case_text: At the outset I set out some legal principles I rely upon for determining this proceeding: • APM bears the onus of proving its solvency: s 459C ; • In order to discharge that onus the Court should generally be presented with the "fullest and best" evidence of the financial position of APM: Commonwealth Bank of Australia v Begonia (1993) 11 ACLC 1075 at 1081; • Unaudited accounts and unverified claims of ownership or valuation are not ordinarily probative of solvency: Commissioner of Taxation v Simionato Holdings Pty Ltd (1997) 15 ACLC 477; Re Citic Commodity Trading Pty Ltd v JBL Enterprises (WA) Pty Ltd [1998] FCA 232 ; Leslie v Howship Holdings Pty Ltd (1997) 15 ACLC 459 at 463; • The nature of a company's assets, and its ability to convert those assets into cash within a relatively short time, at least to the extent of meeting all its debts as and when they fall due, must be considered in determining solvency: Rees v Bank of New South Wales [1964] HCA 47 ; (1964) 111 CLR 210; Re Tweeds Garages Ltd [1962] Ch 406 at 410; Simionato Holdings Pty Ltd 15 ACLC 477; Melbase Corporation Pty Ltd v Segenhoe Ltd (1995) 13 ACLC 823 at 832; Leslie v Howship Holdings Pty Ltd (1997) 15 ACLC at 465-466; • The appropriate test is the "cash flow test" rather than a "balance sheet test" of insolvency. The adoption of a cash flow test for solvency does not mean that the extent of the company's assets is irrelevant to the inquiry. The credit resources available to the company must also be taken into account: Sandell v Porter [1966] HCA 28 ; (1966) 115 CLR 666 at 671 per Barwick CJ (with whom McTiernan and Windeyer JJ agreed); Leslie v Howship Holdings Pty Ltd (1997) 15 ACLC at 466; Taylor v ANZ Banking Group Ltd (1988) 6 ACLC 808 at 812; • The question of solvency must be assessed at the date of the hearing, although relevant future events are not to be ignored: Leslie v Howship Holdings Pty Ltd (1997) 15 ACLC at 466-467.


case_outcome: cited

case_title: Commonwealth Bank of Australia v Begonia (1993) 11 ACLC 1075


case_text: In addition to what I have concluded above, there are other matters which demonstrate that APM has not discharged the onus of proving solvency:- (i) APM has failed to comply with the statutory demand of the creditors, and that of a supply creditor, T & G Welding Pty Ltd. (ii) APM has been in default under mortgages over its property, and has no immediate or foreseeable capacity to service the mortgages. (iii) The application for winding up was made on 15 March 2007, over six months ago. On 18 June 2007, in the written submissions of APM, it was stated: [APM] is able to raise sufficient funds with which to pay for its short term creditors and it is anticipated that it will receive further funds in the near future from the sale of a properties [sic] . It is conceded that there are other further supporting creditors. [APM] will be able to use the funds that it is capable of raising and which it is anticipated of receiving in the near future with which to pay these debts. This has not eventuated despite the time lapse and there is no evidence to suggest that there will be sufficient funds to pay creditors in the near or reasonably near future. All the evidence relied upon by APM over recent months simply raised possibilities which have not eventuated. (iv) APM has been involved in disputes and legal proceedings with a number of people in addition to the Supreme Court proceedings mentioned above. The proceedings instituted already do not appear to be capable of resolution in the short term. (v) APM's books and records are incomplete and unsubstantiated. There have been a number of suggestions by APM since this matter was first heard to the effect that the new director Mr Fisher would take steps to put the books of accounts in order these suggestions have not been fulfilled and even Mr Miller in his report of 30 August 2007 necessarily relied upon incomplete and unsubstantiated records. (vi) No director can make a declaration of solvency. The then current directors of APM on 9 June 2006 resolved that APM was solvent as at that date, but this is obviously not sufficient to persuade me that the company was solvent at the date of hearing of this application. (vii) No cash flow statement or projections have been provided by APM despite ample opportunity to do so in these proceedings. (viii) There is no material to demonstrate that the company, in its attempts to refinance or obtain sufficient funding, will succeed in the foreseeable future or at all see Crema (Vic) Pty Ltd v Land Mark Property Developments (Vic) Pty Ltd (2006) 24 ACLC 889, at [172] per Dodds-Streeton J; Re Presha Engineering (Aust) Pty Ltd (1983) 1 ACLC 675 at 677 and Ace Contractors Staff Pty Ltd v Westgarth Development Ltd (1999) FCA 728 ;


case_title: Crest Realty Pty Ltd (No 2) (In liquidation) (1977) 1 NSWLR 664

case_text: I accept that the rule in Browne v Dunn (1893) 6 R 67 has an important function to play in the course of a trial, as recently made clear by the Full Court in Jardein Pty Ltd v Stathakis [2007] FCAFC 148 , at [27] to [33]: Where a party intends to contradict or challenge the testimony of an opposing party's witness, the party is obliged to put that witness on notice that his or her account will be challenged: Browne v Dunn (1893) 6 R 67. This gives the witness an opportunity to respond to the allegations. The reason this is done is as a matter of basic fairness. See Allied Pastoral Holdings Pty Ltd v Commissioner of Taxation [1983] 1 NSWLR 1 per Hunt J. Adherence to the rule in Browne v Dunn also gives the party calling the witness the chance to adduce supporting evidence which might not otherwise have been led. Compliance with the rule requires only that the substance of the contrary version is put to the witness, and not every detail of the challenge: White Industries (Qld) Pty Ltd v Flower & Hart (a firm) (1998) 156 ALR 169 at 217 per Goldberg J. In a civil case the consequences of a failure to observe the rule will vary. However, they will usually be related to the central object of the rule which is to secure fairness. In Seymour v Australian Broadcasting Commission (1977) 19 NSWLR 219 Mahoney JA said (at 236 237): "This kind of problem may arise at different times in the litigation. It may arise during the trial. Thus, where a party fails to cross-examine a witness at all or on a particular matter, it may be prudent for the trial judge at the time to draw the attention of counsel in an appropriate way to the effect this may have on the later conduct of the trial. It may be that the question arises at a later stage in the trial when counsel seeks to call evidence contradicting the witness or discrediting his evidence, or seeks to address upon the basis that the witness' evidence is untrue. The trial judge may then have to determine what course should be followed. Sometimes the interests of justice may be served by having the witness recalled for cross-examination. Sometimes the circumstances may be such that the only way in which justice can be achieved is by directing that, for example, it is not open to counsel, in address, to make such suggestion. What is to be done will depend, as I have said, upon the circumstances of the case." A possible consequence of a breach of the rule may be that the party in breach will be prevented from suggesting that the witness' testimony should be disbelieved. Another possible consequence will be the exclusion of evidence that challenges the witness' account with respect to those matters upon which there was no cross-examination. A third possible consequence will be to permit the witness to be recalled so that the breach can be remedied. One thing is clear. The rule is not simply to be ignored. The rule in Browne v Dunn has not been abrogated under the uniform Evidence Acts: Heaton v Luczka (unreported, New South Wales Court of Appeal, 3 March 1998) per Beazley JA. Indeed, s 46 of the Evidence Act 1995 (Cth) specifically enables the recall of a witness where there has been a breach of the rule and therefore implies its continued existence. 48 In my view, the appropriate approach is to appoint the liquidator who has power to administer any trust assets (at least at the early states) (see Crest Realty Pty Ltd (No 2) (in liquidation) (1977) 1 NSWLR 664 and Wells v Wily [2004] NSWSC 607) , and the liquidator can approach the Court if any problems arise. I would not think it desirable to separate the function of the liquidator and any receiver of the trust assets in this case, and these functions should (at least initially) be fulfilled by the same person. The liquidator may apply to the Court if his appointment needs to be extended to that of receiver of the trust assets or if he needs further assistance. Equally, if any conflict arises because of the appointment of Mr McCann to other companies associated to APM, he can apply to seek directions on how to deal with that conflict: see ASIC v Westpoint Corporation Pty Ltd (2006) 56 ACSR 646 at 652.


case_text: As I indicated above, the enquiry I needed to undertake was in respect of the solvency of APM. The factors leading to its current position may be relevant if they could impact upon APM's ability to pay its creditors in the near or foreseeable near future. The "fraud" allegations would hardly impact upon that issue following upon the evidence that had been presented to me by APM, particularly through the report of Mr Miller of 30 August 2007. There is also the need for finality in litigation and the particular need for prompt resolution of winding up applications putting aside the public interest, there is, as this case shows, the possibility of the evidence becoming stale or out of date: see Expile Pty Ltd v Jabb's Excavations Pty Ltd (2002) 194 ALR 138 at [9].


case_outcome: followed

case_text: Young J said in Geelong School Supplies Pty Ltd v Dean [2006] FCA 1404 at [35] : The crucial question, therefore, is whether on the evidence before me a fair-minded, reasonably informed member of the public would conclude that the proper administration of justice requires that Vogrig and WVL be restrained from acting for GSS in these proceedings. In answering this question it must be borne in mind that this is an application for a permanent injunction: Yunghanns v Elfic Ltd (unreported, Supreme Court of Victoria, Gillard J, 3 July 1998). It must also be borne in mind that the Court's jurisdiction is an exceptional one; it is to be exercised with appropriate caution and due weight must be given to the public interest in a litigant not being deprived of the solicitor of its choice without due cause. 59 The application was brought at a late stage in the proceedings, after I had reserved judgment. Even if I considered Saxbys had in some way acted improperly, in the exercise of my discretion, I would not at the stage the proceedings had reached have restrained Saxbys from future participation in the proceeding. The cost, inconvenience and practicalities of requiring lawyers to cease to act are a proper basis to refuse relief see Young J in Geelong School Supplies [2006] FCA 1404 at [32] and [51]. Subject to a limited re-opening being permitted to APM after I reserved my judgment, the hearing of the proceedings was otherwise at an end. 60 It was suggested that this Court would need to determine, after a proper hearing, Saxbys' conduct and the effect their conduct had on a fair trial of these proceedings. 61 No proper basis was established for such an enquiry. As I have said, Saxbys have brought the potential conflict to the attention of the relevant persons, and I do not assume that any of their alleged improper conduct has impacted upon a proper and fair trial in these proceedings. No particulars of such impact were provided to the Court even to give cause to make further enquiry.


case_text: The above considerations were all matters I could take into account in considering whether it was in the interests of justice that the proceeding be re-opened: see Smith v New South Wales Bar Association (No 2) [1992] HCA 36 ; (1992) 176 CLR 256 at 266-267, per Brennan, Dawson, Toohey JJ and Gaudron JJ; Urban Transport Authority of NSW v Nweiser (1992) 28 NSWLR 471 at 478-479, per Clarke JA (with whom Mahoney and Meagher JJA agree); Londish v Gulf Pacific Pty Ltd (1993) 45 FCR 128 at 138-139, per Neaves, Bruchett and Ryan JJ; Nikoloski v Ridge Consolidated Pty Ltd (1994) 116 FLR 192, per Higgins J; Boucher v Australian Securities Commission (1996) 71 FCR 122 at 126 at 132, per Spender, Drummond and Merkel JJ; Hindmarsh Medical Clinic v Hindmarsh Family Practice Pty Ltd (1997) 38 IPR 616 at 631-632, per Mansfield J.


case_outcome: distinguished

case_text: APM also contended that APM's financial position must be considered from its position as a "trustee company", APM having a right of indemnity that was equal to the value of the benefits that it provided to the trust estate and that was equivalent to the value of any liabilities that it has incurred, whilst acting as trustee of the trust. It was further contended that the indemnity ranked as a first charge upon the assets of the trust and, if the Court were not satisfied of the solvency of APM, that it should exercise its power to accede to the request of APM to be removed from the office of trustee (a request made during the course of the hearing) upon certain undertakings being made as to certain funds. In effect, APM wanted a receiver to take the place as trustee upon APM's removal as trustee. In addition, APM submitted in reliance upon comments of Young J in Horwath Corporate Pty Ltd v Huie (1999) 32 ACSR 413 (at 416) that the courts have traditionally have been reluctant to wind up a trustee company as difficult questions of rights and entitlements are involved that would need to be determined by litigation, and there would be no useful purpose in winding up the trustee upon its removal from the office of trustee. 36 I do not consider that the contentions of APM should be accepted. At the outset, I do not accept that the principles applied by Young J in Horwath 32 ACSR 413, which was a case concerning a trust and not a corporation, apply to APM, as was contended by APM. APM cannot be treated as a "trustee company" simply because it holds assets on trust for certain beneficiaries. In any event, unlike that before Young J, this is a case where it is necessary for a skilled insolvency practitioner to go through the books and records, having regard to their current state as accepted by Mr Miller and APM itself. Further, the liquidator once appointed will be in a good position to deal with competing claims, which may involve no litigation at all. 37 The simple answer to the other contentions of APM is that in this case, accepting a right of indemnity exists, it is a right which has not been shown will result in the foreseeable future in the availability of funds to pay creditors. This is a case where there will be issues to be determined as to whether a right of indemnity can be exercised, assuming it exists in theory, because of the actions of APM. There is the question of whether the trustee (APM) has properly incurred liabilities in acting as trustee: only if it has done so will it be entitled to be indemnified out of the trust assets.


case_text: I accept that the rule in Browne v Dunn (1893) 6 R 67 has an important function to play in the course of a trial, as recently made clear by the Full Court in Jardein Pty Ltd v Stathakis [2007] FCAFC 148 , at [27] to [33]: Where a party intends to contradict or challenge the testimony of an opposing party's witness, the party is obliged to put that witness on notice that his or her account will be challenged: Browne v Dunn (1893) 6 R 67. This gives the witness an opportunity to respond to the allegations. The reason this is done is as a matter of basic fairness. See Allied Pastoral Holdings Pty Ltd v Commissioner of Taxation [1983] 1 NSWLR 1 per Hunt J. Adherence to the rule in Browne v Dunn also gives the party calling the witness the chance to adduce supporting evidence which might not otherwise have been led. Compliance with the rule requires only that the substance of the contrary version is put to the witness, and not every detail of the challenge: White Industries (Qld) Pty Ltd v Flower & Hart (a firm) (1998) 156 ALR 169 at 217 per Goldberg J. In a civil case the consequences of a failure to observe the rule will vary. However, they will usually be related to the central object of the rule which is to secure fairness. In Seymour v Australian Broadcasting Commission (1977) 19 NSWLR 219 Mahoney JA said (at 236 237): "This kind of problem may arise at different times in the litigation. It may arise during the trial. Thus, where a party fails to cross-examine a witness at all or on a particular matter, it may be prudent for the trial judge at the time to draw the attention of counsel in an appropriate way to the effect this may have on the later conduct of the trial. It may be that the question arises at a later stage in the trial when counsel seeks to call evidence contradicting the witness or discrediting his evidence, or seeks to address upon the basis that the witness' evidence is untrue. The trial judge may then have to determine what course should be followed. Sometimes the interests of justice may be served by having the witness recalled for cross-examination. Sometimes the circumstances may be such that the only way in which justice can be achieved is by directing that, for example, it is not open to counsel, in address, to make such suggestion. What is to be done will depend, as I have said, upon the circumstances of the case." A possible consequence of a breach of the rule may be that the party in breach will be prevented from suggesting that the witness' testimony should be disbelieved. Another possible consequence will be the exclusion of evidence that challenges the witness' account with respect to those matters upon which there was no cross-examination. A third possible consequence will be to permit the witness to be recalled so that the breach can be remedied. One thing is clear. The rule is not simply to be ignored. The rule in Browne v Dunn has not been abrogated under the uniform Evidence Acts: Heaton v Luczka (unreported, New South Wales Court of Appeal, 3 March 1998) per Beazley JA. Indeed, s 46 of the Evidence Act 1995 (Cth) specifically enables the recall of a witness where there has been a breach of the rule and therefore implies its continued existence.


case_title: Leslie v Howship Holdings Pty Ltd (1997) 15 ACLC 459


case_title: Londish v Gulf Pacific Pty Ltd (1993) 45 FCR 128


case_title: Melbase Corporation Pty Ltd v Segenhoe Ltd (1995) 13 ACLC 823


case_title: Nikoloski v Ridge Consolidated Pty Ltd (1994) 116 FLR 192


case_title: Re Citic Commodity Trading Pty Ltd v JBL Enterprises (WA) Pty Ltd [1998] FCA 232


case_title: Rees v Bank of New South Wales [1964] HCA 47 ; (1964) 111 CLR 210


case_title: Re Presha Engineering (Aust) Pty Ltd (1983) 1 ACLC 675


case_title: Re Tweeds Garages Ltd [1962] Ch 406


case_outcome: referred to

case_text: APM then submitted, in reliance upon the principles enunciated in Ron Kingham Real Estate Pty Ltd v Edgar [1999] 2 Qd R 439 at 443 per McPherson JA, that there would be no benefit to the creditors in the trustee company being wound up, and it was trite law that a creditor can claim to be subrogated to the right of indemnity of the trustee company and directly enforce the debt against the trust assets or even the beneficiaries personally. 35 The way in which these submissions were put seemed to relate both to the question of solvency and the discretion to be exercised by the Court as to whether to order a winding up, assuming I was not satisfied as to solvency. As a matter of procedure, APM moved the Court for its removal as trustee, the appointment of a receiver, and that a winding up not be ordered by the Court. 38 As to APM's reliance on Ron Kingham Real Estate 2 Qd R 439, in that case the question of whether the trustee had properly incurred liabilities was not a matter that was or could be in contention. The defendants could not, having authorised the action of the trustee, have complained of a breach of trust. 39 Putting aside the correctness of the decision in Ron Kingham Real Estate 2 Qd R 439 in allowing the trustee's creditor to sue trust beneficiaries directly to enforce the trustee's right of indemnity against the beneficiaries, I do not consider it appropriate where there is an issue or potential issue as to whether the right of indemnity is available in the circumstances of this case to conclude that the creditors should be left to pursue such claims individually. In any event, there is no evidence that there will be sufficient assets to pay the creditors after the secured creditors have been paid. I do not consider that APM's contentions relating to the right of indemnity demonstrate that APM is solvent, assuming that at law there is a right of indemnity in favour of APM, or that such right of indemnity is a factor in favour of exercising my discretion not to wind up the company. If a liquidator is appointed he will be well placed to consider and deal with the question of the right of indemnity, and pursue with priority claims over the beneficiaries. 40 I now turn to other discretionary matters raised by APM and the issue of APM continuing as a trustee and the appointment of a receiver. 41 As I have indicated above, it was contended that if I came to the conclusion that APM had not discharged the burden of proof to show it was solvent, I should not order the winding up of the company but should instead remove it as trustee and appoint a receiver over the trust assets. In support of this approach, evidence was led of a number of creditors who expressed a desire for such a course. It was argued that it would save time and costs if the appropriate person, already familiar with the company, was appointed (in this case Mr Andrew Leonard Dunner). It was further contended that with the number of actions threatened against the company a receiver would be in a better position to defend the company with the aid of the current director, that the principal director (Mr Edwards) who was responsible for the bad state of the books of accounts of the company is no longer involved with APM, and that the current director is taking steps to put the books of accounts in proper order and prepare proper financial statements. 42 In addition, it was argued that because of the operation clause 11 in the Memorandum of Agreement between APM and the developer, Rocco Antonio Calderone, dated 3 August 2005, in the event of the appointment of a liquidator, APM would not be able to rely upon its right of indemnity, as the developer would be released from its duties and obligations under the agreement, and the trust properties would vest in the hands of the beneficiaries. 43 I have come to the view that I should order the winding up of APM despite these contentions. In addition to the views I have expressed in coming to the view that APM has not discharged the burden of proof upon it and my views on the report of Mr Miller of 30 August 2007, I have concluded that APM should be wound up, and that the alternative course of action contended for by APM not be followed, for the following reasons: (i) Whilst some creditors do not want the appointment of a liquidator, this is not the universal view of the unsecured creditors, and in any event is not a decisive factor. (ii) Whilst the appointment of a receiver familiar with the company already may save some time and costs, this is not the important consideration when balanced against the important public interest of ensuring an insolvent company ceases trading even if only a presumed insolvent company. (iii) Clause 11 does not, in my view, release the developer from any past responsibilities or liabilities it may have had under the agreement all it seems to do is to release, upon the appointment of a liquidator, the developer from any further duties and obligations under the agreement from the date of the appointment. In any event, even if clause 11 does have the result as contended for by APM, including the vesting of trust property in the beneficiary, the other factors I have relied upon in these reasons would indicate that it is appropriate for the company to be wind up, the public interest being a paramount consideration where APM is unable to prove its solvency and the books of accounts are incomplete and are unsubstantiated. Upon vesting of the trust property in the beneficiaries, the company will still have a beneficial interest with priority over the beneficiaries if, as trustee, it has a right of indemnity as submitted. If the debts have been incurred in the administration of the trust, the liquidator can call upon the right of indemnity. (iv) I do not consider that there are now better prospects for the creditors as a whole (including the unsecured creditors) if the company, with or without a receiver, were allowed to continue to trade on.


case_title: Smith v New South Wales Bar Association (No 2) [1992] HCA 36 ; (1992) 176 CLR 256


case_title: Taylor v ANZ Banking Group Ltd (1988) 6 ACLC 808


case_title: Urban Transport Authority of NSW v Nweiser (1992) 28 NSWLR 47


case_title: Wells v Wily [2004] NSWSC 607

case_text: In my view, the appropriate approach is to appoint the liquidator who has power to administer any trust assets (at least at the early states) (see Crest Realty Pty Ltd (No 2) (in liquidation) (1977) 1 NSWLR 664 and Wells v Wily [2004] NSWSC 607) , and the liquidator can approach the Court if any problems arise. I would not think it desirable to separate the function of the liquidator and any receiver of the trust assets in this case, and these functions should (at least initially) be fulfilled by the same person. The liquidator may apply to the Court if his appointment needs to be extended to that of receiver of the trust assets or if he needs further assistance. Equally, if any conflict arises because of the appointment of Mr McCann to other companies associated to APM, he can apply to seek directions on how to deal with that conflict: see ASIC v Westpoint Corporation Pty Ltd (2006) 56 ACSR 646 at 652.


case_title: Woodgate v Leonard (2007) NSWSC 495

case_text: In Woodgate v Leonard [2007] NSWSC 495 , Barrett J said (at [37]): The jurisdiction discussed in these cases is an extraordinary and protective jurisdiction. It is separate from the jurisdiction involved in protection of confidential information and the enforcement of fiduciary duty. This is made clear, in particular, in the extract from the judgment of Whealy J just quoted. The concern is with the due and proper administration of justice in a proceeding before the court. The jurisdiction exists to ensure that the integrity of the proceeding is maintained. Identification of the means needed to maintain that integrity will, of course, depend on the nature of the proceeding and its likely course. See also Bahonko v Nurses Board of Victoria (No 3) [2007] FCA 491.


case_text: extent of the authority conferred — and the conclusion that those executing a warrant do not have an " unexaminable discretion " — was endorsed by Hely J in Adler v Gardiner [2002] FCA 1141 , 43 ACSR 42 at 33 to 34 as follows (citation omitted): The objective inquiry [39] The executing officer or constable assisting, has to be satisfied that there are reasonable grounds for suspecting that things seized will afford evidence as to the commission of an offence. The notion of reasonable grounds for a suspicion imports an objective test, but "reasonable" involves a value or normative judgment ( Greiner v Independent Commission Against Corruption (1992) 28 NSWLR 125 at 167), and there may well be legitimate differences of opinion as to what falls within the term, particularly when it is used in relation to a nebulous expression such as "suspicion". A court is not entitled to substitute its own opinion on that question for the opinion of the executing officer or constable assisting. That does not mean that the executing officer, or constable assisting, has an unexaminable discretion; it does mean, however, that the officer's decision is only impeachable if the decision was one which the officer could not lawfully reach on the materials before him or her ... ... [41] The onus, then, is on the applicants to establish that the seizure decisions taken in relation to the disputed documents were infected by reviewable error. ... Notwithstanding the conclusion that it is unnecessary to resolve the Applicants' submission as to the warrants being " bad on their face ", considerable concern is nevertheless expressed as to the guidance which warrants of such complexity provide to those executing them and in protecting those whose premises are being searched. It was perhaps in recognition of the complexity presented by the warrants that a briefing session was held prior to 15 April 2009 with a view to better informing those persons who would be involved in the events of the following day in executing the warrants issued.


case_text: one time it had been suggested that a " warrant should state the description of the offence in question with a particularity sufficient to enable the person whose premises are being searched to know the exact object of the search ": Parker v Churchill [1986] FCA 88 ; (1986) 9 FCR 334 at 348 per Jackson J; Australian Broadcasting Corporation v Cloran (1984) 4 FCR 151 at 153 per Lockhart J. But there has since been a retreat from such an exacting standard. The " precision required ", it has since been suggested, " may vary with the nature of the offence, the other circumstances revealed, the particularity achieved in other respects, and what is disclosed by the warrant, read as a whole, and taking account of its recitals ": Beneficial Finance Corporation Ltd v Commissioner of Australian Federal Police [1991] FCA 92 ; (1991) 31 FCR 523 at 543 per Burchett J. The objective of the requirement, however, has remained constant. The " requirement to state the offence exists to set bounds to the area of search which the execution of the warrant would involve . ... What is significant ... is that the warrant disclose the nature of the offence in question so as to indicate the area of search ": Harts Australia No 1 (1997) 75 FCR at 152 per Hill, Cooper and Whitlam JJ. Each of the limitations upon the power conferred by these provisions only assumes additional importance when it is recalled that a search warrant may be issued and executed in respect to premises occupied by persons other than those involved or suspected of being involved in criminal activity. Where the terms of s 3E are satisfied, a warrant may thus be issued in respect to premises occupied by persons unconnected with any crime. The fundamental interference with privacy which is authorised by a search warrant must be constantly borne in mind. Search warrants are " ... intrusions into the sanctity of a person's domain and concomitantly an interference with his privacy ... ": Different Solutions Pty Ltd v Australian Federal Police (No 2) [2008] FCA 1686 at [106] per Graham J (applying: Cloran (1984) 4 FCR at 154 per Lockhart J). Similarly, in TVW Ltd v Robinson [1964] WAR 33 at 37 Negus J observed: The issue of a search warrant is a very serious matter indeed because it authorizes the invasion of the privacy of the subject in his home or in his business premises. It necessarily involves an interference with the rights of an individual and affects his liberty. See also: Mitchell v New Plymouth Club (Incorporated ) [1958] NZLR 1070 at 1072. Although effect must be given to the terms employed in s 3E , it is also legitimate to bear in mind that the common law has long been " jealous of the prima facie immunity from seizure of papers and possessions ": George v Rockett [1990] HCA 26 ; (1990) 170 CLR 104 at 110 per Mason CJ, Brennan, Deane, Dawson, Toohey, Gaudron and McHugh JJ.


case_text: one time it had been suggested that a " warrant should state the description of the offence in question with a particularity sufficient to enable the person whose premises are being searched to know the exact object of the search ": Parker v Churchill [1986] FCA 88 ; (1986) 9 FCR 334 at 348 per Jackson J; Australian Broadcasting Corporation v Cloran (1984) 4 FCR 151 at 153 per Lockhart J. But there has since been a retreat from such an exacting standard. The " precision required ", it has since been suggested, " may vary with the nature of the offence, the other circumstances revealed, the particularity achieved in other respects, and what is disclosed by the warrant, read as a whole, and taking account of its recitals ": Beneficial Finance Corporation Ltd v Commissioner of Australian Federal Police [1991] FCA 92 ; (1991) 31 FCR 523 at 543 per Burchett J. The objective of the requirement, however, has remained constant. The " requirement to state the offence exists to set bounds to the area of search which the execution of the warrant would involve . ... What is significant ... is that the warrant disclose the nature of the offence in question so as to indicate the area of search ": Harts Australia No 1 (1997) 75 FCR at 152 per Hill, Cooper and Whitlam JJ.


case_title: Carter v Minister for Aboriginal Affairs [2005] FCA 667 , 143 FCR 383

case_text: the extent that there may have been some unstated assumption on the part of the Applicants at the outset that s 16 may have conferred some unconstrained power or authority on this Court to grant interlocutory relief, such an assumption must be rejected. In Johns v Australian Securities Commission [1993] HCA 56 ; (1993) 178 CLR 408 at 434 Brennan J observed (citations omitted): The relief which may be ordered under s 16(1)(d) of the AD(JR) Act is not so much at large that the Court may make an order against a party to litigation even though no ground for relief under the general law is established against that party. Section 16(1)(d) does not set the Court on an uncharted course without legal reference points by which to steer. ... However, s 16(1)(d) applies only when the making of an order is "necessary to do justice between the parties". That means justice according to law. It may be that a person who acquires information knowing that the information is imparted to him in breach of a statutory duty is in the same position as he would have been if the duty were an equitable obligation of confidence. ... If there be no right to relief against a person under the general law, that person does not become liable to have an adverse order made under s 16(1)(d) merely by reason of being joined as a respondent in an application to the Federal Court under the AD(JR) Act. ... See also: Minister for Immigration and Multicultural Affairs v Thiyagarajah [2000] HCA 9 at [34] , [2000] HCA 9 ; 199 CLR 343 at 356 to 357; Carter v Minister for Aboriginal Affairs [2005] FCA 667 at [39] , [2005] FCA 667 ; 143 FCR 383 at 395 to 396.


case_text: present purposes, however, it is sufficient to consider the terms of s 3E and the terms of the warrants issued thereunder. When considering the ambit of a power to search and seize under a statutory warrant, it is to be recalled that the extent of that power " is that conferred by the statute, no more and no less ": Challenge Plastics Pty Ltd v Collector of Customs [1993] FCA 247 ; (1993) 42 FCR 397 at 408 to 409. Each of the requirements imposed by s 3E(5) and the other provisions in Pt 1AA , it is considered, must be construed according to the terms used and in a context where the purpose of search and seizure provisions is to provide for the gathering of information to determine whether offences have been committed and to facilitate proof of them: Hart [2002] FCAFC 392 at [65] , 124 FCR at 399 to 400 per French, Sackville and R D Nicholson JJ.


case_text: the purposes of the present interlocutory application, it is unnecessary to do more than refer to the breadth of the authority conferred by s 3F and to the constraints imposed upon that authority. The authority conferred is that conferred upon the " executing officer or a constable assisting ". It is not an authority to seize only that which a Court subsequently concludes falls within the terms of the warrant. But the extent of the authority conferred by s 3F is constrained by the requirement that the " executing officer " or " constable assisting " only seize that which he " believes on reasonable grounds " is relevantly either " evidential material in relation to an offence to which the warrant relates "; or " evidential material in relation to another offence that is an indictable offence " In the absence of the " executing officer " or " constable " forming such a belief on " reasonable grounds ", the warrant confers no authority to seize anything. No authority has been conferred by the legislature or by the warrants to enter a person's premises and to seize at random documents or things which may be believed to be of interest. There must always remain " reasonable grounds " for the belief set forth in s 3F(1)(d). Authority to seize things other than those described in the warrant (cf Chic Fashions (West Wales) Ltd v Jones [1968] 2 QB 299 at 313) is now expressly addressed in s 3F(1)(d)(ii). But that authority also remains confined by the requirement that there be " reasonable grounds " for the belief that is formed and by the requirement that the thing seized be " in relation to another offence that is an indictable offence ".


case_text: to his attendance at those premises, Mr Caplice had a telephone conversation with the Eighth Respondent, Mr Alan Crowe. Mr Caplice requested an opportunity to " review any materials seized under the search warrants so that they can assert any claims they may have for legal professional privilege ". A request that " the search be suspended for a short period of time so that we can properly advise our clients and get instructions " was denied. A search undertaken with a view to precluding meaningful access to legal advice and the opportunity to claim legal professional privilege may render unlawful a search undertaken: Citibank Ltd v Commissioner of Taxation (1988) 83 ALR 144 ; Federal Commissioner of Taxation v Citibank Ltd (1989) 20 FCR 403. But such is not the present case.


case_text: Senior Counsel on behalf of the Respondents quite properly relied upon the public interest in permitting those responsible for enforcement of the criminal law to continue their investigations. This consideration was rightly advanced as of relevance to both the discretion to grant interlocutory relief and to the discretion to grant an extension of time pursuant to s 11(1)(c) of the Judicial Review Act . In Coward v Allen [1984] FCA 53 ; (1984) 52 ALR 320 Northrop J had concluded in respect to a warrant issued under the now-repealed s 10 of the Crimes Act that there was a serious question to be tried in relation " to the manner in which the warrants were executed and whether the seizure of things was valid ": (1984) 52 ALR at 336. His Honour nevertheless declined relief. In doing so His Honour concluded: In my opinion, the motions for interlocutory injunctions should be refused. The balance of convenience weighs in favour of the respondents. In the public interest, they should have a reasonable time to examine the things seized, to decide whether to prosecute or not, and to retain the things needed as evidence in support of any prosecutions. The other things should be returned to the applicants. The court hearing those criminal proceedings may have to determine, on the principles expressed in Bunning v Cross , whether evidence obtained by means of the search warrants is admissible or not. Any civil action arising from the seizure could be continued at the conclusion of those criminal proceedings. If no prosecutions are commenced, the applicants would be free to continue with their actions based on the unlawful execution of the warrants. In the meantime, the public interest requires that the respondents to the actions should be able to continue their investigations. Accordingly, the motions for interlocutory injunctions are refused. A valuable safeguard which adequately protected the interests of those whose property was wrongly seized lay, it was said, in the discretion of the Court — should there be a prosecution — to exclude such evidence. In the context of considering whether documents should be returned, in Puglisi v Australian Fisheries Management Authority (1997) 148 ALR 393 at 405, Hill J likewise observed: I am thus placed in the situation where there are competing views, although it must be said that the preponderance of view is in favour of refusing to order the return of items, even where those items have been illegally seized, if there are criminal proceedings pending in which the items may be used as evidence. While the court would not wish to be seen to be rewarding members of the police who obtain possession of material without lawful authority, there is to be weighed against that a public interest in the administration of and non-interference with justice. Should the court order that material, albeit invalidly obtained, to be used in evidence in a pending prosecution be delivered up to those from whom it was taken the prosecution, which might otherwise succeed, could be frustrated. Of course, the question whether the items in the present case, if otherwise admissible, should be admitted in evidence in the pending prosecution, despite the fact that they were obtained without lawful authority, will be a matter for the judicial officer hearing the prosecution: Bunning v Cross [1978] HCA 22 ; (1978) 141 CLR 54 ; 19 ALR 641. The existence of this discretion suggests to me that I should not interfere with the pending prosecution by requiring the documents seized to be returned but leave instead to the judicial officer presiding on that prosecution the question whether the material illegally obtained should be admitted into evidence in the prosecution. The importance of the enforcement of the criminal law may readily be accepted. It is self-evidently in the public interest that those who commit criminal offences should be brought to account. Those who commit fraud, including a fraud upon the public revenue, should be brought to account. It is equally of importance that those investigating suspected criminal conduct be able to exercise all powers as are conferred upon them by the legislature to access materials and to secure the availability of all materials lawfully seized for the purposes of any subsequent proceeding. But it is not considered that either Northrop J or Hill J was attempting to do anything other than to recognise that aspect of the public interest and apply it to the facts before them.


case_outcome: applied

case_text: addressing the terms of the now-repealed s 10 in Crowley v Murphy [1981] FCA 31 ; (1981) 34 ALR 496 , Lockhart J addressed some of the principles relevant to the manner in which a search warrant is executed as follows: I will not attempt to state exhaustively the procedures that policemen should follow when executing search warrants. That would be both unnecessary and undesirable. What should be done must vary according to the circumstances of each case. But I shall endeavour to give some general guidance. First, like most statutory powers, the power of enforcing a search warrant must be exercised in good faith. Second, the power must be exercised for the purpose for which it was conferred. It must not be used for some ulterior purpose. If, for example, it is used to punish the person whose premises are to be entered and searched, plainly that is an ulterior purpose. Third, the power must be exercised fairly, having regard to all the circumstances. Fourth, it must be exercised having regard to those affected by its exercise and, in particular, to the rights of those persons. I shall return to this later. Fifth, the officer executing the warrant must strictly follow the directions contained in it and must not exceed the limits of the authority it confers. Northrop J agreed: (1981) 34 ALR at 505. The same principles, it is considered, are equally applicable to a warrant issued under s 3E and executed under s 3F.


case_text: of the limitations upon the power conferred by these provisions only assumes additional importance when it is recalled that a search warrant may be issued and executed in respect to premises occupied by persons other than those involved or suspected of being involved in criminal activity. Where the terms of s 3E are satisfied, a warrant may thus be issued in respect to premises occupied by persons unconnected with any crime. The fundamental interference with privacy which is authorised by a search warrant must be constantly borne in mind. Search warrants are " ... intrusions into the sanctity of a person's domain and concomitantly an interference with his privacy ... ": Different Solutions Pty Ltd v Australian Federal Police (No 2) [2008] FCA 1686 at [106] per Graham J (applying: Cloran (1984) 4 FCR at 154 per Lockhart J). Similarly, in TVW Ltd v Robinson [1964] WAR 33 at 37 Negus J observed: The issue of a search warrant is a very serious matter indeed because it authorizes the invasion of the privacy of the subject in his home or in his business premises. It necessarily involves an interference with the rights of an individual and affects his liberty. See also: Mitchell v New Plymouth Club (Incorporated ) [1958] NZLR 1070 at 1072. Although effect must be given to the terms employed in s 3E , it is also legitimate to bear in mind that the common law has long been " jealous of the prima facie immunity from seizure of papers and possessions ": George v Rockett [1990] HCA 26 ; (1990) 170 CLR 104 at 110 per Mason CJ, Brennan, Deane, Dawson, Toohey, Gaudron and McHugh JJ.


case_title: Federal Commissioner of Taxation v Citibank Ltd (1989) 20 FCR 403


case_title: Hart v Commissioner of Australian Federal Police [2002] FCAFC 392 , 124 FCR 384

case_text: sections are contained within Pt 1AA of the Crimes Act . That Part was incorporated into the Act by the Crimes (Search Warrants and Powers of Arrest) Amendment Act 1994 (Cth). Those amendments (in turn) had their origins in an interim report now known as the Gibbs Report (Attorney-General's Department, Review of Commonwealth Criminal Law, Fourth Interim Report: Offences Relating to the Administration of Justice, Offences Against the Government Involving Property or Money, Bribery and Corruption and Search Warrants (Attorney-General's Department, Canberra, 1990)). " That report and the pre-existing law form an essential part of the context relevant to the interpretation of Pt 1AA ": Harts Australia Ltd v Commissioner, Australian Federal Police (1997) 75 FCR 145 (' Harts Australia No 1 ') at 148 per Hill, Cooper and Whitlam JJ; Hart v Commissioner of Australian Federal Police [2002] FCAFC 392 (' Hart ') at [17] [2002] FCAFC 392 ; , 124 FCR 384 at 390 per French, Sackville and R D Nicholson JJ. For present purposes, however, it is sufficient to consider the terms of s 3E and the terms of the warrants issued thereunder. When considering the ambit of a power to search and seize under a statutory warrant, it is to be recalled that the extent of that power " is that conferred by the statute, no more and no less ": Challenge Plastics Pty Ltd v Collector of Customs [1993] FCA 247 ; (1993) 42 FCR 397 at 408 to 409. Each of the requirements imposed by s 3E(5) and the other provisions in Pt 1AA , it is considered, must be construed according to the terms used and in a context where the purpose of search and seizure provisions is to provide for the gathering of information to determine whether offences have been committed and to facilitate proof of them: Hart [2002] FCAFC 392 at [65] , 124 FCR at 399 to 400 per French, Sackville and R D Nicholson JJ. Notwithstanding s 3K, the power to seize still derives primarily from s 3F and the language of s 3K is " quite specific ": Hart [2002] FCAFC 392 at [92] , 124 FCR at 407. French, Sackville and R D Nicholson JJ, in the context of addressing a different issue to that now before the Court, nevertheless there observed: [86] Where s 3K is relied upon, seizure is deferred until the completion of the examination of things moved from the warrant premises under that section. ... [T]he section involves a distinction between moving things from the warrant premises to another place for examination, on the one hand, and seizure of those things, on the other. Section 3K does not specify any time period for the completion of the examination. However, it is ancillary to s 3F. It confers no free standing power of seizure. The purpose of the examination or processing which it authorises under s 3K(2) is to determine whether the things which have been moved from the premises "may be seized under the warrant". The power to seize still derives from s 3F. It therefore exists only in relation to a "warrant that is in force". The warrant remains in force only for the period specified in it (s 3E(5)). If seizure has not been made of things moved under s 3K within the period stated in the warrant, then the power to seize lapses. If examination has not been completed the power to examine also lapses. Absent any other lawful basis for retaining the things moved, they must be returned. ... [92] The respondents contended that s 3K(2) authorises not only the removal to another place of computers or storage devices in or on which electronic material is stored, but the copying of such material onto storage devices brought to the premises for the purpose and the removal from the premises of those devices. It is a fundamental difficulty in the path of this approach to the construction of s 3K(2) that the language of the subsection is quite specific. It provides that, in certain circumstances, "the things may be moved to another place". The provision only authorises the moving of a thing to another place for the purpose described. The fact that the legislation, by virtue of the definition of "evidential material", contemplates that material in electronic form, may be "seized" (without identifying the manner by which it may be seized) does not demonstrate that material in electronic form can be "moved" in accordance with s 3K(2) of the Crimes Act . Their Honours there also referred to the " need to recognise the operational realities in which warrants are executed ": [2002] FCAFC 392 at [68] , 124 FCR at 401. One purpose achieved by provisions such as ss 3H and 3P is to ensure that the occupier or other person is fully informed as to the extent of the authority conferred by a warrant. He is thereby placed in a position whereby he can observe that the terms of a warrant are not being exceeded. The statement in the warrant of those matters required by s 3E(5)(a) and (c), and the requirement that a copy of the warrant be made available, ensure that the occupier or other person is not reduced to a mere bystander. Just as the issue of a warrant may be challenged in an appropriate Court upon the basis (for example) that the issuing officer erred when reaching the state of " satisfaction " required by s 3E(1) , the manner in which a warrant is executed may also be challenged upon the basis (for example) that there did not exist " reasonable grounds " for seizing materials as required by s 3F(1)(d). Section 3L imposes its own further constraints upon the power that may be exercised, including the limitations in s 3L(3) , the requirement for notice in s 3L(5) and the limitation as to the period of time that " equipment " may be " secured " in s 3L(6).


case_text: sections are contained within Pt 1AA of the Crimes Act . That Part was incorporated into the Act by the Crimes (Search Warrants and Powers of Arrest) Amendment Act 1994 (Cth). Those amendments (in turn) had their origins in an interim report now known as the Gibbs Report (Attorney-General's Department, Review of Commonwealth Criminal Law, Fourth Interim Report: Offences Relating to the Administration of Justice, Offences Against the Government Involving Property or Money, Bribery and Corruption and Search Warrants (Attorney-General's Department, Canberra, 1990)). " That report and the pre-existing law form an essential part of the context relevant to the interpretation of Pt 1AA ": Harts Australia Ltd v Commissioner, Australian Federal Police (1997) 75 FCR 145 (' Harts Australia No 1 ') at 148 per Hill, Cooper and Whitlam JJ; Hart v Commissioner of Australian Federal Police [2002] FCAFC 392 (' Hart ') at [17] [2002] FCAFC 392 ; , 124 FCR 384 at 390 per French, Sackville and R D Nicholson JJ.


case_title: Harts Australia Ltd v Commissioner, Australian Federal Police [2001] FCA 175 , 65 ALD 463

case_text: 11(1)(c) assumes present relevance because the events now the subject of the present proceeding took place on 15 April 2009 and the initial Application was not lodged until 7 September 2009 — a period some four months out of time. Reliance upon s 39B of the Judiciary Act 1903 (Cth) ('the Judiciary Act ') may not present such a problem for the Applicants — but reliance upon s 39B could not permit review of the decision of the " issuing officer " to issue the warrants, that officer not being an " an officer ... of the Commonwealth ". If an extension of time were granted, the decisions to issue the warrants would also be susceptible to review pursuant to the Judicial Review Act . Decisions to issue warrants, it may be accepted, are decisions of an " administrative character " ( Harts Australia Ltd v Commissioner, Australian Federal Police [2001] FCA 175 at [26] , 65 ALD 463 at 470 per Drummond J) and decisions made " under an enactment " ( Kennedy [2004] FCA 562 at [7] , 135 FCR at 524 per Branson J).


case_text: 11(1) provides as follows: (1) An application to the Federal Court or the Federal Magistrates Court for an order of review: (a) ...; and (b) ...; and (c) shall be lodged with a Registry of the court concerned and, in the case of an application in relation to a decision that has been made and the terms of which were recorded in writing and set out in a document that was furnished to the applicant, including such a decision that a person purported to make after the expiration of the period within which it was required to be made, shall be so lodged within the prescribed period or within such further time as the court concerned (whether before or after the expiration of the prescribed period) allows. The principles relevant to the exercise of the discretion conferred by s 11(1)(c) have been summarised by Wilcox J in Hunter Valley Developments Pty Ltd v Cohen [1984] FCA 176 ; (1984) 3 FCR 344 at 348 to 349. Included amongst those matters relevant to the exercise of the discretion are " the merits of the substantial application " and prejudice to the respondent, although it is recognised that " the mere absence of prejudice is not enough to justify the grant of an extension ". It is considered that the merits of the case as sought to be advanced by the Applicants are such that an extension of time should be granted. The discretion to extend time in the present proceeding has been exercised by reference to the merits of the case together with those other matters referred to by Wilcox J. Two submissions advanced on behalf of the Respondents, however, warrant specific attention.


case_title: Johns v Australian Securities Commission [1993] HCA 56 ; (1993) 178 CLR 408


case_title: Kennedy v Baker [2004] FCA 562 , 135 FCR 520

case_text: further concern in respect to the manner in which the warrant was being executed at the O'Keefe's Lane premises emerges from a separate Affidavit filed on behalf of the Applicants. The deponent to that Affidavit , Mr Edward Mazzoni, is the director of corporate services of an entity called Pakshun Enterprise Pty Ltd. Mr Mazzoni attended the O'Keefe's Lane premises and sets forth a statement made by Federal Agent Needham as follows: "We will need to take all of the servers and some of the hard drives today because we are not able to image them here. We agree to provide your lawyers with copies of the images once they have been imaged and we will also return the computers to you at that time." Accepted literally, that is a statement acknowledging that the search which the warrant authorises to be conducted of the premises at O'Keefe's Lane is not to be undertaken there but at some other undisclosed place. Accepted literally, it is also the expression of an intent to " take all of the servers " irrespective of whether or not there has been any attempt at " operating " the equipment as required by s 3L(2) with a view to determining what may be found upon the " hard drives ". Again, at a final hearing that part of the conversation deposed to by Mr Mazzoni may be put in a broader context. And s 3L(1A) may not clothe the Respondents with sufficient authority to copy the data on the disks in the manner in which they did. Irrespective of whether " data " is to be construed in the manner as concluded by Branson J in Kennedy v Baker [2004] FCA 562 at [60] , 135 FCR 530 at 537 to 538, the issue which gives rise to the serious question to be tried remains a question as to whether the manner of execution of the warrants was such as to provide " reasonable grounds " for the belief referred to in s 3L(1A). Nor is it considered that s 3K necessarily provides the authority to remove " the servers and some of the hard drives ". Such evidence as there presently is available provides little basis for any conclusion to be reached that it was " significantly more practicable " to move equipment for the purposes of s 3K(2)(a)(i). Forensic experts were assisting in the search. And, even if s 3K(2)(a)(i) was satisfied, there remains concern as to whether s 3K(2)(a)(ii) had been satisfied. On either view, it is considered that at this stage a serious question arises in respect to whether the manner in which the warrant was executed on the O'Keefe's Lane premises in respect to the computers found on those premises has exceeded the authority conferred by the legislation and by the terms of the warrant as issued. Section 11 of the Judicial Review Act provides for the manner in which an application under that Act is to be made and s 11(1)(c) imposes ( inter alia ) a requirement to lodge an Application in the Registry within 28 days of the decision the subject of review. It is ss 5, 6 and 7 of that Act that confer jurisdiction upon this Court pursuant to the terms of that Act. If the jurisdiction of this Court which is sought to be invoked is to include that conferred by the Judicial Review Act , it may be that the Amended Application fails to comply with O 4 r 3(1)(b) of the Federal Court Rules : cf Kennedy [2004] FCA 562 at [5] , 135 FCR at 523 per Branson J. Whether any further amendment is sought to be made to the existing Amended Application , however, remains a matter for the Applicants to address and for the docket judge who has this proceeding assigned to him to resolve. Section 11(1)(c) assumes present relevance because the events now the subject of the present proceeding took place on 15 April 2009 and the initial Application was not lodged until 7 September 2009 — a period some four months out of time. Reliance upon s 39B of the Judiciary Act 1903 (Cth) ('the Judiciary Act ') may not present such a problem for the Applicants — but reliance upon s 39B could not permit review of the decision of the " issuing officer " to issue the warrants, that officer not being an " an officer ... of the Commonwealth ". If an extension of time were granted, the decisions to issue the warrants would also be susceptible to review pursuant to the Judicial Review Act . Decisions to issue warrants, it may be accepted, are decisions of an " administrative character " ( Harts Australia Ltd v Commissioner, Australian Federal Police [2001] FCA 175 at [26] , 65 ALD 463 at 470 per Drummond J) and decisions made " under an enactment " ( Kennedy [2004] FCA 562 at [7] , 135 FCR at 524 per Branson J).


case_title: Minister for Immigration and Multicultural Affairs v Thiyagarajah [2000] HCA 9 , 199 CLR 343


case_title: Mitchell v New Plymouth Club (Incorporated ) [1958] NZLR 1070


case_title: Parker v Churchill [1986] FCA 88 ; (1986) 9 FCR 334


case_title: Price v Elder [2000] FCA 166

case_text: such circumstances, that inference and that alone may be sufficient to form a conclusion that the balance of convenience rests heavily in favour of the Applicants. If interlocutory relief were to be refused, any success that the Applicants may have at a final hearing would be largely rendered nugatory: cf Price v Elder [2000] FCA 166 per Emmett J. The rights of individuals are not to be whittled away by conferring greater power upon those executing warrants than the already extensive power they presently possess. Damages, in such a context, may not be an adequate remedy. Such factors, however, must necessarily be taken into account together with other considerations. Also to be taken into account is the effect that the seizure of documents is having upon the business of the Applicants. That effect is not insignificant. Some significance is also to be attached to the estimated cost of about $240,000 that would be incurred by the Applicants in further reviewing the materials seized. Whether the task is as complex as is asserted and whether the costs are as high as may presently be believed may be queried. And, whatever may be the extent of those costs and whatever may be the explanation as may finally emerge, the Applicants have made decisions since April 2009 to not challenge the validity of the warrants or the manner of their execution until now. To now raise the question of costs is a very much belated consideration that should be given less weight than had such matters been raised at the outset. But some additional costs will unquestionably be incurred and some weight can be given to that consideration when assessing the balance of convenience.


case_title: Puglisi v Australian Fisheries Management Authority (1997) 148 ALR 393


case_title: TVW Ltd v Robinson [1964] WAR 33


case_text: Network Limited v News Limited (No 15) [2006] FCA 515 (8 May 2006) [ Home ] [ Databases ] [ WorldLII ] [ Search ] [ Feedback ] Federal Court of Australia You are here:   AustLII >> Databases >> Federal Court of Australia >> 2006 >> [2006] FCA 515 [ Database Search ] [ Name Search ] [ Recent Decisions ] [ Noteup ] [ Download ] [ Help ] Seven Network Limited v News Limited (No 15) [2006] FCA 515 (8 May 2006) Last Updated: 9 May 2006 FEDERAL COURT OF AUSTRALIA Seven Network Limited v News Limited (No 15) [2006] FCA 515 EXPERT EVIDENCE admissibility of expert report - whether expert has necessary specialised knowledge to assess the importance of Australian sports broadcasting rights to Australian pay television operators Evidence Act 1995 (Cth) s 79 HG v The Queen [1999] HCA 2 ; (1999) 197 CLR 414 cited SEVEN NETWORK LIMITED and ANOR v NEWS LIMITED and ORS NSD 1223 of 2002 SACKVILLE J SYDNEY 8 MAY 2006 IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY NSD 1223 of 2002 BETWEEN: SEVEN NETWORK LIMITED (ACN 052 816 789) FIRST APPLICANT C7 PTY LIMITED (ACN 082 901 442) SECOND APPLICANT AND: NEWS LIMITED (ACN 007 871 178) FIRST RESPONDENT SKY CABLE PTY LIMITED (ACN 069 799 640) SECOND RESPONDENT TELSTRA MEDIA PTY LIMITED (ACN 069 279 027) THIRD RESPONDENT FOXTEL MANAGEMENT PTY LIMITED (ACN 068 671 938) FOURTH RESPONDENT TELSTRA CORPORATION LIMITED (ACN 051 775 556) FIFTH RESPONDENT TELSTRA MULTIMEDIA PTY LIMITED (ACN 069 279 072) SIXTH RESPONDENT PUBLISHING AND BROADCASTING LIMITED (ACN 009 071 167) SEVENTH RESPONDENT NINE NETWORK AUSTRALIA PTY LIMITED (ACN 008 685 407) EIGHTH RESPONDENT PREMIER MEDIA GROUP PTY LIMITED (ACN 065 445 418) NINTH RESPONDENT AUSTRALIAN RUGBY FOOTBALL LEAGUE LIMITED (ACN 003 107 293) TWELFTH RESPONDENT NATIONAL RUGBY LEAGUE INVESTMENTS PTY LIMITED (ACN 081 778 538) THIRTEENTH RESPONDENT NATIONAL RUGBY LEAGUE LIMITED (ACN 082 088 962) FOURTEENTH RESPONDENT FOXTEL CABLE TELEVISION PTY LIMITED (ACN 069 008 797) FIFTEENTH RESPONDENT OPTUS VISION PTY LIMITED (ACN 066 518 821) SIXTEENTH RESPONDENT AUSTAR UNITED COMMUNICATIONS LIMITED (ACN 087 695 707) SEVENTEENTH RESPONDENT AUSTAR ENTERTAINMENT PTY LIMITED (ACN 068 104 530) EIGHTEENTH RESPONDENT IAN HUNTLY PHILIP NINETEENTH RESPONDENT NEWS PAY TV PTY LIMITED (ACN 085 095 487) TWENTIETH RESPONDENT PBL PAY TV PTY LIMITED (ACN 084 940 367) TWENTY-FIRST RESPONDENT SINGTEL OPTUS PTY LIMITED (ACN 052 833 208) TWENTY-SECOND RESPONDENT JUDGE: SACKVILLE J DATE OF ORDER: 8 MAY 2006 WHERE MADE: SYDNEY THE COURT ORDERS: 1. The tender of pars 5.129-5.178 and section 6 of Mr Kinsella's report dated 2 December 2004 ('the Report') be rejected. 2. The parties consider the application of this ruling to other parts of the Report and to Mr Kinsella's report in reply dated 25 July 2005 and his supplementary statement dated 5 October 2005, with a view to handing up agreed short minutes of order. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules . IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY NSD 1223 of 2002 BETWEEN: SEVEN NETWORK LIMITED (ACN 052 816 789) FIRST APPLICANT C7 PTY LIMITED (ACN 082 901 442) SECOND APPLICANT AND: NEWS LIMITED (ACN 007 871 178) FIRST RESPONDENT SKY CABLE PTY LIMITED (ACN 069 799 640) SECOND RESPONDENT TELSTRA MEDIA PTY LIMITED (ACN 069 279 027) THIRD RESPONDENT FOXTEL MANAGEMENT PTY LIMITED (ACN 068 671 938) FOURTH RESPONDENT TELSTRA CORPORATION LIMITED (ACN 051 775 556) FIFTH RESPONDENT TELSTRA MULTIMEDIA PTY LIMITED (ACN 069 279 072) SIXTH RESPONDENT PUBLISHING AND BROADCASTING LIMITED (ACN 009 071 167) SEVENTH RESPONDENT NINE NETWORK AUSTRALIA PTY LIMITED (ACN 008 685 407) EIGHTH RESPONDENT PREMIER MEDIA GROUP PTY LIMITED (ACN 065 445 418) NINTH RESPONDENT AUSTRALIAN RUGBY FOOTBALL LEAGUE LIMITED (ACN 003 107 293) TWELFTH RESPONDENT NATIONAL RUGBY LEAGUE INVESTMENTS PTY LIMITED (ACN 081 778 538) THIRTEENTH RESPONDENT NATIONAL RUGBY LEAGUE LIMITED (ACN 082 088 962) FOURTEENTH RESPONDENT FOXTEL CABLE TELEVISION PTY LIMITED (ACN 069 008 797) FIFTEENTH RESPONDENT OPTUS VISION PTY LIMITED (ACN 066 518 821) SIXTEENTH RESPONDENT AUSTAR UNITED COMMUNICATIONS LIMITED (ACN 087 695 707) SEVENTEENTH RESPONDENT AUSTAR ENTERTAINMENT PTY LIMITED (ACN 068 104 530) EIGHTEENTH RESPONDENT IAN HUNTLY PHILIP NINETEENTH RESPONDENT NEWS PAY TV PTY LIMITED (ACN 085 095 487) TWENTIETH RESPONDENT PBL PAY TV PTY LIMITED (ACN 084 940 367) TWENTY-FIRST RESPONDENT SINGTEL OPTUS PTY LIMITED (ACN 052 833 208) TWENTY-SECOND RESPONDENT JUDGE: SACKVILLE J DATE: 8 MAY 2006 PLACE: SYDNEY RULING ON EVIDENCE THE REPORT 1 The News parties have objected to the tender by the applicants ('Seven') of what is said to be an expert report prepared by Mr Kevin Kinsella. The report, which is dated 2 December 2004, addresses four questions: '(a) What drives subscriptions for pay television? (b) Which, if any, sports can be characterised as subscription drivers in the context of the Australian pay television industry? (c) What factors and considerations does a retail pay television operator typically take into account in deciding: (i) whether or not to acquire channels and if so on what terms; and (ii) whether to include a channel as part of a tier or basic subscription package? (d) What, if any, impact did the loss of the AFL rights from the commencement of the 2002 AFL season and the failure to obtain the NRL pay rights from the commencement of the 2001 season have on the ability of the Seven Network and C7 to pursue an integrated media strategy? ' 2 Like many of the expert reports prepared in this case, Mr Kinsella's reports are of excessive length. He has prepared three reports: the first report, a report in reply (25 July 2005) and a 'supplementary statement' (5 October 2005). The first report comprises 143 pages (excluding appendices); the report in reply is 89 pages in length; and the supplementary statement adds a further 73 pages to the mountain of material tendered in this case. 3 It seems that neither money nor length of exposition is any object in these proceedings. Neither, however, necessarily produces optimum forensic outcomes. Judges have repeatedly warned about the potential waste of resources involved in the preparation of elaborate expert reports that may turn out to be of little or no assistance in resolving the issues before the court. These warnings appear not always to have been heeded in the present case. 4 News objects to the entirety of Mr Kinsella's report. However, its principal concern appears to be with Mr Kinsella's opinions relating to so-called 'marquee sports'. Mr Kinsella's opinions on this topic include the following (par 4.1): (f) Given that they overcome consumer inertia and are frequently the catalyst for the consumer purchase decision, the most important single factor driving subscriptions is live and exclusive coverage of popular sports ("marquee" sports). (g) Consequently, there are certain fundamental ("marquee") sports rights that a retail pay television operator should acquire if it can do so (either directly or through a channel supplier). The value of such sports rights in building the network and a subscriber base goes beyond the directly attributable cash flows. (h) Only a limited number of sports are popular and attractive enough to be categorised as "premium" sports and still fewer possess the appeal, attributes and utility associated with "marquee" sports. (i) "Marquee" sports are distinguished, in part, by the depth and spread of their appeal to consumers, viewers and subscribers (they are amongst the most popular sports), in part, by social and cultural factors and, in part, by the greater utility they provide to (and for) television (most especially, pay television). ... (l) ...[W]ith respect to anti-siphoning regulation and other salient constraints, it is not necessary for pay television to have every match (or every available match) from a "marquee" sport or competition exclusively accessible for live broadcast on its channel(s) and/or service(s) in order to attain critical mass (albeit that such an approach might reasonably be expected to accelerate the time it takes the pay television operator to attain critical mass). (m) Given the above, whilst in and of itself it is not sufficient, "marquee" sports are a necessary pre-requisite for retail pay television operators seeking to attain critical mass and the most important single factor driving subscriptions. ' (Emphasis added.) 5 Mr Kinsella expresses the view that Seven Network had to pursue an integrated media strategy ('IMS') so as better to face the dual challenges of maintaining audiences and advertising revenues, while investing in necessary diversification to ensure growth (par 4.4(a)). He considers that the pursuit by the Seven Network of an IMS 'was a practical, proven and generally accepted option' (par 4.4(c)). In his view, however, the impact of the loss of the AFL rights and the failure to attain the NRL rights on the IMS was 'profound': 'Without access to such content (the AFL and the NRL) that could overcome consumer inertia and act as a catalyst to the consumer purchase decision, deriving value from producing and providing wholesale sporting or non-sporting channels would be, if possible, problematic and the return, if any, modest. The launch of a "stand-alone" retail pay television service would not have been feasible without such content' (par 4.4(e)). 6 News' principal objection to the admissibility of the report is that Mr Kinsella's opinions have not been shown to be founded on his specialised knowledge, based on his study, training or experience, as required by s 79 of the Evidence Act 1995 (Cth) (' Evidence Act '). Mr Whitford SC, who appeared with Mr Brereton for News, identified three sections of the report as being of particular concern: • pars 5.129 5.178, which contain Mr Kinsella's analysis of 'marquee sports'; • section 6 of the report, where Mr Kinsella considers which, if any, sports can be characterised as subscription drivers in the context of the Australian pay television industry; and • appendix 3, which explains the components of a 'marquee sports assessment matrix' adopted by Mr Kinsella in section 6 of his report. 30 The danger in this case is precisely that identified by Gleeson CJ in HG v The Queen [1999] HCA 2 ; (1999) 197 CLR 414, at [44], where his Honour observed that: ' Experts who venture "opinions" (sometimes merely their own inference of fact), outside their field of specialised knowledge may invest those opinions with a spurious appearance of authority, and legitimate processes of fact-finding may be subverted. ' 31 I do not think that Mr Kinsella has the specialised knowledge required for him to express an opinion on 'marquee' sports in Australia and their significance for Australian retail pay television operators. However, News' objection can be dealt with by concluding, as I do, that Mr Kinsella's reasoning process, as disclosed in his report, does not enable me to determine whether he has the necessary specialised knowledge, based on his training, study or experience, to express the opinions he has on those issues. This conclusion is sufficient to uphold the objection: HG v The Queen, at [39] per Gleeson CJ. 32 I therefore reject the tender of the parts of the report identified by Mr Whitford (see [6], above), other than appendix 3. Appendix 3 may be in a different category because, on one reading, it simply sets out criteria which in Mr Kinsella's opinion should be taken into account in assessing the significance of sports broadcasting rights for pay television in any country, including Australia. Whether that opinion is relevant or helpful may be a different question. 33 Mr Sheahan SC, who appeared with Mr Halley for Seven, put as a fallback position that the portions of Mr Kinsella's reports that are objected to should be treated as submissions. There also may be some other parts of Mr Kinsella's report that are not affected by my ruling. I therefore propose to give the parties an opportunity to consider these reasons before determining whether the whole or only parts of the report should be rejected. The parties should also consider the effect of the ruling in relation to Mr Kinsella's report in reply and supplementary statement. I certify that the preceding thirty-three (33) numbered paragraphs are a true copy of the Ruling on Evidence herein of the Honourable Justice Sackville. Associate: Dated: 8 May 2006 Counsel for the first, second, fourth, ninth, thirteenth, fifteenth, nineteenth and twentieth respondents: Mr P Whitford SC with Mr P Brereton Solicitors for the first, second, fourth, ninth, thirteenth, fifteenth, nineteenth and twentieth respondents: Allens Arthur Robinson Counsel for the applicants: Mr J Sheahan SC with Mr J Halley Solicitors for the applicants: Freehills Date of hearing: 4 May 2006 Date of judgment: 8 May 2006 AustLII: Copyright Policy | Disclaimers | Privacy Policy | Feedback URL: http://www.austlii.edu.au/au/cases/cth/FCA/2006/515.html


case_text: Finance Limited v Commissioner of Taxation [2006] FCA 267 (21 March 2006) [ Home ] [ Databases ] [ WorldLII ] [ Search ] [ Feedback ] Federal Court of Australia You are here:   AustLII >> Databases >> Federal Court of Australia >> 2006 >> [2006] FCA 267 [ Database Search ] [ Name Search ] [ Recent Decisions ] [ Noteup ] [ Download ] [ Help ] IEL Finance Limited v Commissioner of Taxation [2006] FCA 267 (21 March 2006) Last Updated: 22 March 2006 FEDERAL COURT OF AUSTRALIA IEL Finance Limited v Commissioner of Taxation [2006] FCA 267 INCOME TAX large corporate group inter-group transactions undertaken over six consecutive fiscal years transactions involving inter-group interest bearing borrowings principally by one group member and transfers of tax losses arising out of those borrowings to other group members prior primary and appellate claims by proceedings in Federal Court made by borrowing member against the Commissioner for interest deductibility in respect of one fiscal year decision at first instance and on appeal in relation to that fiscal year adverse to that single group member findings made in context of those proceedings as to assessability to tax of that group member in respect of some transactions for differing fiscal years after conclusion of single fiscal year further proceedings commenced by the same corporate group member together with other corporate group members in respect of transactions involving borrowings and transfers of tax losses in respect of antecedent as well as subsequent fiscal years to that resolved by Federal Court in favour of Commissioner whether issue estoppel, Anshun estoppel and/or abuse of process should operate in favour of Commissioner in respect of deductions for losses of antecedent and subsequent fiscal years meaning of privies authority in Australian Courts of earlier decisions of Privy Council and House of Lords summary judgment application of Commissioner granted Income Tax Assessment Act 1936 (Cth) ss 51(1), 79E and 80G and Part VII Tax Administration Act 1953 (Cth) Part IVC Federal Court Rules O 20 r 2 subrule 2(1)(b) and (c) and Order 52B Spassked Pty Ltd v Commissioner of Taxation (No. 5) (2003) 197 ALR 553 cited and applied Spassked Pty Ltd v Commissioner of Taxation [2003] FCAFC 282 ; (2003) 136 FCR 441 cited and applied General Steel Industries Inc v Commissioner for Railways (NSW) [1964] HCA 69 ; (1964) 112 CLR 125 applied Dey v Victorian Railways Commissioners [1949] HCA 1 ; (1948-1949) 78 CLR 62 applied Jackson v Goldsmith [1950] HCA 22 ; (1950) 81 CLR 446 referred to Effem Foods Pty Ltd v Trawl Industries of Australia Pty Limited (1993) 43 FCR 510 referred to Blair v Curran [1939] HCA 23 ; (1939) 62 CLR 464 applied Rogers v The Queen [1994] HCA 42 ; (1994) 181 CLR 251 referred to Trawl Industries of Australia Pty Ltd (in liquidation) v Effem Foods Pty Limited (1992) 36 FCR 406 referred to Spalla v St George Motor Finance Ltd (No 6) [2004] FCA 1699 applied Walton v Gardiner [1992] HCA 12 ; (1993) 177 CLR 378 applied Sea Culture International Pty Ltd v Scoles [1991] 32 FCR 275 referred to Hoysted v Federal Commissioner of Taxation [1921] HCA 56 ; (1921) 29 CLR 537 discussed Hoysted v Federal Commissioner of Taxation [1925] HCA 51 ; [1926] AC 155; (1925) 37 CLR 290 discussed Henderson v Henderson (1843) 3 Ha 100 discussed Murphy v Abi-Saab (1995) 37 NSWLR 280 applied Johnson v Gore Wood & Co [2000] UKHL 65 ; [2002] 2 AC 1 cited Port of Melbourne Authority v Anshun Pty Limited [1981] HCA 45 ; (1981) 147 CLR 589 applied Taylor v Ansett Transport Industries Limited [1987] 18 FCR 342 cited Mohamed Falil Abdul Caffoor, The Trustees of the Abdul Gaffoor Trust v Commissioner of Income Tax Colombo [1961] AC 584 discussed and distinguished Broken Hill Proprietary Company Limited v The Municipal Council of Broken Hill [1925] HCA 44 ; (1925) 37 CLR 284 discussed and distinguished The Council of the Municipality of Broken Hill v The Broken Hill Proprietary Company [1922] HCA 15 ; (1922) 30 CLR 400 discussed and distinguished Chamberlain v Deputy Commissioner of Taxation [1988] HCA 21 ; (1987-1988) 164 CLR 502 discussed Chamberlain v Commissioner of Taxation (1991) 21 FCR 21 cited Federal Commissioner v Wade [1951] HCA 66 ; (1951) 84 CLR 105 referred to Society of Medical Officer of Health v Hope [1960] AC 551 discussed and distinguished Federal Commissioner of Taxation v A.N.Z. Savings Bank Ltd [1994] HCA 58 ; (1994) 181 CLR 466 referred to Falk v Haugh [1935] HCA 35 ; (1935) 53 CLR 163 cited and discussed Viro v The Queen [1978] HCA 9 ; (1978) 141 CLR 88 referred to Orica Ltd v Federal Commissioner of Taxation (2001) 182 ALR 77 not followed Queensland Trustees Limited v Commissioner of Stamp Duties [1956] HCA 75 ; (1956) 96 CLR 131 applied Commissioner of Taxation v Dulux Holdings Pty Ltd [2001] FCA 1344 ; (2001) 113 FCR 436 referred to re Sharpe (1944) QSR 26 referred to Cook v Cook [1986] HCA 73 ; (1986) 162 CLR 376 cited and discussed Skelton v Collins [1966] HCA 14 ; (1966) 115 CLR 94 referred to Hawkins v Clayton (1986) 5 NSWLR 109 referred to Federal Commissioner of Taxation v Cappid Pty Ltd [1970] HCA 41 ; (1970) 127 CLR 140 distinguished Saffron v Federal Commissioner of Taxation (1981) 30 FCR 578 discussed and distinguished Arthur JS Hall & Co v Simons [2000] UKHL 38 ; [2002] 1 AC 615 discussed R v O'Halloran [2000] NSWCCA 528 ; (2000) 36 ACSR 315 discussed IEL FINANCE LIMITED, QUEENSLAND TRADING AND HOLDING COMPANY LIMITED AND SPASSKED PTY LIMITED v COMMISSIONER OF TAXATION NSD 539 OF 2004 NSD 543 OF 2004 NSD 540 OF 2004 NSD 94 OF 2005 CONTI J 21 MARCH 2006 SYDNEY IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY NSD 539 OF 2004 NSD 543 OF 2004 NSD 540 OF 2004 NSD 94 OF 2005 BETWEEN: IEL FINANCE LIMITED, QUEENSLAND TRADING & HOLDING COMPANY LIMITED AND SPASSKED PTY LIMITED APPLICANTS AND: COMMISSIONER OF TAXATION RESPONDENT JUDGE: CONTI J DATE OF ORDER: 21 MARCH 2006 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. The respondent Commissioner lodge with the Court and with the taxpayer applicants draft declarations and/or orders giving effect to the reasons for judgment within fourteen days, including orders as to costs. 3. The respondent Commissioner lodge with the Court submissions in reply within a further seven days. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules . IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY NSD 539 OF 2004 NSD 543 OF 2004 NSD 540 OF 2004 NSD 94 OF 2005 BETWEEN: IEL FINANCE LIMITED, QUEENSLAND TRADING & HOLDING COMPANY LIMITED AND SPASSKED PTY LIMITED APPLICANTS AND: COMMISSIONER OF TAXATION RESPONDENT JUDGE: CONTI J DATE: 21 MARCH 2006 PLACE: SYDNEY REASONS FOR SUMMARY JUDGMENT Outline of the context to the principal proceedings and to the Commissioner's application for summary judgment 1 There is pending before the Court in its original jurisdiction four principal proceedings brought variously by the taxpayer applicants pursuant to Part IVC of the Taxation Administration Act 1953 (Cth) ('the Administration Act'), whereby there is sought to be set aside determinations by the respondent Commissioner of Taxation ('the Commissioner') of objections lodged by the taxpayer applicants against assessments to income tax for the years of income ended 30 June 1991, 1993 and 1994, being questions said by the taxpayer applicants as 'never previously... in issue'. The taxpayer applicants are respectively identified in these reasons as 'IEF' (for IEL Finance Limited), 'QTH' (for Queensland Trading & Holding Company Limited) and 'Spassked' (for Spassked Pty Limited). What was described by the taxpayer applicants as 'the underlying issue now in contest' was the deductibility of the interest expense incurred by Spassked under s 51(1) of the Income Tax Assessment Act 1936 (as amended) ('the Tax Act') in respect of the 1991, 1993 and 1994 fiscal years, being issues which they said 'could not previously have been decided'. I have referred to QTH, IEF and Spassked in these reasons together as 'taxpayer applicants' to avoid confusion, given that the Commissioner is the applicant in the present interlocutory proceedings for summary judgment. Each of QTH, IEF and Spassked was at all material times a wholly owned subsidiary of Industrial Equity Limited ('IEL'), a public company, and IEL in turn traced upwards corporately to the well known Adsteam, David Jones and Tooth & Co public companies. 2 The context to that so-called underlying issue was that between 1 December 1987 and 28 June 1990, Spassked borrowed funds from IEF at interest, and claimed that as a result of the interest incurred on those loans during the 1988 to 1994 years of income inclusively, it made losses for income tax purposes during those years of income. The losses so claimed were progressively transferred by Spassked under s 80G of the Tax Act to other members of the IEL group up to and including the 1998 fiscal year. The Commissioner issued assessments against Spassked and the transferees of the tax losses which disallowed the deductions for the interest originally claimed to have been incurred by it on those borrowings, and consequently reduced the amount of those losses to nil. A critical factor, from the Commissioner's perspective, was that the Federal Court, both at first instance ( Spassked Pty Ltd v Commissioner of Taxation (2003) 197 ALR 553) and on appeal ((2003) [2003] FCAFC 282 ; 136 FCR 441), has already determined the unavailability of those losses or outgoings sustained or undertaken for income tax purposes in the context of Spassked's challenge related to the fiscal year ended 30 June 1992. I will refer to those earlier proceedings at first instance and on appeal as the 'earlier concluded Spassked proceedings'. The presiding judge at first instance was Lindgren J, and those presiding judges on the Full Court appeal were Hill, Gyles and Lander JJ. The present proceedings were not commenced until after the conclusion of the appellate proceedings in favour of the Commissioner. The taxpayer applicants described that taxation issue thus resolved at the instance of Spassked in relation to the 1992 fiscal year as having involved 'a similar but essentially different question' to those raised by the present proceedings, and not having given rise to an estoppel, and not involving an abuse of process, contrary to the Commissioner's contentions. 3 In the context of each of the present four principal proceedings, framed by the applicant taxpayers by reference to the fiscal years 1991, 1993, 1994 and 1996 (see [5] below), the Commissioner seeks by amended notice of motion filed on 25 July 2005 in the present proceedings the following relief in summary: (i) orders that each of the four present proceedings be summarily dismissed by reason of, or (ii) orders that each of the proceedings be stayed generally in relation to, and (iii) in any event declarations that the applicant taxpayers are estopped from advancing or relying on, the facts and matters asserted and the contentions advanced in specified paragraphs of the taxpayer applicants' amended statements of facts, issues and contentions filed in the present proceedings pursuant to Order 52B of the Federal Court Rules . Relief by way of the orders and declarations now sought by the Commissioner is purportedly based upon either one or both of Order 20 rule 2 and Order 29 of the Federal Court Rules , and/or the inherent jurisdiction of the Court. As to Order 20 rule 2, the Commissioner indicated reliance solely on sub-rules 2(1)(b) and (c), upon the footing that the proceedings are an abuse of the processes of the Court or are otherwise frivolous or vexatious. The Commissioner acknowledged that the present application for summary dismissal of the proceedings now brought by IEF, QTH and Spassked is not intended to preclude the taxpayer applicants from contesting the quantum of additional or penalty tax imposed by the disputed notices of assessment. So much is said to involve very substantial issues for later determination.


case_title: Spassked Pty Ltd v Commissioner of Taxation [2003] FCAFC 282 ; (2003) 136 FCR 441


case_text: Finance Limited v Commissioner of Taxation [2006] FCA 267 (21 March 2006) [ Home ] [ Databases ] [ WorldLII ] [ Search ] [ Feedback ] Federal Court of Australia You are here:   AustLII >> Databases >> Federal Court of Australia >> 2006 >> [2006] FCA 267 [ Database Search ] [ Name Search ] [ Recent Decisions ] [ Noteup ] [ Download ] [ Help ] IEL Finance Limited v Commissioner of Taxation [2006] FCA 267 (21 March 2006) Last Updated: 22 March 2006 FEDERAL COURT OF AUSTRALIA IEL Finance Limited v Commissioner of Taxation [2006] FCA 267 INCOME TAX large corporate group inter-group transactions undertaken over six consecutive fiscal years transactions involving inter-group interest bearing borrowings principally by one group member and transfers of tax losses arising out of those borrowings to other group members prior primary and appellate claims by proceedings in Federal Court made by borrowing member against the Commissioner for interest deductibility in respect of one fiscal year decision at first instance and on appeal in relation to that fiscal year adverse to that single group member findings made in context of those proceedings as to assessability to tax of that group member in respect of some transactions for differing fiscal years after conclusion of single fiscal year further proceedings commenced by the same corporate group member together with other corporate group members in respect of transactions involving borrowings and transfers of tax losses in respect of antecedent as well as subsequent fiscal years to that resolved by Federal Court in favour of Commissioner whether issue estoppel, Anshun estoppel and/or abuse of process should operate in favour of Commissioner in respect of deductions for losses of antecedent and subsequent fiscal years meaning of privies authority in Australian Courts of earlier decisions of Privy Council and House of Lords summary judgment application of Commissioner granted Income Tax Assessment Act 1936 (Cth) ss 51(1), 79E and 80G and Part VII Tax Administration Act 1953 (Cth) Part IVC Federal Court Rules O 20 r 2 subrule 2(1)(b) and (c) and Order 52B Spassked Pty Ltd v Commissioner of Taxation (No. 5) (2003) 197 ALR 553 cited and applied Spassked Pty Ltd v Commissioner of Taxation [2003] FCAFC 282 ; (2003) 136 FCR 441 cited and applied General Steel Industries Inc v Commissioner for Railways (NSW) [1964] HCA 69 ; (1964) 112 CLR 125 applied Dey v Victorian Railways Commissioners [1949] HCA 1 ; (1948-1949) 78 CLR 62 applied Jackson v Goldsmith [1950] HCA 22 ; (1950) 81 CLR 446 referred to Effem Foods Pty Ltd v Trawl Industries of Australia Pty Limited (1993) 43 FCR 510 referred to Blair v Curran [1939] HCA 23 ; (1939) 62 CLR 464 applied Rogers v The Queen [1994] HCA 42 ; (1994) 181 CLR 251 referred to Trawl Industries of Australia Pty Ltd (in liquidation) v Effem Foods Pty Limited (1992) 36 FCR 406 referred to Spalla v St George Motor Finance Ltd (No 6) [2004] FCA 1699 applied Walton v Gardiner [1992] HCA 12 ; (1993) 177 CLR 378 applied Sea Culture International Pty Ltd v Scoles [1991] 32 FCR 275 referred to Hoysted v Federal Commissioner of Taxation [1921] HCA 56 ; (1921) 29 CLR 537 discussed Hoysted v Federal Commissioner of Taxation [1925] HCA 51 ; [1926] AC 155; (1925) 37 CLR 290 discussed Henderson v Henderson (1843) 3 Ha 100 discussed Murphy v Abi-Saab (1995) 37 NSWLR 280 applied Johnson v Gore Wood & Co [2000] UKHL 65 ; [2002] 2 AC 1 cited Port of Melbourne Authority v Anshun Pty Limited [1981] HCA 45 ; (1981) 147 CLR 589 applied Taylor v Ansett Transport Industries Limited [1987] 18 FCR 342 cited Mohamed Falil Abdul Caffoor, The Trustees of the Abdul Gaffoor Trust v Commissioner of Income Tax Colombo [1961] AC 584 discussed and distinguished Broken Hill Proprietary Company Limited v The Municipal Council of Broken Hill [1925] HCA 44 ; (1925) 37 CLR 284 discussed and distinguished The Council of the Municipality of Broken Hill v The Broken Hill Proprietary Company [1922] HCA 15 ; (1922) 30 CLR 400 discussed and distinguished Chamberlain v Deputy Commissioner of Taxation [1988] HCA 21 ; (1987-1988) 164 CLR 502 discussed Chamberlain v Commissioner of Taxation (1991) 21 FCR 21 cited Federal Commissioner v Wade [1951] HCA 66 ; (1951) 84 CLR 105 referred to Society of Medical Officer of Health v Hope [1960] AC 551 discussed and distinguished Federal Commissioner of Taxation v A.N.Z. Savings Bank Ltd [1994] HCA 58 ; (1994) 181 CLR 466 referred to Falk v Haugh [1935] HCA 35 ; (1935) 53 CLR 163 cited and discussed Viro v The Queen [1978] HCA 9 ; (1978) 141 CLR 88 referred to Orica Ltd v Federal Commissioner of Taxation (2001) 182 ALR 77 not followed Queensland Trustees Limited v Commissioner of Stamp Duties [1956] HCA 75 ; (1956) 96 CLR 131 applied Commissioner of Taxation v Dulux Holdings Pty Ltd [2001] FCA 1344 ; (2001) 113 FCR 436 referred to re Sharpe (1944) QSR 26 referred to Cook v Cook [1986] HCA 73 ; (1986) 162 CLR 376 cited and discussed Skelton v Collins [1966] HCA 14 ; (1966) 115 CLR 94 referred to Hawkins v Clayton (1986) 5 NSWLR 109 referred to Federal Commissioner of Taxation v Cappid Pty Ltd [1970] HCA 41 ; (1970) 127 CLR 140 distinguished Saffron v Federal Commissioner of Taxation (1981) 30 FCR 578 discussed and distinguished Arthur JS Hall & Co v Simons [2000] UKHL 38 ; [2002] 1 AC 615 discussed R v O'Halloran [2000] NSWCCA 528 ; (2000) 36 ACSR 315 discussed IEL FINANCE LIMITED, QUEENSLAND TRADING AND HOLDING COMPANY LIMITED AND SPASSKED PTY LIMITED v COMMISSIONER OF TAXATION NSD 539 OF 2004 NSD 543 OF 2004 NSD 540 OF 2004 NSD 94 OF 2005 CONTI J 21 MARCH 2006 SYDNEY IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY NSD 539 OF 2004 NSD 543 OF 2004 NSD 540 OF 2004 NSD 94 OF 2005 BETWEEN: IEL FINANCE LIMITED, QUEENSLAND TRADING & HOLDING COMPANY LIMITED AND SPASSKED PTY LIMITED APPLICANTS AND: COMMISSIONER OF TAXATION RESPONDENT JUDGE: CONTI J DATE OF ORDER: 21 MARCH 2006 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. The respondent Commissioner lodge with the Court and with the taxpayer applicants draft declarations and/or orders giving effect to the reasons for judgment within fourteen days, including orders as to costs. 23 The taxpayer applicants drew attention to the principle that any summary dismissal or permanent stay of proceedings must be exercised with 'exceptional caution' and only in 'exceptional circumstances'. So much may be readily accepted. I was referred to the re-statement of principles appearing in General Steel Industries Inc v Commissioner for Railways (NSW) [1964] HCA 69 ; (1964) 112 CLR 125, and in particular to what Barwick CJ emphasised at 129, as follows: '... the plaintiff ought not to be denied access to the customary tribunal which deals with actions of the kind he brings, unless his lack of a cause of action if that be the ground on which the court is invited ... to exercise its powers of summary dismissal is clearly demonstrated. ... [S]ome of these expressions [of the test] occur in cases in which the inherent jurisdiction was invoked and others in cases founded on statutory rules of court but although the material available to the court in either type of case may be different the need for exceptional caution in exercising the power whether it be inherent or under statutory rules is the same.' The taxpayer applicants emphasised the operation of those principles where the ultimate outcome turns upon the resolution of some disputed issue or issues of fact, thereby referring to the earlier authority of Dey v Victorian Railways Commissioners [1949] HCA 1 ; (1948-1949) 78 CLR 62 at 91, where Dixon J (as he then was) explained the operation of relevant principles in the following terms: 'A case must be very clear indeed to justify the summary intervention of the court to prevent a plaintiff submitting his case for determination in the appointed manner ... The fact that a transaction is intricate may not disentitle the court to examine a cause of action alleged to grow out of it for the purpose of seeing whether the proceeding amounts to an abuse of process or is vexatious. But once it appears that there is a real question to be determined whether of fact or law and that the rights of the parties depend upon it, then it is not competent for the court to dismiss the action as frivolous and vexatious and an abuse of process.' 117 The Commissioner's case for summary judgment is required in principle to be ' clearly demonstrated ', and ' very clear indeed ', and is inhibited by the need for ' exceptional caution ' by the Court ( General Steel and Dey ). As I have earlier recorded, the Commissioner's case is not sought to be established on the footing of the doctrine of res judicata as applied in the common law of Australia, and which normally involves the merger of causes of action into judgments (compare Henderson at 114-115). Apart from abuse of process, the Commissioner's case is founded upon the doctrine of issue estoppel as well as Anshun estoppel, as those doctrines have been formulated and applied in Australia by judicial dicta . In the case of issue estoppel, I have earlier cited the well known dictum of Dixon J in Blair v Curran to the effect that it is necessary to expose ' a state of fact or law... alleged or denied the existence of which is a matter necessarily decided by the prior judgment', being a matter ' fundamental to the decision arrived at' , and not merely matters of fact or law which are ' subsidiary or collateral ', or 'concern only evidentiary facts and not ultimate facts... '.


case_title: Dey v Victorian Railways Commissioners [1949] HCA 1 ; (1948-1949) 78 CLR 62