FEDERAL COURT OF AUSTRALIA Barossa Vines Limited v Commissioner for Taxation [2012] FCA 579 Citation: Barossa Vines Limited v Commissioner for Taxation [2012] FCA 579 Parties: BAROSSA VINES LIMITED v COMMISSIONER FOR TAXATION File number: SAD 60 of 2012 Judge: LANDER J Date of judgment: 7 June 2012 Catchwords: PRACTICE AND PROCEDURE – judicial review – application for leave to amend originating application and file statement of claim –application opposed – whether proposed amended originating application and statement of claim disclose a ground of review – whether proposed amended originating application and statement of claim vexatious – whether proceeding incompetent Legislation: Administrative Decisions (Judicial Review) Act 1977 (Cth), s 5, s 11 Federal Court Rules 2011 (Cth), r 31.05(1) Income Tax Assessment Act 1997 (Cth), s 35-55(1) Taxation Administration Act 1953 (Cth), s 357-1, s 358-1, s 358-5, s 358-10, s 358-20 Cases cited: Carey v Field (2002) 122 FCR 538 considered Commissioner for Australian Capital Territory Revenue v Alphaone Pty Ltd (1994) 49 FCR 576 cited Date of hearing: 1 May 2012 Place: Adelaide Division: GENERAL DIVISION Category: Catchwords Number of paragraphs: 77 Counsel for the Applicant: Dr C Bleby Solicitor for the Applicant: Minter Ellison Lawyers Counsel for the Respondent: Ms H Symon SC Solicitor for the Respondent: Australian Government Solicitor IN THE FEDERAL COURT OF AUSTRALIA SOUTH AUSTRALIA DISTRICT REGISTRY GENERAL DIVISION SAD 60 of 2012 BETWEEN: BAROSSA VINES LIMITED Applicant AND: COMMISSIONER FOR TAXATION Respondent JUDGE: LANDER J DATE OF ORDER: 7 june 2012 WHERE MADE: ADELAIDE THE COURT ORDERS THAT: 1. The applicant have leave to file the proposed amended originating application and the proposed statement of claim within 14 days. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. IN THE FEDERAL COURT OF AUSTRALIA SOUTH AUSTRALIA DISTRICT REGISTRY GENERAL DIVISION SAD 60 of 2012 BETWEEN: BAROSSA VINES LIMITED Applicant AND: COMMISSIONER FOR TAXATION Respondent JUDGE: LANDER J DATE: 7 june 2012 PLACE: ADELAIDE REASONS FOR JUDGMENT 1 The applicant, Barossa Vines Limited (Barossa), started this proceeding by filing an originating application on 13 March 2012. The applicant's genuine steps statement was filed on 20 March 2012. 2 The respondent, the Commissioner for Taxation (the Commissioner), responded to the originating application by filing a notice of objection to competency on 23 March 2012. The Commissioner relied on rule 31.05(1) of the Federal Court Rules 2011 (Cth). 3 In that notice the Commissioner contended that the application disclosed no grounds for review under s 5 or s 11 of the Administrative Decisions (Judicial Review) Act 1977 (Cth) (the ADJR Act) of the Commissioner's decision to withdraw Product Rulings PR2007/32, PR2008/21 and PR2008/22. The notice of objection to competency also had as a ground of objection that the application was vexatious and an abuse of process. 4 At the first directions hearing counsel for Barossa applied for leave to amend the originating application. The directions hearing was adjourned to allow Barossa to apply to amend the originating application and to file a statement of claim to accompany the amended originating application. 5 Subsequently, the proposed amended originating application and statement of claim were provided to the Commissioner and to the Court. The application to amend the originating application and file a statement of claim was opposed by the Commissioner on the grounds that no ground for review was disclosed in the proposed amended originating application or in the proposed statement of claim, and that the proposed amended originating application and the proposed statement of claim were vexatious because they are of no utility, and further because the proceeding is incompetent. The parties provided written submissions and spoke to those submissions. 6 For the following reasons, Barossa should be granted leave to file the proposed amended originating application and statement of claim. The Proceeding 7 Barossa seeks judicial review of two decisions of the Commissioner which were sent to Barossa by way of letter dated 14 February 2012. The decisions took effect on 15 February 2012 when they were published in the Government Gazette. 8 In those two decisions the Commissioner, exercising the power granted to him under s 358-20 of Schedule 1 to the Taxation Administration Act 1953 (Cth) (TAA), decided to withdraw three Product Rulings (collectively the Product Rulings): (1) PR2007/32 Income Tax: Barossa Vines Project 2007 – Applicant Group 1 (PR2007/32), from 1 July 2007; (2) PR2008/21 Income Tax: Barossa Vines Project 2007 – Applicant Group 2 (PR2008/21), in its entirety; and (3) PR2008/22 Income Tax: Barossa Vines Project 2007 – Applicant Group 2 (using finance from Barossa Vines Limited) (PR2008/22), in its entirety. 9 The Product Rulings applied to managed investment schemes for which Barossa was the responsible entity. 10 On 29 April 2011 the Commissioner wrote to Barossa offering Barossa the opportunity to make relevant representations as to whether the Commissioner should withdraw the Product Rulings (the Notice). 11 In respect of Product Ruling PR2007/32, Barossa was invited to make submissions with respect to whether a material difference arose in the implementation of the 2007 scheme. 12 In respect of Product Rulings PR2008/21 and PR2008/22, Barossa was invited to make submissions as to whether a material difference arose in the implementation of the 2008 scheme. 13 Barossa responded in respect of each invitation by letter dated 27 May 2001. 14 Part 5-5 of Schedule 1 to the TAA deals with rulings. Section 357-1 provides: This Division sets out the object of this Part, and common rules that apply to public, private and oral rulings. (For the rules specific to each of those kinds of ruling, see Divisions 358, 359 and 360.) A ruling is an expression of the Commissioner's opinion of the way in which a relevant provision applies, or would apply, to you. A ruling binds the Commissioner if it applies to you and you act in accordance with it. If you do act in accordance with it and the law turns out to be less favourable to you than the ruling provides, you are protected by the ruling from any adverse consequences. The Division also sets out some other general rules for rulings. 15 Division 358 deals with public rulings, and s 358-1 provides: A public ruling is an expression of the Commissioner's opinion of the way in which a relevant provision applies, or would apply, to entities generally or a class of entities. The Commissioner must publish the ruling. A public ruling may be withdrawn. 16 Section 358-5 identifies a public ruling: (1) The Commissioner may make a written ruling on the way in which the Commissioner considers a relevant provision applies or would apply to: (a) entities generally or a class of entities; or (b) entities generally, or a class of entities, in relation to a class of schemes; or (c) entities generally, or a class of entities, in relation to a particular scheme. (2) Such a ruling may cover any matter involved in the application of the provision. (3) Such a ruling is a public ruling if it: (a) is published; and (b) states that it is a public ruling. (4) The Commissioner must publish notice of the making of a public ruling in the Gazette. 17 A public ruling applies from the time the ruling is published, or from such earlier or later time as is specified in the ruling, and until the public ruling ceases to apply or is withdrawn: s 358-10. 18 Section 358-20 provides for the withdrawal of a public ruling. It provides: (1) The Commissioner may withdraw a public ruling, either wholly or to an extent, by publishing notice of the withdrawal. (2) The withdrawal takes effect from the time specified in the notice. That time must not be before the time the notice is published. (3) To the extent that a public ruling, other than an indirect tax or excise ruling, is withdrawn, it continues to apply to schemes to which it applied that had begun to be carried out before the withdrawal but does not apply to schemes that begin to be carried out after the withdrawal. (4) The Commissioner must publish notice of the withdrawal of a public ruling in the Gazette. 19 In respect of both decisions the Commissioner gave notice on 14 February 2012, and wrote in two separate letters: Pursuant to section 358-20 of Schedule 1 to the Taxation Administration Act 1953, the Commissioner may withdraw a public ruling, either wholly or to an extent, by publishing notice of the withdrawal in the Gazette. Under the product ruling system, the Commissioner rules on the precise scheme identified in a ruling. If the scheme described in a ruling is materially different from the scheme actually carried out, the ruling will be withdrawn or modified. [Further], the Commissioner considers that a difference in implementation is a material difference if it results in a difference in the tax outcome for investors. 20 In respect of Product Ruling PR2007/32 the Commissioner wrote in his letter: The Commissioner considers that the following conduct or omissions of BVL constitute a difference to the scheme as described in PR 2007/32, and that the differences are material differences: 1. PR 2007/32 required BVL to effectively operate the irrigation system to irrigate investors' Vineyard Lots in the Eckermann and Sturt Highway blocks throughout the life of the scheme. However, for the income year ended 30 June 2008, BVL failed to adequately and effectively irrigate the Eckermann and Sturt Highway blocks by diverting water away from the two blocks in order to irrigate established vineyards. 2. PR 2007/32 required BVL to maintain the vineyards in accordance with good viticultural practices. However, BVL employed insufficient resources to maintain the vineyards, and as such the 2007 project vineyards were neglected and the rootlings planted by 30 June 2007 had all died by February 2008. BVL also failed to adequately control weeds thereby not acting in accordance with good viticultural practices. 3. PR 2007/32 required BVL to replace any rootling planted in the Eckermann and Sturt Highway blocks that died within the first twelve months after the Establishment Period; that is, any rootlings which died on or before 30 June 2008. For the income year ended 30 June 2009, the Commissioner has been provided with limited evidence to show that BVL replanted any of the failed rootlings and some evidence indicates that BVL did not replant any rootlings in the 2007 scheme. If BVL did replace some rootlings, the number of rootlings sourced was insufficient to replant all the failed rootlings and they were of poor quality due to being poorly handled following heat treatments. 21 In this letter the Commissioner advised why PR2007/32 was accepted for the income year ending 30 June 2007 but withdrawn for the income year ending 30 June 2008 and all subsequent income years. 22 Accompanying the letter was a document entitled "Reasons for Decision". The reasons address matters under the following headings: (a) Legislative Framework; (b) Application of the law; (c) Material differences in the implementation of the 2007 scheme in the 2008 income year: (i) Barossa failed to operate the irrigation system in order to irrigate the Grower's Vineyard Lots; (ii) Barossa failed to maintain the Vineyard Lots in accordance with good viticultural practices; (iii) Barossa failed to replace and replant the rootlings which died during the first 12 months; (d) Material Difference in the implementation of the 2007 Scheme in the 2009 income year: (i) Barossa failed to replace and replant dead rootlings and maintain Vineyard Lots in accordance with good viticultural practices; (e) Decision – Withdrawal of the Product Ruling. 23 In respect of the Product Rulings PR2008/21 and PR2008/22, the Commissioner wrote in his letter: The Commissioner considers that the following conduct or omissions of Barossa Vines Limited (BVL) constitute a difference to the schemes as described in PR 2008/21 and PR 2008/22, and that the differences are material differences: 1. PR 2008/21 and PR 2008/22 required BVL to obtain and plant a sufficient number of healthy rootlings on all Vineyard Lots sold to investors under the 2008 scheme, by 30 June 2008. However, BVL failed to exercise due diligence in relation to the supply of rootlings, and as such failed to obtain any healthy rootlings to plant on the 2008 scheme Vineyard Lots. 2. PR 2008/21 and PR 2008/22 required BVL to establish the Vineyard Lots in accordance with good viticultural practices. However, BVL planted an inferior planting material (cuttings) on Vineyard Lots, and did not prepare these cuttings appropriately to give them the best chance of success. 3. PR 2008/21 and PR 2008/22 required BVL to install an appropriate irrigation system on the 2008 scheme Vineyard Lots by 30 June 2008. However, BVL did not install appropriate and effective irrigation equipment by 30 June 2008. 4. PR 2008/21 and PR 2008/22 required BVL to manage and maintain the Vineyard Lots in accordance with good viticultural practices. However, BVL failed to adequately irrigate the cuttings planted in the 2008 income year. 5. PR 2008/21 and PR 2008/22 required BVL to replace any planting material that died within the first twelve months after the Establishment Period; that is any rootlings which died on or before 30 June 2009. However, BVL determined that the soil on certain Vineyard Lots were [sic] of insufficient quality to sustain vines, and as such decided not to replant certain areas of the Vineyard Lots allocated on the block described in PR 2008/21 and PR 2008/22 and also referred to as Zerk 1. 24 Accompanying that letter was a document entitled "Reasons for Decision." These reasons address matters under the following headings: (a) Legislative Framework; (b) Application of the law; (c) Material differences in the implementation of the 2008 scheme in the 2008 income year: (i) Barossa failed to obtain healthy grapevine rootlings for planting; (ii) Barossa failed to plant grapevine rootlings and establish the Vineyard Lots in accordance with good viticultural practices; (iii) Barossa failed to install appropriate irrigation equipment; (d) Material differences in the implementation of the 2008 Scheme in the 2009 income year: (i) Barossa failed to operate the irrigation system in order to irrigate the Grower's Vineyard Lots; (e) Material differences in the implementation of the 2008 Scheme in the 2010 income year: (i) Barossa delayed replanting of rootlings and abandoned Vineyard Lots on the Zerk 1 block; (f) Decision – Withdrawal of the Product Rulings. 25 The grounds of the application identified in the proposed amended originating application are: A. Breach of the rules of natural justice (s 5(1)(a) of the ADJR Act). B. Improper exercise of power in breach of s 5(1)(e) of the ADJR Act. Breach of the Rules of Natural Justice 26 In respect of the first ground in the proposed amended originating application Barossa claims that the Commissioner failed to notify Barossa of the issues to be considered on the question whether the Product Rulings should be withdrawn, and that the Commissioner failed to invite comment on those issues. The proposed amended originating application particularises a number of issues that Barossa alleges the Commissioner failed to notify it of when deciding whether to withdraw the Product Rulings, none of which are the material differences identified in the two letters. Rather, the issues which Barossa alleges the Commissioner considered without notification are facts identified by the Commissioner in the Commissioner's reasons for deciding that material differences existed and that the Product Rulings should therefore be withdrawn. 27 Further, Barossa claims that the Commissioner failed to identify to Barossa and invite Barossa's comment upon documents in the possession of Barossa of which the Commissioner had taken copies, and on which the Commissioner relied in making the decisions. Barossa alleges that the documents or the substance of the issues raised in the documents should have been identified on account of the technical nature of the allegations and the seriousness of the consequences of acting upon them. The documents are identified at paragraph 1-3 of the proposed amended originating application as being the documents listed in an appendix to a letter from the solicitors for the Commissioner to the solicitors for Barossa dated 2 March 2012 and a document described at paragraph 42 of the "Reasons for the Decision" to withdraw PR2008/21 and PR2008/22 as an "internal Water Resources Report" dated 2 June 2009. 28 Next Barossa claims that the Commissioner failed to provide it with and invite comments from it upon various materials identified in the proposed amended originating application relied upon by the Commissioner in making the decisions. Those materials, it is alleged, should have been provided to Barossa because of the technical nature of the allegations contained in the materials and the seriousness of the consequences of acting upon them. 29 Next Barossa claims that the Commissioner failed to provide it with sufficient time to respond to the allegations raised in a notice issued on 26 April 2011 (although I think the reference to this notice is meant to be a reference to the Notice). 30 Lastly, Barossa complains that the Commissioner failed to identify to it, and invite its comment upon, the Commissioner's views as to the length of time that constituted a period that is commercially viable for the viticulture industry within the meaning of s 35-55(1) of the Income Tax Assessment Act 1997 (Cth). Improper Exercise of Power 31 Under this ground Barossa complains that the Commissioner failed to take into account relevant considerations in the exercise of his power to withdraw the Product Rulings for the purposes of s 5(2)(b) of the ADJR Act. 32 The proposed amended originating application identifies the alleged relevant considerations not taken into account by the Commissioner in the Commissioner's "Reasons for Decision" in respect of the Product Rulings. The proposed amended originating application does not assert that the Commissioner erred in identifying and finding the material differences in the two letters. The Relief Sought 33 Barossa seeks the following relief in the proposed amended originating application: 1. An order suspending the operation of the Decisions pending the outcome of this application, pursuant to section 15 of the ADJR Act. 2. A declaration that the Decisions are void and of no effect; 3. An order of review in the nature of certiorari quashing the Decisions; 4. An order remitting the matter to the Respondent to make new decisions in accordance with the requirements of law and in light of the findings made by this Honourable Court; 5. An order requiring the Respondent to pay the Applicant's costs of and incidental to this application; and 6. Such further or other orders as this Honourable Court sees fit. Consideration of Application 34 In Carey v Field (2002) 122 FCR 538; [2002] FCA 1173 Merkel J dealt with the Commissioner's power under s 14ZAAK(1) of the TAA, as it then was, to withdraw a Product Ruling. Relevantly, he said at [42]-[43]: [42] The Commissioner's power under s 14ZAAK(1) of the TA Act to withdraw a product ruling is expressed in terms that are unconfined. Consequently, the factors that may be taken into account in the exercise of the Commissioner's discretion to withdraw a product ruling 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 Commissioner may legitimately have regard: see Minister for Aboriginal Affairs v Peko-Wallsend Ltd (1986) 162 CLR 24 at 39-40 per Mason J. Insofar as there are factors that are impliedly not to be taken into account, judicial review is available on the ground that the decision-maker took into account an irrelevant consideration. [43] Further, in the absence of any statutory indication of the weight to be given to various considerations, it is in general for the Commissioner, and not the Court, to determine the weight to be given to the matters which are to be taken into account in exercising the statutory power: see Peko-Wallsend at 41. 35 Further, he said at [45]-[47]: [45] Further, there is nothing in the legislative provisions governing binding public rulings or in the subject matter, scope and purpose of those provisions that would suggest that the Commissioner should only be entitled to withdraw a public ruling if differences between the arrangements ruled upon and the arrangements implemented must result in tax outcomes that will be different to those ruled upon. The actual tax outcomes are matters that are to be contested in a proceeding under Pt IVC of the TA Act, rather than in a proceeding for judicial review under ADJR Act. Further, the tax outcomes may often involve questions of mixed law and fact that do not permit of easy or quick answers. Generally, I would not expect the Commissioner to withdraw a binding ruling on the ground of a difference between the arrangement ruled upon and the arrangement implemented unless he was of the view that the differences were, at the least, likely to result in a different tax outcome to that ruled upon. However, I do not regard his statutory discretion as confined to that situation. For example, where the Commissioner forms the view that there are material differences which are capable of resulting in the tax outcomes being different to those ruled upon with the consequence that it is unsafe for taxpayers to rely upon the ruling because it may not apply to the arrangement implemented, it would not be an inappropriate exercise of power to withdraw the product ruling. [46] But, having regard to the subject matter, scope and purpose of the binding public ruling system the legislature should not be taken to have intended that the Commissioner was empowered to withdraw a binding ruling because of a difference that is not material in the sense that, on the material before the Commissioner, the difference was not capable of affecting the tax outcomes ruled upon. Thus, reliance upon such a difference would constitute reliance upon an irrelevant consideration for the purposes of judicial review of the decision. [47] That, however, does not answer the question of what is a "material difference". In my view if it is reasonably open to the Commissioner to form the view on the material before him that, because of a difference between the arrangement implemented and that ruled upon, the tax outcome for a taxpayer who is a member of the class of persons to whom the ruling was intended to apply is capable of being, or is or likely to be, different to that provided for in the ruling, that difference is a material difference, and therefore not an irrelevant consideration in the context of the judicial review of a decision to withdraw the ruling under s 14ZAAK(1) of the TA Act. While a purpose of the binding public ruling system is to provide certainty to taxpayers, that purpose is better served by the Commissioner having the power to withdraw a ruling if he forms the view that the differences between the arrangement implemented and that ruled upon are capable of having or likely to have a different tax outcome to that provided for in the ruling. Plainly, if it is reasonably open to the Commissioner to form the view that the tax outcomes ruled upon do not apply, greater certainty is provided by the withdrawal of the ruling. The object of certainty and the public interest are not served by the maintenance of a ruling where the Commissioner has formed a view, that is reasonably open on the basis of the material before him, that the ruling can no longer be safely relied upon because of differences between the arrangement implemented and that ruled upon. 36 I agree with his Honour's remarks. 37 As can be seen from the letters given to Barossa on 14 February 2012, the Commissioner proceeded in accordance with Merkel J's suggested approach by identifying in each of the letters the material differences which he relied upon for the purpose of withdrawing the Product Rulings. 38 If Barossa were to succeed in this proceeding, Barossa would have to establish that it is entitled to have reviewed the material differences identified by the Commissioner in reaching his conclusion to withdraw the Product Rulings. The material differences are collectively and independently the reasons why the Commissioner has reached the conclusion that the Product Rulings should be withdrawn. 39 However, the proposed amended originating application and the proposed statement of claim do not attack those material differences. Instead both documents attack the reasons why the Commissioner was of the opinion that the material differences in the letters have been established. 40 For that reason, the Commissioner submitted that the proposed amended originating application and the proposed statement of claim are in substance misconceived. 41 The proposed statement of claim is in the following form. 42 Paragraph 1 of the proposed statement of claim identifies Barossa and its role as a responsible entity for the "Barossa Vines Project", which was a project to establish new vineyard lots in 2007 and 2008 for investors and growers with a view to producing commercial vineyard crops for sale (the Project). Paragraphs 2 to 7 deal with the history of Barossa's application to the Commissioner for the publication of binding Product Rulings regarding the manner in which the Commissioner would apply income tax legislation in assessing the income tax liability of investors in the Project. On receipt of the Product Rulings, Barossa marketed the Project to investors. Barossa pleads that it implemented the Project in accordance with the Product Rulings. 43 In paragraphs 8 and 9 Barossa pleads that on or about 21 May 2009 the Participant Promoter Compliance Branch (the PPC Branch) of the Commissioner's office informed Barossa that it had commenced a civil investigation in relation to the Project to determine whether Barossa had engaged in conduct that resulted in Barossa or another entity "implementing a scheme otherwise than in accordance with the product ruling", and which may contravene the promoter penalty laws. 44 Paragraph 10 sets out the history of the PPC Branch investigation, including the publishing of notices to Barossa and Barossa's response, and the further steps taken in relation to that investigation. On or about 18 March 2011 the PPC Branch issued an internal interim report. 45 Paragraph 11 of the proposed statement of claim states that by letter dated 29 April 2011 (the letter being the one which I have previously defined as the Notice) the Commissioner notified Barossa, through the Promoter Schemes Advice Branch (PSA Branch), that he was considering making the decisions which were subsequently made on 14 February 2012 and invited Barossa to make representations in response to the Notice by no later than 27 May 2011. 46 In paragraph 12 it is said that the Notice was issued at a time when issues were still being examined by the PPC Branch in relation to Barossa's compliance with the Product Rulings and Barossa had not completed its own investigations into documents which the PPC Branch had seized. 47 On 4 May Barossa's solicitors, Minter Ellison, sent a letter to the Commissioner's representatives in the PPC Branch expressing Barossa's concern over the timing of the Notice in the context of the investigation: paragraph 13.1. 48 On 13 May 2011 the PPC Branch responded asserting that the Notice was given independently of the PPC Branch investigation: paragraph 13.2. 49 On 20 May 2011 Barossa solicitors wrote to the Commissioner's PPC Branch and PSA Branch protesting about the Notice, inviting the Commissioner not to make any decision to withdraw the Product Rulings, and seeking access to all the materials relied on by the Commissioner for issuing the Notice: paragraph 13.3. 50 On 24 May 2011 the Commissioner's PSA Branch replied refusing all of Barossa's requests and requesting Barossa respond to the Notice by 27 May 2011: paragraph 13.4. 51 On 27 May 2011 Minter Ellison sent a letter to the Commissioner's representative in the PSA Branch repeating Barossa's concerns regarding the lack of procedural fairness afforded to Barossa in relation to the Notice, and responding to the broad allegations raised by the Notice on behalf of Barossa to the extent that Barossa was able in the time available and on the basis of the information provided by the Commissioner to support the allegations: paragraph 13.5. 52 It is pleaded in paragraphs 15 and 16 that the decisions were made on 14 February 2012 and published to Barossa by delivering copies of the "Reasons for Decision" to Minter Ellison. On 15 February 2012 the decisions appeared in the Government Gazette and became effective: paragraph 17. 53 In paragraph 18 Barossa pleads that it has requested particulars of the "Reasons for Decision" and access to documents and evidence relied on for the purpose of making the decisions, but has only been provided with limited information and materials. 54 In paragraph 22 Barossa claims the Commissioner breached the rules of natural justice rule in connection with the making of the decisions. In paragraph 22 Barossa identifies, as it does in the proposed amended originating application, the facts and issues raised in the Commissioner's reasons for his decision that material differences existed that meant that the Product Rulings should be withdrawn. The other claims in the proposed statement of claim that the Commissioner breached the rules of natural justice are the same as in the proposed amended originating application. 55 In paragraph 23 the second ground relied upon is that the making of the decision was an improper exercise of power by the respondent. Again, the particulars given are the same as those given in the proposed amended originating application. 56 The relief sought in the proposed statement of claim is the same as sought in the proposed amended originating application. 57 Like the proposed amended originating application, Barossa has attacked the underlying reasons for the material differences identified in the letters in the proposed statement of claim. It has not attacked the material differences identified by the Commissioner in the two letters sent on 14 February 2012. Those underlying reasons are the reasons for the conclusions reached upon which the decisions were made. The conclusions that were reached were those that identified the material differences in relation to the three separate Product Rulings. 58 In opposition to the leave sought by Barossa the Commissioner contended that no ground for review is disclosed by the proposed amended originating application and the proposed statement of claim because the Commissioner afforded Barossa the opportunity to be heard on the question of whether the Product Rulings should be withdrawn, "including indicating generally the matters which he considered might constitute material differences between the schemes described in the Product Rulings and the actual scheme implemented". The Commissioner contended that Barossa had availed itself of the opportunity given by the Commissioner by its letter of 27 May 2011. 59 Further, the Commissioner contended that the matters raised in the Notice form the basis of the two decisions made on 14 February 2012. 60 Next, in his written submissions, the Commissioner contended that "contrary to the tenor of the application, in affording the applicant an opportunity to be heard, the respondent is not obliged to disclose the evidence on which he proposes to or might make a decision". 61 The Commissioner also contended in his written submissions that the Commissioner has provided Barossa with extensive written reasons for decision and "having regard to the reasons, the Court is able to determine whether the respondent's power to make the decisions was properly exercised". The Commissioner submitted that, contrary to the tenor of the proposed amended originating application and proposed statement of claim, whether the decisions are correct is a matter of fact and having regard to all of the evidence is not relevant to the determination of questions arising under the ADJR Act, except in the limited circumstances provided for in s 5(1)(h) and s 5(3), which do not apply in this case. 62 In the alternative, the Commissioner contended that the proposed amended originating application and the proposed statement of claim are vexatious and of no utility for the reasons already identified, and because the Commissioner was entitled to make the decisions without notice to the applicant. For that second submission the Commissioner relied upon the Product Rulings themselves, which apparently state: This Product Ruling has been given on the basis that the entity(s) who applied for the Product Ruling, and their associates, will abide by strict terms of use. Any failure to comply with the terms of use may lead to the withdrawal of this Product Ruling. 63 For that reason the Commissioner submitted that he is entitled to withdraw the Product Rulings without any notice to Barossa. 64 Lastly, the Commissioner submitted that the decisions sent to Barossa on 14 February 2012 do not expose the investors and growers in 2007/2008 financial year to retrospective adverse income tax assessment amendments. It was submitted in the Commissioner's written submissions that: Rather, as disclosed by the Product Rulings, the Respondent's letter dated 29 April 2011 and the Respondent's written reasons for the Decisions, the Product Rulings have no binding effect on the Respondent whenever the Project actually carried out is materially different from that described in the Product Rulings. Accordingly, any adverse consequences for the Applicant as responsible entity for the Project do not arise from the Decisions to withdraw the Product Rulings but arise as a result of its conduct of the Project and in any event. 65 In her oral submissions Ms Symon SC, counsel for the Commissioner, relied upon Merkel J's decision in Carey v Field, and in particular on the paragraphs I have set out above, and upon the failure of the proposed amended originating application and the proposed statement of claim to advert to the material differences that formed the basis of the decision. She contended that Barossa sought to attack the reasoning process of the Commissioner, rather than the decision itself. 66 I will deal with the Commissioner's written submissions first. 67 The submission that the Commissioner discharged his obligation in relation to the rules of natural justice by affording Barossa an opportunity to be heard on the question of whether the product ruling should be withdrawn by sending the Notice has to be rejected because the Notice is not before me. Nor is Barossa's reply of 27 May 2012. I can make no assessment of the Commissioner's submission without these letters. Whether the Commissioner discharged his obligation will be a matter for the trial of the proceeding. 68 The submission that the Court can, by reading the Commissioner's "Reasons for Decision" for the Product Rulings, determine whether the Commissioner has discharged his obligations in relation to the natural justice rule also has to be rejected because I do not know at this stage of the proceeding what information was before the Commissioner, what of the information was known to Barossa, or what of that information Barossa knew would be relied on by the Commissioner. 69 The submission in the Commissioner's written submissions that the Commissioner could make the decision without notice to Barossa must also be rejected. I do not know if that is the case because I do not have the Product Rulings before me. Even if I assume that the Product Rulings allowed the Commissioner to make a decision to withdraw the Product Rulings without notice to Barossa, that is not the way in which the Commissioner has proceeded. The Commissioner has arrived at a decision to withdraw those Product Rulings after notice to Barossa, and for the reasons given by the Commissioner. Barossa is entitled to attack those decisions by the Commissioner. 70 The last contention in the written submissions should also be rejected because, in my opinion, it is irrelevant that the Product Rulings have no binding effect on the Commissioner. Barossa could expect, if the Commissioner makes a Product Ruling and if Barossa complies with those Product Rulings, that there is no material difference in the scheme actually carried out from the scheme identified in the ruling and that the Commissioner would issue an assessment in accordance with the Product Ruling. 71 That leaves the oral submissions made by Ms Symon. 72 At one point I understood Ms Symon to be putting that the proposed statement of claim was defective because Barossa did not identify the content of the natural justice rule as it applied to the Commissioner in this case. On a re-reading of the transcript of her oral submissions, I accept the contention put by Barossa's counsel, Dr Bleby, that that was not an issue raised by Ms Symon. I will not address it further. 73 The question as to whether Barossa was given proper notice of the matters upon which the Commissioner might rely for determining that material differences existed is a matter for determination at trial. Whether or not Barossa was notified of the matters identified in the proposed amended originating application and proposed statement of claim as being relied upon by the Commissioner in making the decisions to withdraw the Product Rulings is a matter that will also have to be determined on the evidence at the trial. It may be, as has been contended, that the Notice was adequate, but, as I have said, that will have to be determined when all the evidence is before me. 74 There is an obligation upon a decision maker to notify anyone who is likely to be adversely affected by the decision of the existence of any adverse material known to the decision maker. There is also an obligation upon the decision maker to identify any issue which might affect the decision which is not manifest from the nature of the decision to be made. Moreover, the decision maker is obliged to advise of any adverse conclusion which a decision maker has made which would not be known to the person who might be adversely affected. 75 It is true, of course, that a decision maker is not obliged to expose his or her mental processes in arriving at his or her decision: Commissioner for Australian Capital Territory Revenue v Alphaone Pty Ltd (1994) 49 FCR 576 at 592. However, in Commissioner for Australian Capital Territory Revenue v Alphaone Pty Ltd the Court said at 590-591: It is a fundamental principle that where the rules of procedural fairness apply to a decision-making process, the party liable to be directly affected by the decision is to be given the opportunity of being heard. That would ordinarily require the party affected to be given the opportunity of ascertaining the relevant issues and to be informed of the nature and content of adverse material… 76 As I have indicated, I cannot know in advance of the trial whether the Commissioner did give proper notice to Barossa. Nor can I know in advance of the trial whether the Commissioner failed to have regard to relevant material in making the decisions made on 14 February 2012. Conclusion 77 It follows then that, in my opinion, the Commissioner's objections to the leave sought by Barossa ought to be rejected. There will be an order that Barossa have leave to file the proposed amended originating application and the proposed statement of claim within 14 days. I certify that the preceding seventy seven (77) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Lander. Associate: Dated: 7 June 2012