Registrar of the Accident Compensation Tribunal v Federal Commissioner of Taxation (Cth) [1993] HCA 69; (1993) 178 CLR 145 (7 December 1993)

HIGH COURT OF AUSTRALIA

THE REGISTRAR OF THE ACCIDENT COMPENSATION TRIBUNAL v. COMMISSIONER OF TAXATION OF THE COMMONWEALTH OF AUSTRALIA [1993] HCA 1; (1993) 178 CLR 145

Number of pages - 37

Income Tax (Cth) - Constitutional Law (Cth)

HIGH COURT OF AUSTRALIA

MASON CJ(1), BRENNAN(2), DEANE(1), DAWSON(2), TOOHEY(1), GAUDRON(1) AND McHUGH(2) JJ

Income Tax (Cth) - Income of trust estate - Accident Compensation Tribunal - Compensation payments held by Registrar for benefit of persons entitled thereto - Whether Registrar trustee - Whether interest on money held by Registrar revenue of public authority - Workers Compensation Act 1958 (Vict), ss. 35, 36, 73 - Income Tax Assessment Act 1936 (Cth), ss. 6(1) "trustee", 17, 23(d), 99 (* Section 23(d) of the Income Tax Assessment Act 1936 (Cth) exempted from income tax "the revenue of ... a public authority constituted under any Act or State Act ...". Section 99 subjected income of a trust estate to tax as if it were the income of an individual and were not subject to any deduction. The definition of "trustee" in s. 6(1) included "in addition to every person appointed or constituted trustee by act of parties, by order, or declaration of a court, or by operation of law ... - (a) an executor or administrator, guardian, committee, receiver, or liquidator; and (b) every person having or taking upon himself the administration or control of income affected by any express or implied trust, or acting in any fiduciary capacity, or having the possession, control or management of the income of a person under any legal or other disability".

Constitutional Law (Cth) - State Accident Compensation Tribunal - Compensation payments held by Registrar for benefit of persons entitled thereto - Interest on payments - Whether subject to income tax as income of trust estate - Whether Registrar Crown servant or agent - Whether taxing of Registrar discrimination against State or interference with its functions - The Constitution (63 and 64 Vict c. 12), s. 114 - Income Tax Assessment Act 1936 (Cth), ss. 6(1) "trustee", 17, 23(d), 99 - Workers Compensation Act 1958 (Vict), ss. 34, 35, 36, 73.

HEARING

CANBERRA, 1993, February 3,4; October 20; December 7.

7:12:1993

ORDER

Appeal allowed.

Set aside the assessment and remit the matter to the respondent for reassessment of the appellant's taxable income in accordance with the Court's reasons for judgment.

Each party to bear its own costs of this appeal.

DECISION

MASON CJ, DEANE, TOOHEY AND GAUDRON JJ This is one of three appeals raising the question whether the Registrar of the Accident Compensation Tribunal ("the Registrar") is liable to pay tax, as trustee, on money credited as interest to accounts kept by him with respect to awards of compensation made under the Workers Compensation Act 1958 (Vict) which, ultimately, came to be administered by him pursuant to that same Act. Strictly, the appeals are appeals to the Full Court of the Federal Court of Australia. They were removed into this Court pursuant to s. 40(1) of the Judiciary Act 1903 (Cth) for the reason that they involve a question under s. 114 of the Constitution.

Factual and legislative background

2. In June 1979 an award of compensation in the sum of $23,940 was made in consequence of the death of Alexander Joseph Abela. It is common ground that the award was made for the benefit of his dependants - his widow (Carol Abela, nor Mrs Payne) and his three daughters (Lisa, Michelle and Tanya) - who are together referred to as "the Abela family".

3. Initially, the compensation was paid to the Workers Compensation Board ("the Board") under s. 34 of the Workers Compensation Act. At that time, 1979, that section relevantly required that, in the case of death and unless the Board ordered otherwise, compensation should be paid into the custody of the Board and that subject to the rules of the Board and the provisions of the Act, it should be "invested applied or otherwise dealt with ... for the benefit of the persons entitled thereto".

4. Until 1983, the Board maintained an account of payments made to or on behalf of members of the Abela family and of interest earned on the money held on their behalf. That account was in the name of Carol M. Abela (later, Carol M. Payne). In 1983, the Board apportioned compensation between Lisa and the other members of the Abela family ((28) Seemingly, this was pursuant to s. 34(2) of the Workers Compensation Act which, in 1983, provided: "In the case of death if the worker leaves more than one dependant the Board having regard to the circumstances of the various dependants and variations in such circumstances from time to time may - (a) apply or otherwise deal with any sum so paid into its custody in such manner as in the opinion of the Board will for the time being be most beneficial to the dependants; (b) provide for any two or more dependants collectively; (c) exclude any dependant from participating in any benefit.") and transferred $16,000 to a separate account in Lisa Abela's name. The balance remained in the original account which, despite the apportionment, was treated by all concerned as an account for the benefit of all four members of the Abela family.

5. The Accident Compensation Act 1985 (Vict) established a new regime with respect to accidents and diseases in the work place. It established various new bodies, including the Accident Compensation Commission ("the Commission") and the Accident Compensation Tribunal ("the Tribunal") ((29) ss. 18 and 39, respectively.). Broadly speaking, it required the Commission to manage the compensation scheme then established and conferred various functions on it ((30) ss. 19 and 20, respectively.), including that of administering the Accident Compensation Fund ("the Compensation Fund") (s. 20(a)) into which employers, other than self-insurers, were obliged to pay an accident compensation levy ((31) s. 187, and generally Pt VII. See s. 140 as to the exemption for self-insurers.) and from which compensation payments were to be made (s. 33(3)(a)).

6. Again broadly speaking, the Accident Compensation Act, as it stood in 1985, required the Tribunal to inquire into, hear and determine compensation claims and various other matters associated with the compensation scheme (s. 40(1)(a)). It also required the Tribunal to establish and maintain a fund called the Accident Compensation Tribunal Fund ("the Fund") (s. 73). The Fund is separate and distinct from the Compensation Fund earlier referred to. Various amounts were required to be paid into the Fund, including, "all ... money that the Tribunal receive(d) under or for the purposes of this Act or any other Act" (s. 73(2)). The Accident Compensation Act was amended in various respects with effect from 1 December 1987 ("the 1987 amendments"), the main consequence being that the Fund then came under the control of the Registrar.

7. The Workers Compensation Act was amended in 1985 and again in 1987 to bring it into harmony with the new compensation arrangements effected by the Accident Compensation Act. It is sufficient, at this stage, to note that s. 37 of the Workers Compensation Act was amended in 1985 to provide, relevantly:

"(1) On and from the appointed day, all moneys paid into

the custody of the Board pursuant to this Division as in

force before that day shall be administered by the

Tribunal in accordance with this Act.

(2) For the purposes of sub-section (1), the moneys shall

be paid to the Tribunal or, where any of the moneys were

before the appointed day invested, the investments shall

be transferred to and vest in the Tribunal." ((32) The

"appointed day" was 31 August 1985.



8. Pursuant to s. 37 of the Workers Compensation Act, as then amended, the Board transferred various moneys to the Tribunal for payment into the Fund, including the money in the accounts kept in the names of Lisa Abela and Mrs Payne.

9. In keeping with the apportionment made by the Board in 1983, the Tribunal and, following the 1987 amendments, the Registrar kept a separate account in the name of each of Lisa J. Abela and Carol M. Payne ("the Payne account"). Again, the Payne account seems to have been treated as an account for the benefit of all four members of the Abela family.

10. On 10 July 1987, an amount of $2,718.69 was credited to the Payne account as "interest" for the period 1 July 1986 to 30 June 1987. It is common ground that that "interest" was or was calculated on the basis of a proportionate share of income earned by the Fund in the year ended 30 June 1987.

11. In 1990, The Commissioner of Taxation ("the Commissioner") issued a notice assessing the Registrar, as trustee for the Abela family, to tax on the basis that the sum of $2,718 was income of a trust estate for the year ended 30 June 1988. It seems that there was another and alternative assessment levied on the Tribunal, on the basis that it was income for the year ended 30 June 1987. It is not entirely clear what has happened to that alternative assessment but it has at all stages been treated as an assessment having effect in the event that the sum of $2,718 is found to be income for that tax year, rather than the year ended 30 June 1988. The Registrar lodged an objection to the 1988 assessment but it was disallowed. He then appealed to the Federal Court. The appeal was dismissed by Jenkinson J ((33) Accident Compensation Tribunal v. Commissioner of Taxation (1992), 34 FCR 1.), the appeal to the Full Court of the Federal Court was then instituted, and later removed into this Court.

Legislative provisions

12. It was common ground in this Court that the case could conveniently be approached on the basis of the provisions of the Workers Compensation Act and of the Accident Compensation Act as they stood following the 1987 amendments. Thus, reference will be made to earlier provisions only if significantly different.

13. The Workers Compensation Act and the Accident Compensation Act were extensively amended in 1992 when the Tribunal was abolished ((34) By operation of s. 64(1)(a)(iii) of the Accident Compensation (WorkCover) Act 1992 (Vict) the Tribunal ceased to exist on 1 December 1992.). The 1992 amendments have no bearing on this case. It is convenient, therefore, to proceed as if both Acts continue in the terms in which they stood following the 1987 amendments and as if the Tribunal, the Registrar and the Fund continue in existence in accordance with their then provisions.

Composition of and payments out of the Fund

14. The composition of the Fund appears from s. 73(2) of the Accident Compensation Act which provides that there is to be paid into the Fund:

"(a) the contributions payable under section 74 by the

Commission and self-insurers;

(aa) payments of compensation made to the Registrar under

section 130;

(ab) payments made under section 34 of the Workers

Compensation Act 1958;

(ac) amounts borrowed by the Registrar under section 51C;

(b) any income from the investment of any money credited

to the Fund and the proceeds of the sale of any

investment;

(c) all other money that the Tribunal receives under or

for the purposes of this Act or any other Act; and

(d) any other money required or permitted to be paid into

the Fund by or under any other Act."

15. It is common ground that, at all relevant times, the major part of the Fund has consisted of, or has been referable to, compensation payments made under the Workers Compensation Act or under the Accident Compensation Act and paid into it under s. 73(2)(aa) and (ab) or, earlier, under s. 73(2)(c) of the Accident Compensation Act ((35) Paragraphs (aa) and (ab) were inserted into s. 73(2) in 1987. Prior to that, it seems, compensations moneys were paid into the Fund under s. 73(2)(c) and, perhaps, par. (d).). Indeed, its balance sheet for the year ended 30 June 1987 indicates that "Beneficiary Fund Investments" then constituted more than 95 per cent of its total assets.

16. Section 73(3) of the Accident Compensation Act authorizes the following payments out of the Fund:

"(a) payments directed by order of the Tribunal to be paid

out of the Fund under this Act or the Workers Compensation

Act 1958;

(aa) any amounts payable in respect of money borrowed

under section 51C;

(ab) any payment authorized under section 131 or 132;

(ac) any payment authorized under section 35 or 36 of the

Workers Compensation Act 1958;

(b) any payment required or authorized to be made or which

is for or towards the cost and expenses of or incidental

to the performance of the functions or the exercise of the

powers of the Tribunal or staff of the Tribunal;

(c) any other costs and expenses incurred by the Tribunal

or Registrar under this Act or any other Act;

(d) any amounts payable in respect of remuneration,

allowances and pensions under section 45 or 50A and any

other payment required or permitted to be paid out of the

Fund by or under any other Act; and

(e) any payment required or authorized to be made out of

the Fund by sub-section (4) or (5)."

Other provisions of the Accident Compensation Act bearing on the Fund

17. Other provisions of the Accident Compensation Act bearing on the Fund are s. 73(4), (5), (6) and (7) which are as follows:

"(4) The Registrar may -

(a) invest any money in the Fund in any manner which is

approved by the Treasurer; and

(b) take, purchase, lease, hold, sell and dispose of real

and personal property for the purpose of enabling the

Tribunal to perform its functions and exercise its powers

under this Act.

(5) The Registrar shall be indemnified from the Fund

against any liability or claim arising under sub-section

(4).

(6) For the purposes of this section, the Registrar may

open and maintain one or more accounts in the name of the

Registrar or the Tribunal with any bank or banks.

(7) If any money is invested under sub-section (4) in the

purchase of any land or the construction or alteration of

any buildings, the whole or part of the land or buildings

may be used by the Tribunal in connection with its powers,

duties or functions under this Act." ((36) This sub-section

is substantially repeated in s. 131(3); and see

fn. (39).)

Legislative provisions bearing on compensation payments paid into the Fund

18. The Workers Compensation Act continues to govern compensation moneys awarded under that Act but paid into the Fund established and maintained under the Accident Compensation Act. The relevant provisions of the Workers Compensation Act, ss. 35 and 36, mirror ss. 131 and 132 of the Accident Compensation Act which apply to compensation awarded under that latter Act.

19. Section 35 of the Workers Compensation Act is as follows:

"(1) Except as otherwise provided in section 34 ((37)

Section 34(1) provides that certain payments of

compensation are to be paid to and administered by the

Registrar, notably compensation in the case of death and,

also, under par. (c) in cases where the Tribunal considers

that that is in the best interests of the worker

concerned. Section 34(2) empowers the Tribunal to impose

any conditions, restrictions or limitations on the

duration and termination of an administration with

respect to compensation to be paid to the Registrar

under s. 34(1)(c) if, as indicated, it considers that that

would be in the best interests of the worker.), any amount

of money administered by the Registrar under this Act may

be invested, applied or otherwise dealt with in any manner

that the Registrar thinks fit for the benefit of the

person entitled to that money.

(2) The Registrar shall not in administering any amount

of money under this Act be bound by any law relating to

the administration of trust funds by trustees but shall

act in good faith.

* * * * * * *

(4) If the amount of money administered by the Registrar

on behalf of any person becomes less than an amount of

money determined by the Registrar the amount shall be

paid out to that person.

(5) All expenses ((38) Section 131(5) of the Accident

Compensation Act, which otherwise mirrors this provision,

is subject to an exception in the case of expenses paid

under s. 51A of that Act to a "funds management agent".)

incurred by or on behalf of the Registrar in the

administration of any amount of money under this Act

shall be paid by the Registrar out of the (Fund)." ((39)

Section 131 of the Accident Compensation Act contains a

provision, namely s. 131(3), which repeats s. 73(7) of

that Act and which is not replicated in s. 35 of the

Workers Compensation Act.)

20. Section 36 of the Workers Compensation Act provides:

"(1) The Registrar may on the application of any person on

whose behalf any amount of money is administered under

this Act determine any dispute in relation to the

administration.

(2) If a deceased worker leaves more than one dependant

the Registrar after having regard to the circumstances of

the various dependants and any variations in the

circumstances from time to time may determine to -

(a) apply or otherwise deal with any money administered

by the Registrar in a manner which the Registrar considers

will for the time being be most beneficial to the

dependants;

(b) make a payment to any dependant;

(c) provide for any two or more dependants collectively;

or

(d) exclude any dependant from participating in any

benefit.

(3) If on an application to the Registrar by an interested

party it appears to the Registrar that because of -

(a) the neglect of any children by the spouse of the

deceased worker or of a relative standing in the place of

a parent in relation to any children of the deceased

worker under the age of 16 years;

(b) a variation in the circumstances of the various

dependants; or

(c) any other sufficient cause -

a determination as to the apportionment between several

dependants of any amount of compensation or as to the

manner in which any amount of compensation payable to any

dependant is to be invested, applied or otherwise dealt

with should be varied, the Registrar may make any

determination for the variation of the previous

determination as the Registrar in the circumstances of

the case considers appropriate.

* * * * * * *

(5) Any person who objects to any determination made by

the Registrar may appeal to the Tribunal which may make

a new determination."

Is the Registrar a trustee?

21. The Registrar has been assessed to tax under Pt III, Div 6 of the Income Tax Assessment Act 1936 (Cth). So far as Pt III, Div 6 is concerned and subject to other questions of a more general nature which will be considered later, it was accepted that, if the Registrar was at relevant times a trustee of the money in the Payne account, then Pt III, Div 6 subjects income earned on that money to tax "as if it were the income of an individual ... and were not subject to any deduction" ((40) See s. 99(2)-(3) of the Income Tax Assessment Act.). The primary question that arises in relation to Pt III, Div 6 is, thus, whether the Registrar was for the purposes of the Income Tax Assessment Act a trustee of that money. If he was, there is a subsidiary question whether the sum of $2,718.69 credited to the Payne account in July 1987 was income earned by the Tribunal in the tax year ended 30 June 1987, or by the Registrar in the tax year ended 30 June 1988.

22. By s. 6(1) of the Income Tax Assessment Act, "trustee" is defined as follows:

"'trustee' in addition to every person appointed or

constituted trustee by act of parties, by order, or

declaration of a court, or by operation of law, includes-

(a) an executor or administrator, guardian, committee,

receiver, or liquidator; and

(b) every person having or taking upon himself the

administration or control of income, affected by any

express or implied trust, or acting in any fiduciary

capacity, or having the possession, control or management

of the income of a person under any legal or other

disability."

23. It is to be remembered that the question in this case is whether the Registrar is a trustee of the balance of the compensation awarded in consequence of the death of Alexander Joseph Abela and standing in the Payne account ((41) Note, the Commissioner is apparently content to treat the moneys in the Lisa J. Abela account as subject to a separate trust. Assuming there is a trust, the question whether that approach is correct in the light of the Registrar's wide discretion with respect to apportionment under s. 36 of the Workers Compensation Act does not arise.), and not whether he is trustee of the Fund. It is in that context that it was argued on behalf of the Commissioner that the Registrar is a trustee by operation of law, alternatively a trustee under par. (b) of the extended definition of "trustee" in s. 6(1) of the Income Tax Assessment Act. It was put that he came within the extended definition because he had the administration or control of income affected by an implied trust (which was identified in the argument as a "trust for statutory purposes" ((42) See, as to a "trust for statutory purposes", Fouche v. Superannuation Fund Board [1952] HCA 1; (1952), 88 CLR 609, at p 640, per Dixon, McTiernan and Fullagar JJ; Harmer v. Federal Commissioner of Taxation [1991] HCA 51; (1991), 173 CLR 264, at p 274.)), or because he was acting in a fiduciary capacity in relation to the moneys in the Payne account.

24. The primary submission made on behalf of the Registrar was that the intention to be discerned from the Workers Compensation Act and the Accident Compensation Act is not that the Registrar should be subject to trust obligations in respect of compensation moneys, but, rather, that they are to be dealt with on a governmental or administrative basis.

25. In the submissions made on behalf of the Registrar, reliance was placed on the fact that the Workers Compensation Act does not expressly constitute the Registrar a trustee of compensation moneys but, on the contrary, s. 35(2) of that Act and s. 131(2) of the Accident Compensation Act expressly provide that he is not "bound by any law relating to the administration of trust funds by trustees". Additionally, it was put that the obligations imposed by the Workers Compensation Act and the Accident Compensation Act are imposed on the Registrar in his official capacity and not on him personally; that the Registrar has a wide discretionary power to apportion between dependants under s. 36 of the Workers Compensation Act and s. 132 of the Accident Compensation Act; that the moneys are to be paid into the Fund, a mixed fund, incorporating not only other compensation payments but moneys which would seem intended to defray the costs associated with the general work of the Tribunal and the Registrar; and, that the Registrar has power to invest moneys in the Fund in any manner approved by the Treasurer.

26. The legislative provisions on which the Registrar relies are to be approached, according to the argument, in the light of the principle in Kinloch v. Secretary of State for India ((43) (1882) 7 App Cas 619.). That principle requires clear words before an obligation on the part of the Crown or a servant or agent of the Crown, even if described as a trust obligation, will be treated as a trust according to ordinary principles or, as it is sometimes called, a "true trust" ((44) Tito v. Waddell (No. 2), (1977) Ch 106, at pp 211, 216-219, per Megarry V-C. See also Kinloch v. Secretary of State for India (1882), 7 App Cas, at pp 625-626, per Lord Selborne LC; Town Investments v. Department of the Environment, [1977] UKHL 2; (1978) AC 359, at p 382, per Diplock LJ); rather, in the absence of clear words, the obligation will be characterized as a governmental or political obligation, sometimes referred to in the decided cases as a trust "in the higher sense" ((45) Kinloch v. Secretary of State for India (1882), 7 App Cas, at pp 625-626, per Lord Selborne LC; Tito v. Waddell (No. 2), (1977) Ch, at pp 216-217, 219, per Megarry V-C.) or "a political trust" ((46) Hogg, Liability of the Crown, 2nd ed (1990), pp 186-188. See also New South Wales v. The Commonwealth (No. 3) [1932] HCA 12; (1932), 46 CLR 246, at pp 260-261, per Rich and Dixon JJ; p 268, per Starke J; Tito v. Waddell (No. 2), (1977) Ch, at p 211, per Megarry V-C.).

27. It is convenient to note, at this stage, that Kinloch does no more than state a rule of construction to be applied in ascertaining whether an intention to create a trust according to ordinary principles is to be discerned from the language of the instrument involved ((47) See Kinloch v. Secretary of State for India (1882), 7 App Cas, at p 626, per Lord Selborne LC; Tito v. Waddell (No. 2), (1977) Ch, at pp 215, 216, per Megarry V-C; Brisbane City Council v. Attorney-General (Q), (1979) AC 411, at pp 421-422; Aboriginal Development Commission v. Treka Aboriginal Arts and Crafts Ltd, (1984) 3 NSWLR 502, at p 519, per Priestley JA). However, subject matter and context are also important and, in some cases, may be more revealing of intention than the actual language used ((48) See Tito v. Waddell (No. 2), (1977) Ch, at p 216, per Megarry V-C; Aboriginal Development Commission v. Treka Arts, (1984) 3 NSWLR, at p 519, per Priestly JA).

28. The second matter to be noted in relation to Kinloch is that there is no rule of law or equity to prevent the imposition of ordinary trust obligations on a person who is, in other respects, a servant or agent of the Crown ((49) See Kinloch v. Secretary of State for India (1882), 7 App Cas, at pp 625-626, per Lord Selborne LC; Civilian War Claimants Association v. The King, (1932) AC 14, at p 27, per Lord Atkin; Town Investments v. Department of Education, (1978) AC, at p 382, per Lord Diplock; Aboriginal Development Commission v. Treka Arts, (1984) 3 NSWLR, at p 519, per Priestly JA). Moreover, it is not entirely helpful to approach cases in which it is claimed that there is a trust in the ordinary sense on the basis that the person who owes the obligation in question is a servant or agent of the Crown. As will later be made clear, that is because, in some circumstances, that person may bear that character in relation to some functions, but not those associated with the obligation in question. That may be illustrated by reference to the present case. If the Registrar's duty in relation to the money in the Payne account is merely to invest it and to hold the investments it represents and accrued income until finally distributed to the Abela family, it is difficult to see that that function involves any Crown or governmental interest. And, if that is the case, the function is not easily described as a Crown or governmental function or as a function performed for or on behalf of the Crown, even if, for other purposes, the Registrar is the servant or agent of the Crown ((50) See the discussion to similar effect in Bank voor Handel en Scheepvaart NV v. Administrator of Hungarian Property, (1954) AC 584, at p 618, per Lord Reid. See also Wynyard Investments Pty Ltd v. Commissioner for Railways (NSW) [1955] HCA 72; (1955), 93 CLR 376, at p 393, per Kitto J). It is thus preferable to approach cases such as the present on the basis that the person concerned holds a statutory office and has a number of functions, not all of which are necessarily governmental in nature. And on that basis, little, if any, significance attaches to the fact that the obligation is imposed on a statutory office holder, or, as was put in the course of argument, on a person "in his official capacity".

29. There is a third matter to be noted in relation to Kinloch. The mere fact that the person on whom the obligation is cast is a statutory office holder cannot, of itself, require the question whether he or she is a trustee in the ordinary sense to be approached on the basis of a presumption to the contrary. As with the question whether a person is a servant or agent of the Crown, and leaving aside any question of prerogative power, there can be no basis for an approach of that kind unless it appears that there is some governmental interest or function involved.

30. Of course, the matters which can be said to involve some governmental interest or function are not confined to closed categories. The question whether a governmental interest is involved depends very much on the law as it stands from time to time ((51) See, generally, Committee of Direction of Fruit Marketing v. Australian Postal Commission [1980] HCA 23; (1980), 144 CLR 577, at p 580, per Gibbs J). Even so, and acknowledging that the administration of compensation moneys awarded to or for the benefit of workers or, in the case of death, their dependants ((52) See s. 34 of the Workers Compensation Act, and see fn (37).) is a matter of considerable public importance, it is not a function that is ordinarily perceived as governmental in nature or as involving the interests of government. That being so, the question in this case is simply whether or not the relevant provisions of the Workers Compensation Act and the Accident Compensation Act, considered in context and having regard to their subject matter, reveal an intention that the Registrar be subject to a trust obligation in the ordinary sense. Accordingly, it is unnecessary to consider the extent to which the strength of the presumption recognized in cases such as Kinloch has been undermined by altered attitudes to the vulnerability of the Crown to curial proceedings and remedies, including the remedies available in cases of unjust enrichment.

31. As already indicated, ss. 35 and 36 of the Workers Compensation Act govern the administration of the compensation moneys involved in this case. However, it is clear from a comparison of those provisions with their Accident Compensation Act counterparts, namely ss. 131 and 132, that compensation moneys paid into the Fund have precisely the same status no matter which of those Acts applies.

32. It is to be noted that the statutory provisions which govern the administration of compensation moneys are separate and distinct from those which govern the administration of the Fund. And, although various costs and expenses associated with the Tribunal and the Registrar are to be paid from the Fund ((53) See s. 73(3)(b)-(d) of the Accident Compensation Act.) and certain of its investments may be used for the purposes of the Tribunal ((54) See s. 73(7) of the Accident Compensation Act.), there is nothing in the Accident Compensation Act or in the Workers Compensation Act to suggest that the Registrar acquires any beneficial right or interest in compensation moneys paid to him, even when paid into the Fund.

33. There is now no provision in either the Workers Compensation Act or the Accident Compensation Act which is as explicit as the direction previously found in s. 34 of the Workers Compensation Act, namely, that certain compensation payments should be paid "into the custody of the Board" and "invested applied or otherwise dealt with ... for the benefit of the persons entitled thereto". However, there are provisions in both Acts which point strongly in the same direction. Thus, as already noted, s. 35(1) of the Workers Compensation Act provides:

"any amount of money administered by the Registrar under

this Act may be invested, applied or otherwise dealt with

in any manner that the Registrar thinks fit FOR THE

BENEFIT OF THE PERSON ENTITLED TO THAT MONEY." (Emphasis

added - in caps.) ((55) See also s. 131(1) of the Accident

Compensation Act.)

34. And s. 35(4) requires that, an "amount of money administered ... on behalf of any person (which) becomes less than an amount of money determined" by the Registrar should "be paid out to that person" ((56) See also s. 131(4) of the Accident Compensation Act.).

35. A trust may be created without use of the word "trust" ((57) See In re Kayford Ltd, (1975) 1 WLR 279, at p 282; (1975) 1 All ER 604, at p 607, per Megarry J; Tito v. Waddell (No. 2), (1977) Ch, at p 211, per Megarry V-C. See also Brisbane City Council v. Attorney-General, (1979) AC, at p 421.). And, unless there is something in the circumstances of the case of indicate otherwise, a person who has "the custody and administration of property on behalf of others" ((58) Taylor v. Davies, (1920) AC 636, at p 651.) or who "has received, as and for the beneficial property of another, something which he is to hold, apply or account for specifically for his benefit" ((59) Cohen v. Cohen [1929] HCA 15; (1929) 42 CLR 91, at p 100, per Dixon J) is a trustee in the ordinary sense. In circumstances of that kind and in terms of s. 6(1) of the Income Tax Assessment Act, if there is no "act of parties" appointing or constituting the Registrar trustee, he is a trustee "by operation of law".

36. Given that no special words are necessary to create a trust in the ordinary sense, the statutory provisions which were last discussed, namely s. 35(1) and (4) of the Workers Compensation Act, would, in the absence of some provision to the contrary, suffice to constitute the Registrar a trustee, in the ordinary sense, of compensation moneys paid to him pursuant to the Workers Compensation Act. They would suffice because they indicate that he has or holds that money for the benefit of the person or persons entitled to the compensation involved.

37. The legislative provisions on which the Registrar relies for the argument that there is, or was, no trust in the ordinary sense fall into two distinct categories. There are those which relate to the Fund and those which directly relate to the administration of compensation moneys.

38. It clearly appears from the provisions governing the Fund that it is a general fund of a kind not ordinarily identified as a trust fund. It is sufficient to refer to the different moneys to be paid into the Fund ((60) See s. 73(2) of the Accident Compensation Act.); to the payment out of expenses associated with the work of the Tribunal and the Registrar ((61) See s. 73(3)(b)-(d) of the Accident Compensation Act.); and, to the power to use land and other buildings in which the moneys of the Fund are invested for the purposes of the Tribunal ((62) See s. 73(7) of the Accident Compensation Act.). However, and as already pointed out, this case is not directly concerned with the status of the Fund, but with the nature of compensation moneys paid to the Registrar for payment into that Fund.

39. Notwithstanding that the Fund is a general fund of the kind indicated, the statutory requirement that compensation moneys be paid into the Fund is not inconsistent with those moneys being trust moneys in the ordinary sense. Much was made in the argument on behalf of the Registrar of his power under s. 73(4)(a) of the Accident Compensation Act to invest moneys in the Fund "in any manner which is approved by the Treasurer". However, that is far from decisive for, in context, the clear effect of s. 73(4)(a) is that the Registrar has now power to invest other than in a manner approved by the Treasurer. And it is not to be supposed in relation to s. 73(4)(a) that the Treasurer would authorize investments which might be imprudent or speculative, or in some way inconsistent with the sound management of compensation moneys awarded for the benefit of injured workers or, in the case of death, their dependants ((63) See fn (37).). Accordingly, in our view, the intention of the legislature with respect to the Registrar's holding of compensation moneys must be discerned not from the provisions which bear on the Fund, but from those which bear directly on the administration of such moneys.

40. So far as the provisions which bear directly on the administration of compensation moneys are concerned, it is convenient to deal first with s. 36 of the Workers Compensation Act ((64) See also s. 132 of the Accident Compensation Act.). As earlier mentioned, s. 36 confers a wide discretionary power to apportion between dependants. That power is entirely consistent with the existence of a discretionary trust for the benefit of the class constituted by the dependants of a deceased worker. It does not, in our view, tell against the imposition of an ordinary trust obligation.

41. The other provision which bears directly on the administration of compensation moneys is s. 35(2) of the Workers Compensation Act which frees the Registrar from "any law relating to the administration of trust funds by trustees" but requires him to "act in good faith" ((65) See also s. 131(2) of the Accident Compensation Act.). It is significant that s. 35(2) does not, in terms, deny the existence of a trust of compensation moneys in the ordinary sense. Rather, it proceeds on the basis that there is, or would otherwise be, a trust of that kind to be administered in accordance with the general law of trusts. It then proceeds to exclude not the entire body of that law, but only laws "relating to the administration of trust funds by trustees". The limited terms of s. 35(2) assume particular significance when it is appreciated that neither the Workers Compensation Act nor the Accident Compensation Act makes provision as to distribution of income referable to compensation moneys paid into the Fund, nor do they make provision, save in the case where the money involved falls below some fixed amount ((66) See s. 35(4) of the Workers Compensation Act; s. 131(4) of the Accident Compensation Act.), as to the final distribution of compensation money to the person or persons for whose benefit it is administered.

42. Workers compensation is a matter of legal entitlement, not charitable subvention. That being so and given the limited terms of s. 35(2) of the Workers Compensation Act, it must be concluded that compensation moneys paid to the Registrar are trust moneys in the ordinary sense. They are held by the Registrar in trust for the persons entitled to the compensation involved and, subject to the applicable legislative provisions, must be administered by the Registrar in accordance with the general law of trusts. Accordingly, the Registrar holds such moneys as trustee in the strict sense and there is no need to consider the alternative arguments based on the extended definition of "trustee" in s. 6(1) of the Income Tax Assessment Act.

Is the Registrar a public authority for the purposes of s. 23(d) of the Income Tax Assessment Act?

43. It was argued by the Solicitor-General for South Australia, intervening in support of the Registrar, that the Registrar was not liable to tax on the income earned on the money in the Payne account by reason that s. 23(d) of the Income Tax Assessment Act exempts "the revenue of a municipal corporation or other local governing body or of a public authority constituted under any Act or State Act, or under any law in force in a Territory being part of Australia" from income tax. It was put that the Registrar is a "public authority" of the purposes of that sub-section.

44. Whatever may be the position of the Tribunal, there is considerable difficulty in categorizing the Registrar as a statutory office holder whose functions are mainly administrative, as "a public authority" in the sense that that expression is used in s. 23(d) of the Income Tax Assessment Act ((67) As to the meaning of "public authority" see Renmark Hotel Inc v Federal Commissioner of Taxation [1949] HCA 7; (1949), 79 CLR 10, at p. 18, per Rich J; Western Australian Turf Club v. Federal Commissioner of Taxation [1978] HCA 13; (1978), 139 CLR 288, at pp 295-299, per Stephen J; Re Anti-Cancer Council (Vict); Ex parte State Public Services Federation [1992] HCA 53; (1992), 175 CLR 442, at pp 450-451.). That aside, the income on money held in trust by the Registrar, which is to be administered in accordance with the general law of trusts, simply is not the revenue of the Registrar. Nor for that matter was it revenue of the Tribunal in the period prior to the 1987 amendments.

45. In the context of s. 23(d) of the Income Tax Assessment Act, the expression "revenue" signifies annual or other period income from which operating expenses for that period are to be paid ((68) See, for an example of the constituents of revenue, Western Australian Turf Club v. Federal Commissioner of Taxation (1978), 139 CLR, at p 298, per Stephen J). The income received from the investment of compensation moneys by the Registrar is, in equity, the income of the persons entitled to the benefit of those compensation moneys. That income is not income available to defray the operating costs of the Fund. Nor has it been treated as such. According to the agreed statement of facts, apart from financial institutions duty, bank charges and commissions paid on mortgage investments, the costs and expenses of the Fund are not paid out of the compensation moneys.

Is the Registrar bound by the Income Tax Assessment Act?

46. It was argued that the Registrar is not bound by the Income Tax Assessment Act because, properly construed, it taxes the Crown only where the Crown is expressly made liable to tax ((69) See, eg, ss. 218, 221C, 255 of the Income Tax Assessment Act which expressly extend the reach of that Act so as to apply to the Commonwealth, a State, a Territory, or, an authority thereof.). It was put that the Income Tax Assessment Act must be construed on the basis that general words such as "person" in s. 17 ((70) Section 17 provides: "Subject to this Act, income tax at the rates declared by the Parliament is levied, and shall be paid ... upon the taxable income derived during the year of income by any person, whether a resident or a non-resident." Note, "person" is defined in s. 6(1) to include a company.) or "trustee" in Pt III, Div 6 do not extend to the Crown, its servants or agents and that, in consequence, the Registrar is not subject to tax, notwithstanding that he has received income by virtue of his being a trustee in the ordinary sense.

47. There are two answers, each involving a slightly different approach, to the submission that the Income Tax Assessment Act must be construed so as to exclude the Registrar from its operation. The first approach involves asking whether the Registrar, in his capacity as trustee, is properly to be regarded as the Crown, its servant or agent. The second is to ask whether there is any basis for reading down the relevant provisions of the Income Tax Assessment Act, namely, s. 17 which, subject to that Act, subjects "taxable income derived ... by any person, whether a resident or a non-resident" to tax and the provisions of Pt III, Div 6 which apply to tax the income of trusts in the hands of "trustees", as defined in s. 6(1).

48. So far as the first approach is concerned, there can be no doubt that certain of the Registrar's functions are functions which are performed on behalf of the government of Victoria and, to that extent and in that sense, the Registrar can be described as the servant or agent of the Crown. The Registrar's functions relating to the administration of the Tribunal are clearly performed on behalf of the Victorian government. And the same may be true of the functions involved in administering the Fund. But the functions involved in administering the ordinary trusts constituted by payment of compensation money "for the benefit of the person entitled to that money" ((71) s. 35(1) of the Workers Compensation Act; s. 131(1) of the Accident Compensation Act.) are of a different kind. The trusts thus constituted are trusts for private citizens and the duties involved are owed to individual beneficiaries, notwithstanding that the trusts arise under the Workers Compensation Act rather than as the result of the acts of individuals.

49. Clearly, it is or will often be inappropriate to describe a person or a statutory office holder as the servant or agent of the Crown in relation to some functions and not others. As a general rule, it will be the overall nature of the functions and duties involved which determines whether he or she is to be categorized as a servant or agent of the Crown, no matter for what purpose that classification is or becomes necessary ((72) See Administrator of Austrian Property v. Russian Bank for Foreign Trade (1932), 48 TLR 37; Bank voor Handel en Scheepvaart NV v. Administrator of Hungarian Property, (1954) AC, at p 619, per Lord Reid.). But there may be cases where there are discrete functions which involve no interest or purpose of the Crown and which are separate and distinct from other functions which serve a Crown purpose.

50. It is clear that the classification of a person as a servant or agent of the Crown, whether generally or in relation to particular functions, does not depend on there being some benefit to or some financial or other interest on the part of the Crown or the government involved ((73) See Bank voor Handel en Scheepvaart NV v. Administrator of Hungarian Property, (1954) AC, at p 618, per Lord Reid. See also Wynyard Investments Pty Ltd v. Commissioner for Railways (NSW) (1955), 93 CLR, at p 393, per Kitto J). However, there may be cases where there is no Crown interest or purpose to be served at all or, in the case of discrete functions, no Crown interest or purpose to be served by those particular functions.

51. By reason and to the extent that the Registrar is a trustee for private individuals, no governmental interest or purpose whatsoever attends or is served by the functions associated with those trust obligations; in no sense are those obligations performed for or on behalf of the Crown. Thus, there is no basis for categorizing the Registrar, in his capacity as a trustee for private individuals, as a servant or agent of the Crown. He is a trustee, pure and simple. That being so and even if the relevant provisions of the Income Tax Assessment Act do not bind the Crown, its servants or agents, they bind the Registrar in his separate capacity as trustee for private individuals.

52. The alternative approach is to ask whether there is any basis for reading down the general words of the Income Tax Assessment Act so as not to include the Crown, its servants or agents. It does not matter whether the reading down is said to be necessary because some of its provisions expressly bind the Crown and, on ordinary principles, the others should be construed as not binding the Crown or because of a presumption against the Crown being bound, save by express words or by "necessary implication", in the sense explained in Bropho v. Western Australia ((74) [1990] HCA 24; (1990) 171 CLR 1, at pp 16-17, per Mason CJ, Deane, Dawson, Toohey, Gaudron and McHugh JJ).

53. Whatever may have been the situation in earlier times, it is clear from Bropho that the presumption that general words do not bind the Crown is one that must now yield to "the circumstances (involved), including the content and purpose of the particular provision and the identity of the entity in respect of which the question of the applicability of the provision arises" ((75) ibid, at p. 23.). It is axiomatic that those circumstances include the way in which the provision in question would operate and, in particular, whether it would operate to bind "servants or agents of the ... government ... in relation to acts which they do or property which they own or occupy exclusively in that capacity" ((76) British Broadcasting Corporation v. Johns, (1965) Ch 32, at p 81, per Diplock LJ; Bropho v. Western Australia (1990), 171 CLR, at p 16, per Mason CJ, Deane, Dawson, Toohey, Gaudron and McHugh JJ), or, as it is sometimes put, whether it would "apply to servants of the Crown acting in the course of their duties as such" ((77) Bropho v. Western Australia (1990) 171 CLR, at p 21, per Mason CJ, Deane, Dawson, Toohey, Gaudron and McHugh JJ). Given the purposes which, historically, were served by the assumption that the Crown is not bound by statute ((78) See ibid, at p. 18.), there is now no basis, if there ever was any, for applying a presumption that the Crown is not bound unless the provision or provisions in question would operate so as to have some effect upon the "interests or purposes of the Sovereign" ((79) Wynyard Investments Pty Ltd v. Commissioner for Railways (NSW) (1955), 93 CLR, at p 393, per Kitto J) or, more accurately, the government concerned ((80) Note that that approach is implicit in the speech of Lord Reid in Bank voor Handel en Scheepvaart NV v. Administrator of Hungarian Property, (1954) AC, at p 618, where his Lordship said, in the context of a taxing statute which did not bind the Crown, that he was "prepared to assume that if ... it was the duty of a Crown servant merely to hold property with accruing income for a period and then pay it to some ... private person, it would be held that tax is payable on the incoming accruing ... because ... payment of tax could not possibly prejudice any Crown interest or purpose".).

54. Similarly, because the provisions of the Income Tax Assessment Act which are expressed to bind the Crown operate in areas in which Crown interests are involved, they provide no basis for reading down general provisions in circumstances where their application has no effect on the interests or purposes of the Crown.

55. As already indicated, there is no Crown or governmental interest in the performance by the Registrar of the trust obligations which he owes to private individuals. Thus, there is no basis, either by reason of a presumption that general words do not bind the Crown or by reason that certain other provisions of the Income Tax Assessment Act are expressed to bind the Crown, for reading down the word "person" in s. 17 or the definition of "trustee" in s. 6(1) so as to exempt the Registrar, in his capacity as a trustee, from tax under Pt III, Div 6.

Questions arising under the Constitution

56. As earlier indicated, this appeal and its two companion appeals were removed into the Court because they were seen to raise a question under s. 114 of the Constitution. So far as presently relevant, s. 114 forbids the Commonwealth from "impos(ing) any tax on property of any kind belonging to a State".

57. In substance, Pt III, Div 6, in its application to this case, taxes income which, in equity, is the income of the private citizens who are the beneficiaries of the trust constituted by payment to the Registrar of compensation to which they are entitled. In form, it taxes the income of the Registrar, in his capacity as trustee. Accordingly, neither in substance nor in form can it be said that, in the circumstances of this case, Pt III, Div 6 taxes any property belonging to the State of Victoria.

58. It was also argued that, in its application to the Registrar in relation to trusts of compensation moneys, Pt III, Div 6 of the Income Tax Assessment Act infringes the implied constitutional prohibition against Commonwealth laws which discriminate against a State or interfere with its ability to carry out its functions ((81) See Melbourne Corporation v. The Commonwealth [1947] HCA 26[1947] HCA 26; ; (1947), 74 CLR 31; Victoria v. The Commonwealth [1971] HCA 16; (1971), 122 CLR 353; Queensland Electricity Commission v. The Commonwealth [1985] HCa 56; (1985), 159 CLR 192.). Because Pt III, Div 6, in its application in this case, subjects the Registrar to tax in his capacity as trustee for private citizens and does not affect any interest or purpose of a State, it does not offend either limb of that prohibition.

The year of income

59. As earlier indicated, the "interest" credited to the Payne account in July 1987 represented a proportionate share of the income earned by the Fund in the tax year ended 30 June 1987. It was suggested in argument that it might, for the purposes of the Income Tax Assessment Act, be income for the 1987 tax year and not of the 1988 tax year which is the tax year involved in this appeal.

60. The Registrar did not appeal against the determination of Jenkinson J, in the Federal Court, that, if the interest was assessable income, it was correctly included in the assessment in respect of the 1988 tax year. No doubt, the reason was that, in a context where the Commissioner has, as already indicated, issued an alternative assessment treating the relevant interest as income of the 1987 tax year, the identity of the correct tax year was seen as being of little practical significance.

61. As has been seen, the Registrar holds the compensation moneys paid to him on trust for the benefit of the persons entitled to those moneys. He is empowered to invest, apply or otherwise deal with the moneys in the Fund in any manner he thinks fit for the benefit of those persons ((82) s. 35(1) of the Workers Compensation Act; s. 131(1)) of the Accident Compensation Act.). Any income from the investment of those compensation moneys is, therefore, referable to the trust at the time of receipt. It is irrelevant that the actual allocation of the income does not occur until some later tax year.

62. The method adopted by the Registrar, and by the Tribunal prior to the 1987 amendments, for the allocation of income accorded with that income being received as trust income. After deducting related costs and expenses, overall income received on investments was allocated between the accounts of different dependants or groups of dependants. While the actual allocation of the net investment income to the credit of particular accounts in the books of the Fund was not effected until after the commencement of the 1988 tax year, the respective amounts which were so credited were ascertained, on a "pro rata" basis, by reference to the monthly amounts held to the credit of the various accounts during the 1987 tax year. Thus, the $2,718.69 credited to the Payne account on 10 July 1987 was calculated by reference to the monthly balances standing to the credit of that account during the year in which the relevant income was received, that is, the 1987 tax year. There was some discussion during the course of argument as to whether the beneficiaries of the various accounts were, in fact, entitled to a pro rata allocation of the moneys each year. It is not necessary to decide that question because, even if there was no such entitlement, the Registrar's and, prior to the 1987 amendments, the Tribunal's statutory duty to invest the moneys for the benefit of the persons entitled means that the discretion to deal with the moneys as thought fit had to be exercised for the benefit of those persons ((83) cf. Flannery v. Secretary, Department of Social Security (1987), 78 ALR 431; Melbourne v. Secretary, Department of Social Security (1988), 20 FCR 496, where the relevant legislation specifically provided that "(i)nvestments made from moneys forming part of the Common Fund SHALL NOT BE MADE on account of or belong to any particular" estate, trust or person. (Emphasis added - in caps)). Thus, a proportionate share of the moneys would, at all times, be referable to each individual account. The income received was, therefore, derived as income at the date at which it was earned, regardless of when it was actually allocated in the books. This was so notwithstanding the fact that the compensation moneys had been mixed in a common fund with other compensation moneys, borrowings, money for the general expenses of the Tribunal and income from investments.

63. It follows that the Registrar and, earlier, the Tribunal derived income on compensation money at the date on which that income was earned by the mixed fund, and not on the date on which the relevant proportion of the income was formally allocated to the particular account. That means that the income involved in this case was earned in the financial year ended 30 June 1987, notwithstanding the fact that it was not actually credited to the Payne account until July 1987.

Conclusion

64. As earlier indicated, the present appeal in relation to the assessment for the 1988 tax year was listed for hearing together with two companion appeals by the Registrar relating to two other accounts administered by him. The Court was informed that the parties should be able to reach agreement in relation to those other appeals once the Court had dealt with the questions involved in this appeal.

65. In the present appeal, the Commissioner has succeeded on each of the grounds of appeal relied on by the Registrar. As has been seen, however, we consider that the notice of assessment involved in this appeal was erroneous for a reason not relied upon by the Registrar, namely, that it treated the $2,718.69 as income derived by the Registrar as trustee for the Abela family during the 1988 tax year whereas it was income derived by the Tribunal during the 1987 tax year. The reasoning which leads to our conclusion in that regard may, no doubt, also lead to the conclusion that some other amount was derived as income, of the Registrar for the 1988 tax year, but was wrongly included in an assessment in respect of some subsequent year.

66. In all the circumstances, the appropriate course is to order that this appeal and the companion appeals stand in the list to enable the parties to confer with a view to reaching agreement about the orders to be made in the light of the reasons expressed in this judgment. If the parties are unable to reach such agreement, it will be necessary to afford to them an opportunity to make written submissions in relation to the appropriate orders. We would indicate that, as at present advised, we consider that the Registrar should pay the Commissioner's costs of the appeal to this Court and of the proceedings in the Federal Court.

BRENNAN, DAWSON AND McHUGH JJ Trust is the creature of equity. It is of the essence of a trust that it is cognizable by a court of equity ((84) Sturt v. Mellis [1743] EngR 82; (1743), 2 Atk 610, at p 612 [1743] EngR 82; (26 ER 765, at p 766); Burgess v. Wheat [1757] EngR 5; (1759), 1 Eden 177, at pp 218, 223 [1757] EngR 5; (28 ER 652, at pp 668, 670); In re Williams; Williams v. Williams, (1897) 2 Ch 12, at p 19.). A relationship which obliges one person to pay money or to transfer property to another may exhibit the features of a trust for the benefit of the other, but there is no such trust unless the obligation is enforceable in equity. In our opinion, the rights of dependants of a deceased worker to receive money following the payment of compensation under the Workers' Compensation Act 1958 (Vict) ("the 1958 Act") are not enforceable in a court of equity. The remedies available to dependants are designed to enforce the performance of statutory, not equitable, duties.

2. For reasons presently to be stated, we would hold that the Registrar of the Accident Compensation Tribunal ("the Registrar") does not hold money paid as compensation for the dependants of a deceased as trustee for the dependants as beneficiaries. If there be a trust of the fund out of which the dependants of a deceased worker receive or are entitled to receive money, the trust is not one which confers on those dependants an equitable interest in the fund or an equitable right to payment out of the fund. For that reason, we would hold that Div 6 of Pt III of the Income Tax Assessment Act 1936 (Cth) has no application to that part of the income of the fund attributed to the dependants of a particular deceased worker. To explain this vie, it is necessary to identify the more important of the statutory provisions from which the nature of the rights possessed by the dependants of a deceased worker can be ascertained. These provisions govern the making of an award of compensation, the payment of the sum awarded, the administration of the fund into which the compensation awarded is paid and, to some extent, the rights of the respective dependants to seek payment out of that fund and the payment of money to the respective dependants in whose favour the fund is applied.

3. The relevant statutory provisions in the 1958 Act were substantially amended by the Accident Compensation Act 1985 (Vict) ("the 1985 Act") which provided, inter alia, for an Accident Compensation Tribunal Fund ("the Tribunal Fund") to be administered by the Accident Compensation Tribunal ("the Tribunal"). The Accident Compensation (Amendment) Act 1987 (Vict) ("the 1987 Act") in turn amended both the 1958 Act and the 1985 Act and, with effect from 1 December 1987, the Registrar of the Tribunal was substituted for the Tribunal as the administrator of the Tribunal Fund. That substitution explains the difference in the parties who were assessed to tax on what the Commissioner contends to have been the income of the trust estate of the dependants of a deceased worker, Alexander Joseph Abela: the Tribunal was assessed to tax in respect of the income year ended 30 June 1987, the Registrar in respect of the income year ended 30 June 1988. In the following discussion, reference will be made to the statutory provisions in force at relevant times.

The operation of the statutes in the present case

4. In consequence of the death of Mr Abela on 6 November 1977, compensation was payable under s. 9(1) of the 1958 Act. His dependants were his widow (now Mrs Payne) and three infant children. Pursuant to an award made on 12 June 1979 by the Workers Compensation Board constituted under the 1958 Act ("the Board") and in conformity with s. 34(1) of that Act, the sum of $23,940 was "paid into the custody of the Board and the receipt of the registrar (was) a sufficient discharge in respect of the sum so paid". Section 34(2) provided as follows:

"In the case of death if the worker leaves more than one

dependant the Board having regard to the circumstances of

the various dependants and variations in such

circumstances from time to time may -

(a) apply or otherwise deal with any sum so paid into its

custody in such manner as in the opinion of the Board will

for the time being be most beneficial to the dependants;

(b) provide for any two or more dependants collectively;

(c) exclude any dependant from participating in any

benefit."

5. Sub-section (2) was deleted (a new sub-section being inserted) by the 1985 Act but a power corresponding to that contained in s. 34(2) was conferred on the Tribunal by an amendment inserting a new s. 36(2). Moreover, a new s. 36(3), substantially re-enacting provisions that had been contained in s. 35, empowered the Tribunal (and now empowers the Registrar) to vary a determination as to the apportionment of moneys among the dependants of a deceased worker where there has been neglect of children, a variation in the circumstances of the dependants or any other sufficient cause. Thus, the extent to which any one or two or more dependants of a deceased worker is entitled to participate in an amount paid to the Board under s. 34(1) of the 1958 Act was in the discretion of the Tribunal until 1 December 1987 and then came to be in the discretion of the Registrar.

6. Presumably pursuant to the power conferred on the Board by s. 34(2) of the 1958 Act, the Board ordered, on or about 20 July 1983, that $16,000 of the $23,940 paid to the Board under s. 34(1) be set aside for Lisa Joan Abela, one of the infant daughters of the deceased. The balance was credited to a separate account in which, it seems, Mrs Payne and the three infant children shared (hereafter "the account"). The account was credited with interest from time to time and debited with payments out. It is the interest credited to the account on 10 July 1987 which the respondent Commissioner seeks to bring to tax by the assessment for the income year ended 30 June 1988.

7. Sub-section (1A) of s. 34 of the 1958 Act provided as follows:

"(1A) All moneys paid into the custody of the Board shall

subject to the rules and the provisions of this Act be

invested applied or otherwise dealt with in such manner

as the Board thinks fit for the benefit of the persons

entitled thereto under this Act."

8. However, the Board's custody of the moneys in the account was affected by a new s. 37 of the 1958 Act inserted by the 1985 Act. The relevant provisions of the new section are as follows:

"(1) On and from the appointed day ((85) 31 August 1985.),

all moneys paid into the custody of the Board pursuant to

this Division as in force before that day shall be

administered by the Tribunal in accordance with this Act.

(2) For the purposes of sub-section (1), the moneys shall

be paid to the Tribunal or, where any of the moneys were

before the appointed day invested, the investments shall

be transferred to and vest in the Tribunal.

(3) ...

(4) No right interest or claim in or with respect to any

money paid into the custody of the Board pursuant to this

Division as in force before the appointed day shall abate

or be in any way prejudicially affected by reason of this

section."

9. The "Tribunal" referred to in these provisions was defined to mean the Accident Compensation Tribunal ((86) s. 3(1) of the 1958 Act as amended.). The Tribunal is the successor to the Board which ceased to exist on the appointed day ((87) 1958 Act, ss. 80, 81.).

10. Section 73(1) of the 1985 Act directed the Tribunal to establish and maintain a fund to be called the Accident Compensation Tribunal Fund. Section 73(2) directed that there should be paid into the Tribunal Fund the moneys received by the Tribunal under the 1985 Act or under any other Act. The other moneys directed to be paid into the Fund were of various descriptions, for example, contributions payable by self-insurers and income from investments. The 1987 Act specifically added "payments made under section 34 of the Workers Compensation Act 1958" to the list of payments to be paid into the Tribunal Fund ((88) s. 73(2)(ab) of the 1985 Act.). The Registrar was then substituted for the Tribunal as the authority charged with responsibility for administration of the Tribunal Fund. The Tribunal Fund is a mixed fund and payments into that fund lose their identity in the mass. Included in that fund were the moneys standing to the credit of the account.

11. The powers of the Registrar (previously the Tribunal) in relation to investment of the Tribunal Fund are set out in s. 73(4) of the 1985 Act which authorizes the Registrar to invest money in the Tribunal Fund in any manner which is approved by the Treasurer. Section 73(3) of the 1985 Act prescribes the payments which may be made out of the Tribunal Fund:

"(a) payments directed by order of the Tribunal to be paid

out of the Fund under this Act or the Workers Compensation

Act 1958;

(aa) any amounts payable in respect of money borrowed

under section 51C;

(ab) any payment authorized under section 131 or 132;

(ac) any payment authorized under section 35 or 36 of the

Workers Compensation Act 1958;

(b) any payment required or authorized to be made or which

is for or towards the cost and expenses of or incidental

to the performance of the functions or the exercise of the

powers of the Tribunal or staff of the Tribunal;

(c) any other costs and expenses incurred by the Tribunal

or Registrar under this Act or any other Act;

(d) any amounts payable in respect of remuneration,

allowances and pensions under section 45 or 50A and any

other payment required or permitted to be paid out of the

Fund by or under any other Act; and

(e) any payment required or authorized to be made out of

the Fund by sub-section (4) or (5)."

12. The Tribunal Fund is thus available to meet any of the debts or payments prescribed by s. 73(3).

13. However, the 1958 Act specifically authorizes the Registrar to determine the application of money which, having been received by the Board under the 1958 Act, became part of the Tribunal Fund. Section 35(1) of the 1958 Act provides:

"Except as otherwise provided in section 34, any amount of

money administered by the Registrar under this Act may be

investment, applied or otherwise dealt with in any manner

that the Registrar thinks fit for the benefit of the

person entitled to that money."

14. Pursuant to this provision, the Registrar can apply moneys for the benefit of dependants by appropriating moneys in the Tribunal Fund for payments to or on behalf of, or to be held on a particular trust for, a dependant or group of dependants. But, unless and until money is so applied, the assets representing compensation paid to the Board under s. 34(1) of the 1958 Act remain part of the Tribunal Fund.

15. Further provisions governing the Registrar's administration of moneys paid to the Board as compensation appear in s. 35 of the 1958 Act which provides, inter alia -

"(2) The Registrar shall not in administering any amount

of money under this Act be bound by any law relating to

the administration of trust funds by trustees but shall

act in good faith.

(3) (repealed)

(4) ...

(5) All expenses incurred by or on behalf of the Registrar

in the administration of any amount of money under this

Act shall be paid by the Registrar out of the Tribunal

Fund."

16. The terms of s. 35(2) follow the provisions previously applied to the Board by s. 39 of the 1958 Act. The Registrar is governed by similar provisions contained in s. 131(2) of the 1985 Act in respect of his administration of any amount of money being administered under the 1985 Act. The duty cast upon the Registrar is, as we shall see, different from the duty which equity imposes on the trustees of a fund for the benefit of beneficiaries.

17. Section 36(1) provides:

"The Registrar may on the application of any person on

whose behalf any amount of money is administered under

this Act determine any dispute in relation to the

administration."

18. The Tribunal nevertheless possesses a supervisory power, for s. 36(5) provides:

"Any person who objects to any determination made by the

Registrar may appeal to the Tribunal which may make a new

determination."

19. The scope of the disputes falling within this provision may be open to argument but, whatever that scope may be, the sub-section provides for the determination of disputes by a statutory authority, not by a court of equity.

20. In this statutory context, the question is whether the statute imposes on the Registrar the character of a trustee of compensation payments "for the benefit of the person entitled to that money" (to adopt the language of s. 35 (1)), "the person" presumably comprehending, where applicable, all the dependants of a deceased worker. Although the language of s. 35(1) might be taken to suggest that dependants are beneficiaries of a trust, the appellant submits that the statutory provisions imposing obligations on the Board, the Tribunal and the Registrar create obligations of the Crown which should not be seen as the obligations of a true trustee unless the statute clearly makes them so ((89) Kinloch v. Secretary of State for India (1882), 7 App Cas 619; Tito v. Waddell (No. 2), (1977) Ch 106, at pp 211-237; New South Wales v. The Commonwealth (No. 3) [1932] HCA 12; (1932), 46 CLR 246, at pp 262, 268; Aboriginal Development Commission v. Treka Aboriginal Arts and Crafts Ltd, (1984) 3 NSWLR 502.). This approach is explained by Lord Diplock in Town Investments Ltd v. Department of the Environment ((90) [1977] UKHL 2; ((1978) AC 359, at p 382.):

"(E)ven where the person to be benefited is a subject, the

use of the expression 'in trust' to describe the capacity

in which the property is granted to an officer of State is

not conclusive that a trust in private law was intended;

for 'trust' is not a term of art in public law and when

used in relation to matters which lie within the field of

public law the words 'in trust' may do no more than

indicate the existence of a duty owed to the Crown by the

officer of State, as servant of the Crown, to deal with

the property for the benefit of the subject for whom it

is expressed to be held in trust, such duty being

enforceable administratively by disciplinary sanctions

and not otherwise."

21. This approach to the construction of a statute may be valid even where the duty is imposed on an officer who is not an "officer of State". A statute which imposes a duty on a public authority charged with the performance of public functions and holding and administering property may not give rise to a trust for the benefit of the individuals who will profit from performance of the duty, whether or not the authority is an emanation of the Crown ((91) Skinners' Co v. Irish Society (1845), 12 Cl and F 425, at pp 488-489, 490 (8 ER 1474, at pp 1500, 1501); Swain v. Law Society, (1983) 1 AC 598, at p 618.). In the end, however, the question is one of statutory construction: if the statute vests property or provides for the vesting of property in one person and requires that person to apply the property for the benefit of another or for the benefit of a class, does the statute intend the property to be held in trust for the other or for the class? A statutorily created trust may not necessarily exhibit all the features of a trust for beneficiaries created by a settlor of property ((92) Ayerst v. C. and K. (Construction) Ltd, (1976) AC 167, at p 178.), but the statutory intention to create a trust must nevertheless appear in the terms of the statute. In our opinion, the relevant statutory provisions in this case are inconsistent with the notion of a trust for the dependants as beneficiaries. There are several indicia which lead to this conclusion.

22. Section 34 itself reveals the policy underlying the provisions governing administration of compensation payments. In the form introduced by the 1985 Act, compensation payments must be paid to the Tribunal (now to the Registrar) when, inter alia, the person entitled is under the age of eighteen years or, in the case of compensation for a worker's death, the person is over the age of eighteen years (unless the Tribunal otherwise determines) or, in any case, where the Tribunal "considers that it would be in the best interests of the worker". The purposes of requiring administration by the Tribunal (now by the Registrar) seem to be the protection of the person or persons entitled against improvidence on their part of against the incursions of creditors and, where compensation payments are to be allocated amongst two or more dependants, the determination of the amount and manner of application of the money available for distribution. The scheme of the provisions following s. 34(1) is that compensation payments are not within the disposition of a dependant or class of dependants until the Registrar applies the Tribunal Fund by paying money to, or by creating a trust for the benefit of, that dependant or class of dependants. The Registrar is not required to pay money into the hands of a dependant; the money may be applied by defraying the cost of services to a dependant, for example, by paying school fees. In that way, the protective purposes of s. 34 may be met ((93) See In re Coleman; Henry v. Strong (1888), 39 Ch D 443, at p 451; In re Bullock; Good v. Lickorish (1891), 60 LJ Ch 341.). Family disputes can be resolved by determinations made by the Registrar, or by the Tribunal on appeal, as to whom money should be paid, how much and when. At the same time, dependants are in a position to seek judicial review of a refusal by the Registrar to pay them their "entitlements" when payment is appropriate in exercise of the statutory discretion which the Registrar possesses.

23. If it were right to regard the Registrar as holding compensation payments in trust for beneficiaries being those entitled under the 1958 Act, a court of equity would control the investment of the compensation payments, requiring the Registrar to exercise his investment powers "in the best interests of the present and future beneficiaries of the trust, holding the scales impartially between different classes of beneficiaries" ((94) Cowan v. Scargill; Re Mineworkers' Pension Scheme Trusts, (1985) Ch 270, at pp 286-287.). The limitations which equity would place on the exercise of a trustee's power to invest are inconsistent with the broad discretion conferred on the Registrar by s. 35(1) of the 1958 Act and s. 73(4) of the 1985 Act. If it were right to regard the Registrar as holding compensation payments in trust for those entitled under the 1958 Act, the jurisdiction of equity would extend to the enforcement of their respective entitlements. If the Registrar were a true trustee of a compensation payment, it would be the duty of the Registrar as trustee to pay or apply on demand the amount to which a dependant was or the dependants as a class were entitled provided the dependant was or all the dependants in the class were sui juris and all consented ((95) In re Marshall; Marshall v. Marshall, (1914) 1 Ch 192; In re Smith; Public Trustee v. Aspinall, (1928) Ch 915.). But that would nullify the effect of s. 34(1) which, as it now stands, contemplates that all compensation payments in respect of the death of a deceased worker will be administered by the Registrar. Presumably, if the Registrar were a true trustee, the powers of the Registrar under s. 36(2) and (3) would be construed as trust powers, so that the dependants would be entitled equally to the compensation payment in default of any exercise by the Registrar of the power to apply the compensation payment in some other way ((96) Queensland Trustees Ltd v. Commissioner of Stamp Duties [1952] HCA 52; (1952), 88 CLR 54, at p 63.). Or a dependant, complaining of a failure by the Registrar to exercise his discretion under s. 36(2) or (3), could apply to a court of equity for an order directing the Registrar to consider an exercise of the power or an order appointing a new trustee or, perhaps, an order directing the distribution of compensation payments among the dependants of the particular deceased worker according to the court's selection after inquiry ((97) See McPhail v. Doulton, [1970] UKHL 1; (1971) AC 424, at p 457.). The existence of such an equitable jurisdiction seems quite inconsistent with the creation of a right of appeal to the Tribunal from any determination made by the Registrar under s. 35 of the 1958 Act.

24. Moreover, s. 35(2) of the 1958 Act expressly releases the Registrar from "any law relating to the administration of trust funds". It is difficult to construe the 1958 and 1985 Acts as intending to create a trust when the foundations of any trust - the law which imposes the duties of a trustee - is thus removed. Section 35(2) exposes the true character of the Registrar's discretionary powers: they are statutory powers amenable to judicial review but not amenable to control by a court of equity. It is immaterial that the Registrar, through compensation payments are paid to or are under the control of or are vested in him, has no beneficial interest in those moneys. As the Privy Council said in Commissioner of Stamp Duties (Q) v. Livingston ((98) [1964] UKPC 2; (1965) AC 694, at p 712.) in reference to assets in the hands of an executor of an unadministered estate:

"When the whole right of property is in a person, as it

is in an executor, there is no need to distinguish between

the legal and equitable interest in that property, any

more than there is for the property of a full beneficial

owner. What matters is that the court will control the

executor in the use of his rights over assets that come to

him in that capacity; but it will do it by the

enforcement of remedies which do not involve the

admission or recognition of equitable rights of property

in those assets. Equity in fact calls into existence and

protects equitable rights and interests in property only

where their recognition has been found to be required in

order to give effect to its doctrines."

25. It is erroneous to conclude that, because property is held by one person but the fruits are ultimately to be enjoyed by others, there is a relationship of trustee and beneficiary between the holder of the property and those who will ultimately receive it ((99) Ayerst v. C. and K. (Construction) Ltd, (1976) AC, at pp 177-178.). When the remedies of those entitled to benefit from property are statutory, equity does not need to call an equitable interest into existence to control the administration of the property by the person in whom it is vested.

26. The dependants of a deceased worker are not without remedy against the Registrar if the Registrar unjustifiably refuses to pay money to which, under the 1958 Act or the 1985 Act, the dependants are "entitled". The scheme of both Acts is to provide administrative machinery for the payment of compensation, for the investing of compensation payments until the time for payment arrives, for the distribution among dependants of the sums available for distribution and for the payment of the respective amounts to which dependants are entitled. The administrative character of the scheme is manifested by the making ((1) pursuant to s. 80 of the 1985 Act.) of the Accident Compensation Tribunal (Workers Compensation) Rules 1986 which apply to compensation paid under the 1958 Act. Regulation 53 provides, inter alia:

"(1) Where a payment is made into the Tribunal Fund in the

case of the death of a worker -

...

(d) if the Tribunal has apportioned the award moneys

between dependants, the respective amounts must be

separately recorded and administered by the Tribunal; and

(e) any person entitled to share in the award moneys or

having an interest as guardian or the like in relation to

a dependant may apply to the Tribunal giving at least five

days notice in writing to all others concerned, for an

order to vary or create or otherwise deal with an

apportionment of the moneys between the dependants; and

(f) any application for apportionment or variation of

apportionment must be made on reasonable notice to all

persons who might be affected thereby.

(2) Where money has been paid into the custody of the

Tribunal, the Registrar must pay it out to or on behalf

of the person entitled to it in such manner and

circumstances as the Tribunal may direct pursuant to

section 35 of the (1958) Act.

(3) Any person entitled to share in the award moneys may

apply informally for payment out of any part of the money,

giving such particulars as will enable the Tribunal to

exercise its discretion in the proper administration of

the moneys and, subject to compliance with such

requirements, by way of security or other safeguards, as

the Tribunal may stipulate for the protection of the

interests of any other dependants, the Tribunal may grant

such an application.

(4) ...

(5) Moneys in the custody of the Tribunal standing to the

credit of a person who has not made application for any

payment therefrom for a period of at least ten years, and

has not been in communication with the Tribunal during

that time, may be transferred out of the name of that

person and into a fund known as the Unclaimed Moneys Fund

to be maintained by the Tribunal and invested in like

manner to the other monies administered by the Tribunal;

provided that if at any later time the person concerned

communicates with the Tribunal with satisfactory proof of

identity, the Tribunal must transfer out of the Unclaimed

Moneys Fund to the credit of that person the appropriate

sum plus accrued interest, to be administered in the

usual manner."

27. In addition to these provisions, a specific duty is imposed on the Registrar to pay out a dependant where only a small amount remains to be administered. Section 35(4) of the 1958 Act provides:

"If the amount of money administered by the Registrar on

behalf of any person becomes less than an amount of money

determined by the Tribunal the amount shall be paid out to

that person."

28. A dependant may apply for payment in accordance with these Rules but, irrespective of the procedure prescribed by the Rules, the only opening through which money may lawfully pass from the Tribunal Fund to a dependant is the Registrar's exercise of the powers conferred on him by s. 35(1) ((2) The powers conferred by s. 36(2) and (3) may supplement or, perhaps, be the relevant powers in particular cases.). According to the circumstances, the Registrar may be under a duty to exercise those powers by paying money to a person entitled but that duty is not imposed by equity. The duty flows from the purpose for which the powers were conferred, namely, to benefit those who are entitled to the compensation paid. And, if there be any dispute in relation to administration of money being administered under the 1958 Act, s. 36 prescribes the forum by which that dispute is to be determined. Provided the powers conferred on the Registrar and the Tribunal are exercised bona fide for the purposes for which they were conferred, no jurisdiction other than that created by the 1958 Act and the 1985 Act can be invoked to enforce a dependant's entitlement ((3) cf. Barraclough v. Brown, (1897) AC 615, at p 622; Stevens v. Jeacocke (1848), 11 QB 731, at p 741 [1848] EngR 314; (116 ER 647, at p 652); Reg. v. Country Court Judge of Essex (1887), 18 QBD 704, at p 707.). If the powers are not so exercised, mandamus and certiorari lie. But a dependant has no entitlement to payment from the Tribunal Fund outside the 1958 and 1985 Acts.

The allocation of interest to the account

29. The balance sheet of the Tribunal as at 30 June 1987 shows that the total assets of the Tribunal were $118,577,200, of which $114,878,200 consisted of "beneficiary fund investments". The income and expenditure account for the year ended 30 June 1987 shows that the income in respect of beneficiary fund investments was $15,848,100, all of which was available for distribution. However, the statement of agreed facts in this case reveals that some expenses "were paid from the income from the Compensation Moneys prior to any distribution of that income to the beneficiaries".

30. The statement of agreed facts shows that, on 10 July 1987, the moneys derived from investments during the year ended 30 June 1987 were allocated to the accounts of beneficiaries "pro rata in accordance with the following practice: (i) The total amount so allocated was divided into twelve equal parts one for each month of the first year. (ii) In respect of a part attributed to a particular month that part was distributed pro rata amongst the accounts of the persons in respect of whom the Compensation Moneys had been received by the Tribunal, each account taking a share proportionate to the minimum balance standing to the credit of that account during the money." The amount so allocated to the account was $2,718.69.

31. The respondent Commissioner assessed the Tribunal to tax in respect of the sum of $2,718 as tax upon income derived during the income year ended 30 June 1987. Subsequently a further assessment was made, assessing the Registrar to tax for the income year ended 30 June 1988 in respect of the sum of $2,718, this assessment resting upon the allocation of a portion of the investment income of the Tribunal Fund to the account on 10 July 1987. The assessments are intended to be alternative, not cumulative. Objections to both assessments were disallowed and an appeal was brought to the Federal Court. Jenkinson J upheld the assessment of the Registrar to tax in respect of the year ended 30 June 1988 but allowed the appeal and set aside the assessment of the Tribunal to tax in respect of the year ended 30 June 1987. The Registrar appealed to the Full Court of the Federal Court against his Honour's judgment in so far as it dismissed his appeal in relation to the 1988 assessment. That appeal was removed into this Court.

The Income Tax Assessment Act and its application

32. Jenkinson J held that the amount allocated on 10 July 1987 was assessable income in respect of which the Registrar was liable to pay tax pursuant to the provisions of Div 6 of Pt III of the Income Tax Assessment Act. The "amounts of compensation" - which we take to be a shorthand description of the amounts standing to the credit of the account from month to month on which interest was calculated and apportioned - were said to be a "trust estate" within the meaning of that expression in that Division.

33. For the purposes of the Income Tax Assessment Act, s. 6(1) defines the term "trustee" as follows:

"'trustee' in addition to every person appointed or

constituted trustee by act of parties, by order, or

declaration of a court, or by operation of law, includes-

(a) an executor or administrator, guardian, committee,

receiver, or liquidator; and

(b) every person having or taking upon himself the

administration or control of income, affected by any

express or implied trust, or acting in any fiduciary

capacity, or having the possession, control or management

of the income of a person under any legal or other

disability."

34. A "trust estate" for the purposes of Div 6 of Pt III of the Income Tax Assessment Act must bear a corresponding meaning, that is, property of any kind held or controlled by a trustee in one or other of the capacities prescribed by the definition. In Manning v. Federal Commissioner of Taxation ((4) [1928] HCA 9; (1928) 40 CLR 506, at p 509.), Knox CJ said in reference to the definition of "trustee" in the Income Tax Assessment Act 1922 (Cth):

"Wide as this definition is, it requires at least as an

essential ingredient in the position of 'trustee' under

the Act the existence of a fiduciary obligation towards

some other person. The existence of a fiduciary

obligation to another person must, I think, always

involve a liability to account at the instance of that

other person, and if I am right in thinking that the

gift of income to the appellant involves no such

liability it seems to me to follow that she is not a

trustee of the income within the meaning of the Act."

35. The applicability of this observation to the Income Tax Assessment Act 1936 must be tested, of course, by reference to the entirety of that extensive legislation. But we see no reason to treat the observation as inapplicable to the present definition of "trustee". The opening words of the definition speak of a trustee in the ordinary sense of a person who holds property on trust. Paragraph (a) comprehends persons who, whether or not they hold the relevant property, have control over it and owe a fiduciary duty to another in exercising that control. Paragraph (b) also comprehends persons who owe a fiduciary duty, but the duty must relate to the administration or control of relevant property.

36. The trust which Jenkinson J held to exist and to attract the application of Div 6 of Pt III of the Income Tax Assessment Act was not a trust for the benefit of the dependants. His Honour held it was a trust for statutory purposes, having the same character as the money which was described in Harmer v. Federal Commissioner of Taxation ((5) [1991] HCA 51; (1991) 173 CLR 264.) as being held on a trust for statutory purposes. In Harmer, the Court referred to Fouche v. Superannuation Fund Board ((6) [1952] HCA 1; (1952) 88 CLR 609, at p 640.) as a precedent for attributing that character to the fund in question.

37. In this Court, the Commissioner has placed some reliance upon Fouche and Harmer in order to characterize the compensation payments being administered by the Registrar as trust estate of which the Registrar was the trustee. The notion of a trust for statutory purposes needs some analysis and it gives rise to the question whether the trustee of such a trust is a "trustee" of a trust estate" for the purposes of Div 6.

38. The relevant claim in Fouche was a claim by the Superannuation Fund Board against individuals who had previously been members of the Board and who, in breach of their duty, had authorized the laying out of the Board's money on a hazardous investment. The question was whether the Board could seek an equitable remedy against former members on the footing that the administration of a trust fund was involved. The Court resolved that question in favour of the Board. But the Court said ((6) [1952] HCA 1; (1952) 88 CLR 609, at p. 640.):

"We do not think it necessary to consider ... the question

whether the individual corporators were, in any sense or

for any purpose, to be regarded as trustees. Nor do we

think it relevant to inquire whether they owed and what

duty to the contributors to the fund, whom the learned

Chief Justice regarded as beneficiaries under the trust.

We do not think, indeed, that the contributors are

beneficiaries in the proper sense: they have, of course,

an interest in the trust fund which would probably give

them standing in a court of equity, but they have not such

a beneficial interest in the fund as has an ordinary

cestui que trust. The trust is not a trust for persons

but for statutory purposes."

39. In using the term "trust for statutory purposes", their Honours were concerned to identify the terms on which the Board held the Superannuation Fund. The fiduciary duties of the Board were stated in reference to the Fund as an entirety but not in reference to the amounts received from or in respect of individual contributors and paid into the Fund. Although the contributors did not acquire the beneficial interest of a cestui que trust in the Fund, their Honours thought that the contributors' interest in its proper administration might give them standing to invoke the jurisdiction of equity if the Board misapplied the Fund by disbursing money from it without authority. The Board had a fiduciary duty to perform in administering the Fund, similar to the duty of a trustee. That duty was stated to be "a duty of reasonable care - the care which an ordinary prudent man of business would take" ((7) (1952) 88 CLR, at p. 641.). In the present case the Legislature, perhaps, conscious of the decision in Fouche, released the Registrar in relation to the administration of "any amount of money under this Act" (that is, the 1958 Act) from the duties imposed by the law relating to the administration of trust funds and imposed on him merely a requirement to act in good faith: s. 39 of the 1958 Act, s. 35(2) of the 1958 Act as amended by the 1985 Act and s. 131 of the 1985 Act as amended by the 1987 Act. Whether or not this provision left the Registrar under a fiduciary duty in relation to the administration of the Tribunal Fund, it is clear from this provision and the other statutory provisions to which reference has already been made that the Registrar was under no fiduciary duty in relation to compensation moneys paid under s. 34(1) of the 1958 Act. The duty to invest and the duty to apply compensation moneys for the benefit of dependants were governed exhaustively by statute.

40. In Harmer, the question in issue was the character of moneys paid into court by a debtor in an action between competing creditors and paid out to solicitors as trustees to invest the moneys pending the determination of the competing claims. The Court said ((8) (1991) 173 CLR, at p. 274.):

"The moneys paid into court were not themselves the

subject matter of dispute but were held to satisfy any

order, including any order for costs, made by the court

consequent upon its determination of those conflicting

claims and counterclaims. Once the moneys were deposited

with the Building Society in the names of the appellants

holding as trustees, the moneys were held by them in that

capacity to be dealt with in accordance with the order of

the court and not otherwise. It is unnecessary to

consider whether the contingent interests of the claimants

in the moneys paid into court could be aggregated into a

totality of beneficial ownership or whether the powers of

the Supreme Court to make orders affecting the moneys,

including orders as to costs, meant that one of the

elements of an ordinary non-purpose trust was lacking. It

suffices to say that the trust upon which the moneys were

held was a trust for statutory purposes ((9) See Fouche v.

Superannuation Fund Board (1952), 88 CLR, at p. 640.) and

that the legislative provisions, including Rules of Court,

applicable to govern the payment of the moneys into court

and their subsequent application effectively overrode any

need of that element."

41. The fact which attracted the description of a trust for statutory purposes was that the trustees were to deal with the moneys "in accordance with the order of the court and not otherwise". In New South Wales v. The Commonwealth (No. 3) ((10) (1932) 46 CLR, at p 268.) Starke J was unwilling to regard a court as a fiduciary in respect of moneys paid into court by suitors. But in Harmer it was accepted that the money which had been paid out to solicitors "as trustees" to invest was held on a trust of some kind, the only question being whether there was no beneficiary "presently entitled" for the purposes of s. 97(1) of the Income Tax Assessment Act.

42. The question in the present case is not whether the Registrar holds the Tribunal Fund on trust for statutory purposes or is under a fiduciary duty in respect of that Fund but whether the Registrar holds a compensation payment in trust for the dependants of a deceased worker or is under a fiduciary duty to those dependants in respect of that money. The assessments against the Tribunal and the Registrar fasten on the income attributed to the amounts appearing in the books of the Tribunal from time to time as standing to the credit of the account. For the reasons stated, we are unable to regard that income as "income of a trust estate" because we do not regard the amounts standing to the credit of the account as a "trust estate" for the purposes of Div 6, the dependants' rights being statutory. There being no trust estate of the kind on which the Commissioner has relied, the interest attributed to the amounts standing to the credit of the account is not "income of a trust estate" within the meaning of that term in Div 6.

43. We were invited to say whether, if the allocation to individual accounts of the accretion from investment of the Tribunal Fund were not assessable income falling within Div 6, the aggregate of the accretion might itself be assessable income in the hands of the Tribunal (in the 1987 year) or the Registrar (in the 1988 year). That invitation must be declined. If the Tribunal Fund were held by the Registrar as a fiduciary or "on trust for statutory purposes", the Registrar's equitable duty would be to apply the Tribunal Fund in accordance with the Act and, in particular, in accordance with s. 73(3) of the 1985 Act. Even if dependants were held to have a sufficient interest to enforce such an equitable duty, they would not be held to have any beneficial interest in the Tribunal Fund ((11) Like the members of a company being wound up: In re Calgary and Edmonton Land Co Ltd, (1975) 1 WLR 355, at p 359; (1975) 1 All ER 1046, at pp 1050-1051.). It would then be a question of some difficulty whether the provisions of Div 6 (or at least the provisions of ss. 99 and 99A) apply to the income of purpose trusts as distinct from the income of trusts for the benefit of beneficiaries. That question was not argued. In practice, of course, the income of valid purpose trusts would often be exempt income under s. 23(e) or (j) and the occasions when Div 6 might apply to the income of a purpose trust do not appear to have arisen for consideration. We would not answer the question whether the receipt of income from the entirety of the Tribunal Fund is assessable in the hands of the Registrar. That is an issue which ought to be determined only when it is necessary to decide it.

44. We would set aside the assessment in respect of the 1988 year because it is not founded on income of a trust estate within the meaning of that term in s. 99. Accordingly we would allow the appeal, set aside the judgment of Jenkinson J and in lieu thereof allow the Registrar's appeal against the Commissioner's refusal to allow the Registrar's objection to the assessment in respect of the income year ended 30 June 1988.

45. It is unnecessary to consider the arguments based on s. 23(d) of the Income Tax Assessment Act and on s. 114 of the Constitution that were advanced to challenge the assessments. Nor do we find it necessary to determine whether, if the Registrar were a trustee of compensation payments for the persons entitled thereto, the Registrar might be outside the reach of the Income Tax Assessment Act on the ground that he is an emanation of the Crown.

Matter to stand in the list.

Parties to bring in on or before 3 November 1993 agreed minutes of

order in accordance with the reasons for judgment.

If parties are unable to reach an agreement on minutes of order,

written submissions as to the appropriate orders to be made to be

filed and served by the parties by 10 November 1993. Parties to

have liberty to file and serve within seven days of such service

written submissions in reply.

46. The following order was pronounced, conforming with minutes brought in by the parties:-

Appeal allowed.

47. Set aside the assessment and remit the matter to the respondent for reassessment of the appellant's taxable income in accordance with the Court's reasons for judgment.

48. Each party to bear its own costs of this appeal.