Rogers and Commissioner of Taxation (Taxation)

[2021] AATA 4478

Rogers and Commissioner of Taxation (Taxation) [2021] AATA 4478 (1 December 2021)

Division:TAXATION AND COMMERCIAL DIVISION

File Number:          2020/3475

Re:Nanette Rogers

APPLICANT

AndCommissioner of Taxation

RESPONDENT

DECISION

Tribunal:The Hon Justice D G Thomas, President
Deputy President Bernard J McCabe

Date:1 December 2021

Place:Brisbane

1.    The decision under review is set aside.

2. In substitution, the Tribunal decides that applicant is a state higher level office holder who is entitled to the benefit of the exception in div 293-E of the Income Tax Assessment Act 1997 (Cth).

..........................[SGD]..............................................

The Hon Justice D G Thomas, President

CATCHWORDS

TAXATION – Superannuation – where applicant was imposed tax for excess superannuation contributions for the 2018 income year pursuant to Division 293 of the Income Tax Assessment Act 1997 (Cth) – whether applicant exempt from Division 293 tax by operation of Subdivision 293-E – consideration of whether applicant is a constitutional state higher level office holder – decision under review set aside and substituted.

LEGISLATION

Constitution Act 1902 (NSW)
Constitution Act 1975 (Vic): ss 82, 87AB, 87AC, 87AE
Constitution of Queensland 2001 (Qld)
County Court Act 1958 (Vic): s 14
Director of Public Prosecutions Act 1984 (Qld)
Director of Public Prosecutions Act 1986 (NSW)
Director of Public Prosecutions Act 1991 (SA)
Director of Public Prosecutions Act 1991 (WA)
Director of Public Prosecutions Bill 1982 (Vic)
Income Tax Assessment Act 1997 (Cth): ss 293-145, 293-150, 995-1
Income Tax Assessment Regulations 1997 (Cth): regs 293-145.01, 995-1.04
Inquiries Act 2014 (Vic): s 123
Police Act 1892 (WA): s 5
Police Force Regulations 1979 (WA): cl 301
Public Prosecutions Act 1994 (Vic): ss 3, 10, 14, 15, 20, 22, 23, 26, 31, 32, 35A, 36, 45, 45A, 48
Salaries and Allowances Act 1975 (WA)
Superannuation (Sustaining the Superannuation Contribution Concession) Imposition Bill 2013 (Cth)
Tax and Superannuation Laws Amendment (Increased Concessional Contributions Cap and Other Measures) Bill 2013 (Cth)

Tax Laws Amendment (2013 Measures No 1) Regulations 2013 (Cth)

CASES

Albrecht v Commissioner of Taxation (2014) 228 FCR 177

Austin v Commonwealth (2003) 215 CLR 185
Clarke v Federal Commissioner of Taxation (2009) 240 CLR 272
Melbourne Corporation v The Commonwealth (1947) 74 CLR 31
R v A2 (2019) 93 ALJR 1106
Re Australian Education Union; Ex parte Victoria (1995) 184 CLR 188

SECONDARY MATERIALS

Hansard, Legislative Council of Victoria

REASONS FOR DECISION

The Hon Justice D G Thomas, President
Deputy President Bernard J McCabe

1 December 2021

Introduction

1. The Commonwealth mandates compulsory superannuation contributions to ensure Australian workers make provision for their retirement. Superannuation affords retired persons greater security and peace of mind. Retired persons with access to superannuation savings are also less likely to call on the social welfare system. To facilitate this policy objective, superannuation contributions made in accordance with the rules are taxed at a lower rate. But there are limits to this concessional treatment.

2. Division 292 of the Income Tax Assessment Act 1997 (Cth) (ITAA97) imposes a cap on the amount of concessional contributions that can be made. Contributions in excess of the cap are included in the taxpayer’s assessable income. Division 293 also imposes rules that limit the amount of concessional contributions which can be made by high-income earners.

3. There are exceptions to the exceptions. One of those exceptions is found in div 293-E. The provisions in div 293-E say taxpayers who would otherwise be caught by the rules under div 293 will not be required to pay div 293 tax if they qualify as constitutionally protected state higher level office holders and the contributions in question were made into constitutionally protected funds.

4. The taxpayer in this case, Dr Nanette Rogers SC, is a Senior Crown Prosecutor with the Office of Public Prosecutions in the State of Victoria. She was appointed to that office for a ten-year term under s 31 of the Public Prosecutions Act 1994 (Vic) by the Governor-in-Council. The instrument of appointment is dated 30 August 2016. There is no dispute that she is a member of a defined benefit scheme that qualifies as a constitutionally protected fund.[1] We have to decide whether Dr Rogers was a constitutionally protected state higher level office holder for the purposes of div 293-E in the income year ending 30 June 2018. If she was, s 293-150(3) of ITAA97 applies to reduce her defined benefit contributions in the 2018 year of income to nil. If Dr Rogers did not qualify, her contributions will be liable to tax under div 293 in the ordinary way.

   [1] Section 995-1 of ITAA97 says a constitutionally protected fund is a fund that is declared in regulations to be constitutionally protected. Regulation 995-1.04 of ITAR97 further defines the concept and lists a number of funds in Schedule 4 of the ITAR97 – including funds established under the County Court Act 1958 (Vic) and the Prosecutions Act.

   What is a ‘constitutionally protected state higher level office holder’?

5. Section 293-145(1)(b) says div 293-E applies to any individual “declared by regulation to be an individual to whom this Subdivision applies” in the relevant year of income. That brings us to reg 293-145.01 of the Income Tax Assessment Regulations 1997 (Cth) (ITAR97) which provides:

   For paragraph 293-145(1)(b) of the Act, the following individuals are declared:

   (a)       a Minister of the government of a State;

   (b)       a member of the staff of a Minister of the government of a State;

   (c)       the Governor of a State;

   (d)       a member of staff of the Governor of a State;

   (e)       a member of the Parliament of a State;

   (f)        the Clerk of a house of the Parliament of a State;

   (g) the head of a Department of the Public Service of a State or a statutory office holder of equivalent seniority, including a statutory office holder who is the head of an instrumentality or agency of a State;

   (h)       a judge, justice or magistrate of the court of a State.

6. The dispute in this case turns on whether Dr Rogers fits within reg 293-145.01(g) – that is, whether a Senior Crown Prosecutor in Victoria was a “statutory office holder of equivalent seniority” to the head of a government department, instrumentality or agency. None of the other limbs of reg 293-145.01 are available. There is no suggestion Dr Rogers is a judge or magistrate, for example, even though (as we shall see) her salary and pension arrangements are linked to those of a judge of the County Court of Victoria.

7. On first reading of this provision, Dr Rogers’s case does not appear promising. She is neither the head nor the deputy of the Office of Public Prosecutions, the instrumentality in question. But it is important to read the words of reg 293.145.01(g) in their context, and (as the Commissioner of Taxation pointed out in his counsel’s written submissions at [11]) having regard to the purpose of the provision.

8. Division 293-E of the ITAA97 and the associated regulations represent the Commonwealth’s latest attempt to deal with the superannuation arrangements of senior state officials in the wake of decisions of the High Court. Those authorities, applying what has become known as the Melbourne Corporation[2] doctrine, say there are limits on the Commonwealth’s ability to (amongst other things) levy taxes on superannuation contributions made into constitutionally protected funds on behalf of state higher level office holders. The leading modern case on the validity and reach of Commonwealth laws into employment arrangements of the State is Re Australian Education Union; Ex parte Victoria (1995) 184 CLR 188 (Re AEU). In Re AEU, Mason CJ, Brennan, Deane, Gaudron, Toohey and McHugh JJ explained “the legislative powers of the Commonwealth cannot be exercised to destroy or curtail the existence of the States or their continuing to function as such”: at 227. The plurality explained (at 232) that focusing on the need to protect the autonomy and integrity of the State served to:

   …direct attention to aspects of a State's functions which are critical to its capacity to function as a government. It seems to us that critical to that capacity of a State is the government's right to determine the number and identity of the persons whom it wishes to employ, the term of appointment of such persons and, as well, the number and identity of the persons whom it wishes to dismiss with or without notice from its employment on redundancy grounds. An impairment of a State's rights in these respects would, in our view, constitute an infringement of the implied limitation.

   [2]Melbourne Corporation v The Commonwealth (1947) 74 CLR 31

9. The key aspect of the reasoning in Re AEU for our purposes is found at 223 where the plurality observed:

   In our view, also critical to a State's capacity to function as a government is its ability, not only to determine the number and identity of those whom it wishes to engage at the higher levels of government, but also to determine the terms and conditions on which those persons shall be engaged. Hence, Ministers, ministerial assistants and advisers, heads of departments and high level statutory office holders, parliamentary officers and judges would clearly fall within this group. The implied limitation would protect the States from the exercise by the Commission of power to fix minimum wages and working conditions in respect of such persons and possibly others as well (58). And, in any event, Ministers and judges are not employees of a State.

   [Emphasis added]

10. The reasoning in Re AEU has been applied and refined by the High Court, most obviously in Austin v Commonwealth (2003) 215 CLR 185 (where state judges successfully challenged a law that levied a surcharge on their superannuation contributions) and Clarke v Federal Commissioner of Taxation (2009) 240 CLR 272 (where the High Court struck down a Commonwealth law levying a surcharge on the pension entitlements of state parliamentarians).

11. The language of reg 293-145.01 was plainly drafted to give effect to the reasoning in the authorities including Re AEU. If there were any doubt about the purpose from the text, it is resolved by reference to the explanatory memorandum that accompanied the Tax Laws Amendment (2013 Measures No 1) Regulation 2013 (Cth) which introduced the provision. The memorandum expressly refers to the High Court jurisprudence applying the Melbourne Corporation doctrine (The explanatory memorandum accompanying the legislation introducing div 293 also included explicit references to the decisions in Austin and Clarke as it explained the new division relied on a definition of high level office holders that would be introduced in regulations to allow for “flexibility”)[3]. In those circumstances, we must prefer an available interpretation of the language of the text of reg 293-145.01 which gives effect to the High Court’s reasoning in Re AEU et al[4].

    [3] Explanatory Memorandum, Tax and Superannuation Laws Amendment (Increased Concessional Contributions Cap and Other Measures) Bill 2013 (Cth) and Superannuation (Sustaining the Superannuation Contribution Concession) Imposition Bill 2013 (Cth), [4.81].

    [4] Written submissions filed on behalf of the Commissioner included a useful summary of the High Court’s jurisprudence on the correct approach to interpreting a provision in light of its purpose – particularly where that purpose involves addressing the implications of a court decision. Those cases make the point (usefully articulated by Kiefel CJ and Keane J in R v A2 (2019) 93 ALJR 1106 at 1117-1118, [32]-[37]) that a decision-maker might prefer a less obvious (but still available) interpretation of the text of a legislative provision if that less obvious interpretation gives effect to the evident purpose of the legislation. Importantly, though, the Court has repeatedly warned that the purpose of legislation informs the interpretation of the text; the purpose does not replace the text so that words are given a meaning they do not bear.

12. The reasoning of the Full Federal Court in Albrecht v Commissioner of Taxation (2014) 228 FCR 177 is particularly important to the outcome of this case. While the Full Court’s decision in Albrecht was made before the amendments that introduced reg 293-145.01, the reasoning is of considerable assistance because it distils the various High Court authorities which the provision is said to embody and so informed the drafting of the provision. In Albrecht, the Court had to decide whether the Commonwealth could validly impose a superannuation surcharge tax upon commissioned officers of the Western Australian police force. The officers challenging the surcharge included a (former) acting Commissioner of Police, two deputy commissioners, and a number of assistant commissioners, commanders and inspectors. In the course of their judgment, Perram, Robertson and Griffiths JJ acknowledged all of the police officers were engaged in the maintenance of law and order, which was certainly a core function of the State: at 181, [13] (The same can be said of Dr Rogers in her work with the Office of Public Prosecutions). But that was not the key question when assessing the validity of the law in question. The Court explained (at 182, [16]):

    …it is not sufficient, without further consideration, simply to identify some State activity as being concerned with a core constitutional function in order to attract the Melbourne Corporation doctrine. Rather, it is necessary, having identified a core constitutional function, to explain why the challenged federal regulation interferes with the capacity of the State to continue to function as a government.

13. The Court went on to say (at 183, [19]):

    It may be accepted that [the Western Australian police] do perform an important, indeed, critical role in the maintenance of peace and order in the State and this role may be described as having a constitutional aspect to it. However, apart from any effect the surcharge tax has upon the terms of and conditions of employment of the State’s high level officials…, the tax has no impact upon the performance by the State of the policing function. It does not affect the number of police, the way in which their duties are performed, how they are supervised, what standards they are subject to or, indeed, policing in any way at all. It may well be that federal regulation of some aspects of State policing would infringe the Melbourne Corporation principle. For example, a federal law which prevented State police from investigating federal public servants for breaches of State criminal law might well have its difficulties. But there is nothing in the current situation of that kind. Ultimately, the appellants conflate the constitutional prohibition against interference with important State constitutional functions with a blanket ban on legislating about such functions at all. …

14. The Court noted the High Court had concluded a surcharge tax was invalid when applied to judges and members of parliament because such a tax interfered with the terms upon which the State engaged those senior officials: at 184, [22]. In those circumstances, it was only necessary for the Court to decide whether particular ranks of commissioned police officers were in an analogous position – i.e. whether they were of sufficient seniority to attract the operation of the Melbourne Corporation principle as it has been refined and applied in ReAEU and subsequent cases.

15. Our task is essentially the same as that facing the Court in Albrecht. While we are formally applying the words of reg 293-145.01, those words encapsulate the same task which faced the Court in that case. Given the words of the regulation were introduced to give effect to the High Court’s reasoning which was authoritatively analysed in Albrecht, we are bound to adopt a consistent approach here when considering whether Dr Rogers’s position as a Senior Crown Prosecutor fell within the residual category of “a statutory office holder of equivalent seniority”. It is important to keep that purpose firmly in mind because it has been suggested a literal reading of the text in the regulation may limit the category of higher level statutory office holders to those who are the heads of departments, agencies or instrumentalities. That interpretation cannot stand in circumstances where the High Court made clear in Re AEU (in the passage highlighted above) that the category of state higher level statutory officeholder was a category of its own that presumably includes, but is not inevitably limited to, the heads of agencies and instrumentalities. The words “of equivalent seniority” are necessarily read widely to accomplish the range of senior positions contemplated by the High Court in Re AEU and other authorities.  We note Ms O’Gorman, counsel for Dr Rogers, argued for essentially the same conclusion in light of a textual analysis of the regulation as a whole. Ms O’Gorman pointed out reg 239-145.01 did not just refer to individuals at the highest levels of the State, such as ministers, members of parliament, the Governor, and heads of department. It also expressly referred to individuals who might be characterised as the private staff of ministers (reg 239-145.01(b)), staff in the office of the Governor (reg 239.145.01(d)) and the Clerk of a house of parliament (reg 239-145.01(f)). Ms O’Gorman said it was evident from the regulation when read as a whole that persons who were not themselves head of an important state instrumentality or agency might still be regarded as “a statutory officeholder of equivalent seniority”.

16. In developing her point, Ms O’Gorman referred to the reasoning in Albrecht where it was said those who provided advice directly to high level office holders other than ministers or the Governor might nonetheless be included within the scope of the implied limitation if excluding those more junior individuals would effectively limit the legitimate and necessary freedom of the high-level office holder to obtain advice as they see fit: at 187-188, [34]-[35]. The Court in Albrecht said there were limits to the range of advisers that would be covered in this way. The Court explained (at 188, [34]):

    …what causes the immunity to attach [to ministerial advisers within the minister’s office, as opposed to more junior officers in the department who were involved in the preparation of advice] in such cases is not the concept of advice – it is the propinquity of the adviser to the advised. …whilst it is true that the central purpose of a government department is to advise its ministers, it is certainly not true that the Melbourne Corporation principle protects every official inside the department involved in the preparation of that advice. The zone of immunity does not extend very far from the minister’s office.

    [Emphasis added]

17. As we apprehend the task, it is necessary in each case to examine where the office holder in question fits within the wider organisational arrangements of the State. While some generalisations are possible (some offices operate in the same way in each State), it is important to emphasise that each office in each State must be examined in its context. It does not inevitably follow that the senior ranks of the police force in States other than Western Australia will qualify as state higher level office holders, for example: indeed, were there to be a change in the particular arrangements that prevailed in Western Australia when Albrecht was decided, the outcome might be different for those officers in subsequent years of income. In the analysis, it is essential to keep in mind the central objective of the Melbourne Corporation doctrine which informs the bounds of the regulation: namely “the interest of the State in being kept free from undue interference in its capacity to function” which might occur when the Commonwealth purports to interfere with terms on which a State engages its most senior functionaries: Albrecht at 188, [35], see also Re AEU at 233.

1. The Commissioner of Taxation in Albrecht did not dispute that the Commissioner of Police was a higher level office holder in Western Australia. We would formally reach the same conclusion in relation to the Director of Public Prosecutions in Victoria. The Director’s place within the State’s arrangements is so senior and important that her office is referred to in the state constitution: see Part IIIA, Constitution Act 1975 (Vic). While a simple hierarchical or functional analysis of positions may not be definitive, it is clear from the operation of the Constitution and the Prosecutions Act that the Director meets the standard given she is head of an important agency of the State and she enjoys a high level of autonomy in the performance of her important role (a role that extends beyond leadership of the agency). If there was any doubt about that, it would be resolved with a reference to the explanatory memorandum which accompanied reg 293-145.01. The memorandum expressly confirms the Director of Public Prosecutions (and the Chief Commissioner of Police, for that matter) in each State was the holder of a key government office that was likely equivalent to a head of department. The challenge in this case lies in determining whether the subordinates of the Director in Victoria – including Dr Rogers – enjoy the same status, either in their own right or by reason of their relationship with, and proximity to, the Director. That brings us back to the reasoning in Albrecht.

2. The appellants in Albrecht included representatives from all ranks of commissioned officers in the Western Australian police force, from inspectors and local area commanders to a former acting Commissioner of Police. The difficult issue in that case was whether any of the officers below the rank of the Commissioner of Police could also be regarded as a state higher level office holder. The Court dealt with the issue by:

   ·Examining the structure and arrangements within the Western Australia police force to determine what the various ranks of commissioned officers actually did which included an analysis of their position relative to other, more senior officers; and

   ·Examining objective evidence suggesting how the State of Western Australia appeared to regard the various officeholders relative to other officeholders.

3. As to the first point, the Court noted (at 185, [26]) the Commissioner of Police was “charged and vested with the general control and management of the Police Force”: s 5, Police Act 1892 (WA). The roles and responsibilities of the other ranks of commissioned officers were not specified. The distribution of responsibilities was a matter for the Commissioner of Police: cl 301, Police Force Regulations 1979 (WA) (As we shall see, the Commissioner of Police in Albrecht appears to possess rather more power over his subordinates than the Director has in relation to Senior Crown Prosecutors). The Court also pointed out (at 185, [25]) all of the commissioned officers down to the rank of inspector were appointed by the Governor-in-Council (ss 5, 6 of the Police Act), and they could be removed by the Governor: s 8 (We should interpolate that the various ranks of commissioned officers enjoyed less security of tenure than Dr Rogers. We will have more to say below about her terms and conditions of appointment and her tenure).

4. The Court in Albrecht accepted more junior ranks of commissioned officers (i.e. those below the rank of Assistant Commissioner of Police) might have important management responsibilities with respect to (in some cases) hundreds of constables and budgets of millions of dollars. The work of those officers was certainly important to the operation of a core state government function. But that did not, of itself, make them state higher level office holders. The Court explained (at 188, [35]):

   …these three more junior ranks are answerable to the three senior ranks who are all high level statutory officers. The imposition of the surcharge tax on the individuals in the more junior ranks does not compromise the ability of the State to continue to receive important advice from whom it wishes.

5. An analysis of the work of the more senior commissioned officers and the propinquity of their relationship with the Commissioner of Police suggested they were higher level statutory office holders. But the decisive factor, at least as far as the Court was concerned, was the objective evidence suggesting the State itself clearly regarded the officers in the three most senior ranks as being higher level statutory office holders in their own right. The Court noted the State had included the officers in question on a list of ‘prescribed officers’ whose salaries and allowances were determined pursuant to the Salaries and Allowances Act 1975 (WA). The Court examined the list of prescribed persons and observed (at 186, [29]):

   Each of the appellants who was a deputy commissioner was either a deputy commissioner for operations or for specialist services, that is to say, each was on this list. It is not difficult to describe the list [of prescribed persons] as encompassing ‘high level statutory office holders’ within Re Australian Education Union. Indeed, it is difficult to describe it otherwise. These two ranks of commissioned police officers are placed in the same company as the Solicitor-General, the Director of Public Prosecutions, the Auditor General and the Commissioner of Police and their pay is fixed by the same independent tribunal. Counsel for the Commissioner submitted that the immunity extended to those four offices. We agree. If one were looking then for a list of ‘high level statutory office holders’, cl 3 would appear to be Western Australia’s effort to identify them all in one place. There is no suggestion that this list had not been compiled in good faith.

   Is Dr Rogers a constitutionally protected state higher level office holder for the purposes of div 293-E?

6. We do not have the advantage in this case of a compendious list of important state offices like the one that commended itself to the Court in Albrecht (Ms O’Gorman argued on behalf of Dr Rogers that we should treat the list of exempt offices in s 123 of the Inquiries Act 2014 (Vic) as a compendious list of equivalent weight, but – for reasons we shall explain – we do not attach the same significance to that list). It follows we must analyse the arrangements in place in Victoria and consider the various indicia which shed light on whether a Senior Crown Prosecutor is properly regarded as “…a statutory office holder of equivalent seniority…” to the other constitutionally protected state higher level office holders expressly referred to in reg 293-145.01. It is convenient to undertake that analysis by reference to:

   (a)The relationship between the Director and Senior Crown Prosecutors under the Prosecutions Act;

   (b)The arrangements with respect to appointment, tenure and dismissal of a Senior Crown Prosecutor;

   (c)Remuneration arrangements;

   (d)Pension arrangements;

   (e)Propinquity with the Director or other state high level office holders; and

   (f)Other factors.

   The relationship between the Director and Senior Crown Prosecutors under the Prosecutions Act

7. In written submissions, Mr Hanks QC (counsel for the Commissioner) emphasised a Senior Crown Prosecutor was in a subordinate relationship with the Director and the Chief Crown Prosecutor. Mr Hanks said the Director, not the Senior Crown Prosecutor, was the “statutory office holder of equivalent seniority” to the head of a department of state because the Director headed up an important state agency who reported to or advised a minister.[5] Mr Hanks pointed out the expression “of equivalent seniority” in reg 293-145.01 “encompasses a range of relationships, from direct equivalence to substantive similarity or correlation”.[6] We agree that determining equivalence involves a comparative analysis to assess the parallels between roles, but it is important to keep in mind (as Mr Hanks pointed out in his submissions) that the comparison must be undertaken with an eye to the fundamental rationale of the immunity.[7] It follows the word ‘equivalent’ must be read widely.

   [5] Commissioner’s written submissions at [52]-[54]

   [6] Commissioner’s written submissions at [42]

   [7] Commissioner’s written submissions at [43]

8. The office of the Director in Victoria is referred to in the Constitution. That is not the case in Western Australia, for example, and there is no express reference to the equivalent office in the Constitution Act 1902 (NSW) or the Constitution of Queensland 2001 (Qld). We were told the explanation for the Director’s pre-eminence in Victoria could be divined from the second reading speech of the Minister introducing the Director of Public Prosecutions Bill 1982 (Vic) (the forerunner of the Prosecutions Act) into the Victorian Parliament. The Minister made much of the need for an independent prosecution authority which made its decisions without being subjected to political pressure. The Minister referred to recommendations from recent royal commissions in the State which had apparently raised questions over the prosecution process. The Minister observed that, under the Bill, the Director would be responsible to the Attorney-General as the portfolio Minister “but he will perform as an independent prosecuting authority and his office will be removed from the political process”[8].

   [8] Hansard, Legislative Council of Victoria, 14 December 1982, 1415 (W. A Landeryou, Minister for Economic Development)

9. The second reading speech provides contextual information about the criminal justice process in Victoria which appears to have informed the allocation of responsibilities and the organisational arrangements which emerged in that State. The Parliament deliberately reallocated an important function that traditionally resided with the Attorney-General (who is certainly a state higher level officer holder) to an independent entity. An analysis of the Prosecutions Act reveals structural arrangements that secure the independence of the Director in the conduct of those core prosecutorial functions. The most striking feature of those arrangements is the fact the Director – the head of the Office of Public Prosecutions established under the Prosecutions Act – is not actually appointed under the Prosecutions Act. The Director is appointed under s 87AB of the Constitution, an indication that she is regarded as amongst the most important officers in the State in her own right. Her remuneration and other entitlements are linked to those of a Supreme Court judge: ss 87AC and 82. Section 87AE provides the Director may be temporarily suspended by the Attorney-General but both houses of parliament must thereafter decide to remove the Director from office or the suspension is lifted (Section 17 of the Prosecutions Act says the Chief Crown Prosecutor enjoys a similar level of protection from dismissal). The link between the Director’s terms and conditions and those of a judge and the removal-from-office provisions that confer a similar (although not identical) level of security on the Director reinforces the message about the State’s attitude towards this position.

10. The Director’s functions and powers are set out in Part 4 of the Prosecutions Act. The Director’s principal responsibility under s 22 is the preparation and conduct of proceedings in relation to criminal matters – especially indictable offences - on behalf of the State. She is also the head of the public prosecutions service with responsibility for ensuring the service is conducted in an efficient, economic and effective manner: s 23. Section 10(1) says the Director is formally responsible to the Attorney-General for the due performance of her role, but the Director does not have the sort of relationship with the Attorney-General that a minister conventionally enjoys with a department or agency head. Mr Hanks described the conventional minister-head relationship in written submissions as one in which the head of department manages the department and advises and reports to the minister on the department’s activities so the minister can fulfil his or her constitutional function: Commissioner’s written submissions at [51]. The Director enjoys much greater security and autonomy than a typical department or agency head under the arrangements established in Victoria. That is made clear in s 10(2) of the Prosecutions Act which provides that sub-s 10(1) does not limit the authority (and autonomy, one might interpolate) of the Director in commencing and carrying on proceedings - which is, after all, the Director’s core function. To similar effect, s 20(1) says the Chief Crown Prosecutor is responsible to the Director for the due performance of the Chief Crown Prosecutor’s role, but sub-s 20(2) includes a qualification that limits the ability of the Director to instruct the Chief Crown Prosecutor in relation to certain matters including his or her decision to file indictments as a crown prosecutor pursuant to s 36.

11. Mr Hanks argued in written submissions that the way in which the Director is dealt with in the Prosecutions Act and the Constitution provided a contrast with the treatment of the Senior Crown Prosecutor’s role. The appointment and functions of crown prosecutors (including the Senior Crown Prosecutor) was dealt with in the more general provisions found in Part 5 of the Prosecutions Act. We agree that these features of the Prosecutions Act point to Dr Rogers being relatively less senior than the Director and her deputy, the Chief Crown Prosecutor. But that does not exhaust the inquiry we must undertake. As the reasoning in Albrecht demonstrates, an office holder that is subordinate to another may yet be regarded as a state higher level office holder by reason of their propinquity to another high level office holder, or perhaps in their own right because that is how they are regarded by the State.

12. Having referred to the role of the Director, we turn to the organisational arrangements within the Office of Public Prosecutions. We should commence that discussion by repeating our earlier observation that the organisational arrangements embedded in the Prosecutions Act are more prescriptive than the arrangements pertaining to different ranks of commissioned officers in the Western Australian Police Force under the legislation discussed in Albrecht. Section 5 of the Police Act provided the Commissioner of Police was “charged and vested with the general control and management of the Police Force” and the roles and responsibilities of the other ranks were left to the Commissioner to determine.

13. Responsibility for day-to-day management of the Office of Public Prosecutions in Victoria (the administrative agency which supports the Director in the performance of her functions) is allocated to the Solicitor for Public Prosecutions: s 43 of the Prosecutions Act. Part 8 of the Prosecutions Act also provides for the establishment of a Directors’ Committee. The Committee is comprised of the Director, the Chief Crown Prosecutor, and the Solicitor for Public Prosecutions: s 45. Dr Rogers is not a member of the Committee, which both reflects the relative importance of her role and potentially indicates her distance from (as opposed to her propinquity with) the Director, although she presumably sits on the Committee when she acts as Chief Crown Prosecutor pursuant to s 35A. The Committee has what might broadly be described as coordinating functions which are set out in s 45A. Another of the Committee’s functions was the subject of evidence at the hearing. Dr Rogers was asked about the powers of the Committee with respect to special decisions. Special decisions are a particular category of decision to indict or discontinue proceedings. Dr Rogers acknowledged the powers of the Committee in this regard might constrain her conduct in respect of that narrow class of proceedings, but she explained the bulk of a Senior Crown Prosecutor’s work did not involve making special decisions. It follows, she argued, the powers of the Committee in this regard did not significantly impact on or constrain her autonomy in the performance of her role within the organisation – particularly the filing of ‘regular’ indictments.

14. Mr Hanks said the Director’s powers relative to Dr Rogers further underlined the difference between them. Mr Hanks pointed out s 14 of the Prosecutions Act gave the Chief Crown Prosecutor:

    Control of day to day management of the Crown Prosecutors and Associate Crown Prosecutors so as to ensure that they perform their functions and duties in an effective, economic and efficient manner…

15. Mr Hanks said that level of control was inconsistent with Dr Rogers enjoying the status she claimed. He said the Prosecutions Act suggested a Senior Crown Prosecutor was subject to the same level of formal control as the more numerous crown prosecutors and associate crown prosecutors. We were also referred to s 23(f)(ii) which permits the Director to give directions to crown prosecutors (including a Senior Crown Prosecutor like Dr Rogers) in accordance with the Prosecutions Act. Section 26(1)(a) authorises the Director to establish general guidelines for crown prosecutors (including a Senior Crown Prosecutor) with respect to the prosecution of offences although s 26(2) points out s 26(1) does not authorise the Director to issue guidelines in respect of a particular case. Section 26(4) underlines the delicate balance between legitimate supervision by the Director and prosecutorial independence when it states:

    Nothing in subsection (1) or in any guidelines established under that subsection prevents the performance or exercise by a Crown Prosecutor or Associate Crown Prosecutor of any of his or her functions or powers under this or any other Act.

16. That balancing act is also evident in s 36, the provision that sets out the functions of crown prosecutors[9] which include filing indictments in the name of the Director and carrying on proceedings on her behalf. On the one hand, s 36(4) notes a Crown Prosecutor (a) is subject to the general direction and control of the Director in the performance of the Crown Prosecutor’s functions, and (b) is responsible to the Director for the “due performance” of those functions. On the other hand, s 36(5) expressly provides the Director may not give directions to a Crown Prosecutor with respect to filing an indictment against any person.

    [9] The reference in the section to ‘crown prosecutors’ is defined to include Senior Crown Prosecutors: s 3 of the Prosecutions Act.

17. These arrangements, taken together, confirm the Director enjoys significant autonomy, although she is also constrained in the performance of her leadership role within the Office of Public Prosecutions by organisational arrangements embedded in the Prosecutions Act. Importantly, though, the legislation makes clear a Crown Prosecutor who brings and conducts proceedings in the Director’s name also enjoys significant autonomy (while not the same level of autonomy as the Director) in the performance of that core function in particular. The Director’s powers in s 14 to “control…the day to day management” of the work of all crown prosecutors and the text of ss 26(2) and 36(4) must be read in light of the obvious intention that crown prosecutors – especially the Senior Crown Prosecutor – would be afforded significant autonomy in exercising their professional judgment as they carried out their core function of filing indictments and appearing in proceedings. That statutorily defined autonomy can be contrasted with the absence of statutory recognition for the different roles and responsibilities of senior commissioned police officers discussed in Albrecht who were nonetheless determined to be state higher level office holders.

18. When Dr Rogers makes a decision within the scope of her authority to file indictments, she is effectively stepping into the shoes of the Director with all (or most) of the freedom which that implies. Those decisions are amongst the most important decisions made by any state official. Her autonomy is an established and intended feature of the criminal justice system in Victoria. It marks out Dr Rogers as an important state official in her own right, even if she has a narrower range of functions and is regarded as less senior than the Director, especially in relation to the management of the Office of Public Prosecutions. Whether that is enough to qualify her as a state higher level office holder as that term is defined in the regulations will ultimately depend on the weight we attach to other indicia.

    The arrangements with respect to appointment, tenure and dismissal of a Senior Crown Prosecutor

1. The instrument of Dr Rogers’s appointment by the Governor-in-Council is dated 30 August 2016. The instrument records the appointment was made pursuant to ss 31 and 32 of the Prosecutions Act. The term of the appointment was for ten years.

2. The immediate explanation for the length of the term can be found in s 32 of the Prosecutions Act. Section 32(1) says a Senior Crown Prosecutor must be appointed for a term of at least ten years whereas s 32(2) says regular crown prosecutors may be appointed for a term of up to ten years (although they may be reappointed to a further term). The significance of the ten-year term of appointment for Senior Crown Prosecutors becomes apparent when one has regard to the terms of s 35. Section 35(1) provides:

   A Senior Crown Prosecutor and his or her partner and children are entitled to pensions in the same circumstances and at the same rates and on the same terms and conditions as a judge of the County Court (other than the Chief Judge) and his or her partner and children are entitled to under section 14 of the County Court Act 1958.

3. The eligibility criteria in s 14 of the County Court Act include a requirement in most cases that a judge serve at least ten years in office. That is the same minimum term of appointment offered to a Senior Crown Prosecutor under the Prosecutions Act.[10] We will discuss the significance of Dr Rogers’s pension arrangements and the linkage with the judiciary below. For now, it is enough to note a longer term of appointment offers a measure of security in and of itself. While term appointments are not unusual for statutory office holders, a ten-year term is relatively long (and certainly longer than the term of ordinary crown prosecutors). Both the Director and the Chief Crown Prosecutor are also appointed for terms of at least ten years.

   [10] The detailed criteria vary depending on the time and circumstances of a judge’s appointment, but the differences are not relevant for present purposes.

4. It is also important to carefully analyse Dr Rogers’s security of tenure during the life of her ten-year appointment. Mr Hanks pointed out crown prosecutors enjoy less security of tenure than the Director and the Chief Crown Prosecutor. That is certainly true as a formal matter. The power to remove a Crown Prosecutor (including a Senior Crown Prosecutor) from office is found in s 34 of the Prosecutions Act. That section provides a Crown Prosecutor is removed upon the occurrence of certain events, including bankruptcy and incapacity. But the Governor-in-Council may also remove any Crown Prosecutor (apart from the Chief Crown Prosecutor) under this section upon the recommendation of the Director after consulting the Committee. Parliament does not have a role in the dismissal of a Crown Prosecutor as it would do in the case of judges, the Director or the Chief Crown Prosecutor. Mr Hanks said that was a basis for distinguishing between the Director and the Chief Crown Prosecutor on the one hand, and the Senior Crown Prosecutor and crown prosecutors on the other.

5. There may be something to this, although we note the Director’s power to terminate a Crown Prosecutor is still constrained by the need to consult, and the involvement of parliament in the dismissal process is not inevitably a feature of all high level state offices. As Ms O’Gorman pointed out, deputy commissioners and assistant commissioners in the Western Australian police force could be removed by the Governor without parliamentary approval. The same is true of Directors of Public Prosecutions in some other states. The provisions of the Director of Public Prosecutions Act 1984 (Qld), the Director of Public Prosecutions Act 1986 (NSW), the Director of Public Prosecutions Act 1991 (WA) and the Director of Public Prosecutions Act 1991 (SA), all provide for the dismissal of the Director by the Governor-in-Council without reference to parliament.

   Remuneration arrangements

6. Sub-sections 32(4) and (5) of the Prosecutions Act says Dr Rogers’s general remuneration and conditions are determined by the Governor-in-Council and set out in the instrument of appointment. Mr Hanks says that is telling: except in one respect, there is no direct statutory link between Dr Rogers’s pay and conditions and the pay and conditions of a judicial officer. It also follows that Dr Rogers’ pay and conditions are not directly regulated by an independent state remuneration tribunal, as was the case of the senior police officers in Western Australia in Albrecht. But while there is no express statutory linkage with the judiciary when it comes to remuneration, there is an indirect connection that must be considered. The instrument of appointment provides Dr Rogers’s remuneration is fixed at 99% of the remuneration paid to the Chief Crown Prosecutor. That is noteworthy for present purposes because s 15(1) of the Prosecutions Act says the Chief Crown Prosecutor is entitled to the same remuneration as a County Court judge. It follows that, on the text of the instrument of appointment, there is an established relationship between the Senior Crown Prosecutor’s general terms and conditions and those of a judicial officer. While Mr Hanks pointed out in submissions the government was not obliged under the legislation to link the remuneration of a Senior Crown Prosecutor to a judge, it is the fact that the appointment in this case was made on this basis – a linkage which appears to be fixed for the life of Dr Rogers’s appointment. This is an indication of the way in which the State sees the appointment of Dr Rogers. We note the salaries and allowances of the Directors in Queensland and South Australia are determined by the Governor-in-Council, rather than the independent remuneration tribunal in those States – yet there seems little doubt those individuals are state higher level office holders in their respective jurisdictions.

   Pension arrangements

7. We have already noted s 35 of the Prosecutions Act establishes a formal link between the pension entitlements of a Senior Crown Prosecutor and those of a County Court judge. The pension arrangements for judges are a means of reinforcing the judges’ independence. The same logic may be seen as underlying the linkage of the Senior Crown Prosecutor’s pension arrangements (as opposed to the pension arrangements of a regular crown prosecutor) with those of a judge. Dr Rogers argues this feature of her role is a strong indicator of her relative importance in the arrangements of the State.

8. Mr Hanks argued it would be a mistake to infer too much from the linkage between the pension entitlements of judges and the Senior Crown Prosecutor. He said the mere fact of the linkage was not as powerful or obvious as the compendious list of offices that was central to the decision of the Court in Albrecht. We agree the linkage is not dispositive in the same way as the compendious list, but it must still be regarded as an important indication of the way the State sees Dr Rogers’s role.  

   Propinquity with the Director or other state high level office holders

9. Dr Rogers says she should be regarded as a state higher level office holder by virtue of her propinquity with the Director. A good deal of Dr Rogers’s statement and her oral evidence at the hearing was directed towards demonstrating propinquity in the sense discussed in Albrecht. Dr Rogers was asked questions about the extent to which she provided advice to the Director. She said she was, by dint of her experience, routinely trusted to advise other members of the Office of Public Prosecutions and the Director about matters where she was regarded as an expert. It was unclear to us whether her role in giving advice directly to the Director was an incident of her appointment as a Senior Crown Prosecutor, or whether – to the extent it occurred – it was simply a matter of practice.

10. There is no reason to doubt Dr Rogers is held in high regard within the Office of Public Prosecutions, and we can accept the Director has come to value Dr Rogers’s advice and assistance. But that evidence of collegial day-to-day interactions within the Office does not of itself establish a Senior Crown Prosecutor in Victoria operates in sufficient propinquity with the Director in the sense discussed in Albrecht. Indeed, the whole thrust of the institutional arrangements applying to crown prosecutors in Victoria suggests they are not focused on providing advice and assistance to the Director in the way a ministerial staffer or departmental head advises a minister. We have also pointed out the Senior Crown Prosecutor is not a member of the Committee, which suggests Dr Rogers sits outside the inner circle of decision-making in relation to the wider operations of the agency.

11. Yet propinquity with the Director might exist in another way. As we have explained, the constitutional and legislative arrangements in Victoria have reallocated a core state function – bringing indictments and carrying on prosecutions – from the Attorney-General to the Director. The provisions of the Prosecutions Act that define the relationship between the Director and the Senior Crown Prosecutor make clear Dr Rogers enjoys significant institutional autonomy in the way in which she goes about her core function of filing indictments and conducting proceedings. As a formal matter, she files indictments in the Director’s name and carries on proceedings on the Director’s behalf pursuant to s 36 of the Prosecutions Act. Stepping into the Director’s shoes is almost certainly a relationship of propinquity with the Director. The fact the Director may have some residual or general control over the way in which the Senior Crown Prosecutor performs while standing in the Director’s shoes does not meaningfully limit the core power the Senior Crown Prosecutor is exercising.

    Other factors

12. Dr Rogers also pointed to s 123 of the Inquiries Act as evidence of her relative status. Section 123 says certain senior state office holders were not subject to the powers of a Royal Commission or Board of Inquiry. The list of protected offices includes the Auditor-General, the Ombudsman, judicial officers, members of Victorian Civil and Administrative Tribunal – and crown prosecutors. Ms O’Gorman argued that list of offices should be treated as a compendious list of state higher level office holders in much the same way as the list of offices discussed in Albrecht. Mr Hanks disagreed. He said the list of offices in s 123 of the Inquiries Act was plainly compiled with a different purpose in mind. Whereas the list in Albrecht was used to determine whose pay and entitlements were governed by the state’s remuneration tribunal, the list in s 123 of the Inquiries Act was designed to ensure the proper functioning of the offices mentioned. It was a protection for offices, not a recognition of office holders.

13. We accept the list of offices in s 123 cannot be regarded as a compendious list of important state offices in the Albrecht sense, not least because the list omits several obviously important offices and includes some that are plainly not high offices. The Governor and her staff are not mentioned, and there is no reference to ministers or heads of departments. Having said that, the fact the offices listed are taken to enjoy a level of immunity from public inquiries is a recognition of the high level at which the State regards these office holders.

    Weighing the factors

14. It is clear that the Senior Crown Prosecutor is not as senior as the Director or the Chief Crown Prosecutor in hierarchical terms. Dr Rogers is generally subject to the directions of her superiors, and she enjoys less security of tenure than either of those officers – although she enjoys more institutionalised autonomy within the Office than the deputy commissioners and assistant commissioners referred to in Albrecht, and she enjoys greater security of tenure than Directors in some other states. The State of Victoria has not gone to the same lengths to formally align the Senior Crown Prosecutor with judicial officers in some respects (although they both appear on the list in s 123 of the Inquiries Act). However:

    ·The extent of the linkage between Dr Rogers’s remuneration and conditions and those of a judicial officer, while indirect, is fixed for the term of her appointment and is significant;

    ·The linkage between Dr Rogers’s pension entitlements and those of a County Court judge is clear, and obviously directed to the same ends – namely, to secure the independence of the office holder in the performance of an important state function; and

    ·Dr Rogers’s security of tenure is significant.

15. We are satisfied those indicia – in particular, the pension arrangements - confirm Dr Rogers is a state higher level office holder in her own right within the meaning of the regulation. The Victorian Parliament has seen fit to invest the Director and her subordinates with significant autonomy, buttressed by substantial institutional protections, in the performance of that important role. As a consequence, Dr Rogers is in a position of significant responsibility and power relative to other state officials. If there were any doubt about our conclusion, we think it is resolved by the relationship of propinquity that exists between Dr Rogers and the Director.

16. In carrying out our analysis, we have made clear that a person does not qualify as a state higher level office holder merely because of an involvement in the performance of an important state function. We have also made clear there may be more than one state higher level officer holder within an organisation, especially (but perhaps not only) where there is propinquity between them. That is the clear lesson from the Full Court’s decision in Albrecht. But Albrecht makes clear (at 188, [35]) the application of the doctrine in ReAEU et al which informs the interpretation of the regulation should:

    proceed by reference to what the doctrine seeks to protect and this is the interest of the State in being kept free from undue interference in its capacity to function.

17. Victoria’s capacity to conduct criminal prosecutions is essential to its capacity to function, and it now performs that function through the Director. The Director carries on that function through carefully constructed institutional arrangements that include the office of the Senior Crown Prosecutor. The imposition of the superannuation contributions tax on Senior Crown Prosecutor impacts on the State’s ability to determine the terms and conditions on which those office holders are engaged.

    Conclusion

18. The objection decision is set aside. We decide in substitution that Dr Rogers is a state higher level office holder who is entitled to the benefit of the exception in div 293-E of the ITAA97.

I certify that the preceding 53 (fifty-three) paragraphs are a true copy of the reasons for the decision herein of the Hon Justice D G Thomas, President and  Deputy President Bernard J McCabe

.........................[SGD]...............................................

Associate

Dated: 1 December 2021

Date of hearing:	9 March 2021
Counsel for the Applicant:	Ms K O'Gorman
Counsel for the Respondent:	Mr P Hanks QC with Ms M Schilling
Solicitors for the Respondent:	Australian Government Solicitor