Walker and Ors and Commissioner of Taxation [1994] AATA 700 (14 December 1994)

Last Updated: 22 September 2008

ADMINISTRATIVE APPEALS TRIBUNAL

DECISION AND REASONS FOR DECISION

FREEDOM OF INFORMATION - review - access sought to documents relating to unfavourable objection decisions - exemption claimed on grounds of public interest - relevant test - balancing exercise - taxation affairs of applicants not of public interest - candour and frankness argument not applicable

Taxation Administration Act s 14ZZC
Freedom of Information Act 1982 ss 36(1)(a), 56
Administrative Appeals Tribunal Regulations r 19(7)

Re Howard and Treasurer, Commonwealth (1985) 3 AAR 169
Re Kamminga and Australian National University [1992] AATA 84; 15 AAR 297
Re Murtagh and Commissioner of Taxation [1984] AATA 249; 1 AAR 419
Re Witheford and Department of Foreigh Affairs (1983) 5 ALD 534
Re Fewster and Department of Prime Minister and Cabinet (NO 2) (1987) 13 ALD 139
Re Saunders and Commissioner of Taxation (1988) 15 ALD 761

AAT Decision No 9926

ADMINISTRATIVE APPEALS TRIBUNAL )
)
GENERAL ADMINISTRATIVE DIVISION )

Re N94/113
JOHN EDWARD WALKER

N94/114
LEYCESTER DEVENISH-MEARES

N94/115
ALFRED STEPHEN ROGER

N94/116
HUGH CHARLES THOMAS

N94/117
ROBERT HUGH BOULTER

N94/118
GRAHAM ROTHESAY SWAN

N94/119
NOALA ADELE WALKER

N94/120
SUSAN JUNE DEVENISH-MEARES

N94/121
DIANE ELIZABETH THOMAS

N94/122
KATHLEEN MARY BOULTER

Applicants

And COMMISSIONER OF
TAXATION

Respondent

DECISION

Tribunal : Mr BJ McMahon (Deputy President)

Date : 14 December 1994

Place : Sydney

Decisions : 1. The decision in relation to all the documents listed in Mr G Scarra’s affidavit of 21 October 1994, except document D66, is affirmed.

2. In relation to document D66 the decision is set aside and the matter is remitted to the respondent with the direction that the applicants be given access to the document.

.........................................
BJ McMahon
Deputy President

ADMINISTRATIVE APPEALS TRIBUNAL )
)
GENERAL ADMINISTRATIVE DIVISION )

Re: N94/113
JOHN EDWARD WALKER

N94/114
LEYCESTER DEVENISH-MEARES

N94/115
ALFRED STEPHEN ROGER

N94/116
HUGH CHARLES THOMAS

N94/117
ROBERT HUGH BOULTER

N94/118
GRAHAM ROTHESAY SWAN

N94/119
NOALA ADELE WALKER

N94/120
SUSAN JUNE DEVENISH-MEARES

N94/121
DIANE ELIZABETH THOMAS

N94/122
KATHLEEN MARY BOULTER

Applicants

And: COMMISSIONER OF
TAXATION

Respondent

REASONS FOR DECISION

14 December 1994 Mr BJ McMahon (Deputy President)

1. This is an application brought to the Tribunal pursuant to s 56(1) of the Freedom of Information Act 1982 (“the Act”) to review a deemed refusal of the respondent to give access to all documents identified as falling within the scope of a request made by the applicants pursuant to the Act.
2. The documents to which access was sought related to amended assessments made in respect of each of the applicants’ income tax liability, in particular a capital gains tax component, for the year of income ended 30 June 1988. Following unfavourable objection decisions by the respondent in respect of objections lodged by each of the applicants to the assessments, the applicants then lodged applications with this Tribunal for review of those decisions pursuant to s 14ZZC of the Taxation Administration Act. These proceedings are currently before the Tribunal.
3. Approximately 1,700 pages of documents were identified as falling within the terms of the request. Most of these have been made available to the applicant in various batches over a period of time. When the matters came on for hearing, the number of documents in issue had been reduced to 14. These were described in the annexure to the affidavit of Gregory Raymond Scarra sworn 21 October 1994 (exhibit 2). Evidence was given in support of the claims for exemption, some of that evidence being in the absence of the applicants and their legal representative. It was not possible to complete the proceedings on the day appointed for the hearing. It was therefore agreed by all parties that written submissions would subsequently be made within the framework of an agreed timetable.
4. In their written submissions the applicants, through their counsel, indicated that they no longer sought access to 13 of the documents in the light of what transpired at the hearing of the proceedings. Accordingly there is only one document in contention. This is referred to in Mr Scarra’s affidavit as an undated document of 2 pages, numbered D66 and described as “ATO file notes detailing various officers’ consideration of the relevance of various provisions of Part IVA of the Income Tax Assessment Act”. Exemption was claimed under sub-section 36(1) of the Act. An examination of the document indicates that the pre-conditions of paragraph 36(1)(a) are clearly met in relation to the document. The only issue therefore is whether its disclosure would be contrary to the public interest.
5. It consists of a recital of some facts, as seen by the author, concerning the applicants’ affairs in relation to a lease and a sub-lease. It concludes with a recommendation that further advice be obtained to test whether the author’s view of the facts and of the law was shared by others. Endorsed on the document are handwritten minutes of statements made by 2 other officers responding to the propositions outlined in the typed portion of the document. The document is quite short and the observations could not be said to be in depth.
6. The respondent submitted that release of the document would be contrary to the public interest. In support of that submission, it relied upon the evidence of Mr Scarra in paragraph 12 of his affidavit as follows 

“12.

I believe that release of the above documents or parts of documents would be contrary to the public interest for the purposes of s.36(1)(b) of the FOI Act for the following reasons:

(i) to release the undisclosed part of D123 would unfairly disclose, in the context of current litigation, the views of individual officers and deliberations undertaken well prior to the commencement of that litigation, in relation to the possibility of settlement or compromise of the dispute between the parties, and could prejudice any further negotiation to settle this matter;
(ii) to release D66 would inhibit the ability of officers of the respondent, charged with the responsibility of investigating and reviewing taxation assessments of individual taxpayers under the Income Tax Assessment Act, from candidly considering alternative courses of action; and may here subject those officers to criticism for considering those alternatives;
(iii) non-disclosure of both documents will protect the integrity of the decision, after having considered alternatives, to issue an amended assessment including the full disputed amount;
(iv) non-disclosure of both the documents will enforce the legitimate expectation of ATO officers that they will be able to communicate with each other and exchange views in a full, frank and uninhibited manner without their opinions, views or recommendations expressed in the course of deliberations about a decision or course of action to be taken, being later called into question in a public forum.”

7. Sub-paragraph (i) no longer has application as the applicants no longer seek access to document D123. The remaining paragraphs are sufficient in the respondent’s submission, to support the claim for exemption, particularly in the light of the principles outlined in Re Howard and Treasurer, Commonwealth (1985) 3 AAR 169. In addition to the material set out in Mr Scarra’s affidavit, counsel for the applicant submitted that disclosure of the document would also be contrary to the public interest because it would “lead to confusion and unnecessary debate resulting from disclosure of possibilities considered” (Howard at 178). The document D66 canvasses the possibility of an amended assessment based upon a Part IVA determination. In the end, that formed no part of the reasons for the amended assessment. I was told by counsel that in the pending taxation review before this Tribunal, it was not the current intention of the Commissioner to rely upon Part IVA. For that reason, it was submitted that to disclose earlier deliberations on that question would simply result in “unnecessary” debate. As he put it : “To agitate the matter may lead to unnecessary debate between the applicants and the officers of the respondent and its legal advisers with the resultant waste of resources and public moneys”.
8. I do not accept this argument as sufficient to sustain a public interest refusal of access. Deciding whether disclosure is contrary to the public interest requires a balancing of competing interests, including the public interest in the applicants’ right to know (Re Kamminga and Australian National University [1992] AATA 84; 15 AAR 297 at 300 and cases there cited). The “unnecessary debate” referred to in Howard must have reference to matters of public interest having regard to the context of the facts in that case. Those facts related to circumstances of national political and economic significance which, if disclosed, would certainly have given rise to public debate, whether necessary or not. The taxation affairs of the applicants are not a matter of public interest. Indeed the privacy of their nature is preserved by statute. Debate of those affairs between officers of the respondent and its legal advisers with the applicant, which might arise from disclosure of the documents, can not be contrary to the public interest, whether or not it results in a use of resources and public moneys. Furthermore, such a use can not be regarded as a waste. As was pointed out by counsel for the applicant, the material in the document may, in any event, be relevant to the question of additional tax to be paid as a result of the amended assessment, whether or not that amended assessment is based upon a Part IVA determination.
9. Sub-paragraphs 12(ii) and (iv) of Mr Scarra’s affidavit simply raise the candour and frankness argument. Such an argument is not new, but has now been largely limited to high level decision making and to policy making (Re Murtagh and Commissioner of Taxation [1984] AATA 249; 1 AAR 419 at 431). The fact that a writer of a document would not have put his comments in such frank terms as he did if he had thought that it would be disclosed is scarcely, of itself, a sufficient ground for a finding that disclosure of the documents would be contrary to the public interest (Re Witheford and Department of Foreign Affairs (1983) 5 ALD 534). In any event there is no cogent evidence before me that such a result would be likely in the present circumstances. The level at which document D66 was dealt with by various officers is not to be compared with the high level which may, in some cases, attract a legitimate application of the candour and frankness argument. An example of this is Re Fewster and Department of Prime Minister and Cabinet (NO 2) (1987) 13 ALD 139.
10. Although the amended assessment followed an investigation, in the end it must be regarded as “a purely routine assessment” as discussed in Murtagh at 430. No allegations of fraud or other acts of turpitude have been made. There is no allegation of taxation evasion. The argument that the integrity and viability of the decision making process would be affected by the release of the document (Murtagh at 430) has no application in the present circumstances.
11. The case is on all fours with the decision in Re Saunders and Commissioner of Taxation (1988) 15 ALD 761. The documents in that case dealt with internal discussions within the Commissioner’s office as to the application of certain sections of the Income Tax Assessment Act to the facts as discerned by the officers concerned. As the Tribunal pointed out (paragraph 43) that Act and the manner in which it has been, or should be, interpreted are matters of public knowledge and public interest. There is nothing confidential about the law. It can not be contrary to the public interest, therefore, to disclose the views of officers as to the application of the law to facts leading to a routine assessment.
12. The decision under review in relation to all the documents listed in Mr Scarra’s affidavit, except document D66, is therefore affirmed. In relation to that document, the decision is set aside and the matter is remitted to the respondent with a direction that the applicants be given access to the document.
13. In view of the fact that the vast majority of documents falling within the terms of the request have been made available to the applicant since proceedings were instituted in this Tribunal, and in view of the decision relating to the last document in dispute, I certify that the proceedings have terminated in a manner favourable to the applicant for the purposes of sub-regulation 19(7) of the Administrative Appeals Tribunal Regulations.

I CERTIFY THAT THIS AND THE ................... PRECEDING PAGES ARE A TRUE COPY OF THE DECISION AND REASONS FOR DECISION HEREIN OF

DEPUTY PRESIDENT BJ McMAHON

SIGNED................................................
ASSOCIATE

DATED : / /