Stojic v Deputy Commissioner of Taxation

AND: DEPUTY COMMISSIONER OF TAXATION Respondent

JUDGE: THAWLEY J DATE OF ORDER: 19 APRIL 2018

1. The application is dismissed.
2. The applicant pay the respondent's costs as agreed or assessed. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

THAWLEY J: 1 This is an application under s 5(1) of the Administrative Decisions (Judicial Review) Act 1977 (Cth) (ADJR Act) for review of a decision by the respondent declining to exercise the power in s 255-15(1) of Schedule 1 (Sch 1) to the Taxation Administration Act 1953 (Cth) (TAA) to permit the applicant to pay a tax-related liability by instalments in accordance with an arrangement proposed by the applicant by letter dated 17 May 2017 (Second Proposal). 2 The decision by the respondent to reject the Second Proposal was communicated to the applicant by letter dated 31 May 2017 (Second Decision). An earlier instalment proposal made by the applicant on 24 April 2017 (First Proposal) had been rejected by letter dated 2 May 2017 (First Decision). 3 The decision by the respondent, the Deputy Commissioner of Taxation, was made pursuant to a delegation by the Commissioner of Taxation under s 8 of the TAA. For convenience, I refer to the respondent simply as the Commissioner.

Background 4 The applicant was the sole director and secretary of a company formerly known as Rediform Contracting Pty Ltd (Rediform) since its registration on 22 June 2012. The company changed its name to Red Con NSW Pty Ltd on 18 April 2017 and, on the same day, a liquidator was appointed pursuant to a creditors' voluntary winding up. 5 On or around 30 November 2015, a Debt Collection Officer (DCO) in the ATO's Significant Debt Management section commenced enforcement action to secure payment of certain outstanding tax-related liabilities of Rediform following an audit of the company's activity statements. The Commissioner issued a number of notices of legal action and a letter of warning to Rediform in respect of unpaid Pay As You Go (PAYG) withholding amounts and other tax-related liabilities. 6 In early 2016, Rediform instructed its tax agent to negotiate an instalment payment plan with the Commissioner. Rediform's tax agent proposed instalment arrangements on behalf of the company on 4 March 2016, 11 March 2016 and 24 March 2016 and an arrangement was ultimately entered into on 12 April 2016. These proposals and instalment arrangements were each dealt with by the DCO who also made the First and Second Decisions on behalf of the Commissioner in respect of the applicant. The emails between the tax agent and the DCO indicate that the tax agent was acting on the instructions or with the approval of the applicant. 7 The instalment proposal of 4 March 2016 was rejected by letter dated 10 March 2016. The letter included the statement that the Commissioner was "unable to consider another payment plan offer and will only accept full payment". It also stated that it had considered the offer but could not "agree to it in its current form" and set out brief reasons for refusal: Your proposal of 4 March 2016 is unacceptable because: • your proposal will not clear the debt in a reasonable timeframe • your past compliance history indicates this arrangement may present a risk to the revenue • your circumstances do not show that you can meet your proposed payment arrangement and also pay your future obligations when they fall due • you are not meeting your current tax obligations as no payment has been made of the June 2015 BAS, September 2015 BAS and December 2015 BAS liabilities which means that with interest and future obligations your debt is going to continue to escalate • the income tax returns for the 2013, 2014 and 2015 financial years remain outstanding 8 The letter invited Rediform to call the ATO if the company considered there were circumstances the Commissioner should have considered when making his decision. 9 The proposal of 11 March 2016 was rejected by letter dated 15 March 2016. The refusal letter was in equivalent terms (apart from the reasons for refusal) to the earlier refusal letter, again stating the Commissioner was "unable to consider another payment plan offer and will only accept full payment" but noting the offer was not acceptable "in its current form". The reasons for refusal were expressed as follows: Your proposal of 11 March 2016 is unacceptable because: • Your offer does not consider payment of the total amount outstanding • A 50/50 arrangement requires you to pay all undisputed debts and a minimum of 50% of the disputed tax debt • We do not consider the information provided in your correspondence of 11 March 2016 is sufficient to offset the reasons for refusal that were outlined in our letter of 10 March 2016 10 The proposal of 24 March 2016 was accepted and a letter dated 12 April 2016 recording the terms of the "payment plan", including the dates and amounts of instalments, was sent to Rediform. The proposal of 24 March 2016 was in terms which made it clear that the actions of the tax agent were being taken on instructions of the applicant. 11 By emails sent to the DCO on 11 May 2016 and 24 May 2016, Rediform's tax agent proposed a new payment arrangement. These emails noted that "the client" proposed a new arrangement. The emails included that the first payment of $100,000 would be paid on 3 June 2016 (in the 11 May 2016 email) or 15 June 2016 (in the 24 May 2016 email), which was when payment would be "received by the company from the client". A letter dated 25 May 2016 was sent to Rediform recording the terms of a new "payment plan", which set out the dates and amounts of instalments. The first instalment due was $100,000 on 3 June 2016. 12 An email dated 2 June 2016 was sent by the tax agent to the DCO noting that the first instalment was due on 3 June 2016 and stating: My client has advised me that the Company was expecting a cheque two (2) days ago by mail, however has not yet been received. 13 The email requested an extension to pay in order to avoid defaulting under the payment plan. The instalment was paid on or about 4 June 2016. It appears that a further payment of $100,000 was received in respect of the instalment due on 3 July 2016, but that Rediform did not make the remaining instalments due over the ensuing months. 14 In the period from February to May 2016, the Commissioner also issued garnishee notices under s 260-5 of Sch 1 to the TAA to Westpac Banking Corporation and J Hutchinson Pty Ltd on account of Rediform's outstanding tax-related liabilities. The Commissioner applied certain amounts received under the garnishee notices, together with other credits, to discharge part of Rediform's PAYG withholding liabilities. However, Rediform failed to pay to the Commissioner all the amounts withheld on account of PAYG as required by s 16-70(1) of Sch 1 to the TAA. 15 In addition to its enforcement action against Rediform, the Commissioner sought to recover the company's tax-related liabilities from the applicant. It is common ground that: (1) as a director of Rediform, the applicant was under an obligation pursuant to s 269-15 of Sch 1 to the TAA to cause Rediform to comply with its PAYG withholding obligations; (2) the applicant failed to discharge that obligation; and (3) pursuant to s 269-20 of Sch 1 to the TAA, the applicant was and is liable to pay to the Commissioner a penalty equal to the unpaid amount of Rediform's obligation. 16 The penalties were the subject of four "director penalty notices" issued by the Commissioner on 12 January 2016, 9 March 2016 (two notices) and 3 November 2016 pursuant to s 269-25 of Sch 1 to the TAA (Notices). They notified the applicant of liabilities to pay penalties totalling $519,023. 17 On 9 February 2017, the Commissioner commenced proceedings against the applicant in the District Court of New South Wales claiming the sum of the unpaid PAYG withholding amounts set out in the Notices ($519,023), less the sum of credits and amounts received under the garnishee notices. The total amount claimed was $366,913 (unpaid debt). 18 On 29 March 2017, the applicant's legal representative emailed the DCO advising that he had been instructed that the applicant wished to enter into an arrangement to pay the unpaid debt by instalments, and requesting that the District Court proceedings be stayed pending negotiations of such an arrangement. The legal representative's email included: Would you kindly advise by return email what documents you will require to review from my client in support of his payment application. 19 The DCO responded by email sent 10 April 2017. The response included: The onus is on the taxpayer to put forward a payment proposal that will clear the debt in the shortest possible timeframe. The proposal should contain sufficient information to satisfy the Commissioner that payment can be made by instalments without the total debt escalating and that future obligations will be lodged and paid on time. 20 The email then furnished a link to the ATO's Practice Statement Law Administration PS LA 2011/14 (PS LA 2011/14) and stated that further information could be found there. 21 The applicant's legal representative confirmed in an email to the DCO sent 10 April 2017 that he had referred his client to the link and asked him to gather the necessary information. This email also requested that the DCO not apply for summary judgment in the District Court proceedings "on the basis that the parties can negotiate a sensible settlement of the claim". 22 The response from the DCO noted that further time would be allowed, but not as much as had been requested taking into account that the DCO had "already unsuccessfully negotiated 2 payment arrangements with Mr Stojic for his company's debt in the past". At the time of the hearing, summary judgment had not been sought. 23 The applicant's legal representative submitted a payment proposal on 24 April 2017 (the "First Proposal"), together with a financial statement signed by the applicant, a copy of the applicant's payslip and an undertaking signed by the applicant's mother to loan the applicant a substantial amount to facilitate payments on the instalment dates. The accompanying financial statement stated the applicant's net average weekly income to be $2,640, with cash of $1,600 and personal liabilities of $12,000. The proposal contemplated the debt being repaid by instalments, the final one of which would occur on 31 May 2019. 24 The Commissioner rejected the First Proposal by letter dated 2 May 2017 (the "First Decision"). The letter included: We have fully considered your offer but we are unable to agree to it in its current form. Your proposal of 24 April 2017 is unacceptable because: • insufficient detail was provided to determine your ability to pay • your past compliance history indicates this arrangement may present a risk to revenue • the requested length of time to repay the debt is not acceptable given the size of the debt • income tax returns for the 2015 and 2016 financial years remain outstanding What you need to do now We are unable to consider another payment plan offer and will only accept full payment … Your review rights In the first instance, if you think there are circumstances we should have considered when we made our decision not to accept your offer, please phone us on 13 11 42. If you are still dissatisfied with our decision you may seek a review by the Federal Court under the Administrative Decisions (Judicial Review) Act 1977. Fees will generally apply. 25 This letter was in the same general form as the refusal letters referred to above in relation to Rediform. So too was the refusal letter in respect of the Second Proposal referred to below. 26 On 19 May 2017, the applicant's legal representative submitted a proposal framed as an "amended proposal" and "further proposal" (the "Second Proposal"). The Second Proposal contemplated full repayment by 30 June 2018. It indicated that a loan of $150,000 would be made to the applicant by the applicant's wife, repayable by the applicant after completion of the proposal. It noted that the applicant's wife intended to refinance real property to facilitate making the loan. The Second Proposal otherwise relied on the documentation submitted in support of the First Proposal, including the letter from the applicant's mother confirming her intention to make a loan. No further supporting documentation was provided with the Second Proposal. It included the following: Despite the content of your letter that further proposals for payment cannot be considered, we see this as being impractical to the resolution of this matter now that you have indicated what issues of our client's initial proposal have been identified by you as requiring attention. 27 The Commissioner rejected the Second Proposal by letter dated 31 May 2017, which included the following: We have fully considered your offer but we are unable to agree to it in its current form. Your proposal of 17 May 2017 is unacceptable because: • We do not consider the information provided in your letter of 17 May 2017 is sufficient to offset the reasons for refusal that were outlined in our letter of 2 May 2017. • According to paragraph 87 of Law Administration Practice Statement PS LA 2011/14, the preferred securities are: • a registered first mortgage from the taxpayer or a third party, over freehold property • a registered second or subsequent mortgage from the taxpayer or a third party, over freehold property where there is sufficient equity in the property to secure the tax debt whilst ceding priority to the first or prior mortgagees. What you need to do now We are unable to consider another payment plan offer and will only accept full payment … Your review rights In the first instance, if you think there are circumstances we should have considered when we made our decision not to accept your offer, please phone us on 13 11 42. If you are still dissatisfied with our decision you may seek a review by the Federal Court under the Administrative Decisions (Judicial Review) Act 1977. Fees will generally apply. 28 The Second Decision is the subject of the present application.

LegislatiVE AND ADMINISTRATIVE CONTEXT 29 Whilst this case revolves around a particular decision not to exercise a discretion or power to permit payment of a tax-related liability by instalments, it is necessary to understand the legislative and administrative context to address the grounds of review which have been advanced.

Legislative Context 30 The Commissioner has the general administration of the taxation laws: s 8 of the Income Tax Assessment Act 1936 (Cth) (ITAA 1936); ss 1-7 of the Income Tax Assessment Act 1997 (Cth); s 3A of the TAA; s 356-5 of Sch 1 to the TAA. The Commissioner's duties include a duty to make an assessment and a duty to pursue the recovery of tax-related liabilities: Denlay v Commissioner of Taxation (2011) 193 FCR 412 at [81]; Deputy Commissioner of Taxation v Rennie Produce (Aust) Pty Ltd (in liq) [2018] FCAFC 38 at [20]. The Commissioner may delegate a power or function to a Deputy Commissioner or any other person, and a power or function so delegated is taken to have been exercised or performed by the Commissioner: ss 8(1) and 8(2) of the TAA. 31 Part 4-15 of Sch 1 to the TAA is entitled "Collection and recovery of tax-related liabilities and other amounts". Division 250 is entitled "Introduction". Subdivision 250-A provides a "Guide to Part 4-15" and s 250-10 contains a summary of tax-related liabilities. Item 139 in the table to s 250-10(2) identifies a "penalty under Subdivision 269-B" to be a tax-related liability which becomes due and payable in accordance with s 269-20 of Sch 1 to the TAA. 32 Subdivision 250-B contains s 250-25 and identifies the object of Part 4-15: 250-25 Object The object of this Part is to ensure that unpaid amounts of tax-related liabilities and other related amounts are collected or recovered in a timely manner. 33 Division 255 is entitled "General rules about collection and recovery". Subdivision 255-A defines in s 255-1 the term "tax-related liability" and provides in s 255-5 that an amount of a tax-related liability that is due and payable is a debt due to the Commonwealth, payable to the Commissioner. 34 Subdivision 255-B is entitled "Commissioner's power to vary payment time". Section 255-10 of Sch 1 to the TAA confers on the Commissioner a discretion to defer the payment time. It includes: 255-10 To defer the payment time Deferrals for particular taxpayers (1) The Commissioner may, having regard to the circumstances of your particular case, defer the time at which an amount of a tax-related liability is, or would become, due and payable by you (whether or not the liability has already arisen). If the Commissioner does so, that time is varied accordingly. Note: General interest charge or any other relevant penalty, if applicable for any unpaid amount of the liability, will begin to accrue from the time as varied. See, for example, paragraph 5-15(a) of the Income Tax Assessment Act 1997. (2) The Commissioner must do so by written notice given to you. 35 Section 255-15(1) of Sch 1 to the TAA provides the Commissioner with the discretion to enter into an arrangement with a taxpayer to permit payment of a tax-related liability by instalments. It is that section which is directly relevant to the present case. It provides: 255-15 To permit payments by instalments (1) The Commissioner may, having regard to the circumstances of your particular case, permit you to pay an amount of a tax-related liability by instalments under an arrangement between you and the Commissioner (whether or not the liability has already arisen). (2) The arrangement does not vary the time at which the amount is due and payable. Note: Despite an arrangement under this section, any general interest charge or other relevant penalty, if applicable for any unpaid amount of the liability, begins to accrue when the liability is due and payable under the relevant taxation law, or at that time as varied under section 255-10 or 255-20. 36 Section 255-20 provides the Commissioner with the power to bring forward the payment time in certain cases. It is not necessary to set out its terms. 37 Subdivision 255-C is entitled "Recovery proceedings". It contains provisions dealing with procedural and evidentiary matters relating to proceedings to recover an amount of a tax-related liability. 38 Subdivision 255-D is entitled "Security deposits" and contains provisions pursuant to which the Commissioner can require a person to give security for the due payment of an existing or future tax-related liability. Section 255-110 makes it an offence to fail to give security if the Commissioner requires security under s 255-100. 39 Part 4-15 contains a number of other Divisions, including Division 260 entitled "Special rules about collection and recovery" and Division 269 entitled "Penalties for directors of non-complying companies" under which the Notices in the present case were issued.

Commissioner's Policy 40 Section 255-10 (which provides the discretion to defer payment) was considered by Hely J in Elias v Commissioner of Taxation (2002) 123 FCR 499 (Elias). At the time of the events relevant to that case, the Commissioner's policy in respect of the power to defer payment pursuant to s 255-10(1) was contained in Chapter 9 of the ATO Receivables Policy. The relevant policy is now documented in the Law Administration Practice Statement PS LA 2011/14, which - as noted above - was sent to the applicant's legal representative. It also addresses the power in s 255-15(1) to permit payment by instalments. 41 His Honour noted at [34] that: The Commissioner is entitled to adopt a policy to provide guidance as to the exercise of the discretion, provided the policy is consistent with the statute by which the discretion is conferred. Thus if the statute gives a discretion in general terms, the discretion cannot be truncated or confined by an inflexible policy that it shall only be exercised in a limited range of circumstances. A general policy as to how a discretion will "normally" be exercised does not infringe these principles, so long as the applicant is able to put forward reasons why the policy should be changed, or should not be applied in the circumstances of the particular case. See Re Drake v Minister for Immigration & Ethnic Affairs (No 2) (1979) 2 ALD 634 at 640-641; Chumbairux v Minister for Immigration & Ethnic Affairs (1986) 74 ALR 480 at 492-493. 42 The desirability of policies was noted, in a different context, in M64/2015 v Minister for Immigration and Border Protection (2015) 258 CLR 173 at [54], per French CJ, Bell, Keane and Gordon JJ: Policy guidelines like the priorities policy promote values of consistency and rationality in decision-making, and the principle that administrative decision-makers should treat like cases alike. In particular, policies or guidelines may help to promote consistency in "high volume decision-making", such as the determination of applications for Subclass 202 visas. Thus in Drake v Minister for Immigration and Ethnic Affairs [No 2], Brennan J, as President of the Administrative Appeals Tribunal, said that "[n]ot only is it lawful for the Minister to form a guiding policy; its promulgation is desirable" because the adoption of a guiding policy serves, among other things, to assure the integrity of administrative decision-making by "diminishing the importance of individual predilection" and "the inconsistencies which might otherwise appear in a series of decisions". The subjectivity of the evaluation by a decision-maker in a case such as the present highlights the importance of guidelines. The importance of avoiding individual predilection and inconsistency in making choices between a large number of generally qualified candidates by the application of the open-textured criterion of "compelling reasons for giving special consideration" is readily apparent. [Citations omitted] 43 PS LA 2011/14 sets out matters of general policy relevant to the exercise of a number of discretions and powers in Division 255. PS LA 2011/14 contains a "Statement" and three Annexures: (1) Annexure A deals with payment due dates and deferrals (broadly, the discretion in Subdivision 255-B); (2) Annexure B deals with payment arrangements (broadly, the discretion in Subdivision 255-C); and (3) Annexure C deals with securities (dealing with that topic both generally and in respect of the specific regime contemplated by Subdivision 255-D). 44 Annexure B includes the following: PAYMENT ARRANGEMENTS Purpose 51. To detail the Commissioner's approach to considering and permitting taxpayers to pay debts by instalments. … Application process 58. Responsibility for demonstrating that payment cannot be made by the due date rests solely with the taxpayer. A taxpayer who cannot pay on time should apply for an arrangement to pay by instalments before that due date has passed. If an application cannot be made by the due date, the taxpayer should apply as soon as possible after the due date. 59. Taxpayers applying to pay their debts by instalments must provide all necessary information within agreed timeframes to enable the Commissioner to give proper consideration to the request. If they do not provide the required information within the agreed timeframe, they will be advised that action to recover their debts may be initiated or continued without further warning. 60. An application to pay by instalments should be accompanied by an initial payment to the extent of the taxpayer's present capacity and the application should: • explain the reasons for non-payment by the due date • satisfy the Commissioner as to the taxpayer's inability to pay the full amount by the due date, not simply provide reasons why they have decided to not pay by the due date • contain a detailed statement of the taxpayer's current financial position (including details of what steps have been taken to obtain funds to pay the debt and what arrangements are in place to pay other creditors) • satisfy the Commissioner that, generally, the taxpayer is treating their tax debts with the same priority they are giving to their other payment obligations (for example, they would need to show that payment of private debts, like credit card debts and mortgage obligations, have not assumed a priority over payment of their tax debts and that any short-term priority afforded to their business debts was appropriate and that the business was viable) • include a detailed proposal for payment of their debt in full in the shortest possible timeframe • incorporate additional charges for late payment and reimbursement for any costs incurred pursuant to any recovery action that the Commissioner had commenced in respect of the debt, and • contain sufficient information to satisfy the Commissioner that payment can be made by instalments without the total debt escalating (taxpayers will need to specify the steps they have taken to ensure that future debts will be met as and when they fall due). Factors to be taken into account 61. Without limiting the Commissioner's discretion in relation to a particular case, the following factors will be taken into account in determining whether to accept payment by instalments: • the information provided by the taxpayer and other information that may be held (or obtained) by the Commissioner • the circumstances that led to the inability to pay • the taxpayer's current financial position, including other current payment obligations and actions taken by the taxpayer to rearrange finances or borrow to meet the debt • the stage that any legal recovery action has reached and any grounds offered by the taxpayer to justify a request that further legal action be deferred • the offer made and the ability to meet payment of the debt (and the additional charges for late payment imposed by legislation) on those terms without seriously impacting on the taxpayer's ability to meet other obligations • whether there is a likely risk to the revenue by accepting payment by instalments and whether that risk could be overcome by seeking some form of security for the debt from the taxpayer (see Annexure C 'Securities'). • the solvency of the taxpayer and arrangements made with other creditors (arm's length or otherwise) to pay debts • compliance with other taxation obligations or commitments (for example, whether all lodgment obligations including activity statements (BAS/IAS) are up to date) and the history of the taxpayer's prior dealings with the Commissioner • whether there are alternative collection options that may result in payment in a shorter timeframe (for example, the use of garnishee provisions) • the willingness of the taxpayer to enter into direct debit arrangements if that facility exists, and • the willingness of the taxpayer to accept the conditions under which the Commissioner will agree to a payment arrangement. … Risk analysis 63. Payment by instalments will not be accepted if prospects of recovery in the longer term would be diminished or the revenue would be disadvantaged. If there is insufficient information to enable the Commissioner to make a decision, taxpayers will be advised that the offer is unacceptable and formal action to recover the debt will be instituted or will continue. Where the Commissioner has concerns about the solvency of taxpayers, or their ability to meet the terms proposed, they may be required to provide adequate security or a surety (see Annexure C 'Securities'). 64. Taxpayers paying by instalments are expected to finalise their debts in the shortest possible timeframe. However, the Commissioner acknowledges there will be instances where that timeframe may extend over more than one financial year depending on factors such as the ability to pay, the size of the debt and the likely costs of alternative collection activity. In these circumstances, the taxpayer may be required to provide security or a surety. The arrangement will also be reviewed regularly to take into account potential changes to the taxpayer's financial situation … 45 Annexure C includes: SECURITIES Purpose 76. This annexure discusses the circumstances in which the Commissioner will require a taxpayer to provide security in relation to an existing or future liability. Please note that this policy does not apply to licensing securities obtained in relation to the Excise Act 1901. 77. The first part of Annexure C examines securities in general: the circumstances in which the Commissioner may require a security; the kinds of security which the Commissioner considers acceptable and how the security arrangement may be executed. It examines general considerations that may be taken into account when security is offered voluntarily by a taxpayer, including cases in which it is provided as a pre-condition to agreeing to defer the time for payment of a debt, agreeing to permit payment of a debt by instalments or agreeing to issue a departure authorisation certificate. 78. The second part of Annexure C examines the provision of securities under a formal requirement by the Commissioner pursuant to Subdivision 255-D of Schedule 1 to the TAA and the way in which the provisions under this Subdivision will be administered by the Commissioner. While some of the considerations outlined in the first part of the policy relating generally to securities are also relevant to the exercise of the power under Subdivision 255-D, there are specific requirements in this legislation that are considered in this part of the practice statement. … Statement Security offered voluntarily by the taxpayer 83. Where a security is offered, the taxpayer should be advised that: • The security is to be located in Australia, be of ascertainable value and be over property in a form acceptable to the Commissioner (see paragraphs 87 and 88 of this practice statement). • The security is to be supported by an agreement or deed which should set out the purpose of taking security, as well as when and what triggers default. For example, a breach of a payment arrangement may trigger default. The terms of the deed may include, but are not limited to, the following: • All costs in maintaining the security property including rates, taxes and other charges are payable by the person offering the security. • Any property must be insured at the taxpayer's expense, showing the Commonwealth's interest in the property (including the nature of that interest, for example as a mortgagee) for the full insurable value on a replacement and reinstatement basis. If the property is owned by the Owners Corporation (for example a strata title), the property must be insured by the Owners' Corporation. The ATO may also require the taxpayer to obtain mortgagee insurance in respect of the mortgage. • The agreement or deed will provide for the Commissioner to realise the security should default occur. • The Commissioner's costs in taking the security are to be met by the taxpayer at the time approval is given to take the security. This may include solicitor's fees, valuation costs, registration and stamping fees. • The Commissioner's costs in realising the security in the event of default are to be met by the taxpayer. • Additional charges for late payment will continue to accrue, unless the taxpayer's circumstances qualify for remission under normal remission guidelines (see PS LA 2011/12). … 85. In some cases, the Commissioner will require a taxpayer to provide 'adequate' security as a pre-condition to agreeing to defer the time for payment of a tax debt, agreeing to permit payment of a tax debt by instalments or agreeing to issue a departure authorisation certificate. The Commissioner will determine what is 'adequate' having regard to the particular circumstances. 86. In deciding whether to take or require security the Commissioner may have regard to (but is not limited to) the following considerations: • the quantum of the debt • the nature of the security being offered - this includes the location of the property, the expectation it can be readily and easily realised if default occurs, the taxpayer's equity in the security, the value of the security and how the value has been determined (that is, the basis of any valuation) • if third party security is offered, whether the third party is solvent and if it is fair and reasonable to take the security • the value of security compared to the amount of the tax debt outstanding or the amount expected to be outstanding when any outstanding objection or appeal is finally determined • the period of time the debt has been outstanding • the taxpayer's past compliance history • the taxpayer's ability to pay, based on available information (either supplied by the taxpayer or otherwise available to the Commissioner) • the level of the taxpayer's other liabilities • arrangements made by the taxpayer's other creditors to secure their debts. 87. The preferred securities are: • a registered first mortgage from the taxpayer or a third party, over freehold property • a registered second or subsequent mortgage from the taxpayer or a third party, over freehold property where there is sufficient equity in the property to secure the tax debt whilst ceding priority to the first or prior mortgagees • an unconditional bank guarantee from an Australian bank acceptable to the Commissioner (unconditional means the bank pays the Commissioner upon demand).

Administrative context 46 A person who wishes the Commissioner to exercise the power under s 255-15(1) may request the Commissioner to do so. No particular form is required. No formal application need be made. There are no particular rules about what must be provided in support of a request. 47 Section 255-15 does not contain a limitation on the number of times the Commissioner might exercise the power contemplated by the section in relation to a particular debtor or tax-related liability, or the number of times a person may ask the Commissioner to consider exercising the power. There is clearly no express limitation on the number of times a person might request the Commissioner to exercise the power. The statutory context and purpose does not suggest that only one request can be made. Indeed, it would be antithetical to the statutory objects and scheme to read into the provision a limitation that only one request could be made under s 255-15(1) by a taxpayer in relation to a particular tax-related liability. 48 As the facts outlined above demonstrate, multiple requests might be made by the one debtor in respect of the same liability. An acceptance of an instalment proposal might follow one or more refusals. This might occur, for example, because the instalment proposals become increasingly more satisfactory to the Commissioner; subsequent proposals might to seek to address the reasons why earlier proposals were rejected. This process, in the ordinary course, does not mean that the Commissioner cannot raise new issues or concerns as and when they arise in respect of later proposals. 49 Likewise, the Commissioner may exercise the power to permit a person to pay by instalments on multiple occasions. The fact that the power has been exercised in a debtor's favour once does not mean it cannot be exercised in their favour again in respect of the same liability. This might happen, for example, because the debtor defaulted or anticipated not being able to meet the first instalment arrangement and the Commissioner is prepared to enter into a new arrangement. Again, this is clearly consistent with the statutory objective. 50 The administrative context is important because the statutory regime is one which might be expected to involve high volumes of decisions, with debtors being able to make multiple requests to pay by instalments in respect of the same liability. The fact that the statutory regime contemplates that a further request can be made after the rejection of an earlier proposal (or after a default or anticipated default of an existing instalment arrangement) affects the content of the rules of procedural fairness, because - in the usual case - a debtor has an opportunity of dealing with a matter raised in a refusal by making a further request. 51 Until the Second Decision, that is what occurred in the present case in respect of Rediform and the applicant.

application for review 52 As noted, the applicant applied to this Court on 5 July 2017 for review of the Commissioner's decision to refuse the Second Proposal. At a case management hearing on 14 March 2018, I made an order requiring the applicant to file and serve an amended originating application setting out the grounds of review upon which he relied, including full particulars of his claims and the nature of the relief sought. The ground of review as contained in the originating application in its original form provided, under the heading "Grounds of application": This Application is brought before this Court pursuant to sections 5(1) and 5(2) of the Administrative Decisions (Judicial Review) Act 1977 ("Act") that the decision of the respondent as set out in a letter date[d] 31 May 2017 was an improper exercise of the power conferred upon the respondent. 53 The originating application in its original form sought an order that the Commissioner be directed to accept the applicant's Second Proposal or, alternatively, that the matter be remitted for further consideration in accordance with law. 54 Section 11(1)(b) of the ADJR Act requires an application to this Court to "set out the grounds of the application". An application which merely recites the text of s 5(1)(e) of the ADJR Act does not set out the grounds of the application in a meaningful way. No attempt was made to identify the grounds of the application with any particularity, even by reference to a particular paragraph of s 5(2) of the ADJR Act which contains an identification of various matters which might constitute "an improper exercise of a power". At least in the absence of an explanation of the grounds of review in an accompanying affidavit, it is necessary to identify the grounds of the application with sufficient particularity to understand the real basis for the application. For example, if the "improper exercise of the power conferred by the enactment" (s 5(1)(e)) is alleged to be constituted by "taking an irrelevant consideration into account" (s 5(2)(b)), it is necessary to identify the irrelevant consideration it is alleged was taken into account, so that the respondent and the Court know the case being advanced, that is, the "grounds of the application". 55 The amended originating application filed on 22 March 2018 advanced three grounds of review: a denial of procedural fairness, the taking into account of an irrelevant consideration and the rigid adherence to a policy. Each is considered below. The amended application did not include a request for relief in the form of the Commissioner being directed to accept the applicant's Second Proposal.

Ground 1 - Natural justice 56 Ground 1 of the amended application relied on s 5(1)(a) of the ADJR Act and was in the following terms: A breach of the rules of natural justice occurred in connection with the making of the Decision. Particulars (i) In making the Decision the respondent took into account that security had not been proffered by the applicant. (ii) The respondent did not inform the applicant that he was intending to have regard to the issue of security or that he had reached an adverse conclusion in that regard. (iii) The respondent's failure to inform the applicant of the matters particularised in (ii) above occurred in circumstances where: (a) on 2 May 2017, the respondent had made a decision with respect to the applicant's proposed payment arrangement (2 May 2017 Decision), the reasons for which did not refer to security; (b) the Decision involved reconsideration of the 2 May 2017 Decision; (c) the respondent's policy [PS LA 2011/14] did not state that security should be proffered by an applicant for a payment arrangement. 57 For the reasons explained below and addressing the particulars identified above: (1) the decision-maker was entitled to take into account, in making the Second Decision, that the payment proposal put forward by the applicant did not offer security; (2) the decision-maker had no obligation as a matter of procedural fairness to inform the applicant before making the Second Decision that: (a) he would take into account, in making that decision, the fact that no security was offered; or (b) he was considering rejecting the request for reasons which included the absence of security; and (3) the foregoing conclusions are not affected by the fact that the reasons for the First Decision did not refer to the fact that security had not been offered, nor by the fact that the Second Decision referred to and took account of the First Decision, nor by the terms of PS LA 2011/14, whether those matters are viewed independently or cumulatively. 58 The Commissioner's letter dated 31 May 2017 stated that he was "unable to consider another payment plan offer and [would] only consider full payment". Each of the refusal letters referred to above contained the same statement. They each also contained statements suggesting that the Commissioner was able to consider further offers; each of them referred to the offer the subject of each refusal letter and stated: "We have fully considered your offer but we are unable to agree to it in its current form". This (at least read on its own) suggests that further proposals could be made. Each refusal letter stated: "In the first instance, if you think there are other circumstances we should have considered when we made our decision not to accept your offer, please phone us on 13 11 42". 59 Nothing in s 255-15(1) of Sch 1 to the TAA or the statutory scheme more generally prevented the Commissioner from considering a further proposal by the applicant. No submission was advanced that the statements that the Commissioner was "unable to consider another payment plan offer" were correct. The Commissioner accepted, consistently with the evidence in this case, that multiple requests can be made and that the power may be exercised or refused multiple times. The statement in the refusal letters should not have been made. 60 It was the Commissioner's obligation to consider the Second Proposal as it was each of the proposals which were put to him (all of which were genuine and proper). That is what he did. 61 Fortunately, the incorrect statement in each of the refusal letters did not mislead this applicant. If it had, then the decision-making process, by misleading the applicant with an incorrect statement, may have affected what would otherwise have been the content of the obligation of procedural fairness. In the case of Rediform, the incorrect statement did not prevent it from making such proposals as it saw fit. Refusals dated 10 March 2016 and 15 March 2016 of instalment proposals made by Rediform did not stop Rediform, at the direction or with the consent of the applicant, from making further instalment proposals and entering into "payment plans" dated 12 April 2016 and 25 May 2016 (which were ultimately dishonoured). The Commissioner's decision of 2 May 2017 included the incorrect statement and the applicant submitted his Second Proposal on 17 May 2017 as he was entitled to do. The applicant did not give evidence that he thought he was not able to make a further request and it was conceded that he could have. The applicant has at all times been able to submit a further proposal or again request the power to be exercised. That request could have, and could, include the offering of security. He could have made a request immediately after the Second Decision; he could make one now, at least on the facts as they existed at the hearing. 62 The applicant submitted that I would not find or infer that the Commissioner would have considered, or would now consider, such a request if it had been made. However, the Commissioner considered four proposals by Rediform, two of which were rejected and two of which were accepted. He considered and rejected two proposals made by the applicant. That is, to date, the Commissioner has considered each proposal put to him. There is no good reason to believe that the Commissioner would not consider any proper and genuine proposal put to him. The Commissioner has the duties earlier outlined. It seems an unlikely inference to draw, in light of his duties and the fact that he has duly considered each proposal put to him by the applicant and Rediform, that he would refuse to consider a further application. In my view, and consistently with the submissions advanced on his behalf, the Commissioner would have considered, and would consider, a further request consistently with his duties and the scheme of s 255-15(1).

Particular (i) 63 As Hely J explained in Elias at [57] in the context of the discretion in s 255-10, but in terms which apply equally to the discretion in s 255-15, the discretion is conferred in very general terms. Given that the statutory objective "is to ensure that unpaid amounts of tax-related liabilities and other related amounts are collected or recovered in a timely manner" (s 250-25), it is obvious that whether security is or is not offered is a relevant (but not mandatory) consideration; that is, it is a permissible consideration - see: Lo v Chief Commissioner of State Revenue (2013) 85 NSWLR 86 at [9], per Basten JA. 64 The applicant did not submit otherwise. Rather, the applicant's complaint was that, if the failure to offer security was to be a ground for, or was to be taken into account in, refusing his Second Proposal, it should have been drawn to his attention before the making of the Second Decision so that he was afforded an opportunity to comment. In other words, particular (i) was simply a statement of fact relevant to the complaint made in particulars (ii) and (iii) and explained in the applicant's submissions in the following way: 22. The making of the Decision involved reconsideration of the matters decided in the 2 May 2017 Decision. The Decision itself referred to "offset[ing] the reasons for refusal … in our letter of 2 May 2017": CB 185. Where reconsideration of a decision occurs by reference to issues which were not previously articulated, procedural fairness requires that the decision-maker give notice of the new issue and permit the person the subject of the decision to be heard: Haoucher v Minister for Immigration and Ethnic Affairs (1990) 169 CLR 648 at 655 per Deane J and 670-671 per Toohey J. Where a decision-maker takes no step to identify a new issue, an applicant is entitled to assume that the issues arising are those which were previously identified: SZBEL v Minister for Immigration and Multicultural and Indigenous Affairs [2006] HCA 63; 228 CLR 152 at 163 [35] per Gleeson CJ, Kirby, Hayne, Callinan and Heydon JJ. 23. A decision maker is also required to advise of any adverse conclusion which has been arrived at which would not obviously be open on the known material: Commissioner for Act [sic] Revenue v Alphaone Pty Ltd (1994) 49 FCR 576 at 592; Asiamet (No 1) Resources Pty Ltd v Federal Commissioner of Taxation [2003] FCA 35; 126 FCR 304 at 327 [79].

Particulars (ii) and (iii) 65 It is well established that the rules of natural justice require a decision-maker to accord procedural fairness in the decision-making process. The Commissioner accepted that the rules of natural justice apply to the making of a decision under s 255-15(1). It is necessary to determine two matters: (1) the "practical content" of the rules of procedural fairness in the circumstances of the present case: Haoucher v Minister for Immigration and Ethnic Affairs (1990) 169 CLR 648 at 653 per Deane J (Haoucher); and (2) whether the Commissioner failed to comply with the content of those rules in a way, or with consequences to the applicant, that would justify the granting of relief. 66 A debtor can offer security if he, she or it wants to. A debtor making a request to pay by instalments is not limited in the material which might be put forward in support of a request or in the offer which they might choose to make. The fact that security is one of the matters which the Commissioner might take into account is obvious from the terms of PS LA 2011/14, if it is not obvious from the context in which a request under s 255-15(1) is being made. It might be a matter of good administration to provide advice to applicants, but procedural fairness does not generally require a decision-maker to advise an affected person of the content of the application that can best be made in their circumstances: Elbourne v Minister for Immigration, Local Government and Ethnic Affairs (1991) 22 ALD 211 at 212, per Davies J. That is especially so in a statutory scheme which contemplates multiple "applications". I use the word "applications" here in an informal sense. Section 255-15(1) does not refer to a requirement to make an application, but in the typical case a debtor makes a request or puts forward a proposal in order to ask the Commissioner to exercise the power. 67 In Re Minister for Immigration and Multicultural Affairs; Ex parte Miah (2001) 206 CLR 57 (Miah) at [31], Gleeson CJ and Hayne J (dissenting, but not relevantly for present purposes) made the point that it is necessary to pay regard to the practical context in which the decision-maker must consider whether to exercise the relevant power (emphasis added): In considering the scheme of legislation relating to the exercise of a particular kind of power, it is necessary to pay regard to the practical context in which the decision-maker must consider whether to exercise the power. This may be of particular importance where, as here, the complaint is of a failure by the decision-maker to communicate something to an affected person before a decision is made. It is the potential for a decision to affect rights, interests, or legitimate expectations, that attracts the requirement of procedural fairness. But decisions of that character are made in varying contexts. Here we are concerned with a decision to be made following a formal application. The nature, and extent, of communication between applicant and decision-maker that is in contemplation, in such a general context, will vary. At one extreme, an application may be made to a judicial decision-maker, in a context in which curial standards of procedural fairness will apply to the fullest extent. Even in such a case, fairness does not require a judicial officer to make a running commentary upon an applicant's prospects of success, so that there is a forewarning of all possible reasons for failure. Most administrative decisions are made in circumstances where a much less formal and extensive form of communication than that which occurs in a court is contemplated. In many cases, it is not contemplated that the applicant will either see, or hear anything from, the decision-maker before the decision is made. 68 Here, the context is that no formal application is required (unlike in Miah), a request to exercise the power can be made in any appropriate way, there is no statutory specification of what must be provided in support of a request, the discretion is conferred in very general terms and the statute does not expressly or impliedly suggest any particular process or requirement for communication between the decision-maker and the debtor making a request or putting forward a proposal. The context includes that, if a proposal were refused for a specific reason, a second request or proposal might be made. The debtor might choose to address or make good the perceived inadequacies identified in the earlier refusal. The process is relatively informal, in this case by exchange of emails, analogous to what might occur in commercial negotiations. 69 If the Commissioner, when considering a request made pursuant to s 255-15(1), forms the view that one of the reasons he might not accept the instalment proposal is that security was not offered, it is not a requirement of procedural fairness on the Commissioner's part to draw that fact to the applicant's attention before making the decision. His decision might identify the lack of security as a reason for refusing to exercise the power. A debtor might then make a further request offering security. Nor is the Commissioner required to ask for security. If a failure to offer security were the only basis for refusing a proposal, or the proposed arrangement would be agreed to if good security were offered, then good administration might suggest in a particular case that the Commissioner should raise the matter in furtherance of securing an outcome which promotes the statutory objective of ensuring timely payment of tax-related liabilities. However, a failure to do so does not constitute a denial of procedural fairness in the ordinary course. 70 A decision-maker is not required by rules of procedural fairness to give a debtor making a request under s 255-15(1) a running commentary on the views being reached or on how the request might be improved. 71 The applicant contended that, even if all of this is ordinarily true, the particular circumstances of this case alter that position. The applicant contended that the Second Decision was a "reconsideration" of the First Decision and that a "new issue" arose in the making of the Second Decision such that the rules of procedural fairness required this "new issue" to be raised with him. The applicant relied on Haoucher and SZBEL v Minister for Immigration and Multicultural and Indigenous Affairs (2006) 228 CLR 152 (SZBEL). 72 Those cases involved a statutory review (SZEBL) or statutory reconsideration (Haoucher) of a decision of another decision-maker. Neither was directly concerned with primary or original decisions. The statutory and administrative context in both cases was different. The present case is not concerned with the requirements of a tribunal or other entity performing an administrative review function. This case is about original decisions. 73 In Haoucher, the applicant had appealed to the Administrative Appeals Tribunal for review of a decision by the Minister to issue a deportation order under s 12 of the Migration Act 1958 (Cth). The Tribunal had remitted the matter to the Minister for reconsideration in accordance with a recommendation that the deportation order be revoked. The Minister declined to follow the Tribunal's recommendation, notifying the applicant that he intended to proceed with the deportation. In so doing, the Minister departed from a previously announced policy that the Minister would only reject a recommendation of the Tribunal "in exceptional circumstances and only when strong evidence can be produced to justify [the] decision": Haoucher at 657. The Minister provided no notice to the applicant of his intention to depart from that policy. If he had, the applicant would have made representations. The case before the High Court ultimately concerned the content of the fair hearing rule in circumstances where the Minister was under a statutory obligation to reconsider his original decision and in doing so, departed from a previously announced policy without notice to the applicant. 74 In SZBEL, the Minister's decision to refuse the applicant's protection visa application was subject to review by the Refugee Review Tribunal in accordance with s 425(1) of the Migration Act 1958 (Cth). That section required that an applicant be invited "to give evidence and present arguments relating to the issues arising in relation to the decision under review". In affirming the Minister's decision, the Tribunal relied in part on issues which the Minister had not considered to be dispositive of the applicant's case. The High Court ultimately found that, where a decision on review is disposed of by a reviewing body by reference to issues other than those considered by the primary decision-maker to be dispositive, a failure to notify the applicant of the "new issues" arising on review constituted a denial of procedural fairness. The Court stated: 34. Those issues will not be sufficiently identified in every case by describing them simply as whether the applicant is entitled to a protection visa. The statutory language "arising in relation to the decision under review" is more particular. The issues arising in relation to a decision under review are to be identified having regard not only to the fact that the Tribunal may exercise all the powers and discretions conferred by the Act on the original decision-maker (here, the Minister's delegate), but also to the fact that the Tribunal is to review that particular decision, for which the decision-maker will have given reasons. [Footnote omitted; emphasis in original] 35. The Tribunal is not confined to whatever may have been the issues that the delegate considered. The issues that arise in relation to the decision are to be identified by the Tribunal. But if the Tribunal takes no step to identify some issue other than those that the delegate considered dispositive, and does not tell the applicant what that other issue is, the applicant is entitled to assume that the issues the delegate considered dispositive are "the issues arising in relation to the decision under review". That is why the point at which to begin the identification of issues arising in relation to the decision under review will usually be the reasons given for that decision. And unless some other additional issues are identified by the Tribunal (as they may be), it would ordinarily follow that, on review by the Tribunal, the issues arising in relation to the decision under review would be those which the original decision-maker identified as determinative against the applicant. 75 Haoucher and SZBEL recognise that the content of the requirements of procedural fairness may be affected by the process of decision-making, including what is or is not said or done during that process. If a review body, reviewing a primary decision under a provision equivalent to s 425(1) of the Migration Act 1958 (Cth), decides the case on a completely new issue without notice to the affected person, it is not difficult to see that there may have been a denial of procedural fairness on the statutory "review" of the primary decision resulting in relevant unfairness. The applicants in those cases were not engaged in the sort of process contemplated here where they might make further applications addressing the reasons for earlier refusals. 76 The statutory scheme presently under consideration is quite different to the statutory schemes in SZBEL and Haoucher. Section 255-15(1) is not a provision which is concerned with review or reconsideration of any earlier decision and that is not what in fact occurred. Here, there were two decisions based on two different proposals, albeit the Second Proposal and Second Decision referred to the First Proposal and First Decision. That does not mean that the overall decision-making process and the terms of the First Decision are irrelevant to the content of what was required by the rules of procedural fairness in relation to the Second Decision. However, what the rules of procedural fairness required in this particular case must be assessed against the statutory scheme in this case and not, for example, the content of what is required by the rules of procedural fairness on a statutory "review" of a primary decision in accordance with the terms of s 425(1) of the Migration Act 1958 (Cth). 77 Whilst the First Decision did not refer to the absence of security, it cannot reasonably be inferred from that fact that the question of security would not be considered relevant in the context of any subsequent, modified or further proposal, even if that subsequent proposal were on otherwise more favourable terms. It is evident from the terms of PS LA 2011/14 that the provision of security might affect the way in which the Commissioner might exercise his discretion. It is true that most of the references to providing security in PS LA 2011/14 have a flavour of it being something the Commissioner might request (or require). In part, that is because of the specific regime in Subdivision 255-D, referred to above. However, PS LA 2011/14 also contains references to a debtor voluntarily providing security. Whether it is offered voluntarily or in anticipation of a request being made by the Commissioner or in response to such a request, PS LA 2011/14 certainly indicated that security was, as a general matter, a potentially relevant consideration. One might have thought that this was clear in any event from the context. 78 The brief reasons provided in the Second Decision indicate that the decision-maker was not satisfied about the capacity or likelihood of the applicant to meet the new instalment proposal he put forward, notwithstanding the promise of additional funds to be borrowed by him from his wife (who would borrow relying on available real property in order to lend to the applicant). That is the reason why the Second Proposal was rejected. It is potentially misleading to speak of the absence of security as a reason the Second Proposal was rejected. The real point is that the Second Proposal may have been acceptable if adequate security had been offered because that may have allayed the decision-maker's concerns about the capacity or likelihood of the applicant meeting his proposal. Adequate security was "required" (to use the words apparently used by the DCO in a conversation with the applicant's legal representative after the Second Decision) in the sense that the Second Proposal was unacceptable without it. The reference to paragraph [87] of PS LA 2011/14 suggests the decision-maker would have been more favourably disposed to the proposal if something more concrete (specifically, adequate security) had been put forward to secure the debt payable to the Commissioner than the promise of a further loan to the applicant. That was something which might have been expected; it was certainly not an unusual stance to take in the context of the earlier dealings between the DCO and the applicant and Rediform. The reference to paragraph [87] merely indicated what kind of security would be preferred. 79 There was no obligation as a matter of procedural fairness on the part of the Commissioner to raise the question of security with the applicant before making the Second Decision, even though security had not previously been raised. A debtor applying under s 255-15(1) may raise for the Commissioner's consideration whatever relevant matter they wish and the Commissioner, in the usual case and subject to what is said below, is under no obligation as a matter of procedural fairness to inform the debtor that the proposal might be acceptable if the debtor were to offer some form of acceptable security, or forewarn the debtor of his proposed reasons for refusing the proposal or request, if that be his decision, before reaching a decision. That position was not altered by the particular decision-making process involved in the present case. 80 The applicant relied on the following two proposition identified by the Full Court (Northrop, Miles and French JJ) in Commissioner for ACT Revenue v Alphaone Pty Ltd (1994) 49 FCR 576 (Alphaone) at 591E-F: 1. The subject of a decision is entitled to have his or her mind directed to the critical issues or factors on which the decision is likely to turn in order to have an opportunity of dealing with it … 2. The subject is entitled to respond to any adverse conclusion drawn by the decision-maker on material supplied by or known to the subject which is not an obvious and natural evaluation of that material … [Citations omitted] 81 The Full Court in Alphaone at 590-591 also said: It is a fundamental principle that where the rules of procedural fairness apply to a decision-making process, the party liable to be directly affected by the decision is to be given the opportunity of being heard. That would ordinarily require the party affected to be given the opportunity of ascertaining the relevant issues and to be informed of the nature and content of adverse material. [Citations omitted] 82 That latter passage was quoted with approval by the High Court in SZBEL at [32]. 83 The content of the rules of procedural fairness, and specifically whether those rules require disclosure of particular matters before making the relevant decision, depends on the circumstances of each case and on the particular statutory context and administrative function it creates, including the nature of the power to be exercised and how the exercise of that power affects the rights or interests of the person affected. 84 In National Companies and Securities Commission v News Corporation Ltd (1984) 156 CLR 296 at 326, Brennan J observed: The terms of the statute which creates the function, the nature of the function and the administrative framework in which the statute requires the function to be performed are material factors in determining what must be done to satisfy the requirements of natural justice. 85 The statutory context and administrative function and framework have been set out in more detail earlier. Multiple requests may be made under s 255-15(1) and later requests may address and seek to overcome issues identified in earlier refusals. 86 A refusal of a proposal in the statutory scheme now being considered does not have the considerations of finality which might apply, for example, to decisions made in respect of formal applications contemplated by the Migration Act 1958 (Cth). The applicant was not relevantly deprived of an opportunity to put his case forward in whatever way he wished, nor was he denied an opportunity to put relevant material forward. The decision-making process did not prevent the opportunity of putting security forward as a possible means of securing a favourable outcome or stating why security was not needed. Rather, the applicant was told that his proposal was rejected because the DCO was not satisfied that the promise of a further loan and shortened time frame for payment of instalments was sufficient to alter the views which had subsisted in relation to the First Proposal, and he was specifically directed to the forms of security which were most likely to be regarded as satisfactory. As a practical matter, this invited the applicant to consider putting forward a proposal which offered security or to provide some other proposal which was satisfactory. In the ordinary course and in light of the history between the DCO and the applicant and Rediform, this is what might have been expected to occur. 87 The general statements of principle in Alphaone may be accepted, although it is preferable to express the content of what procedural fairness requires by reference to the particular case and the particular statutory context rather than through generalised statements of principle, the precise application of which is necessarily dependent upon the particular statutory scheme. Those principles were not breached in their application to the circumstances of this case, which turns on a quite particular statutory scheme. 88 Even if I had concluded that there was an obligation to afford the applicant an opportunity to be heard in relation to whether security was required or might be available to satisfy the decision-maker that the power under s 255-15(1) should be exercised, I would have declined relief because no relevant "unfairness" was demonstrated. The applicant has not shown that there was any "practical injustice": Re Minister for Immigration and Multicultural and Indigenous Affairs; Ex Parte Lam (2003) 214 CLR 1 at [34], [37], per Gleeson CJ. If the applicant wanted to address the issue of security or offer security, he has at all times been able to do so. 89 Further, the utility in making an order remitting the matter to the Commissioner is highly questionable. The applicant continues to be at liberty to submit a further instalment proposal addressing the issue of security or offering security. That is the equivalent result he would achieve if he were successful in obtaining relief from this Court (given that I also reject grounds 2 and 3 for the reasons given, and as indicated, below). 90 Accordingly, this ground fails.

Ground 2 - Irrelevant consideration 91 Ground 2 of the amended application was: The making of the Decision was an improper exercise of the power conferred by s 255-15 of the TAA in that an irrelevant consideration was taken into account in the exercise of that power, being the compliance history of Red Con NSW Pty Ltd (Red Con), formerly Rediform Contracting Pty Ltd (ACN 159 144 680), in respect of its taxation obligations. 92 This ground is based on ss 5(1)(e) and 5(2)(a) of the ADJR Act. Those sections substantially reflect the position at common law that an administrative discretion must be exercised without taking into account a mandatorily irrelevant consideration. 93 The First Decision had stated, as a reason for rejecting the proposal, that "your past compliance history indicates this arrangement may present a risk to revenue". The reference to "your past compliance history" appears to be a reference to that of Rediform. That compliance history included the non-payment of PAYG withholding amounts, the making of requests to pay by instalments and the entering into of two "payment plans" under s 255-15(1) which were not ultimately honoured in accordance with their terms. The material before the decision-maker made it clear that the "payment plans" were entered into on the instructions or with the involvement of the applicant. The applicant was the sole director of Rediform. The material contained requests to delay payments under the payment plan and material which indicated that at least some of the funds which Rediform would use to make payments were to be received from the applicant. 94 It is common ground that the Act gives no express indication of the criteria by which a decision under s 255-15(1) is to be made, beyond requiring that the Commissioner have regard to the taxpayer's particular circumstances in considering whether to enter into a payment arrangement. As such, the relevant factors which the Commissioner was bound to consider, and those which he was prohibited from considering, must be determined by implication from the subject-matter, scope and purpose of the statutory scheme that applies to the statutory power being exercised: Minister for Aboriginal Affairs v Peko-Wallsend Ltd (1986) 162 CLR 24 at 39-40 per Mason J (Peko-Wallsend); Elias at [56]-[57]; Sanctuary Lakes Pty Ltd v Commissioner of Taxation (2013) 212 FCR 483 at [227]-[229] per Griffiths J (Sanctuary Lakes). 95 In Elias, Hely J noted that the discretion afforded by s 255-10 was conferred in very general terms and that, in those circumstances, it was a matter for the decision-maker to decide what is, and what is not, relevant. His Honour said at [56]-[57]: 56. The ground of failure to take into account a relevant consideration in the making of an administrative decision can only be made out if a decision-maker fails to take into account a consideration which he is bound to take into account in making that decision: Peko-Wallsend (supra) at 39. What factors a decision-maker is bound to consider in making the decision is determined by construction of the statute conferring the discretion … 57. Where, as here, a discretion is conferred in very general terms, it is generally a matter for the decision-maker to decide what is relevant and what is not. It is largely for the decision-maker, in the light of the matters placed before him, to determine which matters he regards as relevant and the comparative importance to be accorded to matters which he so regards: Sean Investments Pty Ltd v MacKellar (1981) 38 ALR 363 at 375. As long as the decision-maker considers those things that the legislation requires to be taken into account and ignores any prohibited consideration, the grounds of failing to take into account a relevant consideration, or taking into account an irrelevant consideration, will not be available. Nor are those grounds available where the essence of the complaint is that the decision-maker paid either too little or too much attention to a relevant factor: Aronson & Dyer Judicial Review of Administrative Action 2nd Ed. 2000 at 225. 96 These principles apply equally to the discretion in s 255-15. Ground 2 can only be made out if Rediform's compliance history is properly characterised as a "prohibited consideration". If, however, he was entitled to take that matter into account then the weight to be given to that factor was a matter for the Commissioner: Peko-Wallsend at 41; Elias at [52]. 97 Section 255-15(1) is one of a series of provisions directed towards facilitating recovery of tax-related liabilities in a timely manner. It is plain that circumstances might exist in which it is desirable to allow taxpayers time to pay, whether by deferral (s 255-10) or payment by instalments (s 255-15), rather than pursuing formal recovery. This is recognised in PS LA 2011/14, which states at [52]: Some taxpayers may experience cash flow difficulties that will prevent them from paying their debt on time. In those instances the Commissioner will consider requests to accept payment of the debt by instalments over a period of time. Accepting payment by instalments provides the Commissioner with an alternative to more formal recovery procedures. 98 The legislative context reveals that the Commissioner may take into account any factor which he considers might bear on whether an instalment arrangement should be accepted. Those factors would obviously include such matters as the capacity of the taxpayer to pay, the period of time over which the debt can be repaid, what the risk of non-payment might be and whether that risk is mitigated by some proposal, including a proposal to provide security. It is not uncommon for individuals to conduct their businesses through the medium of a company. The individual's capacity to pay may be affected by the financial position of the company. Where the company is in essence the alter ego of the individual and its decisions are effectively determined by the individual it is not difficult to see how a decision-maker might draw an inference as to what an individual might do from what the individual's company did. Whether it is appropriate to do so will depend on the facts. However, the apparent potential relevance of such matters suggests a construction of s 255-15(1) as advocated by the applicant to be improbable. 99 The applicant submitted: 27. As the expression "having regard to the circumstances of your particular case" makes plain, the focus of s 255-15 is on the connection between circumstances particular, or personal, to the taxpayer, and permission to pay the amount of a tax liability by instalments … 28. Where a provision is limited by considerations particular, or personal, to the taxpayer, a consideration which bears no relevance to the particular circumstances of the taxpayer is an irrelevant consideration: Commissioner of Taxation v Traviati (2012) 205 FCR 136 at [90] [Traviati]. 100 I do not regard Traviati (which must be read with the Full Court decision in Sanctuary Lakes) as assisting the correct construction of s 255-15(1). I accept that the focus of s 255-15(1) is on the particular circumstances of the debtor. However, it is not expressly or necessarily limited to the particular circumstances of the debtor. I do not consider it implicitly so limited. In any event, even if the section implicitly limited the considerations solely to the circumstances of the particular debtor, no narrow view should be taken of what is properly regarded as "the circumstances of your particular case". This is made clear by the decision in Elias at [50]. The applicant's "particular case" included that he became liable to a penalty by operation of provisions within Part 4-15 of the TAA because the company of which he was the sole director, Rediform, had failed to fulfil its obligations and it included that Rediform, through its tax agent and on instruction from the applicant, had secured "payment plans" which Rediform did not honour. 101 A consideration of Rediform's compliance history or history of non-compliance was not a "prohibited consideration" (Elias at [57]). It was accepted that the compliance history included the failure by Rediform to honour instalment or "payment plans". The fact that the statute required that regard be had to the circumstances of the particular case would not mean that the circumstances of a related case (assuming Rediform's non-compliance is not to be viewed also as part of the applicant's "particular case"), and the applicant's involvement in it, are prohibited from being taken into account. It might not be appropriate to take the circumstances of a related case into account as a matter of merit if those circumstances throw no light on the relevant issues so far as concerned the particular debtor; but that is a different question. Rediform was a company which had been at the relevant times under the apparent direction and control of the applicant. The instalment arrangements between Rediform and the Commissioner were entered into with the involvement of the applicant, as might be expected given he was its sole director. There was a logical connection between Rediform's compliance and an assessment of the applicant's likely compliance. It is common ground that the tax-related liabilities of the applicant flowed directly from Rediform's non-compliance with its obligations, including its failure to perform its own instalment arrangements. In my view, Rediform's compliance history was not a "prohibited consideration" and neither was the applicant's involvement in that history. Indeed, in my view, Rediform's compliance history and the applicant's involvement in that history was a part of the applicant's "particular case" which the Commissioner was required to consider by the terms of s 255-15(1). It is not necessary to decide whether or not that is the case; it is sufficient that his involvement was not a prohibited consideration. 102 The applicant submitted that the decision-maker only considered the fact of Rediform's non-compliance and did not consider the role of the applicant in Rediform's non-compliance or how the financial situation of Rediform might impact on the applicant's capacity to pay. In my view, that is to read the decision too narrowly, notwithstanding the brevity of the reasons provided. There was a wealth of material before the decision-maker indicating the role of the applicant in the affairs of Rediform, including his role in relation to the instalment plans which were ultimately not honoured. Before the First Decision and the Second Decision, the decision-maker had directly raised as a matter which was affecting his approach to the issues being discussed between them, the fact that he had "already unsuccessfully negotiated 2 payment arrangements with Mr Stojic for his company's debt in the past". The Second Proposal, which sought to address the matters raised in the First Decision, stated: In relation to the assertion that our client's past compliance history make [sic] present a risk to revenue, our client can only state that as a director of a companies [sic] involved in the construction industry, the receipt of monies was always dependent on the whims of the head contractor which were not always favourable to sub-contractors such as Mr Stojic. Further, we see little prejudice in the Deputy Commissioner at least granting Mr Stojic the opportunity to make payment on the debt, which can be reconsidered in the event of a default. 103 Counsel for the applicant made the submission that it was only the fact of Rediform's non-compliance which was taken into account by focussing only on the precise words used in the First and Second Decision. The applicant did not address the evidence which was before the decision-maker which showed, quite plainly, the extensive dealings which had occurred between the DCO, on the one hand, and Rediform, the applicant and their various representatives, on the other. 104 This was an approach which infringed the principle that the reasons of administrative decision-makers should be read in a common-sense manner and not be construed minutely with an eye keenly attuned to the perception of error: Minister for Immigration and Ethnic Affairs v Wu Shan Liang (1996) 185 CLR 259 at 271-2. What that principle requires is protean: more common-sense and greater practicality may be called for when reading decisions of a non-legally trained high volume administrative decision-maker not obliged by the common law or statute to provide reasons for a decision in respect of which there was no process akin to a hearing, than one would, for example, of a judicial officer sitting as an administrative decision-maker in a statutory tribunal such as the Copyright Tribunal of Australia delivering reasons pursuant to a statutory obligation after a full hearing with the assistance of counsel - see, for example: Endeavour Coal Pty Limited v Association of Professional Engineers, Scientists and Managers, Australia [2012] FCA 764 at [36], per Flick J. 105 Applying just a little common-sense in the present case, it is plain what the considerations were that were taken into account by the decision-maker: Rediform's history of non-compliance, including its failure to make payment to the Commissioner of the PAYG withholding amounts, the requests for and entering into of instalment "payment plans" with Rediform, the failure to honour those "payment plans" and the applicant's involvement in those events. Those matters were logically relevant to the decision-maker's statutory task of deciding whether or not to exercise the power in s 255-15(1) vis-à-vis the applicant and were not "prohibited considerations". 106 On the assumption (which I have rejected) that the decision-maker focussed solely on the fact of Rediform's non-compliance and did not take into account the applicant's involvement in those matters, the applicant submitted that "[i]t cannot have been the intention of the legislature that the very basis for the imposition of the director penalty should preclude a payment arrangement with respect to it". The non-compliance by the company of its obligation, which non-compliance gave rise to the penalty, did not, and does not, and was not shown to have been taken by the decision-maker in this case to, preclude the director the subject of a penalty from being allowed to pay by instalments under a s 255-15(1) arrangement. Whether a penalty applies and whether an instalment proposal should be agreed to are quite different questions. That does not mean that the company's non-compliance which gave rise to the penalty (or its compliance history more generally) has no relevance or is a "prohibited consideration" when it comes to considering whether to permit the director to pay the penalty in instalments. Those events may be entirely irrelevant or may count for or against exercising the power to permit a director debtor to pay by instalments. There is no warrant, having regard to the context, scope and purpose of the statute to regard the company's non-compliance which gave rise to the penalty, or its compliance history, as a prohibited consideration on the basis advanced. 107 This ground fails.

Ground 3 - Rigid adherence to policy 108 Ground 3 of the amended application was: The making of the Decision was an improper exercise of the power conferred by s 255-15 of the TAA in that that power was exercised in accordance with a policy without regard to the merits of the particular case. Particulars (i) The Decision was based upon the respondent's opinion that paragraph 87 of the Law Administration Practice Statement PS LA 2011/14 required that the proposed payment arrangement be rejected. (ii) The respondent's opinion particularised in (i) above prevented the respondent from having proper and genuine regard to the ability of the applicant to meet his obligations under the proposed arrangement. 109 This ground is based on ss 5(1)(e) and 5(2)(f) of the ADJR Act. Read together, these sections permit an aggrieved person to apply for an order for review of a decision on the basis that the decision-maker impermissibly exercised a discretionary power in accordance with a rule or policy without regard to the merits of the applicant's particular case. 110 It is uncontroversial that the Commissioner was entitled to have reference to the policy set out in PS LA 2011/14 in the exercise of his discretion under s 255-15(1): Elias at [34]. The substance of the applicant's submission was that, in declining to exercise the discretion under s 255-15(1), the Commissioner failed to give "proper and genuine" regard to the merits of the Second Proposal due to the DCO's incorrect belief that he was bound to refuse the proposal because the applicant had not proffered a "preferred security" in relation to the unpaid debt. In my view, that is not a correct characterisation of what occurred. 111 The applicant relied on a conversation between the DCO and the applicant's solicitor which had been separately recorded in file notes by the applicant's solicitor and the DCO and was the subject of affidavit evidence by the applicant's solicitor. A file note of a telephone conversation between the DCO and the applicant's solicitor on 8 June 2017, recorded the DCO as saying: "in accordance with PS LA 2011/14, security is required such as [a] registered first mortgage". This and the other accounts contained in the evidence can be read in two ways. On the one hand, they might be construed as indicating that, in the Second Decision, the DCO had concluded that he would not accept the Second Proposal in the absence of security also being offered (such as security in a form as identified at [87] of PS LA 2011/14). On the other hand, they are open to the construction that the DCO considered the terms of PS LA 2011/14 required him to refuse the instalment plan because security had not been offered. This latter view, if it had been held, would have been incorrect. 112 Paragraph [87] (which has been set out above) does not provide that an arrangement must not be entered into absent the provision of a preferred security. There is nothing in PS LA 2011/14 requiring the provision of a preferred security (or any security) as a condition to exercising the discretion under s 255-15(1). Paragraph [87] and PS LA 2011/14 more generally cannot be said to have required the Commissioner to reject the proposed payment arrangement, and nor does it appear from the terms of the Second Decision that the Commissioner thought that it did. 113 In my view, the more likely position is that the DCO was seeking to explain to the applicant's representative, after the Second Decision had been made, in effect that he considered the Second Proposal might be adequate if acceptable security were provided, not that he was bound by the policy to reject the Second Proposal because it did not offer security. The DCO had rejected two instalment proposals by Rediform which did not offer security without stating that he was bound to reject them for that reason and, in fact, without referring to security at all. The DCO granted Rediform two instalment plans without requiring, or even referring to, security. In the First Decision of 2 May 2017, the DCO did not refer to security which he would have done if he had then been operating on the (mistaken) assumption that the policy required him to reject the First Proposal for that reason. No good reason was advanced as to how the DCO might have thought, by the time of the Second Decision on 31 May 2017, that he was bound to reject the proposal by reason of the fact that security had not been offered in respect of it, but was apparently not so bound in the circumstances of any of the earlier proposals. 114 Although it is perhaps unnecessary to address, given I have concluded that the DCO did not consider he was bound by the policy to refuse the applicant's Second Proposal unless security was offered, I consider that the Commissioner had regard to the merits of the applicant's case. The Commissioner's reasons, as set out in the letter dated 31 May 2018 and by reference to the letter of 2 May 2017, make clear that he considered the applicant's particular circumstances in reaching his decision to refuse the Second Proposal. It is also clear that the DCO was familiar with the applicant's circumstances, given his involvement with the applicant and Rediform since around 30 November 2015. I do not accept that the Commissioner failed to have proper and genuine regard to either the applicant's particular circumstances, as expressly required by s 255-15(1), or to the merits of the Second Proposal. 115 For these reasons, this ground fails.

Conclusion 116 For the reasons set out above, the application is dismissed with costs as agreed or assessed. I certify that the preceding one hundred and sixteen (116) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Thawley.