CASE 12/2004

Members:
S Webb M

Tribunal:
Administrative Appeals Tribunal

MEDIA NEUTRAL CITATION: [2004] AATA 1073

Decision date: 14 October 2004

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S Webb (Member)

By these applications the Taxpayer is seeking relief from a decision of the Commissioner of Taxation (``the Commissioner'') to disallow her application for amendment of Higher Education Contribution Scheme (``HECS'') assessments to nil for income years ending on 30 June 1995, 30 June 1996, 30 June 1997, 30 June 1998 and 30 June 1999.

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2. A preliminary matter concerning general interest charges for which the Taxpayer is liable was also raised. I am satisfied that the Tribunal has no jurisdiction to consider the Taxpayer's claim for relief from those charges. That finding was accepted by the parties and the matter of relief was not pursued directly.

3. The matter came on for hearing before me on 14 September 2004 in Canberra. The Taxpayer represented herself and gave oral evidence, as did her daughter, Ms Lara Pullin. The Commissioner was represented by Mr D. Ong, Australian Taxation Office Legal Practice. Materials were tendered and labelled as exhibits at the hearing.

Factual context

4. The Taxpayer (date of birth: 10 November 1948) has two adult children and lives alone.

5. She commenced tertiary studies in 1990.

6. No assessments for the purpose of compulsory repayment of HECS were made in the years ending 30 June 1990 to 30 June 1994. HECS repayment assessments were made for the years ending 30 June 1995 to 30 June 1999 inclusive (T3 folios 6-10). There was no assessment of HECS repayment liability in the year ending 30 June 2000. HECS repayment assessments were made for the years ending 30 June 2001 to 30 June 2003 inclusive.

7. On 28 April 2003 the Taxpayer applied for deferral of HECS assessments in relation to her HECS debt for the years ended 30 June 1990 to 30 June 2003 (T4).

8. On 28 July 2003 a delegate of the Deputy Commissioner of Taxation decided to allow her applications for years ending 30 June 2001 to 30 June 2003 inclusive, amending those assessment notices to nil, and to disallow her application for the years ending 30 June 1995 to 30 June 1999 inclusive (T9 and T10).

9. On 6 August 2003 the Taxpayer applied to the Administrative Appeals Tribunal (the Tribunal) for review of the disallowance decisions (T1).

Legal principles

10. The Taxpayer's application rises for consideration under the Higher Education Funding Act 1988 (``the HEFA''). The Commissioner may make an assessment of the amount required to be paid under s. 106Q in respect of an accumulated HECS debt under the HEFA (s. 106T) (``HECS assessment debt''). A HECS assessment debt is recoverable as if it were income tax assessed to be payable by a taxpayer under applicable parts of the Income Tax Assessment Act 1936 (``the ITAA'') and the Taxation Administration Act 1953 (``the TAA'') (s. 106U). Under the TAA income tax credits are applied on a priority basis to HECS assessment debts (s. 8AAZLD).

11. Under the HEFA the Commissioner may defer the making of an assessment under s. 106T or, if an assessment has been made, may amend that assessment so that no amount is payable in certain circumstances (s. 106W). Relevantly in this case, subs. 106W(3) confers a discretion on the Commissioner to amend a s. 106T assessment so that no amount is payable if the Commissioner, or in those shoes this Tribunal, forms the opinion that:

``(a) payment of the assessed amount has caused or would cause serious hardship to the person; or

(b) there are other special reasons that make it fair and reasonable to make the amendment.''

12. The term ``serious hardship'' is not defined in the HEFA or related tax legislation. In
Powell v Evreniades & Ors 89 ATC 4415; (1989) 21 FCR 252 Hill J concluded that the term should be given its ordinary meaning and drew a distinction between hardship which is serious and hardship which is extreme, accepting that destitution would constitute ``serious hardship'' (ATC 4421; FCR 260).

13. The Australian Taxation Office - Receivables Policy - 24. Release from Payment of Some Taxation Debts states at paragraph 24.4.1:

``the term serious hardship has connotations of unduly burdensome consequence, the magnitude of which would be likely to lead to persons being deprived of necessities according to normal community standards. Thus, serious hardship would be seen to exist where payment of a tax liability would result in the debtor being left without the means to achieve reasonable acquisitions of food, clothing, medical supplies, accommodation, education for children and other basic requirements.''

14. In
Re Ferguson and Ferguson v Commissioner of Taxation [2004] AATA 779 the Tribunal (differently constituted) found that Taxation Ruling IT 2440 - Income Tax:

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Individuals: Release from Payment of Tax on Grounds of Serious Hardship: Guidelines for Determining the Existence of Serious Hardship provided ``appropriate guidance'' at 24.6.14 and concluded that ``serious hardship'' under the TAA ``is less severe than extreme financial hardship but, nevertheless, hardship of a significant kind in terms of normal community standards'' (paragraph 35).

15. The term ``special reasons'' is not defined in the HEFA or related tax legislation. That term has been likened to the term ``special circumstances'' as it appears in social security legislation (see
Compton v FC of T 99 ATC 2287 at 2293-2294) and has been taken to refer to circumstances that ``may fairly be described as unusual, uncommon or exceptional'' (
Re Beadle and Director-General of Social Security (1984) 6 ALD 1 at 4) or where ``... strict enforcement of the liability created by the section would be unjust, unreasonable or otherwise inappropriate'' (
Re Ivovic and Director-General of Social Services (1981) 3 ALN N95 at 97).

Issues

16. In this case HECS repayment assessments were made in relation to the years in question. The issues, then, before the Tribunal are:

• (a) whether payment of the assessed amount has caused or would cause serious hardship to the Taxpayer, and whether there are special reasons that make it fair and reasonable to amend the assessments; and if so
• (b) whether there are grounds to warrant exercising the discretion to amend the relevant assessments so that no amount is payable therefor.

Summary findings

17. In the years ending 30 June 1995 to 30 June 1999 payment of the assessed amounts did not cause the Taxpayer serious hardship.

18. There are no special reasons to amend the assessments for those years.

19. It is not appropriate to exercise the discretion to amend the assessments in question so that no amount is payable.

Decision

20. The decisions under review are affirmed.

Reasons for the decision

21. Making these decisions I have carefully considered all of the evidence, the submissions of the parties, the relevant caselaw and legislation.

22. It is not in dispute that HECS repayment assessments were made for the years ending 30 June 1995 to 30 June 1999 inclusive. The following information was recorded in the related Notices of Assessment issued by the Commissioner:

• 1995 Notice of Assessment dated 30 May 1996 (T3 folio 6):
• Taxable income - $29,219; HECS repayment amount - $876.57; Balance of the assessment - $270.45.
• 1996 Notice of Assessment dated 15 May 1997 (T3 folio 7):
• Taxable income - $81,870; HECS repayment amount - $4,093.50; Balance of the assessment - $7,628.90. A Notice of Amended Assessment for the year ending 30 June 1996 was issued on 29 July 2003 reducing the balance of the assessment to $2,823.90 (Exhibit R3).
• 1997 Notice of Assessment dated 7 May 1998 (T3 folio 8):
• Taxable income - $32,291; HECS repayment amount - $1,130.18; Balance of the assessment - $1,990.23.
• 1998 Notice of Assessment dated 1 March 1999 (T3 folio 9):
• Taxable income - $33,952; HECS repayment amount - $1,697.60; Balance of the assessment - $3,813.96.
• 1999 Notice of Assessment dated 18 April 2000 (T3 folio 10):
• Taxable income - $29,276; HECS repayment amount - $1,271; Balance of the assessment - $1,571.95.

23. The Taxpayer is seeking amendment of the abovelisted HECS repayment amounts to nil by reason of serious hardship or special reasons. The actual amounts of the HECS repayment assessments are not in dispute. It is necessary, therefore, to consider the factual circumstances in order to discern whether, as a matter of probability to the reasonable satisfaction standard, there are grounds to amend one or

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more of the assessments under the terms of s. 106W of the HEFA so that no amount is payable.

Serious hardship

24. Opinion is to be formed under subs. 106W(3)(a) of the HEFA whether ``payment of the assessed amount has caused or would cause serious hardship to the person''. Plainly, hardship is to be assessed in relation to payment of the assessed amount, whether in fact payment has been made or has yet to be made. When does payment of the amount occur? In the Commissioner's submission the payment occurred in this case when the assessment was made and Pay As You Go (``PAYG'') taxation contributions were applied pursuant to s. 8AAZLD of the TAA:

``If, under this Division, the Commissioner is to apply a credit that arises under Schedule 1 to this Act (the PAYG system), the Commissioner must apply it, whether under section 8AAZLA or 8AAZLB:

• (a) first, against any HEC assessment debt of the entity; and
• (aa) secondly, against any compulsory repayment amount of the entity; and
• (b) then against any FS assessment debt of the entity;

before applying it against other non-RBA tax debts of the entity.''

25. It can be seen that payment is effected when a PAYG credit is applied against a HECS assessment debt or compulsory repayment amount of a person, even though a taxation deficit in equivalent amount may result. It follows that the time at which hardship is to be assessed in each of the years under assessment in this case is the time of effective payment from PAYG credits of the HECS repayment amount (see
Re Szekely and Commissioner of Taxation [2001] AATA 704 at paragraph 4 and 22(c)).

26. Having examined the evidence I make the following factual findings concerning the Taxpayer's financial circumstances during the relevant years.

27. In or about 1994 the Taxpayer purchased the house in which she resides.

28. In or about June 1996 the Taxpayer was paid a lump sum amount of $51,003.40 by Comcare Australia being incapacity compensation payments for the years from July 1983 to June 1995. The lump sum had been taxed at the rate of 22.4 percent (Exhibit A3 and A7).

29. The rate of the Taxpayer's gross weekly incapacity payments was $130.22 during the period from 7 March 1996 to 30 June 1997 (Exhibit A7), resulting in net fortnightly payments to her of $247.64 (Exhibit A3). The net amount of those payments increased to $265.76 per fortnight in June 1996 and to $271.76 by June 2001 (Exhibit R4).

30. The Taxpayer's incapacity compensation payments ceased on 24 October 2002.

31. The Taxpayer was in receipt of a superannuation pension during all relevant periods. In June 1997 the pension was paid at the rate of $804.78 net per fortnight (Exhibit R4), which increased to $814.14 net per fortnight in or about July 1997 and to $864.52 net per fortnight in May 2001. In her application for HECS assessment deferral dated 28 April 2003 (T4 folio 14) the Taxpayer listed her superannuation income as $1,153 gross per fortnight. On 14 April 2004 her superannuation pension was $1,179.42 gross per fortnight ($932.42 net per fortnight) (Exhibit A4).

32. During all relevant periods the Taxpayer was in receipt of a Mobility Allowance paid by the Department of Social Security. In June 1997 it was paid at the rate of $56.50 net per fortnight (Exhibit R4). In her HECS deferral application form the Taxpayer listed her Mobility Allowance income as $64 gross per fortnight (T4 folio 14).

33. In 1995, 1998 and until October 1999 the Taxpayer's Australian Capital Territory (``ACT'') Housing Trust Loan Account was frequently in arrears. For example on 1 May 1995 the account was in arrears by $1,044.99 (Exhibit A4). On 28 April 1995 the Taxpayer wrote ``ACTHT OK'd that I am waiting on Comcare payments to pay arrears''. On 2 December 1997 the Taxpayer applied for review of the rate of her repayments to the ACT Housing Trust. On 2 December 1998 the ACT Government Solicitor wrote to the Taxpayer instructing her to vacate her property at Ngunnawal, following her failure to comply with a demand in relation to arrears. On 15 December 1998 the Taxpayer signed an agency agreement with Peter Blackshaw Real Estate for the sale of the property. On 1 March 1999 the Taxpayer wrote to the ACT Housing Trust and stated that she was attempting her best to pay

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``$906 per month to reduce my arrears. Last year I signed a Direct Debit form to have these payments deducted automatically from my bank account and this never occurred... So I would appreciate it if you would recommence my Direct Debit on a fort nightly basis. In addition to this I am currently in the process of having a Disability Discrimination Complaint investigated... If I am successful in this matter I will probably be awarded some Compensation and will clear my arrears then.'' On 22 September 1999 the ACT Government Solicitor served notice for recovery of the property. The Taxpayer subsequently paid the arrears owing from a lump sum discrimination settlement and continues to reside in the premises.

34. In 1996 the Taxpayer purchased a Mazda 121 car at a cost of approximately $12,000. In 1997 the Taxpayer traded that vehicle for a new Ford Laser that was fitted with a wheel chair carrier. Her oral evidence was that the new car cost in excess of $20,000.

35. In June 1997 the Taxpayer spend approximately $9,566 on a trip to Spain for the purposes of study. An amount of approximately $2,300 was refunded in settlement of a travel insurance claim (Exhibit A7).

36. During 1996 and 1997 the Taxpayer paid for renovations and improvements to her house at Ngunnawal (Exhibit A2):

   Carport          $2,400
   Paving           $3,000
   Spanline Roof    $4,000
   Landscaping      $2,000
   Carpet           $3,000
   Curtains         $500
   Furniture        $5,000
          

37. In the period 1993 to 1999 the Taxpayer expended approximately $6,000 in paying fees for Human Awareness Australia Psychotherapy Workshops, which she repeated three times.

38. On 5 November 1999 Dr M.J. Mulcahy demanded payment of an outstanding amount of $341.75 (Exhibit A4). On 21 July 1999 the Taxpayer had an outstanding account in the amount of $175.50 owing to Dr C.J. Gillmore (Exhibit A4). On 22 March 2000 the Taxpayer was offered an arrangement whereby her outstanding account to Dr B.J. Barry would be repaid in instalments of $50 per month (Exhibit A4).

39. On or soon after 20 October 1999 the Taxpayer was paid $7,500 in settlement of a discrimination complaint (Exhibit A4).

40. On 6 March 2000 the balance of the Taxpayer's Qantas Telstra Visa Credit Card was $4,319.28, in relation to which she was required to pay $432.07. On 19 June 2000 ANZ Global Collections demanded payment of an amount of $184.39 that was outstanding on the Taxpayer's Access Savings Account. On 24 January 2001 Collection House Limited demanded payment of an amount of $3,160.11 in settlement of her outstanding Visa Card liability of $4,213.48 (Exhibit A4).

41. On 21 October 1999 the Taxpayer owed an amount of $1,356.37 to ACTEW Corporation. In a consent judgement dated 9 August 2001 the Taxpayer was required to repay ACTEW Retail Pty Ltd and AGL ACT Retail Investments Pty Ltd, trading as ACTEWAGL Retail an amount of $2,552.53 by instalments of $25 per week (Exhibit A4).

42. On 17 December 2003 the Taxpayer estimated a debt to her daughter Ms Lara Pullin as follows (Exhibit A2):

``Darwin trip pre deployment of my son to East Timor as a Peacekeeper $3 000.00.

...

Payout of ANZ Visa account/Collection House, $1 600.00.

Car registration $200.00

Tyres $233.00

Legal Fees CC Law $1 870.00.

Jewellery repair $50.00.

Cash loan $50.00

Virgin Airlines ticket for medical treatment in Sydney $165.00.

Legal fees R. Faulkes $2 000.00

Darwin university trip $400.00

Cash $20.00

Dr Chandran medico legal costs $1 160.00

Dr Danta medico legal costs $440.00

TOTAL $11 188.00''

43. On 7 February 2003 the balance of the Taxpayer's mortgage over her home was $74,823.60, repayable at $608 per month (T11 folio 48). On that day the Taxpayer estimated

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her living expenses to be $1,419 per fortnight (T11 folio 47). On 28 April 2003 the Taxpayer estimated her living expenses to be $1,657 per fortnight (T4 folio 15).

44. On the evidence set out above I am satisfied that the Taxpayer experienced difficult financial circumstances in 1995, 1998 and 1999. It appears that the Taxpayer's financial circumstances were straitened in 1995 and 1996 prior to receipt of a lump sum payment of arrears compensation for incapacity in or about June 1996. I note that her HECS repayment liability for the year ending 30 June 1995 was assessed in May 1996, whereupon payment was effected. I am satisfied that, at that time, payment of her HECS repayment liability would not have caused her serious hardship. Ms Pullin gave oral evidence that she paid the amount of $270.45 being the Taxpayer's tax debt at that time. That may be so, but the Taxpayer received $51,003.40 at or about the same time as the HECS assessment was made and payment was effected.

45. I am satisfied, on the balance of probabilities, that payment of the assessed HECS repayment liabilities for the years ending 30 June 1996 and 30 June 1997, which were, in effect, paid following assessments in May 1997 and May 1998 respectively, did not cause the Taxpayer to suffer serious hardship. I note that, at or about those times, the Taxpayer expended significant amounts on the purchase of a vehicle, on renovations to her house, on new fittings and furnishings for her home and on a trip to Spain.

46. In the Taxpayer's submission she did not repay the amounts of the HECS assessments for those and subsequent years because she was in dispute with the ATO over the rate of taxation of the lump sum payment of incapacity compensation in arrears. I note that that matter was not resolved until 2003. Even though disputation was ongoing at the relevant time it does not mean that payment of the assessed amounts of HECS repayments for those years either did or would have caused serious hardship. I am satisfied that those payments, as effected by application of PAYG contributions, did not cause the Taxpayer to suffer serious hardship.

47. The Taxpayer points to the evidence of her financial difficulties in the period from 1998 to 2000 and thereafter in submitting that payment of the HECS repayment amounts in March 1999 (in relation to the year ending 30 June 1998) and April 2000 (in relation to the year ending 30 June 1999) caused her to suffer serious hardship. I do not agree.

48. On the evidence before me I am satisfied that the financial difficulties the Taxpayer experienced in the period from 1998 to 2000 were caused by the decisions she made to expend monies without due regard to her liabilities. The Taxpayer chose to improve her house and the fittings therein, and to upgrade her furniture, and to purchase a new car.

49. The amounts of HECS repayment liability in question were $1,697.60 for the year ending 30 June 1998 and $1,271 for the year ending 30 June 1999. Payment of those amounts by application of PAYG contributions increased the amount of her tax debt, which the Taxpayer did not repay at that time because of the aforementioned disputation. It follows that the payments did not cause the Taxpayer hardship at the times they were made because the Taxpayer did not, in fact, repay the resultant increase in her tax liabilities.

50. In the Commissioner's submission the delay in the Taxpayer applying for deferral of her assessed HECS repayment liabilities indicates that she did not experience serious hardship as a result of payment of those liabilities. I accept that submission but note that the Taxpayer gave evidence that she could not easily distinguish the HECS repayment from her accumulating taxation debt.

51. Nevertheless, the applicable paragraph requires consideration of the matter on a hypothetical ``would cause'' basis. Even so, I am not persuaded that those payments would have caused the Taxpayer serious hardship at those times. The fact is she was experiencing financial difficulties as a consequence of decisions she made to expend monies purchasing items that she could ill afford, for example expending over $7,600 on a trip to Spain and taking out a loan for the purchase of a new Ford Laser at a cost (in her estimation) of over $20,000, in relation to which she was required to repay an amount of $440 per month.

52. I accept that the Taxpayer accrued arrears debts in relation to her mortgage, her credit card, her motor vehicle loan and for services in 1998 and 1999. It was open to the Taxpayer to reorganise her financial affairs, in consideration of her assets, her liabilities and her income in relation to her expenses, and to manage her

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expenditure. That she did not is a matter of her choice, but I do not accept that payment of her assessed HECS repayment liabilities in March 1999 and April 2000 caused her to suffer, actually or hypothetically or prospectively, serious hardship.

53. In those years the Taxpayer's income was in the order of $1,200 net per fortnight. There is insufficient evidence to accurately assess the Taxpayer's fortnightly expenses in 1999 and 2000. Her own estimates of fortnightly expenses in February 2003 were (T11 folio 47):

   ``Home ownership                                 $304
   Utilities                                        $100
   Home contents                                    $37
   Groceries                                        $240
   Medical                                          $100
   Education and childcare                          $40
   Repayments [not including vehicle repayments]    $60
   Clothing                                         $40
   Work related expenses                            $40
   Transport and vehicle expenses                   $320
   Insurance                                        $48
   Communication                                    $50
   Entertainment                                    $30
   Miscellaneous                                    $10''
          

On those figures, the Taxpayer was expending $1419 per fortnight or $219 per fortnight in excess of her income. There is scant primary documentation before me against which to properly assess the Taxpayer's estimates. Nonetheless, even if these figures are accepted, plainly the Taxpayer's vehicle costs inflate her expenses to an unsustainable level. In fact the repayments on her vehicle loan were approximately $212 per fortnight.

54. The amount of the Taxpayer's assessed HECS repayment in March 1999 was the equivalent of approximately $65 per fortnight and in April 2000 was approximately $49 per fortnight. As can be seen, a 50 percent reduction in the Taxpayer's claimed expenditure on Education, Clothing, Work related expenses, Entertainment and Miscellaneous items (an amount of $160 per fortnight) would be sufficient to cover her HECS repayment liabilities in each year. A reduction of that order does not, in my opinion, constitute serious hardship to the extent that the Taxpayer would be denied the ability to acquire food, clothing, medical treatment, accommodation and other basic necessities without suffering hardship of a significant degree within normal community standards. I so find.

55. The Taxpayer claimed she had incurred a debt to her daughter, Ms Pullin. Ms Pullin agreed that she had provided her mother with money from time to time ``to help her out''. I accept that evidence but do not accept that the amounts in question constitute a loan that is a liability of the Taxpayer's that must be repaid. Notwithstanding, the Taxpayer's assertions that transactions between her daughter and herself were noted in diaries (that are not in evidence), there is no evidence of substance before me to indicate any written agreement between the Taxpayer and her daughter concerning the alleged loan or to support characterisation of the transactions between them as a loan.

56. That being so, I am compelled by the evidence before me to conclude that payment of the Taxpayer's assessed HECS repayment liabilities for each of the years in question did not cause her to suffer serious hardship. The simple fact is that the Taxpayer chose to spend her money on items of indulgence that she could ill- afford, such as home renovations, a new car and a trip to Spain, rather than arranging her finances to ensure that she was able to meet her liabilities. In that regard she was the mistress of her own misfortune and it cannot be said that payment of her HECS repayment liabilities was or would be the cause of serious hardship in those circumstances.

57. Even if I was wrong in that conclusion, I would not be satisfied that it would be appropriate to exercise the discretion to reduce the HECS assessments in question to nil in circumstances, as here, where the taxpayer has acted without proper regard to her liabilities.

Special reasons

58. In the Taxpayer's submission her medical conditions and the need to obtain treatment for those conditions in Sydney are reasons that are special and warrant amendment of her HECS assessments for the years in question to nil. As will appear, I do not agree.

59. I accept that the Taxpayer suffered a whiplash injury in a motor vehicle accident in 1981. There is evidence that the Taxpayer suffers from chronic pain, osteoarthritis and associated conditions, as well as endometriosis,

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low back pain, hydronephrosis from blocked left uterer and hearing loss (Exhibit A6). The Taxpayer placed her Health Insurance Commission records into evidence (Exhibit A5).

60. The evidence indicates that she suffered from those conditions during the years in question, and that she underwent surgical procedures, for example in June and July 1999, and regularly consulted Dr H. Veness, Psychiatrist. Nonetheless, the Taxpayer has had health insurance during all relevant periods and has maintained a range of voluntary activities in addition to her studies.

61. Plainly, the Taxpayer's medical conditions are concerning, disruptive and the cause of disability that increases her difficulty in a range of activities and pursuits. Nonetheless, the Taxpayer estimated that she expended an amount of $100 per fortnight for medical treatment costs and an amount of approximately $100 per fortnight for vehicle costs, once the cost of her vehicle loan is deducted. She maintained health insurance cover during all relevant periods, in relation to which she allowed an amount of $48 per fortnight in her estimated expenses (T11 folio 47).

62. By her own account the Taxpayer effectively managed her psychiatric condition with pharmacological treatments and with periodic consultations with Dr Veness.

63. That being the case, I am not persuaded, on the balance of probabilities, that the Taxpayer's medical conditions and related treatments constitute special reasons that warrant amendment of her HECS repayment assessments for any of the years in question. Considering the case of Re Beadle (supra) I am not satisfied that her conditions, in the context of the applicable legislation, are unusual, uncommon or exceptional. Many are those who suffer from disabling medical conditions that require treatment. Unlike some, the Taxpayer had private health insurance to assist her cover the costs of the treatment she required.

64. To the extent that the Taxpayer asserted that her dispute with the ATO in relation to the deduction of an incorrect amount of tax from her lump sum payment of incapacity compensation arrears constitutes ``special reasons'', I do not agree. The simple fact is that the Taxpayer was notified of a tax debt in relation to the lump sum payment and for subsequent years that she disputed and did not pay. Interest was charged against the amount of that accumulating debt and, on resolution of the incorrect assessment, the interest charge was recalculated and the amount of the debt reduced.

65. Certainly, it is unfortunate and undesirable that the dispute over the 1996 assessment was not resolved until 2003. A period of seven years is excessive and clearly was the cause of frustration and disgruntlement in the Taxpayer. In other circumstances such a delay in resolving an administrative error may provide reasonable grounds for some concession to the Taxpayer. To that extent I am sympathetic to the Taxpayer's concern. It is open to the Taxpayer to negotiate a suitable and appropriate arrangement for the repayment of her taxation debt with the ATO. That is not a matter before me. Nonetheless, in the circumstances, I am satisfied that the error has not caused anything that is unjust, unreasonable or otherwise inappropriate in the context of the assessment of the Taxpayer's HECS repayment liabilities in the years in question.

66. Having carefully considered all of the Taxpayer's submissions and the related evidence, I am satisfied that no special reasons exist to warrant amendment of one or more of the HECS repayment assessments in question so that no amount is payable.

Discretion

67. In the circumstances I am satisfied that there are no grounds to warrant exercise of the discretion to amend the assessments of the Taxpayer's HECS repayment liabilities in the years in question, and so find.

68. Moreover, it would not be appropriate to exercise the discretion contrary to the objects of the legislation and there is no power to amend an assessment made under s. 106T of the HEFA in the absence of the preconditioning requirements applying to the discretion that are set out at subs. 106W(3)(a) and (b) of the HEFA.

69. That being the case, the assessments in question are not amended and the decisions under review are affirmed.