Godolphin Australia Pty Ltd ACN 093921021 v Chief Commissioner of State Revenue

[2023] HCATrans 136

[2023] HCATrans 136

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Sydney  No S33 of 2023

B e t w e e n -

GODOLPHIN AUSTRALIA PTY LTD ACN 093921021

Applicant

and

CHIEF COMMISSIONER OF STATE REVENUE

Respondent

Application for special leave to appeal

KIEFEL CJ
STEWARD J
JAGOT J

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA AND BY VIDEO CONNECTION

ON FRIDAY, 13 OCTOBER 2023, AT 10.30 AM

Copyright in the High Court of Australia

KIEFEL CJ:   In accordance with the protocol for remote hearings, I will announce the appearances of the parties.

MR B.W. WALKER, SC appears with MS D. LEVI for the applicant. (instructed by Johnson Winter Slattery)

MS T.L. WONG, SC appears with MR S. KANAGARATNAM for the respondent.  (instructed by Crown Solicitor (NSW))

KIEFEL CJ:   Yes, Mr Walker.

MR WALKER: Your Honours will find section 10AA of the Land Tax Management Act1956 (NSW) at page 166 of the book. It uses in the critical expressions the notion, first of all, in subsection (1) of what land is used for and the relevant exemption is primary production. In subsection (3), for the purposes of the section, that is, working the exemption, that expression “land used for primary production” means certain specified states and affairs.

Each of them – that is, (a) through (f) – is introduced by the important connective, namely, the dominant use of the land falling within one or other of the descriptions (a) through (f).  As your Honours know, it is paragraph (b) which is at the heart of the dispute in this case.  There is no dispute that the land in question had as its dominant use “the maintenance of animals” – namely, horses.  The dispute concerned what I am going to call the integrated, or, as it was put in the majority, the vertically integrated operation of our client.  To explain, the animals in question are bloodstock racehorses – they are animals, domesticated, that derive from their value from a perception and in some cases the achievement of success on the racetrack. 

Thus, the full gamut of the possibilities of selling, which is the nature of the primary production in question in paragraph (b), applied to this operation.  Namely, racehorses are sold as racehorses; their progeny are sold as the progeny with desirable pedigrees of racehorses.  Of course, also, their gametes are sold for various purposes, but with bloodstock we do not need to emphasise the last of those.  It is selling the racehorses as racehorses and progeny to become racehorses.

Not surprisingly, bearing in mind that it is their perceived or possible success on the track which is in question, the vertically integrated operation, as it has been put, includes the maintenance of the horses for the purposes of training and preparing them to race.  It is accepted that that does not fall within the expression: 

for the purpose of selling them or their natural increase.

In our submission, it is simply wrong to say – as it has been written against us – that this case is unsuitable for special leave because there are facts which are so special as to render this unlikely to be of any assistance in understanding and applying these important provisions of an important tax Act.  We say that for this reason:  obviously enough, identifying the dominant use of land will be fact‑rich – it cannot be anything else.  Obviously enough, identifying the purpose of that use is also fact‑rich – it could not be anything else.  So much is commonplace concerning the nature of a tax statute which is always expressed in terms which then require factual characterisation so as to apply, or not, either the incidence of tax or exemption from it.  That could not be, with respect, a discrimen by which one picks between a case apt for special leave and not.

We accept that odd facts – maverick facts, facts unlikely to recur with much frequency – would be definitely a reason not to consider a grant of special leave.  But a vertically integrated operation is, obviously, not one which is confined to racehorses and one can contemplate a number of different ways in which a purpose other than of selling animals or their natural increase can be seen to be a purpose of the dominant use of land.

One need only contemplate that form of tourism and accommodation by which, on what I call working farms, guests are invited to add to the revenue of the farming operation to appreciate that that purpose would not be within selling the animals or their natural increase, but would be, equally, not a reason to regard the dominant use as one not for the purpose of selling the animals or their natural increase.

KIEFEL CJ: Mr Walker, assuming that to be the case, how would you state the question of principle regarding the construction of section 10AA?

MR WALKER:   The principle is guided by the text and its evident purpose, that one identifies first the dominant use – which is, of course, a matter of factual characterisation – and then asks what the purpose of that use is, to see whether it matches the description of selling the animals, maintaining the animals, selling them or their natural increase.  That will be true even if there is some other purpose – as in this case, namely, racing them for the purpose of enhancing the prospects of selling them, as well as for the purpose of winning prize money, of course.  The two are inseparable.

In our submission, the principle is that the hyphenated composite which is used in the majority reasoning against us – namely, “use‑for‑a‑purpose” is, in our submission, not the way in which the statute falls to be considered.  In principle, one starts with characterising as a matter of fact what the dominant use of the land is, and when one sees that it is an integrated, or vertically integrated operation such as in this case, one does not seek, invidiously – very artificially – to unpick the business model so as to be able to assign dominance to a purpose, to one of several purposes.

KIEFEL CJ:   Did the Full Court hold that use and purpose had to be read together?

MR WALKER:   Yes, and in a sense, of course, everyone agrees all the words have to be read together but, yes, the hyphenated expression “use‑for‑a‑purpose” becomes, in our submission, a wrong way of transferring the notion of dominance to one or other of the purposes which very readily can be seen to coexist in many uses of land.

STEWARD J:   Mr Walker, can I ask you a question about the statutory test.  Just looking at (b), do you say that that requires one to make an assessment about a given animal – that there is a binary outcome?  It is either for the purpose of selling them or their natural increase or bodily produce, or not.

MR WALKER:   No.  Binary outcomes are to be eschewed in a statute which is designed, evidently, to serve the social purpose of adding to the benefits of those engaged in primary production, for self‑evident political reasons.  The text chosen to do so is one which, in our submission, needs to apply in the real world.

STEWARD J:   If it is not a binary choice, what is the quality of the purpose that must attach to a given animal?

MR WALKER:   It has to be a purpose, or the purpose, of the dominant use, in our submission.

STEWARD J:   Does “a purpose” mean that an ancillary or subordinate purpose is sufficient?

MR WALKER:   No, it depends on what one means by subsidiary or ancillary.  In an integrated operation, nothing will be subsidiary or ancillary; they are all part of the same business model.  This case is a very good vehicle for that because, as I say, racehorses, bloodstock, have their value in, as I say, their perceived possibility of winning the Melbourne Cup.

STEWARD J:   So, does that mean – just in the case of an integrated business like this, does that mean that, ultimately, one must assess dominant use by reference to an assessment of what the business is mostly for, perhaps having regard to the three tables that appear in Justice Griffith’s reasons for judgment.

MR WALKER:   Yes, quite.  Yes, that is an ordinary way of factually characterising the use of land.  There is no doubting this question that, in this case, that the dominant use is for the maintenance of animals.  No one doubts that.  Neither, for that matter, is there any doubt about the fact that in terms of the money that comes from the word “selling”, that the economic driver, in terms of our revenue of profit, was the sale of horses and their progeny.  It is for those reasons, in our submission, that the importance of this case is to attend to the way in which this tax statute is expressed so as to avoid the complete artificiality of requiring that a dominant use have only one purpose, or has a purpose that can only be described in one way.

It is for those reasons that when one understands that selling horses also involves presenting them for sale – and thus, of course, involves presenting them with qualities which will appeal to a market – it is neither surprising nor a completely different endeavour to talk about racing them.  We say that the purpose of selling the horses is a purpose to be attributed to the undoubted dominant use of this land for the maintenance of the horses, notwithstanding that there are, of course, winnings to be collected in the event of successful racing, just as there is revenue – rather more important revenue – to be collected by reason of success in racing by reference to the market’s perception that a successful sire or dam will throw a successful foal.

It is for those reasons, in our submission, that the important matter in this case is to attend to, first of all, the characterisation of the dominant use and then simply asking the question, is that a use for the purpose of selling them – and manifestly, it is.  If there is to be an accusation of glossing the statute in an inappropriately anti‑textual way, then, in our submission, in truth, it comes from what is – at least by implication – the essence of the reasoning against us in the court below and against us in the argument here – namely, that there is something in the nature of the epithet “sole” which is to be inserted before the word “purpose” in order to make out an exempting purpose being attributed to the dominant use of the land.

It is for those reasons, in our submission, that this case provides a proper vehicle – first of all, to prevent the gloss by way of hyphens in the expression “use‑for‑a‑purpose” and to prevent the artificiality of denying a purpose of selling when some other activity, integrally involved in rendering the animals attractive for sale, is also, not surprisingly, carried on on the same land.  It is also, in our submission, important because it would prevent a tendency to look for the, in our submission, will‑o’‑the‑wisp assignment of the dominance, or predominance, or its opposite, very unimportant aspects of human activity to which purpose can be ascribed.

In our submission, a tax statute should not involve such almost random subtleties and, instead, the commonsense approach – which is the appropriate approach to the characterisation of the use of land – needs robustly to be employed and, in this case, the inquiry proceeds robustly as follows – is the dominant use of this land for the maintenance of animals?  Yes.  Is that dominant use – that is, the purpose for which those animals are maintained on this land – for the purposes of selling them?  Absolutely. 

One asks, do the figures in fact make out that that is what is intended, and by happy accident, also achieved?  The answer is yes.  Then one asks, and is that disqualified from answering the description in paragraph (3)(b) by reason of the integrated operation in relation to racehorses also including the racing which renders them and their progeny attractive for sale and, in our submission, the answer has to be no, it is either clearly within the notion of maintenance of animals, that you train and prepare them for racing, and it is in our submission plainly integrally related to the project of selling them whereby the purpose of selling them or their natural increase is, as a matter of common sense and robustly looked at in the real world, plainly true of this operation.

Now, one only needs to consider the artificiality of the position by way of contrast with another property on which the only activity is racing, where one cannot say, on that other property, that there is a purpose of selling them as part of the dominant use of that land.  In our submission, those two differences highlight how, as a matter of common sense, understand robustly, the primary characterisation of dominant use and then the attribution of purpose by a proper factual inquiry is one which should have led to the different – the opposite outcome in accordance with Justice Griffiths’ reasons in the court below.

If it please the Court.

KIEFEL CJ:   Yes, thank you.  Yes, Ms Wong.

MS WONG: May it please your Honours. There are three reasons why your Honours would not grant special leave. The first is that the applicant’s three proposed grounds of appeal and their submissions oversimplify a series of factual complexities which render this application an unsuitable vehicle. If I could illustrate this point by reference to one of the two properties, Kelvinside. It was not in dispute that on one of the parcels within that property, 10 per cent of the land was used to maintain stallions for the purpose of the sale of their bodily produce, in other words, a purpose that falls within section 10AA(3)(b), so a clear purpose of sale.

The remaining 90 per cent was used for resting or spelling racehorses.  So, the racehorses would spend some time at Crown Lodge or Osborne Park and when they were not racing, they would spend some time resting and galloping on part of the property.  The remaining 90 per cent was also used for breaking in yearlings and training them on an introductory sand track, in other words, they would go around an introductory sand track with a view to educating them to race on a racecourse.

It is also not in dispute that these activities – not activity, singular, but activities – predominantly involve the maintenance of horses.  However, there were different sets of activities occurring in respect of different groups of horses on different parts of the land, those horses being of different types, ages, and levels of racing education.  The Chief Commissioner conceded that the activities occurring on 10 per cent of that land – stallion nomination activities – were for the purpose of sale.  It made no such concession in respect of the remainder of the activities occurring at either property.

If one goes to the proposed grounds of appeal, if I could take your Honours to paragraph 2(b), page 159 of the application book.  This is where we see the oversimplification of the factual matrix.  Paragraph 2(b) contains two criteria that are said to demand a different construction of the exemption than what was held by the majority of the Court of Appeal.  First, your Honours will see:

The Court of Appeal should have concluded that where the dominant use of the land involves the same physical activity –

That is the first criterion.  The second is this, that:

the same physical activity –

is being conducted:

for two or more complementary or overlapping purposes –

Those are the two different criterion that are said to engage a point of principle, namely, that there ought to have been a different construction of this provision by the Court of Appeal. Can I say that what is said to be the result of the existence of the engagement of these two criterion is that if the two criterion are present – or the criteria are present – it is not one of which satisfies section 10AA(3)(b) and the other does not, and the one which satisfies does not prevail over the other purpose, it is unnecessary to demonstrate separately the exempt purpose is dominant.

In other words, in this case, what is being put is that where the purpose of racing was actually the dominant purpose of the use of the land, or equal to the purpose of sale, then the applicant ought succeed.  Now, Justice Kirk found in the Court of Appeal that racing predominated over sale, and Justice Simpson found that it was equal.  In those circumstances, it is said that they should still succeed.

If I could just illustrate the difficulties with the first criterion.  It is also put further in the submissions that there was only one use or activity being conducted on the land.  This is true, but only at the very highest level of generality would one describe everything that is occurring as the maintenance of horses.  The Chief Commissioner at both levels – both at first instance and also on appeal – maintained that physical use needed to be understood at a more granular level, namely in respect of uses or activities occurring on different parts of the property, did not accept that there was only a single use.  The first criterion is subject of factual dispute, were it to come before the High Court.

STEWARD J:   Ms Wong, could I ask you two questions.  Firstly, the findings that you said were made about the use of the land at Kelvinside, the 10 per cent and so on, are there similar findings about Woodlands?

MS WONG:   No, no.  Woodlands, the horses were being born and also going through from birth to one year, and the mares were being maintained on that property.  We said that what occurred was the horses were, in fact, a string, a racing string, so they would breed 100 to 150 horses, they would be born on Woodlands, they would go through their education process at Kelvinside, and straight onto the racetrack.  Almost all of them, without any exception, would end up on the racetrack.

STEWARD J:   Then can I ask a second question, which is in the context of a business which involves multiple activities, in determining predominant use, what is wrong with the reasoning of Justice Griffiths, which was to simply look at where the money is coming in over time, and inferring from that, that predominant use is that which makes you your money.

MS WONG:   It is a question of fact and degree, your Honour.  So, the authorities that have been to date in the Court of Appeal have said that when one is trying to determine what use predominates – because the Chief Commissioner says that there is more than one use here, not just one.  One might also say more than one purpose, your Honour – then, because this is a statute that is predominantly concerned with use of the physical land, and that comes from a decision of Justice Isaacs, which has been incorporated into more recent decisions of the Court of Appeal – Metricon – one looks at the physical use, the intensity with which that physical use manifests itself on the property, the resources that are used.  Of course, if a use is not profitable, your Honours, that is no barrier to that use being found to be dominant use if the intensity of the resources that are applied to that use, the number of staff, for example, the number of horses – so, for example, stallion covering, that was 10 to 15 horses on 10 per cent of the land – this is the Kelvinside property, your Honours – then there is at least 100 other horses on the remainder of the land or more who have been trained, getting ready to go to the races, effectively.  That is a very simplistic presentation.

JAGOT J:   Ms Wong, is not the issue of principle here disclosed in the primary judge’s paragraph 256 at page 70, where I understand the argument the Commissioner put and the contrary argument that Godolphin put, that her Honour there identifies the question – and it seems to me that that does involve an issue of principle, because the facts, as I understand it, the primary facts about physical activities on land are not actually in dispute.

The issue between the parties was how those physical activities are to be conceptualised in terms of use‑for‑a‑purpose.  I mean, an activity is relevant to the characterisation of a use‑for‑a‑purpose, but it does not determine a use‑for‑a‑purpose, and that is the point the primary judge was making at 256, which it seems that Justice Griffiths adopted.  So, I am just not seeing that disputed issues of fact – well, they are not, really.  It is disputed issues of characterisation based on undisputed – or found, I should say – found primary facts.

MS WONG:   Your Honour, if I could take up paragraph 256 in particular, one sees there that her Honour did not adopt the construction of the statute that is propounded by the applicant in its special leave application.  What her Honour, as well as Justice Griffiths, found on appeal was that the dominant purpose was sale.  What is articulated in the applicant’s special leave application is that it is unnecessary.  So, in other words, where there is an integrated business, one does not need to establish that the dominant purpose is one of sale.

The characterisation that was put on the facts by the trial judge and Justice Griffiths does not actually engage with the question of construction, and if I might go to why we say the construction placed by the applicant is bound to fail, I might just address the Court quickly on that issue.

JAGOT J:   I should note that I am not sure that I read 2(b) in the application of the special leave in quite the way you do, because there is a focus on dominant use.  It is dominant use‑for‑a‑purpose which is the focus there, not dominant purpose.  That is the distinction that is being made, is the statute is directing you to look at dominant use‑for‑a‑purpose, and if you have a dominant use, which is made up of a range of activities, then the two complementary purposes do not take you outside the statute.  Then, I read (c) as saying pretty much what the primary judge and Justice Griffiths were saying.  Anyway, I will let you continue.

MS WONG:   In the time available, I might cross to the difficulties that are presented by separating dominant use from the statutory purpose of sale in the manner that is contended for by the applicant, such that one can, in a sense, integrate the different limbs of activities so that it is not necessary, for example in this case, that the purpose of sale be dominant over the purpose of racing.  That is, really, the nub of the submission by the applicants.

If I could take your Honours to page 166 of the application book, which contains the relevant section.  In substance, as your Honours know, what is said to be the correct construction by the applicant is that one finds it says, is there a dominant use for the maintenance of animals, and then one looks separately at whether that use can be said to simply be for the purpose of sale, regardless of whether that purpose of sale predominates over other purposes, such as the purpose of racing.  So, one of the difficulties with separating the test in this manner, dividing it down the middle one, might even say, is that while one can see two different clauses in (3)(b), as in:

land the dominant use of which is for –

. . .

(b)the maintenance of animals . . . for the purpose of selling –

That same division does not occur in subsections (3)(c) or (3)(e).  For example, in (3)(c) you have “commercial fishing”.  One cannot readily separate the purpose of sale in (3)(c) of “commercial” from “fishing” if one is attempting to divide the two parts of the test in the manner suggested by the applicant.  The same thing happens again with (3)(e).  If one was to accept this division between use and purpose, there would end up being an incoherent and inconsistent application of subsection (3), depending on which subsection the Court was engaging with.  Other defects in terms of this proposed construction is that ‑ ‑ ‑

STEWARD J:   Ms Wong, can I ask you the same question I asked Mr Walker?  In relation to (b) – and you can also ask the question in relation to (d) – must it be the case that you must be able to say, of a given animal, that it is either maintained for the purposes of selling them, et cetera, or not?

MS WONG:   On this occasion, I might agree with Mr Walker.

STEWARD J:   Yes, I see.  So, then the question becomes:  what is the quality of the purpose that we are looking at here?  In your view, is it primarily predominant purpose, ultimate purpose, or any purpose?

MS WONG:   The way I would approach it, your Honour, is, I would say, the test is that the dominant use must be for the maintenance of animals for the purpose of sale.  If there is more than one purpose for that particular one animal, then one has to look at the manner in which the animal was being maintained on the land, the activities being undertaken, and say, is the purpose of sale associated with that dominant use?

STEWARD J:   May I ask you, leaving aside the other lot of land, at Woodlands, were there factual differences in the way in which horses were being maintained?

MS WONG:   The horses were different in ages, your Honour.  There were not the same stark difference as at Kelvinside.  At Kelvinside, there were 10 per cent stallions, and then 90 per cent a range of other horses; there were horses racing, yearlings.  At Woodlands, they were horses, either mares who were mothering foals, and foals who were through to the ages of, I think, about one year old.  So, there was raising of horses taking place on Woodlands.

STEWARD J:   So, in the case of Woodlands, how would one ascertain the purpose of “maintenance”?

MS WONG:   So, certainly, the horses were being maintained on the land.  The dominant use of the land was the maintenance of animals.  Then, on what we would say would be the correct construction of this section, one would say, was that maintenance of animals occurring for the purpose of sale or for the purpose of racing?  If it was both, then one would say:  would one describe the dominant use as being for the purpose of sale?  Because, otherwise, you are in a situation – if you say that both purposes are associated, your Honour, you end up with a situation where you say there are two dominant uses, there is a dominant use for the purpose of sale, and there is a dominant use‑for‑purpose of racing.

We say that is an invidious position to reach, that there could actually be two simultaneously dominant purposes, and not one that the statute had intended to contemplate, especially in circumstances ‑ ‑ ‑

STEWARD J:   But in the case of some horses – the younger horses – you may not yet know.

MS WONG:   No, there is a fairly well‑understood progress, your Honour.  Because what happens is – it is not the situation where some get sold before they go on to the racetrack, and others do not.  All the horses, almost without exception, end up on the racetrack.  Almost all of them, with a very minor few just simply not suitable.  So, we have a situation where it is like a conveyer belt with horses that go through to the racetrack.  Unlike other breeders, who actually sell the horses at a yearling age, that is not the model of Godolphin.  They put them on the racetrack, and they sell the ones that are not considered to be suitable for racing, your Honour.  That is the position they take.

In other words, one sees that there is a very primacy of racing, and in many years racing almost generated the same amount of revenue as the nomination sales, and in one particular year, it generated more.  So, to try and say that there are some stark criteria of more revenue or less revenue, certainly that is a difficult proposition, we say, as well as the fact that the vast majority of expenditure was on racing.  We say it is an error simply to look at revenue because, as we know, the economic driver here was not making money from this operation – it lost millions and millions of dollars every year.  So, there were other things at stake other than making money in respect of Godolphin’s operations, your Honour, and that is certainly part of the findings that were made by the Court of Appeal.

So, as I said, part of the problem here is that it would result in a differential interpretation of (3)(a) and (b) as opposed to (3)(c) and (e).  It would ignore the limiting effect, we say, of the word “for”, because it would allow subsidiary, or less than equal purposes, to effectively predominate and allow for the exemption to be claimed.  So, for example, if breeding was a lesser purpose than racing, on the applicant’s construction, the exemption would still be granted.  In other words, on Justice Kirk’s reasoning, they would say the exemption would be granted.  We say that that is contrary to the object to the statute.  We also say that it moors the definite article before the word “purpose” – as explained by Justice Simpson in her Honour’s reasoning.

We say there are number of very serious defects with respect to the manner in which the applicant approaches the construction of the Act.  If their construction does not succeed, then, really, the Court is simply engaging in a unique process of factual characterisation that will not assist in relation to the construction of other statutes in other States or Territories which use different language such as “primarily”, “mainly”, “solely”, “substantially”.  So, New South Wales is the only State that uses the word “dominant” in relation to this particular exemption.  The criterion that is proposed of overlapping or complementary we say only begs the question – overlapping or complementary in what sense and for what purpose?  Integrated businesses are integrated in a multitude of different ways.

In this case, Justice Kirk found that they were very limited synergies and other judges found that they were more substantial.  But the Court would have to engage with a range of different factual possibilities involved in whether something is overlapping or integrated.  I see that I have very

little time left, your Honours.  We say that this application raises no question of public importance.  It is a unique set of facts.  Vegetable growers are unlikely to have the same degree of lucrative opportunity than those with racehorses, your Honours.  It is an unusual and unique set of the facts and is not an appropriate vehicle for special leave.

KIEFEL CJ:   Yes, thank you, Ms Wong.  Reply, Mr Walker?

MR WALKER:   Your Honours, the last contrast between market gardeners and Godolphin is, with respect, of no assistance in relation to special leave and would be of no assistance with respect to an understanding of those paragraphs (a), (b) and (d) which involve explicitly the notion of purpose.

In our submission, it is significant that our friend slides, time after time, in her submissions today to transfer the epithet dominant to the word “purpose”.  Further, in our submission, to suggest that notwithstanding that all the activities which constitute and display the use, notwithstanding that they all amount to maintenance of animals, to propose that there is nonetheless a plurality of activities and, thus, a plurality of use, that, with respect, is belied by a moment’s thought about the activities on any kind of farm where, of course, there is a plurality of activities, but all for one use, relevantly, with respect to the raising for sale of livestock, for the maintenance of animals.

In our submission, the artificiality is highlighted by it simply not dealing with the kind of integration, by no means unique or odd in this case, which was explained by the slogan quoted by the judge at first instance, application book 70, paragraph 255, your Honours will remember the slogan “breed to race, race to breed”.  That, in our submission, shows the integrated inextricable connection of what I am going to call racing success and market penetration.

That, in our submission, is really no different in kind from the entry of prize animals in agricultural shows in order to obtain ribbons in order to make them – and more to the point their progeny – more attractive to the market for carcasses.  No one would dream of saying that the preparation of a prize bull for the Royal Easter Show was for a – was maintenance of animals which somehow fell outside or belied the fact that the dominant use of the land on which that bull was being cosseted was for the purpose of selling the animals.

It is for those reasons, in our submission, that there is none of the invidious subtleties that my learned friend has proposed as a reason for your Honours to reject special leave.  This is precisely the kind of robust and modern operation of an integrated business which yields one

easily‑identified dominant use of the land, namely, maintenance, and then leads to the second and surely conclusive question, answered thus:  is that maintenance for the purpose of selling them?  Answer:  yes.  Does racing them, which enhances the prospects of being sold, prevent that from being so?   A puzzlement, surely, in the mind of a lay observer, seeing how it is proposed to apply this tax statute.

May it please your Honours.

KIEFEL CJ:   The Court will adjourn to consider the course that it will take.

AT 11.10 AM SHORT ADJOURNMENT

UPON RESUMING AT 11.15 AM:

KIEFEL CJ:   There will be a grant of special leave in this matter.  What is your estimate of time, Mr Walker?

MR WALKER:   Half a day, your Honour.

KIEFEL CJ:   Thank you.  Ms Wong, do you agree with that?

MS WONG:   It may be up to one day, your Honour.

KIEFEL CJ:   All right, then.  Thank you.  The Court will now adjourn until 11.30 am.

AT 11.15 AM THE MATTER WAS CONCLUDED