The Distribution Group Ltd v Commissioner of Taxation [2000] VSC 418

5. The plaintiff seeks a declaration that its products, the exit lights, are exempt from sales tax pursuant to either Item 20 or Item 43(3) of Schedule I to the Sales Tax (Exemptions and Classifications Act 1992) (Cth) ("the Exemptions and Classifications Act").

8. The Commissioner of Taxation contended that the exit lights belong to a class of goods comprising emergency evacuation lighting for buildings and therefore are properly regarded as emergency lights. The position of the Commissioner was that emergency lights are not ordinarily used to protect persons engaged in industrial operations and that accordingly, the exit lights are not within Item 20 of Schedule 1 to the Exemptions and Classifications Act ("the Schedule").

11. The Commissioner contended, also, that exit lights are not electrical safety devices for the protection of persons, and, therefore, are not within Item 43(3) of the Schedule.

16. Under s 24 of the Sales Tax Assessment Act 1992 an assessable dealing is not taxable if the goods are covered by a relevant exemption Item. The term "Exemption Item" is defined in s 5 to mean:

"an item or sub item in Schedule 1 to the Exemptions and Classifications Act."

20. Item 20 of the Exemptions and Classifications Act is in the following terms:

"Equipment of a kind ordinarily used in the course of industrial operations to protect persons engaged in those operations, including masks, respirators, shields, goggles, visors, helmets, belts and machine guards."

24. Sub-item 43(3) of the Exemptions and Classifications Act creates an exemption in the following terms:

"The following goods, if they are of a kind ordinarily used in connection with fixed electrical installations in consumers' premises: (a) adaptors; (b) plugs; (c) electrical safety devices for the protection of persons."

28. Part E4 of the Building Code of Australia ("the BCA") contains mandatory requirements in relation to emergency lighting, exit signs and warning systems. It is made up of a number of sub-parts comprising the Objective,[1] a Functional Statement,[2] Performance Requirements[3] and Deemed-to-satisfy Provisions.[4] Class -9 buildings must comply with Part E4 of the BCA[5].

"... in an emergency, to safeguard occupants from injury by -

(a) having adequate lighting; and

(b) having adequate identification of exits and paths of travel to exits; and

(c) being made aware of the emergency."

The relevant definitions are contained in Part A1 of the BCA. The word "exit" is defined to mean -

"(a) Any, or a combination of the following if they provide egress to a road or open space:

(i) An internal or external stairway.

(ii) A ramp.

(iii) A fire-isolated passageway.

(iv) A doorway opening to a road or open space.

(b) A horizontal exit or a fire-isolated passageway leading to a horizontal exit."

"Open space" is defined[6] to mean:

"a space on the allotment, or a roof or similar part of a building adequately protected from fire, open to the sky and connected directly with a public road."

"Fire-isolated passageway" is defined[7] to mean:

"a corridor, hallway or the like, of fire-resisting construction, which provides egress to or from a fire-isolated stairway or fire isolated ramp or to a road or open space."

"a required doorway between 2 parts of a building separated from each other by a fire wall."

"Required" "required to satisfy a Performance Requirement or a Deemed-to-Satisfy Provisions [sic] of the BCA as appropriate."

48. The relevant Functional Statement and Performance Requirements are also prescribed by the BCA.[9]

51. Clause E4.0 of the BCA[10] provides that Performance Requirements EP4.1 to EP4.3 are satisfied by complying with E4.1 to E4.0. E4.2 deals with emergency lighting requirements. E4.5 to E4.8[11] deal with Exit signs as follows:

"E4.5 Exit signs: An exit sign must be visible to persons approaching the exit, and must be installed on, above or adjacent to each -

(a) door providing direct egress from a storey to -

(a) an enclosed stairway, passageway or ramp serving as a required exit; and

(b) an external stairway, passageway or ramp serving as a required exit; and

(c) an external access balcony leading to a required exit; and

(b) door, from an enclosed stairway, passageway or ramp at every level of discharge to a road or open space; and

(c) horizontal exit; and

(d) door serving as, or forming part of, a required exit in a storey required to be provided in accordance with emergency lighting in accordance with E4.2."

"E4.6 Direction signs: If an exit is not readily apparent to persons occupying or visiting the building then exit signs with directional arrows must be installed in appropriate positions in corridors, hallways, lobbies, and the like, indicating the direction to a required exit." ... "E4.8 Design and operation of exit signs Every required exit sign must - (a) comply with AS/NZS 2293. 1; and (b) be clearly visible at all times when the building is occupied by any person having the right of legal entry to the building."

59. Certain residential units are exempted from using exit signs which comply with the Australian Standard/New Zealand Standard 2293 ("the Standard") and may instead use a non-illuminated sign.[12]

62. Part 1 of the Standard covers system design, installation and operation. Part 2 covers inspection and maintenance of the overall system and Part 3 specifically covers emergency luminaires and exit signs. Note 1 to clause 1.3.12 of the Standard states that:

"An internally illuminated exit sign may also serve as an emergency luminaire provided that it has been classified for this purpose in accordance with AS/NZS 2293.3."

68. Each of the exit lights is designed to be permanently hard-wired into the normal AC electrical system of a building via a terminal block within the exit light.[13] Electricity is required in order to illuminate the emergency lighting lamp and to continuously charge the battery contained within the exit light. It is designed, also, as a single point unit.[14] As a result, each exit light is a stand alone unit hence if the AC power supply is interrupted the exit light will continue to operate in emergency mode until the battery is depleted. Each of the exit lights is designed so as to be operated in the maintained mode.[15] In effect this means that the emergency lighting lamp is energised at all times. When a mains power failure occurs, the lamp will re-illuminate via a battery backup contained inside the unit within one second of the failure.[16]

71. Furthermore, it seems the primary function of each of the exit lights is to protect occupants of a building from injury by providing sufficient directional lighting to allow safe evacuation in an emergency.

76. In the area of sales tax legislation, the general rules as to the construction of revenue statutes[17] have been approached by the courts by way of the more specific canon that classifications of goods attracting exemptions or beneficial rates should be liberally construed unless the text or context requires a narrow construction: see Diethelm Manufacturing Pty Ltd v FCT,[18] followed in GKIV Australia Ltd v FCT[19]; Telstra Corp v FCT.[20]

79. It was submitted by Mr Maxwell Q.C. who appeared for the Commissioner with Mr Sest that where exemption exists for goods "of a kind" ordinarily used in a particular way (as here for both Items), the proper course is to determine first, the kind or class of goods to which the subject goods belong and second, whether the relevant kind of goods is ordinarily used in the way the Item prescribes.[21]

82. As a result the Commissioner directed attention to the nature, quality and adaptation of the goods in the class or genus in question, not the uses or purposes for which the particular goods are designed or manufactured.[22] However, it appeared to be common ground that the class or genus to which the exit lights belong is that of "emergency evacuation lighting for buildings".

85. The Commissioner submitted that if the Item requires the goods to be "ordinarily used" in a particular way (as for both Items here), then, at least a common use (if there is more than one) must be that described by the Item.[23] It was argued that any use of lesser degree than "ordinary" will be a subsidiary or incidental use which is not covered by the Item.[24]

88. It was also submitted on behalf of the Commissioner that the ordinary meaning of the provision applies.[25] The precise[26] language of the Item must be examined as a whole without artificial concentration upon grammatical parts.[27] It was contended that exemption follows only if the statutory language itself (and not some substitute phraseology) is satisfied.[28] Further, it was contended that there is no automatic predisposition to a liberal construction of exemption Items.[29] A narrow construction should be given if the text or context so requires.[30]

91. I observe that the authorities have adopted the approach that where the Court is called upon to construe a composite phrase such as "fixed electrical installation" or "electrical safety device for the protection of persons", it must ascertain the meanings of the compound expressions in the contexts in which they respectively occur, as matters of ordinary English: see Telstra.[31]

94. In Australian Lighting and Hardware (Falkner) Pty Ltd v Brightlight Nominees Pty Ltd[32] the Appeal Division of this Court held that the words "electrical fittings and accessories" were words which were understood to have a common non-technical usage in respect of which expert evidence as to the meaning of the words was inadmissible and on which the opinion of witnesses on the meaning of the words was inadmissible. In that case light fittings were held to be electrical fittings because they were operated by electricity. I will return to the Australian Lighting Case in relation to the meaning of the relevant words.

Item 43(3) whether the goods are electrical safety devices for the protection of persons.

99. The following matters were not to be in dispute between the parties:

(a) first, the function of emergency lights, and of exit lights in particular, is to facilitate the safe evacuation of buildings in the event of emergency, by identifying the location of safe points of exit from the building;

(b) second, emergency lights are not intended to perform a directional function in non-emergency conditions, although they sometimes do perform that function incidentally. In many instances, the exit point identified by an exit sign is an exit not used under normal circumstances;

(c) third, emergency lights fall within the general category of safety signs. They are excluded from AS 1319 (the Standard dealing with "safety signs for the Occupational Environment) only because it was decided that emergency lights should be dealt with in detail in a separate standard;

(d) fourth, exit lights are permanently connected into the electrical circuitry of a building

105. There was no dispute as to whether the exit lights are "goods ... of a kind ordinarily used in connection with fixed electrical installations in consumers' premises". The only issue in dispute was whether the exit lights are "electrical safety devices for the protection of persons".

108. It was submitted by the Commissioner that the phrase "electrical safety devices" has a special trade meaning which is different to the ordinary English meaning. As a consequence, the Commissioner led evidence, subject to objection, from an expert, one Vidler. He said that an exit light is not an electrical safety device. According to Mr Vidler an "electrical safety device" is a device which protects a building and its occupants against current. When this is detected, the system will automatically shut down the supply. According to Mr Vidler, the following (and only the following) types of devices are properly described as electrical safety devices:

(a) fuses (excessive current melts the metal fuse link);

(b) circuit breakers, which turn off the supply in the event of a current flow above the relevant rating for the circuit.

114. Also included are residual current devices that are now compulsory in all domestic installations. Such devices detect an imbalance in current flow, which may indicate a short circuit or, more likely, a leakage of current. When this is detected, the devices will automatically shut down the supply.

117. In Mr Vidler's opinion, the term "electrical safety device" would not be used in the electrical industry to describe an electrically-powered safety device, of which there are many. Examples of devices of this type are boom gates, lift door light beams, proximity sensors near machinery and on the outside of houses for light switching, fire alarms, retractable screens and shields around machinery.

120. It was contended on behalf of the Commissioner that the distinction drawn by Mr Vidler is consistent with the language of Item 43(3). It was said that goods will only qualify for exemption if they are of a kind ordinarily used in connection with fixed electrical installations. It was argued that if paragraph 43(3)(c) had been intended to include electrically-powered safety devices, then there would have been no need to include the word "electrical" in paragraph (c). The connection between the safety device and the fixed electrical installation would have been sufficient to bring the item within the exemption. It was argued that the word "electrical" was clearly intended to have a limiting operation, confining the exemption to devices whose function is to provide safety in an electrical environment.[33]

123. In Dick Smith Electronics Pty Ltd v FCT[34], Carr J held that sub-item 43(3)(C) -

"would ... clearly extend to such electronically operated devices as heat or smoke detectors".[35]

127. Mr Maxwell submitted that his Honour's expression of view (which was obiter) was erroneous. Rather, he contended that as Mr Vidler said, an electrical safety device (properly so-called) does protect persons against injury but that lights are not devices "for the protection of persons".

130. In my view the evidence of Mr. Vidler was inadmissible for the reasons stated in the Australian Lighting case.[36] Whether the relevant phrase has a particular trade or technical meaning is a question of fact: see also Collector of Customs v Agfa-Gevaert Ltd[37] and Telstra.[38]

133. In Australian Lighting the Appeal Division of this court considered an appeal against orders at first instance restraining the appellant from operating a business on Sundays. The court was concerned with, among other matters, whether a particular shop constituted a hardware shop under relevant legislation. If the particular shop was properly characterised as a hardware shop Sunday trading was permitted. The appellant sold a variety of goods including light fittings. The respondent asserted that the appellants' shops were a sham being lighting shops masquerading as hardware shops. The majority of the Appeal Division allowed the appeal.[39] A matter considered by the court was whether the words "electrical fittings & accessories" were words the meaning of which could be the subject of expert evidence. The trial judge at first instance admitted purported expert evidence as to the technical meaning of the words "electrical fittings and accessories". The majority of the court held that the trial judge fell into error in admitting the expert evidence. Brooking J (as he then was) held[40]:

"The expression "electrical fittings and accessories" is not, on its face, a technical term. It is made up of everyday words and there is not to be found in the Act any indication that Parliament intended the expression to bear any other meaning than that which it has in ordinary speech in Victoria. A good deal of evidence was admitted on the meaning of the expression, or parts of it, and on the meaning of `lighting fittings' and other expressions, and this evidence or a substantial part of it was relied on by the learned judge. I do not think the evidence received was admissible. `If the Act is one passed with reference to a particular trade, business or transaction, and words are used which everybody conversant with that trade, business, or transaction knows and understands to have a particular meaning, though it may differ from the common or ordinary meaning of the words.': Unwin v Hanson [19891] 2 Q.B. 115, at p.119, per Lord Esher M.R. It has never been made clear what the supposed industry or business is in which the phrase presently in question is said to have a recognised meaning. ..... I shall assume, however, that it is possible here to identify what Bennion, S_tatutory Interpretation,_ p. 803, calls `a particular expertise with which the Act is dealing'. (I am disposed to think that if this were possible the expertise would have to be defined in some such way as the expertise of those engaged in retail trade.) Still the evidence led fails to prove what had to be shown. For it must be shown, as Lord Esher put it, that everybody conversant with the trade or business in question takes the words to have a `technical' or `particular' meaning. Compare London and North Eastern Railway Co. v Berriman [1946] A.C. 278, at pp. 305-6, per Lord Porter. And there must be agreement as to what that meaning is: proof of several similar versions will not suffice, for Parliament is not to be taken as having intended to use the words in some special sense which cannot be precisely identified. The commercial designation which is different from the ordinary meaning must be both general in its acceptance and definite in its signification: Whitton v Falkiner [1915] HCA 38; (1915) 20 C.L.R. 118, at p. 127, per Isaacs J."

"As I have said, it seems to me that those were not the issues, and the opinion of the witnesses as to the meaning of each of those words was irrelevant to the case, unless it could be said that the words used in para. (h) bore a technical meaning only. I do not consider that this was an appropriate case to call on the assistance of experts to offer their understanding of the meaning of the words. These are words which are capable of being understood as having a common, non-technical, usage and not as being words which have no meaning other than a technical one. Separated, the words `electrical' and `fittings' are capable of being given meaning without resort to expert advice."

139. Obviously, Australian Lighting was not a case concerned with sales tax legislation in any sense. The decision of the majority is not binding upon me for present purposes. However, the approach of the majority in Australian Lighting is highly relevant and persuasive in the consideration in the present matter as to whether evidence was admissible as to the technical meaning of the expression "electrical safety device".

142. Ultimately, I conclude that the evidence of Mr Vidler was not admissible for a number of reasons. First, the expression "electrical safety device" is not, on its face, a technical term. It is made up of everyday words. Second, the Exemptions and Classifications Act does not reveal any legislative intention that the words were to convey other than their ordinary everyday meaning. Third, on no view could it be said that the sales tax legislation is concerned with a particular trade or industry where all participants conversant with that trade or industry know and understand the words in the context of that trade or industry. Fourth, it was not apparent in this proceeding as to what the supposed trade or industry is in which the words are said to have an accepted meaning save for the vague expression or use of the description "the electrical industry".

145. It follows that I treat the evidence of Mr Vidler as to the technical meaning of the words as inadmissible.

148. However, if I were to assume that it is possible to identify a particular expertise with which the Exemptions and Classifications Act is concerned the evidence of Mr Vidler does not prove what was required to be shown. In the words of Brooking J in Australian Lighting[42] "proof of several similar versions will not suffice". Nor in my view does the solitary evidence of Mr Vidler. He gave the evidence as to his belief and understanding as to the accepted and understood meaning for the words "electrical safety device" but that was his view. I was unable to conclude from the evidence of Mr Vidler, in any event, as to the particular trade or industry he regarded as applying the asserted meaning of the words. Ultimately, in so far as it may have been necessary for me to do so, I consider that no uniform and definite view on usage of the words "electrical safety device" emerges from the evidence. Mr Vidler said the words had a technical meaning. Other experts called on behalf of the Plaintiff, Mr Hosking and Mr Collins said that there was no such trade meaning. It seems to me, therefore, that the difference in views of the experts itself compelled the conclusion that there is not an accepted technical meaning of the words "electrical safety device" within any industry.

151. For these reasons I consider that the ordinary meaning of the words "electrical safety device" should be applied.

154. In Telstra, Lindgren J (with whom Ryan J agreed) held that overvoltage protection cassettes were exempt from sales tax. In response to an argument that the cassettes were not described within the electrical industry as being for the protection of persons, Lindgren J observed[43]:

"It must be remembered, however, that the present task is one of construing ordinary English language rather than deciding between expert evidence as to industry or trade usage."

158. The concept of protection is useful in the determining the meaning of the expression "electrical safety device".

161. Protection is not limited to items such as guards or barriers which directly shield a person. The Shorter Oxford English Dictionary defines "protection" as follows:

"1. To defend or guard from injury or danger; to shield; to keep safe, take care of ..."

165. In Airovent Pty Ltd v FCT[44] Sackville J adopted a similar meaning of the word "protect" namely:

"to cover or shield from injury or danger, or to keep safe"

169. In my view it is clear from Objective E04 in the BCA that the objective of requiring the installation of exit lights is to "safeguard occupants from injury".[45] Similarly the objective of the requirements of the Standard is to:

"ensure the provision of visual conditions that will alleviate panic and facilitate safe evacuation of the building occupants".[46]

173. It is settled law that something may "protect in a passive manner". In Nagle v Rottnest Island Authority[47] the majority of the High Court held[48] that:

"In our view, the giving of a warning that the ledge was unsafe for diving was the action that a reasonable person in the respondent's situation would have taken to guard against the foreseeable risk of injury which existed".

177. In Sanfead v Rovell Drilling Pty Ltd (unreported judgment of the Full Court of the Supreme Court of Western Australia[49]) Rowland J noted[50] that "warning signs are a well recognised tool for use in avoiding accidents". In Dick Smith Electronics,[51] Carr J, with whom the other members of the Court agreed, held that Item 43(3)(c) was not concerned solely with items which had only a physical function but would "clearly extend to such electronically operated devices as heat or smoke detectors".

180. The Commissioner contended that the phrase "electrical safety devices" should be read restrictively to mean safety devices such as fuses and circuit breakers which protect one from the adverse effects of electric shock. As a matter of ordinary English usage there is no warrant for reading down the phrase in this way. The word "electrical" is an adjective that describes the relevant device, in this case a safety device, which is operated electrically or is otherwise concerned with electricity. Such approach accords with the approach adopted in the Australian Lighting case.[52]

183. This view is consistent also with the whole Item that is concerned with devices which of themselves are electrical fittings and the like, that is "operated by electricity". In my view, if the Item was read as limiting the protection devices to those which protected people from the adverse effect of current normally present in the relevant electrical installation it would incorporate a non electrical sign that was required to be attached to an electrical installation, such as a "Danger - Live Wires" sign. While such a sign would clearly be exempt under Item 20 as safety equipment it would not be characterised properly as electrical safety equipment. Such view attracted the support of the Full Court in Dick Smith where it was held[53] that sub-item 43(3) would

"clearly extend to electronically operated devices as heat or smoke detectors."

187. Furthermore, the Commissioner's position was not one that attracted the support of the Full Court in Telstra. Although the issue did not directly arise in Telstra, because the cassettes protected people from current, it is to be appreciated that the current to be protected from was not current normally in the system itself. The relevant fixed electrical installation in that case (a telephone exchange) operated on very low voltage (48 volts) and low current (0.02 to 0.01 amps).[54] The relevant device in Telstra protected people from externally introduced current, that is, from lightning.[55] Furthermore, the cassettes in Telstra were also concerned to protect people from the further indirect damage of the introduced current causing a fire. In the present case, apparently one of the main causes of fire is via the electrical system in a building. It would be ironic, and I consider unintended, if an electrical device such as a fuse that sought to prevent a fire was exempt but an electrical device which was intended to provide safe evacuation was not exempt.

190. In Telstra each member of the Court held that it was sufficient if "at least one significant purpose of the [goods] is the protection of [persons]".[56] Such purpose is at least made out in the present case.

193. Item 43(3) requires that the goods must be "used in connection with" a fixed electrical installation. These are words "of the widest import": Telstra[57]. In this case the exit lights are fixed to (so as to form part of) the fixed electrical installation, although they would equally be used in connection with such an installation if they were merely plugged into the electricity supply.[58] It follows that I consider that the exit lights qualify for the exemption under Item 43(3).

Item 20 - Whether the exit lights were industrial safety equipment

198. In so far as it is necessary to do so, I turn to consider the exemption under Item 20. The phrase "of a kind ordinarily used" qualifies both subsequent expressions in the Item.[59] Thus, to achieve exemption, the exit lights must satisfy both "ordinary use" tests. That is, they must:

(a) be ordinarily used "in the course of industrial operations"; and

(b) be ordinarily used "to protect persons engaged in those operations".

204. It was common ground that the function of exit lights is to facilitate the safe evacuation of buildings in the event of emergency. The Commissioner conceded that exit lights are ordinarily used in the course of industrial operations. However, it was contended that they are not "ordinarily used to protect persons engaged in those operations" within the meaning of Item 20. The Commissioner relied upon the meaning of the word "protect". The word "protect" is defined to mean, inter alia:

- "To defend or guard from injury or danger; to shield from attack or assault ... to preserve intact, or from encroachment ... To provide (machinery etc) with devices or appliances to prevent injury from it ... To provide (an electrical device or machine) with safeguards against too high a current or voltage" (emphasis added)".[60] - to defend or guard from attack, invasion, annoyance, insult, etc; cover or shield from injury or danger".[61]

208. The latter definition was adopted by Sackville J in Airovent Pty Ltd v FCT.[62] The Commissioner argued that adapting his Honour's formulation to the present case, it is necessary to consider whether the exit lights are:

"ordinarily used to protect (in the sense of shield from injury or danger) persons engaged in [industrial] operations."[63]

212. It was submitted that the distinguishing characteristic of a shield is that it stands between the person protected and the danger or risk in question. Thus, the word "shield" is defined as meaning (inter alia):

- "to protect (a person or object) by the interposition of some means of defence ... [64] - to protect with or as with a shield ... to serve as a protection for."[65]

216. It was submitted further for the Commissioner that the exit lights do not operate to shield workers from injury or danger. They are not interposed between workers and a danger or risk which is present (and against which they therefore require protection) while they are engaged in carrying out work-related tasks.

219. By contrast, it was argued, goods of each of the following kinds operate to shield workers against a danger or risk which arises during the course of the industrial operations and which is a direct consequence of those operations:

- protective equipment worn by workers while working, such as "masks, respirators, shields, goggles, visors, helmets [and] belts" (per Item 20);

- "belts" and "machine guards" (per Item 20) which are set in place or adjusted by workers operating certain machinery;

- exhaust fans which are operated in commercial kitchens to extract and expel airborne contaminants generated in the course of the industrial operations in question;

- sunglasses worn by workers for protection against ultraviolet radiation.

226. The Commissioner contended that the common characteristic of each of these classes of goods is that they function by way of physical intervention in the course of industrial operations, to protect those engaged in the operations, whether by:

(a) immediate personal application (the wearing of a mask or sunglasses);

(b) proximate mechanical function (the operation of an exhaust fan); or

(c) direct physical action in the work activity (utilising a machine guard).

232. The function of these items of equipment in protecting workers against work-related hazards may be contrasted with the function of Emergency Lights, which is to provide information to building evacuees in an emergency, in order to facilitate their decision-making.

235. The Commissioner accepted that the exit lights are within the general category of safety signs, and that their presence is likely in the event of a future emergency to reduce the risk of injury to workers. However, it was urged that these characteristics do not suffice to bring the lights within the scope of Item 20.

238. Item 20 exempts "equipment of a kind ordinarily used in the course of industrial operations to protect persons engaged in those operations." The expression "ordinarily used" in Item 20 means commonly or usually used, not exclusively or principally used: The New South Wales Cancer Council v FCT[66] (subsequently upheld on appeal). The expression "industrial operations" in Item 20 refers generally to tasks performed in the course of employment. The New South Wales Cancer Council v FCT.[67]

241. In my view given that the requirements of the BCA concerning exit lights cover virtually every conceivable type of building in which "tasks [are] performed in the course of employment" the requirement of the exemption Item that the goods be ordinarily used "in the course of industrial operations" for protection is satisfied in the present case. It follows, in my view, that the protection afforded by the relevant equipment or device is not to be limited to active protection. I note that it is a view that has apparently been accepted by the Commissioner in relation to safety signs.[68] In my view, it follows that there is no basis for distinguishing between a non illuminated "Emergency Exit" sign that is exempt under Item 20 and an exit light which is apparently not considered to be exempt under Item 20.

244. In FCT v New South Wales Cancer Council[69] the Full Court of the Federal Court held that the protection afforded by the goods need not be protection from risk that arises out of the operations in which they are used. However, I consider that even if it does, there is an inherent risk in working in any building that there will be a fire or other emergency that will require evacuation. In this respect at the very least the exit lights constitute "equipment of a kind ordinarily used in the course of industrial operations" for more protection.

247. I am satisfied that the exit lights in question do much more than provide a passive sign of the type referred to by the Commissioner. The court was provided with a number of samples of exit lights together with a demonstration as to their operation. Indeed, there were samples of the exit lights located with the court itself. The exit lights guide occupants to a safe exit and are illuminated via a back up system in the event of a power failure. They also provide a degree of emergency lighting. They form an integral part of an emergency evacuation system. In my view they are much more than, for example, a passive "Emergency Exit" sign.

250. It follows from these reasons that I am satisfied that the emergency evacuation lights manufactured by the plaintiff are exempt from sales tax under Item 43(3) of Schedule 1 to the Exemptions and Classifications Act. In so far as it may be necessary, I am satisfied that the plaintiff's products qualify also for exemption under item 20 of the Act.

[5] See A1.5 and the definition of building classifications in A3.2.

[14] See clause 1.3.36 of the Standard.

[15] See clause 1.3.24 of the Standard.

[16] See clause 2.4.2.2 of the Standard.

[17] See D C Pearce and R S Geddes, Statory Interpretation in Australia (4th ed, 1996, pp 235-236).

[18] [1993] FCA 437; (1993) 44 FCR 450 at p 464 per French J.

[19] [1994] FCA 1186; (1994) 28 ATR 321 at p 323 per Foster J.

[20] (1996) 68 FCR 566 at p 569 per Heerey J.

[21] Diethelm Manufacturing Pty Ltd v FCT [1993] FCA 437; (1993) 44 FCR 450 (FFC French, Hill and Whitlam JJ) per Hill J at 470-2; FCT v Chubb Australia Ltd [1995] FCA 1146; (1995) 56 FCR 557 (FFC) at 569-70 per Hill J; Airovent Pty Ltd v FCT 98 ATC 4,800 at 4,803, 4804 (FC Sackville J); Kmart Australia Ltd v FCT 96 ATC 5,155 at 4,160.

[22] Hygienic Lily Pty Ltd v FCT (1987) 13 FCR 396 at 399.

[23] FCT v Chubb Australia Ltd [1995] FCA 1146; 56 FCR 557 at Hill J at 570, per Burchett J at 560_;_ Cormack Pty Ltd v FCT 92 ATC 4121.

[24] FCT v Chubb Australia Ltd [1995] FCA 1146; (1995) 56 FCR 557 per Burchett J at 560.

[25] Airovent Pty Ltd v FCT 98 ATC 4,800 at 4,803 (FC Sackville J). In an appropriate case this may involve a trade or industry meaning.

[26] Diethelm op. cit. at 470 per Hill J.

[27] Zeroz Pty Ltd v FCT 97 ATC 4277 at 4283 (FFC); Collector of Custona v Agfa-Gevaert Ltd [1996] HCA 36; (1996) 186 CLR 389; Diethelm op. cit. at 472 per Hill J.

[28] Airovent Pty Ltd v FCT 98 ATC 4,800 at 4,809 (per Sackville J)

[29] Totalizator Agency Board v FCT (1996) 69 FCR 311 (Hill, Tamberlin and Sundberg JJ) per Hill J at 322-3.

[30] Telstra Corporation Ltd v FCT, (1996) 68 FCR 566 (Ryan, Heerey and Lindgren JJ) at 569 per Heerey J (referring to French J in Diethelm at 463-4); Reece Pty Ltd v FCT 97 ATC 5,005 at 5,009.

[32] [1994] VicRp 40; [1994] VR 553

[33] cf. Telstra (1996) 68 FCR 566 at 586-7.

[37] [1996] HCA 36; [1995-1996] 186 CLR 389 at p.395

[47] [1993] HCA 76; [1992-1993] 177 CLR 423

[49] (No 79 of 1994) Butterworths Unreported Judgments

[54] See Telstra at first instance 95 ATC 4400 at p.4402.

[56] Per Ryan J at p.5698, Heerey J at p.572G and Lindgren J at p.586F and p.589A; see also Mayne Nickless Ltd v FCT 91 ATC 4621 at p.4630 per Ashley J and FCT v Stewart ]1993-1994] [1984] HCA 11; 154 CLR 385 at p.401.1 per Deane J.

[58] FCT v Kambrook Distributing Pty Ltd 96 ATC 4256 per Sundberg J; Case 40194 94 ATC 372 para 4. See also Dick Smith Electronics Pty v FCT 97 ATC 5089 at p.5097 where Tamberlin J held (L11C.9-RHC.2) that the phrase "in connection with" was concerned with a broader category of goods than the phrase "as part of". See also Lindgren J in Telstra at p.580F.

[59] Mayne Nickless Ltd v FCT 91 ATC 4621 at 4623-4 (per Fullagar J) and at 4626 (per O'Bryan J). Whilst the adverbial phrase in the Item there (Item 113G in previous legislation as the predecessor to Item 20) was different, namely "used exclusively, or primarily and principally", the difference is immaterial to this point. The new phrase "ordinarily used" was accepted by the parties in Airovent as governing both subsequent expressions 98 ATC 4800 at 4804.

[60] Oxford English Dictionary, 2nd Ed (1989), senses 1 and 4.

[61] Macquarie Dictionary 2nd Ed (1991), sense 1.

[64] Oxford English Dictionary 2nd Ed (1989)

[65] Macquarie Dictionary 2nd Ed (1991)

[67] 99 ATC 4427 at p.4433; Mayne Nickless Limited v KT 990 ATC 4104 (Marks J) at p.4105; affirmed in Mayne Nickless Limited v FCT 91 ATC 4621 (S Crt F/C) (no challenge being made to Mark J's analysis on this issue: see p.4625 per O'Bryan J).

[68] Sales Tax Bulletin No.16; Sales Tax Ruling SST 17

[69] (Unreported Full Court Federal Court 20 August 1999) [1999] FCA 1146