Episode 7 18 December 2015
is best viewed in PDF format.
interpretation NOW! is an internal ATO initiative aimed at improving awareness about statutory interpretation. It is not a public ruling or legal advice and is not binding on the ATO.
There is growing external interest in getting access to interpretation NOW! something which will occur soon. Tax Institute president Stephen Healey says iNOW! provides excellent guidance, and that it distils these complex matters into more user friendly and practical guides. Professor Dennis Pearce, co-author of Pearce & Geddes Statutory Interpretation in Australia, writes I like your text-context-text formulation. It seems to me to be the best that one can make of the varying dicta and is, in any case, good sense see Episodes 2 and 4. Like the Tax Institute, we hope that making iNOW! publicly available will positively encourage greater co-operation and collaboration between members of the profession and the ATO. Please enjoy!
Will Day guest editor, Tax Counsel Network
When provisions can be read so as to invalidate them but may also be read in a way that does not, a court must always choose the latter course when it is reasonably open.1 Gageler J in this case (at [75-78]) provides extra insight into this rule.2 He points out that a court has no warrant to depart from ordinary principles of interpretation in this context, and cannot prefer one construction merely to avoid constitutional doubt3 a court should be wary.
Challenges to tax laws are common, as are articles about the validity of new measures, like the Commissioners remedial power. 4 iTip a tax officer must assume validity, but argument before a court to sustain it may call for a more nuanced approach
This case raised whether Div 815-A transfer pricing provisions were invalid by reason of textual uncertainty. Robertson J said no. Legislation can never be void or invalid due to uncertainty.5 However difficult the exercise, a statute always has a meaning and a singular meaning at that.
Neither a court nor an administrator can hold more than one view of what the law requires at any particular time. They cannot speak with a forked tongue6 this is fundamental. As the judge in this case put it: difficulties of construction are not to be regarded as synonymous with legal uncertainty. iTip there is always a meaning our job as interpreters of legislation is to find it.
Acts are presumed not to operate retrospectively7 its all about fairness. Bromberg J explains (at [237-262]) that retrospectivity has 2 senses (A) changing legal rights concerning past events8, and (B) merely taking account of past events as the basis for how a future law will operate.9
The presumption applies only to type (A). It is rebutted by a contrary intention of reasonable certainty, which may be harder to show in tax contexts. iTip get a feel for whether your situation is (A) or (B) eg Long-term leases made in 2010 are subject to tax from their commencement involves type (A). Next, see if text or context shows any contrary intention with reasonable certainty.
There is a growing jurisprudence about when and how practical consequences properly influence interpretation10 this is a controversial area! In 1981, it was said that results which are absurd, extraordinary, capricious, irrational or obscure might drive an alternative construction.11 Section 15AB was legislated for soon after.
The High Court has said12 that inconvenience of result may assist an alternative conclusion that is reasonably open. Di Paolo (at ) cautions that the consequences must be very serious before a court will reject an otherwise correct construction.13 iTip failure to observe this runs the risk of crossing a line into the no-go domain of parliament.14
§ Writer Gordon Brysland, Producer Michelle Janczarski.
§ Thanks to Ivica Bolonja, Robert Olding & Jo Stewart.
 Wilson-Rogers (2015) 44 AT Rev 242, for example.
 Pearce & Geddes (at [2.38-2.40]).