FEDERAL COURT OF AUSTRALIA Elias v Commissioner of Taxation [2002] FCA 845 TAXATION – controlling interest superannuation arrangement – applicant applied to Commissioner for a deferment of time for payment of tax under s 255-10 of the Taxation Administration Act 1953 (Cth) – Commissioner refused application having regard to the "ATO Receivables Policy" – whether the Receivables Policy was an impermissible fetter on the Commissioner's statutory discretion – whether the Commissioner took into account an irrelevant consideration – whether the Commissioner failed to take into account relevant circumstances WORDS & PHRASES – "take into account" Taxation Administration Act 1953 (Cth) Part 4.15, s 8AAD, 8AAG, 8AAG(3), 8AAG(4), 8AAG(5), 14ZZM, 14ZZR, 250-10, 250-25, 255-1, 255-5, 255-10, 255-10(1) Administrative Decisions (Judicial Review) Act 1977 (Cth)s 13 Income Tax Assessment Act 1936 (Cth) s 204, 204(1), 204(3), 204(3)(a), 206 General Interest Charge (Imposition) Bill 1998 (Cth) Harris v Commissioner of Taxation [2001] FCA 1689 considered Re Drake v Minister for Immigration & Ethnic Affairs (No 2) (1979) 2 ALD 634 cited Chumbairux v Minister for Immigration & Ethnic Affairs (1986) 74 ALR 480 cited Minister for Aboriginal Affairs v Peko-Wallsend Ltd (1985-1986) 162 CLR 24 applied Ahern v Deputy Federal Commissioner of Taxation (1983) 50 ALR 177 considered Sean Investments Pty Ltd v MacKellar (1981) 38 ALR 363 applied Harts Fidelity Pty Ltd v Federal Commissioner of Taxation (1999) 42 ATR 438 followed Thurecht v Deputy Federal Commissioner of Taxation (1984) 84 ATC 4,480 considered Barina Corporation Ltd v Deputy Commissioner of Taxation (1985) 6 FCR 368 considered ARM Constructions Pty Ltd v Commissioner of Taxation (1986) 10 FCR 197 considered Nestle Australia Ltd v Commissioner of Taxation (1987) 16 FCR 167 considered Paul v Minister for Immigration & Multicultural Affairs (2001) 64 ALD 289 applied Deloitte Touche Tohmatsu v Australian Securities Commission (1996) 136 ALR 453 considered NIB Health Funds Ltd v Private Health Insurance Administration Council [2002] FCA 40 considered Aronson & Dyer Judicial Review of Administrative Action 2nd Ed. 2000 STEPHEN P ELIAS v COMMISSIONER OF TAXATION N 34 OF 2002 HELY J 3 JULY 2002 SYDNEY IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY N 34 OF 2002 BETWEEN: STEPHEN P ELIAS APPLICANT AND: COMMISSIONER OF TAXATION RESPONDENT JUDGE: HELY J DATE OF ORDER: 3 JULY 2002 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. The application is dismissed with costs. 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 N 34 OF 2002 BETWEEN: STEPHEN P ELIAS APPLICANT AND: COMMISSIONER OF TAXATION RESPONDENT JUDGE: HELY J DATE: 3 JULY 2002 PLACE: SYDNEY REASONS FOR JUDGMENT 1 The applicant is an accountant carrying on practice on his own account under the name of S P Elias and Co. During the financial year ended 30 June 1999 the applicant established a superannuation fund, and made contributions to the trustee of that fund for the purpose of providing superannuation benefits for himself. It is unclear on the materials before me whether the contributions totalled $652,200, or $672,700, as each figure is referred to in different places in the evidence without explanation of the apparent conflict. The applicant claimed the amount of his contributions as an allowable deduction in his income tax return for the 1999 year of income. It is not necessary for present purposes to determine which of the figures to which I have referred is the correct figure. 2 The arrangement which the applicant made in this respect has been referred to by the Commissioner as "a controlling interest superannuation arrangement". That arrangement was apparently entered into by the applicant on the advice of his solicitor, Mr David Bonnell. Other clients of Mr Bonnell (numbering in excess of 100) apparently entered into similar controlling interest superannuation arrangements during the 1999 financial year. Mr Bonnell had obtained a Notice of Private Ruling under Part IVAA of the Taxation Administration Act 1953 (Cth) ("TAA") on 29 September 1998. That Private Ruling, having been issued to Mr Bonnell, and not to the applicant, was not binding on the Commissioner in relation to the applicant or in relation to Mr Bonnell's other clients, but it represented the expression of a considered opinion by the Commissioner on the questions of deductibility, and non-accessibility to the superannuation fund, of contributions of the type made by the applicant to the fund which he established. 3 On 19 May 1999 the Commissioner issued a media release asserting that a number of arrangements, including controlling interest superannuation arrangements: "... fail both at law and in their implementation. … Far from securing the claimed benefits, it is the Tax Office's view that in their contrivance participants are exposing themselves to possible multiple taxing points and penalties." The media release contained an offer that: "If participants come forward voluntarily by 30 June 1999, penalties will be reduced to 5% and only a single and appropriate tax liability will be applied." 4 On 27 January 2000 the applicant signed his tax return for the year ended 30 June 1999 and lodged that return with the Commissioner. The return appears to have been lodged on 27 April 2000, but nothing turns upon this apparent delay in lodgement of the return. 5 By letter dated 22 December 2000 David Bonnell applied on behalf of various of his clients who had entered into controlling interest superannuation arrangements, pursuant to s 255-10 of Schedule 1 to the TAA, to defer the time at which tax assessed under notice of assessments issued or to be issued would become due and payable, to a later date, being the date on which each applicant lodges an objection against the relevant notice of assessment. The applicant was not one of the persons on whose behalf this letter was sent. 6 On 12 January 2001 a Notice of Assessment was issued to the applicant denying the claimed deduction for the 1999 year. The amount payable pursuant to that Notice of Assessment was $277,048.47 which was stated as being due for payment on 14 February 2001. That assessment represented a departure from the position adopted by the Commissioner in the Private Ruling referred to above, and a departure from what was described in an internal briefing paper of 18 March 1999 as the then current ATO practice "to allow the controlling interest super scheme". It was, however, consistent with the media release issued on 19 May 1999. 7 On 18 January 2001 Mr Bonnell notified the respondent of the names of a number of additional taxpayers to be included in the application made by the letter of 22 December 2000 to defer payment time pursuant to s 255-10. The applicant's name was not included on that list. On 31 January 2001 Mr Bonnell forwarded further submissions to the respondent in relation to the applications already lodged, and a list of applicants for whom the application had been lodged to date. That list included the name of the applicant, and asserted that an application had been made on behalf of the applicant on 18 January 2001. 8 By letter dated 9 March 2001 the Commissioner refused the applications to extend the dates for the tax-related liability to become due and payable under s 255-10, which had been made on behalf on Mr Bonnell's clients in his letter of 22 December 2000 and in subsequent letters. That decision was based on guidelines as to the circumstances in which the Commissioner would exercise his discretion to extend the due date under s 255-10 listed in Chapter 9 of the ATO Receivables Policy. The guidelines are referred to in more detail later in these reasons. The letter stated that the Commissioner would only defer payment where taxpayers can demonstrate that because of circumstances beyond their control, they are unable to make payment by the due date, and have demonstrated the ability to pay in full on the extended due date. Proceedings N 244/2001 9 On 15 March 2001 the applicant commenced proceedings in this Court for a review of that decision. On 27 March 2001 the Australian Government Solicitor ("the AGS") advised that the Commissioner proposed to reconsider the applications for deferment of payment of tax assessed for the year ended 30 June 1999 made on behalf of all of Mr Bonnell's clients, including the applicant. 10 On 29 March 2001 orders were made by consent that the Commissioner's decision be set aside. 11 On 23 April 2001 the AGS wrote to Mr Bonnell drawing his attention to a number of problems which the Commissioner perceived to exist in relation to the deferral applications, including that deferment was sought until the date of lodgement of a Notice of Objection against the assessments, there now being a period of four years, rather than sixty days, within which objection might be lodged. The second application 12 By letter dated 21 June 2001, written on behalf of 111 clients who had entered into controlling interest superannuation arrangements (including the applicant), Mr Bonnell applied for a deferment under s 255-10 of Schedule 1 to the TAA of the time at which tax assessed under various assessments issued to those clients was due and payable. The letter addressed the matters raised in the AGS letter of 23 April 2001, as well as indicating the grounds on which an extension was sought. Deferment was sought until a date 7 days after the first to occur of a number of events. The letter envisaged that it might be necessary for a further application for deferment to be made. In the events which have happened, the first of these events to occur was the giving of a decision by Merkel J in Harris v Commissioner of Taxation [2001] FCA 1689 which, as will later appear, was handed down on 3 December 2001. Thus the date to which an extension was sought has now passed, but it was not submitted by the Commissioner that this circumstance renders these proceedings moot. 13 On 18 October 2001 the AGS notified Mr Bonnell that the Commissioner had changed his policy on the application of s 255-10. It was common ground that the change in policy was effected in July 2001, and not in July 2000 as appears from the foot of the document recording the new policy. A copy of the new policy was enclosed, and Mr Bonnell was invited to make any further submissions that he wished to make in the light of the new policy. The nature of the policy change is referred to in more detail hereafter. 14 By letter dated 22 October 2001 Mr Bonnell responded to the AGS' letter of 18 October 2001. Mr Bonnell's letter included the following: "My clients' application to defer time pursuant to s 255-10 of the Income Tax Assessment Act 1936 was drawn in a way that allowed the matter to be determined quickly and without the need for extraneous material. The application did not seek to rely on the individual circumstances of my clients but rather on the facts that were common to them. In my further submissions dated 21 June 2001 I addressed your client's concern that individual circumstances be relied upon by drawing your client's attention to material he already had." The letter noted the change in the Commissioner's policy, but Mr Bonnell advised that it was not relevant to his clients' application. As such, it was Mr Bonnell's opinion that there was no need to make any further submissions. 15 By letter dated 30 October 2001 the AGS notified Mr Bonnell that the Commissioner proposed to make decisions on Mr Bonnell's application for deferral on the basis of each applicant, having regard to all of the matters relied upon by Mr Bonnell on behalf of the applicants, and the circumstances of each case, and not on a global basis. The AGS stated that an examination of 43 folders of documents was involved for this purpose. 16 By letter dated 29 November 2001 the Commissioner advised Mr Bonnell, in response to his letter of 21 June 2001, that: "Section 255-10 provides the Commissioner with the discretion to extend the due date without imposing of General Interest Charge (GIC). Guidelines on the circumstances in which the Commissioner will exercise his discretion to extend the due date, are listed in Chapter 9 in the ATO Receivables Policy. We have considered the grounds upon which you have relied upon to seek deferment of time under s 255-10 and advise that the grounds listed are not sufficient to warrant deferment of the time for payment. Please note that payment of the outstanding amount is required within seven days or we will commence recovery action without further warning." 17 On 3 December 2001 Merkel J handed down judgment in Harris v Commissioner of Taxation [2001] FCA 1689. His Honour's decision, shortly stated, was that contributions payable in relation to controlling superannuation interest arrangements in circumstances such as the present are not deductible. That decision is the subject of an appeal to a Full Court, which has been argued, but in which the decision has been reserved. 18 On 31 January 2002 the Commissioner provided a statement of his reasons for the decision communicated by letter dated 29 November 2001. On 11 March 2002 the applicant lodged an Amended Application for an Order of Review of the Commissioner's decision under s 255-10 of the TAA. That application was made under the Administrative Decisions (Judicial Review) Act 1977 (Cth) ("the ADJR Act"). On 11 March 2002 the applicant lodged a Notice of Objection against the assessment. Legislative context 19 Any assessed income tax assessed under this assessment is due and payable on the date specified in the Notice of Assessment: Income Tax Assessment Act 1936 (Cth) ("ITAA") s 204(1). 20 The fact that a review or appeal is pending in relation to an assessment does not in the meantime interfere with, or affect, the assessment, and any tax may be recovered as if no review or appeal were pending: TAA ss 14ZZM, 14ZZR. 21 If any tax which a person is liable to pay remains unpaid after the time by which the tax is due to be paid, the person is liable to pay the General Interest Charge ("GIC") on the unpaid amount: ITAA, s 204(3). 22 The GIC is substantially in excess of a commercial rate of interest. The amount of the GIC is fixed by s 8AAD of the TAA. The Commissioner has a discretion under s 8AAG of the TAA to remit all or part of the GIC in the circumstances referred to in s 8AAG(3), (4) or (5). 23 The object of Part 4.15 of Schedule 1 to the TAA is to ensure that unpaid amounts of tax-related liabilities and other related amounts are collected or recovered in a timely manner: TAA, Schedule 1, s 250-25. Income tax is a tax-related liability: s 255-1; s 250-10. Part 4.15 of Schedule 1 includes s 255-5 and s 255-10. Section 255-5 provides that an amount of a tax-related liability that is due and payable is a debt due to the Commonwealth and is payable by the Commissioner. Section 255-10(1) provides as follows: "The Commissioner may, having regard to the circumstances of your particular case, defer the time at which an amount of a tax-related liability is, or would become, due and payable by you (whether or not the liability has already arisen). If the Commissioner does so, that time is varied accordingly. Note: General interest charge or any other relevant penalty, if applicable for any unpaid amount of the liability, will begin to accrue from the time as varied. See, for example, paragraph 204(3)(a) of the Income Tax Assessment Act 1936". 24 By amendments to s 207 of ITAA made in 1938, where an extension of time for payment of tax was granted under s 206 of ITAA, additional tax at the rate of 10 per cent was imposed from such date as the Commissioner determined, not being a date prior to the date on which the tax was originally payable. That position changed with the repeal of s 207 and s 207A of ITAA in 1999. The Explanatory Memorandum for the General Interest Charge (Imposition) Bill 1998 (Cth) includes the following: "Consistency in the application of GIC 1.79 A further consequential amendment will ensure that GIC accrues from when an outstanding tax debt is due to be paid. Previously, under subsection 207(1) of ITAA36 the Commissioner was able to impose late payment penalty from the date on which tax was originally due and payable even though there may have been an extension of time allowed for the payment of the tax. 1.80 This is now no longer the case with the repeal of sections 207 and 207A of the ITAA36." 25 As the note to s 255-10(1) makes plain, under the present legislative scheme if the Commissioner defers the time at which tax is due and payable, then by force of the ITAA, GIC only becomes payable in the event of non-payment from the extended date, subject to the power of remission given to the Commissioner under s 8AAG of the TAA. The Commissioner no longer has power to extend the time allowed for payment of tax, on the basis that the penalty for non-payment continues to accrue in the meantime. Respondent's policy in exercising his discretion under s 255-10 26 At the time that the applicant received his assessment and at the time an extension of time was originally sought, Chapter 9 of the Receivables Policy set out the circumstances in which the time for payment would be deferred. Clause 9.4.1 of the Policy provided as follows: "The Commissionerwill only defer the time for payment where debtors can demonstrate: (i) payment cannot be, or has not been, made by the original time for payment because of circumstances beyond their control, and the debtor has taken reasonable steps to mitigate the effects of those circumstances; and (ii) payment in full can be made at a later time (when the circumstances that led to the non-payment have been alleviated)." (emphasis added) 27 In July 2001 the Commissioner altered his policy and republished Chapter 9. Chapter 9 formed part of a larger document styled "ATO Receivables Policy". Chapter 1 of that policy includes clause 1.1.2 which provides as follows: "This policy document does not have the force of law. Each decision taken by the Commissioner is made on the merits of the individual case, having regard to the legislation, this policy document and other relevant documents and information." 28 Clause 9.4.1 of the republished policy provides as follows: "Without limiting the Commissioner's discretion in relation to any particular case, the time for payment will not normally be deferred unless the debtor can demonstrate:- (i) payment cannot be, or has not been, made by the original time for payment because of circumstances beyond their control, and the debtor has taken reasonable steps to mitigate the effects of those circumstances; and (ii) payment in full can be made at a later time (when the circumstances that led to non-payment have been alleviated)." (emphasis added) 29 Clauses 9.3.3, 9.4.4, 9.4.5, 9.4.6 and 9.5.1 of the original policy provided as follows: "9.3.3 The purpose of deferring the time for payment of a liability without the imposition of additional charges is to facilitate the collection of tax-related liabilities from debtors who can demonstrate that because of unusual circumstances beyond their control they are unable to pay by the payment time but have the ability or potential to pay in full at a particular time in the future. (emphasis on the words "in full" in original) 9.4.4 The Commissioner will not generally grant a blanket deferment of time for payment to debtors in a particular industry or region. In all cases where deferment is being sought, the onus is on the debtor (or the debtor's representative) to satisfy the Commissioner:- (i) the inability to pay by the original payment time is/was directly caused by the circumstances that were beyond control; (ii) payment in full of the particular liability or liabilities can be made by the deferred payment time; and (iii) once the circumstances are under control, continuing liabilities will be paid as and when they fall due (that is, the debt will not escalate). The International Tax Division should be consulted where the debtor raises Competent Authority assistance issues 9.4.5 Each request will be considered on its merits and the deferred payment time will be determined having regard to the particular circumstances of the debtor and the circumstances that led to the inability to pay on time. The fact that a debtor may have other outstanding debts or a poor compliance record should not prevent the debtor from applying for deferment of the time for payment of a particular liability, where the inability to pay that liability was caused by circumstances beyond the debtor's control." 9.4.6 The Commissioner will not agree to defer the payment time of any liability on a permanent basis. A deferment will only be granted to assist the debtor to overcome immediate problems caused by the circumstances that were beyond the control of the debtor. 9.5.1 In all cases where it has been decided to defer the payment time of any liability, the debtor is to be advised in writing: (i) … (ii) … (iii) that the decision to defer the payment time is to specifically alleviate the difficulties caused by particular circumstances that were beyond control and is not a permanent deferment. …" 30 When Chapter 9 was republished, the words in bold type were omitted from the above clauses. Why the applicant submits that the Commissioner's decision is bad in law 31 The applicant submits that there are three principal reasons why the Commissioner's decision is bad in law: (a) the Commissioner has erred in the way he has fettered the decision-maker's wide discretion conferred by s 255-10 of Schedule 1 of the TAA; (b) the decision-maker has taken into account, and given great weight to, an irrelevant factor in making his decision; and (c) the decision-maker has failed to take into account a range of relevant and weighty circumstances in making his decision. 32 Furthermore, the applicant contends that once these errors of law are corrected, what is revealed is a set of relevant circumstances that compel a reasonable decision-maker to one conclusion only – that the date for the applicant's tax-related liability to become due and payable should be extended to when the controversy over controlling interest superannuation arrangements is resolved. Presumably, that will be when the Full Court hands down its decision on the appeal from Merkel J, subject to any application for special leave to appeal to the High Court. An impermissible fetter on a statutory discretion 33 Section 255-10 of Schedule 1 to the TAA confers a wide discretion on the Commissioner, "having regard to the circumstances of your particular case", to defer the time at which a tax-related liability would otherwise be due and payable. 34 The Commissioner is entitled to adopt a policy to provide guidance as to the exercise of the discretion, provided the policy is consistent with the statute by which the discretion is conferred. Thus if the statute gives a discretion in general terms, the discretion cannot be truncated or confined by an inflexible policy that it shall only be exercised in a limited range of circumstances. A general policy as to how a discretion will "normally" be exercised does not infringe these principles, so long as the applicant is able to put forward reasons why the policy should be changed, or should not be applied in the circumstances of the particular case. See Re Drake v Minister for Immigration & Ethnic Affairs (No 2) (1979) 2 ALD 634 at 640-641; Chumbairux v Minister for Immigration & Ethnic Affairs (1986) 74 ALR 480 at 492-493. 35 The policy which was in force until July 2001, if taken at face value, was not consistent with these principles as it provided that the Commissioner would only defer the time for payment if a particular set of circumstances involving blameless and temporary financial difficulty were established. 36 The applicant contends that the so-called change in policy adopted by the Commissioner in July of 2001 is illusory, and that all the fetters upon the decision-maker that were present in the original policy are embodied in the policy as republished in July 2001. The applicant submits that "the Commissioner has changed some introductory words in the policy in 9.4.1" but clauses 9.3.3, 9.4.4, 9.4.6 and 9.5.1 remain. The applicant contends that their effect is to preserve the limitations on the exercise of the discretion which were contained in the former policy. In the applicant's submission, the Receivables Policy as republished does not allow the decision-maker the flexibility to deal with the application which Mr Bonnell had made on the applicant's behalf on its merits, as the application was not based upon the particular set of circumstances involving blameless and temporary financial difficulty which was the only basis on which the policy allowed for deferment to be granted. 37 The applicant's contentions in this regard should be rejected for two reasons. First, when regard is had to the context, it is clear that there has been a change in the promulgated policy. Deferment will not "normally" be granted unless the set of circumstances which previously provided the "only" basis for deferment are established, but without prejudice to the exercise of the Commissioner's discretion in relation to any particular case. 38 It may be that clauses 9.3.3, 9.4.2, 9.4.6 and 9.5.1 do not reflect, or fully or sufficiently reflect the changes made to clause 9.4.1, but as a matter of construction of the policy, those clauses, which are subsidiary in character, should be limited in their operation to cases where the ground on which extension is sought is the normal ground. They should not be construed so as to override and to set at nought the changes made to clause 9.4.1, which is the general statement of the policy, which changes were made for the evident purpose of removing the impermissible restrictions contained in the former policy. 39 Secondly, and perhaps more importantly, the decision-maker did not regard himself as being confined in determining the application for deferment in the manner suggested by the applicant's submissions. The report attached to the Statement of Reasons provided by the Commissioner pursuant to s 13 of the ADJR Act ("the s 13 statement") makes it clear that the decision-maker: - was aware of the change in the policy, and regarded the change as significant; - was of the view that clause 9.4.1 allowed the decision-maker to have regard to the circumstances of the particular case, hence he proposed to have regard to all the matters put forward in support of the applications; - proposed to have regard to the wider circumstances (ie wider than those specified in the old policy) specified in clause 70 of Mr Bonnell's letter of 21 June 2001, as the new policy allowed those circumstances to be considered; and - considered each of the factors which the applicants put forward in support of the deferment application. 40 It is evident on the face of the report that the decision-maker regarded himself as the repository of a general discretion, and not one which was confined in the manner for which the applicant contends. 41 This ground on which review is sought therefore fails. Taking into account an irrelevant consideration 42 In an office minute of 6 February 2001 which was prepared in relation to the original deferment application, the decision-maker stated: "[s 255-10] …is there to alleviate the impost of the GIC on taxpayers where payment cannot be made by the due date, due to circumstances beyond the taxpayer's control and payment in full can be made at the deferred date." 43 That statement was made in the context of the policy as it stood before its reformulation in July 2001, and may have paid insufficient regard to the fact that the power of remittal of the GIC stems from s 8AAG of the TAA, and not from s 255-10. Section 255-10 is a power to defer the due date for payment of a tax-related liability. If that power is exercised, then by force of the ITAA, GIC becomes payable on and from the extended date (as opposed to the date originally fixed) in the event that payment is not timeously made. 44 A factor which the decision-maker took into account in refusing the application for deferral was that a consequence of the deferral of the due date for payment of the tax liability would be that no GIC would be payable in relation to the period of the deferral, even if the Commissioner was ultimately successful in establishing that the contributions in question were not deductible. The applicant submits that in taking this matter into account, the decision-maker exercised his power for the improper purpose of imposing the GIC, and/or that his decision not to grant a deferment was influenced by a legally irrelevant consideration. 45 In par 16 of the letter dated 23 April 2001 from AGS to Mr Bonnell it was stated: "One matter in this regard that my client may need to consider is the policy of the relevant Acts in relation to recovery of tax. I would be grateful if you could address such matters. One particular issue concerns s 204(3). Please explain why your clients should not have to pay the general interest charge on tax not paid by the date it was due and payable." 46 Mr Bonnell responded to that enquiry in par 55 of his letter of 21 June 2001. Paragraphs 55, 56 and 57 of that letter are as follows: "55 In paragraph 16 you refer to the 'policy of the relevant Acts in relation to recovery of tax'. You make specific reference to section 204(3) of the 1936 Act. Although you do not expressly mention the decision, I assume you intended to rely upon Harts Fidelity Pty Ltd v Chapman 99 ATC 4797, at page 4809, paragraph 42, a decision of Kiefel J, in this respect. 56 That decision was given per in curiam and without her Honour having the benefit of being taken to decisions such as Ahern v DFC of T (1983) 50 ALR 177, at 190-191 per Sheppard J; ARM Constructions Pty Ltd v FC of T (1986) 10 FCR 197; and Nestle Australia Limited v FC of T (1987) 16 FCR 167 at 178, and 183 per Wilcox J. 57 Those authorities establish, contrary to the decision of Kiefel J, that the existence of an objection or appeal having obvious merits, an imminent hearing date and the Commissioner not revealing his basis of assessment until late in the day are matters that the Commissioner is obliged as a matter of law to have regard to notwithstanding what you refer to as the 'policy of the relevant Acts' and what her Honour described as 'the statutory purposes and powers'." 47 In the report attached to the s 13 statement, the decision-maker indicated that par 55 was of some importance. He said (at 433): "The issue raised is in my opinion an important one. I note that Mr Bonnell did not offer any submission in relation to the important consideration about why the applicant should not be subject to general interest charge on tax not paid by the date it was due and payable. The absence of any explanation is an important consideration in my decision." 48 The decision-maker returned to this matter later in his report (434) when he said: "One critical effect of granting a deferral would be that the GIC would not be payable, even if the Commissioner were to be successful. Consider two possibilities. First, if the Commissioner were to be unsuccessful in the Court then the assessment would be set aside and automatically as a matter of law no GIC would be payable; ie if the taxpayer wins there is no GIC. Second, if the Commissioner were ultimately to be successful there would be two possibilities. The first would be that GIC would ordinarily be payable. The second would be that, if a deferral were granted, no GIC would be payable. The critical question is – why should the applicant, unlike every other taxpayer, have a GIC-free period for a tax liability which is ultimately up-held by the Courts? I note that Mr Bonnell failed to address this question even though asked to do so (see paragraph 55 of his letter). Merely asserting that the applicant has merits in his dispute over the assessment, and even that his position is the better view, does not go far enough. This is an important basis for my decision." 49 The exercise of the s 255-10 power does not simply fix the date on and after which recovery proceedings may be instituted by the Commissioner. The exercise of the power also fixes the date from which GIC will run (subject to any remittal under s 8AAG). Section 255-10 is found in Part 4.15 of the TAA, the object of which is to ensure that unpaid amounts of tax-related liabilities are collected or recovered in a timely manner. Imposition of a GIC if tax is not paid by the date fixed is conducive to the attainment of that object. 50 In determining whether to exercise the s 255-10 power the Commissioner is required to consider the circumstances of the taxpayer's particular case. One of those circumstances is that unless the s 255-10 power is exercised, GIC would be payable, in this case, from 14 February 2001, unless the applicant is ultimately successful in setting aside the Notice of Assessment. The scope and purpose of the s 255-10 power is such that the Commissioner is entitled to consider, and where appropriate, to balance, the factors which favour the exercise of the power as well as the factors which do not. 51 If the s 255-10 power were exercised in the manner requested by the applicant, the result would be that the applicant would have a period of deferral in which the GIC would not be payable even though it may ultimately appear that the Commissioner correctly disallowed the deduction claimed for the contributions to the superannuation scheme, and that the tax-related liability established by the Notice of Assessment was correct. 52 There is nothing in the TAA or the ITAA which indicates or requires that the Commissioner should be indifferent to, or should leave out of account, the impact which a deferral of the due date for payment of a tax-related liability would have upon the date from which GIC might become payable. Relief from the GIC is so integrally involved in deferring the date that a tax-related liability is due and payable that the GIC effect of a decision under s 255-10 is one of the factors which the Commissioner was entitled to take into account. The weight to be given to that factor was a matter for the decision-maker: Minister for Aboriginal Affairs v Peko-Wallsend Ltd (1985-1986) 162 CLR 24 at 41. 53 Accordingly, this ground on which review is sought fails. Failure to take into account relevant circumstances 54 The applicant contends that the decision-maker "did not properly take into account and/or weigh" a number of factors which would have compelled him to a decision that the applicant's tax-related liability should not become due and payable until the controlling interest superannuation controversy was resolved. 55 The factors upon which the applicant relies are: (a) the applicant clearly disputed his tax liability, even though a notice of objection against the assessment had not been lodged at the time of the deferment application; (b) the Commissioner was unsure as to the liability to tax of those involved in controlling interest superannuation arrangements. The Commissioner contributed to the proliferation of such arrangements by his actions in issuing many rulings, opinions and advices; (c) the change in approach outlined by the media statement of 19 May 1999 was not accompanied by any definitive statement of where the liability to tax should be borne. Rather, the media release asserted that taxpayers could be exposed to "multiple taxing points". The applicant asserted that the Commissioner "has not committed himself to the basis for the liability which he asserts": Ahern v Deputy Federal Commissioner of Taxation (1983) 50 ALR 177 at 190 per Sheppard J; (d) it would be an unfair burden that taxpayers involved in controlling superannuation arrangements should be potentially exposed, irrespective of their financial circumstances, to double recovery actions in circumstances where the Commissioner has conceded that only one assessment can stand as correct; and (e) while the Commissioner may create alternative tax-related liabilities by issuing alternative assessments, those tax-related liabilities should not become due and payable unless and until there is certainty as to which one, if any, is correct. 56 The ground of failure to take into account a relevant consideration in the making of an administrative decision can only be made out if a decision-maker fails to take into account a consideration which he is bound to take into account in making that decision: Peko-Wallsend (supra) at 39. What factors a decision-maker is bound to consider in making the decision is determined by construction of the statute conferring the discretion. If those factors are not expressly stated, they must be determined by implication from the subject matter, scope and purpose of the statute. When a statute confers a discretion which in its terms is unconfined, the factors that may be taken into account in the exercise of the discretion are similarly unconfined, except insofar as there may be found in the subject matter, scope and purpose of the statute some implied limitation on the factors to which the decision-maker may legitimately have regard: Peko-Wallsend (supra) at 40. Where the ground of review is that a relevant consideration has not been taken into account, and the discretion is unconfined by the terms of the statute, the Court will not find that the decision-maker is bound to take a particular matter into account unless an implication to that effect is to be found in the subject matter, scope and purpose of the statute: Peko-Wallsend (supra) at 40. 57 Where, as here, a discretion is conferred in very general terms, it is generally a matter for the decision-maker to decide what is relevant and what is not. It is largely for the decision-maker, in the light of the matters placed before him, to determine which matters he regards as relevant and the comparative importance to be accorded to matters which he so regards: Sean Investments Pty Ltd v MacKellar (1981) 38 ALR 363 at 375. As long as the decision-maker considers those things that the legislation requires to be taken into account and ignores any prohibited consideration, the grounds of failing to take into account a relevant consideration, or taking into account an irrelevant consideration, will not be available. Nor are those grounds available where the essence of the complaint is that the decision-maker paid either too little or too much attention to a relevant factor: Aronson & Dyer Judicial Review of Administrative Action 2nd Ed. 2000 at 225. 58 In Harts Fidelity Pty Ltd v Deputy Commissioner of Taxation (1999) 42 ATR 438 at 450, Kiefel J said of the predecessor provision of s 255-10, namely s 206 of the ITAA: "The ITAA 1936 does not specify the matters which are to be taken into account in exercising the discretion given by section 206, to extend the due date for payment. …" Her Honour proceeded at 451 to hold, applying Peko-Wallsend, that the existence of an arguable case on the appeals and the lack of risk to the revenue which were advanced as matters which the officer failed to take into account were not matters required to be considered by the legislation. 59 In Ahern v Deputy Commissioner of Taxation (1983) 50 ALR 177 at 191 Sheppard J, whilst recognising that the matter was not without difficulty, thought that the better view was that in considering the exercise of the discretion conferred by s 206 of the ITAA, the decision-maker was obliged, as a matter of law, to take into account in reaching his decision the fact that the tax-related liability was disputed. In the later case of Thurecht v Deputy Federal Commissioner of Taxation (1984) 84 ATC 4,480 Sheppard J held that in deciding whether to grant an extension of time under s 206 of the ITAA, the Commissioner is not obliged to take into account the mere fact that the applicant had objected to the assessment. In Barina Corporation Ltd v Deputy Commissioner of Taxation (1985) 6 FCR 368 at 382 Wilcox J held that in determining an application under s 206 of the ITAA, the Commissioner is not bound to address himself to the prospects of the taxpayer's ultimate success. 60 In ARM Constructions Pty Ltd v Commissioner of Taxation (1986) 10 FCR 197, Burchett J, after referring to Ahern, Thurecht and Barina held that in the light of the purpose which the discretion under s 206 serves, a claim by a taxpayer who genuinely disputes the imposition of the tax that payment on the due date would wholly or partly abolish his business, is a claim which the Commissioner is bound to consider. In Nestle Australia Ltd v Commissioner of Taxation (1987) 16 FCR 167 at 178 Wilcox J held that in considering an application under s 206 "it is always a relevant matter that the liability for tax is disputed" and the cumulative effect of financial hardship and the existence of a genuine dispute may be such as to warrant an extension of time. 61 The factors on which the applicant relies in the present case are relevant considerations, in the sense that if the decision-maker chose to have regard to them it could not be said that his decision was based upon considerations which were extraneous to the power. But, with respect to those who have taken a different view, I agree with Kiefel J in Harts Fidelity (supra) that the factors in question are not "relevant considerations" in the Peko-Wallsend sense of matters which the decision-maker was bound to take into account. To borrow the language of Allsop J in Paul v Minister for Immigration & Multicultural Affairs (2001) 64 ALD 289 at 312 they are not considerations "made compulsorily relevant" by the Act, although the decision-maker may regard such matters as part of the relevant circumstances of the case. 62 If a consideration is relevant in a Peko-Wallsend sense, a decision-maker does not take it into account if he dismisses the consideration as irrelevant. It was, I think, in that sense that Wilcox J said in Nestle Australia (supra) at 184: "To take a matter into account means to evaluate it and to give it due weight, having regard to all other relevant factors. A matter is not taken into account by being noticed and erroneously discarded as irrelevant." In Deloitte Touche Tohmatsu v Australian Securities Commission (1996) 136 ALR 453 at 468, Lindgren J, under the heading "What it means to 'take into account' a relevant consideration", said that the issue is whether the decision-maker "really", "genuinely", "properly" and "effectively" took into account the consideration in question, but recognising that the weight to be given to the consideration, either in an absolute or relative sense, is a matter for the decision-maker. In NIB Health Funds Ltd v Private Health Insurance Administration Council [2002] FCA 40, Allsop J recognised at [155] that a particular matter may be identifiable as having been touched upon by a decision-maker, but that does not necessarily mean that it has been taken into account in the sense referred to in the authorities. 63 If, on the other hand, a consideration is not relevant in a Peko-Wallsend sense, but is not a matter which the decision-maker is precluded from taking into account, then whether the consideration should be regarded as relevant at all, and if so, the weight to be given to it in an absolute or relative sense, are matters for the decision-maker. 64 In the present case, the decision-maker accepted that: - a dispute as to whether the tax-related liability was properly imposed is a relevant matter to be taken into account in determining the application to defer time for payment; - previous expressions of opinion by the ATO do establish that there are merits in the applicant's disputing the assessment; and - both sides' positions have merit. The ATO view is that its view is the better view, but he did not rest his decision on that view. 65 The decision-maker did not accept that: - the Commissioner had not committed himself to the basis for the liability which he now asserts. It was "tolerably clear" that the position set out in the Commissioner's media release governed the assessment; or - the Commissioner was unsure as to the liability to tax of those involved in controlling interest superannuation arrangements. The decision-maker stated that the Commissioner has personally considered the effectiveness of such schemes and issued the media release which expressed a firm view that the schemes had failed, and that since then the ATO has consistently applied that position. 66 The applicant's letter of 21 June 2001 did not address the issue of alternative assessments to the applicant, nor did the report attached to the s 13 statement address that issue. In fact, alternative assessments have not issued with respect to the superannuation contributions made on behalf of the applicant. 67 Thus, whether or not he was bound to do so, the decision-maker took into account the factors which the applicant contends that the decision-maker was required to take into account, except the issue of alternative assessments, which were not relevant to the applicant's situation. 68 It is clear from what the decision-maker does say about the relative merits of the opposing view, and about the shift in the ATO's position, on the efficacy of the arrangements in question from a taxation point of view, that he did take into account that there was uncertainty as to the underlying taxation liability, but he saw other factors as being more persuasive, with the result that the application was refused. Those factors were that the applicant: - had not shown cause why he should have a GIC-free period for a tax liability in the event that the liability was ultimately upheld by the Courts; and - had provided insufficient information as to his financial position and his ability to meet his tax liabilities. 69 The decision-maker was entitled to regard those factors as being preponderant if that was his view, and no reviewable error has been shown in his refusal of the application. 70 The application for review should be dismissed with costs. I certify that the preceding seventy (70) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Hely. Associate: Dated: 3 July 2002 Counsel for the Applicant: Dr M Robertson Solicitor for the Applicant: David Bonnell & Associates Counsel for the Respondent: Mr G Johnson Solicitor for the Respondent: Australian Government Solicitor Date of Hearing: 18 July 2002 Date of Judgment: 3 July 2002