Commissioner of Taxation v Hacon Pty Ltd

1. The appeal be allowed.
2. Orders 1, 2 and 3 of the orders made by the primary judge on 13 June 2017 be set aside and in lieu thereof the Application be dismissed.
3. The respondents pay the appellant's costs of the appeal and the proceedings below, as agreed or taxed. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

THE COURT: 1 The issue in this appeal is whether the Commissioner was entitled to decline to rule on an application for a ruling made by the respondents ("Hacon"). An application for a ruling had been made on 20 May 2016 under Part 5-5 of Schedule 1 to the Taxation Administration Act 1953 (Cth) ("the 1953 Act"). On 17 August 2016 the Commissioner informed the respondents that he had decided to exercise his discretion to decline to rule on the application on the basis of s 357-110(1)(a) of Schedule 1 to the 1953 Act. The respondents sought judicial review of that decision pursuant to s 39B of the Judiciary Act 1903 (Cth) and the Administrative Decisions (Judicial Decisions) Act 1977 (Cth). Logan J decided the judicial review application in favour of the respondents and ordered that the Commissioner's decision "on 19 (sic) August 2016" be quashed and remitted the matter to the Commissioner for the purpose of dealing with the ruling application according to law. It is from those orders that the Commissioner has appealed to the Full Court. 2 The Commissioner's entitlement to have declined to rule on the application, and his Honour's orders which are the subject of appeal, depend upon the proper construction of ss 357-105 and 357-110 in Schedule 1 to the 1953 Act and their application to the Commissioner's decision. The learned primary judge considered that the Commissioner could not decline to make a ruling on the application under s 357-110(1)(a) but was required to request the respondents to give information under s 357-105(1) because his Honour had concluded, upon his Honour's construction of those provisions, that the Commissioner considered that he needed further information in order to make the requested ruling. 3 Much of the debate before his Honour, and on appeal, was concerned with the meaning and content of the words "information" and "assumptions" appearing in ss 357-105(1) and 357-110(1) respectively. It was submitted that there was a tension between those words and the way in which those provisions were to operate in respect of an application for a ruling. Section 357-105(1) compels the Commissioner to request information in particular circumstances while s 357-110(1)(a) gives the Commissioner a discretion to decline to make a ruling in other circumstances. The Commissioner had submitted that he had a discretion to decline to make the ruling sought in the application because he considered that the correctness of the ruling depended upon which assumptions were made about future events whilst the respondents submitted, and his Honour accepted, that the Commissioner had considered that he needed information to make the ruling and, therefore, was required by s 357-105(1) to require the respondents to give that information rather than to decline to make the ruling. 4 The relationship between the two provisions is less complicated than the arguments made by the parties suggest. Part 5-5 of Schedule 1 to the 1953 Act provides for a means of identifying the Commissioner's view about how certain laws administered by the Commissioner apply to a person by permitting applications for private rulings. Section 359-10 permits applications for a private ruling which the Commissioner is permitted to make pursuant to s 359-5(1). 5 The Commissioner may be bound to make a ruling although the Commissioner need not rule in favour of an applicant. An applicant, if dissatisfied with a ruling, may object against it in the manner set out in Part IVC of the 1953 Act: see s 359-60 of Schedule 1 to the 1953 Act. 6 Section 359-35 provides: 359-35 Dealing with applications (1) The Commissioner must comply with an application for a * private ruling and make the ruling. However, this obligation is subject to subsections (2) and (3). (2) The Commissioner may decline to make a * private ruling if: (a) the Commissioner considers that making the ruling would prejudice or unduly restrict the administration of a * taxation law; or (b) the matter sought to be ruled on is already being, or has been, considered by the Commissioner for you. (3) The Commissioner may also decline to make a * private ruling if the matter sought to be ruled on is how the Commissioner would exercise a power under a relevant provision and the Commissioner has decided or decides whether or not to exercise the power. Example: Michael applies for a private ruling on the way in which the Commissioner might exercise the Commissioner's discretion under section 255-10 (deferring the payment time). Rather than make the ruling, the Commissioner decides to defer the time at which an amount would otherwise be payable by Michael. Note: The Commissioner may also decline to make a private ruling if: (a) the Commissioner has requested the applicant to give further information under section 357-105 and the applicant has not given it to the Commissioner within a reasonable time; or (b) the Commissioner considers that the correctness of a private ruling would depend on which assumptions were made about a future event or other matter (see section 357-110). (4) The Commissioner must give the applicant written reasons for declining to make a * private ruling. By this provision the Commissioner is required to comply with an application for a private ruling and to make the ruling except where the Commissioner is given a discretion to decline to do so. In that context s 357-105(1) requires the Commissioner to request an applicant to provide information if the Commissioner considers "that further information is required to make" the ruling. In such circumstances the time within which the Commissioner must make the ruling is extended (see s 359-50(2)) and the Commissioner may decline to make the ruling if the applicant does not give the information to the Commissioner within a reasonable time (see s 357-105(2)). 7 The obligation upon the Commissioner by s 357-105(1) to request an applicant to give information to the Commissioner is limited to those circumstances where the Commissioner "considers that further information is required to make" the ruling. Section 357-105(1) provides: 357-105 Further information must be sought (1) If the Commissioner considers that further information is required to make a * private ruling or an * oral ruling, the Commissioner must request the applicant to give that information to him or her. Note: The Commissioner should make a private ruling within 60 days. However, if the Commissioner requests further information under this section, that period is extended: see subsection 359-50(2). (2) The Commissioner may decline to make the ruling if the applicant does not give the information to the Commissioner within a reasonable time. Note: The Commissioner must give the applicant written reasons for declining to make a private ruling: see section 359-35. The operation of the provision is both mandatory and specific. It compels the Commissioner to require an applicant to provide information and it specifies the information to be requested as that which is required "to make" the ruling. It is not a general power conferred upon the Commissioner to require a taxpayer to give information or a substitute or an addition to the Commissioner's otherwise broad and far reaching power to compel taxpayers to provide information: see ss 353-10 and 353-15 in Schedule 1 of the 1953 Act formerly found in ss 263 and 264 of the Income Tax Assessment Act 1936 ("the 1936 Act"). The provision in s 353-105 is, rather, a specific safeguard for applicants for private rulings which ensures that rulings will be made where what would otherwise prevent the making of the ruling was the absence of particular information which once provided enables the Commissioner to make a ruling in compliance with the application and s 359-35(1). Its statutory predecessor to the same effect had been in s 14ZAM of the 1953 Act which compelled the Commissioner to request an applicant to give information if the Commissioner considered that the ruling could not be made without that information and "there would be no reason for the Commissioner not to comply with the application for the ruling" if that information were given. 8 The obligation on the Commissioner to require an applicant to give information, however, does not arise where the correctness of a ruling "would depend on which assumptions were made about a future event or other matter". In that circumstance s 357-110(1) confers upon the Commissioner a discretion either to decline to make the ruling or to make such of the assumptions as the Commissioner considers to be most appropriate. Section 357-110 provides: 357-110 Assumptions in making private or oral ruling (1) If the Commissioner considers that the correctness of a * private ruling or an * oral ruling would depend on which assumptions were made about a future event or other matter, the Commissioner may: (a) decline to make the ruling; or (b) make such of the assumptions as the Commissioner considers to be most appropriate. (2) Before making the ruling, the Commissioner must: (a) tell the applicant which assumptions (if any) the Commissioner proposes to make; and (b) give the applicant a reasonable opportunity to respond. Note: The Commissioner should make a private ruling within 60 days. However, if the Commissioner tells the applicant about assumptions the Commissioner proposes to make under this section, that period is extended: see subsection 359-50(2). The legislative policy evident in these provisions is to leave with the Commissioner a discretion about whether to make a ruling where assumptions are needed to be made but to compel the Commissioner to obtain information where its provision will require the Commissioner to make a ruling even though the ruling will be adverse to the applicant. There is no strict dichotomy between "information" and "assumptions" which require them to be seen as discrete or inconsistent categories of facts or circumstances. The word "information" is an ordinary English word apt to cover a large range of facts and circumstances including events yet to occur and assumptions about future events. There is no reason to confine the meaning of the word "information" to existing facts or to construe the word "assumption" as relating only to events or matters that do not yet exist or are unknown. 9 The Commissioner's decision declining to rule in the present case was expressed to be because there were matters in the application for the ruling which the Commissioner considered would require him "to make assumptions about future events". The application upon which the Commissioner had been asked to rule involved a restructuring of a family business which was described by his Honour at [10]-[18] as follows: 10 The individual applicants are each sons of the late Mr Walter Hacon. Mr Walter Hacon was a grazier, as was his father before him. Hacon & Sons Pty Ltd as trustee for the Hacon Family Trust (the Trustee) was the entity which conducted during Mr Walter Hacon's lifetime and still conducts an extensive grazing business. Hacon Pty Ltd (Hacon), is a beneficiary of that trust. The shareholders in Hacon were and remain members of the Hacon family. Prior to Mr Walter Hacon's death on 6 June 2012, the shareholders were him, his wife, and their three sons, the present individual applicants. Since then, Mr Walter Hacon's wife has also died. The result is that the individual applicants are now the shareholders in Hacon. 11 The Trustee's grazing business is conducted on and from the following properties: (a) Buckingham Downs and Double Lagoon, which are owned by corporate subsidiaries of the Trustee; (b) Euraba, Franchar, Bunda Bunda and Nelia Ponds, which are owned by Mr Robert Hacon; (c) Kallala and Wirrilyerna, which are owned by Mr George Hacon; and (d) Granada, Ballaghmore, Tyndol and Cubbaroo, which are owned by Mr Peter Hacon. 12 During Mr Walter Hacon's lifetime, the Trustee and Hacon adopted the following policy as a matter of grazing business judgement, reflecting his own experience and that of his father. Business profits made in good years were distributed by the Trustee to Hacon. It was not Hacon's practice to distribute those profits by dividend. Instead, its practice was to invest funds distributed to it by the Trustee in "off- farm assets". The purpose of this practice was allow Hacon to assist with funding the business during bad years (for example by funding the provision of feed and water during periods of drought), to fund the purchase of new properties, to fund the purchase of new equipment and generally to assist with the operating costs of the grazing business. Hacon has net assets of some $30 million. 13 Mr Walter Hacon's health began to fail in 2006. Increasingly thereafter, each of the individual applicants came to have a greater say in the operation of the Trustee's grazing business. 14 Following their father's death, the individual applicants decided to restructure the grazing business so that each of them, respectively, had greater control over that part of the grazing business conducted on a property owned by the individual concerned. There were a number of reasons for this. Each individual son and his family had come to manage particular grazing properties within the business. Collective decision making had its difficulties. For example, one individual son and his family might want to purchase a property that was near to the properties which that particular family managed, but be unable to obtain agreement of the other sons and their families. The existing structure also affected the ability of individual sons (or their families) to obtain finance. This aside, the "tyranny of distance" itself inhibited collective managerial decision-making. For example, Euraba is 280km from Granada, 500km from Kallala and 600km from Double Lagoon. 15 Another reason for the restructure was the prospect in the future of additional difficulties which would arise as the individual applicants, in their time, passed away, given the further increase in the number of family members who might thereafter be involved in collective managerial decision-making in respect of the grazing business. 16 Yet another reason for the restructure was a view applicants came to hold that the existing structure offered poor asset protection. That was because each individual applicant's shares in Hacon were exposed to claims made against that individual applicant. There is significant potential for such claims given the nature of a grazing business. Many such claims have been made in the past. The applicants wanted to limit the assets that were exposed to such claims in the future. 17 In response to the decision that a restructure was necessary, the three individual applicants (and their respective families) have each established a holding company. Each holding company holds assets on three separate trusts: an operating trust, an investment trust, and a family trust. Each has also established a new banker company, the shares of which are owned by that particular individual applicant's (or their family's) holding company pursuant to that family's family trust. All of the trust deeds for the operating, investment, and family trusts were provided to the Commissioner as part of the private ruling application, along with the constitution for each of the holding companies. 18 As put to the Commissioner for ruling the "scheme" was described in the ruling application in this way (para 4.2): "4.2 To achieve the objectives of: (a) dividing the assets of the existing pastoral business into three new pastoral businesses: and (b) providing asset protection to the families controlling the three New Banker Companies for the three new pastoral business; the following steps will be taken: (c) the Banking Company will declare dividends and distribute retained profits to the newly established trusts via Redeemable Preference Shares; (d) the newly established trusts will make distributions to the New Banking Companies, where all of the ordinary shares are owned by corporate trustees of discretionary trusts; and (e) the New Banking Companies will use the retained profits in the new pastoral businesses, in the same way as Banking Company was used, but so that each of the Applicants has control over investment decisions relating to their business" The questions upon which the ruling was sought included the potential application of the anti-avoidance provisions in the 1936 Act, namely: (a) Is the scheme a scheme to which s 177E of the 1936 Act applies? (b) Alternatively, is the scheme a scheme to which s 177D of the 1936 Act applies? (c) Is there a wider scheme identified in the facts and circumstances of the ruling request? (d) Is there a narrower scheme other than a scheme to divert potential distributions of profits from the original shareholders to their associated entities as ruled in question 2? In a letter dated 12 July 2016 the Commissioner informed the respondents' advisers that the third and fourth of these questions could not be answered as rulings and expressed concerns about issuing a private ruling. 10 On 17 August 2016 the Commissioner informed the respondents via their advisers that he had decided to decline to rule in the exercise of the discretion in s 357-110(1)(a) of the 1953 Act. Paragraph 12 of that letter stated: 12. Despite the further information, there remain other matters about which no further information has been provided. These matters, even if information concerning them was provided, would also require the Commissioner to make assumptions about future events, including but not limited to the following: a. How the Trust will repay the money proposed to be borrowed ($20,810,985.92); b. Noting that Hacon is proposed to declare a fully franked dividend to each Z class shareholder (the Investment Trusts) and that the Investment Trusts will appoint to the new Banking Companies their net income for the year in which the dividends are proposed to be received, whether the income will actually be paid to the New Banking Companies and if so how payment will be effected; c. Noting that the Trading Trusts are proposed to appoint their net income for the year in which the dividends are received to the New Banking Companies, whether the income will actually be paid over and if so by what means; d. Whether the 1/3 interest in the proposed loan will be appointed to the New Banking Companies; e. After Hacon Pty Ltd is liquidated how the Trust assets and liabilities will be divided between the families; f. How the land owned by Hacon Holdings Pty Ltd and Hacon Holdings No 2 Pty Ltd will be divided between the families or otherwise dealt with; and g. What the assets and liabilities of the Trust and each of the Investment Trusts, the Trading Trusts and the New banking Companies will be immediately following completion of the restructure. His Honour considered, at [35] of his Honour's reasons, that letter as evidence of the Commissioner having considered that he needed "further information in order to make the requested ruling". That conclusion was based upon his Honour's view that information required for the purposes of s 357-105(1) had to be requested by the Commissioner from an applicant for a ruling and was not assumptions about a future event or other matter that would enliven the Commissioner's discretion to decline to make a ruling under s 357-110(1)(a). 11 The Commissioner's letter of 17 August 2016, however, was not evidence that the Commissioner considered that the matters identified in paragraph 12 of the letter were information which was required to make the ruling which was sought. On the contrary, the Commissioner did not express a view that the matters in paragraph 12 were "required to make" the ruling but, rather, as matters justifying the exercise of a discretion not to make the ruling. That may be seen from the letter as a whole, from the content of the matters in paragraph 12, and from the words in paragraph 12 preceding the sub-paragraphs where each of the matters in the sub-paragraphs were expressly referred to as "assumptions" rather than more generally as "information". 12 Each of the matters in paragraph 12 may have been information but none was information which was required by the Commissioner to make the ruling and nothing said by the Commissioner anywhere in his decision by letter dated 17 August 2016, or elsewhere, would indicate that any of the matters in paragraph 12 of the letter whether taken individually, or in part or together, was required to make the ruling. Each matter, however, albeit information, was also an assumption about either a future event or about a future other matter that enlivened the Commissioner's discretion under s 357-110(1)(a) to decline to make the ruling. 13 It was submitted by the respondents that the decision in CTC Resources NL v Commissioner of Taxation (1994) 48 FCR 397 required the matters in paragraph 12 of the Commissioner's letter to be seen as information coming within s 395-105 rather than as assumptions within the meaning of s 395-110. That case was concerned with earlier provisions to those now found in Schedule 1 to the 1953 Act, but those provisions also provided a mandatory obligation on the Commissioner to obtain information if needed to make a ruling and gave a discretion either to decline to make a ruling or to make assumptions where the Commissioner considered the correctness of a private ruling to depend upon which assumptions were made about a future event or other matter. The case did not give rise to precisely the same issue as is in this appeal, but the Court came to consider whether an element of a contemplated transaction was to be considered as information or was dealt with as an assumption. The importance of the difference in that case, as in the present, is that information sufficient to make a ruling may compel the Commissioner to make a ruling, even an adverse ruling, (unless one of the exceptions apply), whilst an assumption would permit the Commissioner to decline to rule. 14 CTC Resources was concerned with applications for two rulings in respect of a financing transaction. The Commissioner had made an assumption about a matter which Gummow J (with whom Jenkinson J agreed) considered was information which the applicant for the ruling ought to have been given the opportunity to provide as information. At 415 Gummow J said: However, in my view, the interrelation between the provisions I have discussed is such that the Commissioner should not make assumptions as to information which the applicant might be given the opportunity to provide under s 14ZAM. The present is such a case. It is not one for the making of assumptions under s 14ZAQ. However, as I have already indicated, with reference to p1 para 2(a) and p4 para 4 of the objection decision letter of 4 August 1994, this is what was done in the present case. Hill J proposed at 435 a course to the same effect. The detail in question in that case was described at 410-411 from the reasons of the Commissioner as follows: The bonus pool has a capacity to serve several functions and possesses a character and use not associated with a conventional Share Premium Account ("the SPA"). The payment of the dividend is virtually instantaneous and there is no doubt that Westpac will not permit the SPA to be used for any other purpose. Westpac effectively has a lien or beneficial interest over the funds of the SPA. In these circumstances I do not consider that the payment from the SPA is a deemed dividend for the purposes of s 6(4) of [the Assessment Act]. It does not follow from the decision in CTC Resources, as was submitted for the respondents, that all "matters that can be dealt with by way of provision of further information under s 357-105 are not matters that properly fall within the scope of 'assumptions' for the purposes of s 357-110". For information to fall within the provision it must be information the absence of which prevents the ruling being made or, in other words, is information which, if given, will enable the ruling to be made. An applicant should not be deprived of a ruling (with the benefit of its terms or an entitlement to object and appeal under Part IVC) by the Commissioner classifying some particular (to use a neutral word) as an assumption if the absence of that particular prevents the ruling being made and the giving of the information upon the Commissioner's mandatory request will enable the ruling to be made. None of the matters identified in paragraph 12 of the Commissioner's letter as assumptions have that effect in relation to the application for ruling if those matters are seen as information. The details identified by the Commissioner in paragraph 12 of his letter are unlike those considered by the Court in CTC Resources. The matters identified by the Commissioner in paragraph 12 of his letter in the present case would not be, and were not shown to be capable of being, information needed by the Commissioner to make a ruling; they were, rather, matters which the Commissioner considered showed that he could not make the ruling without making assumptions of the kind contemplated by s 357-110. 15 It becomes unnecessary to consider the separate ground of appeal of the Commissioner to the effect that the Commissioner was not obliged to make the ruling because the application was not for a ruling "on the way in which the Commissioner considers a relevant provision applies or would apply to [a particular person or persons] in relation to a specified scheme". That ground of appeal, however, should be rejected if it were necessary to have considered it. 16 The power to make an application for a private ruling is found in ss 359-5 and 359-10 in Schedule 1 to the 1953 Act in the following terms: 359-5 Private rulings (1) The Commissioner may, on application, make a written ruling on the way in which the Commissioner considers a relevant provision applies or would apply to you in relation to a specified * scheme. Such a ruling is called a private ruling . Note: Section 357-55 specifies the relevant provisions. (2) A * private ruling may cover any matter involved in the application of the provision. 359-10 Applying for a private ruling (1) You, your * agent or your * legal personal representative may apply to the Commissioner for a * private ruling. (2) An application for a * private ruling must be made in the * approved form. (3) You, your * agent or your * legal personal representative may withdraw the application at any time before the ruling is made. The Commissioner must confirm the withdrawal in writing. The provisions do not prescribe how an application may be made beyond providing that it must be made in the approved form. Section 359-20 requires that a private ruling state certain details: 359-20 Private rulings must contain certain details (1) A * private ruling must state that it is a private ruling. (2) A * private ruling must identify the entity to whom it applies and specify the relevant * scheme and the relevant provision to which it relates. Note 1: Commissioner must tell the applicant which assumptions the Commissioner made in making the ruling: see section 357-110. Note 2: Section 357-55 specifies the relevant provisions. The purpose of an application is to enable the Commissioner to "make a written ruling on the way in which the Commissioner considers a relevant provision applies or would apply" to the applicant in relation to a specified scheme but there is no reason to confine or prescribe by statutory construction how an application for such a ruling is to be made. There is, for example, no reason to require an application to be expressed in words requesting a ruling on the way in which the Commissioner considers a relevant provision applies or would apply to a person in relation to a specified scheme. To do so would be to place form over substance and would create a potentially artificial impediment to the Commissioner's power to make a ruling in the terms of s 359-5. The statutory description of a ruling as "the way in which the Commissioner considered a relevant provision applies or would apply" to an applicant in relation to a specified scheme bears upon the character of what the Commissioner produces but does not govern how an application may be made. 17 The function of the ability in s 359-5 to make an application is to enliven the Commissioner's power to make a ruling in the terms of the section. The Commissioner may require an application to be made in an approved form and can, to that extent, control the form and the content of applications for rulings. He had no difficulty in treating the application which had been made in this case as an effective application for a ruling. Applications for rulings may be made in many circumstances. The objects of these provisions are set out in s 357-5 in broad terms, namely: 357-5 Object of this Part (1) The object of this Part is to provide a way for you to find out the Commissioner's view about how certain laws administered by the Commissioner apply to you so that the risks to you of uncertainty when you are self assessing or working out your tax obligations or entitlements are reduced. (2) This object is achieved by: (a) making advice in the form of rulings by the Commissioner available on a wide range of matters and to many taxpayers; and (b) ensuring that the Commissioner provides rulings in a timely manner; and (c) enabling the Commissioner to obtain, and make rulings based on, relevant information; and (d) protecting you from increases in tax and from penalties and interest where you rely on rulings; and (e) protecting you from decreases in entitlements where you rely on rulings; and (f) limiting the ways the Commissioner can alter rulings to your detriment; and (g) giving you protection from interest charges where you rely on other advice from the Commissioner, or on the Commissioner's general administrative practice. (3) A further object of this Part is to provide a way for you to find out * Innovation and Science Australia's view about whether activities are not ineligible activities for the purposes of applying capital gains tax provisions to venture capital investments. Note: For rulings by Innovation and Science Australia: see Division 362. Section 359-20 prescribes what a ruling must contain but there is no reason to construe the provisions, in light of these objects and the Commissioner's power to determine the content of the ruling in s 359-5, beyond that an application directs the attention of the Commissioner to the fact that the applicant seeks a ruling by reference to an entity to whom it applies in relation to a specified scheme and in relation to the provisions to which it relates. 18 The word 'scheme" is defined in s 995-1 of the Income Tax Assessment Act 1997 (Cth) to mean any arrangement; or any scheme, plan, proposal, action, course of action or course of conduct, whether unilateral or otherwise. And "arrangement" is defined to mean any arrangement, agreement, understanding, promise or undertaking, whether express or implied, and whether or not enforceable (or intended to be enforceable) by legal proceedings. 19 The Commissioner did not contend that the respondents had not complied with the approved form but submitted, in effect, that the approved form could not control the substantive statutory provision. It followed, in the Commissioner's submission, that an application to commence the ruling process must, at the point of application, answer s 359-5, that is, be as to the way in which the Commissioner considered a relevant provision applied or would apply to the taxpayer or taxpayers in relation to a specified scheme. If the application did not, then, so the submission went, it was ineffective such that the Commissioner had no obligation to consider it or to request information or, it seems, to refuse to rule on it. 20 The question is one of statutory construction, and much turns on the purpose of the provision for an application. However, in the present case, where the Commissioner has discretionary powers directed to effecting the beneficial purpose of the legislation, we do not accept that an application is ineffective if it does not enable the Commissioner, without more, to make the ruling requested. 21 We do not accept the Commissioner's central contention that ss 359-5 and 359-10 are to be read as a composite, controlling not only the content of a ruling but also the content of an application. In our opinion, the authorities on which the Commissioner relied, Corporate Business Centres International Pty Ltd v Federal Commissioner of Taxation [2004] FCA 458; 137 FCR 108 and Lamont v Federal Commissioner of Taxation [2005] FCA 513; 144 FCR 312, are directed to the content of a ruling rather than to the content of an application. 22 An application would not be ineffective merely because, on consideration by the Commissioner, it were rejected on the merits. The contention by the Commissioner seeks to construe the legislation so as to curtail the obligation to consider the substance of the application. 23 In our opinion, an application is effective where it is in such a form that the Commissioner is able to deal with it or, to put it differently, where it permits the determination of the application. In the present case the application outlined the scheme as contended for by the respondents and listed the questions and issues they wanted the ruling, for which they were applying, to address. The application did so by reference to certain provisions of Part IVA of the 1936 Act. 24 In the present case, it is impossible for the Commissioner successfully to contend that he was not able to deal with the application because he was able to indicate the difficulties he perceived, and did so by his proposed notice of intention to decline to rule dated 12 July 2016. Not only did this provide to the respondents an opportunity to be heard but it also may have elicited material which, taken with the original form of application, could have removed those difficulties: see Corporate Business Centres International at [56]. 25 An illustration from a different context is provided by Nicovations Australia Pty Ltd v Secretary, Department of Health [2016] FCA 394; 338 ALR 429. There a question arose as to the validity of an application under the Therapeutic Goods Act 1989 (Cth). The applicant had used one approved form, whereas the respondent contended that the applicant should have used a different approved form. In that statutory context, it was submitted that at the point of application the substantive character of the goods, to be evaluated under s 25, determined which form of application could be used and, if a different form were used, the application was invalid. That submission was not accepted. 26 As in the present case, the construction which was not accepted by the Court would have had the substantive provision, concerned with the merits of the application, controlling the effectiveness of the application. 27 We accept, as noted by Hill J in Bellinz v Commissioner of Taxation (Cth) (1998) 84 FCR 154 at 170, the practical difficulty in some cases which would be faced by the Commissioner in giving a private ruling as to whether Pt IVA applied to a particular arrangement. But that does not go to the efficacy of an application. 28 In the circumstances this ground of appeal would have been dismissed if it had been necessary to have considered it. I certify that the preceding twenty-eight (28) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justices Robertson, Pagone and Derrington.