Incat Australia Pty Ltd v Australian Securities and Investment Commission

In the Federal Court, Incat Australia Pty Ltd contested a decision by the Administrative Appeals Tribunal (AAT) to require them to lodge financial accounts. Incat argued that disclosing their financial information would impose unreasonable burdens and be inappropriate given their unique business model of constructing a limited number of high-value vessels annually. They claimed that revealing their profit margins would disadvantage them in negotiations with customers and competitors. The AAT reviewed the matter and assessed whether the burden of lodging accounts was unreasonable based on the ordinary meaning of the term. They considered it to be a factual determination that required evaluating the evidence in light of the nature of the compliance requirements and the policy objectives of the legislation.

The AAT noted that the burden must exceed the bounds of reason to be considered unreasonable. They compared their approach to an earlier decision by the Tribunal, acknowledging that while overwhelming burdens were unreasonable, not all unreasonable burdens were overwhelming. The AAT concluded that determining whether a burden was unreasonable involved an assessment of the evidence, the nature of the requirements, and the potential economic detriment to Incat from compliance. The AAT reviewed the evidence and found that Incat's competitors, Austal Ships and Kvaerner Fjellstrand, were also subject to similar disclosure requirements. Incat's European representative stated that it was difficult to estimate Incat's profit margins from publicly available information. However, since 1995-96, Incat's accounting methods had resulted in the full recognition of profit in the year of sale, making it easier for customers and competitors to estimate Incat's profit margins.

The Court upheld the AAT's decision, dismissing Incat's application. The Court found that the AAT's approach to determining unreasonable burdens was consistent with the ordinary meaning of the term and the policy objectives of the legislation. The Court also accepted the AAT's factual findings based on the evidence presented. As a result, Incat was required to lodge their financial accounts as determined by the AAT. Additionally, the Court ordered Incat to pay the respondent's costs, including reserved costs.