case_text: was said in the very recent decision of the High Court in Minister for Immigration & Citizenship v SZIAI & Anor [2009] HCA 39 (23 September 2009) to clarify when those 'strictly limited' circumstances exist. At [25] in the joint judgment, it was said: 'Although decisions in the Federal Court concerned with a failure to make obvious inquiries have led to references to a "duty to inquire", that term is apt to direct consideration away from the question whether the decision which is under review is vitiated by jurisdictional error. The duty imposed upon the Tribunal by the Migration Act is a duty to review. It may be that a failure to make an obvious inquiry about a critical fact, the existence of which is easily ascertained, could, in some circumstances, supply a sufficient link to the outcome to constitute a failure to review. If so, such a failure could give rise to jurisdictional error by constructive failure to exercise jurisdiction. It may be that failure to make such an inquiry results in a decision being affected in some other way that manifests itself as jurisdictional error. It is not necessary to explore these questions of principle in this case. ...' (Citations omitted) The second difficulty with this ground in the present case is that on the hearing of the application, the Minister led evidence (Ex. B) as to the summonses he filed at the Tribunal for issue to various courts for the production of files relating to sentences handed down for offences in respect of which the applicant had been convicted; details of the files that were produced; and to the fact that on review of all the documents produced, none contained any sentencing remarks, by way of mitigation or otherwise, beyond those made by Blanch CJ in an appeal to the District Court in June 2006. His Honour confirmed a conviction of the Sutherland Local Court of nine months with a three month non-parole period but which his Honour suspended on condition that the applicant enter into a bond to be of good behaviour for a period of nine months. His Honour took this course, according to the sentence remarks, because the applicant had not been to gaol previously, and bearing in mind the nature of the facts of the charge; hardly mitigating circumstances. In the face of this, the Minister submitted that it could hardly be contended that it was 'obvious' that there was further 'readily available' material which the Minister or the Tribunal could have, but did not, seek out. The deponent of the affidavit that was Ex. B was cross-examined on a document headed 'Attorney-General's Department New South Wales Court and Tribunal Transcripts', when it was suggested to the witness that following the procedures in that document may have been more productive of transcript of sentencing remarks than the summonses to produce. He was asked: 'Would you agree that those summonses to produce were unlikely to yield sentencing remarks?---When the summonses were prepared we were trying to be as broad and as inclusive as possible so rather than limiting any request for documents to simply sentencing remarks, we were being more inclusive and trying to look for court files which, if the transcript did exist, we thought would have been contained in the court file that had been requested. But would you agree that having regard to this document which I have just asked you some questions about, transcripts are not kept as a matter of course on court files?---Reviewing this document after the summonses, it looks like there are transcripts kept at this place, on that database, yes.' Two observations can be made concerning this evidence. First, it does not lead to the conclusion that it is 'obvious' that material centrally relevant to an issue whether the applicant is of good character against the criteria of s 501(6)(c)(i) exists; it may exist, but then again it may not. Second, in the face of what was produced in response to the summons, it was not so unreasonable in the Wednesbury sense for the view to be taken that such material was not readily available. It was not, in my view, 'a failure to make an obvious inquiry about a critical fact, the existence of which is easily ascertained' (emphasis added), to use the words from the joint judgment in SZIAI at [25].


case_outcome: applied

case_title: Minister for Immigration & Ethnic Affairs v Baker (1997) 73 FCR 187

case_text: the ability to take such matters into account as 'past and present general conduct' (or indeed as 'past and present criminal conduct' for the purposes of s 501(6)(c)(i)) is dependent on a finding that conduct of that description has occurred. In Minister for Immigration and Ethnic Affairs v Baker (1997) 73 FCR 187 , a Full Court of this Court held that it was not necessary, for the purposes of taking such conduct into account, for it to have resulted in a conviction. However, the Full Court concluded at 194 that the forerunner of s 501(6)(c) was: '... concerned with a person's conduct either "general conduct" or conduct of a more particular kind, described as "criminal conduct". It is not concerned with whether the conduct has had some temporal result, such as the incurring of a conviction, but with the light that the conduct throws on the actor's character. Of course, in the absence of a prosecution and conviction, satisfaction that criminal conduct has occurred will not be attained on slight material: see the interesting note by B Robertson, "Criminal Allegations in Civil Cases" (1991) 107 LQR 194. ' In Baker the Full Court also held that the Tribunal may rely on both kinds of conduct (both criminal conduct and general conduct) in deciding whether a person fails the character test and need not anchor its decision in one of the matters mentioned in subparas (i) and (ii). A later amendment to the provisions has made this abundantly clear by the insertion of the words 'either or both of the following' in s 501(6)(c). Part 2 of Direction No 21 sets out the considerations to which decision-makers must have regard when, if the non-citizen does not pass the character test, exercising the discretion to decide whether or not the non-citizen should be permitted to enter or remain in Australia. Paragraph 2.2 provides: ' Weight of considerations 2.2 The Government is mindful of the need to balance a number of important factors in reaching a decision whether or not to refuse or cancel a visa. In making such a decision, a decision-maker should have regard to three primary considerations and a number of other considerations. The primary considerations are set out at paragraphs 2.3 2.16 and other considerations are set out at paragraphs 2.17 2.24. Decision-makers must have due regard to the importance placed by the Government on the three primary considerations, but should also adopt a balancing process which takes into account all relevant considerations.' Reference was made to what Deane J said in Pochi at 685: '[T]he Tribunal was bound, as a matter of law, to act on the basis that any conduct alleged against Mr. Pochi which was relied upon as a basis for sustaining the deportation order should be established, on the balance of probability, to its satisfaction by some rationally probative evidence and not merely raised before it as a matter of suspicion or speculation.' and to the Full Court in Baker , that 'satisfaction that criminal conduct has occurred will not be attained on slight material'. The Minister submitted that there is no basis to suggest that the Tribunal did not apply a standard of balance of probabilities. The real complaint, according to the Minister, appears to be that the Tribunal had regard to the housing department records and police intelligence reports when finding that the applicant failed the character test in s 501(6)(c). As the Tribunal found that the applicant failed the test in s 501(6)(a) any error in also finding that the applicant failed the test in s 501(6)(c) is irrelevant. In any case, there was no reason why the Tribunal could not have regard to the housing department records and police intelligence reports. As it noted, they indicated similar behaviour to that for which the applicant had been convicted: [156]. According to the Minister, there is no error in the Tribunal's statement at [168] [169] that a substantial number of similar reports from a wide variety of different sources detailing similar conduct increases the probability that the overall picture is true. This is perfectly rational reasoning in the circumstances of this case. The weight to be attributed to particular evidence was a matter for the Tribunal: Minister for Aboriginal Affairs v Peko-Wallsend Ltd [1986] HCA 40 ; (1986) 162 CLR 24 at 41 per Mason J. Given the nature of the applicant's convictions there was no reason why the Tribunal could not also have regard to other evidence of similar behaviour by the applicant when considering s 501(6)(c). In the circumstances of this case the Tribunal was not finding criminal conduct in the absence of a conviction on 'slight material' (as cautioned against in Baker at 194C), it was finding that the applicant failed to satisfy the character tests in s 501(6)(a) and (c) 'on the basis of the evidence': [169], which included the applicant's criminal convictions as well as the housing department records and police intelligence reports. As 'criminal conduct' and 'general conduct' are not a dichotomy and may overlap, the Minister submitted that it was perfectly appropriate for the Tribunal to consider both together: Wong v Minister for Immigration & Multicultural & Indigenous Affairs [2002] FCAFC 440 at [33] [35]. It might be otherwise if there were no convictions and there was a finding that the applicant failed to satisfy the character test under s 501(6)(c)(i) and (ii) by recourse only to the police intelligence reports and the housing department records. In that context, the caution that came out of Baker referred to in [82] above, that there should not be a finding of criminal conduct on 'slight material', may well be apt. But that is not this case. The only real issue in the context of this case was whether the Tribunal acted capriciously in taking into account conduct referred to in the police intelligence reports and the housing department records of a kind similar to the conduct which constituted offences for which the applicant had been convicted; Ngaronoa (Jacobson J) at [60]. Clearly it did not and, unsurprisingly, there was no suggestion or submission that it did. This ground cannot sustain the application for review. The applicant submitted that the Tribunal erred in finding that the applicant failed the character test under ss 501(6)(c)(i) and/or 501(6)(c)(ii) of the Act by taking into account the police intelligence reports and the housing department records concerning the applicant because in doing so it took into account irrelevant considerations. Those reports and records went into evidence; it was not articulated why the matters contained in them were irrelevant considerations to which the Tribunal could not have regard, particularly when they 'showed a continuing pattern of similar behaviour' (similar to the behaviour constituting the offences upon which the convictions were based) and 'paint a similar picture'. There is certainly no prohibition in the Act, express or implied, against taking such considerations into account. The weight to be attached to them is a different matter; it is a matter for the Tribunal, not for this Court on review of the Tribunal's decision. In my view, this ground has no merit and cannot sustain the application for review.


case_outcome: referred to

case_text: applicant observed that facts relevant to a tribunal decision are required to be established on the balance of probabilities: Minister for Immigration & Ethnic Affairs v Pochi [1980] FCA 85 ; (1980) 31 ALR 666 ; Re Kirby and Collector of Customs (1989) 20 ALD 369. The only reference to an applicable standard of proof in Direction No 21 is in para 1.9(a) dealing with 'past and present general conduct' which refers to 'business activities which fall short of criminal fraud requiring proof beyond reasonable doubt, but which, on a more likely than not basis are disreputable ...'. According to the applicant, this suggests that when considering whether criminal conduct (of any kind) can be taken into account for the purpose of s 501 of the Act, the Minister (and the Tribunal) is required to apply the standard of proof known as 'the balance of probabilities'. Reference was made to what Deane J said in Pochi at 685: '[T]he Tribunal was bound, as a matter of law, to act on the basis that any conduct alleged against Mr. Pochi which was relied upon as a basis for sustaining the deportation order should be established, on the balance of probability, to its satisfaction by some rationally probative evidence and not merely raised before it as a matter of suspicion or speculation.' and to the Full Court in Baker , that 'satisfaction that criminal conduct has occurred will not be attained on slight material'.


case_title: Minister for Immigration & Multicultural & Indigenous Affairs v Ball [2004] FCAFC 91 ; (2004) 138 FCR 450


case_outcome: cited

case_text: response to the applicant's claim that the Tribunal was obliged to seek specific comment from the applicant about each allegation contained in the police intelligence reports and the housing department records, the Minister submitted that procedural fairness does not so require; it must have been obvious to the applicant that the Tribunal may rely on the allegations contained in these reports and records as they were in evidence before the Tribunal: cf. Puafisi v Minister for Immigration & Citizenship [2008] FCAFC 39 at [14] . Moreover, the gist of the allegations contained therein was put to the applicant, and the Tribunal's conclusions from the reports and records were obvious so as not to require specific disclosure: Commissioner for ACT Revenue v Alphaone Pty Ltd [1994] FCA 1074 ; (1994) 49 FCR 576 at 591 592; Pilbara Aboriginal Land Council v Minister for Aboriginal & Torres Strait Islander Affairs [2000] FCA 1113 ; (2000) 103 FCR 539 at 555 557, referred to with approval in NAOA v Minister for Immigration & Multicultural Affairs [2004] FCAFC 241 at [25] [28]; Puafisi at [20] [23]. It follows, the Minister submitted, that neither more particulars of that evidence nor the Tribunal's conclusions based on that evidence were required to be put to the applicant.


case_outcome: considered

case_text: Minister submitted that the case put by the applicant on this point is similar to that rejected in Ngaronoa v Minister for Immigration & Citizenship [2007] FCA 1565 (Jacobson J) at [47] [65], affirmed [2007] FCAFC 196 ; (2007) 244 ALR 119 at [10] [12]. While concerning a decision of the Minister personally, the Court stressed the width of the discretion in s 501 and the fact that weight to be attached to evidence was a matter for the decision-maker, in holding that it was open to consider charges for which an applicant had been acquitted in considering the exercise of discretion under s 501(2). Both Jacobson J at [60] and the Full Court at [10] [12] proceeded on the basis that the real issue was whether the Minister had acted capriciously in taking into account the charges for which the applicant had been acquitted, and concluded that he had not. Still less can the Tribunal here be said to have acted capriciously in taking into account material which was obviously relevant. Analysis


case_title: Ngaronoa v Minister for Immigration & Citizenship [2007] FCAFC 196 ; (2007) 244 ALR 119


case_title: Pilbara Aboriginal Land Council v Minister for Aboriginal & Torres Strait Islander Affairs [2000] FCA 1113 ; (2000) 103 FCR 539


case_text: applicant, while acknowledging that the Tribunal is under no general duty with respect to making inquiries, referred nevertheless to what was said by Wilcox J in Prasad v Minister for Immigration & Ethnic Affairs [1985] FCA 47 ; (1985) 6 FCR 155 at 169 170, that a failure to inquire may, in exceptional circumstances, invalidate a decision. The effect of what Wilcox J said in Prasad at 169 170 is that there may be Wednesbury unreasonableness where it is obvious that there is material that is readily available to the decision-maker that is centrally relevant to an issue for determination. Prasad was subsequently endorsed by the Full Court: Luu v Renevier (1989) 91 ALR 39. See also Tickner v Bropho [1993] FCA 208 ; (1993) 40 FCR 183 at 197 198 per Black CJ; C v T (1995) 58 FCR 1 ; see too Minister for Immigration & Citizenship v Le (Kenny J) [2007] FCA 1318 ; (2007) 164 FCR 151 at [65] [67]. The first difficulty with this ground in the present case is that what was said by Wilcox J in Prasad at 169 170 is to be confined to exceptional circumstances; to circumstances which Wilcox J himself described as 'strictly limited'; where it is obvious that there is material that is readily available to the decision-maker that is centrally relevant to an issue for determination. In other words, there is a dual requirement: first, that it is 'obvious' that there is material centrally relevant to an issue for determination; and second, that that material is 'readily available'. Only if both requirements are satisfied would the 'strictly limited' circumstances exist. Neither requirement of the 'strictly limited' circumstances in Prasad has been made out and this ground cannot sustain the application for review. GROUND 7 Applicant's Submissions Under this ground, the applicant submitted that the Tribunal's discretion under s 501(2) of the Act miscarried either because it did not properly take into account relevant considerations, namely, the mandatory considerations specified in Part 2 of Direction No 21 (para 2.3), or because it took into account extraneous or irrelevant considerations, namely, police intelligence reports and housing department records concerning the applicant. So submitted, the alternative limb of this ground is the same as the alleged error identified in ground 4 albeit in relation to the Tribunal's conclusion that the applicant failed the character test under ss 501(6)(c)(i) and/or 501(6)(c)(ii), whereas the alternative limb under this ground goes to the allegation that the Tribunal's exercise of the discretion miscarried. Analysis However, as noted in [34] above, this ground as crafted in the amended application for review, is not put in the alternative. It is crafted on the basis that relevant considerations were not properly taken into account because irrelevant considerations were taken into account. So construed it cannot sustain the application for review. I therefore propose to deal with it on the basis pressed in the submissions.


case_title: Puafisi v Minister for Immigration & Citizenship [2008] FCAFC 39


case_text: was made to what Evatt J said in R v War Pensions Entitlement Appeals Tribunal; Ex parte Bott [1933] HCA 30 ; (1933) 50 CLR 228 at 256, when referring to a provision that the Tribunal was not bound by the rules of evidence: 'But this does not mean that all rules of evidence may be ignored as of no account. After all, they represent the attempt made, through many generations, to evolve a method of inquiry best calculated to prevent error and elicit truth. No tribunal can, without grave danger of injustice, set them on one side and resort to methods of inquiry which necessarily advantage one party and necessarily disadvantage the opposing party. In other words, although rules of evidence, as such, do not bind, every attempt must be made to administer "substantial justice".' The applicant submitted that in the present case, the Tribunal's reliance on a large amount of evidence of a general nature, consisting predominantly of hearsay, is made all the more unfair given the highly prejudicial nature of that material and the inability to adduce evidence to the contrary. Regardless of the reasons for which much of that evidence was de-identified (for privacy reasons, say, or because it referred to an informer), the outcome, the applicant submitted, was that there was a serious denial of procedural fairness. The applicant submitted that it was not open to the Tribunal, in the exercise of the power conferred by the statute, to consider (or make findings based upon) the truthfulness or the seriousness of the matters for which the applicant had been the subject of complaint on the basis of such objectionable evidence. There was an obligation on the Tribunal to seek specific comment from the applicant about the truthfulness or the seriousness of each of the matters which were taken into account. This was plainly not possible given that the evidence was general in nature and the particulars of the allegations were anonymous. This may partly explain why the applicant was not cross-examined at all in relation to some of the allegations or in a fair manner in relation to others. In the applicant's submission, this does not justify the failure but merely highlights the unfairness of the Tribunal relying on such evidence. Turning to the allegation in ground 2, that the applicant was denied procedural fairness in relation to police allegations that she was amongst other things 'the head of the drug trade' because such allegations were not put to her fairly or at all, including during her cross-examination, the applicant made the following observations: (1) At p 168 line 30 of the hearing transcript, Detective Inspector Galea gave evidence that based on intelligence, although there were 'other persons, obviously, dealing drugs', the applicant was 'a major player, a mid-level dealer' of drugs 'in the Airds area' and that she was 'a predominant player there'. The witness repeated at p 171 line 9 of the transcript that the applicant was a 'significant player' in the drug trade and later under cross-examination that she was 'the head of the drug trade' based on police 'intelligence' (p 174 line 34). The Tribunal referred to this evidence at [129] of its reasons and appeared to accept it (at [161], [191] [192]). (2) The police witness also invited the Tribunal to accept that there had been fewer drug reports relating to Airds since the applicant had been detained in Villawood Immigration Detention Centre, that there had been a reduction in the drug trade and social tension and that violent assault and robbery had ceased altogether (seemingly to bolster the claim that she was the head of the drug trade). The Tribunal was further asked (in final submissions) to infer that the number of intelligence reports impugning the applicant far exceeded the number of charges against her because victims were reluctant to complain for fear of reprisals (at [133] and transcript at p 180 lines 3 22). (3) The Tribunal appeared to accept these propositions (at [191] [192]), notwithstanding that the relevant police witness conceded under cross-examination that he had no statistics to prove those assertions and conceded that intelligence is 'not absolute fact' and said that he could not comment upon, and did not know if any informants had a vendetta against the applicant. The applicant submitted that there was no cogent evidence before the Tribunal to substantiate these highly prejudicial submissions; nor were these matters put to the applicant during cross-examination. The allegations that the applicant was a 'major player' were only raised in Detective Inspector Galea's evidence towards the end of the hearing. The applicant was given no opportunity to address that evidence, either before the hearing or during the hearing. Although she was taken to her criminal record and it was put to her that she had dealt drugs, it would not have been obvious to her that she was alleged to be a leader of the criminal drug trade. Nor was she legally represented so that submissions could be made about the admissibility or permissible use of that evidence.


case_text: applicant observed that facts relevant to a tribunal decision are required to be established on the balance of probabilities: Minister for Immigration & Ethnic Affairs v Pochi [1980] FCA 85 ; (1980) 31 ALR 666 ; Re Kirby and Collector of Customs (1989) 20 ALD 369. The only reference to an applicable standard of proof in Direction No 21 is in para 1.9(a) dealing with 'past and present general conduct' which refers to 'business activities which fall short of criminal fraud requiring proof beyond reasonable doubt, but which, on a more likely than not basis are disreputable ...'. According to the applicant, this suggests that when considering whether criminal conduct (of any kind) can be taken into account for the purpose of s 501 of the Act, the Minister (and the Tribunal) is required to apply the standard of proof known as 'the balance of probabilities'.


case_text: applicant further submitted that having regarded the information as significant, the Tribunal was bound to accord the applicant an opportunity to deal with it: see Gleeson CJ, Gummow, Kirby, Hayne and Heydon JJ in Applicant VEAL of 2002 v Minister for Immigration & Multicultural & Indigenous Affairs [2005] HCA 72 ; (2005) 225 CLR 88 at 95 96. Even if the evidence was given no weight (unlike here), there was a real risk of prejudice arising from the admission of the evidence (see Brennan J in Kioa v West [1985] HCA 81 ; (1985) 159 CLR 550 at 629 and Gleeson CJ, Gummow, Kirby, Hayne and Heydon JJ in Applicant VEAL at 96 - 97). Because the exercise of the statutory power is conditioned upon the provision of procedural fairness, the denial of procedural fairness in this case vitiates the Tribunal's decision (see Re Refugee Review Tribunal; Ex parte Aala [2000] HCA 57 ; (2000) 204 CLR 82 at [59] per Gaudron and Gummow JJ).


case_text: the evidence from Detective Inspector Galea was consistent with what had earlier been put to the applicant and he was specifically cross-examined on it on the applicant's behalf, there cannot, the Minister submitted, be any unfairness in this case. The Minister further observed that it was obvious that the applicant would deny being a significant drug dealer in Airds because she had previously denied dealing drugs at all; and her representative in closing submissions specifically denied that the applicant was a 'significant player in the drug trade', or indeed a dealer at all. The Minister submitted that the applicant did not need to be specifically recalled to deny the allegation herself; the rule in Browne v Dunn does not apply to inquisitorial tribunals: Re Ruddock; Ex parte Applicant S154/2002 [2003] HCA 60 ; (2003) 201 ALR 437 at [57] per Gummow and Heydon JJ; and that there was no unfairness in the Tribunal's reception of the evidence from Detective Inspector Galea. Analysis


case_text: 5 alleges that the Tribunal erred in finding that the applicant failed the character test under ss 501(6)(a) and 501 (7) of the Act on the basis that she had a 'substantial criminal record' for the purposes of s 501(6)(a) by reason of the fact that the applicant had received two suspended sentences of 12 months' imprisonment because a suspended sentence is not 'a term of imprisonment of 12 months or more' for the purposes of s 501(7). This ground was only formally pressed because the applicant's counsel rightly accepted that this Court was bound by the decision of the Full Court in Seyfarth v Minister for Immigration & Multicultural & Indigenous Affairs [2005] FCAFC 105 ; (2005) 142 FCR 580 at [27] where the Full Court decided that s 501(7)(c) is concerned with the sentence that has been imposed on the person rather than the term of imprisonment actually served. In the circumstances, it is unnecessary to return to this ground. Ground 6 alleges that the decision of the Tribunal was vitiated by the failure of the Minister's delegate and the Tribunal to inquire as to the sentencing remarks in relation to each of the applicant's convictions in circumstances where it was unreasonable for it not to make the straightforward administrative inquiry into those matters. Ground 7 alleges that the Tribunal's exercise of the discretion under s 501(2) miscarried because it did not properly take into account a relevant consideration, namely, the protection of the Australian community and the expectations of the Australian community; two of the three primary considerations referred to in para 2.3 of Direction No 21 (see [26] above). The way the ground is crafted alleges that these primary considerations were not taken into account because the Tribunal took into account irrelevant considerations the police intelligence reports and housing department records concerning the applicant but the applicant's submissions were pressed in the alternative: that the Tribunal's discretion miscarried because it failed to take into account relevant considerations or took into account irrelevant considerations.


case_text: applicant, while acknowledging that the Tribunal is under no general duty with respect to making inquiries, referred nevertheless to what was said by Wilcox J in Prasad v Minister for Immigration & Ethnic Affairs [1985] FCA 47 ; (1985) 6 FCR 155 at 169 170, that a failure to inquire may, in exceptional circumstances, invalidate a decision. The effect of what Wilcox J said in Prasad at 169 170 is that there may be Wednesbury unreasonableness where it is obvious that there is material that is readily available to the decision-maker that is centrally relevant to an issue for determination. Prasad was subsequently endorsed by the Full Court: Luu v Renevier (1989) 91 ALR 39. See also Tickner v Bropho [1993] FCA 208 ; (1993) 40 FCR 183 at 197 198 per Black CJ; C v T (1995) 58 FCR 1 ; see too Minister for Immigration & Citizenship v Le (Kenny J) [2007] FCA 1318 ; (2007) 164 FCR 151 at [65] [67].


case_text: Minister submitted that there is no basis to suggest that the Tribunal did not apply a standard of balance of probabilities. The real complaint, according to the Minister, appears to be that the Tribunal had regard to the housing department records and police intelligence reports when finding that the applicant failed the character test in s 501(6)(c). As the Tribunal found that the applicant failed the test in s 501(6)(a) any error in also finding that the applicant failed the test in s 501(6)(c) is irrelevant. In any case, there was no reason why the Tribunal could not have regard to the housing department records and police intelligence reports. As it noted, they indicated similar behaviour to that for which the applicant had been convicted: [156]. According to the Minister, there is no error in the Tribunal's statement at [168] [169] that a substantial number of similar reports from a wide variety of different sources detailing similar conduct increases the probability that the overall picture is true. This is perfectly rational reasoning in the circumstances of this case. The weight to be attributed to particular evidence was a matter for the Tribunal: Minister for Aboriginal Affairs v Peko-Wallsend Ltd [1986] HCA 40 ; (1986) 162 CLR 24 at 41 per Mason J. Given the nature of the applicant's convictions there was no reason why the Tribunal could not also have regard to other evidence of similar behaviour by the applicant when considering s 501(6)(c). In the circumstances of this case the Tribunal was not finding criminal conduct in the absence of a conviction on 'slight material' (as cautioned against in Baker at 194C), it was finding that the applicant failed to satisfy the character tests in s 501(6)(a) and (c) 'on the basis of the evidence': [169], which included the applicant's criminal convictions as well as the housing department records and police intelligence reports. As 'criminal conduct' and 'general conduct' are not a dichotomy and may overlap, the Minister submitted that it was perfectly appropriate for the Tribunal to consider both together: Wong v Minister for Immigration & Multicultural & Indigenous Affairs [2002] FCAFC 440 at [33] [35].


case_outcome: approved

case_text: This passage from Dixon [1999] FCA 582 ; 29 AAR 235 was cited with approval by Tamberlin J in Borrett v Repatriation Commission [2000] FCA 1829. I respectfully agree with their Honours. In the latter case, his Honour held that the Tribunal had erred in law when it found that there was "no evidence" of a veteran's drinking patterns either during or prior to service. In that case, there was evidence that the veteran had drunk prior to service, as well as evidence from a psychiatrist and a contemporary of the veteran as to the drinking habits of the veteran whilst in service. That case has obvious parallels with the present. 40 The "findings" referred to above were made by the Tribunal in its application of s 120(3). The finding that there was "no evidence" of the veteran's pre-service fat intake was clearly wrong, when there was evidence presented by the applicant, the veteran's brother and a boyhood friend of the veteran regarding the diet of the veteran, as well as the evidence of the dietary survey from which, indeed, the Tribunal explicitly inferred a pre-service, daily animal fat intake: Borret [2000] FCA 1829 at [30] ; see also Gleeson v Repatriation Commission (1994) 34 ALD 505 at 509. Further, the conclusion regarding the accuracy of the applicant's recall of her husband's post-service diet also demonstrates error on the Tribunal's part, in terms of impermissible fact-finding: see Dixon [1999] FCA 582 ; 29 AAR 235 at [24] .


case_text: If the Court finds that there is a "question of law" to be answered, the respondent contends that the Tribunal's decision was not marred by error. The question whether a reasonable hypothesis is raised is to be determined on consideration of the whole of the material before the decision-maker, as held by the High Court in Repatriation Commission v Owens (1996) 70 ALJR 904 at 904. According to the respondent, it is "well accepted" that a reasonable hypothesis requires more than a possibility, not fanciful or unreal, consistent with the known facts. The respondent relies on a line of authority to support the proposition that there must be a hypothesis pointed to by the facts, even though not proved upon the balance of probabilities: East v Repatriation Commission [1987] FCA 242 ; (1987) 16 FCR 517 at 532-3, Bull v Repatriation Commission [2001] FCA 1832 ; (2001) 34 AAR 326 at 330 and Gardiner [2007] FCA 1290. 34 Nevertheless, there are, in this area of the law, a number of clearly defined steps which a decision-maker must take, each with its own mandated methodology of application. In particular, the four Deledio steps (with the exception of the correction made in Bull v Repatriation Commission [2001] FCA 1834 ; (2001) 188 ALR 756 at [14] [15]) have become something of an algorithm in cases of this kind. While the Deledio propositions were intended as an aid to clear thinking and, with respect, are clearly right, treating them as if they were a substitute for the statute and, as I have put it, an algorithm, indeed the only available algorithm, seems in practice to have created at least as many problems as their learned author intended that they should avoid. That is not, of course, their author's fault. Notwithstanding this, the application of the necessary steps cannot be said to be easy. As Gyles J said in Byrne v Repatriation Commission [2007] FCAFC 126 ; (2007) 97 ALD 359 at [1] [o]ne can only have sympathy for the members of the [Tribunal] who are called upon to apply ss 120, 120A and 120B of the [Act] as they have been interpreted by the authorities of the High Court and this Court. The reasoning required would confuse most philosophers. 35 It is settled that the decision-maker is not to engage in fact finding during the first three Deledio steps (ie the application of s 120(3) as affected by s 120A): Deledio 83 FCR at 97; Bull 188 ALR at 761 . It is only during the fourth Deledio step (ie the application of s 120(1)) that actual fact finding is permissible. However, the determination of whether a reasonable hypothesis has been raised by the whole of the material before the decision-maker is itself a question of a factual nature: Bey 79 FCR 373 and Gardiner [2007] FCA 1290 , and the first three Deledio steps are concerned with this very determination. This requires the decision-maker to determine a question of a factual nature, without engaging in formal or ultimate fact-finding. Such a tension makes the dividing line referred to by Allsop J above all the more difficult to discern.


case_text: The applicant relied on Hill [2002] FCAFC 192 ; 69 ALD 581 , where the Full Court held at [57] that a hypothesis must be supported by material pointing to each element that the SoP makes essential for the hypothesis to be reasonable. How the material must "raise" or "point to" a hypothesis is determined by applying the principle set down by the High Court in Bushell v Repatriation Commission (1992) 175 CLR 408 at 414: The material will raise a reasonable hypothesis within the meaning of s 120(3) if the material points to some fact or facts ("the raised facts") which support the hypothesis and if the hypothesis can be regarded as reasonable if the raised facts are true. (Emphasis added.) According to the applicant, in applying s 120(3), the Tribunal had to consider all the material and determine: 1. whether it points to some fact or facts (the raised facts) which support a hypothesis connecting the death with the circumstances of operational service; and 2. whether that hypothesis can be regarded as reasonable, if the raised facts are assumed to be true. 31 The respondent submits that the applicant has misconceived the authorities in making her submissions. According to the respondent, Hill [2002] FCAFC 192 ; 69 ALD 581 does not stand as authority that the elements of the SoP may be established on "assumed facts": [56]-[57]. The respondent argues that that the Full Court decision in Hill [2002] FCAFC 192 ; 69 ALD 581 casts doubt on the utility of cases decided prior to the enactment of s 120A, including Bushell 175 CLR 408 , with respect to whether the elements of an SoP may be established on something other than direct factual evidence. 32 The respondent submits that there was no error on the part of the Tribunal in applying s 120(3) and s 120A, and finding that there was no evidence to support the essential elements of factor 5(c) of the SoP. 43 Fact finding by the Tribunal is permitted during the fourth step in the Deledio process: Deledio [1998] FCA 391 ; 83 FCR 82. Indeed it is then required. The Tribunal in this matter picked up the language of s 120(1), where it referred to "no sufficient ground" for making a determination that the death was war-caused, and fastened on the language of the majority in Bushell 175 CLR at 416 when referring to the lack of "factual foundation". However, the authorities indicate that an applicant will only fail at this point of the analysis if, as stated by Mason CJ, Gaudron and McHugh JJ in Byrnes 177 CLR at 570, the Commission is satisfied beyond reasonable doubt that the factual foundation of the hypothesis has been disproved , either by proof beyond reasonable doubt that a fact or fact relied upon to support the hypothesis is not true, or by proof beyond reasonable doubt of the truth of a further fact, inconsistent with the hypothesis. [See also 571; Deledio 82 FCR at 93] . (Emphasis added. Footnotes omitted.)


case_text: Nevertheless, there are, in this area of the law, a number of clearly defined steps which a decision-maker must take, each with its own mandated methodology of application. In particular, the four Deledio steps (with the exception of the correction made in Bull v Repatriation Commission [2001] FCA 1834 ; (2001) 188 ALR 756 at [14] [15]) have become something of an algorithm in cases of this kind. While the Deledio propositions were intended as an aid to clear thinking and, with respect, are clearly right, treating them as if they were a substitute for the statute and, as I have put it, an algorithm, indeed the only available algorithm, seems in practice to have created at least as many problems as their learned author intended that they should avoid. That is not, of course, their author's fault. Notwithstanding this, the application of the necessary steps cannot be said to be easy. As Gyles J said in Byrne v Repatriation Commission [2007] FCAFC 126 ; (2007) 97 ALD 359 at [1] [o]ne can only have sympathy for the members of the [Tribunal] who are called upon to apply ss 120, 120A and 120B of the [Act] as they have been interpreted by the authorities of the High Court and this Court. The reasoning required would confuse most philosophers.


case_title: Byrnes v Repatriation Commission [1993] HCA 51 ; (1993) 177 CLR 564

case_text: In Dixon [1999] FCA 582 ; 29 AAR 235 at [24] Wilcox J further held that at [ Deledio steps 1-3] the decision-maker is not concerned with the accuracy of the material giving rise to the hypothesis; the decision-maker is still working under s 120(3). The two steps additional to those identified in Byrnes that is, steps 2 and 3 in the Deledio formulation are simply limitations on the result that may be obtained in connection with the first of the two Byrnes steps. As the Full Court said in Deledio it is only at the step 4 stage of the process "that the Tribunal will be required to find facts from the material before it." 43 Fact finding by the Tribunal is permitted during the fourth step in the Deledio process: Deledio [1998] FCA 391 ; 83 FCR 82. Indeed it is then required. The Tribunal in this matter picked up the language of s 120(1), where it referred to "no sufficient ground" for making a determination that the death was war-caused, and fastened on the language of the majority in Bushell 175 CLR at 416 when referring to the lack of "factual foundation". However, the authorities indicate that an applicant will only fail at this point of the analysis if, as stated by Mason CJ, Gaudron and McHugh JJ in Byrnes 177 CLR at 570, the Commission is satisfied beyond reasonable doubt that the factual foundation of the hypothesis has been disproved , either by proof beyond reasonable doubt that a fact or fact relied upon to support the hypothesis is not true, or by proof beyond reasonable doubt of the truth of a further fact, inconsistent with the hypothesis. [See also 571; Deledio 82 FCR at 93] . (Emphasis added. Footnotes omitted.)


case_text: This case demonstrates the difficulties attending matters concerning s 120(3) and s 120A. As Allsop J said in Collins v Administrative Appeals Tribunal [2007] FCAFC 111 ; (2007) 163 FCR 35 at [49] , [t]he dividing line between impermissible fact finding and the required assessment of all the material in the formation of an opinion as to whether a hypothesis is reasonable in connecting the ... death with the circumstances of service and as to whether a relevant SoP upholds the hypothesis is not easy to discern.


case_text: Nevertheless, it is important not only to draw the line, but to ensure that decision-makers do not step beyond its boundary. In Dixon v Repatriation Commission [1999] FCA 582 ; (1999) 29 AAR 235 , Wilcox J held at 243 that: [t]he question whether a decision-maker reaches a conclusion adverse to a claimant at the step 3 stage or the step 4 stage is not a mere technicality. If belief is addressed at the step 3 stage, there is a risk that the decision-maker will rule against a claimant simply because he or she is not persuaded the claimant's story is probably true. Although the decision-maker should not think in terms of onus of proof, in a practical sense at the step 3 stage the claimant is likely to be left with this burden. Moreover, the decision-maker is likely to reject the application even though he or she thinks the claimant's story may possibly be true. (Emphasis in original.) 37 This passage from Dixon [1999] FCA 582 ; 29 AAR 235 was cited with approval by Tamberlin J in Borrett v Repatriation Commission [2000] FCA 1829. I respectfully agree with their Honours. In the latter case, his Honour held that the Tribunal had erred in law when it found that there was "no evidence" of a veteran's drinking patterns either during or prior to service. In that case, there was evidence that the veteran had drunk prior to service, as well as evidence from a psychiatrist and a contemporary of the veteran as to the drinking habits of the veteran whilst in service. That case has obvious parallels with the present. 39 In Dixon [1999] FCA 582 ; 29 AAR 235 at [24] Wilcox J further held that at [ Deledio steps 1-3] the decision-maker is not concerned with the accuracy of the material giving rise to the hypothesis; the decision-maker is still working under s 120(3). The two steps additional to those identified in Byrnes that is, steps 2 and 3 in the Deledio formulation are simply limitations on the result that may be obtained in connection with the first of the two Byrnes steps. As the Full Court said in Deledio it is only at the step 4 stage of the process "that the Tribunal will be required to find facts from the material before it." 40 The "findings" referred to above were made by the Tribunal in its application of s 120(3). The finding that there was "no evidence" of the veteran's pre-service fat intake was clearly wrong, when there was evidence presented by the applicant, the veteran's brother and a boyhood friend of the veteran regarding the diet of the veteran, as well as the evidence of the dietary survey from which, indeed, the Tribunal explicitly inferred a pre-service, daily animal fat intake: Borret [2000] FCA 1829 at [30] ; see also Gleeson v Repatriation Commission (1994) 34 ALD 505 at 509. Further, the conclusion regarding the accuracy of the applicant's recall of her husband's post-service diet also demonstrates error on the Tribunal's part, in terms of impermissible fact-finding: see Dixon [1999] FCA 582 ; 29 AAR 235 at [24] .


case_text: The applicant's general submission is that there is no requirement for there to be direct evidence of the elements required by an SoP. It is sufficient if there is some material that pointed to and thus permits the inference of facts which satisfy the SoP. The applicant submits that there were raised facts in the material before the Tribunal, and acknowledged in its reasons for decision, which supported the sub-hypothesis that the veteran's pre-service daily intake of animal fat was around or possibly slightly below the national average of 126 g per day. The fact that any estimate of fat consumption was speculative was irrelevant, as stated by the majority in Bey 79 FCR at 372: While a hypothesis may be no more than a possibility or supposition , in order for a hypothesis to be reasonable, it must, as East [ v Repatriation Commission [1987] FCA 242 ; (1987) 16 FCR 517] states, be pointed to or supported, and not merely left open as a possibility, by the material before the decision maker. (Emphasis added.) 29 If the Court finds that there is a "question of law" to be answered, the respondent contends that the Tribunal's decision was not marred by error. The question whether a reasonable hypothesis is raised is to be determined on consideration of the whole of the material before the decision-maker, as held by the High Court in Repatriation Commission v Owens (1996) 70 ALJR 904 at 904. According to the respondent, it is "well accepted" that a reasonable hypothesis requires more than a possibility, not fanciful or unreal, consistent with the known facts. The respondent relies on a line of authority to support the proposition that there must be a hypothesis pointed to by the facts, even though not proved upon the balance of probabilities: East v Repatriation Commission [1987] FCA 242 ; (1987) 16 FCR 517 at 532-3, Bull v Repatriation Commission [2001] FCA 1832 ; (2001) 34 AAR 326 at 330 and Gardiner [2007] FCA 1290.


case_text: The respondent submits that the applicant's notice of appeal raises no question of law; a finding as to whether a reasonable hypothesis has not been raised is a question of fact: Gardiner v Repatriation Commission [2007] FCA 1290. Further, the respondent submits that the applicant's challenge to the Tribunal's finding that it was satisfied beyond a reasonable doubt that the veteran's death was not war-caused (the alternative finding, and fourth Deledio step) is an attempt to challenge a question of fact. 29 If the Court finds that there is a "question of law" to be answered, the respondent contends that the Tribunal's decision was not marred by error. The question whether a reasonable hypothesis is raised is to be determined on consideration of the whole of the material before the decision-maker, as held by the High Court in Repatriation Commission v Owens (1996) 70 ALJR 904 at 904. According to the respondent, it is "well accepted" that a reasonable hypothesis requires more than a possibility, not fanciful or unreal, consistent with the known facts. The respondent relies on a line of authority to support the proposition that there must be a hypothesis pointed to by the facts, even though not proved upon the balance of probabilities: East v Repatriation Commission [1987] FCA 242 ; (1987) 16 FCR 517 at 532-3, Bull v Repatriation Commission [2001] FCA 1832 ; (2001) 34 AAR 326 at 330 and Gardiner [2007] FCA 1290. 35 It is settled that the decision-maker is not to engage in fact finding during the first three Deledio steps (ie the application of s 120(3) as affected by s 120A): Deledio 83 FCR at 97; Bull 188 ALR at 761 . It is only during the fourth Deledio step (ie the application of s 120(1)) that actual fact finding is permissible. However, the determination of whether a reasonable hypothesis has been raised by the whole of the material before the decision-maker is itself a question of a factual nature: Bey 79 FCR 373 and Gardiner [2007] FCA 1290 , and the first three Deledio steps are concerned with this very determination. This requires the decision-maker to determine a question of a factual nature, without engaging in formal or ultimate fact-finding. Such a tension makes the dividing line referred to by Allsop J above all the more difficult to discern.


case_text: The "findings" referred to above were made by the Tribunal in its application of s 120(3). The finding that there was "no evidence" of the veteran's pre-service fat intake was clearly wrong, when there was evidence presented by the applicant, the veteran's brother and a boyhood friend of the veteran regarding the diet of the veteran, as well as the evidence of the dietary survey from which, indeed, the Tribunal explicitly inferred a pre-service, daily animal fat intake: Borret [2000] FCA 1829 at [30] ; see also Gleeson v Repatriation Commission (1994) 34 ALD 505 at 509. Further, the conclusion regarding the accuracy of the applicant's recall of her husband's post-service diet also demonstrates error on the Tribunal's part, in terms of impermissible fact-finding: see Dixon [1999] FCA 582 ; 29 AAR 235 at [24] .


case_text: In Hall v Repatriation Commission [2007] FCA 2021 at [19] Gyles J said that: mis-statement of the statutory task pursuant to s 120(1) in the reasons cannot simply be ignored and treated as a slip of the pen. Satisfaction beyond reasonable doubt is an exacting standard, particularly where it is framed in the negative. As Barwick CJ said in Keeley v Brooking [1979] HCA 28 ; (1979) 143 CLR 162 at 169: " To be satisfied beyond all reasonable doubt is, for the purposes of the law, to be certain. " (Emphasis in original.) 45 Whether or not Barwick CJ may, with respect, have overstated the position, in my view Gyles J certainly did not. 46 While the reasons of the Tribunal are to be read with due generosity, the language used here by it suggests inescapably that it approached its task incorrectly. The Tribunal stated that it was "satisfied beyond reasonable doubt that the factual foundation upon which the hypothesis can operate does not exist" because there was "no evidence as to pre-war consumption and no reliable evidence as to the amount of post-war consumption". An absence of evidence or of reliable evidence cannot be a sufficient basis for the Tribunal to reach the requisite level of satisfaction that either a fact asserted by a claimant is not true, or that a contrary fact is true.


case_text: However, the Tribunal held that there were no facts present to support the hypothesis of an increase in animal fats by at least 40%, as required by the SoP. The Tribunal was prepared to assume that the deceased increased his animal fat consumption post-service, but considered that the actual amount of increase was pure speculation, a finding confirmed by the reports of Dr English and Professor Duggan. Amongst other authorities, the Tribunal cited Repatriation Commission v Bey [1997] FCA 1347 ; (1997) 79 FCR 364 where the majority said, at 373: Whether material raises a "reasonable hypothesis" for the purposes of s 120(3) is a question of fact for it involves no more than a determination whether a hypothesis of connection is reasonable: Repatriation Commission v Owens (1996) 70 ALJR 904. The Tribunal held that in the present matter there is no fact of connection sufficient to raise a reasonable hypothesis as the percentage increase of animal fat consumption by the deceased is purely speculative. As the factor which the Applicant contends raises the reasonable hypothesis connecting the death of the deceased with operational service cannot be said to exist, there is no hypothesis which fits within the template provided by the SoP, and hence no reasonable hypothesis exists for the purposes of sub-section 120(3) [of the Act]. 23 The applicant's general submission is that there is no requirement for there to be direct evidence of the elements required by an SoP. It is sufficient if there is some material that pointed to and thus permits the inference of facts which satisfy the SoP. The applicant submits that there were raised facts in the material before the Tribunal, and acknowledged in its reasons for decision, which supported the sub-hypothesis that the veteran's pre-service daily intake of animal fat was around or possibly slightly below the national average of 126 g per day. The fact that any estimate of fat consumption was speculative was irrelevant, as stated by the majority in Bey 79 FCR at 372: While a hypothesis may be no more than a possibility or supposition , in order for a hypothesis to be reasonable, it must, as East [ v Repatriation Commission [1987] FCA 242 ; (1987) 16 FCR 517] states, be pointed to or supported, and not merely left open as a possibility, by the material before the decision maker. (Emphasis added.) 35 It is settled that the decision-maker is not to engage in fact finding during the first three Deledio steps (ie the application of s 120(3) as affected by s 120A): Deledio 83 FCR at 97; Bull 188 ALR at 761 . It is only during the fourth Deledio step (ie the application of s 120(1)) that actual fact finding is permissible. However, the determination of whether a reasonable hypothesis has been raised by the whole of the material before the decision-maker is itself a question of a factual nature: Bey 79 FCR 373 and Gardiner [2007] FCA 1290 , and the first three Deledio steps are concerned with this very determination. This requires the decision-maker to determine a question of a factual nature, without engaging in formal or ultimate fact-finding. Such a tension makes the dividing line referred to by Allsop J above all the more difficult to discern.


case_text: In Repatriation Commission v Deledio [1998] FCA 391 ; (1998) 83 FCR 82 at 97-8, the Full Court held that a four-step process is required under s 120 and s 120A of the Act to determine if an injury or death was war-caused. These steps may be summarised as: 1. the material before the Tribunal is to be examined to see if it points to a hypothesis connecting the death with the circumstances of the veteran's service. In the absence of a hypothesis, the claim fails; 2. if the material does raise a hypothesis, the Tribunal must see if there is an SoP in force. If there is no SoP in force that fits the hypothesis, it will be taken not to be reasonable and the claim fails; 3. if an SoP is in force and relevant to the hypothesis, the Tribunal will consider if the hypothesis is reasonable. If the hypothesis is consistent with the template found in the SoP, the hypothesis is reasonable. If the hypothesis fails to fit within the template, the claim fails; 4. the Tribunal must then decide whether it is satisfied beyond reasonable doubt that the death was not war-caused. If it is not so satisfied, the claim succeeds. If it is so satisfied, the claim fails. 8 The Tribunal described the hypothesis which the applicant contended linked the deceased veteran's war-service with his prostate cancer as follows: he was fed a low fat diet by his mother prior to enlistment in the Royal Australian Navy but during service in the RAN, acquired a liking for foods with a high animal fat content, and after discharge from the Navy insisted on maintaining a diet high in animal fats. 9 The more favourable SoP, which the Tribunal applied, provided as a factor that must as a minimum exist before a reasonable hypothesis has been raised connecting cancer of the prostate with operational service, an increase in "animal fat consumption by at least 40% and to at least 50 g/day, and maintaining these levels for at least five years within the twenty-five years before the clinical onset of malignant neoplasm of the prostate." 19 In the alternative, the Tribunal held that the applicant's claim in any case failed at the fourth Deledio step. The lack of evidence of the pre-service diet, and the apparent inaccuracy of the post-service diet led the Tribunal members to find that they were satisfied beyond reasonable doubt the factual foundation upon which the hypothesis linking war service to death could operate, did not exist. Finally, the Tribunal stated that "[a]s no reasonable hypothesis connecting the death of the deceased with the service exists, we are deemed to be satisfied beyond reasonable doubt that the death of the deceased was not war-caused". 21 The applicant contends that the primary issue for determination is whether s 120 of the Act requires direct evidence of a factor required by an SoP in order for a claim to succeed. The applicant submits that the issue for the Tribunal under s 120(3) was not the reliability of the evidence, or whether there was considerable doubt about aspects of the applicant's evidence, or whether it was likely to be wrong. Rather, under s 120(3), the issue is whether the facts raised by the claimant give rise to a reasonable hypothesis when proof of those facts is not in issue: Deledio 83 FCR at 92. The applicant submits that the Tribunal erred by engaging in fact-finding when applying s 120(3). 26 The applicant further submits that the Tribunal erred in its application of s 120(1), and the fourth Deledio step. The Court in Deledio 83 FCR at 96 stated that if the hypothesis is reasonable the claim will succeed unless: (1) one or more facts necessary to support it are disproved beyond reasonable doubt; or (2) the truth of a fact inconsistent with the hypothesis is proved beyond reasonable doubt. 27 The applicant submits that the elements of her hypothesis addressed by the Tribunal were that the deceased's pre-service diet contained 126 g of animal fat per day, and that his post-service diet contained 187 g per day. According to the applicant, the proper application of the fourth Deledio step requires either one of these facts to be disproved beyond reasonable doubt or for a fact inconsistent with them to be proved beyond reasonable doubt. The Tribunal concluded that it was satisfied beyond reasonable doubt that the factual foundation upon which the hypothesis could operate did not exist. The applicant submits that the Tribunal misconstrued and misapplied s 120(1) and, as a result, did not address the correct question. 28 The respondent submits that the applicant's notice of appeal raises no question of law; a finding as to whether a reasonable hypothesis has not been raised is a question of fact: Gardiner v Repatriation Commission [2007] FCA 1290. Further, the respondent submits that the applicant's challenge to the Tribunal's finding that it was satisfied beyond a reasonable doubt that the veteran's death was not war-caused (the alternative finding, and fourth Deledio step) is an attempt to challenge a question of fact. 34 Nevertheless, there are, in this area of the law, a number of clearly defined steps which a decision-maker must take, each with its own mandated methodology of application. In particular, the four Deledio steps (with the exception of the correction made in Bull v Repatriation Commission [2001] FCA 1834 ; (2001) 188 ALR 756 at [14] [15]) have become something of an algorithm in cases of this kind. While the Deledio propositions were intended as an aid to clear thinking and, with respect, are clearly right, treating them as if they were a substitute for the statute and, as I have put it, an algorithm, indeed the only available algorithm, seems in practice to have created at least as many problems as their learned author intended that they should avoid. That is not, of course, their author's fault. Notwithstanding this, the application of the necessary steps cannot be said to be easy. As Gyles J said in Byrne v Repatriation Commission [2007] FCAFC 126 ; (2007) 97 ALD 359 at [1] [o]ne can only have sympathy for the members of the [Tribunal] who are called upon to apply ss 120, 120A and 120B of the [Act] as they have been interpreted by the authorities of the High Court and this Court. The reasoning required would confuse most philosophers. 35 It is settled that the decision-maker is not to engage in fact finding during the first three Deledio steps (ie the application of s 120(3) as affected by s 120A): Deledio 83 FCR at 97; Bull 188 ALR at 761 . It is only during the fourth Deledio step (ie the application of s 120(1)) that actual fact finding is permissible. However, the determination of whether a reasonable hypothesis has been raised by the whole of the material before the decision-maker is itself a question of a factual nature: Bey 79 FCR 373 and Gardiner [2007] FCA 1290 , and the first three Deledio steps are concerned with this very determination. This requires the decision-maker to determine a question of a factual nature, without engaging in formal or ultimate fact-finding. Such a tension makes the dividing line referred to by Allsop J above all the more difficult to discern. 38 The Tribunal in the present case made a clear distinction between its application of s 120(3) (and the first three Deledio steps), and s 120(1) (and the fourth Deledio step). In its application of s 120(3), the Tribunal noted that the applicant had conceded that her recall of the total amount of food ingested by her late husband may have been inaccurate. The Tribunal then held "[i]f this recall is wrong, then it is equally likely that her recall of the relative proportions of the different foods consumed is also wrong." The Tribunal further held that there was "no evidence" regarding the amount of fat the deceased consumed in his pre-service years, and "no facts which address the hypothesis of an increase in animal fats by 40%". These comments suggest that the Tribunal both crossed the line into impermissible fact finding, and misunderstood the nature of its then preliminary inquiry. 39 In Dixon [1999] FCA 582 ; 29 AAR 235 at [24] Wilcox J further held that at [ Deledio steps 1-3] the decision-maker is not concerned with the accuracy of the material giving rise to the hypothesis; the decision-maker is still working under s 120(3). The two steps additional to those identified in Byrnes that is, steps 2 and 3 in the Deledio formulation are simply limitations on the result that may be obtained in connection with the first of the two Byrnes steps. As the Full Court said in Deledio it is only at the step 4 stage of the process "that the Tribunal will be required to find facts from the material before it." 42 The Tribunal also found that the applicant's claim failed at the fourth Deledio step, that is, the application of s 120(1). The Tribunal again stated that there was "no evidence" regarding the amount of animal fat ingested by the deceased veteran pre-service, and repeated the finding that the applicant's mistaken estimate of quantity of food eaten by her husband post-service also tainted her estimate of relative proportions. These findings led the Tribunal to conclude that it was satisfied beyond reasonable doubt "that the factual foundation upon which the hypothesis can operate does not exist." 43 Fact finding by the Tribunal is permitted during the fourth step in the Deledio process: Deledio [1998] FCA 391 ; 83 FCR 82. Indeed it is then required. The Tribunal in this matter picked up the language of s 120(1), where it referred to "no sufficient ground" for making a determination that the death was war-caused, and fastened on the language of the majority in Bushell 175 CLR at 416 when referring to the lack of "factual foundation". However, the authorities indicate that an applicant will only fail at this point of the analysis if, as stated by Mason CJ, Gaudron and McHugh JJ in Byrnes 177 CLR at 570, the Commission is satisfied beyond reasonable doubt that the factual foundation of the hypothesis has been disproved , either by proof beyond reasonable doubt that a fact or fact relied upon to support the hypothesis is not true, or by proof beyond reasonable doubt of the truth of a further fact, inconsistent with the hypothesis. [See also 571; Deledio 82 FCR at 93] . (Emphasis added. Footnotes omitted.) 47 To try to put the matter clearly (and avoiding the Deledio formulation), (1) Contrary to the Tribunal's view that there was "no evidence" from which a possible assessment of the deceased's dietary habits before and after his service could be made, there was significant material from which, under s 120(3), the Tribunal might have concluded that there was a real possibility of a very large, even of 40%, increase in the deceased's daily animal fat consumption, ie by 61 g (a little over two ounces in the more readily comprehensible, older measurements or, if all the increased fat were butter, a shade under a quarter of a 250 g packet). There was a deal of lay evidence, and not only from the applicant widow, to point to this hypothesis, which is all that is required at the s 120(3) stage. The lay evidence could hardly have precisely quantified the increase to 40% or more, and did not, in terms, purport to do so. However, that evidence strongly supported a dramatic increase in the deceased's animal fats consumption after his war service and the Tribunal did not hold the entirety of that evidence to be completely lacking in credibility. While an increase of such an amount in daily fat intake would certainly be very considerable, it could not be assumed from mere common experience to be impossible. There was no expert testimony establishing that an increase of 61 g of fat per day (ie to 187 g per day) was impossible. (In this regard, it seems clear that by oversight, when recounting the effects of Dr English's evidence at [23] of its reasons, the Tribunal mistakenly referred to 187 g when it should have given 264 g as her estimate of the amount of claimed post-service fat intake, cf for example [31].) If the Tribunal had therefore concluded that the asserted real possibility existed, it might properly not have been satisfied (as s 120(3) contemplates) that the material did not raise a reasonable hypothesis of war-caused connection. It would then have needed to confront its ultimate fact-finding task under s 120(1). (2) While the Tribunal may possibly have been positively satisfied beyond reasonable doubt under s 120(1) that, in fact, there was no sufficient ground for making the determination that the disease was war-caused, it could not do so merely because of its stated reasons, that either there was no evidence or no sufficient evidence to sustain a positive finding that there was such a connexion. Absence of proof of X simply cannot prove non-X. (3) Both of these errors amount to errors of law. In each instance, the Tribunal misconceived its function: R v War Pensions Entitlement Appeal Tribunal; Ex parte Bott (1933) 50 CLR 227 at 242-3 per Rich, Dixon & McTiernan JJ, or asked the wrong question: Roncevich [2005] HCA 40 ; 222 CLR 115.


case_text: The Tribunal held that, according to authority ( Repatriation Commission v Hill [2002] FCAFC 192 ; (2002) 69 ALD 581) "a hypothesis relied on by a veteran to support a pension claim must be supported by material pointing to each element that the SoP makes essential for the hypothesis to be reasonable". Further, the Tribunal held that material which supports the hypothesis of the connection must exist, citing Repatriation Commission v Dunn [2006] FCA 1703 ; (2006) 94 ALD 97 per Nicholson J at [46]. 11 The Tribunal however concluded that there was "no reliable evidence whatsoever as to the deceased's actual dietary intake of animal fat prior to service." The Tribunal referred to a national dietary survey of the Australian people conducted between 1936-8 which gave the average adult intake of animal fat as 126 g per day. The deceased veteran had a body mass index (BMI) of 18.7 at the time of his enlistment, bringing him within a healthy weight range (between BMI 18.5 and 25). The Tribunal inferred from this information that the deceased veteran's daily intake of animal fat was around, or possibly slightly below, the national average. 12 The Tribunal also held that there were no facts upon which to estimate an average daily fat intake while the deceased was serving in the RAN. There was "no doubt" however, that the deceased veteran was at times served fatty and greasy foods. With regard to post-service diet, the Tribunal said the following: the Applicant's evidence was that the deceased post war insisted on having the fatty food he had come to enjoy whilst in the Navy. She went on to state that the deceased had fried eggs and sausages for breakfast, toast with plenty of butter, that he liked the fat left on chops and steak, the outside slice on roast lamb, and gravy in the dish from the baked meat. He wanted apple pie or baked custard with cream or anything with chocolate or cheese in or on it. She further added that the deceased stated he had acquired a taste for fatty foods whilst in the Navy. In oral evidence the Applicant stated "he liked what he had been denied as a child".


case_text: The applicant says that the Tribunal misconstrued s 120(1) and (3) of the Act, and posed and answered the wrong questions. Such errors are errors of law, appellable under s 44 of the AAT Act: in Roncevich v Repatriation Commission [2005] HCA 40 ; (2005) 222 CLR 115 a majority of the High Court held, at [28], that "[i]n failing to pose and answer the correct question the Tribunal erred in law. That error constituted an appealable [sic] error of law within the meaning of s 44 of the Administrative Appeals Tribunal Act ". 47 To try to put the matter clearly (and avoiding the Deledio formulation), (1) Contrary to the Tribunal's view that there was "no evidence" from which a possible assessment of the deceased's dietary habits before and after his service could be made, there was significant material from which, under s 120(3), the Tribunal might have concluded that there was a real possibility of a very large, even of 40%, increase in the deceased's daily animal fat consumption, ie by 61 g (a little over two ounces in the more readily comprehensible, older measurements or, if all the increased fat were butter, a shade under a quarter of a 250 g packet). There was a deal of lay evidence, and not only from the applicant widow, to point to this hypothesis, which is all that is required at the s 120(3) stage. The lay evidence could hardly have precisely quantified the increase to 40% or more, and did not, in terms, purport to do so. However, that evidence strongly supported a dramatic increase in the deceased's animal fats consumption after his war service and the Tribunal did not hold the entirety of that evidence to be completely lacking in credibility. While an increase of such an amount in daily fat intake would certainly be very considerable, it could not be assumed from mere common experience to be impossible. There was no expert testimony establishing that an increase of 61 g of fat per day (ie to 187 g per day) was impossible. (In this regard, it seems clear that by oversight, when recounting the effects of Dr English's evidence at [23] of its reasons, the Tribunal mistakenly referred to 187 g when it should have given 264 g as her estimate of the amount of claimed post-service fat intake, cf for example [31].) If the Tribunal had therefore concluded that the asserted real possibility existed, it might properly not have been satisfied (as s 120(3) contemplates) that the material did not raise a reasonable hypothesis of war-caused connection. It would then have needed to confront its ultimate fact-finding task under s 120(1). (2) While the Tribunal may possibly have been positively satisfied beyond reasonable doubt under s 120(1) that, in fact, there was no sufficient ground for making the determination that the disease was war-caused, it could not do so merely because of its stated reasons, that either there was no evidence or no sufficient evidence to sustain a positive finding that there was such a connexion. Absence of proof of X simply cannot prove non-X. (3) Both of these errors amount to errors of law. In each instance, the Tribunal misconceived its function: R v War Pensions Entitlement Appeal Tribunal; Ex parte Bott (1933) 50 CLR 227 at 242-3 per Rich, Dixon & McTiernan JJ, or asked the wrong question: Roncevich [2005] HCA 40 ; 222 CLR 115.


case_text: unusual application is for vesting of disclaimed real property in fee simple pursuant to s 568F of the Corporations Act 2001 (Cth) (the Act). The starting point for discussion of the disclaimer provisions in modern times was the analysis by Sir Nigel Bowen in Re Middle Harbour Investments Ltd (in liq) [1977] 2 NSWLR 652, dealing with the provisions of the Companies Act 1961 as they stood in 1976. The dicta of Young CJ in Eq in Sullivan v Energy Services International Pty Ltd (in liq) [2002] NSWSC 937 ; (2002) 171 FLR 106, (2002) 43 ACSR 179, particularly at [33] [50], is also of some relevance. His Honour said that there had not been any judicial consideration of s 568F of the current Act (although cf Global Television Pty Ltd v Sportsvision Australia Pty Ltd (in liq) (2000) 35 ACSR 484 [70]). There is a cognate power in bankruptcy (cf Bankruptcy Act 1966 (Cth), s 133(9) ; see National Bank Ltd v Leroy; In the matter of Woo [2003] FCA 862). The usual position upon disclaimer would be that the company's interest in the property would estreat to the Crown in right of New South Wales subject to any charges ( Re Middle Harbour Investments Ltd at 662 663; Re Tulloch Ltd (in liq) (1977) 3 ACLR 808; National Bank Ltd v Leroy; In the matter of Woo at [5]). The State of New South Wales has been joined and submits to any order that the Court might make. It does not seek to press any claim it may have.


case_title: Re Middle Harbour Investments Ltd (in liq) [1977] 2 NSWLR 652


case_text: usual position upon disclaimer would be that the company's interest in the property would estreat to the Crown in right of New South Wales subject to any charges ( Re Middle Harbour Investments Ltd at 662 663; Re Tulloch Ltd (in liq) (1977) 3 ACLR 808; National Bank Ltd v Leroy; In the matter of Woo at [5]). The State of New South Wales has been joined and submits to any order that the Court might make. It does not seek to press any claim it may have.


case_text: unusual application is for vesting of disclaimed real property in fee simple pursuant to s 568F of the Corporations Act 2001 (Cth) (the Act). The starting point for discussion of the disclaimer provisions in modern times was the analysis by Sir Nigel Bowen in Re Middle Harbour Investments Ltd (in liq) [1977] 2 NSWLR 652, dealing with the provisions of the Companies Act 1961 as they stood in 1976. The dicta of Young CJ in Eq in Sullivan v Energy Services International Pty Ltd (in liq) [2002] NSWSC 937 ; (2002) 171 FLR 106, (2002) 43 ACSR 179, particularly at [33] [50], is also of some relevance. His Honour said that there had not been any judicial consideration of s 568F of the current Act (although cf Global Television Pty Ltd v Sportsvision Australia Pty Ltd (in liq) (2000) 35 ACSR 484 [70]). There is a cognate power in bankruptcy (cf Bankruptcy Act 1966 (Cth), s 133(9) ; see National Bank Ltd v Leroy; In the matter of Woo [2003] FCA 862).


case_outcome: distinguished

case_text: The applicant relies upon a line of cases in bankruptcy commencing with In re Dagnall Ex parte Soan & Morley [1896] 2 QB 407. Pursuant to the Married Women's Property Act 1982 , 'Every married woman carrying on a trade separately from her husband shall, in respect of her separate property, be subject to the bankruptcy laws in the same way as if she were a feme sole.' Mrs Dagnall had been carrying on a trade separately from her husband. Having sold her business, she gave notice to creditors that she was about to suspend payment of their debts. As a result a bankruptcy petition was presented. The question was whether or not the bankruptcy laws continued to apply to her after she had ceased trading but whilst she still owed trading debts. The Divisional Court (Vaughan Williams J and Wright J) found that the bankruptcy legislation continued to apply. Vaughan Williams J said (at 410-11): 'But whether a person is carrying on a trade or not is a question of fact; and if it were not for the decision in Ex parte McGeorge... , I would have said without any hesitation that as long as a woman trading separately from her husband had not paid the trade debts which she had incurred, so long she was continuing to trade. It seems to me that trading is not completed until you have performed all the obligations that the fact of trading imposed upon you. And that was the view that was taken in the older cases. Then we have to consider whether there is anything in the decision in Ex parte McGeorge... which prevents us from holding that the non-payment of debts incurred by a married woman while trading separately is evidence that she is still continuing to trade.' 24 His Lordship then referred to numerous "older" cases, noting that the decision in Ex parte McGeorge had departed from them on the basis of differences in the wording of the relevant bankruptcy legislation. Two alternative lines of reasoning emerge from his Lordship's brief judgment. The first is that a trader continues to trade until he or she has performed all obligations incurred as a result of such trading. The second is that non-payment of trading debts is evidence of continued trading, presumably to be considered in the light of other evidence. Wright J disposed of the matter on a different basis, holding (at 411) that: '... this appeal must be allowed, upon the short ground that in my view the natural meaning of the section is that a married woman who trades separately is to be subject to the bankruptcy laws in respect of all debts incurred by her in the period during which she was carrying on the trade.' 26 Those "older cases" are of some assistance in understanding the decision in Dagnall . In Meggot v Mills , 1 Ld Raym 286; 91 ER 1088, it was said that: '... though a man quits his trade, yet he may be a bankrupt for the debts that he owed before.' 29 In bankruptcy matters, Dagnall has been followed in Theophile v The Solicitor-General [1950] AC 186 at 201-203; In re Bird v Inland Revenue Commissioner [1962] 1 WLR 686 at 695-697 and In re a Debtor [1992] Ch 554. However, in Avondale Motors (Parts) Pty Ltd v Commissioner of Taxation [1971] HCA 17 ; (1971) 124 CLR 97 at 102-103, Gibbs J (as his Honour then was) doubted the applicability of the decision in Dagnall 'beyond the field of bankruptcy and into that of taxation law' , referring to the decision of Tryka Ltd v Newall (1963) 41 TC 146 where Wilberforce J (as his Lordship then was) said: 'I do not think I can accept the application of the bankruptcy cases here. It seems to me that the two fields are quite different. When one is considering the question whether for purposes of bankruptcy laws a person is carrying on business, it may be necessary to hold that he does not cease to carry on business when trading activity has ceased, and for that reason, the Courts have been ready to extend the Section so as to cover a case where he has left debts unpaid. But to apply the same line of thought to Income Tax cases would lead to very great difficulties and, indeed, would mean that almost every case which one finds in the books on such questions as cessation of business would have been complicated by the introduction of this question and might, indeed, have been otherwise decided.' 38 One might well say that the railway company was in a position similar to that of the applicant prior to 25 June 2001. It had an interest in an asset, which was being managed by another party, and derived income from such interest. However the change in the undertaking of the railway company effected by the 1906 agreement was quite different from that made to the applicant's position by the agreement of 25 June 2001. The railway company's capital continued to be tied up in the railway, and it continued to derive income from that source. In the present case the applicant terminated its investment in the joint venture and ceased to derive income from it. Although Lord Sumner's reference to Dagnall may suggest some support for the applicant's case, the reference hardly amounted to an endorsement of the decision, and his Lordship clearly decided the case on its own facts. The other Law Lords made no reference to Dagnall . The applicant also refers to decisions applying the Dagnall-Theophile line of authorities in the Australian Taxation Board of Review and in Canada where Bowman CJ said: 'It is, I believe, settled law that a business continues to be carried on so long as the obligations arising out of the business remain unfulfilled ... .' 39 The cases cited in Dagnall and the reasons of Wright J do not support that proposition, even in the bankruptcy context. The rule is rather that, under bankruptcy legislation then in force, trading debts were recoverable in bankruptcy after trading had ceased. In Australia two eminent judges have doubted the wisdom of applying that proposition in the tax context, and a third (Brennan J) appears to have had a similar view. In England another eminent judge has expressed similar reservations. The decision in South Behar Railway cannot be interpreted as an endorsement of the wider application of the decision in Dagnall . Only one member of the House of Lords referred to it, and in a qualified way. Decisions in the Australian Taxation Board of Review can hardly be set against the views of the judges to whom I have referred. The observation in the Canadian case is not persuasive. In the circumstances I decline to follow Dagnall for present purposes.


case_title: Meggot v Mills , 1 Ld Raym 286; 91 ER

case_text: Those "older cases" are of some assistance in understanding the decision in Dagnall . In Meggot v Mills , 1 Ld Raym 286; 91 ER 1088, it was said that: '... though a man quits his trade, yet he may be a bankrupt for the debts that he owed before.'


case_text: The reference by Vaughan Williams J to the "older cases" is explained in the summary of argument by counsel for the petitioning creditor. At 408-9, counsels' submissions are summarized as follows: 'The meaning of s.1, sub-s 5, of the Married Women's Property Act 1882 is that a woman who once carries on a trade and contracts debts as a trader becomes subject to the bankruptcy laws, and continues to be so until she has discharged her trade debts, even though she may have ceased to carry on her trade. Under the old law of bankruptcy, in force at a time when only traders could be made bankrupt, a man who had retired from business might be made a bankrupt in respect of debts contracted before he did retire: Meggot v Mills ... . Similarly, in Ex parte Bamford ... , a case decided on an Act of Parliament which provided that persons "using the trade of merchandise" might be made bankrupt, it was held that an act of bankruptcy committed after retiring from trade was sufficient.' 27 In Ex parte Bamford (1809) 15 Ves Jun 449; 33 ER 824, Lord Eldon said (at 827): 'Upon the point, which has been taken at the trial, whether a Commission can be sustained by an act of bankruptcy, committed after retiring from trade, the debts, contracted in the course of that trade, remaining unpaid, I shall say no more, than that my clear opinion, unqualified by any doubt, is, that the Commission may be sustained; and I should not have heard so much upon it, if I had not understood, that two of the Judges held different opinions upon that question at the Assizes.' 28 Neither of these authorities supports the proposition that a trader, who ceases trading in the usual sense, continues to trade for so long as trade debts remain owing. They rather establish the proposition advanced by Wright J that a person who has traded may be bankrupted upon debts incurred during trading, notwithstanding the fact that he has ceased to trade.


case_text: In bankruptcy matters, Dagnall has been followed in Theophile v The Solicitor-General [1950] AC 186 at 201-203; In re Bird v Inland Revenue Commissioner [1962] 1 WLR 686 at 695-697 and In re a Debtor [1992] Ch 554. However, in Avondale Motors (Parts) Pty Ltd v Commissioner of Taxation [1971] HCA 17 ; (1971) 124 CLR 97 at 102-103, Gibbs J (as his Honour then was) doubted the applicability of the decision in Dagnall 'beyond the field of bankruptcy and into that of taxation law' , referring to the decision of Tryka Ltd v Newall (1963) 41 TC 146 where Wilberforce J (as his Lordship then was) said: 'I do not think I can accept the application of the bankruptcy cases here. It seems to me that the two fields are quite different. When one is considering the question whether for purposes of bankruptcy laws a person is carrying on business, it may be necessary to hold that he does not cease to carry on business when trading activity has ceased, and for that reason, the Courts have been ready to extend the Section so as to cover a case where he has left debts unpaid. But to apply the same line of thought to Income Tax cases would lead to very great difficulties and, indeed, would mean that almost every case which one finds in the books on such questions as cessation of business would have been complicated by the introduction of this question and might, indeed, have been otherwise decided.' 30 Similarly, in Northern Engineering Pty Ltd v Federal Commissioner of Taxation (1979) 42 FLR 301, Deane J considered that the decision in Theophile could not be applied in considering whether a taxpayer was carrying on business for so long as any debt owing to him remained uncollected. In that case Brennan J (as his Honour then was) said (at 304): 'When a company's business is closing down there comes a time when the activity of a trading or profit-making nature comes to an end. The business of the company is not carried on merely by managing or disposing of the company's assets otherwise than in a business. There was, as it seems to me, no element of business in the circumstances of the case here appearing in the movement of funds between the appellant and the other companies in the group. It was not shown that the movement of those funds was for the purpose of deriving any commercial benefit for the appellant and the mere existence of a debt owing by the holding company during the income year had no element of a business about it, nor was it in an relevant sense an incident of the trading business in which the appellant had been engaged.' I infer that Brennan J also saw no reason to apply Theophile .


case_text: In bankruptcy matters, Dagnall has been followed in Theophile v The Solicitor-General [1950] AC 186 at 201-203; In re Bird v Inland Revenue Commissioner [1962] 1 WLR 686 at 695-697 and In re a Debtor [1992] Ch 554. However, in Avondale Motors (Parts) Pty Ltd v Commissioner of Taxation [1971] HCA 17 ; (1971) 124 CLR 97 at 102-103, Gibbs J (as his Honour then was) doubted the applicability of the decision in Dagnall 'beyond the field of bankruptcy and into that of taxation law' , referring to the decision of Tryka Ltd v Newall (1963) 41 TC 146 where Wilberforce J (as his Lordship then was) said: 'I do not think I can accept the application of the bankruptcy cases here. It seems to me that the two fields are quite different. When one is considering the question whether for purposes of bankruptcy laws a person is carrying on business, it may be necessary to hold that he does not cease to carry on business when trading activity has ceased, and for that reason, the Courts have been ready to extend the Section so as to cover a case where he has left debts unpaid. But to apply the same line of thought to Income Tax cases would lead to very great difficulties and, indeed, would mean that almost every case which one finds in the books on such questions as cessation of business would have been complicated by the introduction of this question and might, indeed, have been otherwise decided.'


case_title: In re a Debtor [1992] Ch 554


case_text: In bankruptcy matters, Dagnall has been followed in Theophile v The Solicitor-General [1950] AC 186 at 201-203; In re Bird v Inland Revenue Commissioner [1962] 1 WLR 686 at 695-697 and In re a Debtor [1992] Ch 554. However, in Avondale Motors (Parts) Pty Ltd v Commissioner of Taxation [1971] HCA 17 ; (1971) 124 CLR 97 at 102-103, Gibbs J (as his Honour then was) doubted the applicability of the decision in Dagnall 'beyond the field of bankruptcy and into that of taxation law' , referring to the decision of Tryka Ltd v Newall (1963) 41 TC 146 where Wilberforce J (as his Lordship then was) said: 'I do not think I can accept the application of the bankruptcy cases here. It seems to me that the two fields are quite different. When one is considering the question whether for purposes of bankruptcy laws a person is carrying on business, it may be necessary to hold that he does not cease to carry on business when trading activity has ceased, and for that reason, the Courts have been ready to extend the Section so as to cover a case where he has left debts unpaid. But to apply the same line of thought to Income Tax cases would lead to very great difficulties and, indeed, would mean that almost every case which one finds in the books on such questions as cessation of business would have been complicated by the introduction of this question and might, indeed, have been otherwise decided.' 41 For present purposes the applicant must show that until 31 December 2001, it continued to carry on the same business as that carried on before 25 March 1998, as explained by Gibbs J in Avondale Motors . It claims that its interests pursuant to the joint venture agreement, at all relevant times prior to 25 June 2001 were: '(a) ... rights, duties, obligations and liabilities which were several to those of other participants ...; (b) a beneficial interest in the property and assets of the (joint venture) as a tenant in common with the other participants, proportionate to its interest in the (joint venture) ...; (c) (several responsibility) for the expenditure and operational expenses incurred by the (joint venture); and (d) (ownership of) coal produced by the (joint venture) in proportion to its interests in the (joint venture) which was to be divided and sold separately. This was achieved by each participant appointing (the manager of the joint venture) to market and sell the coal produced by the (joint venture) on its behalf.' 42 The applicant submits that prior to 25 March 1998 and thereafter, until 25 June 2001, it carried on a business properly characterized as that of developing and exploiting deposits of coal at German Creek in Queensland through participation in the joint venture, conducting such business through an agent who was responsible for day-to-day management. In the 2002 tax year (ie 1 January-31 December 2001) the applicant conducted such business until 25 June 2001. Thereafter, as it asserts: '(It) was engaged in various activities arising out of its participation in (the joint venture), including the transfer of its rights and obligations under the Corporation User Agreement and the German Creek East Agreement which were both essential to the operation of the (joint venture).' 43 The respondent submits that from early 1998 until 25 March 1998 the only business activity of the applicant was its participation in the joint venture. It submits that on 25 June 2001, 'The applicant ceased to be a participant in the joint venture. It no longer conducted the activities' associated with that joint venture. The respondent submits that in so doing the applicant altered in a significant way the source of its earnings, divesting itself of its profit-making interest in the joint venture. To the extent that the activities identified by Mr Purkiss were performed after 25 June 2001, they: '... comprised ad hoc attendance to matters involving: (a) preparation of documents to finalize some remaining obligations of the parties under the Asset Purchase Agreement; (b) the receipt prior to 30 September 2001 of the amount of a tax adjustment payable to the applicant under the Asset Purchase Agreement; (c) taxation or accounting-related issues.'


case_outcome: followed

case_title: Tryka Ltd v Newall (1963) 41 TC 146


case_text: Similarly, in Northern Engineering Pty Ltd v Federal Commissioner of Taxation (1979) 42 FLR 301, Deane J considered that the decision in Theophile could not be applied in considering whether a taxpayer was carrying on business for so long as any debt owing to him remained uncollected. In that case Brennan J (as his Honour then was) said (at 304): 'When a company's business is closing down there comes a time when the activity of a trading or profit-making nature comes to an end. The business of the company is not carried on merely by managing or disposing of the company's assets otherwise than in a business. There was, as it seems to me, no element of business in the circumstances of the case here appearing in the movement of funds between the appellant and the other companies in the group. It was not shown that the movement of those funds was for the purpose of deriving any commercial benefit for the appellant and the mere existence of a debt owing by the holding company during the income year had no element of a business about it, nor was it in an relevant sense an incident of the trading business in which the appellant had been engaged.' I infer that Brennan J also saw no reason to apply Theophile . 44 It is submitted that none of those matters involved participation in the joint venture. The respondent relies upon the observations made by Brennan J in Northern Engineering to which I have previously referred. 45 I adopt those observations by Brennan J. Managing or disposing of remaining assets after active business operations have ceased will not necessarily constitute the continued conduct of the original business. Assets are often sold in the course of conducting a business, and such conduct does not necessarily imply that the former business has ceased. However, where those assets are essential to the conduct of the business and are not replaced, it is difficult to infer that the same business continues to be conducted. The line between, on the one hand, managing and selling assets whilst continuing to conduct the same business and, on the other, selling assets after cessation of business may not always be clear. However, in the present case, there can be little doubt that continuation of the business conducted prior to 25 March 1998 was dependent upon retention of the applicant's interest in the joint venture. Once that was sold, there was no business. 46 The negotiations and correspondence concerning the material contracts were incidents of the sale of the applicant's interest in the joint venture and not incidents of a continuing business. The continuing liability to the National Australia Bank should be similarly characterized. Similar comments apply to the finalization of the allocation of the purchase price, the agreement as to tax adjustments and finalization of the applicant's obligations in connection with the mining tenements. The preparation and lodgement of applications for tax concessions associated with research and development might well occur in the course of conducting a business. However when such actions occur after sale of the principal asset of the business, it may be otherwise. The better view is that in this case, these transactions were also incidents of the management or disposal of assets following the discontinuance of business, rather than incidents of the continued conduct of the business. The maintenance of records and preparation of accounts and tax returns should be similarly treated. 47 Whether these matters are taken separately or together, it is impossible to resist the inference that the applicant's business ceased when its interest in the joint venture was sold. Thereafter it sought to finalise obligations arising under the sale agreement, get in some assets (the tax concessions) and dispose of others. It also maintained its records. Although those actions arose out of its previous business undertaking, they did not constitute the continuation of the business of developing and exporting coal deposits at German Creek or anywhere else. 48 The appeal should be dismissed with costs. I certify that the preceding forty-eight (48) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Dowsett. Associate: Dated: 28 August 2007 Counsel for the Applicant: Mr B Sullivan SC Mr M Richmond Solicitor for the Applicant: Minter Ellison Counsel for the Respondent: Mr K Dorney QC Mr S Lumb Solicitor for the Respondent: Australian Government Solicitor Date of Hearing: 23 and 24 April 2007 Date of Judgment: 28 August 2007 AustLII: Copyright Policy | Disclaimers | Privacy Policy | Feedback URL: http://www.austlii.edu.au/au/cases/cth/FCA/2007/1324.html