R & D Holdings Pty Limited v Deputy Commissioner of Taxation

[2007] HCATrans 796

[2007] HCATrans 796

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry  
  Sydney  No S378 of 2007
  No S379 of 2007

B e t w e e n -

R & D HOLDINGS PTY LIMITED

Applicant

and

DEPUTY COMMISSIONER OF TAXATION

Respondent

Office of the Registry
  Sydney  No S382 of 2007

B e t w e e n -

DEPUTY COMMISSIONER OF TAXATION

Applicant

and

R & D HOLDINGS PTY LIMITED

Respondent

Applications for special leave to appeal

GLEESON CJ
GUMMOW J

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON FRIDAY, 14 DECEMBER 2007, AT 9.31 AM

Copyright in the High Court of Australia

__________________

MR D. F. JACKSON, QC:   If the Court pleases, I appear with my learned friend, MR D.K.L RAPHAEL, for R & D Holdings.  It is the applicant, your Honours, in S378 and 379, the respondent in the other matter.  (instructed by Sagacious Legal Pty Limited)

MR A.H. SLATER, QC:   If the Court pleases, I appear with my learned friends, MR N.J. WILLIAMS, SC and MR S.J. McMILLAN, for the Commissioner in both those matters.  (instructed by Australian Government Solicitor)

GLEESON CJ:   Yes, Mr Jackson.

MR JACKSON:   Your Honours, the Court will have seen that we are the applicant in matters relating to the years ended 30 June 1998 and 30 June 1999.  The Commissioner is the applicant in respect of the year prior to those two.  Your Honours, may I just say something very briefly about the basic facts before moving on.  In each of the three years we claimed to deduct the net losses of the subsidiary which owned a substantial office building.  There was a loss in each year because the interest bill on the money borrowed to build the building or, perhaps more accurately, to refinance the money borrowed to build to the building, was too great and exceeded the revenue.

Your Honours will see that summarised conveniently by Justice Finn at first instance at page 34, paragraphs 104 to 106.  Your Honours, at relevant times the lender to us was acting as mortgagee and had taken possession of the premises.  As the parent company of that subsidiary we were entitled to deduct the subsidiary’s loss each year subject to some matters, one of them, the relevant matter, being that the subsidiary meeting a same business test which your Honours can see referred to at page 45 paragraph 146.

GLEESON CJ:   As it was ultimately held, the company’s entitlement to deduct the interest was under the first limb of section 51(1) as it was held.

MR JACKSON:   That was what was held, your Honour, yes.  If I could just take your Honours to the relevant provision your Honours will see it set out at page 46, paragraph 149 and it is says:

The company satisfies the same business test if throughout the same business test period it carries on the same business as it carried on immediately before the test time.

Your Honours, the view taken by the primary judge and endorsed quite briefly by the Full Court was that, although the subsidiary company called shortly Chapel Road was acting in the same way at all relevant times, it was not carrying on any business, rather, the view seems to have been taken that because the mortgagee was in possession and the mortgagee’s agents acting in relation to the letting of the building, the only business was one being carried on by the mortgagee in possession. 

Your Honours, the core parts of the reasoning can be seen in the primary judge at page 52, paragraphs 173 to 175.  Your Honours, I will revert in a moment, if I may, to the question whether this is just a question of fact is observed at the start of paragraph 173.  May I come to that in a moment.  So your Honours will see that it is said there in those paragraphs that it was a question of fact whether it was carrying on a business let alone “the same business”.  The essence of the reasoning appears to be in the next two short sentences, “it did not carry on a business at all”, the mortgagee did.

GLEESON CJ:   They do not seem to be saying, do they, that there could never be a situation where a mortgagee is in possession where the mortgager is not still carrying on a business?

MR JACKSON:   No, your Honour.  I accept what your Honour puts to me in the sense they do not say that in terms, but if you have a situation where you have a single business company, in effect, that would seem to be the conclusion that would follow from it because the provisions, like for the appointment of mortgagees in possession, give the mortgagee the right to carry on the business. 

The relevant parts of the Full Court’s reasons, your Honours, are at page 99 first in paragraphs 62 and 63 and your Honours will see what is said there in those two paragraphs by Justices Heerey and Edmonds.  Then at page 115 in the paragraph 108 in the reasons for judgment of Justice Stone your Honours will see about the middle of that paragraph her Honour refers to the fact that “from the time Mercantile Mutual went into possession” it, rather than Chapel Road, was carrying on the business. 

GLEESON CJ:   That was back in about 1990, was it not?

MR JACKSON:   Some years ago.  Yes, your Honour, about 1990.  The exact date I just do not quite recall, but it was some years before the three years in question.  Your Honours, we or Chapel Road had tried to bring the matter to an end with the mortgagee but it was not able to. 

GLEESON CJ:   But the view seems to have been taken to refer to a passage that occurred in this Court many years ago that at the relevant time not only was Chapel Road on the ropes, it was on the canvas.

MR JACKSON:   Yes, your Honour, and one also has had ships being torpedoed by submarines and other graphic images.  Your Honours, could I just say that, in our submission, if I could refer to page 129 of the application book, as we seek to say in paragraphs 15 to 18 of our summary of argument, our submission is that the courts below have applied a test which is incorrect.  Certainly the mortgagee may have been carrying on a business.  Certainly the mortgagee in doing so was performing many, if not most, of the management functions which the company Chapel Road had performed before the mortgagee went into possession, but it did not follow at all, your Honours, with respect that Chapel Road, which was after all a company, was not carrying on any business because ‑ ‑ ‑

GUMMOW J:   What business was it carrying on?

MR JACKSON:   Your Honour, it was carrying on the business of operating the premises.  It was doing so by, in effect, a company which was its statutory agent because of statute.  When I say “agent”, I use the term a little loosely, but the mortgagee in possession was carrying on business.  The mortgagee in possession was carrying on a business which was in relevant respects attributable for Chapel Road.  It was carrying on the business which Chapel Road could carry on, but our business – when I say “ours” I mean Chapel Road – was being carried on by the mortgagee in possession.  The actual functions, of course, were much more limited than could be carried on if there were no mortgagee in possession.  That does not mean that the business came to an end.

It was not just a case, your Honours, of sitting there as an investor who might own an investment property but perform nothing more than that, private investor, an individual.  The point we would seek to make, your Honours, is that whilst our business might have been, to use the words we use in paragraph 16, very much circumscribed, at the same time it was a business and it was the same business that was carried on throughout the relevant period. 

Your Honours, our learned friends contend, in effect, that the question whether a person is carrying on a business is a question of fact.  So too it is, ultimately, but, in our submission, the judges must direct themselves properly on the approach to its resolution.  Could I refer your Honours to a background matter.  It is set out in our reply at page 143 in paragraphs 1 and 2.  If I could just say, your Honours, I have said, I think, what is in paragraph 1 already but the point we make in paragraph 2 is one that one does need to bear in mind and that is that the transfer of loss provisions arise where there is a loss otherwise they become irrelevant and, in our submission, a business may be a losing business, but still a business. 

Your Honours, that is the substantive aspect of the first of our applications, but there is a second aspect too, and that concerns the question of penalties.  A 50 per cent penalty was held to be applicable and the two potentially relevant provisions appear at page 53 at paragraph 179.  Your Honours will see section 226H refers to, in paragraph (b), to “recklessness of the taxpayer” giving rise to a 50 per cent penalty.  Section 226K, set out immediately below it, refers to the case being, in paragraph (d) “not reasonably arguable” to put it shortly. 

Your Honours, we were held to be reckless and the 50 per cent penalty applied.  That was because what was said by Justice Finn at page 55 in paragraphs 183 through to 187.  Your Honours will see, if I could put it shortly, that it is a case, your Honours will see from paragraph 184, where we had consulted with an accountant in relation to the question whether the same business test would be satisfied and the accountant expressed that view.  The judge went on to say, however, that there should have been more evidence.  You will see that at paragraph 187. 

What the judge does not, with respect, refer to is that the issue had not been raised prior to the hearing before him.  Your Honours will see that at page 100 in the Full Court’s reasons at paragraph 69.   So that, your Honours, it is rather a harsh judgment, in our submission, to hold that there has been recklessness in circumstances where there has been consultation with an accountant about the matter and where the issue is one which, your Honours will see, ultimately brought about the decision, being one raised by the judge at the first hearing.

GLEESON CJ:   What would be the special leave point in relation to this?

MR JACKSON:   The special leave point, your Honours, is this, that the view taken by the judge as to recklessness was one that could not be justified on the evidence and whilst it is difficult to say that the test that the

judge referred to was incorrect, it is a case where the interests of justice would merit the grant of special leave on the application of that test to the particular circumstances. 

May I say just one other thing, your Honours, and that is, if the Court is otherwise of the view that special leave should be granted on our applications as to the substantive matter, then we would submit the penalty issue should go also ‑ ‑ ‑

GLEESON CJ:   Yes, I think ‑ ‑ ‑

MR JACKSON:   Yes, your Honour.  Thank you.  Your Honours, that is what I wanted to say in relation to our application.  I am happy to deal with my learned friend’s application now or following.

GLEESON CJ:   It would probably be better to deal with it after his submissions.  Thank you, Mr Jackson.  Yes, Mr Slater.

MR SLATER:   Thank you, your Honour.  Are your Honours more assisted by my dealing with the 80E question or ‑ ‑ ‑

GLEESON CJ:   Whatever suits you.

MR SLATER:   Your Honour, so far as our friend’s application is concerned, our respectful submission is that neither of the matters that our friends seek to agitate raise a special leave point.  The essence of the decisions below was that there was no course of conduct amounting to a business and it is to be remembered that the test enacted in section 165-210 is not whether the taxpayer owns a business, but whether it is carrying on the same business for that relevant period.  In this case, in our submission, the courts below were entirely justified in concluding that there was no such course of activity as a matter to the conduct of the business.

GLEESON CJ:   These decisions would not stand as authority for the proposition, would they, that whenever there is a mortgagee in possession, that denies the possibility that the mortgagor is carrying on a business?

MR SLATER:   No, your Honour.  At page 57 of the appeal book – and this perhaps is more directed to the penalty issue than to the carrying on business issue – his Honour points out that there were two questions:

(i) whether Chapel Road was, in the circumstances, “carrying on a business” . . .  (ii) what was the significance of MMLIC being in possession –

and the decision that was reached both at first instance and in the Full Court turned on the absence of any “course of conduct”, picking up the words that had been used in Murry’s Case.  In our submission, those are purely questions of fact, the findings of fact which were made by the trial judge, endorsed by the Full Court and, we would respectfully submit, do not raise a special leave point. 

As to the penalty point, the argument principally is put on two bases, as we understand it; one being that the trial judge and the Full Court had concentrated on the significance of the mortgagee being in possession but, although the significance of the mortgagee being in possession was raised by the trial judge and not by the parties, what the debate at first instance concerning the same business test concerned was whether there was a  sufficient course of conduct, that is, whether there was the carrying on of a business and that issue, in our submission, is just an issue which goes to the activities of the taxpayer. 

His Honour found, in the passage that I drew your Honours’ attention to a moment ago on page 57 that there were two matters which the taxpayers had failed to avert to, the first of them being the existence of any course of conduct, the satisfaction of the 80E test and his Honour found that to fail to address that question at all comprised recklessness.  Whether that finding be right or wrong, it is a finding on the facts and we would respectfully submit that it is not a special leave point. 

As to the second basis from which the matter is put that this raises some issue about vicarious liability, we simply draw your Honours’ attention to the circumstance that both the 1936 Act, which has not been in operation since the end of the 2000 year, and the current Act, the Taxation Administration Act, expressly make the taxpayer responsible for the recklessness of its tax agent.  This does not seem to be a special leave point either, in our respectful submission.

Your Honours, there is nothing more that I can really say about that application beyond making the point, as we did in our written submissions, that if your Honours were minded to grant our friend’s application, we would seek to contend that there was no loss to be transferred.  Might I then turn to our application, which is addressed to section 51 of the 1936 Act but is equally ‑ ‑ ‑

GLEESON CJ:   And whether this was incurred in gaining or producing assessable income.

MR SLATER:   Yes.  Your Honours, at the very heart of the system of assessing income tax in Australia there are two primary integers in the calculation of taxable income.  They are assessable income and allowable deductions and the definitions of those are to be found in terms substantially similar in both Acts; as to “income”, in sections 25 and 6-5 of the 1936 and 1997 Acts respectively and as to “deductions”, in section 51 and section 8-1 of those two Acts again respectively.  Your Honours, those provisions – and I am concerned only with the deduction provision – are expressed in both cases in clear and simple language.  Section 51, which is the provision in contest in the 1997 year, provides that:

All losses and outgoings to the extent to which they are incurred in gaining or producing assessable income . . . shall be allowable deductions –

I have left out some words which are not material to the present contest.  We respectfully submit that the judgments below have overlooked the clarity of this language in favour of interpretation and application of the language used in earlier judgments, including judgments in that court.  Your Honours, it is axomatic that income tax is a statutory impost and that the text of the statute is of first importance.

Justice Hill, in the passage which is referred by Justice Finn in his judgment, made the point some years ago that there is a danger in substituting for the words of section 51(1) language which does not appear in it and we would respectfully submit that the courts at both first instance and on appeal in this case have succumbed to that danger.  At both levels, while the court recited the text of the statute, their Honours went almost immediately to the language of earlier decisions and, in doing so ‑ ‑ ‑

GLEESON CJ:   Was not the proposition for which you contend that, if you borrow money for the purpose of your business in year one and by year three there is a mortgagee in the possession of the business, the interest is still accruing and being charged against you?  You have not in year three incurred an outgoing in gaining or producing assessable income?

MR SLATER:   We do not put it in quite that way, your Honour.  We start with the text of the statute, if I may respectfully do so.  We say, the first question is, what is the outgoing?  The outgoing is the interest for the period in question.  What makes that interest deductible?  The outgoing itself, supposing that there is an outgoing and we contest that there was an outgoing here, there was only an accrual.  But if there is an outgoing, what is the income produced by it?  Nothing.  No income is produced directly by the outgoing.

GLEESON CJ:   Did we not deal with this in Steele?

MR SLATER:   Yes, you did, your Honour, and that is where I was about to take your Honours.  In Steele’s Case the Court said that what makes interest deductible is that it is the cost of retaining for the time being the use of the money that was borrowed.  In this case – and this is an egregious case – the accruing liability for interest on a compounding basis in the years in question did not secure for the taxpayer the continued use of money.  The money had become repayable within two weeks of the borrowing from Mercantile Mutual because the taxpayer had defaulted almost immediately.

So that the accruing obligation to interest was not an obligation which was incurred in order to have the benefit of the right to continued use of the money, it was just a contractual obligation.  That puts it in a different category from, for example, a mortgagor who defaults to the point where the mortgagee takes possession but nonetheless continues to have the useful product of retention of the monies.  In this case, there was no prospect at any point that the mortgagor would secure any advantage other than a diminution, perhaps, in the extent to which its liabilities were accelerating during the period.  So we say that primarily the ‑ ‑ ‑

GLEESON CJ:   It secured a reduction of its liability to the mortgagee.

MR SLATER:   Yes.  It did, in a sense, your Honour, but in the sense that the liability accelerated at a rate less than it might otherwise have done, but in every year in question, the extent of the indebtedness of the mortgagor increased.  So that for the period to which each of these accruing interest obligations related, the mortgagor was not advantaged but disadvantaged by the continuation of the indebtedness.

GUMMOW J:   What do you say about Mr Jackson’s submission at page 186, paragraph 3?

MR SLATER:   We do not dispute that the original borrowing from a State mortgage was made for the purpose of earning assessable income.  We do not dispute that the borrowing from Mercantile Mutual was undertaken to replace that borrowing, but it is not the acquisition of the capital sum or the promise to repay the capital sum, that is, the amount for which the deduction is claimed here.  This is not a once and for all payment.  That is an inappropriate expression.  This is not a single payment, as was the case, for example, in Placer Pacific. 

This is a periodic outgoing and in relation to each period one asks the question, during that period is the taxpayer obtaining an advantage of an income character by continuing to incur the liability?  Our respectful submission is that it was not.  It was simply bound by a contract from which, in practical terms, it could not escape but the accruing obligation, undischarged, fated never to be discharged, was not, in our submission, one incurred in gaining assessable income because the only way it could be incurred in gaining assessable income was for it to be the price of an advantage comprising the retention of the borrowed funds.  We would respectfully submit that that was not an advantage which was obtained in the context of this case. 

Obviously there are other circumstances where there would be other answers, but the result in this case is so extraordinary that it must lead to the conclusion that there is something odd about the reasoning which results in it.

GLEESON CJ:   Sorry, why is the result extraordinary?

MR SLATER:   The result is extraordinary in this sense, your Honour.  The initial borrowing was about $40 million.  The borrowing from Mercantile Mutual was slightly more.  By the end of the years of income in question, the total interest expense was something in excess of $90 million.  None of that had been paid.  The total debt was approximately $100 million.  Again, none of it had been paid.  The company continues in existence.  If the reasoning of the courts below is correct, then notwithstanding that the property may have been sold, the debt has not been discharged.  It continues in existence.  It will continue indefinitely.  If the reasoning below is correct, then indefinitely the accruing interest expense on the debt which cannot and will not be repaid continues to be deductible and continues to be amenable to transfer.

We make the point in our submissions that the loss transfer provisions terminated some years ago when the consolidation regime came in, but a consolidated group is able to take advantage of the deductions of a subsidiary member of the group, so the question is not moot.  We would respectfully submit that such a result is not one which would properly be regarded as a correct outflow of the operation of the words of the section which concern losses and outgoings to the extent to which they are incurred in gaining income. 

So on that basis, your Honours, we respectfully submit that the decision below errs in principle.  We say that it errs because their Honours concentrated too much on tests which had been used in previous decisions about the use to which the capital was applied without first considering whether a periodic outgoing of this nature is a loss or outgoing incurred in gaining income. 

We have also submitted in our written submissions – and I will not take your Honours to it in detail – that the courts have said from to time, perhaps most recently at length in Coles Myer and repeated in CityLink, that the analysis of the existence of liabilities is to be undertaken on the jurisprudential basis.  We would accept that while the existence of a liability is a matter to be determined on the jurisprudential basis.  Whether the

liability qualifies as a deductible loss or outgoing should be determined having regard to what this Court in Fletcher’s Case described as a practical weighing of all the factors.  Their Honours in this case were led astray by concentrating too much on jurisprudential reasoning and paying insufficient attention to the practical reality that this company was accruing liabilities which were not yielding any income to it by reason of any benefit arising from the accrual of the liabilities.

In Coles Myer the Court observed that neither party had contested the appropriateness of the jurisprudential analysis and that that was not the occasion to address it.  Insofar as the jurisprudential analysis is taken beyond the question whether a liability exists and into the question whether the liability qualifies as one deductible under section 51, we would respectfully submit that this is not an occasion on which to review the matter.  If your Honours please.

GLEESON CJ:   Thank you, Mr Slater.  Yes, Mr Jackson.

MR JACKSON:   Your Honours, may I deal first with my learned friend’s submissions about our application and say these things, your Honours.  It is submitted that there has to be a course of conduct in carrying on a business but, of course, that does depend very much on what the nature of the business is.  One can carry on a business, for example, by holding shares and thus not much is involved in that, or by leasing out a building. 

If your Honours look, for example, at page 187 of the application book which is the actual document – and I will come to it in a little more detail in a moment – our summary of argument in response to the Commissioner’s application.  The passage quoted at paragraph 6 on page 187 really sets out, in effect, what was happening.  You have Mercantile Mutual acting in its own interests, not having:

an absolute right to deal with the income . . . obliged to apply any income from the property in a particular way, namely by discharging liabilities, including Chapels Road’s liability for interest.  If any of the income was left over, it belonged to Chapel Road. 

Your Honours, in relation to that the position was that if one is looking at the same business test, all you had was a situation where the company, Chapel Road, owned the building, was leasing out the building.  Its mortgagee then took over those tasks and at all relevant times there is nothing to suggest that it ceased to carry on a business.  As we said before, maybe it was circumscribed, but it was certainly carrying on a business and the same business.

Your Honours, our learned friends’ argument says, No, no, this only applies to a limited range of facts, but in reality the views taken by the Full Court and by the primary judge are ones which would necessarily, we would submit, be applied to very many cases where a mortgagee takes possession.

Your Honours, could I come then to our learned friends’ argument and the point we would seek to make about it is this.  If one goes to that same document, your Honours, at page 186, if we refer to paragraph 5, the issue our learned friend seeks to raise derives no support at all from the reasons for judgment in the courts below.  Your Honours, if I could refer to one of the references we have given there, what was said by Justice Finn, at page 44, paragraph 142.  Your Honours will see that his Honour said, quite rightly, that:

The circumstances of this case, doubtless, provide an extreme example of inability to discharge a liability.  But this does not assist the Deputy Commissioner.

Your Honours, if I could refer to the next sentence:

The articulation of the point at which an otherwise allowable deduction of a loss is to be transformed . . . is obviously beset with no little difficulty.

In the end it is a matter that, if it is to be changed, should go to the legislature.  It is a matter for the Parliament, not for the court.  We would submit, that view is a view which is correct and the views adopted by the Full Court are views which have been applied for quite some time.  Your Honours, one of the difficulties that arises with our learned friend’s submission is endeavouring to identify what is the criterion that is to be applied.  At what point is it said that the amount is not a loss which is deductible?  When does the business cease to be carried on?

GLEESON CJ:   No.  On his point it is a question of when the loss was incurred in gaining and producing assessable income.

MR JACKSON:   I am sorry, your Honour.  I was putting it a little inexactly, but that does itself give rise to the question of what is involved in that.  Does it come at a point where it seems just very difficult to maintain or able to pay out the loan?  What happens if the value of the land increases dramatically?  Things of that kind.  It is a very difficult criterion, your Honour, to identify.  It is very difficult to identify what test our learned friends would seek to impose and, if there is to be one, it is better for the Parliament to do it.

Your Honours, may I just say this.  Could I refer in that regard to paragraph 7 of our submission at page 187.  It is extraordinary, our learned friends’ arguments say, but, your Honours, we would submit that if that is right, then the result is that the case does involve very particular facts.  One reason why is because what you see in the same document at paragraph 2(c) at the bottom of page 185, Chapel Road tried to extract itself but could not.”  Your Honours will also see, in our submission, that one of the reasons why the amounts are high is because the interest rates were then very high indeed.  Your Honours, those are our submissions.

GLEESON CJ:   Mr Jackson.  I think you have a right of reply, Mr Slater, on your application.

MR SLATER:   Briefly, your Honours.  Your Honours, as to the proposition that this is a matter for the legislature if there is to be a change in law, in our respectful submission, it is not so much a matter of a change in law as a review and correction of the law.  We would submit that the Federal Court has, not only in this case but in the line of cases that lead up to it, gone astray and that it is the function of this Court to correct that.  That is not a change in the law.  That is merely the role of the ultimate appellate court. 

As to the idea that it is better that the legislature undertake the task, ultimately, of course, income tax is a matter of statute, but trying to get the legislature to enunciate the basis upon which deductions are available in particular circumstances usually leads to grief because one winds up with provisions which are unduly rigid.  One can see the difficulties in the course of legislation which proceeded from about 1978 to the late 1980s in attempts to deal with tax avoidance.  There are increasingly minute provisions dealing with the circumstances of different outgoings, payments nominated as being to research facilities or for agricultural projects.

Ultimately, what the courts did was to say, put all that side, the question really is one of whether the outgoing is incurred in gaining income, and that is the approach which we would submit should be taken in this matter.  It is a matter for the Court to elucidate and apply in the particular cases but in the line of authority which culminated in the decision below, the Federal Court, in our submission, has gone astray.

Finally, your Honours, my friend says that we do not enunciate a clear test or that the identification of a point at which amounts cease to be incurred in gaining or producing assessable income is not the subject of any clearly articulated dividing line in our submissions.  Your Honours, that is not a requirement.  It is not one which the courts or the legislature have ever imposed in discerning whether legislation applies to one sets of fact or another. 

If I can give two examples.  One is the question of whether a company is engaged in insolvent trading under the corporations legislation.  Neither the courts nor businesses have ever had any real difficulty in determining whether a particular business is engaged in insolvent trading.  It is not something which causes impracticability or impossibility of managing affairs under corporations law.

A second example closer to the income tax context is determining when a company is carrying on business or what amounts to the carrying on of a business.  The issue is one which involves gradations, but it has never been a matter of impossibility to determine what the outcome is.  Obviously there are shades of grey.  There is a point at which the Court has to decide the matter one way or the other, but it is not something which requires legislative intervention to cure. 

Your Honours, in our submission, the courts below have gone astray in this case and it is an area of sufficient importance and the error is of sufficient magnitude to warrant special leave.  If your Honours please.

GLEESON CJ:   As for the matter of penalties, we think that the case does not raise an issue suitable to a grant of special leave to appeal and we are not persuaded that the interests of justice require it.  As to the remaining issues in both applications, we think that there are insufficient prospects of success of an appeal to warrant a grant of special leave and each application is dismissed with costs.

AT 10.11 AM THE MATTER WAS CONCLUDED