A clear trend has been identified in relation to the interpretation of statutes from a strict or literal approach towards a more purposive approach. This has even been the case for revenue law which for some time has been considered as a penal statute. This trend is evident in other tax jurisdictions, both civilian and common law. After comparing and contrasting the various arguments for and against the purposive approach, it has been concluded that this observed change should not be welcomed in relation to the taxation legislation. Such an approach poses a serious threat to the separation of powers’, as the judicial arm would be able to read words into the legislation as they see fit. Even worse, however, is the threat to human rights, that is, the ability of the taxpayers to protect what is rightfully their own.
Introduction
The approach to statutory interpretation has undergone immense change over the past couple of decades, particularly in relation to the interpretation of revenue statutes.[ A Mason, ‘Taxation Policy and the Courts’ (1990) 2 CCH Journal of Australian Taxation, (Issue 4) 40, 42]The change is said to be from a strict or literal approach (which has tended to favour the taxpayer), towards a more purposive approach (which tends to favour revenue). This shift has been viewed as quite bold, given that revenue statutes have for a long time been considered penal statutes and interpreted accordingly, that is, strictly and in favour of the taxpayer. As with any criticism there are also praises, for example from Kirby J, in FC of T v Ryan: [(2000) 42 ATR 694, 715-716.],
‘In this last decade, there have been numerous cases in which members of this court … have insisted that the proper approach to the construction of federal legislation is that which advances and does not frustrate or defeat the ascertained purpose of the legislature … Even to the point of reading words into the legislation in proper cases, to carry into effect an apparent legislative purpose … This court should not return to the dark days of literalism.’
The following paragraph shows that purposive approach may not be in consonance with the concept of separation of power that is the essence of any free democratic set up. How can one be allowed to read in or read down words in the statute as a matter of prerogative. It is strictly condemnable.[Blogger]
In effect, Kirby J is stating that todays preferred approach to interpreting legislation is that approach which promotes the purpose of the legislation, rather than one that does not. One can ‘read words into’ the legislation to ensure that its apparent purpose is more easily recognised and promoted when making judgement. Kirby Js final words imply that the courts should adopt this more purposive approach for all judgments and the literal approach be forgotten. This article compares and contrasts the practicality of the different approaches to the interpretation of revenue statutes. It examines recent trends in legislative interpretation and considers the effectiveness and appropriateness of the purposive approach in today’s courts. First, however, let us examine the various approaches that have been adopted in relation to statutory interpretation as a whole.
THE TREND TOWARDS PURPOSIVE STATUTORY INTERPRETATION: HUMAN RIGHTS AT STAKE, By Tobias Lonnquist, BCom, BIT, MAcc (Bond). The author would like to thank Professor James Corkery, School of Law, Bond University for his assistance in preparing this paper
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