Context and policy

Peter Greensill Family Co v FCT [2020] FCA 559

The meaning of connecting words depends very much on context.  Were certain capital gains to be disregarded as being ‘from’ a CGT event?6  That word indicates a causal connection7 but as Thawley J found (at [52]) ‘causation is not the exclusive criterion’. 

It requires a stronger degree of connection than ‘in relation to’ or ‘in respect of’ and (at [55]) ‘should be understood as requiring a direct connection between the capital gain and the CGT event’ – absent here.  Further, in making assumptions about the ‘desired or desirable’ tax outcome, the taxpayer had erred.  As the judge pointed out (at [70]), the ‘correct process is the inverse’8.  The wider context made this clear.

This principle is from Episode 61 of interpretation NOW!


6 s 855-10 of the Income Tax Assessment Act 1997.

7 Deal [2016] HCA 31 (at [41]), Pizzino (1982) 56 ALJR 843 (at 845) cited.

8 Certain Lloyd’s [2012] HCA 56 (at [26]), cf Rio[2015] FCA 94 (at [30]).