CATCHWORDS Taxation - Sales tax - Application for registration as a wholesale merchant - Mandamus - Whether applicant is engaged in sale of goods by wholesale. BAYFORD WHOLESALE PTY. LIMITED v. TREVOR PERCY WINSTON BOURCHER (zn his capacity as Commissioner of Taxation) and JAMES EDWARD McTIGUE (in his capacity as Deputy Commissioner of Taxation for the State of Victoria) No. VG164 of 1983 Beaumont, J. 10 August 1984. Sydney. IN THE FEDERAL COURT OF AUSTRALIA VICTORIAN DISTRICT REGISTRY wee ww GENERAL DIVISION No. VG164 of 1983 BETWEEN : BAYFORD WHOLESALE PTY. LIMITED Applicant AND: TREVOR PERCY WINSTON BOUCHER (in his capacity as Commissioner of Taxation) and JAMES EDWARD McTIGUE (in his capacity as Deputy Commissioner of Taxation for the State of Victoria) Respondents ORDER Judge making order: Beaumont, J. Date order made: 10 August 1984. Where made: Sydney. THE COURT ORDERS THAT: 1. Order that a writ of mandamus issue to the respondents to compel them to consider the applicant's application for registration as a wholesale merchant and to determine such application in accordance with law. 2. 2. Make no order as to costs. 3. Reserve liberty to the applicant to apply on seven days' notice for further relief as it may be advised. IN THE FEDERAL COURT OF AUSTRALIA VICTORIAN DISTRICT REGISTRY ween GENERAL DIVISION No. VG164 of 1983 BETWEEN : BAYFORD WHOLESALE PTY. LIMITED Applicant AND: TREVOR PERCY WINSTON BOUCHER (in his capacity as Commissioner of Taxation) and JAMES EDWARD McTIGUE (in his capacity as Deputy Commissioner of Taxation for the State of Victoria) Respondents CORAM o Beaumont, J. DATED: 10 August 1984. REASONS FOR JUDGMENT: The applicant, a company claiming to be engaged in the sale by wholesale of motor vehicles, seeks an order compelling its registration as a wholesale merchant of motor vehicles for the purposes of the Sales Tax Assessment Acts (Nos.1-9) (1930) and the issue to it of a certificate of registration. The ground upon which relief 18 sought 15s that one or other of the respondents is under a statutory duty to register the applicant but has failed or refused to 2. perform that duty. The application was originally made in the High Court of Australia. Dawson, gd. remitted the matter to this Court for the reasons reported at (1983) 48 A.L.R. 477, The legislative scheme is as follows. Registration and certificates are dealt with by Part III of the Sales Tax Assessment Act (No.1) ("the Act"). In particular, by 3.11(1) of the Act, a person who becomes a manufacturer or wholesale merchant shall, within twenty eight days after he becomes a manufacturer or wholesale merchant as the case may be, become registered as prescribed. Registration and certificates are treated by Part II of the Sales Tax Regulations. By reg.5, a person who by virtue of an Assessment Act is required to become registered as a manufacturer or wholesale merchant shall, unless the Commissioner otherwise directs, make application to the Commissioner in accordance with form A, for registration in each State in which he has a place of business as a manufacturer or a wholesale merchant. Form A requires the following, amongst other, information: "2. Name under which business as manufacturer or Wholesale merchant 1s or will be carried on... 3. Full address of place where that business 3. is or will be carried on. 5. State whether manufacturer, wholesale merchant or both. 6. State kind of goods- (a) manufactured (b) sold by wholesale. 7. Date, ar proposed date, of commencement of business as manufacturer or wholesale merchant." (emphasis added) By reg.7, where a person applies for registration ina State in accordance with Part II of the Regulations, the Commissioner shall cause the applicant to be registered in that State and shall issue to the applicant a certificate in the prescribed form. "Wholesale merchant" is defined by s.3(1) of the Act to mean (inter alia) "a person who engages, whether exclusively or not, in the sale of goods by wholesale". The fate of this application depends substantially upon the true construction of this definition and its application to the facts. Specifically, the question arises whether, in the circumstances of the case, it may be said that the applicant engages in the activity there described as "the sale of goods by wholesale". There is a statutory definition, ins.3(1), of 4. "sale of goods by wholesale" which includes a sale of goods to a person who buys the goods for the purpose of resale. The applicant, a member of a group of companies engaged in the retail sale of motor vehicles, seeks to put its case in a number of ways. Primarily, it argues that, in acting under s.11(1), the Commissioner performs merely a ministerial role; he is therefore not required to investigate the nature of the activities carried on by an applicant for registration. It follows, the applicant says, that its claim upon the Commissioner to he registered as a wholesale merchant should have been acceded to as of course, without any objective examination of the applicant's trading position. Alternatively, the applicant argues that, in the circumstances of this case, it satisfies the definition of a wholesale merchant in the Act; so that, even if it were appropriate that the Commissioner investigate the nature of the applicant's activities with a view to determining whether it falls within the statutory definition, the only view reasonably open to the Commissioner is that the applicant falls within that definition (cf. Finance Facilities Pty. Limited v. Federal Commissioner of Taxation (1971) 127 C.L.R. 106). The history of the dealings between the applicant and the Commissioner is as follows. On 8 October 1982, the applicant lodged with the Deputy Commissioner of Taxation, 5. Victorian Office, an application for registration as a wholesale merchant. At about that time, the applicant also applied to Ford Motor Company of Australia Limited ("Ford Motor") to become an "accredited dealer wholesale company". By letter dated 20 December 1982, Ford Motor wrote to the applicant saying: "Whereas you have advised us of your desire to purchase certain Ford Products from us from time to time for the purpose of enabling such Products to be delivered to an Authorised Ford Dealer or certain Authorised Ford Dealers pursuant to wholesale floor plan arrangements which you have entered into or propose to enter into with such Dealer or Dealers, we now sét out hereunder the terms and conditions on which we are prepared to sell to you from time to time cars, trucks and other products of the Company (hereinafter called 'Ford Products') for such purpose. These terms are:- 1. That you will make the Ford Products which you have purchased in accordance with the terms and conditions of this arrangement available to Ford Sales Company of Australia Limited ('Ford Sales') on bailment as and when requested by it and will agree to Ford Sales making such Ford Products available to such of the Authorised Dealer Agents of Ford Sales as are nominated by you and approved by Ford Sales from time to time ('Approved Dealers'), on sub-ballment and on terms and conditions to be agreed from time to time between you and the respective Approved Dealers and Ford Sales. 2. That if at any time you are unable or unwilling to furnish such wholesale finance facilities as are provided for under the terms of this arrangement or if you 6. foresee or anticipate that your resources will not enable you to furnish such facilities in the future you will forthwith notify us accordingly. (Such notification shall not be required in the case of minor changes in wholesale finance facilities which relate only to a specific Approved Dealer). ..." By letter dated 24 December 1982, Messrs. Price Waterhouse, acting for the applicant, informed the Deputy Commissioner of Taxation of the "accreditation" and forwarded a copy of Ford Motor's letter. In May 1983, Price Waterhouse was informed by an officer in the Taxation Office that consideration of the application for registration had not been finalised and that it was not necessary for a decision to be made until the applicant actually began to engage in wholesale transactions. On 3 June 1983, the applicant lodged a further application for registration as a wholesale merchant. In the application, it was stated that the sale of goods by wholesale commenced on 1 June 1983. The Taxation office adhered to its previous view that the applicant was not entitled to registration. It confirmed its position ina telex to Price Waterhouse dated 7 July 1983 as follows: 1. Whether or not your client is engaged in the sale of goods by wholesale depends upon 7. the facts. Information available to this office has led to the conclusion that your client is not engaged in the sale of goods by wholesale. 2. In the circumstances no action to effect registration of the company for sales tax purposes, as a wholesale merchant can be taken. 3. The sales tax law contains no requirement or authority for the Commissioner to take action for a person to be registered for sales tax purposes where that person has not become a manuacturer or wholesale merchant." (Nothing here turns on the statutory requirement that the sale be by wholesale. The respondents accept that, if, contrary to their contention, there 15 a sale at all, it 1s a sale by wholesale. There is no suggestion that the sales are retail sales. The question, the respondents say, is whether there is an effective sale by the applicant of any kind.) In support of 1ts application, the applicant adduced evidence, in a documentary form, of a number of transactions which, it claims, constituted wholesale sales of motor vehicles. The applicant called one of its directors, Mr. H.R. Bayford, to prove the documentation of the transactions in question consisting, in the main, of invoices said to evidence wholesale sales by the applicant, together with financial records evidencing payments made and received on that account. Before describing the detail of these transactions, the matters urged by the respondents in 8. opposition to the relief sought should be stated. In joining issue with the applicant's contention that the Commissioner's functions are merely ministerial, the respondents say that the Commissioner is bound to refuse an applicant for registration except where the requisite activity is, onan objective basis, demonstrated; and the activity of engaging in the sale of goods by wholesale is not established unless and until a specific sale of the goods 1s completed and property has passed to the buyer from the applicant as seller. The test suggested by the respondents is thus objective and, according to their argument, ait can only be concluded that an applicant for registration engages in the sale of goods by wholesale if he can point to at least one such completed sale. In my opinion, despite the prospective language used in form A, emphasised supra, the right, or for that matter, the obligation, to register under s.11(1) does not rest merely in the assertion of an applicant for registration any more than the denial of registration ina proper case rests merely in the assertion of the Commissioner. Further, in my view, the functions of the Commissioner are not merely ministerial. Although reg.7 provides that the Commissioner is under a duty to register a person (applying) for registration in accordance with this Part", this does not refer to simply any person. It is 9. clearly a reference back to the person already identified in reg.5 aS a person required by s.11(1) to become registered. Section 11(1) lays down objective criteria for registration which cannot be reconciled with a merely ministerial function on the part of the Commissioner. In particular, none of the language used in s.11(1) or in s.3(1) suggests that the matter should merely depend upon the opinion of either the applicant or, for that matter, the Commissioner (cf. s.5(2)). Except if he acts under. s.11(3A), registration under s.11(1) is not a privilege which lies in the grant of the Commissioner in the exercise of an unfettered discretion. The aspirations of an applicant for registration are likewise irrelevant. I reject the applicant's suggestion that, in dealing with an application for registration, the Commissioner 1s in no way concerned to inquire into the character of the activities in which the applicant 1s engaged. In my opinion, the question of the proper character to be attributed to those activities is fundamental to a determination by the Commissioner that registration be granted or refused. It follows, in my view, that in entering upon that determination, the Commissioner is bound to apply an objective standard to the facts of the particular case. But even if an objective standard be required and even if merely preparatory acts are excluded for this purpose (see Southern Estates Pty. Limited v. The Federal 10. Commissioner of Taxation of the Commonwealth of Australia (1967) 117 C.L.R. 481), it does not follow, as the respondents contend, that the requisite activity is engaged in only when a single sale of the subject goods is completed in the sense that property has passed, at the wholesale level, from the seller to the buyer. In my view, given the commercial background of the legislation (cf. Federal Commissioner of Taxation v. Suttons Motors (Chullora) Wholesale Pty. Limited (1983) 47 A.L.R. 449 at p.454), to fasten upon the point of time at which property happens to pass as the exclusive criterion for registration is an unduly refined and thus, inappropriate, approach to the construction of s.11(1). It 1s one thing to select the making of a sale as the criterion for liability for sales tax. It is a different thing to stipulate that registration is required when the activity of engaging in saie is embarked upon. The former raises a specific legal question. The latter calis for a more general commercial inquiry, even 1f registration may indirectly involve immunity from liability for tax in certain circumstances (cf. Deputy Federal Commissioner of Taxation ($.A.) v. Ellis & Clark Limited (1934) 52 C.L.R. 85 at p-91; see also the observations of Dawson, J. in the remitter application (1983) 48 A.L.R. 477 at p.482). It may be accepted that when, in defining a wholesale merchant, the Act refers to a sale, prima facie, a 1i. concluded sale in which property in the goods has passed would be intended (cf.s.3(4)). But, in my view, given the commercial context in which s.11(1) 1s operating, the Passing of property is not a universal prerequisite to registration. In the present type of case, the essential inquiry involves a question of fact which is to identify, from a commercial standpoint, the character of the applicant's activities. Although the legal question, whether the applicant has entered into and completed a particular contract for the sale of goods, may provide some evidence as to the character of the commercial activities of an applicant for registration, it cannot be determinative of the inquiry to be made. Evidence of the activity should not be permitted to be substituted as the ultimate test of whether the stipulated activity is, in fact, being carried on, for other indicia of the activity may well exist. It 15 possible to imagine a case where, although 1t is appropriate to describe the activity of a party as that of the sale of goods, yet that party, because, for example, his business has only recently commenced, is unable to point to a contract of sale in which property had, at that stage, actually passed to a buyer. If the respondents' contention be accepted, it would follow that, in the case of a newly established business, the proprietor 1s not engaged in the sale of goods until property has passed to the buyer in at least one transaction. On this argument, there is a hiatus 12. in the period intervening between commencement of the business and the passing of property on the first sale. On this argument, the business would change 1ts character from that of a person not engaged in the sale of goods into that of a person so engaged at the precise point of time at which property passes on the first sale transaction. On this argument, an applicant for registration who purported to sell goods by wholesale but who, for some technical reason, had not then passed title to the goods, although thereby engaged, in commercial terms at least, in selling goods, would not be deemed to be engaged in their "sale" for the purposes of s.11(1). In my view, 1t 1s unlikely that the legislature intended that such artificial distinctions should be drawn. In short, I am of the opinion that the proper construction of s.11{(1) requires that emphasis should be placed upon the business nature of the applicant's activities rather than upon a fine legal analysis of the point of time at which property passes in an agreement for sale. Take the case of an applicant who could establish that stock had been acquired and offered to prospective purchasers for sale at the wholesale level. Such a person could, inmy view, properly be described as "engaged in the sale of goods by wholesale" within the meaning of the Act. On the other hand, that description may not always be properly applied to a@ person whose activities consisted of no more than a 13. single, albeit completed, sale by wholesale at some prior date. Support for the emphasis upon the business activities of the applicant rather than the legal operation of the sale agreement is, I think, found in s.16 of the Act, insofar as it provides for cancellation of a certificate of registration when a manufacturer or wholesale merchant "ceases to carry on the business to which the certificate relates". This provision recognises, to some extent at least, that registration 18 dependent upon the carrying on of a particular business rather than entry into and completion of a particular contract of sale of goods. In my opinion, in an application for registration under s.11(1), the Commissioner 1s under a duty to enter upon a determination of the character of the activities of the applicant. In determining this question, essentially one of fact, the Commissioner 1s bound to examine the applicant's circumstances objectively. He 1s not bound by the applicant's assertions of its wishes in the matter. It 1s not necessarily fatal to an application for registration that the applicant cannot establish the completion of a particular contract of sale interms of the passing of property to the buyer, especially, as here, in the case of an operation recently established. However, in the absence of a completed agreement for sale, a_ successful 14. applicant would need to demonstrate the existence of some other indicia in the form of objective circumstances from which an inference could be drawn that it was, in fact, engaged in the sale of goods by wholesale. The applicant seeks to establish that it effected a number of conpleted sales by wholesale. The background to these transactions is as follows. By a written agreement dated 1 September 1982 made between Ford Sales Company of Australia Limited ("Ford Sales"), Ford Motor and Lennox (trading as Bayford of Preston), Ford Sales appointed Lennox as an authorised retail sales agent at the location 687 High Street, Preston, Victoria. Subject to and in accordance with the agreement, Ford Sales agreed to provide vehicles to Lennox which, for its part, agreed to effect the sale of vehicles as an authorised retail sales agent of Ford Sales. Upon the negotiation of a retail sale, a prospective retail purchaser of a vehicle executes a retail buyer's order which is in the form of an offer to Ford Sales and to Lennox to purchase from Ford Sales a vehicle there identified upon the condition that the order is not binding on Ford Sales until accepted by it in accordance with clause 2{c). By that clause, the offer contained in the order may be accepted by Ford Sales by its notifying its acceptance thereof to Lennox or by Ford Sales delivering the vehicle to Lennox. isd. By a Bailment Plan dated 1 July 1963 made between Esanda (Wholesale) Pty. Limited ("Esanda (Wholesale)") and Ford Sales, in consideration of Esanda (Wholesale)'s supplying Ford Sales from time to time with new motor vehicles acquired by it from the manufacturer or wholesale distributor, Ford Sales agreed to order display units on behalf of and as agent for Esanda (Wholesale) within the limits and subject to the conditions there described. Ford Sales further agreed to take on hire every display unit provided thereunder and to keep the same in its possession as bailee for Esanda (Wholesale) for display purposes. Ford Sales further agreed to obtain (but not as agent for Esanda (Wholesale), offers to purchase the units or offers addressed to Esanda to take the unit under hire purchase; and upon receipt of any such offer, Esanda (Wholesale) might in its discretion sell the unit to Ford Sales at a price equal to that paid for it by Esanda (Wholesale). By a Sub-Bailment Agreement dated 1 July 1982 made between Lennox Motors Pty. Limited ("Lennox") another member of the Bayford group, as sub-bailee, Ford Sales as distributor, Esanda (Wholesale) and Esanda, it was acknowledged that Ford Sales may from time to time hold motor vehicles, ainter alia, (described as "display units") from Esanda (Wholesale) as a bailee under the terms of Esanda (Wholesale)'s bailment plan agreement. It was further acknowledged that Lennox wishes on behalf of Ford 16. Sales to try to obtain offers from the public to purchase or take on hire purchase display units and for that purpose to take on hire as sub-bailee of Ford Sales such display units as Ford Sales with the consent of Esanda (Wholesale) and Esanda may be prepared to make available to the sub-bailee. The sub-bailment then created is to continue during the same period as the primary bailment. Under the agreement, Esanda (Wholesale) agreed, on the supply of the display unit, to advance to Ford Sales an amount equal to the margin Ford Sales would expect to make in the event of an ultimate retail sale by it. By a Bailment Agreement dated 25 November 1982, made between the applicant as bailor and Ford Sales as bailee, 1t was recited that Ford Sales was desirous of being supplied, as bailee, with such goods as it from time to time should require and the applicant should be willing to supply. It was agreed that at the time of or before taking delivery of goods which the applicant 1s willing to let on hire to Ford Sales, that company or its agent should sign an acknowledgement in respect of the goods which should be deemed to mean that Ford Sales') shall hold the goods as bailee pursuant to the provisions of the agreement. It was further agreed that property in the goods held by Ford Sales should remain exclusively in the applicant and should not pass to Ford Sales who should be bailee only until the termination of the bailment as therein provided. Thereupon, 17. the applicant might, in its descretion, sell the goods to Ford Sales. By a Sub-Bailment Agreement dated 25 November 1982 made between the applicant as bailor, Ford Sales as bailee and Lennox as' sub-bailee, the Bailment Agreement of even date between the applicant and Ford Sales was recited. It was agreed that, 1f and so often as Lennox should desire to have let to it possession as sub-ba1ilee goods of which Ford Sales should be the bailee from the applicant under the Bailment Agreement and the applicant should approve of the goods being let unto Lennox, that company should sign an acknowledgement in respect of the goods and such acknowledgement would be deemed to mean that Lennox would hold the goods as sub-bailee. Earlier this year, Mr. Bayford raised with Esanda the question of the introduction of the applicant into the finance arrangements then subsisting between the Bayford group and the Esanda group. Esanda responded by letter dated 16 February 1984: "In reply to your recent telephone inquiry regarding the inclusion of Bayford Wholesale Pty Ltd into the dealer's arrangement. I advise that the support of directors and associated companies by way of cross guarantees as delivered to you on 9/2/84 18 required. For ease of reference the relative guarantees 18. are as follows:- Joint & Several Guarantee Wholesale Guarantee Retail Guarantee Customer : Lennox Motors Pty Ltd. Guarantor : Bayford Wholesale Pty Ltd. Joint & Several Guarantee Wholesale Guarantee Customer : Bayford Wholesale Pty Ltd. Guarantors : Lennox Motors Pty Ltd Bayford Properties Pty Ltd Elgon Nominees Pty itd Bayford Motors Wholesale Pty Ltd Hugh Richard Bayford Lindsay Milton Bayford Francis James Vernon. With reference to your inquiry regarding the need for a sub-bailment agreement with Bayford Wholesale Pty Ltd I advise that the sub-bailment agreement is only required with the franchise holder and unless Bayford Wholesale Pty Ltd is party ts the franchise agreement with Ford Motor Company this is not required." The guarantees sought have not yet been executed. The specific transactions relied on by the applicant are as follows. In the period from June 1983 to March 1984, Esanda (Wholesale) sent the applicant invoices in respect of one hundred and twenty one motor vehicles manufactured by Ford Motor. In each case, the invoice was addressed to the applicant from Esanda (Wholesale), was headed "tax inclusive invoice", identified the vehicie, and claimed payment of a total sum made up of a number of items 19. described as sales tax, wholesale price, freight/delivery charges, petrol, distributor's margin advance and a credit for a floor plan allowance. In the case of each vehicle, an invoice was also raised by the applicant. It bore the same date as the invoice from Esanda (Wholesale), was addressed from the applicant to Lennox an associated company and another member of the Bayford group, and claimed payment of the same amount as the invoice from Esanda (Wholesale). The procedure followed by the parties upon negotiation of a retail sale of a motor vehicle, as described by Mr. Bayford, commenced with the execution by the prospective retail buyer of the order form mentioned above. The vehicle selected was prepared by Lennox for delivery and registration. Lennox notified Esanda (Wholesale) that it intended to register a vehicle and requested an invoice. Prior to this time, (Esanda Wholesale) had acquired title to the vehicle from Ford Motor. In some cases, Esanda (Wholesale) addressed its invoice to the applicant but in the great majority of cases, its invoice was addressed to Lennox as agent for Ford Sales. The invoices were received by the applicant or by Lennox as agent for Ford Sales, as the case may be, on the same day as they were raised. On the same day, the applicant raised its invoice in favour of Lennox as agent for Ford Sales. The respondents contend that, in these 20. circumstances, no sale, or at least no effective sale, was made by Esanda (Wholesale) to the applicant or by the applicant to Lennox as agent for Ford Sales. A number of analyses of the devolution of title are suggested as possible on the facts, none of which, it is said, involve the applicant's ever receiving property in the goods. First, it is suggested that on the conclusion of the retail sale, title passes directly from Esanda (Wholesale) to Ford Sales by reason of Esanda (Wholesale)'s having armed Lennox and Ford Sales with authority to sell at the retail level. It is said that Esanda (Wholesale) is thereby estopped from denying the authority of either Lennox or Ford Sales to sell to the retail buyer. In my opinion, any estoppel arising vis-a-vis a retail buyer cannot determine the course of progress of the property in the goods at the wholesale level. This isa matter for the intention of the wholesale parties themselves (see Minister for Supply and Development v. Servicemen's Co-Operative Joinery Manufactuers Limited (1951) 81 C.L.R. 621 at p.635). Alternatively, 1t is suggested that implied authority to sell was given by Esanda (Wholesale) to Lennox by reason of the course of conduct adopted. It 1s said that the procedures contemplated by the several bailments between the parties were not followed. Again, in my view, even if 21. these procedures were departed from, and even if Lennox or Ford Sales were given implied authority to sell to a retail buyer, the passing of title to the goods at the wholesale stage remains a matter within the exclusive province of the parties to the wholesale transactions. In my opinion, even if the respondents were right in their contention that, for technical reasons, and notwithstanding the presumed intentions of the Esanda group and the Bayford group, property 1n the vehicles had passed to Lennox before the applicant could acquire it, 1t would not necessarily follow that, in fact, the applicant was not engaged in the sale of vehicles by wholesale. On any view, the applicant 1s purporting to sell gocds and is thus. at least, de facto engaged in the sale of goods. In my opinion, even if the applicant lacked title to the goods at the relevant time, its conduct in purporting to sell the goods by wholesale in the belief that it had or could obtain title, constitutes the conduct of engaging in the sale of goods viewed from the commercial standpoint previously mentioned. It is next submitted by the respondents that the provisions of s.11(1) cannot be satisfied in the present case because the "sales" relied on were mere paper transactions and the applicant's role was no more than that of a banker. It is true that the evidence relied upon by 22. the applicant in this connection consists, in the main, of the invoices mentioned together with payments made and received in that behalf. It would also seem that the applicant does not maintain a separate business infrastructure in terms of its own staff and its own premises. Further, the applicant made no profit or loss on any of the transactions. It sold to Lennox at the price from Esanda (Wholesale). In my opinion, none of these matters, taken singly or collectively, preclude as a possibility a conclusion that the applicant is engaged in the sale of goods by wholesale. The circumstances certainly indicate the limited scale of the applicant's operation and its lack of profitability, but none of these matters can foreclose adversely to the applicant the question of fact to be determined. In my opinion, there 15 no basis for importing into s.11(1) a requirement of a particular size of business or of ats profitability as a condition of registration. As part of this submission, the respondents also pointed to what they described as the contrived nature of the application for registration. It may be accepted that the several members of the Bayford group intended to bring about a situation i1nwhich the applicant, as a distinct legal personality, became engaged in the sale of goods by wholesale (cf. Cecil Bros. Pty. Limited v. Federal Commissioner of Taxation (1964) 111 C.L.R. 430 at 23. pp.439-40). But the respondents do not contend that any sham is involved here. Once it is conceded that the transactions are genuine insofar as the documentation employed reflects the nature of the transactions intended to be entered into (see Mullens v. Federal Commissioner of Taxation (1976) 135 C.L.R. 290 at p.316), it must follow that the respondents' challenge in this area 15 no more than an attack upon the motives of the applicant, in terms of collateral advantage, in seeking registration. In my opinion, the challenge fails. The inquiry contemplated by s.11(1) can not travel beyond the fact, if it be so, of engaging in the requisite activity, into the reasons why registration 1s sought. There is nothing in the language of s.1l1(1) to warrant the conclusion that there is some purposive element which must be established in order that registration may be achieved. Cases concerned with the taxpayer's purpose, such as Deane v. Federal Commissioner of Taxation (1982) 40 A.L.R. 499 relied on by the respondents can have no application here (cf. Federal Commissioner of Taxation v. Patcorp Investments Limited (1976) 140 C.L.R. 247 at pp.291-2). Finally, the respondents seek to invoke the principle of "fiscal nullity" recently propounded by the House of Lords inW.T. Ramsay Limited v. Inland Revenue Commissioner €19823 A.C. 300 and Furniss v. Dawson £1984] 2 24, W.L.R. 226. A threshold question arises whether this doctrine should be received as part of the law of Australia. However, this need not now be decided since, even if the principle were part of the law of Australia, it could not, in my view, have any application in the instant case. In Ramsay, supra, the principle was held to apply in the case of a series of self-cancelling transactions entered into with a view to avoiding tax. In Furniss, supra, the rule was extended to apply where liability to tax was deferred indefinitely by a device of inserting into a scheme a number of steps which had no commercial purpose. Both cases were concerned with capital gains tax. Thus, the ultimate enquiry was whether a profit or gain had, in truth, been made. It was held that the court has to look at the "end result" or, more precisely, the "fiscal result", although exactly how the end result will he taxed will depend upon the terms of the taxing statute sought to be applied (see Furniss, supra, at p.242)}. The House of Lords was prepared, in each case, to ignore as nullities the steps taken without any commercial purpose but with a view to avoiding tax or deferring it indefinitely. In my view, this context is far removed from the present case. No question of liability to tax, in any strict sense, arises. It 1s not suggested that sales tax is being avoided. Although it 1s suggested that sales tax will 25. be deferred if registration is granted, there is, in fact, no deferment of liability for sales tax on any indefinite footing, as happened in Furniss. Indeed, if registration is achieved, liability to sales tax will not be deferred at all. Sales tax will, as before, still be levied on the last wholesale sale. It is true that if the applicant were not to become registered, Esanda Wholesale would be liable to pay tax which, in accordance with the arrangements previously described, would, no doubt, be promptly reimbursed by the applicant. If the applicant were to become registered, 1t would be liable under the applicable Assessment Act (in this case (No.3) s.9), to pay tax to the Commissioner within twenty one days after the close of the month in which the wholesale sale occurs. It 15 true that, by reason of the financing arrangements made with the Esanda group, registration of the applicant as a wholesale merchant would afford it a little more time to pay sales tax. Under those arrangements, the applicant is committed to reimburse Esanda (Wholesale) for the tax although the statutory twenty one days has not yet run and interest payable to Hsanda (Wholesale) will accrue against the applicant in the interim. If the applicant becomes registered, 1t, rather than Esanda (Wholesale), will have the statutory twenty one days to pay the tax to the Commissioner. In my opinion, even 1f the doctrine of "fiscal nullity" were part of the law of Australia, there is no 26. deferment of liability of the kind contemplated in Furniss (and see the observations of Dawson, J. on this aspect in the remitter application (1983) 48 A.L.R. 477 at p.482). I turn now to the form of relief to be granted. It is true that the applicant has established a case that the Commissioner has taken into account "matters absolutely apart from the matters which by law ought to be taken into consideration", so that mandamus should issue commanding the officer concerned to exercise his discretion according to law (see The Queen v. Anderson; Ex parte Ipec-Air Pty. Limited (1965) 113 C.L.R. 177 at ».189). However, mandamus in that form does not dictate the decision sought to be made in a given case (ibid). Although the applicant seeks a specific order compelling registration, I do not think this is appropriate, having regard to the time which has elapsed since the last sale relied on (March 1984). Indeed, there is no evidence of the position so far as concerns the applicant's present trading activities. Although the applicant may rely upon a presumption of continuance, given the fact that transactions relied upon are internal to the Bayford group, I am not able to assume that the position established as at the commencement of March remains. In my view, the applicant should be required to demonstrate that it is still engaged in the sale of goods by wholesale. I propose to grant the applicant the limited relief 27. indicated and to reserve liberty to it to apply for further relief, if necessary. On the question of costs, the position 1s evenly balanced. The applicant has failed in its primary submission. The respondents have failed in some of their main defences. Although the applicant has obtained limited relief, the determination of the application for registration remains an open question. On the whole, I think that there should be no order as to costs. I make the following orders: 1. Order that a writ of mandamus issue to the respondents to compel them to consider the applicant's application for registration as a wholesale merchant and to determine such application in accordance with law. 2. Make no order as to costs. 3. Reserve liberty to the applicant to apply on seven days' notice for further relief as it may be advised. lcerufy thetiiacr iihe 26 preceding pecescvl woe i. P2oens for judgmen. eiiach i. 3 tcaotracle Mr Jusiace Esoumeas SC umon. Associate Dated 10 Pugest, 1784,