case_title: Vintage Developments Pty Ltd v GHD Pty Ltd (No 2) [2006] FCA 1437

case_text: Developments Pty Ltd v GHD Pty Ltd (No 2) [2006] FCA 1437 involved a successful application to amend the capacity in which an application and statement of claim had been filed from "Errol Investments Pty Ltd" to "Errol Investments Pty Ltd as Trustee for the Shellharbour Unit Trust". Evidence was adduced of minutes of a meeting of the company resolving that the contract to purchase land would be executed by the company in its capacity as trustee of the Shellharbour Unit Trust as well as a contract for the sale of land that in one place, at least, referred to the purchaser as Errol Investments Pty Ltd as Trustee for the Shellharbour Property Trust. The judge was satisfied that the reference should have been to the Shellharbour Unit Trust. It is contended by the defendants that if Liquid was acting in its capacity as trustee of the Sharp Family Trust when it carried out the actions pleaded in paras [59]-[72] of the Substituted Statement of Claim, then it should have copies of the minutes of meetings, recording decisions to purchase properties, copies of the contracts for the sale and purchase of the properties referred to in the Substituted Statement of Claim, bank documents recording the application for facilities to be provided to Liquid, in its capacity as trustee of the Sharp Family Trust, relating to the property acquisitions and other tax and trust records. No such evidence has been put before the Court in this case. I do not consider this to be fatal to the application. Mr Sharp has deposed, in effect, that Liquid was incorporated as a sole purpose vehicle and never acted other than in its capacity as trustee of the Sharp Family Trust. There was no cross-examination upon his affidavit. He was at all material times, the sole director and shareholder of Liquid. I am satisfied, for present purposes that the position is as deposed to by him. There was certainly nothing inherently improbable about his assertions nor are they inconsistent with any document which is before the Court. Liquid is deregistered. Mr Sharp was appointed trustee in its place nearly seven weeks prior to its deregistration. Liquid is not practically the "party" referred to in O 13 r 2(6). I infer that it was by some oversight that the proceedings were not brought by Liquid in its capacity as trustee. Had that occurred, then Mr Sharp would simply be seeking to be substituted for Liquid because he had been appointed as the new trustee on 8 September 2005. I regard Mr Sharp as, in effect, being the "party" for the purposes of O 13 r 2(6). There will be an order that Mr Sharp, as trustee for the Sharp Family Trust, be substituted as the second plaintiff. I will hear the parties on the question of security for costs and otherwise invite the parties to bring in a draft minute of proposed orders to give effect to these reasons. I certify that the preceding fifty (50) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gilmour. Associate: Dated: 19 June 2008 Counsel for the Plaintiff: Mr A Rumsley Solicitor for the Plaintiff: Alan Rumsley-Commercial Dispute Lawyer Counsel for the Defendant: Ms K F Banks-Smith Solicitor for the Defendant: Freehills Date of Hearing: 7 February 2008 Date of Judgment: 19 June 2008 AustLII: Copyright Policy | Disclaimers | Privacy Policy | Feedback URL: http://www.austlii.edu.au/au/cases/cth/FCA/2008/927.html


case_outcome: cited

case_text: On behalf of the Minister my attention was drawn to a number of prior authorities which bear upon the construction of the word "information", as it appears in s 424A, and on the construction generally of that section. In SZBYR v Minister for Immigration and Citizenship [2007] HCA 26 ; (2007) 81 ALJR 1190 at 1196, para 18, the following passage appears in the joint judgment of Gleeson CJ and Gummow, Callinan, Heydon and Crennan JJ: Third and conversely, if the reason why the Tribunal affirmed the decision under review was the Tribunal's disbelief of the Appellants' evidence arising from inconsistencies therein, it is difficult to see how such disbelief could be characterised as constituting "information" within the meaning of paragraph (a) of s 424A(1). Again, if the Tribunal affirmed the decision because even the best view of the Appellants' evidence failed to disclose a Convention nexus, it is hard to see how such a failure can constitute "information." Finn and Stone JJ correctly observed in VAF v Minister for Immigration and Multicultural and Indigenous Affairs [2004] FCAFC 123 ; (2004) 206 ALR 471 at 477, para 24 that the word "information": "does not encompass the Tribunal's subjective appraisals, thought processes or determinations; nor does it extend to identified gaps, defects or lack of detail or specificity in evidence or to conclusions arrived at by the Tribunal in weighing up the evidence by reference to those gaps, etc." If the contrary were true, s 424A would in effect oblige the Tribunal to give advance written notice not merely of its reasons, but of each step in its prospective reasoning process. However broadly "information" be defined, its meaning in this context is related to the existence of evidentiary material or documentation, not the existence of doubts, inconsistencies or the absence of evidence. The Appellants were thus correct to concede that the relevant "information" was not to be found in circumstances or disbelief, as opposed to the text of the statutory declaration itself.


case_title: VAF v Minister for Immigration and Multicultural and Indigenous Affairs [2004] FCAFC 123 ; (2004) 206 ALR 471


case_text: Earlier in time, in their joint judgment in Minister for Immigration v Multicultural and Indigenous Affairs v NAMW [2004] FCAFC 264 ; (2004) 140 FCR 572 at pages 595-596, para 123, Merkel and Hely JJ observed: Accordingly, the remaining issue is whether the relevant country information was information that fell within the exclusion in s 424A(3)(a) because it "is not specifically about the applicant or another person and is just about a class of persons of which the applicant or other person is a member". The information was not specifically about the first respondent or another person. It was, however, about a class of persons: namely, the persons in Bangladesh who are likely to be targeted for violence by their political enemies. Significantly, the RRT found that the first respondent was not a member of that class. Without reference to authority, and applying a literal meaning to the words used in s 424A(3)(a), the relevant country information can be characterised as information that is not specifically about the appellant or another person and is not about a class of persons of which the applicant or the other person is a member. On that basis the information would not be excluded under s 424A(3)(a) and would therefore be required to be given under s 424A(1). 9 Later in their joint judgment at pages 599-600, para 138, their Honours further observed: As is demonstrated by the differences of opinion within the Court to which we have referred, s 424A is not incapable of a construction that gives effect to the intention of the legislature. Accordingly, albeit for reasons that differ from those expressed in VHAP and by Beaumont J, we are also of the view that the reference in s 424A(3)(a) to the class of persons is not another criterion to be met but, as is the case with s 57(1)(b), is designed to underline the specificity required by precluding any argument that reference to a class could be taken as a reference to all individuals (including for example, an applicant) falling within it: see VHAP at [14]. It follows that the Magistrate was in error in failing to find that the relevant country information fell within the exclusion in s 424A(3)(a), and in finding that the RRT failed to comply with s 424A(1).


case_text: Observations made by Allsop J, as his Honour then was, in SZEEU v Minister for Immigration and Multicultural and Indigenous Affairs [2006] FCAFC 2 ; (2006) 150 FCR 214 at 262, para 216 also serve as a reminder of the need, in relation to the application of s 424A in particular cases, to read the reasons of the Tribunal as a whole, in order to understand whether particular "information" truly provided the "reason" for the Tribunal's decision. 11 When one reads the reasons for decision of the Refugee Review Tribunal one sees the following paragraphs which in the circumstances of the present case are material. At appeal book page 90: As put to the applicant in the course of the hearing, generally speaking, members of the Hindu community in India are not ill-treated. In consideration of the evidence as a whole, the Tribunal does not accept that the applicant has a political, ethnic/racial or a religious profile that means he has suffered any persecution as contemplated by the Convention or that there's a real chance of this occurring to the applicant in the reasonably foreseeable future. The Tribunal appreciates that there are religious based tensions in India. However, on balance, independent country information indicates that whilst there are problems in some areas, the Indian Constitution provides for freedom of religion and that the government generally respected this right in practice etcetera. 12 Further, at appeal book page 91, the Tribunal stated: In essence, the Tribunal is not satisfied that there are Convention reasons as to why the applicant should not return to India. In consideration of the evidence as a whole, the Tribunal does not accept that the applicant has a political, ethnic/racial or a religious profile that means that there is a real chance of persecution as contemplated by the Convention occurring to the applicant in the reasonably foreseeable future. Notably and by his own admission, the applicant wants to stay in Australia to work, raising serious doubts about his claims of persecution. In sum, the Tribunal is not satisfied that the applicant has a well-founded fear of persecution for a Convention reason. 13 The Tribunal's reasons are very detailed indeed. Reading them as a whole, one sees that influences on the conclusions reached in the passages which I have quoted were an assessment by the Tribunal of the male Appellant's credibility, having regard to evidence which he gave before the Tribunal and independent country information. 14 The authorities to which I have made reference make it plain that the country information does not constitute "information" for the purposes of s 424A and further, that the Tribunal's views in relation to credibility do not constitute "information". Those views do not seem to have been informed by reference to anything provided in the initial visa application. Thus, the question as to whether the exclusion found in s 424A(3) as it stood prior to the insertion of s 424A(3)(ba) is not raised for consideration.


case_outcome: considered

case_title: Calder v Federal Commissioner of Taxation (2005) 59 ATR 655


case_outcome: applied

case_text: Section 177D(b) requires the decision-maker to consider the eight matters referred to in the paragraph, and those matters alone, and to decide on the balance of probabilities if a certain conclusion would be drawn: Peabody v Commissioner of Taxation (1993) 40 FCR 531 (' Peabody ') at 541 per Hill J (Ryan and Cooper JJ concurring); Calder v Federal Commissioner of Taxation (2005) 61 ATR 267 (' Calder ') at 290 [91]. The conclusion to be drawn is, in this case, as to the relevant taxpayer's purpose and by reason of s 177A(5) that means his or her dominant purpose. A relevant taxpayer may have more than one purpose and one of his or her purposes may be to obtain commercial benefits. However, if, having regard to the matters in s 177D(b) , his or her dominant purpose is to obtain a tax benefit in connection with the scheme, then Part IVA applies even if one of the relevant taxpayer's other purposes is to obtain commercial benefits: Commissioner of Taxation v Spotless Services Ltd [1996] HCA 34 ; (1996) 186 CLR 404 (' Spotless ') at 415-416; Commissioner of Taxation v Hart [2004] HCA 26 ; (2004) 217 CLR 216 (' Hart ') at 227 [16] per Gleeson CJ and McHugh J; Commissioner of Taxation v Sleight [2004] FCAFC 94 ; (2004) 136 FCR 211 (' Sleight ') at 229-230 [67] and 238-239 [113] per Hill J (with whom Hely J agreed); Calder at 291 [92]) . The question is to be determined objectively in the sense that the question is not as to the relevant taxpayer's subjective intention and purpose: Spotless at 421-422, 424; Hart at 233 [37], 243 [65] per Gummow and Hayne JJ; Peabody at 542; Calder at 291-292 [96]. What these propositions mean in this case is that the applicant's subjective purpose in entering into the scheme, even if a commercial one, is not of itself relevant. Furthermore, a decision-maker may conclude, after having regard to the matters in s 177D(b) , that the applicant had a commercial purpose in entering into the scheme but that will not assist him if it is otherwise concluded that his dominant purpose in entering into the scheme was to obtain a tax benefit in connection with the scheme.


case_text: In Commissioner of Taxation v Consolidated Press Holdings Ltd [2001] HCA 32 ; (2001) 207 CLR 235 the High Court said (at 264 [95]): 'The finding made by Hill J, set out above, was criticised both in the Full Court and in this Court on the ground that, as the case was particularised by the Commissioner, the persons who entered into or carried out the scheme were CPIL(UK), MLG and ACP. They were the persons referred to in s 177D; not some unidentified advisors. There is no point in making a finding about what would be concluded concerning the purpose of an advisor unless that purpose is then attributed to a relevant person. It is reasonably clear that, albeit in a slightly elliptical fashion, Hill J was doing that. He was justified in doing so. As was mentioned above, it is to be expected that those who participate in a complex, international, commercial transaction will be concerned about its tax implications, and will seek expert advice. Attributing the purpose of a professional advisor to one or more of the corporate parties in the present case is both possible and appropriate. In some cases, the actual parties to a scheme subjectively may not have any purpose, independent of that of a professional advisor, in relation to the scheme or part of the scheme, but that does not defeat the operation of s 177D. If, in the present case, there had been evidence which showed that no director or employee of any member of the Group had ever heard of s 79D, that would not conclude the matter in favour of the taxpayer. One of the reasons for making s 177D turn upon the objective matters listed in the section, it may be inferred, was to avoid the consequence that the operation of Pt IVA depends upon the fiscal awareness of a taxpayer.' 88 The applicant referred to the decision of Stone J in Cooke v Federal Commissioner of Taxation (2002) 51 ATR 223 and submitted that arrangements of which the taxpayer is unaware are not part of the scheme for the purposes of s 177D(b) and therefore should not be considered when addressing the matters in s 177D(b). However, on appeal in Commissioner of Taxation v Cooke (2004) 55 ATR 183 the Full Court of this Court did not agree. The Court said (at 216 [88]): 'The primary judge found that the evidence of the respondents was to the effect that at the time of making their respective investments, they knew nothing about the transactions identified in the emphasized passage in the preceding paragraph. Upon that footing, her Honour accepted the submission of the respondents that those transactions could not be part of any scheme, and purported to apply the dictum of Blanshard J of the New Zealand Court of Appeal in Commissioner of Inland Revenue v BNZ Investments Limited (2001) 20 NZTC 17 at [103] to the effect that a taxpayer's ignorance of the arrangements the subject of an income tax avoidance scheme renders the New Zealand anti-avoidance legislation unavailable to the New Zealand revenue authority. However as was pointed out in Howland-Rose at [134], Part IVA of the Tax Act is distinguishable from the New Zealand legislation in that regard. Thus in Federal Commissioner of Taxation v Consolidated Press Holdings Ltd [2001] HCA 32 ; (2001) 207 CLR 235, in the joint judgment of Gleeson CJ, Gaudron, Gummow, Hayne and Callinan JJ at [95], it was pointed out that "[o]ne of the reasons for making s 177D turn upon the objective matters listed in the section, it may be inferred, was to avoid the consequence that the operation of Part IVA depends upon the fiscal awareness of a taxpayer".'


case_text: The applicant referred to the decision of Stone J in Cooke v Federal Commissioner of Taxation (2002) 51 ATR 223 and submitted that arrangements of which the taxpayer is unaware are not part of the scheme for the purposes of s 177D(b) and therefore should not be considered when addressing the matters in s 177D(b). However, on appeal in Commissioner of Taxation v Cooke (2004) 55 ATR 183 the Full Court of this Court did not agree. The Court said (at 216 [88]): 'The primary judge found that the evidence of the respondents was to the effect that at the time of making their respective investments, they knew nothing about the transactions identified in the emphasized passage in the preceding paragraph. Upon that footing, her Honour accepted the submission of the respondents that those transactions could not be part of any scheme, and purported to apply the dictum of Blanshard J of the New Zealand Court of Appeal in Commissioner of Inland Revenue v BNZ Investments Limited (2001) 20 NZTC 17 at [103] to the effect that a taxpayer's ignorance of the arrangements the subject of an income tax avoidance scheme renders the New Zealand anti-avoidance legislation unavailable to the New Zealand revenue authority. However as was pointed out in Howland-Rose at [134], Part IVA of the Tax Act is distinguishable from the New Zealand legislation in that regard. Thus in Federal Commissioner of Taxation v Consolidated Press Holdings Ltd [2001] HCA 32 ; (2001) 207 CLR 235, in the joint judgment of Gleeson CJ, Gaudron, Gummow, Hayne and Callinan JJ at [95], it was pointed out that "[o]ne of the reasons for making s 177D turn upon the objective matters listed in the section, it may be inferred, was to avoid the consequence that the operation of Part IVA depends upon the fiscal awareness of a taxpayer".'


case_text: Section 177D(b) requires the decision-maker to consider the eight matters referred to in the paragraph, and those matters alone, and to decide on the balance of probabilities if a certain conclusion would be drawn: Peabody v Commissioner of Taxation (1993) 40 FCR 531 (' Peabody ') at 541 per Hill J (Ryan and Cooper JJ concurring); Calder v Federal Commissioner of Taxation (2005) 61 ATR 267 (' Calder ') at 290 [91]. The conclusion to be drawn is, in this case, as to the relevant taxpayer's purpose and by reason of s 177A(5) that means his or her dominant purpose. A relevant taxpayer may have more than one purpose and one of his or her purposes may be to obtain commercial benefits. However, if, having regard to the matters in s 177D(b) , his or her dominant purpose is to obtain a tax benefit in connection with the scheme, then Part IVA applies even if one of the relevant taxpayer's other purposes is to obtain commercial benefits: Commissioner of Taxation v Spotless Services Ltd [1996] HCA 34 ; (1996) 186 CLR 404 (' Spotless ') at 415-416; Commissioner of Taxation v Hart [2004] HCA 26 ; (2004) 217 CLR 216 (' Hart ') at 227 [16] per Gleeson CJ and McHugh J; Commissioner of Taxation v Sleight [2004] FCAFC 94 ; (2004) 136 FCR 211 (' Sleight ') at 229-230 [67] and 238-239 [113] per Hill J (with whom Hely J agreed); Calder at 291 [92]) . The question is to be determined objectively in the sense that the question is not as to the relevant taxpayer's subjective intention and purpose: Spotless at 421-422, 424; Hart at 233 [37], 243 [65] per Gummow and Hayne JJ; Peabody at 542; Calder at 291-292 [96]. What these propositions mean in this case is that the applicant's subjective purpose in entering into the scheme, even if a commercial one, is not of itself relevant. Furthermore, a decision-maker may conclude, after having regard to the matters in s 177D(b) , that the applicant had a commercial purpose in entering into the scheme but that will not assist him if it is otherwise concluded that his dominant purpose in entering into the scheme was to obtain a tax benefit in connection with the scheme. 99 In this context, the applicant referred to the decision of the High Court in Hart in which Gummow and Hayne JJ said (at 240 [53]): 'The bare fact that a taxpayer pays less tax, if one form of transaction rather than another is made, does not demonstrate that Pt IVA applies. Simply to show that a taxpayer has obtained a tax benefit does not show that Pt IVA applies. With these considerations in mind, it is sometimes said that it is necessary to read Pt IVA in a way that will not bring "ordinary" transactions to tax. It is obvious that the content of such a proposition turns entirely upon what is meant by "ordinary".' 100 The applicant's criticism of the Tribunal member's reasoning is misconceived. The Tribunal member was addressing one of the eight matters in s 177D(b) and the conclusion he drew that, but for Part IVA, the applicant would enjoy tax benefits by way of the income tax deductibility of the expenses was undoubtedly correct. He said that that supported the conclusion that the applicant's prevailing purpose was to obtain tax benefits in connection with the scheme, but he did not say that it was decisive. There is no error in that approach. 101 The Tribunal member found that the project was commercially viable, had been successful and that there was no reason to doubt that it would be successful to its conclusion. The income received by the applicant from the project to the date of the hearing before the Tribunal had exceeded $31,000 and was within 2.5 per cent of prospectus forecasts after seven years. The Tribunal member found that if the project continued to perform according to prospectus forecasts, the applicant will make a substantial profit from his business.


case_title: Commissioner of Taxation v Spotless Services Ltd [1996] HCA 34 ; (1996) 186 CLR 404


case_text: Section 177D(b) requires the decision-maker to consider the eight matters referred to in the paragraph, and those matters alone, and to decide on the balance of probabilities if a certain conclusion would be drawn: Peabody v Commissioner of Taxation (1993) 40 FCR 531 (' Peabody ') at 541 per Hill J (Ryan and Cooper JJ concurring); Calder v Federal Commissioner of Taxation (2005) 61 ATR 267 (' Calder ') at 290 [91]. The conclusion to be drawn is, in this case, as to the relevant taxpayer's purpose and by reason of s 177A(5) that means his or her dominant purpose. A relevant taxpayer may have more than one purpose and one of his or her purposes may be to obtain commercial benefits. However, if, having regard to the matters in s 177D(b) , his or her dominant purpose is to obtain a tax benefit in connection with the scheme, then Part IVA applies even if one of the relevant taxpayer's other purposes is to obtain commercial benefits: Commissioner of Taxation v Spotless Services Ltd [1996] HCA 34 ; (1996) 186 CLR 404 (' Spotless ') at 415-416; Commissioner of Taxation v Hart [2004] HCA 26 ; (2004) 217 CLR 216 (' Hart ') at 227 [16] per Gleeson CJ and McHugh J; Commissioner of Taxation v Sleight [2004] FCAFC 94 ; (2004) 136 FCR 211 (' Sleight ') at 229-230 [67] and 238-239 [113] per Hill J (with whom Hely J agreed); Calder at 291 [92]) . The question is to be determined objectively in the sense that the question is not as to the relevant taxpayer's subjective intention and purpose: Spotless at 421-422, 424; Hart at 233 [37], 243 [65] per Gummow and Hayne JJ; Peabody at 542; Calder at 291-292 [96]. What these propositions mean in this case is that the applicant's subjective purpose in entering into the scheme, even if a commercial one, is not of itself relevant. Furthermore, a decision-maker may conclude, after having regard to the matters in s 177D(b) , that the applicant had a commercial purpose in entering into the scheme but that will not assist him if it is otherwise concluded that his dominant purpose in entering into the scheme was to obtain a tax benefit in connection with the scheme. 74 The authorities establish that in relation to the matters in s 177D(b) in any particular case one matter may be decisive and in another case it may only be after a careful weighing of all matters that a conclusion can be drawn. Furthermore, some factors may be neutral, others may point towards a commercial purpose but the conclusion drawn from a consideration of all matters may support a conclusion of a dominant purpose to obtain tax benefits in connection with the scheme ( Sleight at 229-230 [67]; Calder at 290 [91]). 75 In [58] above I have identified the Tribunal member's conclusion with respect to this matter and the fact that he said the six matters he identified did not 'diminish' the finding that the applicant's prevailing purpose was to obtain tax benefits in connection with the scheme. The applicant submits the Tribunal member should have found that the six matters negated a finding of a prevailing purpose of obtaining tax benefits, or at the least diminished it. 76 It is important to appreciate the reasoning of the Tribunal member. He identified features relevant to the manner in which the scheme was entered into or carried out. He decided, after considering those features, that a conclusion of a dominant purpose of obtaining tax benefits should be drawn. With respect, the Tribunal member's use of the word 'diminished' is not entirely felicitous, but I think, reading his reasons as a whole, it is clear what he meant. I do not think he was saying the six matters should not be considered or should not be weighed in the balance. In my opinion, all the Tribunal member was saying was that weighing them in the balance they did not dissuade him from reaching the conclusion that, in relation to the manner in which the scheme was entered into or carried out, the applicant's prevailing purpose was to obtain tax benefits in connection with the scheme. 90 The Tribunal member was entitled to have regard to the round-robin arrangements in concluding that the applicant's prevailing purpose was to obtain tax benefits. The weight he placed on the matter is unclear but ultimately that was a matter for him, and the applicant's case is not advanced by referring to another case where a Judge said that he was not inclined to place a great deal of weight on the round-robin arrangements Sleight at 232 [77] per Hill J). 91 The Tribunal member did not err in law in his approach to the manner in which the scheme was entered into or carried out, and the conclusions he reached in relation to that matter were reasonably open to him. 92 The Tribunal member said that the form of the scheme was one whereby the applicant conducted a business of growing wine grapes and using a limited recourse loan, whereas the substance of the scheme was a passive investment which, but for the tax benefits, would ordinarily have been cast in a different form. He said that that difference pointed to a prevailing purpose on the part of the applicant to obtain tax benefits. 95 The approach taken by the Tribunal member in relation to this matter was consistent with the approach taken in decisions of this Court. In Sleight , Hill J said (at 233 [81]- [82]): 'There is a difference between the form and the substance of the present scheme. In form there is an option whether to farm alone or to employ the management company. There is a management agreement and financing and interest payments. The form, involving prepayment of management fee and interest is, it may be concluded readily, designed to increase the taxation deductions available to an investor. The substance is, however, quite different. As senior counsel for the Commissioner put it, in substance the investor is a mere passive investor in what, once the tax features are removed, is a managed fund where no deduction would be available, or perhaps an alternative characterisation of the substance of the scheme is an investment in shares in the Land Company which at the expiration of 15 years is to own the tea tree plantation. With respect to the learned primary judge it is not correct to say that form and substance are the same. Rather the particular shape the investment took was clearly fashioned in a way that would maximise the tax deductions. They were geared up by the loan agreement with up front interest payments. But for the tax deductions the form the investment might be expected to take would clearly relate more to the substance of what happened. Rather than a loan with prepaid interest where the loan was to be repaid out of the investor's profit share without recourse (achieved through the indemnity agreement) the substance is that the investor was to receive only a lesser share of profit over the term of the loan agreement. The loan allowed, also, the prepayment of the management fee and the deduction which emanated from that.' 96 I refer also to the Full Court's decision in Calder (at 295-296 [116]-[118]). 97 I did not understand the applicant to challenge the Tribunal member's conclusions in relation to this matter. 102 The Tribunal member said that the matter must be considered as at the date the scheme was entered into and he referred to the reasons of Carr J in Sleight at 255-256 [223]-[224]. The applicant did not take issue with that approach. 103 The applicant's first submission in relation to the Tribunal member's reasons in relation to this matter was that he had made an error in concluding that, according to the projections, the applicant would begin to derive after tax returns in 2007, that is, after 10 years. The applicant submitted that this was wrong and that the projections indicated after tax-returns after six years. As I understand the projections, the applicant is right in the sense that after about six years there are after-tax returns before repayments of the loan are taken into account. If repayments of the loan are taken into account there are only after-tax returns after 10 years. 104 I have no doubt that the Tribunal member did not misunderstand the effect of the projections. Earlier in his reasons he summarised the position accurately as follows: 'Moreover, until 2007, tax savings were, in substance, the only source of returns to the participant as follows: (a) From 1997-2001, the participant's returns were the result of tax savings which more than covered the cash payments required of him pursuant to the loan; (b) From 2003-2006, the project was expected to generate revenue of its own. However, in those years, the structure of the loan resulted in neutral cashflows to the participant who, after meeting his loan obligations was to be paid enough only to meet anticipated tax obligations. (c) Only in the latter years of the project, 2007-2012, when the loan was paid off, was the project expected to be cashflow positive to the participant by reason of revenue received from the proceeds of the project itself.'


case_title: Cooke v Federal Commissioner of Taxation (2002) 51 ATR 223


case_text: There is no doubt that, as the Tribunal member found, the round-robin arrangements were legally effective: Equuscorp Pty Ltd v Glengallan Investments Pty Ltd [2004] HCA 55 ; (2004) 218 CLR 471 at 486-487 [46] - [47] . The applicant gave evidence that he was not aware of the round-robin arrangements, but the Tribunal member did not make a finding as to whether the applicant was or was not aware of the arrangements. He referred to the applicant's evidence without disapproval and it is appropriate for me to proceed on the basis that the applicant was not aware of the arrangements.


case_title: Peabody v Commissioner of Taxation (1993) 40 FCR 531


case_text: Another instance of an appropriate case is where one party has unreasonably refused an offer to compromise. The principle is derived from Calderbank v Calderbank [1975] 3 All ER 333. A party may set up a situation in which an award of indemnity costs is possible by making a reasonable offer of compromise in what is described as a "Calderbank letter", containing the terms of the offer and signifying that the letter will be relied upon to found an application for costs on an indemnity basis in the event that it turns out that the offer ought to have been accepted. To some extent, O 23 of the Federal Court Rules now codifies the circumstances in which refusal of an offer of compromise will found an application for indemnity costs. The area of law has become beset by technicality, much of which appears to me to be unnecessary. Arguments were raised in the present case about whether letters written by one party or another did or did not fit within what the authorities would regard as a Calderbank letter. In particular, it was said that there must be a true offer to compromise, involving the giving of something, and not merely a demand that the other party capitulate. I am by no means certain that this is a universal rule. Whatever the terms of any letter, or other means of conveying an offer of compromise, the question at heart must remain whether the unsuccessful party to the case pursued it unreasonably, having regard to the circumstances at any particular time. As the Full Court said in Amadio Pty Ltd v Henderson (1998) 81 FCR 149 at 259: It was argued that conditional offers should not have been treated by his Honour as Calderbank offers for the purpose of ordering indemnity costs. It is to be emphasised that the costs discretion is broad and is to be exercised in circumstances that will vary considerably from case to case. Whilst the criteria used in analogous circumstances will be of assistance it is simply wrong...to use such criteria as rules or tests governing the exercise of the discretion. Thus, an "imprudent" refusal or a "plainly unreasonable" refusal to accept an offer of settlement might, having regard to all the circumstances of the case, warrant the making of an order for indemnity costs if it is "just" to do so...However, such circumstances merely offer examples of where indemnity costs are ordered. Likewise, in some situations a conditional offer may be less likely to attract the Court's discretion to order indemnity costs than others. Much will depend upon the reasonableness of the offer and of [ sic ] the reasonableness of the conduct of the other party in refusing it having regard to all the circumstances of the case.


case_text: These reasons for judgment concern issues of costs. On 29 May 2007, I made orders dismissing the application in this proceeding, reserving questions of costs and giving directions about the filing of written submissions and the hearing of argument in relation to issues of costs. At that time, I also published reasons for judgment, very substantial in length, dealing with the principal issues in the proceeding. See Australian Competition & Consumer Commission v Leahy Petroleum Pty Ltd [2007] FCA 794. It is convenient to refer to that judgment in these reasons for judgment as Leahy Petroleum . 2 The proceeding in which that judgment was given involved allegations by the applicant, the Australian Competition and Consumer Commission ("the ACCC"), of contraventions of s 45(2) of the Trade Practices Act 1974 (Cth) ("the Trade Practices Act ") by a number of corporations engaged in retail selling of petrol in and around the City of Geelong. The corporations were alleged to have entered into, and to have given effect to, a series of arrangements or understandings that contravened s 45A of the Trade Practices Act , because they contained provisions for the fixing, controlling or maintaining of prices of petrol. In addition, a number of natural persons were alleged to have been involved in the contraventions. The corporate respondents are identified in Leahy Petroleum at [57]. Their respective relationships with the natural person respondents are set out in Leahy Petroleum at [64]. For ease of reference, in these reasons for judgment, I propose to refer to the corporate respondents by their abbreviated names, in the same way as I referred to them in Leahy Petroleum . Similarly, I propose to refer to the natural person respondents by their names. The orders I make will reflect the way that the ACCC and the various respondents are described in the title to the proceeding. 3 The power of the Court to award costs is conferred specifically by s 43(1) of the Federal Court of Australia Act 1976 (Cth) ("the Federal Court Act "). The effect of s 43(2) of the Federal Court Act is that, in a case such as the present, the award of costs is in the discretion of the Court. Courts have developed rules or principles to guide the exercise of the discretion in particular cases. Foremost among these is the rule or principle that costs should follow the event, ie. a party successful in litigation should be entitled to recover costs from an unsuccessful party. Similarly, there is a rule or principle that, when costs are awarded, they are normally awarded on a party-party basis. Costs calculated on a party-party basis do not provide anything like full compensation to the successful party for the expenditure incurred in prosecuting or defending the case successfully. Courts have therefore developed rules or principles to guide the exercise of the discretion in exceptional cases, so that costs calculated on a more compensatory basis, right up to a full indemnity, can be awarded if the circumstances justify such an order. Rules and principles are very helpful in determining whether an order for the payment of costs should be made at all, or what the basis of the calculation of costs ordered should be. They are not binding, however, and it must be recognised always that the Court exercises discretionary powers in relation to awarding costs, including the extent to which they should compensate the successful party for actual expenditure. 4 The ACCC and several of the respondents have submitted consent orders in relation to costs. There is no reason not to make those orders. In relation to other respondents, the ACCC accepts in general that it should be required to pay the costs of the successful respondents who contested the proceeding, in the application of the rule or principle that costs follow the event. There are some respondents who entered into agreements with the ACCC during the course of the proceeding, prior to its trial, which agreements obliged those respondents to make full admissions as to contraventions of s 45(2) of the Trade Practices Act , to consent to orders being made against them, including orders for pecuniary penalties, declarations and injunctions, in some cases to give evidence on behalf of the ACCC at the trial, and to submit to orders that they pay costs to the ACCC. For reasons that I gave in Leahy Petroleum , at [962], I declined to make findings in accordance with the admissions made pursuant to those agreements. The ACCC has recognised that, in view of this, and of its lack of success despite the evidence given by some respondents pursuant to those agreements, it ought not to attempt to enforce the agreements so far as they obliged the parties to them to submit to orders for costs in favour of the ACCC. Some of those respondents have contended that they should be entitled to orders for costs against the ACCC, on the basis that such costs should follow the event. The ACCC has contended that there ought to be no order as to costs as between it and the successful respondents who were parties to such agreements. It is therefore necessary to resolve that issue. 5 In addition, some of the respondents who contested the proceeding have asked the Court to order that the ACCC pay their costs on an indemnity basis, or on some other basis that would compensate them more fully than party-party costs, for their expenditure on legal costs, either in respect of the entire proceeding, or in respect of part of it. Various arguments have been advanced in support of these applications, and various times during the trial have been advanced as appropriate points from which indemnity costs should be ordered in favour of different respondents, if they are not to receive indemnity costs in respect of the entire proceeding. It is also necessary to resolve these issues. 6 On 21 June 2007, the ACCC and Liberty filed a consent order to the effect that there be no order as to costs as between them. Similarly, on 21 June 2007, the ACCC and Alan Shuvaly filed a consent order to the effect that there should be no order as to costs as between those parties. 10 Ian Carmichael, Michael Warner and Eino Heikkila each entered into an agreement with the ACCC as to the outcome of the proceeding. I have referred to these agreements in Leahy Petroleum at [133]-[136]. Mr Carmichael and Mr Warner each agreed to consent to orders in the terms of, or in similar terms to, those sought against them in the application in its original form. These included an order that the respondents pay the ACCC's costs of and incidental to the proceeding. Mr Heikkila's agreement was in a different form. In it, the ACCC agreed to accept costs of $5,000 from Mr Heikkila in respect of the proceeding. It should also be noted that Alan Shuvaly entered into an agreement with the ACCC similar to that entered into by Mr Carmichael and Mr Warner, but Mr Shuvaly has sought an order by consent involving no order as to costs as between himself and the ACCC. 11 Much of the argument about whether the ACCC should be ordered to pay the costs of Mr Carmichael, Mr Warner and Mr Heikkila, or whether there should be no order as to costs between the ACCC and each of those respondents, was concerned with issues of contract law. Attempting to approach the issue in this way is unproductive. There can be little doubt that there was implicit in each agreement to pay the ACCC's costs a term that each of the respondents so agreeing would pay his own costs of the proceeding. This is not to say a great deal, however. The parties to each of the agreements acted on the assumption that the case would have a particular outcome. The agreement by each of the relevant respondents to pay his own costs of the proceeding rested on that assumption. Once that assumption is falsified, it is impossible to say that the parties would have been of a unified view as to what should happen in relation to the costs of those respondents. More than likely, they would have disagreed, as they now do. In those circumstances, it is impossible to find that each of the agreements contained an implied term that either party to it would pay the other's costs, or that costs would lie where they fell. 12 Nor does the application of other principles of contract law assist in the resolution of the question whether orders for costs should be made in favour of the respondents who entered into costs agreements. The power of the Court to award, or to refrain from awarding, costs is not dependent upon what the parties concerned have agreed. It is therefore pointless to seek to determine whether the agreements have failed for want of a subject-matter, and whether they could or should be set aside, as was suggested by counsel for Mr Heikkila. The same applies to suggestions that the Court should now attempt to determine whether the relevant respondents entered into agreements under duress (given that they lacked the resources necessary to defend the proceeding properly) or in consequence of a misrepresentation by the ACCC (to the effect that it had the evidence necessary to prove the case against them). 20 With the benefit of hindsight, there is much in the applicant's preparation and conduct of the case about which it is possible to be critical. Plainly, the ACCC's investigators, and its legal representatives, were too carried away by the supposed correlation in the data the ACCC had collected between telephone calls and petrol price increases. Insufficient attention was given to the question whether such a correlation really existed, particularly in the light of the occasions recorded in the data summary, known as Annexure B, on which there were telephone calls without price increases, and on which there were price increases without telephone calls. I refer particularly to the analysis in Leahy Petroleum at [844]-[869], an analysis of the kind that should have been done prior to the commencement of the case, or at the very least prior to the trial, and should not have been left to the Court. It is most unfortunate that the leader of the ACCC's investigating team remained unaware of the ACCC's own report, entitled Reducing Fuel Price Variability (to which I have referred in Leahy Petroleum at [91]-[99] and [118]) until she was being cross-examined during the trial. If the investigators had taken into account the fact that the sawtooth pattern of movements in the retail price of petrol was common in Australia, and the various possible reasons advanced by the ACCC for that pattern, two things might have followed. They might not have made the assumption, which the principal investigator was reluctant to abandon in the witness box, that the only likely cause for such a pattern was collusion between petrol retailers. The investigators might also have been prepared to consider the possibility of a relationship between prices in the Geelong petrol market and those in the Melbourne petrol market. They might have taken a less Geelong-centric view than they appear to have taken. See generally Leahy Petroleum at [90]-[118]. 21 It must be remembered that the ACCC prepared and pleaded its case without the knowledge, or even the expectation, that it would have available to it the evidence of Ian Carmichael, Michael Warner, Alan Shuvaly and Eino Heikkila. These four respondents only agreed to give evidence after the proceeding had been instituted. In its preparation for the trial, the ACCC gave far too little attention to the inconsistencies between the evidence that those witnesses were to give, and did in fact give, and the data in Annexure B. It only emerged in the course of the oral evidence that those witnesses had not been given an opportunity to examine the data before they went into the witness box, thereby exposing them to cross-examination as to the inconsistencies. When I drew attention to this, pointing out that it was bound to lead to additional cross-examination, counsel for the ACCC resorted to putting a handful of selected occasions to some of the subsequent witnesses, and inviting them to speculate as to how the data on those occasions might fit with their general recollections. This was a wholly inadequate attempt to deal with the relationship between the circumstantial evidence and the oral evidence. It appears to me to stem from a belief that the supposed correlation between telephone calls and petrol price increases was strong enough to make the case for the ACCC, irrespective of what the other evidence might have been. 22 Two other inadequacies of the ACCC's case appear to have resulted from the same belief. One was the failure to lead evidence of the evolutionary origins of the alleged arrangements or understandings, particularly in circumstances in which there did not appear to have been sufficient time during which, or any pattern of events from which, the arrangements or understandings might possibly have evolved. See Leahy Petroleum at [150]-[177]. The ACCC's investigators and representatives appear to have taken the view that the data in Annexure B would justify the Court in making findings that effect was given to arrangements or understandings, and would thereby justify findings that those arrangements or understandings existed, irrespective of the effect of the oral evidence. The other inadequacy was the failure of the ACCC's legal representatives to make any serious attempt to grapple with an essential element of an arrangement or understanding, labelled for convenience as "commitment". This inadequacy is dealt with in Leahy Petroleum at [940]-[949]. The ACCC's case on this aspect required acceptance of the proposition that changes in the prices of petrol resulted from the implementation of arrangements or understandings, and that therefore such arrangements or understandings, including the requisite element of commitment, must exist. 23 It is clear that closer attention to the content of the available evidence, and to its relationship with the elements that the ACCC was required to prove, in order to establish contraventions of s 45(2) of the Trade Practices Act , might well have led to the conclusion that the prospect of a successful outcome for the ACCC was not great enough to warrant the expenditure of money involved in the proceeding. Further, the need for such close analysis became greater as the trial advanced, with the inconsistencies between the circumstantial evidence and the oral evidence, and the absence of evidence about significant elements, becoming progressively more apparent. To make these criticisms is not to conclude the question whether costs should be awarded other than on a party-party basis, however. The criticisms do not necessarily establish the proposition that it was unreasonable for the ACCC to commence the proceeding in the first place, or to pursue it to its end. 24 The ACCC is a statutory body, established by s 6A of the Trade Practices Act . It has a number of functions conferred on it, including functions of a regulatory nature. By s 77(1) of the Trade Practices Act , the ACCC may institute a proceeding in this Court for the recovery on behalf of the Commonwealth of a pecuniary penalty. The provisions for contravention of which pecuniary penalties may be imposed are listed in s 76. They include s 45. The ACCC is the only possible applicant for a pecuniary penalty. By other provisions of the Trade Practices Act , the ACCC may apply for other kinds of orders under the provisions of that Act, although its capacity to do so is not always exclusive of the capacity of other persons to apply for particular orders. For instance, under s 80(1) , the ACCC or any other person may apply for an injunction in respect of a contravention of a number of provisions, including s 45. It is apparent that the ACCC has cast upon it significant responsibilities on behalf of the public, to ensure as far as practicable that there is compliance with the provisions of the Trade Practices Act . When the ACCC has commenced and pursued a proceeding in respect of alleged contraventions of a provision of the Trade Practices Act , and there is no suggestion that it has acted with any ulterior motive, the Court should not be quick to award costs against it on anything other than the usual party-party basis when the ACCC has suffered a loss in the proceeding. Excessive readiness to force the ACCC to compensate the winning party to a greater extent than the normal party-party costs incurred might operate as a deterrent to the ACCC against bringing proceedings in the exercise of its public functions. 28 It is true that, at various points in the trial, I made comments that reflected the tentative views I had that the case was not proceeding in the way the ACCC had opened it, and that I could see difficulties in the evidence, particularly in the inconsistencies between the oral evidence and the circumstantial evidence in Annexure B. These comments cannot be taken as indicating that the ACCC was bound to lose. Indeed, the length of the reasons for judgment in Leahy Petroleum (967 paragraphs), and the detailed analysis of the evidence they contain, are inconsistent with the proposition that it was obvious that the ACCC would lose. 29 For these reasons, it cannot be said that the case is generally one appropriate for indemnity costs, or for the award of costs on any basis other than the usual party-party basis. There is an exception to this proposition that needs further attention. 30 In relation to the alleged arrangement or understanding known as Arrangement No 8, the ACCC set itself a more difficult task in proving the existence of an arrangement or understanding, and that effect was given to it, than was the case with any other alleged arrangement or understanding in the proceeding. Arrangement No 8 was the only tripartite arrangement or understanding alleged. Each of the three parties it was alleged to involve, Apco, Liberty and Andrianopoulos, was a discount retailer of petrol. Each of Liberty and Andrianopoulos had only one petrol outlet in the Geelong retail petrol market area. Apco had a number of such outlets. Each of the three had a significant number of other petrol outlets in other parts of Victoria. Annexure B contained information about a very large number of telephone calls passing between Alan Shuvaly of Liberty and Christos Andrianopoulos of Andrianopoulos, as well as a substantial number of calls between Peter Anderson of Apco and either Mr Shuvaly or Mr Andrianopoulos. It would have required an extremely Geelong-centric view to assume that all of these calls related to retail prices of petrol in the Geelong petrol market. This is especially so as the number of occasions on which the ACCC was prepared to allege that effect was given to Arrangement No 8 was quite small, when compared with the number of occasions on which it alleged that effect was given to some of the other alleged arrangements or understandings. Further, the occasions on which it was alleged that effect was given to Arrangement No 8 diminished in number significantly during the course of the trial. From the outset, Arrangement No 8 was far from the strongest aspect of the ACCC's case. In order to bolster it, the ACCC called Mr Shuvaly to give evidence, pursuant to the agreement to which I have referred between the ACCC and Mr Shuvaly, in [11] of these reasons for judgment and [135] of Leahy Petroleum . Mr Shuvaly gave evidence on the 12th, 13th and 14th days of the trial, Wednesday, 31 August, Thursday, 1 September and Friday, 2 September 2005. The evidence is summarised in Leahy Petroleum in [231]-[245]. It did not go well for the ACCC. In fact, as is described in [238]-[241], counsel for the ACCC sought, and were granted, leave to cross-examine Mr Shuvaly about a prior inconsistent statement. The cross-examination was largely ineffective. 31 After another witness had followed Mr Shuvaly into the witness box on 2 September 2005, shortly before adjourning the proceeding at the end of the day, I raised with counsel for the ACCC the difficulty of establishing the existence of Arrangement No 8, and particularly the necessary element of commitment, by reference to Mr Shuvaly's evidence. I invited counsel for the ACCC, in conjunction with senior people from the ACCC, to give serious consideration to the way in which the case was put, because I was concerned about the expenditure of money involved. 32 The trial resumed on the following Wednesday, 7 September 2005. Counsel for the ACCC therefore had sufficient time to consider the transcript of Mr Shuvaly's evidence, in the light of the relatively slight circumstantial evidence in relation to Arrangement No 8. In my view, they ought at that time to have realised that Mr Shuvaly's evidence would not assist them to prove the existence of Arrangement No 8 and that, in a number of significant respects, the evidence was inconsistent with the existence of an arrangement or understanding of the kind alleged as Arrangement No 8. In the light of the relatively scant circumstantial evidence on which the ACCC felt able to rely in suggesting that effect was given to Arrangement No 8, by the 15th day of the trial, 7 September 2005, the ACCC ought to have realised that Arrangement No 8 was not going to be proved.


case_title: Calderbank v Calderbank [1975] 3 All ER 333


case_text: There is no doubt that the Court has power to order indemnity costs, or costs assessed on a basis lying somewhere between indemnity costs and party-party costs, in an appropriate case. It must be recognised that an appropriate case will only be one in which the circumstances justify the Court in departing from the usual rule that costs awarded will be calculated on a party-party basis. It is impossible to provide a comprehensive definition of what is an appropriate case. In Colgate-Palmolive Company v Cussons Pty Ltd (1993) 46 FCR 225 at 232-234, Sheppard J set out principles that his Honour derived from the authorities. Those principles are summarised in the judgment of the Full Court in Hamod v State of New South Wales [2002] FCAFC 97 (2002) 188 ALR 659 at [20] : Indemnity costs are not designed to punish a party for persisting with a case that turns out to fail. They are not awarded as a means of deterring litigants from putting forward arguments that might be attended by uncertainty. Rather, they serve the purpose of compensating a party fully for costs incurred, as a normal costs order could not be expected to do, when the Court takes the view that it was unreasonable for the party against whom the order is made to have subjected the innocent party to the expenditure of costs.


case_text: One instance of an appropriate case for indemnity costs is described as follows by Woodward J in Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Pty Ltd (1988) 81 ALR 397 at 401: I believe that it is appropriate to consider awarding "solicitor and client" or "indemnity" costs, whenever it appears that an action has been commenced or continued in circumstances where the applicant, properly advised, should have known that he had no chance of success. In such cases the action must be presumed to have been commenced or continued for some ulterior motive, or because of some wilful disregard of the known facts or the clearly established law. Such cases are, fortunately, rare. But when they occur, the court will need to consider how it should exercise its unfettered discretion.


case_title: Hamod v State of New South Wales [2002] FCAFC 97 (2002) 188 ALR 659


case_title: Hickman v Berens [1895] 2 Ch 638

case_text: The question remains whether costs should follow the event, so that the ACCC should be ordered to pay the costs of Mr Carmichael, Mr Warner and Mr Heikkila, in the application of the usual principle, or whether there is something in the circumstances of the case that would warrant departure from that principle. The researches of counsel, and my own researches, have not revealed the existence of any authority that is of great assistance. The nearest is perhaps Hickman v Berens [1895] 2 Ch 638. In that case, the plaintiff applied to set aside an agreement to compromise a proceeding, on the ground that no consensus had existed as to the basis of the agreement. An official referee declined to set aside the agreement. Kekewich J dismissed an appeal from the official referee's decision. The Court of Appeal allowed an appeal from the judgment of Kekewich J. At 647, Lindley LJ (with whom Lopes LJ and Rigby LJ agreed) said: With regard to the costs, the plaintiff ought to pay the costs of the summons and hearing before the official referee to set aside the mistake, the mistake being on the part of the plaintiff. The order of Kekewich J. must be discharged, and there must be no costs of either side, either of the appeal to him or of the appeal to us. We take that to be as near justice in the matter of costs as is possible. 14 Of course, in the present case, there is no application to set aside the compromise agreements, and no such application is needed. The Court has simply declined to give effect to the agreements, so far as they committed the relevant respondents to consenting to orders of the Court. In the light of that, the ACCC, properly in my view, has accepted that it should not seek to enforce those agreements in so far as they require consent to orders for, or the actual payment of, the ACCC's costs. 15 In my view, as in Hickman v Berens , the justice of the case with respect to costs is that there should be no order as to costs as between the ACCC and the respondents who entered into agreements. It appears to me that there were mistakes on both sides in relation to the agreements. I do not know what the ACCC's cooperation policy (in accordance with which it is said that the agreements were made) says in detail. It does seem to me, however, that the ACCC needs to be more aware of the disparity that may exist between itself and opposing parties with whom it proposes to enter into agreements of this kind, in terms of the resources available to contest litigation. The legal costs of defending a proceeding may be so great as to induce respondents to be more ready than they should to concede all that the ACCC claims against them, when the claims may in truth be unfounded, or some good defence may exist. In addition, the ACCC needs to recognise that large-scale litigation often has a profound effect on the lives of people who are caught up in it, an effect much greater than that suffered by those who manage large corporations caught up in similar litigation. The present case is a good example of the need for caution in accepting total capitulation. On the other hand, there was no obligation on the part of any respondent to enter into an agreement with the ACCC as to the outcome of the case. Each of Mr Carmichael, Mr Warner and Mr Heikkila opted to do so, after receiving legal advice. One alternative was to play no significant part in the trial, as Colin Williamson did. He will now be the beneficiary of an order that the ACCC pay his costs of the proceeding as a successful respondent. Another possible option might be to defend the case in person, perhaps with some coaching from a legal adviser. In the present case, without the oral evidence of Mr Carmichael, Mr Warner and Mr Heikkila, the ACCC's case would have depended even more on the circumstantial evidence, particularly the alleged relationship between telephone calls and petrol price increases, than it did. A detailed analysis of that data, together with evidence produced by the cross-examination of such other witnesses as the ACCC called would have made clear some of the weaknesses of the ACCC's case. 16 Plainly, the result of the case has falsified the assumption on which the ACCC and each of the relevant parties entered into the agreements, namely that there had in fact been unlawful price-fixing in the Geelong petrol market. In the circumstances, the justice of the case seems to me to require that there be no order as to costs as between the ACCC and the parties who entered into the agreements. It is significant that this view appears to have commended itself to both the ACCC and Mr Shuvaly, who have consented to an order that no order for costs be made as between them, despite the fact that there was an agreement between them that dealt with the question of costs.


case_text: Sections 48 and 49 were both located in Chapter 7 of the BCII Act. Section 2 of that Act provided that the chapter was to commence on the date of Royal Assent. If, as has been assumed, s 49 applied to the Second Strike action, it is difficult to see why s 48 should not also have applied. However the respondents submitted that the decision of Le Miere J in Leighton Contractors Pty Ltd v Construction, Forestry, Mining and Energy Union (2006) 164 IR 375 established that s 48 did not apply to conduct occurring prior to 12 September 2005, although his Honour appears to have accepted that s 49 did apply. 26 The applicant accepted that s 48 had no application for present purposes but asserted that the respondents had admitted the alleged contraventions, and that the precise basis for treating Mr Powell, the CFMEUW and the CFMEU as having contravened s 38 was not in dispute. The applicant also submitted that the common law concerning accessorial liability would fill any "lacuna" caused by the absence of a provision such as s 48. 27 The respondents have not sought to withdraw any of the admissions contained in the statement of agreed facts. I propose to dispose of the matter upon the basis of such facts. However, in identifying the seriousness of the conduct alleged against each respondent it will be necessary to say something about accessorial liability. Because the question has been ventilated at length, I will first address the question of whether s 49 applied to the conduct of the first, second and fourth respondents in connection with the Second Strike action. As the applicant has not relied upon s 48, it is not necessary to consider its application for present purposes. 52 In Leighton at [30], Le Miere J set out these passages and observed: In my opinion, convening and conducting a meeting of workers during working hours might, but will not necessarily, constitute a ban, limitation or restriction on the performance of building work and hence be building industrial action. Such conduct is capable of constituting a "ban, limitation or restriction on the performance of building work" if its purpose is to prevent or deter or discourage employees from performing building work and it purports to be at least hortatory, if not authoritative and binding, upon the person or persons to whom it is directed. In this way relevant building industrial action may be committed by a person other than an employer or employee. 53 As to the requirement that the relevant conduct was "constitutionally-connected action", that term was defined in s 36 to mean: ... building industrial action that satisfies at least one of the following conditions: (a) the action is taken by an organisation; (b) the action is taken by a constitutional corporation, or adversely affects a constitutional corporation in its capacity as a building industry participant; (c) the action is taken in connection with an industrial dispute; (d) the action relates to work that is regulated by a Commonwealth industrial instrument; (e) the action relates to the negotiation, proposed negotiation, or making or proposed making, (as relevant), of a collective agreement under Division 2 of Part 8 of the Workplace Relations Act ; (f) the action occurs in a Territory or Commonwealth place. 54 In the present case the applicant claimed that the Second Strike action was constitutionally connected, having been taken by the CFMEU (an organization for the purposes of para (a) of the definition), and it having adversely affected AGC (a constitutional corporation) in its capacity as a building industry participant. However para (a) would only have applied if the relevant action were taken by the CFMEU. I proceed upon the basis that para (b) applied. 55 In para 34 it is agreed that the strike on 25 August 2005 was unlawful industrial action, and that Mr Powell, in conducting the meeting and taking the vote, "aided the workers to engage in" such unlawful industrial action in contravention of s 38. Paragraph 36 seems to assert that the actions referred to in paras 33 to 35 were not authorized by AGC. Those actions included the raising of issues at the authorized meeting held on 24 August 2004. It is not clear to me that such matters were necessarily unlawful. I proceed upon the basis that the relevant unlawful industrial action was the failure to attend for work, or to perform work, on 25 August 2005, and that Mr Powell "aided" the workers to engage in such action by his conduct at the meeting. It is agreed that he thereby contravened s 38. It is also agreed that the CFMEU and the CFMEUW engaged in such action and similarly contravened s 38. Whatever the true state of the law may be with respect to accessorial liability at common law, it is not necessary for me to take that matter further, given these admissions. 56 The applicant identified the following relevant considerations in fixing penalties: (a) the nature of the unlawful industrial action found to have occurred; (b) the circumstances in which the relevant conduct took place (including whether the conduct was undertaken in deliberate defiance or disregard of the Act); (c) the likely deterrent effect (both specific and general) of any civil penalty imposed; (d) the consequences of the conduct found to be in contravention of the BCII Act, both in terms of the amount of loss or damage caused, if any, and less tangible effect on the building and construction industry and public generally; (e) the period over which the contraventions extended; (f) the extent of co-operation with regulatory authorities and any acknowledgment of wrong doing; (g) the need to give effect to the statutory purposes underpinning the BCII Act and the relevant parts of the WR Act; (h) whether the contraventions involved or were directly attributable to the conduct of senior management; (i) the Respondents' past record of statutory contraventions and other conduct in industrial relations; (j) if the contravention involved an association or organization, the size of that association or organization; (k) A building association's corporate culture; and, (l) the financial position of each of the Respondents (if the evidence suggests that they will personally pay any penalty that is imposed). 61 I have previously referred to the decision in Leighton. That case involved alleged breaches of s 38 of the BCII Act. The three respondents were, I understand, the CFMEU, the CFMEUW and Mr McDonald, although this is not entirely clear from the report of the case. Mr McDonald conducted meetings at which industrial action was considered. The relevant industrial action was the holding of the meetings during working hours and subsequent bans and strikes. I note that there were eighteen infringements by the CFMEU and five by the CFMEUW. Mr McDonald committed sixteen infringements. The industrial action extended over a longer period of time than did the presently relevant conduct. 62 The respondents have other industrial "background". The applicant pointed to the decision in Cruse v CFMEU [2007] FMCA 1873. In that case the CFMEU was found to have breached s 38 in connection with an unlawful strike lasting two and a half days. In Australian Competition and Consumer Commissioner v CFMEU [2006] FCA 1730 ; [2007] ATPR 42-140 all four of the present respondents were found to have engaged in secondary boycott action by preventing or hindering the supply of concrete to a site by forming a picket line at the gate. Both Mr McDonald and Mr Powell have had their rights of entry revoked or suspended because of their conduct in connection with the exercise of such rights. The applicant asserts that the CFMEU has, on numerous occasions, been found to have contravened other provisions of industrial legislation involving coercive behaviour and false and misleading statements, advising or organising action with intent to coerce an employer and breaching orders. Unfortunately, save in the case of the Leighton matter, I was not told whether this conduct occurred before or after that with which I am present concerned. In Leighton , the relevant conduct occurred in March 2005. Normally, only conduct preceding that in question is taken into account in fixing penalties. In any event, although the respondents have apparently engaged in prior industrial misconduct, I have insufficient information to justify my according great weight to such misconduct. 70 The penalties imposed in Leighton offer a convenient starting point for present purposes. Because of the more extensive misconduct in that case, the penalties in this case should be lower. In Leighton the relevant conduct was all contrary to s 38 of the BCII Act. For that reason, and because the maximum penalty for such a breach is higher than those for the WR Act infringements, I will commence by considering the penalties for the infringements of s 38. Mr McDonald was not involved in this aspect of the case. 71 In Leighton the penalty imposed on Mr McDonald was $30,000 against a maximum penalty of $22,000 for each infringement. The applicant suggested that in this case a penalty of $2,500 should be imposed on Mr Powell. The respondents suggested a penalty of $1,000, fully suspended for a period of six months. In other words no penalty would be payable in the event that Mr Powell behaved himself for that period. This approach may have been partially motivated by the view that there was really only one course of unlawful conduct. I find it difficult to take such an indulgent view of Mr Powell's conduct, given that he had some previous history of disobedience to industrial law, and that, as I infer, the second strike imposed additional disruption upon AGC. The substantial penalty imposed upon Mr McDonald in Leighton also dictates something more than a merely nominal penalty in this case. The two unions also have previous histories of industrial misconduct. For each of them the maximum penalty is $110,000. In Leighton the CFMEUW was treated as being less involved in the contraventions than was the CFMEU. This may have reflected the fact that the CFMEU had acknowledged eighteen contraventions whilst the CFMEUW had acknowledged only five. The Court imposed a penalty of $30,000 upon the CFMEUW for those five infringements. In this case, the applicant suggested a penalty of $20,000 for each union. The respondents submitted that a penalty of $5,000, fully suspended, was appropriate. I do not agree. There was nothing trivial about the misconduct in question. I see no real basis for distinguishing between the CFMEU and the CFMEUW. 72 The applicant's recommendation of a penalty of $2,500 for Mr Powell is, in my view, at the lower end of the appropriate range. I adopt it, subject to any adjustment which may be necessary after I have considered the appropriate penalty for him in connection with the First Strike action. The penalties imposed on the CFMEU and CFMEUW should be roughly equivalent to that imposed upon Mr Powell but adjusted, having regard to the higher maximum penalty. I see no reason for treating the two unions as being more or less culpable than was Mr Powell. Subject to the possibility of adjustment for overall effect I fix the penalty at $12,000 in each case. 73 I turn to the First Strike action. It led to a two day strike and involved a much larger number of men, serving a wider range of employers, than did the later strike. It was, in that sense, more serious. On the other hand, in the case of Mr McDonald, it was the only action in which he was involved. The maximum penalties under the WR Act are substantially lower than those under the BCII Act. For Messrs Powell and McDonald the maximum penalty for a breach of s 170MN is $6,600. The maximum for the CFMEU is $33,000. In the case of a corporation, the maximum penalty for a breach of s 178 is $49,500. It is important to keep in mind that the conduct constituting the CFMEU's breach of s 170MN was the same as that constituting its breach of s 178. 76 Turning to Messrs Powell and McDonald, the applicant submitted that in Mr Powell's case, the penalty should be $2,500 and in Mr McDonald's, $4,000. The respondents submitted that each should receive a penalty of $1,500 of which two-thirds should be suspended for a period of six months. The distinction between the treatment of Mr McDonald and that of Mr Powell is presumably based upon Mr McDonald's involvement in the Leighton matter and the rather more serious circumstances surrounding the revocation of his entry permits as compared to those surrounding the suspension of Mr Powell's permits. As I have said, it may be unfair and unwise to place much reliance upon the latter matter, given absence of any knowledge concerning the dates of the relevant misconduct. With regard to the Leighton matter, I must keep in mind the fact that Mr McDonald had not been dealt with for such conduct at the time of the First Strike action. However I am inclined to accept that Mr McDonald has a somewhat worse record than does Mr Powell. 77 I do not accept that Mr Powell's infringement of s 170MN (with a maximum penalty of $6,600) should attract the same penalty as his infringement of s 38 of the BCII Act (with a maximum penalty of $22,000). It is true that the first strike was more serious than the second. More employers and employees were involved, and the strike was for two days rather than one. On the other hand, Mr Powell engaged in the Second Strike action knowing that he had previously engaged in the First Strike action, and probably intending to aggravate the effects upon AGC of the earlier strike. These considerations will be best reflected by my imposing a penalty of $1,000 upon Mr Powell in connection with the First Strike action. In the case of Mr McDonald, a penalty of $1,500 is appropriate. Thus, the penalties which I have provisionally fixed are: s 170MN s 178 s 38 Total Mr Powell $1,000 Nil $ 2,500 $ 3,500 CFMEUW Nil Nil $12,000 $12,000 Mr McDonald $1,500 Nil Nil $ 1,500 CFMEU $1,000 $5,000 $12,000 $18,000 78 Having considered the overall conduct of the various respondents and all other material facts, I see no reason to make any further adjustment to these figures. I also see no reason for suspending any of the penalties.


case_text: The applicant submitted that s 49 was intended to apply to conduct occurring between 9 March and 12 September 2005. That approach to s 49 was based upon a series of decisions which commenced with In re A Solicitor's Clerk [1957] 1 WLR 1219. The case concerned legislation which prohibited the continued employment as a solicitor's clerk of a person who had previous convictions for offences of dishonesty. The relevant legislation had, at one stage, applied to a solicitor's clerk who was convicted of larceny, embezzlement, fraudulent conversion or any other criminal offence in respect of money or property belonging to, or held by, the solicitor who employed him or her, or any client of such solicitor. The Act was amended so that it applied to a solicitor's clerk who had been convicted of larceny, embezzlement or fraudulent conversion of any money or property, regardless of who owned or controlled it. The question was whether the amendment applied to a clerk who had been convicted of such an offence prior to the amendment. In the Queen's Bench Division Lord Goddard CJ said, at 1222-1223 (Barry and Havers JJ concurring): In all editions of Maxwell on the Interpretation of Statutes it is stated that it is a fundamental rule of English law that no statute should be construed to have a retrospective operation unless such a construction appears very clearly in the terms of the Act or arises by a necessary or distinct implication and this passage has received judicial approval by the Court of Appeal ... . But in my opinion this Act is not in truth retrospective. It enables an order to be made disqualifying a person from acting as a solicitor's clerk in the future and what happened in the past is the cause or reason for the making of the order, but the order has no retrospective effect. It would be retrospective if the Act provided that anything done before the Act came into force or before the order was made should be void or voidable, or if a penalty were inflicted for having acted in this or any other capacity before the Act came into force or before the order was made. This Act simply enables a disqualification to be imposed for the future which in no way affects anything done by the appellant in the past.


case_text: In La Macchia v Minister for Primary Industries (1986) 72 ALR 23 , the Full Court considered a provision pursuant to which the relevant minister might cancel a fishing licence if the holder were convicted of certain offences. That section took effect from 31 August 1985. On 13 June 1985 one joint licence holder was convicted of a relevant offence. On 14 October 1986 the minister decided to cancel the licence. The question was whether or not the minister was entitled to do so upon the basis of a conviction recorded prior to the commencement of the legislation authorizing such cancellation. At 26-27, Toohey J (Bowen CJ concurring) said: There are, I think, only two other matters in the applicant's case that call for comment. The first is the argument that, in relying upon a power in section 9A(3A) which did not exist at the time of the conviction of Mr La Macchia, a penal power was exercised retrospectively. There are two answers to this contention. The first is that the Minister was not exercising a penal power even though cancellation imposed a hardship on the applicants by depriving them for a time of their ability to fish commercially. Cancellation is not part of the penalty a Court of Petty Sessions may impose. It is part of the scheme of the Act which seeks to control commercial fishermen in their fishing activity. Rock lobsters are a valuable common property resource and activities damaging the resources are hard and costly to police. The power of cancellation is an important aspect of the system of control and should be seen in that light. Secondly, while the Minister could not have given notice prior to the sub-section coming into operation, he was not constrained thereafter to rely upon a conviction that itself occurred after the sub-section came into operation. The commission of an offence, whether before or after 31 August 1985, is a circumstance warranting the giving of a notice under sub-section (3A). The order does not have retrospective effect simply because it relies upon conduct that occurred before the power existed ... .


case_text: Finally, in The Commonwealth v SCI Operations [1998] HCA 20 ; (1998) 192 CLR 285 , at 309 McHugh and Gummow JJ referred with apparent approval to an observation by Jordan CJ in Coleman v Shell Company of Australia (1943) 45 SRNSW 27 at 30-31. His Honour said, concerning the retrospective operation of statutes: As to the first question, it is to be noted that there has been some ambiguity in the use of the word "retrospective". In some cases, it has been said that it would give a retrospective operation to a statute to treat it as impairing an existing right or obligation or creating a new right or obligation ... . On the other hand it was said ... that an Act is retrospective if it provides that as at past date the law shall be taken to have been that which it was not. It is not retrospective because it interferes with existing rights. Most Acts do. There is no presumption that interference with existing rights is not intended; but there is a presumption that an Act speaks only as to the future. Similarly it has been said that an amendment of a section in an Act makes it retrospective in its original form but not retrospective so far as it is new ... . Upon a consideration of the authorities, I think that as regards any matter or transaction, if events have occurred prior to the passing of the Act which have brought into existence particular rights or liabilities in respect of that matter or transaction, it would be giving a retrospective operation to the Act to treat it as intended to alter those rights or liabilities, But it would not be giving it a retrospective operation to treat it as governing the future operation of the matter or transaction as regards the creation of further particular rights or liabilities.


case_title: Coleman v Shell Company of Australia (1943) 45 SRNSW 27


case_text: I have cited these passages at some length because the applicant assumed that these cases establish that the various statutory provisions relating to parties to offences reflected the position at common law in connection with torts. However, in Credit Lyonnais Bank Nederland NV v Export Credit Guarantee Department [1998] 1 Lloyd's Rep 19 the Court of Appeal rejected that proposition. See, in particular, the judgment of Stuart-Smith LJ at 35-36 and that of Hobhouse LJ at 42-46. Hobhouse LJ identified three categories of conduct by a person other than the actual perpetrator which might attract criminal liability. They were: • those who solicit or incite another to commit a crime or conspire with another to commit a crime; • those who aid another in the commission of a crime, often known as "aiding, abetting, counselling and procuring"; and • principals whose agents commit offences.


case_title: Credit Lyonnais Bank Nederland NV v Export Credit Guarantee Department [2000] 1 AC 486

case_text: His Lordship concluded, at 46, that only conduct which fell into either the first or the third category would constitute a tort at common law. In other words, at common law, aiding, abetting, counselling and procuring was not a basis for tortious liability. On appeal to the House of Lords (reported at [2000] 1 AC 486) the decision of the Court of Appeal was upheld, although on slightly different grounds. Their Lordships observed that the criminal law might not offer a good guide to accessorial liability in tort. See the speech of Lord Wolfe MR at 496-500 (Lord Slynn, Lord Steyn, Lord Clyde and Lord Millett agreeing).


case_outcome: discussed

case_title: Thompson v Australian Capital Television Pty Ltd [1996] HCA 38 ; (1996) 186 CLR 574

case_text: In Thompson v Australian Capital Television Ltd [1996] HCA 38 ; (1996) 186 CLR 574 the High Court considered accessorial liability in tort. At 580-1 Brennan CJ, Dawson and Toohey JJ said: ... (F)or there to be joint tort feasors there must be a concurrence in the act or acts causing damage ... (T)o constitute joint tort feasors two or more persons must act in concern in committing the tort. 42 As with the decision in Credit Lyonnais these propositions were largely based upon the decision of the Court of Appeal in The "Koursk" [1924] P 140. In Thompson at 600, Gummow J said, concerning the judgments in The "Koursk" : Scrutton LJ ... there spoke of "two persons who agree on common action, in the course of, and to further which, one of them commits a tort", saying that in such a case there is one tort committed by one of them "in concert with another". Sargant LJ ... accepted the proposition that persons are joint tort feasors when their "respective shares in the commission of the tort are done in furtherance of a common design" so that those who "aid or counsel, direct, or join" in commission of the tort are joint tort feasors ... .


case_text: As with the decision in Credit Lyonnais these propositions were largely based upon the decision of the Court of Appeal in The "Koursk" [1924] P 140. In Thompson at 600, Gummow J said, concerning the judgments in The "Koursk" : Scrutton LJ ... there spoke of "two persons who agree on common action, in the course of, and to further which, one of them commits a tort", saying that in such a case there is one tort committed by one of them "in concert with another". Sargant LJ ... accepted the proposition that persons are joint tort feasors when their "respective shares in the commission of the tort are done in furtherance of a common design" so that those who "aid or counsel, direct, or join" in commission of the tort are joint tort feasors ... .


case_text: The conduct identified in paras (a) and (d) would, almost certainly, have been the conduct of employers or employees. However the conduct identified in paras (b) and (c) may have been the conduct of others. In Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Laing (1998) 89 FCR 17 at 30-31, French J observed, concerning a similar provision in the WR Act: While par (a) of the definition relates to the "performance of work", par (b) is more broadly expressed. It refers to "a ban, limitation or restriction on the performance of work, or on the acceptance of or offering for work". The central meaning of the term "ban" in the industrial, as in its ordinary usage, is to "prohibit or interdict": the Macquarie Dictionary. Communication between persons or an organization and persons is essential to a "ban". And while the notion of "limitation" or "restriction" may have a meaning related to manner of actual performance of work, that meaning is picked up in par (a) of the definition. Under par (b) it extends to the communication of a limitation or restriction. Communication picked up under pars (b) and (c) must no doubt purport to be at least hortatory, if not authoritative and binding, upon the person or persons to whom they are directed. In the ordinary course such communication will be verbal whether oral, written or in electronic form. Being intended to affect or affecting the performance of work, it is industrial action because of its instrumental character. Notwithstanding that it is communication it falls within the terms of the definition. 51 At 32, his Honour continued: So a picket line whose purpose is to prevent or deter or discourage employees from attending on their employer's premises and from carrying out their work could constitute a ban for the purposes of s 127."


case_outcome: followed

case_text: The applicant submitted that in fixing civil penalties, the Court should take account of the views of any relevant regulator as a specialist body, but that such views should not be treated as determinative. As much appears to be established by the decision of the Full Court in Minister for Industry, Tourism and Resources v Mobil Oil Australia Pty Ltd [2004] FCAFC 72. Accepting that decision as I must, I observe only that considerable care must be exercised in so doing, particularly where the regulator is a party to the proceedings. Such "views" must be more than bald assertions of the desired outcome in a particular case, or of the regulator's policy. One would expect some factual basis to be demonstrated for the views so advanced. A respondent might expect an opportunity to test the views and the facts upon which they are allegedly based. In other words, it may be necessary for the regulator to provide admissible lay and expert evidence. The Court cannot treat a statement as relevant if it is really only an opinion or statement of preferred outcome. I do not understand this issue to loom large in the present case. 58 The applicant's submissions deal in some detail with the purpose of the WR Act and the BCII Act, pointing to various reasons for treating breaches of industrial legislation as relatively serious. I doubt, however, whether such considerations are of particular relevance in a case such as this where the relevant conduct was limited in scope and effect. All legislation which prescribes penalties, criminal or otherwise, has the purpose of deterring conduct which is deemed to be undesirable. The important point is that the penalty be sufficiently substantial to act as an appropriate deterrent, having regard to matters which may tempt persons to infringe. The penalty must also be proportionate to the infringing conduct. 59 I infer that the First Strike action substantially disrupted work on the Ravensthorpe project. It lasted for 48 hours and involved about 400 workers. It may be, however, that little work would have been done at that time in any event. Weather conditions were unfavourable. No attempt was made to negotiate with the employers prior to taking industrial action. Such pre-emptive action may be attractive to workers and unions. Minimal notice of industrial action probably maximises disruptive effect. It is said that the contraventions "were in manifest defiance of the law". That may be so. However the statement of agreed facts demonstrates that neither Mr Powell nor Mr McDonald directly instigated any discussion concerning strike action. It may be that they deliberately created a situation from which such action was calculated to emerge, but there is no evidence to that effect.


case_title: Cruse v CFMEU [2007] FMCA 1873

case_text: The respondents have other industrial "background". The applicant pointed to the decision in Cruse v CFMEU [2007] FMCA 1873. In that case the CFMEU was found to have breached s 38 in connection with an unlawful strike lasting two and a half days. In Australian Competition and Consumer Commissioner v CFMEU [2006] FCA 1730 ; [2007] ATPR 42-140 all four of the present respondents were found to have engaged in secondary boycott action by preventing or hindering the supply of concrete to a site by forming a picket line at the gate. Both Mr McDonald and Mr Powell have had their rights of entry revoked or suspended because of their conduct in connection with the exercise of such rights. The applicant asserts that the CFMEU has, on numerous occasions, been found to have contravened other provisions of industrial legislation involving coercive behaviour and false and misleading statements, advising or organising action with intent to coerce an employer and breaching orders. Unfortunately, save in the case of the Leighton matter, I was not told whether this conduct occurred before or after that with which I am present concerned. In Leighton , the relevant conduct occurred in March 2005. Normally, only conduct preceding that in question is taken into account in fixing penalties. In any event, although the respondents have apparently engaged in prior industrial misconduct, I have insufficient information to justify my according great weight to such misconduct.


case_outcome: referred to

case_text: In the days preceding the hearing, Mr Jewiss through a corporation sent to the Court (but not to the Commissioner's legal representatives) medical certificates indicating that he was unfit for work by reason of illness for the period from 6 to 20 November 2006. He did not attend the hearing. He sent a letter to the Court indicating that he would be unable to do so because of illness. There is no further medical evidence to indicate his ongoing incapacity for work after 20 November 2006, or more importantly, any medical evidence stating that he was unfit to appear in Court on 20 November 2006 to conduct the proceedings or to appear in Court to support any application for an adjournment: see e.g. the remarks of Middleton J in MZXJN v Minister for Immigration and Multicultural Affairs [2006] FCA 1624 at [13] - [14] , adopting the words of Lindgren J in NAKX v Minister for Immigration and Multicultural and Indigenous Affairs [2003] FCA 1559. There is no detailed medical report from any medical practitioner.


case_title: NAKX v Minister for Immigration and Multicultural and Indigenous Affairs [2003] FCA 1559


case_text: The Commissioner contends that there is now no basis upon which the claims asserted in the Amended Application and the Amended Statement of Claim could succeed because: 1. those issues have been ventilated and determined in the District Court proceedings, and 2. in any event, s 177 of the ITAA precludes all challenges against the "due making of an assessment", and the nature of the allegations are in fact in substance challenges to the due making of the assessments the subject of the notices: see Commissioner of Taxation v Dalco [1990] HCA 3 ; (1990) 168 CLR 614.


case_text: It is plain that s 31A of the FCA Act is intended to relax the test imposed by General Steel Industries Inc v Commissioner for Railways (NSW) [1964] HCA 69 ; (1964) 112 CLR 125 as to the circumstances in which a proceeding may be struck out or summarily dismissed. 27 Section 31A(2) provides that the Court may exercise that power if the Court is satisfied that the applicant has no reasonable prospect of successfully prosecuting the proceeding or the relevant part of the proceeding, and s 31A(3) explains to a degree when a proceeding should be found to have no reasonable prospect of success. 29 In my judgment, the Amended Application and the Amended Statement of Claim should be dismissed, whether one applies the test prescribed by s 31A of the FCA Act, or whether one applies O 20 r 2 of the Federal Court Rules , as explained in General Steel Industries . In my view, there is simply no real question to be tried on the issues raised by the Amended Application and by the Amended Statement of Claim in the circumstances of this matter. 30 It is appropriate first to advert briefly to the statutory background or context in which the assessments came to be made and the Notices issued. Section 166 of the ITAA requires the Commissioner to make an assessment of the taxable income of a taxpayer and of the tax payable thereon. If the Commissioner is not satisfied with the tax information provided by the taxpayer in the tax return furnished by the taxpayer, the Commissioner is empowered by s 167 to make an assessment of the amount upon which, in the Commissioner's judgment, income tax ought to be levied. Section 174(1) then requires that a notice of assessment of the tax to be paid be served on the taxpayer. Section 175 provides that the validity of any assessment shall not be affected by reason that any of the provisions of the ITAA have not been complied with. Relevantly to the District Court proceedings, for the reasons which are referred to above, s 177 provides that the production of the Notices under the hand of the Commissioner is conclusive evidence of the due making of the assessment, and (other than in respect of proceedings under Pt IVC of the TAA by a review or appeal relating to the assessment) is also conclusive evidence of the amount and particulars of the assessments as being correct. The procedure to be followed by a taxpayer dissatisfied with an assessment is the objection and appeal process available under Pt IVC of the TAA.


case_text: Section 31A commenced operation on 1 December 2005. It applies only in relation to "proceedings commenced on or after the commencement day": see item 44 of Sch 1 to the Migration Litigation Reform Act 2005 , and item 7 of that Act which inserted s 31A into the FCA Act. The Commissioner has submitted that s 31A applies in this instance because the Amended Application and the Amended Statement of Claim were filed only on 15 August 2006, and that the assertion in this proceeding seeking to invalidate the Notices by reason of improper conduct on the part of officers of the respondent was first made only by the "Statement of Claim" filed on 7 July 2006. The effect of the "Statement of Claim" first filed on 7 July 2006 would appear, by O 13 rr 3(3) and 3A of the Federal Court Rules , to operate from that day as a proceeding commenced on or after that day: see Tepperova v Minister for Immigration and Multicultural and Indigenous Affairs [2006] FCA 1147 at [27] . I do not need, however, to decide that question.