Hallas & Ors v The National Mutual Life Association of Australasia

In the High Court of Australia, the applicants, Kathleen Clare Hallas and Lisa Adele Strohfeldt, sought special leave to appeal against a decision of the Full Court. The respondent was The National Mutual Life Association of Australasia. A preliminary issue arose concerning the applicants' compliance with High Court rules regarding the filing of application books, which were filed four days late. The applicants sought an order under Order 69A rule 10(1) to prevent the application from being deemed abandoned due to this delay, attributing it to a misunderstanding between the applicants and their solicitors. The respondent indicated they took no point on the late filing.

The substantive legal issue before the High Court was whether a contract is rendered unenforceable on grounds of public policy if it was part of an arrangement intended by the party seeking to enforce it to deceive a third party. Specifically, the applicants sought to argue that it was sufficient for unenforceability that the arrangement was intended by that party to deceive the Commissioner of Taxation, contrary to the policy of full and true disclosure under the *Income Tax Assessment Act 1936* (Cth). This contrasted with the Full Court's view, which held that for unenforceability, the arrangement must have been intended by that party to *defraud* the Commissioner.

The High Court, by order, directed that the application in the present matter not be deemed abandoned pursuant to Order 69A rule 10(1). The Court then proceeded to consider the application for special leave on its merits, with the primary question being the correct legal test for unenforceability of a contract based on public policy concerning deception of the Commissioner of Taxation. The applicants contended that an intention to deceive was sufficient, while the Full Court had determined that an intention to defraud was a necessary element.