mdroth/huggingface-course_section-5_zst huggingface dataset:
Case: Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321
Outcome: cited
identifying whether the administrative decision-maker (in this case the Tribunal) has engaged in an error of law giving rise to a question of law , it is necessary to precisely identify the "nature and quality" of the error and the legal principle that attracts a particular legal consequence, that is, the "legal rubric under which a decision is challenged": Minister for Immigration and Multicultural Affairs; Ex parte Applicant S20/2002 (2003) 198 ALR 59 per Gleeson CJ at [9]. The scope of that legal rubric is conventionally understood in terms of the well known passage from Craig v South Australia (1995) 184 CLR 163 at 179 per Brennan, Deane, Toohey, Gaudron and McHugh JJ, adopted and applied in Minister for Immigration and Multicultural Affairs v Yusuf (2001) 206 CLR 323 at 351 [82] per McHugh, Gummow and Hayne JJ. As to misconceptions which might suggest an unsupportable supposition on the part of the decision-maker, see Avon Downs Pty Ltd v Federal Commissioner of Taxation (1949) 78 CLR 353 at 360 per Dixon J and R v Australian Stevedoring Industry Board; Ex parte Melbourne Stevedoring Co. Pty Ltd (1953) 88 CLR 100 at 120 per Dixon CJ, Williams, Webb and Fullagar JJ. As to the constraints upon a court interfering with a decision-maker's assessment of the evidence in exercising supervisory review of administrative decision-making, see Attorney-General (NSW) v Quin (1990) 170 CLR 1 at 35-36 per Brennan J. At common law, want of logic, is not synonymous with error of law: Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321 per Mason CJ at 356 with whom Brennan, Toohey and Gaudron JJ agreed. As to inferences, Mason CJ said this at 356 in Bond : So long as there is some basis for an inference in other words, the particular inference is reasonably open, even if that inference appears to have been drawn as a result of illogical reasoning, there is no place for judicial review because no error of law has taken place. [the emphasis is his Honour's emphasis]
Case: Wecker v Secretary, Department of Education, Science and Training [2008] FCAFC 108; (2008) 249 ALR 762
Outcome: cited
to these questions and the broader framework of whether an administrative decision-maker has fallen into error of law see Wecker v Secretary, Department of Education, Science and Training [2008] FCAFC 108; (2008) 249 ALR 762, per Greenwood J at [96] to [99], per French J agreeing, at [3] and Weinberg J agreeing at [41]. It follows therefore that if the Tribunal takes an irrelevant consideration into account in reaching its decision, it has engaged in an error of law and the question of whether the Tribunal has taken an irrelevant consideration into account raises a question of law. It also follows that a question of whether the Tribunal has reached a finding unsupported by any evidence, raises a question of law. A contention that inferences have been drawn from facts in circumstances where those inferences are not reasonably open, also raises a question of law. Considerations The position in relation to the resolution of the present application seems to me to be this.
Case: Helicopter Sales (Australia) Pty Ltd v Rotor Work Pty Ltd [1974] HCA 32 ; (1974) 132 CLR 1
Outcome: cited
The Court can only make an order under s 588FF(1) if it is 'satisfied' that the relevant payment transactions are voidable under s 588FE. This means, inter alia, that the relevant transactions must be proven to be insolvent transactions and unfair preferences and/or uncommercial transactions. In this case, Scott and Fairbank wish to contest the claims that the relevant payments were transactions within the meaning of s 9 , that they were unfair preferences or uncommercial transactions (as the case may be) within the meaning of ss 588FA and 588FB, and that the company was insolvent at the time when the relevant payments were made. Generally speaking, the right to contest issues that only arise in the principal proceeding are an accepted incident of third party status: see Helicopter Sales (Australia) Pty Ltd v Rotor Work Pty Ltd [1974] HCA 32 ; (1974) 132 CLR 1 per Barwick CJ at 5 and Mason J at 15.
Case: Crosbie v Commissioner of Taxation [2003] FCA 922 ; (2003) 130 FCR 275
Outcome: discussed
The authorities recognise that directors in the position of Scott and Fairbank should be able to contest the liquidator's claims against the Commissioner: see Crosbie v Commissioner of Taxation [2003] FCA 922 ; (2003) 130 FCR 275 at [4] - [7] (' Crosbie' ); Hall v Commissioner of Taxation [2004] NSWSC 985 ; (2004) 186 FLR 111 at [16] and [21]-[23] (' Hall' ), and Dean-Willcocks v Commissioner of Taxation (No 2) (2004) 49 ACSR 325. In Crosbie , Finkelstein J made an order that the directors have leave to defend the liquidator's claim against the Commissioner of Taxation on terms that they be bound by all decisions made in that action and they be treated as if parties to the action on any issue relating to costs. In Hall , Barrett J directed that the third parties have leave to appear and take part in the hearing of the plaintiffs' claims and to defend those claims: at [25]. 24 When these issues were raised, I made orders in each proceeding in the same form as those made by Finkelstein J in Crosbie . Specifically, I ordered that the third parties have leave to defend the plaintiff's claim against the Commissioner on terms that: (a) they each be bound by all decisions made in those actions; and (b) they each be treated as if parties to the action on any issue relating to costs. This order was not opposed by either the plaintiff or the Commissioner. 25 In Crosbie , Finkelstein J also expressed the view, which was not necessary to his decision, that the Court should not act on the parties' admissions as to insolvency without satisfying itself on the evidence as to the correctness of that admission. In his Honour's view, this conclusion followed from the fact that the Court can only make an order under s 588FF if it is satisfied that a transaction of a company is voidable under s 588FE. Subsequent cases have rejected this view, and held that the Court can reach the requisite satisfaction on the basis of the parties' agreement: see Wanted World Wide (Australia) Limited v Commissioner of Taxation [2004] FCA 1063 ; (2004) 139 FCR 205 (' Wanted World Wide ') and Young v Commissioner of Taxation (2006) 56 ACSR 654 (' Young' ). As I see it, no practical significance attaches to the issue in this case, notwithstanding the settlement reached between the plaintiff and the Commissioner, because the claims made by the plaintiff as to solvency and other matters were contested by Scott and Fairbank. However, if and to the extent that the issue has any significance for this case, I prefer, and would apply, the views expressed in Wanted World Wide and Young .
Case: Hall v Commissioner of Taxation [2004] NSWSC 985 ; (2004) 186 FLR 111
Outcome: cited
The authorities recognise that directors in the position of Scott and Fairbank should be able to contest the liquidator's claims against the Commissioner: see Crosbie v Commissioner of Taxation [2003] FCA 922 ; (2003) 130 FCR 275 at [4] - [7] (' Crosbie' ); Hall v Commissioner of Taxation [2004] NSWSC 985 ; (2004) 186 FLR 111 at [16] and [21]-[23] (' Hall' ), and Dean-Willcocks v Commissioner of Taxation (No 2) (2004) 49 ACSR 325. In Crosbie , Finkelstein J made an order that the directors have leave to defend the liquidator's claim against the Commissioner of Taxation on terms that they be bound by all decisions made in that action and they be treated as if parties to the action on any issue relating to costs. In Hall , Barrett J directed that the third parties have leave to appear and take part in the hearing of the plaintiffs' claims and to defend those claims: at [25].
Case: Dean-Willcocks v Commissioner of Taxation (No 2) (2004) 49 ACSR 325
Outcome: cited
The authorities recognise that directors in the position of Scott and Fairbank should be able to contest the liquidator's claims against the Commissioner: see Crosbie v Commissioner of Taxation [2003] FCA 922 ; (2003) 130 FCR 275 at [4] - [7] (' Crosbie' ); Hall v Commissioner of Taxation [2004] NSWSC 985 ; (2004) 186 FLR 111 at [16] and [21]-[23] (' Hall' ), and Dean-Willcocks v Commissioner of Taxation (No 2) (2004) 49 ACSR 325. In Crosbie , Finkelstein J made an order that the directors have leave to defend the liquidator's claim against the Commissioner of Taxation on terms that they be bound by all decisions made in that action and they be treated as if parties to the action on any issue relating to costs. In Hall , Barrett J directed that the third parties have leave to appear and take part in the hearing of the plaintiffs' claims and to defend those claims: at [25].
Case: Wanted World Wide (Australia) Limited v Commissioner of Taxation [2004] FCA 1063 ; (2004) 139 FCR 205
Outcome: cited
In Crosbie , Finkelstein J also expressed the view, which was not necessary to his decision, that the Court should not act on the parties' admissions as to insolvency without satisfying itself on the evidence as to the correctness of that admission. In his Honour's view, this conclusion followed from the fact that the Court can only make an order under s 588FF if it is satisfied that a transaction of a company is voidable under s 588FE. Subsequent cases have rejected this view, and held that the Court can reach the requisite satisfaction on the basis of the parties' agreement: see Wanted World Wide (Australia) Limited v Commissioner of Taxation [2004] FCA 1063 ; (2004) 139 FCR 205 (' Wanted World Wide ') and Young v Commissioner of Taxation (2006) 56 ACSR 654 (' Young' ). As I see it, no practical significance attaches to the issue in this case, notwithstanding the settlement reached between the plaintiff and the Commissioner, because the claims made by the plaintiff as to solvency and other matters were contested by Scott and Fairbank. However, if and to the extent that the issue has any significance for this case, I prefer, and would apply, the views expressed in Wanted World Wide and Young .
Case: Young v Commissioner of Taxation (2006) 56 ACSR 654
Outcome: cited
In Crosbie , Finkelstein J also expressed the view, which was not necessary to his decision, that the Court should not act on the parties' admissions as to insolvency without satisfying itself on the evidence as to the correctness of that admission. In his Honour's view, this conclusion followed from the fact that the Court can only make an order under s 588FF if it is satisfied that a transaction of a company is voidable under s 588FE. Subsequent cases have rejected this view, and held that the Court can reach the requisite satisfaction on the basis of the parties' agreement: see Wanted World Wide (Australia) Limited v Commissioner of Taxation [2004] FCA 1063 ; (2004) 139 FCR 205 (' Wanted World Wide ') and Young v Commissioner of Taxation (2006) 56 ACSR 654 (' Young' ). As I see it, no practical significance attaches to the issue in this case, notwithstanding the settlement reached between the plaintiff and the Commissioner, because the claims made by the plaintiff as to solvency and other matters were contested by Scott and Fairbank. However, if and to the extent that the issue has any significance for this case, I prefer, and would apply, the views expressed in Wanted World Wide and Young .
Case: Tru Floor Service Pty Ltd v Jenkins (No 2) [2006] FCA 632
Outcome: cited
As Sundberg J said recently in Tru Floor Service Pty Ltd v Jenkins (No 2) [2006] FCA 632 at [43] ( 'Tru Floor' ), s 95A mandates a cash flow rather than a balance sheet approach to determining solvency. 39 In the end, it is a question of fact to be ascertained from a consideration of a company's financial position taken as a whole whether a voluntary arrangement with a third party for the provision of funds amounts to a sufficient basis for concluding that the company is able to meet its liabilities as they fall due: see Southern Cross Interiors at 224; Lewis at 572 [79] and Tru Floor at [44]. In Tru Floor at [44], Sundberg J said, correctly in my view, that it must also be borne in mind that the plain words of s 95A ('as and when they become due') require anticipated debts to be taken, to some extent, into account in determining solvency.
Case: Rees v Bank of New South Wales [1964] HCA 47 ; (1964) 111 CLR 210
Outcome: cited
As Palmer J indicated, the law takes a commercially realistic view in determining what resources are available to a company to enable it to pay its debts as and when they fall due. This has long been recognised. In Rees v Bank of New South Wales [1964] HCA 47 ; (1964) 111 CLR 210 at 218, Barwick CJ said: 'It is quite true that a trader, to remain solvent, does not need to have ready cash by him to cover his commitments as they fall for payment, and that in determining whether he can pay his debts as they become due regard must be had to his realizable assets. The extent to which their existence will prevent a conclusion of insolvency will depend on a number of surrounding circumstances, one of which must be the nature of the assets and in the case of a trader, the nature of his business.'
Case: FAI Insurances Limited v Gold Leaf Interior Decorators Pty Ltd (1988) 14 NSWLR 643
Outcome: cited
I am also satisfied that the funds actually advanced by Swift Malaysia directly, or via Swift Australia, to TSI and TSIA were not sufficient to enable either TSI or TSIA to pay their debts as and when they fell due. On the contrary, there is clear evidence that TSI and TSIA never had sufficient funds, whether from Swift Malaysia or elsewhere, to pay all of their debts as and when they fell due. It does not avail the directors to say that they used funds provided by Swift Malaysia to pay some of the larger and more pressing debts of TSI and TSIA, especially those, such as the debt to the Commissioner, which might expose the directors to personal liability. As Kirby P said in FAI Insurances Limited v Gold Leaf Interior Decorators Pty Ltd (1988) 14 NSWLR 643 at 649, a company's failure to pay a small debt may often be the best possible evidence of the company's insolvency.
Case: D'Aloia v Commissioner of Taxation (2003) 203 ALR 609
Outcome: cited
In my opinion, the payments in question were uncommercial transactions. They conferred no benefit on TSIA. Indeed, the payments conferred only detriments on TSIA in that they had the effect of increasing the outstanding liabilities of TSI to TSIA in circumstances where there was no prospect that TSI would be able to repay the advances. This conclusion is supported by the decision in D'Aloia v Commissioner of Taxation (2003) 203 ALR 609 (' D'Aloia '). In D'Aloia , the issue was whether payments that had been made on behalf of another company for the discharge of its taxation debts were uncommercial transactions within the meaning of the Act. In return for making the payment, there was a reduction in the loan account of the company making the payment. Merkel J held that the transaction was uncommercial. His Honour said (at 613): 'The only benefit to Damark from making payments totalling in excess of $36,000 on behalf of Gralyn appears to have been the reduction in the loan account to Gralyn in the sum of $3775 and, possibly, the use of some of Gralyn's motor vehicles. However, the evidence is to the effect that the benefit to Damark was minor compared to the amount it paid. I am not satisfied that, having regard to the matters set out in s 588FB(1), a reasonable person in Damark's circumstances would have made the payments. Accordingly, subject to any defence under s 588FG(2), I am satisfied that the three payments in question constituted uncommercial transactions .' The present is a stronger case than D'Aloia . Neither Scott nor Fairbank pointed in evidence, or in submissions, to any benefit to TSIA in making these tax payments on behalf of TSI. 108 The payments made by TSIA to discharge TSI's tax liabilities to the Commissioner were insolvent transactions within the meaning of s 588FC; they were uncommercial transactions which were entered into when TSIA was insolvent. 109 For the foregoing reasons, I am satisfied that each of the payments challenged by the liquidator is voidable because of s 588FE. Each payment in question was an insolvent transaction of the relevant company and it was entered into during the six months ending on the relation back day. It is unnecessary to consider the longer relation back period relating to uncommercial transactions.
Case: Tourprint International Pty Ltd (in liq) v Bott (1999) 32 ACSR 201
Outcome: cited
Section 588FGB(3) is expressed in the same terms as the former s 588H of the Corporations Law. Austin J explained the meaning and effect of s 588H in Tourprint International Pty Ltd (in liq) v Bott (1999) 32 ACSR 201 at 215 [67]: '"Expectation", as required by s 588H(2), means a higher degree of certainty than "mere hope or possibility" or "suspecting": 3M Australia Pty Ltd v Kemish (1986) 10 ACLR 371 at 378; Dunn v Shapowloff [1978] 2 NSWLR 235 at 249; (1978) 3 ACLR 775. The defence requires an actual expectation that the company was and would continue to be solvent, and that the grounds for so expecting are reasonable. A director cannot rely on a complete ignorance of or neglect of duty ( Metal Manufacturers Ltd v Lewis (1986) 11 ACLR 122 at 129) and cannot hide behind ignorance of the company's affairs which is of their own making or, if not entirely of their own making, has been contributed to by their own failure to make further necessary inquiries: Statewide Tobacco Services Ltd v Morley (1990) 2 ACSR 405; Morley v State Wide Tobacco Services Ltd [1993] 1 VR 423; (1992) 8 ACSR 305.'
Case: Metropolitan Fire Systems Pty Ltd v Miller (1997) 23 ACSR 699
Outcome: cited
The operation of the defence was described in similar terms by Einfeld J in Metropolitan Fire Systems Pty Ltd v Miller (1997) 23 ACSR 699 at 711: 'The onus of proof for these defences is on the director seeking to rely on them who must establish the elements of the defences on the balance of probabilities. The grounds on which the director forms the view as to the company's solvency or otherwise must be reasonable. This implies an objective consideration of the grounds viewed against all circumstances and not whether, when looked at from the point of view of the director in question, the grounds appear reasonable. The defences under s 588H require that there be reasonable grounds to "expect", as opposed to "suspect", solvency as provided in s 588G. From the cases in which the meaning of these words has been considered, it would appear that to "suspect" something requires a lower threshold of knowledge or awareness than to "expect" it: see a discussion on "to suspect" by Kitto J in Queensland Bacon Pty Ltd v Rees [1966] HCA 21 ; (1966) 115 CLR 266 at 303; [1966] ALR 855; and 3M Australia at 192. The expectation must be differentiated from mere hope in order to satisfy this defence: Dunn v Shapowloff [1978] NSWLR 235; (1978) 3 ACLR 775. It implies a measure of confidence that the company is solvent. The directors must have reasonable grounds for regarding it as likely that the company would at the relevant date have been able to pay its debts as and when they fall due.' Einfeld J also said at 703 that the requirement for objectively reasonable grounds must be judged by the standard appropriate to a director of ordinary competence: 3M Australia Pty Ltd v Kemish (1986) 10 ACLR 371 at 373.
Case: 3M Australia Pty Ltd v Kemish (1986) 10 ACLR 371
Outcome: cited
Section 588FGB(3) is expressed in the same terms as the former s 588H of the Corporations Law. Austin J explained the meaning and effect of s 588H in Tourprint International Pty Ltd (in liq) v Bott (1999) 32 ACSR 201 at 215 [67]: '"Expectation", as required by s 588H(2), means a higher degree of certainty than "mere hope or possibility" or "suspecting": 3M Australia Pty Ltd v Kemish (1986) 10 ACLR 371 at 378; Dunn v Shapowloff [1978] 2 NSWLR 235 at 249; (1978) 3 ACLR 775. The defence requires an actual expectation that the company was and would continue to be solvent, and that the grounds for so expecting are reasonable. A director cannot rely on a complete ignorance of or neglect of duty ( Metal Manufacturers Ltd v Lewis (1986) 11 ACLR 122 at 129) and cannot hide behind ignorance of the company's affairs which is of their own making or, if not entirely of their own making, has been contributed to by their own failure to make further necessary inquiries: Statewide Tobacco Services Ltd v Morley (1990) 2 ACSR 405; Morley v State Wide Tobacco Services Ltd [1993] 1 VR 423; (1992) 8 ACSR 305.' 114 The operation of the defence was described in similar terms by Einfeld J in Metropolitan Fire Systems Pty Ltd v Miller (1997) 23 ACSR 699 at 711: 'The onus of proof for these defences is on the director seeking to rely on them who must establish the elements of the defences on the balance of probabilities. The grounds on which the director forms the view as to the company's solvency or otherwise must be reasonable. This implies an objective consideration of the grounds viewed against all circumstances and not whether, when looked at from the point of view of the director in question, the grounds appear reasonable. The defences under s 588H require that there be reasonable grounds to "expect", as opposed to "suspect", solvency as provided in s 588G. From the cases in which the meaning of these words has been considered, it would appear that to "suspect" something requires a lower threshold of knowledge or awareness than to "expect" it: see a discussion on "to suspect" by Kitto J in Queensland Bacon Pty Ltd v Rees [1966] HCA 21 ; (1966) 115 CLR 266 at 303; [1966] ALR 855; and 3M Australia at 192. The expectation must be differentiated from mere hope in order to satisfy this defence: Dunn v Shapowloff [1978] NSWLR 235; (1978) 3 ACLR 775. It implies a measure of confidence that the company is solvent. The directors must have reasonable grounds for regarding it as likely that the company would at the relevant date have been able to pay its debts as and when they fall due.' Einfeld J also said at 703 that the requirement for objectively reasonable grounds must be judged by the standard appropriate to a director of ordinary competence: 3M Australia Pty Ltd v Kemish (1986) 10 ACLR 371 at 373.