Binetter v Deputy Commissioner of Taxation

Solicitor for the Appellant: Signet Lawyers Pty Limited

Counsel for the Respondent: Mr D J Fagan SC with Ms K C Morgan

Solicitor for the Respondent: Australian Government Solicitor

IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION NSD 1003 of 2012

JUDGES: EDMONDS, PERRAM AND JAGOT JJ DATE OF ORDER: 6 SEPTEMBER 2012 WHERE MADE: SYDNEY

1. The appeal be dismissed.
2. The appellant pay the respondent's costs of the appeal.
3. Time for compliance with the notice issued to the appellant on 24 February 2012 pursuant to s 264(1)(a) of the Income Tax Assessment Act 1936 (Cth) be extended until 5:00 pm on 20 September 2012 or until such further time and date as the respondent may by notice in writing to the appellant allow. 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 1003 of 2012

JUDGES: EDMONDS, PERRAM AND JAGOT JJ DATE: 6 SEPTEMBER 2012 PLACE: SYDNEY

Introduction 1 By her amended notice of appeal the appellant appeals from part of the judgment of a judge of this Court (Binetter v Deputy Commissioner of Taxation (No 3) [2012] FCA 704) dismissing her further amended originating application for judicial review of the decision of the respondent ("Commissioner") under s 264 of the Income Tax Assessment Act 1936 (Cth) ("the 1936 Act") to issue a notice dated 24 February 2012 requiring the appellant to furnish information and to produce documents ("the Notice"). 2 The appellant appeals from that part of the judgment relating to whether the appellant was entitled to refuse to comply with the Notice on one or more of the following grounds: (1) Self-incrimination privilege; (2) that the Notice was invalid as being misleading for the reason that the covering letter asserted that self-incrimination privilege was abrogated by s 264; and (3) that the Notice was invalid as it was issued for an improper purpose.

Grounds of Appeal 3 The grounds of appeal were grouped under two heads: self-incrimination privilege and improper purpose.

Self-incrimination privilege 4 The appellant claimed that the Court below erred in: (1) Holding that a recipient of a notice under s 264 of the 1936 Act may not refuse to comply with it on the basis of self-incrimination privilege: at Reasons ("R") [21], [23] and [25]. According to the appellant, the Court ought to have held that the recipient, the appellant, of the Notice is entitled to refuse to comply with it to the extent of a valid claim of self-incrimination privilege; (2) failing to hold that the assertion in the covering letter accompanying the Notice, that a recipient of a notice could not refuse to comply with it on the basis of self-incrimination privilege, rendered the Notice misleading and therefore invalid: R [24]-[26]. According to the appellant, the Court ought to have held that in the circumstances where the covering letter asserted that self-incrimination privilege was not available, the Notice was thereby misleading and invalid.

Improper purpose 5 The appellant claimed that the Court erred in holding that in issuing the Notice, the function the Commissioner was seeking to exercise was to make a decision on the objection: R [91]. According to the appellant, the Court ought to have held the guiding or dominant purpose in issuing the Notice was to affect the outcome of anticipated court or tribunal proceedings under Pt IVC of the Taxation Administration Act 1953 (Cth) ("TAA") said to be an improper purpose. 6 The appellant claimed that the Court erred in failing to draw an inference from the available evidence that the Commissioner had made the objection decision or deferred the making of the objection decision in order to allow the Commissioner to issue the Notice to advance his interests in anticipated Pt IVC proceedings: R [108]. According to the appellant, the Court ought to have held that: (1) There was evidence to sustain an inference that the Commissioner had, at the time of issuing the Notice, made the objection decision or deferred the making of the objection decision in order to allow the Commissioner to issue the Notice to advance his interests in anticipated Pt IVC proceedings; (2) the unexplained failure of the Commissioner to call the person who made the decision to issue the Notice led to the inference referred to being more readily accepted; and (3) a purpose and further or in the alternative, the dominant or guiding purpose in issuing the Notice was not to exercise the function of determining the objection, but to affect the rights of the appellant and the Commissioner in the Pt IVC proceedings and that such purpose was an improper purpose which invalidated the Notice.

Relief Sought 7 The appellant sought the following relief: that the decision below be set aside and in lieu: (1) A declaration that the Notice is invalid; and/or in the alternative, (2) a declaration that the appellant is entitled to rely upon a valid claim of self-incrimination privilege, in order to refuse to provide information and documents otherwise required under the Notice.

Legislation 8 Section 264 of the 1936 Act relevantly provides: "264(1) The Commissioner may by notice in writing require any person, whether a taxpayer or not, including any officer employed in or in connexion with any department of a Government or by any public authority: (a) to furnish the Commissioner with such information as the Commissioner may require; and (b) to attend and give evidence before the Commissioner or before any officer authorized by the Commissioner in that behalf concerning the person's or any other person's income or assessment, and may require the person to produce all books, documents and other papers whatever in the person's custody or under the person's control relating thereto. (2) The Commissioner may require the information or evidence to be given on oath or affirmation and either verbally or in writing, and for that purpose the Commissioner or the officers so authorized by the Commissioner may administer an oath or affirmation …" 9 By s 8C(1) of the TAA, a person who refuses or fails, when and as required under or pursuant to a taxation law to do so, to furnish any information to the Commissioner or another person; or to produce a book, paper, record or other document to the Commissioner or another person, is guilty of an offence. An offence under s 8C(1) is an offence of absolute liability, as defined in s 6.2 of the Criminal Code Act 1995 (Cth) ("the Criminal Code"). By s 8C(1B), s 8C(1) does not apply to the extent that the person is not capable of complying with the relevant requirement. A defendant bears an evidential burden in relation to the matters in s 8C(1B); see s 13.3(3) of the Criminal Code. By s 8E of the TAA, a first offence against s 8C is punishable on conviction by a fine not exceeding 20 penalty units.

The Notice 10 The Notice required the appellant to furnish the information in Schedule A not later than 23 March 2012 and produce those documents described in Schedule B "which are in your custody or under your control concerning the income or assessment of Margaret Binetter for the period 1 July 2001 to 30 June 2009" not later than 23 March 2012. Schedule A to the Notice was in the following terms: "1. In your objection dated 18 February 2011, you contend that the relevant deposits made into joint Commonwealth Bank account number 28-011-521 represent loan repayments in respect of loans from you to Erma Nominees Pty Ltd as Trustee for the Erwin Binetter Family Trust ('Erma Nominees') and Ligon 158 Pty Ltd as Trustee for the Caringbah Investment Trust ('Ligon 158'). Provide full details concerning the terms and history of each purported loan, including: a. the date the loan was made and to which entity b. the account name(s) and number(s) which the loaned funds were made from c. the account name(s) and number(s) which the loaned funds were made into d. the principal amount of the loan e. the purpose of the loan, i.e. why you personally loaned funds to the relevant entity and for what purpose the entity used the loaned funds for [sic] f. the repayment conditions of the loan, including the frequency of the repayments, amount of the repayment [sic], interest payable on the loan, default interest payable g. the security provided, and h. the current balance of the loan. 2. On 17 October 2011 you provided copies of several hand written extracts from the financial accounts of the relevant entities to support your claim of a loan arrangement between the relevant parties and explained that: on 27 May 2004 the premises at Pagewood, NSW at which the majority of Erma's and Ligon 158's books and records were kept were destroyed by fire. Given your statement of 17 October 2011 that a majority of the relevant documents were destroyed, you are required to explain for the period after 27 May 2004: a. how the amounts of the purported loan repayments were calculated, and what documents were used to calculate them, and b. how the outstanding balance of the purported loan was determined, and what documents were used to determine this. 3. An analysis of the relevant bank statements for Commonwealth Bank account number 28-011-521 shows that the amounts of the relevant deposits varied significantly. For example, on 25 February 2005 you received $999,992 from Ligon 158 and on 3 March 2005 you received $8 from Ligon 158. You are required to explain why there are significant variances in the amounts of the purported loan repayments. 4. Advise whether at anytime during the relevant period, Erma Nominees and/or Ligon 158 were unable to meet their obligations under the purported loan arrangement and failed to make repayments or were unable to make repayments to you in full. If so, provide full details of how the purported loan agreement dealt with such default payments and whether this clause was enforced. If this was not enforced, explain why not. 5. You declared $50,000 as 'other assessable income' in each of your tax returns for the 2000-01 to 2003-04 years of income. Provide details of: a. the source of the funds b. the account name(s) and number(s) which the relevant funds were paid into, and c. the activities undertaken to earn the relevant income. 6. You did not report any amounts as 'other assessable income' in your tax returns for the 2004-05 and subsequent years of income. Confirm that you did not continue to receive the 'other assessable income' which you received in the 2000-01 to 2003-04 years of income and provide details of the change in circumstances which led to you ceasing to receive this particular income." 11 Schedule B to the Notice was as follows: "Pursuant to questions 1 to 6 in Schedule A, please provide the following (note that copies of the documents will be sufficient): 1. Bank statements for the relevant bank accounts showing that you loaned the respective amounts to Erma Nominees and Ligon 158. 2. Bank statements for the relevant bank accounts showing that Erma Nominees and Ligon 158 received the respective amounts from you. 3. Loan agreements and any other documents evidencing loan agreements between you and Erma Nominees and you and Ligon 158, other than the hand written extracts provided on 17 October 2011. 4. Documents showing a full history and running balance of the purported loans between you and Erma Nominees and you and Ligon 158. 5. Documents used to calculate the amount of the purported loan repayments for the period after 27 May 2004. 6. Documents used to determine the balance of the purported loans for the period after 27 May 2004. 7. Bank statements and any other documents showing that you received $50,000 as 'other assessable income' in each of the 2000-01 to 2003-04 years of income. 8. Documents showing why you ceased receiving your 'other assessable income' in the 2004-05 and later years of income." 12 The covering letter dated 24 February 2012, so far as relevant to the second ground of appeal, that is, that the Court erred in failing to hold that the assertion in the covering letter accompanying the Notice, that a recipient of a notice could not refuse to comply with it on the basis of self-incrimination privilege, rendered the Notice misleading and therefore invalid, was in the following terms: "You cannot refuse to comply with this notice on the basis of self-incrimination. However, section 264 of the ITAA 1936 does not override legal professional privilege. We may also allow some advice to remain in confidence between you and your professional accounting adviser. We have adopted a series of proformas that you are requested to complete in respect of every communication for which you make a claim. If you complete the proformas, this will enable us to make an informed decision about the claim. If you think any of the documents requested falls into either category, please contact Mr Stasinopoulos as soon as possible. The information required in the attached notice is for the purposes of the ITAA 1936 and the Income Tax Assessment Act 1997."

Overview 13 A fundamental difficulty with the first ground of appeal in terms of the primary relief sought, namely, a declaration that the Notice is invalid, is that even if this Court were to conclude, contrary to the decision of the Full Court in Commissioner of Taxation v De Vonk (1995) 61 FCR 564 ("De Vonk"), that self-incrimination privilege is not abrogated by s 264, the Notice would not thereby be rendered invalid. So much was effectively conceded by the appellant and no doubt explains the alternative relief sought by the appellant, namely, a declaration that she is entitled to rely upon a valid claim of self-incrimination privilege in order to refuse to provide information and documents otherwise required under the Notice. 14 But the alternative declaratory relief sought also suffers from a fundamental difficulty in that it is hypothetical: Forster v Jododex (1972) 127 CLR 421 at 437, 438; Ainsworth v Criminal Justice Commission (1992) 175 CLR 564 at 581, 582. No claim of self-incrimination privilege has been made by the appellant in respect of any particular requirement of the Notice. Indeed, the appellant has not even adduced any evidence that in respect of any response she is required to give to the Notice she might wish to invoke privilege against self-incrimination, if it were available. The hypothetical nature of the relief sought is exemplified by a question which was put to counsel for the appellant during the hearing of the appeal and, in particular, counsel's response (T 3/30): "PERRAM J: [J]ust as a matter of interest, which paragraph, Schedule A, do you say now would incriminate your client if you were required … to reply? … MS SEIDEN: Well, paragraphs 1, 2, 3 and the documents in Schedule B, perhaps five and six and, your Honours, I don't have instructions - specific instructions - on the self-incrimination claim. This submission is based on a construction of the Notice and the allegation that Mrs Binetter deliberately failed to disclose the income which obviously suggests a prosecution of defrauding the Commonwealth or seeking an advantage by deception, and that requesting information about the very subject of that foreshadowed prosecution would raise the issue, so primarily it's paragraphs 1, 2 and 3." 15 No doubt these difficulties with the first ground of appeal in terms of the relief sought, also explain reliance by the appellant on the second ground of appeal, namely, that the Notice was invalid as being misleading for the reason that the covering letter asserted that self-incrimination privilege was abrogated by s 264. But this ground has its own difficulty. It is difficult to understand how the requirements of the Notice are rendered misleading by the terms of the covering letter; what is said in the covering letter is either right or wrong; it does not render the requirements of the Notice misleading. As the learned primary judge said at R [24]: "If, as the applicant submitted, s 264 and a notice under it does not displace the privilege against self-incrimination then that is the position, irrespective of the covering letter." 16 We now turn to deal with the appellant's submissions and our analysis of them in respect of each separate ground of appeal.

First Ground - Self-incrimination is not abrogated by s 264

The appellant's submissions 17 The appellant accepted that in De Vonk a Full Court of this Court held that self-incrimination privilege was abrogated by s 264, but nevertheless contended that the reasoning in De Vonk, at least in relation to what the appellant called "the express abrogation argument", namely, that the words appearing in s 8C(1B) of the TAA, "not capable of complying" with the Notice, reflect or evince legislative intention to abrogate self-incrimination privilege, had been "undermined", even "directly overruled", by the High Court's observations in Daniels Corporation International Pty Ltd v Australian Competition and Consumer Commission (2002) 213 CLR 543 ("Daniels") at [33] per Gleeson CJ, Gaudron, Gummow and Hayne JJ at [33] and McHugh at [46]. 18 The appellant further contended that to maintain a contrary contention would be wholly inconsistent with the line of authorities that support the proposition that s 264 does not abrogate legal professional privilege (Baker v Campbell (1983) 153 CLR 52: at 87, 88 per Murphy J; at 93, 96 per Wilson J; at 115, 116, 118 per Deane J and at 121, 127 per Dawson J) as self-incrimination privilege is an important common law immunity (Sorby v The Commonwealth (1983) 152 CLR 281 at 289, 294, 295, 309, 311) ("Sorby"). 19 The appellant, in support of her argument, also referred to the absence of any protection against documents and information provided pursuant to s 264 being subsequently provided to a prosecutor, cf Sorby at 294, 295 per Gibbs CJ; at 310, 311 per Mason, Wilson and Dawson JJ, specifically referring to the exceptions to s 355-25 of Sch 1 to the TAA to be found in items 2 and 3 of the table of exceptions in s 355-50(2). The appellant argued that there is no express protection against self-incrimination elsewhere under the tax legislation, which indicates that the protection is itself to be found in s 264. 20 The appellant acknowledged that on the introduction of ss 8C and 8D into the TAA in 1984, the Explanatory Memorandum stated at p 55 that s 8C "requires compliance to the extent that the subject person is capable of complying with the particular requirement. Thus, self-incrimination would not be a defence to a charge under section 8C", but observed that the High Court has consistently held that it is the language of the statute that the Court is required to interpret, rather than a statement of legislative intention issued by a Minister: Jemena Asset Management (3) Pty Ltd v Coinvest (2011) 244 CLR 508 at [50] (French CJ, Gummow, Heydon, Crennan, Kiefel and Bell JJ) referring to Saeed v Minister for Immigration & Citizenship (2010) 241 CLR 252 at [31] (French CJ, Gummow, Hayne, Crennan and Kiefel JJ) and Alcan (NT) Alumina v Commissioner of Territory Revenue (2009) 239 CLR 27 at [47] (Hayne, Heydon, Crennan and Kiefel JJ); referring also to s 34(1) of the Acts Interpretation Act 1901 (Cth). 21 The appellant's submissions also called into question the second ground relied upon in De Vonk for the Full Court's conclusion that the statute must have abrogated self-incrimination privilege by necessary implication because to do otherwise would stultify the operation of s 264. This was referred to as the "stultification argument". 22 First, the appellant referred to the observations of McHugh J at [43] in Daniels that a general power (as s 264 is) will be given some operation even if that operation is limited in scope. 23 Second, the appellant argued that in the context of the legislation in which s 264 is found there is, with respect, no stultification of the purpose of s 264 if self-incrimination privilege prevails, for the following reasons: (1) The scope of s 264 is limited by the scope and purposes of the 1936 Act: Southwestern Indemnities Limited v Bank of New South Wales (1973) 129 CLR 512 at 519-520 and Commissioner of Taxation v Australia & New Zealand Banking Group Limited (1979) 143 CLR 499 ("Smorgon") at 525 (Gibbs ACJ), 534 (Mason J), 544 (Murphy J); Industrial Equity Limited v Deputy Commissioner Taxation (1990) 170 CLR 649 at 659-60. Primarily, it is concerned with assessment: Smorgon at 536 per Mason J. The scope of s 264 does not include investigating criminal offences in relation to taxation affairs. This may be contrasted with the purpose of the legislation in question in Pyneboard Proprietary Limited v Trade Practices Commission (1983) 152 CLR 328 which was expressly directed to giving the Commissioner access to information, documents and evidence in relation to "a contravention" of the Trade Practices Act 1974 (Cth). In s 6 of the 1936 Act, "this Act" is defined to include the Income Tax Assessment Act 1997 (Cth) ("the 1997 Act") and also Pt IVC and Sch 1 of the TAA. The 1936 Act does not incorporate taxation offences of the TAA and, therefore, the purpose of the s 264 notice is not to collect evidence of a contravention of the TAA. (2) The Commissioner can issue a s 264 notice to someone other than the taxpayer and to which self-incrimination privilege is irrelevant: for instance, banks, accountants, lawyers, real estate agents or other persons. (3) Not every misstatement in a tax return will ground a prosecution for an offence. Accordingly, it will not be in every case that a claim for self-incrimination privilege will be open. There would not be, in the ordinary case, the necessary reasonable apprehension that an answer would tend to incriminate the taxpayer, in order to found a claim of self-incrimination privilege. (4) There is nothing to suggest that the offence provision that existed before 1984 stultified the operation of s 264, even though privilege against self-incrimination apparently could then be claimed. This type of analysis was employed by the High Court in Daniels, per Gleeson CJ, Gaudron, Gummow, Hayne JJ at [33] and McHugh J at [46]. In Stergis v Boucher (1989) 86 ALR 174, Hill J noted that prior to the amendments to s 8C, it was open to argument that the privilege prevailed at 188.7-189.2. (5) To the extent that it might be contended that the protection of the privilege under s 264 stultifies the assessment process, the Commissioner has numerous sources of information from which to make an assessment and is not solely reliant upon the taxpayer for the information. (6) Once there is an "assessment" it matters not whether some provision of the TAA has or has not been complied with, or if the assessment is wrong: the validity and due making of the assessment is protected and, in all but proceedings under Pt IVC of the TAA (where the taxpayer may challenge the quantum of the assessment), the assessment is conclusive proof that the particulars are correct. The reversal of the onus of proof ensures that there is no stultification of the assessment process, in the event that self-incrimination privilege prevails under a s 264 notice. (7) There is no stultification of the recovery process. Once an assessment has been issued, the Commissioner can commence to recover irrespective of Pt IVC review or appeal proceedings: ss 14ZZM and 14ZZR of the TAA. The Commissioner can recover notwithstanding the pendency of an objection. 24 In conclusion, the appellant contended that for the foregoing reasons there is no stultification of the s 264 power (or the assessment and recovery process to which it is directed), if privilege against self-incrimination prevails under s 264; with respect to their Honours in De Vonk, maintenance of the privilege against self-incrimination under s 264 will not stultify its operation.

Whether this Court should reconsider the decision of the Full Court in De Vonk? 25 The primary judge applied the decision of the Full Court in De Vonk to conclude that a recipient of a s 264 notice may not refuse to comply with the notice on the basis of self-incrimination: R [21]. His Honour specifically rejected the appellant's argument that the High Court's reasoning in Daniels undermined De Vonk: R [22]-[23]. 26 As a single judge, his Honour made no error in concluding that he was bound to follow De Vonk (see too Lander J in Australia and New Zealand Banking Group Limited v Konza [2012] FCA 196; (2012) 126 ALD 255 at [69]). 27 The approach to be adopted when this Court is asked to depart from an earlier decision has been articulated in a number of cases; it suffices to mention two. 28 In Byrne v Australia Airlines Limited (1994) 47 FCR 300, at 304 Black CJ said: "This Court is not bound by its previous decisions but will normally follow an earlier decision unless convinced it is wrong: Chamberlain v The Queen (1983) 72 FLR 1 at 8-9 per Bowen CJ and Forster J, and see Perrett v Commissioner for Superannuation (1991) 29 FCR 581 at 592. The occasions upon which the Court will depart from one of its previous decisions will be rare. In Nguyen v Nguyen (1990) 169 CLR 245 at 268-269, Dawson, Toohey and McHugh JJ referred to the practice of Supreme Courts of the States in regarding themselves as free to depart from their own previous decisions and, citing Chamberlain v The Queen, observed that the Full Court of this Court will depart from a previous decision if convinced that it is wrong. Their Honours then said: 'Where a court of appeal holds itself free to depart from an earlier decision it should do so cautiously and only when compelled to the conclusion that the earlier decision is wrong. The occasions upon which the departure from previous authority is warranted are infrequent and exceptional and pose no real threat to the doctrine of precedent and the predictability of the law: see Queensland v Commonwealth (1977) 139 CLR 585 at 620 et seq, per Aickin J.'" 29 In SZEEU v Minister for Immigration and Multicultural and Indigenous Affairs (2006) 150 FCR 214, at [187]-[190] Allsop J said: "The approach to the question as to when a Full Court will depart from an earlier Full Court decision was laid down early in the life of this Court by the then Chief Judge (later Chief Justice) Sir Nigel Bowen and Forster J in a joint judgment in Chamberlain v The Queen (No 2) (1983) 72 FLR 1 at 8-9 where their Honours said: We do not regard this court as being bound by its previous decisions. However, we will normally follow an earlier decision unless convinced that it is wrong. It was argued that Duff's case was wrongly decided. It was a closely reasoned decision. We are not persuaded that it is wrong. We consider we should follow it. In Nguyen v Nguyen (1990) 169 CLR 245 at 268-9, Dawson, Toohey and McHugh JJ observed that the extent to which a Full Court regards itself free to depart from its own previous decisions is a matter of practice for the court to determine for itself, citing, without disapproval, Chamberlain at 8-9 as the approach of this Court. In Transurban City Link Ltd v Allan (1999) 95 FCR 553 a unanimous five member Bench of the Full Court, including the Chief Justice, discussed, at [26]-[31], the circumstances in which, as a matter of practice in this Court, reconsideration of a previous decision of a Full Court should be embarked upon and when such a decision should be departed from. The proper approach enunciated in Chamberlain and Transurban is that, normally, a previous Full Court decision will be followed unless the later Full Court is convinced or persuaded of the error in the previous decision which would be perpetuated in doing otherwise. If it is a question upon which minds simply differ, both views being open, it would mean that the later court would not be convinced of the earlier court's error. Beyond these considerations, it is undesirable to formulate exhaustive criteria as to when a later Full Court should or should not depart from an earlier Full Court decision. It will depend upon the nature of the controversy, the strength of the arguments and the particular circumstances, including the degree to which the later court is persuaded of the error of the earlier court." 30 In our view, the decision in De Vonk should be followed because it is a unanimous decision of this Court which is not clearly or plainly wrong. It has stood for 17 years and despite subsequent amendments to ss 8C and 8D of the TAA, none of those amendments have sought to interfere with the position for which it stands as authority. More importantly for present purposes, we agree with the learned primary judge at R [23] that De Vonk has not been overruled either in Daniels or elsewhere. As his Honour said at R [23]: "In Daniels, the High Court was not construing s 264 in relation to the privilege against self-incrimination but was construing s 155 of the Trade Practices Act 1974 (Cth) in relation to legal professional privilege. Indeed, one of the matters referred to by the High Court for its conclusion that s 155 did not displace legal professional privilege was the express exclusion of the privilege against self-incrimination in the same section. Another matter taken into account by the High Court was that construing s 155 so that it did not displace legal professional privilege would not stultify the operation of the legislation because legal professional privilege is not available for communications made in furtherance of an unlawful or other improper purpose. Quite different considerations would apply to a claim based on the privilege against self-incrimination, particularly in relation to tax legislation." 31 The first ground of appeal must be rejected.

Second Ground - Covering letter renders Notice misleading and thereby invalid 32 As indicated at [15] above, it is difficult to understand how the requirements of the Notice are rendered misleading by the terms of the covering letter; what is said in the covering letter is either right or wrong; it does not render the requirements of the Notice misleading. 33 In reply, the appellant submitted that the covering letter is misleading, but only if De Vonk is no longer sound. In response to the first ground of appeal, we have already concluded that there is no basis upon which the decision in De Vonk should be reconsidered. On the appellant's own submission, that is sufficient to reject this second ground of appeal.

Third Ground - the Notice was issued for an improper purpose and is therefore invalid 34 This ground was raised and ventilated below and dealt with by the primary judge at R [87]-[108]. 35 As she did below, the appellant submitted that a purpose and arguably the dominant or sole purpose of issuing the Notice was to advance the Commissioner's interest in future litigation he perceived to be imminent. Further, it was submitted, there was evidence to sustain an inference that the objection decision had in fact been made, or could be made without the information and documents sought under the Notice but it had been held up in order to allow the Commissioner time to issue the Notice and receive the information to further his purpose of advancing his interests in future litigation. 36 At R [91], the learned primary judge said: "In my opinion the first element of the submission pays insufficient regard to the function the Commissioner was in fact seeking to exercise; that is, to make a decision on the applicant's objections. This is not a case where the question can be approached by asking whether the decision maker had or had not decided to commence legal proceedings: compare Korean Airlines Co Ltd v Australian Competition and Consumer Commission (No 3) [2008] FCA 701; (2008) 247 ALR 781 at [70]. This is because the administrative process of assessment, which includes making a decision on the objections, precedes the commencement of either tribunal proceedings or court proceedings by the taxpayer. Further, in the present case there are no proceedings in the Tribunal or in the Court. The Commissioner was not deciding whether proceedings should be instituted by him. Such proceedings were neither imminent nor pending although they were foreseeable if the objections were disallowed. But there was no intrusion on judicial power nor any exercise of power for an improper purpose. Thus at that level of abstraction the ground fails." 37 We agree with his Honour's observations and conclusion. We also agree with his Honour's response to the further submission that there was evidence to sustain an inference that the objection decision had in fact been made or could be made but had been held up to secure a forensic advantage in future litigation. At R [108] his Honour said: " … it is clear that the objection decisions had not been made and indeed there is no evidence that they have yet been made. To contend that the decisions could have been made without the material sought or had been held up to obtain that material is to invert the inquiry. I reject the related submission that the objection process was being used to collateral advantage. These contentions do not recognise that the better the information before the Commissioner at the objection stage the better the decision on the objection. Further, to investigate the question of fraud and evasion does not show that a decision has been made: depending on the circumstances, such an investigation is appropriate to enable a decision to be made." 38 This third ground of appeal must be rejected.

Conclusion 39 The appeal must be dismissed with costs. I certify that the preceding thirty-nine (39) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justices Edmonds, Perram and Jagot.