IOOF Holdings Limited and Commissioner of Taxation Senior Member F D O'Loughlin 19 April 2013 Melbourne
[2013] AATA 239
Administrative Appeals Tribunal
ADMINISTRATIVE APPEALS TRIBUNAL )
)No: 2012/0578
Taxation Appeals Division )
Re: IOOF HOLDINGS LIMITED
Applicant
And: COMMISSIONER OF TAXATION
Respondent
Direction to Registrar
TRIBUNAL: Senior Member F D O’Loughlin
DATE: 29 April 2013
PLACE: Melbourne
To the Registrar:
Pursuant to s 43AA(1) of the Administrative Appeals Tribunal Act 1975, I direct that the decision made on 19 April 2013 be altered as follows:
1. replace the words s 46(3) in paragraph 38 with s 43(6).
...........................[sgd]................................
Senior Member F D O’Loughlin
[2013] AATA 239
| Division | TAXATION APPEALS DIVISION | |
| File Number(s) | 2012/0578 | |
| Re | IOOF Holdings Limited | |
| APPLICANT | ||
| And | Commissioner of Taxation | |
| RESPONDENT | ||
INTERLOCUTORY DECISION
| Tribunal | Senior Member F D O'Loughlin |
| Date | 19 April 2013 |
| Place | Melbourne |
The answer to the preliminary question:
For the purposes of undertaking its review of the Respondent’s deemed disallowance of the Applicant’s objection against the Respondent’s failure to make a private ruling concerning its claim for a deduction under section 716-405 in Part 3-90 of the Income Tax Assessment Act 1997 (Cth) (1997 Act), is it open to the Tribunal to apply the provisions of Part 3-90 of the 1997 Act before the amendments contained in the Tax Laws Amendment (2012 Measures No 2) Act 2012 (Cth)?
is no.
..................[sgd]....................................................
Senior Member F D O'Loughlin
TAXATION – Private Rulings – whether Applicant entitled to a ruling based on law that has been amended – whether the Applicant had an accrued right to a ruling based on law that has been amended – whether any accrued right abrogated by the terms of the amending legislation.
Legislation
Acts Interpretation Act 1901 (C’th)
Administrative Appeals Tribunal Act 1975 (C'th)
Income Tax Assessment Act 1997 (C’th)
Taxation Administration Act 1958 (C’th)
Tax Laws Amendment (2010 Measures No 1) Act 2010 (C’th)
Tax Laws Amendment (2012 Measures No 2) Act 2012 (C’th)
Cases
Abbott v The Minister for Lands [1895] AC 425
Continental Liqueurs Pty Ltd v G F Heublein and Bro. Incorporated (1960) 103 CLR 422
Esber v Commonwealth (1992) 174 CLR 430
G F Heublein and Bro. Inc v Continental Liqueurs Pty Ltd (1962) 109 CLR 153
Hall and Commissioner of Taxation [2006] AATA 360
JR Exports Pty Ltd v Australian Trade Commission (1987) 14 FCR 161
Lee v Secretary, Department of Social Security (1996) 68 FCR 491
Repatriation Commission v Keeley (2000) 98 FCR 108
REASONS FOR INTERLOCUTORY DECISION
Senior Member F D O'Loughlin
19 April 2013
This is the second preliminary decision[1] in substantive proceedings concerning a private ruling sought pursuant to the Administration Act[2] in relation to whether the Applicant was entitled to deductions in respect of rights to future income. The Applicant and the Commissioner have formulated a preliminary question that may assist in resolving the issues between them. That question is:
For the purposes of undertaking its review of the Respondent’s deemed disallowance of the Applicant’s objection against the Respondent’s failure to make a private ruling concerning its claim for a deduction under section 716-405 in Part 3-90 of the Income Tax Assessment Act 1997 (Cth) (1997 Act), is it open to the Tribunal to apply the provisions of Part 3-90 of the 1997 Act before the amendments contained in the Tax Laws Amendment (2012 Measures No 2) Act 2012 (Cth)?
[1]The first preliminary decision was that of 22 June 2012, [2012] AATA 378.
[2]Taxation Administration Act 1953 (C’th).
The preliminary question arises from events contemplated in the 22 June 2012 decision, namely that the Assessment Act[3] rules conferring deduction entitlements in respect of rights to future income[4] would be repealed, and repealed with retrospective effect. Rules conferring deduction entitlements in respect of rights to future income were introduced into Part 3-90 of the Assessment Act on 3 June 2010 by the 2010 Amending Act.[5] They were amended by the 2012 Amending Act,[6] which commenced on 29 June 2012.
[3]Income Tax Assessment Act 1997 (C'th).
[4]Assessment Act: s 716-405.
[5] Tax Laws Amendment (2010 Measures No 1) Act 2010 (C’th).
[6] Tax Laws Amendment (2012 Measures No 2) Act 2012 (C’th).
As noted in the 22 June 2012 decision:
(a)in the substantive proceedings:
(1)the Applicant seeks a review of a deemed decision to disallow an objection that was made following the Commissioner’s failure to issue a private ruling;
(2)the subject matter of the private ruling application is the applicability of s 716-405 of the Assessment Act upon the Applicant’s purchase of shares in Australian Wealth Management Limited and whether or not rights pursuant to a variety of contracts are rights to future income in respect of which deductions were once allowable over time; and
(3)the Applicant wants the Tribunal’s substantive decision to take effect retrospectively, pursuant to s 43(6) of the AAT Act[7], to counter the effect of the then anticipated legislation that would have retrospective effect;
[7]Administrative Appeals Tribunal Act 1975 (C'th).
(b)on 25 November 2011 the Assistant Treasurer and Minister for Financial Services and Superannuation announced that:
(1)the legislation creating the deduction entitlement in respect of rights to future income would be amended with retrospective effect from 31 March 2011; and
(2)taxpayers who had the benefit of private rulings issued before 31 March 2011 were not to be affected by the changed legislation;
(c)on 24 May 2012 the Government introduced Tax Laws Amendment (2012 Measures No 2) Bill 2012 (the Bill) to give effect to this proposal;
(d)the Bill had not been passed by both houses of the Parliament at the time of the 22 June 2012 decision;
(e)to assist its claims for a decision of the Tribunal to have retrospective effect in the substantive proceedings, the Applicant sought, and continues to seek, a direction from the Tribunal pursuant to s 37(2) of the AAT Act that the Respondent provide to it, and to the Tribunal, three categories of documents;
(f)the Respondent resists this direction;
(g)the Applicant does not have the benefit of a private ruling issued before 31 March 2011 and contended, and continues to contend, that it should have such a ruling for reasons noted in the 22 June 2012 decision, namely:
(1) it applied for a private ruling on 30 December 2010 (a request that the Respondent only accepts was received by the Australian Taxation Office (ATO) on 10 January 2011);
(2) the request was a routine or straight forward application of the example given in the explanatory memorandum to the Bill that, when enacted, became the 2010 Amending Act that introduced s 716-405 of the Assessment Act and the private ruling ought to have been given;
(3) the Respondent indicated to the Applicant that the private ruling would be processed within 28 days; and
(4) the private ruling ought to have been processed within 28 days but was not;
(h)to get to the stage of being able to make the substantive application, the Applicant activated the procedures allowing an objection, a deemed objection decision and a review application to the Tribunal;
(i)because of the timing of events, the Applicant contended, and continues to contend, that it is entitled to the private ruling it sought and an order from the Tribunal pursuant to s 43(6) of the AAT Act that that private ruling take effect from a date prior to 31 March 2011;
(j)in support of the retrospective aspect of the contention above, the Applicant contended, and continues to contend, that the delay within the ATO and the failure to make the private ruling that should have been made was the result of decisions made within the ATO not to issue private rulings in the knowledge that the topic of deductions in respect of rights to future income was under review and that retrospective legislation was a possible outcome;
(k)with a view to making good the contention in (i) above, the Applicant has sought, and continues to seek, a direction from the Tribunal pursuant to s 37(2) of the AAT Act that the Respondent produce three categories of documents, namely:
1.The Commissioner of Taxation's (the Commissioner) policy or policies on providing private rulings to Taxpayer's (sic) in relation to the application of the rights to future income provisions from the time that the Tax Laws Amendment (2010 Measures No 1) Act 2010 (Cth) (Amendment Act) (that is, 3 June 2010) was enacted until the present, including but not limited to directives, policy documents, internal email or any other documents.
2.Correspondence and/or any other document recording such correspondence, including but not limited to records (written or electronic) of phone calls, between the Commissioner and the Commonwealth Department of the Treasury and Finance and between the Commissioner and Board of Taxation about:
(a) private rulings made in relation to the rights to future income provisions pursuant to the Amendment Act; and
(b) the private ruling application made by IOOF Holdings Limited 30 December 2010 (the Private Ruling Application).
3.Notes, correspondence and/or any other document in relation to the Private Ruling Application, including but not limited to records of phone calls or consideration relevant to of technical aspects of the application.
The 22 June 2012 decision denied the Applicant’s request for a direction that the documents be produced at a time when there had been an announcement that the law would be amended but before it had been amended.
Following the 22 June 2012 decision, s 716-405 was amended in terms consistent with those announced; including the same transitional terms, which operate retrospectively.
The Applicant has re-agitated its request for the direction that the Commissioner provide the abovementioned documents to the Tribunal.
The contentions in relation to the preliminary question
The Applicant contends that :
2… the question raised for preliminary determination is whether, given the enactment of the … [2012 Amending Act], it is open to the Tribunal, regardless of the facts, to find that the Commissioner should have issued a favourable ruling to IOOF [and submits] that it is ... for the following two reasons
(a)[the Applicant’s unaffected accrued right contention] as a result of applying for a private binding ruling before 31 March 2011, and appealing to the Tribunal before the Amending Legislation was enacted, IOOF has an accrued right for this matter to be determined based on the law as it stood prior to the enactment of the Amending Legislation; and/or
(b)[the Applicant’s transitional provision contention] under the transitional provisions of the Amending Legislation, the Tribunal can rule in favour of IOOF based on the law before the Amending Legislation.
[Words in brackets added]
The Respondent rejects the Applicant’s contentions.
The Applicant’s unaffected accrued right contention
The Applicant’s expansion of its unaffected accrued right contention is:
5... [By taking the steps to bring the matter to the Tribunal] .., the Applicant effectively ensured that certain rights accrued to the Applicant, being:
a.Upon lodging the Private Ruling Application pursuant to section 359-10 of Schedule 1 of the Tax Administration Act 1953, IOOF had a right to a private ruling made according to law[8] and the Commissioner had the obligation to make the private ruling according to law. When IOOF subsequently gave the Commissioner notice requiring him to make the ruling under section 359-90, it was merely enforcing the rights that had already been created upon lodging the Private Ruling Application.
[8]Administration Act: Schedule 1, s 359-35(1).
b.Once the Applicant objected to the Commissioner’s failure to make a private ruling, the Applicant had a right under section 14ZY(1A) of the Tax Administration Act 1953 to require that the Commissioner make a ruling in either the same terms as the draft ruling lodged with the objection or make a different ruling. Again, the Commissioner had an obligation to make the private ruling according to law.
c.The Applicant has appealed to the Tribunal pursuant to section 14ZZ of the Tax Administration Act 1953. The Applicant’s appeal was lodged in the approved form within the time limits imposed by the TAA 1953. Section 14ZZ gives a taxpayer a right to have a reviewable objection decision of the Commissioner reviewed by the Tribunal or the Federal Court.
[Words in brackets added]
and
14… IOOF therefore submits that it has –
·accrued rights under section 359-35 of Sch. 1 and section 14ZY(1A) of the Tax Administration Act 1953 in relation to the Commissioner making the private ruling based on the law at the time of lodging the Private Ruling Application and the objection respectively.
·an accrued right under section 14ZZ of the Tax Administration Act 1953 from the time that it applied to the Tribunal for a review of the Commissioner’s objection decision for the Tribunal to review the decision and, if it sees fit, make the orders sought in that application, based on the law as it applied when the decision was being considered. In this regard, section 43(1) of the AAT Act confers all the powers and discretions of the original decision maker upon the Tribunal.
…
and there is no intent that these rights be affected by the 2012 Amending Act with retrospective effect because the 2012 Amending Act and the Assessment Act as amended are:
17… silent about taxpayers in a range of situations where, although no positive ruling issued before 31 March 2011, a ruling had been applied for and should have been granted before that date.
The Commissioner’s response to these contentions is that the Applicant has successively enjoyed rights to take steps provided for under the legislation that have been exercised and exhausted, whereupon new entitlements to take further steps arose and when those steps were taken new rights arose.
In the Commissioner’s submission, whatever rights the Applicant has before the Tribunal, those rights are separate and distinct from any right the Applicant may have had to any entitlement to an ongoing operation of Part 3-90 of the Assessment Act, as it stood before the effect of the 2012 Amending Act.
STATUTORY REGIMES IN ISSUE
At the heart of the present controversy are three sets of rules that, if not interconnected, affect each other:
(a)the Interpretation Act[9] rules regulating the effect of an amending Act on the Act amended;[10]
(b)the Administration Act rules concerning rulings;[11] and
(c)the Assessment Act rules which impose taxation obligations and/or confer taxation benefit entitlements.[12]
[9] Acts Interpretation Act 1901 (C’th).
[10]Interpretation Act: ss 2 and 7.
[11]Administration Act: Schedule 1 Part 5-5 Divisions 357 to 360 (the Rulings Rules).
[12]The Taxing Rules.
Interpretation Act rules regulating the effect of amending Acts
Subject to contrary intention,[13] an amending Act does not affect rights or privileges that have accrued under the Act[14] before the amendments; or legal proceedings and remedies in respect of those rights and privileges.[15]
[13]Interpretation Act: s 2(2).
[14]Interpretation Act: s 7(2)(c).
[15]Interpretation Act: s 7(2)(e).
What is a right that might be preserved by s 7(2) of the Interpretation Act?
For an entitlement to constitute an accrued right under an enactment attracting the terms of s 7(2), the entitlement must be more than a capacity to pursue an entitlement.[16] Steps must have been taken to activate an entitlement. If a person takes the steps provided for in the legislation creating the entitlement so as to enjoy the entitlement, and prosecutes further steps to redress a failure to enjoy that entitlement, the entitlement becomes a substantive right.[17] And absent intention to the contrary, that substantive right is a right to pursue the entitlement based on, and in accordance with, the law at the time of accrual of the right.[18]
[16]Abbott v The Minister for Lands [1895] AC 425. See also JR Exports Pty Ltd v Australian Trade Commission (1987) 14 FCR 161 at p 163-165 per Fox J.
[17]Esber v Commonwealth (1992) 174 CLR 430 at 440 per Mason CJ Deane, Toohey and Gaudron JJ.
[18]Repatriation Commission v Keeley (2000) 98 FCR 108 at p 123 per Lee and Cooper JJ.
These Interpretation Act rules are in many respects, if not wholly, a statutory manifestation of the presumption that the legislature does not intend to abrogate accrued rights absent something that displaces that presumption.[19]
[19] See, for example, Lee v Secretary, Department of Social Security (1996) 68 FCR 491 at p 507 per Cooper J.
The Rulings Rules
For present purposes, viewed in isolation, entitlements and rights created by the Rulings Rules have not been amended. That is not, however, the end of the matter given the inter relationship between those rules and the Taxing Rules.
There are features of the Ruling Rules which need to be noted.
(a)A private ruling is a determination of the way in which the Commissioner considers the law applies to a specified scheme.[20]
[20]Administration Act: Schedule 1, s 359-5(1).
(b)All taxpayers have an entitlement to seek a private ruling from the Commissioner if they are participants in or affected by a scheme in respect of which the Commissioner can make rulings.[21]
[21]Administration Act: Schedule 1, s 359-10. It is also implicit in the conferral of the power on the Commissioner to make private rulings - Administration Act: s 359-5(1).
(c)Subject to prescribed exceptions, the Commissioner is obliged to comply with a request for a private ruling and make a ruling.[22] If a ruling is not made[23] within 60 days of application, or such extended period provided for,[24] taxpayer applicants enjoy entitlements to require the Commissioner to make a ruling.[25]
[22]Administration Act: Schedule 1, s 359-35.
[23]In this matter, the Commissioner’s power to decline to make a ruling has not been exercised. Accordingly, apart from in this footnote, these Reasons do not refer to either the Commissioner declining to make a ruling or the consequences of him declining.
[24]Administration Act: Schedule 1, s 359-50(2).
[25]Administration Act: Schedule 1, s 359-50(1).
(d)If the Commissioner fails to make a ruling within 60 days (as extended if applicable) and the taxpayer applicant has given the required notice, and if the Commissioner continues to fail to make a ruling within a further 30 days, the taxpayer applicant is entitled to object against the Commissioner’s failure.[26] Such objections must be accompanied by a draft of the ruling sought.[27] Objection entitlements also exist for Applicants for rulings who are dissatisfied with a ruling made by the Commissioner.[28]
(e)The Commissioner is obliged to decide whether to allow or disallow objections.[29] Where the objection is against a failure to make a ruling, the Commissioner is obliged to make a ruling in the terms of the draft provided with the objection or to make a different ruling.[30]
(f)In a similar vein to the Commissioner’s failures to make rulings, if the Commissioner does not make an objection decision within the prescribed times,[31] he is deemed to have disallowed the objection.[32] If a taxpayer applicant is dissatisfied with that deemed decision then the taxpayer applicant can apply to the Tribunal to have the deemed objection decision reviewed.[33]
(g)In circumstances where the Commissioner has not made a ruling and an objection decision, the role of the Tribunal is to consider and determine whether the taxpayer applicant is entitled to a private ruling in the same terms as set out in the draft ruling, which must accompany the notice of objection,[34] or whether a different ruling ought be made.
(h)The end achieved by (c) to (g) is that a taxpayer applicant for a ruling has an entitlement to, and when taken up a right to, dispute both a known disagreement with the Commissioner (where the Commissioner issues a ruling in terms the taxpayer applicant disputes) and an assumed disagreement with the Commissioner (where the Commissioner fails to make a ruling). A taxpayer applicant is, for all practical purposes, allowed the same rights of disputation and carries the same burden to succeed in both situations by showing that the ruling made should have been made differently.[35] In a practical sense, this is achieved by demonstrating that the proper ruling is the ruling sought.
(i)In the context of a failure to rule and to determine an objection to that failure, at the stage of a Tribunal hearing there is no ruling in existence. Accordingly, whatever decision is made on the Tribunal’s review, it does not have the effect of altering the terms of a pre-existing ruling.[36] As such, there is no prospect of the Tribunal making a decision that alters a ruling and takes effect from the date of the earlier ruling. If a ruling emerges from the Tribunal’s consideration of a deemed decision to disallow an objection to a failure to make a ruling, it would be the first time such a ruling exists.
(j)The mere lodgement of a ruling request neither stops other taxpayer obligations arising nor prevents the Commissioner from exercising his powers.[37] Making a ruling request, therefore, does not confer any entitlement or right to any particular operation of the Taxing Rules.
(k)The Commissioner may revise a private ruling of his own volition.[38]
(l)The entitlement to apply for a ruling is an entitlement to seek a ruling as to the manner in which the Taxing Rules apply in relation to real or posited facts. The laws which are the subject of the ruling are the laws operative at the time the real or posited facts attract the Taxing Rules. And where the facts produce effects which are expected to occur or attract the Taxing Rules in the future, the law as it stands at the time of making a ruling is assumed to continue.
(m)A ruling stops having effect if the Taxing Rules change.[39] Accordingly, making a ruling does not bind the outcome for the taxpayer applicant in relation to the posited facts forever. If the legislature changes the Taxing Rules in a way that does not extend or preserve the pre-existing Taxing Rules for the recipient of a ruling, then the effect of the ruling comes to an end.
[26]Administration Act: Schedule 1, s 359-50(3).
[27]Administration Act: Schedule 1, s 359-50(4).
[28]Administration Act: Schedule 1, s 359-60.
[29]Administration Act: s 14ZY(1).
[30]Administration Act: s 14ZY(1A).
[31]Administration Act: s 14ZYB(1).
[32]Administration Act: s 14ZYB(2).
[33]Administration Act: s 14ZZ.
[34] See Administration Act: Schedule 1, s 359-50(3); and Administration Act: ss 14ZY(1A) and 14ZZK.
[35] See Administration Act: s 14ZZK.
[36]c.f. Administration Act: Schedule 1, s 359-70.
[37]See Administration Act: Schedule 1, s 357-125.
[38]See Administration Act: Schedule 1, s 359-55(3).
[39]See Administration Act: Schedule 1, s 357-60(1) (Note 2).
It follows that in the present matter, and assuming the posited facts were such that the Applicant was entitled to the deductions in respect of what it contends are rights to future income, had the Commissioner made a ruling after 31 March 2011, the effect of the 2012 Amending Act would have been to render that ruling inoperative. Had the ruling been made on or before 31 March 2011, then it would have continued in operation after the change in the Taxing Rules.
The Taxing Rules
In the present matter the change in the Taxing Rules made by the 2012 Amending Act affected taxpayers with entitlements, or rights, to deductions in respect of rights to future income. Those entitlements, or rights, existed until the 2012 Amending Act became effective. Until that time, those rights were an accrued right. By the terms of the 2012 Amending Act, the legislature determined that those rights would be withdrawn and replaced by three sets of rules, the pre rules, the interim rules and the prospective rules. These changes were subject to one important proviso: namely that the pre-existing Taxing Rules, and the rights conferred by them, would continue to apply to, and be enjoyed by, those taxpayers who had private rulings issued before 31 March 2011.
RESOLVING THE COMPETING UNAFFECTED ACCRUED RIGHTS CONTENTIONS
In this matter the Rulings Rules, and any entitlements which they create, and the Rulings Rules’ interrelationship with the Taxing Rules and the manner in which the Taxing Rules were amended by the 2012 Amending Act all affect the scope of the Interpretation Act rules.
There are two different entitlements, conferred by two statutes:
(a)first, there was until 31 March 2011, and after 31 March 2011 in some circumstances, a right conferred by the Assessment Act to a deduction in respect of rights to future income; and
(b)second, entitlements, and if acted upon rights, conferred by the Administration Act to seek private rulings, to have private ruling decisions made by the Commissioner, or the absence of such decisions, the subject of an objection process and to have objection decisions reviewed by the Tribunal,
which overlap because rights of the former nature inform the outcome of the pursuit of rights of the latter nature. The two sets of rights are intrinsically linked.
Absent considerations of intended retrospectivity of the 2012 Amending Act, there is some force to the Applicant’s contention that it is entitled to pursue, and has an accrued right to, a ruling based on the Taxing Rules as operative at a date before 31 March 2011: namely the Taxing Rules that were operational at the time it took steps pursuant to its entitlement to seek a ruling; at the time it filed its objection; at the time when its objection was deemed to have been disallowed; and at the time it activated the current application in the Tribunal. These steps take the Applicant’s position beyond that of the Appellant in Abbott v The Minister for Lands[40] and are properly regarded as steps to take advantage of the entitlement.
[40][1895] AC 425.
On lodging its application with the Tribunal, if not before, the Applicant had the substantive right to have its application determined by the Tribunal[41] and, absent contrary intention in amending legislation, to have that right determined in accordance with the law as it stood when the right accrued.[42]
[41]Esber v Commonwealth (1992) 174 CLR 430 at 440 per Mason CJ Deane, Toohey and Gaudron JJ.
[42]Repatriation Commission v Keeley (2000) 98 FCR 108 at p 123 per Lee and Cooper JJ.
In the case of a ruling applicant who has the benefit of a ruling (albeit not a ruling that was wanted), the fact that the result of the objection and subsequent disputation processes alters the earlier ruling rather than replacing it[43] suggests that upon a review the law at the earlier time is to be the applied.
[43]See Administration Act: Schedule 1, s 359-70.
In the case of a ruling applicant whose application to the Tribunal (or Court) arises as a result of rights to object upon the Commissioner failing to rule and failing to determine an objection, the ruling system provides the same remedy. Such an applicant is conferred rights to object and have deemed objection decisions reviewed, preventing frustration of the system by inaction on the part of the Commissioner, and is intended to be afforded the same rights as an applicant who is issued a ruling.
The Commissioner’s contention that there was no accrued right to pursue a ruling based on the Taxing Rules as they were before the effect of the 2012 Amending Act, and that the Applicant had a series of rights that were exhausted and, effectively, replaced by the new rights as the steps involved in the history to this matter were taken; does not have regard for the context in which the Rulings Rules operate. The Rulings Rules are the process by which taxpayer applicants can obtain certainty as to the operation of the Taxing Rules in particular circumstances. Of themselves, and without operation in the context of the Taxing Rules, they are devoid of practical application.
It is not necessary to resolve this aspect of the impasse between the Applicant and the Respondent in this matter because the existence of an accrued right is one of two propositions that need to be resolved favourably for the Applicant if it is to succeed in securing an affirmative answer to the preliminary question.
Retrospective Intent
The second, and necessary, limb to the Applicant’s unaffected accrued rights contention is that the 2012 Amending Act did not affect any accrued rights that it had.
The Applicant:
(a)accepts that if amending acts have transitional provisions that exhaustively deal with possible factual circumstances, then there is no room for s 7(2) of the Interpretation Act to operate; and
(b)contends that if Parliament intended to affect rights that have accrued under a statute, then the 2012 Amending Act which would bring that about must show a clear intention to do so.
Both of these positions are consistent with authority.[44]
[44]Continental Liqueurs Pty Ltd v G F Heublein and Bro. Incorporated (1960) 103 CLR 422 at 427 per Kitto J and G F Heublein and Bro Inc v Continental Liqueurs Pty Ltd (1962) 109 CLR 153 at 161-162 per Dixon CJ and Taylor and Windeyer JJ.
The Applicant relies on the decision of the Tribunal in Hall and Commissioner of Taxation[45] to the effect that the 2012 Amending Act did not cover the field of possibilities in not providing for an outcome for taxpayers who had lodged objections.
[45][2006] AATA 360.
The decision in Hall does not deal with analogous circumstances as contended by the Applicant. If it did, it ought be followed, not just for the sake of consistency but also because it is soundly based. In Hall, the Tribunal needed to deal with a circumstance of a change, and relocation[46] of rules concerning the processing of rulings which did not cater for all circumstances, namely the circumstance of a taxpayer with an undetermined application to the Tribunal for a review of a private ruling. There were, in a similar vein, no provisions in the new law that dealt with migration of pending objections or appeals. In those circumstances, the Tribunal held that the earlier, and repealed, rules for determining the review application ought apply.
[46]From Administration Act: Part IVAA to Administration Act: Schedule 1, Part 5-5, Divisions 357 to 360.
In the present matter, the transitional rule together with the three alternative sets of post-amendment rules, exhaust the possibilities. Either the taxpayer had a ruling or it did not. The rule covers all alternatives.
This is a case where any accrued rights analysis is displaced by the terms of the 2012 Amending Act. It is not a case of accrued rights surviving the effect of the 2012 Amending Act.
The Applicant’s transitional provision contention
The Applicant’s transitional provision contention, put as an alternative, is that:
24.… it is open to the Tribunal to find that IOOF comes within Item 51 of the Amending Legislation, in which case it would be entitled to have the objection to the disallowance of the ruling application determined in accordance with the law before the Amending Legislation.
25.Subsection 43(6) of the AAT Act provides that unless the Tribunal otherwise orders, the Tribunal’s decision has effect, or will be deemed to have effect, from the date of the original decision. Under section 43(6) of the AAT Act the Tribunal has the power to order that a decision is to take effect from a date other than the date of the original decision, including a date before the original decision (in this case, before 31 March 2011). Therefore, under the transitional rules, it is open to the Tribunal to treat the provisions prior to the Amending Legislation as applicable, for the following reasons -
(a)If the Tribunal ultimately orders that the Respondent’s objection decision be set aside and substituted with a decision to issue a favourable private ruling that is deemed to have effect before 31 March 2011, Item 51 of the Amending Legislation provides that Item 50 (being the general application provisions) does not affect the effect of a ruling that was issued before 31 March 2011.
(b)Therefore, the laws to be applied in deciding whether or not to issue a ruling, if that ruling is to be deemed to have effect before 31 March 2011, must be the law that was in existence before 31 March 2011. The Amending Legislation does not apply to such a ruling by virtue of Item 51.
[Reference omitted]
…
Here the question is, did the 2012 Amending Act intend to abrogate s 7(2) of the Interpretation Act and common law principles? The right to a deduction was removed by the 2012 Amending Act. A single criterion was adopted by it to differentiate between those who continued to be entitled to deductions and those who did not, the existence of a private ruling having been issued.
The Applicant’s contentions are circular. They gloss over the structure of s 46(3) of the AAT Act. The first task of the Tribunal is to make its decision. The date of effect of that decision is then to be determined. The Applicant’s contention is that the date of effect of a decision informs, if not directs, the decision to be made as the first step in the process. Such a contention is not supported by s 46(3) of the AAT Act.
Decision
For the foregoing reasons, the answer to the preliminary question is: No.
| I certify that the preceding 39 (thirty nine) paragraphs are a true copy of the reasons for the interlocutory decision herein of Senior Member F D O’Loughlin |
...............[sgd]........................................................
S Herath, Associate
Dated 19 April 2013
| Date of hearing | 29 October 2012 |
| Counsel for the Applicant | Mr Leslie Glick SC with Mr Michael Flynn |
| Solicitor for the Applicant | Mr Aldrin De Zilva – Deloitte Lawyers Pty Ltd |
| Counsel for the Respondent | Mr Mark Moshinsky SC with Ms Melanie Baker |
| Solicitor for the Respondent | Ms Suzanne Singh – ATO Legal Services Branch |
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