Hierarchy & harmony

Channel Pastoral v FCT [2015] FCAFC 57

What should we do when provisions in different sectors of the tax system collide? Answer – apply the hierarchy/harmony principles the High Court told us about in Project Blue Sky1. The provisions as a whole are presumed to be intended to produce harmonious goals. Conflict is alleviated by adjusting the meaning of competing provisions to give effect to the purpose and language while maintaining the unity of all provisions.

The collision was between Part IVA and the single entity rule in consolidations. For Allsop CJ (at [4-5]), Project Blue Sky principles were of ‘central importance’ here. The case shows how orthodox purposive rules promote coherence of the tax system – a favourite theme of Jeremy Hirschhorn.

This case is from Episode 1 of interpretationNOW!


1Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28 (at [69-71]), iTip – read these paragraphs!