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10 Dec 13 Decision Impact Statement - Sea Shepherd Australia

The ATO has published a Decision Impact Statement in relation to the decision of the Full Federal Court in Sea Shepherd Australia v FCT [2013] FCAFC 68. The taxpayer's application for special leave to appeal against the decision was refused by the High Court on 8 November 2013 - see [2013] HCATrans 271.

The case concerned whether Sea Shepherd Australia Limited was entitled to endorsement as a Deductible Gift Recipient under item 4.1.6 of s 30-45 of ITAA 1997.

The AAT had found that Sea Shepherd did not provide 'short-term direct care' to animals. Further, the AAT found that Sea Shepherd did not provide care to 'animals without owners' as whales are not animals that would ordinarily be expected to have owners from whom they have subsequently become separated. The majority in the Full Court found that Sea Shepherd did not provide 'care' to animals. The question of whether it provided 'direct care' did not therefore arise. Further, the majority did not consider it necessary to consider the meaning of 'animals ... without owners'.

The ATO states its view of the decision as follows:

"...the Commissioner respectfully agrees with the Court's finding that Sea Shepherd's principal activity of protecting whales from harm does not constitute care of animals. Whether a charitable institutions principal activity constitutes 'short-term direct care' is a question of fact in the circumstances of each institution.

Although the Court found it unnecessary to consider whether whales were 'animals...without owners' for the purposes of item 4.1.6, the Commissioner considers that the Tribunal was correct in finding that wild animals that would not ordinarily be expected to have an owner would not come within that phrase. The Commissioner considers that the construction of the phrase, 'animals ... without owners' should take account of the statutory context. The first two categories of animals referred to in paragraph (a) of Item 4.1.6 are animals that have suffered some misfortune because of something that has happened (being lost or mistreated), rather than something that may happen. In that context, 'animals without owners' should be interpreted as referring to animals that are in need of care because of the misfortune of being without an owner."

The Commissioner also says he respectfully accepts the Court's conclusion that there is no choice to be made between some "generous" construction of item 4.1.6 and a more confined meaning, because when construed according to orthodox principles of statutory construction, Item 4.1.6 could not be given the meaning which Sea Shepherd sought to give it.

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