case_text: matter is complicated by the number of related claims and appeals. In summary: 1. The genesis of this matter was proceedings commenced by the appellant against the respondents in the Federal Court of Australia in November 2003. The appellant claimed contraventions of the Trade Practices Act 1975 (Cth) in respect of the respondents' alleged refusal to honour a promotional card sold to the appellant by the Queensland University of Technology Association of Law Students. Those proceedings were heard and summarily dismissed by Cooper J on 24 May 2004 ( Worchild v The Drink Nightclub (Qld) Pty Ltd [2004] FCA 642). His Honour ordered that the appellant pay the respondents' costs of and incidental to the proceedings. 2. On 20 September 2004, an estimate of the respondents' bill of costs arising out of the decision of Cooper J was made pursuant to the provisions of O 62 r 46 Federal Court Rules and allowed in the sum of $24 000.00, for which sum a Certificate of Taxation was issued on 12 October 2004. 3. On 26 November 2004 Deputy District Registrar Baldwin in the Federal Court made an order that the appellant pay the sum of $24 000.00 to the respondents. 4. Bankruptcy Notice Q/N1238/2004 ('the bankruptcy notice') identifying the appellant as the debtor was issued by the Official Receiver on 15 December 2004. The bankruptcy notice was issued in relation to the appellant's failure to pay the respondents in accordance with the costs order of Deputy District Registrar Baldwin of 26 November 2004. 5. On 21 January 2005 the respondents served the bankruptcy notice on the appellant. 6. On 13 May 2005 before Deputy District Registrar Baldwin in the Federal Court the appellant sought to have the bankruptcy notice set aside. The appellant was unsuccessful and he was ordered to pay costs in the amount of $2500. The appellant unsuccessfully appealed this decision of the Deputy District Registrar ( Worchild v The Drink Nightclub (Qld) Pty Ltd ACN 090 830 854, in the matter of Worchild [2005] FCA 863 per Dowsett J), and then again unsuccessfully to the Full Court of the Federal Court ( Worchild v The Drink Nightclub (Qld) Pty Ltd [2005] FCAFC 240). As at the date of the hearing the appellant had sought special leave to appeal to the High Court from the decision of the Full Court. (I understand that special leave to appeal was refused: Worchild v The Drink Nightclub (Qld) Pty Ltd [2006] HCA Trans 223.) 7. On 3 June 2005, the respondents filed a creditor's petition in the Federal Magistrates Court applying for a sequestration order under s 43 Bankruptcy Act 1966 (Cth) (' Bankruptcy Act ') against the estate of the appellant in respect of the debt of $24 000.00 owing to them under the order of Deputy District Registrar Baldwin in the Federal Court of 26 November 2004. The document was accompanied by an affidavit of the second respondent sworn 31 May 2005, deposing that he had access to the books and records of the first respondent, and that the appellant had not paid, nor made arrangements to the satisfaction of the respondents for the settlement of the debt claimed in the bankruptcy notice. 8. On 20 June 2005 the appellant filed and served a Notice of Intention to Oppose the Petition in the Federal Magistrates Court. 9. The petition came before District Registrar Ramsey in the Federal Magistrates Court on 24 June 2005, however the Registrar directed that the matter be adjourned for hearing before a Federal Magistrate at 10.15 am on 26 August 2005. The matter then came before Rimmer FM.


case_outcome: cited

case_text: matter is complicated by the number of related claims and appeals. In summary: 1. The genesis of this matter was proceedings commenced by the appellant against the respondents in the Federal Court of Australia in November 2003. The appellant claimed contraventions of the Trade Practices Act 1975 (Cth) in respect of the respondents' alleged refusal to honour a promotional card sold to the appellant by the Queensland University of Technology Association of Law Students. Those proceedings were heard and summarily dismissed by Cooper J on 24 May 2004 ( Worchild v The Drink Nightclub (Qld) Pty Ltd [2004] FCA 642). His Honour ordered that the appellant pay the respondents' costs of and incidental to the proceedings. 2. On 20 September 2004, an estimate of the respondents' bill of costs arising out of the decision of Cooper J was made pursuant to the provisions of O 62 r 46 Federal Court Rules and allowed in the sum of $24 000.00, for which sum a Certificate of Taxation was issued on 12 October 2004. 3. On 26 November 2004 Deputy District Registrar Baldwin in the Federal Court made an order that the appellant pay the sum of $24 000.00 to the respondents. 4. Bankruptcy Notice Q/N1238/2004 ('the bankruptcy notice') identifying the appellant as the debtor was issued by the Official Receiver on 15 December 2004. The bankruptcy notice was issued in relation to the appellant's failure to pay the respondents in accordance with the costs order of Deputy District Registrar Baldwin of 26 November 2004. 5. On 21 January 2005 the respondents served the bankruptcy notice on the appellant. 6. On 13 May 2005 before Deputy District Registrar Baldwin in the Federal Court the appellant sought to have the bankruptcy notice set aside. The appellant was unsuccessful and he was ordered to pay costs in the amount of $2500. The appellant unsuccessfully appealed this decision of the Deputy District Registrar ( Worchild v The Drink Nightclub (Qld) Pty Ltd ACN 090 830 854, in the matter of Worchild [2005] FCA 863 per Dowsett J), and then again unsuccessfully to the Full Court of the Federal Court ( Worchild v The Drink Nightclub (Qld) Pty Ltd [2005] FCAFC 240). As at the date of the hearing the appellant had sought special leave to appeal to the High Court from the decision of the Full Court. (I understand that special leave to appeal was refused: Worchild v The Drink Nightclub (Qld) Pty Ltd [2006] HCA Trans 223.) 7. On 3 June 2005, the respondents filed a creditor's petition in the Federal Magistrates Court applying for a sequestration order under s 43 Bankruptcy Act 1966 (Cth) (' Bankruptcy Act ') against the estate of the appellant in respect of the debt of $24 000.00 owing to them under the order of Deputy District Registrar Baldwin in the Federal Court of 26 November 2004. The document was accompanied by an affidavit of the second respondent sworn 31 May 2005, deposing that he had access to the books and records of the first respondent, and that the appellant had not paid, nor made arrangements to the satisfaction of the respondents for the settlement of the debt claimed in the bankruptcy notice. 8. On 20 June 2005 the appellant filed and served a Notice of Intention to Oppose the Petition in the Federal Magistrates Court. 9. The petition came before District Registrar Ramsey in the Federal Magistrates Court on 24 June 2005, however the Registrar directed that the matter be adjourned for hearing before a Federal Magistrate at 10.15 am on 26 August 2005. The matter then came before Rimmer FM. In the original notice of appeal, the appellant claimed as his third ground of appeal that there had yet to be a final determination of the application to set aside the bankruptcy notice as required under s 43 of the Bankruptcy Act . Specifically, the appellant submits that in an affidavit of 3 June 2005 filed by Mr Bisson, a solicitor acting for the respondents, in accordance with r 31.04 of the Federal Magistrates Rules, Mr Bisson deposed that an application was made for an order setting aside the bankruptcy notice and that the application had been finally decided by Deputy District Registrar Baldwin on 13 May 2005. However, the appellant submitted that no affidavit was filed before the creditor's petition was heard by Rimmer FM to the effect that the decision of Deputy District Registrar Baldwin had been appealed to Dowsett J, and an appeal from the decision of Dowsett J was pending before the Full Court. (The decision of Dowsett J was subsequently upheld: Worchild v The Drink Nightclub (Qld) Pty Ltd [2005] FCAFC 240.) The appellant submits further that as at the date of the hearing before me there was an application for special leave to appeal the decision of the Full Court to the High Court of Australia. Principally, it appears that the issue of whether the order of the Deputy District Registrar was in the nature of a final order has already been raised by the appellant in other litigation, and dealt with by the Full Court in that context: Worchild v The Drink Nightclub (Qld) Pty Ltd [2005] FCAFC 240. In particular I note par 10 of the joint judgment of Kiefel, Jacobson and Greenwood JJ where their Honours said: '10 In our view the order of 26 November 2004 is a final order within the meaning of the Bankruptcy Act , one in which the respondents' rights were ascertained and given effect to. Unlike a mere Certificate of Taxation, an order made under O 62 r 45(3) of the Federal Court Rules directs the payment of money. This was a feature absent in Re Walker; Ex parte Noble Einsiedel Pty Ltd [1992] FCA 327 , a decision of Northrop J of 16 April 1992 at p 4. A purpose of the rule is to permit enforcement and execution under the order. The latter is an important element in determining whether an order is final or not: Pepper v McNiece [1941] HCA 27 ; (1941) 64 CLR 642 at 657. In Re Draper; Ex parte Australian Society of Accountants, an unreported decision of 3 February 1989, von Doussa J held that an order made under the rule was final, within the meaning of s 40(1)(g) of the Bankruptcy Act . In his Honour's view, if there be any doubt about that, it is removed by the provisions of s 40(3)(b) of the Bankruptcy Act , as the orders are ones which can be enforced as final judgments. See also Re Luckins; Ex parte Columbia Pictures Industries & Anor (1996) 67 FCR 549, a decision of Beaumont J at p 559.' The nature of the 'weight of evidence' against her Honour's finding in relation to par 1 of the petition is unclear. As I have already noted, none of the facts to which par 1 refers appeared to be in dispute before her Honour. Indeed, I note this same issue has been raised by the appellant before the Full Court in other proceedings, and the Full Court found that it was not necessary that a certificate of taxation be attached to the bankruptcy notice, and that the relevant order of Deputy District Registrar Baldwin was as required by the Bankruptcy Act attached to the bankruptcy notice ( Worchild v The Drink Nightclub (Qld) Pty Ltd [2005] FCAFC 240 at 8, 9). The appellant has sought to rely on the decision of the Full Court (see TS ll 38-42) however he appears to have misread the judgment of their Honours. No error in the reasoning of Rimmer FM is demonstrated by this submission. I note that the Full Court in Worchild v The Drink Nightclub (Qld) Pty Ltd [2005] FCAFC 240 at par 5 explained to the appellant that there was no uncertainty as to the amount he should pay to satisfy the relevant debt, nor to whom he should make payment. It is concerning that the appellant continues to raise this putative 'doubt' as to the identity of the petitioners as an issue. There is no 'weight of evidence' against her Honour's finding. In my view, no error in her Honour's judgment is demonstrated by this submission of the appellant. 4. The appellant submits that 'paragraph 4 of the Petition fails to state the date of act of bankruptcy'. In respect of this point, her Honour at par 74 of her judgment held that she was satisfied that the petition was compliant with the formal requirements of the prescribed Form. I find no error in the finding of her Honour in relation to this issue. The fifth ground of appeal in the appellant's original notice of appeal fails. Rimmer FM in her judgment considered in some detail the application of s 52(2)(b) Bankruptcy Act to this case. Section 52(2) provides: 'If the Court is not satisfied with the proof of any of those matters, or is satisfied by the debtor: (a) that he or she is able to pay his or her debts; or (b) that for other sufficient cause a sequestration order ought not to be made: it may dismiss the petition.' This ground of appeal fails for the following reasons: 1. This issue was raised by the appellant in related litigation before the Full Court, and dismissed by the Full Court ( Worchild v The Drink Nightclub (Qld) Pty Ltd [2005] FCAFC 240 at [19] ). 2. It is incorrect to claim that the learned Federal Magistrate 'failed to appreciate' that security for costs was required to contest a bill of costs in the Federal Court: it does not appear that the issue was actually raised before her Honour. 3. On the basis of the principles I explained earlier, I do not consider there are exceptional circumstances which entitle the appellant to raise this new issue on appeal. This ground of appeal is founded in a claim that Rimmer FM failed to investigate the appellant's allegations in circumstances where there was sufficient cause to doubt the judgment debt. In my view this ground of appeal, and the appellant's submissions in support, are misconceived. At the hearing, the appellant submitted that there was a 'real and relevant issue of fact', namely that there were grounds for the learned Federal Magistrate to 'go behind the judgment in circumstances where there was no other material before the court' (TS p 10 ll 1-2).


case_title: Worchild v The Drink Nightclub (Qld) Pty Ltd [2006] HCA Trans 223


case_text: respondents have drawn my attention to the decision of McGill DCJ of the District Court of Queensland in Worchild v University of Queensland Law Society Inc [2005] QDC 161. I note that his Honour's decision was delivered on 10 June 2005. In this case it appears that the appellant was prosecuting the claim against the Law Societies to which he adverted in ground 6 of the original notice of appeal. His Honour found against the appellant, and the appellant unsuccessfully appealed the decision of Gill DCJ to the Queensland Court of Appeal. The decision of the Court of Appeal was delivered on 5 October 2005 ( Worchild v. University of Queensland Law Society [2005] QCA 37). I understand the appellant sought special leave to appeal to the High Court from this decision, and it was refused ( Worchild v University of Queensland Law Society [2006] HCA Trans 181).


case_title: Worchild v University of Queensland Law Society [2005] QCA 37


case_title: Worchild v University of Queensland Law Society [2006] HCA Trans 181


case_text: I understand that subsequent to the decision of Rimmer FM the appellant commenced fresh proceedings in the Federal Court against the Student Law Societies. These proceedings, or the prospect of commencing them, were not raised before her Honour. In any event, the proceedings were recently dismissed by Spender J ( Worchild v University of Queensland Law Society [2006] FCA 1078). On the basis of the principles I explained earlier, I do not consider there are exceptional circumstances which entitle the appellant to raise this new issue on appeal. Accordingly this ground of appeal fails. The appellant claimed that Rimmer FM failed to appreciate that security for costs is required to contest a bill of costs in the Federal Court. In particular, the appellant submitted that: • in order to contest a bill of costs in the Federal Court one needs to file security for costs • if a party cannot provide security for costs because of impecuniosity, then ostensibly the provision is a statutory abrogation of the right to a hearing, a denial of natural justice or a right to be heard.


case_text: The purpose of the rule is to avoid the expense, delay and aggravation involved in protracted litigation arising out of the taxation process: Beach Petroleum v LV Johnson (1995) 57 FCR 119 at 120. An order that costs be assessed as a gross sum does not require that any process similar to that involved in taxation should take place. However, the power must be exercised judicially and after giving the parties adequate opportunity to make submissions on the matter: Ualesi t/a Australian Empire Imports v Expeditors International Pty Ltd [2006] FCA 26.


case_text: One of the relevant factors determining whether to make an order for costs as a gross sum is whether the party required to meet the costs order would be likely to meet those costs: Sony Entertainment (Aust) Ltd v Smith [2005] FCA 228 ; (2005) 215 ALR 788. As stated above, the exercise of the rule contemplates: ...a much broader brush than would be applied in taxation. The gross sum can only be fixed broadly having regard to the information before the Court. ( Sony Entertainment at [197]). 16 Counsel for Niugini Mining has submitted, and I accept, that the following factors lead to the conclusion that gross costs orders are appropriate in this case: 1. Niugini Mining is unlikely to recover any of its costs from Mr Salfinger. He has consistently sought to demonstrate that he lacks the financial means by which he might fulfil any costs order. 2. Mr Salfinger appears to have no real property assets in Australia. 3. A significant number of companies with which he is associated have been deregistered. 4. He apparently resides in Canada. He does not appear to be usually resident in Australia and his address for service in Australia that he has previously given in these proceedings is not his own residence. 5. He has resisted attempts to locate and serve him with material in respect of taxation in proceedings before the Victorian Supreme Court. 6. He has consistently shown little intention to comply with court orders and directions. He has made repeated attempts to delay the progress of the matter at first instance and on appeal and in respect of the present application. 7. To date Niugini Mining has not been able to recover any of its costs from him. 17 In all the circumstances, I am satisfied that it is appropriate to make gross sum costs orders. Such an order may be made notwithstanding that previous orders have been made for taxed costs. 18 As to the appropriate amount, Niugini Mining have had costs assessed by Hickey & Garrett, legal costs consultants. It is apparent from the affidavit of Mr Lobban that the gross sum costs orders sought are significantly less than the amount of the costs actually paid by Niugini Mining. There are a number of costs that have not been included in the assessments as they were not able to be determined at the time the files were submitted for assessments. The figures do not include counsels' fees for the three days of the actual hearing. In addition, there were significant costs thrown away during the course of defending the proceedings as a result of Mr Salfinger's non-observance of court orders and directions which are not reflected in the assessments. 19 The Hickey & Garrett figures were: (a) in respect of the Injunction Order, professional costs of $7,475 plus disbursements of $9,299.72, a total of $16,774.72; (b) in respect of the Adjournment Order, professional costs of $1,094 plus disbursements of $75, a total of $1,169; (c) in respect of the Separate Question Order, professional costs of $48,661.00 plus disbursements of $32,965.77, a total of $81,626.77.


case_title: Ualesi t/a Australian Empire Imports v Expeditors International Pty Ltd [2006] FCA 26


case_text: There is authority for the proposition that no order for substituted service should be made in relation to a person out of the jurisdiction who has not been the subject of an order for leave to serve out of the jurisdiction: Laurie v Carroll [1958] HCA 4 ; (1958) 98 CLR 310 at 329. 20 The ACCC submitted that an order for substituted service can be made against a defendant who was out of the jurisdiction when the proceedings were issued but in relation to whom an order for service out of the jurisdiction has, or could have, been made. At this point the document to be served on Mr Yeo is a motion for his joinder. It is not the originating process itself. 21 In Australian Securities and Investments Commission v Sweeney (No 2) (2001) 38 ACSR 743, Austin J referred to what the High Court said in Laurie [1958] HCA 4 ; 98 CLR 310 and in particular a passage in which the Court stated at 333-334: In all these circumstances the substance of the matter was that, unless the case could be brought within O XI or the Service and Execution of Process Act , a contingency that must have appeared very dubious, the Supreme Court by ordering substituted service was really asserting a jurisdiction over the defendant Laurie which otherwise it could not possess ...


case_text: In Australian Securities and Investments Commission v Sweeney (No 2) (2001) 38 ACSR 743, Austin J referred to what the High Court said in Laurie [1958] HCA 4 ; 98 CLR 310 and in particular a passage in which the Court stated at 333-334: In all these circumstances the substance of the matter was that, unless the case could be brought within O XI or the Service and Execution of Process Act , a contingency that must have appeared very dubious, the Supreme Court by ordering substituted service was really asserting a jurisdiction over the defendant Laurie which otherwise it could not possess ... 22 Austin J in Sweeney (No 2) 38 ACSR 743 referred to the passage quoted in the High Court and said: In this passage their Honours acknowledged the proposition that substituted service cannot be ordered if direct personal service is not available in the circumstances and the corollary, that if under the rules direct personal service could have been effected, although the defendant was outside the jurisdiction, then substituted service is also permissible.


case_text: Sweeney (No 2) 38 ACSR 743 was applied by Drummond J in Australian Competition & Consumer Commission v Chaste Corporation Pty Ltd (in liq) [2002] FCA 1183.


case_text: I also have regard to the observations of Nicholson J in Mercator Property Consultants Pty Ltd v Christmas Island Resort Pty Ltd [1998] FCA 1150 and The Swan Brewery Co Ltd v Atlee [1998] FCA 277. See also Commissioner of Taxation v Ma [1999] FCA 1093 ; (1999) 92 FCR 569 where Emmett J observed that where respondents are out of Australia it is not appropriate to consider an order under O 7, r 9 for substituted service unless some leave is at least obtained to serve the proceedings outside the jurisdiction pursuant to O 8.


case_title: The Swan Brewery Co Ltd v Atlee [1998] FCA 277


case_title: Commissioner of Taxation v Ma [1999] FCA 1093 ; (1992) 92 FCR 569


case_text: Second, the applicant contends that a duty to act in good faith should also be implied into the Mentone BSA generally, or into the right to terminate specifically. The general duty is said to include an obligation of full and frank disclosure of all matters relevant to the implementation of the agreement. The applicant submits that the term is to be implied ad hoc, and as a matter of law. See Renard ; Hughes Aircraft Systems International v Airservices Australia (1997) 76 FCR 151 at 190-98 per Finn J; Alcatel Australia Ltd v Scarcella (1998) 44 NSWLR 349; Garry Rogers Motors (Aust) Pty Ltd v Subaru (Aust) Pty Ltd (1999) ATPR |P41-703; Central Exchange Ltd v Anaconda Nickel Ltd (2001) 24 WAR 382; GEC Marconi Systems v BHP-IT [2003] FCA 50 ; (2003) 128 FCR 1 at [920] per Finn J; and Pacific Brands Sport & Leisure Pty Ltd v Underworks Pty Ltd [2005] FCA 288 at [61] - [65] per Finkelstein J. I note that the latter case was the subject of a Full Court appeal in which judgment was given following the hearing of this proceeding. However, the majority of the Full Court did not deal with the findings of the primary judge in relation to the implied duty of good faith in the exercise of a termination right: see Pacific Brands Sport & Leisure Pty Ltd v Underworks Pty Ltd [2006] FCAFC 40 at [119] per Finn and Sundberg JJ.


case_outcome: referred to

case_text: First, the applicant says that the Mentone BSA contained an implied term not to deprive a party of the benefit of that agreement. The applicant submits that this term should be implied by operation of law or, alternatively, on an ad hoc basis. I understand that latter category of implied term to refer to what is sometimes described as an "implication of fact", and to which the rules laid down in BP Refinery (Westernport) Pty Ltd v Hastings Shire Council [1977] HCA 40 ; (1977) 180 CLR 266 (" BP Refinery ") and Codelfa Construction Pty Ltd v State Rail Authority of NSW [1982] HCA 24 ; (1982) 149 CLR 337 (" Codelfa ") apply. 212 The applicant also relies upon two implied terms it submits constitute part of the litigation agreement. The first term is the same term implied into the Mentone BSA, namely an obligation not to deprive a party of the benefit of an agreement. The second term is an implied term requiring each party to provide full and frank disclosure of any matter relevant to the Supreme Court proceedings. This term is said to be implied by operation of law as a concomitant of the duty to act faithfully or, alternatively, on an ad hoc basis. See BP Refinery and Codelfa .


case_title: Central Exchange Ltd v Anaconda Nickel Ltd (2001) 24 WAR 382


case_title: Codelfa Construction Pty Ltd v State Rail Authority of NSW [1982] HCA 24 ; (1982) 149 CLR 337


case_text: In May 2005, the applicant settled its claims against Coles, and the Lessor. It did not, however, resolve its claims against Franklins. In June 2005, Franklins, somewhat belatedly, sought leave to bring cross-claims against Coles and the Lessor. Such leave was refused: Dresna Pty Ltd v Linknarf Management Services Pty Ltd (In Liq) formerly Franklins Management Services Pty Ltd [2005] FCA 1011. 17 In its final incarnation, the application before me against the remaining respondents, the two Franklins parties, is an application for damages for breach of contract, breach of s 52 of the TPA, and breach of fiduciary duty. 18 The applicant's claims for breach of contract arise from two agreements. The first agreement is a business sale agreement dated 8 August 2001 between Franklins on the one hand, and the applicant and Mr Blake on the other. It will be convenient to describe this business sale agreement as "the Mentone BSA". The second agreement, which was said to be partially written, and partially oral, was entered into on or about 28 September 2001. That agreement, between Franklins and the applicant, involved them in jointly bringing proceedings, in the Supreme Court of Victoria, against the Lessor for unreasonably withholding consent to the assignment of the lease of the Mentone store to the applicant. For convenience sake, I will refer to this agreement as "the litigation agreement".


case_text: On 19 December 2003, I gave a judgment in relation to an application by the applicant for leave to amend its statement of claim: Dresna Pty Ltd v Misu Nominees Pty Ltd [2003] FCA 1537. Further background to these proceedings is set out in those reasons for judgment. That decision was appealed to the Full Court: Dresna Pty Ltd v Misu Nominees Pty Ltd [2004] FCAFC 169. The effect of the Full Court's decision was that the applicant was able to plead claims of conspiracy as between Franklins Limited and Coles (in addition to its claim of tortious conspiracy as between Coles and the Lessor).


case_title: Dresna Pty Ltd v Misu Nominees Pty Ltd [2004] FCAFC 169


case_title: Garry Rogers Motors (Aust) Pty Ltd v Subaru (Aust) Pty Ltd (1999) ATPR |P41-703


case_title: GEC Marconi Systems v BHP-IT [2003] FCA 50 ; (2003) 128 FCR 1


case_text: It is true that the parties in this case agreed to join together to procure the Lessor's consent to the assignment of the lease, including jointly commencing proceedings against the Lessor in the Supreme Court. However, the basis for those arrangements was a conditional , commercial, arms length agreement for the sale of a business from one party to another. While Hospital Products Ltd v United States Surgical Corporation [1984] HCA 64 ; (1984) 156 CLR 41 per Mason J at 99-100 makes clear that commercial transactions do not "stand outside the fiduciary regime", it does not follow that such transactions necessarily give rise to fiduciary obligations.


case_title: Hughes Aircraft Systems International v Airservices Australia (1997) 76 FCR 151


case_text: The Turner document is important and, as such, I shall set it out in full. The email from Mr Rattray-Wood states: "From: Alan Rattray-Wood Sent: Monday, 15 October 2001 9.59 To: Joanne Turner Cc: Roger Stansfield; Jim Rush; Natalie Wilson Subject: Mentone -Blake Jo, Could you please let me know when you have managed to get Coles to call Susan Herbert (Landlord Solicitor 03 92299999) about advising her client that Coles have no interest in this property. As advised on Friday, this looks like going full on legal if we don't quash their perceived options. thanks, Alan" 166 There is then a handwritten note on the print out of the email saying "John Kop please call". As previously mentioned, Mr Kop was the project manager for Project Lincoln within Coles. 167 Under this is another handwritten note which states as follows: "Alan, Mary has spoken to Coles. Coles have done a deal in principle here, based on vacant possession. Mary has told Coles that Franklins is going to litigate & hopefully scared them off with the threat of tortious interference , let alone jeopardising our deal with Coles on the whole . Jo." (emphasis added) 195 Many of the documents upon which the applicant relied in support of its circumstantial case were prepared by people who would not have been directly involved in any negotiations that took place between Franklins and Coles, and may not have known what was happening at the level that counted. For example, the Turner document, though capable of having the sinister connotation that the applicant placed upon it, it also perfectly capable of being read in an innocent light. One interpretation of the document is that Ms Turner did not appreciate that the agreement to sell the first tranche of stores to Coles had already been finalised ten days earlier, and that was the "deal with Coles on the whole" to which she was referring. The fact that Ms Turner was not called to give evidence lends some support to the applicant's case regarding the interpretation to be given to this document. See generally Jones v Dunkel [1959] HCA 8 ; (1959) 101 CLR 298. However, that does not, in my view, override the highly favourable impression that I formed of Mr Cornell as a witness in this proceeding. 196 It is arguable that the applicant has a stronger case in relation to its claim that the November 2001 dealings constituted a breach of Franklins' contractual obligations. The real substance of this claim is that Franklins "jumped the gun" in terms of seeking the ACCC's consent to sell the Mentone store to Coles, and in concluding an agreement with Coles to do so. It did both these things, according to the applicant, while it still owed obligations, both contractual and fiduciary, to the applicant. 197 The Mentone BSA and the litigation agreement were both still on foot on 23 November 2001. Notice to terminate these agreements was not served until 28 November 2001. The Mentone BSA required seven business days notice to be terminated. Accordingly, the Mentone BSA remained on foot until 7 December 2001. However, in relation to the litigation agreement, the applicant accepts that it came to an end on 28 November 2001.


case_title: Pacific Brands Sport & Leisure Pty Ltd v Underworks Pty Ltd [2005] FCA 288


case_title: Pacific Brands Sport & Leisure Pty Ltd v Underworks Pty Ltd [2006] FCAFC 40


case_text: In Renard Constructions (ME) Pty Ltd v Minister for Public Works (1992) 26 NSWLR 234 (" Renard "), Priestley JA commented upon the notion of implications on an ad hoc basis. His Honour said, at 255-6: "Questions of construction and different kinds of implication tend to blur together. In recent years terms implied in contracts have been said to fall into two classes the first of which has come to be called, somewhat misleadingly, implication in fact, the second, implication by law. The so-called implication in fact is really implication by judge based on the judge's view of the actual intention of the parties drawn from the surrounding circumstances of the particular contract, its language, and its purposes, as they emerge from the language and in the circumstances. This has been called implication ad hoc (see Professor Lucke "Ad Hoc Implications in Written Contracts" (1973-1976) 5 Adelaide Law Review 32) a usage I will adopt." 210 Second, the applicant contends that a duty to act in good faith should also be implied into the Mentone BSA generally, or into the right to terminate specifically. The general duty is said to include an obligation of full and frank disclosure of all matters relevant to the implementation of the agreement. The applicant submits that the term is to be implied ad hoc, and as a matter of law. See Renard ; Hughes Aircraft Systems International v Airservices Australia (1997) 76 FCR 151 at 190-98 per Finn J; Alcatel Australia Ltd v Scarcella (1998) 44 NSWLR 349; Garry Rogers Motors (Aust) Pty Ltd v Subaru (Aust) Pty Ltd (1999) ATPR |P41-703; Central Exchange Ltd v Anaconda Nickel Ltd (2001) 24 WAR 382; GEC Marconi Systems v BHP-IT [2003] FCA 50 ; (2003) 128 FCR 1 at [920] per Finn J; and Pacific Brands Sport & Leisure Pty Ltd v Underworks Pty Ltd [2005] FCA 288 at [61] - [65] per Finkelstein J. I note that the latter case was the subject of a Full Court appeal in which judgment was given following the hearing of this proceeding. However, the majority of the Full Court did not deal with the findings of the primary judge in relation to the implied duty of good faith in the exercise of a termination right: see Pacific Brands Sport & Leisure Pty Ltd v Underworks Pty Ltd [2006] FCAFC 40 at [119] per Finn and Sundberg JJ.


case_text: Third, the applicant submits there is an implied term requiring Franklins to do all such acts as are necessary on its part to enable the applicant to enjoy the promised benefits of the agreement. The applicant contends that this term is to be implied by operation of law or, alternatively, on an ad hoc basis. It referred to Secured Income Real Estate (Australia) Ltd v St Martins Investments Pty Ltd [1979] HCA 51 ; (1979) 144 CLR 596 at 607 per Mason J to support its contention.


case_outcome: discussed

case_text: In relation to the implied term not to deprive a party of the benefit of that agreement, the applicant relies upon Shepherd v Felt and Textiles of Australia Ltd [1931] HCA 21 ; (1931) 45 CLR 359 at 378, where Dixon J stated that the express promise of the appellant to use his best endeavours to obtain fabric orders for the respondent fabric manufacturer "necessarily includes an obligation not to hinder or prevent the fulfilment of its purpose". The applicant contends, by analogy, that the express promise of Franklins to use reasonable endeavours to satisfy the condition precedent necessarily includes an obligation not to hinder or prevent fulfilment of it.


case_text: The applicant relied upon the following passage in United Dominions Corporation Ltd v Brian Pty Ltd [1985] HCA 49 ; (1985) 157 CLR 1 at 12 per Mason, Brennan and Deane JJ to support its case: "In particular, a fiduciary relationship with attendant fiduciary obligations may, and ordinarily will, exist between prospective partners who have embarked upon the conduct of the partnership business or venture before the precise terms of any partnership agreement have been settled. Indeed, in such circumstances, the mutual confidence and trust which underlie most consensual fiduciary relationships are likely to be more readily apparent than in the case where mutual rights and obligations have been expressly defined in some formal agreement. Likewise, the relationship between prospective partners or participants in a proposed partnership to carry out a single joint undertaking or endeavour will ordinarily be fiduciary if the prospective partners have reached an informal arrangement to assume such a relationship and have proceeded to take steps involved in its establishment or implementation." 218 The relationship between Franklins and the applicant was not one of "mutual trust and confidence". The arrangements between Franklins and the applicant concerning the efforts to obtain the consent of the Lessor to the assignment of the Mentone store lease had a singularly fragile quality. They could be terminated on short notice. At the first directions hearing in the Supreme Court proceedings on 19 October 2001, counsel then appearing for the applicant and Franklins submitted, in support of the application for expedition, that there was "nothing to stop the parties walking away". When counsel spoke of "the parties" he was referring to the applicant and Franklins. He also said that it was "a fair inference, given the nature of the commercial dealings between the parties, that the matter is quite fragile". That was an accurate statement of the parties' legal position vis-a-vis one another. 219 The reality of the litigation agreement was that Franklins lent its name to the Supreme Court proceedings, but the applicant's solicitors, Mason Sier Turnball, and counsel conducted the proceedings, and the applicant funded them. However, at the same time, Franklins retained HWL to maintain what Mr Colbran QC, counsel for Franklins, described as a "supervising brief" over the proceedings.


case_outcome: applied

case_text: agreed statement of facts includes agreement as to the making of declaratory orders. The parties invite the Court to make a declaration that the first and second respondents have each contravened s 38 of the BCII Act "by reason of the matters in paragraphs 20 to 22 and 26 to 31 of the Statement of Agreed Facts". They also invite the Court to make a declaration that the first and second respondents have each contravened s 44 of the BCII Act "by reason of the matters in paragraphs 12 to 22 and 32 to 35" of the statement of agreed facts. Orders in this form would be totally pointless. If declarations that are not true declarations of right are ever to be made, their only justification can be to provide some kind of record of what has been found to have occurred in a particular case. For that purpose, it is necessary that any such declaration contains sufficient detail to provide such a record. To require any person who might be interested in reading such a record to go from the order to a document found only on the relevant Court file would not fulfil any function at all. The function of recording the Court's findings, principally fulfilled by the Court's reasons for judgment, can also be fulfilled by specifying in an order relating to a penalty the conduct in respect of which the penalty has been imposed. See, for example, the orders made by Jessup J in Williams v Construction, Forestry, Mining and Energy Union (No 2) [2009] FCA 548. For these reasons, I decline to make the declarations sought by both parties. The statement of agreed facts also records the agreement of the parties that there is to be no order as to the costs of the proceeding. The task of the Court is to assess and impose appropriate penalties, or an appropriate penalty, in respect of the admitted contraventions. The applicant seeks no penalty against the second respondent, who has retired from the construction industry. Penalties against the first respondent are to be assessed solely on the basis of its vicarious liability for the conduct of the second respondent. Assessing the penalty There were conflicting submissions by counsel for the parties about the extent to which I should take into account previous findings of contraventions of the BCII Act by the first respondent. The conflict concerned such matters as the relevance of contraventions of provisions of the BCII Act other than those directly in issue in the present case, and whether it was legitimate to take into account contraventions brought about by the activities of branches of the first respondent in states other than Victoria, which might be affected by the degree of autonomy under which branches function. These questions are now largely dealt with in the judgment of Jessup J in Williams v Construction, Forestry, Mining and Energy Union (No 2) [2009] FCA 548 , to which the parties referred me in writing by agreement after the close of argument in the present case. It is unnecessary to repeat what is said in that case. For present purposes, it is sufficient for me to say that I deal with the first respondent on the basis that it has a record of prior contraventions of the BCII Act and similar provisions, in circumstances having some similarities to those of the present case. It is not surprising that an organisation in the position of the first respondent will have some difficulty adjusting to legislation that applies sanctions in an attempt to bring about a change to an entrenched culture. It remains to be seen whether repeated imposition of penalties, and lapse of time, will bring about greater compliance. The first respondent cannot be treated as having first offender status for the purposes of this case. On the basis of the affidavit filed on behalf of the applicant, I accept that the first respondent has ample financial capacity to meet a penalty. It cannot seek leniency on the basis of poverty. It is unnecessary to go to the details of its assets. Counsel for the applicant acknowledged that there is no evidence that senior management of the first respondent was involved in the contraventions. He relied on the absence of any apology by either respondent to Celltech, or any expression of regret, contrition or remorse on the part of either respondent. He also relied on the absence of evidence of any corrective action taken by either respondent in relation to the contraventions. It is true that there is an absence of evidence about any of these matters. More controversially, counsel for the applicant asserted that there had been no cooperation by the respondents with the applicant until shortly before the trial, when settlement was achieved. Apart from making what counsel for the applicant described as limited admissions of facts, the respondents contested the allegations made against them up to that time, causing the applicant to have to prepare for a contested trial involving a large number of witnesses, and to incur costs in doing so. As I have said, when the proceeding commenced it involved many more allegations of contraventions than those that are now its subject. It is as difficult to be critical of the respondents for denying allegations that the applicant chose not to proceed with in procuring a settlement as it is to be critical of the applicant for making those allegations in the first place and being prepared to discard them to achieve a settlement. The fact is, cooperation between the parties has had the effect of reaching a settlement and saving the costs of the parties, and the expenditure of public money, that would have been involved in a full-scale trial on all of the applicant's allegations. The respondents may even have gone further in making admissions than they need have done, by admitting the element of intent to apply undue pressure. As I have said, in the circumstances, it is difficult to see that the second respondent in fact had that intent, although I am required to deal with the case on the basis that he did. In the criminal law, a plea of guilty entitles an accused person to favourable consideration in sentencing, irrespective of the stage at which the plea is entered. In my view, the respondents are entitled to be regarded as having cooperated to the extent that they did, and not to be criticised for having failed to admit to the full range of allegations made in the original statement of claim and submitted to penalties in respect of the full range of contraventions alleged.


case_text: That gives rise to the first ground of appeal. The last sentence reverses the effect of s 120(1) of the Act. It is well established that, once a reasonable hypothesis connecting the death with the circumstances of the particular service rendered by the person has been raised, then the death will be determined as war caused unless the Tribunal is satisfied, beyond reasonable doubt, that there is no sufficient ground for making that determination (s 120(1) of the Act; Repatriation Commission v Deledio (1998) 83 FCR 82 at 97 98, corrected in a manner not relevant here in Bull v Repatriation Commission (2001) 188 ALR 756 at [14] [15]). 18 The argument put by Counsel for the Commission is not unlike that considered in Bull 188 ALR 756 . However, the discussion there concerned the existence of a reasonable hypothesis pursuant to s 120(3) rather than negating that hypothesis pursuant to s 120(1). The facts, of course, were different from those in issue here. 21 In my opinion, the parties were correct in focusing argument before the Tribunal on the existence of the necessary hypothesis, as occurred in Bull 188 ALR 756, but the Tribunal ended up misdirecting itself as to the interplay between s 120(1) and s 120(3) and so applied the wrong standard of proof. The remaining grounds of appeal are best seen as aspects of that fundamental problem. I have remarked elsewhere upon the difficult task that the Tribunal has in applying these sections as they have been interpreted by the relevant authorities of the High Court and this Court ( Byrne v Repatriation Commission [2007] FCAFC 126 , 97 ALD 359 at [1] ).


case_outcome: followed

case_text: The presiding Member of the Tribunal appeared to recognise that in the comment made during the course of argument which I have quoted. There were various bases for a link between operational service and alcohol dependence in the material before the Tribunal. The Tribunal considered and dealt with some of those bases and not others. There are occasions where primary facts alleged to support a hypothesis might be positively rejected and the hypothesis, or an essential integer of it, negated beyond reasonable doubt ( Byrnes v Repatriation Commission [1993] HCA 51 ; (1993) 177 CLR 564 at 570). That is not the manner in which the Tribunal proceeded and, having in mind the objective circumstances of the case, it could hardly have proceeded to find the relevant circumstances disproved in that sense. 21 In my opinion, the parties were correct in focusing argument before the Tribunal on the existence of the necessary hypothesis, as occurred in Bull 188 ALR 756, but the Tribunal ended up misdirecting itself as to the interplay between s 120(1) and s 120(3) and so applied the wrong standard of proof. The remaining grounds of appeal are best seen as aspects of that fundamental problem. I have remarked elsewhere upon the difficult task that the Tribunal has in applying these sections as they have been interpreted by the relevant authorities of the High Court and this Court ( Byrne v Repatriation Commission [2007] FCAFC 126 , 97 ALD 359 at [1] ). 23 The appeal will be upheld and the decision of the Tribunal set aside. The notice of appeal seeks a further order that the matter be remitted to the Tribunal for redetermination in accordance with the law and does not seek a substantive favourable order from this Court pursuant to s 44(4), (5) and (7) of the AAT Act (cf Byrne [2007] FCAFC 126 per Gyles J at [4], Edmonds J at [14] and Buchanan J at [59] [60]). The appeal will be stood over for a short period to enable the parties to make submissions as to the appropriate ancillary orders to be made. The Commission will be ordered to pay the costs of the applicant of the appeal. The administrative law proceeding will be dismissed with no order as to costs. I certify that the preceding twenty-three (23) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gyles. Associate: Dated: 18 December 2007 Counsel for the Applicant: Ms E Wood Solicitor for the Applicant: Legal Aid Commission of NSW Counsel for the Repatriation Commission: Miss RM Henderson Solicitor for the Repatriation Commission: Australian Government Solicitor Date of Hearing: 7 December 2007 Date of Judgment: 18 December 2007 AustLII: Copyright Policy | Disclaimers | Privacy Policy | Feedback URL: http://www.austlii.edu.au/au/cases/cth/FCA/2007/2021.html


case_text: The suggestion as to the Naval historian was not followed up by the Tribunal. In that respect, I refer to what I said in Harris v Secretary, Department of Employment and Workplace Relations (2007) 158 FCR 252 at [16] [19] (on appeal Secretary, Department of Employment and Workplace Relations v Harris [2007] FCAFC 130 ; 97 ALD 534 at [33] [34]).


case_text: The foregoing analysis persuades me that the mis-statement of the statutory task pursuant to s 120(1) in the reasons cannot simply be ignored and treated as a slip of the pen. Satisfaction beyond reasonable doubt is an exacting standard, particularly where it is framed in the negative. As Barwick CJ said in Keeley v Brooking [1979] HCA 28 ; (1979) 143 CLR 162 at 169: "To be satisfied beyond all reasonable doubt is, for the purposes of the law, to be certain."


case_text: That gives rise to the first ground of appeal. The last sentence reverses the effect of s 120(1) of the Act. It is well established that, once a reasonable hypothesis connecting the death with the circumstances of the particular service rendered by the person has been raised, then the death will be determined as war caused unless the Tribunal is satisfied, beyond reasonable doubt, that there is no sufficient ground for making that determination (s 120(1) of the Act; Repatriation Commission v Deledio (1998) 83 FCR 82 at 97 98, corrected in a manner not relevant here in Bull v Repatriation Commission (2001) 188 ALR 756 at [14] [15]).


case_text: During the hearing the presiding Member of the Tribunal summed up the arguments for the applicant by referring to the factors as: (1) Monotony of service life; (2) Peer pressure; and (3) Attitude to misfortune or service mishaps. There is no reference in the findings to monotony and no finding is made as to peer group pressure from June 1950 onwards. The latter is surprising as the Tribunal was expressly referred to the decision in Roncevich v Repatriation Commission [2005] HCA 40 ; (2005) 222 CLR 115 in that connection. 15 It is relevant to note that the Commission's statement of facts and contentions, filed before the hearing in the Tribunal, put in issue the existence of a reasonable hypothesis of connection rather than proposing disproof of such an hypothesis. It was argued that factor 6(f) was not related to the relevant service rendered by the Veteran as required by cl 5 of the SOP. Naturally enough, the applicant's statement of facts and contentions was directed to establishing the reasonable hypothesis. 16 The transcript of the argument that took place before the Tribunal does not reveal any submission on the part of the representative of the Commission that a reasonable hypothesis, if raised, was negated beyond reasonable doubt. That is not surprising. The only reference to reasonable doubt was in the following passage: "MS POLLOCK (Solicitor for the applicant) : Well, from my point of view we only have to get to the stage of a reasonable hypothesis and then at the end of the day if that hypothesis is a reasonable hypothesis that the things that he complained of to Dr Dinnen was sufficient to create some causal connection to his operational service, then it is a matter for the respondent to be able to establish, to the satisfaction of the tribunal, beyond reasonable doubt that it's not." "DR CAMPBELL (Member presiding) : That is a correct exposition, I think. That, in itself, creates some difficulties for the respondent in the absence of the veteran and the absence of material. Normally you would be relying on 119 but he would probably want to rely on it." The representative of the Commission referred to material "pointing away" in the passage immediately following that exchange. That is a common phrase used where considering whether a reasonable hypothesis has been raised pursuant to s 120(3).


case_title: Secretary, Department of Employment and Workplace Relations v Harris [2007] FCAFC 130 ; 97 ALD 534


case_text: Paragraphs 18 to 20, dealing with the exercise of the discretion, under the general heading "Ruling" stated, inter alia: 18. In exercising the discretion under subsection 80G(6A) (paragraph 170-50(2)(d)), the Commissioner is guided by administrative law principles. These include an obligation to identify and consider all factors that may be relevant to the exercise of the discretion and to give them an appropriate weighting. In determining the relevant factors and their weighting, the Commissioner has regard to the policy of section 80G (Subdivision 170-A) and its context within the Act. Although each case must be decided on its merits, this Ruling provides a guide to taxpayers and ATO officers as to what factors may be relevant in the exercise of the discretion. 19. In cases where there has been delay on the part of the relevant companies in effecting an agreement, the principles outlined in Hunter Valley Developments Pty Ltd & Ors v Minister for Home Affairs and Environment ... (1984) 3 FCR 344 ... and subsequent supporting authorities in respect of statutory discretions to extend time, is relevant to the subsection 80G(6A) (paragraph 170-50(2)(d)) discretion. Following Hunter Valley Developments, the statutory time limit is not to be ignored and, prima facie, agreements must be made within time. Therefore, the onus is on the taxpayer to demonstrate to the Commissioner that the case is an appropriate one for the favourable exercise of the discretion. This generally requires the taxpayer to provide an adequate explanation for the delay. 20. In cases where an agreement is sought to be made out of time as a result of an adjustment to the tax position of the company group by the Commissioner, a relevant factor is the conduct giving rise to the adjustment. For example, where there is fraud or evasion, or a scheme to which Part IVA of the Act applies, this factor weighs heavily against a favourable exercise of the discretion. Conversely, where an adjustment stems from conduct which could not be regarded as culpable, this factor would be weighted in favour of the extension of time being granted. 96 Paragraphs 85 through to 90 dealt with non-compliance with the time limit caused by delay of the taxpayer. Paragraph 85 provided: This category encompasses cases where no agreement has been made prior to the date of lodgment of the income company's return or, where an agreement has been made, the group subsequently discovers, for example: (i) there are further losses within the group available for transfer to the income company; or (ii) the income company has additional income against which unused losses within the group can be offset. The relevant principles applied were those in Hunter Valley Developments v Cohen (1984) 3 FCR 344: 86. In these cases, the Commissioner considers that the principles outlined by Wilcox J in Hunter Valley Developments in respect of statutory discretions to extend time are relevant to the subsection 80G(6A) (paragraph 170-50(2)(d)) discretion, although the case was decided in the context of a different statutory provision. 87. The Commissioner also considers these general principles need to be balanced with a consideration of the underlying policy of section 80G (Subdivision 170-A) (to broadly align the treatment of company groups with divisional companies) and the wider consideration of the proper administration of the Act. 88. In Hunter Valley Developments, Wilcox J stated that statutory time limits are not to be ignored and the onus is on the applicant to convince the decision-maker that the case is an appropriate one for a favourable exercise of the discretion. This would generally require the taxpayer to provide an acceptable explanation of the delay. 89. The length of the delay in making an agreement after the prescribed time is relevant to the exercise of the discretion. Generally, the longer the delay, the greater the onus is upon the applicant to demonstrate an acceptable explanation for the delay (see Stergis and Ors v Boucher and Anor (1989) 86 ALR 174; ... Also, it should not be assumed that the Commissioner will automatically exercise this discretion in circumstances where the request is lodged within the objection period relating to assessments. 90. The Commissioner will weigh the explanation of delay with the other relevant factors referred to in Hunter Valley Developments (for example, public interest considerations and the question of prejudice to either party arising from the exercise or non-exercise of the discretion). 112 The principles enunciated by Wilcox J in Hunter Valley Developments Pty Ltd 3 FCR 344 were said by the Commissioner in Taxation Ruling TR 98/12 to be relevant to the exercise of the statutory discretion under subs 80G(6A) of the ITAA 1936. The Ruling also stated that these general principles need to be balanced with a consideration of the underlying policy of s 80G which was identified as broadly aligning the treatment of company groups with divisional companies. 113 Hunter Valley Developments Pty Ltd 3 FCR 344 concerned the circumstances in which an extension of time would be allowed for bringing an application for an order of review of an administrative decision under s 11 of the ADJR Act. Wilcox J outlined a number of positions emerging from the authorities which he suggested could guide, albeit not in any exhaustive manner, the exercise of the Court's discretion. In summary form (omitting authorities) they were as follows: 1. Although the section does not, in terms, place any onus of proof upon an applicant for extension an application has to be made. Special circumstances need not be shown but the Court will not grant the application unless positively satisfied that it is proper so to do. The "prescribed period" of 28 days is not to be ignored. Indeed it is the prima facie rule that proceedings commenced outside that period will not be entertained. It is a precondition to the exercise of discretion in his favour that the applicant for extension show "an acceptable explanation of the delay" and that it is "fair and equitable in the circumstances" to extend time. 2. Action taken by the applicant, other than by making an application for review under the Act, is relevant to the consideration of the question whether an acceptable explanation for the delay has been furnished. A distinction is to be made between the case of a person who, by non-curial means, has continued to make the decision-maker aware that he contests the finality of the decision (who has not "rested on his rights") and a case where the decision-maker was allowed to believe that the matter was finally concluded. The reasons for this distinction are not only "... for finality in disputes" but also the "fading from memory" problem. 3. Any prejudice to the respondent including any prejudice in defending the proceedings occasioned by the delay is a material factor militating against the grant of an extension. 4. The mere absence of prejudice is not enough to justify the grant of an extension. In this context, public considerations often intrude. A delay which may result, if the application is successful, in the unsettling of other people or of established practices is likely to prove fatal to the application. 5. The merits of the substantial application are properly to be taken into account in considering whether an extension of time can be granted. 6. Considerations of fairness as between the applicants and other persons otherwise in a like position are relevant to the manner of exercise of the Court's discretion. 133 In [28] the submission considered what it called "errors of the decision-maker by reference first to the six general principles referred to by Wilcox J in Hunter Valley ". In [29] to [30] it dealt with the subject of delay and in [31] to [39] the imposition of GIC and the alleged culpable behaviour of Development Finance. Paragraphs 40 to 46 dealt with the Asiamet [2004] FCAFC 73 ; 137 FCR 146 decision. Paragraph 47 asserted under the heading "No limitation" that the Commissioner erred in stating that there was nothing in the subject matter, scope and purpose of s 80G which would imply any limitation upon his ability to consider the conduct of a company group giving rise to an adjustment as being a relevant factor to the exercise of the discretion. The final heading "Additional or collateral penalty" complained that the Commissioner erred in treating the refusal of the discretion as reflecting a need to penalise to a greater extent taxpayers involved in serious non-compliance activities.


case_text: Part IVAAA was considered by the Full Court in Bellinz v Commissioner of Taxation (1998) 84 FCR 154. The Court drew the following conclusions from the legislative scheme of Pt IVAAA: 1. ... the issue of a public ruling is to be made in accordance with the Act as interpreted by the Commissioner and not in accordance with some practice which the Commissioner may have adopted, to the extent that that is inconsistent with the Assessment Act. What is to be ruled upon is the way in which, inter alia, the Act under which the extent of a liability for income tax of the appellants is to be worked out would apply. 2. A public ruling which is inconsistent with a prior public ruling may be made if the Commissioner decides that the law is otherwise than as stated in the initial public ruling. However the new ruling will not operate retrospectively in respect of arrangements commenced or brought into operation prior to the earlier ruling. 3. A public ruling which is inconsistent with a prior private ruling may be made if the Commissioner determines that the initial private ruling was wrong. In that case the initial private ruling will be taken to have been withdrawn: ... 4. The binding quality which the legislation gives to a public ruling applies to the tax consequences of the arrangement or class of arrangements to which the ruling relates, and not, ..., to the underlying philosophy behind the ruling. That this is so follows inexorably from the language of s 14ZAAE ... The Court was also of the view that Pt IVAAA left no room for the operation of any doctrine of estoppel or the reintroduction of that doctrine through administrative law remedies. Their Honours said (at 169): The public ruling operates as if it is the statutory basis upon which tax is to be levied. No question arises as to whether it is or is not relied upon. I take that last statement not to be a statement that a public ruling has statutory force. Rather, it reflects a commitment on the part of the Commissioner to a particular approach to the law in those cases to which it applies. That commitment will necessarily be qualified by the extent to which the ruling itself embodies qualifications and conditions in its own terms.


case_text: Those principles were related to applications for extensions of time to commence judicial review proceedings under the ADJR Act. That kind of discretion differs in purpose and character from the discretion presently under review. As Hill J observed in Brown v Federal Commissioner of Taxation (1999) 42 ATR 118, Wilcox J did not say that he was laying down principles of universal application or even covering all applications to commence proceedings for judicial review outside the time prescribed by the ADJR Act. Brown 42 ATR 118 was a case in which a taxpayer had sought from the Commissioner an extension of time for filing an objection against an income tax assessment. An objection to an assessment was quite different from an application for judicial review which would proceed on quite limited grounds. Hill J discussed the nature of the objection process (at 127): It is the first step in a process whereby the assessment may be reconsidered by the Commissioner in the light of the objection and if disallowed may be the subject of merits review by an independent tribunal, the Administrative Appeals Tribunal, or by the court, (although before the court matters involving the exercise of discretion are the subject of judicial rather than merits, review). If the disallowance of the objection is reviewed by the tribunal and a decision adverse to the taxpayer is arrived at there is the possibility of an application to this court by way of an appeal on a question of law. 115 Hill J said that it had been in the past a "reproach to the law" that a taxpayer could be refused independent review of a meritorious objection even in circumstances where the failure to object may not have been his or her fault. While the explanation for delay in lodging an objection would be an important factor, the decision-maker was required to take into account all the circumstances of the particular case against the background that parliament had enacted a procedure to permit extensions of time being granted. Extensions should be granted where the justice of the case required. They should not be reserved for exceptional cases. 116 The emphasis on general considerations of injustice and the need for a balancing process continued in his Honour's judgment at 132, where he said: What is required is the balancing of the delay; the explanation for it; the circumstances which gave rise to it and such prejudice if any as may be shown to exist to the Commissioner against the prejudice which may arise to a taxpayer who has by reason of the failure to object in time lost the right to a review of the assessment. In this balancing process the Commissioner or the Tribunal on a review will be guided by what the justice of the case requires. The balancing process should be approached on the basis that while Parliament has stipulated a time in which objections are required to be lodged it has entrusted to the Commissioner a power to extend that time in appropriate circumstances. The decision maker should not lose sight of the fact that s 14ZW is an ameliorating provision designed to avoid injustice. 117 The Full Court in Zizza v Federal Commissioner of Taxation (1999) 42 ATR 371 said it would be an error to regard the summary in Hunter Valley Developments Pty Ltd 3 FCR 344 as complete or to treat each of the six principles it contained as necessarily applicable to any particular application for extension of time especially an application under different legislation. The Court agreed with the observations to that effect made by Hill J in Brown 42 ATR 118 (at 376). 125 In any case in which a discretion to extend time is involved the decision-maker must be satisfied that there is a proper basis for it. But there is no basis in the statute for suggesting that the Commissioner should regard the extension of time for an agreement to transfer losses as exceptional. The time limit is a procedural protection of the administrative process. There is no windfall to a taxpayer who is given an extension. The taxpayer is given no more than what would have been its due had the agreement been made within time. The approach undertaken by Hill J in Brown 42 ATR 118 to extensions of time for the lodgment of objections applies also, if not with greater force, to the discretion to extend time to make agreements to transfer losses. This proposition was not reflected explicitly in Taxation Ruling TR 98/12. Indeed the reliance placed in the ruling upon Hunter Valley Developments Pty Ltd 3 FCR 344 was somewhat at odds with that approach. That is not to say that the policy is therefore unlawful. It did not treat the Hunter Valley Developments Pty Ltd 3 FCR 344 principles as exhaustive or determinative. The focus therefore must not be so much upon the content of the policy but the way in which it was applied and the discretion exercised in this case. 126 By [35] of the application, DRI and Development Finance alleged that the respondents had a duty, in exercising the power under s 170-50(2)(d) of the ITAA 1997 "to act fairly and in accordance with reasonable public standards". The respondents admitted in their defence a duty to act fairly and reasonably. They submitted in argument that they did so act. 127 DRI and Development Finance did not allege any breach of a free standing statutory duty to act fairly and in accordance with reasonable public standards. The source and content of that duty was not described. No statement of such a duty is to be found in the relevant part of the statute. There was no allegation in the grounds of a breach by the respondents of procedural fairness. The unfairness which was alleged went to the substance of the decision and, together with questions of reasonableness, (not "reasonable public standards") was raised in the following ways in the grounds of review: 1. In support of the allegation of a failure to take into account relevant considerations which included: 36(a)(xxiii) the justice of the case and the unfairness to the applicants, their parent company and its shareholders if the losses of BHPBDRI are not able to be used to be offset against taxable income of BHPDF. 36(a)(xxvii) that the time within which loss transfer agreements were to be made was regulatory and could cause grave injustice if the discretion to extend time was not applied fairly. 2. In support of the allegation that the Commissioner's power was exercised for a purpose other than that for which it was conferred it was said in the particulars to [36(c)]: In the circumstances of this case, the decision is so unreasonable and unfair that such a purpose should be inferred. 3. In the allegation in [36(e)] that the first respondent's exercise of the power resulted in unfairness amounting to an abuse of power. This allegation was also relied upon as a particular of the claim that the first respondent's exercise of the power was so unreasonable that no reasonable person could have so exercised it. 128 Having regard to the way in which the application is framed, the alleged duty to act fairly and in accordance with reasonable public standards does not support any identifiable ground of review. No direct breach of such a duty is alleged. It is questionable whether any such "duty" is to be implied into the discretion. The discretion involves the exercise of a statutory power. Its limits are defined, inter alia, by the purposes for which it can be exercised, factors which may be relevant or irrelevant to its exercise and the way in which such a decision should be made including requirements of procedural fairness. There is probably a duty to decide whether to exercise the discretion which may be enforced by mandamus if the Commissioner or his delegate simply failed to respond to a request for an extension of time. Given the way in which the balance of the application was framed, the existence of the duty alleged in [35] and whether it was breached does not fall for decision. 129 The way in which the applicants' submissions were structured did not bear a precise correlation with the grounds in their application. The written submissions began with a survey of the facts: [1] to [12]. This was followed by an outline of the legislation: [13] to [17]. The point was there made that the origin of the requirement to enter into an agreement to transfer losses was procedural only. The change made to s 80G in 1992 did not convert the procedural requirement into something more substantive. The change from giving a notice to making an agreement reflected the introduction of the self-assessment regime and no more. Then it was said that the 1936 and 1997 Acts drew a distinction between procedural steps which the Commissioner or a taxpayer must undertake and the rules which affect substantive liability to tax. The rules in s 170-50 which affect substantive liability to tax include statutory conditions for a valid transfer which were said to achieve the result of broadly aligning "the treatment of company groups with divisional companies".


case_text: In Ross Palmer Holdings v Federal Commissioner of Taxation (2003) 52 ATR 805, which was concerned with the exercise of the discretion under s 80G(6A) of the ITAA 1936, Spender J identified the purpose of the loss transfer provisions (at 816-817): ... to permit and facilitate the transfer of losses within a group of companies so that there is no difference in the tax treatment of a group of companies, each carrying on separate enterprises, as against a single company that carries on the same enterprises in separate divisions. The purpose of the provisions was also considered by the Full Court in Commissioner of Taxation v Asiamet (No 1) Resources Pty Ltd [2004] FCAFC 73 ; (2004) 137 FCR 146 in the judgment of Allsop J (Ryan and Finkelstein JJ agreeing). In rejecting, as overstated, the proposition that their statutory purpose was to allow for the transfer of losses within a group so as to equate the tax treatment of a group to that of a company with divisions, his Honour said (at [141]): That, with respect, overstates the purpose of s 80G. Section 80G is intended to be beneficial to the taxpayer: Harts Australia Ltd v Commissioner of Taxation (Cth) [2001] FCA 761 ; (2001) 109 FCR 405 at [18] . There is not, however, a complete equation with the single company. Conditions apply to the transfer of losses, one of which is that the agreement must be made before the date of lodgment of the return of income or the income company, or later as the Commissioner allows. The legislative history of s 80G, and in particular the content of the Asprey Committee Report and the Campbell Committee Report , reveals that a choice was made by Parliament not to adopt the group assessment procedure which might be seen as a complete equation of subsidiaries with divisions. His Honour accepted the statement of the policy of the section as set out in the Commissioner's Taxation Ruling, TR 98/12 saying (at [142]): There is, undoubtedly, a beneficial policy underlying s 80G as described at [87] of the ruling: broadly to align the treatment of company groups with divisional companies. That is not to deny, however, that a broad, otherwise expressly unconfined discretion, is reposed in the Commissioner in s 80G(6A)(b). Naturally, the discretion is to be confined by reference to the subject matter, scope and purposes of the provisions and the ITAA as a whole. 123 The legal character of Taxation Rulings as administrative policies was assumed in Asiamet [2004] FCAFC 73 ; 137 FCR 146 when Allsop J rejected the view that it was not open to the Commissioner to adopt a policy in terms of Taxation Ruling TR 98/12. He pointed out that the terms of the Ruling displayed a recognition of the need to make each decision on its merits, a recognition of the purpose and policy of s 80G and a recognition of the important object of the ITAA found in PT IVA. Relevantly for present purposes, he observed (at [143]): The real issue is whether the Commissioner can promulgate and apply a policy for guidance which identifies as a factor which generally weighs heavily against the exercise of the discretion the fact that the adjustment flows from the application of Pt IVA, though still recognising the need to make each decision on the merits of the particular case. To posit such a policy does not negate the evident beneficial purpose of s 80G, it merely sets up an available countervailing factor of weight, drawn from another important part of the ITAA. To do so does not subvert s 80G, nor does it preclude the decision-maker from taking into account any factor required by the legislation, nor does it require the decision-maker to take into account any factor required by the legislation not to be taken into account, nor does it preclude the decision-maker dealing with any decision on the merits. 124 His Honour also rejected the contention that to disallow an extension substantially on the basis of the application of Pt IVA was to give an impermissibly extended operation to Pt IVA and to increase the penalty beyond that contemplated by the ITAA. He said (at [145]): I cannot agree. There is no additional or collateral penalty. If the discretion is not exercised and fresh losses are not transferred, there will, or may be, a penalty applicable by the operation of s 226 upon the amount of tax calculated as assessable or that tax less the "claimed tax" within the meaning of s 226(1). If the discretion is exercised so as to create the same position in the Income Companies as had previously subsisted before the application of Pt IVA, no penalty under s 266 arises. It is not a matter of collaterally increasing a penalty by refusing to extend time, but of removing the consequences by way of penalty for participation in a Pt IVA Scheme by extending time. Those observations of course went to the lawfulness of the policy and not to its proper application. 133 In [28] the submission considered what it called "errors of the decision-maker by reference first to the six general principles referred to by Wilcox J in Hunter Valley ". In [29] to [30] it dealt with the subject of delay and in [31] to [39] the imposition of GIC and the alleged culpable behaviour of Development Finance. Paragraphs 40 to 46 dealt with the Asiamet [2004] FCAFC 73 ; 137 FCR 146 decision. Paragraph 47 asserted under the heading "No limitation" that the Commissioner erred in stating that there was nothing in the subject matter, scope and purpose of s 80G which would imply any limitation upon his ability to consider the conduct of a company group giving rise to an adjustment as being a relevant factor to the exercise of the discretion. The final heading "Additional or collateral penalty" complained that the Commissioner erred in treating the refusal of the discretion as reflecting a need to penalise to a greater extent taxpayers involved in serious non-compliance activities. 143 The core of the argument actually presented by DRI and Development Finance in relation to Mr Duffus' consideration of the "culpable" behaviour of Development Finance focussed on his approach to the way in which evidence of tax avoidance should be weighted in the exercise of the discretion to extend time to transfer losses. The key paragraph in his letter of 14 February 2006 was in the following terms: Examples are given in Paragraph 93 [of TR 98/12] of factors which weigh heavily against a favourable exercise of the discretion. The examples listed are where an adjustment is made as a result of fraud or evasion or a scheme to which Part IVA applies. It is suggested in the ruling that these matters should be weighted heavily in considering whether to exercise the discretion. The heavy weighting reflects the need to penalise to a greater extent any taxpayers who are involved in these serious non-compliance activities. It is the proposition that the discretion should be exercised so as to penalise taxpayers who are said to have engaged in such conduct that creates difficulty in this case. Such an approach is not sanctioned by the decision of the Full Court in Asiamet [2004] FCAFC 73 ; 137 FCR 146. In that case Allsop J accepted that it was permissible to disallow an extension of time on the basis of the application of Pt IVA and that to do so was not to increase any penalty on the taxpayer beyond that contemplated by the ITAA. The fact that a penalty would be applicable, absent the transfer of losses, does not mean that a refusal to extend time involved collaterally increasing a penalty. That is a very different matter from applying a "heavy weighting" to culpable conduct in order to "penalise to a greater extent any taxpayers who are involved in these serious non-compliance activities". That does involve, in my opinion, a consideration which is irrelevant to the statutory purposes. It is not to be found in Taxation Ruling TR 98/12. It appears to be based upon a misreading of that Ruling. 144 It is necessary, of course, in reviewing reasons for administrative decisions not to scrutinise them with an eye keenly attuned to error nor to engage in close semantic analysis. It is not for the Court through judicial review to impose the requirements which would "judicialise" the process of administrative decision-making. The passage cited, however, is unequivocal in its import and in the error which it reflects. It is difficult to assess the impact which it may have had on the weight given by the decision-maker to the alleged culpable conduct and the extent to which he had put to one side other aspects of the history to which reference was made earlier. In my opinion reviewable error is disclosed under this head. 145 In support of this ground it was said that the decision was so unreasonable and unfair that such a purpose should be inferred. I am not prepared to make such a finding. However, to the extent that consideration of a need to penalise "to a greater extent" taxpayers involved in serious non-compliance activities is an irrelevant consideration it also reflects a purpose other than a purpose for which the power was conferred.


case_text: In the section under the heading "Explanations" which dealt with the discretion it was said, in [82]: This part of the Ruling provides a general guide for taxpayers and officers of the ATO when considering the exercise of the discretion. This is desirable in the interests of consistent, efficient administration and equity among taxpayers in similar circumstances. However, the decision-maker must exercise the discretion according to the merits of each case and should not fetter the discretion by inflexibly applying, or acting in blind obedience to a policy or rule ... There were then set out in [83] and [84] "Factors relevant to the exercise of the discretion". Those two paragraphs provided: 83. The exercise of the discretion under subsection 80G(6A) (paragraph 170-50(2)(d)) includes a two-step process of identifying relevant factors and applying a weighting to each of those factors, having regard to the circumstances of the case. Further, it is for the decision-maker to determine the appropriate weighting to be applied to these factors - see Minister for Aboriginal Affairs and Anor v Peko-Wallsend Ltd and Ors [1986] HCA 40 ; (1986) 162 CLR 24. 84. Applications for the exercise of the discretion usually fall into one of two broad categories. The first is where it can be said that there has been delay on the part of the taxpayer that results in non-compliance with the ... time limit. The second is where the request for an extension of time to make an agreement arises out of an adjustment to the tax position of the company group by the Commissioner. The following paragraphs outline the factors the Commissioner considers to be relevant to the exercise of the discretion ... in both categories, although they are by no means exhaustive. 136 A failure to take into account a relevant consideration or considerations in the exercise of a power is one of the grounds set out in s 5(2) of the ADJR Act for finding that there has been an improper exercise of the power within the meaning of s 5(1)(e) of that Act. In Minister for Aboriginal Affairs v Peko-Wallsend Ltd [1986] HCA 40 ; (1986) 162 CLR 24 at 39 Mason J made the following points about this head of review: (a) The ground of failure to take into account a relevant consideration can only be made out if a decision-maker fails to take into account a consideration which he is bound to take into account in making that decision. (b) What factors a decision-maker is bound to consider in making the decision is determined by construction of the statute conferring the discretion. If the relevant factors are not expressly stated, they must be determined by implication from the subject matter, scope and purpose of the Act. (c) Not every consideration that a decision-maker is bound to take into account but fails to take into account will justify the court setting aside the impugned decision and ordering that the discretion be re-exercised according to law. (d) The limited role of a court reviewing the exercise of an administrative discretion must constantly be borne in mind. It is not the function of the court to substitute its own decision for that of the administrator by exercising a discretion which the legislature has vested in the administrator. In the absence of any statutory indication of the weight to be given to various considerations it is generally for the decision-maker and not the court to determine the appropriate weight to be given to the matters which are required to be taken into account in exercising the statutory power. 137 Paragraph 36(a) of the application set out some 29 matters each of which were said to be a relevant consideration not taken into account by the first respondent. These included various aspects of the factual history which has already been outlined. It is not necessary for present purposes to address each of those matters. This was not done in the submissions. Many of them, as elements of the factual history could not conceivably be mandatory relevant considerations. Rather it is helpful to focus upon those matters, which having regard to the nature of the discretion, could be said to be mandatory relevant factors. 138 Earlier in these reasons a number of matters relevant to the discretion to extend time under s 170-50(2)(d) were set out. Some of them overlapped with those set out by Wilcox J in Hunter Valley Developments Pty Ltd 3 FCR 344. They were however formulated by reference to the scope and purpose of Subdiv 170-A and s 170-50 of the ITAA 1997. While many aspects of the history of dealings between the Commissioner, his officers and DRI and Development Finance could not be said to be mandatory relevant considerations, there were features of that history overall that went to matters at the heart of the statutory purpose. Although the reasons for his decision given by Mr Duffus in his letter of 14 February 2006 made reference to Taxation Ruling TR 98/12 they disclosed no consideration of the general purpose of Subdiv 170-A. There was no reference to the effect on the statutory purpose, in this case, of the requested extension of time. There was no reference to any adverse impact upon DRI and Development Finance of the inability to transfer losses or of any prejudice to the position of the Commissioner for the good administration of the Act were the extension of time to be allowed. A failure to have regard to those general issues may have resulted in a failure to give express consideration to certain of the factual matters referred to in [36] of the application. There was no evidence in the reasons for decision of any balancing of competing considerations having regard to those purposes. 139 It was also a relevant factor, apparently not taken into account by Mr Duffus, that the Commissioner was well aware of the intention of DRI to transfer tax losses to Development Finance when its position had crystallised. That crystallisation took a long time because of the extended audit of the tax position of Development Finance. On 30 November 2004 Mr Killaly wrote to Mr Mulqueen, in respect of extensions for the year ended 30 June 2000 saying that: In our view, there is no reason to seek the Commissioner's permission to make additional loss transfer agreements until such time as the loss deductions available to the income companies are finally determined. And further: We consider that the appropriate time to seek the favourable exercise of the Commissioner's discretion would be once amended assessments had issued to the income companies (were this to occur). Mr Killaly described the issue at that time as "hypothetical". The letter of 1 December 2004 from Mr Killaly to Mr Clough of Mallesons was to similar effect. 140 This matter is specifically referred to as a mandatory relevant consideration not taken into account in [36(a)(xxvi)]. Importantly, no consideration appears to have been given to the fact that the Commissioner was well aware well in advance of the request that the BHPGroup proposed to request a transfer of tax losses in the relevant years. A finding that the factor of delay should be "taken into account but should not be weighted heavily against the favourable exercise of the discretion" indicates a narrowly based approach to the question of the delay. Had the relevant statutory purposes and the factors of prejudice on both sides together with the ongoing advice of the intention to effect loss transfers been taken into account, then this factor might well have been treated as neutral and not weighed against DRI and Development Finance at all.


case_text: Where the Parliament has conferred wide discretions on an official decision-maker, particularly in relation to high volume decision-making, it is entirely consistent with the legislative intention in conferring such a discretion that its exercise will be guided by administrative policies. Indeed it may be inferred that the creation of such policies is contemplated by the legislature when it confers such discretions. As Drummond J and I said in Minister for Immigration, Local Government and Ethnic Affairs v Gray (1994) 50 FCR 189 (at 206): This is particularly so in the case of a power which involves high volume decision-making, or which may, in any event, because of its subject matter, be expected to attract policy guidelines ... Common concepts of justice suggest that, while each case is to be considered on its individual merits, like cases will generally be treated similarly. The imputed legislative contemplation of such policies for that purpose must be limited to those which are consistent with the general purposes and requirements, express or implied, of the legislation in question. They cannot be expressed to fetter the exercise of the relevant discretion. And as we observed in that case an administrative policy may amount to a mandatory relevant consideration such that a significant failure to properly construe and apply the policy may cause the discretion to miscarry. The public rulings issued by the Commissioner are expressly provided for by the TAA. They can have legal consequences in favour of the taxpayer. A failure by the Commissioner to have regard to a public ruling relating to the exercise of a discretion under the tax law could vitiate the decision made in the exercise of that discretion. Whether it would or not, would depend upon the circumstances and the factors properly considered by the decision-maker. That is not to say that the Commissioner is bound to apply any ruling which he has issued. The Act does not say so and there is no principle of estoppel in the exercise of his functions which would prevent him from doing so. Questions of procedural fairness may require the taxpayer to be heard against an unexpected departure from policy with consequences unfavourable to the taxpayer and against which there is no statutory protection. 104 The word "ruling" has an obvious capacity to mislead. It is capable of conveying the impression that rulings published by the Commissioner have legal force. Insofar as it relates to the interpretation of the law, a ruling has no greater status than an administrative opinion. In so far as it relates to the way in which a discretion conferred by law would be exercised, it has no greater status than an administrative policy. There is a risk of an unwarranted elevation of rulings, by virtue of their terminology to a kind of "de facto law". This risk has been discussed in a helpful review of the subject generally in Scolaro D, Tax Rulings: Opinion or Law? The need for an Independent 'Rule-Maker' (2006) 16 Revenue Law Journal 109. The footnotes in that article also make reference to a number of other papers on the topic. 105 Importantly the Taxation Ruling in issue in this case, so far as it related to the exercise of the Commissioner's discretion to extend the time for making an agreement to transfer losses, stated that the Commissioner was "guided by administrative law principles". It identified two particular factors of significance. The first was the explanation for the taxpayer's delay. The second was the culpability of the taxpayer in relation to any adjustment to the tax position of the company group which gave rise to an application to make an agreement out of time. 106 The "Explanations" part of Taxation Ruling TR 98/12 did not, in terms, form part of the substantive ruling which, in relation to extensions of time was confined to [18] to [20] inclusive. Paragraph 82 and the succeeding paragraphs were of an expository character. They included justifications for the approach taken. So the provision of a general guide for taxpayers and ATO officers when considering the exercise of the discretion was justified in [82] as "... desirable in the interests of consistent, efficient administration and equity among taxpayers in similar circumstances". The administrative law principle that the discretion cannot be confined by an inflexible rule of policy was also recognised in [82] which said: However, the decision-maker must exercise the discretion according to the merits of each case and should not fetter the discretion by inflexibly applying, or acting in blind obedience to a policy or rule. In so far as the ruling identified factors which could be considered by the Commissioner in the exercise of his discretion and recognised that no inflexible policy was being laid down, it did not offend against general principles of administrative law. 107 Statutory time limits affecting the exercise of legal rights, the imposition of liabilities or the exercise of powers are created for a variety of purposes. Limitation Acts which bar various categories of proceedings not commenced within a certain time after a cause of action has accrued may serve the following purposes: 1. To protect defendants from claims relating to incidents which occurred many years ago and about which they, and their witnesses, may have little recollection and no records; 2. To discourage plaintiffs from sleeping on their rights; it is in the public interest for disputes to be resolved as quickly as possible; and 3. To give an assurance to defendants that after a given period of time any possible claim against them arising out of a particular incident is at an end, that is, to operate as an "act of peace": see The Laws of Australia (Lawbook Co, subscription service) 5 at [5.10.120] and also Halsbury's Laws of Australia (Butterworths, subscription service) Vol 16, at [255.5]. Additional considerations affect the imposition of time limits in respect of proceedings brought in tribunals by way of merits review of administrative act decisions or in courts by way of judicial review of such decisions. Such limits are typically expressed in terms of weeks rather than years as is the case with Limitations Acts. They are imposed in part to ensure public administration is expeditious and that decisions once made take effect unless promptly challenged. 108 There are also innumerable examples of time limits imposed by statute upon subjects and decision-makers for taking steps necessary to secure rights or privileges or to exercise powers or impose liabilities. Self evidently they have the common purpose of securing expedition in statutory processes. They may also serve purposes related to the subject matter of the relevant statute. 109 Where the law imposes time limits, whether they bar or extinguish causes of action or rights to seek review or whether they require applications to administrative decision-makers or steps taken by such decision-makers to be done within a particular time, excessive rigidity in their application can lead to absurdity and injustice. There are many examples of statutory discretions to extend time to avoid such mischief.


case_text: In Ross Palmer Holdings v Federal Commissioner of Taxation (2003) 52 ATR 805, which was concerned with the exercise of the discretion under s 80G(6A) of the ITAA 1936, Spender J identified the purpose of the loss transfer provisions (at 816-817): ... to permit and facilitate the transfer of losses within a group of companies so that there is no difference in the tax treatment of a group of companies, each carrying on separate enterprises, as against a single company that carries on the same enterprises in separate divisions. The purpose of the provisions was also considered by the Full Court in Commissioner of Taxation v Asiamet (No 1) Resources Pty Ltd [2004] FCAFC 73 ; (2004) 137 FCR 146 in the judgment of Allsop J (Ryan and Finkelstein JJ agreeing). In rejecting, as overstated, the proposition that their statutory purpose was to allow for the transfer of losses within a group so as to equate the tax treatment of a group to that of a company with divisions, his Honour said (at [141]): That, with respect, overstates the purpose of s 80G. Section 80G is intended to be beneficial to the taxpayer: Harts Australia Ltd v Commissioner of Taxation (Cth) [2001] FCA 761 ; (2001) 109 FCR 405 at [18] . There is not, however, a complete equation with the single company. Conditions apply to the transfer of losses, one of which is that the agreement must be made before the date of lodgment of the return of income or the income company, or later as the Commissioner allows. The legislative history of s 80G, and in particular the content of the Asprey Committee Report and the Campbell Committee Report , reveals that a choice was made by Parliament not to adopt the group assessment procedure which might be seen as a complete equation of subsidiaries with divisions. His Honour accepted the statement of the policy of the section as set out in the Commissioner's Taxation Ruling, TR 98/12 saying (at [142]): There is, undoubtedly, a beneficial policy underlying s 80G as described at [87] of the ruling: broadly to align the treatment of company groups with divisional companies. That is not to deny, however, that a broad, otherwise expressly unconfined discretion, is reposed in the Commissioner in s 80G(6A)(b). Naturally, the discretion is to be confined by reference to the subject matter, scope and purposes of the provisions and the ITAA as a whole.


case_text: The Full Court in Zizza v Federal Commissioner of Taxation (1999) 42 ATR 371 said it would be an error to regard the summary in Hunter Valley Developments Pty Ltd 3 FCR 344 as complete or to treat each of the six principles it contained as necessarily applicable to any particular application for extension of time especially an application under different legislation. The Court agreed with the observations to that effect made by Hill J in Brown 42 ATR 118 (at 376).