Mobil Oil Australia Pty Ltd v Federal Commissioner of Taxation

The Board of Review stated the case or cases on the hearing of references from the Commissioner pursuant to s. 187 (a) after he had disallowed objections to assessments. The assessments had been made under s. 136. Section 136 authorizes assessments which may depend in no small degree upon the discretion of the Commissioner. But the section provides certain preliminary conditions to its application. The first such condition is that there should be a business carried on in Australia either controlled principally by non-residents or carried on by a company a majority of the shares in which is held by or on behalf of non-residents, or carried on by a company which holds (or on behalf of which other persons hold) a majority of the shares in a non-resident company. The second condition of the application of the section is that it appears to the Commissioner that the business produces either no taxable income or less than the amount of taxable income which might be expected to arise from the business. When these conditions are fulfilled, the section provides that the person carrying on the business in Australia shall, notwithstanding any other provisions of the Act, be liable to pay income tax on a taxable income of such amount of the total receipts (whether cash or credit) of the business as the Commissioner determines. It may be supposed that the words "as the Commissioner determines" involve a discretion on his part.

Section 187 provides that a taxpayer dissatisfied with the decision (scil. the decision of the Commissioner on an objection which he may have made under s. 185) may in writing request the Commissioner to refer the decision to a Board of Review for review. Section 192 provides that a Board of Review should have power to review such decisions of the Commissioner, Second Commissioner or a Deputy Commissioner as are referred to it under the Act. Section 193 deals with the powers exercised by the Board for the purpose of reviewing such decisions and in effect reposes the same powers in it as the Act does in the Commissioner in making assessments, determinations and decisions and s. 196 (1) provides that the Commissioner or taxpayer may appeal to the High Court from any decision of the Board which involves a question of law.

The Board is an administrative tribunal (British Imperial Oil Co. Ltd. v. Federal Commissioner of Taxation [1] affd. sub. nom. Shell Co. of Australia Ltd. v. Federal Commissioner of Taxation [2] ) and in effect the purpose of enabling a taxpayer who objects to an assessment to "appeal" to the original jurisdiction of the Court or to require the matter to be referred to a Board of Review as another administrative authority seems to have been to provide a less formal method of investigating facts at a hearing, an opportunity of exercising discretion and the like by a more detached administrative process, although a dispute between the Commissioner and a taxpayer might alternatively become the subject of litigation before this Court or if it involved questions of law might do so in any case in the end.

1. (1926) 38 C.L.R. 153. 2. [1931] A.C. 275; (1930) 44 C.L.R. 530.

In the present case the Board of Review, which had a heavy task, encountered difficulties under s. 16. That section is directed to preserving secrecy about a taxpayer's affairs when they are laid before the Commissioner and his officers. In the cases before the Board which are the subject of this reference it was thought desirable that some of the affairs of other taxpayers of which the Commissioner had learned from their returns and from his dealings with the taxpayers should be made known to the Board of Review as a means, so to speak, of sophisticating the judgment of members of the Board concerning some of the matters raised by the taxpayer who had objected and whose objections had been referred to the Board. Section 16 (2) provides that "Subject to this section, an officer shall not either directly or indirectly, except in the performance of any duty as an officer, and either while he is, or after he ceases to be an officer, make a record of, or divulge or communicate to any person any such information so acquired by him". Sub-section (3) provides that "An officer shall not be required to produce in Court any return, assessment or notice of assessment, or to divulge or communicate to any Court any matter or thing coming under his notice in the performance of his duties as an officer, except when it is necessary to do so for the purpose of carrying into effect the provisions of this Act or of any previous law of the Commonwealth relating to Income Tax". Sub-section (1) defines "officer" to mean "a person who is or has been appointed or employed by the Commonwealth and who by reason of that appointment or employment, or in the course of that employment, may acquire or has acquired information respecting the affairs of any other person, disclosed or obtained under the provisions of this Act or of any previous law of the Commonwealth relating to Income Tax". For reasons which it is not necessary to go into on this case stated, what is revealed by the returns or other income tax documents of other companies concerned in the importation and sale or disposal of oil may provide relevant information in the case of the appellant taxpayer.

The corresponding previous form of s. 16 (4) (b) recognized specifically the particular position of Boards of Review and referred to them as Boards of Review in terms. Section 16 (4) in its existing and relevant form provides that nothing in the section "shall be deemed to prohibit the Commissioner, Second Commissioner, or a Deputy Commissioner, or any person thereto authorized by him, from communicating any information to - (a) (b) any board exercising any function under any Act administered by the Commissioner of Taxation or any member of any such Board" and this expression appears to me clearly to include the Board of Review. The result, as it seems to me, is to enable any "officer" as defined, with the authority of the Commissioner, to act with complete freedom from the other provisions of s. 16 in communicating information to a Board of Review. This freedom extends to any information. To me it seems to follow from the nature of the functions of a Board of Review that it must have unfettered power to ascertain the facts which in the opinion of the Board or its Chairman are indispensable to the proper performance of its duties and powers. It appears to me that the exception created by sub-s. 4 (b) to the operation of the other provisions of the section extends to all things which are incidental to the purpose of the exception. Paragraph (b) of sub-s. (4) speaks only of "any board exercising any functions under any Act administered by the Commissioner " but the history shows that it clearly contemplated a Board of Review. What is incidental must be ascertained from considering the functions of the Board of Review but I think a wide view must be taken of the immunity from the operation of s. 16 which witnesses and others speaking with the authority of the Commissioner possess. As in many cases the presence of solicitors and accountants is necessary on the hearing before a Board of Review it appears to me that nothing which is incidentally or accidentally communicated to them in the course of laying information before the Board of Review is within the prohibition of s. 16. Of course persons must not be unnecessarily allowed to gain information but shorthand writers and others engaged in the task of recording the evidence are necessarily within the incidental immunity. At the hearing in this Court of the case stated by the Board of Review much difficulty was experienced because of the embarrassing nature of the questions and the difficulty of saying how many were confined to questions of law within the meaning of s. 196 (2). A direction was given that the questions should be reframed but this merely led to further questions being framed and in the result the Court had before it a large number of inquiries as to what ought to be done. This seemed to me to tend to replace the administrative procedure contemplated by the legislation in relation to reviews, as distinguished from appeals, by a very formal procedure and a strictness of legal rule which was not intended and would be unfortunate.

I have had the advantage of reading the judgments of Kitto J. and of McTiernan and Taylor JJ. and, speaking generally, agree with them in their discussion of the case or cases stated. But I am not disposed to agree with the view that a breach of s. 16 is committed when an officer who divulges information to a Board of Review does so in the hearing of other persons as well as the Board, provided, of course, that it is all done under the authority of the Commissioner, Second Commissioner or a Deputy Commissioner or any person thereto authorized by him.

The foregoing observations will, I hope, be sufficient to explain why I find myself prepared to concur in the view that the case stated should be referred back to the Board of Review without specific answers to the questions appearing therein.

By s. 192 of the Income Tax and Social Services Contribution Assessment Act 1936-1958 a Board of Review is given power to review such decisions of the Commissioner of Taxation as are referred to it under the Act. For the purpose of reviewing such decisions the Board has "all the powers and functions of the Commissioner in making assessments, determinations and decisions under this Act, and such assessments, determinations and decisions of the Board, and its decisions upon review, shall for all purposes (except for the purpose of objections thereto and review thereof and appeals therefrom) be deemed to be assessments, determinations or decisions of the Commissioner" (s. 193). The Act clearly enough contemplates that there will be "sittings" of the Board, s. 195 requires that it shall give a "decision" in writing and that if requested by either party to a review it shall state in writing its findings of fact and its reasons in law for the decision. Sittings are to be held in such place or places and at such time or times as are fixed by the Chairman of the Board (reg. 37). Reviews are to be conducted "as the Chairman from time to time directs" and they are to take place in camera unless the taxpayer otherwise requires. Either party may nominate a person to represent him at the review (reg. 38) and under s. 194 of the Act two members of the Board constitute a quorum at any sitting. Following objections by the objector to assessments of income tax in respect of four successive income years the last of which ended on 30th June 1957 the assessments were referred to a Board of Review and the questions and further questions which we are asked to consider have been propounded in a case which purports to have been stated pursuant to s. 196 of the Act.

Generally, the questions which have been asked are concerned with the manner in which the Board should, in the particular circumstances of the contest before it, conduct its proceedings particularly in relation to the reception of various items of evidence. We have italicized the word evidence because the Board is not a court and it is not bound by the rules which govern the admissibility of evidence before a judicial tribunal (see Sutton v. Commissioner of Taxation [1] ). Indeed, the general declaration, already mentioned, that for the purposes of review the Board is to have all the powers and functions of the Commissioner in making assessments, determinations and decisions under the Act, clearly reveals it as an administrative tribunal with the like, though superior, authority to the Commissioner in the case of assessments which have been referred to it for review. In making his assessment the Commissioner is required to act upon the taxpayer's returns and upon "any other information in his possession" (s. 166) and, particularly in view of the fact that the Board's decisions upon review are deemed to be assessments, determinations or decisions of the Commissioner, it would be idle to suppose that its functions were intended to be exercised only upon the consideration of evidence in the strictly judicial sense. It is, we think, clear that within the limits of its statutory authority it is for the Board and for the Board alone to regulate the conduct of proceedings before it. Regulation 39 of the Regulations made under the Act makes some provision with respect to the form in which "evidence" may be adduced but no provision of the regulations operates to destroy the general authority of the Board to regulate the conduct of proceedings before it.

With these observations in mind it is at once possible to say that, in the main, the questions raised by the case stated are not questions of law within the meaning of s. 196 (2). In general, they are questions concerned with the "duty" of the Board to receive evidence of a particular character in a particular manner or with the "propriety" of various proposed courses of procedure but unless what is said to be the relevant "duty" is defined by law or "propriety", in some way or other, be referable to some legal criterion the questions asked cannot be questions of law.

A number of the further questions which were raised after the commencement of the argument are infected with the same vice but, additionally, they include questions which, however much they may have been debated before the Board, cannot be said to be questions of law "arising before the Board". We refer in particular to question 4 of the further questions which in its introductory matter postulates the receipt of evidence of a certain character in the absence of the taxpayer's representatives and then asks whether if that course be followed the decision of the Board will be a valid decision, or whether it will be liable to be set aside or quashed by an order of this Court or whether it will be subject to prohibition in this Court or subject to appeal to this Court. But when s. 196 (2) speaks of "any question of law arising before the Board" it is speaking of questions of law which arise for decision by the Board and it is obvious that questions such as those to which reference has been made did not arise for decision by the Board. Indeed, we are disposed to think that the category of questions which may be raised by case stated under the section in question may be limited to questions of law affecting the taxpayer's liability and that it does not extend to questions concerning the Board's procedural authority. But, however this may be, questions of the character referred to in this paragraph are not "questions of law arising before the Board" and, that being so, it is not open to this Court to consider them.

However, some questions of law do seem to have arisen before the Board but they are overlaid by the form and multiplicity of the questions which have been formulated. Chief among these is the operation, in the circumstances, of certain of the provisions of s. 16 of the Act. It is, we are told, the desire of the Commissioner to support his case before the Board by evidence, both oral and documentary, concerning certain of the affairs of companies, other than the taxpayer, which are engaged in the marketing of petroleum products. This evidence, it is proposed, shall be given or produced by an officer of the Department and it consists of information within the meaning of s. 16 (1) which that officer has acquired by reason of or in the course of his employment and which has been disclosed to him under the provisions of the Act. In other words it consists of information gleaned from the returns of those companies and in the course of associated dealings between officers of the Department and officers of those companies. Apparently the Commissioner takes the view that, although his officer is at liberty pursuant to s. 16 (4) (a) and (b) of the Act to communicate this information to the Board, it would be a breach of s. 16 (2) if the communication were made to the Board in the presence of the taxpayer's representatives. It is in this connexion that it is asked whether it is the duty of the Board, or whether it would be proper for it, to receive such evidence in the absence of the taxpayer's representatives or whether the Board would be under a duty to exclude the taxpayer's representatives whilst such a communication was made. In our view, the only question of law which arises in these circumstances is concerned with the character and quality of the exception created by the terms of s. 16 (4) (b).

That sub-section excepts from the operation of the main provisions of the section, inter alia, the communication of any information to "any board exercising any function under any Act administered by the Commissioner of Taxation". It may be thought at first sight that the only relevant effect of this provision is to authorize the communication to a Board of Review of information respecting the affairs of the taxpayer whose assessment is under review. But to some extent, at least, the Commissioner is under a duty, within the meaning of s. 16 (2), to communicate to a Board information which he has received from an objecting taxpayer for he must upon request refer the decision upon the objection "or forward the objection" to the Board. Nevertheless, it may be difficult to see how this duty could be taken to comprehend the communication by officers of the department of all the information which they have obtained from the taxpayer in the course of investigating his affairs. Accordingly, as we have said, it may be thought that the excluding provision was merely intended to facilitate reviews by the Board by enabling the Commissioner and his officers to place before the Board all relevant information obtained from the taxpayer and concerning his affairs. But a consideration of the history of the provision is sufficient to dispose of this notion. The exception in favour of communications to the Board of Review was first introduced by the amending Act No. 46 of 1928 and the terms of the proviso which were then added to s. 12 (4) of the Income Tax Assessment Act 1922-1928 expressly made it clear that the Commissioner was free to communicate to a Board of Review information respecting the affairs of persons other than the objecting taxpayer. The present s. 16, though in some ways framed in a more comprehensive form, makes no such express reference, but consideration of the substance of the many excepting provisions makes it certain that the same result was intended.

This view of s. 16 is in accordance with the Commissioner's contention but in relation to information of the character specified in s. 16 (1) obtained by him or his officers from other taxpayers it is further contended that the only form of excepted communication to the Board of Review is one which is made privately. Accordingly, he submits that it is permissible for him to make such a communication only in the absence of the objecting taxpayer and its representatives. But the character of the communication which is the subject of the exception must be the same whether the information communicated relates to the affairs of an objecting taxpayer or any other taxpayer and it would reduce the contemplated "sittings" of the Board to an absurdity if the excepting provision were to be taken to extend only to private communications of such information. When one comes to consider the character and functions of a Board of Review the fact that, although it is an administrative body, it is designed to proceed and, in fact, proceeds in a quasi-judicial manner it is, we think, obvious that the exclusion operates to protect all communications made to it in the normal course of its proceedings. That being so, there is nothing in s. 16 to require the Board to exclude the taxpayer's representatives if and when evidence of the character in question is submitted to it. On the other hand, there is no legal duty on the Board to receive such information. At the most, the communication of such information would constitute hearsay evidence and it would be open to the Board to take the view upon consideration that the communication of such information in the presence of the taxpayer's representatives would unduly prejudice the other companies concerned or, on the other hand, that the exclusion of the taxpayer's representatives whilst such hearsay evidence was being given would unduly prejudice the taxpayer in the proceedings before it. But whether it should receive the evidence in the presence of the objecting taxpayer's representatives, or, whether they should be excluded, or, whether the evidence should be received at all, are matters for the decision of the Board in the course of its proceedings and do not involve questions of law which it would be proper for us to consider.

A further question has arisen in relation to s. 16 with respect to the situation which will arise if an officer of one of the companies in question be called to give direct evidence of the company's affairs and concerning matters upon which information has previously been disclosed to or obtained by the Commissioner or an officer of the Commissioner under the provisions of the Act and by reason of, or in the course of, the employment of either of them. The Commissioner seems to have taken the view that, in seeking to elicit information of this character from such a witness, he would, or his representative would, in some way, become involved in a breach of s. 16 (2). As we understand the suggestion it is that having become possessed of the material information pursuant to the provisions of the Act, the Commissioner or his representative, in seeking to elicit the same information directly from the company which had disclosed it to him under the provisions of the Act, would be indirectly disclosing the information contrary to the statutory provision. To our minds, there is no substance in the suggestion and such a course of procedure would not involve a breach of the sub-section in question. Nevertheless other objections to this course being pursued were based upon the allegation that the information in question is highly confidential, or that it relates to the secret manufacturing processes of one or other of the companies concerned. On one or other of these grounds the companies have objected to disclosing the information in the presence of the taxpayer who is one of their competitors in business. These objections do not raise any question of law though they may well be matters for the Chairman of the Board to take into consideration in determining whether he should require evidence to be given openly or in such a manner as to prevent injury to the companies concerned.

The final question as we see it is concerned with reg. 35 of the Public Service Regulations. This regulation provides that "Except in the course of official duty, no information concerning public business or any matter of which an officer has knowledge officially shall be given, directly or indirectly, nor shall the contents of official papers be disclosed, by an officer without the express authority of the Chief Officer". This regulation was relied upon by way of objection to the production of a document by a senior scientific officer of the Defence Standard Laboratories. The document contained confidential information which had been supplied to the Defence Standard Laboratories by one of the companies concerned relating to the details of the composition of that company's products, the origin of its base stocks and the additives and the quantity of additives incorporated therein. In our view, the regulation in question does not operate to prevent the Chairman from requiring the production of the document although the confidential nature of the document may, again, well be a matter for consideration when the Chairman determines whether he should require the witness to produce the document.

Having made these observations it is we think unnecessary to say more than that we think the case stated should be referred back to the Board of Review without specific answers to the questions appearing therein.

We have before us two sets of questions referred by a Board of Review constituted under Pt. V of the Income Tax and Social Services Contribution Assessment Act 1936 Cth as amended. One set was referred on 19th September 1962, but to some extent (it is not entirely clear to what extent) it was superseded by a new set on 12th November 1962. The result is that we are asked to answer at least nine questions, some being referred at the request of both the Commissioner and the taxpayer, some at the request of the taxpayer alone and some at the request of the Commissioner alone. The questions are divided into many sub-questions. They read somewhat less like an oppressive examination paper than did the original batch, but they are still objectionable as not conforming with the requirements of s. 196 (2), the provision of the Act upon which the authority of the Board to refer questions to the Court depends. The sub-section provides that upon the request of the Commissioner or the taxpayer the Board shall refer to the High Court "any question of law arising before the Board". A question of law arises before the Board when facts have been found "requiring only the certainty of some point of law applied to those facts to determine either the whole case or some particular stage of it - the stage at which the case is stated": Australian Commonwealth Shipping Board v. Federated Seamen's Union of Australasia [1] . In my opinion it arises also where, in the course of a reference, the Board finds itself unable to perform its function properly without deciding a question, adjective rather than substantive though it may be, which depends wholly upon the application of the law to a situation which has actually developed. Hypothetical questions are plainly not within s. 196 (2), and for that reason, if for no other, all the questions in the second batch fall outside that sub-section. Indeed they depend upon a double hypothesis, all being asked with the introduction: "In relation to (certain) categories of evidence if such evidence is tendered on behalf of the Commissioner and in so far as such evidence is material ". Again, questions which, far from asking the legal effect of ascertained facts, demand a disquisition on a general topic cannot be said in the relevant sense to be questions of law which have arisen before the Board. An example is a question that has been submitted in this form: "If the Board has (a particular) power, according to what criterion ought the Board to exercise such power?". The function of this Court is not to give the Board general or abstract advice as to the manner in which it ought to exercise the authority confided to it by the Act: per Starke J. [1] , but to give a judgment deciding a concrete question of law which must be decided in order that the Board may perform its function in the particular case in accordance with law.

1. (1925) 36 C.L.R. 442, at p. 450. 2. (1925) 36 C.L.R., at p. 462.

Upon this view of the matter none of the questions, as framed, is within the authority of the Board to submit or of this Court to answer. Nevertheless it appears to me that there are certain questions of law which, though not stated in isolation by the Board, are inherent in some of the questions that are stated, and that they are questions which have arisen before the Board so as to require determination for the purposes of the reference. I think we should endeavour to answer these questions. In order to identify them some introduction is necessary.

The Board is engaged in hearing references arising out of a decision by the Commissioner to disallow objections to assessments which had been made in virtue of a provision, contained in s.136 of the Act, which enables the Commissioner in certain circumstances to treat as a taxpayer's taxable income an amount determined by himself, instead of the excess of assessable income over allowable deductions. The object of the provision is discussed in the Texas Case [2] . It applies only in a limited class of cases; namely those where a business carried on in Australia is controlled principally by non-residents, or is carried on by a company a majority of the shares in which is held by or on behalf of nonresidents, or is carried on by a company which holds or on behalf of which other persons hold a majority of the shares in a non-resident company. And it applies in such a case only if it appears to the Commissioner that the business produces either no taxable income or less than the amount of taxable income which might be expected to arise from that business. Where both conditions are fulfilled, the person carrying on the business in Australia is made liable to pay income tax on a taxable income of such amount of the total receipts (whether cash or credit) of the business as the Commissioner determines. The taxpayer in the present case carries on a business in Australia which falls within the descriptions in the section, and each of the assessments complained of has been made on the footing that it appears to the Commissioner that the business produces less than the amount of taxable income that might be expected to arise from it. On that basis the Commissioner has fixed an amount, being less than the total receipts, as the amount he has determined under the section as the taxpayer's taxable income.

In the hearing of the reference the Board has found, as one might expect, that it cannot deal with the matter satisfactorily without taking into consideration a good deal of information, oral and documentary, about businesses in Australia similar to the taxpayer's but carried on by other companies. The Commissioner in making the assessments apparently had regard to information of this character, and the Board obviously ought to have available to it any information the Commissioner can supply or the Board can obtain for itself which may help towards a proper and reasoned decision. But a great deal of information of the kind referred to is information which the companies to whom it directly relates have valid commercial reasons for wishing to keep from their competitors, and in particular from their rival the taxpayer in this case. It is information as to their financial affairs, the profits their accounts disclose, the prices they have paid for their petroleum products, the terms of agreements under which they have obtained supplies, their business methods and arrangements, and the composition and methods of preparation of the goods they sell. In the ordinary course of legal proceedings a Court often has occasion to devise its own methods for obviating unfair prejudice to persons who are required to disclose information about their private concerns. In so far as the Board is faced with a question not of law but of fairness it, like a court, must exercise its own discretion. It cannot submit its discretion on such a question to the High Court by means of a case stated. But the Act makes specific provisions as to secrecy, and both the Board itself and officers of the Taxation Department who have relevant information in their possession find themselves under the necessity of considering as a matter of law how those provisions affect them in relation to the proceedings under the reference. The necessity to do so is particularly pressing because the taxpayer not only desires but claims as of legal right that its representatives be allowed to know the whole of the information that comes before the Board, including any that relates to the affairs of other companies.

The secrecy provisions are contained in s. 16. They apply to any person (called in the section an "officer") who is or has been appointed or employed by the Commonwealth or a State, and who by reason of that appointment or employment, or in the course of that employment, may acquire or has acquired information respecting the affairs of any other person, disclosed or obtained under the provision of the Act or any previous law of the Commonwealth relating to income tax. Thus the section applies not only to the Commissioner and to all officers under his departmental authority but also to the members of the Board. The central provision of the section is in sub-s. (2). Its effect, so far as material, is that, subject to the section, an officer shall not either directly or indirectly, "except in the performance of any duty as an officer", make a record of, or divulge or communicate to any person, any information acquired by him by reason of his appointment or employment or in the course of that employment, respecting the affairs of any other person, disclosed or obtained under the provisions of the Act. To this sub-s. (6) adds the requirement of an oath or declaration of secrecy, and the sanction of a penalty for breach.

Before attempting to define any of the questions of law to be considered it is necessary to mention that the Board has power to obtain relevant information by compulsion. By s. 193 (1) it is given (with immaterial exceptions) all the powers and functions of the Commissioner in making assessments, determinations and decisions under the Act; and a power which the Commissioner has, under s. 264 (1), is by notice in writing to require any person to furnish him with such information as he may require and to attend and give evidence before him or before any officer authorized by him in that behalf concerning his or any other person's income or assessments, and may require him to produce all books, documents and other papers whatever in his custody or under his control relating thereto. By s. 264 (2) the Commissioner also has power to require the information or evidence to be given on oath and either verbally or in writing. Again, by reg. 39 (2) of the Income Tax and Social Services Contribution Regulations, the Chairman of a Board is given similar powers by direct provision; and by reg. 39 (2A) a person is forbidden, without just cause or excuse, to refuse or neglect to comply with a requirement made on him under the regulation, or to answer fully and truly any questions put to him by the Chairman in connexion with a review. By reg. 38 (1) the Chairman is given a general authority to direct from time to time the manner in which reviews shall be conducted.

Three concrete questions of law which seem to me to have arisen before the Board and to be in effect submitted to the Court may be expressed as follows: - (1) Whether an officer of the Commissioner's staff, having as such acquired information respecting the affairs of persons other than the taxpayer, is forbidden by s. 16 to divulge or communicate that information to the Board in the presence of representatives of the taxpayer. (2) Whether the Chairman is forbidden by s. 16 to compel a person other than an officer to give evidence respecting the affairs of a person other than the taxpayer in the presence of representatives of the taxpayer. (3) Whether the members of the Board are forbidden by s. 16 to divulge or communicate to the taxpayer's representatives any information respecting the affairs of a person other than the taxpayer which the members acquire in connexion with the reference.

It is clear enough that neither the Commissioner nor any authorized member of his staff is forbidden to divulge or communicate information to a Board of Review with a view to assisting the Board in its consideration of a reference; for to give such assistance is in the performance of their general duty under the Act: see Canadian Pacific Tobacco Co. Ltd. v. Stapleton [1] , and indeed sub-s. (4) (b) specifically provides that nothing in the section shall be deemed to prohibit the Commissioner, Second Commissioner, or a Deputy Commissioner, or any person thereto authorized by him, from communicating any information to a board exercising any function under the Act. An officer thus communicating information to the Board is, of course, not responsible for any subsequent disclosure of it which the Board may make to another person; but if he divulges the information to the Board in the hearing of other persons he himself, in my opinion, divulges it to those persons as well as to the Board, and by so doing commits a breach of s. 16 unless his divulging of the information to those other persons is "in the performance of any duty as an officer". It seems clearly to be in the performance of such a duty if (as may be assumed) the officer is required by the Board (or its Chairman) to give the information in the presence of the other persons; for the Board (or the Chairman) has authority to impose upon the officer a duty to communicate the information to the Board in the course of the review, and the discretionary power of the Chairman under reg. 38 (1) to direct the manner in which the review shall be conducted plainly extends to determining who may be present at the proceedings. I would therefore answer the first question by saying that an officer is not forbidden by s. 16 to divulge or communicate to the Board in the presence of the taxpayer's representatives anything which the Board requires him to disclose in their presence.

The second question likewise depends, in my opinion, upon the words of exception in s. 16 (2), for it seems to me that by compelling a witness to give information in the presence of representatives of the taxpayer the Chairman divulges it to those representatives. The information is, I should hold, simultaneously acquired and divulged. But the Chairman has authority under reg. 38 (1) to allow the representatives to be present during the hearing, and if he allows them to be present it must follow that whatever divulging of information to them by the Chairman results from their presence will occur in the performance of his duty to hear the reference in the manner he sees fit to direct, and therefore will be protected by the exceptive words in s. 16 (2). My answer to the second question would therefore be: No.

The third question depends upon similar considerations and I would answer it similarly. If the Board considers that for the more satisfactory determination of the reference it is necessary or desirable to disclose to the taxpayer's representatives information which the Board proposes to take into consideration, so that they may adequately present their case before the Board, the disclosure is, in my opinion, in the course of the Board's duty and no infringement of s. 16 (2).

These answers, I realize, fall far short of solving the whole of the Board's problems; indeed they only throw into relief the central difficulty. The Board, or at least the Chairman, is faced with the necessity of deciding as part of the handling of the reference whether to allow the taxpayer's representatives to know what information respecting the affairs of other persons is before the Board and is likely to be taken into consideration against the taxpayer. It is generally true, as the Court observed in Sutton v. Commissioner of Taxation [1] that natural justice requires that the taxpayer shall know the course that is taken and what is placed before the Board; but the Court was not there deciding as a matter of law that the Board is bound to disclose to the taxpayer every scrap of material that it takes into consideration. A decision that the Board is so bound in a case under s. 136 would involve two steps, first that the nature of the Board's function in such a case is (to use a convenient though inexact expression) quasi-judicial, and secondly that the general proposition stated in Sutton's Case [2] is absolute, or at least applies without qualification to such a case. Unless both steps are to be taken, the Board has an unfettered discretion as to what it will and what it will not disclose to the taxpayer; and while its sense of fairness will no doubt lead it to make what disclosure it considers can reasonably be made it will have to decide in relation to particular pieces or classes of evidence, as a matter of purely discretionary judgment, whether and to what extent considerations of fairness to other people and the readily understandable and highly important policy which is reflected in s. 16 should deter it from doing all that natural justice might otherwise suggest.

1. (1959) 100 C.L.R. 518, at p. 524. 2. (1959) 100 C.L.R. 518.

The question of law has been debated, therefore, whether the Board is legally bound to conform to the principles of natural justice in dealing with a reference in a case under s. 136. A legal obligation so to act arises in respect of many statutory powers, as is shown by a long line of cases of which the most recent are Ridge v. Baldwin [1] in the House of Lords and Commissioner of Police v. Tanos [2] in this Court. It is beyond question that in the ordinary kind of case a Board of Review is not under such an obligation, for its function is merely to do over again (within the limits of the taxpayer's objection) what the Commissioner did in making the assessment - not to give a decision affecting the taxpayer's legal situation, but to work out, as a step in administration, what it considers that situation to be. The Board is "in the same position as the Commissioner himself", as the Privy Council said in Shell Co. of Australia Ltd. v. Federal Commissioner of Taxation [3] . It is "only another executive body in an administrative hierarchy": Jolly v. Federal Commissioner of Taxation [4] , per Rich and Dixon JJ. [5] . But the taxpayer in the present case contends that a review of an assessment made under s. 136 has special features which give it a quasi-judicial character. The function of the Board under that section, like the function of the Commissioner, is not to ascertain and give effect administratively to a liability existing under the Act, but, where the Board forms a certain opinion as to a matter affecting the taxpayer's liability under the ordinary provisions of the Act, to select an amount (of the total receipts of the business) which it considers normal or reasonable: cf. Minister of National Revenue v Wrights' Canadian Ropes, Ltd. [6] to become the taxpayer's taxable income for the purposes of assessment, and by so doing to cause a special tax liability to arise by force of the section. It must give a decision as to whether s. 136 shall operate to subject the taxpayer to the special tax liability for which it provides, and if so what the amount of the liability shall be. If the decision involves a question of law it will be subject to appeal to this Court; but even where an appeal lies to this Court - and it is then an appeal on fact as well as law - the Court will not substitute its own discretionary judgment for those of the Commissioner or of the Board: Robertson v. Federal Commissioner of Taxation [1] ; Denver Chemical Manufacturing Co. v. Commissioner of Taxation (N.S.W.) [2] ; McEvoy v. Federal Commissioner of Taxation [3] . The Board's function, therefore, is to decide whether to create a liability. To adapt some words of Lord Reid in Ridge v. Baldwin [4] , although the Board has not to decide, like a judge in a law suit, what is the liability of the taxpayer, it has to decide how the taxpayer shall be treated - "something analogous to a judge's duty in imposing a penalty". It is just such a duty, the taxpayer here contends, that entails an obligation to conform to the substantial requirements of justice, and in particular to give to each party who may be adversely affected an opportunity of adequately presenting its case. On the other side it is said, in effect, that although the Board's recognition of its obligation to act responsibly and not arbitrarily or capriciously (see the Texas Case [5] ) will cause it to feel a practical necessity of studying the affairs of other companies as well as of the taxpayer in order to qualify itself to reach an informed and reasoned conclusion, its duty is not inherently one of decision based upon investigation and ascertainment of objective matters and for that reason it is not quasi-judicial.

1. [1963] 2 W.L.R. 935. 2. (1958) 98 C.L.R. 383. 3. [1931] A.C. 275, at p. 298; (1930) 44 C.L.R. 530, at p. 545. 4. (1935) 53 C.L.R. 206. 5. (1935) 53 C.L.R., at p. 214 6. [1947] A.C. 109, at p. 122. 7. (1937) 57 C.L.R. 147. 8. (1949) 79 C.L.R. 296, at pp. 311, 313. 9. (1950) 9 A.T.D. 206, at p. 211. 10. [1963] 2 W.L.R. 935, at p. 946. 11. (1940) 63 C.L.R. 382, at p. 456.

I do not think it is necessary to decide the point. Even if the Board is bound in law to act "in the spirit and with the sense of responsibility of a tribunal whose duty is to mete out justice" (to quote Lord Haldane's words in Local Government Board v. Arlidge [6] ) it does not follow (and his Lordship proceeded immediately to say so) that the procedure of each such tribunal must be the same: "what that procedure is to be in detail must depend on the nature of the tribunal" [7] . And notwithstanding what Lord Loreburn said in Board of Education v. Rice [8] about "always giving a fair opportunity to those who were parties in the controversy to correct or contradict any relevant statement prejudicial to their view" [9] , the books are full of cases which illustrate both the impossibility of laying down a universally valid test by which to ascertain what may constitute such an opportunity in the infinite variety of circumstances that may exist, and the necessity of allowing full effect in every case to the particular statutory framework within which the proceeding takes place. By the statutory framework I mean the express and implied provisions of the relevant Act and the inferences of legislative intention to be drawn from the circumstances to which the Act was directed and from its subject-matter: cf. Ridge v. Baldwin [1] . As Tucker L.J. said in Russell v. Duke of Norfolk [2] , in a passage approved by the Privy Council in University of Ceylon v. Fernando [3] , there are no words which are of universal application to every kind of inquiry and every kind of tribunal: "the requirements of natural justice must depend on the circumstances of the case, the nature of the inquiry, the rules under which the tribunal is acting, the subject matter that is being dealt with, and so forth" [4] . What the law requires in the discharge of a quasi-judicial function is judicial fairness. That is not a label for any fixed body of rules. What is fair in a given situation depends upon the circumstances. And it is not a one-sided business. What is a fair opportunity to allow the taxpayer in a given case is a question which by its very nature forbids an answer in disregard of the interests of other people. This is particularly true where, as here, the statute giving rise to the duty of decision expressly recognizes and aims to protect the interests of others which may come into competition with those of the taxpayer. For this reason the proposition cannot be maintained that even assuming that the Board is legally bound to determine the reference in a case under s. 136 in accordance with the substantial requirements of justice it must disclose all that it has learned about the affairs of other companies. How much it should disclose is a question which this Court ought not to attempt to answer in the abstract. On the opposite hypothesis, that the Board is not bound legally to act in a quasi-judicial manner, all questions as to disclosing information to the taxpayer are questions of pure discretion; but the Board's sense of fairness and responsibility will no doubt make the decision as to how the discretion should be exercised practically indistinguishable from that which it would have to make if faced with a legal necessity to conform to natural justice.

1. [1915] A.C. 120, at p. 132. 2. [1915] A.C., at p. 132. 3. [1911] A.C. 179. 4. [1911] A.C., at p. 182. 5. [1963] 2 W.L.R. 935, at p. 947. 6. [1949] 1 All E.R. 109. 7. [1960] 1 All E.R. 631, at p. 637. 8. [1949] 1 All E.R., at p. 118.

There remains one minor question of law that has arisen. It is whether reg. 35 of the Public Service Regulations forbids an officer of the Commonwealth Public Service to disclose the contents of official papers to the Board of Review by direction of the Board or the Chairman of the Board. The regulation provides that except in the course of official duty no information concerning public business or any matter of which an officer has knowledge officially shall be given, directly or indirectly, nor shall the contents of official papers be disclosed, by an officer without the express authority of the Chief Officer. The short answer to the question is that if an officer is required, by a body having legal authority to obtain information compulsorily, to give information or disclose the contents of documents which he has in his official capacity, it is in the course of his official duty to obey the requirement.

I have made the foregoing observations upon the only questions of law which I have been able to identify as involved in the questions stated by the Board, but the only formal order which it seems to me we can make is that the questions specifically referred to the Court be referred back to the Board as not being questions of law which have arisen before the Board within the meaning of s. 196 of the Act.

I agree that this case should be remitted to the Board as proposed.