Shell Energy Holdings v FCT [2026] FCA 577
What is of note in this CGT case is the summary from Jackman J (at [62]) on the legal effect of deeming provisions. The judge observed that they do not always create a statutory fiction13. But, where they do, we are to ‘proceed on the deemed basis when applying the law, notwithstanding the true facts’14.
In these cases, added the judge, ‘the hypothesis must be made to work’15. The deeming is to be applied ‘irrespective of how realistic or fanciful such a hypothesis may be’. Accordingly, the interpreter is to suspend any disbelief they may hold about the hypothesis required by parliament. The true facts are to be cast aside in favour of the legislated deeming.
This principle is from Episode 133 of interpretation NOW!
Footnotes:
13 Hunter Douglas (1970) 122 CLR 49 (65-67), Pearce 10th ed [4.82].
14 Bain (1965) 112 CLR 246 (273), Maroney [2003] HCA 63 [11] cited.
15 Chevron [2017] FCAFC 62 [48], cf Singapore Telecom [2024] FCAFC 29 [134].