SILLS v FC of T

Members:
G Ettinger SM

Tribunal:
Administrative Appeals Tribunal, Sydney

MEDIA NEUTRAL CITATION: [2010] AATA 843

Decision date: 10 November 2010

G Ettinger (Senior Member)

Summary

1. Mr Shannon Sills who is 35 years old, did an apprenticeship as a shop fitter and joiner which he completed in 1995. He then worked for several years as a labourer and shop fitter. Relevantly, he subsequently trained as a police officer. Mr Sills worked as a police officer from 1996 to 2007, and was medically discharged from the NSW Police Force on 23 February 2007 after suffering an injury in 2005. He received two lump sum payments in relation to his termination, and wants to have them accepted by the Commissioner of Taxation, (the Commissioner), as Eligible Termination Payments (ETPs) with invalidity segments and the relevant tax advantages. Shortly after leaving the Police Force Mr Sills was employed as Development Compliance Officer - Building with the Lake Macquarie Council where he has remained employed.

2. The Commissioner agrees that the issue in dispute between the parties is the two medical certificates which Mr Sills has submitted, and considers they contain jurisdictional error. I explore these issues and the requirements of the legislation in the paragraphs which follow.

3. I have decided that the decision under review should be set aside. My reasons follow.

The relevant legislation

4. The relevant legislation in this matter is the Income Tax Assessment Act 1936 (Cth) (the 1936 Act), in relation to the 2006/7 tax year, and the Income Tax Assessment Act 1997 (Cth) (the 1997 Act), in relation to the 2007/8 tax year.

5. In relation to the 2007 year and section 27G of the 1936 Act; it is common ground that the ETP was made to Mr Sills after 1 July 1994; that the payment was made to Mr Sills because he stopped being gainfully employed because of ill health; and that he was below retirement age at that time. The remaining and only factor to be decided in regard to whether what he received in 2007 was an invalidity payment is pursuant to section 27G(b)(i)(B) of the 1936 Act.

  • " 27G Invalidity payments

    Where:

    • (a) an eligible termination payment is made in relation to a taxpayer in consequence of the termination of any employment of the taxpayer; and
    • (b) the termination of the employment of the taxpayer occurred:
      • (i) because of:
        • (A) if the eligible termination payment is made before 1 July 1994 - the taxpayer's physical or mental incapacity to engage in that employment; or
        • (B) if the eligible termination payment is made on or after 1 July 1994 - the disability of the taxpayer, where 2 legally qualified medical practitioners have certified that the disability is likely to result in the taxpayer being unable ever to be employed in a capacity for which the taxpayer is reasonably qualified because of education, training or experience; and

    …"

6. In relation to the 2008 year, section 82-150(1)(d) of the 1997 Act is the only subsection about which the parties cannot agree. Accordingly it is common ground that the ETP made to Mr Sills in 2008 was because he stopped being gainfully employed because of ill health, and that he was below retirement age.

Issues before the tribunal

7. I have noted that the Commissioner disallowed both objections by Mr Sills, to the 2007 and 2008 assessments. The issues I have to decide are in the paragraphs which follow.

Year ended 30 June 2007

8. I must decide whether any part of the ETP of $136,632 made to Mr Sills in the year ending 30 June 2007 is an invalidity payment pursuant to section 27G of the 1936 Act, and therefore contains a post-June 1994 invalidity component which is exempt from tax pursuant to section 27CB of the 1936 Act.

9. In particular, I must decide whether the medical certificates of Professor Ghabrial, an orthopaedic and spinal surgeon, dated 8 September 2009, (Exhibit A3), and Dr Matalani, a consultant occupational physician, dated 23 February 2010 (Exhibit A2), on their face properly answer the question posed by section 27G(b)(i)(B) of the 1936 Act.

Year ended 30 June 2008

10. I must decide whether any part of the eligible termination payment (ETP) of $336,116 made to Mr Sills in the year ending 30 June 2008 is an invalidity payment pursuant to section 82-150 of the 1997 Act, and therefore contains part of a tax free component of an employment termination payment under section 82-140 of the 1997 Act.

11. In particular, I must decide whether the medical certificates of Professor Ghabrial dated 8 September 2009 and Dr Matalani dated 23 February 2010 on their face properly answer the question posed by section 82-150(1)(d) of the 1997 Act.

12. I am mindful that the medical certificate of Professor Ghabrial was not before the Commissioner at the time of making his decisions. The decision maker had reports of Dr Matalani which are in the T-documents, but not the most recent one dated 23 February 2010, (Exhibit A2), which was tendered at the hearing.

13. I am not concerned that new material was before me which was not before the decision maker, as the Tribunal hearing is de novo, and pursuant to
Drake v Minister for Immigration and Ethnic Affairs (1979) 2 ALD 60 at 69 and
Shi v Migration Agents Registration Authority (2008) 235 CLR 286, can take into account fresh material.

14. The timing of the medical certificates, certain of which were not available at the time of Mr Sills' retirement, may previously have been considered an issue, but is, in my view, not relevant (
Commissioner of Taxation v Pitcher (2005) 146 FCR 344).

Relevant facts

15. It is common ground that Mr Sills did an apprenticeship, and worked as a labourer and shop fitter before joining the NSW Police Force in May 1996 as a Probationary Constable, progressing to become a Senior Constable.

16. In 2005 Mr Sills suffered an injury. After his injury, Mr Sills worked on restricted duties, performing the role of Assistant Station Manager. This consisted of various administrative functions such as checking miscellaneous property and exhibit entries on the Departmental Police system.

17. On 23 February 2007, Mr Sills was medically discharged from the NSW Police Force. He received two ETPs, $136,632, in the year ending 30 June 2007, and $336,116, in the year ending 30 June 2008.

18. Mr Sills commenced employment with the Lake Macquarie as a Development Compliance Officer - Building on 16 July 2007 shortly after leaving the Police Force, and has remained so employed.

19. During his employment with the NSW Police Force, Mr Sills received the following education:

20. The duties performed by Mr Sills included:

21. The Job Stream Responsibilities for an operational Police Officer [TB1-2 Exhibit R2] lists the requirements/criteria relevant to the position. They include technical professional knowledge, integrity, decision making, communication, collaboration, safety awareness, customer service and work management.

22. Mr Sills' objections to the Commissioner's refusal to accept that his ETPs were invalidity payments, and that he should benefit from the tax concessions therefor, were disallowed. The Commissioner held that Mr Sills did not satisfy the requirements of section 27G(b)(i)(B) of the 1936 Act in respect of the ETP received by Mr Sills, and section 82-150(1)(d) of the 1997 Act. Mr Sills then appealed to this Tribunal.

23. I moved then to consider the medical certificates in the context of section 27G(b)(i)(B) of the 1936 Act, and section 82-150(1)(d) of the 1997 Act.

The two medical certificates

Timing

24. The timing of the two medical certificates being that of Professor Ghabrial dated 8 September 2009 (Exhibit A3), and the updated certificate of Dr Matalani dated 23 February 2010 (Exhibit A2) had been the subject of discussion between the parties before the matter came to hearing. Those reports had not been before the ATO's decision maker although earlier certificates of Dr Matalani had. Previous reports of Dr Matalani made in 2007 were in the T-documents at T7. The parties agreed, and I accept that there is no impediment to my considering the additional medical certificates.

Do the medical certificates satisfy the requirements of section 27G(b)(i)(B) of the 1936 Act and/or section 82-150(1)(d) of the 1997 Act?

25. I have already stated above that sections 27G(b)(i)(B) of the 1936 Act and section 82-150(1)(d) of the 1997 Act are the only subsections in dispute. I am mindful also that Mr Sills' disability was paid out on a partial disability basis.

26. I am mindful that to satisfy section 27G(b)(i)(B) of the 1936 Act, if the eligible termination payment is made on or after 1 July 1994 - (which it was in Mr Sills' case), two legally qualified medical practitioners must have certified that the disability is likely to result in the taxpayer being unable ever to be employed in a capacity for which the taxpayer is reasonably qualified because of education, training or experience.

27. Section 82-150(1)(d) of the 1997 Act states that an ETP includes an invalidity segment if two legally qualified medical practitioners have certified that, because of his or her ill-health, it is unlikely that the person can ever be gainfully employed in capacity for which he or she is reasonably qualified because of education, experience or training.

28. The earlier medical certificates included in the T-documents did not satisfy the Commissioner in regard to the two subsections mentioned above. Mr Sills was given the opportunity of providing further medical certificates. The two further certificates which are before the Tribunal were those of Professor Ghabrial (Exhibit A3) and Dr Matalani (Exhibit A2).

29. Professor Ghabrial summarised Mr Sills' previous work:

"As a result of his injuries he was medically discharged from the Police Force and at present he is working on a full time basis at Lake Macquarie Council, avoiding aggravating activities.

…

He used to work as a Shop Fitter & Joiner prior to joining the Police Force and as a result of his injuries in the Police Force he was medically discharged.

…

I believe the disability suffered by Mr Sills resulted in him being unable to ever be employed in a capacity for which he is reasonably qualified by reasons of education, training or experience.

For the avoidance of doubt, my opinion as expressed above relates to the period of time including the date of Mr Sills' medical discharge on 23 February 2007."

30. Dr Matalani also referred to Mr Sills' previous work, and his training. He described the anticipated progress of Mr Sills' chronic low back pain which he opined is likely to persist, and further that his degenerative changes are likely to become progressively worse. Dr Matalani stated:

"He is therefore permanently unfit to return to his occupation as a police officer, which is likely to aggravate his condition.

His occupational history, prior to his employment with New South Wales Police Service, is primarily in a labouring type of occupation such as labourer, shop fitter/joiner. He therefore had limited training and experience with the majority of it being in New South Wales Police Force.

…

He is unlikely to ever return to labouring occupations, even on a casual or part-time basis and is unlikely to every (sic) be able to tolerate the work of a shop fitter/joiner, which requires repetitive bending and heavy manual handling activities, even on a casually (sic) or part-time basis.

Since Mr Sills was suffering from his condition at the time of his medical discharge, he would be unable to ever be employed in a capacity for which he was, at the time of his medical discharge, reasonably qualified because of education, training or experience.

…

His incapacity applies to full-time, part-time and casual work of the type that he would have had education, training or experience in."

Submissions

31. Mr Somerville submitted on behalf of Mr Sills, and relying on
Pitcher and Manokian v Minister for Immigration and Multicultural Affairs (1997) 48 ALD 632 that the legislation directs the decision maker, in this case the Tribunal, to the medical certification. He submitted that the legislation requires the doctors to express an opinion, and that the Tribunal has no role in assessing Mr Sills' ability to work. He submitted further that there were no medical reports to contradict the medical reports tendered by Professor Ghabrial and Dr Matalani, and that the doctors had not been called for cross-examination. The Tribunal's role was to look at the doctors' reports, he submitted, and to see if they answered the relevant questions. It was not to analyse what was said, or concern itself with the thoughts of the doctors. The Tribunal was to rely on the reports before it, he submitted.

32. Mr Somerville also submitted that the subsequent training which Mr Sills may have undertaken in relation to the Lake Macquarie Council position was irrelevant. He did not call Mr Sills to give any evidence or make submissions about any of his qualifications or further training.

33. Mr Somerville submitted that the doctors gave clear answers to the questions asked, and whether they were right or wrong was not the Tribunal's concern. He submitted that it was not for the Tribunal to make a decision on Mr Sills' ability to work.

34. Mr Somerville also referred to the case of
Minister for Immigration and Multicultural Affairs v Seligman (1999) 85 FCR 115 which concerned an application for a Senior Executive Visa pursuant to Migration Act 1958 (Cth) (the Migration Act), by a family with a mildly intellectually disabled son. In that case, in order to determine whether the relevant visa would be granted, the Minister was, pursuant to regulation 2.25A of the Migration Regulations 1994 (Cth), required to seek the opinion of a Commonwealth Medical Officer, who could certify whether a person met a requirement, or satisfied a relevant criterion. Pursuant to regulation 2.25B, the Medical Officer had to determine whether during Mr Seligman's proposed period of stay in Australia, his son's disease or condition would be likely to result in a significant cost to the Australian community in the areas of health care or community services. The Medical Officer was charged with considering the son's need and eligibility for health care or community services without regard to whether the son would use the services.

35. The abovementioned regulations were made pursuant to section 505 of the Migration Act. The court in Seligman held that regulation 2.25B was internally inconsistent with section 505 of the Act, and not authorised by it, further it was beyond the power conferred by section 505, and therefore invalid and severable. Mr Somerville submitted that the present case was quite different in that the doctors had only to express an opinion in relation to Mr Sills, and not gauge anything like use of government services.

36. Dr Mantziaris who appeared for the Commissioner, also referred to the legislation, and submitted that the Tribunal could not substitute its own opinions for those of the doctors, but that the certificates had to be proper, and not infected with jurisdictional error. He submitted in that regard that the certificates of Professor Ghabrial and Dr Matalani did not properly address the capacity of the taxpayer to be employed, and did not address his qualifications, training and other relevant factors which were mandatory considerations. He submitted that the doctors simply repeated the words of the legislation.

37. Dr Mantziaris referred to T9/78 which set out that Mr Sills had first been a Probationary Constable, had undertaken a diploma of policing and advanced to Senior Constable. He had also trained for the Operational Support Group for riot and crowd control.

38. Dr Mantziaris pointed to Dr Matalani's first report at T7/65, where, in a report dated 17 April 2007, he detailed Mr Sills capacity for future work. I noted that he stated, amongst other things that Mr Sills was unfit for his pre-injury employment as a Police Officer.

39. Dr Mantziaris also referred to T7/44, a Workers Compensation Commission, Medical Assessment Certificate, of Dr Best, an orthopaedic surgeon, dated 18 December 2007, which I noted was prepared for the sole purpose of assessing permanent impairment (for workers compensation purposes), and is irrelevant to the issue before me.

40. Dr Mantziaris emphasised the duties Mr Sills undertook in his previous occupations of shop fitter and police officer, particularly in the latter stages after his injury, when Mr Sills was involved in office duties at a police station. He emphasised that Mr Sills had been assistant station manager after his injury.

41. He submitted that the position at the Lake Macquarie Council which is the employment Mr Sills undertook after leaving the police force required policing skills, which he submitted was not a physical requirement. In its Statement of Facts and Contentions, the Commissioner contended at paragraph 32 that in his position at Lake Macquarie Council, Mr Sills performed duties based on the education, experience and training attained during his employment with the NSW Police Force, and from his previous employment and education. Dr Mantziaris drew my attention to TB3-27 (Exhibit R3), where the duties of the Lake Macquarie Development Compliance Officer - Building, which Mr Sills had taken, up were described. He also indicated that the first of the "Essential" Key Selection Criteria for the Lake Macquarie position was "Tertiary qualifications in Building/Construction Management, Engineering or Policing" and that in the "Desirable" category "Previous experience in an investigation/regulatory function" and/or "The ability to provide written and verbal evidence before a court" were listed.

42. Dr Mantziaris indicated that the Key Selection Criteria at TB3-26 and the Duties listed at TB3-27 of Exhibit R3 for the Lake Macquarie Council position had all the elements of a job Mr Sills could do without the physical demands of apprehending offenders.

43. Dr Mantziaris also submitted by reference to TB2-8 and TB2-9 (Crown Employees (Police Officers Death and Disability) Award 2005 of the Industrial Relations Commission of New South Wales, the contrast between total and permanent disability, noting that the differences between the Award and requirements of section 27G(b)(i)(B) of the 1936 Act. Mr Somerville was concerned that the submissions regarding awards were not relevant as they are not mentioned in the taxation acts, noting also that the awards make no mention of certification by doctors (as referred to in section 27G of the 1936 Act and section 82-150 of the 1997 Act). I accept Mr Somerville's submissions on that point, and will not further comment on the relevance of the award.

44. Both parties agreed that Dr Matalani's letter of 17 April 2007 was insufficient to satisfy the requirements of section 27G. I noted however that the Applicant placed reliance on the later medical certificate of Dr Matalani which was Exhibit A2 before the Tribunal.

45. In summary, Dr Mantziaris agreed that it was not a case of the Tribunal going behind the medical certificates, but submitted that the Tribunal had to look at the face of the certificates. He submitted they had jurisdictional error in that the certificates failed to specify the education, training and qualifications, and subsequent certificate in Occupational Health and Safety in the building industry, as referred to by Dr Matalani at T7/66. He also submitted that the medical certificates had failed to distinguish operational and non operational (office) duties in the Police Force, which I noted Mr Somerville submitted was unnecessary. Dr Mantziaris also submitted that the medical certificates did not mention Mr Sills' current job and the duties associated with it.

46. Dr Mantziaris also submitted that the second and sixth paragraphs of Professor Ghabrial's medical certificate (Exhibit A3) contradicted one another. He indicated that in the second paragraph, the doctor referred to Mr Sills working fulltime at Lake Macquarie Council, avoiding aggravating activities. In the sixth paragraph, Dr Mantziaris submitted, the doctor had written: I believe the disability suffered by Mr Sills resulted in him being unable to ever be employed in a capacity for which he is reasonably qualified by reasons of education, training or experience. Mr Somerville submitted that Dr Mantziaris' submission regarding the two paragraphs being in contradiction of each other had arisen due to a misunderstanding by the Commissioner of the medical certificate. He also submitted that the Tribunal did not have a role in considering that submission or further analysing the reports.

47. I do not find those paragraphs contradictory in that the earlier one comments on Mr Sills' present employment without giving any details of the education, training or experience required for it, while the latter expresses a view about employment in a capacity for which he is reasonably qualified by reasons of education, training or experience, with reference to his previous training as a shop fitter and police officer (fourth paragraph).

48. Dr Mantziaris further submitted that the medical certificates were defective because for operation of the sections of the relevant Acts, they were required to particularise the education, training and qualifications for which they had certified Mr Sills. Needless to say, Mr Somerville did not agree.

The Tribunals' conclusions

49. In order to come to the correct or preferable decision, I have carefully considered the submissions of the parties, the legislation, and the case law. I have already stated above that only the two subsections, 27G(b)(i)(B) of the 1936 Act, and section 82-150(1)(d) of the 1997 Act, remain in contention. The legislation requires, in summary, that two legally qualified medical practitioners have certified that, because of the ill-health of the person, it is unlikely that he or she can ever be gainfully employed in a capacity for which he or she is reasonably qualified because of education, experience or training.

50. Mr Sills has provided certificates from two doctors, Professor Ghabrial and Dr Matalani. I accept the submissions which emphasise that whether the ETPs made to Mr Sills on his retirement from the Police Force provide him with the taxation benefits pursuant to section 27G(b)(i)(B) of the 1936 Act, and section 82-150(1)(d) of the 1997 Act are satisfied, comes down to the certification of the doctors. I have quoted from the certificates in the paragraphs above, and note here that Professor Ghabrial has relevantly certified that:

"He used to work as a Shop Fitter & Joiner prior to joining the Police Force and as a result of his injuries in the Police Force he was medically discharged.

…

I believe the disability suffered by Mr Sills resulted in him being unable to ever be employed in a capacity for which he is reasonably qualified by reasons of education, training or experience."

51. Dr Matalani opined as follows:

"Since Mr Sills was suffering from his condition at the time of his medical discharge, he would be unable to ever be employed in a capacity for which he was, at the time of his medical discharge, reasonably qualified because of education, training or experience."

52. In that regard I am mindful of Ryan J in Pitcher, who stated that section 27G reposes in the medical practitioners, not the Commissioner. I am satisfied from his Honour's statement that this also applies to the equivalent section, 82-150, in the 1997 Act, and if the power to certify does not repose in the Commissioner, then neither does it repose in the Tribunal. His Honour stated at 359 [54]:

"I accept, as the Tribunal appeared also to accept, that s 27G reposes in the medical practitioners, not the Commissioner, the attainment of the requisite satisfaction that the taxpayer is unable to be likely ever to be employed in a relevant capacity. However, it remains a question of fact for the Commissioner or the Tribunal whether the two medical certificates on their face have properly answered the question posed by s 27G(b)(i)(B). On my reading of the two certificates in this case, I entertain considerable doubt whether that has occurred. For a discussion of the analogous circumstances in which a tribunal may examine a certificate required by statute to be issued by a 'competent person', see
Meroka v Minister for Immigration and Multicultural Affairs (2002) 117 FCR 251 at 262 [32]-[33]."

53. I turned also to
Meroka v Minister for immigration and Multicultural Affairs (2002) 117 FCR 251 noting that the Court there stated:

"In my view, it is not sufficient for an applicant to adduce statutory declarations from two 'competent persons' each of which recites the possession of an opinion that relevant domestic violence has been suffered by the applicant. Regulation 1.26(f) imposes the additional requirement that each statutory declaration must set out the evidence on which the competent person's opinion is based. The only purpose which can be imputed to the drafter who inserted that requirement is to provide an opportunity for objective examination of the evidence on which the opinion was based. Thus, if the competent person, in purporting to comply with Reg 1.26(f) were to refer to 'evidence' which was quite unrelated to whether relevant domestic violence had been suffered by the applicant, the alleged victim could not be 'taken' pursuant to Reg 1.23 to have suffered domestic violence.

That is not to say that the Minister (or the Tribunal) can substitute for that of the 'competent person', his or its own opinion of whether domestic violence has been suffered. Operation can be denied to Reg 1.23 only if the description of the nature of the violence experienced or the evidence set out by the competent person is incapable, as a matter of law, of affording a basis for an opinion that relevant domestic violence has been suffered by an applicant and has been committed by the person identified by the competent person as the perpetrator."

54. I am mindful there was no oral evidence called at the hearing. However Mr Sills' education, experience and training, first as a labourer and shop fitter, then as a police officer were in the written documents before the doctors and before the Tribunal. I was satisfied the doctors had addressed the relevant issues in their medical certificates, and it is for the Tribunal to rely on the doctors' opinions, not to go behind them.

55. Relevantly, Professor Ghabrial said in relation to Mr Sills' employment:

"He used to work as a Shop Fitter & Joiner prior to joining the Police Force and as a result of his injuries in the Police Force he was medically discharged.

…

I believe the disability suffered by Mr Sills resulted in him being unable to ever be employed in a capacity for which he is reasonably qualified by reasons of education, training or experience."

56. Dr Matalani addressed Mr Sills' inability to ever be employed in a capacity for which he was, at the time of his medical discharge, reasonably qualified because of education, training or experience as follows:

"His occupational history, prior to his employment with New South Wales Police Service, is primarily in a labouring type of occupation such as labourer, shop fitter/joiner. He therefore had limited training and experience with the majority of it being in New South Wales Police Force.

…

Since Mr Sills was suffering from his condition at the time of his medical discharge, he would be unable to ever be employed in a capacity for which he was, at the time of his medical discharge, reasonably qualified because of education, training or experience."

57. By way of completeness, I note however that in contrast to the regulations referred to in Meroka, sections 27G(b)(i)(B) of the 1936 Act, and 82-150(1)(d) of the 1997 Act do not impose the additional requirement that each medical certificate must set out the evidence on which the doctor's opinion is based.

58. Ryan J in Pitcher at 358-359 [53], stated:

"It was submitted on behalf of the respondent that the Tribunal had erred in referring to the fact that the respondent had been in full-time employment for two years at the time of Mr Warne's purported certificate. I accept that the statutory test erected by s 27G(b)(i)(B) is not whether the taxpayer will ever be fit for employment but whether he or she is likely to be unable ever to be employed in a capacity for which the taxpayer is reasonably qualified because of education, training or experience. In many cases the application of either test may not lead to a different result. However, because of the time which I have identified at [51] above when the certificates have to issue, the possibility can exist that the taxpayer has, at that time, by training or education undertaken after the former employment was terminated, qualified himself or herself for employment in a capacity in which such employment was not available when the earlier termination occurred."

59. I am mindful that the above noted situation applies to Mr Sills who undertook a course in occupational health and safety before joining Lake Macquarie Council.

60. I am mindful that my task is to consider the medical certificates before me, noting that pursuant to sections 27G(b)(i)(B) of the 1936 Act, and 82-150(1)(d) of the 1997 Act, the certification reposes in the medical practitioners, and not the Commissioner or the Tribunal. The medical certificates before me have, in my view, on their face, properly answered the questions posed by the two subsections. They have both informed me to my satisfaction that Mr Sills is unable to be likely ever to be gainfully employed in a relevant capacity for which he is reasonably qualified because of his education, experience or training.

61. I noted that there was reference to the Explanatory Memorandum (EM) to the Taxation Laws Amendment (Superannuation) Bill 1992. In explaining the test for invalidity, the EM relevantly stated:

"To clarify the test for incapacity and to place the onus of determining invalidity on legally qualified medical practitioners, from 1 July 1994 the incapacity of the person will have to be certified by two medical practitioners.

… the invalidity payment concession is extended only to people who are unable to undertake any form of employment for which they are reasonably qualified. A person who is unable to continue his or her employment, but is able to undertake other appropriate employment, will not have access to the concession."

62. The use of an EM may be to clarify the context of legislation. However I have noted what the High Court held in
Saeed v Minister for Immigration and Citizenship (2010) 115 ALD 493 at 503 [31]:

"… statements as to legislative intention made in explanatory memoranda or by Ministers, however clear or emphatic, cannot overcome the need to carefully consider the words of the statute to ascertain its meaning.

And at 504 [39] … the presumption is that words are used in a statute for a reason; they should be given their meaning and effect."

63. I am mindful that I am bound by the legislation and not extraneous material.

64. My conclusion is that for the reasons given above, Mr Sills' ETPs made pursuant to sections 27G of the 1936 Act, and 82-150 of the 1997 Act, include invalidity payments. The requirements of all the subsections are satisfied. I note that the decision here required consideration in particular of sections 27G(b)(i)(B) of the 1936 Act, and 82-150(1)(d) of the 1997 Act.

Decision

65. The Tribunal sets aside the decision under review, and in substitution decides that the amounts Mr Sills received in relation to the tax years 2007 and 2008 are ETPs and include invalidity payments. Mr Sills accordingly benefits from the tax advantages which flow from those.

 

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