The first issue
91 The first issue is whether the Tribunal (at [88] of the Reasons) made findings that were not open on the evidence and applied a wrong legal standard, in considering whether the applicant's activities were of a kind "whose outcome cannot be known or determined in advance" within the meaning of s 355-25(1)(a) of the ITAA 1997.
92 The applicant's submissions focus on the final sentence of [88] of the Reasons (see [85] above), in which the Tribunal concluded that the experts were in agreement that the outcome of the work undertaken by A&B Mylec and Sedgman: (a) was predictable based on experience and the current knowledge available about the FCCM; (b) could have been determined in advance; and (c) did not generate any new knowledge. As to (a), the applicant submits that the opening words of s 355-25(1)(a) require consideration of whether the outcome of the activity in question "cannot be known or determined in advance"; the Tribunal wrongly equated the issue of whether an outcome can be known or determined with whether it can be predicted. As to (b), the applicant submits that, as a matter of fact, the experts were not agreed that the outcome of the work referred to at [88] "could have been determined in advance" and it was not open to the Tribunal so to conclude. As to (c), the applicant submits: first, as a matter of fact, the experts were not agreed that the outcome of the work referred to at [88] did not generate any new knowledge and it was not open to the Tribunal so to conclude; secondly, in considering whether the applicant's activities did or did not in fact generate new knowledge the Tribunal applied the wrong legal standard; the question s 355-25(1)(b) asks is whether the activities were conducted for the purpose of generating new knowledge.
93 The applicant's more detailed submissions on this issue can be summarised as follows:
(a) The Tribunal made critical erroneous findings with regard to the evidence relating to the work done by A&B Mylec and Sedgman. In general terms, that work sought to quantify the extent to which FCCM coal was liberated from impurities when crushed to samples of different maximum sizes. It is incorrect, and it was not open to the Tribunal to conclude, either (a) that the experts were agreed that the outcome of the work undertaken by A&B Mylec and Sedgman could have been determined in advance and did not generate any new knowledge; or (b) that that was in fact the case. The Tribunal, which published its decision some 17½ months after the hearing, appears to have reached this erroneous conclusion by simply copying verbatim an assertion that had been made in the Board's closing written submissions (at paragraph 84), which cited only Dr Vince's report, and parts of it that did not, in any event, support what was asserted. It was pointed out in closing address that the Board's written submissions were wrong on this point, but the Tribunal failed to address this. Given the delay and the failure to address the applicant's argument, a reasonable inference or apprehension arises that the Tribunal was "unable to grapple adequately with the issues and, in the end, had become attracted to the decision which was the easiest to make" and that the Tribunal's "failure to deal in a significantly delayed judgment with particular matters on which the [applicant] relied in contradiction of the findings made … resulted from those matters being overlooked": cf Monie v Commonwealth (2005) 63 NSWLR 726 at [43]-[44]. The repetition of the Board's written submissions gives no indication that the applicant's contentions on this issue were given any independent consideration and in this respect the reasons below "do not contain indicia … that they are the product of the active application of an independent and impartial mind, which has absorbed and analysed the competing submissions": cf Li v Attorney General (NSW) (2019) 99 NSWLR 630 at [132].
(b) Moreover and contrary to the Tribunal's conclusion, the Board's expert, Dr Vince, accepted that nobody had previously done the work that A&B Mylec and Sedgman did (Tribunal transcript, day 5, p 288). Dr Vince gave evidence that it is not possible to quantify yield increases (i.e. recovery of coal after liberating ash and other impurities) without actual testing, and that one cannot estimate quantitatively the extent of liberation in the absence of testing.
(c) The applicant's expert, Dr Euston, gave evidence that the outcome of the work by A&B Mylec was experimental and that while they would have anticipated a less than favourable outcome from their work with the FCCM, the overall outcome of that work, which could have been predicted, could not have been accurately known in advance.
(d) The experts were not, therefore, in agreement that the outcome of the work undertaken by A&B Mylec and Sedgman could have been known or determined in advance. Further, the evidence of Mr Vorias was that: "The outcomes of the work undertaken by A&B Mylec and Sedgman were not known or able to be known in advance."
(e) The statutory requirement in s 355-25(1) that the outcome of work cannot be "known or determined" in advance requires a level of certainty that goes beyond whether or not an outcome can be predicted.
(f) The Tribunal therefore applied a wrong legal test in determining the issue with reference to whether the results were "predictable". It was also wrong, and irrelevant, to determine the issue adversely to the applicant by reference to whether or not the work in fact generated new knowledge: the statutory requirement is that the purpose of the activities is the generation of new knowledge. Whether new knowledge is generated or not is neither here nor there. The result might have been different if the Tribunal had not erred by making findings not open on the evidence and applying criteria other than those mandated by the statute: cf Comptroller-General of Customs v Pharm-A-Care Laboratories Pty Ltd (2020) 375 ALR 98 at [40].
94 During the hearing of the appeal, senior counsel for the applicant was asked by the Court whether the contention that certain findings were "not open" on the evidence was in substance a 'no evidence' ground. Initially, this question was answered affirmatively. However, subsequently, senior counsel said that the applicant did contend that the relevant findings were "not open". The difficulty with the latter proposition is that it is not self-evident that such a contention raises a question of law. If and to the extent that the applicant submits that the relevant findings were wrong, it is established that there is no error of law simply by making a wrong finding of fact: see Minister for Immigration and Multicultural Affairs v Al-Miahi (2001) 65 ALD 141 (Al-Miahi) at [34]. On the other hand, it is established that:
(a) whether a fact is supported by any evidence is a question of law (Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321 (Bond) at 355-356; Kostas v HIA Insurance Services Pty Ltd (2010) 241 CLR 390 at [91]); and
(b) whether a particular inference can be drawn from facts found is a question of law; that is because, before an inference may be drawn, there is the preliminary question whether the evidence reasonably admits of different conclusions (Bond at 355-356; Al-Miahi at [34]).
95 To the extent that the applicant seeks to invoke either or both of these propositions (as indicated in oral submissions at T13-T14), we accept that the submissions give rise to a question of law. However, as discussed later in these reasons, some of the applicant's submissions amount to no more than a submission that the Tribunal's findings were incorrect; such a submission does not give rise to a question of law.
96 For the reasons that follow, we do not accept the applicant's contentions in relation to the first issue.
97 Insofar as the applicant challenges the Tribunal's finding that the experts were agreed that the outcome of the work undertaken by A&B Mylec and Sedgman "could have been determined in advance and did not generate any new knowledge", there was evidence to support this finding, and the evidence did reasonably admit of this inference.
98 Dr Vince's evidence, as set out at [43]-[58] above, was to the effect that, while the precise yield values could not have been known in advance, the outcome of the work could have been known and determined in advance, and the work did not generate new knowledge (in the sense of a major departure from the current level of understanding or a discovery of something new). For example, in relation to Activity 1.1, Dr Vince opined that the outcome of the activity "could in general terms have been … determined by appropriately qualified personnel in advance" (see [46] above). In relation to Activity 1.2, Dr Vince's view was that "an appropriately qualified professional would be expected to know that the highly banded nature of the coal measures would cause poor yields, but that the exact value of the expected yield would have to be determined by analysing and measuring samples of the coal" (see [49] above). Further, Dr Vince expressed the opinion in relation to the registered activities generally that "the outcome could have been known in advance" and that "much data has been generated but there are no clear indicators that cite that new knowledge was generated from the activities or that the data has been converted to knowledge" (see [57]-[58] above).
99 Dr Euston's evidence also provided support for the Tribunal's findings. In particular, in regard to the A&B Mylec and Sedgman work, he stated (see [61] above):
(a) A&B Mylec "would have anticipated a less than favourable outcome from their work with the FCCM. The quality of these coals is well documented, and I am confident that A&BMylec would have been aware of this work".
(b) The work carried out by A&B Mylec and subsequently confirmed by Sedgman "closely followed the standard and accepted methods for coal testing and analysis. The work to that stage had focused on determining the size and quality of the FCCM coal deposit. This work was aimed at determining how the coal is to be mined and the expected variability in quality".
(c) A&B Mylec "would more than likely have been aware of the likely outcome of their work. As such the results could have been predicted, but not accurately known, in advance".
100 Thus, both Dr Vince and Dr Euston provided evidence that supported the Tribunal's findings that the outcome of the work undertaken by A&B Mylec and Sedgman "could have been determined in advance and did not generate any new knowledge". In the case of Dr Vince, he provided evidence in these terms. In the case of Dr Euston, the evidence referred to in [99] above, in the context of the evidence generally, supported the findings.
101 A theme running through the applicant's submissions is that the precise data produced by the tests conducted by A&B Mylec could not have been known in advance. The difficulty with this line of argument is that it fails to read s 355-25(1) in its entirety. The section refers to experimental activities "whose outcome cannot be known or determined in advance on the basis of current knowledge, information and experience …". During the hearing of the appeal, senior counsel for the Board provided an analogy of a person having a routine blood test for their cholesterol level. In that analogy, merely because the precise data or results cannot be known in advance does not mean that the test constitutes an experimental activity whose outcome cannot be known or determined in advance as referred to in the section. That analogy is useful in exposing the difficulty with the applicant's approach. In the present case, while the precise data produced by the work undertaken by A&B Mylec could not have been known in advance, it does not necessarily follow that the work constituted an activity whose outcome could not have been known or determined in advance on the basis of current knowledge, information and experience.
102 Insofar as the applicant submits that the Tribunal appears to have reached its conclusion by "simply copying verbatim an assertion that had been made in the respondent's closing written submissions (at para [84])", we do not accept this submission in relation to the last sentence of [88] of the Reasons. The Tribunal's finding in that sentence is not in precisely the same terms as paragraph 84 of the Board's closing written submissions. That paragraph included: "Both Dr Vince and Dr Euston agree that the outcome of the work could have been determined in advance [fn 44]. It was not conducted for the substantial purpose of generating new knowledge." Further, the Tribunal had earlier set out, in some detail, the relevant portions of the evidence of Dr Vince and Dr Euston that supported its findings. In the circumstances, it was not necessary for the Tribunal to refer in its Reasons to the applicant's submission in closing address on this point, and the delay in delivering a decision does not provide a sufficient basis to infer that the Tribunal failed to have regard to that submission.
103 Insofar as the applicant submits that "contrary to the AAT's conclusion, the respondent's expert, Dr Vince, accepted that nobody had previously done the work that A&B Mylec and Sedgman did", citing Tribunal transcript, day 5, p 288, it is not apparent that the submission raises a question of law as distinct from a submission that the factual finding was wrong. In any event, the submission does not convey the full substance of Dr Vince's evidence in the passage cited. The full passage of the cross-examination of Dr Vince reads:
[Counsel:] That work, nobody else had done that work in relation to the Fort Cooper coal until MILEC, Sedgman, Virginia Tech, have they?
[Dr Vince:] That particular work, no, but the knowledge about its performance in those sort of processes was well known, and it doesn't - - -
104 Insofar as the applicant submits that Dr Vince gave evidence that it is not possible to quantify yield increases (i.e. recovery of coal after liberating ash and other impurities) without actual testing, and that one cannot estimate quantitatively the extent of liberation in the absence of testing, it is not apparent that the submission raises a question of law. In any event, the submission again fails to appreciate the distinction between the outcome, on the one hand, and yield values or data or results, on the other.
105 Insofar as the applicant submits that Dr Euston gave evidence that the overall outcome of the work could not have been accurately known in advance, it is not apparent that this raises a question of law. In any event, this evidence needs to be read in context. When so read, it is capable of referring to the data or results as distinct from the outcome of the activities. Dr Euston also gave evidence that A&B Mylec "would have anticipated a less than favourable outcome from their work with the FCCM". Dr Euston also stated that the "quality of these coals is well documented" and he was "confident that A&B Mylec would have been aware of this work" (see [61] above).
106 Insofar as the applicant relies on the evidence of Mr Vorias to challenge the Tribunal's finding in the last sentence of [88], this does not appear to raise a question of law.
107 Insofar as the applicant submits that the Tribunal applied the wrong test by asking whether the outcome was predictable, we do not accept that submission. The Tribunal's statement in the last sentence of [88] that the experts agreed that the outcome was "predictable" merely reflected the evidence that the experts had given. The Tribunal went on to refer to the outcome being one that "could have been determined in advance", reflecting the statutory test. For the reasons given above, there was evidence to support that finding.
108 Insofar as the applicant submits that it was incorrect and irrelevant to determine whether the work in fact generated new knowledge, because the question is whether the experimental activities are conducted for the purpose of generating new knowledge, this takes the Tribunal's finding out of context. The Tribunal's finding at [88] reflected the evidence of the experts (discussed above). The Tribunal dealt elsewhere (at [90]) with the question whether the activities were conducted for the purpose of generating new knowledge.
109 For these reasons, the applicant's contentions in relation to the first issue are not made out.