The Full Court of the Federal Court has found that Sea Shepherd Australia Ltd was not entitled to endorsement as a deductible gift recipient (DGR) because it was not a charitable institution whose principal activity was“providing short-term direct care to animals (but not only native wildlife) that have been lost or mistreated or are without owners” within the meaning of para (a) of Item 4.1.6 in s 30-45 ITAA 1997: Sea Shepherd Australia Ltd v FCT  FCAFC 68 (Besanko, Gordon and Dodds-Streeton JJ, 3 July 2013). The Full Court, by majority (Besanko and Gordon JJ – Dodds-Streeton J dissenting), dismissed the taxpayer’s appeal from the decision of the Administrative Appeals Tribunal: Sea Shepherd Australia Ltd v FCT  AATA 520.
Sea Shepherd applied for endorsement as a deductible gift recipient pursuant to s 30-120 in February 2010. Sea Shepherd contended it satisfied Item 4.1.6. The Commissioner refused to endorse Sea Shepherd, Sea Shepherd objected and the Commissioner disallowed the objection. Sea Shepherd applied to the Tribunal for review of the disallowance of its objection. The Tribunal affirmed the Commissioner’s decision.
It was common ground that Sea Shepherd was a “charitable institution” for the purposes of Item 4.1.6.
Gordon J (Besanko J agreeing) said that, read as a whole, the expression “providing short-term direct care to animals (but not only native wildlife) that have been lost or mistreated or are without owners” directs attention to activities and services (“short-term direct care”) provided in respect of a class of animals (that cannot be restricted to “native wildlife”) identified as animals “that have been lost or mistreated or are without owners”. Obviously, domesticated pets that have been lost or mistreated or abandoned by owners fall within the class of animals identified in the provision. And wildlife that has been mistreated would likewise fall within that class (but the organisation concerned must direct its activities to a wider class of animals than just native wildlife). Animals of the kinds identified are all in need of direct, short-term care.
However, the activities in which Sea Shepherd engaged did not constitute the provision of “short-term direct care to animals” (emphasis added). Read in the context of the whole provision, the expression connotes the direct provision by the organisation concerned of treatment or accommodation to animals. It is animals that must be the object of the care. Taking steps to interrupt or prevent others harming animals in the wild, as Sea Shepherd did, is not the provision of “short-term direct care to animals” (emphasis added). What Sea Shepherd attempted to do was to prevent the killing of whales. The object of its campaigns was the Japanese whaling fleet. It did not provide care to any animal.
Even if “animals without owners” is a phrase which can encompass whales before reduction to possession by capture, Sea Shepherd’s interception of attempts to capture and kill whales was not the provision of “short-term direct care” to the particular whales or whales more generally.
Dodds-Streeton J, in dissent, held that when para (a) of Item 4.1.6 is construed in context and according to general principles of statutory construction, Sea Shepherd’s construction was to be preferred. It gave effect to the plain meaning of the language and the intention to include wild animals as legitimate objects of the care. It also accorded a substantive, mutually coherent application to each of the three specified subcategories of animals in paragraph (a).