, no doubt, for this reason that the Act contemplates that the three members of the Trust shall have had "appropriate experience in matters relating to the investment of moneys or otherwise in matters relating to the management of moneys" (s. 30 (5)), since to their entirely independent judgment is entrusted the investment of available moneys of the Fund (s. 42 (1)). They are given extremely wide investment powers, which extend far beyond conventional trustee investments and are very much wider than were the investment powers of the Board under the 1922 Act. These powers now extend, for example, to the purchase of shares in any company incorporated in Australia and of real estate in Australia (s. 42 (2)). The Trust's purchase of the shopping centres and supermarket here in question provides instances of the exercise of this latter power.

In the exercise of its power of investment the Trust is neither subject to any control by government nor is it afforded any statutory guidelines. The only injunction is to so manage the Fund that moneys required for payment out of benefits are available for that purpose (s. 42 (1)), and "so far as is practicable" to ensure observance of the rule familiar to all those acquainted with the investment of Australian superannuation funds, the "30/20 rule" (s. 42 (4)).

The Act is careful to ensure that, once appointed, appointment being by the Governor-General, the members of the Trust, in carrying out their function as managers of the Fund, will be entirely independent of government. Even the sanction of a member's removal from office before the expiration of his term of appointment is exercisable only for "misbehaviour or physical or mental incapacity" or in the event of non-disclosure of pecuniary interest, or of bankruptcy or the like (s. 35). There is an obligation both to keep accounts and records, allowing the Auditor-General free access to them (s. 44), and to report annually to the Treasurer (s. 161), and to furnish him with such information relating to the management of the Fund as he may from time to time require (s. 163 (2)). But while these provisions do serve to keep government informed of the activities of the Trust, they impose no limitations upon its complete independence of action.

The members of the Trust are, then, subject to no ministerial or other control in the exercise of their function as expert investors of the moneys of the Fund, a most significant factor, albeit no more than a factor, in determining whether in the exercise of that function the Trust is to be treated as if it were the Crown in right of the Commonwealth.

I do not treat as conclusive the fact that the Trust is incorporated. While numerous statutory corporations have been regarded as independent of the Crown, there are a number of cases in which the fact of incorporation has not been regarded as depriving the corporation of its right to invoke certain privileges or immunities of the Crown - the case of Public Works Commissioners v. Pontypridd Masonic Hall Co. [7] and Chief Secretary (N.S.W.) v. Oliver Food Products Pty. Ltd. [8] provide instances of this. In short, I regard the incorporation of the Trust as a neutral factor.

1. [1920] 2 K.B. 233. 2. (1960) 60 S.R. (N.S.W.) 435.

There is, in my view, also little importance to be attached to the fact that the word "Trust" is used to describe the entity which s. 29 incorporates. I do not regard it as significantly assisting the case for the respondent. No true analogy can, I think, be drawn between the Trust's closely confined statutory power of management of the Fund and of investment of such of its assets as are available for investment and the position of a trustee in a privately constituted trust: I have thus found the attempted identification of some cestuis que trust of the Fund to be of little profit. The most that can usefully be concluded concerning the Fund, viewed as a going concern, is that both contributors and the Commonwealth are in a practical sense interested in its prudent but profitable management. The current flow of moneys into the Fund derives exclusively from contributions by contributors. These the Commissioner receives and pays into the Fund. At its outset the Fund also received the moneys and assets of the old fund established under the 1922 Act. That fund, unlike the present Fund, was fed from two sources, the Commonwealth as well as contributors making contributions to it - see 1922 Act, s. 8 (1). Thus, apart from a component of Commonwealth funds in the initially transferred assets of the old fund the moneys which the Trust invests come exclusively from contributors and not out of Consolidated Revenue. On the other hand it is true, as the appellant points out, that the Fund is expressed, by s. 40 (2) of the Act, to form part of the Trust Fund referred to in s. 60 of the Audit Act 1901 Cth, as amended, and certain provisions of that Act are made applicable to the Fund. However s. 62B of the Audit Act, which deals with the investment of moneys standing to the credit of the Trust Fund, is expressly stated not to extend to the Fund, and the other provisions of the Audit Act only extend to it subject to the terms of the Superannuation Act itself. That the Fund is thus made to form part of the Trust Fund of which the Audit Act speaks may have consequences from an accounting viewpoint and no doubt emphasizes the extent to which the Auditor-General, already given wide powers by the Superannuation Act, may oversee dealings with the Fund. But to my mind none of this throws much light upon the question now in issue.

The respondent relied upon the fact that it is not exclusively public servants of the Commonwealth who are contributors under this superannuation scheme. It is true that a limited class of other employees do participate in it but the substance of the matter is, without doubt, that the Trust is an integral part of a scheme created so that it may provide for the superannuation of Commonwealth public servants.

The appellant relied upon this circumstance as demonstrating an intimate connexion between the Trust's activities and matters central to government. In a sense this is true: but not in the sense in which it has been said in the past that there exist certain traditional functions of central government to which the shield of the Crown will most readily be applicable, functions such as the maintenance of law and order and the defence of the realm. The superannuation of employees, viewed as a subject matter, has no such inherent governmental character. That in the present case the employer will usually be the Commonwealth is of course a relevant consideration, indeed it is the genesis of this appeal and provides the reason for this superannuation scheme being the subject of elaborate Commonwealth legislation. But it does not of itself appear to me to provide any firm ground for concluding that the legislative intent was that because the Trust had the duty of investing moneys of the Fund it should therefore attract the so-called shield of the Crown.

Apart from these general considerations, arising from the form taken by the legislation, there are certain express provisions of the Superannuation Act which also call for comment. The first relates to s. 160 (1) of the Act. It reads:

The costs of the administration of this Act, including the costs of and incidental to the management of the Fund by the Trust, shall be paid out of moneys appropriated from time to time by the Parliament for the purpose. Were the effect of this provision that the Commonwealth became directly responsible for defraying the cost of stamp duty incurred by the Trust in the course of its investment programme, this might be regarded not only as giving rise to a question of the constitutionality of such State imposts but, constitutionality apart, might suggest that, since moneys of the Commonwealth were thus directly involved, the Trust should, in its investment function and in relation to stamp duties, be equated to the Crown in right of the Commonwealth. In my view however this sub-section does not have that effect. Outgoings such as conveyancing fees, stamp duty, brokerage and the like, which represent the difference between the gross and the net realization price of investments sold, and between the gross and net cost of investments acquired, are not, I think, to be understood as answering the description of "costs of and incidental to the management of the Fund by the Trust".

This is not so much because of any distinction which the Act may perhaps be thought to make between the general "management" of the Fund and the more specific "investment of moneys" standing to its credit - e.g. in s. 41 (2) and s. 42 (1) and (5), but rather because I would not understand s. 160 (1) as requiring the Trust to adopt in its accounts a method of accounting which such an interpretation would seem to involve. Such a method of accounting would, in the Trust's reporting of its investment activities, require it to disregard all out-of-pocket costs involved in the acquisition or realization of investments, the outcome of a year's investment activities being shown net of all such costs. They would presumbaly be shown separately and be offset by a corresponding Commonwealth contribution. However, as Viscount Simonds said in Sun Life Assurance Society v. Davidson [9] , when speaking of the investment fund of a life assurance company and, in particular, of out-goings in the form of stamp duty and brokerage, "as a matter of accounting such disbursements need not be and generally are not included in the item "expenses of management" " His Lordship went on to cite, by way of elaboration, a passage from the reasons of the Special Commissioners in which they had said that "the brokerage and stamp duties payable on the purchase of an investment being not general expenses of conducting the society's business but expenses specifically referable to and only incurred by reason of the purchase, are expenses of the purchase and not expenses of management" and also expressed a like view concerning such expenses when incurred on the sale of investments. Lord Morton [10] , described brokerage and stamp duty as being expenses "so closely linked with the transaction of purchase that they may naturally be considered as items in the total cost of a purchase and not as expenses of management". Lord Reid, confining his view to the case of stamp duties, said [11] that they formed part of the cost of acquisition of an investment rather than an expense of management. The case, like the earlier decisions to which reference is made in the course of their Lordships' judgments, was concerned with slightly different language from that found in s. 160 (1) and occurring in a different context. But it is for its statements of what was to be regarded as proper accounting treatment of outgoings such as stamp duty incurred in the course of investment management, rather than as precedent authority on the interpretation of s. 160 (1), that I cite it. I conclude that stamp duty incurred by the Trust in connexion with the purchase of investments of the Fund are not "costs of and incidental to the management of the Fund" within s. 160 (1). It follows that the provisions of that sub-section throw no light upon the present problem.

1. [1958] A.C. 184, at p. 197. 2. [1958] A.C., at p. 202. 3. [1958] A.C., at p. 206.

There are two provisions of the Act, s. 42 (5) and s. 173 (3), which grant exemption from State and federal imposts. Section 42 (5) exempts from "taxation under a law of the Commonwealth, a Territory or a State" the income derived from the investment of moneys of the Fund or otherwise from its management. So long as this provision is viewed in isolation from s. 173 (3) it may appear equivocal in effect: its presence in the Act may either be accounted for on the score of abundance of caution, and hence of no significance, or else may be regarded as an indication that, but for this express exemption, the income of the Fund would indeed be assessable income liable to tax. However when viewed, together with s. 173 (3), as representing the only instances in which, in this legislation, the legislature has directed its attention to the impact of revenue laws upon the activities of the Trust and of the Fund, it loses, in large measure, its equivocality. But first I should examine s. 173 (3) and then revert to s. 42 (5).

Section 173 (3) forms part of the transitional provisions of the Act, dealing with the transition from old to new superannuation scheme. It reads as follows:

An instrument or document that an authorized person certifies to have been made, executed or given by reason of, or for a purpose connected with or arising out of, the operation of this Division is not liable to stamp duty or other tax under a law of the Commonwealth or of a State or of a Territory. When read in the light both of the meanings given by s. 170 (1) to the defined terms which s. 173 (3) employs and of the effect of the transitional provisions which precede it, it may be seen to exempt from stamp duty instruments which the Chairman of the Trust certifies as having come into existence in connexion with the transfer to the new Fund of the assets and liabilities of the old Fund. Unlike s. 42 (5), it deals specifically with stamp duty, relieving the Fund from the burden of such duty on the initial acquisition by it of the old Fund's assets. Were there to have been liability to stamp duty on such acquisition, its incidence would, no doubt, have been very substantial.

That it was thought proper to exempt from all stamp duty such instruments as were necessary to effect that acquisition is understandable, the more so since, in truth, such instruments represented no true dealing in assets but only gave effect to the new Fund's succession to the assets of the old. What is significant, however, is that, whereas the legislature had occasion specifically to advert to the incidence of stamp duty, it did so only in respect of one transaction, the initial acquisition of the assets of the old fund and then only if appropriate certification was effected. The Act is otherwise silent on the matter, saying nothing about any incidence of stamp duty upon instruments which come into existence in the conduct by the Trust of its day-to-day investment activities. In these circumstances, the presence of s. 173 (3) in the Act cannot be attributed to any mere abundance of caution. Had that been the state of mind of the legislature the exemption conferred would scarcely have stopped short at the initial transaction affecting assets of the old fund. Its presence must, I think, be viewed as a recognition by the legislature that, but for it, liability to State stamp duties might be incurred on the original acquisition of the old Fund's assets and the absence of any wider exemption from stamp duties may then be seen as a legislative acceptance of the Trust's liability to such duties when incurred from time to time in the continuing course of portfolio management. Accordingly I regard the provisions of s. 173 (3) as of quite substantial weight in supporting the view that there was no legislative contemplation that the Trust would, by reason of any connexion with the Crown in right of the Commonwealth, be exempt from stamp duty on instruments by which its function of investing moneys of the Fund was carried into effect.

Reverting to s. 42 (5): if, instead of looking at it in isolation, it be viewed together with s. 173 (3) as the expression of the legislature's intent with respect to the impact of revenue laws upon the superannuation scheme its presence in the Act ceases to be equivocal in effect. It cannot then be explained as indicating no more than an abundance of caution. The legislature has, by s. 173 (3), specifically adverted to stamp duties and if s. 42 (5) was inserted only by reason of caution, to say explicitly what was in any event implicit, there would then be no reason to confine it to taxes upon the income of the Fund rather than extending it to exempt from all imposts. So regarded it seems to point no less clearly than does s. 173 (3) to a legislative acceptance of the inherent liability to taxes and duties generally and to a legislative intent that exemption therefrom be granted, but limited to the extent spelt out in ss. 42 (5) and 173 (3) and no further.

It is in light of each of the foregoing considerations that I have concluded that the Trust is not here to be equated to the Crown in right of the Commonwealth. I have not expressed these various considerations in terms of specific "tests" although the precedent authorities provide fertile ground for the development of the concept of such "tests". I have, of course, had regard to those authorities, while recognizing that the primary task is that of statutory interpretation rather than any mechanical application of supposed tests. I have placed most weight upon the entire independence of the members of the Trust in relation to their investment function. This appears to me to be of considerable importance and to have been so treated in many of the precedent cases; of which may be cited three decisions of their Lordships: Fox v. Government of Newfoundland [12] , Metropolitan Meat Industry Board v. Sheedy [13] and Bank voor Handel en Sheepvaart N.V. v. Administrator of Hungarian Property [14] , per Lord Reid and [15] per Lord Asquith. In this Court like views have been expressed: it suffices to cite decisions in recent years in Grain Elevators Board (Vict.) v. Dunmunkle Corporation [16] , in The Commonwealth v. Bogle [17] , per Taylor J., in City of Launceston v. Hydro Electric Commission [18] , and in Inglis v. Commonwealth Trading Bank of Australia [19] in the leading judgment of Kitto J. To these references may be added the decision of Crockett J. in Taylor v. Town and Country Planning Board [20] and the decision of the Court of Appeal in Tamlin v. Hannaford [21] .

1. [1898] A.C., esp. at pp. 671-672. 2. [1927] A.C., esp. at pp. 905-906. 3. [1954] A.C., esp. at pp. 616-618. 4. [1954] A.C., at p. 631. 5. (1946) 73 C.L.R. 70, at pp. 76, 81, 86-87, 90. 6. (1953) 89 C.L.R., at pp. 281-282. 7. (1959) 100 C.L.R., at p. 663. 8. (1969) 119 C.L.R. 334. 9. [1974] V.R. 173. 10. [1950] 1 K.B. 18.

The importance of the presence or absence of control by the executive government in ascertaining whether or not a statutory corporation possesses a particular immunity or privilege of the Crown is a consequence of the very nature of that inquiry, concerned as it is with the nexus between the corporation and the executive. If a corporation is no more than the passive instrument of the Crown, subject in a high degree to control by the executive, it is appropriate enough that its acts be viewed as those of its master and that it be itself treated as the alter ego of the Crown, enjoying accordingly those immunities and privileges with which the Crown is clothed. If, on the contrary, a statutory corporation is essentially autonomous, its acts being in no sense the outcome of directions by the executive but truly its own, there will be little reason to clothe it with any of those immunities or privileges. In saying this I do not intend to suggest the need for any examination of the actual extent to which particular actions are or are not the result of the exercise of control by the executive: it is the existence of the statutory ability to control, or its absence, that is to be looked at.

No doubt in practice a statutory corporation will seldom be either a mere passive instrument or wholly autonomous. If the former its creation would scarcely be worthwhile, departmental officers could serve the purpose just as well. If the latter it would savour of Frankenstein's monster, hence the usual retention of some control, even if it be no more than some power of appointment and removal of the members of its governing body, perhaps the existence of an obligation to make periodic reports to Parliament, or, particularly if public funds are in question, the imposition of audit and financial reporting procedures.

In the usual case of the statutory corporation which is subject to some greater or lesser degree of control by the executive government, conclusions sought to be arrived at on the basis of the extent of control by the executive will often involve nice questions of degree, particularly in borderline cases. However this is a problem commonly encountered in processes of statutory interpretation and the likelihood of its occurrence does nothing to diminish the relevance of the factor of control.

When, by reference to the extent of control and such other indicia as the constituting statute may provide, a Court embarks upon the task of determining whether, in particular circumstances, a statutory corporation attracts particular Crown immunities or privileges it does no more than seek out the legislative intent. That being the aim, relevant indicia will be as various as the scope of the material in the statute permits. Occasionally, as in the present case, some express reference to immunities may cast light upon that intent: the type of function which the corporation performs, its funding from consolidated revenue, any frustration of its intended purposes which the absence of some immunity or privilege may threaten, all these may aid in divining legislative intent. To dignify anyone or more of them by the title of test or rule may do no harm so long as it neither leads to rigid application of particular tests nor obscures the fact that what is in hand always remains the search for legislative intent.

One observation may be made concerning the significance of the type of function which a corporation performs. There has been both judicial and academic criticism of the notion that attaches significance to the allegedly governmental nature of a corporation's function. It may be acknowledged that what is a function appropriate to government may be answered differently in different ages and under the influence of differing social and political theories of the State. However there nevertheless remain some areas, such as those dealt with in Repatriation Commission v. Kirkland [22] and in Goodfellow v. Federal Commissioner of Taxation [23] , of which it may confidently be said that, in an Australian context, they are traditionally the province of central government. Where that is so it constitutes a relevant factor in any consideration of the claim of the statutory corporation in question to the benefit of some Crown immunity or privilege. But, as I have said earlier, I do not regard this factor as of weight in the present case.

1. (1923) 32 C.L.R. 1. 2. (1977) 51 A.L.J.R. 437; 13 A.L.R. 203; 7 A.T.R. 265; 77 A.T.C. 4,086.

On occasions the legislative intent may be a complex one, especially where a corporation has conferred upon it a number of quite distinct functions. The intention may be that only some of these should attract the immunities and privileges of the Crown. Again, whether a corporation possesses one or more functions, the intention of the legislation may be that only some of the Crown's immunities and privileges should attach to it. Whatever complexities may arise in such cases the course of statutory interpretation will but reflect the complex nature of the legislative intent to which effect is being sought to be given. In such cases indicia may at first sight appear to point in different directions, the apparent conflict only resolving itself by reference to the circumstances relevant to the case in hand and how they bear upon the particular function in question or the praticular immunity or privilege to which claim is made.

In the present case the Trust has but one function and only immunity from stamp duty in the exercise of that function is in question. As will have appeared from what I have earlier said, all relevant indicia appear to me to point quite clearly to the conclusion that the Trust is not, in the exercise of its function of investing moneys of the Fund, entitled to any immunity from stamp duty.

I would answer in the affirmative the question asked in the case stated, as did the majority in the Full Court, and would accordingly dismiss this appeal.

The appellant Trust, which claims to be the Crown in right of the Commonwealth, is the transferee in three memoranda of transfer relating to land on which shopping centres are erected. The common seal of the Trust was affixed to the memoranda of transfer pursuant to s. 96a of the Real Property Act, 1886 S.A., as amended, which requires that "Every transfer shall contain a statement signed by the transferee indicating that he accepts the transfer or grant of the land". Argument has proceeded on the footing that the appellant concedes that it was a party to the three instruments.

The total consideration payable under the three instruments of transfer was $34,430,000. The respondent Commissioner assessed the three instruments to stamp duty under the Stamp Duties Act, 1923-1976 S.A. in an amount of $1,373,990, despite a request by the appellant and the transferors that the instruments be marked "Not subject to duty".

Stamp duty is imposed by s. 5 (1) of the Stamp Duties Act. It is in these terms:

Subject to the exemptions contained in the second schedule and other provisions of this Act, there shall be charged, for the use of His Majesty, the several stamp duties specified in the said schedule and elsewhere in this Act upon and for the several instruments therein set forth, and also such other duties as are specified in the said schedule or in any other provision of this Act. Section 5 (2) provides: The duty chargeable upon any such instrument shall be a debt due to His Majesty from every party who executes such instrument, and shall be recoverable in the name of the Commissioner on behalf of His Majesty from any such party or parties in any court of competent jurisdiction.

In conformity with the provisions of s. 24 of the Stamp Duties Act the appellant appealed against the assessment, the Commissioner stating a case pursuant to s. 24 (5) for the opinion of the Supreme Court of South Australia. The questions asked in the stated case are:

(a) Whether the instruments and each of them are chargeable with the ad valorem duty assessed by the respondent.

(b) Whether the appellant is liable to pay stamp duty.

The Full Court of the Supreme Court held that the second question should not be answered on the ground that the appellant was not entitled under the Stamp Duties Act to raise that question in its appeal. By majority, the Full Court held that the appellant was not the Crown in right of the Commonwealth and that there was no inconsistency between the Superannuation Act 1976, the statute which establishes the Trust, and the Stamp Duties Act. The Court answered question (a) in the affirmative and dismissed the appeal.

In its appeal to this Court the appellant does not challenge the Supreme Court's refusal to answer question (b). We are concerned, therefore, only with question (a) and the correctness of the conclusion reached by the Supreme Court on that question.

Whether the appellant is, or represents, the Crown in right of the Commonwealth depends upon the Superannuation Act. That Act makes provision for a superannuation scheme for Commonwealth public servants and employees of approved Commonwealth statutory authorities and other bodies corporate. Part II of the Act creates the office of Commissioner for Superannuation (s. 17 (1)) and charges him with the general administration of the Act, other than Pt III (s. 17 (2)). The Commissioner is appointed by the Governor-General (s. 18 (1)) and his appointment may be terminated by the Governor-General for misbehaviour or incapacity (s. 23 (1)). It is the Commissioner's responsibility to cause proper records to be kept in respect of contributions paid into the Superannuation Fund in respect of benefits paid under the Act and in respect of amounts that are paid out of the Consolidated Revenue Fund into the Superannuation Fund or vice versa (s. 27).

Part III of the Act deals with the Superannuation Fund Investment Trust ("the Trust") and the Superannuation Fund. It sets up the Trust (s. 28), as a body corporate with perpetual succession and a common seal (s. 29). The Trust consists of three members, all appointed by the Governor-General (s. 30 (1) and (2)). A member holds office on such terms and conditions in respect of matters not provided for by the Act as are determined by the Governor-General (s. 30 (9)). The chairman, who is a full-time member, shall not engage in paid employment outside the duties of his office without the approval of the Treasurer (s. 31). The Treasurer may grant leave of absence to a member on such terms and conditions as he determines (s. 33). A member may resign by writing signed by him and delivered to the Governor-General, but his resignation does not have effect until it is accepted by the Governor-General (s. 34). The Governor-General may terminate the appointment of a member in certain circumstances (s. 35). The Treasurer may fill vacancies in the office of chairman or member (s. 36).

The Fund is established by s. 40 (1). Section 40 (2) provides:

The Superannuation Fund shall form part of the Trust Fund referred to in section 60 of the Audit Act 1901-1975, and the provisions of that Act relating to the Trust Fund (other than section 62B of that Act) shall, subject to this Act, extend to that portion of the Trust Fund which comprises the Superannuation Fund. The Fund is managed by the Trust (s. 41 (1)). The income of the Fund is not subject to Commonwealth, Territory or State taxation (s. 42 (5)).

Part IV deals with contributions. The Act provides for a variety of benefits. They include an age retirement benefit (s. 55), an early retirement benefit (ss. 58 and 59), an invalidity benefit (Pt IV, Div. 4), benefits for spouses (Pt VI, Divs. 1 to 3 inclusive) and an orphan benefit (Pt VI, Div. 4).

In most cases the benefit comprises the payment of a periodic pension. In many cases a lump sum benefit is payable as well. In certain cases the employee is given a right of election for lump sum benefits in lieu of periodic payments: see, for example, ss. 62 and 64. Each employee must pay fortnightly basic contributions (s. 45) and may elect to pay supplementary contributions (s. 48). The contributions are paid to the Commissioner by or on behalf of the persons liable to pay them (s. 53 (1)) and the Commissioner is bound to pay all contributions received by him into the Fund (s. 53 (3)).

All the amounts payable for age retirement benefits, both periodic and lump sum payments, are payable out of the Consolidated Revenue Fund (ss. 55 to 57 inclusive). This result is achieved by s. 112 (2) which provides that, except where other provision is made, any payment of benefit is to be made out of the Consolidated Revenue Fund, which is appropriated accordingly. Every benefit to the extent that it consists of periodic or pension payment is payable out of the Consolidated Revenue Fund and out of it only. Lump sum benefits payable under s. 62 (2) in case of involuntary retirement are also payable out of the Consolidated Revenue Fund.

But a number of lump sum payments are made directly out of the Superannuation Fund. They include accumulated contributions payable out of that Fund under ss. 68 (5), 71 (5) and 80 (1) and certain lump sum benefits equal in amount to the employee's accumulated supplementary contributions. In each case where a pension is payable additionally, it is payable out of the Consolidated Revenue Fund. In each case there is paid from the Superannuation Fund to the Consolidated Revenue Fund an amount equal to the employee's accumulated basic contributions and the total benefit, with the exception of the lump sum equal to accumulated supplementary contributions, is payable out of the Consolidated Revenue Fund (s. 112 (2)).

The costs of, and incidental to, the management of the Fund by the Trust shall be paid out of moneys appropriated from time to time by Parliament (s. 160 (1)). The Fund is subject to audit by the Auditor-General (s. 44 (3), s. 161 (2)). The Trust must report annually to the Treasurer and furnish him with such information as he requires (ss. 161 (1) and 163).

The resumé of the statute reflects various features which tend to demonstrate that the Trust is the Crown. First, the scheme set up by the statute is a superannuation scheme for Crown employees and other employees of Commonwealth authorities or of companies or bodies in which the Commonwealth has a controlling interest or for which it is financially responsible. Superannuation benefits are part of the total remuneration which the Crown provides for its employees. The Superannuation Fund which the Trust manages is a fund established by the Crown for the purpose of providing superannuation benefits for its employees.

The argument for the respondent rested chiefly on the submission that the moneys standing to the credit of the Fund belong in equity to the contributors. I do not agree with this submission. The Act prescribes the amounts of the benefits to which contributors become entitled but it does not, as I read its provisions, give them any property or equitable interest in the Fund. To a very substantial extent benefits payable under the Act are payable out of the Consolidated Revenue Fund, that Fund being reimbursed in appropriate cases by the Superannuation Fund. The moneys standing to the credit of the Superannuation Fund are Commonwealth public moneys in an account within the Treasury (s. 60 of the Audit Act 1901, as amended). To the extent to which the Trust is a trustee of the moneys it is a trustee for the Commonwealth, not for the contributors.

Although the Trust is a separate corporate entity the control which the Crown has over its membership and its activities shows that it is an alter ego of the Crown. Thus its members are appointed and liable to removal by the Executive Government, it is bound to furnish information to the Treasurer at his request and it must submit its annual report and financial statements to the Treasurer after they have been audited by the Auditor-General. The Trust, in determining the investment policy which it will pursue within the prescribed investments which it is authorized to make (see s. 42 (2) and (4)), is free of directions by the Treasurer and the Government, but this in itself does not show that it has been established as a body independent of the Crown.

It must be acknowledged that the provisions of the Act may become applicable to employees of bodies corporate in which the Commonwealth has a controlling interest, and employees of an authority or body which is financed in whole or in substantial part, either directly or indirectly, by moneys provided by the Commonwealth - see the definition of approved authority in s. 3 (1). This circumstance, it is argued, shows that the superannuation scheme extends beyond the realm of Crown employees. So much may be conceded. However, it is to be noticed first, that an authority in order to qualify as an approved authority must be specified in the regulations as an approved authority - see the definition. Secondly, the companies, authorities and bodies described in pars. (iii) and (iv) of the statutory definition are so closely connected with the Commonwealth that the inclusion of their employees in the superannuation scheme does not give the scheme a significantly different character. In essence it remains a scheme whereby the Commonwealth discharges its obligation to Crown employees to provide superannuation benefits.

Although there are some differences between the scheme in this case and the scheme embodied in the Defence Forces Retirement Benefits Act 1948, as amended, the decision in Goodfellow v. Federal Commissioner of Taxation suggests that the Trust is the Crown. The two cases have much in common and I quote what Aickin J. said [24] :

The Board performs what is plainly a governmental function in the administration of the Act, payments under which form part of the terms of service of members of the Defence Forces. The considerations which led this Court in Repatriation Commission v. Kirkland [25] to hold that the Repatriation Commission under the Australian Soldiers' Repatriation Act 1920 was the Crown, notwithstanding that it was given separate corporate personality, appear to me to lead to the conclusion that this Board is also the Crown. It is true that the Repatriation Act gave to the Commission the general administration of the Act "subject to the control of the Minister" and that this feature was relied upon by the Court, along with the general structure of the Act. In my opinion the absence of an express provision to that effect in the present Act does not require a different conclusion in view of the wholly governmental membership of the Board, and the nature of its functions. The alternative modes for dealing with the payment of eighty per cent of each pension payment emphasizes, rather than negatives, the identity of the Board with the Crown. The considerations adverted to in Inglis v. Commonwealth Trading Bank [26] point in the same direction. 1. (1977) 51 A.L.J.R., at p. 442; 13 A.L.R., at p. 213, 7 A.T.R., at p. 273; 77 A.T.C., at p. 4,093. 2. (1923) 32 C.L.R. 3. (1969) 119 C.L.R. 334.

I therefore conclude that the Trust is the Crown in right of the Commonwealth. It was submitted that once this conclusion is reached the Stamp Duties Act exempts the Trust from liability to duty on the footing that it is the Crown. The provision relied upon to sustain this argument is Item 13b under the heading "General Exemptions from all Stamp Duties" in the Second Schedule to the Act. The Item is expressed in this way:

Conveyance, whether on sale or otherwise, to the Crown, or to any person on behalf of the Crown (not being a surrender to the Crown or any such person, of a lease or other interest in land in order that the Crown may grant to a person other than the surrenderor a lease of or other interest in the same land or any part thereof).

The term "the Crown" should, I think, be understood as a reference to the Crown in right of the State of South Australia. The provision is one which exempts the Crown from liability; it is not a provision which imposes an obligation or a liability: cf. Bradken Consolidated Ltd. v. Broken Hill Proprietary Co. Ltd. [27] . The interpretation which I favour accords with indications as to the meaning of the term that are to be found in the Stamp Duties Act itself. When s. 5 (2) makes a stamp duty a duty due to "His Majesty" it refers to His Majesty in right of the State of South Australia, that is, to the Crown in that capacity. Accordingly, the references to the Crown in the exemptions contained in the Second Schedule should be read as references to the Crown in right of the State. I am unable to find in them, or in the subject matter to which they relate, anything that indicates that the Crown means the Crown in right of the Commonwealth as well as the Crown in right of the State. Some references, chiefly Item 13a which precedes Item 13b, seem to be capable of applying only to the Crown in right of a State. Item 13a exempts "Grant of land from the Crown". Although there are other references in the exemptions to the State and to the Commonwealth, I am unable to draw from them any implication that the statute when it speaks of the Crown is speaking of the Crown in right of the Commonwealth.

Certain provisions in the Superannuation Act indicate that whether or not the Trust is the Crown in right of the Commonwealth it is liable to pay stamp duty chargeable under State laws on instruments to which it is a party. The only provision in the Act which exempts the Trust or the Fund from liability for State taxes and duties is that continued in s. 42 (5). It provides that the income of the Fund shall not be liable to taxation under Commonwealth, State or Territory laws. As there is no corresponding provision relating to stamp duty, the implication is that the Trust is liable to stamp duty. This implication is assisted by s. 173 (3) which provides that an instrument that an authorized person certifies to have been made, executed or given by reason of, or for a purpose connected with, the operation of Div. 2 of Pt XII (Transitional Provisions - Existing Superannuation Fund) is not liable to stamp duty.

Read in the light of this, s. 160 (1) is to be understood as a direction that the costs of and incidental to the management of the Fund, including stamp duties payable under State laws, are to be paid out of moneys appropriated by Parliament.

I acknowledge that, so understood, the provisions of s. 160 (1) give some support to the argument that the Trust is not the Crown. However, as the liability is one that arises because Commonwealth law exposes the Trust to it, the existence of the liability is consistent with an identity between the Trust and the Crown.

Section 114 of the Constitution is no barrier to the conclusion that the Trust is liable. If the instrument of transfer is property of the Commonwealth and the stamp duty payable in respect of the transfer is a tax on property of the Commonwealth, the stamp duty is imposed with the consent of the Parliament, as evidenced by ss. 42 (5), 160 (1) and 173 (3) of the Superannuation Act.

Whether or not the Superannuation Fund Investment Trust is "the Commonwealth" is not decisive of this case. The decision rests on three points. First, the Superannuation Act 1976 Cth evinces an intention that the Trust is liable to pay stamp duties under State laws on instruments to which it is a party. Section 45 of the Act exempts the income of the Fund from taxation under Commonwealth, State or Territorial laws. The implication is, therefore, that the Trust is liable to other forms of taxation. This is fortified by s. 173 (3) which provides that an instrument which an authorized person certifies to have been made executed or given by reason of, or for a purpose connected with, the operation of Div. 2 of Pt XII (Transitional Provisions - Existing Superannuation Fund) is not liable to stamp duty.

Second, s. 160 (1) of the Act provides that "The costs of the administration of this Act, including the costs of and incidental to the management of the Fund by the Trust, shall be paid out of moneys appropriated from time to time by the Parliament for the purpose".

Any stamp duty payable is a cost of and incidental to the management of the Fund by the Trust. Section 160 (1) shows that imposition of any such tax by a State is with the consent of the Parliament of the Commonwealth. There is, therefore, no breach of s. 114 of the Constitution, which provides that "A State shall not, without the consent of the Parliament of the Commonwealth, impose any tax on property of any kind belonging to the Commonwealth ". Therefore, even if the Trust is the Commonwealth and the Stamp Duties Act, 1923-1976 S.A. imposes tax on its property, there is no breach of s. 114.

Third, even if the Trust is the Commonwealth, there is no exemption provided for it in the Stamp Duties Act. The exemption in favour of "His Majesty" refers only to the Crown in right of, or the Government of, South Australia. I agree with what Mason J. says on this aspect.

This is an appeal from the decision of the Full Court of the Supreme Court of South Australia which unanimously held that an instrument of transfer of land in South Australia from a vendor to the Superannuation Fund Investment Trust as purchaser was an instrument chargeable with ad valorem duty under the Stamp Duties Act, 1923-1976 S.A. ("the Stamp Duties Act "). The Superannuation Fund Investment Trust ("the Trust") is a body corporate incorporated by the Superannuation Act 1976 Cth ("the Superannuation Act "). It purchased certain real estate in South Australia pursuant to its powers of investment and the instruments of transfer of that land were submitted to the Commissioner of Stamps pursuant to s. 23 of the Stamp Duties Act requiring him to express his opinion with reference to the question whether they were chargeable with any duty. The application for the opinion of the Commissioner of Stamps bore a request that the transfer should be marked "not subject to duty", but he assessed the three transfers to stamp duty amounting in all to $1,373,990.00. There was no dispute as to the quantification of the duty, but only as to whether the instruments were chargeable with duty. Section 27 of the Stamp Duties Act provides as follows:

No person whose office it is to enrol, register, or enter in or upon any rolls, books, or records any instrument chargeable with any duty, or the memorial of any instrument chargeable with any duty, shall enrol, register, or enter any such instrument or memorial, unless the instrument is duly stamped.

Under s. 24 of the Stamp Duties Act provision is made for a person dissatisfied with an assessment by the Commissioner of Stamps to forward to the Treasurer a statement of his grounds for objection or alternatively to appeal to the Supreme Court; if the Treasurer confirms the assessment an appeal lies to the Supreme Court. The opening words of the section are "Any person who is dissatisfied with the assessment of the Commissioner may, on payment of duty in accordance therewith", take the various steps which I have described. The Trust paid the amount of stamp duty and, after the Treasurer had upheld the views of the Commissioner of Stamps, appealed to the Supreme Court. The Stamp Duties Act provides that an appeal to the Supreme Court is to be by way of case stated.

The case stated submitted to the Supreme Court asked two questions which were:

(a) Whether the instruments and each of them are chargeable with the ad valorem duty assessed by the respondent.

(b) Whether the appellant is liable to pay stamp duty.

In the Supreme Court it was held that the second question should not be asked because it was not one which could properly be put to the Commissioner or the Court under the section, because the only questions upon which the Commissioner of Stamps may be required to express his opinion are whether the instrument was chargeable with any duty, and with what amount of duty it was chargeable. It is not now in dispute that the Supreme Court were right in refusing to answer the second question.

The contention of the Trust was that the instruments were not chargeable with duty because the Trust is or represents the Crown in right of the Commonwealth or is an instrumentality or emanation of the Crown in right of the Commonwealth and accordingly the instruments were conveyances to the Crown within the meaning of General Exemption 13b in the Second Schedule to the Stamp Duties Act, or alternatively that the amount of duty was a tax on property of the Commonwealth contrary to s. 114 of the Constitution. A further contention was that the operation of the legislation constituted taxation of the Commonwealth by the State and was therefore invalid, or alternatively the imposition of such duty was inconsistent with the provisions of the Superannuation Act and to that extent inoperative by reason of s. 109 of the Constitution.

Central to all but the last aspect of the argument on behalf of the Trust is the proposition that it is or represents or is an agent or emanation of the Crown. If that contention is not made out it is not necessary to consider a number of other questions which were argued concerning the meaning and operation of the Stamp Duties Act.

The scheme of the Superannuation Act differs considerably from that of its predecessor, the Superannuation Act 1922-1974, and generally speaking the former supersedes the latter, though there are some transitional provisions which continue the latter Act in operation for certain purposes. The general scheme of the Superannuation Act is to establish the office of the Commissioner for Superannuation, an officer who is to be appointed by the Governor-General, and to give to him "the general administration of this Act, other than Part III, and the general administration of the superseded Act." Part III provides in s. 28 that there shall be "a body by the name of the Superannuation Fund Investment Trust" and by s. 29 that the Trust is a body corporate with perpetual succession and a common seal and that it may acquire, hold and dispose of real and personal property and may sue and be sued in its corporate name. Section 30 provides that it shall consist of three members to be appointed by the Governor-General, namely, a Chairman, a member who shall be an eligible employee or a pensioner and one other member. The Chairman is to be a full-time member and the executive member of the Trust; the other two are to be part-time members. The Chairman is to be appointed for a term not exceeding seven years and the other members for a period not exceeding three years. By s. 30 (5) the Governor-General in making appointments is to ensure, so far as practicable, that no person is appointed unless he has appropriate experience in the investment or management of moneys. By s. 35 the Governor-General may terminate the appointment of a member of the Trust for misbehaviour or physical or mental incapacity. By s. 36 the Treasurer may appoint an acting Chairman and an acting member in certain specified circumstances and the Treasurer is also to determine the terms and conditions of appointment of acting members. By s. 40 it is provided that there shall be a "Fund" to be known as the Superannuation Fund and by sub-s. (2) it is provided as follows:

The Superannuation Fund shall form part of the Trust Fund referred to in section 60 of the Audit Act 1901-1975, and the provisions of that Act relating to the Trust Fund (other than section 62B of that Act) shall, subject to this Act, extend to that portion of the Trust Fund which comprises the Superannuation Fund.

By s. 41 it is provided that the Fund shall be managed by the Trust and various powers are given to the Trust to do all things necessary or convenient in connexion with the management of the Fund and the investment under s. 42 of the moneys standing to the credit of the Fund, including certain specified powers such as to give guarantees, to appoint agents, to engage consultants and to open and maintain accounts with the Reserve Bank or any other Bank for the time being approved by the Treasurer. Section 42 (1) provides as follows:

Moneys standing to the credit of the Fund which the Trust, after consultation with the Commissioner, is of the opinion are moneys that are not for the time being required for the purpose of making payments out of the Fund under this Act shall, so far as is practicable, be invested by the Trust in accordance with this section, but the Trust shall so manage the Fund that moneys that are from time to time required to pay benefits that are payable out of the Fund are available for that purpose. Section 42 (2) gives a very wide power of investment, subject however to a direction in sub-s. (4) to invest a required proportion of the Fund in public securities. Section 42 (5) provides that income derived from the investment of moneys standing to the credit of the Fund or from the management of the Fund shall form part of the Fund and "is not subject to taxation under a law of the Commonwealth, a Territory or a State".

Part IV of the Act is concerned with contributions and by s. 45 it is provided that an "eligible employee" shall pay fortnightly basic contributions and by s. 48 may elect to pay supplementary contributions. By s. 53 contributions under the Act are to be paid to the Commissioner by or on behalf of the person liable to pay and a provision is made for deduction of the contributions from the salary of the relevant employees. Sub-section (3) of s. 53 provides "The Commissioner shall pay all contributions received by him into the Fund."

Part V provides for benefits but the details are not material for present purposes, save to note that in relation to certain of the benefits an eligible employee may in some circumstances elect to take a lump sum benefit wholly or partly in lieu of a pension, but the primary benefit is by way of pension.

Part VI deals with benefits payable to spouses and children and Pt VII contains general provisions applicable to benefits. By s. 112 it is provided as follows:

(1) Subject to sub-sections (3) and (4), the accumulated contributions of an eligible employee shall, upon his ceasing to be an eligible employee, be paid out of the Superannuation Fund into the Consolidated Revenue Fund.

(2) Except where otherwise provided by this Act, any payment of benefit shall be made out of the Consolidated Revenue Fund, which is appropriated accordingly.

(3) Where a person ceases to be an eligible employee and, upon his so ceasing, a lump sum benefit of an amount equal to his accumulated contributions is payable to or in respect of him out of the Superannuation Fund, sub-section (1) does not apply in relation to him.

(4) Where a person ceases to be an eligible employee and, upon his so ceasing, a lump sum benefit of an amount equal to his accumulated supplementary contributions is payable out of the Superannuation Fund to or in respect of him, sub-section (1) does not apply in relation to him, but his accumulated basic contributions shall be paid out of the Superannuation Fund into the Consolidated Revenue Fund.

(5) Where a person to whom invalidity pension is payable in accordance with section 67 or 70 again becomes an eligible employee, an amount equal to the amount that was paid in respect of the person out of the Superannuation Fund to the Consolidated Revenue Fund upon his last ceasing to be an eligible employee shall be paid to the Superannuation Fund out of the Consolidated Revenue Fund, which is appropriated accordingly.

By s. 113 it is provided that pensions shall be paid in fortnightly instalments, i.e. out of the Consolidated Revenue Fund. There are certain lump sums which are required to be paid out of the Fund to eligible employees or their personal representatives - see, e.g. ss. 62, 64 and 69, and s. 111 which deals with the death of an eligible employee in respect of whom there is no benefit payable to any person under Pt VI: in such a case a lump sum benefit of an amount equal to that person's accumulated contributions is to be paid out of the Fund to his personal representatives or to such persons as the Commissioner determines. Certain other provisions provide that in some cases accumulated supplementary contributions may be payable out of the Fund - ss. 62 (3), 67 (5), 69 (3), 70 (5), 72 (3), 73 (3), 84 (3), 87 (3), 88 (2), 98 (3), 100 (3) and 101 (3) - but nonetheless the accumulated basic contributions are in such cases paid out of the Fund into the Consolidated Revenue Fund in accordance with s. 112. The details of the circumstances in which eligible persons may elect to take these lump sums are not material. All amounts in respect of "Age Retirement", whether periodic or lump sum, are payable out of the Consolidated Revenue Fund. Where lump sums are otherwise payable, either alone or along with pensions, the lump sums are paid out of the Fund to the person entitled and the balance of the accumulated contributions (if any) in respect of that employee is paid by the Fund into the Consolidated Revenue Fund.

The Fund is thus to be held by the Trust upon trusts to be ascertained from the terms of the Act itself. Those trusts may be described briefly by saying that they are to hold the contributions upon trust to accumulate the income thereof until each relevant employee who makes them ceases to be an eligible employee, to hold all the contributions and the income derived therefrom as a common fund for purposes of investment and to invest the amounts in the forms of investment authorized by the Act. Upon an individual employee ceasing to be an eligible employee, the primary trust is to pay to the Commonwealth by payment into the Consolidated Revenue Fund the proportion of the fund represented by the contributions of that eligible employee and the interest or other income earned thereon during the time that he was an eligible employee ("the accumulated contributions"). In certain exceptional cases the Trust is required to pay either part or the whole of those accumulated contributions to the employee or to his dependants or personal representatives. A statutory obligation rests upon the Commonwealth to pay to each former eligible employee a pension as prescribed by the terms of the Act. That pension is to be payable out of the Consolidated Revenue Fund which is appropriated for that purpose by the terms of the Superannuation Act itself (s. 112 (2)). That statutory obligation continues throughout the life of each former eligible employee with provision in appropriate cases for payments to widows and dependants. The making of such payments out of the Consolidated Revenue Fund is not a use of the Fund either wholly or partly for that purpose, nor is it a use wholly or partly for that purpose of moneys paid into the Consolidated Revenue Fund by the Fund itself. Nor is the amount of the pension calculated by reference, direct or indirect, to the amount of an individual eligible employee's accumulated contributions to the Fund, but it is fixed by the Act itself. Lump sums are, however, related to the accumulated contributions, whether payable out of the Fund or out of Consolidated Revenue. The Consolidated Revenue Fund is from its very nature a common fund in which are blended indistinguishably all payments made to or moneys received by the Commonwealth and payments are made out of the general mass by appropriation. No statute provides for the tracing of individual amounts that are paid into the Consolidated Revenue Fund, for they are by their very nature consolidated upon payment in. If it matters, there could never be an occasion for the application of Clayton's Case [28] or the conceptions of tracing which have been developed in equity. That which reaches the Consolidated Revenue Fund from the hands of the Trust thereby ceases to be trust moneys under the Superannuation Act or at all and becomes simply part of the general funds of the Commonwealth, consolidated together in a single fund pursuant to s. 81 of the Constitution and the Audit Act 1901-1969 Cth. In no sense, therefore, can it be said that the pensions are payable out of the Fund, though some lump sums are payable directly out of it. In this sense the Fund is held primarily, but not exclusively, for the purpose of making payments to the Commonwealth on the happening of the relevant events, i.e. the cessation of an eligible employee to be such.

The nature of the trusts upon which the Trust holds its funds demonstrates that it is by no means a "bare trustee" holding property to which some beneficiary is absolutely entitled in the sense that it may call for immediate transfer of the funds. It has been held that a bare trustee who holds property on trust for the Crown is entitled to the same privileges and immunities as the Crown itself - seeGrain Elevators Board (Vict.) v. Dunmunkle Corporation [29] , per Latham C.J.; Perry v. Eames [30] ; Hornsey Urban Council v. Hennell [31] ; Launceston Corporation v. Hydro-Electric Commission [32] . Although the Commonwealth is in a sense the principal beneficiary for whom the Fund is held, it cannot be said to be absolutely entitled, either now or at any particular future time, although it will from time to time become so entitled to parts of the Fund, upon occasions which are certain and to some extent predictable as to time. As such events occur the Fund will continue to grow or at least be replenished as other eligible employees make contributions to it. The Trust itself has active duties of management to perform in the interest of all who may ultimately become entitled to any part or parts of the Fund, including the Commonwealth, and under the Act in its present form those duties will continue indefinitely. In the absence of amendment of the Superannuation Act the Fund will continue in existence so long as the Commonwealth and its Public Service exist, and during that period there will never be a time when any person or body politic will be absolutely entitled to the Fund.

1. (1946) 73 C.L.R. 70, at p. 74. 2. [1891] 1 Ch. 658, at pp. 668-669. 3. [1902] 2 K.B. 73. 4. (1959) 100 C.L.R. 654, at p. 658.

The Commonwealth has set up this body corporate, the only members of which are nominated by the executive government of the Commonwealth. They are corporators by virtue of that nomination and each ceases to be a corporator on the expiration of his term of appointment. It has no board of management other than the corporators themselves who combine the functions of corporators and directors in carrying on the sole function committed to the corporation, namely, the investment of the Fund and its management, and the payment of sums out of it, the former by exercise of its discretion, the latter by statutory direction. Neither the Trust nor its corporators have any other function and in the performance of the former function they are subject to no direction at all by the executive government. Its only contact with the executive government or its officers, apart from paying moneys into the Consolidated Revenue Fund, is that, in relation to investment of the Fund, it is required to consult with the Commissioner as to what amounts standing to the credit of the Fund are not required for the purpose of making payments out of the Fund under the Act, but not as to the mode of investment. It is required to make its records available to the Auditor-General (s. 44) and to make an annual report and to deliver the report and its financial statements to the Commissioner for transmission to the Treasurer. The Trust is thus an independent body to which is committed the power and the duty to invest and manage large sums which come into its hands regularly each fortnight throughout each year. It has only very limited responsibility for the making of payments to eligible employees or those who have been eligible employees. It is empowered to engage consultants but is under no obligation to consult the executive government nor any of its officers as to the mode in which it should exercise its powers of investment, which in the nature of things would be a continuing task. The skill with which it exercises its powers of investment and reinvestment may in some degree reduce the burden on the Consolidated Revenue Fund out of which pensions must be paid. It must calculate the "accumulated contributions" of individual employees who reach the retiring age or otherwise cease to be members of the Fund, though it is the Commissioner who keeps the records of contributions (s. 27).

In the result it seems to me that, whichever of the various indicia which have been suggested in the many cases on this topic is used in the process of characterization, the Trust does not fall into the category of the Crown, or a servant or agent of the Crown. There is first the absence of any power to control the activities of the Trust; there is also the nature of the function of the Trust which is a limited one, though no doubt of importance. It is an investment manager having wide powers over the nature of the investments to be made and the realization and reinvestment of the Fund. It has no discretion, however, as to the manner in which the Fund is to be dispersed. There is nothing here which could be regarded as an ordinary or usual function of government, or of a means by which such functions may conveniently be performed. No doubt the provision of pensions for retired government employees is a familiar function of government and the choice of means of performing this familiar task and of financing it is a matter which falls to the executive government and the Parliament. No doubt the Trust performs a function which is inherent in the kind of pension scheme which the Parliament has chosen to establish. It does not, however, collect the contributions, but receives them in bulk from the Commissioner, who keeps the records relating thereto, and it makes no payments of pensions as such. Determinations of the entitlement of individual eligible employees are made by the Commissioner, and the Trust plays no part in dealing with disputes as to entitlement. In the present case the Parliament has chosen a system which puts the investment and the management of the invested funds by realization and reinvestment out of the hands of the Public Service and places it in the hands of three persons who are required to have experience in relation to the investment of money, but who are not answerable to the executive government, nor subject to any direction by the executive government as to the manner in which they exercise their powers.

It is only in the widest and most imprecise sense of the terms "governmental functions" or "governmental purposes" that this body could be said to be performing a function of government or carrying out a purpose of government. It is, of course, established by statute and it performs one substantial function in the total scheme for superannuation of public servants. I do not obtain any assistance in its characterization from the fact that the Trust is incorporated or the fact that the funds are legally vested in the body corporate. The situation would, I think, be no different if the legislation provided for the appointment of three commissioners who had the power to vary investments the legal title to which was vested in a custodian trustee, such as the Public Trustee.

The Trust is sui generis, bearing little resemblance to any statutory body discussed in the decided cases. The cases are important, and indeed decisive as to the relevant principles, but no analogy readily presents itself amongst the many bodies which have been the subject of decisions in relation to this aspect of their status.

I am, however, satisfied that where a body has committed to it only one narrowly defined function (i.e. the investment and management of investments) in respect of which it has any discretion at all, and the Parliament has provided a scheme in which in the performance of that function the executive government is precluded from the exercise of any control or influence whatever, then there is no basis for saying that the body is an organ of, part of, or an agent of the executive government, i.e. of the Crown. The mere power of appointment of the persons who will together exercise this one discretionary function does not appear to me to constitute control of the Trust or of its function, there being no power to dismiss except for misconduct or incapacity.

Some reliance was placed in argument on the decision of this Court in Goodfellow v. Commissioner of Taxation [33] which dealt with the Defence Forces Retirement Benefits Act 1948. It was there held that the payments made to that taxpayer were pensions and allowances "paid", or "payments made", by the Commonwealth within the meaning of s. 23 (kaa) of theIncome Tax Assessment Act 1936, as amended. As to 80 per cent of the payments there in question it was clear that they were paid directly by the Commonwealth, though the Act provided an alternative mode of payment which would have amounted to indirect payment, i.e. by payment to the Defence Forces Retirement Benefits Board which would have been obliged immediately to pay the amount over to the person entitled under that Act. The remaining 20 per cent was paid out of or ultimately borne by the Fund to which the taxpayer along with other members of the Defence Forces had contributed. The Board, had, amongst other functions, that of investing the Fund though the range of authorized investment was much narrower than in the present case. The critical provisions of that Act were those which related to the composition and functions of the Board which consisted of the President of the Superannuation Board under the Superannuation Act 1922, as amended, the Commonwealth Actuary, and four persons representing respectively the Minister, the Naval Forces, the Military Forces and the Air Force, who were appointed by the Governor-General after nomination by the relevant Ministers. However, all the persons other than the President of the Superannuation Board and the Commonwealth Actuary (who under their respective Acts were appointed by the Governor-General) were removable by the Governor-General whenever in his opinion it was "desirable or necessary" to terminate such appointment. The composition of the Board and the complete control over the appointment and removal of four out of the six members was sufficient, along with the nature of its functions which included the general administration of the whole of that Act, to demonstrate that it was the Commonwealth or an emanation of the Commonwealth. The present case differs in important respects. The first is that the Trust has not the responsibility for the general administration of the Superannuation Scheme and the Act itself, but a much more limited function, namely, the investment of the Fund and the making of direct payments to the Consolidated Revenue Fund, as well as a limited number of payments to certain eligible persons. Under this Act the basic records in respect of contributions into the Fund and payment of benefits under the Act are to be kept by the Commissioner, not by the Trust. Decisions as to amounts of pensions and entitlement are made by the Commissioner and not by the Trust, and there is an appeal from the Commissioner to the Administrative Appeals Tribunal - see s. 154. It is the Commissioner who makes decisions about, for example, whether persons are entitled to invalidity pensions or having been so entitled are thereafter restored to health so as to be capable of returning to employment, and indeed all other matters concerning eligibility for pensions or other benefits and the amount thereof. All these matters comprise the general administration of the Act and the Superannuation Scheme. It is the management of investments pursuant to the provisions of Pt III which alone is given to the Trust.

1. (1977) 51 A.L.J.R. 437; 13 A.L.R. 203; 7 A.T.R. 265; 77 A.T.C. 4,086.

The segregation of the Trust from the general administration of the Act and the limited nature of its functions, together with the independence of the Trust from government control, the nature of its functions and the security of tenure of its members demonstrate very significant differences between the Trust and the Defence Forces Retirement Benefits Board in Goodfellow's Case. The reasons which I have just indicated for those differences combine to show, in my opinion, that the Trust established under the Superannuation Act is not the Crown nor an agency or emanation thereof.

It was further argued that the provisions of s. 160 (1) of the Superannuation Act which provides that "The costs of the administration of this Act, including the costs of and incidental to the management of the Fund by the Trust, shall be paid out of moneys appropriated from time to time by the Parliament for the purpose" supported the argument that the Fund was the Crown or a servant or agent of the Crown. Alternatively, it was argued that because the costs of management must be borne by the Consolidated Revenue Fund, the burden of the stamp duty fell on the Commonwealth itself, a result which was beyond the power of the State to effect. I am unable to see that there is any substance in this argument. I do not think that the stamp duty in question can properly be regarded as a "cost of" or "incidental to" the management of the Fund. No doubt it is a cost incurred by the Trust, but in my opinion, it is properly characterized as part of the cost of the purchase of the land. It has the character of a capital outgoing, and in a trust which distinguished in its terms between those entitled to income and those entitled to capital, would undoubtedly be on capital account. No doubt that analogy is not an exact one. A closer analogy is to be found discussed in Sun Life Assurance Society v. Davidson [34] which concerned the entitlement to a refund of income tax to a life assurance company under the Income Tax Act 1918 U.K. which required repayment to each such company "of so much of the tax paid by it as is equal to the amount of the tax on any sums dispersed as expenses of management (including commissions)". The company claimed that brokerage and stamp duties incurred upon the investment and reinvestment of funds were "expenses of management", it being common ground that the expression "commissions" in that context did not include brokerage. It was held unanimously by the House of Lords that the amounts paid in respect of stamp duties were not expenses of management and (with one dissentient) that the amounts paid in respect of brokerage were not expenses of management. Lord Reid (dealing with stamp duty) said [35] :

It seems to me more reasonable to ask, with regard to a payment, whether it should be regarded as part of the cost of acquisition, on the one hand, or, on the other hand, something severable from the cost of acquisition which can properly be regarded as an expense of management.

If that be the true test, then I have no doubt that the sums paid for stamp duty were not expenses of management. The companies could not acquire and hold shares without making these payments and no matter of management was involved any more than it was in paying the price due to the seller. Buying the shares and paying the duty were inseparable. I do not say that no payment of duty can be an expense of management: for example, cheques are required for management and it seems to me that the cost of acquisition of cheque books must be an expense of management whether it arises from stamp duty or not. But where payment of duty is a necessary consequence of something which is not itself an expense of management, I do not see how the payment of duty becomes an expense of management.

See also per Viscount Simonds [36] and per Lord Morton [37] . In my opinion those considerations apply equally to the present situation. 1. [1958] A.C. 184. 2. [1958] A.C., at p. 206. 3. [1958] A.C., at p. 197. 4. [1958] A.C., at p. 202.

This payment is part of the cost of the investment and not a cost of management. A fee paid by the Trust to a consultant to give advice on investment or a fee paid to a valuer of land to advise on the value of land might be an expense of management, just as would rent of office space and the salaries of employees, for the only employees which the Fund could have would be those engaged in the management of the Fund. The fact that the making of investments and reinvestments is in one sense part of the management of the Fund does not make any part of the cost of an investment part of the cost of management. It could not be contended that the cost of an investment would be a cost of the management of the Fund, any more than it was contended in the House of Lords that the price payable to the vendor of the securities was a cost of management. In my opinion, therefore, if stamp duty is payable on these instruments, it is not a cost of management to be paid out of the Consolidated Revenue Fund, but part of the cost of the purchase of the investment and, therefore, to be borne out of the Fund itself in the same manner as the amount paid or payable to the vendor. I am, therefore, of opinion that this argument does not assist in leading to a conclusion that the Trust is the Crown, nor does it show any inconsistency with any of the provisions of the Superannuation Act.

Section 40 (2) was also relied upon as an indication that the Trust was the Crown or an agent or emanation of the Crown. The Audit Act 1901-1969 Cth defines the expression "the Commonwealth Public Account" as follows:

"the Commonwealth Public Account" includes moneys constituting the Consolidated Revenue Fund, the Loan Fund or the Trust Fund, and all other moneys received by any person for or on behalf of the Commonwealth. Part VIII of the Audit Act deals with "The Loan Fund" and s. 55 (1) provides as follows: A separate account shall be kept in the Treasury of all moneys which shall be raised by way of loan upon the public credit of the Commonwealth and which shall have been placed to the Credit of the Commonwealth Public Account. Part IX deals with "The Trust Fund". The material provisions are ss. 60, 61, 62 and 62A (1), (3) and (4). Section 62B, which is expressly excluded from application to the Fund by s. 40 (2) of the Superannuation Act, provides for the investment of "The Trust Fund" by the Treasurer in a very limited range of investments, the application of which to the Fund would directly conflict with the wide powers of investment given to the Trust by s. 42 (2) of the Superannuation Act. Moreover the Trust is given express power to open its own bank accounts with the Reserve Bank and with any other Bank approved by the Treasurer. That is the only control exercisable by the Treasurer over any dealing with the Fund by the Trust. This second scheme is completed by s. 160 (2) of the Superannuation Act which provides that: Moneys received and paid under this section, and the accounts in connexion therewith, shall be kept, as part of the Public Account, separately from the moneys and accounts of the Fund.

It is clear that the application of the Audit Act to the Fund is severely limited not only by the exclusion of s. 62B, but also by the words "subject to this Act" found in s. 40 (2) of the Superannuation Act.

The Trust is required by s. 161 to furnish an annual report and financial statements to the Commissioner for forwarding to the Treasurer, and to submit its financial statements to the Auditor-General for him to report thereon to the Treasurer. By s. 163 (2) the Trust is required to furnish the Treasurer with such information relating to the management of the Fund as he may require, but no power of supervision or control is given to the Treasurer.

In my opinion these provisions do not assist in reaching a conclusion that the Trust is the Crown. The limitations on the application of the Audit Act are substantial. It might be said that they are not inconsistent with the Trust being the Crown, but they provide no positive indication that it is. The duty to report to the Treasurer involves no control by the Treasurer.

Of all the kinds of provisions that may be relevant to the determination of whether a statutory body (whether corporate or not) is the Crown, the capacity of the executive government to control its operations (whether directly by instruction or direction or indirectly by power to remove otherwise than for misconduct or incapacity those in control of its operations), and the nature of its functions are the most important. In relation to the Trust neither of these indicators point to it being the Crown, its agent or emanation.

Some consideration is also required of two specific references to the application of some taxes to the Fund and the Trust. By s. 42 (5) of the Superannuation Act it is provided that the income derived from the investment of the income of the Fund or otherwise from its management shall be exempt from taxation under any law of the Commonwealth, a Territory or a State. Part XII contains transitional provisions which include arrangements for the transfer of the assets and liabilities of the old Fund set up by the superseded Act to the Fund created under the new Act to be held by the Trust. Section 173 (3) provides as follows:

An instrument or document that an authorized person certifies to have been made, executed or given by reason of, or for a purpose connected with or arising out of, the operation of this Division is not liable to stamp duty or other tax under a law of the Commonwealth or of a State or of a Territory. Such instruments would include transfers of individual assets of the old Fund. In the case of many such assets the instruments of transfer would prima facie fall within the charging sections of the stamp duty legislation of each of the States and Territories. Such instruments would not be transfers on sale, nor would they be transfers for full, or any, consideration. It is not unnatural that the possible impact of such stamp duties on the transfer of the assets of the old Fund to its successor would call for examination and some legislative provision to be made to avoid those possibilities. The payment of stamp duty on transfers of the assets of the old Fund might well impose a severe burden on the accumulated contributions and disturb the financial expectations of both the government and the contributors. It is to be expected that some special legislative arrangement might be thought desirable to prevent the possible exaction of stamp duties on such transfers. Such transfers and the stamp duties possibly exigible thereon stand in quite a different position from the stamp duties payable on instruments created in the day to day acquisition of new investments and the variation from time to time of such investments. The latter are part of the cost of the new investments payable out of the Fund. The former have no such character.

This express exemption appears to me to constitute a legislative recognition that the Trust is not the Crown and not exempt from State and Territory taxation otherwise than by express provision. The express exemption from income tax appears to me, especially in the context of the exemption from stamp duties, to have the same significance as a recognition of the need for a special legislative provision to provide exemption.

Therefore, I do not regard these provisions as inserted merely for more abundant caution; they are inserted in my opinion because of a recognition of the nature of the statutory body created.

For those reasons I am of opinion that the Trust is not the Crown or its agent and that the imposition of stamp duty on the transfers of land now in question involves no conflict with any law of the Commonwealth, nor with the Constitution. Accordingly, the transfers are not exempt from stamp duty.

In those circumstances it is not necessary for me to consider the interesting questions with respect to the operation of the Stamp Duties Act and the Commonwealth Constitution which would otherwise arise.