FEDERAL COURT OF AUSTRALIA Transtar Linehaul Pty Limited v Deputy Commissioner of Taxation [2011] FCA 856 Citation: Transtar Linehaul Pty Limited v Deputy Commissioner of Taxation [2011] FCA 856 Parties: TRANSTAR LINEHAUL PTY LIMITED v DEPUTY COMMISSIONER OF TAXATION File number: NSD 997 of 2011 Judge: ROBERTSON J Date of judgment: 5 August 2011 Catchwords: TAXATION – PAYG liability – estimate – whether estimate revoked by operation of statute – whether proceedings related to recovery of unpaid amount of estimate –whether affidavit verified facts sufficient to prove underlying liability never existed – whether wages paid to employees - whether amount withheld from those wages ADMINISTRATIVE LAW – garnishee notices – whether procedural fairness required prior opportunity to be heard – whether issue of notices improper exercise of the power ADMINISTRATIVE LAW – Commissioner's refusal to extend time for a statutory declaration to be given to him – whether refusal an improper exercise of the power Legislation: Acts Interpretation Act 1901 (Cth) Administrative Decisions (Judicial Review) Act 1977 (Cth) Federal Court of Australia Act 1976 (Cth) Income Tax Assessment Act 1936 (Cth) Income Tax Assessment Act 1997 (Cth) Insolvency (Tax Priorities) Legislation Amendment Act 1993 (Cth) Judiciary Act 1903 (Cth) Taxation Administration Act 1953 (Cth) Tax Laws Amendment (Transfer of Provisions) Act 2010 (Cth) Cases cited: Beecham Group Ltd v Bristol Laboratories Pty Ltd (1968) 118 CLR 618 considered Cassaniti v Federal Commissioner of Taxation (2010) 186 FCR 480 considered Commissioner of State Revenue (Vict.) v Royal Insurance Australia Ltd (1994) 182 CLR 51 cited Commissioner of Taxation v Sargon (1985) 75 FLR 394 followed Commonwealth of Australia v SCI Operations Pty Limited (1998) 192 CLR 285 cited Comptroller-General of Customs v Kawasaki Motors Pty Limited (No 2) (1991) 32 FCR 243 cited Elsinora Global Ltd v Commissioner of Taxation (2006) 155 FCR 413 cited General Electronics International Pty Ltd v Deputy Commissioner of Taxation (1996) 96 ATC 5036 considered Heath v Deputy Federal Commissioner of Taxation (1995) 95 ATC 4430 considered IBM Australia Ltd v National Distribution Services Pty Ltd (1991) 22 NSWLR 466 distinguished Minister for Immigration and Multicultural Affairs v Yusuf (2001) 206 CLR 323 considered Price v Elder (2000) 97 FCR 218 applied Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 cited Saitta Pty Ltd v Commissioner of Taxation (2002) 125 FCR 388 cited Travelex Ltd v Federal Commissioner of Taxation (2010) 241 CLR 510 considered Uratoriu v Commissioner of Taxation (2008) 106 ALD 513 cited Victorian WorkCover Authority v Esso Australia Ltd (2001) 207 CLR 520 cited Workers' Compensation Board of Queensland v Technical Products Pty Limited (1988) 165 CLR 642 cited Date of hearing: 11 and 15 July 2011 Date of last submissions: 21 July 2011 Place: Sydney Division: GENERAL DIVISION Category: Catchwords Number of paragraphs: 148 Counsel for the Applicant: Mr CW Robinson Solicitor for the Applicant: Menassa Barbouttis Counsel for the Respondent: Mr MA Wigney SC Solicitor for the Respondent: Australian Government Solicitor IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION NSD 997 of 2011 BETWEEN: TRANSTAR LINEHAUL PTY LIMITED Applicant AND: DEPUTY COMMISSIONER OF TAXATION Respondent JUDGE: ROBERTSON J DATE OF ORDER: 5 AUGUST 2011 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. The application be dismissed with costs, including reserved costs. 2. Order 15 made on 24 June 2011, that the operation be suspended of each of the notices issued by the respondent under s 260-5 and listed in appendix 1 to those orders, be set aside. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION NSD 997 of 2011 BETWEEN: TRANSTAR LINEHAUL PTY LIMITED Applicant AND: DEPUTY COMMISSIONER OF TAXATION Respondent JUDGE: ROBERTSON J DATE: 5 AUGUST 2011 PLACE: SYDNEY REASONS FOR JUDGMENT Introduction 1 The issues in this case centre upon an estimate of PAYG liability under s 268-10 of Schedule 1 to the Taxation Administration Act 1953 (Cth) ("the Schedule"), a notice of estimate dated 17 May 2011 issued under s 268-15 of the Schedule and notices ("garnishee notices") given under s 260-5 of the Schedule to certain third parties who owed or may later owe money to the applicant Transtar Linehaul Pty Limited ("Transtar Linehaul"). 2 By an amended application dated 6 July 2011 Transtar Linehaul invokes the jurisdiction of the Court under s 39B of the Judiciary Act 1903 (Cth) ("Judiciary Act") and under the Administrative Decisions (Judicial Review) Act 1977 (Cth) ("AD(JR) Act"). 3 On 23 June 2011 I extended, and on 24 June 2011 varied, the interlocutory relief granted ex parte by the duty judge on 22 June 2011 and set the matter down for final hearing on 11 July 2011. 4 Transtar Linehaul seeks relief in relation to the garnishee notices under s 260-5 of the Schedule and in relation to the estimate under s 268-10 of the Schedule. It also seeks relief in respect of the refusal of the Commissioner to allow a longer period for the giving of a statutory declaration under item 1 of s 268-40(1) of the Schedule. 5 Schedule 1 to the AD(JR) Act sets out classes of decisions that are not decisions to which that Act applies. Paragraph (gaa) of that Schedule specifies: decisions of the Commissioner of Taxation under Subdivision 268-B or section 268-35 in Schedule 1 to the Taxation Administration Act 1953; Note: Subdivision 268-B and section 268-35 empower the Commissioner to make, reduce and revoke estimates of certain liabilities. 6 Sections 268-10 and 268-15, under which the contested estimate and notice of estimate of PAYG liability were given, are found in Subdivision 268-B. That is why s 39B of the Judiciary Act is invoked in respect of them. No such exclusion from the AD(JR) Act is made in respect of the garnishee notices given under s 260-5. The relevant legislation 7 Division 12 of the Schedule sets out payments from which amounts must be withheld: the heading to Part 2-5 is "Pay as you go (PAYG) withholding". 8 By s 12-35 of the Schedule: An entity must withhold an amount from salary, wages, commission, bonuses or allowances it pays to an individual as an employee (whether of that or another entity). 9 By s 16-70(1) of the Schedule: An entity that withholds an amount under Division 12 must pay the amount to the Commissioner in accordance with this subdivision [16-B]. 10 By s 268-10 of the Schedule, the Commissioner may make an estimate. The section is in the following terms: Estimate (1) The Commissioner may estimate the unpaid and overdue amount of a liability (the underlying liability) of yours under section 16-70. Note: Section 16-70 requires you to pay to the Commissioner amounts you have withheld under the Pay as you go withholding rules. Amount of estimate (2) The amount of the estimate must be what the Commissioner thinks is reasonable. (3) In making the estimate, the Commissioner may have regard to anything he or she thinks relevant. Example: The Commissioner may have regard to information about amounts you withheld under the Pay as you go rules before the period in relation to which the underlying liability arose. Only one estimate for each liability (4) While the estimate is in force, the Commissioner cannot make another estimate relating to the underlying liability. (5) For the purposes of subsection (4), the estimate is in force if: (a) the Commissioner has given you notice of the estimate; and (b) the estimate has not been revoked; and (c) your liability to pay the estimate has not been discharged. 11 By s 268-15 of the Schedule, the Commissioner must give written notice of the estimate and the notice must: (a) identify the underlying liability; and (b) specify the date of the estimate; and (c) set out the amount of the estimate; and (d) state that the amount of the estimate is due and payable; and (e) explain how you may have the amount of the estimate reduced or the estimate revoked. 12 By s 268-15(4), despite s 29 of the Acts Interpretation Act 1901 (Cth), a notice under s 268-15(1) is taken to be given at the time the Commissioner leaves or posts it. 13 By s 268-20(1): You must pay to the Commissioner the amount of the estimate if the Commissioner gives you notice of the estimate in accordance with section 268-15. The amount is due and payable when the Commissioner gives you the notice. 14 Section 268-20(2) provides as follows: Your liability to pay the amount of the estimate is separate and distinct from the underlying liability. It is separate and distinct for all purposes. Example: The Commissioner may take: (a) proceedings to recover the unpaid amount of the estimate; or (b) proceedings to recover the unpaid amount of the underlying liability; or (c) proceedings of both kinds. 15 By s 268-25: You are liable to pay the unpaid amount of the estimate even if: (a) the underlying liability never existed or has been discharged in full; or (b) the unpaid amount of the underlying liability is less than the unpaid amount of the estimate. Note 1: Section 268-40 revokes the estimate if you give the Commissioner a statutory declaration, or file an affidavit, to the effect that the underlying liability never existed. Note 2: Subdivision 268-D provides ways in which you can challenge the estimate or its amount. 16 Subdivision 268-D deals with reducing and revoking estimates. 17 Section 268-40, which is one of the provisions in subdivision 268-D and is central to the present litigation, provides as follows: Scope (1) This section applies as set out in the following table: Statutory declaration or affidavit Item This section applies if ... and ... within ... 1 the Commissioner gives you notice of the estimate you give the Commissioner a statutory declaration for the purposes of this section (a) 7 days after the Commissioner gives you the notice; or (b) a longer period allowed by the Commissioner. 2 you are a party to proceedings before a court that relate to the recovery of the unpaid amount of the estimate you: (a) 14 days after you first take a procedural step as a party to the proceedings; or (a) file an affidavit for the purposes of this section; and (b) a longer period allowed by the court. (b) serve a copy on the Commissioner 3 (a) the estimate is of the unpaid amount of a liability of a company; and the company: (a) 14 days after notice of the application was served on the company; or (b) the Commissioner serves on the company a *statutory demand relating to the company's liability to pay the unpaid amount of the estimate; and (a) files an affidavit for the purposes of this section; and (b) a longer period allowed by the court. (c) an application is made to a court under section 234, 459P, 462 or 464 of the Corporations Act 2001 for the company to be wound up (b) serves a copy on the applicant Example: For the purposes of item 2 of the table, taking a procedural step as a party to proceedings includes entering an appearance, filing a notice of intention to defend, or applying to set aside judgment entered in default of appearance. Note 1: Section 459C of the Corporations Act 2001 creates a presumption that a company is insolvent, and may be wound up, if the company fails to comply with a statutory demand. Note 2: See section 268-90 for what the statutory declaration or affidavit must contain and who must make, swear or affirm it. Reduction (2) The amount of the estimate is reduced if the statutory declaration is to the effect, or the affidavit verifies facts sufficient to prove, that a specified lesser amount is the unpaid amount of the underlying liability. Example: Subsection (2) will apply if the statutory declaration etc. is to the effect that the underlying liability has been discharged in full (and therefore the unpaid amount of the liability is nil). (3) The amount of the reduction is the amount by which the unpaid amount of the estimate (just before the reduction) exceeds the amount specified. Note: The effect of subsection (3) is to reduce the unpaid amount of the estimate to the amount specified. Revocation (4) The estimate is revoked if the statutory declaration is to the effect, or the affidavit verifies facts sufficient to prove, that the underlying liability never existed. 18 Thus, under item 1, where the Commissioner gives you notice of the estimate and you give the Commissioner a statutory declaration for the purposes of s 268-40 within 7 days after the Commissioner gives you the notice, or a longer period allowed by the Commissioner, then by s 268-40(4), the estimate is revoked if the statutory declaration is to the effect that the underlying liability never existed. 19 Under item 2, if you are a party to proceedings before a court that relate to the recovery of the unpaid amount of the estimate and you file an affidavit for the purposes of s 268-40 and serve a copy on the Commissioner within 14 days after you first take a procedural step as a party to the proceedings, or a longer period allowed by the court, then by s 268-40(4), the estimate is revoked if the affidavit verifies facts sufficient to prove that the underlying liability never existed. 20 For the purposes of Subdivision 268-C, amongst other provisions, by s 268-55(3), if the estimate is revoked, the estimate is taken never to have been made. 21 By s 268-70, revocation of the estimate does not affect the Commissioner's rights or remedies in relation to the underlying liability, except to the extent that Division 268 expressly provides otherwise. 22 Under s 268-90(2), so far as presently relevant, the statutory declaration or affidavit for the purposes of s 268-40 must verify the following facts: (a) whichever of the following are applicable: (i) the sum of all amounts you withheld under Division 12 during the relevant period, or the fact that you did not withhold any such amounts during the period; … (b) what has been done to comply with Division 16 (Payer's obligations and rights) in relation to the amounts referred to in paragraph (a). 23 By s 268-90(3), the statutory declaration or affidavit must be made, sworn or affirmed by an individual specified in the table which, in the case of a body corporate, is a director of the company or the company's secretary. 24 The relevant provisions of the Schedule reflect provisions introduced by the Insolvency (Tax Priorities) Legislation Amendment Act 1993 (Cth). 25 The Explanatory Memorandum stated: Division 8 - Prompt recovery through estimates and payment agreements, of amounts not remitted under Divisions 2, 3A, 3B and 4. Subdivision A – Object and Interpretation Section 222AFA: explains the purpose of new Division 8 as enabling the Commissioner to take prompt and effective action to recover unremitted amounts. The action will be facilitated through the making of an estimate of the amounts deducted and commencing recovery proceedings based on the estimate. Section 222AFB: introduces new terminology for the proposed arrangements whereby the Commissioner will be able to commence recovery proceedings based on an estimate. Section 222AFC: explains the concepts of unpaid amount of a liability and unpaid amount of an estimate. . . . Subdivision C – Recovering unpaid amount of estimate … Section 222AHC: details the available defences in recovery proceedings. The section entitles the person liable (or trustee if appropriate) to file an affidavit to verify facts sufficient to prove the actual amount of underlying liability. Section 222AHD: states the effect of an affidavit on an estimate when there are sufficient facts to prove that the underlying liability never existed or has been discharged in full. Section 222AHE: specifies the requirements for an affidavit under section 222AHC to be used as a defence in recovery proceedings. . . . Background to the legislation The Commissioner is currently required to establish the precise amount of the unremitted amount before he can take any legal action to recover the amount. This often frustrates the efficient and timely recovery of the unremitted deductions because of the necessary delay between non-remittance and ascertainment of the unpaid amount. . . . What happens if the estimate is too low or too high? In practice it will be most unusual for the Commissioner to estimate precisely the actual unremitted amounts. Of course the estimate could be reduced to the actual unremitted amount when the person liable, upon being notified of the estimate by the Commissioner, declares what the actual unremitted amount was. . . . The prime objective of the amendments involving the estimation of unremitted amounts is to enable the Commissioner to recover the actual amount which was deducted and not remitted. Accordingly, the proposed amendments contain provisions which will allow for adjustments to be made to the estimate which will facilitate collection of the actual amount. . . . Will a person have the right to defend proceedings brought by the Commissioner to recover an estimate on the basis that the Commissioner's estimate is higher than the actual liability? Yes, new section 222AHC provides that the Commissioner is not entitled to recover if the defendant proves by affidavit that: a) the underlying liability never existed; or b) the underlying liability has been discharged; or c) the underlying liability is less than the estimate. In the case of (c), the Commissioner will be entitled to judgment only for the unpaid amount of the underlying liability. New section 222AHE stipulates that the affidavit must be filed with the court by the person liable. A copy must also be served on the Commissioner within 14 days of the person taking a procedural step, for example, entering an appearance, as a party to the proceedings (if the Court does not extend this time). The section also sets out what facts the affidavit must verify and who can swear the affidavit (the same persons who can make a statutory declaration). 26 The Tax Laws Amendment (Transfer of Provisions) Act 2010 (Cth), which moved the relevant sections into the Schedule, was intended to reproduce the effect of the provisions inserted in Division 8 of Part VI of the Income Tax Assessment Act 1936 (Cth) ("ITAA 1936") by the Insolvency (Tax Priorities) Legislation Amendment Act 1993 (Cth). The facts on the applicant's statutory revocation case 27 The notice under s 268-15 of the Schedule was dated 17 May 2011 and was sent to the registered office of Transtar Linehaul on 17 May 2011. 28 It stated that you have become liable under subsection 16-70(1) in Schedule 1 to the TAA 1953 to pay to the Commissioner amounts withheld under Division 12 in Schedule 1 to the TAA 1953 from payments made during each period specified in the Table below. The total of the estimate was $493,219.95 for the monthly withholding periods 1 January 2010 to and including 31 March 2011. 29 In terms of s 268-40(1), a statutory declaration of Ronald Wesley Searle was made and sent to the Commissioner on 10 June 2011. 30 This was some 16 days outside the seven days specified in item 1 of s 268-40(1). 31 At paragraph 11 of his statutory declaration Mr Searle stated: 11. I say that Transtar Linehaul Pty Limited does not have any liability for PAYG Withholding and disputes that it owes any monies in this regard, particularly the amounts estimated in the Notice of 17 May 2011. 32 By letter dated 16 June 2011 from Transtar Linehaul to the Commissioner the following was said: We believe we have provided a reasonable excuse as to why the writer had not provided a Statutory Declaration within seven (7) days of the date of the notice of estimate. In the circumstances we believe that the Commissioner should allow an extension of time to provide the said Statutory Declaration. Quite simply, Transtar Linehaul Pty Limited does not have employees and does not pay wages. We require the Commissioner to extend the time for submission of the said Statutory Declaration, cease garnishing the accounts of Transtar Linehaul Pty Limited and reverse the action taken in levying the PAYG Withholding debt. 33 This was in response to a letter dated 14 June 2011 from the respondent to the effect that, despite repeated requests, substantiating evidence had not been provided. 34 There was a reply to the 16 June 2011 correspondence from Transtar Linehaul by letter dated 21 June 2011 from the Deputy Commissioner to Transtar Linehaul. The relevant parts of the letter were as follows: 4. You have also asserted that "a reasonable excuse as to why the writer had not provided a Statutory Declaration within 7 days" has been provided to the Commissioner. In this regard we presume that you are referring to comments made by Mr Lahood to Ms Gray of this office on 8 June 2011 to the effect that counsel advice had been received to not submit a statutory declaration until a suitable response to questions raised in your correspondence had been provided. Please advise if this is not the reasonable excuse you are referring to. 5. A Notice of Estimate of Liability Payable ("Estimate Notice") issued to Transtar Linehaul on 17 May 2011 pursuant to s.268-15 of Schedule 1 to the Taxation Administration Act 1953 ("TAA53"). On 25 May 2011, correspondence was received requesting details on the parts of the Division in the Act relied on by the Commissioner to issue the Estimate Notice and responses were provided on 25 May 2011 and 26 May 2011. As such, the Commissioner does not consider the assertion made by Mr Lahood to be a reasonable excuse and as such will not be extending the time pursuant to s.268-40(1) of the TAA53 in which to lodge a Statutory Declaration. 6. However, as stated in our correspondence dated 17 June 2011, the Commissioner retains the discretion not to pursue amounts related to Estimate notices issued to Transtar Linehaul where it is proven to the Commissioner's satisfaction that Transtar Linehaul is not the relevant employing entity. Again, you are invited to submit any and all relevant evidence for the Commissioner's consideration. 35 There that aspect of the matter, the request and refusal of the request for a longer period under item 1 of s 268-40(1), rested. 36 As to the affidavit material sworn by Mr Searle, his affidavit dated 21 June 2011 and filed on 22 June 2011 contained the following relevant paragraph: 9. I say that TSL [Transtar Linehaul] has never paid salary or wages to any individual and has never applied for registration for PAYG withholding. The only person who could be said to be an employee is me, and TSL does not pay me a salary. … 37 In relation to the second affidavit dated 29 June 2011 and filed on 30 June 2011 the relevant paragraphs were as follows, the references to TSX being to a company called Transtar Express Pty Ltd which I describe more fully below: 19. During the period 1 January 2010 to 31 March 2011, no amounts on account of PAYG withholding were withheld from payments made to any person on behalf of TSX, or to any creditor of TSL, including to TSX by TSL. 20. During the period 1 January 2010 to 31 March 2011, TSL had no employees receiving salary or wages, and paid no amount to any person as an employee, from which it might have withheld an amount on account of PAYG. Indeed TSL during that period withheld no amount on account of a PAYG obligation of any description. … 22. As far as I am aware, during the period 1 January 2010 to 31 March 2011, TSL had no liability to withhold amounts on account of PAYG withholding obligations and the business of TSL was arranged to that end. A copy of the Business Activity Statements for the period 1 January 2010 to 30 March 2011 are exhibited hereto at RWS-2-46. The issues 38 The issues may be divided into the s 268-40(4) statutory revocation issues on the one hand and the administrative law challenges to the exercise of discretionary powers on the other. 39 Transtar Linehaul's primary case was that the estimate was or had been revoked by s 268-40(4) because item 2 of s 268-40(1) applied and an affidavit was filed and served which "verifies facts sufficient to prove" that the underlying liability never existed. It followed that the garnishee notices also ceased or had ceased to be effective. This is what I have referred to as the s 268-40(4) statutory revocation issues. I have set out above the facts which Transtar Linehaul submitted were sufficient to lead to revocation of the estimate. Transtar Linehaul submitted that any other material was irrelevant. The relief claimed in relation to the s 268-10 estimate was: 5. a declaration that the estimates are revoked under s 268-40(4); 6. a declaration that the estimates were revoked under s 268-40(4) on 10 June 2011. 40 10 June 2011 was the date the statutory declaration of Ronald Wesley Searle was made and sent to the Commissioner. That date would be relevant only if a longer period than 7 days were allowed for the giving of the statutory declaration to the Commissioner. 41 As to statutory revocation by s 268-40(4), one issue is whether the present proceedings "relate to the recovery of the unpaid amount of the estimate" within the meaning of item 2 of s 268-40(1). A second issue is whether the affidavit material relied on by Transtar Linehaul "verifies facts sufficient to prove, that the underlying liability never existed". The underlying liability is that referred to in s 268-10(1), that is the unpaid and overdue amount of a liability. 42 In terms of "14 days after you first take a procedural step as a party to the proceedings; or a longer period allowed by the court" there is no issue. The proceedings were commenced on 22 June 2011 and the last affidavits were filed on 30 June 2011. 43 Transtar Linehaul also, in the alternative, made administrative law challenges to the issue of the garnishee notices and the refusal by the Commissioner to extend time for the giving of a statutory declaration under item 1 of s 268-40(1). The s 268-40(4) statutory revocation issue 44 Transtar Linehaul submitted that the current proceedings are proceedings that relate to the recovery of the unpaid amount of the estimate; it was next said that Transtar Linehaul filed an affidavit which satisfied s 268-90(2)(a)(i) and 268-90(3) with the consequence that the estimate was revoked and deemed never to have been made. Thus it was further submitted that the garnishee notices would fall. 45 The respondent accepted only that a s 260-5 garnishee notice under the Schedule depended on, relevantly, an amount of a tax related liability, in this case the estimate. 46 For the respondent it was submitted that the proceedings referred to in item 2 must be recovery proceedings commenced by the Commissioner which these were not; therefore the filing of affidavits did not lead to revocation under s 268-40. Alternatively the bare assertions in paragraph 9 of the first affidavit and in paragraphs 19 and 20 of the second affidavit did not verify facts sufficient to prove that the underlying liability never existed or that Transtar Linehaul did not withhold amounts. Alternatively it was submitted that the Commissioner is permitted to challenge the facts asserted in the affidavit and, having regard to the evidence, the relevant assertions of Mr Searle in his affidavits should be rejected. 47 I next consider these competing submissions. It seems that there is no direct authority on the points. 48 As to item 2 of s 268-40(1), for a number of reasons I conclude that Transtar Linehaul is not a "party to proceedings before a court that relate to the recovery of the unpaid amount of the estimate" within item 2. 49 First, the statutory context suggests that recovery proceedings are those referred to in s 268-5, the object of Division 268 being to enable the Commissioner to take prompt and effective action to recover amounts not paid as required by Part 2-5 (Pay as you go (PAYG) withholding). 50 Secondly, in my view the scheme of the legislation is that the estimate is revoked in such recovery proceedings so that the court is then in a position to determine the underlying liability rather than the accuracy of the estimate. This is supported by Transtar Linehaul's contention that what the section requires for an affidavit is slight. 51 Thirdly, paying close attention to the terms of item 2, it is the proceedings which must relate to the recovery of the unpaid amount of the estimate. Here, the proceedings are for a declaration that the estimate is revoked in proceedings brought for that purpose. Transtar Linehaul's contention was that whenever proceedings are commenced for a declaration that an estimate is revoked and a formal affidavit is filed and served within 14 days of commencing the action stating that no amounts were withheld, then the estimate is revoked. I do not attribute that intention to the legislature. 52 There is in my opinion a difference in the present context between proceedings that relate to the recovery of the unpaid amount and proceedings that forestall the recovery of that amount. 53 The present proceedings are not, in my opinion, proceedings for the recovery of any money. A parallel is provided by cases concerning s 51A of the Federal Court of Australia Act 1976 (Cth): see Comptroller-General of Customs v Kawasaki Motors Pty Limited (No 2) (1991) 32 FCR 243 where at 266-267, Hill and Heerey JJ held that an application which sought, inter alia, an order under s 16(1)(d) of the AD(JR) Act directed to the Comptroller-General for the repayment of excess duty was not a proceeding "for the recovery of any money" within the terms of s 51A. See also Commonwealth of Australia v SCI Operations Pty Limited (1998) 192 CLR 285 at 327 [99] per Kirby J; and Commissioner of State Revenue (Vict.) v Royal Insurance Australia Ltd (1994) 182 CLR 51 at 92 per Brennan J, Victorian WorkCover Authority v Esso Australia Ltd (2001) 207 CLR 520 at [41] per Gleeson CJ, Gummow, Hayne and Callinan JJ and at [105] per Kirby J and Elsinora Global Ltd v Commissioner of Taxation (2006) 155 FCR 413 ("Elsinora"). 54 Elsinora concerned notices under s 255 of the ITAA 1936. It was held that s 51A had no application in the circumstances of the case: see per Young J at [37]-[38], Gyles and Stone JJ concurring. 55 Here of course the legislation proceeds by reference to "you are a party to proceedings before a court that relate to the recovery of the unpaid amount of the estimate". 56 "In respect of", "in relation to" and similar phrases are considered in Pearce DC and Geddes RS, Statutory Interpretation in Australia (7th ed, LexisNexis Butterworths, 2011) at [12.7]. The authors refer at page 376 to Workers' Compensation Board of Queensland v Technical Products Pty Limited (1988) 165 CLR 642 at 653-654 for the proposition that the phrase gathers meaning from the context in which it appears and it is that context which will determine the matters to which it extends. 57 This should be seen as an example of the modern approach to statutory construction more fully explained in Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 ("Project Blue Sky"). 58 In Travelex Ltd v Federal Commissioner of Taxation (2010) 241 CLR 510 ("Travelex") French CJ and Hayne J said at [25]: It may readily be accepted that "in relation to" is a phrase that can be used in a variety of contexts, in which the degree of connection that must be shown between the two subject matters joined by the expression may differ (HP Mercantile Pty Ltd v Federal Commissioner of Taxation (2005) 143 FCR 553 at 563 [35] per Hill J). It may also be accepted that "the subject matter of the inquiry, the legislative history, and the facts of the case" ((2005) 143 FCR 553 at 563 [35] per Hill J) are all matters that will bear upon the judgment of what relationship must be shown in order to conclude that there is a supply "in relation to" rights. 59 The applicant relied on IBM Australia Ltd v National Distribution Services Ltd (1991) 22 NSWLR 466. This case considered the terms of an arbitration clause in an agreement which included the sentence "any controversy or claim arising out of or related to this Agreement or the breach thereof will be settled by arbitration". The case did not concern the construction of a statute and did not refer to Project Blue Sky. I would not apply in the present statutory context the dicta of Clarke JA or of Handley JA on which the applicant relied, at pages 483B and 487B of the report, that is, that "[t]he phrases "in relation to" or "related to" are of the widest import and should not, in the absence of compelling reasons to the contrary, be read down": (citation omitted). Alternatively, I find that the context and the unlikely result of the applicant's construction do provide compelling reasons to the contrary. The approach of Kirby P at 477C-D was different although the entire Court agreed in the conclusion that the arbitration clause was wide enough to include claims under s 52 of the Trade Practices Act 1974 (Cth). 60 Considering legislative history, as suggested by Travelex, I note that in its form as originally enacted the equivalent provision was s 222AHC of the ITAA 1936 which provided: This section has effect for the purposes of proceedings, in so far as they relate to the recovery of the unpaid amount of an estimate. This is a different expression of the same idea and is, to my mind, neutral. 61 The examples given in s 268-20(2), that is, that the Commissioner may take: (a) proceedings to recover the unpaid amount of the estimate; or (b) proceedings to recover the unpaid amount of the underlying liability; or (c) proceedings of both kinds; provide some support for the construction I prefer although, by s 15AD of the Acts Interpretation Act 1901 (Cth), the examples are not to be taken to be exhaustive. I make the same observation about the example below the table in s 268-40 that for the purposes of item 2 of the table, taking a procedural step as a party to proceedings includes entering an appearance, filing a notice of intention to defend, or applying to set aside judgment entered in default of appearance. 62 Lastly, the extrinsic material I have set out above suggests that what the legislature had in mind was that the affidavit would operate where the Commissioner brought proceedings to recover the unpaid amount of the estimate. 63 I add that if, as I have concluded, the claims for relief in respect of the estimate do not mean that the proceedings relate to the recovery of the unpaid amount of the estimate then the same conclusion follows in respect of the other claims, being the consequential claim in respect of the garnishee notices, the administrative law attack on the garnishee notices or on the decision to issue them and the administrative law attack on the refusal by the Commissioner to allow a longer period for the giving of a statutory declaration for the purposes of item 1 of s 268-40(1) of the Schedule. As to the consequential claim in respect of the garnishee notices, that claim is more remote from proceedings before a court that relate to the recovery of the unpaid amount of the estimate since what is the subject of the garnishee notices is amounts owed or which may later be owed by the third party to, in this case, Transtar Linehaul. 64 This conclusion disposes of the s 268-40(4) statutory revocation issue. 65 In case I am wrong, I consider the next aspect of the case on the s 268-40(4) point which was, in the alternative, whether the affidavit material "verifies facts sufficient to prove that the underlying liability never existed". Is this a formal requirement, that is, is it sufficient to enliven the provision that the affidavit makes a formal statement? Further, may the material be tested by the respondent? 66 There is a preliminary question of construction which is the relationship between s 268-40(4) and s 268-90 which "applies to" an affidavit filed for the purpose of s 268-40 in relation to the estimate. The latter section provides relevantly that the affidavit must verify the fact that you did not withhold any amounts under Division 12 during the relevant period and what has been done to comply with Division 16 (Payer's obligations and rights) in relation to such amounts. The former section relevantly provides that the estimate is revoked if the affidavit verifies facts sufficient to prove that the underlying liability never existed. In my opinion, on the facts of this case at least there is no conflict if the words "verify . . . the fact that you did not" withhold any amounts under Division 12 mean the same as the deponent verifies facts sufficient to prove that the underlying liability never existed. 67 The ordinary meaning of 'verify' is "prove to be true" although it may mean "to state to be true" by affirmation or affidavit. 68 The relevant definitions of "verify" in the Macquarie Dictionary are: 1. to prove (something) to be true, as by evidence or testimony; confirm or substantiate. 2. … 3. to state to be true, especially in legal use, formally or upon on oath … . 69 The relevant definitions in the Oxford English Dictionary of the word verify are: 1.a. trans. Law. To prove by good evidence or valid testimony; to testify or affirm formally or upon oath. … 2. To show to be true by demonstration or evidence; to confirm the truth or authenticity of; to substantiate: . . . 70 Secondly the expression "facts sufficient to prove" suggests that the affidavit must deal with the facts necessary to establish the statutory criterion, that is, that the relevant underlying liability never existed. 71 The use of the word "sufficient" suggests that there may be evaluation by the court in order to conclude, in that curial setting, that there are enough facts to prove that the underlying liability never existed. 72 Does the provision convey the same idea as a prima facie case, in the sense that if the evidence remains as it is there is a probability the plaintiff will be held entitled to relief: see Beecham Group Ltd v Bristol Laboratories Pty Ltd (1968) 118 CLR 618 at 622. 73 Even if there be an analogy, it does not follow that the provisions require no more than a formal statement or that the material relied on may not be the subject of evaluation or testing. Depending on the complexity of the subject-matter, to establish even a prima facie case the evidence will often need to be substantiated beyond the level of mere assertions about the contents of records which are not produced or mere conclusions about complex or mixed questions of fact and law. 74 Further, the affidavit must be admissible according to the rules of evidence. 75 That evaluation must be so involved where appropriate in the context of court proceedings follows also from the fact that a standard of proof must be applied, that is, there must be facts sufficient to prove the matter on the balance of probabilities in a civil case. 76 In my view the distinction being drawn by s 268-40(4) is that it is not necessary, in order to effect the statutory revocation referred to, that the corporation file all the evidence as if the matter were a full scale trial on the estimate. 77 As I have said, in my view, the scheme is that where such an affidavit is filed and served within time in proceedings that relate to the recovery of the unpaid amount of the estimate then the estimate is revoked and the matter proceeds by reference to the underlying liability. 78 In the present case, in my opinion, to enliven s 268-40(4) it was necessary to do more than assert in affidavits, without reference to primary facts or to primary documents which must have existed, that during the period 1 January 2010 to 31 March 2011, no amounts on account of PAYG withholding were withheld from payments made to any person or that Transtar Linehaul had no employees receiving salary or wages, and paid no amount as salary or wages or at all to any person as an employee, from which it might have withheld an amount on account of PAYG or that during that period Transtar Linehaul withheld no amount on account of a PAYG obligation of any description or that Transtar Linehaul had no liability to withhold amounts on account of PAYG withholding obligations and the business of Transtar Linehaul was arranged to that end. 79 Put differently, this material dealt in a summary way with matters which were by no means pure questions of fact. In addition it dealt with those matters in such a rolled up and conclusory way that it did not in my view verify facts sufficient to prove that the underlying liability, to pay to the Commissioner the amount that Transtar Linehaul withheld, never existed. 80 If the proper test is akin to establishing a prima facie case then, looking only at the affidavit material, that point was not reached. I find that the affidavits did not verify facts sufficient to prove that the underlying liability never existed. In this respect I take into account that the 14 day period, subject to a longer period allowed by the court, suggests that in some cases the affidavit may be a relatively simple one. 81 Further, I see no reason why in a case such as the present, and assuming the proceedings relate to the recovery of the unpaid amount of the estimate, the affidavit may not be tested in the ordinary way. Were it otherwise a formally correct but inherently or latently flawed affidavit would enliven s 268-40(4). 82 So viewed, in my opinion the affidavits did not verify facts sufficient to prove that the underlying liability never existed. 83 Part of the immediate statutory context is the non-curial or administrative path to reduction of the amount of the estimate or revocation of the estimate by means of a statutory declaration. The language of the section is that the statutory declaration be "to the effect that" the underlying liability never existed. 84 There should be a broad consistency between the effect of the two paths, while bearing in mind that one is administrative and the other is curial. 85 In my view there is an equivalence to the requirement that the affidavit "verifies facts sufficient to prove" in that, in the case also of a statutory declaration, a merely formal statement without substantiation would not always answer that requirement and would not do so in a matter of any complexity. In my view the expression "to the effect that" directs attention to the substance of the statutory declaration rather than to its form. In my opinion, as with the affidavit, the statutory declaration need not in every case contain the entirety of the relevant material. 86 Further, in my view, the recipient of the statutory declaration may evaluate it in order to assess its substance or effect, although in the case of dispute it would ultimately be for a court to decide whether the statutory declaration was to the effect required by the statute. 87 Thus there is a broad similarity in the present context between what is required of a statutory declaration and what is required of an affidavit. 88 This construction is confirmed by s 268-90 which applies in the same terms to a statutory declaration given or an affidavit filed for the purposes of s 268-40. 89 My conclusion that the affidavits filed by Transtar Linehaul did not verify facts sufficient to prove that the underlying liability never existed is of itself also sufficient to dispose of the s 268-40(4) statutory revocation issue. 90 For completeness I next consider the related issues which arise under s 12-35 and s 16-70. That is, I now assume that these are proceedings within item 2 and that the affidavit material may be evaluated in order to decide whether it does verify facts sufficient to prove that the underlying liability never existed. I note that Transtar Linehaul objected to the relevance of this evidence, consistently with its submission that these were proceedings that related to the recovery of the unpaid amount of the estimate and that an affidavit or affidavits had been filed and served verifying facts sufficient to prove that the underlying liability never existed. 91 In my view Transtar Linehaul did pay wages to individuals as employees. I next set out the facts I find and on which I base this conclusion. It is to be recalled that s 12-35 of the Schedule refers to whether an entity pays wages to an individual as an employee whether of that or another entity. 92 Relevantly there were two companies: Transtar Express Pty Ltd ("Transtar Express") and the applicant, Transtar Linehaul. Mr Searle was appointed a director of Transtar Express on 7 August 1981. He was also a shareholder at that time. Mr Searle's father, John Wesley Searle, was also a director at that time. At no stage after 1981 has there been any other director of Transtar Express other than Mr Searle, his father or at some stages the two of them together. Mr Searle remained a shareholder of Transtar Express at least up until the end of 2008. At that time he assigned his shares back to his father for no consideration other than an unwritten agreement between them that all outstanding debts to him would be settled with interest. Mr Searle is a creditor of Transtar Express. Up to the period to late 2008, the business of Transtar Express was in the light transport industry. In more recent times the business of Transtar Express included the transportation of goods in trucks. From 2000 the transportation business of Transtar Express has included larger trucks transporting goods between cities including interstate. Transtar Express has always employed people to drive those trucks and to maintain or clean those trucks. 93 Mr Searle remained a director of Transtar Express continuously from August of 1991 to 18 January 2005 and during that period he was involved in the day-to-day management of Transtar Express. During that period there were lengthy periods of time when his father was overseas. On 18 January 2005, Mr Searle was convicted in the Local Court of two offences under section 1308 of the Corporations Act 2001 (Cth), those convictions relating to him, as a director of a company, lodging documents with the Australian Securities and Investment Commission which included false or misleading information. On 18 January 2005 Mr Searle resigned as a director of Transtar Express. On 7 March 2005 his father, John Searle, was appointed a director of Transtar Express. On 23 February 2006 Mr Searle became involved again in the management of Transtar Express being reappointed as a director on 23 February 2006. On 19 December 2008 Mr Searle again resigned from the board of Transtar Express. 94 In relation to Transtar Linehaul, the company was incorporated in December 2006. Mr Searle was appointed its sole director. He was the sole shareholder. At least from 2008 Mr Searle was involved in the day-to-day management of Transtar Linehaul and he was responsible for managing the affairs of Transtar Linehaul when he decided to set up in the transport industry in his own right, that is, separate from his father. Yet his father was appointed a director of Transtar Linehaul on 27 October 2008. His father was also involved in the big management decisions from that time. 95 The company did not trade until early 2009. It contracted with clients to transport goods, usually interstate. These were clients who had been clients of Transtar Express. According to Mr Searle, Transtar Linehaul did not employ anyone. To carry on its linehaul business Transtar Linehaul purchased plant and equipment and a number of trucks, prime movers and trailers. Transtar Linehaul operated those trucks and trailers in the conduct of its business. Transtar Linehaul carried goods for a majority of the clients, all the major parcel and courier companies, which had previously been clients of Transtar Express. 96 During 2009 and 2010, Transtar Express and Transtar Linehaul effectively operated out of the same premises. The two companies had a postal address in common. The office of Transtar Linehaul was in Gladesville. Transtar Linehaul's trucks and plant and equipment were at York Road, Ingleburn, with other plant and equipment owned by Transtar Express. 97 According to Mr Searle, Transtar Linehaul entered into unwritten contracts with Transtar Express whereby Transtar Express carried out transport on behalf of Transtar Linehaul. 98 In light of the terms of s 12-35 of the Schedule, which refers to whether an entity pays wages to an individual as an employee whether of that or another entity, I do not need to decide whether the employees were of Transtar Linehaul or of Transtar Express. It was common ground that Transtar Express had employees who were paid as outlined below. 99 There were two accounts at the Bank of Queensland, one in the name of Transtar Linehaul and one in the name of Mr Searle. 100 As to the account in the name of Transtar Linehaul, that account was credited with payments from Transtar Linehaul's customers in respect of the transport services which Transtar Linehaul supplied to them albeit, according to Mr Searle, by persons who were not employees of Transtar Linehaul but of Transtar Express. 101 The wages of the employees of Transtar Express were paid each week out of the cheque account in the name of Mr Searle. This was processed by Ms Susan Arentz. Each week, shortly before the wages of the employees of Transtar Express were paid out of that account, funds were transferred into that account, that is the account in Mr Searle's name, from the account in the name of Transtar Linehaul. Mr Searle accepted, and I find, that the money in the account in his name was Transtar Linehaul's money. That account was treated in the accounts of Transtar Linehaul as being its bank account. 102 In my opinion it is not relevant to the statutory question that Transtar Express may have asked for the payments to be made nor that each time wages were paid out of the account in Mr Searle's name to employees, that that payment was or may have been added to a loan account between Transtar Express and Transtar Linehaul. I note that Mr Searle accepted that the loan between Transtar Express and Transtar Linehaul was not documented in any form of loan agreement, no interest was paid and there were no commercial terms attaching to the loan. 103 As I have indicated, I find that Transtar Linehaul did pay wages to individuals as employees within the meaning of s 12-35 of the Schedule. 104 I also find, for the reasons which follow, that Transtar Linehaul withheld amounts under Division 12. This is a question of construction as well as of fact. 105 As to construction, in s 995-1(1) of the Income Tax Assessment Act 1997 there are definitions of "amount withheld", "withholder", "withholding payment" and "withholding payment covered by a particular provision in Schedule 1". None of them seems presently useful. There is no definition of "withhold" or "withholding". There is nothing that deems "withhold" to mean "ought to have withheld". 106 The definitions given in the Macquarie Dictionary are: 1. to hold back; restrain of check. 2. to refrain from giving or granting: to withhold payment. 107 In the Oxford English Dictionary the most apposite definition is: 2. to keep back; to keep in one's possession (what belongs to, is due to or is desired by another); to refrain from giving, granting, or allowing. 108 In Commissioner of Taxation v Sargon (1985) 75 FLR 394 ("Sargon") Ormiston J was considering an action by the Commissioner for instalments of income tax deducted by the taxpayer as an employer. More specifically, the action was for the balance of tax instalment deductions alleged to have been made by the defendant as a group employer for the purposes of Div 2 of Pt VI of the ITAA 1936. His Honour was dealing with the ITAA Act 1936 in operation during the years 1977 and 1978. 109 In Sargon, the defendant's case was that either he or one of his employees actually paid the wages each week to the employees but that each week during the relevant period sufficient moneys only to pay the employees' net wages were paid by that company, so that no sums in respect of income tax were deducted by him in the sense that no sums were or could have been retained by him in order to pay "group tax" to the Deputy Commissioner in accordance with the requirements of s 221S(5) of the ITAA 1936. 110 Essentially the dispute was whether a "deduction" of income tax instalments, the amount of which an employer was made liable to pay under s 221F of the ITAA 1936, required only the reduction of an employee's gross salary or wages by the arithmetical subtraction of the prescribed amount of income tax and payment to him of the net amount resulting from that calculation, or whether it also required the retention of the sum deducted by the employer. 111 The defendant's case was simply that, as he never had the money to remit to the Commissioner under s 221F, he could not have "deducted" and did not "deduct" the required instalments of income tax within the meaning of that expression and Div 2 of Pt VI of the Act. That was said to be sufficient answer to the plaintiff's claim as no proceedings had been brought under s 221N for failing to make deductions. 112 His Honour said at 397: I do not consider that it is necessary to resolve precisely how reliable was the defendant's version of events. I have reached the conclusion that, on his own admissions, he had made "deductions" from the wages paid to his employees at the prescribed rates, in accordance with s 221C(1A), but had failed to deal with the amounts so deducted in the manner required by Div 2 and in particular had failed to pay the amount of the deductions to the Commissioner, as required by s 221F(5)(a). For this purpose I have concluded that "deduction" within the meaning of the word used in the Division involves the arithmetical subtraction of instalments of income tax at the prescribed rates from the gross income of employees and the payment to them of only the resulting remainder of their wages, that is their net pay. The Division does not specifically require the retention of the amounts so deducted in any identifiable form. Although the provisions contained in this Division assume that a group employer will have sufficient funds to pay the Commissioner the amount of the deductions each month and impose penalties if he fails to do so, he is not obliged to pay those amounts into a trust account or any separate bank account or to deal with them in a way that separates those amounts from his other moneys. In my opinion, upon a proper construction of all the provisions contained in the Division, there is nothing in the Division which requires the separate retention by an employer of the amount so deducted. Nor is there any authority which requires me to hold that it is implicit from the provisions of the statute that the employer is required to retain those amounts separately. 113 Finally, at 403-404, Ormiston J said: My conclusion is that the authorities do not compel me to hold that the word "deduction" in any sections of the Division requires the retention of the sums which have been deducted by an employer of group tax instalments. It follows that the defendant in the present case deducted such instalments when paying his employees their net wages during the relevant period and that there was, within the meaning of s. 221P, a failure to deal with the amount so deducted in the manner required by the Division, notwithstanding the failure to set aside or retain the amounts so deducted. Whether or not he had identifiable or unidentifiable sums in his hands representing those deductions, he is liable to pay the amount for those deductions to the Commission in this action. 114 Sargon's case was considered in Cassaniti v Federal Commissioner of Taxation (2010) 186 FCR 480. In general terms the taxpayer sought, amongst other things, a declaration that he was entitled to credits for the years ended 30 June 2002, 2003 and 2004 in certain amounts being the amounts said to be deducted by his employer, Reliance Financial Services Pty Ltd, as trustee for the Reliance Services Trust from salaries or wages paid to the taxpayer. 115 Edmonds J noted at [7] that it lay at the heart of the taxpayer's case that all that was necessary for a withholding to be made was that there be a mathematical subtraction of amounts from his gross salary or wages so that what was paid to him was a net amount; in other words "withhold" in s 12-35 of Schedule 1 involved no more than the words "make a deduction" in s 221C(1A) of the ITAA 1936 and did not specifically require the retention of the amounts so withheld – deducted in any identifiable form. This submission was made with reference to Sargon's case. 116 The Commissioner accepted that a net amount was paid on a weekly basis into the taxpayer's Commonwealth Bank account of account of salary or wages. The Commissioner did not accept that the amount paid was a reduced amount, that is, a net amount resulting after the withholding of a PAYG amount from a gross amount of salary or wages. 117 At [161] Edmonds J in Cassaniti applied what Ormiston J had said in Sargon about "deduction". 118 At [167] Edmonds J said: Where there is a controversy about the occurrence of a withholding the surrounding circumstances may either support or detract from the drawing of an inference that a withholding was in fact made. There are a number of reporting requirements where an employer makes a PAYG withholding. In particular, pursuant to s 16-150 of Sch 1 to the TAA the payer is required to give notification to the Commissioner of the amounts it was required to pay to the Commissioner under s 16-70(1) on or before the day on which the amount is due to be paid (regardless of whether it is paid). 119 At [173] Edmonds J rejected the submission on behalf of the taxpayer that the scheme of the legislation was that a withholding (or deduction) was taken to have been made by virtue of the liability of the entity to withhold, regardless of whether any amount was actually withheld or not. 120 The facts I find, and on which I base my conclusion, are that the evidence disclosed no more than that Ms Arentz, the administration manager with Transtar Express and who was responsible for the payroll, looked at what the drivers' weekly trips were and then entered all of the data onto MYOB and then each Friday she made online transfers of the funds from the Bank of Queensland in Mr Searle's name into their accounts. 121 Her evidence was that each employee's details were already set up in the system with their hourly rate and, depending on where they drove to, that information was already set up there and flagged for each person. Ms Arentz put their name in, altered the pay date accordingly and then marked off how many trips they did, or how many hours they needed to be paid for and the software did all the calculations. 122 It is clear that only net amounts were paid to the employees: there were in evidence payment summaries recording "total tax withheld" from the payment of wages. There was however no direct evidence as to whether only the net amounts were transferred from the Bank of Queensland account in Mr Searle's name or whether, somehow, a gross amount was thus transferred not to each employee but to Transtar Express. The inference I draw is that only the net amounts were so transferred since the evidence was that Transtar Express's bank accounts showed almost no activity over that period. Further there was no evidence given by Mr Searle or by Ms Arentz that gross amounts were so transferred. 123 It follows that, applying Sargon, Transtar Linehaul was an entity that "withholds an amount under Division 12" in relation to each of the persons to whom amounts were transferred from the Bank of Queensland account in Mr Searle's name to their account as wages. The administrative law challenges to the garnishee notices 124 It was said in the amended application that the garnishee notices should be quashed or the decision to issue them should be quashed or set aside. In any event, an attack was made on the validity of the garnishee notices. 125 It was said in the written submissions that the respondent failed to take into account relevant considerations when exercising the power to issue the garnishee notices. Twelve "relevant considerations" were there addressed or identified. Reference was made to the decisions in Edelsten v Wilcox (1988) 83 ALR 99 ("Edelsten") and Heath v Deputy Federal Commissioner of Taxation (1995) 95 ATC 4430 ("Heath"), an interlocutory decision. 126 In Price v Elder (2000) 97 FCR 218 the Full Court said: [13] Failure to take into account a relevant consideration can only be made out as a ground of review of an administrative decision if the decision-maker fails to take into account a consideration that he or she is bound to take into account in making that decision. What factors a decision-maker is bound to consider in making the decision is determined by construction of the statute conferring the discretion. If the relevant factors are not expressly stated in the statute, they must be determined by implication from the subject matter, scope and purpose of the Act. Where 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 in so far as there may be found in the subject matter, scope and purpose of the statutes some implied limitation on the factors to which the decision-maker may legitimately have regard. Where a discretion is unconfined by the terms of the statute, a court will not find that the decision-maker is bound to take particular matter into account unless an implication that he or she is bound to do so is to be found in the subject matter, scope and purpose of the Act: Minister for Aboriginal Affairs v Peko-Wallsend Ltd (1986) 162 CLR 24 at 39–40. (original emphasis) 127 It is also to be recalled that in Minister for Immigration and Multicultural Affairs v Yusuf (2001) 206 CLR 323, McHugh, Gummow and Hayne JJ said at 348 [74]: What is important ... is that the grounds of judicial review that fasten upon the use made of relevant and irrelevant considerations are concerned essentially with whether the decision-maker has properly applied the law. They are not grounds that are centrally concerned with the process of making the particular findings of fact upon which the decision-maker acts. 128 Here a distillation of the matters said to be relevant considerations is: that the power was not intended to be an instrument of oppression; the consequences for the taxpayer; the monetary sums for which payment was sought by the garnishee notices; that the garnishee notices were founded on the notice of estimate; and other matters going to the merits of the estimate. No distinction was sought to be drawn by reference to the dates of the various garnishee notices or by reference to what the decision-maker was aware of at those times. No detailed evidence was called by Transtar Linehaul as to the effect of the garnishee notices on it. 129 The decision-maker affirmed an affidavit dealing with the issue by her of the garnishee notices on 27 May 2011, 30 May 2011, 17 June 2011 and 20 June 2011. She was not cross-examined. 130 In my view this ground was not established. Assuming that some at least of these matters were relevant considerations, for example that the Commissioner must have regard to the particular position of the individual taxpayer: Saitta Pty Ltd v Commissioner of Taxation (2002) 125 FCR 388 at [15]-[18], Uratoriu v Commissioner of Taxation (2008) 106 ALD 513; [2008] FCA 1531 at [39], it was not established that the decision-maker did not take them into account. She had been involved in the decision to issue the notice of estimate and therefore was aware of those particular circumstances of Transtar Linehaul. It was not shown that she knew of any other particular circumstances of Transtar Linehaul which she failed to take into account. 131 Certainly the present case is a long way from the facts in Edelsten. In that case although the Commissioner had raised assessments in excess of $5.3 million, it was conceded that the total liability would not exceed $1.7 million. The applicant objected to the assessments, as did associated companies. The Commissioner served a notice under s 218 on the Health Insurance Commission ("HIC") to pay to him the whole of any money due by it to the applicant until the amount of tax due was satisfied. This was followed by discussions to settle the tax claim during the course of which the Commissioner revoked the notice and served a substitute notice requiring payment only of 45 cents in every dollar due by the HIC to the applicant. Ultimately the settlement negotiations broke down. Thereafter, the Commissioner issued a fresh notice under s 218 requiring the HIC to pay 100 cents in every dollar due to it by the applicant. Burchett J found that there was a legitimate expectation that the rules of natural justice would be observed, in particular in light of the fact that the first notice to the HIC had been withdrawn because it was accepted as inappropriate in the circumstances. 132 The relevant part of Heath is that which deals with the second s 218 garnishee notice there considered. It was held that, in the particular circumstances of that case, there was a serious question to be tried in respect of that s 218 notice. The circumstances were that as at the date of the issue of that second s 218 notice, the respondent would have been aware that a major portion of the assessments issued were unlikely to withstand proper scrutiny. Olney J held that there was a serious question to be tried as to whether the decision to issue the second s 218 notice without regard to the likely result of the taxpayer's objections was unreasonable or made without taking a relevant consideration into account. The case turned on its own facts which were very unlike the present facts; it contains no applicable statement of principle. 133 An alternative and additional attack was that the Commissioner breached the rules of natural justice in issuing or deciding to issue the s 260-5 notices. 134 As to procedural fairness in relation to the garnishee notices see Edelsten at 114; Walker v Secretary, Department of Social Security (No 2) (1997) 75 FCR 493; General Electronics International Pty Limited v Deputy Commissioner of Taxation (1996) ATC 5036 ("General Electronics International") and Woodroffe v Deputy Commissioner of Taxation (2000) 179 ALR 750 ("Woodroffe"). 135 In General Electronics International, Lindgren J said in relation to a notice under s 74 of the Sales Tax Assessment Act 1992 (Cth); 52. Often, perhaps usually, it would put at risk the effectiveness of the remedy afforded by s 74 if a taxpayer knew in advance of the Commissioner's intention to give a direction under the section, since the taxpayer would be enabled to cause the third party to pay to it or to its nominee the amount in question which could then be dissipated. This consideration provides some indication that in the absence of special factual circumstances distinguishing a particular case, a taxpayer does not have a reasonable expectation of being afforded an opportunity to be heard before the Commissioner gives a direction under s 74. 136 Woodroffe, concerned a notice under s 218 of the ITAA 1936. Mansfield J said at [13]: In my judgment, absent circumstances of the kind which existed in Edelsten, I think it is clear that the decision to issue a s 218 notice is not one of which advance notice is required to be given to the proposed recipient of the notice or to others whose money is to be the target of the notice. … In my view, such an intention is clearly evidenced by s 218 itself. Its object is to secure the paying of taxation liability. It would frustrate the fulfilment of that object if such advance notice were required to be given, which might facilitate the movement of the funds the subject of the proposed notice: see, for example, Walker v Secretary, Department of Social Security (No 2) (1997) 75 FCR 493 at 500, 508. 137 At [14] his Honour said: Section 218(1) expressly provides that notice of the decision will be given to the taxpayer whose funds are the subject of the notice at the time the notice is given. See also General Electronics International Pty Ltd v Deputy Federal Commissioner of Taxation (1996) 96 ATC 5036. Moreover, s 218(1) has within its terms a remedy for any unfairness which may result. It also empowers the amendment or revocation of a notice at any time, or from time to time, or it may extend the time for making any payment in pursuance of the notice. It therefore contemplates that the recipient of a notice, or persons whose interests are affected by the notice, will then have the opportunity to make submissions and perhaps to present evidence in support of the revocation or amendment of the notice. That action may be undertaken promptly, as indeed occurred in the present circumstances. It is not action which is therefore final and conclusive in that sense. Indeed, as the expression "from time to time" contemplates, the notice may be amended or revoked even after an initial request for its amendment or revocation has once (or more) been refused. It was not the subject of argument before me, so I do not decide whether, even after the notice has been fully complied with, Ms Woodroffe or JAJ may still endeavour to have the notice amended or revoked. 138 In the present case the denial of procedural fairness was said to consist in the respondent's failure to allow Transtar Linehaul the opportunity to explain why the tax file number declarations showed the ABN of Transtar Linehaul; that the respondent failed to enquire why the tax file number declarations showed the ABN of Transtar Linehaul; and the respondent failed to allow Transtar Linehaul the opportunity to be heard as to the extent of the effect of the garnishee notices upon Transtar Linehaul's business. 139 I find that there was no denial of procedural fairness because there was no duty to accord procedural fairness, in the sense of an opportunity to be heard before the decision was made to issue the garnishee notices or before the garnishee notices issued. As the authorities to which I have referred make plain, the nature of the power displaces the requirements of procedural fairness except in an extreme case. The administrative law challenge to the decision not to allow a longer period of time 140 It was also submitted by Transtar Linehaul that the Commissioner acted unreasonably and impermissibly in deciding not to allow a further period of time for the giving of a statutory declaration under item 1 of s 268-40(1). 141 One of the prayers for relief in the amended application under s 39B of the Judiciary Act was: 7. An order directing the Respondent to extend time under s.268-40(1) in Schedule 1 to the Taxation Administration Act 1953 until 10 June 2011 or some later time as the Court sees fit. 142 This claim was not contended for or supported in Transtar Linehaul's outline of submissions dated 7 July 2011. I was asked to treat that prayer for relief as asking for the issue of the refusal to extend time to be referred back to the decision-maker. 143 Transtar Linehaul submitted that the statutory declaration was provided some 16 days outside the 7 days after the Commissioner gave notice of the estimate. The request for an extension was made by letter dated 16 June 2011 which was in response to a letter dated 14 June 2011. The decision was evidenced by the letter from the Commissioner dated 21 June 2011. I have set out the terms of the correspondence above. 144 Reading the notice with the correspondence and on the assumption that the statutory declaration answered the description in s 268-40(4), I reject the submission that the Commissioner acted unreasonably and impermissibly in deciding not to extend the time to comply. 145 Transtar Linehaul's arguments rose no higher than to dispute the reasonableness, in a colloquial sense, of the decision evidenced by the letter of 21 June 2011. As Gleeson CJ said in Re Minister for Immigration and Multicultural Affairs; Ex parte Applicant S20/2002 (2003) 198 ALR 59 at [5]: As was pointed out in Minister for Immigration v Eshetu (1999) 197 CLR 611 at 626 [40], to describe reasoning as illogical, or unreasonable, or irrational, may merely be an emphatic way of expressing disagreement with it. If it is suggested that there is a legal consequence, it may be necessary to be more precise as to the nature and quality of the error attributed to the decision-maker, and to identify the legal principle or statutory provision that attracts the suggested consequence. 146 The applicant has not established legal irrationality or perversity or illogicality in the exercise of the statutory discretion. 147 I do not therefore deal with any question of the continued applicability of item 1 once court proceedings have begun, whether that question be founded in the construction of the provisions or in the exercise of discretion to withhold relief in such circumstances. Conclusion 148 For these reasons each of the applicant's grounds fails and the application is dismissed with costs. To avoid doubt, I set aside Order 15 made on 24 June 2011, to the effect that the operation of each of the notices issued by the respondent under s 260-5 listed in appendix 1 to those orders is no longer suspended. I certify that the preceding one hundred and forty-eight (148) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Robertson. Associate: Dated: 5 August 2011