Incise Technologies Pty Ltd & Anor v Chief Commissioner of State Revenue

REASONS FOR DECISION 1 The Chief Commissioner of State Revenue ('the Commissioner') has appealed against a decision of the Revenue Division of the Tribunal, following consideration of an application for review, varying his determination of an objection lodged by two companies. The application for review was made pursuant to s 96 of the Taxation Administration Act 1996 ('TA Act'). The Tribunal's decision is reported as Incise Technologies Pty Ltd & Incise Sales Pty Ltd v Commissioner of State Revenue [2003] NSWADT 246 (17 November 2003). The two companies are the respondents to the appeal, and are referred to in these reasons as 'the taxpayers'. 2 The Commissioner had determined pursuant to the TA Act that, in respect of overdue tax, the taxpayers should pay interest at the market rate, interest at the premium rate and penalty tax at the rate applicable to voluntary disclosure subsequent to commencement of an investigation (80 per cent of 25 per cent). The Tribunal varied the determination by relieving the taxpayers of liability to pay the premium rate component of interest, and by reducing the penalty tax to the rate applicable to voluntary disclosure prior to investigation (20 per cent of 25 per cent). 3 The appeal is made under ss 112 and 113 of the Administrative Decisions Tribunal Act 1997 (the Tribunal Act). By virtue of s 113(2): 'An appeal … : (a) may be made on any question of law, and (b) with the leave of the Appeal Panel, may extend to a review of the merits of the appealable decision'. 4 The Commissioner asserts that there are a number of errors of law in the decision, and has applied for leave to extend the appeal to a review of the merits of the appealable decision. The taxpayers in reply asserted that the decision under appeal was correct. 5 The taxpayers operate in the computer repair and services sector. They became subject to pay-roll tax as imposed by the Pay-roll Tax Act 1971 ('PRT Act') after crossing the relevant threshold for the years 1997-98 and 1998-99. They did not pay the tax as it fell due. The liability attaches on the 7th day after the end of each relevant month, so in this instance pay-roll tax first fell due on 7 August 1997. 6 After investigation of the reasons for their failures to pay the tax, the Commissioner proceeded to demand payment of the unpaid tax and imposed penalties, as provided by the TA Act. The original decision is found in notices of assessment issued on 20 April 2000. The Commissioner rejected the taxpayers' objection by letter dated 17 August 2000. The taxpayers applied for review of the Commissioner's decision to impose interest and penalty tax at the levels specified in the notice. 7 The Commissioner imposed on the amount of tax unpaid: (1) interest at the 'market rate' (8.8% for 1997-98, 4.72% for 1998-99) (see TA Act, ss 21, 22); (2) interest at the 'premium rate' (8.00% in both years) (see ss 21, 22); (3) 'penalty tax' at the rate of 80% of 25% of the unpaid tax (see s 29, TA Act). 8 Interest: Under the TA Act the taxpayer is liable to pay interest in respect of 'the amount of tax unpaid calculated on a daily basis from the end of the last day for payment until the day it is paid at the interest rate from time to time applying under [the Act]': see s 21. The interest rate payable is the sum of the 'market rate component' and the 'premium rate' component: s 22(1). These components are defined by s 22(2)-(4): '(2) The market rate component is: (a) unless an order is in force under paragraph (b), the Bank Accepted Bill rate rounded to the second decimal place (rounding 0.005 upwards), or (b) the rate specified for the time being by order of the Minister published in the Gazette. (3) The premium component is 8% per annum. (4) In this section, the Bank Accepted Bill rate in respect of any day is the yield rate for 90-day Bank Accepted Bills published by the Reserve Bank for the month of May in the financial year preceding the financial year in which the day occurs.' 9 Penalty Tax: In addition penalty tax is payable: s 26(1) (subject to certain exceptions set out in s 26(2), not relevant here). The amount of penalty tax varies according to the culpability of the conduct of the taxpayers. The ordinary rate of penalty tax payable is 25% of the tax unpaid: s 27(1). In this case the Commissioner did not make any finding that circumstances of a more egregious kind existed (such as intentional disregard of tax law: see s 27(2)), nor on the other hand did the Commissioner make a finding that the taxpayers took 'reasonable care' to comply with the tax law or there were 'circumstances beyond the taxpayer's control', in which case no penalty tax may be imposed (s 27(3)). 10 In this case the debate as to the appropriate rate of penalty tax focussed on ss 28 and 29. Section 28 provides for the amount due under s 27 (25% of the tax unpaid) to be reduced by 80% if the taxpayer has made disclosure of 'sufficient information to enable the nature and extent of the tax default to be determined' prior to the Commissioner informing the taxpayer that an investigation is to be carried out. The full text of the provision is: ' 28 Reduction in penalty tax for disclosure before investigation The amount of penalty tax determined under section 27 is to be reduced by 80% if, before the Commissioner informs the taxpayer that an investigation relating to the taxpayer is to be carried out, the taxpayer discloses to the Commissioner, in writing, sufficient information to enable the nature and extent of the tax default to be determined.' 11 Instead, the Commissioner reduced the penalty tax due by 20% as in his view the circumstances were ones where the information was made available during the course of the tax investigation and applied s 29 which provides: ' 29 Reduction in penalty tax for disclosure during investigation The amount of penalty tax determined under section 27 is to be reduced by 20% if, after the Commissioner informs the taxpayer that an investigation relating to the taxpayer is to be carried out and before it is completed, the taxpayer discloses to the Commissioner, in writing, sufficient information to enable the nature and extent of the tax default to be determined.' 12 As to the imposition of penalty tax, the taxpayers contend that they had given sufficient information (not disputed by Commissioner) ahead (disputed by the Commissioner) of an investigation being carried out, and should therefore have their penalty tax reduced by 80% not by 20%. The Tribunal accepted the contention of the taxpayers that they had given information ahead of the investigation. 13 General Discretions to Waive: Also relevant to this dispute are the general discretions vested in the Commissioner to waive interest and penalty tax. ' 25 Remission of interest The Commissioner may, in such circumstances as the Commissioner considers appropriate, remit the market rate component or the premium component of interest, or both, by any amount.' 14 The general discretion relating to penalty tax is found in s 33: ' 33 Remission of penalty tax The Commissioner may, in such circumstances as the Commissioner considers appropriate, remit penalty tax by any amount.' 15 The Commissioner refused to exercise these discretions. The Tribunal disagreed with the Commissioner in respect of his failure to exercise the s 25 discretion. In light of its conclusion on s 28 the Tribunal did not find it necessary to consider s 33. 16 The Tribunal's decision was: '61 Accordingly, I will reduce the penalty tax payable in the relevant two years by 80% as required by s 28 of the TA Act. In addition, as indicated above, the interest imposed in the relevant assessments should be reduced to the market rate interest as from the end of the last day of payment of the tax assessed in each assessment until the day the tax assessed is paid by the applicants.' Factual Background 17 The taxpayers are associated companies. During the years in issue, computer businesses of differing types were conducted through four companies with similar names and the same registered address, i.e. Incise Sales Pty Ltd, Incise Technologies Pty Ltd (these are the companies involved in these proceedings), Incise Service Pty Ltd and Incise Pty Ltd. On behalf of the taxpayers, Mr Galazzo gave the Tribunal below and the Appeal Panel various explanations as to how the situation had arisen whereby the taxpayers did not pay pay-roll tax during the years 1997-98 and 1998-99. The main explanation was that the taxpayers had misunderstood the effect of the grouping provisions as they affected them. 18 The Commissioner's evidence was that his office first moved to investigate the taxpayers in relation to non-payment of pay-roll tax in October 1998. The Commissioner relied on a letter dated 30 October 1998 addressed to Incise Service Pty Ltd. The letter was addressed to 'The Proper Officer, Incise Service Pty Ltd, 3/1-7 Lyon Park Rd, North Ryde NSW 2113.' The letter was not addressed to either of the two taxpayers who are the parties to these proceedings, namely, Incise Technologies Pty Ltd and Incise Sales Pty Ltd. There was no reply to the letter to Incise Service Pty Ltd. Mr Galazzo disputed that any such letter was ever received. 19 The Commissioner's next communication occurred on 11 October 1999 when a copy of the earlier letter was faxed to Incise Service Pty Ltd with a questionnaire. Incise Service responded to this communication, as did the two taxpayers and the fourth company also. Mr Galazzo says that this was the first such letter received by any of the four companies. 20 On 20 April 2000, on the basis of the information supplied by the taxpayers, pay-roll tax assessments were issued to them for the two financial years ending June 1998 and June 1999. The taxpayers accepted the liability to pay-roll tax but lodged objections to the inclusion of interest and penalty tax in the assessments. 21 On 17 August 2000, the Commissioner rejected the objections, with these 'reasons': 'Interest and penalties have been imposed in line with the Taxation Administration Act, 1996 and the business rules that support that legislation. You are advised that the basis for the business's non-compliance with their pay-roll tax obligations for the period detailed above, does not warrant any reduction or remission of the interest and penalties. As a consequence the objection has been totally disallowed.' 22 The 'business rules' were not provided. No material was provided as to the criteria relevant to the exercise of the discretion to waive. In contrast to the position at that time, by virtue of TA Act, s 93(2A) the Commissioner is now bound to observe s 49(3) of the Tribunal Act and must in the statement of reasons for a reviewable decision set out the matters referred to there, i.e. (a) the findings on material questions of fact, referring to the evidence or other material on which those findings were based, (b) the administrator's understanding of the applicable law, (c) the reasoning processes that led the administrator to the conclusions the administrator made. 23 On 28 March 2001 the Commissioner obtained judgments in the Parramatta Local Court against the taxpayers for outstanding pay-roll tax and interest and penalty tax but gave an undertaking not to enforce the judgments pending the determination of their application to this Tribunal. Appeal in relation to Penalty Tax 24 We will deal first with the Commissioner's appeal as it related to the Tribunal's decision in respect of whether s 28 or s 29 was applicable to the circumstances. The Tribunal's view was that the disclosures that were made by the taxpayers were voluntary and fell within the circumstances to which s 28 applied. The taxpayers were found to have made satisfactory disclosure ahead of any investigation. 25 The Tribunal rejected the Commissioner's submission that the letter of 30 October 1998 to Incise Service Pty Ltd constituted, as a matter of law, notice of an investigation to the four associated companies, in particular the two taxpayers. The Tribunal considered that at most the earliest possible date for the giving of notice was 11 October 1999 not 30 October 1998. As it was, that notice only went to Incise Service Pty Ltd. Consequently at no point was there notice of investigation issued to the taxpayers before the Tribunal. The Tribunal said: '56 The real issue is whether the provisions of s 28 prevent the reduction in penalty tax in the case of the applicants. Section 28 is a statutory direction that penalty tax is to be reduced by 80% if, "before the Commissioner informs the taxpayer that an investigation relating to the taxpayer is to be carried out, the taxpayer discloses to the Commissioner, in writing, sufficient information to enable the nature and extent of the tax default to be determined". This as I say is a statutory direction and not a discretion to ensure that the severe penalties are only justified in cases where the information is not provided prior to the investigation. 57 The letter dated 30 October 1998 was addressed to "The Proper Officer" of Incise Service Pty Ltd. The letter refers to liabilities if any of "you", Incise Service Pty Ltd, the named company. No mention was made of the liability if any of any related company. I accept that the letter clearly indicated that an investigation relating to Incise Service Pty Ltd was to be carried out. But I am unable to construe a provision imposing a penalty to extend to related companies when no such notification was in fact given to the applicants. 58 Although the relevant information of the liability to pay-roll tax of the applicants was provided in consequence of the Commissioner's inquiry addressed to Incise Service Pty Ltd, it was sufficient information in writing to determine the nature and extent of the tax default made prior to any notification to the applicants that an investigation was to be carried out. In fact no notification was sent as required because the information was provided by the applicants quite independently. 59 Section 28 of the TA Act is generally worded and is designed to apply to various taxation laws, including pay-roll tax law, which are administered by the Commissioner. The section operates to allow a reduction in the penalties unless the Commissioner informs the taxpayer that an investigation relating to the taxpayer is to be carried out before the information is provided by the taxpayer. The term "taxpayer" is defined in s 3 of the TA Act to mean "a person who has been assessed as liable to pay an amount of tax, who has paid an amount as tax or who is liable or may be liable to pay tax". The definition does not include any group of taxpayers or related taxpayers to be treated as being a singular taxpayer for purposes of the TA Act. 60 There may be a lacuna in the law in relation to pay-roll tax liability of a group of related companies. On the other hand, if the Commissioner had taken reasonable care and included all the companies in the group, including the applicants, in his letter of 30 October 1998, the provisions of s 28 would not have applied to allow the applicants a lower penalty rate. On the contrary, the Commissioner did not act upon his original request for information for almost a year and there is no evidence before the Tribunal that at any stage prior to the furnishing of the information by the applicants the Commissioner had indicated in writing or orally that the applicants or all the companies in the group were under investigation. The facsimile message sent by the Commissioner of 11 October 1999 was only directed to Incise Service Pty Ltd.' 26 Section 28 speaks of a Commissioner who 'informs the taxpayer that an investigation relating to the taxpayer' is to be carried out. The Tribunal took the simple point that the letter of 30 October was addressed to Incise Service Pty Ltd and not to either or both of the two taxpayers who are the present respondents. 27 The Commissioner's submission is that, as a matter of law, the term 'taxpayer' includes within its meaning taxpayers that are grouped for the purposes of s 16A of the PRT Act. Section 16A provides: ' group means a group constituted under Part 10A of the Taxation Administration Act 1996 , but does not include any member of the group in respect of whom a determination under section 16B is in force.' 28 Part 10A deals with groups, and defines them partly by reference to the concept of the 'primary group'. Section 106I provides: ' 106I Primary groups of commonly controlled businesses (1) If a person or set of persons has a controlling interest in each of 2 businesses, the persons who carry on those businesses constitute a primary group. (2) For the purposes of this section, a person or set of persons has a controlling interest in a business if: (a) in the case of 1 person - the person is the sole owner (whether or not as trustee) of the business, or (b) in the case of a set of persons - the persons are together the exclusive owners (whether or not as trustees) of the business, or (c) in the case of a business carried on by a corporation: (i) the person or each of the set of persons is a director of the corporation and the person or set of persons is entitled to exercise more than 50% of the voting power at meetings of the directors of the corporation, or (ii) a director or set of directors of the corporation that is entitled to exercise more than 50% of the voting power at meetings of the corporation is under an obligation, whether formal or informal, to act in accordance with the direction, instructions or wishes of that person or set of persons, or (d) in the case of a business carried on by a corporation that has a share capital - that person or set of persons can, directly or indirectly, exercise, control the exercise of, or substantially influence the exercise of, more than 50% of the voting power attached to the voting shares issued by the corporation, or (e) in the case of a business carried on by a partnership - that person or set of persons: (i) own (whether beneficially or not) more than 50% of the capital of the partnership, or (ii) is entitled (whether beneficially or not) to more than 50% of the profits of the partnership, or (f) in the case of a business carried on under a trust - the person or set of persons (whether or not as a trustee or trustees of another trust) is the beneficiary in respect of more than 50% of the value of the interests in the first mentioned trust. (3) If: (a) 2 corporations are related to each other within the meaning of the Corporations Act 2001 of the Commonwealth, and (b) 1 of the corporations has a controlling interest in a business, the other corporation has a controlling interest in the business.' 29 The Commissioner's submission is that 'expressly informing Incise Service Pty Limited of the commencement of an investigation [letter dated 30 October 1998] is sufficient for the purposes of informing Incise Technologies Pty Limited and Incise Sales Pty Limited.' The Commissioner objected to the practical consequences of the Tribunal's decision for the Office of State Revenue, in that in future it would need to communicate with all members of a group before the liability created by s 28 could come into play. 30 The Commissioner's view - that for the purposes of State taxation law, a communication with one company within such a group is a communication to all members of the group - can be found reflected in Revenue Ruling No TAA.006 published by the Victorian Office of State Revenue (the equivalent office in that State). At para [29] of the Ruling the Victorian Office states: 'A voluntary disclosure must be in writing and provide sufficient information to determine the nature and extent of the tax default. … The SRO would not accept a voluntary disclosure from a member of a pay-roll tax group if another member of that group has been advised of an investigation.' 31 Whatever the position in Victoria, the New South Wales position depends on the proper construction of s 28. In our view the definitions of 'group' and the provisions relating to primary groups of commonly controlled businesses do not assist, having regard to the clear terms of the TA Act. 32 The definition of taxpayer in s 3 of the TA Act is: ' taxpayer means a person who has been assessed as liable to pay an amount of tax, who has paid an amount as tax or who is liable or may be liable to pay tax.' 33 There is no definition of 'person'. In the PRT Act 'person' is defined, conventionally, as: ' person includes a company.' 34 Under the Interpretation Act 1987, s 21 ' person includes an individual, a corporation and a body corporate or politic.' 35 All of these subordinate definitions point to 'taxpayer' having a singular meaning, i.e. a specific person, being in turn a specific individual or a specific company. 36 Schedule 2 of the PRT Act (relating to financial years commencing 1 July 1996 to 1 July 1999) relevantly provides under paragraph 12 ['groups with no designated group employer'] that each member of the group is liable to pay as pay-roll tax for that year the amount of dollars calculated in accordance with the formula specified. As applied to the present case, though the two taxpayers were grouped with Incise Service Pty Ltd and another company for the purposes of calculating pay-roll tax liability, each of them bore a primary liability to pay its own pay-roll tax liability under the PRT Act. We acknowledge in that regard that s 16LA(1) of the PRT Act provides that if a member of a group fails to pay an amount that the member is required to pay under the PRT Act in respect of any period, every member of the group is liable jointly and severally to pay that amount to the Commissioner; and that s 45(1) of the TA Act provides that if two or more persons are jointly or severally liable to pay an amount under a taxation law, the Commissioner may recover the whole of the amount from them, or any of them, or any one of them. 37 Even though Incise Service Pty Ltd could be liable for outstanding pay-roll tax payable by the other members of the group and vice versa, it does not follow that a communication with one of them (even in respect to such liability) is a communication with all of them. (It is noted that since interest and penalty tax is no longer imposed under the PRT Act, but only under the TA Act, group members are only jointly and severally liable for unpaid pay-roll tax, but not interest or penalty tax on such unpaid pay-roll tax.) 38 In this instance, the Commissioner's reasons for opposing the Tribunal's interpretation of s 28 of the TA Act are policy and administrative ones. They do not grapple with the apparently plain meaning of the provision. 39 In any case it is possible for different companies within a group to have different levels of tax liability; just as it is possible for different individual partners in a business partnership to have different levels of tax liability. It is important, therefore, as we see it, for communications by the Commissioner to be taxpayer-specific. 40 In light of this conclusion, we will only consider briefly other submissions made in relation to this aspect of the case. 41 The Commissioner submitted that s 116(1)(c) of the TA Act allows his Office to "serve" or "give" a document by post addressed to the person at the registered address of the corporation and that a document is "given" by his Office if it is posted to the registered address of the corporation and that it is irrelevant whether the document is "received" by the taxpayer. 42 While the Commissioner's submission as to the effect of s 116 was made primarily in relation to the question of the date when the investigation commenced, as we have noted the TA Act requires communications by the Commissioner to be taxpayer-specific. Since the documents upon which the Commissioner has relied were not addressed to the taxpayers, or either of them, it is not necessary for us to decide on the Commissioner's submission that the act of posting a document alone constitutes service by the Commissioner such that the Appellant has thereby "informed" the taxpayer to whom it has been posted. 43 The Commissioner submitted that if the Panel (as it has) affirmed the Tribunal's finding that this was a case of voluntary disclosure without investigation, it still did not follow that s 28 was applicable. 44 The Commissioner's submission was that s 28 only become operative in circumstances where ultimately, notice of an investigation had been given. The Tribunal's finding was that no notice of an investigation had ever been given to taxpayers. If the Commissioner is right, the fixed rule found in s 28 would not apply and only the general discretion to remit penalty tax found in s 33 would be open to be exercised. On the Commissioner's construction, s 28 is only to be invoked if notice of an investigation is given by the Commissioner after voluntary disclosure. 45 The principal proposition found in s 28 is that: 'The amount of penalty tax determined under section 27 is to be reduced by 80% if … the taxpayer discloses to the Chief Commissioner, in writing, sufficient information to enable the nature and extent of the tax default to be determined.' This reduction, to reiterate, is made when the disclosure occurs before the Chief Commissioner informs the taxpayer that an investigation relating to the taxpayer is to be carried out. 46 Is formal notice of an investigation therefore a pre-condition to the applicability of s 28? If there is voluntary disclosure and no investigation subsequently occurs can the taxpayer be less generously dealt with than is provided for by s 28? The issuance of a formal notice is an action entirely within the power of the Commissioner. If the view advocated by the Commissioner were to be adopted then a perverse outcome would result. The taxpayer who discloses voluntarily could be placed in a worse position that the taxpayer who despite voluntary disclosure nevertheless becomes the subject of an investigation. 47 This is a circumstance where the taxpayer has no control over what the Commissioner might choose to do. If a voluntary disclosure is sufficient, there would often be no point in going on and commencing a formal investigation. We are not satisfied that Parliament intended an investigation to be a condition precedent to the provision of relief to a taxpayer for the purposes of s 28. Many of the cases that deal with non-fulfilment of a condition related to the exercise of power arise in the context of challenges to jurisdiction or challenges to the lawfulness of the conduct of statutory authorities (ultra vires). While the following statements appear in that context they are, we consider, relevant to the proposition advanced by the Commissioner in this case: (i) 'Parliament will be presumed not to intend injustice or absurdity or anomaly': F v F [1971] P 1 at 12 per Simon P; 'unless it is a consequence of the only reasonable meaning which suits the scope and object of the statute': ibid, at 13 per Simon P; see generally Bennion, Statutory Interpretation (2nd ed. 1992), Part XXI. (ii) 'When the provisions of a statute relate to the performance of a public duty and the case is such that to hold null and void acts done in neglect of this duty would work serious general inconvenience, or injustice to persons who have no control over those entrusted with the duty, and at the same time would not promote the main object of the Legislature, it has been the practice to hold such provisions to be directory only, the neglect of them, though punishable, not affecting the validity of the acts done': Montreal Street Rwy Co v Normandin [1917] AC 170 at 175 (PC). (iii) '[T]he unexpressed intention of the legislature must be discerned by a consideration of the scope and object of the legislature': Attorney General ex rel. Franklins Stores Pty Ltd v Lizelle Pty Ltd & ors [1977] 2 NSWLR 955 at 969 per Reynolds JA. (iv) 'For a complainant to be denied the remedies under [an] Act to which he or she was otherwise entitled because the Commissioner failed to observe [certain] requirements with the consequence that jurisdiction was lost would completely frustrate the expressed intentions of Parliament': Commissioner of Police v Reid [2000] TASSC 181 at [17]. 48 Here we are satisfied that the TA Act, read as a whole, contemplates three basic sets of circumstances when dealing with co-operation by taxpayers. The first is pre-investigation co-operation, the second is in-investigation co-operation and the third is co-operation that never occurs or only occurs after investigation. The ordinary meaning of s 28 does not, we consider, make it essential that an investigation subsequently occurs. If ss 27 and 28 are read together it becomes clear that at this point of the legislation the Parliament is grappling with the issue of what allowance should be made in favour of the taxpayer who has failed to pay on time but nevertheless has subsequently co-operated with the Commissioner in making known relevant information. It would be a very strange outcome if s 28 was read to mean that the Commissioner could take advantage of a taxpayer's voluntary disclosure while denying the taxpayer the benefit of that disclosure. 49 This understanding is also supported by the Note and Table that appears between s 30 and s 31 of the TA Act. The Table is described as one which 'contains a summary of the provisions of sections 27-30'. The table is cross-hatched. Along the horizontal line it describes three circumstances: before investigation; during investigation; and concealment and hindrance in establishing underpayment. Along the vertical line it has two circumstances: failure to take reasonable care but no intentional disregard of the law; intentional disregard of the law. 50 The Commissioner also made submissions relating to the way the s 33 discretion might operate. It is unnecessary to deal with those submissions in light of our conclusions on the s 28 point. 51 There was an application from the Commissioner to reopen the proceedings generally so that consideration could be given to the conduct of the taxpayers after the issuance of his determination dismissing the objections. As we see it, s 28 operates as a mandatory rule in favour of the voluntarily disclosing taxpayer. In these circumstances, there is no point in reopening the proceedings to allow for consideration of subsequent conduct. Our view is different, as we indicate below, in relation to the issues as they relate to relief from interest at the premium rate. Appeal in relation to Remission of Premium Component of Interest 52 The Tribunal's decision as it related to remission of the premium component of interest involved, in substance, the re-exercise of the discretion given to the Commissioner by TA Act, s 25. 53 Discretionary decisions are difficult to disturb on error of law grounds. The most authoritative Australian statement of the relevant principles is found in House v The King (1936) 55 CLR 499 where Dixon, Evatt and McTiernan JJ stated at 504-505: 'The manner in which an appeal against an exercise of discretion should be determined is governed by established principles. It is not enough that the judges composing the appellate court consider that, if they had been in the position of the primary judge, they would have taken a different course. It must appear that some error has been made in exercising the discretion. If the judge acts upon a wrong principle, if he allows extraneous or irrelevant matters to guide or affect him, if he mistakes the facts, if he does not take into account some material considerations, then his determination should be reviewed and the appellate court may exercise its own discretion in substitution for his if it has material for doing so. It may not appear how the primary judge has reached the result embodied in his order, but, if upon the facts it is unreasonable or plainly unjust, the appellate court may infer that in some way there has been a failure properly to exercise the discretion which the law reposes in the court of first instance. In such a case, although the nature of the error may not be discoverable, the exercise of the discretion is reviewed on the ground that a substantial wrong has occurred.' (See also Australian Coal and Shale Employees' Federation v Commonwealth (1956) 94 CLR 621 at 627; Do Carmo v Ford Excavations Pty Ltd [1981] 1 NSWLR 409, 420-422 per Cross J; Government Insurance Office of New South Wales v Ivanoff (1991) 22 NSWLR 368 at 377 per Mahoney JA; and Hession v Century 21 South Pacific (1992) 28 NSWLR 120.) 54 The Commissioner objected to several aspects of the Tribunal's reasoning. We will deal first with the grounds of appeal that we consider are established. (1) Whether 'Mere Failure' to take reasonable care to comply is a Consideration relevant to the s 25 Discretion (2) Exclusion from Consideration of Conduct Subsequent to Administrator's Decision 55 These are linked grounds, and we deal with them together. 56 The Tribunal saw this as a case involving 'mere failure' to take reasonable care to ensure compliance with tax laws as distinct from 'intentional disregard' of the law. This emphasis is one that appears in the provisions relating to penalty tax at ss 27(2) and (3). There is no reference to such a distinction in the provisions relating to the imposition of interest. The Tribunal, however, saw these factors as useful ones to use in cases involving the s 25 discretion. 57 The Tribunal said: '47 In this matter, the Commissioner accepts that the applicants did not intentionally disregard the law and that their behaviour amounted to merely failure to take reasonable care to ensure compliance with the pay-roll tax law. That would, I think, provide a prima facie case for the imposition of interest at only the market rate. Premium rate component should, in my opinion, be included in more serious cases as a rule. 48 There are also other grounds that warrant a remission of the premium component of the interest in this review. In his letter of the 30 October 1998 to Incise Service Pty Ltd making inquiries as to pay-roll tax liabilities, the Commissioner accepted that "many employers are unaware of the implications of" the grouping and wage definition provisions. In 1998 and 1999 years the applicants exceeded the threshold and, in both years, that was due to the law requiring the inclusion of superannuation contributions and fringe benefits. This "was not recognised" by the applicants and their related companies at the relevant time and that was the reason why no application was made for registration for pay-roll tax. 49 When all the circumstances are taken into account, there are grounds for remitting the interest imposed at the premium rate from the total interest included in the assessments.' 58 The Commissioner's first objection is to the statement in [47] that mere unintentional failure to take reasonable care to ensure compliance with the tax law should ordinarily be a factor favouring relief from the premium rate component. 59 The Commissioner submits that '[T]his finding encourages taxpayers not to take reasonable care to ensure compliance as the lack of such care will lead to a partial remission of interest. In such circumstances there will be few instances where the premium component would not be remitted. It is simply not a special circumstance warranting remission.' 60 In our view the primary interest rate (the market rate component) is intended to compensate the Commissioner (on behalf of the Government of New South Wales) for not having the benefit of the tax payment from the time it was due. So a rate is set which fluctuates, and is connected to an external rate, the Reserve Bank's Accepted Bill rate. This, as we see it, is a component that could rarely, if ever, be waived as otherwise tax would be paid at a devalued amount thereby discriminating against taxpayers who meet their obligations on time. The Tribunal made the observation at [50] that to justify any remission of the market rate component of interest, it would be necessary to show that in some way the Commissioner contributed to the default. We agree with this observation. 61 On the other hand, the premium rate is a form of penalty. Its purpose, as we see it, is to provide an additional economic deterrent against taxpayers failing to meet their obligations on time. The 'market rate' component approximates ordinary lending interest rates. Taxpayers may withhold tax simply to invest the money in schemes and projects that have a higher potential earnings; and may be content to carry the late payment surcharge were it only at the market rate. The 'premium rate' is intended as we see it to operate as the key disincentive to delaying tax payments. For that reason, the TA Act imposes both the market rate component and the premium rate component in respect of late payment. The Commissioner is then given a discretion to remit the market rate component or the premium rate component or both by any amount (s 25). 62 The Tribunal did not have the benefit of a detailed statement of the considerations relevant to the s 25 discretion as seen by the Commissioner. Moreover, the Commissioner has not developed any public guidelines going to the exercise of this discretion, in contrast to the position that applies in Victoria. Before the Appeal Panel, the Commissioner nominated four cumulative criteria for the circumstances where the premium component of interest should be remitted, namely: (1) all principal tax that is owing and not in dispute has been fully paid; (2) there has been co-operation by the taxpayer in providing relevant information to the Commissioner so as to enable the Commissioner to issue assessments; (3) such co-operation by the taxpayer has occurred prior to any investigation being commenced by the Commissioner (voluntary disclosure) or, at the very least, within reasonable time after requests for information have been made by the Commissioner - i.e. the taxpayer has taken reasonable care; and (4) there has been no wilful default by the taxpayer in not paying tax on time. 63 The first of these criteria could be clarified to 'all principal tax that has been assessed and is not in dispute has been fully paid at the time of the request for remission of interest'. With this change, we agree that these four cumulative criteria are relevant and appropriate to the question of the circumstances in which the Commissioner should remit the premium component of interest. There may also be other circumstances where it could be appropriate to remit the premium component such as, as previously noted, where the Commissioner has in some way contributed to the tax default. 64 In its reasons the Tribunal referred to various factors, pro and con the taxpayers, that might be taken into account. It referred at [52] to the following parts of the text of the Commissioner's submissions on this point: '(e) additionally, it is submitted by the Respondent that during the period October 1999-April 2000 (when the assessments were issued) the Applicant was very uncooperative in providing the information required and it took until April 2000 to obtain all the necessary detail to issue the information - ie a period of some 6 months. To exercise the power to remit either penalty tax or interest the intention of the TA Act was to ensure, at the very least, some cooperation on behalf of the taxpayer. Such cooperation has been totally lacking in this case as there was a delay in the provision of relevant information and refusal to pay the principal amount of pay-roll tax; (f) furthermore, the whole history of these proceedings as indicated in the chronology tendered before the Tribunal shows a total lack of cooperation by the Applicant. Indeed, the evidence shows nothing but continuous delay and obstruction by the Applicant in the Respondent's efforts to obtain and seek to enforce a judgment in its favour for the relevant amounts of outstanding pay-roll tax owing to it (for both principal and interest amounts). In particular, to this day, the Respondent still has not been paid, at the very least, the principal amounts for pay-roll tax which were levied in respect of assessments issued on 20 April 2000 - some 3 years ago. The principal amount of pay-roll tax has never been in dispute. It still has not been paid. The lengthy history of the recovery proceedings issued against the Applicants by the Respondent in the Parramatta Local Court is clear evidence of sheer obstruction and delay by the Applicants in the payment of the substantive amounts of pay-roll tax. In such circumstances, it was legitimate for the Respondent not to exercise its discretion at all to remit either the market rate component or the premium component of the interest rate under section 25 nor to remit any further the penalty tax that was imposed under Division 2 Part 5 TA Act.' 65 The Commissioner objected to the Tribunal's failure to consider the above submissions. This omission by the Tribunal was a conscious one. In [55] of its reasons it said: '55 In considering this issue in the context of the objection decision made on 17 August 2000, I am of the opinion that there would be an error in law if I took into account events after 17 August 2000 unless they explained events that were relevant in making the objection decision. I will accordingly, disregard the submissions that the Commissioner has made in relation to the behaviour of the applicants after the objection decision had been made in considering the substantive issue.' 66 We agree with the Commissioner that the Tribunal has misconstrued the nature of the inquiry that the Tribunal is called on to make by the Tribunal Act. The key provision is s 63 which provides: '(1) In determining an application for a review of a reviewable decision, the Tribunal is to decide what the correct and preferable decision is having regard to the material then before it, including the following: (a) any relevant factual material, (b) any applicable written or unwritten law. (2) For this purpose, the Tribunal may exercise all of the functions that are conferred or imposed by any relevant enactment on the administrator who made the decision. (3) In determining an application for the review of a reviewable decision, the Tribunal may decide: (a) to affirm the reviewable decision, or (b) to vary the reviewable decision, or (c) to set aside the reviewable decision and make a decision in substitution for the reviewable decision it set aside, or (d) to set aside the reviewable decision and remit the matter for reconsideration by the administrator in accordance with any directions or recommendations of the Tribunal.' 67 It is well established that a merits review tribunal (as here) is to make its decision based on all relevant information as at the time of hearing. See per Bowen CJ and Deane J in Drake v Minister for Immigration and Ethnic Affairs (1979) 2 ALD 60 at 68 adopting the formulation first proposed in Re Becker and Minister for Immigration and Ethnic Affairs (1977) 1 ALD 158. Consequently a situation could arise where the administrator might be perceived not to have made the correct and preferable decision as at the date of the administrator's decision, but circumstances could now exist which warranted a decision which was the same as the administrator's decision. 68 These views were applied in the context of State and Territory tax administration by Curtis P in Re Perpetual Trustee Co (Canberra) Ltd v Commissioner for ACT Revenue, ACT AAT, 16 June 1995 where, in examining a similar discretionary waiver provision in ACT tax law (ACT Taxation (Administration) Act 1987, s 32(1)), he said that subsequent conduct was clearly relevant in considering whether the conditions for the exercise of the discretion had been satisfied. 69 There was substantial material placed before the Tribunal in support of the Commissioner's case that this was not simply a case of mere failure to take reasonable care. It needed to be considered. We agree with the Commissioner that the Tribunal erred in not having regard to the circumstances subsequent to April 2000. 70 One of the oddities of this case is that the application for review was not filed until 4 December 2002. Ordinarily an application for review must be filed within 28 days of the decision in issue. If the application is brought on for hearing reasonably promptly, then at most, developments within a subsequent 3 to 4 month period may be brought into view. Here it was sought to bring into view developments over an intervening period of almost 3 years. The reasons for accepting the application for review so long after the decision in issue are explained in the original decision, and were not the subject of appeal by the Commissioner. 71 Despite the taxpayers having been originally assessed to pay-roll tax in assessments dated 20 April 2000, and despite liability for such assessments not being disputed by them, there is no dispute that full payment of the assessments continued to remain outstanding including as at the date of the Tribunal hearing at first instance. 72 We will refer briefly to the other grounds of appeal which we do not uphold. (3) Whether the Tribunal took into account an irrelevant consideration in referring to the absence of public guidelines (at para [39] of the Reasons) (4) Whether the Tribunal took into account an irrelevant consideration in referring to the desirability of the Commissioner having 'some effective follow up system' to deal with non-responses to notices (at para [46] of the Reasons) (5) Whether the Tribunal took into account an irrelevant consideration when it referred at para [48] to the taxpayers' claim that in the relevant years in assessing their potential exposure to pay-roll tax they had mistakenly not taken account of such factors as: the effect of the company grouping provisions under State tax law, and the inclusion of superannuation benefits and fringe benefits in the threshold amount. 73 The Commissioner submitted that these were not considerations relevant to the exercise of the discretion to waive interest (subject to the qualification noted below at para [78] in respect of item (5)). 74 As to the first of these matters, the Tribunal was simply, in our view, indicating its frustration at the absence of any material from the Commissioner which explains to taxpayers his thinking about how the s 25 discretion might be exercised. We have already commented to similar effect in these Reasons. 75 It is helpful to the public and to the processes of inquiry of the Tribunal if administrators have available material which explains how broadly-expressed and important statutory discretions are exercised. 'Transparency' is the term often used today to capture this idea. The Tribunal, appropriately in our view, drew attention to a lack of transparency in this aspect of the decision-making practices of the Office of State Revenue. (See by way of comparison the Victorian Office of State Revenue, which has a detailed Ruling TAA.006 on its website as to the criteria that the Commissioner applies in considering whether to waive interest and penalty tax, one part of which we referred to earlier.) The comment did not, in our view, have any significant bearing on the decision ultimately made. 76 The second of these matters goes to a wider issue - the overall conduct of the administrator. While it is the case that a Commissioner can not be estopped from imposing a penalty tax because of inadequate administration (Wade v Federal Commissioner of Taxation (1951) 84 CLR 105; applied in Re Inglis and anor v Commissioner of Taxation (1993) 27 ATR 1050), it is in our view open to the Tribunal, when considering how an administrative discretion to relieve a taxpayer from interest or penalty tax should be exercised, to take account of the conduct of an administrator. We are not satisfied, reading the reasons as a whole, that the absence of a follow-up system materially affected the decision in this case. While in general we would not consider it relevant to address such a matter, there may be circumstances in which it would be reasonable to moderate a view as to the penalty if there was a reasonable basis for concluding that an initial notice had not been received, there was a long delay before any further notice issued, and then there was an immediate response to the further notice. 77 As to the third matter, the Commissioner criticised the Tribunal for taking an approach which he considered would encourage 'slackness' on the part of taxpayers. In our view these observations need to be placed in context. They were made after the Tribunal had referred to the Commissioner's letter of 30 October 1998. The Commissioner in that letter acknowledged that 'many employers are unaware of the implications' of the grouping and wage definitions. 78 The Commissioner, as administrator, made a (proper) acknowledgment of the existence of a situation that had arisen in a complex field of regulation and one with significant financial implications for those regulated. In general, we consider that it is open to an administrator and the Tribunal on review to take account of factors, such as complex changes in the regulatory environment, in considering whether to provide some relief from a penalty for non-compliance. 79 As we read the Tribunal's reasons, it accepted that the taxpayers were willing to pay the tax once the question of grouping and the inclusion of the other amounts (superannuation, fringe benefits) in the threshold was understood. If that was where the matter had ended our view would be that it is within the framework of a broad discretion of the kind given by s 25 for the Commissioner to treat that factor as a basis for partial or total waiver of the premium rate component. For the reasons that we have previously given, there was an error in not having regard to the taxpayers' post-August 2000 conduct. As a result, conduct which stands against any waiver was not taken into account; see further para 81, below. Disposal of the Application for Review 80 The appeal hearing was confined to consideration of the questions of law. The Tribunal has been found to be in error in its approach to the question of relief from the premium rate component of interest. The effect is that the Commissioner's decision as to that matter is restored, but the taxpayers' application for review remains to be decided according to law. The Commissioner has applied for leave to extend the appeal to the merits. 81 One aspect of the application for review must be reconsidered: the decision by the Commissioner to refuse to waive the premium rate component of interest on the overdue amount. All the material relevant at that time of its hearing was placed before the Tribunal. In our view, for the reasons we have already given, waiver of the premium rate component should only occur in special circumstances. There is little utility in returning this issue to the Tribunal for reconsideration. Our provisional view is that there is nothing in the material considered by the Tribunal that would justify remission of the premium rate component especially as the taxpayers have not paid the primary tax that is not in dispute in full. 82 The Commissioner's application for leave is granted, and the parties will be given 14 days in which to file and serve any additional material going to the question of remission of the premium rate component. The Appeal Panel will then dispose of the matter on the papers, unless it considers there is a need to hold a further hearing. 83 (Finally we note that until the matter reached the Appeal Panel it had been accepted by the taxpayers that a tax default had occurred, i.e. the taxpayers had not paid tax when due (see TA Act, s 3). At the hearing of the appeal, Mr Galazzo made some submissions which appeared to challenge the conclusion that the taxpayers were at the relevant times exposed to liability for pay-roll tax. This decision does not deal with that question as it did not form part of the decision under review.) DECISION 1. Appeal allowed in part. 2. The Tribunal's decision to reduce the penalty tax by 80% to an amount of 5% under s28 of the Taxation Administration Act is affirmed 3. Tribunal's decision to relieve applicant from payment of premium rate component of interest set aside. 4. Appeal extended to merits in respect of the Commissioner's decision not to waive the premium rate component of interest. 5. Appeal to proceed in accordance with directions given in para [82]. 30 June 2004 - decision revised to amend order 2.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.

Nestle Australia Ltd v Equal Opportunity Board [1990] VicRp 71; [1990] VR 805; Waters v Public Transport Corporation [1991] HCA 49; (1991) 173 CLR 349; I W v City of Perth (1996 - [1997] HCA 30; 1997) 191 CLR 1; Qantas Airways Ltd v Christie (1998) 193 CLR 280; Montreal Street Railway Company v Normandin [1917] AC 170, referred to.

1 This is an appeal pursuant to the Anti-Discrimination Act 1998, s100(3), against a determination on a question of law under s86(4) of that Act. It arises out of the referral by the Sex Discrimination Commissioner ("the Commissioner") on or about 1 December 1999 of a complaint or a number of matters of complaint accepted under the Sex Discrimination Act 1994 ("the Act"). The Act was repealed by the Anti-Discrimination Act 1998, which commenced nine days later on 10 December 1999, and by virtue of the transitional provisions of the latter Act, Sch 2, cl 2, the complaint became a complaint referred to the Anti-Discrimination Tribunal ("the Tribunal"). The Chairperson of that Tribunal, on 22 August 2000, made a number of determinations on questions of law arising under the Act, which are the subject of this appeal.

2 On 23 February 1999, a Complaint Lodgment Form, in writing and signed by the respondent, was lodged with the Commissioner. The Act, s34, provides:

(a) be made in writing and signed by the complainant; and

(b) identify the person, class of persons or organization against whom the alleged discrimination or prohibited conduct was directed and against whom the complaint is made; and

(c) set out details of the alleged discrimination or prohibited conduct; and

(d) be lodged with the Commissioner or sent to the Commissioner by post.

(2) The Commissioner may provide procedural advice and assistance to any person who requires assistance to make a complaint."

(For example, the person or company that employs you, a business or office providing goods or service, the owner and/or their agent for your accommodation, a school, university, TAFE, or club)."

Against the printed words "Business/Organisation name" and "Their address" respectively, the respondent inserted "Police Academy - Training" and "Rokeby". Against the printed questions "If the alleged discrimination is or was ongoing, please indicate: Date of first incident: and Date of last or latest incident:", the respondent inserted "Friday 6 February 1998" and "ongoing" respectively, and against a further question "Is the alleged discrimination/harassment still ongoing?" she inserted "Yes". The location of the alleged discriminatory incident/s was filled in as "Police Academy" and against the question "What do you think was the basis (ground) of the discrimination?" appeared a number of boxes to be ticked where applicable, indicating "Sex or gender; Marital status; Pregnancy; Parental status; Family responsibilities; Prohibited conduct, harassment or sexual harassment; Promoting prohibited conduct or discrimination; Victimisation because of making or supporting a complaint of discrimination; and Other (please explain)". In this last section of the form, the respondent placed the words "Denied graduation from Police Training Course 2/97 on unfounded grounds". Employment/work and education and training were also indicated as the area of activity where the discrimination took place. In the body of the form, the subject matter of the respondent's dissatisfaction was revealed as the fact that shortly before she was due to graduate as a police constable at the conclusion of course No 2 of 1997, she had been told that she was not permitted to graduate because of adverse reports, that she had had to cancel the visit of her own family and friends to the graduation ceremony, but had been required to be present while her course mates were sworn in and that a requisition for special running shoes needed by her for physical education training had not been filled. She claimed in respect of the last matter that a male member who had submitted a similar requisition, received the shoes he had ordered whereas she had received standard shoes and in respect of the refusal to allow her to graduate, that male members of the course had had worse reports and lower assessments on the way through the course than she had.

3 On 20 March 1998, the General Secretary of the Police Association of Tasmania, Mr Le Fevre, wrote to the Commissioner in the following terms (formal parts omitted):

"I write to afford you an update on this matter and unfortunately, on this occasion to detail what I believe to be further discrimination or victimisation against our member.

As part of the processes toward the graduation of course 3/97 to which Samantha was assigned when she was denied her graduation from course 2/97, the course members were recently asked to submit reports as to their preference for postings after graduation. Samantha was present when this took place and asked the instructing sergeant whether she should also submit such a report, to be met with the comment 'No that won't be necessary because we already know where you want to go'.

Samantha has now been given written notice (copy attached) that she will be assigned to North Western District (Devonport).

She feels that with five single members being assigned to the Northern District and the Police Department being aware of her personal circumstances she is being further discriminated against or victimised because the posting will remove her from the support mechanisms provided by her mother and fiance in Launceston as she settles into her new career. She will also be required to remove her son from his current circumstances and find alternatives for him at Devonport, which will be exceedingly difficult in the context of her working rotational shift rosters."

4 On 13 May 1998, the respondent wrote to one of the investigations officers of the Commissioner advising (i_nter alia_) that she had been advised in writing by the Commissioner of Police that she would not be sworn in as a constable at the conclusion of the then current recruit course No 3 of 1997 and would not be participating in the graduation ceremony. Further, she was to be stood down on full pay and was directed to remove herself from the Academy. The letter concluded:

"Today I reported back to the Police Academy as directed and was served with a notice of dismissal.

I was then directed to clear my Academy room and after doing so had the plastic bag (which contained my coat hangers) searched, had the shirt I was wearing (a police uniform issue one) taken from me and was directed to hand in the sports shoes I was wearing thus leaving me bare foot for the remainder of the day until I can get back to Launceston.

I visited my Bank in Hobart with a view to obtaining money to replace my footwear but I was there advised that no funds had been deposited in my name even though my suspension order recorded that I would be on full pay throughout the period."

5 The following further provisions of the Act are relevant:

"39 If the Commissioner accepts a complaint, the Commissioner, within 10 days of accepting it, is to -

(a) notify the respondent of that acceptance; and

(b) provide the respondent with reasons for accepting the complaint; and

(ii) with the consent of the complainant, a copy of the complaint.

41 (1) The Commissioner or an authorized person may investigate a complaint in any manner that is appropriate to the circumstances.

48 (1) The Commissioner or an authorized person is to refer a complaint for inquiry if the Commissioner or authorized person -

(a) believes the complaint cannot be resolved by conciliation; or

(b) has attempted to resolve the complaint by conciliation but has not been successful; or

(c) believes that the nature of the complaint is such that it should be referred for inquiry.

(2) The Commissioner or an authorized person is to refer a complaint within 6 months of the date of a notification under section 39 (a) or within any further period agreed with the complainant regardless of whether an investigation has been completed.

(3) The Commissioner or an authorized person is to notify the respondent of any further period agreed under subsection (2).

(4) A referral for inquiry is to be accompanied by a report relating to any investigation made into the complaint.

(6) The Commissioner or an authorized person is to give a copy of the report to the complainant and the respondent."

It appears the report referred to in s48(4) was dated 29 November 1999 and accompanied the referral under the Act on 1 December 1999. The Anti-Discrimination Commissioner, appointed under the new Act, filed with the Tribunal set up under that Act on 5 January 2000, a document entitled "Referral Report". This set out the five issues referred to the Tribunal, identifying them as follows:

"1 Whether Ms Reid was directly discriminated against on the basis of gender when she was prevented from graduating from Course 2/97 at the Police Academy;

2 Whether the prevented graduation amounted to humiliating and insulting conduct on the basis of gender contrary to section 17(1) of the Anti-Discrimination Act 1998;

3 Whether the failure of Ms Reid to be provided with special shoes, instead of the standard issue shoes, amounts to direct discrimination on the basis of gender.

4 Whether the requirement that Ms Reid be posted to Devonport instead of Launceston amounts to indirect discrimination on the ground of family responsibilities;

5 Whether Ms Reid was victimised contrary to section 18(1) of the Anti-Discrimination Act 1998 during the return of her police uniform, prior to her departure from the Police Academy."

6 At a directions hearing presided over by the Chairperson of the Tribunal, the appellant's counsel submitted that the Tribunal had no jurisdiction to enquire into any of the above five issues. In substance, the claim was that the document in which the first three issues were said by the respondent to be raised was deficient in form and failed to constitute a complaint within the meaning of the Act, s34, because it did not identify the person or organization against whom the alleged discrimination was directed and against whom the complaint was made and because it did not set out details of the alleged discrimination or prohibited conduct. As to the fourth issue, it was said that Mr Le Fevre's letter of 20 March 1998 was not a complaint within the meaning of that section and that in any event, the Commissioner had not notified the respondent in compliance with s39. In respect of the fifth issue, it was submitted that the respondent's letter of 13 May 1998 was a new matter of complaint which did not comply with s34 and in respect of which the Commissioner had again failed to notify the respondent in accordance with s39 and furthermore there had been a failure to comply with s48(2) and (3) because that complaint had not been referred to the Tribunal within six months of any notification under s39(a) (of which it was said there was none) or with any further period agreed with the respondent. Furthermore, if such an agreement had been made, it was claimed that the appellant had not been notified of it as required by s48(3). The Chairperson of the Tribunal ruled against these submissions and held that the Tribunal had jurisdiction in respect of each issue. I deal now in turn with the grounds of appeal.

"The Tribunal erred in ruling that the Complaint Lodgment Form 1998 lodged with the Sex Discrimination Commissioner by the Respondent on 25 February 1998 constituted a valid complaint under Section 34 of the Sex Discrimination Act 1994."

7 The appellant first submits that the complaint in respect of issues 1 to 3 is invalid because it fails, as required by s34, to identify the person, class of persons or organization against whom the complaint is made. In one section, as I have already noted, the Complaint Lodgment Form indicated that the person or company the respondent considered had discriminated against her was "Police Academy - Training" whose address was given as "Rokeby". However, in the body of the form there is ample material from which it can be seen that various officers of that institution concerned in the training of recruits for induction into the Tasmania Police Force are alleged to have been involved in discrimination or prohibited conduct. Many of them are identified by police rank. It would be obvious to any reader of the complaint that the proper authority having responsibility for the Academy and the named officers is the person or organization against whom the complaint is made. This is beneficial and remedial legislation concerned with Human Rights.

"In construing such legislation the courts have a special responsibility to take account of and give effect to the statutory purpose." (Waters v Public Transport Corporation [1991] HCA 49; (1991) 173 CLR 349, per Mason CJ and Gaudron J at 359.)

See also Qantas Airways Ltd v Christie (1998) 193 CLR 280, where Kirby J said at 332:

"Remedial legislation, designed to achieve the high public purpose of upholding equal opportunity, should be construed beneficially and not narrowly. Any other approach risks frustrating the will of Parliament."

and I W v City of Perth (1996 - [1997] HCA 30; 1997) 191 CLR 1, where Brennan CJ and McHugh J said at 15:

"Many persons think that anti-discrimination law still has a long way to go. In the meantime, courts and tribunals must faithfully give effect to the text and structure of these statutes without any preconceptions as to their scope. But when ambiguities arise, they should not hesitate to give the legislation a construction and application that promotes its objects."

8 The purpose of the legislation is not only "to prohibit discrimination and other specified conduct", but "to prohibit discrimination and other specified conduct and to provide for the investigation and conciliation of, and inquiry into, complaints in relation to discrimination and prohibited conduct" (the Act, long title). The Commissioner's jurisdiction to commence an investigation comes initially from a complaint of discrimination or prohibited conduct. That complaint does not require the precision of a formal document such as an indictment or civil pleading. It does not have to be served on the person or organization complained against. The term "respondent" is defined in s3 as a person or organization against whom a complaint is made. The appellant argues that the Commissioner has no right to nominate a respondent. I do not accept this. It is for the Commissioner to determine, from the material available in the complaint lodged or otherwise available (see the Act, s6(1) which enables the Commission "to collect and analyse data relating to complaints made in relation to discrimination and prohibited behaviour"), the person or organization against whom a complaint is made and hence the appropriate respondent to notify under s39. The name of the person or organization concerned may not be known to the complainant, but if he or she can provide in the complaint sufficient information to enable that person or organization to be ascertained, that will be sufficient to satisfy that requirement for the Commissioner's jurisdiction to be seized of the matter and to commence an investigation. The information provided by the respondent to this appeal in her Complaint Lodgment Form was adequate for that purpose. In the whole history of the lengthy correspondence between the appellant's counsel and the Commissioner, there has never been any suggestion that the Commissioner of Police is not the appropriate legal authority having ultimate responsibility for the conduct of the Police Academy and of the officers named in the form.

9 The second objection is that the complaint does not identify the alleged discrimination and prohibited conduct or give details of it. In Nestle Australia Ltd v Equal Opportunity Board [1990] VicRp 71; [1990] VR 805, Vincent J considered similar legislation and the question whether the documents before the board contained "details of the alleged act of discrimination". At 812, he said:

"... in dealing with this question it is important to avoid the adoption of an unduly restrictive or pedantic interpretation of the document. As the board itself indicated when it stated that it followed the approach earlier adopted in O'Callaghan v Loder (1984) EOC 92-022: 'The complainant must identify the contravention but it need not allege the relevant facts with the particularity of a pleading or indictment.' This position is, I think, consistent with the overall approach the legislature has adopted in relation to the legislation under consideration."

"Although the lack of particularisation in the complaints under consideration or the fact that they do not refer to relevant sections in the Act or attempt to relate the alleged acts of discrimination to grounds which are specified in the Act do not constitute a bar to the invocation of the board's jurisdiction, it is nevertheless necessary for the acts which have been identified in the complaints to be such that a preliminary recognition of jurisdiction can be made."

10 In my view, the document constituting the complaint in respect of the first three issues does give sufficient detail to invoke the Commissioner's jurisdiction. Among other things, the form raises the following matters of complaint:

(a) that the respondent was prevented from graduating from her training course by the appellant at short notice in circumstances where the respondent "firmly believed that male members of the course had had worse reports and lower assessments on the way through the course than I had" and that it was "an open secret that some of the boys had far worse assessments than I did";

(b) that the respondent, who had invited friends and family to the graduation, was required to explain to them that she would not be graduating, but was herself required to attend and watch all her course mates do so; and

(c) that when the respondent and a male course member sought to be provided with special running shoes, the special shoes were requisitioned and provided to the male member while standard issue shoes were provided to the respondent.

The matters complained of refer to possible discrimination on the basis of gender and humiliating conduct, both of which the Commissioner is empowered by the Act to investigate. Ground 1 is not made out.

"The Tribunal erred in ruling that Mr Desmond Le Fevre's letter of 20 March 1998 to the Sex Discrimination Commissioner can be regarded as part of the complaint lodged with the Sex Discrimination Commissioner by the Respondent on 25 February 1998."

11 The letter of Mr Le Fevre raised the question whether the proposed posting of the respondent to Devonport rather than to Launceston was discriminatory. This question was not mentioned in the Complaint Lodgment Form, but the letter was delivered to the Commissioner while the complaint was being investigated, but prior to its being accepted. The issue arose after the Complaint Lodgment Form was delivered to the Commissioner, but refers to the same course and the same subject matter of the complaint in the Form. It represents an instance of the "ongoing" discriminatory behaviour of which the respondent was the alleged victim and of which she complained in her initial form. If other matters of complaint are revealed, as the Commissioner exercises his or her powers of investigation on receipt of an initial complaint, it does not follow that the lodgment of a new complaint complying with s34 is a condition precedent to the Commissioner's jurisdiction to investigate these matters further. Indeed, s32, which identifies the persons and organizations who may invoke the Commissioner's jurisdiction by way of complaint, provides in subs(2) that "The Commissioner may investigate any discrimination or prohibited conduct if satisfied that there are reasonable grounds for doing so". I accept the respondent's submission that the Commissioner is empowered to determine the procedures to be followed in an investigation and to do all things necessary and convenient to perform the functions of his or her office (see s7(a) and (d)). Where an allegation of continuing discrimination has been made, the Commissioner is entitled to be informed of and to take into account any ongoing matters referable to the complaint.

"The Tribunal erred in ruling that Mr Desmond Le Fevre's letter of 20 March 1998 to the Sex Discrimination Commissioner could be accepted as a complaint against the Appellant by the Respondent."

12 The appellant submits that Mr Le Fevre's letter did not comply with s34(1)(b) in that it did not identify the person complained against. The Tribunal ruled:

"The context of the letter written by Mr Le Fevre is the Commissioner's investigation which was current at the time the letter was written. Relevant background which may properly be taken into account is information in the original Complaint Lodgment Form. Read in the context of the investigation and the background of the original complaint an inference can properly be drawn from the letter that the person responsible for the conduct set out in the letter is the respondent identified in the Complaint Lodgment Form with a question raised in the letter as to the liability under the Act of the Police Department and instructing Sergeant."

For substantially the same reasons I have already given in respect of the Complaint Lodgment Form's alleged failure to identify the appellant as the person or organization complained against, I reject the appellant's submission. The letter itself clearly identifies the Police Department as the organization responsible for the conduct and it is not claimed that the Commissioner of Police is not the appropriate respondent for the purposes of a properly instituted enquiry.

"The Tribunal erred in ruling that the Sex Discrimination Commissioner had complied with Section 39 of the Sex Discrimination Act in respect of the fourth matter referred to the Tribunal on 1 December 1999."

13 The Commissioner, by letter dated 3 April 1998, accepted the complaint. The appellant was notified of the acceptance of the complaint by a letter from the Commissioner dated 8 April 1998. That letter, as well as detailing the sections of the Act which the Commissioner believed to have been breached and providing copies of those sections, also attached a copy of Mr Le Fevre's letter. The appellant was therefore made aware of all aspects of the complaint, including the posting to Devonport when notified of its acceptance. By letter dated 21 April 1998, the appellant replied to the Commissioner and not only addressed the matters referred to in the Complaint Lodgment Form, but also the posting. The appellant was aware that the question of the posting formed part of the complaint accepted and made no objection to its inclusion. Section 39 has been complied with in that:

(a) the appellant was notified of the acceptance of the complaint;

(b) reasons were given for the acceptance of the complaint, namely that the complaint disclosed possible breaches of the Act; and

(c) the Commissioner provided a summary of the complaint in the form of an extract of the respondent's Complaint Lodgment Form and a copy of Mr Le Fevre's letter and the attachments thereto.

"The Tribunal erred in ruling that the Sex Discrimination Commissioner had complied with Section 48(2) and Section 48(3) of the Sex Discrimination Act in respect of the fourth matter referred to the Tribunal on 1 December 1999."

14 In accordance with s48(1), extensions were agreed with the complainant for the referral of the complaint beyond the period of six months from the date of notification under s39 and the appellant was notified of each extension in accordance with s48(3). The appellant's submission is that the fourth issue (the Devonport posting matter of complaint) was a separate matter of complaint and required separate treatment procedurally. I do not accept this contention. The threatened posting was accepted by the Commissioner as part of the respondent's complaint and the date of notification of the parameters of that complaint was 8 April 1998. All the agreed extensions related to the complaint as notified on that date, including the Devonport posting complaint. There is no substance in this ground.

"The Tribunal erred in ruling that the proposed posting referred to in the fourth matter of complaint referred to the Tribunal on 1 December 1999 was capable of amounting to indirect discrimination within the meaning of the Sex Discrimination Act."

15 The Tribunal did not make a ruling to the effect complained of. The Chairperson observed that whether or not there had been indirect discrimination was a question going to the merits of the respondent's case and was not a matter going to jurisdiction. This is clearly right, in my view. The submission was that as the posting had not taken place, it could not be said to have had the effect of disadvantaging the respondent. However, the prospect of such a posting could, as a matter of law and of fact, cause some disadvantage to the person concerned, even before it eventuated. It could even be, for example, the catalyst for a resignation in preference to a posting which would be, but was not yet, causative of disadvantage. Counsel for the appellant sought leave to substitute the word "accepting" for the word "ruling" in the first line of the ground of appeal, but I am not prepared to grant leave and in any event, for the reason advanced above, consider there would be no utility in allowing such an amendment as the point has no merit.

"The Tribunal erred in ruling that the fresh allegation contained in the Respondent's letter of 13 May 1998 to the Sex Discrimination Commissioner could be accepted for investigation by the Commissioner as an aspect of a course of conduct referred to in the Complaint Lodgment Form lodged with the Commissioner by the Respondent on 25 February 1998."

16 The Chairperson made the following ruling which is the subject of challenge by the above ground:

"38 It is Mr Miller's submission that the complainant did not make a complaint of matter number 5 to the Sex Discrimination Commission. Further, that the Commissioner has failed to comply with s34, s39 and s48(3) of the Act.

39 It is common ground that this matter of complaint was first raised in Ms Reid's letter of the 13th May 1998 to the Sex Discrimination Commission. Mr Miller submits that the letter does not purport to be a formal complaint under s32 of the Act and should not be regarded as a complaint. In the response provided by the Commissioner to the Tribunal it is said that the allegations made in Ms Reid's letter of 13 May 1998 were accepted for investigation as part of Ms Reid's original complaint on the basis that they formed ongoing aspects of it. It is apparent from the Commissioner's position that the matter has been referred to the Tribunal as an aspect of ongoing conduct towards the complainant.

40 As to whether or not a matter of complaint can be treated as part of continuing conduct by the respondent or whether it ought to be the subject of a separate complaint will often be a question of fact depending upon the circumstances of the case. Sometimes it will be difficult to discern whether the additional matter complained of is a separate matter or part of a course of conduct. In such cases it will often be a question of degree. It may be noted that if the additional matter should be regarded as a separate matter of complaint and not part of the original complaint then the Tribunal has power to amend the original complaint to include the additional matter.

41 In this case I note that the original Complaint Lodgment Form alleges 'ongoing' conduct; ref page 2. The respondent to the additional matter appears to be the same respondent referred to in the original Complaint Lodgment Form. It is at least arguable on the information before me that the additional matter of complaint referred to in the letter from Ms Reid dated 13 May 1998 is part of a course of conduct.

42 I will proceed on the basis that the additional matter of complaint referred to in the complainant's letter of 13 May 1998 has been properly referred to the Tribunal as an aspect of a course of conduct referred to in the original Complaint Lodgment Form. If, according to evidence, it is revealed that the additional matter of complaint referred to in the letter of 13 May 1998 is a separate matter and not part of a course of conduct then I will hear from the parties as to amendment of the complaint. A relevant consideration will be the question of prejudice to the Police Commissioner. It is noteworthy that the respondent was promptly advised of the additional allegations contained in the letter of 13 May 1998.

43 I understand that the submission regarding non-compliance with s39 and s48(3) hinges on the submission that the letter of 13 May 1998 is a matter of separate complaint. In view of my conclusion about this submission it is not necessary for me to consider this aspect of Mr Miller's submission."

17 I agree with that ruling. Whether or not a matter can be treated as part of continuing conduct or whether it should be the subject of a separate complaint will often be a question of fact depending upon the circumstances of the case. But there is a further reason for rejecting the contention that the Tribunal lacked jurisdiction to inquire into issue number 5 because of the alleged non-compliance with ss39 and 48(3). I have already adverted to the remedial character of this legislation. I find the suggestion that these sections impose mandatory requirements, non-compliance with which would deprive the Commissioner and ultimately the Tribunal of jurisdiction, completely at variance with the objects of the Act. While it is true the sections use the words "is to", an expression which, like "shall" the courts tend to treat as mandatory, they are provisions which fall into a recognised exception to the general rule. That exception is exemplified by Montreal Street Railway Company v Normandin [1917] AC 170, where the Privy Council said, at 175:

"When the provisions of a statute relate to the performance of a public duty and the case is such that to hold null and void acts done in neglect of this duty would work serious general inconvenience, or injustice to persons who have no control over those entrusted with the duty, and at the same time would not promote the main object of the Legislature, it has been the practice to hold such provisions to be directory only ..."

See also Attorney-General; Ex Rel Franklins Store Pty Ltd v Lizelle Pty Ltd [1977] 2 NSWLR 955; ABC Corporation v Redmore Pty Ltd (1988 - [1989] HCA 15; 1989) 166 CLR 454; R v Urbanowski [1976] 1 WLR 455; Accident Compensation Commission v Murphy [1988] VicRp 52; [1988] VR 444. The complainant has no control over the observance by the Commissioner of the requirements of s39 or s48. For a complainant to be denied the remedies under the Act to which he or she was otherwise entitled because the Commissioner failed to observe these requirements with the consequence that jurisdiction was lost would completely frustrate the expressed intentions of Parliament.

"The Appellant was not the Respondent to any complaints lodged with the Sex Discrimination Commission by or on behalf of the Respondent and the Commissioner's and Chairperson's actions in treating the Appellant as the Respondent to the matters of complaint referred to the Tribunal were invalid."

18 This was not a matter upon which the Chairperson gave any specific ruling. Counsel for the respondent points out in argument that the appellant did not deny that it was the respondent to the complaint, but referred to itself as the respondent in a letter from its legal officer to the Commissioner dated 28 May 1998, in a further letter to the Commissioner dated 13 April 2000 and also in written submissions to the Tribunal dated 19 July 2000. The appellant's position has always been, not that it is not the appropriate respondent to the complaint, but that the complaint does not name a person capable of being a respondent. In any event, to the extent that the Chairperson proceeded on an assumption that the Commissioner was entitled to nominate a respondent to the complaint in the light of the material he or she has, before notifying that person as required by s39, I think the Chairperson was right for the reasons that I have already advanced in respect of the first ground of appeal.

19 None of the grounds has been made out and the appeal must be dismissed.