interpretation NOW!

Episode 70 – 30 March 2021

interpretation NOW! 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.

Recent appeal cases stress 4 related propositions – ¦ purpose is to be considered throughout the interpretive process1, ¦ harmony between provisions must be sought2, ¦ we must try to ensure the legislative target is hit not missed3, and ¦ a purposive answer may rule over ordinary meaning4. These propositions wrap up in a meaningful way the practical impact of our ‘modern approach’. The High Court itself has said next to nothing on interpretation lately. In a case about difficult tax administration provisions, for example, the court wrote but 10 pages and remained wholly silent on interpretation. There are issues bubbling away in the intermediate courts which will ultimately require apex court attention – like the circuity issue with statutory definitions5. However, as a systemic baseline, stability rules! The 4 propositions referred to above are core aspects of that stability.

Gordon Brysland – Tax Counsel Network

Meaning of ‘agreement’

Bob Brown Foundation v Cth [2021] FCAFC 5

Normally an ‘agreement’ is an accord which is legally enforceable. BBF argued this seeking to prevent forestry operations affecting habitat of the swift parrot. Earlier approvals were invalid, said BBF, because the inter-governmental agreement (IGA) in question was not an ‘agreement that is in force’ under the legislation6. This was rejected (at [47-49]). The court pointed out that not every ‘agreement’ must be judicially enforceable7. IGAs, being political in nature, are not intended to be adjudicated on by courts. Requiring this ‘agreement’ to be enforceable would also defeat the statutory purpose (at [68]). iTip – an IGA is not ‘merely a scrap of paper’8.

International treaties

Spain v Infrastructure Services [2021] FCAFC 3

Investors secured an arbitration award for €1.1m under the ICSID Convention9 against Spain for default on a solar power project. They sought execution in Australia under ICSID, a point being whether ‘execution’ extends to ‘enforcement’. ICSID is made in English, French & Spanish – all equally authentic. Treaty terms are presumed to ‘have the same meaning in each authentic text’10. Difficulties are resolved by adopting the meaning which ‘best reconciles the texts’ by reference to objects and purpose. Perram J held that ‘execution’ and ‘enforcement’ took their meanings from the French and Spanish texts – the English text did not prevail.

Procedural fairness

Raina v CIC Allianz Insurance [2021] NSWSC 13

Raina was injured when another driver ran into the back of his car. He challenged medical review panel assessments on grounds which included denial of natural justice. Campbell J (at [92]) rejected this, given Raina refused a further medical examination. The judge (at [51-56]) describes how statutory powers are interpreted to require procedural fairness for persons affected. The basic principle is that the critical issue on which the decision is likely to turn must be brought to the person’s attention ‘so that he may have an opportunity of dealing with it’11. This extends to confronting the person with inconsistencies and providing an option to respond12.

Guidelines and rulings

Antegra Pty Ltd v CCSR [2021] NSWSC 107

Payne JA (at [86-87]) held that the ordinary principles of interpretation apply to Treasurer guidelines, and that it was ‘to be construed according to its text and purpose as evident from the document itself in the context of the legislative scheme in which the guidelines are required to be applied’13. Text writers14 and other factors supported this outcome. The discussion in this case points the way on how public rulings issued by the ATO are to be read. This is particularly important because proper reliance on a ruling which ‘applies to you’ operates to bind the Commissioner15. iTip – read administrative rulings and guidelines in the same general way as statutes.

§ Credits – Gordon Brysland, Oliver Hood & Patrick Boyd.

[1] Cheshire (No 2) [2021] SASCFC 11 (at [90]), cf Calidad [2020] HCA 41 (at [91]).

[2] Groupline [2020] QCA 245 (at [98-101]), cf Wigmans [2021] HCA 7 (at [77]).

[3] Douglas [2020] FCAFC 220 (at [90-91]), cf Taylor [2014] HCA 9 (at [60]).

[4] Lawson [2021] NSWCA 6 (at [25, 58]), cf SZTAL [2017] HCA 34 (at [38-39]).

[5] Auctus [2021] FCAFC 39 (at [56-69]), Singh [2020] NSWCA 152 (at [98-131]).

[6] s 4 of the Regional Forest Agreements Act 2002 (Cth) RFA definition.

[7] South Australia 108 CLR 130, cf Rose in Finn (ed) Essays on Contract (at 240).

[8] South Australia (at 155), cf Seddon Government Contracts (at [3.6]).

[9] Convention on the Settlement of Investment Disputes [etc].

[10] Vienna Convention , cf Pharma-a-Care [2020] HCA 2 (at [36]), Episode 58 .

[11] Kioa (1985) 159 CLR 550 (at 587), SZGUR [2011] HCA 1 (at [9]).

[12] Frost [2014] NSWCA 39 (at 31-32]), cf ACN [2020] FCAFC 190 (at [178-180]).

[13] Salvation Army [2018] NSWSC 128 (at [159-166]), cf s 46 AIA 1901 (Cth).

[14] Pearce 9th ed (at [1.2]), Herzfeld & Prince Interpretation (at [16.10]).

[15] s 357-60(1) of Sch 1 to TAA53 , cf Resource [2019] FCAFC 51 (at [94-95]).

ISSN 2651-9518