Re Verschuer and Commissioner of Taxation
[2013] AATA 12
[2013] AATA 12
Division TAXATION APPEALS DIVISION File Number(s)
2012/0351
Re
Ann Verschuer
APPLICANT
And
Commissioner of Taxation
RESPONDENT
DECISION
Tribunal Professor R Deutsch, Deputy President
Date 14 January 2013 Place Sydney Decision Summary
The Tribunal affirms the decision under review.
.............................[sgd]...........................................
Professor R Deutsch, Deputy President
Catchwords
INCOME TAX – superannuation – special circumstances – whether contribution was made – when contribution was made – reallocation of concessional contribution – whether contribution made to complying superannuation fund – whether contribution made in respect of Applicant – discretion – the Tribunal affirms the decision under review.
Legislation
Income Tax Assessment Act 1997 s 292-465; 292-25
Acts Interpretation Act 1901 (Cth) s 15ABCases
Peaker v Commissioner of Taxation (2012) AATA 140
Schuurmans-Stekhoven v Commissioner of Taxation (2012) AATA 62
Bornstein v Commissioner of Taxation (2012) AATA 424
Hamad v Commissioner of Taxation (2012) AATA 530Secondary Materials
Explanatory Memorandum to the Tax Laws Amendment (Simplified Superannuation) Act 2007 para 1.117
REASONS FOR DECISION
Professor R Deutsch, Deputy President
14 January 2013
The Factual Background
The Applicant, Ms Verschuer, is an Executive Director of Dymocks Book Arcade Pty Ltd (“Dymocks”) and is largely responsible for overseeing the operation of several farms held by that company. She is also a member of the Board of Directors for the Dymocks Group of Companies.
On 17 February 2006 the Board of Directors for the Dymocks Group of Companies resolved to employ the Colonial State Fund to operate the Dymocks Group default superannuation fund.
On 12 May 2006 Belinda Hanson, the then General Manager of Human Resources and Development, and Maria Antonis, the then Payroll Officer, completed on behalf of the Dymocks Group of Companies, a Colonial First State First Choice Employer Super Application Form (“the Application Form”). That form, a copy of which was provided to of the Tribunal (ST6 at pages 104 to 113), contained a substantial amount of information. It specified the name of the employer’s super plan as the “Dymocks Staff Super Plan”. It also provided that the units in First Choice Employer Super (‘First Choice’) would only be issued on receipt of the completed application form, which is issued together with the Product Disclosure Statement (PDS) dated 6 March 2006. As part of the declaration which was required to be signed, Ms Hanson and Ms Antonis declared that they had read Parts 1, 2 and 3 of that PDS.
First Choice is described in the PDS as an online product in respect of which all contributions and fund maintenance must be done online.
Under the heading ‘Make an employer contribution?’ at page 21 of the PDS, it is made clear that from the perspective of First Choice the employer, Dymocks, in this case, is responsible for making quarterly employer contributions and other contributions, and it is noted that employer contributions are only allocated to employees accounts the day after a file is confirmed in First Net, and cleared funds have been received. Thus, as far as First Choice is concerned, in order to make a superannuation contribution on behalf of an employee, Dymocks was required to do two things, namely make a payment to Colonial and upload a contribution file to First Net.
First Net is Colonial’s secure online service or portal through which Dymocks administered First Choice. Clearly, as far as the superannuation fund in question is concerned, payments would only be allocated to a particular employee’s account as a superannuation contribution the day after a file is confirmed on First Net, and cleared funds have been received.
In yet a further document, which is readily available on the Colonial website and titled Employer Super First Net User Guide, users are advised along the following lines:
‘To simplify the management of your contribution payments each paycentre established (per investor category) will be assigned a unique clearing account. Payments made by you will be deposited into this account. When sufficient cleared funds are received in your clearing account to cover a confirmed contribution file, contributions will be automatically allocated to your employees First Choice Employer Super Account on a first in, first out basis.’
On 3 June 2008 Ms Cathy Tibero, the then Finance Director of Dymocks, sought approval from Mr John Forsyth, the then chairman of the Dymocks Group of Companies to make ‘top up’ superannuation contributions for him and for the Applicant for the year ended 30 June 2008. The Applicant’s superannuation was to be topped up by $91,141.65. On 4 June 2008 Mr Forsyth approved the top up payments.
On 27 June 2008, Ms Antonis transferred the total amount of $182,302.36 in respect of both Mr Forsyth and the Applicant, of which $91,141.65 was in respect of the Applicant. The total amount was transferred from a Commonwealth bank account held by Dymocks and was deposited to a Colonial First State Clearing Account that bears the account name Dymocks Book Arcade Pty Ltd. That account records the receipt of the said funds on 27 June 2008 (see ST 6–131). This clearing account is automatically opened by Colonial First State as part of the arrangements when an employer seeks to participate in superannuation arrangements through Colonial First State. Importantly, it is not an account opened by Dymocks or any of its associated companies although it is an account in the name of Dymocks which has been opened by Colonial First State.
On 23 July 2008, Ms Antonis uploaded to First Net a contribution file in respect of the Applicant. The cause and circumstances of the delay between the making of the payment on 27 June 2008 and the uploading of the file on 23 July 2008 was the subject of considerable debate in the hearing and there was some evidence provided as to Ms Antonis’ personal circumstances which may have contributed to that delay. The interval between the two dates excluding the date of payment and the date of uploading is 26 days whereas normal practice looking at the historical record in relation to Dymocks and Ms Antonis varied between 3 and 13 days with the most common average time being around 5 to 7 days.
On 7 May 2009, an unidentified person accessed and printed a First Choice Investor Report in relation to the Applicant for the period 1 July to 31 December 2008 (see ST5 page 46). The Investor Report was specifically in respect of the Colonial account belonging to the Applicant and it identified a contribution of $91,141.65 as a contribution that fell within that six-month period. This Investor Report had been accessed and printed from First Net and according to the Applicant’s own evidence was located by the Applicant in a file kept in a filing cabinet in her office.
On the same day as the Investor Report was printed, the Applicant made three separate contributions to a self-managed superannuation fund established by the Applicant and called the Verschuer Pension Fund. One of those contributions was for an amount of $90,000 which the Applicant claimed as a deduction in the tax return lodged by her for the year ended 30 June 2009. As such this amount constituted a concessional contribution. At the same time 2 other amounts totalling $450,000 were contributed as non-concessional contributions which was at that time the maximum non-concessional contribution allowed without triggering an excess non-concessional contribution
It was put in evidence that the Applicant had made numerous enquiries before making the $90,000 contribution to her self-managed superannuation fund with her employer to ensure that she would not be subject to excess contributions tax.
On 27 October 2009 and on 12 January 2010 respectively, the Commissioner received information from the Trustee for First Choice and the Trustee for the Verschuer Pension Fund which identified superannuation contributions that had been made for the Applicant in the financial year ended 30 June 2009.
On 8 November 2010, the Commissioner wrote to the Applicant and advised that the concessional and non-concessional contributions for the financial year ended 30 June 2009 had been exceeded by the sum of $89,314.21. This was on the basis that three relevant amounts had been contributed as concessional contributions in the year ended 30 June 2009 namely
·$91,141.65 to the personal Colonial First Choice account of the Applicant;
·$90,000 to the Verschuer Pension Fund; and
·$8172.56 in employer contributions for the year.
The total of the three amounts was $189,314.21 and this amount exceeded the then annual concessional contributions cap by the said amount of $89,314.21.
On 27 November 2010 the Applicant made an application requesting the Commissioner to exercise his powers under s 292–465(1)(a) of the Income Tax Assessment Act 1997 (ITAA 1997), to make a written determination reallocating the concessional contribution in the amount $91,141.65 from the financial year ending 30 June 2009 to the financial year ending 30 June 2008.
On 21 February 2011 the Commissioner issued a notice of assessment assessing the Applicant with excess concessional contributions tax in the amount of $28,133.97, and non-concessional contributions tax in the amount of $41,531.10 for the year ended 30 June 2009.
The excess concessional contributions tax is worked out as 31.5% of $89,314.21, being the excess (i.e. $28,133.97), and the non-concessional contributions tax is worked out as 46.5% of the same amount (i.e. $41,531.10). In other words, the excess is counted as both an excessive concessional and as an excessive non-concessional contribution. When added together, and taken as a percentage, this gives rise to the much referred to rate of 78% (i.e. $28,133.97 plus $41,531.10 divided by $89,314.21 as a percentage).
On 29 August 2011, the Commissioner advised the Applicant that he would not make a written determination reallocating a concessional contribution, in the amount $91,141.65, from the financial year ended 30 June 2009 to the financial year ended 30 June 2008. If the discretion had been exercised that way, the Applicant would not have had neither excess concessional nor excess non-concessional contributions for the year ended 30 June 2009.
On 10 October 2011 the Applicant objected to the excess contributions tax assessment.
On 2 December 2011, the Commissioner disallowed the Applicant’s objection, and by application for review of decision filed 30 June 2012, the Applicant seeks a review of the Commissioner’s decision.
The Issues
There are two issues that arise for determination:
(a)Whether for the purposes of s 292–25(2)(a) ITAA 1997, the $91,141.65 contribution was ‘made’ to First Choice, in respect of the Applicant, on 27 June 2008 or only on 23 July 2008?
(b)If the answer to (a) above is 23 July 2008, should the Commissioner have made a written determination under s 292–465(1)(a), reallocating the Applicant’s concessional contribution in the amount of $91,141.65 from the financial year ended 30 June 2009 to the financial year ended 2008?
The First Issue – When was the $91,141.65 contribution made to a complying superannuation plan in respect of the Applicant?
The first issue raises the question as to the proper construction and interpretation of s 292–25 ITAA 1997.
That section is worth quoting in full as a number of interpretive issues arise from different subsections. Thus, s 292–25 provides as follows:
(1) The amount of your concessional contributions for a financial year is the sum of:
(a) each contribution covered under subsection (2); and
(b) each amount covered under subsection (3).
(2) A contribution is covered under this subsection if:
(a)it is made in the financial year to a complying superannuation plan in respect of you; and
(b)it is included in the assessable income of the superannuation provider in relation to the plan, or, by way of rollover superannuation benefit, in the assessable income of a complying superannuation fund or RSA provider in the circumstances mentioned in subsection 290 – 170(5) (about successor funds); and
(c) it is not any of the following:
(i) an amount mentioned in subsection 295–200(2);
(ii) an amount mentioned in item 2 of the table in subsection 29 –190(1);
(iii) a contribution made to a constitutionally protected fund.
(3)An amount in a complying superannuation plan is covered under this subsection if it is allocated by the superannuation provider in relation to the plan for you for the year in accordance with conditions specified in the regulations.
(4)Disregard subdivision 295–D for the purposes of paragraph (2)(b).
The critical question to determine is whether the contribution by the Applicant in the amount of $91,141.65 was covered by subsection (2) above.
In determining the answer to this question subparagraph (c) raises no concerns, as the amount in question is not a transfer from a foreign superannuation fund; is not a roll-over superannuation benefit and is not a contribution made to a constitutionally protected fund.
Sub-paragraph (b) is fulfilled if the amount of $91,141.65 is included in the assessable income of the Colonial (i.e. the superannuation provider) in relation to the plan. Importantly, this subparagraph does not on its face have a timing requirement. Accordingly, all that needs to be demonstrated is that an amount is included in assessable income of the relevant provider at some stage, even if it is included in a year other than the year in which the contribution may be taken to be made.
The critical question in this case is whether subparagraph (a) is fulfilled. This sub-paragraph is deceptively brief but carries within it a number of conditions. Thus, in order for the $91,141.65 contribution to be treated as a concessional contribution in the year to 30 June 2008:
·the contribution must be ‘made’ ;
·it must be made at any time in the period 1 July 2007 to 30 June 2008;
·it must be so made to a complying superannuation plan; and
·it must be so made in respect of the Applicant.
The first and third requirements look like separate conditions, but the reality is that they need to be read together since a contribution cannot be made in a vacuum – it needs to be made to someone or something. Clearly, a contribution of $91,141.65 was made in the relevant period, but it is not at all clear that that contribution can be said to have been made to a complying superannuation fund in the said period, namely 1 July 2007 to 30 June 2008.
The factual complexities that arise in the context of superannuation and, in particular, how contributions are made are many and varied.
One complication relates to the use by superannuation providers of what are loosely described as ‘clearing accounts’. Clearing accounts are commonly established by superannuation providers. They are essentially accounts into which monies are placed by employers in respect of one or more employees (usually many more) until such time as the exact identity of each employee, and the amount attributed to each employee, can be determined. At that time, the money is transferred out of the clearing account and into an account designated specifically for the employee to whom a specific segmented amount is attributable. This essentially is a mechanism of convenience to enable the receipt of the funds without the need for specific identification of the target employee and requisite amount until a later date.
The amount in question in this case was clearly recorded as a deposit to the Colonial First State Clearing Account, held in the name of Dymocks Book Arcade Pty Ltd, and the date of receipt of those funds was 27 June 2008.
The exact status of such a clearing account remains somewhat unclear but the following factors appear to be relevant:
(i)the account is not opened by the employer but rather by the superannuation provider;
(ii)the employer’s name but not the employee’s appears on the account;
(iii)the account holder is the employer; and
(iv)the superannuation provider itself specifically declares in unambiguous terms that the clearing account is not a superannuation fund.
The clearing account is not itself a superannuation fund. It is not an account held by a superannuation fund. It is not an account held by or in the name of the trustee of a superannuation fund. As far as I can ascertain from what was said in the hearing, and based on materials that have been provided to me, the clearing account in question here is opened by Colonial First State in the name of the employer. It is not itself a superannuation account in any sense. Rather, it is a temporary parking station for those funds pending transfer to a superannuation account. The clearing account merely facilitates the payment of certain superannuation contributions by requiring the employer to pay only one amount for all its employees, rather than individual amounts for each individual employee. The operator of the clearing account then distributes that payment to the specified superannuation fund, which is specified either by the employee, or by way of a default mechanism in the event of the employee failing to make an appropriate selection.
The effect of the operation of this mechanism is that whilst it may well be said that payment has been made on 27 June 2008, and therefore made by the end of 30 June 2008, it cannot be said that it is a payment that has been made by the end of 30 June 2008 to a complying superannuation fund.
Accordingly, I decide the first issue in favour of the Respondent and that renders it necessary for me to consider the second issue.
The Second Issue – Should there be a reallocation from the year ended 30 June 2009 to the year ended 30 June 2008?
This second issue raises the question whether the Tribunal, standing in the shoes of the Commissioner of Taxation, should exercise the discretion in s 292–465(3) ITAA 1997 to allocate that contribution to the 2007/2008 financial year.
Section 292–465(3) relevantly provides that the Respondent may only make such a determination if the Respondent considers that:
(a)there are special circumstances; and
(b)making the determination would be consistent with the object of Division 292 of ITAA 1997.
Subsection 292–465(4) then provides that in making the determination the Respondent may have regard to matters in subss (5) and (6) and any other relevant matters.
Subsection 292–465(5) is to the effect that the Respondent may have regard to whether a contribution, made in the relevant financial year, would more appropriately be allocated towards another financial year instead.
Finally, subss 292–465(6) provides that the Respondent may have regard to whether it was reasonably foreseeable, when a relevant contribution was made, that the taxpayer would have excess concessional contributions, or excess non-concessional contributions, in the relevant financial year. In particular, if the relevant contribution is made in respect of the taxpayer by another person, the terms of any agreement or arrangement between the taxpayer and that person as to the amount timing of the contribution and the extent to which the tax payer had control over the making of the contribution.
The expression ‘special circumstances’ is not defined in the legislation, but its meaning has been the subject of much discussion in a number of decisions both in the Federal Court and the Tribunal. I will return to those decisions a little later.
Paragraph 1.117 of the Explanatory Memorandum to the Tax Laws Amendment (Simplified Superannuation) Act 2007, which relevantly amended ITAA 1997 to include section 292–465, stated that:
‘The courts have considered what ‘special circumstances’ means in many different contexts. It is clear from the case law that special circumstances are unusual circumstances, or circumstances out of the ordinary. Whether the circumstances are special will vary from case-to-case as the context requires, but in this context they must make it unjust, unreasonable or inappropriate to impose the liability for excess contributions tax.’
The relevance of the words of the Explanatory Memorandum are confirmed by s 15AB of the Acts Interpretation Act 1901 (Cth), which specifically permits reference to such extrinsic material to confirm the ordinary meaning of words used in the text of legislation.
Counsel for both the Applicant and the Respondent referred me to a number of Tribunal decisions where the exercise of this discretion has been considered. Thus, I note that both in Peaker v Commissioner of Taxation (2012) AATA 140 and in Schuurmans-Stekhoven v Commissioner of Taxation (2012) AATA 62 the Tribunal took the view that a mistaken belief or ignorance of the consequences of making a concessional contribution in July of one financial year, rather than in June of the previous financial year, did not amount to special circumstances.
By way of contrast in Bornstein v Commissioner of Taxation (2012) AATA 424 at [12], the Tribunal was of the view that there had been ‘… a “perfect storm” of events, miscommunications and misunderstanding that combined to leave the taxpayer in an unusual and unfortunate position.’ and consequently special circumstances had been made out.
In addition, in Hamad v Commissioner of Taxation (2012) AATA 530 special circumstances were found to exist, where the taxpayer was unaware of the delay in payment by the employer and that the taxpayer had been misled by the employer.
In this case, the Applicant effectively relies on three arguments to support the view that there are special circumstances.
First, it is suggested that the unfortunate circumstances that arose in relation to the Payroll Officer, Ms Antonis, is a special circumstance of relevance to this case.
Secondly, the ultimate result here is a tax of 78 per cent on the excess contribution, a rate which applies only because of the unusual circumstances of an employer concessional contribution, a personal concessional contribution and the maximum non-concessional contribution all being made in the same year. These circumstances, it is suggested, combined to give rise to special circumstances.
Thirdly, Dymocks, as the employer, was unknowingly a participant in a clearing house arrangement, which led to the extensive delay which could not have been anticipated by the taxpayer, and such a delay would be something out of the ordinary and would constitute special circumstances.
In my view none of these three bases constitute special circumstances.
With regard to the first suggested special circumstance, I accept the evidence of the former Payroll Officer of Dymock’s, Ms Antonis, that at the relevant time she was suffering severe emotional distress because of problems arising from her sister-in-law’s pregnancy and that that necessitated her taking time off work. Ms Antonis indicated in her evidence that she suspects that this was the reason she failed to advise the Trustee as to who the contributions were in respect of until 23 July 2008. I also accept that the Applicant had no control over the time at which the Trustee was so advised.
However, it is difficult to accept that Ms Antonis’s problems were the sole or even the main cause of the notification to the Trustee being late. The payment was made on 27 June 2008, which was a Friday, with the end of that financial year being on Monday, 30 June 2008. It would be optimistic to expect that a payment made on Friday 27 June 2008 would actually lead to the uplifting of the relevant file and notification to the Trustee before the end of Monday 30 June 2008. In fact this is borne out by the fact that rarely, if ever, did notification occur that quickly. As I mentioned earlier, the evidence suggests that the minimum time was three working days and far more commonly took five, seven or even more working days.
Accordingly, even taking into account the problems which Ms Antonis was experiencing at the time, it would be unlikely that a payment on 27 June 2008 would result in the crediting of that amount to the account of the taxpayer before the conclusion of 30 June 2008. To put it another way, even if Ms Antonis had not been subjected to the unfortunate circumstances she has testified to, the uplifting of the relevant file is most unlikely to have occurred before the end of Monday 30 June 2008, in circumstances where the payment was only made on Friday 27 June 2008. Having regard to all this I do not believe the circumstances of the Payroll Officer give rise to special circumstances.
With regard to the second suggested special circumstances, the logic of the Applicant’s argument appears to be along the lines that she was in a special situation, because it just so happens that in the relevant year in question three contributions were made to superannuation for the Applicant namely:
·the payment of $91,141.65 which almost accidentally fell into the 2008/2009 year ;
·the payment of $90,000 as a personal concessional contribution made by the Applicant ; and
·the payment $450,000 as a non-concessional contribution made by the Applicant.
This according to the Aapplicant is a special circumstance that has given rise to a penal rate of tax which is 78 per cent on the excess contribution, plus a further 15 per cent in contributions tax imposed upon the superannuation fund itself.
According to the Applicant, the penal rate arises in this case because of the unusual circumstances of an employer, and personal concessional contribution being treated as having been made in the same income year, and the taxpayer having contributed the maximum non-concessional amount in the same year.
I must confess I find this line of argument difficult to accept. It is akin to saying that if legislation provides that:
‘if conditions A,B and C operate a tax rate of 78% will apply unless there are special circumstances’
and the taxpayer then seeking to argue either that the presence of conditions A, B and C or the imposition of a 78 per cent rate or the two together constitutes special circumstances.
This in my view is an improbable line of argument that cannot be sustained. The very essence of the legislation is that if there is such a coincidence of events the intention is to tax at 78 per cent. Whilst this is clearly a rate of tax that is itself unacceptably high by almost every standard (with the possible exception of recently announced French taxes), it is the prescribed outcome declared in unambiguous terms by the Federal Parliament. It is not, in my view, correct to suggest that special circumstances exist either because those three conditions have all been found to arise in the one year or because the tax rate is unacceptably high. Special circumstances need to be found beyond the actual rate imposed and beyond the specific conditions which give rise to that rate being imposed.
The third line of argument which the Applicant sought to put in relation to special circumstances is to the effect that the clearing account mechanism, and its use in this case, gives rise to a special circumstance.
There are two difficulties with this argument.
First, the use of a clearing account facility within the superannuation context is hardly novel or surprising or unusual or out of the ordinary. Indeed it seems that in large superannuation funds it would be rare for such a facility, or something remarkably similar to it, not to be used, and in that sense I can see nothing special about the situation that has arisen here.
Secondly, as mentioned previously, the delay in the funds being specifically credited to the Applicant did not arise for any other reason than that the contribution was made from the employer’s perspective on Friday 27 June 2008, in circumstances where historically the crediting to a specific taxpayer’s superannuation account would take anywhere from three to 17 working days, thereby eliminating the possibility that those funds would be credited by close of business on Monday, 30 June 2008. In this sense the clearing account is itself a red herring – clearing account or no clearing account, the trustee of First Choice simply could not credit the payment to the Applicant’s account until the contribution file was uploaded, which was very unlikely to be by close of business on Monday, 30 June 2008.
Returning to the statutory formulation, as mentioned previously, subss 292-465(4), (5) and (6) of the ITAA 1997 allow the Respondent to have regard to:
· whether a contribution made in the relevant financial year would more appropriately be allocated towards another financial year instead [subsection 5];
·… whether it was reasonably foreseeable, when a relevant contribution was made, that the Applicant would have excess concessional contributions or excess non-concessional contributions for the relevant financial year and in particular:
(a) if the relevant contribution was made in respect of the Applicant by another person – the terms of any agreement or arrangement between the Applicant and the employer as to the amount and timing of the contribution; and
(b) the extent to which the Applicant had control over the making of the contribution (subsection 6); [and]
· any other relevant matters (subsection 3)].
There is one critically important other relevant matter in this case and that is the existence of the First Choice Investor Report, which was printed on the very same day as the $90,000 payment was made. It was accessed and printed from First Net, was in the name of the Applicant, clearly shows that the amount of $91,141.65 was treated as a contribution received by First Choice at some time between 1 July and 31 December 2008 and not in the previous income year, bears the Applicant’s account number and was located in a filing cabinet in the office of the Applicant. Presumably some identifier personal to the Applicant, such as a PIN, a password or user name or a combination thereof, is required to access this account and an Investor Report. The Applicant was asked at the hearing but was unable to advise as to what, if anything, was required to access the account and the Investor Report.
The Applicant categorically denies having printed or seen this document at the time the additional $90,000 payment was made. I find this testimony unconvincing and inconsistent with the facts.
The fact is that someone, who could access the Applicant’s superannuation account and all the relevant details, had done so on the very same day as the $90,000 contribution was made. The only possible factual inference that can be drawn from this set of facts is that either the Applicant or, at the very least someone very close to her, knew of the problem with the exact timing of the $91,141.65 contribution, and chose to ignore it when making the further $90,000 contribution which gave rise to the problem the subject of these proceedings.
In considering whether it was reasonably foreseeable when a contribution was made that the Applicant would have excess concessional or excess non-concessional contributions for the relevant financial year, regard needs to be had according to subs 292-465(6) in particular to – the terms of any agreement or arrangement between the Applicant and the employer as to the amount and timing of the contribution, and the extent to which the Applicant had control over the making of the contribution.
It was agreed between the parties that there was no formal salary sacrifice agreement between the Applicant and the employer and, whilst there seems to have been a loose understanding as to payments that might be made to superannuation, apart from the mandated contributions, this could hardly be described as an agreement. Further, in relation to both contributions that are in question here, the Applicant appears to have had total control over the fact of whether a contribution will be made although not, it must be said, over the exact timing. Nonetheless, in my view, the matters alluded to in subs 292-465(6) would suggest that the Respondent could quite reasonably conclude that special circumstances do not exist.
In regard to subs 292-465(5), which raises the question as to whether a contribution made in the relevant financial year would more appropriately be allocated towards another financial year instead, the word ‘appropriately’ needs careful consideration. There is no doubt that it would be more convenient if the contribution of $91,141.65 were allocated towards the financial year ended 30 June 2008, rather than the financial year ended 30 June 2009, and this may accord more closely with what the Applicant had intended. Whilst that may be more convenient and desirable from the Applicant’s perspective, the appropriateness of reallocating that contribution needs to be judged by reference to all the factors that exist in a given case.
Furthermore, in looking at what was reasonably foreseeable it is clear from the evidence that had the Applicant taken the simple expedient of obtaining an Investor Report before making the $90,000 contribution, she would have realised the problem that had arisen with the timing of the earlier contribution and could then have decided not to make the later one. This would have avoided the excess contributions problem entirely. The Applicant claims not to have obtained such an Investor Report although clearly someone with considerable knowledge of the Applicant’s affairs etc. did.
Overall in my view the factors discussed above point to a lack of special circumstances.
Accordingly, I am of the view that in this case there are no special circumstances to warrant the exercise of the discretion in subs 292-465(1)(a).
Accordingly I find for the Respondent in respect of this second issue.
Decision
The Tribunal affirms the decision under review.
I certify that the preceding 77 (seventy-seven) paragraphs are a true copy of the reasons for the decision herein of Professor R Deutsch, Deputy President. ............................[sgd]............................................
Associate
Dated 14 January 2013
Date(s) of hearing 8 & 9 November 2012 Date final submissions received 7 December 2012 Counsel for the Applicant Mr Davis Advocate for the Applicant Mr Forsyth Solicitors for the Applicant Ms O'Sullivan Counsel for the Respondent Mr Kasep Solicitors for the Respondent Mr Gordon
Key Legal Topics
Areas of Law
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Taxation Law
Legal Concepts
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Jurisdiction
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Statutory Interpretation
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Compensatory Damages
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