Allen Allen & Hemsley v. Deputy Commissioner of Taxation & Anor [1988] FCA 231

of the issues raised in the case appear to bear some similarity

to issues which were raised in the recent Full Court decision in Sharp v. Deputy Federal Commissioner of Taxation (1988) 88 A.T.C. 4259. A significant difference is that the applicants are a firm of solicitors, and questions of legal professional privilege arise. A matter of similarity is that, in this case also, the records to which access is sought are said not to be clearly related to the taxation affairs of identified clients, and indeed the applicants say that the particular matter, to check which they were advised access was required, is a matter they have checked themselves, and they have ascertained that there are no records answering the description put to them by the first respondent's officer. That of course does not mean in itself that the Deputy Commissioner is not entitled to check by his own

The decision was made to have access to the solicitors' trust accounts on or about 27 October last. As a result of the raising of questions of legal professional privilege, and of other matters, and communications between the parties, implementation of that decision has been delayed; but the Deputy Commissioner has indicated he wishes to have access on Monday,

One of the delaying factors was a prompt request, which was made, for reasons under s.13 of the Administrative Decisions (Judicial Review) Act 1977, that was not complied with until 29 April 1988. The applicants say that perusal of the _ reasons supplied shows that questions of legal professional privilege,

and considerations related to the burdensomeness for the

applicants of the particular requirements imposed upon them, were not mentioned, and the applicants say the inference should be drawn they were not taken into account. The applicants say that, on a fair reading of the s.13 statement, only matters favouring the having of access were taken into account, and no balancing exercise to enable a discretionary judgment to be made was entered into at all. The applicants contend that the requirements of law, despite the extreme width of 8.263, demanded that such a balancing exercise be undertaken, and particularly in a case where, they say, it should inevitably have been realized,

if any consideration had been given to the matter, that what was

"1. The making of the decisions was in breach of the rules of natural justice.

(i) The Respondents, in the circumstances, owed a duty to the Applicants to allow them an opportunity of being heard;

(ii) The failure by the Respondents to identify those taxpayers whose affairs were being investigated denied the Applicants the said opportunity.

2. The making of the decisions was not authorised by 8.263 of the Income Tax Assessment Act (Cth), ('the Act').

(i) The said 8.263 does not authorise access to books, documents or other papers beyond those required for the urposes of the Act and such further access is in fact

The said 8.263 does not authorise access to books, documents or other papers beyond those required for the purposes of administering the Act in respect to identified or identifiable taxpayers;

The said 8.263 does not authorise access to books, documents or other papers except for purposes which are disclosed to the Applicants.

The making of the decisions was an improper exercise of power conferred by the said s.263 by reason of the failure

to take into account relevant considerations. PARTICULARS

(i) The fact that access was sought to information beyond that which was required by the Respondents for the purposes of the Act;

(ii) The fact that access was sought to information beyond that which was required by the Respondents for the purposes of the Act, such information being communicated in confidence to the Applicants;

(iii) The fact that access was sought to information which is in fact confidential;

(iv) The fact that invoking a right of access would expose the Applicants to excessive and unreasonable burdens;

(v) The fact that such information as was sought may be or is in fact in whole or in part the subject of a claim for legal professional privilege;

was sought could have been or is in fact available from other sources.

The making of the decisions was an improper exercise of power conferred by the said s.263 by reason of the exercise

of power being so unreasonable that no reasonable person could have so exercise that power.

PARTICULARS (i) The Applicants repeat those particulars set forth in

(ii) The failure by the Respondents to pursue other means open to it to secure that information which was in fact sought from the Applicants.

5. There was no evidence or other material to justify the making of the decisions.

PARTICULARS The applicants rely upon the facts set out in the Applicants' letter of 11 November, 1987 to the Deputy Commissioner of Taxation.

6. The making of the decision was otherwise contrary to law.

PARTICULARS The Applicants repeat those particulars

The applicants claim that the balance of convenience clearly supports them, since the whole point of the case would be lost to them if no restraint were imposed, and no urgency has been suggested, as a balancing consideration in respect of convenience, on the part of the Commissioner. No damage has been suggested to be likely to be incurred if relief is granted, and the leisurely way in which the 58.13 reasons were prepared

suggests that in fact no urgent need was felt to have access.

For the respondents, it was put that an explanation of the absence of the considerations, the absence of which from the 8.13 statement was relied upon by the applicants, is that those considerations went, not to the decision to have access, but to the enforcement of it. It seems to me that this argument inevitably raises a serious question as to whether that is so or not. The applicants, in reply, say that a decision to have access is one decision, which involves all that is incidental to the exercise of that access, and it seems to me that it cannot be

It was also put, on behalf of the respondents, that a number of the matters which the applicants claim should have been taken into account, as pointing to the burdensomeness of access, were matters which were only raised subsequently to the decision. It seems to me that there must be a serious question whether those matters, or any of them, were so obviously likely to be involved that they should have been considered, so that the raising of them subsequently is merely an evidentiary matter, the considerations themselves being considerations which as a matter of law the Commissioner was bound to take into account, at least as reasonably likely to arise. Again, the applicants' propositions on that subject do not seem to me to be propositions of the kind which could be rejected as unarguable, and I. think

Having regard to what was said in the two Full Court

decisions in Aboriginal Development Commission v. Ralkon Agricultural Co. Pty. Ltd. (1987) 74 A.L.R. 505 at 509-10

(supra), I do not think that I should fail to take into account the strength of the arguments with respect to the balance of convenience when considering whether there is a serious question to be tried. If I add the strength of the considerations relating to the balance of convenience into the scales, it seems to me that the decision comes down quite definitely in favour of the applicants. Accordingly, I propose to grant the relief sought.

It was suggested by counsel for the respondents that the relief should be subject to a condition relating to the identification of the documents in respect of which privilege is claimed. I do not think that I should impose that condition at this stage, in view of the fact that the serious question to be tried does not seem to me inevitably to relate only to those documents for which privilege is claimed, but rather to _ the decision. It may be that in the course of the preparation of the case for final hearing what the respondents seek will have to be done anyway, but I think that is a matter I do not need to decide with the same urgency with which at this stage I have to decide whether or not interlocutory relief should be granted to prevent

There has been no suggestion that, if I came to these views, the relief as sought in paragraph 1 of the notice of motion is inappropriate. Accordingly I make an order in terms of paragraph 1 of the notice of motion. I direct that the directions hearing be brought forward to a date to be fixed by

arrangement with the parties. I order that the respondents pay

I certify that this and the preceding seven (7) pages are a true copy of the Reasons for Judgment rein of his Honour

Solicitors for the Respondent: Australian Government Solicitor