Associated Provincial Picture Houses Limited v Wednesbury Corporation

High Court held that, even if the circumstances were established, the Board established under that Act for consideration of release applications had a discretion as to whether or not it should exercise the power. It seems to me that if Trebilco's case is to be distinguished at all from the present case, it can only be by saying that the argument in favour of a mandatory obligation was a little stronger in that case than it is in the present case. I say that because, as I have said, the circumstances were more tightly circumscribed under the Land Tax Assessment Act than they are under the Income Tax Assessment Act. The circumstances stipulated by s 265 of the Income Tax Assessment Act are extremely broad. It is sufficient, for example, for a taxpayer to establish that he or she has suffered a loss or is in such circumstances that the exaction of the full amount of the tax will entail serious hardship. On some occasions, of course, the loss or the circumstances may be for reasons that were outside the control of the taxpayer, but that will not necessarily be so. It would be extremely odd if a taxpayer who was the author of his or her misfortunes, through imprudent or extravagant expenditure, was entitled, as a matter of right, to a release of unpaid income tax. I think it is unnecessary for me to say anything more about the first point. As I say, it is discussed in some detail by her Honour and I agree with what she has said. The second argument is always a difficult argument to maintain. In order to establish unreasonableness in the relevant sense, it is necessary to demonstrate to a Court that the decision made by the statutory decision-maker was one that no rational person, properly understanding his or her duty, could make. It is not enough that it be a decision that the members of the Court reviewing the case might not themselves have made. In the present case, Mr Corlette's application for release stated a ground of hardship: that as he was a chartered accountant, bankruptcy might jeopardise his ability to work. Apparently, when he made the application, he was not in fact working as a chartered accountant. He gave his occupation as being a sales manager for a company which, however, does not seem to have been carrying on active business at that time. Mrs Corlette was employed as an office assistant. She gave no reason for her claim of serious hardship. Despite this, the Board concluded in May 1992 that serious hardship would be sustained if Mr and Mrs Corlette were obliged to pay their tax liability. Apparently, this was done on the basis that the extent of the tax liability was so great that it could not be discharged without diminishing their ability to provide the necessities of life for themselves and their young child. The Board however refused the application, saying it was not satisfied that the granting of relief would alleviate that hardship, given the appellants' other debtors. The evidence is that they owed a very considerable sum, apparently approaching $1 million, to Equiticorp Financial Services Limited (In Liquidation) in respect of the acquisition of some shares. As I said, there was a request for re-consideration. This took place over a lengthy period in 1993 and 1994. The request for reconsideration was conveyed in an application dated 22 September 1993, signed by Mr Corlette. He requested reconsideration of the May 1992 decision "on the basis that I believe that that company, Equiticorp, has abandoned any claim against me". He gave some reasons for this belief. The Board apparently made inquiries about this matter and reached a view adverse to the application. But the appellants complained about this course being taken without them having been heard. They were then given an opportunity of putting further material before the Board and they availed themselves of that opportunity. They even put before the Board an opinion of Mr David Bennett QC relating to the Equiticorp situation. The Board was apparently minded to seek the comments of Equiticorp on the matters advanced by Mr Bennett and, in particular, to ascertain whether Equiticorp proposed to take any action. But it appears that Mr and Mrs Corlette, through their solicitor, vigorously opposed any contact with Equiticorp and the Board accordingly decided not to make any direct inquiry. It was in this situation that the request for reconsideration was finally dealt with. The letter of 20 October 1994 conveyed to the appellants the Board's decision. It acknowledged Mr Bennett's advice but commented that the Board was not prepared to reverse its earlier decision because the opinion only reflected one side of the argument. It did not reflect the views of Equiticorp. The letter went on: "The board was not satisfied that Equiticorp Financial Services Ltd (In Liquidation)(Receiver and Manager Appointed) does not intend to pursue its debt or indeed that it is precluded from pursuing that debt. The Board would have contacted the receiver/manager to either confirm there was no intention to pursue the debt or that the receiver/manager was precluded from doing so, but both you and your representative, Mr Teen, indicated strong opposition to that action. You would be aware that a Board is not prepared to grant a release in situations where it was perceived the granting of the release would benefit other creditors in an insolvency. You should now contact the Debt Collection area of the Chatswood Taxation Office to discuss payment of your liabilities." It will be seen that this letter directly responds to the ground advanced by Mr Corlette in his request for reconsideration. He had asserted that Equiticorp did not intend to pursue its debt. The Board attempted to satisfy itself about that matter but, because of the attitude of the appellants, it was frustrated in doing so. It thereupon determined the matter on the basis that it was not satisfied that what Mr Corlette had alleged was correct. It seems to me that there was nothing unreasonable or irrational about that course. Indeed, any other course might have caused some surprise. Mr Libling on behalf of the appellants focused on the last paragraph of the letter set out above. He referred to the reference to the granting of release benefiting other creditors in an insolvency and said this was an irrational approach because there was no certainty of a bankruptcy. I do not think this is the gist of the Board's reasoning. It was simply a comment and related to a general attitude. It is difficult to criticise the logic of that attitude. If the basis of a request for release is to avoid a bankruptcy, there is really not much point in granting the application if the person is likely to be made bankrupt at the instance of another creditor. The only effect of the release would be to preclude the Australian Taxation Office from proving in the bankruptcy and taking whatever dividend might be available. I think that was all that the Board was saying in the last paragraph of the letter. I think that there is no irrationality in the decision made in this case. I agree with what the learned primary judge said about that. In my view the appeal should be dismissed with costs. I certify that this and the preceding seven (7) pages are a true copy of the reasons for judgment herein of the Honourable Justice Wilcox