Consideration and determination on statutory construction
118 As noted above, the parties were generally agreed on the relevant principles of statutory construction, however, the applicant joined issue with some aspects of the Commissioner's reliance on those principles. In my view, the central task of statutory construction in this proceeding is assisted by reference to the following general principles.
119 First, it is important at the outset to acknowledge the distinction between the legal, as opposed to the grammatical, meaning of statutory text. This is emphasised in the following extract from the joint judgment of McHugh, Gummow, Kirby and Hayne JJ in the leading decision of the High Court in Project Blue Sky (footnotes omitted):
78. However, the duty of a court is to give the words of a statutory provision the meaning that the legislature is taken to have intended them to have. Ordinarily, that meaning (the legal meaning) will correspond with the grammatical meaning of the provision. But not always. The context of the words, the consequences of a literal or grammatical construction, the purpose of the statute or the canons of construction may require the words of a legislative provision to be read in a way that does not correspond with the literal or grammatical meaning. In Statutory Interpretation, Mr Francis Bennion points out:
The distinction between literal and legal meaning lies at the heart of the problem of statutory interpretation. An enactment consists of a verbal formula. Unless defectively worded, this has a grammatical meaning in itself. The unwary reader of this formula (particularly if not a lawyer) may mistakenly conclude that the grammatical meaning is all that is of concern. If that were right, there would be little need for books on statutory interpretation. Indeed, so far as concerns law embodied in statute, there would scarcely be a need for law books of any kind. Unhappily this state of being able to rely on grammatical meaning does not prevail in the realm of statute law; nor is it likely to. In some cases the grammatical meaning, when applied to the facts of the instant case, is ambiguous. Furthermore there needs to be brought to the grammatical meaning of an enactment due consideration of the relevant matters drawn from the context (using that term in its widest sense). Consideration of the enactment in its context may raise factors that pull in different ways. For example the desirability of applying the clear literal meaning may conflict with the fact that this does not remedy the mischief that Parliament intended to deal with.
120 The importance of the distinction between the legal and grammatical meaning of statutory text was subsequently emphasised by French CJ, Hayne, Kiefel, Gageler and Keane JJ in Thiess at [22] (footnotes omitted):
22. Statutory construction involves attribution of meaning to statutory text. As recently reiterated:
This Court has stated on many occasions that the task of statutory construction must begin with a consideration of the [statutory] text'. So must the task of statutory construction end. The statutory text must be considered in its context. That context includes legislative history and extrinsic materials. Understanding context has utility if, and in so far as, it assists in fixing the meaning of the statutory text.
121 Chief Justice French and Hayne J reaffirmed these principles in Certain Lloyd's Underwriters v Cross [2012] HCA 56; 248 CLR 378 at [25]-[26]. In particular, their Honours emphasised that the search for "legal meaning" involves the application of "the processes of statutory construction" and that the identification of statutory purposes and legislative intention is the product of those processes, and not the discovery of some subjective purpose or intention.
122 Secondly, as the Commissioner correctly emphasised, the consideration of text often requires consideration of context and questions of context should be addressed in the first instance and not merely at a subsequent stage when ambiguity may arise (see the authorities referred to in [48] above). I consider that the Explanatory Memorandum to the Bill which introduced Div 144 provides a relevant part of that context. In particular, as the Commissioner submitted, the relevant part of the Explanatory Memorandum (which is set out at [61] above) makes clear that the exception which was created in respect of taxis was informed by an appreciation of the difficulties which had arisen with goods and services taxes in overseas jurisdictions and the fact that some but not all taxi drivers were registered for GST purposes. This meant that GST was not paid by all drivers or, in the case of unregistered taxi drivers, GST could be collected and not remitted.
123 A plain object of Div 144 was to address this problem by requiring all persons who supplied "taxi travel" to be registered for, and remit, GST. I accept the Commissioner's construction that, in these circumstances, the concept of "taxi travel" as defined in s 195-1 should be construed broadly and not technically.
124 Thirdly, although the High Court made reference in Agfa-Gevaert at 399 to a "presumption" in favour of trade meaning in revenue statutes, it emphasised that this did not "deny the possibility that words used in a revenue statute directed to commerce are to be understood in their ordinary meaning".
125 I consider that other matters point to the need for a broad and non-technical approach to be taken in construing the relevant provisions of the GST Act. As Young J noted in Saga Holidays at [70] in the context of determining whether holiday package tours were "taxable supplies" within the meaning of s 9-5 of the GST Act:
70 The second answer to Saga's argument is that it depends on a very technical reading of s 195-1 that does not sit comfortably with the policy and purposes of the GST Act or the context in which s 195-1 must be applied: see HP Mercantile 143 FCR 553 at [40]-[43] per Hill J. GST has been described as a practical business tax: Sterling Guardian Pty Ltd v Commissioner of Taxation (Cth) (2005) 60 ATR 502; 220 ALR 550 at [39]. It falls on a wide variety of transactions that constitute taxable supplies and it is self-assessing. For this reason, the legislation is expressed in broad and flexible language. These considerations, and the nature, policy and surrounding legislative context of the GST Act, indicate that the Court should construe the Act in a practical and common sense way and that, generally speaking, it should avoid interpretations which are unduly technical or overly meticulous and literal: see HP Mercantile 143 FCR 553 at [41]-[53] per Hill J; and Hill DG, "Some Thoughts on the Principles Applicable to the Interpretation of the GST" (2004) 6 Journal of Australian Taxation 1. This approach seems particularly apposite to the construction of s 9-25 and s 195-1.
126 In Saga Holidays, Stone J (with whom Gyles J and Young J agreed) noted that the Court had tended to adopt a purposive approach to the interpretation of the GST Act and had rejected "strict grammatical analyses in favour of a consideration not only of the syntax but also of "the policy and the surrounding legislative context" of the relevant provision" and with the characterisation of the tax as "a practical business tax" (see at [29]). Her Honour added that, this did not mean that there was "some special canon of construction that should be applied when interpreting the GST Act", however, recognition of the legislation as involving "a practical business tax", requires a broad approach to be taken to the relevant context, which includes the "legislative history, the parliamentary intention and the mischief to which a particular provision has been directed", citing at [30] the Full Federal Court's observations in Chaudhri v Commissioner of Taxation [2001] FCA 554; 109 FCR 416.
127 I consider that there is particular force in the Commissioner's submission that, in construing the phrase "taxi travel", it is relevant to take into account the fact that the legislation is directed to persons who supply "taxi travel", who need to understand whether or not they are obliged to register for GST, notwithstanding that their income does not reach the general statutory threshold. This reinforces the desirability of construing the legislation in a practical and common sense way and to avoid an approach which is "unduly technical or overly meticulous and literal" as Young J observed in Saga Holidays at [70].
128 A practical and common sense approach was adopted and applied by Sundberg J in Lansell House at first instance at [51] and [52]. As noted above, the issue there was whether Italian flat bread fell within item 32 of Sch 1 to the GST Act. His Honour described the question for decision as "the proper classification of every day food items for the purpose of the Goods and Services Tax". He then added at [59]:
… The everyday English words in item 32 must be given their ordinary and natural meaning - what is the reasonable view on the basis of all the facts known to the Court as to whether or not the product is one which falls within the relevant category, which here is crackers. Thus, it seems to me, it is inappropriate for the Court to apply refined analytical tools - in this case rather elusive and qualified technical distinctions - to an ordinary English word, rather than local knowledge and common sense. As Toulson LJ said in Procter & Gamble, this is not a scientific question.
129 Justice Sundberg held that the words in item 32 were ordinary English words and were not used in any specialised sense. His Honour held that the product in question was a "cracker" within the meaning of item 32. His Honour's decision was upheld on appeal (see Lansell House Pty Ltd v Commissioner of Taxation [2011] FCAFC 6; 190 FCR 354 per Bennett, Edmonds and Nicholas JJ).
130 Fourthly, I accept the Commissioner's submission that this is an appropriate case in which to regard the relevant provisions of the GST Act as "always speaking". Thus, merely because software technology of the type used in providing the uberX service may not have been known at the time that Div 144 was inserted into Pt 4-5 of the GST Act is not determinative.
131 Fifthly, there is the issue whether the definition of "taxi travel" in s 195-1 is to be construed as a composite phrase. The relevant principles guiding the construction of a composite phrase are reflected in the following summary by Gordon J in Sea Shepherd at [34] (with whom Besanko J agreed):
34. The general principles of construction of a statute were not in dispute. For present purposes, it is sufficient to record that they were identified by the Tribunal and may be summarised as follows:
1. The task is to construe the language of the statute, not individual words: St George Bank Ltd v Federal Commissioner of Taxation (2009) 176 FCR 424 at [28]; see also XYZ v Commonwealth (2006) 227 CLR 532 at [102]; R v Brown [1996] AC 543 at 561 quoted in Agfa-Gevaert at 397 and Metropolitan Gas Company v Federated Gas Employees' Industrial Union (1925) 35 CLR 449 at 455.
2. The task is not to pull apart a provision, or composite phrase within a provision, into its constituent words, select one meaning, divorced from the context in which it appears, and then reassemble the provision: Lorimer v Smail (1911) 12 CLR 504 at 508-10; R v Carter; Ex parte Kisch (1934) 52 CLR 221; Biga Nominees Pty Ltd v Commissioner of Taxation (1991) 21 ATR 1459 at 1468-1469. Indeed, it is rare that resort to a dictionary will be of assistance in searching for the legal meaning of a provision in a statute: R v Campbell (2008) 73 NSWLR 272 at [49].
3. As Gleeson CJ said in XYZ v Commonwealth at [19]:
There are many instances where it is misleading to construe a composite phrase simply by combining the dictionary meanings of its component parts.
See also General Accident Fire & Life Assurance Corporation Ltd v Commissioner of Pay-roll Tax [1982] 2 NSWLR 52 referred to by Gleeson CJ where Lord Wilberforce remarked, in the course of argument, that an Australian who looked up the words "commission" and "agent" in a dictionary would probably be surprised to be told that, in England, a commission agent is a bookmaker.
4. The text of the provision is to be construed according to the context "by reference to the language of the instrument viewed as a whole": Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 at [69] (citations omitted). In the present case, the word "care" is to be construed in the context of the composite phrase of which it forms part, being "short-term direct care", in the context of the rest of the specific paragraph and in the context of para (b) of Item 4.1.6. Similarly, the phrase "animals without owners" is to be construed in context.
132 I should indicate, however, that I do not consider that the definition of "taxi travel" in s 195-1 of the GST Act is in truth a composite phrase. Rather, the focus in the definition on "travel that involves transporting passengers, by taxi or limousine, for fares" (emphasis added) expressly differentiates between two types of vehicles, as is further reflected in the use of the disjunctive "or". The definition is to be contrasted with the phrase in Agfa-Gevaert, namely "silver dye bleach reversal process", which was viewed as a composite phrase. For these reasons, I see no utility in approaching the task of statutory construction as if it was directed to a composite phrase. It may be that the phrase "taxi travel" in s 144-1 is itself a composite phrase but attention must also be focused upon the specific statutory definition of that phrase in s 195-1 which is not properly characterised as a composite expression.
133 Sixthly, and perhaps related to the first of the principles summarised above, I acknowledge that appropriate caution needs to be taken in using dictionary meanings. This is highlighted in the passage from Gordon J's judgment in Sea Shepherd which is set out in [131] above. I also respectfully agree with her Honour's further observations at [36]:
36. …Construction of a statute cannot be undertaken with no more than the words of the provision in one hand and a dictionary in the other. Judge Learned Hand rightly cautioned against the mechanical examination of words in isolation. As his Honour said in Cabell v Markham 148 F (2d) 737 (2d Cir 1945) at 739:
... it is one of the surest indexes of a mature and developed jurisprudence not to make a fortress out of the dictionary; but to remember that statutes always have some purpose or object to accomplish, whose sympathetic and imaginative discovery is the surest guide to their meaning.
134 That is not to say, however, that reference can never be made to dictionary meanings in ascertaining or confirming the ordinary meaning of words. I respectfully agree with the following observations of Mahoney JA in Provincial Insurance Australia Pty Ltd v Consolidated Wood Products Pty Ltd (1991) 25 NSWLR 541 at 560 concerning the use of dictionary meanings:
Dictionaries are not a substitute for the judicial determination of the interpretation and then construction of statutes and other documents: Life Insurance Co of Australia Ltd v Phillips (1925) 36 CLR 60 at 78 per Isaacs J. The meaning of the words used in a statute or document is not merely the sum of the individual meanings of the words used, ascertained from dictionaries. To adapt the much cited comment of Holmes J, a word is the skin of a living thought, and it is the thought which the court must ascertain and apply.
In doing this, it is, of course, necessary first to determine what is the ordinary or natural meaning of the words used because primarily it is from that that the intention of the legislator or of the parties is to be ascertained: see M P Metals Pty Ltd v Commissioner of Taxation (1968) 117 CLR 631 at 634; Cooper Brookes (Wollongong) Pty Ltd v Federal Commissioner of Taxation (1981) 147 CLR 297 at 304-305; Tullamore Bowling & Citizens Club Ltd v Lander [1984] 2 NSWLR 32 at 53. But that meaning is the ordinary usage of society: Shore v Wilson (1842) 9 Cl & Fin 355 at 527; 8 ER 450 at 518 per Coleridge J and R v Peters (1886) LR 16 QBD 636 at 641. And it is to be taken from the judge's understanding of the sense in which words are used: see, eg, NSW Associated Blue Metal Quarries Ltd v Federal Commissioner of Taxation (1956) 94 CLR 509 at 514 per Kitto J. In Midland Railway Co v Robinson (1889) LR 15 App Cas 19, Lord Macnaghten (albeit in dissent) said (at 35) that, in considering the meaning of a term such as 'mines and minerals', the opinion of particular judges may be "a safer guide than any definitions or illustrations to be found in dictionaries". No doubt a judge will find it of assistance to know the meanings in which, as dictionaries show, the words have been used: for an early example of resort to dictionaries, see Matthew v Purchins (1608) Cro Jac 203; 79 ER 177 (the dictionary of Thomas. Thomasius not that of Robert Cowdrey). But courts are not bound by such meanings: Grieves v Rawley (1852) 10 Hare 63 at 65; 68 ER 840 at 841.
135 Applying these principles, which I view as providing helpful guidance rather than talismanic formulae or inflexible rules of law, I consider that the words in s 195-1 should be given their ordinary, everyday meanings and not a trade or specialised meaning (including one which reflects what Dr Abelson describes as a "regulatory concept"). I accept the Commissioner's submission that the ordinary meaning of the word "taxi" is a vehicle available for hire by the public and which transports a passenger at his or her direction for the payment of a fare that will often, but not always, be calculated by reference to a taximeter. This meaning is supported by the dictionary definitions which are set out in [55] above. I do not regard the use of those dictionary definitions to confirm the ordinary meaning of the word "taxi" as offending any of the relevant principles concerning limitations in the use of such materials.
136 The word "limousine" should also be given its ordinary meaning. That meaning is a private luxurious motor vehicle which is made available for public hire and which transports a passenger at his or her direction for the payment of a fare. This meaning is confirmed by the following definition in the Macquarie Dictionary, 3rd edition:
limousine… any large, luxurious car, especially a chauffeur-driven one, often with a glass division between the passengers and the driver.
Neither party seriously disputed the proposition that a "hire car" is a synonym for a "limousine" in ordinary parlance. The emphasis on a limousine being a car which is both large and luxurious reflects the everyday understanding of the meaning of that word. The presence of a glass division between the passengers and the driver is not an essential feature of a limousine (or a hire car).
137 I do not accept the Commissioner's submissions that the ordinary meaning of "limousine" is not confined to luxury vehicles. As emphasised above, the ordinary meaning of the words "limousine" (and its synonym "hire car") involves a luxury vehicle. I am not persuaded by the Commissioner's contention that the word "limousine" should be construed as not involving the use of a luxury vehicle because of the practical difficulties which he contends such a construction would allegedly present for limousine operators having to decide whether or not their vehicle is or is not a luxury vehicle. I consider that the inclusion of the words "or limousine" in the definition of "taxi travel" in s 195-1 suggests that the Parliament considered that a taxi is different from a limousine in supplying transport to passengers for a fare. I do not consider that the relevant difference is to be found at the level of granularity suggested by the applicant's lists of "essential characteristics" of such vehicles, which lists are drawn from various State and Territory legislative requirements which apply to the regulation of the operation of such vehicles. Those requirements address discrete regulatory purposes which, I believe, are far removed from the purpose or object of the GST Act. In common usage, the fundamental relevant difference between a taxi and a limousine (or hire car) is that the latter is invariably a luxury car (which is often large) which is available for hire to transport passengers for a fare.
138 I consider that, on 11 September 2015, Mr Fine was supplying taxi travel as defined in ss 144-5(1) and 195-1 of the GST Act when he was operating as an uberX Partner. That is because I consider that, at that time, he was supplying travel that involved transporting passengers by taxi for fares. The fact that his car did not have a taximeter installed in it is not determinative of the question because I do not consider that it is an essential aspect of the ordinary meaning of the word "taxi" that a vehicle must have such a device. This is reflected in the dictionary definitions which make clear that while such a device is usually present in a taxi, it is not essential to the ordinary meaning of that word. Nor do I consider that the ordinary meaning of the word "taxi" requires consideration to be given to the numerous other characteristics which the applicant advanced as being essential to the notion of a "taxi" as set out in [29] above. The applicant's approach, which emphasised these so-called "essential characteristics" and highlighted how the uberX service failed to meet those characteristics is at odds with the common usage of the word "taxi". In my respectful view, the approach is also inappropriate for the reasons given by Sundberg J in Lansell House at first instance at [59], which bear repeating (emphasis added):
… The everyday English words in item 32 must be given their ordinary and natural meaning - what is the reasonable view on the basis of all the facts known to the Court as to whether or not the product is one which falls within the relevant category, which here is crackers. Thus, it seems to me, it is inappropriate for the Court to apply refined analytical tools - in this case rather elusive and qualified technical distinctions - to an ordinary English word, rather than local knowledge and common sense. As Toulson LJ said in Procter & Gamble, this is not a scientific question.
139 Although it is strictly unnecessary to determine the matter in the light of my finding that the type of car used by Mr Fine on the relevant day was a "taxi" within the ordinary meaning of that word, I can also indicate that I consider that the Honda Civic vehicle which he used on the relevant day is not a luxury car, with the consequence that Mr Fine was not on that day supplying a service which involved travel by limousine. That is not to deny, however, that the position may be different in a case of other uberX Partners who do use luxury cars in providing uberX services.
140 The following additional matters support the conclusions expressed above (some of these matters serve to underline the application of the general principles of statutory construction set out above). First, the words in s 195-1 are common, everyday words which are intelligible to ordinary people, including those who operate taxis and limousines.
141 Secondly, I do not accept that the "regulatory concept" of "taxi", as described by Dr Abelson coincides with the ordinary meaning of the word "taxi". The ordinary meaning of the word "taxi", as is reflected in various dictionary definitions, is expressed at a higher level of generality than the "regulatory concept" identified by Dr Abelson. I accept the Commissioner's submission that there is no basis for concluding that the Parliament intended persons who offer supplies which are affected by the GST Act closely to analyse State or Territory legislation governing the provision of taxi or limousine services. The GST legislation has a national and uniform operation. As the Commissioner pointed out, the licensing and regulatory requirements applicable to taxis have various subtle and not so subtle variations from one jurisdiction to another. The point is illustrated by the fact that in Western Australia taximeters are not required in all vehicles which are taxis (see [57] above). As has been emphasised above, the purpose or object of State and Territory licensing and regulatory requirements applicable to taxis and limousines are quite different from the purpose or object of the GST Act.
142 Moreover, I reject the applicant's contention that the meaning of the phrase "taxi travel" in s 144-5 of the GST Act , as defined in s 195-1, is influenced by the "regulatory concept" of taxi as has emerged in various publications which are directed to the issue whether regulatory intervention is required in what Dr Abelson described as "the rank and hail channel" arising from perceived market failures. Most of that literature postdates the GST Act. Some of it predates the legislation but the applicant did not point to any conclusive material which supported its claim that the choice of terminology by the Commonwealth Parliament in enacting Div 144 was influenced in any way by a broader public policy debate concerning regulation of the taxi industry and emerging transport operations, such as those involved in the uberX service. In any event, State and Territory licensing and regulatory provisions serve quite different purposes or objects to the GST Act.
143 Finally, I consider that some limited assistance is obtained from the mischief identified in the Explanatory Memorandum for inserting Div 144 (see [61] above). I accept the Commissioner's submission that this mischief or purpose supports a broad construction of the relevant provisions, however, it does not dictate the resolution of the task of construction. Broadly construed, and having regard to other relevant matters of construction, I consider that the word "taxi" is sufficiently broad in its ordinary meaning to encompass the uberX service supplied by Mr Fine on 11 September 2015.