Case: Powell v Evreniades (1989) 21 FCR 252
Outcome: applied
Further to the statutory notion of serious hardship addressed in decisions referrable to the not dissimilarly framed provisions of the precursor s 265 of the Income Tax Assessment Act 1936 (Cth), reliance was placed by the Tribunal upon this Court's decisions in Powell v Evreniades (1989) 21 FCR 252, where Hill J made the following observations at 258-260 in the context of the then Tax Relief Board's statutory discretion to release the trustee of a deceased person's estate wholly or in part from a taxation liability in the case of 'serious hardship': '... The Court will not subject [a statement pursuant to s 13 of the Administrative Decisions (Judicial Review) Act 1977 (Cth) ] to a fine analysis with a view to finding through a microscopic study of it some error of law.... There is no definition in s 265 of what is meant by "serious hardship" nor would one expect there to be. Each of the words in the phrase is an ordinary English word having a well understood meaning... The context in which the words appear makes it clear that the Relief Board is to consider whether the exaction of the full amount of tax would involve the dependants of a deceased taxpayer in financial difficulty which in all the circumstances can be said to be serious... it is obvious enough that what will constitute either will depend upon the circumstances of a given case. It is inappropriate to endeavour in the abstract to state tests of what will and what will not constitute serious hardship within the context of s 265. Clearly there would be severe financial hardship if the dependants of a deceased person were left destitute without any means of support. That is not to say that in any particular case something less than that will not constitute serious hardship. ... it was open to the Board to conclude that the exaction of the full amount of tax would cause serious hardship, just as it was also open to the Board to conclude that exaction of the whole tax would not leave this applicant and her daughter in a situation that could properly be described as one of serious hardship. The circumstances of the present case, while clearly very close to the end of the spectrum representing destitution still come within that range of spectrum in which the decision could not be described as unreasonable in the Wednesbury sense... that is to say unless consideration of some extraneous or irrelevant factor intervened to vitiate the decision.... ... I can see no error of law in the way to which the Board so proceeded.' Understandably counsel for Mr Milne invoked, as largely here applicable, those observations of his Honour. As I have already implied, that precursor s 265 was expressed to require regard to be paid to the serious hardship which might otherwise affect a taxpayer in the event of an absence of intervention by way of release (or partial release) of income tax liability. That precursor provision operated directly in favour of the dependants of a deceased taxpayer as well as a taxpayer, but for present purposes, the dictum of his Honour in Powell nevertheless provides a significant measure of assistance in relation to the operation of the present s 340- 5 . 24 Further in his reasons for judgment in Powell at 263, Hill J referred to the dictum of Windeyer J in Giris Pty Ltd v Commissioner of Taxation [1969] HCA 5 ; (1969) 119 CLR 365 at 384 concerning the need '... to be guided and controlled by the policy and purpose of the enactment, so far as that is manifest in it [and to] exclude from... consideration any matter which it would be unlawful... to take as a criterion... [subject to the qualification where] the statute seems to allow great latitude to the Commissioner in forming his opinion' . Moreover his Honour referred to what was said by Dixon J (as he then was) in R v Trebilco; Ex parte FS Falkiner &amp; Sons Ltd [1936] HCA 63 ; (1936) 56 CLR 20 at 32 as to certain statutory 'considerations by which an exercise of discretion is to be guided... [t] he nature of those considerations [to] be gathered from the scope and object of the provision' . Additionally his Honour referred further to dictum of Mason J (as he then was) in Minister for Aboriginal Affairs v Peko-Wallsend Ltd [1986] HCA 40 ; (1986) 162 CLR 24 at 40, where his Honour described the statutory discretion there addressed, albeit not related to fiscal exaction, as '... similarly unconfined, except in so far as there may be found in the subject matter, scope and purpose of the statute some implied limitation on the factors to which the decision-maker may legitimately have regard', and where his Honour thereafter proceeded to emphasise that '[b]y analogy, where the ground of review is that a relevant consideration has not been taken into account and the discretion is unconfined by the terms of the statute, the court will not find that the decision-maker is bound to take a particular matter into account unless an implication that he is bound to do so is to be found in the subject matter, scope and purpose of the Act.' Those factors have aspects of materiality in relation to the issue or issues here falling for consideration. 25 Subsequently in Van Grieken v Veilands (1991) 21 ATR 1639, Gummow J cited the principled approach outlined by Hill J in Powell with at least implicit approval, observing that his Honour had further pointed out (at 626 of Powell ) that the decision-maker was entitled to 'consider not only such matters as go to the issue of serious hardship, but also other matters which, in the discretion of the Board, may be relevant'. 56 In my opinion submissions propounded by the Commissioner, which I have sought to outline in detail discretely or in the aggregate, do not vitiate the conclusions of the Tribunal according to law. The Tribunal's conclusions were reasonably open for adoption, being sufficiently founded upon evidentiary material bearing upon the critical statutory issue of serious hardship , including in particular the fraudulent conduct of Mr Milne's former partner in legal practice and its adverse effect upon Mr Milne financially and probably to at least an intangible extent professionally, and the unsaleable character of the Brindabella property for the time being for the reasons I have earlier indicated. It is of course necessary in that regard that the Commissioner's challenge to the factual findings of the Tribunal should establish a viable footing according to principles of administrative law, and the present appeal does not of course operate by way of a re-hearing. As I have foreshadowed, I am unable to accept that the Commissioner has distilled administrative error in the juridical sense referrable to the reasoning and findings of the Tribunal, being reasoning and findings which were rationally open for adoption in my opinion according to principles of administrative law, and in particular in the light of the relevant evidentiary material placed before the Tribunal. That material was consistent essentially with the conclusion that any enforced exaction of the outstanding income tax indebtedness of Mr Milne would cause serious hardship within the scope of that notion established for instance in Powell and subsequently in Van Grieken , and as continues in operation in the terms of operation of s 340-5 of the Administration Act.