Case: Minister for Immigration, Local Government and Ethnic Affairs v Gray (1994) 50 FCR 189
Outcome: cited
Where the Parliament has conferred wide discretions on an official decision-maker, particularly in relation to high volume decision-making, it is entirely consistent with the legislative intention in conferring such a discretion that its exercise will be guided by administrative policies. Indeed it may be inferred that the creation of such policies is contemplated by the legislature when it confers such discretions. As Drummond J and I said in Minister for Immigration, Local Government and Ethnic Affairs v Gray (1994) 50 FCR 189 (at 206): This is particularly so in the case of a power which involves high volume decision-making, or which may, in any event, because of its subject matter, be expected to attract policy guidelines ... Common concepts of justice suggest that, while each case is to be considered on its individual merits, like cases will generally be treated similarly. The imputed legislative contemplation of such policies for that purpose must be limited to those which are consistent with the general purposes and requirements, express or implied, of the legislation in question. They cannot be expressed to fetter the exercise of the relevant discretion. And as we observed in that case an administrative policy may amount to a mandatory relevant consideration such that a significant failure to properly construe and apply the policy may cause the discretion to miscarry. The public rulings issued by the Commissioner are expressly provided for by the TAA. They can have legal consequences in favour of the taxpayer. A failure by the Commissioner to have regard to a public ruling relating to the exercise of a discretion under the tax law could vitiate the decision made in the exercise of that discretion. Whether it would or not, would depend upon the circumstances and the factors properly considered by the decision-maker. That is not to say that the Commissioner is bound to apply any ruling which he has issued. The Act does not say so and there is no principle of estoppel in the exercise of his functions which would prevent him from doing so. Questions of procedural fairness may require the taxpayer to be heard against an unexpected departure from policy with consequences unfavourable to the taxpayer and against which there is no statutory protection. 104 The word "ruling" has an obvious capacity to mislead. It is capable of conveying the impression that rulings published by the Commissioner have legal force. Insofar as it relates to the interpretation of the law, a ruling has no greater status than an administrative opinion. In so far as it relates to the way in which a discretion conferred by law would be exercised, it has no greater status than an administrative policy. There is a risk of an unwarranted elevation of rulings, by virtue of their terminology to a kind of "de facto law". This risk has been discussed in a helpful review of the subject generally in Scolaro D, Tax Rulings: Opinion or Law? The need for an Independent 'Rule-Maker' (2006) 16 Revenue Law Journal 109. The footnotes in that article also make reference to a number of other papers on the topic. 105 Importantly the Taxation Ruling in issue in this case, so far as it related to the exercise of the Commissioner's discretion to extend the time for making an agreement to transfer losses, stated that the Commissioner was "guided by administrative law principles". It identified two particular factors of significance. The first was the explanation for the taxpayer's delay. The second was the culpability of the taxpayer in relation to any adjustment to the tax position of the company group which gave rise to an application to make an agreement out of time. 106 The "Explanations" part of Taxation Ruling TR 98/12 did not, in terms, form part of the substantive ruling which, in relation to extensions of time was confined to [18] to [20] inclusive. Paragraph 82 and the succeeding paragraphs were of an expository character. They included justifications for the approach taken. So the provision of a general guide for taxpayers and ATO officers when considering the exercise of the discretion was justified in [82] as "... desirable in the interests of consistent, efficient administration and equity among taxpayers in similar circumstances". The administrative law principle that the discretion cannot be confined by an inflexible rule of policy was also recognised in [82] which said: However, the decision-maker must exercise the discretion according to the merits of each case and should not fetter the discretion by inflexibly applying, or acting in blind obedience to a policy or rule. In so far as the ruling identified factors which could be considered by the Commissioner in the exercise of his discretion and recognised that no inflexible policy was being laid down, it did not offend against general principles of administrative law. 107 Statutory time limits affecting the exercise of legal rights, the imposition of liabilities or the exercise of powers are created for a variety of purposes. Limitation Acts which bar various categories of proceedings not commenced within a certain time after a cause of action has accrued may serve the following purposes: 1. To protect defendants from claims relating to incidents which occurred many years ago and about which they, and their witnesses, may have little recollection and no records; 2. To discourage plaintiffs from sleeping on their rights; it is in the public interest for disputes to be resolved as quickly as possible; and 3. To give an assurance to defendants that after a given period of time any possible claim against them arising out of a particular incident is at an end, that is, to operate as an "act of peace": see The Laws of Australia (Lawbook Co, subscription service) 5 at [5.10.120] and also Halsbury's Laws of Australia (Butterworths, subscription service) Vol 16, at [255.5]. Additional considerations affect the imposition of time limits in respect of proceedings brought in tribunals by way of merits review of administrative act decisions or in courts by way of judicial review of such decisions. Such limits are typically expressed in terms of weeks rather than years as is the case with Limitations Acts. They are imposed in part to ensure public administration is expeditious and that decisions once made take effect unless promptly challenged. 108 There are also innumerable examples of time limits imposed by statute upon subjects and decision-makers for taking steps necessary to secure rights or privileges or to exercise powers or impose liabilities. Self evidently they have the common purpose of securing expedition in statutory processes. They may also serve purposes related to the subject matter of the relevant statute. 109 Where the law imposes time limits, whether they bar or extinguish causes of action or rights to seek review or whether they require applications to administrative decision-makers or steps taken by such decision-makers to be done within a particular time, excessive rigidity in their application can lead to absurdity and injustice. There are many examples of statutory discretions to extend time to avoid such mischief.