Episode 70 30 March 2021
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
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 ). iTip an IGA is not merely a scrap of paper8.
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 text10. 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.
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 ) 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 persons attention so that he may have an opportunity of dealing with it11. This extends to confronting the person with inconsistencies and providing an option to respond12.
Guidelines and rulings
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 applied13. 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.
 Pearce 9th ed (at [1.2]), Herzfeld & Prince Interpretation (at [16.10]).