The Honourable Murray Gleeson AC
This basic example of the need for interpretation of statutory language also illustrates an abiding problem: the interpretation itself is rendered in words that could have different shades of meaning. What exactly does it mean to say that a regulation is clearly appropriate or adapted to a purpose stated in the Act that confers power to make the regulation? What exactly does it mean to say that an expense is clearly appropriate or adapted to the pursuit of a business purpose? Understood in one way, the phrase might merely re-state the original problem. The phrase signifies a relationship between ends and means. Something must be capable of being regarded as a means to an end, but within the bounds of legitimate possibility, the choice of means is left, in the case of tax law, to the taxpayer. We speak of plain language, and we all agree on its value. Yet the clearest method of communicating an idea depends upon the idea itself. A mismatch between the simplicity of language and the complexity of an idea may result, not in plain speech, but in confusion. It is an interesting exercise to ask how you might better state, in a brief general formula, the test for deciding what business expenditure would be an allowable deduction. Language is an imperfect instrument of communication, and we have to live with that imperfection.
I said that I would return to a qualification to the proposition that the Act operates upon the legal and factual circumstances of a case as it finds them. The general anti-avoidance provisions of the 1936 Act in Pt IVA, and more specific anti- avoidance provisions elsewhere, limit the generality of that proposition. It is not my present purpose to discuss either the policy or the form of anti-avoidance provisions. Some of them involve their own complexities of interpretation. One point, however, should be made. In an important sense the presence in the Act of those provisions, and the specificity with which they attempt to describe the circumstances in which the Act operates upon a legal situation different from that
© The Honourable Murray Gleeson AC, Chief Justice of New South Wales 1988-1998, Chief Justice of Australia 1998-2008