Payne and Commissioner of Taxation [2002] AATA 9; (2002) 49 ATR 1076; 2002 ATC 2025 (11 January 2002)

DECISION AND REASONS FOR DECISION [2002] AATA 9

Decision Having regard to orders of the High Court set out fully in the Reasons, the Tribunal determines that the Applicant should not have leave, in respect of the years of income ending 30 June 1991 and 30 June 1992 to rely on an additional ground of objection to the effect that the Respondent was bound by taxation ruling TR 95/19 to assess the tax payable by the Applicant in accordance with that ruling or, in the alternative, and if leave should be granted, TR 95/19 does not apply in respect of the two years aforesaid. In addition and although not covered by the orders of the High Court and having regard to the Applicant's contentions, the Tribunal does not find that the Respondent should, as a matter of fairness, assess the Applicant, in respect of the two years aforesaid, in accordance with TR95/19.

Effect of TR95/19 - public rulings as a system - whether a Public Ruling can apply or be binding prior to 1 July 1992 - administrative fairness - correct and preferable decision

Taxation Administration Act 1953

Taxation Laws Amendment (Self Assessment) Act 1992

David Jones Finance & Investments Pty Ltd v Federal Commissioner of Taxation (1990) 90 ATC 4730

Payne v Federal Commissioner of Taxation 98 ATC 4703

Commissioner of Taxation v Payne [1999] FCA 320; (1999) 90 FCR 435

Commissioner of Taxation v Payne [2001] HCA 3; (2001) 202 CLR 93; 177 ALR 270

Federal Commissioner of Taxation v Swift [1989] FCA 413; (1989) 18 ALD 679

Wentworth v Wentworth, unreported, NSWSC, 6 February 1998

Lunney and Hayley v Federal Commissioner of Taxation (1958) 100 CLR 478

1. (a) This matter originally came before me in 1997 (NT96/184-187) and my decision in respect of the relevant objection decision was handed down on 16 May 1997 and reported as AAT case 26/97(1997) 97 ATC 296. That decision (referred to in these Reasons as the "original decision") affirmed the objection decision except for the remission of all penalties. The Applicant, in respect of each of the years ending June 1991 to June 1994 (inclusive), claimed deductions for the cost of travel incurred between Tamworth (where he had his home and at which he conducted a deer farm) and Sydney where he was employed as a pilot. The two activities were not connected with each other.

(b) The original decision was appealed by the Applicant. The appeal was heard by Foster J; in his judgement ("the Foster judgement") which was reported as Payne v Federal Commissioner of Taxation (1998) 98 ATC 4703 Foster J allowed the appeal and remitted the matter to the Tribunal for reconsideration.

(c) The Foster judgement was appealed to the Full Federal Court by the Respondent; in its judgement ("the Federal Court judgement"), the Full Federal Court (Hill, Sackville & Hely JJ) by majority (with Hill J in the minority) affirmed the Foster judgement. The Full Federal Court judgement was reported as Commissioner of Taxation v Payne [1999] FCA 320; (1999) 90 FCR 435. The Respondent then sought and obtained leave to appeal to the High Court; which by majority (Gleeson CJ, Kirby and Hayne JJ) allowed the appeal but remitted the matter to the Tribunal. The full orders of the High Court read as follows:

2. Set aside orders 1 and 2 of the orders of the Full Court of the Federal Court of Australia made on 30 March 1999 and in lieu thereof order:

Set aside orders 1 and 2 of the orders made by Foster J on 2 July 1998 and in lieu thereof order:

that the matter be remitted to the Tribunal for consideration of the questions:

first, whether the taxpayer should have leave in respect of any of the years of income ended 30 June 1991, 1992, 1993 or 1994 to rely on an additional ground of objection to the effect that the Commissioner was bound in respect of Taxation Ruling TR 95/19 to assess the tax payable by the taxpayer in accordance with that ruling; and

second, if leave is granted, whether and to what extent the Commissioner was so bound.

The High Court judgement was reported as Commissioner of Taxation v Payne [2001] HCA 3; (2001) 202 CLR 93; 177 ALR 270.

2. (a) The Applicant was represented by Mr A O'Brien of Counsel instructed by Harris McHugh Lawyers of Tamworth, while the Respondent was represented by Mr S Gibb, SC of Counsel instructed by Mr Denis Stokes of the Australian Government Solicitor.

(b) A few days prior to the date of the hearing (19 December 2001) the Tribunal received notice that the parties had entered into terms of settlement in respect of the years ending June 1993 and June 1994, leaving in issue only the years ending June 1991 and June 1992 (referred to in these Reasons as "the relevant years").

3 (a) The Tribunal file, as furnished to me a few days prior to the hearing contained only the original decision, the High Court judgement, a letter dated 30 May 2001 by one R A Prince (which in the result proved to be totally irrelevant) and a memorandum as to a conference held some time ago. The parties submitted lists of authorities, but at a late stage, and so that they were received by me only after entering the hearing room.

(b) At the commencement of the hearing I asked the two barristers to inform me as to the issues, and in particular whether there were not other documents which might be relevant or helpful. It was at this stage that Mr Gibb furnished the Tribunal with the Appeal Book, in two volumes, in respect of the hearing in the High Court. The pages of the Appeal Book are numbered sequentially so that page numbers cited in these Reasons refer to volume one or volume two of the Appeal Book as appropriate. Mr Gibb also furnished me with a letter from the Australian Government Solicitors to the Applicant's solicitors dated 11 December 2001 and a letter by the Applicant's solicitors in reply dated 17 December 2001.

(c) It transpired that the Applicant's counsel did not have the Respondent's list of authorities. While my associate was out of the hearing room preparing a photocopy, I made a comment to the effect that the progress of this matter through the courts, coupled with differences of view as between the various judges who heard it, had come as something of a surprise to me, given that I had not thought, notwithstanding the length and comprehensive nature of the original decision, that in the light of the judgement in Lunney (Lunney and Hayley v Federal Commissioner of Taxation (1958)100 CLR 478) the matter was very complicated. I noted furthermore that the nature of the subsequent litigation indicated that the matter was apparently rather more complex than I had first realised. I noted also that I found it odd, that, notwithstanding the fact that the Respondent had seen fit to appeal both the Foster judgement and the Full Federal Court judgement all the way to the High Court, the government has recently announced that legislation is to be introduced in order to amend the law so as to allow deductions for travel between two unrelated places of business. I emphasise that I made these remarks purely as a matter of interest, and by way of pleasantry, and to fill in the time while photocopies were made, and having regard in particular to the fact that the litigation in question had over a period of years involved a number of eminent counsel, and including both of Messrs Gibb and O'Brien.

(d) Mr O'Brien explained to me that he would be seeking to argue that TR 95/19 ("the Public Ruling") applied so as to bind the Respondent prior to 1 July 1992 when the public ruling system and the self-assessment system came into effect. I noted that such an argument appeared to me prima facie to be one which would not be easy to run (and the term "courageous" was used in this context) given that the public ruling system came into effect only as from 1 July 1992.

4 (a) Before argument proper commenced, I reminded Mr O'Brien I was the Senior Member who had heard the matter originally, and that if his client wished to object to my hearing this matter he should do so then, since to do so at some later stage would not be competent. In particular, and in respect of the original decision I noted that there was no issue whatever as to the credibility of the Applicant, which was accepted totally, and that the original decision had been decided (excepting only as regards penalties and then in favour of the Applicant) purely as a matter of law and that furthermore the only outstanding issue before me appeared to be a matter of law. I noted however that actual bias and apprehended bias may be differing concepts and that I might be inclined to entertain an application for my own disqualification on the basis of apprehended bias, even though and as I noted at the time, the Applicant had become aware prior to the hearing date that the matter was listed for hearing before me. That statement was made before hearing from Mr Gibb and at a time when I was not aware of certain other relevant considerations referred to later in these Reasons.

(b) After a brief adjournment to enable Mr O'Brien to take instructions, Mr O'Brien asked me to disqualify myself on the grounds of apprehended bias. He cited three reasons; two of those reasons were the remarks by me referred to previously in these Reasons being firstly the remarks as a matter of interest in respect of the subsequent litigation and secondly my remark as to the fact that it might be difficult to run an argument as to the applicability of the public ruling prior to the public ruling regime coming into effect; the third ground related to my conduct of the original hearing at which, so it was alleged, I had on occasion cut the Applicant short. That third allegation was unfounded; as the transcript (which is included in the Appeal Book) in respect of the original hearing indicates, there is no truth whatever in it. On the contrary, I allowed the Applicant to give evidence at the original hearing without restriction. (It may be noted that the Applicant was then represented by Mr D B McGovern of Counsel who is very experienced in tax matters.) I noted also that although at the original hearing I had accepted that the Applicant conducted a deer farm at his home in Tamworth, I had nevertheless allowed the Applicant (at his own insistence), to show in full a lengthy video of the activities conducted therein, and even though that showing was unnecessary.

(c ) Mr Gibb pointed out in reply that in the first half of 2001, and at the conference attended by Mr O'Brien, the parties were advised that I would be listed to hear this matter, and that Mr O'Brien did not object. Moreover in September 2001 the parties were informed by the Registry staff of the Tribunal that there was no member available to hear the matter in November 2001 but that I had dates available in December 2001. The parties agreed that I should hear the matter in December 2001. This is the information which was not known to me when Mr O'Brien applied for my disqualification. In respect of both of these aspects, Mr O'Brien accepted that Mr Gibb's contentions in this regard were correct.

(d) Mr Gibb cited authority supporting the proposition that there is no invariable rule that a remitted matter be heard by a differently constituted Tribunal. Moreover he contended that there are instances where for the original Tribunal to hear the remitted matter is advantageous as far as the parties are concerned, in that the remitted matter will be heard by a Tribunal which is cognisant of all of the relevant ramifications.

(e) Mr Gibb argued also that to demonstrate apprehended bias it must be shown that a third party observer might on reasonable grounds feel that the matter would not be fairly decided.

(f) In refusing the disqualification application (and indeed, and in my view, to have granted it would have been manifestly unjust to the Respondent) I referred the parties to the decision of Santow J in Wentworth v Wentworth, unreported, NSWSC, 6 February 1998 and where I noted that the authorities indicate that a judge should not lightly abandon his bench and moreover that remarks made during the proceedings may assist the parties since it gives them the opportunity if so desired to endeavour to persuade the judge otherwise.

(g) The disqualification application, was as I have said based on one ground which was demonstrably false; I refer in this context to the suggestion that the Applicant was in some way hampered during the original hearing. Remarks as to the applicable public ruling system were designed to be helpful, and to indicate to Mr O'Brien that his case was not an easy one (and of which he must have been aware). Mr O'Brien is too experienced a lawyer not to appreciate that to persuade a Tribunal that it should apply a public ruling before it became effective could never be easy. The ground referable to my remarks as to the subsequent litigation demonstrates the paucity of the application; to read bias into my reference to the litigation which followed the original decision is simply ludicrous.

(h) Nevertheless, it is at least arguable that the remarks in question (or perhaps some of them) were unnecessary, and I regret that I made them.

5. What then is this case all about? It can conveniently be summarised in the following manner:-

(a) As from 1 July 1992 (but not previously) a public ruling system was brought into effect in connection with the self-assessment regime which commenced at the same time.

(b) A public ruling can bind the Respondent in the circumstances set out in the Taxation Laws Amendment (Self Assessment) Act. Part IVAAA of the Taxation Administration Act sets out the public ruling provisions and what is necessary for a ruling to be a binding public ruling. (See also in this regard TR 92/1 which is included in the Appeal Book). A public ruling will inter alia be a binding public ruling only when it contains a statement that it is a public ruling, and is published on or after 1 July 1992. Moreover a public ruling cannot apply to any arrangement commenced before 1 July 1992.

(c) A public ruling can apply for the benefit of a taxpayer both after and prior to its date of issue but not prior to 1 July 1992; put in other words the relevant "arrangement" as defined must have commenced after 1 July 1992. Under the terms of the High Court orders referred to previously in these Reasons, the Applicant must first apply for leave to rely on an additional ground of objection

" ...to the effect that the Commissioner was bound in respect of Taxation Ruling TR 95/19 to assess the tax payable by the taxpayer in accordance with that ruling...."

(d) (i)The Australian Government Solicitor in its letter to the Applicant's solicitors dated 11 December 2001 asked the Applicant to specify the relevant "facts and circumstances" in the following terms:

"I refer to the hearing before the Tribunal on 19 December 2001 in respect of the years of income ended 30 June 1991 and 1992.

Would you kindly furnish as a matter of urgency, the following further and better particulars of your client's application in respect of those years -

1. Upon what facts and circumstances does the applicant rely for any contention that he should have leave to rely on an additional ground of objection to the effect that the Commissioner was bound in respect of Taxation Ruling TR 95/19 to assess the tax payable by the applicant in accordance with that ruling?

2. If the applicant contends that there was an "arrangement" within the meaning of that expression in section 14ZAAA of the Taxation Administration Act 1953 (Cth.), please identify precisely what that arrangement was, and the facts and circumstances upon which the applicant relies to establish it.

3. If the applicant contends that the arrangement had begun to be carried out so as to attract application of Part IVAAA... please specify precisely when and how that arrangement had begun to be carried out (bearing in mind that the ruling could not apply to any arrangement which began to be carried out before 1 July 1992, as Senior Counsel for the Applicant correctly acknowledged in argument before the High Court).

4. If the applicant contends that TR 95/19 applied to the applicant in relation to any part of the travelling expenditure, please identify precisely which part of the ruling (specifying paragraphs or passages) and which expenditure.

5. If the applicant contends that the income tax law (subsection 51(1) of the Income Tax Assessment Act 1936 (Cth) applied to the Applicant in relation to his travelling expenditure in a different way, please specify in what way it applied.

6. If the Applicant contends that the tax payable under the amended assessments in relation to the applicant exceeded what it would have been if TR 95/19 applied, please identify the tax payable in each case, and state how it was calculated." (Exhibit B)

(ii) The Applicant's solicitors in their reply dated 17 December 2001 said:

"1.The basis on which leave should be granted to allow the taxpayer to rely on an additional ground is firstly that there is no prejudice to the Commissioner and secondly as demonstrated by the following references the issue was one that was agitated before the Commissioner and Administrative Appeal Tribunal albeit no decision was made by either in respect of the issue:

• The Statement of Facts and Contentions (undated of 2 pages) prepared for and on behalf of the Deputy Commissioner of Taxation - reference to IT 2199;
• The Statement of Issues (undated) submitted by Andrew J Payne - reference to IT 2199;
• The Statement of Facts and Contentions (undated of 15 pages) submitted by Andrew Payne - reference to IT 2199 and TR 95/19;
• The Statement of Issues (undated of 6 pages) submitted by Andrew Payne - reliance on IT 2199 and TR 95/19.
• The transcript of proceedings where the respondent does not dispute that IT 2199 (the precursor to IT 95/19) is administratively binding on the Tribunal (and the Commissioner) - at pages 3.9, 4.9 and 52.8;
• Page 41 of the Reasons for Decision of the AAT at paragraph 10 (e).

5. The Commissioner was bound by his administrative practice to apply section 51(1) in accordance with his stated practice.

6. The amounts claimed as allowable deductions for the years of income ended 30 June 1991 and 1992 was $2,092 and $2,988 respectively. These amounts were not in dispute at the previous hearing before the AAT: see Reasons for Decision dated 16 May 1997 paragraph 1(c)." (Exhibit C)

The Tribunal notes, having regard in particular to clauses 2 and 3 of the letter referred to in subclause (i) above and the replies in the letter referred to in subclause (ii) above, that the Applicant did not furnish details of the relevant arrangement and facts and circumstances. It is on this basis that the Respondent contended that unless and until the Applicant specifies the basis on which he seeks leave, the Tribunal does not have jurisdiction to hear this matter. It is clear of course that when the original decision was handed down, the Tribunal became functus officio in that its function must now of necessity be confined to the boundaries of the High Court orders. In accordance with the High Court orders the Tribunal must first determine whether leave to amend should be granted and if granted whether TR95/19 applied in favour of the Applicant.

(e) Although the Tribunal considers that the argument referred to subclause (d) may well be correct, it decided nevertheless to allow Mr O'Brien to argue the substantive application, on the notional hypothesis that the Tribunal had found that there was a valid basis upon which the original objection could and should be amplified.

6. It is convenient at this juncture to consider (albeit briefly) the Public Ruling and the manner in which it was dealt with in the various hearings.

(a) the Public Ruling was not referred to in the objection; so much is clear from the fact that an amendment is required.

(b) At the original hearing there was a brief reference to the Public Ruling; there was reference at greater length to IT 2199 (the "non-public ruling").

(c) In respect of the original decision, and as set out previously, I remitted the penalties entirely; clauses 10(c) and 10(d) of the original decision read as follows:

"(c ). The Respondent's argument, however, was identical in respect of both regimes, namely that the Applicant failed to take reasonable care in returning his income. The Respondent points towards the existence of various rulings, such as Taxation Ruling IT 2199 and Miscellaneous Tax Ruling MT 2027 (the 'Rulings') in support of this position, claiming that the law was made manifestly clear in each of these instruments, and that had the Applicant consulted these rulings and correctly read them he would not have returned his income as he did, or at least, that there would have been sufficient doubt as to whether he could claim the deduction such as to necessitate further inquiries. I am not, however, persuaded by these arguments.

(d)The Rulings are far from clear in their treatment of the fact situation which concerned the Applicant, namely that of travel between a place of business and an unrelated place of full-time employment. Taxation Ruling IT 2199 (the conclusions of which are adopted in a number of subsequent rulings, including MT 2027 and relevantly Taxation Ruling TR 95/19) makes a distinction (which, I might add, I am not convinced is altogether helpful) between, on the one hand, the situation of travel between a business or place of full-time employment and a home based part-time employment; and on the other travel between a place of business or full-time employment and a home based full-time employment. It treats the expenses of the former situation as non-deductible, but does not deal at all with the latter situation. In fact the tenor of the Ruling gives rise to the inference that travel between "two places of employment or business" (see paragraph 4 and 9) when found as a fact, will automatically be deductible, an interpretation with which I do not agree." (Exhibit D)

(d) The Foster judgement dealt in the main in this context with the non-public ruling; I refer to the following extract from the Foster judgement (p 327 of the Appeal Book):

"It appears from portions of the transcript of the hearing before the Tribunal, to which I was taken by counsel for the applicant, that an issue in these terms was sought to be raised before the Tribunal. It is submitted on behalf of Mr Payne that an agreed issue was in fact presented to the Tribunal for determination, namely that the deduction should be allowed if the circumstances fell within the wording of IT 2199. The Tribunal's failure to determine this issue, it is now submitted, amounted to a denial of procedural fairness. I have read and considered the passages to which I have been taken. In my view they do not support the applicant's contention. The matter was raised in what I regard as a tentative way at the beginning and at the end of the proceedings. In my view, it would reasonably have appeared to the Tribunal to be no more than a statement of an expectation on the part of the applicant that the Commissioner would concede that this was an issue for determination. The concession was, quite clearly, not made. In my view, the Tribunal was amply justified in regarding the matter of compliance or non-compliance with IT 2199 as going only to the question of whether penalties should have been imposed. As I have already indicated, the learned Senior Member considered that it was not unreasonable that the applicant should have been misled by the ambiguity of IT 2199 and consequently set aside the penalties. This aspect of the Tribunal's determination has not been made the subject of a cross-appeal to this Court. I do not consider that any procedural unfairness in the proceedings before the Tribunal has been demonstrated. Accordingly, I reject this ground of appeal." (Exhibit E)

(e) That the Public Ruling did not figure before the Tribunal is clear also from the Federal Court judgment; (see p 383 of the Appeal Book) as follows;

The taxpayer contended that the AAT committed an error of law in failing to determine whether the Commissioner was obliged to issue an assessment in accordance with public ruling TR 95/19 if the public ruling was contrary to law. In view of the conclusion which we have reached, it is not necessary for detailed consideration to be given to the various problems which are or may be associated with the taxation ruling. It is sufficient to say that this matter was not raised before AAT for its determination and that this may well be an insurmountable barrier to the taxpayer being able to rely on the point in this Court: see Glennan v Federal Commissioner of Taxation (unreported, Full Federal Court, 26 March 1999)." (Exhibit F)

(f) The minority judgement in the High Court, in dealing with the Public Ruling and at p 21, reads:-

"That conclusion makes this appeal an inconvenient occasion to determine whether the decision of the Full Court should be affirmed but on a ground other than that relied upon by the majority. The further ground is said to be that the AAT committed an error of law in failing to determine whether the Commissioner was obliged to issue an assessment which allowed a deduction to the taxpayer in reliance upon a public ruling, TR 95/19. There is a dispute between the parties as to the extent to which the application of this public ruling was ever raised for determination by the AAT. The Notice of Appeal to the Federal Court asserted an error of law by the AAT by its alleged failure to determine whether the facts as found fell within the terms of a "non-binding" ruling, IT 2199. No error of law was asserted respecting TR 95/19. Not surprisingly, Foster J did not consider TR 95/19. The point was apparently agitated in the Full Court but was not determined by it. The taxpayer seeks to raise the matter in this Court by a proposed Notice of Contention. Given the lapse of time since the filing and service of the Notice of Appeal in December 1999, leave to the filing of the Notice of Contention is required by O 70 r 6(5) of the High Court Rules. Leave is opposed and in the circumstances it should be refused." (Exhibit G)

However the majority in the High Court made the orders referred to earlier in these Reasons.

7 (a) Mr O'Brien (citing David Jones Finance and Investments Pty Ltd v Federal Commissioner of Taxation (1990) 90 ATC 4730) contended that the Respondent should determine matters fairly; to do so fairly (so he argued) in respect of the relevant years requires that they be determined as if the Public Ruling were then in force. This would result, so he contended, in the correct and preferable decision. He contended furthermore that the Tribunal, standing in the shoes of the Respondent, should deal with the matter in exactly the same manner. Mr O'Brien presented the Tribunal with written submissions; clause 12 of his written submissions reads as follows:

"It is obvious that the Commissioner is possessed of a power that allows him to apply the law contrary to determinative decisions of the court, even where the provision being considered does not confer a discretion on the Commissioner. Presumably this power flows from section 8 of the Income Tax Assessment Act 1936 pursuant to which the Commissioner is mandated to attend to the general administration of the Act. It is often stated by the courts that the AAT "stands in the shoes of the Commissioner". Even if the view is formed that the Commissioner has not acted unfairly in the current context such that his action is capable of judicial review (which is not admitted), it does not mean that the AAT in re-exercising the power and performing its administrative function cannot decide the matter in a different manner in order to achieve a more fair or preferable result in all the circumstances of the case ie, from an administrative prospective [sic] a more desirable outcome." (Exhibit G)

(b) Mr Gibb referred the Tribunal to Commissioner of Taxation v Swift [1989] FCA 413; (1989) 18 ALD 679 and in particular to a passage in p 692 reading as follows:

"In the absence of any statutory direction, the Tribunal is not bound to apply the administrative policies by which the exercise of the discretion under review is regulated at the primary decision-making level. In particular, it was not bound in this case to apply taxation ruling IT 2063 to which reference has already been made." (emphasis added)

8 (a) As set out previously in these Reasons the parties have entered into terms of settlement in respect of the 1993 and 1994 years; and pursuant to which the Applicant has been allowed the deductions claimed by him. It would appear then that the Respondent has accepted that the Public Ruling, in respect of those two years, applied in favour of the Applicant.

(b) The heading to paragraph 148 of the Public Ruling, and that paragraph, are in the following terms: -

"Travel between two places of employment or between a place of employment and a place of business

148. A deduction is allowable for the cost of travelling directly between two places of employment or between a place of employment and a place of business. This is provided that the travel is undertaken for the purpose of engaging in income-producing activities."

(c) It is my view that paragraph 148 might in some respects be ambiguous. If it contained only the first sentence there would be no ambiguity; however the presence of the proviso in the second sentence could arguably require that the first sentence be construed subject to the rule in Lunney (supra), and so that travel costs incurred in order to commence work are not deductible. It is however unnecessary for me to decide this issue; in respect of the 1993 and 1994 years, and as set out previously, the Respondent allowed the deductions claimed.

(d) In respect of the relevant years the position is, in my view, totally different. Assuming that (despite the reservations expressed in subclause (c)) the Public Ruling should be construed in favour of the Applicant for the 1993 and 1994 years, the Public Ruling was not applicable in respect of the relevant years.

(e) It must be remembered that the Tribunal is required under the orders of the High Court to determine two matters and two matters only, and being firstly whether an amendment should be allowed, and if so whether TR95/19 applied in favour of the Applicant. Since TR95/19 did not apply during the relevant years, and cannot benefit the Applicant during these years, it does not matter whether or not an amendment is allowed, since the consequences are precisely the same. It is totally clear that the Public Ruling did not apply during the relevant years; this being so to allow the amendment does not assist the Applicant. My own view is that the amendment should not be allowed but even if I am wrong, to allow it does not bring about any different result.

(f) Strictly speaking and confined as I am to the terms of the orders of the High Court there was in fact no real basis upon which the Applicant was entitled to present arguments as to any matters of procedural fairness and as to what is or might be the "correct and preferable decision." Mr O'Brien should on this basis have confined his argument to whether the amendment should be allowed, and if so whether the Public Ruling assisted his client during the relevant years. However, there was no objection at the hearing by Mr Gibb on this basis, perhaps because the arguments made by Mr O'Brien are so obviously untenable.

(g) The Applicant in effect asked me to find that despite the original decision and the High Court judgement which found that the Public Ruling (and for that matter the non-public ruling) was not correct in law, I should nevertheless, as a matter of administrative fairness and so as to produce the correct and preferable decision (and standing in the shoes of the Respondent) allow the deductions claimed in the relevant years. Of course the correctness or otherwise of the non-public ruling was in no way relevant, but in any event and having regard to Swift's case (supra), the non-public ruling cannot possibly be treated as if it were in some way binding. The Public Ruling could not, as I have said, have applied in respect of the relevant years.

(h) I have dealt with the non-public ruling only because it was dealt with in argument. It was, as I have said, not relevant.

(i) It follows then that the objection decision, in respect of the relevant years must stand (except for the remission of penalties) simply because having regard to the orders of the High Court; TR95/19 (the Public Ruling) does not in any way assist the Applicant in respect of the relevant years. The determination of the question whether the amendment sought should be allowed does not in the end result matter, because the outcome is in either case, the same. I note though that it is my view that it should not be allowed.

9. In the result and having regard to orders of the High Court set out fully in these Reasons, the Tribunal determines that the Applicant should not have leave, in respect of the years of income ending 30 June 1991 and 30 June 1992 to rely on an additional ground of objection to the effect that the Respondent was bound by taxation ruling TR 95/19 to assess the tax payable by the Applicant in accordance with that ruling or, in the alternative, and if leave should be granted, TR 95/19 does not apply in respect of the two years aforesaid. In addition and although not covered by the orders of the High Court and having regard to the Applicant's contentions, the Tribunal does not find that the Respondent should, as a matter of fairness, assess the Applicant, in respect of the two years aforesaid, in accordance with TR95/19.

I certify that the 9 preceding paragraphs are a true copy of the reasons for the decision herein of J Block, Deputy President

Signed: R Savage .....................................................................................