CATCHWORDS
INCOME TAX - secrecy obligations of officers - prohibition against divulging information - use of expert outside Australian Taxation Office
Income Tax Assessment Act 1936, s 16(2)
Australian Institute of Marine and Power Engineers v Secretary, Department of Transport (1986) 13 FCR 124
Commissioner of Taxation v Nestle Australia Ltd (1986) 12 FCR 257
Dunkel v Commissioner of Taxation (1990) 27 FCR 524
Johns v Australian Securities Commission (1993) 178 CLR 458
Mobil Oil Australia Pty ltd v Commissioner of Taxation (1936) 113 CLR 475
R v Murphy (1992) ATR 422
R v Yates (1991) 102 ALR 673
Saunders v Federal Commissioner of Taxation (1988) 88 ATC 4349
CONSOLIDATED PRESS HOLDINGS LIMITED and ANOR v COMMISSIONER OF TAXATION and ANOR
No. NG 122 of 1995
Coram: Whitlam J
Place: Sydney
Date: 15 March 1995
IN THE FEDERAL COURT OF AUSTRALIA )
)
NEW SOUTH WALES DISTRICT REGISTRY) NG 122 of 1995
)
GENERAL DIVISION )
CONSOLIDATED PRESS HOLDINGS LIMITED
First Applicant
CPH PROPERTY LIMITED
Second Applicant
MURRAY LEISURE GROUP LIMITED
Third Applicant
COMMISSIONER OF TAXATION
First Respondent
AUSTRALIAN GOVERNMENT SOLICITOR
Second Respondent
Coram: Whitlam J
Place: Sydney
Date: 15 March 1995
MINUTES OF ORDER
Upon the applicants by their counsel giving the usual undertaking as to damages, THE COURT ORDERS THAT:
1. The respondents and each of them be restrained until further order from:
(a) divulging and communicating to partners and employees of Ferrier Hodgson information respecting the affairs of the applicants;
(b) causing and permitting officers of the respondents and each of them from divulging and communicating to partners and employees of Ferrier Hodgson information respecting the affairs of the applicants.
2. The first respondent be restrained until further order from divulging and communicating to the second respondent information respecting the affairs of the applicants for the purpose of divulging and communicating such information or parts thereof to partners and employees of Ferrier Hodgson.
3. The first respondent retake possession from the partners and employees of Ferrier Hodgson of all documents and papers containing information respecting the affairs of the applicants and all copies that have been made in respect thereof.
AND THE COURT ORDERS THAT:
4. The respondents pay the applicants' costs of the claim for interlocutory relief in the amended application filed on 6 March 1995.
Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
IN THE FEDERAL COURT OF AUSTRALIA )
)
NEW SOUTH WALES DISTRICT REGISTRY ) NG 122 of 1995
)
GENERAL DIVISION )
CONSOLIDATED PRESS HOLDINGS LIMITED
First Applicant
CPH PROPERTY LIMITED
Second Applicant
MURRAY LEISURE GROUP LIMITED
Third Applicant
COMMISSIONER OF TAXATION
First Respondent
AUSTRALIAN GOVERNMENT SOLICITOR
Second Respondent
Coram: Whitlam J
Place: Sydney
Date: 15 March 1995
REASONS FOR JUDGMENT
Application under section 39B of the Judiciary Act 1903
The applicants are three companies which I shall refer to as the taxpayers. The first respondent is the Commissioner of Taxation ("the Commissioner") and the second respondent is the Australian Government Solicitor ("the AGS").
By their amended application filed on 6 March 1995 the taxpayers seek a declaration that conduct of the Commissioner, his officers and officers of the AGS contravenes s 16 of the Income Tax Assessment Act 1936 ("the Tax Act"). The conduct impugned is divulging or communicating to a partner in a firm of chartered accountants information respecting the affairs of the taxpayers. The amended application also seeks a declaration that it was an improper or unreasonable exercise of power to divulge such information without taking appropriate steps to ensure that the obligation of secrecy under s 16 of the Tax Act applied to the partners and employees of the firm of chartered accountants, and a declaration that the taxpayers had a legitimate or reasonable expectation that the Commissioner would not divulge or communicate information respecting their affairs to any person outside the Australian Taxation Office ("the ATO") without consulting them or giving them an opportunity to withdraw their application under s 206 of the Tax Act.
This is the hearing of claims for interlocutory relief in the following terms:
"3. Orders that the Respondents and each of them be restrained from:
(a) divulging and communicating to partners and employees of Ferrier Hodgson information respecting the affairs of the Applicants;
(b) causing and permitting officers of the Respondents and each of them from divulging and communicating to partners and employees of Ferrier Hodgson information respecting the affairs of the Applicants.
4. Orders that the First Respondent be restrained from divulging and communicating to the Second Respondent information respecting the affairs of the Applicants for the purpose of divulging and communicating such information or parts thereof to partners and employees of Ferrier Hodgson.
5. A further order that the First Respondent retake possession from the partners and employees of Ferrier Hodgson all documents and papers containing information respecting the affairs of the Applicants and all copies that have been made in respect thereof."
Two affidavits of Mr J.H. Cherry, a director of the taxpayers, have been read; and an affidavit of Mr G.G. Carroll, an officer of the ATO, has been read, and he has been cross-examined. There is no conflict in the evidence which can be shortly stated.
On 22 December 1994 notices of assessment were served on the taxpayers. On 13 January 1995 the taxpayers applied to the Deputy Commissioner of Taxation at Bankstown for an extension of time for payment of tax under s 206 of the Tax Act and for the determination of such extended due date as the date for the purpose of any late payment penalties under s 207 of the Tax Act. The taxpayers are members of a group of companies. The material submitted in support of their extension request referred to the financial impact on the group of payment of the assessments by the due date and included a copy of a Syndicated Bill Facility Agreement, to which members of the group were parties.
Mr Carroll is employed in the ATO's Appeals and Review Group. As part of his duties, he provides advice and assistance to Jennifer Granger, the Deputy Commissioner at Bankstown. He discussed the taxpayers' extension request with Ms Granger on 18 January 1995. As a result of those discussions, Mr Carroll telephoned Mr Cherry the same day to request separate financial statements for each of the taxpayers.
The AGS had evidently been retained by Mr Carroll to advise the Deputy Commissioner soon after the taxpayers' extension request was received. Later, "perhaps that afternoon" after he had spoken to Ms Granger on 18 January, Mr Carroll realized the complexity of the material submitted by the taxpayers. He deposed that he was then in a position where:
"16. I do not feel able without assistance to understand the legal and commercial operation of the Syndicated Bill Facility Agreement, to assess the claims made by the applicants or to assess the financial position of the applicants and the Consolidated Press group. I believe that to obtain that assistance it is necessary for me to consult an expert in the fields involved."
Mr Carroll deposed that, accordingly:
"17. I consulted AGS and the ATO Tax Counsel Network about engaging an expert of high quality able to provide advice, who had no conflict of interest and who we could be sure would maintain secrecy. After discussing who that person should be with Ms Granger I instructed AGS to engage a partner of Ferrier Hodgson to assist the Deputy Commissioner with that commercial analysis. That person had previously done work for the ATO in respect of a complex commercial matter and was highly regarded."
In cross-examination, Mr Carroll agreed that, although he had come to the view that there was no expertise of the kind that he thought was necessary within the ATO, he had made no inquiries to ascertain whether that was so.
Mr Carroll's telephone request to Mr Cherry was confirmed in writing on 23 January 1995. By letter dated 27 January 1995 Mr Cherry forwarded to the Deputy Commissioner information and financial statements for the year ended 30 June 1994 in respect of each of the taxpayers.
According to Mr Carroll, the partner of Ferrier Hodgson (to whom I shall refer as the expert) has been retained by the AGS. He had instructed the AGS to ensure that the expert "had no conflict of interest in this matter." By this expression, it seems clear Mr Carroll meant that the expert (or anyone who might be working with him, such as a secretary) did not act for the taxpayers or the group to which they belonged. Necessarily, this involved revealing their identities. Mr Carroll said that, so far as he was aware, no steps were taken to ensure that, for example, partners of the expert did not act for a well known competitor of the group.
Mr Carroll also said that he instructed the AGS that the expert was to be informed of his secrecy obligations under various statutes and the confidential nature of the material. He does not know the terms of the expert's engagement, but he had seen copies of earlier correspondence between the AGS and the expert in which assurances as to conflict of interest and secrecy were apparently sought and given.
The information forwarded by the taxpayers to the Deputy Commissioner with their request of 13 January 1995 and with Mr Cherry's letter of 27 January 1995 was "communicated" by Mr Carroll to the AGS. Mr Carroll said that he did not know whether all such information had been passed on to the expert, but the gist of his evidence is that he intended that such information should be made available to the expert for analysis and need not be edited in any way.
On 1 February 1995 the AGS wrote to Mr Cherry requesting further information from the taxpayers. Mr Carroll had seen this letter before it was sent and said that the expert had suggested most of what was requested. When he received this letter, Mr Cherry discussed it with Mr Stephen Catt, an officer of the AGS.
On 6 February 1995 the AGS sent Mr Cherry a request for yet further information and documents from the taxpayers. Mr Carroll said that the material requested by this letter had also been suggested by the expert. Mr Cherry and Mr Catt discussed this request on 7 February 1995. They discussed the availability of the person whom Mr Cherry had earlier been told by Mr Catt was the "taxation officer absolutely crucial to the exercise of the Commissioner's discretion."
Mr Cherry deposed to the conversation then proceeding as follows:
"Mr Catt said words to the following effect:
"Look, I don't want to mislead you; he isn't a taxation officer ... well, yes he is in the sense of Section 16. He is actually a chartered accountant. However, we have a very tight agreement with him relating to disclosure of information to this [sic] partners. I have used him before in some highly sensitive matters."
... I said
words to the effect that I was concerned that there should not be any
disclosure of sensitive financial information concerning the CPH group in the
"private domain". Mr Catt then
said that the chartered accountant being consulted by the Australian Taxation
Officer was a partner of Ferrier Hodgson, but he did not disclose the
name. He said again to me that the
contract entered into with the Ferrier Hodgson partner was "very
tight". He said words to the effect
that the partner concerned could not even disclose the nature of details of his
assignment to the other partners or staff at his firm. Mr Catt said words to the effect that the
partner was under a strict obligation not to use any junior staff to assist him
"unless absolutely necessary".
I reiterated to Mr Catt my concerns about the commercial sensitivity of the
information in the context of the procedure being adopted."
The next day, on 8 February 1995, the taxpayers' solicitors wrote to the AGS protesting that it was "totally inappropriate" to divulge the financial data that had been furnished by their clients to sources outside the Deputy Commissioner's office. The letter concluded:
"Have you required, or are you prepared to require, the Ferrier Hodgson partner to give an undertaking that neither he nor his firm will now, or in the future, act for clients with commercial or financial interests where such conflict or breaches of confidentiality would have that impact? Are you prepared to provide us with a copy of the agreement?
I would ask for your early response to the matters raised herein. Until this matter is resolved to our satisfaction, we would ask you to retrieve from the Ferrier Hodgson partner concerned the financial data that has been provided to him"
On 15 February 1995 the AGS replied to the taxpayers' solicitors, saying (inter alia):
"Faced with [taxpayers' applications of 13 January 1995] the Deputy Commissioner sought financial statements sufficient to allow the Australian Taxation Office to ascertain the current financial position of the companies and engaged an independent expert to assist her in assessing the assertions made on behalf of the companies. With our expert's assistance further information and documents were sought. It seems to us relatively clear that engaging an expert chartered accountant experienced in analysing complex financial data and documents in order to assess the financial position of large and complex corporate groups and the necessity and likely impact of the measures asserted was justified in these circumstances. The Deputy Commissioner does not accept that it was 'totally inappropriate' to do so.
The Deputy Commissioner was particularly concerned with the need to maintain confidentiality. The expert chosen had previously assisted the Commissioner with similarly sensitive tasks, was accordingly familiar with the Commissioner's concerns in relation to security of information generally and had a proven record of respecting those concerns."
Further correspondence ensued between the taxpayers' solicitors and the AGS. In a letter dated 27 February 1995 the AGS concluded with the observation:
"Please note that s.16(1A) provides-
For the purpose of this section, a person who, although not appointed or employed by the Commonwealth, performs services for the Commonwealth shall be taken to be an officer.
Any person who performs services for the Commonwealth, whether for example they may be counsel or an expert, is accordingly an officer for the purposes of s.16 and subject to its prohibitions."
In his second affidavit, Mr Cherry said that, had he known that the information provided by the taxpayers to the Deputy Commissioner would be passed to a partner of Ferrier Hodgson, he would not have provided it.
Against the background of this evidence, it is convenient to turn to s 16 of the Tax Act. In Mobil Oil Australia Pty Ltd v Federal Commissioner of Taxation (1963) 113 CLR 475 Dixon CJ said (at 488) that s 16 "is directed to preserving secrecy about a taxpayer's affairs when they are laid before the Commissioner and his officers." In the same case Kitto J said (at 499) the "central provision" of s 16 was subs (2), which now provides:
"16(2) Subject to this section, an officer shall not either directly or indirectly, except in the performance of any duty as an officer, and either while he is, or after he ceases to be an officer, make a record of, or divulge or communicate to any person any information respecting the affairs of another person acquired by the officer as mentioned in the definition of "officer" in subsection (1)."
Section 16(1) of the Tax Act provides the following definition:
""officer" means a person who is or has been appointed or employed by the Commonwealth or by a State, and who by reason of that appointment or employment, or in the course of that employment, may acquire or has acquired information respecting the affairs of any other person, disclosed or obtained under the provisions of this Act or of any previous law of the Commonwealth relating to income tax;"
Section 16(1A) of the Tax Act is also important. It provides:
"16(1A) For the purposes of this section, a person who, although not appointed or employed by the Commonwealth, performs services for the Commonwealth shall be taken to be employed by the Commonwealth."
The taxpayers submit that divulging or communicating to the expert the information that they have furnished to the ATO is not within the exception in s 16(2). However, and perhaps not surprisingly given their sensitivity about the confidential nature of that information, the taxpayers accept that the expert is an "officer" for the purposes of s 16 by virtue of s 16(1A). Accordingly, he will, if that view be correct, be subject to what s 16(5) describes as the "rights, privileges, obligations and liabilities, under subsections (2) and (3)" of s 16.
The exception in s 16(2) has been considered in a number of cases. In Commissioner of Taxation v Nestle Australia Ltd (1986) 12 FCR 257 a Full Court of this Court said (at 261-262):
" The principal question argued before us was whether s 16 rendered the documents in the possession of the Commissioner relating to his investigation of the taxpayer's affairs immune from the processes of discovery and inspection. The section has proved a fertile field for litigation, but it is now well tilled by judicial decision and little arable land remains. Section 16 is designed to preserve secrecy about a taxpayer's affairs when they come before the Commissioner and any officer. The central provisions of the section are subss (2) and (3). The effect of subs (2) is that an officer is prohibited, except in the performance of any duty as an officer, either while he is or after he ceases to be an officer, from making a record of or divulging or communicating to any person any information respecting the affairs of another person acquired by the officer. The expression "except in the performance of any duty as an officer" ought to receive a very wide interpretation. In Canadian Pacific Tobacco Co Ltd v Stapelton (1952) 86 CLR 1 Dixon CJ said at 6 that the word "duty":
"... is not, I think, used in a sense that is confined to a legal obligation, but really would be better represented by the word 'function'. The exception governs all that is incidental to the carrying out of what is commonly called 'the duties of an officer's employment'; that is to say, the functions and proper actions which his employment authorises.
In a case of this description I should think that did include the making of an affidavit in this Court, in a proceeding for the ultimate obtaining of revenue, even if the word 'divulge' is used in a sense which includes the giving of evidence.
The
"duty" of an officer extends beyond the performance of work of an
administrative nature such a processing returns, making assessments,
considering and dealing with objections, conducting investigations into the
affairs of taxpayers and matters of this nature. It includes the occasions on which he is
required by the judicial process to produce documents or give evidence in
courts, by affidavit or viva voce, concerning the affairs of some other person
which he has acquired as an "officer", where the proceedings are
referable to the imposition, assessment or collection of revenue. These include appeals to courts under Pt V of
the Assessment Act, proceedings for the obtaining of revenue, applications
challenging decisions of the Commissioner pursuant to s 39B of the Judiciary
Act 1903 (Cth) and
applications for review of decisions of the Commissioner under the Judicial
Review Act with which this case in concerned.
The approach is consistent with what was said by Kitto J in Mobil Oil
Australia Pty Ltd v Commissioner of Taxation (1963) 113 CLR 475 at 500.
... Compliance by "officers" (within the meaning of the expression in s 16) with orders of the Court for discovery and inspection of documents in proceedings of this kind readily falls within the scope of their duties as such officers for the purposes of s 16(2).
There is another, but independent, ground for rejecting the Commissioner's argument that s 16(2) applies in this case to bar discovery and inspection. The prohibition imposed by the subsection is against divulging or communicating information to "any person" and this plainly could not apply to a court. ...
Section 16(2) cannot therefore avail the Commissioner in his assertion that it renders him or his officers immune from the processes of discovery and inspection in this case."
In Australian Institute of Marine and Power Engineers v Secretary, Department of Transport (1986) 13 FCR 124 Gummow J had to consider the effect of s 16(2) of the Tax Act upon the entitlement of a person to make a request under s 13(1) of the Administrative Decisions (Judicial Review) Act 1977. After observing that "the other provisions of s 16 include elaborate releases from the prohibition upon communicating information, but they are not expressed as limiting the general terms of the exception in s 16(2)", his Honour went on to say (at 136):
"Also
included, in my view, in the exception is what is appropriate to discharge or
satisfy requirements or duties imposed pursuant to procedures existing under
statutes other than the Tax Act. The
receipt of a request which falls within the terms of s 13(1) of the ADJR Act
leads, by dint of s 13(2) of that Act, to the imposition upon the
decision-maker of a duty or requirement to prepare and furnish the statement
described in subs (1). To the extent that
in discharging or satisfying that duty or requirement the decision-maker, being
an "officer" for s 16 of the Tax Act, is divulging or communicating
to any person any information respecting the affairs of another person
acquired by him by reason of or in the course of his appointment or employment
as an officer, he does so in the performance of a duty as an officer and within
the exception provided in s 16(2)."
In Saunders v Federal Commissioner of Taxation (1988) 88 ATC 4349 Northrop J had to deal with a contention that the Commissioner had breached the secrecy provisions in s 16 of the Tax Act. The evidence established that material, which had been obtained pursuant to notices under s 263 of the Tax Act, had been made available to the Director of Public Prosecutions. His Honour said (at 4,358):
"Section 16 enumerates persons and bodies to whom the Commissioner is authorised to communicate information without being in breach of sec. 16(2). The D.P.P. is not amongst those enumerated bodies as an authorised recipient of information except in the context of a Royal Commission: see para 16(4A)(ba) and subsec. 16(4FA). Strangely, officers of the Australian Government Solicitor are not among those authorised to receive information. Therefore, prima facie, the information obtained by the Commissioner ought not to have been divulged to the D.P.P."
Counsel for the Commissioner in that case relied on the exception in s 16(2) of the Tax Act. After referring to the Mobil Oil, Nestle and AIMPE cases, Northrop J said:
"In applying these principles to the facts before me, I am of the opinion that the tax officers have acted and would be acting in the performance of their duties in disclosing information to the D.P.P. It is plainly part of the duty of the tax officers to assist the revenue to recover moneys owing to the Commonwealth and for this purpose it is permissible to instruct the D.P.P. Indeed, sec. 6(1)(fa) of the Director of Public Prosecutions Act 1983 makes it a function of the Director to take or supervise the taking of civil remedies on behalf of and in the name of the Commonwealth and authorities of the Commonwealth. Further, it is noted that sec. 16 does not in express terms authorise tax officers to disclose information to the Australian Government Solicitor for the purpose of receiving legal advice or action. Information so disclosed would not be in breach of sec. 16 of the Tax Act."
In Dunkel v Commissioner of Taxation (1990) 27 FCR 524 Sheppard J did not expressly refer to the exception in s 16(2). However, his Honour held that the power to conduct a private examination under s 264 of the Tax Act impliedly authorised "everything which can fairly be regarded as incidental or consequential to the power itself." His Honour found that, where the examinee was likely to be represented by counsel, it was highly desirable in the public interest that the Commissioner's officer conducting the examination be advised by a competent and responsible counsel.
Finally in R v Yates (1991) 102 ALR 673, a case involving the sales tax equivalent of s 16(2) of the Tax Act, Priestley JA added "prosecutions involving the evasion of payment" to the kinds of proceedings instanced by the Full Court in the Nestle case where the duty of an officer is affected by the judicial process. The Victorian Court of Criminal Appeal agreed with this view: R v Murphy (1992) 23 ATR 422 at 464-467.
The claim for interlocutory relief turns, in my view, on whether there is a serious question to be tried. There is no question but that, as counsel for the taxpayers submits, the information in question is highly confidential and commercially sensitive. The balance of convenience clearly favours the taxpayers.
The duty in question is to determine the taxpayers' request for an extension under s 206 of the Tax Act. This will involve, as counsel for the respondents submit, making findings of fact on the material furnished by the taxpayers. It may be accepted too that much of that material presents a complicated financial picture.
Counsel for the taxpayers accept that the Commissioner may obtain legal advice. But he submits, in effect, that it would never be the case that the Commissioner is entitled to turn over "holus bolus" to an outside expert, such as a chartered accountant in private practice, all of the information furnished by a taxpayer in support of a request under s 206 of the Tax Act. (It should be noted that no information has yet been furnished in answer to the requests suggested by the expert.)
I do not think that there is any evidence to support the submission by counsel for the taxpayers that the Deputy Commissioner has in any way abdicated her duty under s 206 of the Act. What is critical is whether her "duty" requires her not to maintain the secrecy of the information provided by the taxpayers. The cases to which I have referred above all provide, in my view, fairly obvious examples where the exception in s 16(2) will apply. Here, however, it does not seem to me that, if the Deputy Commissioner is entitled to seek advice from outside experts on the meaning and effect of material submitted by the taxpayers, she should not be obliged to maintain secrecy in respect of what may be termed "raw information" forwarded by taxpayers.
After all, it should be borne in mind that these statutory obligations exist primarily for the benefit of taxpayers. In a different context, the High Court has recently emphasized the importance of observing statutory obligations of confidentiality: Johns v Australian Securities Commission (1993) 178 CLR 458.
It also seems to me arguable that little comfort may be derived from the provisions of s 16(1A) of the Tax Act. (This provision was only enacted in 1984. The explanatory memorandum accompanying the relevant Bill gave as an example of persons who would be covered by the new provision officers of overseas governments serving in Australia under exchange arrangements.) Even if it be the case, as counsel for the taxpayers accepts, that s 16(1A) covers the expert, that may only compound problems. What is to be the source of any "duty" he may have under the exception in s 16(2)? Surely it cannot be the terms of the retainer negotiated with the AGS, whatever they may be.
Counsel for the taxpayers raised the position of a secretary of the expert. He submitted that he or she would not be an "officer" for the purposes of s 16. Counsel for the respondents pointed out that such a secretary would be in no different position to the secretary of a barrister retained to advise the Commissioner. That may well be the case. If so, that rather suggests that s 16(1A) has little to say about the problem. The Commonwealth Crown Solicitor has instructed counsel on behalf of the Commissioner since s 16 first appeared in the Tax Act. Accepting a brief to advise involves duties of non-disclosure on the part of counsel in respect of confidential information. (See, for example, the New South Wales Barristers' Rules, rr 103, 104 et seq.) No doubt, for this reason the Parliament has not been concerned about the incidental or consequential authority of the Commissioner to brief counsel.
In the alternative to a case based on contravention of s
16(2) of the Tax Act, the taxpayers advanced a case under the rubric of what
their counsel described as "abuse of power." In support of this case he pointed to a
number of matters, including the following: the information was provided by the
taxpayers voluntarily; the information
involved forecasts and was thus different to the sort of material that
otherwise came to the knowledge of the Commissioner in his general administration
of the Tax Act; the fact that the information was disclosed to a partner in a
firm whose partners and employees could not be officers for the purpose of s 16
with a consequent risk of disclosure to persons not bound by obligations of
secrecy under the Tax Act; the passing over to the expert of the information in
its entirety without any attempt to mask the identity of the taxpayers; and,
most importantly, the taxpayers did not expect that the information that they
provided would be handed over to a person outside the ATO, nor could they
reasonably have expected it to be.
Counsel for the taxpayers submit that, in those circumstances, his clients were deprived of the opportunity to withdraw their request for an extension under s 206 of the Tax Act. He relies on the requirements of procedural fairness said to arise out of the "legitimate expectations" of the taxpayers, as that concept has been explained in Attorney-General of Hong Kong v Ng Yuen Shiu [1983] 2 AC 629 and Haoucher v Minister for Immigration and Ethnic Affairs (1990) 169 CLR 648. Counsel also relied on the recent ex tempore judgment of Macpherson J in R v Inland Revenue Commissioners; ex p. Unilever plc [1994] BTC 362. However, to the extent that in that case his Lordship purported to apply a general principle of "unfairness" in administrative law, I do not think that it can be taken to represent the law in Australia: Minister for Immigration and Ethnic Affairs v Kurtovic (1990) 21 FCR 193.
In any event, there seems to me to be an overwhelming element of circularity in these submissions by the taxpayers. The only source of any legitimate or reasonable expectations on their part is ultimately s 16(2) of the Tax Act. The alternative case is not, in my view, arguable. However, as I have already indicated, I think that there is a serious question to be tried whether there is a continuing contravention of the Commissioner's statutory obligation. The above matters show why the balance of convenience favours the grant of interlocutory relief.
Accordingly, upon the applicants giving the usual undertaking as to damages, I propose to grant interlocutory relief in the terms sought by the taxpayers.
I certify that this and the preceding sixteen pages are a true copy of the reasons for judgment herein of the Hon. Mr Justice A.P. Whitlam
Associate:
Date: 15 March 1995
Counsel for the applicant: R F Edmonds
Solicitors for the applicant: Gilbert & Tobin
Counsel for the respondent: B J Shaw QC and G T Pagone
Solicitor for the respondent: Australian Government Solicitor
Date of hearing: 6 March 1995
