case_text: The above considerations are to be construed in light of the fundamental right of a citizen to have access to the courts: see The Airtourer Co-operative Ltd v Millicer Aircraft Industries Pty Ltd [2004] FCA 1400 at [18] (' Airtourer '). As Morling J observed in Barton v Minister for Foreign Affairs (1984) 2 FCR 463 at 469: 'It has never been the case that impecuniosity on the part of a plaintiff is a ground for ordering him to give security for costs. In Pearson v. Naydler [1977] 1 W.L.R. 899, Megarry V-C said: "The basic rule that a natural person who sues will not be ordered to give security for costs, however poor he is, is ancient and well-established. As Bowen L.J. said in Cowell v Taylor (1885) 31 Ch. D. 34 at 38, both at law and in equity 'the general rule is that poverty is no bar to a litigant'. The power to require security for costs ought not to be used so as to bar even the poorest man from the courts."' However, as Branson J noted in Airtourer at [21]: 'Recognition by this Court of the general rule that poverty is no bar to a litigant has not meant that the Court has proceeded on the basis that an order for security for costs can never be made against a litigant. An order for security for costs is only rarely sought against a litigant who is not impecunious. An order for security for costs made against an impecunious litigant when justified by a factor other than mere impecuniosity does not offend the general rule that poverty is no bar to a litigant.' 27 I consider that the circumstances of the present case are, despite some similarities, also distinguishable from those considered by Branson J in Airtourer . That case involved an impecunious co-operative which was pursuing litigation out of a limited pool of funds. There was evidence before her Honour that the applicant planned to exhaust its funds to meet its own legal costs, leaving no funds in reserve for any costs order made against it. Branson J commented at [27]: 'I do not conclude that an order requiring the applicant to provide a relatively modest sum by way of security for costs would preclude the applicant from pursuing its application to the Court. It might require the directors of the applicant to request additional funds from members of the applicant but, as the proceeding is presumably being pursued by the applicant in the interests of its members, I see nothing inappropriate in such an outcome.' 28 Since PCR is a not-for-profit organisation which aims to provide radio broadcasts serving youth and ethnic minority groups, the proceedings are not being pursued by PCR in the interests of its 'members' so much as in the interests of the wider community group which it serves. I am not satisfied that volunteer members of a not-for-profit organisation should be required to provide funds for litigation when the organisation is impecunious. To impose such a requirement would mean a not-for-profit community organisation with a history of providing services to the public, which was legitimately bringing proceedings to the Court, might be prevented from pursuing an action to protect its interests merely on the ground of impecuniosity. This would, in my opinion, breach the principle that impecuniosity should not, without more, prevent a litigant from accessing the courts. 29 However, the difficulty which remains in this instance is that, because PCR has provided very limited information with respect to its financial status, members, objectives, any possible sources of funding and other relevant details, no conclusive finding can be made on the evidence as to the effect which an order for security for costs may have in these proceedings. Further, in the absence of a direct submission from PCR that the proceedings would be stifled if an order were made, I am unwilling to draw the inference that this consequence would follow.


case_outcome: distinguished

case_text: A further consideration is that PCR is not a mere nominal applicant. In this sense, the present facts are distinguishable from those considered by Hely J in Truth About Motorways Pty Ltd v Macquarie Infrastructure Investment Management Ltd (2000) 34 ACSR 673, in which the applicant had no private right or interest. Hely J observed in that case at [37]: 'In my view, the fact that no private right or special interest of the applicant is involved in these proceedings is a factor which weighs in favour of making an order for security, rather than against it.' 25 His Honour added at [38]: 'If those who control the applicant wish to have the benefit of litigating when no private right or special interest of the applicant is at stake in the proceedings and when the applicant is impecunious, then it is appropriate that security for the respondent's costs be provided.'


case_text: PCR has submitted that it is not the true 'aggressor' in the present application and relies upon the decision of Wilcox J in Amalgamated Mining Services Pty Ltd v Warman International Ltd and Anor (1988) 88 ALR 63 (' Amalgamated Mining '). In those proceedings Amalgamated Mining sought a declaration that statements contained in a letter from Warman's solicitors alleging that Warman's copyright had been breached by Amalgamated Mining's supplier were unjustified. In deciding that Amalgamated Mining should not be required to pay security for costs, Wilcox J said (at 67-8): 'If one applies the homely test adopted by Scrutton LJ [in Maatschappij Voor Fondsenbezit v Shell Transport and Trading Co and Ors [1923] 2 KB 166] of asking who, in the litigation, was the attacker and who was the defender, I think it must be said that the first attack came in the letter from [Warman's solicitors] . Although the letter was not written directly to Amalgamated Mining, it is that company which has an interest in defending and, in a commercial sense, probably has very little alternative other than to take that course. I think that it is an accurate analysis of the matter to say, therefore, that it is the respondents to the principal proceeding who are the attackers and that Amalgamated Mining is, in substance, the defender.' His Honour also referred to the decision of the High Court in Willey v Synan [1935] HCA 76 ; (1935) 54 CLR 175. 31 I consider the facts of the present case to be different from those in Amalgamated Mining and Willey v Synan . Those were both cases in which proceedings had been instigated to forestall a threat by a respondent to existing entitlements of the applicant. In these proceedings the respondents have not threatened existing rights of PCR. PCR does not have any specific entitlement to the licence. Although it is true that the decision of ACMA has led to PCR being unable to operate its radio station, PCR only ever held a temporary licence and never had an ongoing right to operate. It cannot be said that the action of either respondent deprived, or threatened to deprive, PCR of its rights such that it was forced to bring these proceedings to protect itself. Accordingly I do not consider that PCR can reasonably be construed as ' the party attacked ' in these proceedings, or that either of the respondents can be considered as the true attacker.


case_outcome: cited

case_title: Comcare v Etheridge [2006] FCAFC 27

case_text: 31A empowers the Court to award summary judgment in relation to a proceeding if satisfied that the applicant has no reasonable prospect of prosecuting it. The basis of the respondent Secretary's resort to s 31A is the contention that the applicant has not identified any question of law such as would enliven the Court's jurisdiction under s 44 of the AAT Act. Given that an appeal lies "on a question of law" only and not on a question of fact or of mixed law and fact: see Comcare v Etheridge [2006] FCAFC 27 at [11] - [17] the issues before me are whether such a question has been raised by Mr Kronen and whether his argument thereon is sufficiently strong to warrant the matter going to trial: Vranic v Secretary, Department of Education, Employment and Workplace Relations [2009] FCA 672.


case_title: Vranic v Secretary, Department of Education, Employment and Workplace Relations [2009] FCA 672


case_text: in turn were enlarged upon in Mr Kronen's written submissions. These revealed that much of his complaint was with matters of fact involving merits-review. He is now aware that a wrong fact finding is not sufficient to establish an error of law: Waterford v The Commonwealth [1987] HCA 25 ; (1987) 163 CLR 54 at 77. Nonetheless, the submissions also exposed that he was taking issue with the manner in which the Tribunal purported to apply the statute to the circumstances. In this one can discern that in several respects he was contending that the Tribunal fell into an error of law which caused it to identify a wrong issue, to ask itself a wrong question, and to ignore relevant material, so exceeding its authority or powers: Craig v South Australia [1995] HCA 58 ; (1995) 184 CLR 163 at 179. The essence of his complaints are both that the Tribunal failed to apply the correct sections of the Act (eg s 615), and misconstrued or misapplied the terms of the Act (eg "to be negotiated" or "reasonable excuse"). To this extent, as I will indicate, I am satisfied that Mr Kronen's application to this Court has in some degree enlivened its jurisdiction under the AAT Act. Nonetheless, I am satisfied that the proceeding has no reasonable prospects of success and for the reason that in ascribing error to the Tribunal he misapprehends the scheme of the Act and of the decision-making processes it mandates.


case_title: Craig v South Australia [1995] HCA 58 ; (1995) 184 CLR 163


case_outcome: applied

case_text: to this trio is Mr Kronen's conception of what is signified by the words "to be negotiated" in s 605(3). What is clear is that the level of permissible compromise and of required mutual agreement that this formula might otherwise suggest when used in other contexts, is radically curtailed in this statutory setting. Whether one can say that the ordinary meaning of "negotiate" is what is intended here (albeit what can be negotiated is limited by the Act and its purposes), hence the meaning is a question of fact: Collector of Customs v Pozzolanic Enterprises Pty Ltd (1993) 43 FCR 280 at 287 (proposition 2); or that its meaning and hence proper construction is contrived by its legislative settings, hence are questions of law: Pozzolanic , 287 (propositions 1 and 4), what is clear is that Mr Kronen misapprehends the latitude the Act gives him. Elblematic of this was his presenting Maxima with negotiation procedures which included referral to an independent panel if any terms could not be agreed. If Mr Kronen is to qualify for a newstart allowance, he was required, in the circumstances, enter into an activity agreement: s 593(1)(e); he was required to undertake one or more activities that the Secretary regarded as suitable for the person: s 606(1); the terms of the agreement were to be approved by the Secretary. In this scheme, the "right to negotiate" could be illusory in quite some degree for some purposes and especially when the Secretary (or a delegate) takes decisions or actions in effectuation of the purposes of the Act itself. This is not to say that there was no room for discussion, accommodation and compromise. Rather, it is to recognise that the actual terms of the negotiation itself were something in relation to which the Secretary, acting reasonably and in good faith, could ultimately dictate, approve or disapprove, if there was to be an agreement. The Tribunal clearly understood this was the case: see Reasons [106]-[108]. It committed no error of law in construing and hence giving legal effect to the "negotiation expectation" of s 605(3) as it did. Further, the Tribunal satisfied itself on the evidence before it that the requirements Maxima sought to impose were reasonable and that those upon which Mr Kronen insisted were unreasonable in the circumstances. These fact findings were open to it and were unimpeachable in this proceeding.


case_outcome: considered

case_text: There is one case concerning par (ac). It is Port of Brisbane Corporation v Federal Commissioner of Taxation [2004] FCA 1232. That was an appeal from a decision of the Administrative Appeals Tribunal and was therefore limited to questions of law. The decision appears to have been based upon a finding that the Administrative Appeals Tribunal had considered irrelevant material in construing the relevant legislative provisions. In those circumstances, the decision can be of little assistance for present purposes. 35 This case depends upon the meaning of the expression "in rail transport". A considerable amount of time was spent in discussing the meaning of the word "in", in my opinion, not a particularly fruitful area of debate. To my mind, the more significant aspect is the word "transport", with any particular connotations that the word "rail" may contribute. The Shorter Oxford Dictionary defines the word "transport", used as a noun, to mean: 'transfer or conveyance of property ... the carrying or conveyance of a person or thing from one place to another ... a system or means of transportation or conveyance of people, goods etc ...' 36 The question depends substantially upon whether, in the present context, the word "transport" means the carriage or conveyance of persons or things or the system of transportation or conveyance. The Commissioner advanced the former view. Queensland Rail advanced the latter. The Commissioner submitted that the word "in" connoted such a close association between the use of the diesel fuel and the rail that it could only be satisfied if the usage occurred on the rail. Thus the movement of persons or goods (including Queensland Rail's own equipment) on rail would be included, but loading or unloading a train with loading equipment, which was not on-rail, would not. Similarly, the use of diesel fuel in rail-mounted track maintenance equipment would be included, but such use in non-rail mounted equipment would not. 37 This approach may give too much significance to the word "rail" which is used adjectivally to qualify the word "transport". The preposition "in" governs the noun "transport". In other words the phrase "in rail transport" means "in transport which uses rail". 38 If Parliament had intended that only use of diesel fuel in activities on-rail was to attract the rebate, it would have been easy to say so. Language analogous to the very specific language used for the purpose of excluding the rebate in the case of vehicles used on public roads and use relating to forestry might have been appropriate. Paragraphs (ad), (b), (c) and (d) are "place-specific" and might also have been appropriate models for a requirement that the relevant activity occur "on-rail".


case_outcome: followed

case_text: Lindgren J has recently collected the cases on the meaning and effect of s 31A and comparable provisions: White Industries Aust Ltd v Federal Commissioner of Taxation [2007] FCA 511 ; (2007) 160 FCR 298 at [58] - [59] , where he considered the test to be whether there are "real" as opposed to "fanciful" or "merely arguable" prospects. 10 Lilly's motion gives rise to three issues. The first is the viability of the applicant's claim to relief under s 52 of the Trade Practices Act . The second is whether the applicant has standing to claim relief under the ADJR Act, s 192 of the Patents Act and s 39B of the Judiciary Act . The third is whether, assuming it has standing, it should be denied relief because of its delay. In a s 31A context, in each case the question is whether the Court is satisfied that there is no reasonable prospect of the applicant succeeding in the relevant claim or issue. 11 The applicant alleges that in applying for an extension of the term of the Patent, Lilly represented to the first respondent (the Commissioner) that the pharmaceutical substance on the ARTG on which it relied was disclosed in claims 1 to 4 and 6 of the Patent. The applicant alleges that these representations were made in trade and commerce and were false.


case_title: Glueck v Stang (2008) 76 IPR 75

case_text: In Glueck v Stang (2008) 76 IPR 75 the applicant alleged that Novopharm, in trade or commerce, engaged in misleading and deceptive conduct in relation to an application to the Australian Patent Office for the grant of letters patent. At [32] to [33] Lindgren J said: The course of authority outlined above requires me to hold that the alleged representations by Novopharm to the APO ... were not made in trade or commerce. They were not made in the course of a trading or commercial relationship between Novopharm on the one hand, and ... the APO ... on the other hand. Novopharm had no trading or commercial dealings with the APO .... Nor were they made in the course of the negotiation of contracts .... The alleged representations were made to a government instrumentality pursuant to legislation for the purpose of obtaining an exclusive right or bundle of rights made available by that legislation. No doubt the alleged representations were made by Novopharm in trade or commerce in a broad non-s 52 sense. However, in Concrete Constructions the High Court ... rejected the view that the expression 'in trade or commerce' in s 52 referred to the 'immense field of activities' in which corporations may engage in the course of, or for the purposes of, carrying on some overall trading or commercial business .... 14 The applicant sought to distinguish the present case from Glueck on the ground that the facts of the two cases were different. That is true, but the proposition derived by Lindgren J from the authorities referred to is applicable here. Essentially that is because of the passage in Concrete Constructions at 604, upon which Glueck was based, in which it was said: What the section is concerned with is the conduct of a corporation towards persons, be they consumers or not, with whom it ... has or may have dealings in the course of those activities or transactions which, of their nature, bear a trading or commercial character. It is that relationship that is absent here. I am not persuaded that Glueck is plainly wrong, and accordingly I should follow it.


case_text: The course of authority to which Lindgren J referred consisted of Concrete Constructions (NSW) Pty Ltd v Nelson [1990] HCA 17 ; (1990) 169 CLR 594 , Village Building Co Ltd v Canberra International Airport (No 2) [2004] FCA 133 ; (2004) 134 FCR 422 at [57] - [58] , affirmed on appeal at [2004] FCAFC 240 ; (2004) 139 FCR 330 at [50] - [55] , and RGC Mineral Sands Ltd v Wimmera Industrial Minerals Pty Ltd (No 2) [2000] FCA 22. 14 The applicant sought to distinguish the present case from Glueck on the ground that the facts of the two cases were different. That is true, but the proposition derived by Lindgren J from the authorities referred to is applicable here. Essentially that is because of the passage in Concrete Constructions at 604, upon which Glueck was based, in which it was said: What the section is concerned with is the conduct of a corporation towards persons, be they consumers or not, with whom it ... has or may have dealings in the course of those activities or transactions which, of their nature, bear a trading or commercial character. It is that relationship that is absent here. I am not persuaded that Glueck is plainly wrong, and accordingly I should follow it.


case_text: The course of authority to which Lindgren J referred consisted of Concrete Constructions (NSW) Pty Ltd v Nelson [1990] HCA 17 ; (1990) 169 CLR 594 , Village Building Co Ltd v Canberra International Airport (No 2) [2004] FCA 133 ; (2004) 134 FCR 422 at [57] - [58] , affirmed on appeal at [2004] FCAFC 240 ; (2004) 139 FCR 330 at [50] - [55] , and RGC Mineral Sands Ltd v Wimmera Industrial Minerals Pty Ltd (No 2) [2000] FCA 22.


case_title: RGC Mineral Sands Ltd v Wimmera Industrial Minerals Pty Ltd (No 2) [2000] FCA 22


case_text: In Assa Abloy Australia Pty Ltd v Australian Lock Co Pty Ltd [2005] FCAFC 246 ; (2005) 68 IPR 105 at [19] the Full Court referred to the observations of McLelland J in a trade mark context in Ritz Hotel Ltd v Charles of the Ritz Ltd (1988) 15 NSWLR 158 at 193 ( Ritz ), and said: [Adapting] that language to the design context, the expression would embrace any person having a real interest in having the entry expunged and thus would include any person who would be or in respect of whom there is a reasonable possibility of his or her being 'appreciably disadvantaged in a legal or practical sense' by the entry not being expunged. 27 I return to the Assa Abloy test recorded at [18]. Adapted to the present case, the question is whether there is a reasonable possibility that the applicant would be disadvantaged in the sense that it would be prevented from exploiting the invention in any of the respects falling within the definition of "exploit" in the Patents Act . That includes a number of things preparatory to placing a product in the marketplace. Matters falling within the concept of "launching" a product include importing, keeping for the purpose of offering for sale, and using. In my view the fair reading of par 49 of Mr Gray's affidavit is that propounded by the applicant. Nor do I think the use of the word "marketing" in par 26 of that affidavit bears the emphasis Lilly places on it. All Mr Gray is saying is that in order successfully to sell a product, that is to say make money out of it, PBS listing is essential. As appears from [19] and [21], the applicant has pleaded only that it has not yet obtained TGA approval, believes it will obtain it in late 2008 or early 2009, and will not import and sell the product until it receives TGA registration. It does not plead PBS listing as a precondition. The Assa Abloy test speaks of the existence of a reasonable possibility of disadvantage. For the purposes of a s 31A application, I am not satisfied that that possibility does not exist. I am not persuaded that the applicant has no reasonable prospect of successfully prosecuting the ADJR, s 192 and s 39A parts of the proceeding by reason of a lack of standing. 28 Section 11(1)(c) of the ADJR Act provides that an application for an order of review in relation to a written decision "that was furnished to the applicant" must be lodged within the prescribed period or within such further time as the court allows. Under sub-s (3) the prescribed period is the period commencing on the day on which the decision is made and ending on the 28 th day after the decision is "furnished to the applicant". Subsection (4) provides that where no period is prescribed, the court may refuse to entertain an application if of the opinion that the application was not made within a reasonable time after the decision was made. In forming an opinion for the purposes of subs (4), the court is to have regard to the time at which the applicant became aware of the making of the decision: subs (5)(a).


case_text: In Assa Abloy Australia Pty Ltd v Australian Lock Co Pty Ltd [2005] FCAFC 246 ; (2005) 68 IPR 105 at [19] the Full Court referred to the observations of McLelland J in a trade mark context in Ritz Hotel Ltd v Charles of the Ritz Ltd (1988) 15 NSWLR 158 at 193 ( Ritz ), and said: [Adapting] that language to the design context, the expression would embrace any person having a real interest in having the entry expunged and thus would include any person who would be or in respect of whom there is a reasonable possibility of his or her being 'appreciably disadvantaged in a legal or practical sense' by the entry not being expunged.


case_text: In my view delay in relation to the ADJR part of the proceeding is to be determined under s 11(4) and (5) and not under subs (3). In this case the applicant discovered the existence of the decision through its own resources. I agree with Pincus J in Australian Foreman Stevedores Association v Crone (1988) 20 FCR 377 that the expression "furnished to the applicant" contemplates delivery specifically to the applicant by the decision-maker. Accordingly the matter is to be approached under subss (4) and (5). 30 It is common ground that the alleged delay in relation to the s 192 and s 39B parts of the case are to be dealt with on the same basis as the ADJR aspect, so that relief may be refused if application was not made within a reasonable time. 31 A chronology of the relevant events will assist in understanding the parties' contentions on delay. 14 January 2000 Extension of term granted 12 March 2002 Applicant incorporated May 2003 Applicant signed agreement with EBEWE Pharma Late May 2005, 2006- 2007 Dr Schnait of EBEWE Pharma tells Mr Gray that while Lilly had an Austrian patent for the product he could find no equivalent patent in Australia 2 August 2007 Applicant becomes aware of Australian patent and extension of term 12 October 2007 Applicant obtains patent file from IP Australia 26 October 2007 Applicant's TGA application 5 December 2007 Applicant writes to Lilly contending that extension of term was wrong and seeking confirmation of this 18 December 2007 Lilly sends letter of demand as to infringement 20 December 2007 Applicant seeks without prejudice meeting with Lilly to discuss commercial resolution 11 January to 27 February 2008 Communications about without prejudice meeting 28 February 2008 Without prejudice meeting 6 March 2008 Negotiations break down; Lilly sends second letter of demand 18 March 2008 Applicant informed of Austrian injunction 19 March 2008 Applicant seeks review of extension


case_text: The principles which ordinarily govern the exercise of the Court's discretion to award costs pursuant to s 43 of the Federal Court of Australia Act 1976 (Cth) where an applicant no longer wishes to proceed were identified in Australian Securities Commission v Aust-Home Investments Ltd (1993) 44 FCR 194 at 201. Those principles, so far as presently relevant, may be summarised as follows. First, the Court should be ready to facilitate the conclusion of the proceeding by making a costs order. Secondly, although the Court will not ordinarily seek to determine the likely outcome of a hypothetical trial, it may be more ready to do so where the issues are simple and issues of credit do not arise. Thirdly, it will ordinarily be appropriate for the Court to consider the reasonableness of the conduct of the parties in instituting and defending the proceedings and it may be appropriate for the Court to consider whether unreasonable conduct of the respondent precipitated the commencement of the proceeding.


case_text: The Bankruptcy Act recognises that the Court may extend the time for compliance with a bankruptcy notice where proceedings to set aside the judgment in respect of which the notice was issued have been instituted by the debtor (s 41(6A)(a)). The power to extend time for compliance is in aid of the power to set aside the notice itself should the judgment ultimately be set aside ( Byron v Southern Star Group Pty Ltd (1997) 73 FCR 264 at 268). The judgment upon which the bankruptcy notice was founded has now been set aside. I conclude that Mr George Elias acted reasonably in instituting this proceeding. 15 The trustee was entitled to serve the bankruptcy notice as no stay of execution of the District Court judgment had been sought (s 40(1)(g) of the Bankruptcy Act ). I am not satisfied that he acted unreasonably in doing so. However, he must be assumed to have understood that, if the judgment were set aside on appeal, the judgment debt on which the bankruptcy notice was founded would no longer exist and the notice would be liable to be set aside. 16 The judgment of the Court of Appeal setting aside the judgment of the District Court was unanimous. One member of the Court of Appeal was implicitly critical of the conduct of the trustee in opposing a stay of proceedings in the District Court to allow the s 139ZQ notice to be challenged in the Federal Magistrates Court (Giles JA at [51]). Another member of the Court of Appeal considered that there was 'some plausibility' in the contention that the District Court proceeding should have been stayed but found it unnecessary to consider the issue (Santow JA at [111]). The third member (Bryson JA) of the Court of Appeal also found it unnecessary to consider the issue. However, all members of the Court of Appeal concluded that the District Court erred in entering summary judgment against Mr George Elias. I infer that the District Court adopted this course at the invitation of the trustee. I incline to the view that, in this sense, unreasonable conduct of the trustee precipitated the events that led to the institution of this proceeding.


case_outcome: referred to

case_title: Elias v Pascoe [2006] NSWCA 110

case_text: On 9 May 2006 the New South Wales Court of Appeal granted Mr George Elias leave to appeal against the judgment of the District Court, allowed the appeal and set aside the judgment ( Elias v Pascoe [2006] NSWCA 110).


case_text: In my view, the above principles also ordinarily guide the exercise of the Court's discretion in comparable circumstances to award costs pursuant to s 32 of the Bankruptcy Act . As I observed in Principal Strategic Options Pty Ltd [2001] FCA 664 at [17] - [18] , s 32 gives the Court a very wide discretion with respect to orders for costs, albeit that the discretion must be exercised judicially. 11 Mr George Elias submitted that the trustee should pay his costs of this proceeding because the trustee had acted precipitously in serving the bankruptcy notice. He argued that, once the holding summons for leave to appeal had been filed, it was inherently risky to serve the bankruptcy notice; the risk having eventuated, the trustee should pay the costs reasonably incurred by him with respect to the bankruptcy notice. 12 The trustee submitted that as no stay of the judgment of the District Court had been obtained, or indeed sought, he had acted reasonably and properly in serving the bankruptcy notice and in respect of the conduct of this proceeding.


case_outcome: discussed

case_text: any event, it is clear enough that there is no matter if there is no real controversy between parties. Various words have been used to describe what will not qualify as a matter on this ground: abstract question, theoretical question or hypothetical question. In Ainsworth v Criminal Justice Commission [1992] HCA 10 ; (1992) 175 CLR 564 , Mason CJ, Dawson, Toohey and Gaudron JJ referred to the discretionary power to grant a declaration as being confined by considerations which mark out the boundaries of judicial power. Their Honours said (at 581-582): "It is now accepted that superior courts have inherent power to grant declaratory relief. It is a discretionary power which '[i]t is neither possible nor desirable to fetter ... by laying down rules as to the manner of its exercise.' However, it is confined by the considerations which mark out the boundaries of judicial power. Hence, declaratory relief must be directed to the determination of legal controversies and not to answering abstract or hypothetical questions. The person seeking relief must have 'a real interest' and relief will not be granted if the question 'is purely hypothetical', if relief is 'claimed in relation to circumstances that [have] not occurred and might never happen' or if 'the Court's declaration will produce no foreseeable consequences for the parties'." (Citations omitted.) (See also Truth About Motorways Pty Ltd v Macquarie Infrastructure Investment Management Ltd [2000] HCA 11 ; (2000) 200 CLR 591 at 613 [52] per Gaudron J).


case_text: power in O 9 r 7 may be exercised where the originating process has been served outside the jurisdiction and the Court is satisfied that there is no prima facie case: Amust Computer Corporation Pty Ltd v Australia Entre Business Centres Pty Ltd (No 2) [1987] ATPR 40-829; Trade Practices Commission v The Gillette Company (No 1) [1993] FCA 496 ; (1993) 45 FCR 366 ; Southern Cross Airlines Holdings Ltd v Arthur Andersen & Co (A Firm) (unreported, Cooper J, 7 May 1998). That follows from the fact that, in certain cases, a prima facie case must be shown before service outside the jurisdiction is effective: O 8 r 3.


case_text: second respondent contends that the Court does not have jurisdiction to entertain the application because there is no matter , in the sense of a justiciable controversy, within s 39B(1A) of the Judiciary Act . It is common ground that the word matter in that subsection has the same meaning as it has in Ch III of the Constitution (see Australian Securities and Investments Commission v Edensor Nominees Pty Ltd [2001] HCA 1 ; (2001) 204 CLR 559 at 584-586 [50] , [51] and [54] per Gleeson CJ, Gaudron and Gummow JJ).


case_text: order sought by the second respondent (set out at [6] above) is sought under O 9 r 7(1)(a). In Cell Tech Communications Pty Ltd v Nokia Mobile Phones (UK) Ltd (1995) 58 FCR 365 (" Cell Tech Communications "), Lindgren J made a number of observations about the scope of O 9 r 7(1). His Honour said that the rule was to be distinguished from an application for summary dismissal (O 20 r 2) and an application for the striking out of pleading (O 11 r 16). To these I would add an application for summary judgment (Federal Court Act s 31A) and an order for dismissal which may follow the determination of a separate question under O 29 r 2. Lindgren J also made the point (at 370) that, although the other procedures he identified were to be distinguished from O 9 r 7, that was not to say that "considerations relevant to such applications may not be relevant to an application under one or other of the paragraphs of O 9, r 7(1)". The authorities establish that O 9 r 7(1) is not confined to cases where there has been service outside the jurisdiction. While O 9 r 7(1)(b), (c) and (d) refer to service of an originating process, (a) does not, and under that subparagraph an originating process may be set aside where the Court does not have jurisdiction to entertain the claim made in it, or where the originating process constitutes an abuse of process: F Sharkey & Co Pty Ltd v Fisher [1980] FCA 146 ; (1980) 50 FLR 130 ; 33 ALR 173 ; Cell Tech Communications (at 370). The second respondent's first ground (see [7] above) raises an issue of jurisdiction and, if made good, engages the power to set aside the originating process. By contrast, the second ground does not raise an issue of jurisdiction, and, even if made good, does not engage the power to set aside the originating process. I have not been able to find any direct authority addressing the submission by the second respondent that an originating process served within the jurisdiction may nevertheless be set aside because the applicant has no prima facie case on the merits. There is authority that it is not appropriate to exercise the power in O 9 r 7 on the ground that a party's pleadings are defective: Cell Tech Communications at 371 per Lindgren J. I do not think the power in O 9 r 7 extends to cases where the originating process has been served within the jurisdiction and a respondent claims that the applicant has no prima facie case on the merits. The rules, and now s 31A of the Federal Court Act, provide adequate procedures for a party who claims that the case against him or her has no substance. The second respondent's submission that I can order that the application be set aside under O 9 r 7 because the applicant does not have a prima facie case on the merits must be rejected. I would not permit the second respondent to call in aid s 31A of the Federal Court Act in circumstances where it was not referred to in the application or supporting affidavit and was only mentioned briefly in submissions. Jurisdiction In her application, the applicant relies on s 39B(1A)(c) of the Judiciary Act and s 21 of the Federal Court Act. The important provision is s 39B(1A)(c) because s 21 gives this Court power to grant declarations only in those matters in which the Court has original jurisdiction.


case_text: authorities establish that O 9 r 7(1) is not confined to cases where there has been service outside the jurisdiction. While O 9 r 7(1)(b), (c) and (d) refer to service of an originating process, (a) does not, and under that subparagraph an originating process may be set aside where the Court does not have jurisdiction to entertain the claim made in it, or where the originating process constitutes an abuse of process: F Sharkey & Co Pty Ltd v Fisher [1980] FCA 146 ; (1980) 50 FLR 130 ; 33 ALR 173 ; Cell Tech Communications (at 370). The second respondent's first ground (see [7] above) raises an issue of jurisdiction and, if made good, engages the power to set aside the originating process. By contrast, the second ground does not raise an issue of jurisdiction, and, even if made good, does not engage the power to set aside the originating process.


case_text: have been considerable developments in the law relating to declarations since the decision in In re Judiciary and Navigation Acts . One of the leading High Court decisions in the area of declarations is Forster v Jododex Australia Pty Ltd [1972] HCA 61 ; (1972) 127 CLR 421. That case dealt with the statutory power of the Supreme Court of New South Wales in s 10 of the Equity Act 1901 (NSW) to make a declaration. Gibbs J said (at 437) that it was neither possible nor desirable to fetter the broad discretion in s 10 by laying down rules as to the manner of its exercise. His Honour said that, in general, the requirements identified by Lord Dunedin in Russian Commercial and Industrial Bank v British Bank for Foreign Trade Ltd [1921] 2 AC 438 should be satisfied before the discretion to make a declaration is exercised. In the latter case, Lord Dunedin said (at 448): "The question must be a real and not a theoretical question; the person raising it must have a real interest to raise it; he must be able to secure a proper contradictor, that is to say, some one presently existing who has a true interest to oppose the declaration sought."


case_text: second respondent's submission in this case is that there is no matter within s 39B(1A)(c) of the Judiciary Act because there is no real controversy between parties. He submits that the question raised, and the relief sought, is abstract or hypothetical. If that proposition is rejected, the second respondent does not put any other argument suggesting that the Court does not have jurisdiction to make the declaration sought. It is not said, for example, that the Court would never make the declaration sought because it is claimed in relation to circumstances that have not occurred and might never happen in the sense explained by Gibbs J in The University of New South Wales v Moorhouse [1975] HCA 26 ; (1975) 133 CLR 1 at 9-11, or because it will produce no foreseeable consequences for the parties in the sense explained by Mason J in Gardner v The Dairy Industry Authority of New South Wales (1978) 52 ALJR 180 ; 18 ALR 55 at 188; 69.


case_title: Ibeneweka v Egbuna [1964] 1 WLR 219

case_text: J also referred with approval to a passage in the advice given by Viscount Radcliffe on behalf of the Privy Council in Ibeneweka v Egbuna [1964] 1 WLR 219 at 225: "After all, it is doubtful if there is more of principle involved than the undoubted truth that the power to grant a declaration should be exercised with a proper sense of responsibility and a full realisation that judicial pronouncements ought not to be issued unless there are circumstances that call for their making. Beyond that there is no legal restriction on the award of a declaration."


case_text: has been a good deal of debate in the authorities as to whether, in the case of a general statutory power to make declarations, and leaving aside a statutory intention to exclude the remedy of declaration, there are any jurisdictional limits on the power of the Court to make a declaration, or whether all the matters which from time to time have been identified in the authorities as relevant are no more than discretionary considerations (see, for example, the discussion of this issue by King CJ in J N Taylor Holdings Ltd (in liq) v Bond (1993) 59 SASR 432 at 436-437). There is also a question of whether jurisdiction and discretion are "congruent" in relation to declaratory relief. That was said by French J in IMF (Australia) Ltd v Sons of Gwalia Ltd (admin apptd) (2004) 211 ALR 231 (" Sons of Gwalia ") at 243 [45] to be debatable. In Sons of Gwalia , French J considered a case involving a declaration as to the lawfulness of future conduct. His Honour said (at 243 [44]): "In my opinion, the issue in the present application is neither hypothetical nor contingent. It involves a real question, namely whether IMF can lawfully proceed to do what it intends to do in using information on the Sons of Gwalia register to approach members and former members of the company with a view to joining them in possible recovery action against the company. The capacity of courts to declare that conduct, which has not yet taken place, will or will not be in breach of the law 'contributes enormously to the utility of the jurisdiction': Commonwealth of Australia v Sterling Nicholas Duty Free Pty Ltd [1972] HCA 19 ; (1972) 126 CLR 297 at 305; [1972-3] ALR 23." In my opinion, there is a matter in this case and it arises under a law of the Parliament, namely, the Migration Act 1958 (Cth). There is a real controversy and the question raised is not an abstract or hypothetical question. It seems to me important not to confuse considerations relating to the desirability of the Tribunal ruling on the issue and then the matter proceeding by way of judicial review through the seeking of constitutional writs. Those considerations are relevant, perhaps highly relevant, to whether this Court should, as a matter of discretion, entertain the application for declaratory relief. They do not go to the question of whether there is a matter .


case_text: starting point in determining whether there is a matter within s 39B(1A) of the Judiciary Act is the early decision of the High Court in In re the Judiciary Act 1903-1920 and In re the Navigation Act 1912-1920 [1921] HCA 20 ; (1921) 29 CLR 257 (" In re Judiciary and Navigation Acts "). For there to be a matter , it is not enough that there be a legal proceeding; there must be "some immediate right, duty or liability to be established by the determination of the Court" (see at 265 per Knox CJ, Gavan Duffy, Powers, Rich and Starke JJ). The Court said (at 267) that the power to confer jurisdiction under Ch III of the Constitution did not include a jurisdiction to "determine abstract questions of law without the right or duty of any body or person being involved".


case_text: has been a good deal of debate in the authorities as to whether, in the case of a general statutory power to make declarations, and leaving aside a statutory intention to exclude the remedy of declaration, there are any jurisdictional limits on the power of the Court to make a declaration, or whether all the matters which from time to time have been identified in the authorities as relevant are no more than discretionary considerations (see, for example, the discussion of this issue by King CJ in J N Taylor Holdings Ltd (in liq) v Bond (1993) 59 SASR 432 at 436-437). There is also a question of whether jurisdiction and discretion are "congruent" in relation to declaratory relief. That was said by French J in IMF (Australia) Ltd v Sons of Gwalia Ltd (admin apptd) (2004) 211 ALR 231 (" Sons of Gwalia ") at 243 [45] to be debatable.


case_text: Re Tooth & Co , Brennan J addressed the difference between a hypothetical and a non-hypothetical question. His Honour was dealing with a case involving a declaration as to the lawfulness of future conduct. He said that the difference between a hypothetical and a non-hypothetical question was one of degree and he referred to the following passage from the United States case of Maryland Casualty Co v Pacific Coal & Oil Co [1941] USSC 28 ; 312 US 270 (1941) at 273: "The difference between an abstract question and a 'controversy' contemplated by the Declaratory Judgment Act is necessarily one of degree, and it would be difficult, if it would be possible, to fashion a precise test for determining in every case whether there is such a controversy. Basically, the question in every case is whether the facts alleged, under all the circumstances, show that there is a substantial controversy, between parties having adverse legal interests, of sufficient immediacy and reality to warrant the issuance of a declaratory judgment." Brennan J said (at 333-334; 209): "A controversy as to the lawfulness of future conduct cannot be said to be immediate and real if it is unlikely that the applicant will engage in the conduct ( Golden, Acting District Attorney of Kings County v. Zwickler [1969] USSC 46 ; (1969) 394 U.S. 103 , at p. 109). If the prospects of the applicant engaging in the conduct are uncertain, the uncertainty may deprive the controversy of a sufficient immediacy and reality to warrant the making of a declaration ( Steffel v. Thompson [1974] USSC 53 ; (1973) 415 U.S. 452 , at p. 460). The degree of uncertainty as to whether the applicant will engage in the conduct proposed will usually determine whether the circumstances call for the making of a declaration." (Original emphasis.)


case_text: considerations referred to in the above passage are essential to the presence of a matter and therefore the jurisdiction of this Court under s 39B(1A) of the Judiciary Act (see also Mentha v GE Capital Ltd (1997) 154 ALR 565 at 574 per Finkelstein J; Re Gidley [2006] FCA 102 ; (2006) 150 FCR 345 ; Purchas v Estore Pty Ltd (in liq) [2006] FCA 1222 ; (2006) 154 FCR 246).


case_text: Full Court of this Court considered the proper construction of s 494C in Xie v Minister for Immigration & Multicultural & Indigenous Affairs [2005] FCAFC 172 (" Xie "). The Court held that the effect of the section was to identify the date of receipt of a document and that it was not open to a person to establish that in fact he received the document on another date. In other words, the effect of the section was not merely to create a rebuttable presumption of fact (see also Murphy v Minister for Immigration and Multicultural and Indigenous Affairs [2004] FCA 657 ; (2004) 135 FCR 550).


case_title: Purchas v Estore Pty Ltd (in liq) [2006] FCA 1222 ; (2006) 154 FCR 246


case_text: submission made by the second respondent should be addressed before leaving this topic. It was suggested that this case was similar to Re McBain; Ex parte Australian Catholic Bishops Conference [2002] HCA 16 ; (2002) 209 CLR 372 in that the thrust of the application was an attack on the reasoning in Xie and that did not give rise to a justiciable issue (cf at 394-396 [22] and [26] per Gleeson CJ). That argument must be rejected because, in this case, the proper interpretation of s 494C of the Act has a direct effect on the competency of the applicant's application for review. Discretion


case_text: issue which has arisen is the extent to which the jurisdiction to make a declaration in the exercise of federal judicial power is narrower, because of the need to show that a matter is involved, than it is in the case of the exercise of non-federal judicial power. This issue was mentioned by Brennan J sitting as a judge of this Court in Re Tooth & Co Ltd [1978] FCA 9 ; (1978) 31 FLR 314 ; 19 ALR 191 (" Re Tooth & Co ") at 330-331; 206 (see also Re Tooth & Co Ltd (No 2) [1978] FCA 36 ; (1978) 34 FLR 112 at 118-119 per Bowen CJ). Perhaps the point will not matter a great deal in practice because, in the case of non-federal judicial power, the considerations identified in the authorities as relevant will be, in any event, powerful discretionary considerations likely to lead to the refusal of declaratory relief.


case_title: Russian Commercial and Industrial Bank v British Bank for Foreign Trade Ltd [1921] 2 AC 438


case_title: Southern Cross Airlines Holdings Ltd v Arthur Andersen & Co (A Firm) (unreported, Cooper J, 7 May 1998)


case_title: The University of New South Wales v Moorhouse [1975] HCA 26 ; (1975) 133 CLR 1


case_title: Trade Practices Commission v The Gillette Company (No 1) [1993] FCA 496 ; (1993) 45 FCR 366


case_title: Truth About Motorways Pty Ltd v Macquarie Infrastructure Investment Management Ltd [2000] HCA 11 ; (2000) 200 CLR 591


case_text: Full Court of this Court considered the proper construction of s 494C in Xie v Minister for Immigration & Multicultural & Indigenous Affairs [2005] FCAFC 172 (" Xie "). The Court held that the effect of the section was to identify the date of receipt of a document and that it was not open to a person to establish that in fact he received the document on another date. In other words, the effect of the section was not merely to create a rebuttable presumption of fact (see also Murphy v Minister for Immigration and Multicultural and Indigenous Affairs [2004] FCA 657 ; (2004) 135 FCR 550). The declaration which the applicant seeks is to the effect that s 494C creates nothing more than a rebuttable statutory presumption. As I understand it, the applicant acknowledges that, in order to succeed, she would have to persuade the Court not to follow the decision in Xie . She also acknowledges that only a Full Court could make the decision not to follow Xie . The second respondent, the Minister for Immigration and Citizenship, has filed and served a conditional appearance. He has issued a notice of motion seeking the following order: "The application for a declaration filed by the Applicant on 14 November 2008 be set aside pursuant to Order 9 rule 7 of the Federal Court Rules ." An affidavit was sworn in support of the motion, and that affidavit sets out the grounds upon which the application is made. They are as follows: There is no justiciable controversy or "matter" arising under a law made by the Parliament and therefore paragraph 39B(1A)(c) of the Judiciary Act is not a proper source of jurisdiction and the declaratory relief sought under s 21 of the Federal Court Act is not available. The relief sought should be refused in any event because an adequate alternative remedy is available, being a review by the first respondent, the Migration Review Tribunal, and, if appropriate, an application for constitutional writs directed to the Tribunal. In this case, the facts necessary for determining whether a declaration should be made have occurred and are not in dispute. The second respondent claims that the applicant was given notice of the delegate's decision and the reasons therefor on 22 September 2008, and that by reason of s 494C of the Act (and the construction placed on that section in Xie ) the applicant's application for review by the Tribunal is not competent. The applicant wishes to pursue an application for review by the Tribunal with a view to having the decision of the delegate reversed. Those circumstances are sufficient to give rise to a matter . One submission made by the second respondent should be addressed before leaving this topic. It was suggested that this case was similar to Re McBain; Ex parte Australian Catholic Bishops Conference [2002] HCA 16 ; (2002) 209 CLR 372 in that the thrust of the application was an attack on the reasoning in Xie and that did not give rise to a justiciable issue (cf at 394-396 [22] and [26] per Gleeson CJ). That argument must be rejected because, in this case, the proper interpretation of s 494C of the Act has a direct effect on the competency of the applicant's application for review. Discretion


case_text: The questions of law must be stated with precision: Australian Securities & Investments Commission v Saxby Bridge Financial Planning Pty Ltd [2003] FCAFC 244 ; (2003) 133 FCR 290. Order 53B rule 2 of the Federal Court of Australia Rules 1979 (Cth) provides that O 53, with any necessary changes, applies for appeals from the SCT. Order 53 relates to appeals from the Administrative Appeals Tribunal (the Tribunal). In particular, O 53 r 3(2)(b) provides that the notice of appeal shall state the question or questions of law to be raised on the appeal. 44 It is the respondent's contention that this notice of appeal does not comply with O 53 r 3(2)(b) but, more particularly, does not raise any question of law.


case_text: In TNT Skypak International (Aust) Pty Ltd v Federal Commissioner of Taxation [1988] FCA 119 ; (1988) 82 ALR 175 , Gummow J, speaking of the corresponding provision in the AAT Act, said at 178: Section 44 of the AAT Act is expressed in narrower terms than the old s 196 of the Tax Act. This provided for appeals from the Board of Review which "involved" a question of law. The result was that if some question of law was involved, the whole of the decision of the Board was open to review, not merely the question of law ... This no longer will be the case with appeals brought to this court under s 44 of the AAT Act. The existence of a question of law is now not merely a qualifying condition to ground the appeal, but also the subject matter of the appeal itself. (Footnotes omitted.) That statement was approved by the Full Court in Birdseye v Australian Securities & Investments Commission [2003] FCAFC 232 ; (2003) 76 ALD 321.


case_text: In Collector of Customs v Pozzolanic Enterprises Pty Ltd [1993] FCA 322 ; (1993) 43 FCR 280 , the Full Court of the Federal Court sought to identify from previous decisions what might amount to a question of law. That decision was considered by the High Court in Collector of Customs v Agfa-Gevaert Ltd [1996] HCA 36 ; (1996) 186 CLR 389. The Court said at 395: Some recent Federal Court decisions have attempted to distil the numerous authorities on the problem into a number of general propositions. Thus in Pozzolanic, after referring to many cases, the Court identified five general propositions: "1. The question whether a word or phrase in a statute is to be given its ordinary meaning or some technical or other meaning is a question of law. 2. The ordinary meaning of a word or its non-legal technical meaning is a question of fact. 3. The meaning of a technical legal term is a question of law. 4. The effect or construction of a term whose meaning or interpretation is established is a question of law. 5. The question whether facts fully found fall within the provision of a statutory enactment properly construed is generally a question of law." (Footnotes omitted.)


case_title: Collector of Customs v Pozzolanic Enterprises Pty Ltd [1993] FCA 322 ; (1993) 43 FCR 280


case_text: In my opinion, that is not correct. The procedure under s 37 of the Act is to review the decisions made by the trustee and insurer. The SCT needs to determine whether those decisions were correct when they were made. In Davis v Rio Tinto Staff Superannuation Fund Pty Ltd [2002] FCAFC 376 ; (2002) 118 FCR 170 at 173-174 at [15], Heerey J said: Under s 37 of the Act the function of the Tribunal was to determine whether the decision of the Trustee was fair and reasonable in the circumstances: see National Mutual Life Association of Autralia Ltd v Campbell [2000] FCA 852 ; (2000) 99 FCR 562 and the cases therein cited. Counsel for the applicant submitted that the relevant time to consider whether the applicant was TPD within the meaning of the contract of insurance was 19 February 1999, that being six months from the date on which he last worked. I do not agree. What the Tribunal had to review and either affirm, vary or set aside was the decision of the Trustee made on 23 December 1999 and subsequently reviewed and affirmed by the Trustee on 1 June 2000 and 28 June 2000. Although not explicitly stated, it would seem that the Tribunal regarded its task as reviewing the decision of the Trustee as at the last mentioned date, an approach I think was correct. The system of review under the Act is to be distinguished from claims made by an insured under a policy: cf Giles v National Mutual Life Association of Australasia Ltd (1986) 4 ANZ Ins Cas 60-751. See also Samaras v Australian Retirement Fund Pty Ltd [2007] FCA 1323 per Gordon J at [18].


case_text: An appeal lies to this Court pursuant to s 46 of the Act on a question of law: s 46(1). The appeal is, of course, an application in the original jurisdiction of the Court: Drake v Minister for Immigration and Ethnic Affairs (1979) 24 ALR 577 at 581.


case_text: A failure to take into account particular facts will only raise a question of law if the Tribunal was bound to take that fact or that matter into account: Minister for Aboriginal Affairs v Peko-Wallsend Ltd [1986] HCA 40 ; (1986) 162 CLR 24. The applicant complained that the SCT should not have taken into account the video surveillance evidence because it was in digital format. He said that the video might have been altered, cropped, edited or corrupted in its conversion to the digital format. He also complained that the SCT failed to take into consideration that the medical report from Dr BC was based on a short term medical treatment. It failed to take into account that Dr BC was a general practitioner, not a specialist. It failed to take into account any and all pain levels experienced in the activities seen on the video footage. He said that the SCT could not know what medication he had taken on that day or prior to being able to drive his vehicle. The SCT failed to take into account the disadvantage that he had been placed in by receiving his disability support pension. He said also that the SCT should not have taken into account the report of the private investigators. They were not signed and therefore they were inadmissible. 56 The Tribunal's powers, for complaints under s 14, are identified in s 37. In particular, the Tribunal is obliged to affirm a decision in relation to a complainant if satisfied that the decision was fair and reasonable in the circumstances. Section 37(6) of the Act provides: (6) The Tribunal must affirm a decision referred to under subsection (3) if it is satisfied that the decision, in its operation in relation to: (a) the complainant; and (b) so far as concerns a complaint regarding the payment of a death benefit--any person (other than the complainant, a trustee, insurer or decision-maker) who: (i) has become a party to the complaint; and (ii) has an interest in the death benefit or claims to be, or to be entitled to benefits through, a person having an interest in the death benefit; was fair and reasonable in the circumstances. 57 The Tribunal is not compelled or obliged to take into account any particular consideration in determining whether or not a decision was fair and reasonable.


case_text: The SCT has been appropriately joined as the third respondent to the appeal: SAAP v Minister of Immigration and Multicultural and Indigenous Affairs [2005] HCA 24 ; (2005) 228 CLR 294 at [43] , [91], [153] and [180]. It has filed a submitting appearance which is also appropriate: The Queen v Australian Broadcasting Tribunal; Ex parte Hardiman [1980] HCA 13 ; (1980) 144 CLR 13.


case_title: The Queen v Australian Broadcasting Tribunal; Ex parte Hardiman [1980] HCA 13 ; (1980) 144 CLR 13


case_title: TNT Skypak International (Aust) Pty Ltd v Federal Commissioner of Taxation [1988] FCA 119 ; (1988) 82 ALR 175


case_title: Samaras v Australian Retirement Fund Pty Ltd [2007] FCA 1323


case_text: The Court has the power to grant a stay in its discretion pursuant to O 52 r 17 of the Federal Courts Rules. The principles governing applications for a stay are settled. It is sufficient for the respondent to demonstrate that there is a reason or it is an appropriate case to warrant the exercise of the discretion: see Powerflex Services Pty Ltd v Data Access Corp (1996) 67 FCR 65 at 66. 6 The prima facie assumption is that the judgment appealed from is correct and the Court should not deprive a litigant of the benefit of a judgment in its favour. Counsel for the Union relied on this and opposed the grant of a stay upon the basis, first, that the appeal disclosed no arguable ground of appeal, alternatively, the prospects of success were weak; secondly, Ms Chester said all but three of the employees had indicated that they would repay the money if called upon to do so pursuant to a judgment of the Court on appeal; and, thirdly, the evidence for Prestige did not rise above speculation as to the difficulty of recovery. 7 According to counsel for Prestige, it proposed to challenge the judgment under appeal on two bases, first, that as a matter of construction the Victorian Arts Centre is not a premise of a state government instrumentality for the purposes of the relevant industrial awards in the ordinary sense of those words; and, secondly, as understood in context, having regard to relevant history, it was not such an instrumentality.


case_text: Mr Hutley draws attention to the remarks of Branson, Lindgren and Finkelstein JJ in Sharman Networks Ltd and Others v Universal Music Australia Pty Ltd and Others [2006] FCAFC 178 ; (2006) 155 FCR 291 at [8] . Their Honours recognised that industry associations whose members' interests may be affected, directly or indirectly, by the outcome of litigation, may be an appropriate class of interveners: see also Dorajay Pty Ltd v Aristocrat Leisure Ltd [2005] FCA 1483 ; (2005) 147 FCR 394 at [22] - [24] .


case_text: Moreover, I do not consider that ASIC will be influenced by tactical or forensic considerations which would be necessary to be off-set by submissions made by AFMA. ASIC's duty as a litigant is analogous to that of the executive branch of Government. As to this, Mahoney J said in P. & C. Cantarella Pty Ltd v Egg Marketing Board for the State of New South Wales [1973] 2 NSWLR 366 at 383: "it is the duty of the executive to assist the Court to arrive at the proper and just result". 14 However, against the possibility that in the course of the proceedings I should come to the view that AFMA's submissions would provide a useful and different perspective, I will reserve liberty to it to renew this application. 15 I have no doubt that AFMA will closely observe the conduct of the proceedings so that if, at or toward the close of the hearing, it wishes to renew its application it should be well placed to do so.


case_title: Sharman Networks Ltd and Ors v Universal Music Australia Pty Ltd and Ors [2006] FCAFC 178 ; [2006] 155 FCR 291


case_text: If those criteria are made out, the Court has discretion to give leave to intervene on appropriate terms: see Wilson v Manna Hill Mining Co Pty Ltd (2004) 51 ASCR 404 at [104]. The basis upon which AFMA wishes to intervene is quite limited. It seeks to make oral and written submissions in closing address on the following issues raised in the statement of claim: • the interpretation, scope and operation of s 912A(1)(aa) of the Corporations Act 2001 (Cth) and related regulations, and the scope of any fiduciary duties that may arise at general law in respect of services provided by a financial services licensee to its client; and • the effect of any disclosure provided by a financial services licensee to its client upon obligations that may arise under s 912A(1)(aa) of the Corporations Act , and upon any fiduciary obligations that may arise at general law. 3 AFMA is an industry association for participants in the financial markets industry. It would not be an overstatement to describe it as a lobby group for the industry. Its role is to represent the interests of its members and advocate what it describes in its evidence as a "sensible and proportionate regulation of the wholesale banking and financial markets". 4 It is an association made up of 141 direct and indirect participants ('Members'). Citigroup is a Full Member and has a representative on the AFMA board. ASIC is an Affiliate Member.


case_outcome: affirmed

case_text: This is set out conveniently in [3] to [17] of the decision of the Federal Magistrate whose orders are the subject of the present appeal: SBRF v Minister for Immigration and Citizenship [2008] FMCA 163. The following is an adaptation of those paragraphs. I should indicate at the outset that the Tribunal has made three decisions in relation to review applications of the appellant. Though it is technically inaccurate, I will for ease in exposition differentiate between what I will call the "first Tribunal", "the second Tribunal" and the "third Tribunal". 4 The Tribunal decision, the subject of the present judicial review proceedings, is in fact the third decision of the Tribunal in relation to the appellant. The first review was conducted in 2000. The appellant was unsuccessful, both before the delegate of the Minister and before the Tribunal at that time and for reasons of lack of credibility in each instance. In the claim advanced by the appellant in 2000 he and his wife used false identities. His claimed entitlement to a protection visa and to refugee status under the Refugee Convention arose from a fear of his being persecuted by Serbs, arising out of what he said was his forced conscription into the Kosovo Liberation Army. 5 Notwithstanding the lack of success of their application, in 2001 the Minister exercised his discretion under s 417(1) of the Act and provided the appellant and his wife with three year protection visas on humanitarian grounds.


case_text: The Tribunal noted that the appellant's brother had succeeded on a similar claim. The appellant's brother's claim had been made prior to the amendment of s 91S of the Act that was effected by the Migration Legislation Amendment Act (No 6) 2001 (Cth) . The effect of these amendments is described in the decision of the High Court in STCB v Minister for Immigration and Multicultural and Indigenous Affairs [2006] HCA 61 ; (2006) 231 ALR 556. 14 The Tribunal went on to say: Even if I were satisfied which I am not that the applicant's family were involved in such a feud, the applicant's claims amount to a claim to fear persecution for reason of membership of a particular social group, namely his family. In considering such a claim, s 91S of the Migration Act would be relevant and, in interpreting that provision, I would be bound by the terms and reasons of the High Court's decision in STCB v Minister for Immigration and Multicultural and Indigenous Affairs [2006] HCA 61 ... Following that decision and applying s 91S(a) , it is clear that the applicant's cousin, Martin's fear of persecution would be for a reason other than those mentioned in Art 1A(2) of the Convention namely revenge for murder. Section 91S(a) would then require that fear of persecution to be disregarded. Section 91S(b)(i) would then require the applicant's fear of persecution to be disregarded, since it would be reasonable to conclude that that fear would not exist if his cousin's fear had never existed. And s 91S(b)(ii) would require that his father's and brother's fear of persecution be disregarded, since it would be reasonable to conclude that neither of those fears would exist either if the cousin's fear had never existed. The result of disregarding the fears of persecution of the cousin, the applicant, the father and the brother would then be that the applicant would be treated as not having a well-founded fear of persecution for the reason of membership of a particular social group that consists of the (sic) his family. 15 It is necessary to refer only to two provisions of the Act, s 91S and s 425. Section 91S provides: For the purposes of the application of this Act and the regulations to a particular person (the first person), in determining whether the first person has a well-founded fear of being persecuted for the reason of membership of a particular social group that consists of the first person's family: (a) disregard any fear of persecution, or any persecution, that any other member or former member (whether alive or dead) of the family has ever experienced, where the reason for the fear or persecution is not a reason mentioned in Article 1A(2) of the Refugees Convention as amended by the Refugees Protocol; and (b) disregard any fear of persecution, or any persecution, that: (i) the first person has ever experienced; or (ii) any other member or former member (whether alive or dead) of the family has ever experienced; where it is reasonable to conclude that the fear or persecution would not exist if it were assumed that the fear or persecution mentioned in paragraph (a) had never existed. 16 As the decision of the High Court in STCB v Minister for Immigration and Multicultural and Indigenous Affairs illustrates, this provision has an inexorable operation to fears of persecution based on family membership in the usual blood feud case. 17 Section 425(1) provides: The Tribunal must invite the applicant to appear before the Tribunal to give evidence and present arguments relating to the issues arising in relation to the decision under review.


case_text: As the High Court indicated in SZBEL v Minister for Immigration and Multicultural and Indigenous Affairs [2006] HCA 63 ; (2006) 228 CLR 152 at [33] to [35]: [33] The Act defines the nature of the opportunity to be heard that is to be given to an applicant for review by the Tribunal. The applicant is to be invited "to give evidence and present arguments relating to the issues arising in relation to the decision under review ". The reference to "the issues arising in relation to the decision under review" is important. [34] Those issues will not be sufficiently identified in every case by describing them simply as whether the applicant is entitled to a protection visa. The statutory language "arising in relation to the decision under review" is more particular. The issues arising in relation to a decision under review are to be identified having regard not only to the fact that the Tribunal may exercise ... all the powers and discretions conferred by the Act on the original decision-maker (here, the minister's delegate), but also to the fact that the Tribunal is to review that particular decision, for which the decision-maker will have given reasons. [35] The Tribunal is not confined to whatever may have been the issues that the delegate considered. The issues that arise in relation to the decision are to be identified by the Tribunal. But ... unless some other additional issues are identified by the Tribunal (as they may be), it would ordinarily follow that, on review by the Tribunal, the issues arising in relation to the decision under review would be those which the original decision-maker identified as determinative against the applicant. (Emphasis in original.) 19 As I have already noted, the particular decision that was under review by the third Tribunal was the decision of the second delegate who said that he found the appellant was not credible in those claims originally advanced under his false identity and that he made no claims in relation to fear of persecution in Albania under his actual name. To reiterate the Albanian blood feud claims were only raised for the first time before the second Tribunal whose decision was quashed by Brown FM. 20 There has been recent discussion and some level of disagreement between judges of this Court on the operation of s 425(1) where a Tribunal decision is quashed and the matter remitted to the Tribunal (whether or not constituted by the same member) for determination. For present purposes I would merely note the following.


case_text: (i) Until the Tribunal makes a valid decision on the review that has been initiated by a valid application under s 414, it has a duty to perform that particular review: SZEPZ v Minister for Immigration and Multicultural Affairs (2006) 159 FCR 291 at [39]. 23 (iii) When a decision on a particular review is set aside, it is a decision of the Tribunal, not of the person constituting it, that is set aside: Minister for Immigration and Multicultural Affairs v Wang [2003] HCA 11 ; (2003) 215 CLR 518 at [31] . Correspondingly, a redetermination of the particular review is a redetermination by the Tribunal, not by the particular member who happens to constitute the Tribunal for the purpose: SZEPZ at [38]. 24 (iv) As was said by the Full Court in SZEPZ at [39]: An invalid decision by the Tribunal is no decision at all but it does not follow that all steps and procedures taken in arriving at that invalid decision are themselves invalid. The Tribunal still has before it the materials that were obtained when the decision that had been set aside was made. To the extent that Cowdroy J is properly to be taken as suggesting to the contrary in SZHLM v Minister for Immigration and Citizenship [2007] FCA 1100 ; (2007) 98 ALD 567 at [34] , his Honour's view ought not be followed in my view. 25 (v) As it is the Tribunal which continues to conduct the particular review consequent upon a remitter, the steps taken by the Tribunal to discharge its statutory obligations under s 424A and s 425 in the conduct of that review prior to the making of an invalid decision may, but need not necessarily, be a sufficient discharge of those statutory obligations for the purpose of making a subsequent and valid decision on the review: SZEPZ (on s 424A); SZILQ (on s 425); and also NBKM v Minister for Immigration and Citizenship [2007] FCA 1413. Thus, a s 424A notice or a s 425 invitation given prior to the Tribunal's invalid decision may, or may not, suffice without a further notice or invitation depending upon whether on the remitter the circumstances then are such that s 424A or s 425 does or does not require, according to their respective terms, a fresh notice or invitation.


case_text: (ii) An invalid Tribunal decision in purported performance of a particular review is to be treated for all purposes as having no operative effect and it does not represent a performance by the Tribunal of its duty in connection with that review: SZILQ v Minister for Immigration and Citizenship (2007) 163 FCR 304 at [10]. 25 (v) As it is the Tribunal which continues to conduct the particular review consequent upon a remitter, the steps taken by the Tribunal to discharge its statutory obligations under s 424A and s 425 in the conduct of that review prior to the making of an invalid decision may, but need not necessarily, be a sufficient discharge of those statutory obligations for the purpose of making a subsequent and valid decision on the review: SZEPZ (on s 424A); SZILQ (on s 425); and also NBKM v Minister for Immigration and Citizenship [2007] FCA 1413. Thus, a s 424A notice or a s 425 invitation given prior to the Tribunal's invalid decision may, or may not, suffice without a further notice or invitation depending upon whether on the remitter the circumstances then are such that s 424A or s 425 does or does not require, according to their respective terms, a fresh notice or invitation.


case_text: (iii) When a decision on a particular review is set aside, it is a decision of the Tribunal, not of the person constituting it, that is set aside: Minister for Immigration and Multicultural Affairs v Wang [2003] HCA 11 ; (2003) 215 CLR 518 at [31] . Correspondingly, a redetermination of the particular review is a redetermination by the Tribunal, not by the particular member who happens to constitute the Tribunal for the purpose: SZEPZ at [38].


case_text: (iv) As was said by the Full Court in SZEPZ at [39]: An invalid decision by the Tribunal is no decision at all but it does not follow that all steps and procedures taken in arriving at that invalid decision are themselves invalid. The Tribunal still has before it the materials that were obtained when the decision that had been set aside was made. To the extent that Cowdroy J is properly to be taken as suggesting to the contrary in SZHLM v Minister for Immigration and Citizenship [2007] FCA 1100 ; (2007) 98 ALD 567 at [34] , his Honour's view ought not be followed in my view.


case_text: (v) As it is the Tribunal which continues to conduct the particular review consequent upon a remitter, the steps taken by the Tribunal to discharge its statutory obligations under s 424A and s 425 in the conduct of that review prior to the making of an invalid decision may, but need not necessarily, be a sufficient discharge of those statutory obligations for the purpose of making a subsequent and valid decision on the review: SZEPZ (on s 424A); SZILQ (on s 425); and also NBKM v Minister for Immigration and Citizenship [2007] FCA 1413. Thus, a s 424A notice or a s 425 invitation given prior to the Tribunal's invalid decision may, or may not, suffice without a further notice or invitation depending upon whether on the remitter the circumstances then are such that s 424A or s 425 does or does not require, according to their respective terms, a fresh notice or invitation.


case_text: It is now well accepted that, where an application for an administrative decision such as here is one which the decision-maker was bound by the governing statute to refuse, irrespective of any question of procedural fairness, then relief may be refused on the ground of utility: see Re Refugee Review Tribunal; Ex parte Aala [2000] FCA 57 ; (2000) 204 CLR 82 at [57] - [58] ; SZBYR v Minister for Immigration and Citizenship [2007] FCA 26 ; (2007) 235 ALR 609 at [29] . But for such to occur, it must be quite clear that a rehearing or reconsideration would be futile: Lee v Minister for Immigration and Citizenship (2007) 159 FCR 181 at [48].


case_text: It is now well accepted that, where an application for an administrative decision such as here is one which the decision-maker was bound by the governing statute to refuse, irrespective of any question of procedural fairness, then relief may be refused on the ground of utility: see Re Refugee Review Tribunal; Ex parte Aala [2000] FCA 57 ; (2000) 204 CLR 82 at [57] - [58] ; SZBYR v Minister for Immigration and Citizenship [2007] FCA 26 ; (2007) 235 ALR 609 at [29] . But for such to occur, it must be quite clear that a rehearing or reconsideration would be futile: Lee v Minister for Immigration and Citizenship (2007) 159 FCR 181 at [48]. 37 Though the appellant has not addressed, and has not been asked to address, the application of s 91S to his claim, he so founded and formulated it that the section applied inevitably and inexorably as to ordain that that claim "lacked the requisite Convention nexus": SZBYR at [29]. I am, in consequence, satisfied the Federal Magistrate did not err in dismissing the application for judicial review. 38 I will order that the appeal be dismissed with costs. I certify that the preceding thirty-eight (38) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Finn. Associate: Dated: 21 May 2008 Counsel for the Appellant: Mr S Ower Solicitor for the Appellant: McDonald Steed McGrath Counsel for the Respondents: Dr C Bleby Solicitor for the Respondents: Australian Government Solicitor Date of Hearing: 8 May 2008 Date of Judgment: 21 May 2008 AustLII: Copyright Policy | Disclaimers | Privacy Policy | Feedback URL: http://www.austlii.edu.au/au/cases/cth/FCA/2008/712.html


case_title: Lee v Minister for Immigration and Citizenship (2007) 159 FCR 181


case_text: The Commissioner relies on the following special characteristics of dividends: (a) that the division of a company's profits among its shareholders by the declaration of a dividend is "an effectuation or realisation of the rights obtained by the acquisition of the share" (citing Chief Commissioner of State Revenue (NSW) v Dick Smith Electronics Holdings Pty Ltd [2005] HCA 3 ; (2005) 221 CLR 496 per Gleeson CJ and Callinan J at [25] [26], quoting from the judgment of Dixon J in Archibald Howie Pty Ltd v Commissioner of Stamp Duties (NSW) [1948] HCA 28 ; (1948) 77 CLR 143 at 153); (b) that in the winding up of a company, debts owed by the company to its members in their capacity as members, including debts arising from the declaration of a dividend, are postponed until all debts owed to, or claims made by, persons other than as members of the company have been satisfied: Corporations Act 2001 (Cth) s 563A (in 1996 the comparable provision was s 563A of the Corporations Law , which was in identical terms); (c) on an assignment of a debt created by the declaration of a dividend, the debt remains subject to the "equity" of the ordinary creditors proving in priority (the Commissioner cites Re Harry Simpson & Company Pty Ltd and Companies Act 1936 [1964-5] NSWR 603 ( Simpson )).


case_text: Arthur Murray (NSW) Pty Ltd v Commissioner of Taxation [1965] HCA 58 ; (1965) 114 CLR 314 ( Arthur Murray ) was, in a sense, the converse of Carden's Case [1938] HCA 69 ; 63 CLR 108. The taxpayer company received fees for dancing lessons yet to be given. It placed the fees in a suspense account until the lessons were given, when it transferred them to its revenue account. The High Court held that the fees were not assessable income at the time of receipt. 146 In Commissioner of Taxation v Citibank Ltd (1993) 44 FCR 434, Hill J, with whom Jenkinson and Einfeld JJ agreed, cautioned against a too ready reliance on business and accounting practice relating to preparation of the company's profit and loss account required in accordance with s 269(1) of the Companies (New South Wales) Code (at 443 446). His Honour stated (at 445 446): With respect to his Honour, who presumably must be taken as having decided otherwise, I do not think that the accounting evidence in the present case establishes that the amount derived each year by applying the financial or actuarial method represents income in ordinary concepts. What that evidence establishes is that the outcome of the finance or actuarial method is an appropriate figure to be used in the preparation of the profit and loss account of the respondent for the year in accordance with the Companies (New South Wales) Code : s 269(1). If the relevant issue were the determination of the profit of the respondents, or whether that profit was to be seen as on revenue account, the evidence would clearly be most cogent. But it must be remembered that the role of the accounting standards is in the determination of profit so as to ensure that financial statements, required to be prepared by statute, give a true and fair view and not the determination of "income", notwithstanding that those two concepts may, as will be seen, sometimes overlap. Thus Professor Walker [an expert witness] states that he has been asked to advise as to the correct method of accounting in relation to the leases in question. But his affidavit and subsequent explanation makes it clear that he has answered that question by reference to the companies law for the purposes of which the relevant standards have been prepared and with which of course each of the respondents was obliged to comply. Mr Westworth's affidavit [regarding accounting practices] makes clear that he too has addressed himself to that issue, not relevant in the present proceedings. All that may be said is that if there be no impediment in the Act to bringing into account, in a case such as the present, a net profit figure as gross income, then that profit figure will need to be calculated in accordance with the accounting standards. The real issue for decision is rather a question of construction of the Act, namely, whether in a case such as the present, the scheme of the Act precludes treating as gross income the net profit calculated in accordance with the financial or actuarial method. Hill J noted earlier, however, that accounting evidence was often relevant and often highly significant in resolving issues under the Act. He gave as an example the issue whether a cash receipts or accruals basis of accounting will give "a true reflex of the income derived by a taxpayer" (at 443, citing Carden's Case [1938] HCA 69 ; 63 CLR 108 his Honour also cited Arthur Murray [1965] HCA 58 ; 114 CLR 314). 149 In Commissioner of Taxation (Commonwealth) v Sun Alliance Investments Pty Limited (in liq) [2005] HCA 70 ; (2005) 225 CLR 488, the High Court in a joint judgment, drew attention to the fact that the meaning of the word "derived" in a particular provision could not be ascertained without at least some reference to the thing said to be derived (in that case, the profits of the company) (at [42]). In particular their Honours cautioned against conflating the concept of derivation of income with derivation of profits. Their Honours referred to the fact that for the most part the notion of "income" directs attention to "receipts" by a taxpayer. Their Honours further referred to the late Professor RW Parsons's work, Income Taxation in Australia (The Law Book Company, 1985) in which the learned author stated (at [2.10]): "For the most part, the law expresses an ordinary usage notion of derivation of a receipt". I do not think that their Honours or the late learned author were intending to exclude the possibility that business and accounting practice might demonstrate, in the case of the particular category of income, that it is derived at a time other than upon receipt. Arthur Murray [1965] HCA 58 ; 114 CLR 314 stands against the existence of any such universal rule.


case_text: The dividend was declared before ss 254U and 254V were introduced into the predecessor to the Corporations Act 2001 (Cth), the Corporations Law , by the Company Law Review Act 1998 (Cth) (No 61 of 1998) with effect on and from 1 July 1998. Therefore I need not discuss the purpose and effect of those provisions. See the discussion of them in Bluebottle UK Ltd v Deputy Commissioner of Taxation [2006] NSWSC 706 ; (2006) 233 ALR 747 at [14] [45] and, on appeal, Deputy Commissioner of Taxation v Bluebottle UK Ltd [2006] ATC 4803 at [35] [53] per Santow JA, [105] [112] per Basten JA. (Special leave to appeal to the High Court was granted on 25 May 2007.)


case_text: The authorities cited by the applicants are St Lucia Usines and Estates Company Limited v Colonial Treasurer of St Lucia [1924] AC 508 ( St Lucia ) at 512; Commissioner of Taxes (SA) v The Executor Trustee and Agency Company of South Australia Limited [1938] HCA 69 ; (1938) 63 CLR 108 ( Carden's Case ) at 155; Permanent Trustee Co v Federal Commissioner of Taxation (1940) 6 ATD 5 ( Prior's Case ) at 13; South Australia v Commonwealth [1992] HCA 7 ; (1992) 174 CLR 235 at 253; and Bowaters Sales Co Ltd v Commissioners of Inland Revenue (1958) 38 TC 593 ( Bowaters ) at 597 599. As well, the applicants refer to the Commissioner's Public Ruling TR 98/1 at [19], in which the Commissioner has said that as a general rule, the receipts method is appropriate to determine income derived from investments, although there are exceptions, such as in the case of interest from a business of money lending carried on by the taxpayer. 69 The Commissioner distinguishes Bowaters 38 TC 593 on the basis that Harman J noted (at 597) that "[t]here is no evidence here that the function of this Company was mainly the holding of investments". The Commissioner suggests that his Lordship was intending to distinguish holding companies from purely passive investment companies. The evidence 70 The Commissioner relies on two forms of evidence as being relevant to the question whether ABB Zurich derived income consisting of the dividend when the dividend was declared. The first is evidence relating to the international group of companies known as the ABB Group and its accounting practices. This evidence is found in an affidavit of Alfred Storck of the ABB Group and documentary exhibits. The second class of evidence is expert evidence of an accountant, Brigid Therese Curran, adduced by the Commissioner. The Commissioner read Ms Curran's affidavit subject to objection by the applicants on the ground of relevance. 71 Mr Storck is the Deputy Chief Financial Officer and the person responsible for Corporate Finance and Taxes for the ABB Group. In 1996, he was employed by ABB Zurich as head of its Taxation Division. Mr Storck states that ABB Group "specialises in the engineering of power and automation technologies" and "supplies products and services to utility and industrial customers around the world". 119 The last of the cases principally relied on by the applicants, Bowaters 38 TC 593, concerned a dividend declared by an Australian subsidiary of a United Kingdom parent. The case concerned provisions of the Finance Act 1937 (UK) and the Finance Act 1952 (UK). The dividend in question was declared on 16 December 1953 but not paid until 28 January 1954. The relevant accounting period commenced on 1 October 1953 and ended on 31 December 1953. Accordingly, the dividend was declared during that chargeable accounting period, but paid after it. 120 The taxpayer company was the main selling company of the Bowaters organisation and was the principal member of a group of companies. It had two subsidiaries that were ordinarily resident in the United Kingdom and a number of non-resident subsidiaries, including the Australian company that declared the dividend. At the annual general meeting of the Australian company held on 16 December 1953, the dividend was declared, in respect of its accounting year ended 30 September 1953, payable forthwith. Bowaters' accounts for the year ended 30 September 1953 anticipated the dividend to be declared by the Australian company. 121 The particular dividend was not included in Bowaters' computation of its profits for the purposes of Excess Profits Levy for the period of three months to 31 December 1953, on the ground that it was received after 31 December 1953. However, the Crown included it in the assessment of profits to Excess Profits Levy for that three month period on the ground that the income arose during that period. It was against that assessment that Bowaters appealed. The Crown affirmed the assessment. As required by Bowaters, a case was stated for the opinion of the High Court. 124 Harman J noted that there was no evidence that the functions of Bowaters was mainly the holding of investments. Rather its business was mainly that of trading in paper, although it also had a number of wholly owned subsidiaries from which it might draw dividends. Accordingly, s 19(4) had no application. 125 His Lordship considered that various English authorities to which he referred established that "excepting the case of receipts from trade or receipts analogous to trading receipts, the [fundamental conception of Income Tax legislation] is ... receipt and not receivability" (at 599). His Lordship rejected the Crown's submission that the dividends were as much a part of Bowaters' trade as were the profits of its trading activities. 126 It followed that the expression "income arising" in the context before his Lordship (a dividend declared and paid by an Australian subsidiary to its United Kingdom parent) and in every context except that of trade debts, meant income received. The company's appeal was allowed. 127 Harman J expressed the opinion (at 599) that the method by which Bowaters kept its accounts had no relevance for tax purposes. 128 Bowaters 38 TC 593 is said to be against the Commissioner's contention in the present case. I note that I do not see any relevant distinction between the concepts "arising" in ss 19 and 20(1) of the Finance Act 1937 (UK) and "derived" in the Australian s 128B(1): see Harding v Federal Commissioner of Taxation [1917] HCA 13 ; 23 CLR 119 at 133 noted at [106] above. 129 Unlike Bowaters, ABB Zurich would apparently have qualified for the purposes of s 19(4) of the Finance Act 1937 (UK) as a company whose functions consisted wholly or mainly in the "holding of investments". Indeed, the only business of ABB Zurich was that of managing the affairs of its some 1,000 subsidiaries. It appears, although not clearly so, that the reason why Harman J did not accept a submission by the Crown that the receipt of dividends was as much a part of Bowaters' trade as was the profit from its trading activity, was that s 19(4) did not apply (at 599). In other words, if s 19(4) had applied, as it apparently would have done to the circumstances of ABB Zurich, his Lordship would have treated a dividend from its subsidiary in the same way as he would have done a trading receipt. It seems that his Lordship would have treated the dividend as derived when the debt for it arose, that is to say, when the subsidiary declared the dividend (at 598). 130 Before returning to consider the evidence, in particular that of Ms Curran, I will refer to the authorities called in aid of the Commissioner.


case_text: The Commissioner submits that for the purposes of identifying the appropriate basis of accounting, the authorities show or suggest that a holding company is classified as a trading company. He cites Carapark Holdings Ltd v Commissioner of Taxation [1967] HCA 5 ; (1966) 115 CLR 653 ( Carapark ) at 663 664; Esquire Nominees Limited v Federal Commissioner of Taxation [1972] HCA 32 ; (1973) 129 CLR 177 ( Esquire Nominees ) at 212 per Barwick CJ, 221 per Menzies J; Brookton Co-operative Society Limited v Commissioner of Taxation [1981] HCA 28 ; (1981) 147 CLR 441 ( Brookton ) at 469 per Aickin J; and Broken Hill Pty Co Ltd v Federal Commissioner of Taxation (1999) 99 ATC 5193 ( BHP v FCT ) at [48] per Kenny J.


case_title: Brookton Co-operative Society Ltd v Commissioner of Taxation [1981] HCA 28 ; (1981) 147 CLR 441

case_text: Prior to the introduction of those provisions, there was a well established distinction between final and interim dividends. A declaration of a final dividend by the shareholders gave rise to an immediate debt owed by the company to the shareholders, whereas a resolution by the directors to pay an interim dividend did not do so: Potel v Inland Revenue Commissioners [1971] 2 All ER 504 at 511 512; Industrial Equity Limited v Blackburn [1977] HCA 59 ; (1977) 137 CLR 567 at 572; Marra Developments Ltd v BW Rofe Pty Ltd [1977] 2 NSWLR 616 at 625; Brookton Co-operative Society Limited v Commissioner of Taxation [1981] HCA 28 ; (1981) 147 CLR 441 at 455. Thus, a declaration of a final dividend could not be revoked and the company's indebtedness to its shareholders eliminated, if profits ceased to be available to fund the dividend between the time of the declaration and the time fixed for payment. A decision of the directors to pay an interim dividend, on the other hand, could always be revoked down to the time fixed for payment. 66 The Commissioner submits that for the purposes of identifying the appropriate basis of accounting, the authorities show or suggest that a holding company is classified as a trading company. He cites Carapark Holdings Ltd v Commissioner of Taxation [1967] HCA 5 ; (1966) 115 CLR 653 ( Carapark ) at 663 664; Esquire Nominees Limited v Federal Commissioner of Taxation [1972] HCA 32 ; (1973) 129 CLR 177 ( Esquire Nominees ) at 212 per Barwick CJ, 221 per Menzies J; Brookton Co-operative Society Limited v Commissioner of Taxation [1981] HCA 28 ; (1981) 147 CLR 441 ( Brookton ) at 469 per Aickin J; and Broken Hill Pty Co Ltd v Federal Commissioner of Taxation (1999) 99 ATC 5193 ( BHP v FCT ) at [48] per Kenny J. 139 The Commissioner also refers to a passage in the judgment of Aickin J in Brookton [1981] HCA 28 ; 147 CLR 441. His Honour stated (at 469) that in the case of a company that had no activity other than the receipt of dividends from shares that it had purchased, it would ordinarily be regarded as carrying on a business, even if it did not actively manage its portfolio of investments, whereas an individual in the same circumstances would not necessarily be regarded as carrying on such a business. Aickin J cited Esquire Nominees [1972] HCA 32 ; 129 CLR 177 at 212 per Barwick CJ and 221 per Menzies J. Again, the statement is relevant only to the question whether ABB Zurich carried on a business. I accept that it did. 140 Finally, the Commissioner relies on BHP v FCT 99 ATC 5193, in which Kenny J said (at [48]) that the taxpayer company carried on businesses which included holding shares in, and managing, its subsidiaries. Her Honour stated, citing Esquire Nominees [1972] HCA 32 ; 129 CLR 177 and Brookton [1981] HCA 28 ; 147 CLR 441, that the holding of shares in subsidiaries can of itself constitute the carrying of a business for the purposes of s 51(1) of the Act. 167 Cases on the statutory definition of "paid" similarly suggest that the word "paid", even standing alone, refers to the making over of a benefit that is accepted in discharge of the dividend debt. Brookton [1981] HCA 28 ; 147 CLR 441 concerned s 44(1)(a) of the Act (set out at [6] above). It will be recalled that s 44(1) referred to dividends paid to a shareholder. Mason J said (at 456) that the purpose of the extended definition of "paid" in s 6 is to guard against the possibility, perhaps remote , that the word "paid" might be so narrowly construed that dividends credited or distributed to shareholders in circumstances where they can no longer be revoked or rescinded by the company would not constitute assessable income in the hands of shareholders. (Emphasis added.) Once declared, the present dividend could not be revoked. I do not construe the word "paid" in art 82(1) of ABB Australia's articles of association (see [51] above) or understand the general law notion of payment so narrowly that the effectuation of the dividend declared in favour of ABB Zurich by payment could take no form other than the transfer of money to it.