case_text: It is well recognised that a claim of legal professional privilege will not be upheld if the party resisting the claim for legal professional privilege can show reasonable grounds for believing that the communication effected by the document for which privilege is claimed was made for an illegal or improper purpose: Commissioner of Australian Federal Police v Propend Finance Pty Ltd [1997] HCA 3 ; (1997) 188 CLR 501; Attorney-General (NT) v Kearney [1985] HCA 60 ; (1985) 158 CLR 500; and see generally AWB Ltd v Cole (No 5) [2006] FCA 1234 at [211] - [219] . This does not require a demonstration that the legal advisers were themselves conscious participants in fulfilling the improper purpose: Yunghanns v Elfic Pty Ltd [2000] VSC 113 ; (2000) 1 VR 92 at 106. While it is not sufficient merely to allege improper purpose, it is not necessary fully to prove the allegations. There has to be something to give colour to the charge a prima facie case: Propend at 514.


case_outcome: cited

case_title: Commissioner of Australian Federal Police v Propend Finance Pty Ltd [1997] HCA 3 ; (1997) 188 CLR 501


case_title: Attorney-General (NT) v Kearney [1985] HCA 60 ; (1985) 158 CLR 500


case_title: AWB Ltd v Cole (No 5) [2006] FCA 1234


case_title: Yunghanns v Elfic Pty Ltd [2000] VSC 113 ; (2000) 1 VR 92


case_text: Corporation Limited, in the matter of SFE Corporation Limited [2006] FCA 670 (31 May 2006) [ Home ] [ Databases ] [ WorldLII ] [ Search ] [ Feedback ] Federal Court of Australia You are here:   AustLII >> Databases >> Federal Court of Australia >> 2006 >> [2006] FCA 670 [ Database Search ] [ Name Search ] [ Recent Decisions ] [ Noteup ] [ Download ] [ Help ] SFE Corporation Limited, in the matter of SFE Corporation Limited [2006] FCA 670 (31 May 2006) Last Updated: 31 May 2006 FEDERAL COURT OF AUSTRALIA SFE Corporation Limited, in the matter of SFE Corporation Limited [2006] FCA 670 CORPORATIONS scheme of arrangement meeting to be convened pursuant to s 411(1) of the Corporations Act 2001 (Cth) Corporations Act 2001 (Cth) ss 411(1) , 411 (3), 411 (6) Atkins v St Barbara Mines Ltd (1997) 138 FLR 425 cited Re Arthur Yates & Co Ltd (2001) 36 ACSR 758 cited Re Barbeques Galore Ltd [2005] FCA 1519 cited Re Hills Motorway Ltd (2002) 43 ACSR 101 cited Re KAZ Group Ltd [2004] FCA 738 cited IN THE MATTER OF SFE CORPORATION LIMITED ABN 74 000 299 392; SFE CORPORATION LIMITED NSD 934 OF 2006 GYLES J 31 MAY 2006 SYDNEY IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY NSD 934 OF 2006 IN THE MATTER OF SFE CORPORATION LIMITED ABN: 74 000 299 329 BETWEEN: SFE CORPORATION LIMITED PLAINTIFF JUDGE: GYLES J DATE: 31 MAY 2006 PLACE: SYDNEY REASONS FOR ORDERS 1 On 29 May 2006 I made orders convening a meeting of members of SFE Corporation Limited (SFE) pursuant to s 411(1) of the Corporations Act 2001 (Cth) (the Act) and ancillary orders. I said I would deliver short reasons for those orders. These are those reasons. 9 It is proposed that a corporation can attend the meeting and vote by a corporate representative rather than by a proxy, relying upon the decision of Ipp J in Atkins v St Barbara Mines Ltd (1997) 138 FLR 425 at 432. Again, that is a reasonable basis upon which to proceed. 10 I have been taken through the manner in which executive options, employee share acquisition plan shares and executive equity plan shares are to be dealt with and I see no difficulty in what is proposed. 11 There were two aspects of the Explanatory Statement which called for some consideration. The first related to the explanation of the cash and share consideration option. It is not easy to summarise that option in a manner understandable by a lay person. The final result is acceptable. The second arose from the form of the independent expert's report (the Expert Report) which is incorporated by reference in the Explanatory Statement.


case_text: Corporation Limited, in the matter of SFE Corporation Limited [2006] FCA 670 (31 May 2006) [ Home ] [ Databases ] [ WorldLII ] [ Search ] [ Feedback ] Federal Court of Australia You are here:   AustLII >> Databases >> Federal Court of Australia >> 2006 >> [2006] FCA 670 [ Database Search ] [ Name Search ] [ Recent Decisions ] [ Noteup ] [ Download ] [ Help ] SFE Corporation Limited, in the matter of SFE Corporation Limited [2006] FCA 670 (31 May 2006) Last Updated: 31 May 2006 FEDERAL COURT OF AUSTRALIA SFE Corporation Limited, in the matter of SFE Corporation Limited [2006] FCA 670 CORPORATIONS scheme of arrangement meeting to be convened pursuant to s 411(1) of the Corporations Act 2001 (Cth) Corporations Act 2001 (Cth) ss 411(1) , 411 (3), 411 (6) Atkins v St Barbara Mines Ltd (1997) 138 FLR 425 cited Re Arthur Yates & Co Ltd (2001) 36 ACSR 758 cited Re Barbeques Galore Ltd [2005] FCA 1519 cited Re Hills Motorway Ltd (2002) 43 ACSR 101 cited Re KAZ Group Ltd [2004] FCA 738 cited IN THE MATTER OF SFE CORPORATION LIMITED ABN 74 000 299 392; SFE CORPORATION LIMITED NSD 934 OF 2006 GYLES J 31 MAY 2006 SYDNEY IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY NSD 934 OF 2006 IN THE MATTER OF SFE CORPORATION LIMITED ABN: 74 000 299 329 BETWEEN: SFE CORPORATION LIMITED PLAINTIFF JUDGE: GYLES J DATE: 31 MAY 2006 PLACE: SYDNEY REASONS FOR ORDERS 1 On 29 May 2006 I made orders convening a meeting of members of SFE Corporation Limited (SFE) pursuant to s 411(1) of the Corporations Act 2001 (Cth) (the Act) and ancillary orders. I said I would deliver short reasons for those orders. These are those reasons. 7 Having considered the authorities referred to by counsel for the applicant Re Arthur Yates & Co Ltd (2001) 36 ACSR 758 and Re Barbeques Galore Ltd [2005] FCA 1519 and the material provided concerning the views of the Takeovers Panel, these clauses are not such as to cause me to refrain from ordering the meeting. I would only be inclined to do that if the amount of the break fee was such that it could influence voting at the meeting to be convened or if there were some other unusual circumstances. As at present advised, I do not think that the present case falls within either head. This is not the occasion to undertake any more general consideration of these provisions.


case_title: Re Barbeques Galore Ltd [2005] FCA 1519


case_text: Corporation Limited, in the matter of SFE Corporation Limited [2006] FCA 670 (31 May 2006) [ Home ] [ Databases ] [ WorldLII ] [ Search ] [ Feedback ] Federal Court of Australia You are here:   AustLII >> Databases >> Federal Court of Australia >> 2006 >> [2006] FCA 670 [ Database Search ] [ Name Search ] [ Recent Decisions ] [ Noteup ] [ Download ] [ Help ] SFE Corporation Limited, in the matter of SFE Corporation Limited [2006] FCA 670 (31 May 2006) Last Updated: 31 May 2006 FEDERAL COURT OF AUSTRALIA SFE Corporation Limited, in the matter of SFE Corporation Limited [2006] FCA 670 CORPORATIONS scheme of arrangement meeting to be convened pursuant to s 411(1) of the Corporations Act 2001 (Cth) Corporations Act 2001 (Cth) ss 411(1) , 411 (3), 411 (6) Atkins v St Barbara Mines Ltd (1997) 138 FLR 425 cited Re Arthur Yates & Co Ltd (2001) 36 ACSR 758 cited Re Barbeques Galore Ltd [2005] FCA 1519 cited Re Hills Motorway Ltd (2002) 43 ACSR 101 cited Re KAZ Group Ltd [2004] FCA 738 cited IN THE MATTER OF SFE CORPORATION LIMITED ABN 74 000 299 392; SFE CORPORATION LIMITED NSD 934 OF 2006 GYLES J 31 MAY 2006 SYDNEY IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY NSD 934 OF 2006 IN THE MATTER OF SFE CORPORATION LIMITED ABN: 74 000 299 329 BETWEEN: SFE CORPORATION LIMITED PLAINTIFF JUDGE: GYLES J DATE: 31 MAY 2006 PLACE: SYDNEY REASONS FOR ORDERS 1 On 29 May 2006 I made orders convening a meeting of members of SFE Corporation Limited (SFE) pursuant to s 411(1) of the Corporations Act 2001 (Cth) (the Act) and ancillary orders. I said I would deliver short reasons for those orders. These are those reasons. 8 It is not proposed that ineligible foreign shareholders constitute a separate class, relying upon the decision of Barrett J in Re Hills Motorway Ltd (2002) 43 ACSR 101 at 104. That appears to be a reasonable basis for proceeding in the absence of contrary argument.


case_title: Re KAZ Group Ltd [2004] FCA 738

case_text: Corporation Limited, in the matter of SFE Corporation Limited [2006] FCA 670 (31 May 2006) [ Home ] [ Databases ] [ WorldLII ] [ Search ] [ Feedback ] Federal Court of Australia You are here:   AustLII >> Databases >> Federal Court of Australia >> 2006 >> [2006] FCA 670 [ Database Search ] [ Name Search ] [ Recent Decisions ] [ Noteup ] [ Download ] [ Help ] SFE Corporation Limited, in the matter of SFE Corporation Limited [2006] FCA 670 (31 May 2006) Last Updated: 31 May 2006 FEDERAL COURT OF AUSTRALIA SFE Corporation Limited, in the matter of SFE Corporation Limited [2006] FCA 670 CORPORATIONS scheme of arrangement meeting to be convened pursuant to s 411(1) of the Corporations Act 2001 (Cth) Corporations Act 2001 (Cth) ss 411(1) , 411 (3), 411 (6) Atkins v St Barbara Mines Ltd (1997) 138 FLR 425 cited Re Arthur Yates & Co Ltd (2001) 36 ACSR 758 cited Re Barbeques Galore Ltd [2005] FCA 1519 cited Re Hills Motorway Ltd (2002) 43 ACSR 101 cited Re KAZ Group Ltd [2004] FCA 738 cited IN THE MATTER OF SFE CORPORATION LIMITED ABN 74 000 299 392; SFE CORPORATION LIMITED NSD 934 OF 2006 GYLES J 31 MAY 2006 SYDNEY IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY NSD 934 OF 2006 IN THE MATTER OF SFE CORPORATION LIMITED ABN: 74 000 299 329 BETWEEN: SFE CORPORATION LIMITED PLAINTIFF JUDGE: GYLES J DATE: 31 MAY 2006 PLACE: SYDNEY REASONS FOR ORDERS 1 On 29 May 2006 I made orders convening a meeting of members of SFE Corporation Limited (SFE) pursuant to s 411(1) of the Corporations Act 2001 (Cth) (the Act) and ancillary orders. I said I would deliver short reasons for those orders. These are those reasons. 4 The obligations of ASX, in particular in relation to the Scheme consideration, are backed up by an executed deed poll as is the case in many such schemes. I have remarked in other cases (eg Re KAZ Group Ltd [2004] FCA 738) that this procedure is not entirely satisfactory as, in the event of default or delay, the shareholder whose shares have been actually acquired is left with the remedy of suing upon a deed poll. It may be that in this case the practical risk is slight. Indeed, the provision of undertakings plus appropriate evidence, if and when the matter comes back for approval, may eliminate the risk for all practical purposes. It seems to me, however, that schemes of this kind would be more acceptable if a procedure be devised whereby a mechanism were built in by which a third party such as a trustee company would have the role of suing on behalf of former shareholders in the target company. An alternative safeguard in relation to the cash portion of the payment would be to set aside a trust fund immediately before the vesting of the shares in the acquiring company. I do not see why shareholders whose shares are divested should run any performance risk so far as the quid pro quo is concerned. 5 My attention was drawn to the provisions relating to ineligible foreign shareholders and to breach of the law or the ASX Constitution . I saw no problem with them. 6 The Implementation Agreement includes exclusivity provisions including 'no shop' and 'no talk' restrictions. It also provides for a break fee to be paid by one side or the other in certain circumstances which could amount to over $11 million.


case_text: On a discovery application, the Court has a broad discretion and will balance the costs, time and possible oppression to the producing party against the importance and likely benefits which arise to the requesting party from production of the documents: Australian Broadcasting Commission v Parish (1981) 41 FLR 292 at 295. The Court will ensure that in all the circumstances, the litigation is conducted fairly in the interests of both parties, and care must be taken to make sure that there is no excessive or unnecessary discovery: see Index Group of Companies Pty Ltd v Nolan [2002] FCA 608. This Court has made it clear in Practice Note 14 that it will take a restrictive approach to discovery to ensure that excessive and wasteful discovery does not occur.


case_title: Index Group of Companies Pty Ltd v Nolan [2002] FCA 608


case_outcome: referred to

case_text: passage was quoted with approval by two members of the High Court in Amcor Ltd v Construction, Forestry, Mining and Energy Union [2005] HCA 10 ; (2005) 222 CLR 241 at 271 (Kirby J), 282-3 (Callinan J). In Australasian Meat Industry Employees Union v Coles Supermarkets Australia Pty Ltd (1998) 80 IR 208 at 212 Northrop J expressly agreed with this statement of principles and held that it had even stronger application to certified agreements than it did to awards.


case_title: Australasian Meat Industry Employees Union v Coles Supermarkets Australia Pty Ltd (1998) 80 IR 208


case_text: this Court single judges have adopted a more guarded approach. In McDonald (at 398-400) Buchanan J reviewed the authorities relating to the mutual trust and confidence term. He expressed disquiet about the notion that such a term could have escaped judicial notice for so long. More significantly he queried whether such a term could be implied consistently with the principles expounded by the High Court in BP Refinery (Westernport) Pty Ltd v Shire of Hastings (1977) 180 CLR 266 at 283. I respectfully share his Honour's reservations.


case_text: s 721(1) of the Act provides that a person who suffers loss or damage as a result of a breach of an AWA may recover that loss or damage in curial proceedings, the provision is silent as to the basis on which such loss and damage should be calculated. Mr Van Efferen submits that, because AWAs are statutory contracts, damages should be calculated as they would be in respect of any breach of contract. The applicant should be placed in the same situation, as far as money may do it, as if the contract had been performed: Commonwealth v Amann Aviation Pty Ltd [1991] HCA 54 ; (1991) 174 CLR 64 at 80 (Mason CJ and Dawson J), 98-9 (Brennan J), 116 (Deane J) and 148 (Gaudron J). In appropriate cases damages could be calculated by reference to what the applicant was entitled to expect by way of performance by the respondent and the losses incurred when the respondent failed to comply with its contractual obligations: Amann Aviation , at 91-2. Mr Van Efferen submitted that, had CMA complied with clause 2.10, he would not have been removed from the Dolphin Project and would have continued to perform his duties as marine supervisor until the project was completed on 15 April 2008. He submitted that damages should be assessed by reference to what he would have earned during this period, less the amount which he had earned since the termination of his employment. Alternatively, Mr Van Efferen contended that the same measure of damages should be awarded if a "loss of expectation" or "loss of chance" analysis of the kind deployed in Amann Aviation was applied. The award of compensatory damages for breach of contract protects the expectation interest of the innocent party: Amann Aviation at 80. That expectation is that the contract would be performed according to its terms. Mr Van Efferen sought to characterise the present case as one involving a "loss of chance" because he had lost the opportunity to obtain benefits which would have resulted from his continued employment with CMA. These submissions led to what I regard as an unprofitable debate about whether damages could and should be awarded in the present case on the alternative basis of a "loss of chance". In Amann Aviation , the plaintiff obtained damages against the Commonwealth for breach of a three year contract under which the plaintiff was to provide aerial coastal surveillance. Damages were awarded on the conventional basis. Additional damages were also awarded to compensate the plaintiff for a loss of opportunity to obtain a further contract after the repudiated contract had run its term. The plaintiff succeeded. The court considered that there was "a strong prospect of renewal" (at 94): it would have had the benefit of three years experience and any competitor would effectively have been starting from scratch. It was this latter award of damages that attracted the terms "loss of a chance" or "lost opportunity". More recently, in McDonald v Parnell Laboratories (Aust) Pty Ltd (2007) 168 IR 375 Buchanan J cautioned that the award of damages for "loss of a chance" could not occur, consistently with Amann Aviation , in the absence of a fixed term contract and evidence supporting the possibility that the contract might be renewed.


case_text: an employer wrongfully terminates an employment contract which has a fixed term, thereby causing damage to an employee, damages are normally calculated on the basis that the employee would have enjoyed the benefits of the contract for the remainder of its term: see Kilburn v Enzed Precision Products Pty Ltd (1988) 4 VIR 31 at 33; Patterson v Middle Harbour Yacht Club (1996) 64 FCR 405 at 406; Martin v Tasmanian Development and Resources (1999) 89 IR 98 at 120-1. The employee is under an obligation to mitigate his loss by seeking to obtain alternative remunerative employment. Although the AWA had a three year term, Mr Van Efferen only sought damages until CMA's work on the Dolphin Project ceased.


case_outcome: applied

case_title: Kucks v CSR Limited (1996) 66 IR 182

case_text: dealing with the construction of awards in Kucks v CSR Limited (1996) 66 IR 182 at 184 Madgwick J observed that: "It is trite that narrow or pedantic approaches to the interpretation of an award are misplaced. The search is for the meaning intended by the framer(s) of the document, bearing in mind that such framer(s) were likely of a practical bent of mind: they may well have been more concerned with expressing an intention in ways likely to have been understood in the context of the relevant industry and industrial relations environment than with legal niceties or jargon. Thus, for example, it is justifiable to read the award to give effect to its evident purposes, having regard to such context, despite mere inconsistencies or infelicities of expression which might tend to some other reading. And meanings which avoid inconvenience or injustice may reasonably be strained for. For reasons such as these, expressions which have been held in the case of other instruments to have been used to mean particular things may sensibly and properly be held to mean something else in the document at hand."


case_outcome: followed

case_text: an employer wrongfully terminates an employment contract which has a fixed term, thereby causing damage to an employee, damages are normally calculated on the basis that the employee would have enjoyed the benefits of the contract for the remainder of its term: see Kilburn v Enzed Precision Products Pty Ltd (1988) 4 VIR 31 at 33; Patterson v Middle Harbour Yacht Club (1996) 64 FCR 405 at 406; Martin v Tasmanian Development and Resources (1999) 89 IR 98 at 120-1. The employee is under an obligation to mitigate his loss by seeking to obtain alternative remunerative employment. Although the AWA had a three year term, Mr Van Efferen only sought damages until CMA's work on the Dolphin Project ceased. Full Courts of this Court have applied the "loss of a chance" approach to the assessment of damages for breaches of employment contracts. In Tasmania Development and Resources v Martin [1999] FCA 593 ; (2000) 97 IR 66 the Full Court upheld the trial judge's decision to award damages to reflect the applicant's loss of the prospect that his contract would be renewed even though he had no legal right to renewal. The applicant was employed by a statutory authority. He was employed on a three year contract. After about 18 months his employment was terminated on the grounds of redundancy. The trial judge found that the contract had been terminated by the statutory authority in breach of a provision which required that there be consultation between employer and employee before an employee was terminated for redundancy. The trial judge held that, had the contract not been wrongly terminated, the employee would have enjoyed its benefits for the remainder of the three year term. He allowed damages for that period. He also allowed a further sum to compensate the employee for loss of the chance of obtaining a fresh contract at the end of the term of the existing contract. In any event, in the circumstances in the present case, it is, at best for Mr Van Efferen, doubtful that the two implied terms add anything to CMA's contractual obligations having regard to the protective procedures incorporated expressly in clause 2.10 of the AWA. CMA was obliged to act in good faith in applying clause 2.10: cf Tasmania Development and Resources v Martin [1999] FCA 593 ; (2000) 97 IR 66 at 72. Had it done so no breach would have occurred. No detailed submissions were advanced relating to the precise terms of the orders which should be made were Mr Van Efferen to be successful. In particular no attention was directed as to the taxation implications of any order which the Court might be minded to make in Mr Van Efferen's favour: see Martin v Tasmania Development and Resources (1999) 89 IR 98 at 121-122. It is also necessary to consider whether any specific provision should be made in the court's order to deal with Mr Van Efferen's entitlement to interest. I will, therefore, direct that the parties file and serve minutes of orders which will give effect to these reasons. I certify that the preceding eighty-eight (88) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice TRACEY. Associate: Dated: 4 June 2009 Counsel for the Applicant: Mr J L Bourke and Mr M Felman Solicitor for the Applicant: Petersens Lawyers Counsel for the Respondent: Mr T Saunders Solicitor for the Respondent: Sparke Helmore Lawyers Date of Hearing: 16, 17 and 18 December 2008 Date of Judgment: 4 June 2009 AustLII: Copyright Policy | Disclaimers | Privacy Policy | Feedback URL: http://www.austlii.edu.au/au/cases/cth/FCA/2009/597.html


case_text: argument on damages seemed to proceed on the assumption that compensatory damages were not available. It resisted the "loss of chance" claim on the basis that Mr Van Efferen did not have a contract for a specific term and that no question of the possibility of renewal of the contract arose: see McDonald v Parnell Laboratories (Aust) Pty Ltd (2007) 168 IR 375 at 397-8. In this context it relied on the arguments, outlined above at [52] which, it contended, supported the view that there was no causal nexus between any contravention of clause 2.10 and the damage alleged by Mr Van Efferen. More recently, in McDonald v Parnell Laboratories (Aust) Pty Ltd (2007) 168 IR 375 Buchanan J cautioned that the award of damages for "loss of a chance" could not occur, consistently with Amann Aviation , in the absence of a fixed term contract and evidence supporting the possibility that the contract might be renewed. In this Court single judges have adopted a more guarded approach. In McDonald (at 398-400) Buchanan J reviewed the authorities relating to the mutual trust and confidence term. He expressed disquiet about the notion that such a term could have escaped judicial notice for so long. More significantly he queried whether such a term could be implied consistently with the principles expounded by the High Court in BP Refinery (Westernport) Pty Ltd v Shire of Hastings (1977) 180 CLR 266 at 283. I respectfully share his Honour's reservations. As a single judge I would follow the decisions of other single judges unless I considered them to be clearly wrong: see Bank of Western Australia Ltd v Commissioner of Taxation (1994) 55 FCR 233 at 255. Although Buchanan J's observations in McDonald were obiter I nonetheless consider them to be correct. Kenny J's ruling in Walker forms part of the ratio of her decision in that case. I do not consider either decision to be clearly wrong. Had it been necessary I would have followed them.


case_title: Pan Foods Company Importers and Distributors Pty Ltd v Australia and New Zealand Banking Group Ltd [2000] HCA 20 ; (2000) 170 ALR 579

case_text: as to the construction of industrial instruments may also be obtained by reference to principles which courts apply to the construction of commercial contracts. Commercial contracts should, as Kirby J held in Pan Foods Company Importers & Distributors Pty Ltd v Australia and New Zealand Banking Group Ltd [2000] HCA 20 ; (2000) 170 ALR 579 at 584 "be construed practically, so as to give effect to their presumed commercial purposes and so as not to defeat the achievement of such purposes by an excessively narrow and artificially restricted construction." An interpretation which accords with business common sense will be preferred to one which does not: see Upper Hunter County District Council v Australian Chilling and Freezing Co Ltd [1968] HCA 8 ; (1968) 118 CLR 429 at 437.


case_title: Patterson v Middle Harbour Yacht Club (1996) 64 FCR 405 at 406


case_title: Russell v The Trustees of the Roman Catholic Church for the Archdiocese of Sydney [2008] NSWCA 217 ; (2008) 176 IR 82

case_text: Russell Rothman J held that both terms should be implied in contracts of employment. In that case they did not avail the employee because, although they had been breached, the plaintiff had suffered no damage by reason of the breaches. On appeal, the New South Wales Court of Appeal went no further than holding that such terms may be implied in contracts of employment. Basten JA was (at [2008] NSWCA 217 ; (2008) 176 IR 82 [32]) inclined to treat the two implied terms as a single obligation. He considered (at [33]) that there was uncertainty as to the "scope and extent of the implied duties." Campbell JA was prepared to assume, without deciding, that an employer owed implied contractual obligations of the kind relied on by Mr Van Efferen. Giles JA (at [1]) was also prepared to assume rather than determine that such implied terms were incorporated in contracts of employment.


case_title: Russell v The Trustees of the Roman Catholic Church for the Archdiocese of Sydney [2007] NSWSC 104 ; (2007) 69 NSWLR 198


case_title: Tasmania Development & Resources v Martin [1999] FCA 593 ; (2000) 97 IR 66

case_text: Courts of this Court have applied the "loss of a chance" approach to the assessment of damages for breaches of employment contracts. In Tasmania Development and Resources v Martin [1999] FCA 593 ; (2000) 97 IR 66 the Full Court upheld the trial judge's decision to award damages to reflect the applicant's loss of the prospect that his contract would be renewed even though he had no legal right to renewal. The applicant was employed by a statutory authority. He was employed on a three year contract. After about 18 months his employment was terminated on the grounds of redundancy. The trial judge found that the contract had been terminated by the statutory authority in breach of a provision which required that there be consultation between employer and employee before an employee was terminated for redundancy. The trial judge held that, had the contract not been wrongly terminated, the employee would have enjoyed its benefits for the remainder of the three year term. He allowed damages for that period. He also allowed a further sum to compensate the employee for loss of the chance of obtaining a fresh contract at the end of the term of the existing contract. In any event, in the circumstances in the present case, it is, at best for Mr Van Efferen, doubtful that the two implied terms add anything to CMA's contractual obligations having regard to the protective procedures incorporated expressly in clause 2.10 of the AWA. CMA was obliged to act in good faith in applying clause 2.10: cf Tasmania Development and Resources v Martin [1999] FCA 593 ; (2000) 97 IR 66 at 72. Had it done so no breach would have occurred.


case_text: determining whether a commercial document imposes contractual obligations regard is had to the intention of the parties: would a reasonable person conclude that the person making the alleged binding promise intend to be contractually bound by that promise. In Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd [2004] HCA 52 ; (2004) 219 CLR 165 at 179 the High Court summarised the position as follows: "It is not the subjective beliefs or understanding of the parties about their rights and liabilities that govern their contractual relations. What matters is what each party by words and conduct would have led a reasonable person in the position of the other party to believe ... That, normally requires consideration not only of the text, but also of the surrounding circumstances known to the parties, and the purpose and object of the transaction." Clause 2.10 is, as it says, designed to deal with "concerns" which CMA may, from time to time have about the behaviour of its employees. Those concerns may arise from some innocent act of the employee which leads CMA mistakenly to believe that some misconduct has occurred. At the other end of the spectrum concern may be raised by blatant misconduct which occurs in the presence of a supervisor. Between these extremes fall many forms of conduct which have the potential to give rise to concern on the part of the employer. They include matters such as unapproved absences from duty, the failure to meet production targets, the performance of work in a manner which might compromise the health and safety of other employees, failure to contribute as part of a team and many more possibilities. Clause 2.10 is intended to deal with all such situations. Step 1 would, for example, be of use where CMA suspected that an employee had engaged in some misconduct but was not sure. The discussion between the manager and the employee may set the manager's mind at rest. Step 1 might also be useful where an employee is thought not to be working productively. If the issue is raised with the employee the employee may be able to offer a satisfactory explanation to CMA such as that his work is being impeded by some work-related injury. Serious misconduct such as abuse of a supervisor or actions which jeopardise the health and safety of other employees can be dealt with by immediate counselling under Step 2. The subsequent steps ensure that the employee knows that he or she is on notice that any repetition will place his or her continued employment in jeopardy. Extreme misconduct may lead to summary dismissal. Clause 2.10 can be engaged even when CMA has not determined that disciplinary action against the employee is warranted. The prefatory words of the clause make no mention of disciplinary action and do not condition its application on a decision by CMA that disciplinary action is warranted. The adoption of the term "grievance procedure" suggests that the clause was intended to have application to a wider range of "concerns" than those which have disciplinary implications. This is made plain by a reading of the clause as a whole. Its language confirms that it has application if CMA has a concern about an employee's behaviour and wishes to ascertain whether the employee has, in fact, done anything wrong. CMA may also harbour concerns about behaviour which it is satisfied amounts to misconduct but, in respect of which, it considers it appropriate to do no more than draw the matter to the employee's attention and request or direct that the conduct not be repeated. The word "grievance" is, of course, apt also to embrace CMA's reaction to conduct by an employee which CMA considers does or may warrant disciplinary action. The terms in which industrial instruments are drafted often require a distinction to be drawn between aspirational and promissory statements. In accordance with the objective theory of contract expounded in Toll , a provision in a document proffered by an employer, will be treated as promissory in nature if the hypothetical, reasonable, potential employee to whom the document is presented would have concluded that CMA intended to be contractually bound to follow the procedures, outlined in it if CMA developed any concerns about the behaviour of the employee. Whether or not he or she would have so concluded will depend on a consideration of the terms of the clause, the surrounding circumstances known to the parties and the nature of the arrangement which is being entered into. In my view clause 2.10 does impose an obligation on CMA to proceed at least as far as step 1 in a case such as the present. The clause appears in a particular type of contract which is recognised and regulated by statute. It is an agreement which is intended to govern the employment relationship of an employer and an employee. It provides a form of protection to an employee whose conduct has, for any reason, given the employer cause for concern. It is designed to ensure that the employee is informed of the nature of those concerns and has the opportunity to disabuse the employer or to have the opportunity (in most instances) of rectifying any shortcomings which have given rise to the employer's misgivings.


case_title: Upper Hunter County District Council v Australian Chilling and Freezing Co Ltd [1968] HCA 8 ; (1968) 118 CLR 429


case_text: Walker v Citigroup Global Markets Pty Ltd [2005] FCA 1678 ; (2005) 226 ALR 114 at 156-157 Kenny J held that, in Australia, a term of good faith "does not apply to employment contracts." On appeal the Full Court did not need to express a view on her Honour's finding: see Walker v Citigroup Global Markets Australia Pty Ltd [2006] FCAFC 101 ; (2006) 233 ALR 687 at 708 [86] .


case_text: Walker v Citigroup Global Markets Australia Pty Ltd [2006] FCAFC 101 ; (2006) 233 ALR 687 it was held that damages could be assessed on a "loss of a chance" basis where a contract of employment had been repudiated before the applicant had commenced to perform duties under it. The Full Court considered that, on the evidence, had Mr Walker been permitted to commence work under the contract, it was to be expected that he would not have left his employment voluntarily or for cause within a five year period. Damages were assessed on this basis with a 25% discount applied to take account of the possibility that the contract might have been terminated during the five year period. In Walker v Citigroup Global Markets Pty Ltd [2005] FCA 1678 ; (2005) 226 ALR 114 at 156-157 Kenny J held that, in Australia, a term of good faith "does not apply to employment contracts." On appeal the Full Court did not need to express a view on her Honour's finding: see Walker v Citigroup Global Markets Australia Pty Ltd [2006] FCAFC 101 ; (2006) 233 ALR 687 at 708 [86] .


case_text: Van Efferen gave evidence about his attempts to obtain alternative employment between October 2006 and April 2008. He had found it impossible to obtain maritime work but had been prepared to take whatever work he could get. He was able to obtain some short term employment. His evidence was not seriously challenged. I accept it. CMA has failed to discharge the onus which fell on it to prove that Mr Van Efferen failed to mitigate his loss: see: Watts v Rake [1960] HCA 58 ; (1960) 108 CLR 158. There is no reason, in my opinion, why Mr Van Efferen's damages should not be assessed on the normal contractual basis. He had a contract for a three year term which did not expire until mid-2009. He confines his claim to the period of the Dolphin Project. The amount Mr Van Efferen would have earned during the life of the project would have been $313,007.47 in salary plus $14,284 in superannuation. This is a total of $327,291.47. From this figure must be deducted the amount which Mr Van Efferen earned in alternative employment during the relevant period. That figure was $22,525.94. His loss was, therefore, $304,765.53.


case_title: Jess v Scott (1986) 12 FCR 187

case_text: The leading authority on the circumstances in which an extension of time may be granted under O 52 r 15 is Jess v Scott (1986) 12 FCR 187. In that case, the Court (Lockhart, Sheppard and Burchett JJ) said at 195: 'What is needed to justify an extension of time is indicated in r 15(2) by the words "for special reasons". It is that there be shown a special reason why the appeal should be permitted to proceed, though filed after the expiry of 21 days. In that context, the expression "special reasons" is intended to distinguish the case from the usual course according to which the time is 21 days. But it may be so distinguished (not necessarily will for the rule gives a discretion) wherever the Court sees a ground which does justify departure from the general rule in a particular case. Such a ground is a special reason because it takes the case out of the ordinary. We do not think the use of the expression "for special reasons" implies something narrower than this. ... It should not be overlooked that r 15(2) enables leave to be given "at any time"; the "special reasons" relevant to such a power cannot but describe an elastic test, suitable for application across a wide range of situations, from an oversight of a day to a neglect persisted in during a prolonged period. It would require something very persuasive indeed to justify a grant of leave after, for example, a year; equally, it may be said, something much less significant might justify leave where a party is a few days late. "Special reasons" must be understood in a sense capable of accommodating both types of situation. It is an expression describing a flexible discretionary power, but one requiring a case to be made upon grounds sufficient to justify a departure, in the particular circumstances, from the ordinary rule prescribing a period within which an appeal must be filed and served.'


case_text: Considerations relevant to the exercise of the power are discussed in Howard v Australian Electoral Commission [2000] FCA 1767 and Ariaee v Minister for Immigration and Multicultural Affairs [2001] FCA 1627.


case_title: Ariaee v Minister for Immigration and Multicultural Affairs [2001] FCA 1627


case_text: In my opinion, the Magistrate did not err in the way in which he exercised his discretion. As I understand the submissions, the only way in which a cancellation of the appellant's student visa could be avoided is if the university's decision not to certify that the appellant's academic results were satisfactory was altered. The decision by the university to exclude her was taken some two to three years ago. It was not suggested that since the delegate's decision on 7 April 2004 the university had been approached to alter its decision, or that there are any proceedings on foot to achieve that result. In my opinion, there is no reason to interfere with the Magistrate's conclusion that, at a practical level, the inevitable result of a rehearing would be a cancellation of the appellant's student visa. In my opinion, Re Refugee Review Tribunal; Ex parte Aala [2000] HCA 57 ; (2000) 204 CLR 82 (" Aala ") and SAAP are authority for the proposition that relief may be refused if, irrespective of any question of procedural fairness or individual merits, the decision-maker was bound by the governing statute to refuse the application: Aala per Gaudron and Gummow JJ at 109 [58]; SAAP per McHugh J at 109 [58]. In this case it is not necessary to consider if futility is to be judged by asking what decision the Tribunal would have made even if it had complied with s 359A(1)(b) or by asking if a decision by the Tribunal in the future refusing the application is inevitable because there has been no relevant change of circumstances (see the discussion in Giretti v Commissioner of Taxation (1996) 70 FCR 151 per Lindgren J at 164-165 and Merkel J at 174-180).


case_outcome: considered

case_text: The Full Court considered the obligations in s 424A of the Act in Minister for Immigration and Multicultural Affairs v SZGMF [2006] FCAFC 138. In material respects, that section is in the same terms as s 359A. The Court held that the Tribunal had failed to comply with s 424A(1)(a) and s 424A(1)(b). The Court said (at [40]-[41]): As mentioned above, the obligation on the Tribunal was to 'ensure, as far as is reasonably practicable', that the respondent understood why the information set out in the s 424A letter was relevant to the review. No practical or other difficulty stood in the way of the Tribunal telling the respondent that the information which it had received about his letters of support caused it to disbelieve or doubt the content of those letters. Yet the s 424A letter did not explicitly tell the respondent that the relevance to the review of the information which it had received about his letters of support was that the information indicated that the content of the letters was false. The Tribunal's failure to state explicitly the relevance to the review of the information concerning the respondent's letters of support is of importance because of the opaque nature of the particulars of the information provided to the respondent by the s 424A letter; the use that the Tribunal could make of the information as particularised was not self-evident. 29 It is to be noted that the case involved a breach of both of the subparagraphs, whereas this case involves an alleged breach of subparagraph (b). It is also to be noted that the Court said that the use the Tribunal could make of the information as particularised was not self-evident. In my opinion, there may well be cases where the relevance of the information to the review is self-evident and no letter or explanation is required to satisfy the requirements of s 359A(1)(b). However, in this case I think that the Tribunal was required to do more than it did. The Tribunal should have advised the appellant that the non-certification by the university that her academic results were at least satisfactory would constitute a breach of a condition attached to her student visa. It may not have been necessary for the Tribunal to go on and say that in those circumstances cancellation of the visa was mandatory but, at the very least, the Tribunal should have advised the appellant that the information was relevant because it would constitute a breach of a condition attached to her visa.


case_title: Refugee Review Tribunal, Re; Ex parte Aala [2000] HCA 57 ; (2000) 204 CLR 82


case_text: The first respondent did not submit that a failure to comply with s 359A(1)(b) did not constitute a jurisdictional error ( SAAP v Minister for Immigration and Multicultural and Indigenous Affairs [2005] HCA 24 ; (2005) 79 ALJR 1009 (" SAAP ")). In my opinion, the Magistrate erred in concluding that there had not been a breach of s 359A(1)(b). 31 The Magistrate held that, in any event, it would be futile to grant relief and, that in those circumstances, he exercised his discretion to decline to grant relief. The Magistrate said that the appellant had not sought to adduce any material to indicate that in any way "the academic performance could or should have been altered". No application was made to the university for special consideration nor any attempt made to alter the academic outcome. The appellant did not point to any material to suggest that these conclusions were wrong. Her submission was that as long as there was a theoretical possibility that relief would not be futile then the discretion should not be exercised to refuse relief. 32 In my opinion, the Magistrate did not err in the way in which he exercised his discretion. As I understand the submissions, the only way in which a cancellation of the appellant's student visa could be avoided is if the university's decision not to certify that the appellant's academic results were satisfactory was altered. The decision by the university to exclude her was taken some two to three years ago. It was not suggested that since the delegate's decision on 7 April 2004 the university had been approached to alter its decision, or that there are any proceedings on foot to achieve that result. In my opinion, there is no reason to interfere with the Magistrate's conclusion that, at a practical level, the inevitable result of a rehearing would be a cancellation of the appellant's student visa. In my opinion, Re Refugee Review Tribunal; Ex parte Aala [2000] HCA 57 ; (2000) 204 CLR 82 (" Aala ") and SAAP are authority for the proposition that relief may be refused if, irrespective of any question of procedural fairness or individual merits, the decision-maker was bound by the governing statute to refuse the application: Aala per Gaudron and Gummow JJ at 109 [58]; SAAP per McHugh J at 109 [58]. In this case it is not necessary to consider if futility is to be judged by asking what decision the Tribunal would have made even if it had complied with s 359A(1)(b) or by asking if a decision by the Tribunal in the future refusing the application is inevitable because there has been no relevant change of circumstances (see the discussion in Giretti v Commissioner of Taxation (1996) 70 FCR 151 per Lindgren J at 164-165 and Merkel J at 174-180).


case_outcome: distinguished

case_text: The appellant also submits that the Magistrate erred in concluding that to grant relief would be futile and , in those circumstances, he should exercise his discretion to refuse relief. She submits that it was at least theoretically possible that the grant of relief would not be futile and that, in those circumstances, the discretion to refuse relief should not have been exercised. The appellant referred to the decision in Tran v Minister for Immigration and Multicultural Affairs [2006] FCA 1229 ; (2006) 154 FCR 536 (" Tran "). 21 The first respondent sought to meet the appellant's submissions. In addition, he sought to raise two other arguments. The first argument is that s 359A of the Act did not apply because the relevant information was information the applicant gave for the purpose of the application and that, in those circumstances, the section did not apply by reason of s 359A(4)(b). That argument is raised by the first respondent in a notice of contention which has been filed. The second argument is that the obligation in s 359A(1)(b) may be satisfied by a method other than by giving a document to an applicant. In support of that argument he refers to the fact that s 359A(1)(a) refers to information and s 359A(1)(c) refers to an invitation. Section 359A(2) refers to information and the invitation but does not refer to an explanation which might be given in compliance with s 359A(1)(b). This second argument of the first respondent was not the subject of consideration by the Magistrate and is not the subject of the notice of contention. It does not appear to have been raised before the Magistrate. If I accept the argument, the first respondent goes on to submit that the onus is on the appellant to prove a breach of the section and the appellant is unable to discharge that onus. In other words, the first respondent submits that the appellant is unable to prove that by some means the Tribunal did not ensure, as far as reasonably practicable, that she understood why the information was relevant to the review. 22 I start by a consideration of the two other arguments raised by the first respondent. 33 The appellant referred to the decision of Rares J in Tran . It is true that his Honour referred to the fact that it was theoretically possible for the Tribunal to reach a different result and that that was sufficient to overcome any objection to the granting of relief, but all of his Honour's observations must be considered and it is clear that, on the ground of futility, the case before him was quite a different one from that before me. In the case before his Honour, it was clear that, although improbable, it was possible that the Tribunal would reach a different result. That is not the case here and no ground for interfering with the Magistrate's exercise of the discretion has been established. 34 Although in my respectful opinion the Magistrate should have concluded that the Tribunal had failed to comply with s 359A(1)(b), he did not err in exercising his discretion to refuse to grant relief. In those circumstances, the appeal must be dismissed. The appellant must pay the first respondent's costs. I certify that the preceding thirty-four (34) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Besanko. Associate: Dated: 4 April 2007 Counsel for the Appellant: Mr J Gibson Solicitor for the Appellant: Australian Legal Advisory Centre Counsel for the First Respondent: Mr S Donaghue Solicitor for the First Respondent: Phillips Fox Date of Hearing: 30 October 2006 Date of Judgment: 4 April 2007 AustLII: Copyright Policy | Disclaimers | Privacy Policy | Feedback URL: http://www.austlii.edu.au/au/cases/cth/FCA/2007/488.html


case_text: In the context of operations in overseas territories, I note at this point that the CECK partnership was successful in obtaining an export market development grant ("development grant") under the Export Market Development Grants Act 1974 (Cth) in relation to its expenditure in promoting the Travel Vision system in overseas territories in the 1994 FY. The CECK partnership and other licensees made a claim for a similar grant in relation to the 1995 FY. The claim was rejected by the Australian Trade Commission ("the Commission") but upheld by the Administrative Appeals Tribunal. On appeal by the Commission to a single Judge of this Court, the decision of the Tribunal was upheld: Australian Trade Commission v Disktravel [1999] FCA 48. On a further appeal, the Full Court of this Court set aside the decision of the single Judge and the Tribunal: Australian Trade Commission v Disktravel [1999] FCA 1399 ; (1999) 91 FCR 374. I will discuss the issues in those proceedings and their significance to the applications before me in due course. 228 The Australian Trade Commission refused the application for the grant. The Commission decision was overturned by the Administrative Appeals Tribunal: Travel Vision International Pty Ltd and Australian Trade Commission AAT No 12540 [1988] AATA 11. An appeal by the Commission to a single Judge of this Court on a question of law was dismissed: Australian Trade Commission v Disktravel [1999] FCA 48. On a further appeal by the Commission to the Full Court, the appeal was allowed. The three principal issues in the appeal were as follows: 1. Whether the expenditure was incurred "primarily and principally" for the purpose of the possible disposition of any intellectual property rights, as s 11Z(8) requires; 2. Whether intellectual property rights if any in the software and disks passed to the applicants under the licence agreements; and 3. Whether the provisions of s 38 of the Act applied. As to the first issue, the Tribunal made the following findings: "135. The objective purpose of these applicants in incurring the expenditure to Plutora was to provide Plutora with sufficient funds to acquit its obligations to the applicants pursuant to the agreements. That is, to promote the disposal of the licences by way of granting sub-licences. That is what the expenditure was intended to achieve .... The investment or outlay of each applicant was motivated by an expectation that in achieving the objective purpose, it would generate income, in the form of royalties. And more remotely, there was the hope that, in due course sufficient income would be generated to repay the limited recourse loans and provide a return on the original investment. Those were the objectives and motives of the applicants. As a result of entering into the agreements with Plutora the six applicants had a reasonable expectation, on the basis of the information provided to them by Mr Snow, and in Mr Fiocco's case, on the basis of advice from his accountant, that they would receive income tax relief and an export market development grant. 136. The evidence is that the directors of TVI, the consultants and Mr Martinson, at the time of their overseas promotions trips and the incurring of the expenditures in question, believed they would succeed in 'selling' sub-licences. Mr Fiocco's evidence is that he too thought that was a possibility but not without considerable risk. He saw the prospect of the financial effect of enhanced income tax deductions and an export market development grant as the incentive. That is subjectively, it was those possible consequences of making the investment which induced the applicants to enter into the arrangement. But the purpose of their investment was as stated. If the arrangement offered by TVI lacked commercial realism then it would be open to a tribunal of fact to conclude that the subjective purpose, of obtaining financial gains, through exploitation of the income tax and export market development grants laws, was dominant. On that basis the requisite purpose would not be met. However, this Tribunal finds, on the evidence, that the arrangement entered into between TVI and the applicants and Plutora and the applicants, at the time, was sufficiently commercially plausible to be considered, objectively, as a reasonable investment, the risk of which had been considerably reduced by the prospect of income tax and export grant financial benefits."


case_text: In the context of operations in overseas territories, I note at this point that the CECK partnership was successful in obtaining an export market development grant ("development grant") under the Export Market Development Grants Act 1974 (Cth) in relation to its expenditure in promoting the Travel Vision system in overseas territories in the 1994 FY. The CECK partnership and other licensees made a claim for a similar grant in relation to the 1995 FY. The claim was rejected by the Australian Trade Commission ("the Commission") but upheld by the Administrative Appeals Tribunal. On appeal by the Commission to a single Judge of this Court, the decision of the Tribunal was upheld: Australian Trade Commission v Disktravel [1999] FCA 48. On a further appeal, the Full Court of this Court set aside the decision of the single Judge and the Tribunal: Australian Trade Commission v Disktravel [1999] FCA 1399 ; (1999) 91 FCR 374. I will discuss the issues in those proceedings and their significance to the applications before me in due course. 226 Before addressing each of the eight matters, it is appropriate for me to refer to the decision of the Full Court of this Court in Australian Trade Commission v Disktravel [1999] FCA 1399 ; (1999) 91 FCR 374. The issue in that case was whether the applicants, including the CECK partnership, were eligible for a grant under the Export Market Development Grants Act 1974 (Cth) in respect of the 1995 FY. The claim by the CECK partnership was in respect of expenditure incurred by way of marketing fees to Plutora in relation to the overseas territories in respect of which it held licences. Under the Export Market Development Grants Act 1974 (Cth) the relevant expenditure must be "eligible expenditure". That in turn involved a number of requirements, one of which was that the expenditure be "qualifying export development expenditure". Section 11Z(8) of the Export Market Development Grants Act 1974 (Cth) provided as follows: "Expenditure is qualifying export development expenditure of a person to whom this section applies if: (a) in the Commission's opinion, it is incurred primarily and principally for the purpose of: (i) creating or seeking opportunities for; or (ii) creating or increasing demand for; the disposal, by that person, to persons resident outside Australia for use and enjoyment outside Australia of: (iii) eligible industrial property rights owned by that person; or (iv) eligible know-how owned by that person." 227 The terms "eligible industrial property rights", "eligible know-how" and "know-how" were all defined in the Export Market Development Grants Act .


case_text: The eight matters identified in s 177D(b)(i)-(viii) inclusive are exhaustive of the matters to be considered in determining whether the relevant conclusion should be drawn: Peabody v Commissioner of Taxation (1993) 40 FCR 531 (" Peabody ") at 541 per Hill J (Ryan and Cooper JJ concurring); Calder v Commissioner of Taxation (2005) 226 ALR 643 (" Calder ") at 290 [91]. Whether the relevant conclusion should be drawn is to be determined objectively in the sense that the question is not as to the taxpayer's subjective intention and purpose: Commissioner of Taxation v Spotless Services Ltd [1996] HCA 34 ; (1996) 186 CLR 404 (" Spotless ") at 421-422, 424; Commissioner of Taxation v Hart [2004] HCA 26 ; (2004) 217 CLR 216 (" Hart ") at 223 [37], 243 [65] per Gummow and Hayne JJ; Peabody at 542; Calder at 291-292 [96]. A person may have more than one purpose and that is made clear by s 177A(5). One purpose may be a commercial purpose, but Part IVA will nevertheless apply if the other purpose was to obtain a tax benefit and that purpose was the dominant purpose: Spotless at 415-416; Hart at 227 [16] per Gleeson CJ and McHugh J; Sleight at 229-230 [67] and 238-239 [113] per Hill J (with whom Hely J agreed); Calder at 291 [92]. 224 The authorities also establish that, in any particular case, one of the eight matters may be decisive; in another case, it may only be after a careful weighing of all eight matters that the relevant conclusion can be drawn. Furthermore, even though some matters may be neutral and others may point towards a commercial purpose, the other matters may be such that a conclusion of a dominant purpose of obtaining a tax benefit should be drawn: Sleight at 229-230 [67]; Calder at 290 [91]. 253 An important feature related to the management fees is the method whereby obligations under the limited recourse loan agreements and the management agreements were met. In this respect, I am referring to the endorsing and later cancellation of the bills of exchange in the manner I have described. It was very similar to a "round robin" of cheques which, although effective as a matter of law ( Equuscorp Pty Ltd v Glengallan Investments Pty Ltd [2004] HCA 55 ; (2004) 218 CLR 471 at 486-487 [46] - [47] ) is, as Hill J pointed out in Sleight (at 232 [77]), a feature of many tax avoidance schemes. The method by which the moneys to be paid under the limited recourse loan agreements were paid by the lender and then in turn paid to the manager was known to the members of the CECK partnership because they endorsed the bills of exchange. Even if it was unknown, as might have been the case with the applicants involved in the TVA Project because the bills of exchange were endorsed by Plutora as duly appointed agent and attorney of Civil and Earth, the method of payment is still a matter to be taken into account. Commissioner of Taxation v Consolidated Press Holdings Ltd [2001] HCA 32 ; (2001) 207 CLR 235 at 264 [95] ; Commissioner of Taxation v Cooke (2004) 55 ATR 183 at 216 [88]; Calder v Commissioner of Taxation (2005) 226 ALR 643 at 294-295 [113]-]115].


case_text: An important feature related to the management fees is the method whereby obligations under the limited recourse loan agreements and the management agreements were met. In this respect, I am referring to the endorsing and later cancellation of the bills of exchange in the manner I have described. It was very similar to a "round robin" of cheques which, although effective as a matter of law ( Equuscorp Pty Ltd v Glengallan Investments Pty Ltd [2004] HCA 55 ; (2004) 218 CLR 471 at 486-487 [46] - [47] ) is, as Hill J pointed out in Sleight (at 232 [77]), a feature of many tax avoidance schemes. The method by which the moneys to be paid under the limited recourse loan agreements were paid by the lender and then in turn paid to the manager was known to the members of the CECK partnership because they endorsed the bills of exchange. Even if it was unknown, as might have been the case with the applicants involved in the TVA Project because the bills of exchange were endorsed by Plutora as duly appointed agent and attorney of Civil and Earth, the method of payment is still a matter to be taken into account. Commissioner of Taxation v Consolidated Press Holdings Ltd [2001] HCA 32 ; (2001) 207 CLR 235 at 264 [95] ; Commissioner of Taxation v Cooke (2004) 55 ATR 183 at 216 [88]; Calder v Commissioner of Taxation (2005) 226 ALR 643 at 294-295 [113]-]115].


case_title: Commissioner of Taxation v Cooke (2004) 55 ATR 183


case_text: The eight matters identified in s 177D(b)(i)-(viii) inclusive are exhaustive of the matters to be considered in determining whether the relevant conclusion should be drawn: Peabody v Commissioner of Taxation (1993) 40 FCR 531 (" Peabody ") at 541 per Hill J (Ryan and Cooper JJ concurring); Calder v Commissioner of Taxation (2005) 226 ALR 643 (" Calder ") at 290 [91]. Whether the relevant conclusion should be drawn is to be determined objectively in the sense that the question is not as to the taxpayer's subjective intention and purpose: Commissioner of Taxation v Spotless Services Ltd [1996] HCA 34 ; (1996) 186 CLR 404 (" Spotless ") at 421-422, 424; Commissioner of Taxation v Hart [2004] HCA 26 ; (2004) 217 CLR 216 (" Hart ") at 223 [37], 243 [65] per Gummow and Hayne JJ; Peabody at 542; Calder at 291-292 [96]. A person may have more than one purpose and that is made clear by s 177A(5). One purpose may be a commercial purpose, but Part IVA will nevertheless apply if the other purpose was to obtain a tax benefit and that purpose was the dominant purpose: Spotless at 415-416; Hart at 227 [16] per Gleeson CJ and McHugh J; Sleight at 229-230 [67] and 238-239 [113] per Hill J (with whom Hely J agreed); Calder at 291 [92]. 263 The result that would be achieved by the schemes but for Part IVA is that each of the applicants would be entitled to substantial deductions in excess of funds actually contributed by them. That points to a dominant tax purpose: Sleight at 234 [84] per Hill J. However, it must be borne in mind that simply because a taxpayer pays less tax if one form of transaction rather than another is made does not demonstrate that Part IVA applies: Hart at 240 [53] per Gummow and Hayne JJ.


case_text: I reject the respondent's first submission. The payments made by the applicants are allowable deductions if they fall within the terms of s 51(1) of the ITAA 1936 and Part IVA does not apply to them. Part IVA might apply to a scheme but it is well recognised that the relevant deduction may be disallowed only to the extent that it is not reflected in an actual cash outlay: Commissioner of Taxation v Sleight [2004] FCAFC 94 ; (2004) 136 FCR 211 per Hill J at 238-239 [112]-[116]. It seems to me that whether there has been an actual cash outlay cannot turn on whether the taxpayer finds the cash at the time or, through a loan agreement, finds it later. It is the transaction which gives rise to the deduction which is the focus of the inquiry and whether Part IVA applies to it and not the character of the later transaction whereby, for example, a loan is repaid. It might be said that Part IVA only applies to the extent that the scheme has been entered into or carried out for a dominant tax purpose or, alternatively, the discretion in s 177F(b) should be exercised in favour of the taxpayer to the extent that he makes an actual cash outlay either at the time or later. 142 The respondent's second submission is more difficult to deal with. There is force in the respondent's submission, but at the same time there appears to be no dispute that the payments were made and there is no evidence of any obligations of the members of the CECK partnership to Plutora other than in relation to the TVI Project. The total amount in issue is substantial, that is, $300,000 as against the sum of $100,000 accepted by the respondent, and the parties only made written submissions on the point. In the circumstances, I will give them leave to make further submissions if so advised. 143 In the 1996 FY the promoters decided to restructure the existing arrangements. The features of the proposal to restructure the existing arrangements were outlined in a letter from Mr Snow on behalf of Plutora to Mr Prince on behalf of the CECK partnership dated 6 May 1996. 192 The respondent did not formally concede that the deductions fell with s 51(1). However, he did not make any submissions to the contrary and he submitted that it was open to the Court to find that the claimed deductions fell within the terms of s 51(1). Having considered the authorities discussed by Hill J (at 224-228) and Carr J (at 251-252) in Sleight , I think it is proper to hold that the claimed deductions fall within s 51(1) of the ITAA 1936. 193 Section 79D limits a taxpayer's right to claim deductions in relation to assessable foreign income. 194 Section 79D(1) provides as follows: "(1) Where: (a) apart from this section, there are one or more foreign income deductions of a taxpayer in relation to a class of assessable foreign income in relation to a year of income; and (b) either: (i) the taxpayer did not derive any assessable foreign income of that class in the year of income; or (ii) the taxpayer derived assessable foreign income of that class in the year of income and its amount is exceeded by the sum of the foreign income deductions; then, for the purposes of this Act, those deductions are reduced respectively: (c) where subparagraph (b)(i) applies--to nil; or (d) where subparagraph (b)(ii) applies--by amounts proportionate to those deductions and equal in total to the amount of the excess referred to in that subparagraph." 223 The eight matters identified in s 177D(b)(i)-(viii) inclusive are exhaustive of the matters to be considered in determining whether the relevant conclusion should be drawn: Peabody v Commissioner of Taxation (1993) 40 FCR 531 (" Peabody ") at 541 per Hill J (Ryan and Cooper JJ concurring); Calder v Commissioner of Taxation (2005) 226 ALR 643 (" Calder ") at 290 [91]. Whether the relevant conclusion should be drawn is to be determined objectively in the sense that the question is not as to the taxpayer's subjective intention and purpose: Commissioner of Taxation v Spotless Services Ltd [1996] HCA 34 ; (1996) 186 CLR 404 (" Spotless ") at 421-422, 424; Commissioner of Taxation v Hart [2004] HCA 26 ; (2004) 217 CLR 216 (" Hart ") at 223 [37], 243 [65] per Gummow and Hayne JJ; Peabody at 542; Calder at 291-292 [96]. A person may have more than one purpose and that is made clear by s 177A(5). One purpose may be a commercial purpose, but Part IVA will nevertheless apply if the other purpose was to obtain a tax benefit and that purpose was the dominant purpose: Spotless at 415-416; Hart at 227 [16] per Gleeson CJ and McHugh J; Sleight at 229-230 [67] and 238-239 [113] per Hill J (with whom Hely J agreed); Calder at 291 [92]. 224 The authorities also establish that, in any particular case, one of the eight matters may be decisive; in another case, it may only be after a careful weighing of all eight matters that the relevant conclusion can be drawn. Furthermore, even though some matters may be neutral and others may point towards a commercial purpose, the other matters may be such that a conclusion of a dominant purpose of obtaining a tax benefit should be drawn: Sleight at 229-230 [67]; Calder at 290 [91]. 252 The management fees involved very significant sums of money and they were to be paid "up-front" and before any expenses were incurred. There are no details in any of the information memoranda as to how the fees were calculated. I cannot put any weight on the mere assertions of some of the applicants that they considered the management fees to be appropriate and reasonable. No basis for those assertions was provided. Other than referring to some quite general matters, Mr Snow provided no details of the basis on which he calculated the management fees and I do not think I can put any weight on his evidence on this point in the face of such strong objective evidence that suggests that they were calculated at the figures they were in order to provide substantial tax benefits to, among others, the applicants. The terms and conditions of the limited recourse loans are important in this respect. They meant that as to the amounts referred to in the limited recourse loan agreements the respective assets of each applicant were not at risk. The promoters were taking the risk of expenses exceeding actual cash outlays. The terms of the agreements and, in particular, the provision for a percentage of the profits (if any) from the Projects to be paid to the lender (which was one of the promoters) for an indefinite period after the principal had been repaid and to be deemed to be interest were unusual and to my mind they suggest that the dominant purpose of each applicant, objectively assessed, was the obtaining of tax benefits. It seems to me that the management fees were "loaded up" and that that was done so that the applicants obtained tax benefits. The words of Hill J in Sleight at 233 [80] are apposite: "Finally, it should be noted that the financial structure that the management agreement, loan agreement and indemnity agreement created was not necessary to the success of a tea tree project. Presumably the promoters, for example, could have still received the same amount of return by limiting the first year management fee to the actual cash outlay of the investor, and then adjusting the management fee in subsequent years to achieve this result. Arguably, an investor would thus have a legitimate, albeit significantly reduced, tax deduction for his cash outlay because it was actually a necessary cost of the project. This fact points towards a dominant tax incentive purpose because it could be objectively determined or concluded that an investor, who had a dominant commercial purpose, would prefer the project with a normal structure, rather than one which was so structured that it maximised the deductions available by the use of a somewhat artificial structure." 253 An important feature related to the management fees is the method whereby obligations under the limited recourse loan agreements and the management agreements were met. In this respect, I am referring to the endorsing and later cancellation of the bills of exchange in the manner I have described. It was very similar to a "round robin" of cheques which, although effective as a matter of law ( Equuscorp Pty Ltd v Glengallan Investments Pty Ltd [2004] HCA 55 ; (2004) 218 CLR 471 at 486-487 [46] - [47] ) is, as Hill J pointed out in Sleight (at 232 [77]), a feature of many tax avoidance schemes. The method by which the moneys to be paid under the limited recourse loan agreements were paid by the lender and then in turn paid to the manager was known to the members of the CECK partnership because they endorsed the bills of exchange. Even if it was unknown, as might have been the case with the applicants involved in the TVA Project because the bills of exchange were endorsed by Plutora as duly appointed agent and attorney of Civil and Earth, the method of payment is still a matter to be taken into account. Commissioner of Taxation v Consolidated Press Holdings Ltd [2001] HCA 32 ; (2001) 207 CLR 235 at 264 [95] ; Commissioner of Taxation v Cooke (2004) 55 ATR 183 at 216 [88]; Calder v Commissioner of Taxation (2005) 226 ALR 643 at 294-295 [113]-]115]. 258 The substance of the schemes was very different. The applicants played no role in the ongoing activities of the schemes, which were left in the hands of the companies involved in the promotion of the schemes. The applicants were in effect no more than passive investors. As in Sleight (at 233 [81]), once the tax features are removed, it can be seen that the applicants are no more than passive investors in a managed fund. Furthermore, although the applicants undertook substantial financial obligations, the reality was that their cash contributions were much smaller and they were more than outweighed by the tax benefits offered by the "gearing up" of the management fees. As I have said, the management fees were of an amount which could not be explained in pure commercial terms and the limited recourse loan meant that if the manager incurred fees in excess of the actual cash contributions it would be the party taking the risk that the Projects were sufficiently successful to ensure repayment of its fees. The applicants put at risk only their actual cash outlays. 259 Furthermore, there were a number of somewhat artificial features of the agreements comprising the Projects. First, there was the fact that one company granted a licence to an investor who nominated a company related to the licensor to carry out the activities envisaged by the licensee. In relation to the overseas territories, there was the additional feature of a sub-licence and the puzzling clause as to the circumstances in which the licensee was not required to carry out certain obligations in the licence. Secondly, there was the unusual feature of the limited recourse loans under which no interest in the usual sense was payable but an amount of advertising revenue was payable for an indefinite period, which amount was deemed to be interest. Thirdly, there was the unusual feature that the licences were only for a year, with options to extend, in circumstances in which the amounts borrowed by the licensees were very substantial. Fourthly, there was disparity between the initial fee for overseas licences and the projected initial fee for sub-licences. As I have said, the reason for that difference was unexplained. 260 In my opinion, all of the considerations relating to the form and substance of the schemes suggest a conclusion of a dominant tax purpose should be drawn. 263 The result that would be achieved by the schemes but for Part IVA is that each of the applicants would be entitled to substantial deductions in excess of funds actually contributed by them. That points to a dominant tax purpose: Sleight at 234 [84] per Hill J. However, it must be borne in mind that simply because a taxpayer pays less tax if one form of transaction rather than another is made does not demonstrate that Part IVA applies: Hart at 240 [53] per Gummow and Hayne JJ. 268 The applicants pointed to the evidence of Mr Simpson that the internal rate of return of the Travel Vision Projects calculated by reference to the financial projections in the information memoranda were attractive and were commensurate with the risks involved in the particular Projects. As I have said, that does distinguish this case from cases in which the commercial returns, if achieved, were likely to be very modest, or were only likely to be received many years into the future. At the same time, the fact is that the Travel Vision Projects in the 1994 FY, 1995 FY and 1996 FY did not generate any commercial returns. Furthermore, the tax benefits from the scheme were relatively certain, whereas the commercial benefits were quite uncertain and, after the first year or so, very uncertain. That is a fact pointing to a dominant tax purpose: Sleight at 234 [88] per Hill J. 269 Overall, the considerations under this paragraph point to a dominant tax purpose. 270 The respondent referred to the financial effects of the schemes on Plutora and TVI. He submitted that the management company, Plutora, received only a fraction of the management fees in cash. The cash that was received related to licence fees and marketing fees in relation to overseas territories. The respondent submitted that the funds received by Plutora and TVI were sourced from the tax benefits received by investors by reason of their participation in the Travel Vision Projects and that the funds received by those companies were directed towards the marketing of the Travel Vision system in overseas territories and that was done with a view to obtaining development grants. The respondent also pointed to the fact that the financial position of the promoters did not change beyond the cash payments made to them. Plutora in effect was a lender in relation to its own fees. It is difficult to see why Plutora would apparently lend such large amounts when in effect the fees, or at least the bulk of them, could only be recovered from the revenue generated by the Projects. If the amounts were genuine then the promoters were taking the entire risk associated with their recovery in circumstances where the applicants could "walk away" from the loans by not renewing their licences after one year and their only recourse was to the revenue, if any, generated by the Projects. 271 It seems to me that there was not a relevant connection within s 177D(b)(vi) between the applicants (other than Mr Sleight) on the one hand, and TVI and Plutora on the other. The position in this case is the same as it was in Sleight where Hill J said (at 234-235 [89]): "This is not a case where a taxpayer received a tax benefit and a person associated with him or her received some collateral capital payment. No doubt the promoter companies made money out of the scheme, but they would hardly seem to be entities having any real connection of a business nature with Mr Sleight as that expression is used in s 177D(b)(vi)." 272 In the case of Mr Sleight it might be said that there was a relevant connection because he received commissions from the promoters in the 1994 FY and in the 1996 FY for introducing investors to the Projects (see Sleight at 256 [229]-[232] per Carr J) but even if this is so, I do not think anything under this paragraph advances the case much beyond the considerations under the other paragraphs. 273 Neither party suggested that there were any considerations under these paragraphs of s 177D(b). 274 In my opinion, having regard to the matters in s 177D(b), the conclusion should be drawn that each of the applicants entered into the respective schemes and carried them out for the dominant purpose of enabling the relevant applicant to obtain a tax benefit in connection with the scheme.


case_title: Equuscorp Pty Ltd v Glengallan Investments Pty Ltd [2004] HCA 55 ; (2004) 218 CLR 471


case_text: In Esquire Nominees Ltd v Federal Commissioner of Taxation [1972] HCA 32 ; (1973) 129 CLR 177, Stephen J said (at 224-225): "The process of identification of the locality of a source of income may differ depending upon the nature of the income in question. Where income may be seen to be derived solely from the acts of the taxpayer the source is to be found where those acts are performed; but the problem is seldom set in such simple terms, such personal exertion income will often be seen to be derived from the performance of work pursuant to some contract and the place of performance, the place of payment and the locus of the contract may all affect the question of source French's Case, per Taylor J. ... To say that questions of source depend upon practical matters of fact will not necessarily assist in determining which of a range of possible meanings of source is meant, but context should provide a solution. The context furnished by the proviso to s 7(1) is that of the individual taxpayer and of his derivation of his income either by his own acts or from property rights which he possesses. It is a context unconcerned with the questions of ultimate origin; the source referred to is that from which income is produced by the taxpayer's own acts of derivation or ownership. All this suggests that a quite proximate source is being referred to." 210 In this case, the TVI Project and the TVA Project, insofar as they involved overseas territories, were to operate by Plutora finding sub-licensees and not by the licensees directly approaching advertisers and travel agents in those areas. The licence agreements or sub-licence agreements did not affect TVI's right to the exclusive ownership of any intellectual property in the Travel Vision system. 211 The two possible sources of income for the licensees under a sub-licence agreement were sub-licence fees and advertising royalties or advertising service fees. The licence agreements between TVI and the CECK partnership (or the TVA partnership) were made in Australia and governed by Australian law, and the CECK partnership and Civil and Earth carried on business in Australia. Plutora was the marketer and it also carried on business in Australia. 212 In relation to sub-licence fees (had they been earned) I agree with the submissions of the respondent that they would not have been income derived from a source in a foreign country. The CECK partnership and the TVA partnership did not itself undertake any activity in a foreign territory and it was not required to under the licence agreements and deeds of variation to those agreements with the licensor. I agree with the submission of the respondent that in practical terms the source of the partnership income was "its licence agreement with TVI, and through that agreement, its right to share in the income stream of TVI from the sale of rights to use the TVI product to persons in the territories for which the partnership held licences". 213 As to the advertising royalties or advertising service fees (had they been earned) I also agree with the respondent's submission that they would not have been income derived from sources in a foreign country. The fact is that the activities that represent the consideration for such advertising royalties or advertising service fees were activities in the nature of the production and distribution of the Disks which were to be carried out, not by the CECK partnership or by the TVA partnership, but by TVI in Australia.


case_text: To determine the source of income one must have regard to practical considerations. In Federal Commissioner of Taxation v French [1957] HCA 73 ; (1957) 98 CLR 398, Kitto J said (at 417): "The Australian Act, in such provisions as ss 23(q) and 25, assumes that it is possible to identify, with respect to every amount of income, some activity event or thing which may properly, though metaphorically, be described as the source from which that income has been derived; and it is settled by undoubted authority that to select for the description one out of all the many elements which, as a matter of history, have together culminated in the derivation is a practical task to be performed on substantial considerations"


case_text: In Nathan v Federal Commissioner of Taxation [1918] HCA 45 ; (1918) 25 CLR 183 at 189-190, the High Court said that in using the word "source" Parliament was not using a legal concept but something which a practical man would regard as "a real source of income" and that the actual source of a given income is "a practical, hard matter of fact". See also Federal Commissioner of Taxation v Mitchum [1965] HCA 23 ; (1965) 113 CLR 401 at 407.


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

case_text: The eight matters identified in s 177D(b)(i)-(viii) inclusive are exhaustive of the matters to be considered in determining whether the relevant conclusion should be drawn: Peabody v Commissioner of Taxation (1993) 40 FCR 531 (" Peabody ") at 541 per Hill J (Ryan and Cooper JJ concurring); Calder v Commissioner of Taxation (2005) 226 ALR 643 (" Calder ") at 290 [91]. Whether the relevant conclusion should be drawn is to be determined objectively in the sense that the question is not as to the taxpayer's subjective intention and purpose: Commissioner of Taxation v Spotless Services Ltd [1996] HCA 34 ; (1996) 186 CLR 404 (" Spotless ") at 421-422, 424; Commissioner of Taxation v Hart [2004] HCA 26 ; (2004) 217 CLR 216 (" Hart ") at 223 [37], 243 [65] per Gummow and Hayne JJ; Peabody at 542; Calder at 291-292 [96]. A person may have more than one purpose and that is made clear by s 177A(5). One purpose may be a commercial purpose, but Part IVA will nevertheless apply if the other purpose was to obtain a tax benefit and that purpose was the dominant purpose: Spotless at 415-416; Hart at 227 [16] per Gleeson CJ and McHugh J; Sleight at 229-230 [67] and 238-239 [113] per Hill J (with whom Hely J agreed); Calder at 291 [92].


case_text: In Federal Commissioner of Taxation v United Aircraft Corporation [1943] HCA 49 ; (1943) 68 CLR 525, Latham CJ said (at 536): "Income derived from property means, in my opinion, income derived from the property of the person sought to be taxed as having derived the income. So also the income of a person derived from acts done is income derived by that person from his own acts or from the acts of his servants or agents. If such a person, being a company, has no servants or agents in Australia, it cannot, in my opinion, derive income from any acts done in Australia. A person who neither owns anything in a country nor does nor has done anything in that country cannot, in my opinion, derive income from that country."


case_title: Nathan v Federal Commissioner of Taxation [1918] HCA 45 ; (1918) 25 CLR 183


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


case_text: The Australian Trade Commission refused the application for the grant. The Commission decision was overturned by the Administrative Appeals Tribunal: Travel Vision International Pty Ltd and Australian Trade Commission AAT No 12540 [1988] AATA 11. An appeal by the Commission to a single Judge of this Court on a question of law was dismissed: Australian Trade Commission v Disktravel [1999] FCA 48. On a further appeal by the Commission to the Full Court, the appeal was allowed. The three principal issues in the appeal were as follows: 1. Whether the expenditure was incurred "primarily and principally" for the purpose of the possible disposition of any intellectual property rights, as s 11Z(8) requires; 2. Whether intellectual property rights if any in the software and disks passed to the applicants under the licence agreements; and 3. Whether the provisions of s 38 of the Act applied. As to the first issue, the Tribunal made the following findings: "135. The objective purpose of these applicants in incurring the expenditure to Plutora was to provide Plutora with sufficient funds to acquit its obligations to the applicants pursuant to the agreements. That is, to promote the disposal of the licences by way of granting sub-licences. That is what the expenditure was intended to achieve .... The investment or outlay of each applicant was motivated by an expectation that in achieving the objective purpose, it would generate income, in the form of royalties. And more remotely, there was the hope that, in due course sufficient income would be generated to repay the limited recourse loans and provide a return on the original investment. Those were the objectives and motives of the applicants. As a result of entering into the agreements with Plutora the six applicants had a reasonable expectation, on the basis of the information provided to them by Mr Snow, and in Mr Fiocco's case, on the basis of advice from his accountant, that they would receive income tax relief and an export market development grant. 136. The evidence is that the directors of TVI, the consultants and Mr Martinson, at the time of their overseas promotions trips and the incurring of the expenditures in question, believed they would succeed in 'selling' sub-licences. Mr Fiocco's evidence is that he too thought that was a possibility but not without considerable risk. He saw the prospect of the financial effect of enhanced income tax deductions and an export market development grant as the incentive. That is subjectively, it was those possible consequences of making the investment which induced the applicants to enter into the arrangement. But the purpose of their investment was as stated. If the arrangement offered by TVI lacked commercial realism then it would be open to a tribunal of fact to conclude that the subjective purpose, of obtaining financial gains, through exploitation of the income tax and export market development grants laws, was dominant. On that basis the requisite purpose would not be met. However, this Tribunal finds, on the evidence, that the arrangement entered into between TVI and the applicants and Plutora and the applicants, at the time, was sufficiently commercially plausible to be considered, objectively, as a reasonable investment, the risk of which had been considerably reduced by the prospect of income tax and export grant financial benefits."


case_text: analysis, that reliance can be seen to be misconceived, for the following reasons: (a) Booth v Bosworth [2001] FCA 1453 ; (2001) 114 FCR 39. The foundation for the injunctive relief sought in that case under s 475 was an alleged breach of s 12 of the Act. An element of s 12 is that the action concerned either have a significant impact on world heritage values or be likely to have such an impact in respect of a declared world heritage property. In contrast, "significant impact" is - unless it has in some way in the wording of a condition in a particular case, and this is not one of no relevance at all in respect of whether there has been a contravention of a condition of the kind with which s 142 is concerned. (b) Minister for the Environment and Heritage v Greentree (No 2) [2004] FCA 741 ; (2004) 138 FCR 198. In that case, the injunctive relief sought pursuant to s 475 had as its foundation an alleged breach of s 16 of the Act as read with s 17. Regard to s 16 discloses that it, too, has a "significant impact" element akin to that found in s 12, but in this instance focused upon the ecological character of a declared RAMSAR wetland. For reasons already given in respect of Booth [2001] FCA 1453 ; 114 FCR 39 , "significant impact" has no role to play here in relation to the alleged breach of the condition and hence a contravention of s 142. (c) Brown v Forestry Tasmania (No 4) [2006] FCA 1729 ; (2006) 157 FCR 1. In this case, the alleged contravention grounding injunctive relief was a contravention of s 18 of the Act. Regard to that section discloses that it, too, has a "significant impact" element, on this occasion related to listed threatened species included in the "extinct in the wild" category. Again, for reasons given in relation to Booth [2001] FCA 1453 ; 114 FCR 39 , "significant impact" has no role to play in this case in relation to s 142.


case_title: Brown v Forestry Tasmania (No 4) [2006] FCA 1729 ; (2006) 157 FCR 1