Ahern, Jogn Waymouth v Deputy Commisisoner of Taxation [1983] FCA 303

5(1)(a) and (e), 5(2),(e) and (f) and Scneaule 1, para.(e). Income Tax Assessment Act 1936, ss.177, 185, 186, 2Cl, 204, 206, 207, 208 and 209.

JOHN WAYMOUTH AHERN v. DEPUTY COMMISSIONER CF _TAXs«TION

eu? QUEENSLAND DISTRICT REGISTRY ; No.,G 55 of 1983 GENERAL DIVISION ) BETWEEN JOHN %AYMCUTE AHERN Applicant AND DEPUTY CO¥MISSIONER CF ; Respondent ORDER : JULGE MAKING ORDER : Sheppard J. DATE OF ORDER : 28 October, 1983 WHERE MADE 3 SYDNEY

1. The Commissioner's decision dated 28 July, 1983, by

which ne refused to grant to the applicant an extension of time to pay income tax claimed to be due in notices of assessment dated 30 December, 1982, be set aside.

2. The applicant's application for an extension of time

be referred to the resvonaent for further consideration

(a) the fact'tnat the notices of assessment have teen obgjectec to;

(b) the fact that the notices of objection nave not

(c) the fact that the applicant has not been informed of the basis upon which it is

3. The respondent pay to tne applicant his costs of

pursuant to s.5 of the Administrative Decisions (Judicial Review) Act 1977 ("the Judicial Review Act"). + The decision review of which is sought 1s the decision of the respondent not to grant the applicant an extension of time in which to pay the amounts claimea in certain notices of assessment of income tax. The application for an exten- sion of time was made pursuant te s.20€ of tne Income Tax Assessment Act 1936 ("the Act"), The notices of assess- ment were issued in respect of the years of income end- ing 30 June, 1980, 1981 and 1982. The total amount claimed 1s $1,687,1353.21. Additional tax for late payment is, according to the respondent, accruing at the rate of

It is first necessary to refer to the background of tne matter without whicn the substance of the matters relied upon by senior counsel for the applicant cannot be fully understood. The applicant 1s a public accountant and has carried on practice in Brisbane for some years. In the tax years in question, and probably before, he made 1t his business to learr of companies which were or might be avéilacle for stripping by those interested in seeking to avoid income tax by entering into what are commonly known as "bettom of the narbour" schemes. He also advised on the availability of tax shelters overseas and on investments in certain areas, e.g. in films, which might have the effect of reducing income tax otherwise payable by his clients. Much of his work was for sclicitors and other accountants. From all these activities substantial sums were earnec by way of commission.

The apolicant purported to carry on his practice through two trusts which were known as the Betar and Ahern Trust and tne ABD Practice Trust. The applicant nad amalgamated his own practice with taat of another accountant but for taxation purposes the two practices were apparently kept separate.

the credit of one or other of the trusts and distributed to otner trusts whicn, according to serior counsel for

the applicant, did not benefit him except perhaps as

the result of the exercise of a discretion by the trustees. The trust instruments are not in evidence,

What the applicant noped to achieve by tais method of carrying on his practice was the avoidance of the peyment of income tax upon his professional earnings.

His personal returns showed a loss for each of the years in question. The returns of the ABD Practice Trust showed the trust as receiving large sums in fees, as pay- ing out expenses which would normally have been debited to the applicant's personal account and a substantial net profit. The Betar and Ahern Trust showed the Trust 4s having received even larger figures for commissions and as earning a very much greater net profit. For instance, commissions earned in the year ending 3C June, 1981, exceeded $650,000. After taking into account an earlier distribution which had been received the gross profit

of the trust was said to exceed 1.5 million dollars ane its net profit more than one million doliars. The

profits were sown to nave been distributed in tne ain

to two trusts known as the Anern and Betar Subscribable Unit Trust and to the Betar and Ahern Subscribable Unit Trust,

I should say at this point tnat I have endeavoured to glean the nature of the principal activity of the practice from the documents which have been tendered, The applicant did not give evidence. If my understanding is in some ways incomplete, it 1s due to the fact that I was not afforded tne opportunity of clarifying my mind on a number of aspects concerning the way in whicn the practice was carried on and the nature of the business which it did. I should add that 1% may not be strictly necessary for these matters to be precisely understood.

Instead of giving effect to the returns of the applic- ant as they were lodged, the respondent took tne view that moneys earned by the trusts were in fact the applicant's personal earnings and assessed him for income tax accord~ ingly. Additionally he disallowed deductions for interest claimed to have been paid to yet another trust, the Rocklea Trading Trust. That 1s the explanation for the very substantial total wnich the respondent claims in his notices of assessment.

Tne applicant objected to each of the assessvrents.

The notices of objection are dated 24 Fehruery, 1963.

They were prepared, of course, without knowledge on the

part of the applicant of the provisions of the Act which were relied upon by tne respondent, But each notice objected to the inclusion in the applicant's assessable income of income from the ABD Practice Trust and the Betar and Ahern Trust and the disallowance of interest paid¢ to the Rocklea Trading Trust. In an endeavour to meet, as best he could, possible: bases for the notices of assess- ments the applicant in his grounds denied tnat he was assessable 1n respect of the verious amounts because of the provisions of s.19, Division 6 and Division ¢A of Part III, and s.260 of the act. In tne notices of object- 1on in respect of the 1981 and 1982 tax years reference was also made to Part IVA of tne Act which was said to have no application. No decision on the notices of objection has'yet been given. On 12 August, 1983, the respondent wrote to the applicant seeking a great deal of information and copies of a number of Gocuments. On 10 and 12 August, 1983, letters were also written to a number of trusts and companies seeking information end copies of documents. It is to be observed that these letters were written almost six months after tne notices of ongection were locged. The evidence does not dis- close whether the information and documents neve yet

objection are yet to be dealt with at a point of time which 1s now eight months after their lodgment.

Tne due cate for payment of each of the notices of assessment was 27 January, 1983. On 26 January, 1983, the applicant wrote to tne respondent saying that obgections to the assessments were in the course of preparation. "The 'letter asked for an'extension of time to pay pending the lodging of the objections and the respondent's. dealing with them,

On 4 February, 1983, the applicant's solicitors wrote the respondent a lengthy letter seeking particulars of the basis upon which the applicant had been assessed for tax in the notices of assessment. On 24 February, 1983, the solicitors wrote again. With their letter they enclosed the notices of obgection. Additionally they made a request for certain documents pursuent to the Freedom of Information Act 1982, a request that payment of the tax assessed "remain in abeyance", and a request for the amendment of the assessments pursuant to sub-sec.82KL(7) of the Act.

With each of the notices of objection lodged on 24 February, 1983, there was lodged a document ertitled, "Application for deferral of payment of tax", The application was that the respondent permit the tax "to remain in abeyance" until 14 deys after the date on

which the applicant's notices of objection were allowed

so allowed and an appeal were made to the Court, then unti1 14 days after tnat appeal or any further appeal therefrom was decided.

No reply to the solicitors' letters nad been received by 31 March, 1983, and they wrote again, Tney expressed concern at the failure of the respondent to deal with the letters ana the matters raised by them. Included amongst the metters which were mentioned was the respondent's failure to deal w:th the application for extension of time to pay the assessments.

On 19 April, 1983, the respondent wrote to the applicant care of his solicitors, He was told tnat the total of the assessments (which came to a figure in excess of 1.5 million dollars) remained outstanding on his account. Reference was made to certain of the provisions of the Act in relation to the payment of tax and the payment of a penalty in respect of amounts remaining unpaid after the due date of an assessment. The respondent saza, however, that he was prepared to defer legal action for the recovery of 50 per cent of the

tax in dispute, as well as the ad«itional tax imposed,

'until the applicant was notified of his decisions relating to the objections. The offer was con- ditional upon the balance (almost $800,60C) being paid within 14 days of the date of the letter, 1.e. 19 April, 1983. There was other correspondence concerning the applicant's request for information pursuant to the Freedom of Informetion Act wnich it 1s not material to set out.

On 5 May, 1983, the applicant's solicitors wrote to the respondent seeking clerificaticn of one of tne matters in the respondent's letter to tne applicant of 19 April. On 30 May, 1983, the resyondent wrote to the apclicant care of his solicitors clearing up the matter of misunderstanding. The letter further saia that 1t was noted that tne dete for acceptance of the offer of a deferment of the due date for »vayment had passed end, accordingly, the offer hac lapsed. The letter concluced:

"To ensure that legal acticn for recovery of the debt 1s not instituted, full settlement shoula be made by 13 June 1983. Additional tax

for late payment continues to accrue at the rate of 3924.45 per day."

On 14 June, 1983, the applicant's solicitors wrote to the respondent and, amongst other things, asked whether the letter of 19 April, 1983 (not the letter of 30 May, 1983), "was, or evidenced, a decision to refuse our Client's requests", i.e. for an extension of time. Pursuant to s.13 of the Judicial Review Act there was then a request for reasons for any decision yhich had been made. Finally there was a request, pursuant to s.206 of the Act, that the time for payment of tax be extended, at the very least, until 50 days after the respondent's reply to the letter.

The letter of 14 June, 1983, was acknowledged in two letters of 21 June, 1983, tc which it 1S unnecessary otherwise to refer. The letter was answered by a letter from the respondent dated 28 July, 1983, addressed to the applicant care of his solicitors. The respondent referred to the earlier correspondence and to a number of sections of the Act. He referreac to his practice of allowing one half of the tax in dispute to remain outstanding until the question of liability was resolved. The respondent said tnat the practice nad beer dis- continued "following tne enactment of amendments of

section 207 and a general reappraisal by the Commissioner

of his practice in this area". The letter continued:

to requests for extensions of time where an assessment 1S disputed now dictates that, in deciding wnether tne circumstances cf a parti-

of time for payment, each application is considered in tne context that income tax snould be collected in the financial year in whicn it becomes due and payable. Moreover, every effort 1s to be made to collect tax as soon as possible after 1t becomes payable. An extension of time will only be granted where reasonable grounds are given by a taxpayer

an support of his application together with sufficient details cf his financial position to enaple an assessment of the taxpayer's ability to pay to be made. Where any deferment arrangements are approved, the amount outstanding will be subject to additional tax in terms of section 207 whicn will accrue from the date the tax became due and payable.

With regard to your second rejuest for a further extension of time to pay the tax outstanding, your letter of 14 June 1983 contains no anformation con- cerning your financial position or liquidity. In these circumstances, I am unable to grant your request for a further extension of time."

The letter concluded with an indication that the amount of the assessments remained outstanding and that additional tax for late payment was continuing to accrue.

The applicant's solicitors wrote to the respondent on 3 August, 1983. They acknowledged tne letter of 28 July and said that the respondent's office had elways had knowledge of the applicent's financial position because

of the inclusion in each return of a balance sheet disclos-

ing his tnen assets and liabilities, The letter said

that the applicant 'was unable to meet the assessments "or any significant part thereof". It said thet there nad been no significant change in tne applicant's financial affairs since the balance sheet loaged with his return of income for the year ended 30 June, 1982.

The balance sheet to which reference was made showed assets of $413,000 and liabilities of almost £700,000. It said that there was a net deficiency of over 5270,000. The liabilitzres included a sum of $500,000 saia to be owing to the Rocklea Trading Trust by way of loan.

The applicant's solicitors' letter of 3 August, 1983, also said that they were treating the respondent's letter of 28 July as a statement cf reesons for decision pursuant to s.13 of the Judicial Review act. They fore- shadowed proceedings under that Act but saia that they would stay their nand in case the respondent's decision had been made without reference to the information which their letter disclosed.

and the present application was filed on 15 August, 1983.

On 1 September, 19843, the respondent furnished reasons pursuant to s.13 of the Judicial Review Act. These recounted tne earlier correspondence and made

reference to the notices of assessment. The substantive

(1) the amount of cutstanding tax as at 30 May 1983 was 31,687,133.21;

(2) there was no evidence put forward by you to show tnat at the time of applic- ation you were unacle to pay your debt when 1t fell due.

dated 3 November 1981, 5 January 1983 and 8 March 1983. Copies of these memoranda are attacned hereto ana marked "Attachment G", "Attachment H" and "Attachment I". Further, no reason was apparent why I should, in the exercise of my discretion through my authorised officers, depart from the guidelines in order to grant the extension sought."

The attachments referred to disclose the respondent's policy in relation to the grant of extensions of time for payment of tax where notices of assessment are disputed. In order that they nay be better uncerstood it is aporop- riate first to refer to the relevant sections of the

Section 177 of tne Act provides that tne production of a notice of assessment 1s tc be conclusive evidence of the que making of the assessment and, except in proceedings on appeal against tne assessment, that the emount and all the particulars of the assessment are correct. Section 185 provides for the lodgment of an objection. By s.186 the Commissioner 15 to consider the objection. He nay disallow it or aliow it in whole or in part. Succeeding sections in Part V provide for appeals against the dis- allowance of an orgection, Section 201 provides that the fact that an appeal 1s pending aoes not affect the assessment and income tax may be recovered as if no appeal were pending. It 1s to be observed that vhe Act contains no express provision concerning the obligation of a taxpayer to pay an assessment pending the Commissioner's decision on an objection. But 1t would seem that s.204 obliges him to pay

notwithstanding that he has objected to 1t.That section

provides that any income tax assessed shall be due and pay-

able on the date specified in the notice of assessment as

the date upon which the tax is due and payable. Section 208 provides tnat income tax, when 1t becomes due end payable, shall be a debt'due to tne Commonwealth ana vayable tc the Commissioner in *ne manner and at tne vlece prescribtec.

By s.209 any unpaic tax may be suea for ana recovered in

any court of competent gurisdiction by the Commissioner or

Section 206 provides that the Commissioner may in any case grant such extension of time for payment or permit payment to -e made by sucn instalments and within such time as he considers the circumstances warrant, "and in such case the tax shall be cue and payable accordingly". Section 207 provices for the imposition of penalties for unpaid tax. It has under- gone recent amendment (Income Tax Assessment Amendment (No.6) Act 1982 (Act No.123 of 1982), s.9). Inits present form the section provides that 1f any tax remains unpaid after the time when 1t became cue and payable or would, but for s.206, have become ave and payable, additional tax is aue and payable at the rate of 20 ver cent per annum on the amount unpaid cemputea from the time when the tax became due and payable. Power 1s given to the Commissioner to vary tnis time in cases

where he has granted an extension of time or permitted payment by instalments pursuant to his powers under s.206. Sub-section 207(1A) empowers the Commissioner in certain circumstances to remit wholly or in vart the additional tax for which the section vrovides. Theat sub-section 1s not in question in this case. Finally,

sub-sec.207(2) provides that, notwithstanding anything

contained in tne section, the Commissicner may sue for recovery of any tax unpaid immediately after the expiry of the time when it becomes due and payable.

With that legislative background it is now appropriate to come back to the guidelines set out in the attachments enclosed with the respondent's reasons of 1 September, 1983. There are three dated respectively 3 November, 1981, 5 January, 1983 and 8 March, 1983. Under the guidelines of 3 November,1981, it was the Commissioner's practice to accept half of what was due under a notice of assessment pencing the determination of an obgection and any consequent appeal. Additional tax under s.207 was usually remitted in cases of genuine dispute which were ultimately determined against the taxpayer. With the amendment of s.207 this practice was changed as appears from the guideiines dated 5 January, 1983. The Commissioner was prepared to extend time pending the determination of the question of liability provided 50 per cent of the amount in dispute was valid.

But usually the additaonal tax provided for in s.207 would

have to be paid from the due date of the assessment

on the unpaid 50 per cent if the question of liability

to pay the tax was determined adversely to the taxpayer. The guidelines of 5 January, 1983, also dealt with

whet were described as general reauests for extensions

of time to pay. Before such a request could be con-~

sidered the taxpayer was requirred to demonstrate that

he dad not have the means necessary to nay tne tax by tne

due date. There are some other matters mentioned in

the guidelines but 1t is not necessary to refer to them. The guidelines of 8 March, 1983, saia that further

consideration was being given to the policy to be applied

in respect of the collection ana recovery of tax in cases

of disputed assessments. The procedures outlined in the

guidelines of 5 January, 1983, were to continue in the

meantime. The March guidelines dealt comprehensively with

Applications for extensions of time falling into this

category were divided into short-term applications and

long-term applications. In relation ta the latter it

was said that the taxpayer must clearly demonstrate thet

he does not have the means necessary to discharge nis liability when 1t falls due. If that 1s shown it is said that an extension should tnen only be granted where the taxpayer can demonstrate that he will, within the period for wnich extensions may be granted, have the ability or potential to vay the tax at some time in the future. The guidelines are lengthy ard deal witn a variety of circumstances, but so far as general requests for extension of time are concerned point to the primary consideretion being the financial circumstances of the taxpayer.

It would seem to follow tnat 1n cases of dispute as to liability, the Commissioner would usually require paymert of half tne amount in dispute. If tnis were not made, he would treat the case as peing in the category of a general request to which he would apply no different considerations than those which asplied where no dispute existed. In sucn cases tne outcome of a request for an extension would depend substantially on the taxpayer's ability to pay on the due date and nis

prospects of teing atle to pay if an extension of time

were granted, The central question in such a case was what were the financial circumstances of tne taxpayer. In the present case it can be seen from the correspondence that the respondent has, subject to one qualification, implemented this polacy. In his letter of 19 April, 1983, ne offered to extend tne time if half the disputed amount was paid. This offer was refused and accoraingly he applied the general guidelines involving consideration of the taxpayer's financial affairs. This 1s most clearly seen in the respondent's statement of reasons dated 1 September ,1983. However, the respondent's letter of 28 July, 1983, suggested that it! was no longer the policy to accept half the amount of tax claimed in cases of dispute. That is not what the guidelines say. Nothing, however, turns on this matter because the applicant 1s not prepared to pay half tne amount claimed in the notices of assessment. The decision review of which 1s souvht is tne

decision of the Commissioner evidenced in his letter

of 28 July, 1983, not to grant the extension of time which was sought. ' The grounds of the application were, amended at the hearing. Not all grounds were pressed, The provisions of the Judicial Review Act relied upon were paera- graphs 5(1)(a) and:(e). The ground provided for in paragraph (a) 1s that a breach of the

for in paragraph (e) that the making of the decision was an improper exerc1se of the power conferred by tne relevant enactment. This

latter paregraph hes to be read in conjunction with sub-sec.5(2). In this respect the avplicant relied on paragraphs 2(b) and (f).,, The first of these paragraphs involves failure to take a relevant consideration into account in the exercise of a power and the second, an exercise ofa discretionary power in accordance with a

the respondent failed to take account of the financial position of the applicant as dis- closed in the balance sheet lodged with his income tax return for the year ending 30 June, 1982;

the respondent failed to take into account that there was outstanding an objection to the assessments which raised a bona fide dispute concerning the correctness of them;

the respondent failed to take account of the adverse effedt failure to extend the time would have on the professional standing and reputation of the applicant as an accountant; the respondent, in applying his guidelines of 5 January ena 8 March, 1983, had exercised his

This 1s not a case where the rules of natural justice apply. Apart from any problems which there mey be in relation to the construction of s.207 of the Act, the applicant nas no standing to rely upon any such ground. That 1s because he has no right nor legitimate expectation to the extension of time which he seeks. He 1S not to be likened to an applicant for relief in a case where there is involved the canceliation of or refusal to renew a licence; see Fire and All Risks Insurance Co. Limited v. Winneke (1982) 41 4.L.R. 1. Nor is he to be likened to an employee whose employ- ment 1s terminated or otherwise affected in a case where statutory provisions govern nis terms and conditions of employment. The matter is at large and is in the dis- cretion of the respondent. The discretion 1s a wide

one, albeit that it must be exercised according to law. That does not involve the respondent in being bound to observe the rules of natural justice wnen he deals with an application. That disposes of the grouna based upon

I turn to the grounds based on paragraph 5(1)(e). The first of these relies upon a failure by the respon~ dent to take into account the financial position of the applicant as revealed in the balance sheet forming part of his income tax return for the year ended 30 June, 1982. I have earlier saic that the only evidence before me 1S comprised in the various documents to which I have made reference. The applicant did not give evidence. I was thus not able to ask him questions which may have enabled me the better to understand the complexity of his financial affairs. I have said what I have because I do not wish, in the absence of the applicant's evidence, to be thought to te over critical of him. Furthermore, I wzsh it to be clear that in saying what I am about to say I have based my remarks on the evidence which 1s before me without the light that may have been shed on some of it by oral evidence from the apvlicant.

evidence which I have. To say that the totality of the

pacture presented by the applicant's returns and the returns of the trusts 1s one of mystery 1s an under- statement. For that reason the balance sheet 1s,

in the context of an application for an extension of time based on inability to vay, quite meaningless.

Not to put too fine a point on it the application, insofar as 1t relies upon that balance sheet, is an affront both to the intelligence of the respondent and of tnis Court. If only for the reason that there 1s no way in which one can determine the circumstances in which it is said that there 1s a liability of $5C0O,000 to the Rocklea Trading Trust, the balance sheet tells one nothing.

In my opinion it was not a matter which the Commissioner could possibly have considerec in determining whether or not to grant the extension of time which was sought. | I do not have to ge so far. It is enough to say that it was certainly not a matter which the Commissioner was bound to take into account in reaching his conclusion. He had no evidence before him upon which he could have been expected to rely to come to a conclusion as to the financ1al circumstances cf the avplicant, Ground

Ground (b) I propose to leave until last. Groune (c) relies upon the adverse effect the respondent's refusal might be exvected to nave on the applicant's professional position as an accountant. Reference was made to the Public Accountants Registration Act 1946~- 1971 (G.), particularly to s.24(e) thereof which empowers the registration board to remove the name of any undis- charged bankrupt from the register. No reference to this Act was made in any letter to the respondent. The respondent knew no more than that the applicant carried on practice as an accountant end, with the help of a number of trusts, sought to achieve a situation in vhich he paid no tax on his earnings. The matter relied upon was again a matter of which there was e1lther no, or no satisfactory, evidence. It was not a matter which the respondent was bound tc take into account, I would add that bankruptcy is a long wey off. Eefore bankruptcy proceedings can be instituted tne respondent must recover Judgment. Assuming he does, he must then persuade this Court to allow a petition to proceed notwithstanding that there is a dispute as to the applicant's liatility to pay the tax 1n question.

Then there is the question of the guidelines raised an ground (d). It seems clear tnat the respondent has applied the policy laid down in the guidelines witnout

particular reference to tne circumsténces of this case.

But insofar as this ground 1s based on the respondent's failure to take into account the applicant's financial position and tne adverse effect on his professional status as an accountant there can te no basis fer com- plaint. For reasons already given there 1s no evidence, or no sufficient evidence, obliging the respondent to teke these matters into account.

guidelines were received it wag rot anown that the financial position of an acplicant for an extension of time was relevant. I accept thet those were counsel's znstructions, but, coming as tney do from a professional accountant, I find them unbelievable. Furthermore, the fact that financial considerations nad been taxen into account 1s made clear in the letter of 28 July, 1983. That the applicant was not prepered to furnish more particulars of his financial affairs than were disclosed in the balance sheet which accompanied his 1982 return is made clear in his solicitors! letter of 3 August, 1983. That was as far as ne was prepared to go. Insofar as the respon- dent's application of the guidelines was »1ithout

reference to the applicant's financia? positicn, the

applicant has failed to show that the respondent nes

failed to take into account the merits of his particular case. As regards his financial position he put before the respondent virtually no material whatever. The remaining ground relied upon (ground (b)) is that based on the fact that the objections wnich have been lodged have not teen dealt wita and further, that on tne face of the evidence before me, the applicant has at least a reasonable cnance of success, 1f not in having the objections disallowed, then in the eppeals whicn he will tring against their disallowance. It seems to me that thet matter may stand alone or may provide a reason itself why ground (d) should be upheld. Before I proceed I should say that 1n many cases the respondent may be persuaded to extend time for a variety of reasons the cumulative effect of which he will take into account. Thus in a case where he had evicence that 1t would place a taxpayer in a difficult financial position

before the respondent. But the fact of the matter is that the respondent seeks to recover from an individual a sum in excess of 1.5 million dollars in circumstances where he hes not Gisclosed his hand and has not taken the step which will enable the applicant to put in motion the eppellate process which he 1s entitlea to invoke if his objections are disallowed.

It having been conceded that none of these matters were taken into account, tne question is whether

Having reflected on the matter I have reacned the conclusion that the applicant has demonstrated that

the respondent's failure to take account of the matters

I have mentioned constitutes a failure on his part to

take a relevant consideration into account in exercising his power unaer s.206 to grant or refuse an extension

of time. In reaching my conclusion I have had regard to a number of de@isions whica deal with the circumstences- in whica the Court will interfere in ae case of this kind. The

criteria wnich the Commissioner 1s to take into acccunt

MacKellar (1981) 38 a.L.R. 363, Deane J. said (p.375): "Tne ground of failure to take into account a relevant consideration will only be made good if it 1S shown tnat tne decision-maker has failec to take anto account a consideretion which he was, in the circumstances, bound to

take into acccunt for there to be a valid exercise of tne power to decide".

His Honour's decision was upheld on appeal ((1982) 42

A.L.R. 676). Reference snould also be made to Elliott

v. Southwark London Eorough Council (1976) 1 «.L.R. 499 and to Reg. v. Australian Broadcasting Tribunal; ex parte 2HD Pty. Limited (1979) 144 C.L.R. 45.

For the applicant to succeed he has to demonstrate that the matters upon which he relies in ground (b) are such that the respondent was obligea to take them into account in reaching his conclusion. I do not think the matter is without difficulty, but I think the better view is tnat he was bound to do so. I also think that the applicant has brought himself within paragraph 2(f) of the Act in that he has demonstrated that the respondent in eppvlying the Commissioner's guidelines has done so without regard to the merits of

toe particular case, that 15 witmout taxing iznto account

tne fact that his decision on the applicant's notices of objection remains outstanding.

There are no matters gaing to the exercise of my discretion which sould dissuade me from granting the reliaef for which the applicant has made out a case, Cne may cecry the way he has earned his living in the last few years or so, In some minds there will be conjured up feelings of resentment, ever revulsion, at the extent of the tax avoidance which the applicant's activities seem likely to nave made possible. But as 1s often saia, this 15 a court of law, not of morals, The respondent is bound to exercise his discretion according to law. In my opinion he has not done so because he has failed to take into account the relevant consideration to which I nave referred.

There 1S no reason why, that being the case, the applicent

Senior counsel for the applicant sought a direction that the respondent extend tne time for vayment until a reasonable time after the notices of obgection had been

matter. But I have decided that the proper oraer is

that tne respondent's decision of 28 July, 1983, be

set aside and that the applicant's applicatz:on for

for further consideration with a @airection that he

take into account the fact that the notices of assess-

ment nave been objected to, that the odgections have

not been dealt with and that the applicant has not teen

aunformed of the. basis upon which it 18 claimed he is

liable for the tax which has been imposed. Of course

there 1s nothing to prevent the applicant from making

a fresh application with which he might include a detailed

account of his financial position arc a statement of any

hardship he will suffer if he be compelled to pay the

tax now. That is a matter for him and his edvisers. Before I conclude I should mention that it was faintly

argued that this case was outside the jurisdiction of

the Court because review was sought of a decision excluded

from the Court's jurisdiction in paragraph (e) of the

enough for me to say that tne decision here in question

1s not a decision making, or forming part of the process

of making, or leaaing up to the making,of the assessment,

(a) the fact that the notices of assessment have been objected to;

(b) the fact that the notices of objection nave not been dealt with; and

(c) the fact that the epplicant has not been informed of the basis upon which it 1s claimed he 1s liable for the tax wnich the notices of assessment impose.

The respondent pay to the applicant his costs of the

bceriity Liat tus and the 37] yee sy pages are a true copy of the 35ers! ¢ judgment herein of The Honourable