Marwood and Secretary, Department of Agriculture
[2015] AATA 594
•14 August 2015
Marwood and Secretary, Department of Agriculture [2015] AATA 594 (14 August 2015)
Division
GENERAL DIVISION
File Number(s)
2014/4592
Re
Jason Marwood
APPLICANT
And
Secretary, Department of Agriculture
RESPONDENT
DECISION
Tribunal Deputy President F J Alpins
Date 14 August 2015 Place Melbourne The decision under review is affirmed.
..... [sgd]...................................................................
Deputy President F J Alpins
TAXATION – income tax – whether taxpayer entitled to tax offset under subdivision 385-J (repealed) of Income Tax Assessment Act 1997 (Cth) – conservation tillage offset – Secretary of Department of Agriculture refused to issue Research Participation Certificate – not satisfied that taxpayer completed conservation tillage survey at any time during income year – taxpayer completed survey after income year ended – whether any power or discretion by which Secretary or Tribunal could extend time within which to complete survey – relevance of statements made in approved application form inconsistent with statutory provisions
Legislation
Administrative Appeals Tribunal Act 1975 (Cth) s 43
Clean Energy (Consequential Amendments) Act 2011 (Cth)
Clean Energy Legislation (Carbon Tax Repeal) Act 2014 (Cth), Sch 3 s 6
Income Tax Assessment Act 1997 (Cth) ss 385-175, 385-180, 385-185, 385-190, 385-195, 385-205, 385-215, 385-225, 385-230, 385-235; Sch 1 ss 388-50, 388-55
Cases
Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (2009) 239 CLR 27
Allina Pty Ltd v Federal Commission of Taxation (1991) 28 FCR 203
Aussie Vic Plant Hire Pty Ltd v Esanda Finance Corporation Ltd (2008) 232 CLR 314
Australian Fisheries Management Authority v Graham (2003) 127 FCR 436
Beesly v Hallwood Estates Ltd [1960] 2 All ER 314
BHP Billiton Direct Reduced Iron Pty Ltd v Deputy Commissioner of Taxation (2007) 99 ALD 149
Commissioner of Taxation v Consolidated Media Holdings Ltd (2012) 250 CLR 503
Considine v Citicorp Australia Ltd [1981] 1 NSWLR 657
Drake v Minister for Immigration and Ethnic Affairs (1979) 2 ALD 60
Federal Commissioner of Taxation v Wade (1951) 84 CLR 105
Green v Daniels (1977) 13 ALR 1
Humane Society International Inc v Minister for Environment and Heritage (2003) 126 FCR 205
IW v City of Perth (1997) 191 CLR 1
Khoury v Government Insurance Office (NSW) (1984) 165 CLR 622
O’Grady v Northern Queensland Co Ltd (1990) 169 CLR 356
Port of Brisbane Corporation v Commissioner of Taxation (2004) 140 FCR 375
Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355
Re Aston and Secretary, Department of Primary Industry (1985) 8 ALD 366
Re Brian Lawlor Automotive Pty Ltd and Collector of Customs (New South Wales) (1978) 1 ALD 167
Re Drake and Minister for Immigration and Ethnic Affairs (No 2) (1979) 2 ALD 634
Re Shortis and Secretary, Department of Community Services and Health (1991) 23 ALD 396
Saeed v Minister for Immigration and Citizenship (2010) 241 CLR 252
Thiess v Collector of Customs (2014) 250 CLR 664
Travelex Ltd v Commissioner of Taxation (2010) 241 CLR 510
Secondary Materials
Clean Energy (Consequential Amendments) Bill 2011 Explanatory Memorandum
Clean Energy (Consequential Amendments) Bill 2011 Revised Explanatory Memorandum
Macquarie Dictionary (6th ed, Macquarie Library, 2013)
Oxford English Dictionary (2nd ed, Oxford University Press, 2013, <ww.oed.com>)
REASONS FOR DECISION
Deputy President F J Alpins
14 August 2015
INTRODUCTION
This is an application for review of a decision made by the respondent, the Secretary of the Department of Agriculture (the “Secretary”), to refuse an application made by the applicant, Mr Jason Marwood, under s 385-185 of the Income Tax Assessment Act 1997 (Cth) (the “Act”) for the issue of a Research Participation Certificate to him under s 385-190 of the Act.
The decision under review bears upon Mr Marwood’s entitlement to a tax offset, called a “conservation tillage offset”, for the 2013-14 year of income. During that income year, taxpayers were entitled under s 385-175 of the Act to such a tax offset if, amongst other things, the Secretary had issued such a certificate to them for that income year. The Secretary was required to do so if, amongst other things, he was “satisfied that the [taxpayer] has, at any time during the income year, completed a conservation tillage survey”.
The essential issue in this case is whether there is any basis upon which a certificate might be issued to Mr Marwood despite his failure to complete such a survey within the statutory time limit.
LEGISLATION
Legislative history
The provisions to which I have referred were contained in subdivision 385-J of the Act (ss 385-175 - 385-235) of the Act, which was inserted in the Act by the Clean Energy (Consequential Amendments) Act 2011 (Cth). As was explained in the Explanatory Memorandum to the relevant Bill (and the Revised Explanatory Memorandum), the provisions were inserted “to provide a conservation tillage offset ... for certain new depreciating assets used in conservation tillage farming practices” (para 3.1) which the taxpayer started to use or had installed ready for use between 1 July 2012 and 30 June 2015 (para 3.10). Commensurately, the offset was to be claimable in the 2012-3, 2013-14 and 2014-15 income years (para 3.10).
The conservation tillage offset was said to form part of the “Carbon Farming Futures program ... to help farmers and landholders benefit from carbon farming ... [and to] support research, measurement approaches and action on the ground to reduce emissions or store carbon, including support for conservation tillage equipment” (para 3.3 of the Explanatory Memorandum). That program in turn formed part of the Australian Government’s “Clean Energy Future Plan” (see para 3.3).
It is instructive to note that the purpose of the Research Participation Certificate (the “certificate”) provided for in subdivision 385-J of the Act was explained in the Explanatory Memorandum as follows:
“A taxpayer will not be entitled to claim a [conservation tillage offset] unless they hold a Research Participation Certificate evidencing that they have participated in research into the carbon sequestration properties of soil. Taxpayers will meet this participation requirement by filling out a survey.
...
...
The Research Participation Certificate requirement ensures that the conservation tillage offset supports the Government’s research efforts and the development of the methodologies in respect of the carbon sequestration properties of soil. This will help to identify opportunities to reduce emissions and to generate Australian Carbon Credit Units under the Carbon Farming Initiative.
...
The information collected via the survey will be used to create a data set for further agricultural research, for research into soil carbon sequestration, and for useful information on the sustainability and impacts of farming practices.” (paras 3.11, 3.27 and 3.30)
Subdivision 385-J was repealed by Sch 3 to the Clean Energy Legislation (Carbon Tax Repeal) Act 2014 (Cth) (the “Repeal Act”), which commenced on 18 July 2014 and was expressed to have effect with respect to assessments for the 2014-2015 income year and later years. The repealed provisions continue to apply to assessments for the 2012-13 and 2013-14 income years (s 6 of Sch 3). Despite their repeal, for the sake of ease of expression I shall nevertheless refer to the provisions of subdivision 385-J, which as I indicate below applied at all material times in respect of Mr Marwood’s application for the issue of a certificate, in the present tense.
Legislative provisions
Section 385-175(1) of the Act provides that a taxpayer is entitled to a tax offset under that provision, called a “conservation tillage offset”, for an income year in respect of a depreciating asset if the various conjunctive requirements enumerated in that provision are satisfied. The relevant income years in respect of which entitlement to such a tax offset might arise are specified in s 385-175(1)(b) as being the 2012-13 income year, the 2013-14 income year and the 2014-15 income year. The amount of the conservation tillage offset is 15% of the cost of the cost of the depreciating asset (s 385-180 of the Act).
Section 385-175(1) requires first that the asset in question is an “eligible no-till seeder” (s 385-175(1)(a)), that term being defined in s 385-235 of the Act). The taxpayer must “at a particular time during the income year” either “start to use the asset to carry on a primary production business” or “have the asset installed ready for use to carry on” such a business (s 385-175(1)(c)) and must at that time “hold” the asset (s 385-175(1)(d)). The time mentioned in para (c) of s 385-175(1) must not be before 1 July 2012 or after 30 June 2015 (s 385-175(1)(e)(i) and (ii)).
More relevantly, s 385-175(1)(f) requires that “the Agriculture Secretary has issued a Research Participation Certificate to you under section 385-190 for the income year”.
Section 385-185(1) of the Act provides for applications to be made for the issue of a certificate to an entity for an income year under s 385-190. The application must be writing and in a form approved, in writing, by the Secretary (s 385-185(2)).
Section 385-190 provides for the issue of such certificates, in the following terms:
“(1) The *Agriculture Secretary must issue a written certificate to an entity for an income year if:
(a) the entity has made an application under section 385‑185 in relation to the income year; and
(b) the Agriculture Secretary is satisfied that the entity has, at any time during the income year, completed a conservation tillage survey; and
(c) the time mentioned in paragraph (b) is not:
(i) before 1 July 2012; or
(ii) after 30 June 2015.
(2) A certificate under this section is to be known as a Research Participation Certificate.
(3) For the purposes of this section, a conservation tillage survey is a survey:
(a) conducted by the *Agriculture Secretary; and
(b) that relates to:
(i) farming practices; and
(ii) climate change.
(4) For the purposes of this section, an entity completes a conservation tillage survey if the entity:
(a) fills up and supplies, in accordance with the instructions set out in the relevant survey form, the information specified in the survey form; and
(b) gives the filled‑up survey form to a person specified in the instructions.”
(Bold emphasis in original; underlined emphasis added.)
The Secretary is required to give the Commissioner of Taxation (the “Commissioner”) written notice of the issue of a certificate to any entity within 30 days after it is issued, which must specify, amongst other things, the income year to which the certificate relates (s 385-205(1), (3)); the notice must be accompanied by a copy of the certificate concerned (s 385-205(4)). (If requested to do so by the Commissioner, the Secretary may certify that a specified asset is an eligible no-till seeder (s 285-225(1)).)
If the Secretary decides not to issue a Research Participation Certificate to an applicant for an income year, he or she must give the applicant written notice of the decision (including reasons for the decision) (s 385-195; see also s 385-210)). Section 385-215 of the Act provides for applications to be made to this Tribunal for review of such decisions.
Section 385-230 of the Act provides that the Secretary may, by writing, delegate his functions and powers under subdivision 385-J to employees in the Department of Agriculture.
Although, as I indicate below, Mr Marwood’s application for the issue of a certificate preceded (by eight days) the commencement of Sch 3 to the Repeal Act and thus the repeal of subdivision 385-J of the Act, it is nevertheless instructive to note that Sch 3 to that Act includes a transitional provision with respect to the 2013- 2014 income year, being that s 385-190(1)(c)(ii) (and s 385-175(1)(e)(ii)) apply for the purposes of assessments for the 2013-14 income year “as if those provisions referred to 30 June 2014 rather than 30 June 2015” (s 7 of Sch 3).
Approved application form and relevant survey form
It is apparent from the copy of the application form completed by Mr Marwood that the form of application for the issue of a certificate approved by the Secretary for the purposes of s 385-185(2)(b) of the Act comprises eight parts. Five of those parts consist of the “relevant survey form” the subject of s 385-190(4)(a) of the Act for the conservation tillage survey to be completed for the purposes of s 385-190(1)(b). Accordingly, although the making of such an application and the completion of such a survey are the subject of separate provisions in s 385-190, the document by which the latter requirement is to be satisfied has in fact been subsumed into the document by which the former is to be met.
The following information is printed in the approved application form:
“This application form (which includes a Conservation Tillage Survey) must be completed in order to receive a Research Participation Certificate. The application form must be completed and submitted in the same financial year that the seeder is installed and ready for use.
...
All applications must be completed and submitted within the income year that the new seeder is installed and ready for use. For example, if your new seeder was ‘installed and ready for use’ during the 2013-14 income year, your application needs to be submitted by midnight (AEST) 30 June 2014.
The department may consider late applications under extenuating circumstances provided a request for an extension is made in writing to the [Conservation tillage offset] team ... prior to the end of the relevant income year.”
FACTS AND PROCEDURAL HISTORY
On 10 July 2014, the Department of Agriculture received an email message from Mr Marwood attaching an application made by him pursuant to s 385-185 of the Act for the issue of a certificate under s 385-190. I note that it appears from the application form before the Tribunal which was completed by Mr Marwood that he applied for the certificate in his capacity as the trustee of the S Marwood Family Trust.
In his email message, Mr Marwood stated the following:
“My mother Sandra Marwood does the Administration and book keeping for our family Farm [sic]. She has been to Melbourne in early June with our Grandmother [sic] Florence Marwood who has not been well. Sandra is still in Melbourne at the moment with our grandmother who has had open heart surgery. Sandra has been caring for her over the past 6 weeks or so.
With the medical issues to deal with we inadvertently omitted to apply for the certificate for the conservation tillage offset by the 30th June.
We advise that we purchased the equipment on finance and the conservation tillage offset is to be used to assist us to meet the finance commitments. The Mallee area has had some dry times recently and without the conservation tillage offset it will put further pressure on our budget as we are struggling to stay within our overdraft limit.
We apologise for the inconvenience and thank you in anticipation of a positive response.”
A statement in identical terms was made in Mr Marwood’s application form, in the space provided for additional comments relating to the application, following his answers to the questions posed in the conservation tillage survey.
Furthermore, Mr Marwood stated in a section of the application preceding the survey that the relevant eligible no-till seeder was installed and ready for use on 12 April 2014.
I note that it was stated in an “Assessment Sheet” setting out reasons to refuse Mr Marwood’s application that “[t]he department has made provisions to consider late applications under extenuating circumstances, provided that the applicant made their request in writing prior to 30 June 2014, as stated [in] the application form”.
By a letter dated 5 August 2014, a delegate of the Secretary notified Mr Marwood for the purposes of s 385-195 of the Act that he had decided not to issue a certificate to Mr Marwood under s 385-190 of the Act for the relevant income year, being the 2013-14 income year, because in effect he was not satisfied for the purposes of s 385-190(1)(b) of the Act that Mr Marwood had completed a conservation tillage survey during that income year. The delegate noted that the survey “was included in the application form that you were required to submit to the department on or before 30 June 2014 in order to be eligible for the certificate”.
The delegate explained that he was precluded from considering Mr Marwood’s request for an extension of time within which to make his application because he had failed to request an extension prior to 30 June 2014 and referred in that regard to the statement in the application form concerning the circumstances in which “late” applications might be considered.
SUBMISSIONS
As Mr Marwood did not fill out and lodge his application form, which included the conservation tillage survey, until 10 July 2014, it was not in dispute that the Secretary could not properly be satisfied for the purposes of s 385-190(1)(b) of the Act that Mr Marwood “at any time during the income year, completed a conservation tillage survey”. Nor was it in dispute that the only relevant income year for the purposes of Mr Marwood’s possible entitlement to a conservation tillage offset under s 385-175 was the 2013-2014 income year, given that the eligible no-till seeder in question was “installed ready for use” for the purposes of s 385-175(1)(c) on 12 April 2014 (see s 385-175(1)(f)).
Mr Marwood’s uncle, an accountant, appeared and made submissions on his behalf. He submitted that a certificate should nevertheless be issued to Mr Marwood for the 2013-14 income year by the exercise of any discretion which might be available for that purpose, for the following reasons. He pointed to the fact that Mr Marwood’s survey was only 10 days late and therefore the timeliness of the information provided therein was not seriously compromised and the Secretary had nevertheless had the benefit of that information. He pointed to the fact that Mr Marwood had a justifiable reason for having lodged his survey late, given the circumstances of his grandmother’s surgery, which had interfered with his mother’s carrying out of her administrative duties. I note that the Tribunal had before it evidence establishing his grandmother’s medical condition.
He also pointed to the fact that Mr Marwood’s application was made prior to the repeal of subdivision 385-J of the Act; his application was made on 10 July 2014, while the subdivision was not repealed until 18 July 2014. He made a further submission that the Secretary might be able to exercise a discretion granted to the Commissioner to defer the time for lodgment of an “approved form”, which I address below.
Furthermore, he submitted that the availability of the conservation tillage offset had been factored into Mr Marwood’s financing of the purchase of the eligible no-till seeder and that his failure to obtain a certificate, by precluding him from entitlement to the offset, caused him significant financial difficulties, particularly given dry conditions in the area in which his farm is located. I note that Mr Marwood did not give evidence, but given the reasons that follow, nothing turns on that.
Finally, he submitted that any available discretion by which a certificate might be issued to Mr Marwood should be exercised in his favour given the importance of encouraging young farmers like him to remain in the farming industry, which would assist in the improvement of farming practices and thus the protection of the environment.
The Secretary submitted that the decision by which he refused to issue a certificate to Mr Marwood was correct, albeit he conceded for reasons other than those he had given with his decision. The Secretary submitted that as Mr Marwood had not at any time during the 2013-14 income year completed a conservation tillage survey for the purposes of s 385-190(1)(b) of the Act, there was no basis upon which a certificate could properly be issued to him. In that regard, the Secretary submitted that he did not possess any discretion, whether within or beyond the provisions of subdivision 385-J of the Act, by which he might relieve Mr Marwood from the consequences of the failure to satisfy all the requirements of s 385-190. Accordingly, there was no discretion available to the Tribunal which it might exercise in Mr Marwood’s favour.
The Secretary conceded that the reference in the approved application form to his department having a discretion to consider “late” applications under extenuating circumstances in certain circumstances was erroneous, in two respects. First, the true temporal requirement for the purposes of s 385-190(1) was that the conservation tillage survey be completed during the income year, rather than that the application be made under s 385-185 during the income year. Second, the Secretary had no such discretion, whether on the expressed basis or otherwise.
The Secretary submitted that this erroneous conflation of statutory requirements arose because the “practical effect” of the fact that the survey form was included in the approved application form was that the lodging of the application (which occurred upon online application by filling in the application form, including the survey, and then “clicking” the “submit” button) brought about completion of the survey. I note in passing that the approved form merely states that online applications are “preferred”, rather than required, but in any event nothing turns on that in this case. He relied also on the fact that at a point in the application form it was noted that the form included a conservation tillage survey before it was stated that the form must be “completed and submitted in the same financial year that the seeder is installed and ready for use”.
Nevertheless, the Secretary conceded that in the approved application form he had, by his statement concerning “late” applications, purported to assume a discretion he did not in fact possess under the legislative provisions, whether on the stated basis (that is to say, that it depended on whether a request for an extension was made before the end of the income year in question) or any other basis. Accordingly, the Secretary conceded that, to the extent that that statement in the approved form (to which he adverted in his reasons for his decision) reflected a departmental policy, that policy was wrong.
In any event, the Secretary informed the Tribunal in written submissions lodged after the hearing in accordance with the Tribunal’s directions that he was unable to find any departmental policy documents which might found the relevant statement in the approved form. He said that that was so despite the statement in the assessment form concerning Mr Marwood’s application which referred to “provisions” made by the department “to consider late applications under extenuating circumstances”.
CONSIDERATION
Unfortunately for Mr Marwood, I have concluded that there is no legislative warrant for the Tribunal to disturb the Secretary’s decision to refuse his application for a certificate. More particularly, in the absence of a basis upon which the Secretary might properly be satisfied that he “at any time during the [2013-14] income year, completed a conservation tillage survey” for the purposes of s 385-190(1)(b) of the Act, there is no power or discretion, whether express or implied, under the Act or some other statute by which a such a certificate might be issued to Mr Marwood. Furthermore, the Tribunal’s powers of review under s 43(1) of the Administrative Appeals Tribunal Act 1975 (Cth) (the “AAT Act”) do not afford any power or discretion by which Mr Marwood might somehow be relieved from the consequences of his failure to comply with s 385-190(1)(b).
General principles of statutory interpretation
Before turning to interpret the relevant provisions of subdivision 385-J of the Act, it is apt to set out general principles of statutory interpretation which govern their interpretation. Statutory construction “involves attribution of meaning to statutory text” (Thiess v Collector of Customs (2014) 250 CLR 664 at [22]). The task of statutory construction must begin, and also end, with a careful consideration of such text (Commissioner of Taxation v Consolidated MediaHoldings Ltd (2012) 250 CLR 503 at [39], citing Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (2009) 239 CLR 27 at [47]). One must discern “the ordinary and grammatical sense of the statutory words to be interpreted having regard to their context and the legislative purpose (Alcan at [4]-[5] per French CJ; Consolidated Media Holdings at [39]). “Objective discernment of statutory purpose is integral to contextual construction” (Thiess at [23]) and requires that regard be had to the language of the relevant provision, as well as the scope and object of the statute in question (Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 at [93]).
Section 385-190(1)(b) and subdivision 385-J
The composite phrase “at any time during” in s 385-190(1)(b) it is to be read as a whole in the context of the provision in which it appears. That phrase bears two temporal aspects. The first aspect – “at any time” - is of an expansive nature. The second aspect – “during” - is of a restrictive nature and confines the operation of the expansive aspect. It is instructive to note that the word “during” is defined in the Macquarie Dictionary (6th ed) to mean “throughout the continuance of” and “in the course of” and is relevantly defined in the Oxford English Dictionary (2nd ed) to mean “[t]hroughout the whole continuance of; hence, in the course of, in the time of”.
The essential temporal concern of s 385-190(1)(b) is that the entity has completed a conservation tillage survey at a time that falls within the ambit of the income year in question. Provided that requirement is satisfied, the express terms of the provision make it clear that there is no further temporal concern as to the precise time of compliance within that income year. Nevertheless, the survey must be completed, as that term is defined in s 385-190(4), during the confined period covered by the income year.
In my view, the terms of s 385-190(1)(c) cannot properly be taken to suggest that a “time during the income year” may fall after 30 June 2014 in circumstances where the income year in question is the 2013-14 income year. The requisite “time” must nevertheless have occurred “during” the income year. Rather, that provision serves to make it clear that an “income year” as that expression is employed in para (b) of s 385-190(1) must be an income year in respect of which entitlement of a conservation tillage offset might arise pursuant to s 385-175 of the Act (see s 385-175(1)(b)) and that the “time” in para (b) must therefore fall within such an income year.
It is instructive to note that this interpretation of para (c) is confirmed by the transitional provision in Sch 3 to the Repeal Act, which as I have said deems the reference in s 385-190(1)(c)(ii) to 30 June 2015 (being the end of the final income year in respect of which the offset was intended to be available) to be a reference to 30 June 2014, although there is no need to resort to examination of that provision in the absence of any ambiguity as to the meaning of paras (b) and (c) at the time of Mr Marwood’s application for the issue of a certificate (Allina Pty Ltd v Federal Commission of Taxation (1991) 28 FCR 203 at 212).
The deliberate temporal specificity of para (b) of s 385-190(1) is confirmed by way of contradistinction to the terms of para (a) thereof, being the other substantive provision governing the issue of a certificate. Paragraph (a) merely requires that the entity has made an application for the issue of a certificate “in relation to” the income year. The phrase “in relation to” is “of broad import” (O’Grady v Northern Queensland Co Ltd (1990) 169 CLR 356 at 374), the meaning of which depends on the context in which it is used (Travelex Ltd v Commissioner of Taxation (2010) 241 CLR 510 at [25]).
The use of the phrase “in relation to” in para (a) of s 385-190(1), read in the context of paras (b) and (c) thereof and in the context of the provision referred to in para (a), being s 385-185 (which permits application for the issue of a certificate “for” an income year), evinces a legislative intention that the requirements governing the issue of a certificate be more stringent in a temporal sense with respect to the completion of a conservation tillage survey than with respect to the procedure by which the resultant entitlement to such a certificate is to be established.
In my view it follows that, in order for the entity to be entitled to the issue of a certificate and thus on that account to be entitled to a tax offset (see s 385-175(1)(f)), while an entity must have completed a conservation tillage survey by the end of the income year in respect of which entitlement to a conservation tillage offset might arise, the application under s 385-185 need not be made by the end of the income year. That accords with the fact that s 385-175(1)(g) merely requires that a taxpayer claim the offset in their income tax return “for the income year”.
The temporal requirements of subdivision 385-J are directed to substantive matters that govern a taxpayer’s entitlement to a conservation tillage offset and which reflect its purpose. As I have indicated, in order to be entitled to a conservation tillage offset for the 2013-14 income year, Mr Marwood was required to do two things “during” that year - the requirement to complete a conservation tillage survey “at any time during the income year” for the purposes of s 385-190(1)(b) corresponds with the requirement to have the eligible no-till seeder installed ready for use to carry on a primary production business “at a particular time during” that income year (s 385-175(1)(c)(ii)). Furthermore, he was required to hold the asset at the time mentioned in s 385-175(1)(c) (s 175(1)(d)).
I do not consider that any significance lies in the use of the words “a particular” in s 385-175(1)(c) instead of “any”, which is used in s 385-190(1)(b). The difference perhaps lies in the different nature of each provision’s subject matter; in any event, both provisions clearly require the tasks in question to be undertaken within the ambit of the income year for which the offset is to be claimed. Furthermore, as I have indicated the availability of the conservation tillage offset is governed by the overarching temporal requirement that, as enacted, the offset was intended to be available for only three income years (see ss 385-175(1)(b) and 385-175(1)(e) and the corresponding provision in s 385-190(1)(c)).
The content of the Explanatory Memorandum is instructive in so far as it gives general context to the provisions governing the conservation tillage offset and confirms that the mechanism for the issuing of a certificate is designed to ensure that the conservation tillage offset is only available to taxpayers who or that have supplied relevant information to the Secretary by means of the conservation tillage survey. However, in my view it is otherwise of little assistance in the interpretation of subdivision 385-J, the terms of which are clear.
Statutory time limits are often accompanied by statutory discretions to extend time for compliance with such limits. As French J (as his Honour then was) stated in BHP Billiton Direct Reduced Iron Pty Ltd v Deputy Commissioner of Taxation (2007) 99 ALD 149 at [107]-[109]:
“Statutory time limits affecting the exercise of legal rights, the imposition of liabilities or the exercise of powers are created for a variety of purposes.
...
There are ... innumerable examples of time limits imposed by statute upon subjects and decision-makers for taking steps necessary to secure rights or privileges or to exercise powers or impose liabilities. Self-evidently, they have the common purpose of securing expedition in statutory processes. They may also serve purposes related to the subject matter of the relevant statute.
... Where the law imposes time limits, whether they bar or extinguish causes of action or rights to seek review or whether they require applications to administrative decision-makers or steps taken by such decision-makers to be done within a particular time, excessive rigidity in their application can lead to absurdity and injustice. There are many examples of statutory discretions to extend time to avoid such mischief.”
In that case, his Honour construed a provision imposing a time limit for making a requisite “transfer agreement” in the context of a subdivision permitting the transfer of tax losses within company groups as being “intended to secure the general purpose of expeditious administration of the taxation system”. His Honour construed the express discretion contained in that provision to extend time for the making of such an agreement as being “conferred to ensure that the policy objective of the section is not defeated by inappropriate application of the time limit” (at [120], [122]).
The provision in issue in that case can be contrasted with those of subdivision 385-J which, of course, are to be construed in accordance with their own terms and in their own context. There is no express discretion granted to the Secretary to extend time for completion of a conservation tillage survey for the purposes of s 385-190(1)(b) of the Act. In the absence of such a discretion, there is nothing in the text of s 385-190 nor its wider statutory context to suggest that the legislature intended the conservation tillage offset to be available in circumstances other than those specified in s 385-190(1). Accordingly, entitlement to a conservation tillage offset will only arise if a relevant taxpayer has satisfied the prescribed temporal requirement in s 385-190(1)(b), and not in other circumstances.
Nor does the extrinsic material suggest otherwise, leaving aside the fact that legislative history and extrinsic materials cannot displace the meaning of the statutory text (Alcan at [47]; Saeed v Minister for Immigration and Citizenship (2010) 241 CLR 252 at [31]-[33]). There is nothing in the context outside the corners of subdivision 385-J which might serve to displace its clear meaning.
The Explanatory Memorandum merely confirms the quid pro quo involved in the requirement that relevant taxpayers complete the conservation tillage survey in order to be entitled to the conservation tillage offset, so that the offset “supports the Government’s research efforts and ... development of ... methodologies”; it does not have any greater focus on the time of completion than the text of the provision. However, that text has a clear temporal focus which evinces a legislative intention that the conservation tillage survey provide timely data for research.
In my view, the omission of any statutory discretion to extend time or to otherwise relieve a taxpayer from the consequences of failure to comply with the temporal requirement of s 385-190(1)(b) also evinces a legislative intention that greater weight be given to the public interest served by the benefit gained from the provision of timely data for research than to an individual taxpayer’s interest in obtaining the benefit of a conservation tillage offset, even in circumstances where such an outcome is unfair to, or has harsh consequences for, such a taxpayer.
There is no basis in the terms of subdivision 385-J to imply a discretion to extend time or otherwise relieve a taxpayer from the requirement that the conservation tillage survey be completed (as that term is defined in s 385-190(4)) during the relevant income year. The fact that s 385-190(1) provides that the Secretary “must” issue a certificate if its provisions are satisfied cannot properly be interpreted to mean that the Secretary “may” issue a certificate in other circumstances. The use of the word “must” merely serves to impose an obligation on the Secretary.
In my view the provisions of subdivision 385-J of the Act, although forming part of a taxing statute, are beneficial in nature, in that they encourage certain activities by means of the provision of a tax offset. That forms part of the context in which those provisions are to be construed (see Alcan at [57]). However, the beneficial nature of the provisions does not alter my conclusion that there is no provision affording the Secretary an express or implied discretion by which a certificate might be issued to Mr Marwood.
First, the beneficial nature of the provisions does not do away with the necessary task of statutory construction; given the statutory language used, such a construction is not fairly open (Khoury v Government Insurance Office (NSW) (1984) 165 CLR 622 at 638; IW v City of Perth (1997) 191 CLR 1 at 11 per Brennan CJ and McHugh J).
Furthermore, one cannot properly assume from the fact that the provisions are beneficial in nature that the legislature therefore intended the conservation tillage offset to be available in circumstances other than those falling within its express terms, whether because in the particular circumstances of the case a taxpayer failed to complete a conservation tillage survey during the relevant income year for the purposes of s 385-190(1)(b) or otherwise. It is not enough to say that the purpose or object underlying subdivision 385J is to afford a conservation tillage offset to relevant taxpayers in the wider context of the Carbon Farming Futures program to which I have referred above – the question remains of how far the legislation goes in that regard, and that question is to be answered by paying proper attention to the text and construing it according to appropriate principles of statutory construction (see Alcan at [51], citing Carr v Western Australia (2007) 232 CLR 138 at 143).
Nor is there some general provision in the Act which might attach to the same subject matter, such as a general statutory power or discretion to extend time, and thus raise the issue of the proper reconciliation of competing general and specific provisions (see Project Blue Sky at [70]; Aussie Vic Plant Hire Pty Ltd v Esanda Finance Corporation Ltd (2008) 232 CLR 314). Furthermore, there is no general power or discretion granted to the Secretary under other legislation which might arise for consideration.
Commissioner of Taxation’s discretion to defer time for lodgement – s 388-55 of Sch 1
The Commissioner of Taxation’s function with respect to conservation tillage offsets in so far as they are claimed in income tax returns (see s 385-175(1)(g) of the Act) is impliedly acknowledged in s 385-205 of the Act, which requires the Secretary to notify the Commissioner of the issue of a certificate and any revocation thereof and also in s 385-225, by which the Secretary may certify that a specified asset is an eligible no-till seeder if requested to do so by the Commissioner.
Mr Marwood relied on a statement in the Explanatory Memorandum prefatory to paragraphs concerning those provisions, being that “[t]he bill includes provisions that enable” the Secretary and the Commissioner “to share information and facilitate the smooth administration of the offset” in support of his submission that they should also share the Commissioner’s general discretion to defer time for lodgment of approved forms pursuant to s 388-55 of Sch 1 to the Act. However, as the Secretary submitted, the fact that the Secretary and the Commissioner of Taxation each have a role to play with respect to the offset does not mean that the Secretary is somehow empowered to exercise the Commissioner’s general discretion to defer time for lodgment of approved forms pursuant to s 388-55 of Sch 1 to the Act.
First, that discretion is held by and therefore may only be exercised by the Commissioner, not the Secretary, Second, it pertains to “approved forms”. That term is defined in s 388-50(1) of Sch 1 to the Act to mean amongst other things, relevantly, an application under a tax law “if, and only if … it is in the form approved in writing by the Commissioner for that kind of … application”. Accordingly, the form of application required for the purpose of an application for a certificate, being “a form approved, in writing, by the … Secretary” (s 385-185(2)(b) of the Act), does not constitute an “approved form” for the purposes of s 388-50(1) of Sch 1 to the Act.
Statements in approved application form
As I have said, the Secretary conceded, properly in my view, that his department did not in fact possess the discretion to “consider late applications under extenuating circumstances” as stated in the approved form and that accordingly any policy reflected by that statement was wrong, although in any event no written document recording such a policy could be found.
As I have also said, as s 385-190(1) requires that the conservation tillage survey be “completed” as prescribed in s 385-190(4), that is to say that the survey form be filled up and given to the person specified, during the income year, but does not require the application to be made during the income year. It was therefore inapposite for reference to be made in the approved form for applications to “late” applications and for it to be suggested that the department “may consider” them, as it is only a survey form which could properly be described as “late” in the relevant sense. Neither the fact that the survey form has been incorporated within the approved form for applications, nor the fact that reference has been made to that fact at another point in the application form, makes that statement any more correct. As the Secretary conceded, he did not hold any discretion to consider late surveys either. Nor is there any discernable basis for the purported limitation on that assumed discretion, said to require the making of a request for an extension prior to the end of the relevant income year.
It is unfortunate that the Secretary’s department made statements in the approved form which were inconsistent with the applicable statutory provisions. What is even more unfortunate is that the Secretary has been unable to find any policy documents on which those statements were based, despite the statement in the assessment sheet concerning Mr Marwood’s application suggesting or alternatively assuming that such a policy document exists.
The power to issue a certificate is to be exercised by reference to the defined criteria enumerated in s 385-190(1). As I have indicated, s 385-190(1)(a) merely requires the Secretary to ascertain whether the entity has made an application under s 385-185 in relation to the relevant income year (see s 385-175 of the Act); the application need not have been made during the income year. Section 385-190(1)(b) requires the Secretary to decide whether has attained the requisite state of satisfaction that the entity has “completed” a conservation tillage survey during that income year; the provision makes it clear that the survey need not be completed at a particular time during the income year, provided that has been completed during that period.
As there is no discretion conferred on the Secretary in either respect, a decision made in accordance with the statements suggesting otherwise in the approved application form, being inconsistent with the statutory provisions in question, is unlawful (Green v Daniels (1977) 13 ALR 1 at 8-9 per Stephen J; Drake v Minister for Immigration and Ethnic Affairs (1979) 2 ALD 60 at 69 per Bowen CJ and Deane J; Humane Society International Inc v Minister for Environment and Heritage (2003) 126 FCR 205 at [53]-[57] per Kiefel J).
The statement of policy in the approved application form could not assist Mr Marwood on the facts of his case, given that he did not request an extension of time for any purpose prior to the end of the 2013-14 income year. I note also for the sake of completeness, although there was no evidence that Mr Marwood relied on the statement in the form, that the statement could not give rise to an estoppel against the operation of the terms of s 385-190(1)(b) of the Act (Beesly v Hallwood Estates Ltd [1960] 2 All ER 314 at 324, cited with approval in Considine v Citicorp Australia Ltd [1981] 1 NSWLR 657 at 662; see Federal Commissioner of Taxation v Wade (1951) 84 CLR 105 at 117).
More to the point, given that the statement of policy does not reflect the statute and is therefore incorrect, the Tribunal in reviewing the Secretary’s decision would be compelled to decline to follow it in any event (Drake, op cit, at 70; Re Drake and Minister for Immigration and Ethnic Affairs (No 2) (1979) 2 ALD 634 at 640, 642-643 per Brennan J; Re Aston and Secretary, Department of Primary Industry (1985) 8 ALD 366 at 380, cited with approval in Australian Fisheries Management Authority v Graham (2003) 127 FCR 436 at [40] per Ryan J). In reviewing the Secretary’s decision, the Tribunal must apply the relevant statutory provisions.
To the extent that the statement made in the approved application form constitutes the expression of the Secretary’s or his department’s view about the scope or meaning of subdivision 385-J (rather than reflecting a departmental policy as such, given the lack of any policy document), it cannot be used by the Tribunal as a tool or aid in its construction, as it is merely an expression of opinion about what the legislation means after its enactment (Port of Brisbane Corporation v Commissioner of Taxation (2004) 140 FCR 375 at [25]-[26]).
Section 43(1) of Administrative Appeals Tribunal Act 1975 (Cth)
The Secretary’s decision to refuse Mr Marwood’s application for a certificate is correct, given that on the evidence before the Tribunal there is no basis to be satisfied that Mr Marwood completed a conservation tillage survey at any time during the 2013-14 income year for the purposes of s 385-190(1)(b) of the Act and, for the reasons I have given, there is no basis upon which he might be relieved from the consequences of his failure to do so.
As I have said, the Tribunal’s powers of review under s 43(1) of the AAT Act do not afford any power or discretion by which Mr Marwood might somehow be relieved from those consequences by the Tribunal. The prefatory words of s 43(1) provide that “[f]or the purpose of reviewing a decision, the Tribunal may exercise all the powers and discretions that are conferred by any relevant enactment on the person who made the decision”. There is no discretion or power available to the Secretary under any such enactment which might be exercised in a manner favourable to Mr Marwood. As “the Tribunal ... is not the original repository of powers and discretions under an enactment” (Re Brian Lawlor Automotive Pty Ltd and Collector of Customs (New South Wales) (1978) 1 ALD 167 at 175 per Brennan J), it has no overarching or discrete power or discretion available to it for the purpose of reviewing the Secretary’s decision to refuse to issue a certificate to Mr Marwood, whether pursuant to s 43(1) (Re Shortis and Secretary, Department of Community Services and Health (1991) 23 ALD 396 at [15] per O’Connor J) or otherwise.
Other matters
As I have said, Mr Marwood pointed to the fact that his application for the issue of a certificate had been made prior to the repeal of subdivision 385-J. However, there was no submission made by the Secretary to the effect or suggesting that the Repeal Act operated retrospectively so as to preclude Mr Marwood’s entitlement to a conservation tillage offset; the true impediment to Mr Marwood’s application for review lies in the terms of subdivision 385-J.
The Tribunal has considerable sympathy for Mr Marwood’s predicament. As he submitted, although his failure to comply with the temporal requirement of s 285-190(1)(b) was not significant, as he lodged his application and thus the survey only 10 days after the last day of the relevant income year, the consequences of that failure are very significant for him. Furthermore, his failure to comply with the time limit was brought about by the consequences of his grandmother’s major surgery.
Mr Marwood’s circumstances serve as a compelling example of “excessive rigidity” in the application of a statutory time limit described by French J in BHP Billiton. Regrettably, that rigidity is not ameliorated by any statutory power or discretion which might operate in his favour. Accordingly, there is no basis upon which the Tribunal can disturb the Secretary’s decision.
CONCLUSION
For the above reasons, the Tribunal will affirm the decision under review.
I certify that the preceding 74 (seventy -four) paragraphs are a true copy of the reasons for the decision herein of Deputy President F J Alpins .....[sgd]...............................................
Associate
Dated 14 August 2015
Date(s) of hearing 16 March 2015 Date final submissions received 7 April 2015 Advocate for the Applicant Mr D Marwood, Charles & Partners Advocate for the Respondent Mr M Palfrey Solicitors for the Respondent Sparke Helmore Lawyers
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