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interpretation NOW!

Episode 33 – 28 February 2018

interpretation NOW! 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.


Justice Pagone of the Federal Court has given a paper on the continuing need for tax academics to provide assistance to judges1. After discussing core interpretation principles, the judge said that academics can assist courts in ‘resolving ambiguities in legislation’, and are most useful in ‘exploring and explaining context’. The knowledge of a judge unaided in this regard is ‘likely to be less fully informed than that of the academic’, the judge said. While litigation provides a more intense focus in the search for statutory purpose, it is sound practice always to see what academics have had to say about provisions. Be careful, however, that the methodology applied is the same as for a judge, and that purpose is derived at the correct level of specificity. iTip - a general or political purpose of raising revenue will not help much when reading specific tax provisions2.

Marcus Ryan – Tax Counsel Network

Adding words

Hunter Quarries v Mexon [2017] NSWSC 1587

Adding words to fix minor glitches in legislation is part of purposive interpretation3, though it seldom succeeds in practice. The argument was that ‘permanent impairment’ excluded situations where death followed ‘shortly after injury4’. Schmidt J (at [89-101]) declined to ‘read in’ allegedly missing words of limitation, as preconditions were not met5. Also, the proposed words to be added were inconsistent with legislative intent, and would create uncertainty. Had parliament wanted the outcome suggested, it ‘would have expressly provided for that result’. iTip – courts are cautious in applying this technique and you should be too!

Statutory definitions

Law Society of NSW v Bouzanis [2017] NSWCA 330

Are client payments to solicitors on account of disbursements ‘trust money’ for legal practice purposes6? Yes, said the majority, despite the difficult terms of the statutory definition involved. While definitions ‘should not readily be put aside’, this might be done ‘where context suggests that a different meaning should be adopted to give effect to the apparent purpose of a specific provision’. A literal reading of the provision with the definition incorporated would have frustrated the apparent purpose . iTip – a range of issues need to be kept in mind when dealing with statutory definitions7.

De minimis principle

Riverstone v Blacktown CC [2015] NSWLEC 137

We all know de minimis8, but how does it apply in practice? First, it is a principle of construction, not a rule of law. Second, its application always depends on text, purpose and context9. Third, it inevitably involves a substantial element of value judgment10. In this case, development consent for works was refused as the council was not satisfied the works would ‘not increase flood levels on adjoining properties …’ The fact that floods may be ‘very small to very large’ went against de minimis applying. It was not self-evident, said the court (at [23]), that the flood increase requirement should be read as qualified by a ‘trivial or minor’ breach.

‘in connection with’

R v PJ [2017] NSWCCA 290

It’s no secret that phrases like ‘in connection with’11 routinely raise interpretation problems because of their general nature and variability of operation12. They may cover a wide spectrum of relationships. The court in this case, like many others before it, exercised caution in approaching the phrase. However, it went a step further saying (at [31]) that ‘greater care’ should be exercised when these terms appear in criminal statutes13. Relational phrases are like chameleons – they take their colour from their surroundings14. iTip – relational phrases must always be ‘appropriately confined to accord with the object and purpose’ of the provision in which they appear.

§ Writers – Marcus Ryan, Suna Rizalar, Gordon Brysland, Emma Robins.

§ Thanks – Wolfgang Laggner, Ivica Bolonja, Michelle Janczarski (Bangkok).

1 Pagone J Brambles, hedgehogs and foxes [2018] FedJSchol1.

2 Carr[2007] HCA 47 (at [6]), Esso [2017] HCA 54 (at [69]), Episodes 6 & 22.

3 Lumb & Christensen (2014) 88 ALJ 661 (at 665), Pearce & Geddes (at [2.32]).

4 ss 65 and 66 of the Workers Compensation Act 1987.

5 See Taylor [2014] HCA 9 & Episode 5 for applicable conditions.

6 s 246(4) of the Legal Profession Act 2004.

7 See Episodes 1, 11, 23 and 27.

8 Minor variations from a legal requirement are to be disregarded.

9 Farnell (1996) 142 ALR 322 (at 324-327), Unisys [1997] FCA 777.

10 Pearce & Geddes (at [4.22]), Samuels (1985) 6 Statute Law Review 167.

11 See Episodes 19 & 26, Pearce & Geddes (at [12.7-12.8]).

12 cf Goyal [2018] FCA 129 (at [34-36]), Our Town FM [1987] FCA 301 (at [37]).

13 In this case, s 73(2)(c) of the Crimes Act 1900.

14 Technical Products [1989] HCA 24 (at [5]), Morris [2017] FCAFC 97 (at [41]).


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