In a 2:1 majority decision handed down on Wed 3.7.2013, the Full Federal Court (Dodds-Streeton J dissenting) affirmed the Commissioner’s decision that Sea Shepherd Australia was not entitled to be endorsed as a deductible gift recipient (DGR).

The Commissioner had determined that Sea Shepherd’s activities did not satisfy para (a) of Item 4.1.6 in s 30-45 of the ITAA 1997 and that, therefore, Sea Shepherd was not entitled to be endorsed as a DGR. The AAT, the second respondent to the proceedings, affirmed the Commissioner’s decision. There were 2 principal issues on appeal.

  • First, was Sea Shepherd’s challenge to the Tribunal’s construction of para (a) of Item 4.1.6 a question of law; and, secondly, if it was a question of law,
  • what was the proper construction of that paragraph, and did Sea Shepherd’s activities (as found by the Tribunal) satisfy para (a) of Item 4.1.6?

The Full Federal Court accepted that Sea Shepherd’s challenge to the AAT’s construction of para (a) of Item 4.1.6. was a question of law (and not a question of fact as contended by the Commissioner).

However, the majority did not accept Sea Shepherd’s construction of Item 4.1.6. In its analysis of what was meant by “providing short-term direct care to animals (but not only native wildlife) that have been lost or mistreated or are without owners“, the majority found Sea Shepherd took steps to prevent the killing of whales, but it did not provide “short-term direct care to animals”. Accordingly, the taxpayer’s appeal was dismissed. (Sea Shepherd Australia Ltd v FCT & Anor [2013] FCAFC 68, Full Federal Court, Besanko, Gordon & Dodds-Streeton JJ, 3 July 2013.)

[LTN 126, 3/7/13]