May v Deputy Commissioner of Taxation

The Factual Setting 8 The notice the subject of this appeal was the outcome of communications between the Australian Tax Office ("the ATO") and Mr May extending over some number of months during which time other s 264(1)(a) notices were served but were withdrawn on service of the present notice. From at least 10 November 1997 Mr May had been made aware that the ATO had in train a national project relating to employee share plans and employee benefit trusts and that its purpose was to determine whether certain legislative amendments, previously made, were effective. Mr May's firm, it should be said, provided legal advice to clients on matters relating to income tax legislation. 9 On 14 May 1998 the respondent wrote a letter to Mr May that enclosed the s 264(1)(a) notice. Insofar as presently relevant the letter stated: "Please note that section 264 does not override legal professional privilege but does override the privilege against self-incrimination. The information requested in the attached notice is requested for the purposes of the Income Tax Assessment Act 1936 and 1997, as amended." 10 The notice required Mr May to furnish to the Deputy Commissioner in writing by a specified date the information described in the schedule to the notice. The schedule requires to be set out in full. "SCHEDULE The following information is requested in relation to all employee share acquisition plans, employee benefits trusts or similar plans which have been established or prepared by Herbert Geer & Rundle in the abovementioned period:

1. Explanatory details of the manner in which an arrangement is intended to operate and the perceived benefits of entering into an arrangement.
2. Names and addresses of employer participants who have purchased, implemented or entered into an arrangement. Where the employer participant is a company please also provide the Australian Company Number.
3. For each employer participant identified by name, indicate: (a) (i) the number of employer shares issued for each financial year and (ii) the premium applicable to each share; and (b) where an arrangement involves the employer participant making contributions into a trust, the amount of those contributions for each financial year in the relevant period. 4. For each employer participant identified by name, supply the names and Australian Company Numbers of all special purpose companies incorporated, purchased or otherwise acquired, in connection with an arrangement. 5. In relation to 4, provide details of the terms of the Memorandum and Articles of Association of the special purpose companies. 6. Where a trust is used in an arrangement, provide details of the terms of the trust deed including the names of the settlor, trustees, appointors and beneficiaries. 7. For each employer participant, indicate whether you or your firm have in your possession, custody or control any resolutions and/or directors' minutes passed in connection with an arrangement. 8. Details of the fee structure used by Herbert Geer & Rundle to determine professional fees and disbursements payable by an existing or prospective client for the establishment, implementation or setting up of an arrangement. 9. Details of any financial dealings between Herbert Geer & Rundle and/or persons acting on behalf thereof, and any employer participants and/or persons acting on behalf of those employer participants, in relation to the payment of subscription monies or share premiums for shares issued pursuant to an arrangement. 10. Details of any financial dealings between Herbert Geer & Rundle and/or persons acting on behalf thereof, and any employer participants and/or persons acting on behalf of those employer participants, in relation to the payment of contributions into any trust pursuant to an arrangement. 11. Particulars of any taxation determinations and/or private binding rulings sought in relation to an arrangement. In the schedule: "arrangement" means all employee share acquisition plans, employee benefits trusts or similar plans which have been prepared by Herbert Geer & Rundle in the relevant period. "similar plans" means an arrangement that has the following features: . an employer participant makes contributions into another entity, usually for the purpose of motivating, retaining, benefiting or remunerating employees; . that entity may be a company or trust; and . the entity provides benefits (cash or otherwise) to employees of the employer participant. This includes, but is not limited to, employee welfare funds, employee bonus trusts and employee incentive plans. "the relevant period" means the period from 1 July 1994 to 30 June 1997 inclusive. "employer participants" means former and existing clients of Herbert Geer & Rundle who have purchased, implemented or entered into an arrangement. "your firm" means the partnership known as Herbert Geer & Rundle as composed from time to time. Also note that references to the plural include references to the singular, and vice versa." 11 Of the various definitions given we would draw particular attention to that of "employer participants". Such, necessarily, are former and existing clients of the firm. Importantly, as will be seen, the information sought in paras 2, 3, 4, 5, 6, 7, 9 and 10 of the Schedule relates to, or is connected to, "employer participants". Thus the notice requires, subject to legal professional privilege (as the covering letter indicates), the provision of information of and/or about present and past clients. 12 On 9 June 1998 Mr May requested the Deputy Commissioner for a statement of reasons for decision under s 13(1) of the ADJR Act. It was provided by letter of 7 July 1998. For present purposes we need only refer to part C of the statement: "C. The reason for the decision. a. The Commissioner as part of a project involving employee share acquisition and benefit trusts arrangements sought information from the Firm regarding the arrangements established for its clients. b. The Firm declined to furnish the information. c. The Commissioner, for the proper administration of the ITAA, considered it necessary to obtain the information held by the Firm regarding employee share plans and benefit trusts. d. Subsection 264(1)(a) of the ITAA provides that the Commissioner may by notice in writing require any person, whether a taxpayer or not, to furnish the Commissioner with such information as he may require. e. The information sought from the Firm was considered necessary to determine the taxation implications applicable to arrangements established by the Firm for its clients. f. The decision to request the particulars contained in item 1 of the section 264 notice was considered necessary to determine how the arrangement was intended to operate and what the perceived benefits were for entering into the arrangement. g. The decision to request the particulars contained in item 2 of the section 264 notice was considered necessary to assist in seeking further information from the party or parties, who may be in the best position to supply such information. h. The decision to request the particulars contained in item 3 of the section 264 notice was taken to determine the extent and scope of the arrangement and to assess the volume of contributions in share plan and trust arrangements respectively. i. The decision to request the particulars contained in item 4 of the section 264 notice was considered necessary to enable the Commissioner to determine the flow of funds between the various entities that were involved in the arrangement and to enable further enquiries to be made in relation to the company if required. j. The decision to request the particulars contained in item 5 of the section 264 notice was considered necessary to determine the nature of the legal rights and obligations arising from a share plan arrangement. k. The decision to request the particulars in item 6 of the section 264 notice was considered necessary to determine the nature of the legal rights and obligations arising from a benefit trust arrangement. l. The decision to request the particulars contained in item 7 of the section 264 notice was considered necessary to determine whether the Firm is in a position to assist with the supply of additional information or documents with respect to particular employer participants. m. The decision to request the particulars contained in item 8 of the section 264 notice was made to determine whether the arrangements are tailored specifically for individual participants or more akin to a mass marketed exercise. n. The decision to request the particulars contained in item 9 of the section 264 notice was made to ascertain whether a contribution made into a share plan arrangement was financed by the employer participant, Mr May or by the Firm or persons acting on their behalf. o. The decision to request the particulars contained in Item 10 of the section 264 notice was made to ascertain whether a contribution made into a trust arrangement was financed by the employer participant, Mr May or by the Firm or persons acting on their behalf. p. The decision to request the particulars contained in item 11 of the section 264 notice was made to ascertain whether the Firm has received from the Commissioner any taxation determinations and/or any private rulings in relation to the arrangement. q. Having regard to the nature of the information sought and the previous requests made to Mr May, the 28 days given to comply with the notice and the time to respond to each piece of information sought was considered to be fair and reasonable."

The Issues in the Appeal

1. Procedural Fairness and Relevant Considerations 13 This ground of challenge to the decision to issue the notice is that the Deputy Commissioner failed to have regard to a relevant consideration being the rights of clients and former clients whose interests were affected by the notice, to be accorded procedural fairness. The following submissions were advanced in support of this. (i) The statutory power to require the provision of information relating to the affairs of a client so affects that client's affairs (ie interests) as to give the client the right to be accorded procedural fairness in the circumstances. Various decisions of the High Court were relied upon in support of the principle underlying this submission and most notably the regularly quoted observations in the joint judgment of Mason CJ and of Deane and McHugh JJ in Annetts v McCann (1990) 170 CLR 596 at 598. (ii) The content of that right is not fixed and rigid. What is appropriate depends on the circumstances of the case. Particular reliance was placed on the observations of Mason J in Kioa v West (1985) 159 CLR 550 at 585 which, because of their centrality to the appellant's argument, warrant quotation at some length. "In this respect the expression "procedural fairness" more aptly conveys the notion of a flexible obligation to adopt fair procedures which are appropriate and adapted to the circumstances of the particular case. The statutory power must be exercised fairly, i.e., in accordance with procedures that are fair to the individual considered in the light of the statutory requirements, the interests of the individual and the interests and purposes, whether public or private, which the statute seeks to advance or protect or permits to be taken into account as legitimate considerations: … When the doctrine of natural justice or the duty to act fairly in its application to administrative decision-making is so understood, the need for a strong manifestation of contrary statutory intention in order for it to be excluded becomes apparent. The critical question in most cases is not whether the principles of natural justice apply. It is: what does the duty to act fairly require in the circumstances of the particular case? It will be convenient to consider at the outset whether the statute displaces the duty when the statute contains a specific provision to that effect, for then it will be pointless to inquire what the duty requires in the circumstances of the case, unless there are circumstances not contemplated by the statutory provision that may give rise to a legitimate expectation. However, in general, it will be a matter of determining what the duty to act fairly requires in the way of procedural fairness in the circumstances of the case. A resolution of that question calls for an examination of the statutory provisions and the interests which I have already mentioned." (iii) In the present case, even accepting that neither Mr May (as recipient of the notice) nor any client affected by it had any right to be heard or to make representations prior to the decision to issue the notice: cf Sixth Ravini Pty Ltd v Federal Commissioner of Taxation (1985) 6 FCR 356 at 363 and on appeal, see Eighth Oupan Pty Ltd v Commissioner of Taxation (1986) 10 FCR 559 at 564; Allen, Allen & Hemsley v Deputy Federal Commissioner of Taxation 88 ATC 4734 at 4747; Minosea Pty Ltd v ASC (1994) 14 ACSR 642 at 648-652; procedural fairness could still be given content in a way that was appropriate and adapted to the circumstances. 14 We would note in passing that in the three decisions noted above, judges of this Court have held that the obligation of procedural fairness does not apply to a decision to issue a notice under s 264 or equivalent statutory provisions. The appellant invites us to hold, in light of the observations in Kioa v West to which we have referred, that these decisions should be understood in the context of the particular procedural claims asserted and rejected in those cases, ie a right to make representations etc prior to the decision to issue a notice. They should not be understood as precluding the imposition of procedures appropriate to the circumstances, or else they should to that extent be rejected. (iv) In a case such as this where the person whose interests were affected by the notice was not the recipient of the notice, procedural fairness to that person required that he or she be given appropriate warning that the decision to issue the notice was being taken so that an adequate opportunity would thus be given to challenge the exercise of the s 264(1) power. Such a warning in the present case could be included in the covering letter to Mr May requesting he provide his clients with a copy of the notice. Sample warnings were provided in the appellant's written submissions. (v) The provisions of s 264(1) do not manifest a clear statutory intention to exclude the above requirement of procedural fairness. (vi) The failure to provide a warning such as has been suggested demonstrates that the Deputy Commissioner failed to take into account a relevant consideration, this being procedural fairness to present and former clients affected by the notice. 15 There is a number of reasons why we are unable to accept the appellant's submission. Before indicating these, it is necessary to comment first on s 264(1) itself. 16 It is clear enough that "the powers contained in s 264(1) … must be exercised for the purposes of the [ITA Act]": Industrial Equity Ltd v Deputy Commissioner of Taxation (1990) 170 CLR 649 at 6. But subject to that, they "should be circumscribed only by reference to the limitations which are expressed in that section": Federal Commissioner of Taxation v Australia and New Zealand Banking Group Ltd (1979) 143 CLR 499 at 535. They may, without any issue or dispute of fact having arisen with a taxpayer, be used to conduct a "fishing expedition" in the sense of "a wide-ranging inquiry to ascertain a taxpayer's taxable income": Industrial Equity Ltd v Deputy Commissioner of Taxation, above, 662. 17 The information, etc sought need not be from the taxpayer. It may be from a third person. A s 264(1) notice will override any duty of confidence owed by a third person recipient to the taxpayer in respect of confidential information of or about the taxpayer possessed by the third person, to the extent that such information is sought in the notice: Smorgon v Australia and New Zealand Banking Group Ltd (1976) 134 CLR 475 at 486-490. It will not, though, displace any properly available claim of legal professional privilege, as the letter of 14 May 1998 to Mr May itself acknowledged: Commissioner of Taxation v Citibank Ltd (1989) 20 FCR 403. 18 The powers of s 264(1) are inquisitorial and coercive. While the section does not itself impose a specific obligation on the recipient of a notice to comply with it, penalties of some severity for defaults etc are imposed by Part III, Division 2 of the Taxation Administration Act 1953 (Cth): see Fieldhouse v Commissioner of Taxation (1989) 25 FCR 187 at 207-208. We would note for present purposes that in Sixth Ravini Pty Ltd v Federal Commissioner of Taxation, above, at 362, Northrop J regarded the conjunction of the inquisitorial and coercive characteristics of the s 264(1) powers as making it difficult to see how the need to comply with the requirements of natural justice could be expected before the Deputy Commissioner issued and served a notice. 19 Turning now to the ground of appeal, we consider it must fail for a number of reasons, although as we will indicate it is unnecessary to express conclusions on some of these. 20 First, it is important to reiterate that the appellant alleges that there has been a failure to take a relevant consideration into account in the decision to issue the s 264(1) notice ("relevant considerations"). What is not alleged is a breach of the rules of natural justice in the making of the decision ("procedural fairness"): cf ADJR Act s 5(1)(e) and (2)(b) and s 5(1)(a); notwithstanding that the alleged relevant consideration related to the rights, interests or expectations of present and former clients affected by the notice. For so long as the obligation to accord procedural fairness was viewed as a matter of statutory presumption: see eg Kioa v West, above, per Brennan J; and not of common law duty: see eg Annetts v McCann, above, at 598; it may have been appropriate in some cases to regard relevant considerations and procedural fairness as being interrelated. 21 In Kioa v West, for example, Brennan J commented at 619 that: "If a power is apt to affect the interests of an individual in a way that is substantially different from the way in which it is apt to affect the interests of the public at large, the repository of the power will ordinarily be bound or entitled to have regard to the interests of the individual before he exercises the power. No doubt the matters to which the repository is bound or is entitled to have regard depend on the terms of the particular statute and, if there be no positive indications in its text, the subject-matter, scope and purpose of the statute must be looked at to determine whether the repository is bound or is entitled to have regard to individual interests: Water Conservation and Irrigation Commission (NSW) v Browning (1947) 74 CLR 492 at 505. When the repository is bound or is entitled to have regard to the interests of an individual, it may be presumed that observance of the principles of natural justice conditions the exercise of the power, for the legislature can be presumed to intend that an individual whose interests are to be regarded should be heard before the power is exercised." 22 Given more recent developments in the law on procedural fairness in this country that now locate the right to procedural fairness and the obligation to accord it in the common law; see Annetts v McCann; it is in our view unnecessary to merge or blur relevant considerations and procedural fairness at least for the purpose of determining when a consideration is a relevant consideration: but see Aronson and Dyer, Judicial Review of Administrative Action, 434-435, 1996. 23 As is well known, the orthodox position is that (i) the ground of failure to take a relevant consideration into account can only be made out if a decision-maker fails to take into account a consideration he or she is bound to do in making that decision; (ii) the factors a decision-maker is so bound to consider are determined by construction of the statute conferring the discretion; (iii) if the relevant factors are not expressly stated, they must be determined by implication from the subject-matter, scope and purpose of the Act; and (iv) the court will not find that a decision-maker is bound to take a particular matter into account unless such an implication to that effect can properly be made: see generally Minister for Aboriginal Affairs v Peko-Wallsend Ltd (1986) 162 CLR 24 at 39-40. 24 With the common law providing the obligation of procedural fairness (subject to express or implied statutory exclusion), there is, in our view, no purpose to be served in yet again transforming the obligation and the conditions giving rise to it into considerations which, as a matter of statutory implication, the decision-maker is obliged to take into account. The respective obligations serve their own purposes. 25 In the present case in taking his decision the Deputy Commissioner clearly was aware that he was seeking from Mr May information of and about clients and former clients of the firm. Both the reference in the letter of 14 May 1998 to the notice not overriding legal professional privilege and the very terms of the schedule to the notice itself, make this plain. Those persons' affairs were a subject of the inquiry and for that reason their interests were affected by it. If the manner of affection of those interests could, subject to statutory exclusion, give rise to a requirement of procedural fairness, no need existed to engage in the process of statutory construction for the purpose of making an implication that the Deputy Commissioner was bound to take into account as a relevant consideration what, apart from such implication, he would be obliged to do in the circumstances as a matter of procedural fairness. In other words we regard the resort to the relevant considerations ground as unnecessary. 26 In the course of submissions, counsel for Mr May accepted that in the end his submission turned entirely upon whether or not a third party affected by the notice was entitled to procedural fairness. Given the argument that has been addressed to us by both parties on that matter, we do not consider it appropriate to dispose of this appeal on the technical ground that reliance has been placed on what in the circumstances is a superfluous ground of judicial review. 27 Secondly, for a person to be entitled to procedural fairness in the exercise of a statutory power, then, statutory exclusion apart, it must be shown that that power enables the decision maker "to destroy, defeat or prejudice [that] person's rights, interests or legitimate expectations": Annetts v McCann, at 598. In the present case it is claimed that it is the "interests" of present and former clients that are affected, those interests being the client's affairs that are affected by income tax or may give rise to a liability to income tax. Because of the view we take of the particular obligation of procedural fairness advanced by the appellant, we do not consider it necessary to determine whether the "interests" so identified would, statutory preclusion apart, be capable in the circumstances of generating a right to procedural fairness in the decision to issue a s 264(1) notice. 28 Thirdly, the observations of Mason J in Kioa v West that we set out earlier are central to the appellant's case. It is important to set them in context. In Kioa at 582-584 in the passages immediately preceding that quoted it is apparent that Mason J, in referring to the circumstances giving rise to procedural fairness, was limiting himself to what is commonly referred to as the "hearing rule" - to the entitlement of the person affected "to know the case sought to be made against him and to be given an opportunity of replying to it": Kioa v West, at 582. The appellant's case is not one that invokes the hearing rule in any of its manifestations. Its concern is with warning clients of the actual decision itself - albeit, it is claimed, the manner of giving of the warning is part of the making of the decision to issue the notice. 29 So framed, the appellant's case raises directly the question whether such a right to be warned is capable of falling within the obligation of procedural fairness. In our view it does not. 30 It is broadly accepted that, traditionally, natural justice both contained and has been confined to two principles: that no person be condemned unheard; and that no person be judge in his or her own cause: see Aronson and Dyer, above, 387ff; Wade and Forsyth, Administrative Law, 469-470, 7th Ed, 1994; Craig, Administrative Law, 281ff, London, 3rd Ed, 1994; Dussault & Borgeat, Administrative Law, vol 4, 243ff, Toronto, 2nd Ed, 1990; Joseph, Constitutional and Administrative Law in New Zealand, 717ff, 1993. So limiting have these principles been that Wade and Forsyth have made the comment (it is appropriate as well to this country) that "[natural justice] has not, as yet, included a general requirement that reasons should be given for decisions. On the other hand there are isolated judicial statements that natural justice requires decisions to be based on some evidence of probative value": at 469-470; but cf Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321 at 356-357. Nonetheless the same authors go on: "[t]he courts are now so conscious of natural justice that they may well extend its scope in both these directions". 31 The appellant in the present case is inviting us to extend natural justice's scope in a third direction so as to require a person affected by a decision to be given a warning that the decision has been made so that that person may take appropriate steps to protect his or her own interests by challenging the decision if grounds exist for so doing. It is not an invitation we accept. 32 There is an extensive scholarly literature on the various justifications for, and suggested proper province of, the requirement of procedural fairness: see eg Galligan, Due Process and Fair Procedures, 1996; Richardson and Genn, Administrative Law and Government Action, 105ff, 1994; Bayles, Procedural Justice, 1990; and see also Allan, "Procedural Fairness and the Duty of Respect" (1998) 18 Oxford JLS 497. That by no means harmonious literature is not easily summarised: but see Aronson and Dyer, at 393-395. It clearly advocates procedural requirements, for example, a duty to give reasons for decisions, that have not found their way into Australian common law: Public Service Board of New South Wales v Osmond (1986) 159 CLR 656. It likewise espouses procedural requirements, for example, appeal and review processes, that can require parliamentary not judicial authorisation and which fall beyond the traditional province of natural justice: see eg Galligan, Ch 13. 33 For present purposes it is unnecessary for us to examine the various justifications advanced for procedural fairness to see whether one or other might conceivably be manipulated to justify the procedural right sought in the present appeal. Given the traditional understanding of natural justice with its twin sources, and given the present state of the common law in this country which still is constrained by those sources, we do not consider that any of the rationales for procedural fairness could justify our giving it a scope which is unrelated in its burden to the making of the decision in respect of which the obligation is exacted. In so limiting procedural fairness we do not consider we are saying anything that is inconsistent with the quite considerable adaptation the "hearing rule" has undergone as it has penetrated the modern administrative justice system: on which see eg Griffiths, "Procedural Fairness", in Finn (ed), Essays on Law and Government, vol 2, 1996 at 196-198. That adaptation retains as its focus the fairness of the processes leading to the decision to be made by the relevant decision-maker. 34 Notwithstanding that the appellant sought to make the decision as to the nature of the warning to be given a part of the decision-making process, the obligation to give such a warning could not properly be seen as an element in the decision to exercise the power. It would be a consequence - albeit on the appellant's submission a necessary consequence - of the making of the decision. Tellingly in this regard, the warning proposed by the appellant is not contained in the s 264(1) notice. Rather it takes the form of a request in the letter accompanying the notice that the recipient of the notice provide an appropriate warning. 35 Equally, and unlike for example an obligation to give reasons for decision which, according to its advocates, has some reflex action back on the process of decision making: see eg Galligan, at 431-2; Bayles, at 84-85; an obligation simply to give notice of a decision has only a prospective purpose. That is to give an early opportunity to considering making, and/or to make, a challenge to the decision by whatever avenues are available for such a challenge. And we would re-emphasise that not even a duty to give reasons is yet accepted as being generally required as a matter of procedural fairness. 36 There may well be good reasons of public policy why, as between public officials and persons directly affected by the exercise of a power, such persons should as a rule be notified of decisions exercising that power. But if such an obligation is to be imposed, notwithstanding the obvious practical difficulties it could entail, it is one for parliament, not for the courts, to prescribe. It has not done so to date. Rather our system of judicial review contemplates the very contingency that a person aggrieved by a decision may not receive official notice of it and may only ascertain that it has been made at some later date: see eg ADJR Act, s 11(4) and (5); and see Worthley v Australian Securities Commission (1993) 42 FCR 578. 37 Fourthly, given the circumscribed scope of the requirements of procedural fairness, we consider that no proper basis exists for calling into question the observations made by judges of this Court in Sixth Ravini Pty Ltd v Federal Commissioner of Taxation, in Allen, Allen & Hemsley v Deputy Federal Commissioner of Taxation, and in Minosea Pty Ltd v ASC, above, that the obligation of procedural fairness does not apply to a decision to issue a notice under s 264(1) or equivalent statutory provisions. 38 Fifthly, there are three additional matters to which it is appropriate to refer. (i) With the transformation of the language of natural justice into that of acting fairly it is necessary to keep in mind that one, nonetheless, is dealing with a "duty to act fairly, in the sense of according procedural fairness, in the making of administrative decisions": Kioa v West, at 584 (emphasis added). Quite unrelated to that duty, in a variety of settings and for a variety of reasons public officials and agencies are being obliged to adhere to standards of fair play or fair dealing in their relationships with, and treatment of, members of the public - as, for example, in the conduct of litigation: Scott v Handley [1999] FCA 404, Full Court; and in the performance of tender process contracts: Hughes Aircraft Systems International v Airservices Australia (1997) 76 FCR 151. While the imposition of these standards may in a general way be said to conform to "principles of natural justice", those standards are not the progeny of the rules of natural justice with which this appeal is concerned. They have their own provinces and purposes. The enlargement of the range of circumstances in which such standards are exacted should not be effected covertly by the illegitimate use of natural justice's duty to act fairly. Such, however, is the burden of the appellant's argument. (ii) We do not consider that decisions dealing with the right to claim legal professional privilege where a statutory demand for access to information is made, assist in the determination of this matter. Where that right is not overridden by statute it is clear that an adequate opportunity in the circumstances must be given in which to make a privilege claim: Commissioner of Taxation v Citibank Ltd,above. If the right itself is to have vitality, such an opportunity must be given. No corresponding reason exists here for imposing on the Deputy Commissioner an obligation to provide an adequate opportunity to challenge the validity of the notice. That opportunity is provided by the ordinary processes of judicial review. (iii) We merely note that it is unnecessary in this appeal for us to consider in what circumstances a client or former client of a solicitor in receipt of a s 264(1) notice would properly be entitled to expect that the solicitor would warn him or her of that notice: cf Marcel v Commissioner of Police of the Metropolis [1992] Ch 225 at 261, 266. 39 We reject this ground of appeal.
2. The Deputy Commissioner's Purpose in Exercising the Power 40 In part C of his statement of reasons the Deputy Commissioner indicated (para (e)) that: "The information sought from the Firm was considered necessary to determine the taxation implications applicable to arrangements established by the Firm for its clients." (Emphasis added.) 41 It is the appellant's case that this is the only purpose for which the decision to issue the notice was taken, and it is a purpose insufficient to justify the furnishing of all of the information sought from Mr May. Hence, it is said, the power has been exercised in part at least for an improper purpose or because an (unspecified) irrelevant consideration has been taken into account, notwithstanding that the information actually sought could lawfully have been sought under s 264(1)(a) given its scope, had the power been exercised for a more wide-ranging purpose. 42 Critical to this submission as developed before us is the use of the words "arrangements established by the Firm", the emphatic word being "established." It is asserted that an arrangement prepared for a client, but not actually "established" by the firm in the sense of constituted, implemented, or put in place for a client, would not fall within the para (e) purpose. Yet it is claimed the various categories of information sought in the notice extend to arrangements so "prepared". 43 There is no substance to this submission. Before indicating why this is so, it is appropriate to reiterate that the language and expression of reasons statements are not to be approached overcritically and with a determination to detect possible error: Minister for Immigration and Ethnic Affairs v Wu Shan Liang (1996) 185 CLR 259 at 271-272; see also Justice RS French, "Administrative Justice in Australian Administrative Law," AIAL Conference, 29 April 1999, where it is suggested that this requirement of restraint "[i]n a sense … enjoins the court against judicialising the reasoning processes of administrative decision-makers." 44 First, we do not accept that there was a sole particular purpose informing the decision to issue the notice. Rather, considered as a whole and in context, it seems to us that the reasons can be said to reflect a complex of purposes relating in varying ways to "arrangements" that had been established or prepared for clients and that these purposes converged on the overriding purpose stated in para (C)(c) of the reasons statement that: "The Commissioner, for the proper administration of the ITAA, considered it necessary to obtain the information held by the Firm regarding employee share plans and benefit trusts." 45 Secondly, and dealing directly with the appellant's submission, when one analyses the use of language in both the schedule to the notice and in the statement of reasons, it is difficult to avoid the conclusion that the term "established" as used in the reasons is not used in a precise or technical fashion in any event. The burden of both documents is with dealings between the firm and its clients that resulted in the provision of an arrangement (as defined) to a client and with the consequential tax implications thereof, whatever these may have been. 46 Given (i) the definition in the notice of "employer participant" - ie "former and existing clients … who have purchased, implemented or entered into an arrangement;" (ii) that the information sought in all save paras 1, 8 and 11 of the notice (none of which are presently relevant) relate to employer participants - and para 6 does so by implication; (iii) the undiscriminating use of language in the notice itself as to how and by whom (ie the firm or a client) life is to be breathed into an arrangement if at all (eg para 8: "the establishment, implementation or setting up of an arrangement"; and the schedule's definition of "arrangement": ie plans "prepared by" the firm) - it would be quite inappropriate to give the term "established" the limiting function attributed to it by the appellant. The burden of the notice is obvious enough in terms of the taxation inquiry that is being made. And the reason given in para (e) is an adequate justification of it. What the word "established" envisages is the "provision" of an arrangement irrespective of whether it is the firm or the client that formally constitutes or implements that arrangement - if it is implemented at all. 47 Thirdly, even if it was the case that the Deputy Commissioner's purpose was limited as the appellant submits, it would not follow as of course that that purpose would not justify the information sought. Information relating to an arrangement purchased by a client, though not "established" by the firm or implemented by the client, may well be considered relevant by the Deputy Commissioner and reasonably so to his stated purpose and be an appropriate subject of inquisition. 48 Fourthly, if the purpose as stated did not justify the information sought, it again would not follow as of course that the power was exercised for an improper purpose in the sense of a "purpose other than a purpose for which the power is conferred:" ADJR Act, s 5(2)(c). The power was exercised for no demonstrated reason other than for reasons related to "the proper administration" of the ITA Act: see para (c) of the statement of reasons. These being proper reasons for its exercise: see Industrial Equity Ltd v Deputy Commission of Taxation at 661, 671-672; it is difficult to see how, to use an old description, a "fraud on the power" has nonetheless been perpetrated: cf Vatcher v Paull [1915] AC 372 at 378. 49 We reject the appellant's submission. We should note, though, that our view of the scope of the notice is more limited than that allowed by the trial judge. To the extent that the notice seeks information about arrangements prepared by the firm, it must be information prepared for former or existing clients. Such is the significance and effect of the term "employer participant" in the notice itself. The Deputy Commissioner, we should add, has not sought to give the notice greater scope than that which we consider it has.
3. The Relationship of s 264(1)(a) and s 264(1)(b) 50 It should be recalled that while s 264(1)(a) allows the Commissioner to require a person to furnish him "with such information as he may require," he can only require a person under s 264(1)(b) to produce books etc if they relate to "[that person's] or any other person's income or assessment". 51 The appellant's submission is that you cannot allow the limitations of para (1)(b) to be circumvented by simply asking for details of the text of the document under para (1)(a) and that is what the Deputy Commissioner has done here in items 5 and 6 of the notice which seek: "5. In relation to 4, provide details of the terms of the Memorandum and Articles of Association of the special purpose companies. 6. Where a trust is used in an arrangement, provide details of the terms of the trust deed including the names of the settlor, trustees, appointors and beneficiaries." Reliance in this is placed on the observations of Gibbs J in Geosam Investments Pty Ltd v Australia and New Zealand Banking Group Ltd (1979) 25 ALR 445 at 446 that: "The Commissioner is entitled to require the production of such books, documents and papers under s 264(1)(b). The Commissioner's problem is to discover which books, documents and papers he may require to be produced. The way in which he seeks to solve that problem is to ask the bank, which has the documents in its safe deposit boxes, to give particulars of the books, documents and papers. It seems to me that that information is information which is required by the Commissioner for the purposes of the Act. In reaching that conclusion, I accept that when the notice asks for particulars it asks only for a general description of any book, document or paper and not for complete details of its contents. It is quite obvious that the Commissioner would not be able to obtain, under para (a), full information as to the contents of a document which he could not have produced under para (b), but what he can require is information which will enable him to know which books, documents and papers he can require to be produced." 52 Though the Deputy Commissioner does not concede it to be the case, we are prepared to accept for present purposes that while the notice in items 5 and 6 does not require the production of documents as such, it does seek full information of the documents there referred to. That information, though, relates back to documents utilised by an "employer participant" - ie a taxpayer-client or former client - in an arrangement having possible tax implications and it is sought in relation to the income or assessment of that client. In other words the Deputy Commissioner has, in issuing a notice under s 264(1)(a), simply telescoped the requirements of paras (1)(a) and (1)(b) of the section. 53 We can see nothing impermissible in his so doing. If a document is one production of which could be sought under para (1)(b), then we can see no objection to full information of it being required under para (1)(a). We do not consider that this position is affected by the consideration that it is the recipient of the notice who has to identify the particular taxpayers to whom the information related. The taxpayers are described generically. In this particular setting that is sufficient: Federal Commissioner of Taxation v Australian and New Zealand Banking Group Ltd, above, at 523. 54 We reject the appellant's contention
4. The Trial Judge's Costs Order 55 The costs order made at the trial was that the applicant (the appellant here) pay 90 per cent of the respondent's costs. It has been argued before us that this apportionment did not recognise the significance of the appellant's success in relation to items 1 and 8 of the notice which the trial judge held the appellant was not required to answer. The trial only took one day and the appellant claims that the appropriate order would have been one in his favour or else no order as to costs. 56 We need only say that no case has been made out that could justify this Court exercising its own discretion in substitution for His Honour's on House v R (1936) 55 CLR 499 at 507 grounds. 57 We would dismiss the appeal. I certify that the preceding fifty-seven (57) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justices Branson, Finn and Kenny JJ.

Associate: Dated: Counsel for the Applicant: Mr JD Merrells QC with Mr PH Solomon

Solicitor for the Applicant: Herbert Greer & Rundle

Counsel for the Respondent: Mr G Davies with Ms J Davies

Solicitor for the Respondent: Australian Government Solicitor