¹ (1991) 21 ATR1506 (Full Federal Court).

² EI Sykes, D J Lanham and R S S Tracey, General Principles of Administrative Law (2nd ed 1984) at 328.

³ In David Jones Finance the version of s 177 was slightly different. The reference to the Taxation Administration Act 1953 (Cth) was instead a reference to Part V of the Income Tax Assessment Act, a provision which has since been repealed and replaced by Part IVC of the Taxation Administration Act. Nothing turns on the change for the purposes of this paper.

⁴ As part of an audit strategy, the Australian Taxation Office engaged in an audit of the 100 largest companies in Australia. The legality of such a targeting of audits was unsuccessfully challenged by the taxpayer in Industrial Equity Ltd v FCT (1990) 170 CLR 649.

⁵ Section 46(2) provides:Subject to this section, a shareholder, being a company that is a resident, is entitled to a rebate in its assessment in respect of income of the year of income of the amount obtained by applying the average rate of tax payable by the shareholder –

(a) if the shareholder is a private company in relation to the year of income, to the sum of–

(i) one-half of the part of any private company dividends that is included in its taxable income; and

(ii) the part of any other dividends that is included in its taxable income;and

(b) if the shareholder is not a private company in relation to the year of income, to the part of any dividends that is included in its taxable income.

⁶ David Jones Finance & Investments Pty Ltd and Adsteam Finance & Investments Pty Ltd v FCT(1990) 21 ATR 718 at 721 per O’Loughlin J.

⁷ (1977) 140 CLR 247.

⁸ The fact that the Tax Office was able to act in a manner contrary to the law in their application of s 46 raises serious questions about the accountability of administrative decision-makers to the rule of law. The associated problem is that the legal system is often deficient in providing adequate redress when the law is not being followed by the administrative branch. For example, it would be very difficult for someone who was unhappy with the fact that the Tax Office was not following the law to seek judicial redress because if they were not a taxpayer directly affected, they would be likely not to have standing to bring an application for a writ of mandamus or other remedy to compel the Commissioner to apply the correct law.

⁹ (1991) 21 ATR 1506 at 1525 per Pincus J.

¹⁰ Section 177 has since been amended, as indicated in n 3, to provide that appeal and review of an assessment is made through Part IVC of the Taxation Administration Act (1953) (Cth).

¹¹ (1990) 21 ATR 718.

¹² (1991) 21 ATR 1506.

¹³ Ibid at 1508 per Morling and French JJ.

¹⁴ For example: Ah Yick v Lehmert (1905) 2 CLR 593; R v Commonwealth Court of Conciliation and Arbitration; Ex parte Brisbane Tramways Co Ltd (1914) 18 CLR 54; Waterside Workers’ Federation of Australia v Gilchrist, Watt and Sanderson Ltd (1924) 34 CLR 482.

¹⁵ (1945) 70 CLR 598.

¹⁶ (1991) 21 ATR1508 at 1517 per Morling and French JJ.

¹⁷ Ibid at 1518.

¹⁸ Ibid at 1524.

¹⁹ (1945) 70 CLR 598.

²⁰ (1981) 147 CLR 360.

²¹ (1991) 21 ATR 1506 at 1530 per Pincus J.

²² (1991) 22 ATR 397 (Mason CJ, Deane and McHugh JJ).

²³ Hickman is still good law in Australia. It has been considered and followed in numerous cases in recent years. See: O’Toole v Charles David Pty Ltd (No 2) (1990) 171 CLR 232; R v Coldham; Ex parte Australian Workers Union (1983) 153 CLR 415; R v Central Sugar Cane Prices Board; Ex parte Maryborough (1959) 101 CLR 246; Re Cram; Ex parte NSW Colliery Proprietors Assoc Ltd. (1987) 163 CLR 117.

²⁴ O’Toole v Charles David Pty Ltd (1990) 171 CLR 232 at 236 per Deane, Gaudron and McHugh JJ, referring to Dixon J’s judgment in R v Hickman.

²⁵ The High Court concluded that the Local Reference Board had applied their ruling in relation to an employer not operating in the coal industry. Since the Board did not have legislative jurisdiction outside the coal industry the ruling was ultra vires and therefore the privative clause was of no effect.

²⁶ See Chapter III Commonwealth Constitution.

²⁷ (1981) 147 CLR 360.

²⁸ Ibid at 365.

²⁹ (1956) 98 CLR 263.

³⁰ (1981) 147 CLR 360 at 375 per Mason and Wilson JJ, Stephen J concurring.

³¹ Ibid at 376 per Mason and Wilson JJ, Stephen J concurring.

³² Ibid at 375-376 per Mason and Wilson JJ, Stephen J concurring.

³³ ADJR Act (Cth), Schedule 1(e). Schedule 1(e) excludes decisions related to the process of making assessments under a number of tax laws, including the Income Tax Assessment Act.

³⁴ Section 10(2)(b)(ii) ADJR Act provides: “The Court may, in its discretion, refuse to grant an application under section 5, 6 or 7 that was made to the Court in respect of a decision, in respect of conduct engaged in for the purpose of making a decision, or in respect of a failure to make a decision for the reason –

(ii) that adequate provision is made by any law other than this Act under which the applicant is entitled to seek a review by the Court, by another court, or by another tribunal, authority or person, of that decision, conduct or failure.”

³⁵ The equivalent of s 177 in the 1915 Act was s 35(1) of the Income Tax Assessment Act 1915 (Cth). It provided: “The production of any assessment or of any document under the hand of the Commissioner purporting to be a copy of an assessment shall –

(a) be conclusive evidence of the due making of the assessment; and

(b) be conclusive evidence that the amount and all the particulars of the assessment are correct;except in proceedings on appeal against the assessment when it shall be prima facie evidence only.” The provision appeared in a slightly altered form in the 1922 Act as s 39 and the substance of the provision has been little changed since then.

³⁶ These ideas are considered in detail in YFR Grbich, Institutional Renewal in the Australian Tax System (1984).

³⁷ Act No 35 of 1992, s 10.

³⁸ Section 45Z applies to all dividends paid after 17 August 1976.