Haritos v Commissioner of Taxation

1. The application for leave to appeal be granted.
2. The appeal be allowed.
3. The orders of the Court made on 20 February 2014 be set aside and in lieu thereof order that: (a) the decision of the Administrative Appeals Tribunal dated 1 March 2013 be set aside; and (b) the matter be remitted to the Administrative Appeals Tribunal to be heard and determined according to law and the reasons herein.
4. Unless a party notifies the Court in writing within 14 days of today that an order as to costs has been agreed between them, the parties are to file and serve submissions as to costs (limited to 3 pages) by 4.00 pm on 31 July 2015. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY GENERAL DIVISION VID 144 of 2014

JUDGES: ALLSOP CJ, KENNY, BESANKO, ROBERTSON AND MORTIMER JJ DATE: 30 June 2015 PLACE: MELBOURNE

Introduction 1 Mr George Haritos and Mr Alex Kyritsis (applicants) bring this application for leave to appeal under s 24(1A) of the Federal Court of Australia Act 1976 (Cth) (FCA Act) from the judgment and orders of a judge of this Court made on 20 February 2014 dismissing the proceeding as incompetent for failing to disclose a question of law: Haritos v Commissioner of Taxation [2014] FCA 96; 141 ALD 369; 62 AAR 467. The proceeding was a purported appeal from the Administrative Appeals Tribunal (Tribunal) under s 44 of the Administrative Appeals Tribunal Act 1975 (Cth) (AAT Act) in relation to income tax assessments under ss 167(b), 167(c) and 170(1) of the Income Tax Assessment Act 1936 (Cth) (ITAA 1936) for the years of income ended 30 June 2005 to 30 June 2009. The Commissioner of Taxation (respondent) filed a draft notice of contention which was amended, by leave, after the hearing before us. 2 The relevant provisions of the AAT Act are as follows: 44 Appeals to Federal Court of Australia from decisions of the Tribunal Appeal on question of law (1) A party to a proceeding before the Tribunal may appeal to the Federal Court of Australia, on a question of law, from any decision of the Tribunal in that proceeding. Appeal about standing (2) Where a person has applied to the Tribunal for a review of a decision, or has applied to be made a party to a proceeding before the Tribunal for a review of a decision, and the Tribunal decides that the interests of the person are not affected by the decision, the person may appeal to the Federal Court of Australia from the decision of the Tribunal. When and how appeal instituted (2A) An appeal by a person under subsection (1) or (2) shall be instituted: (a) not later than the twenty-eighth day after the day on which a document setting out the terms of the decision of the Tribunal is given to the person or within such further time as the Federal Court of Australia (whether before or after the expiration of that day) allows; and (b) in such manner as is prescribed by rules of court made under the Federal Court of Australia Act 1976. … Jurisdiction (3) The Federal Court of Australia has jurisdiction to hear and determine appeals instituted in that Court in accordance with subsections (1) and (2) and that jurisdiction: (a) may be exercised by that Court constituted as a Full Court; (b) shall be so exercised if: (i) the Tribunal's decision was given by the Tribunal constituted by a member who was, or by members at least one of whom was, a presidential member; and (ii) after consulting the President, the Chief Justice of that Court considers that it is appropriate for the appeal from the decision to be heard and determined by that Court constituted as a Full Court; and (c) shall be so exercised if the Tribunal's decision was given by the Tribunal constituted by a member who was, or by members at least one of whom was, a Judge. Powers of Federal Court (4) The Federal Court of Australia shall hear and determine the appeal and may make such order as it thinks appropriate by reason of its decision. (5) Without limiting by implication the generality of subsection (4), the orders that may be made by the Federal Court of Australia on an appeal include an order affirming or setting aside the decision of the Tribunal and an order remitting the case to be heard and decided again, either with or without the hearing of further evidence, by the Tribunal in accordance with the directions of the Court. Constitution of Tribunal if Federal Court remits case etc. … Federal Court may make findings of fact (7) If a party to a proceeding before the Tribunal appeals to the Federal Court of Australia under subsection (1), the Court may make findings of fact if: (a) the findings of fact are not inconsistent with findings of fact made by the Tribunal (other than findings made by the Tribunal as the result of an error of law); and (b) it appears to the Court that it is convenient for the Court to make the findings of fact, having regard to: (i) the extent (if any) to which it is necessary for facts to be found; and (ii) the means by which those facts might be established; and (iii) the expeditious and efficient resolution of the whole of the matter to which the proceeding before the Tribunal relates; and (iv) the relative expense to the parties of the Court, rather than the Tribunal, making the findings of fact; and (v) the relative delay to the parties of the Court, rather than the Tribunal, making the findings of fact; and (vi) whether any of the parties considers that it is appropriate for the Court, rather than the Tribunal, to make the findings of fact; and (vii) such other matters (if any) as the Court considers relevant. (8) For the purposes of making findings of fact under subsection (7), the Federal Court of Australia may: (a) have regard to the evidence given in the proceeding before the Tribunal; and (b) receive further evidence. (9) Subsection (7) does not limit the Federal Court of Australia's power under subsection (5) to make an order remitting the case to be heard and decided again by the Tribunal. (10) The jurisdiction of the Federal Court of Australia under subsection (3) includes jurisdiction to make findings of fact under subsection (7). … 45 Reference of questions of law to Federal Court of Australia (1) The Tribunal may, of its own motion or at the request of a party, refer a question of law arising in a proceeding before the Tribunal to the Federal Court of Australia for decision but: (a) a question must not be so referred without the concurrence of the President; and (c) in respect of a proceeding before the Small Taxation Claims Tribunal - in so referring a question, the interests of the applicant seeking review of a relevant taxation decision must be taken into account. (2) The Federal Court of Australia has jurisdiction to hear and determine a question of law referred to it under this section and that jurisdiction shall be exercised by that Court constituted as a Full Court. (3) Where a question of law arising in any proceeding has been referred to the Federal Court of Australia under this section, the Tribunal shall not, in that proceeding: (a) give a decision to which the question is relevant while the reference is pending; or (b) proceed in a manner, or make a decision, that is inconsistent with the opinion of the Federal Court of Australia on the question. By s 7 of the AAT Act, only the President and Deputy Presidents of the Tribunal are required to be lawyers. 3 Rule 33.12 of the Federal Court Rules 2011 (Cth) provides: 33.12 Starting an appeal - filing and service of notice of appeal (1) A person who wants to appeal to the Court under the AAT Act must file a notice of appeal, in accordance with Form 75. Note: The notice of appeal must be filed within the time mentioned in section 44(2A) of the AAT Act, being not later than the 28th day after the day that a document setting out the terms of the decision is given to the person. (2) The notice of appeal must state: (a) the part of the decision the applicant appeals from or contends should be varied; and (b) the precise question or questions of law to be raised on the appeal; and (c) any findings of fact that the Court is asked to make; and (d) the relief sought instead of the decision appealed from, or the variation of the decision that is sought; and (e) briefly but specifically, the grounds relied on in support of the relief or variation sought. Note: The Court can only make findings of fact in limited circumstances - see section 44(7) of the AAT Act. …

Proposed notice of appeal 4 The applicants pressed six questions said to be contained in their amended notice of appeal before the primary judge: questions 4 and 5 and questions 2, 7, 8 and 9 as to parts. The proposed further amended draft notice of appeal to the Full Court, as pressed, was as follows: 1. The primary judge erred in holding that the notice of appeal disclosed no question of law and the appeal was therefore incompetent. Particulars (a) The notice of appeal stated that the decision of the Tribunal below was unauthorised because the Tribunal's reasoning process was illogical, irrational or lacking in findings or inferences of fact supported on logical grounds, and articulated that ground as a question of law (question of law 4). (b) The notice of appeal stated that the decision of the Tribunal below was so unreasonable that no reasonable decision-maker could have made it, and articulated that ground as a question of law (question of law 5). (c) The notice of appeal stated that the Tribunal misunderstood and/or misapplied the test in section 14ZZK(b)(i) of the Taxation Administration Act 1953, and articulated that ground as a question of law (question of law 2). (d) The notice of appeal stated that the Tribunal erred in the proper construction of Division 7A of the Income Tax Assessment Act 1936, and articulated that ground as a question of law (question of law 8) (e) The notice of appeal stated that the Tribunal erred in the proper construction of s. 6-5 of the Income Tax Assessment Act 1997, and articulated that ground as a question of law (question of law 9). (f) The notice of appeal stated that the Tribunal erred in the proper construction of s. 44(1) of the Income Tax Assessment Act 1936, and articulated that ground as a question of law (question of law 7). 2. The primary judge should have held that the appeal was competent and allowed the appeal against the orders of the Administrative Appeals Tribunal made on 1 March 2013. Particulars (a) The decision of the Tribunal below was unauthorised because the Tribunal's reasoning process was illogical, irrational or lacking in findings or inferences of fact supported on logical grounds (question of law 4). (b) The decision of the Tribunal below was so unreasonable that no reasonable decision-maker could have made it (question of law 5). (c) The decision of the Tribunal below was vitiated by a misunderstanding of the test in section 14ZZK(b)(i) of the Taxation Administration Act 1953, (question of law 2). (d) The decision of the Tribunal below was vitiated by the application of the wrong test for determining distributable surplus, for the purpose of calculating the amount of any deemed dividend under Division 7A of the Income Tax Assessment Act 1936 (question of law 8 insofar as it incorporates sub-paragraph (f)). (e) The Tribunal erred in holding that payments made by the company were income derived by the appellants under s. 6-5(4) of the Income Tax Assessment Act 1997 or s. 44(1) of the Income Tax Assessment Act 1936, merely because as directors of the company the appellants directed the funds be paid to their recipient. 5 It is also necessary to set out the amended notice of appeal dated 10 December 2013 which was before the primary judge. So far as presently relevant, it took the following form: Questions of law 2. Whether, on the evidence before the Tribunal namely: a. The evidence given by the Applicants that funds deposited in the Westpac account were used for the purposes of AES Services Pty Ltd (non-private purposes); b. The evidence given by Glenys Murray in relation to the preparation of MYOB records of sub-contractor payments and director loans; c. The evidence that all deposits into and withdrawals from the Westpac account were accounted for in full and that the sole issue [sic] the verification of the final destination of the withdrawals. d. The evidence of the Applicants and that of Glenys Murray: i. was accepted by the administrator of AES Services Pty Ltd in carrying out his duties as the administrator and in settling the dispute with the Commissioner; ii. was consistent with the costs incurred during the administration of AES Services Pty Ltd by the administrator; iii. was consistent with the costs incurred by AES Services Pty Ltd after the administration period; e. The evidence given by Andrew Yeo about the cost structure of AES Services Pty Ltd and that the cost [sic] incurred by the Applicants were consistent with his experience in carrying on the business of AES Services Pty Ltd during its administration by him; f. The evidence given by: i. Stephen Adrian that the costs were reasonable and consistent with industry benchmarks; ii. Ivan Dalla Costa that the costs were reasonable and consistent with industry benchmarks and practice; iii. Jonathan Karlovsky that the costs were reasonable and consistent with industry benchmarks and practice; iv. Greg Meredith (called by the Commissioner) that the costs were reasonable and consistent with industry benchmarks; g. The acceptance by the Commissioner of those costs in negotiating his claim against AES Services Pty Ltd; and the findings of fact made by the Tribunal [76-158], the Tribunal misunderstood and/or misapplied the test in section 14ZZK(b)(i) of the Taxation Administration Act 1953 [4] and [sic] concluding that the Applicants failed to discharge the burden cast upon them by that section 14ZZK(b)(i). 4. Whether, given the matters in questions 2(a)-(g), the Tribunal's reasoning process was illogical, irrational or lacking a basis in findings or inferences of fact supported on logical grounds and the [sic] made a decision it was not authorised to make. 5. Whether, given the matters particularised in ground 5 (a)-(f) the Tribunal [sic] decision was so unreasonable that no reasonable decision maker could have made [sic] and in so doing failed to act judicially. 6. … 7. Whether, on the evidence before the Tribunal, namely: a. …; b. …; c. The withdrawals from the Westpac account were made to confer a benefit upon the associated [sic] of the Applicants and not the Applicants personally; d. …; e. …; f. …; g. …; h. In the years 2005-2008 AES did not have a distributable surplus or profits to sustain a distribution of dividend; the Tribunal erred in the proper construction and application of section 44(1) of the Income Tax Assessment Act 1936 and in deciding [4, 602-786] that the withdrawals from the Westpac account were assessable to the Applicants as dividend under that section 44(1). 8. Whether, on the evidence before the Tribunal, namely: a. …; b. …; c. The withdrawals from the Westpac account were made to confer a benefit upon the associated [sic] of the Applicants and not the Applicants personally; d. …; e. …; f. In the years 2005-2008 AES did not have a distributable surplus or profits to sustain a distribution of dividend; the Tribunal erred in the proper construction and application of Division 7A of the Income Tax Assessment Act 1936 and in deciding, on alternative basis [sic], [4, 787-828] that the withdrawals from the Westpac account were assessable to the Applicants as deemed dividend under that Division. 9. Whether, on the evidence before the Tribunal, namely: a. …; b. …; c. The withdrawals from the Westpac account were made to confer a benefit upon the associated [sic] of the Applicants and not the Applicants personally; d. …; e. …; the Tribunal erred in the proper construction and application of section 6-5 of the Income Tax Assessment Act 1997 and in deciding, on a further alternative basis, [829-838] that the withdrawals from the Westpac account were assessable to the Applicants as income on ordinary concepts within that section 6-5. 10. … 11. … … Grounds relied on … 5. The Tribunal adopted a process of reasoning that was so illogical, irrational or lacking a basis in findings or inferences of fact supported on logical grounds that its reasoning was affected by errors of law and [sic] has made a decision that was so unreasonable that no reasonable decision maker would have made it, in that: a. The Tribunal was not satisfied [613-658] that any sub-contract payments were made from the Westpac account despite evidence that: i. The business of AES Services Pty Ltd was labour intensive and required the engagement of sub-contractors; ii. AES Services Pty Ltd engaged subcontractors to perform cleaning services in the ordinary course of its business; iii. The sub-contractors were actually paid from the Westpac account; iv. Invoices were obtained from sub-contractors. Some of the invoices were lost and some of the invoices were confiscated by the Australian Federal Police; v. MYOB records of the payments to sub-contractors, which records were based on Westpac bank statements and hand-written notes of the directors, were prepared; vi. The Applicants engaged and paid sub-contractors in respect of services provided to AES Services Pty Ltd from the Westpac account; vii. The amount paid by the directors to sub-contractors was accepted by the administrator of AES Services Pty Ltd; viii. The amount paid by the directors to sub-contractors was accepted by the Commissioner in negotiating a deed of company arrangement in respect of his claim against AES Services Pty Ltd; ix. The amount paid by the directors to sub-contractors was less than the costs incurred by the administrators during the period of administration; x. The amount paid by the directors to sub-contractors was consistent with costs incurred after the period of administration; xi. The amount paid by the directors to sub-contractors was accepted as reasonable and consistent with benchmarks by three experts called by the Applicants, namely Stephen Adrian, Jonathan Karlovsky and Ivan Dalla Costa; and xii. The amount paid by the directors to sub-contractors was accepted as reasonable and consistent with benchmarks by Greg Meredith - a witness called by the Commissioner. b. The Tribunal found that the MYOB records [640-675] in relation to subcontractor payments were not reliable despite evidence: i. The records were based on hand-written notes prepared by the directors and reconciled with Westpac bank statements; ii. There was one version of those accounts; iii. If there was more than one version, the evidence of Stephen Adrian and Greg Meredith that the difference between the two version [sic] was not material; and iv. That the records were consistent with the evidence as particularised in 5(a). c. The Tribunal was not satisfied [700-710] that AES Services Pty Ltd made loans to the Applicants [as contended at 468] to the extent of the drawings from the Westpac account applied by the Applicants for private purposes despite: i. Evidence given by the Applicants that they considered the drawings to be loans; ii. The drawings were recorded in MYOB accounts of AES Service Pty Ltd as loans; iii. The drawings were accepted by the administrator of AES Service Pty Ltd as loans; iv. The drawings were accepted by the Commissioner as loans when negotiating the deed of company arrangement; v. Documents exchanged between the Commissioner, the Applicants as directors of AES Service Pty Ltd and the administrator of AES Service Pty Ltd treat those drawings as loans; vi. The deed of company arrangement treated those drawings as loans; vii. Payments by the Applicants to AES Service Pty Ltd pursuant to the deed of company arrangement were made upon the premise that the drawings were loans; and viii. With respect to the 2009 year of income, the drawings were treated as loans by the Commissioner in a letter upon which the Applicants and AES Service Pty Ltd relied to negotiate the deed of company arrangement. d. The Tribunal was not satisfied [711-713] that Alex Kyritsis made a loan to George Haritos in the 2009 income year despite: i. Evidence given by both Applicants that the relevant amount was a loan; ii. Documents exchanged between the Commissioner, the Applicants as directors of AES Service Pty Ltd and the administrator of AES Service Pty Ltd treat those drawings as loans; and iii. The deed of company arrangement treated that amount as a loan. e. The Tribunal was not satisfied that the Applicants discharged the burden of proof in respect of the transactions listed at [722-762] despite: i. Evidence given by the Applicants of those transactions; ii. Evidence given by Stephen Adrian, Ivan Dalla Costa, Jonathan Karlovsky and Greg Meredith that the profitability of AES Services Pty Ltd was consistent with relevant industry profitability and benchmarks; iii. The report of the administrator; and iv. The evidence of Andrew Yeo. f. The Tribunal was satisfied [818-828] that the distributable surplus of AES Services Pty Ltd was sufficient to support the deeming of a dividend under Division 7A of the Income Tax Assessment Act 1936 despite: i. Evidence that, in calculating the distributable surplus, the Commissioner did not take into account liabilities of AES Services Pty Ltd including taxation liabilities, penalties and interest payable under the Taxation Administration Act 1953; ii. Evidence that the Commissioner did not exercise his discretion under section 109Y(2) of the Income Tax Assessment Act 1936 to substitute an alternative value for the assets of AES Services Pty Ltd or alternatively, it was open for the Commissioner to exercise that discretion on the evidence before him; and iii. Evidence as to the distributable surplus of AES Services Pty Ltd given by Stephen Adrian.

The parties' submissions 6 In their outline of submissions the applicants pressed "six questions of law discernible from the notice of appeal below": A. Whether a decision that was irrational, illogical or not based upon findings or inferences supported by logical grounds, is authorised by s. 43 the AAT Act? B. Whether a proper construction of s. 14ZZK of the Taxation Administration Act 1953 (Cth) (the TAA Act) requires a taxpayer to prove that an assessment is excessive and disprove any further excess before the Tribunal may set aside or vary an assessment? C. Whether on a proper construction of s. 44(1) of the Income Tax Assessment Act 1936 (Cth) (ITAA 36), company funds paid at the direction of a director who is also a shareholder, to the director's associate and not for the director's benefit, constitute dividends paid to the director? D. Whether on a proper construction of s. 6-5(4) of the Income Tax Assessment Act 1997 (Cth) (ITAA 97), company funds paid at the direction of a taxpayer company director to his associate and not for the director's benefit constitute income derived by the taxpayer? E. Whether on a proper construction of s. 109C(3) of the ITAA 36, company funds paid at the direction of a director who is also a shareholder, to the director's associate and not for the director's benefit, constitute payments to the director within s. 109C(3)? F. Whether the calculation of a distributable surplus under s. 109Y of the ITAA 36 for the financial years ending June 2004 to 2009 should be undertaken in accordance with s. 109Y as current at the end of each financial year, or in accordance with an amendment that regulated payments occurring from 1 July 2009? 7 The applicants submitted that each of these questions of law was raised by the amended notice of appeal below, but in a different form. Because each of the questions of law was raised in the notice of appeal, the applicants submitted, the primary judge erred in declining to resolve them. 8 The applicants submitted that question A restated question of law 4 in the amended notice of appeal before the primary judge. The applicants submitted this was the legal error identified by the High Court in Minister for Immigration and Citizenship v SZMDS [2010] HCA 16; 240 CLR 611. We assume that question A was also intended to restate question of law 5 in the amended notice of appeal before the primary judge which invoked Wednesbury unreasonableness. 9 The applicants submitted that question B was contained in question 2 in the amended notice of appeal before the primary judge. 10 The applicants submitted that questions C, D and E appeared as questions 7, 8 and 9 in the amended notice of appeal before the primary judge in so far as each incorporated its sub-paragraph (c). 11 The applicants submitted that question F arose from question of law 7 before the primary judge as it incorporated sub-paragraph (h) and question of law 8 as it incorporated sub-paragraph (f). 12 The respondent submitted that the Court should not permit what were, in substance, new questions to be raised in this appeal by way of elaboration (or particularisation) of abstract questions purportedly before the primary judge below. To do so would be inconsistent with the principles governing s 44 appeals; the provisions of r 33.12(2)(b) of the Federal Court Rules; and the principle that new questions cannot be added on an appeal from such a decision of a primary judge to the Full Court. The respondent submitted that raising new questions would be prejudicial to the respondent in circumstances where the applicants carried the burden of establishing the competency of the appeal and were represented by solicitors and counsel both in the hearing before the primary judge and in the Tribunal. 13 The respondent submitted that question A in the applicants' outline did not restate question 4 in the amended notice of appeal before the primary judge. 14 The respondent submitted that question B did not restate question 2 in the amended notice of appeal. 15 The respondent submitted that the proposed amended draft notice of appeal to the Full Court did not refer to any prospective appeal from the decision of the primary judge on the competency of question 7 of the amended notice of appeal. Further, the respondent submitted, as to questions 7, 8 and 9 in the amended notice of appeal and questions C, D and E in the applicants' outline it was plain from the invitation to examine "the evidence before the Tribunal" that the Court was being invited to reconsider the Tribunal's factual findings. That conclusion was reinforced by the fact that the asserted "fact" in sub-paragraph (c) was inconsistent with the Tribunal's findings, at [837], that the payments to associates conferred a benefit on the applicants personally. 16 As to question F in the applicants' outline, the respondent submitted that it was raised for the first time on the appeal and the respondent objected to the court considering it in the absence of leave and opposed the grant of leave. 17 As to the respondent's amended draft notice of contention, filed on 18 February 2015, it took the following form: 1. If, contrary to the findings of the primary Judge, any of Questions 2, 4, 5, 7, 8 and 9 in the Amended Notice of Appeal filed on 10 December 2013 (the NOA) disclosed a proper question of law for the purposes of s 44 of the Administrative Appeals Tribunal Act 1975 (the AAT Act), the appeal from the Administrative Appeals Tribunal (the Tribunal) to the Federal Court should nevertheless have been dismissed by reason of: 1.1 the finding of the primary Judge that the so-called facts and findings on which the Appellants relied in each of questions 2, 4 and 5 misstated, alternatively were inconsistent with, the Tribunal's actual findings: paragraphs 26 and 27 of his Honour's reasons for judgment; 1.2 the finding of the primary Judge that, before his Honour, the Applicants [sic] did not assert that the Tribunal's factual findings were not open to the Tribunal: paragraph 27 of his Honour's reasons for judgment; and 1.3 the fact that the Appellants did not invite the primary Judge to make any additional findings of fact pursuant to s 44(7) of the AAT Act. 1.4 the asserted facts on which questions 7, 8 and 9 were premised misstated, alternatively were inconsistent with, the Tribunal's actual findings 2. Further and alternatively: 2.1 In respect of Question 2 of the NOA: (a) The factual matters identified in Questions 2(a) to 2(g) of the NOA, and the findings of fact made by the Tribunal in paragraphs 76-158 of the Tribunal's Reasons for Decision, did not disclose that the Tribunal misunderstood or misapplied s 14ZZK(b)(i) of the Taxation Administration Act 1953. (b) The Appellants did not dispute the Tribunal's findings at paragraphs 678, 679 and 681 of the Tribunal's Reasons for Decision; and, accordingly, the Tribunal's finding at paragraph 696 of its Reasons for Decision in respect of the quantum of subcontractor expenses was relevant only in respect of the 2007 income year. (c) Before the primary Judge, the Appellants did not challenge the Tribunal's factual findings at paragraph 719-746 of the Tribunal's Reasons for Decision in respect of Issues 4, 5, 7, 8 and 10, all of which were relevant to AES's operating profits during the relevant period. Accordingly, any error by the Tribunal, in finding that the Appellants had failed to discharge their onus of proof in respect of AES's subcontractor expenses, could not have affected the outcome of the appeal. 2.2 In respect of Question 4 of the NOA, as found by the primary Judge at paragraph 28 of his Honour's reasons for judgment, the factual matters identified in Questions 2(a) to 2(g) (which were incorporated by reference into Question 4), did not disclose any irrationality in the Tribunal's findings or reasoning process. 2.3 In respect of Question 8 of the NOA: (a) Having regard to the Tribunal's findings at paragraphs 696 and 719-746 of the Tribunal's Reasons for Decision, any error by the Tribunal in the construction or application of Division 7A of the Income Tax Assessment Act 1936 (Division 7A) could not have affected the outcome of the appeal. 2.4 Further and alternatively, as found by the primary Judge at paragraph 29 of his Honour's reasons for judgment, the factual matters identified in Questions 7(a) to 7(h), Questions 8(a) to 8(f) and Questions 9(a) to 9(b) of the NOA did not disclose any error in the Tribunal's construction or application of s 44, s 6-5 or Division 7A. 18 The respondent's written submissions, at [61]-[65], dealt with "Questions 7, 8 and 9 of the [Amended Notice of Appeal] in so far as they incorporated sub-paragraph (c)". The respondent contended, at [61], that if those questions disclosed a proper question of law the appeal should nevertheless be dismissed on the basis that the Tribunal made findings at [710], [836] and [837] which were not challenged by the applicants in the appeal below, and, accordingly, it was open to the Tribunal to conclude that the payments from the Westpac account (defined at [23] below), to the extent that they were made to associated entities, were ordinary income: s 6-5(4) of the Income Tax Assessment Act 1997 (ITAA 1997). The provisions of s 6-10(3) of the ITAA 1997 and s 109C(3) of the ITAA 1936 provide for similar rules of constructive receipt in relation to statutory income. 19 In our opinion, in assessing the competing submissions, care should be taken to distinguish between whether or not the amended notice of appeal before the primary judge invoked the jurisdiction of the Court under s 44 of the AAT Act, on the one hand, and the merit of any question or questions of law, on the other hand.

The decision of the AAT 20 Before turning to the detail of the reasons of the Tribunal, it is necessary to make two important preliminary points. First, the Tribunal upheld the assessments subject to some adjustments which are not material for present purposes. The Tribunal did so on the same three independent grounds which were relied on by the respondent. They were that the payments in issue were dividends paid to the applicants as shareholders of AES Services Pty Ltd (company) within s 44(1) of the ITAA 1936. In the alternative, the payments were deemed dividends within Part III Division 7A of the ITAA 1936. In the further alternative, the payments to the applicants or their associates were income according to ordinary concepts within s 6-5 of the ITAA 1997. For reasons we will give in relation to question F, the Tribunal committed an error of law in its analysis of the second ground of liability (i.e., deemed dividends), and the Tribunal's decision cannot be upheld on that ground. Secondly, the Tribunal addressed a large number of issues and its reasons are over 400 pages long. The issues raised by the questions of law relate to only some of the issues addressed by the Tribunal, and our examination of the Tribunal's reasons will be restricted to those issues. Broadly speaking, our examination will relate primarily to two matters advanced by the applicants in their case before the Tribunal. First, the applicants contended that the company's profits could only be assessed after taking into account very substantial payments the company made in discharge of obligations it owed to subcontractors (subcontractor expenses). A key issue before the Tribunal was whether those alleged payments to subcontractors were made. Secondly, the applicants contended that payments made by the company to them or their associates were, in fact, loans by the company to the applicants. Another key issue before the Tribunal was whether those payments were loans. 21 The company was incorporated on 8 October 2004. Mr Haritos and Mr Kyritsis were directors of the company, and Mr Haritos was also the secretary of the company. Mr Haritos and Mr Kyritsis each held 50 shares in the company. The company's issued share capital consisted of 100 ordinary class shares. The Tribunal said that, in earlier times, other persons had owned shares in the company, but that fact was of no importance to the Tribunal's decision. 22 The company carried on a service business on a large scale of cleaning trains. It had two major clients and a number of smaller clients. The Tribunal referred to the major clients as client A and client Z. The company provided the cleaning services through subcontractors rather than through employees. The Tribunal said that the company's employees consisted of two operation managers, nine contract managers, and two secretaries. 23 The company operated two bank accounts, a cheque account with overdraft facilities with the Commonwealth Bank of Australia (CBA account), and a business cheque account in the names of Mr Haritos and Mr Kyritsis trading as AES Services Pty Ltd with the Westpac Banking Corporation (Westpac account). The destination and characterisation of substantial payments into the Westpac account by clients of the company were, for reasons which will become clear, critical issues. 24 On 6 December 2009, the company was placed into administration by a resolution of its directors. Three partners of the firm Pitcher Partners were appointed joint and several administrators of the company. On 9 July 2010, the company's creditors resolved that the company enter into a deed of company arrangement and it did that on 28 July 2010. Under the deed, the company's officers continued to manage the company and its business, but the administrators established a deed administration fund into which various amounts were paid. 25 Prior to the incorporation of the company, another company, AES Property Pty Ltd (AES Property) carried on the service business of cleaning trains, and Mr Haritos and Mr Kyritsis, and their respective wives, were directors of AES Property. Unlike the company, AES Property provided the cleaning services through its own employees. AES Property sold its business to the company and, although Tribunal did not make a finding as to the exact date of transfer, it found that instructions for the preparation of the contract of sale were given in the middle of November 2004. On 22 October 2006, AES Property changed its name to Lake Services Pty Ltd and, on 17 October 2006, a liquidator was appointed to the company. The Tribunal found that Lake Services Pty Ltd was wound up under s 509 of the Corporations Act 2001 (Cth) on 19 May 2008. 26 The Tribunal found that Mr Haritos and Mr Kyritsis were directors of a number of other companies, some of which were nominee or family companies. It also found that each of them, either alone or with their respective wives, held a number of bank accounts. It is not necessary for us to set out the details. 27 The Tribunal also found that during the four income years from 2005 to 2008, Mr Haritos and Mr Kyritsis purchased seven properties. The registered proprietors of those properties were either Mr Haritos or Mr Kyritsis, or family members, or nominee or family companies of each of them. The details were set out in tabular form by the Tribunal and, again, it is not necessary for us to set out the details. 28 Mr Haritos gave evidence that between 1 July 2004 and 30 June 2008, clients of the company paid an amount of $34,359,772 into the Westpac account. He gave evidence that during the same period, an amount of $34,514,547 was paid from the Westpac account to subcontractors of the company. He explained the difference between monies in and monies out by the fact he or his associated entities had paid an amount of $979,953 to subcontractors on the company's behalf. He gave evidence as to the procedure adopted for the payment of invoices rendered by the company's subcontractors. He said that generally, a cheque to "Cash" was drawn. He accepted that various personal expenses of himself and his family, and Mr Kyritsis and his family, were paid out of the Westpac account. 29 As part of their involvement as administrators of the company, Pitcher Partners carried out an investigation of the company's financial affairs for the purpose of reaching "a conclusion as to what amount we can recover in the event of liquidation against the directors". As part of that investigation, Pitcher Partners had to determine the amounts which had been used to pay subcontractors. Pitcher Partners prepared a report which was before the Tribunal. That report was not included in the papers before this Court and the applicants were content to rely on the Tribunal's conclusions as to the contents of the report. 30 Pitcher Partners concluded that between March 2005 and December 2009, an amount of $46,149,772 was paid into the Westpac account, and an amount of $46,074,248 was paid out. Of the amount paid out, Pitcher Partners was able to identify the sum of $11,961,367 as paid out for the private use of Mr Haritos and Mr Kyritsis. 31 Pitcher Partners did not have invoices rendered by the company's subcontractors to assist them in determining the amount paid to subcontractors. They had 1,962 of the 2,405 cheques effecting payments from the account. Of the 1,962 cheques they had, 1,752 were made payable to cash. 32 Pitcher Partners concluded that at least an amount of $5,053,631 was paid to subcontractors from the Westpac account being the amount of $2,121,127 which they assumed had been paid from the Westpac account to one subcontractor (Akimbo Pty Ltd), and an amount of $2,932,504 paid out by cheque to another subcontractor (Crown International Property Management). 33 Pitcher Partners prepared a reconstruction of the company's accounts on the basis of, among other things, an assumed amount of $23,993,809 "claimed by the directors to have been paid to subcontractors in the income years 2005 to 2009". By reference to their experience of a profitability model for a business of a similar nature to that of the company and the company's trading whilst in administration, Pitcher Partners concluded that the claim by the directors that the sum of $23,993,809 of the total amount of $46,074,248 withdrawn from the Westpac account was made up of likely payments to subcontractors and that they were reasonable costs and likely to be correct. 34 Mr Haritos said that the invoices from the subcontractors were thrown out by mistake in about the middle of May 2009. He also said that the company had not returned as income any of the income in the Westpac account during the four incomes years. The company's financial statements prepared at the time did not include information from the Westpac account with respect to income or expenditure. 35 The applicants advanced in support of their case, records of the company described as MYOB records. The Tribunal described the circumstances surrounding the creation of these records at some length. The short points to note are that the Tribunal found that the MYOB records were prepared some considerable time after the events they purported to record, and were not books kept by the company within s 1305 of the Corporations Act or business records within s 69 of the Evidence Act 1995 (Cth). 36 The applicants called evidence from various witnesses regarding the benchmarks applicable in the service industry in which the company was engaged to support their case concerning the payments made to subcontractors from the Westpac account. These witnesses were Mr Dalla Costa, Mr Karlovsky, and Mr Adrian of the firm Moore Stephens. The evidence of these witnesses was not included in the papers before this Court, and, again, the applicants were content to rely on the Tribunal's conclusions as to their evidence and reports. 37 Mr Dalla Costa was engaged either as chief financial officer or as group executive officer of a group of companies engaged in the same industry as the company from 2002 to 2010. He was asked to provide his opinion on the average cost of labour as a percentage of turnover or revenue in the relevant service industry generally and, in particular, for companies similar to the company between the years 2005 to 2009 (inclusive). He was also asked to provide an opinion on whether, given the nature and structure of the company's business, the labour costs said by the company to be expenses in those years were an appropriate level of expenditure for labour costs. 38 Mr Dalla Costa prepared a business model and he gave evidence of the average ratio between total direct cost and average total direct labour cost, and between gross revenue and total direct labour costs. To do this, he had relied on his own information which he had not disclosed because he was subject to a confidentiality obligation with respect to that information. The Tribunal said that in all other respects, Mr Dalla Costa had relied on Mr Adrian's calculations. 39 Mr Dalla Costa then expressed an opinion about the company's financial performance relying in part on the combined final balance calculated by Mr Adrian as his starting point for the four income years, and, as far as the figures for 2010 and 2011 were concerned, he relied on the figures in the Pitcher Partners report when that firm was managing the business. Mr Dalla Costa's conclusion was that, having regard to his benchmarking data, the direct labour costs for the company which he was asked to assume were appropriate given the size of the company and the nature of the work it undertook in each year. 40 Mr Karlovsky was a partner in the Enterprise Advisers Business Unit of PKF, a firm of chartered accountants and business advisers. The Tribunal found that he had experience in taxation, management accounting and consulting, compliance, audit and financial planning, and that he had been a chartered accountant for 18 years. He was asked to give an opinion on the same matters addressed by Mr Dalla Costa. 41 Mr Karlovsky had information about labour costs as a percentage of revenue incurred by four companies engaged in providing similar services to the company in the four income years, and in 2009. He had access to all the relevant financial data of one company which he did not name, and the financial statements of the other three companies (which he did name). He performed a comparison between the four companies and the company. He expressed opinions on whether the labour cost of the company as shown in Mr Adrian's report was in line with industry standards. He said that it was for the years 2005, 2006 and 2008. It was slightly lower than industry standards for 2009. It was slightly higher than industry standards for 2007, and he identified some matters which might explain that fact. 42 Mr Adrian was a forensic accountant who was engaged by the applicants to prepare financial statements for the company in accordance with generally accepted accounting principles, to review the reasonableness of the financial statements, and to determine the net profit and distributable surplus in terms of the ITAA 1936 of the company during the period. Mr Adrian was given a large amount of material to assist him in performing this exercise. It is fair to say that none of this material objectively established the subcontractor expenses for the relevant period. The company's MYOB material did not do that for reasons set out below. Mr Adrian assumed the correctness of the MYOB material. Having reconstructed the financial statements, Mr Adrian identified profit margins and compared them with industry benchmark figures. Mr Adrian reviewed the profitability of the company and "benchmarked it" against comparable businesses. He reviewed the relevant industry reports from the IBIS World Industry Report, the Australian Bureau of Statistics, and the Australian Taxation Office. He carried out that exercise to gain "comfort that the financial statements accurately reflected the business performance and profitability". 43 The Tribunal decided that it would not accept Mr Haritos' evidence as to the subcontractor expenses without corroboration. It is apparent from the Tribunal's reasons that he was cross-examined at length on a number of matters. The Tribunal identified the areas in which it was unimpressed by Mr Haritos' evidence, including Mr Haritos' inability to remember the subcontractors, the fact that he gave inconsistent evidence about the timing of entries into a spreadsheet, the fact that his evidence as to the reasons income paid into the Westpac account was not declared was unconvincing, the fact that he relied on experts in an attempt to disassociate himself from the documents, the fact that his view of matters changed according to the purpose for which he was describing matters, and the fact that he had a tendency to interpret events and requirements to suit his view of what was required rather than what was required. The Tribunal also relied on examples of Mr Haritos' unreliable memory. It was not suggested by the applicants that it was not open to the Tribunal to take the view that it would not accept Mr Haritos' evidence without corroboration. 44 The Tribunal found that Mr Kyritsis' evidence did not advance the applicants' case. He was not involved in the management of the company's arrangements with clients A or Z or with the payments into, or, in respect of the payments said to have been made to subcontractors, out of the Westpac account. He was not involved in recording any of these transactions or in arranging the preparation of certain schedules or the MYOB records prepared in relation to the Westpac account. 45 The Tribunal was prepared to place very little weight on the MYOB records because, among other things, they were prepared some considerable time after the events they purported to record, and they could not be independently verified by reference to either invoices issued by subcontractors who were said to have been paid, or by reference to evidence of the subcontractors themselves. It was not suggested by the applicants that it was not open to the Tribunal to take the view it did as to the weight to be placed on the MYOB records. 46 The Tribunal considered the evidence which potentially corroborated Mr Haritos' evidence. It characterised Mr Adrian's expert evidence as expert advice rather than an expert opinion. It said that he could not corroborate Mr Haritos' evidence because his evidence was based on Mr Haritos' evidence. Except to a very limited extent, Mr Adrian had been unable to verify the accuracy of Mr Haritos' evidence. 47 The Tribunal said that the evidence of Mr Dalla Costa and Mr Karlovsky that the company's labour costs came within their benchmarking figures, or was at least consistent with them, did not advance the applicants' case because their evidence was "based on" the conclusions reached by Mr Adrian. In any event, they did not prove the company's costs and its assessment of its on-costs. A further point made by the Tribunal was that consistency with industry standards did not of itself prove the amount by which the assessments were excessive and, in order to succeed, an applicant was bound to establish the extent of the excess. We will consider the Tribunal's reasons for rejecting the evidence said to corroborate Mr Haritos' evidence in more detail in the context of our consideration of question 4. 48 The Tribunal rejected the applicants' contention that the payments to them and their associates were loans to them by the company. The Tribunal's reasons for rejecting that contention included the lack of documentation evidencing the loans, the fact that the applicants had never paid interest to the company, the fact that the payments were not recorded as loans in the company's books, or in the books of at least some of the companies which were associated with the applicants. The Tribunal also found that the properties which were purchased with some of the monies were not (as the applicants had contended) purchased for asset preservation purposes. Again, we consider the Tribunal's reasons for rejecting the contention that the payments were loans in more detail in the context of our consideration of question 9(c). 49 As we have said at [20] above, the Tribunal's conclusion that the payments were deemed dividends within Part III Division 7A of the ITAA 1936 cannot stand, and we do not need to consider the Tribunal's findings in relation to that matter: see further [63] and [256]-[257] below. 50 The third alternative basis of liability, namely that the payments were income within s 6-5 of the ITAA 1997, can be dealt with briefly. As they had with the first basis of liability, the applicants argued that the payments were loans by the company. The Tribunal referred to the reasons it had already given for rejecting this contention. The Tribunal rejected the other argument advanced by the applicants as to why the payments were not income, and that was that they did not receive a benefit, even if their associates did. The Tribunal rejected that argument because it considered that the applicants did obtain a benefit because they dealt with the funds as their own and were able to direct where payments were to be made.

The judgment of the primary judge 51 As stated above, the primary judge dismissed the appeal as incompetent. His Honour's reasoning so far as presently relevant was as follows. 52 Having considered what was said to be the first question of law, involving procedural fairness (question 1) the primary judge said, at [24]-[26]: The other questions of law which were set out in the amended notice of appeal are similarly complaints about the Tribunal's decision on the evidence which was available to the Tribunal and are not questions of law. Many take the form of asserting a misunderstanding by the Tribunal of the terms of a statutory provision, but the taxpayers do not identify a misconstruction in some way except to contend that the Tribunal should have decided the case in their favour. Thus, for example, question 2 was, in essence, whether the Tribunal had misunderstood or misapplied s 14ZZK(b)(i) of the 1953 Act in light of the evidence before the Tribunal. The question was purportedly expressed in the form of a question of law but it was no more than a complaint that the Tribunal ought to have reached a different conclusion on the evidence in the exercise of its statutory jurisdiction. The reformulation of question 2 made clear the taxpayers' desire to challenge the Tribunal's decision on the facts rather than raising a question of law. Questions 3, 4 and 5 are in the same position. … The formulation of the questions in this way reveals how each question fails to identify a question of law but seek [sic], rather, merits review. The questions do not identify any error of principle in the Tribunal's reasoning beyond the complaint that the Tribunal ought to have reached a different conclusion. A further difficulty with questions 2, 3, 4 and 5, and the grounds upon which they are based, is that the facts do not support what is asserted as the factual foundation upon which the questions are based, and, at times, the factual assertions contained in the questions mis-state the facts as revealed by the Tribunal's reasons. Question 2(a), for example, is predicated in part upon the description of the evidence before the Tribunal as being that: The evidence given by the [taxpayers] that funds deposited in the Westpac account were used for the purposes of AES Services Pty Ltd (non-private purposes). However, the evidence recited by the Tribunal is significantly different. At [102] of the Tribunal's reasons the Tribunal recorded that Mr Haritos did not dispute that the funds identified in the Pitcher Partners report had been withdrawn for the taxpayer's own use. The relevant paragraph stated: 102. [Mr Haritos] said in cross examination that he agreed with the outcome of Pitcher Partners' forensic accounting that in excess of $46,149,772 had been deposited in the [AES Services] Westpac account in the period from March 2005 to December 2009. The majority had been deposited by Clients A and Z with significant amounts by two other clients and multiple "Other" clients depositing $2,753,871. He did not dispute Pitcher Partners' assessment that $46,074,248 had been withdrawn from that account. He did not dispute their finding that $11,961,373 had been withdrawn for their own use. It is conceivable that what appeared at [102] of the Tribunal's reasons does not fully address the asserted evidence upon which question 2(a) in part depends, but the passage in the Tribunal's reasons undermines the foundation upon which the question is based and shows, again, that the taxpayers seek to challenge conclusions which were open to the Tribunal upon the evidence rather than that they identify a question of law said to have been erroneously answered by the Tribunal. 53 The primary judge then reproduced a table prepared by the respondent in which the respondent identified inconsistencies, misstatements or errors between, on the one hand, the statements of facts or findings in the Tribunal's reasons and, on the other hand, the statements of the factual findings as described in the taxpayers' amended notice of appeal forming part of the questions or the grounds relied upon in support of the questions. The primary judge continued, at [27]: A comparison between (a) the facts and findings of the Tribunal as described by the taxpayers and (b) those facts and findings as stated in the Tribunal's reasons for decision reveals that the former do not accurately reflect the latter. I will not repeat the taxpayers' questions and grounds nor set out the lengthy material in the Tribunal's reasons or in the transcript which were referred to, but adopt the summary provided by the Commissioner as a convenient, and accurate, summary of the extent to which the taxpayers' proposed grounds depend upon their mis-description of the facts and findings of the Tribunal. The extent of material differences between the fact asserted in the amended notice of appeal (either directly in the question or by incorporation in the question from the grounds) and the fact as set out in the Tribunal's reasons or as found in the transcript tells against the taxpayers' contentions that the questions posed were ones of law where the Tribunal can be shown to have committed some error in legal principle. The taxpayers' case was, at best, that there must have been an error of law because they ought to have succeeded on the evidence. In no instance have the taxpayers contended, or established, that the findings made by the Tribunal were not open to the Tribunal in the sense of there being no evidence to support the finding: Minister for Immigration and Multicultural Affairs v Al-Miahi (2001) 65 ALD 141 at 149 [34]-[35]; Tisdall v Webber (2011) 193 FCR 260 at 270-271 [31]-[32], 295-298 [124]-[131]. The taxpayer may be unhappy about the weight given to the evidence before the Tribunal, but the weight which may be given to evidence is a matter within the Tribunal's domain: Rawson Finances v Commissioner of Taxation [2013] FCAFC 26 at [119]. 54 The primary judge then referred to question 6, which does not form part of the application to the Full Court. 55 At [29], the primary judge said in relation to questions 7, 8 and 9 in the amended notice of appeal that these were also not questions of law and also sought to engage in merits review. Having set out those questions, as well as questions 10 and 11 which do not form part of the application to the Full Court, the primary judge said, at [29]-[30]: In each case the question is expressed as a question concerning the proper construction of a statutory provision, but in none of the questions is there identified what construction the Tribunal gave to the provisions which might [be] said to be erroneous. At most, in relation to questions 7, 8 and 9, there was [sic] identified specific facts said to be the foundation of an erroneous construction but none of the questions reveal a legal error in contrast with an attempt to engage in merits review … Furthermore, if it were necessary to consider the matter, it appears that many of the asserted facts in the questions, or in the grounds upon which they are supported, are either wrong in fact or depend upon erroneous view[s] of the law. It is not desirable to deal further with erroneous statements of the facts, or of erroneous statements of law where the appeal is not otherwise competent and where the mis-statements are not material to that conclusion, other than to give an example. Thus, question 7(g) appears to assert that the operation of s 44(1) of the 1936 Act required there to be a "formal or informal resolution authorising a distribution". However, the law does not require what the fact asserted implies: see ss 6(1) and 44(1) of the 1936 Act; Federal Commissioner of Taxation v Blakely (1981) 82 CLR 388 at 400 and 406, s 109C(3) of the Income Tax Assessment Act 1997 (Cth), 3D Scaffolding Pty Ltd v Commissioner of Taxation [2009] FCAFC 75 at [53]. For present purposes it is sufficient to conclude that the appeal is incompetent. 56 In construing s 44 of the AAT Act, the primary judge cited Comcare v Etheridge [2006] FCAFC 27; 149 FCR 522 at [19]; TNT Skypak International (Aust) Pty Ltd v Commissioner of Taxation [1988] FCA 198; 82 ALR 175 at 178, and HBF Health Funds Inc v Minister for Health and Ageing [2006] FCAFC 34; 149 FCR 291. 57 In considering the relationship between the pleaded questions of law and grounds of appeal his Honour applied Osland v Secretary to the Department of Justice [2010] HCA 24; 241 CLR 320 at 333 [21] and Australian Telecommunications Corporation v Lambroglou [1990] FCA 689; 12 AAR 515 at 524 per Ryan J.

The application for leave to appeal 58 The principles to be applied in deciding whether or not leave to appeal should be granted from an interlocutory decision are well-known: Decor Corporation Pty Ltd v Dart Industries Inc [1991] FCA 844; 33 FCR 397 at 398-399. They are whether the decision is attended with sufficient doubt to warrant its being reconsidered by the Full Court and whether substantial injustice would result if leave were refused, supposing the decision to be wrong. 59 The applicants submitted that if the primary judge was satisfied that none of the grounds were made out, having effectively analysed them, his Honour should have made an order dismissing the appeal. The applicants also submitted that questions of law were raised before the primary judge and the questions of law pressed on the appeal should have been heard on their merits by the primary judge. The applicants further submitted that the questions of law raised by the appeal should be resolved by the Full Court in the applicants' favour. The respondent opposed the grant of leave to appeal but developed his submissions by reference to the absence of questions of law and the absence of merit in any such questions. 60 We grant leave to appeal. As will appear below, in our opinion, the decision of the primary judge is attended with sufficient doubt to warrant its being reconsidered by the Full Court and substantial injustice would result if leave were refused, supposing the decision to be wrong. The substantial injustice would be that the applicants' liability to income tax may be increased as a result of an error or errors of law by the Tribunal. We also conclude that leave to appeal should be granted in any event, given the form of the orders made by the primary judge that the appeal was incompetent, in circumstances where the primary judge nevertheless considered to some extent the merits of the grounds. In those circumstances the appropriate order would have been to dismiss the appeal. 61 In consequence of the grant of leave to appeal, the draft notice of appeal is to be taken to be filed as the notice of appeal and the draft notice of contention is to be taken to be filed as the respondent's notice of contention. We refer to these documents in this way in the following discussion; and hereafter we refer to Mr Haritos and Mr Kyritis as the appellants, rather than the applicants.

Summary of conclusions in relation to s 44 of the AAT Act 62 We now turn to consider the more general questions raised by the appeal in relation to s 44 of the AAT Act. In summary, our conclusions are as follows: (1) The subject-matter of the Court's jurisdiction under s 44 of the AAT Act is confined to a question or questions of law. The ambit of the appeal is confined to a question or questions of law. (2) The statement of the question of law with sufficient precision is a matter of great importance to the efficient and effective hearing and determination of appeals from the Tribunal. (3) The Court has jurisdiction to decide whether or not an appeal from the Tribunal is on a question of law. It also has power to grant a party leave to amend a notice of appeal from the Tribunal under s 44. (4) Any requirements of drafting precision concerning the form of the question of law do not go to the existence of the jurisdiction conferred on the Court by s 44(3) to hear and determine appeals instituted in the Court in accordance with s 44(1), but to the exercise of that jurisdiction. (5) In certain circumstances it may be preferable, as a matter of practice and procedure, to determine whether or not the appeal is on a question of law as part of the hearing of the appeal. (6) Whether or not the appeal is on a question of law is to be approached as a matter of substance rather than form. (7) A question of law within s 44 is not confined to jurisdictional error but extends to a non-jurisdictional question of law. (8) The expression "may appeal to the Federal Court of Australia, on a question of law, from any decision of the Tribunal" in s 44 should not be read as if the words "pure" or "only" qualified "question of law". Not all so-called "mixed questions of fact and law" stand outside an appeal on a question of law. (9) In certain circumstances, a new question of law may be raised on appeal to a Full Court. The exercise of the Court's discretion will be affected not only by Coulton v Holcombe [1986] HCA 33; 162 CLR 1 considerations, but also by considerations specific to the limited nature of the appeal from the Tribunal on a question of law, for example the consideration referred to by Gummow J in Federal Commissioner of Taxation v Raptis [1989] FCA 557; 89 ATC 4994 that there is difficulty in finding an "error of law" in the failure in the Tribunal to make a finding first urged in this Court. (10) Earlier decisions of this Court to the extent to which they hold contrary to these conclusions, especially to conclusions (3), (4), (6) and (8), should not be followed to that extent and are overruled. Those cases include Birdseye v Australian Securities and Investments Commission [2003] FCA 232; 76 ALD 321, Australian Securities and Investments Commission v Saxby Bridge Financial Planning Pty Ltd [2003] FCAFC 244, 133 FCR 290, Etheridge, HBF Health Funds and Hussain v Minister for Foreign Affairs [2008] FCAFC 128; 169 FCR 241.

Whether a new question of law may be raised on appeal to a Full Court 63 A separate issue arose in relation to a matter which the appellants accepted was not before the primary judge. It related to Div 7A of the ITAA 1936, and it was that the Tribunal applied the wrong provision in that the provision it applied was not in force at the time of the relevant assessments in 2005 to 2009. This was said to be picked up in grounds 7(h) and 8(f), which we have set out above. Item 35 of Schedule 1 to the Tax Laws Amendment (2010 Measures No. 2) Act 2010 (Cth) provided that the amendments made by Schedule 1 applied in relation to: (a) payments made; and (b) loans made; and (c) debts forgiven on or after 1 July 2009. It was Schedule 1 which amended, amongst other things, s 109Y(2) of the ITAA 1936. The impact of applying the amended provision rather than the earlier provision was set out at appendix A to the appellants' written submissions. 64 The respondent submitted that an entirely new question could not be raised as the basis of an application for leave to appeal from a primary judgment dismissing an appeal as incompetent because there was no question of law. The respondent submitted that if the appellants' complaint was that the primary judge erred in dismissing the appeal as incompetent, the appellants must demonstrate that the questions of law in the original or the amended notice of appeal were truly questions of law. The appellants could not, the respondent submitted, come to the Full Court with reformulated questions or new questions and seek to persuade the Full Court that the reformulated questions, or the new questions, were questions of law. This submission by the respondent went not only to the admittedly new question about the wrong provision being applied, but also to the formulation of the grounds of appeal in the proposed notice of appeal. 65 The respondent submitted that once the notice of appeal or, as here, the amended notice of appeal, had been settled before the primary judge, then that was the document that identified what were said to be the questions of law on which the Court's jurisdiction was based. The respondent submitted that this was a rational approach because the complaint that was mounted against a judge who dismissed an appeal as incompetent was that the judge should not have taken that course. The presence or absence of error on the part of the primary judge was critical to determining whether leave to appeal should be granted and, if granted, the appeal should be allowed. The presence or absence of error could only be determined by evaluating the asserted questions of law stated in the notice of appeal. If they did answer the description of questions of law, leave to appeal would be granted and the appeal may well be allowed. If they did not answer that description, there was no point in allowing leave to appeal because there was no error on the part of the primary judge. 66 The respondent submitted that at least where there was no question of law in the notice of appeal, even after amendment, s 44 of the AAT Act, by reason of its language and policy, did not permit a Coulton v Holcombe approach to be taken on appeal. 67 The respondent submitted that a question of law having been identified, it formed the subject matter of the proceeding which was before the court. An appellant could not identify a question and then rely on grounds or advance arguments which did not fall within the area marked out by that question. In support of that proposition, the respondent referred to the following authorities which we cite and shall consider in chronological order: Condell v Commissioner of Taxation [2007] FCAFC 44; 66 ATR 100; Price Street Professional Centre Pty Ltd v Commissioner of Taxation [2007] FCAFC 154; 243 ALR 728; De Simone v Commissioner of Taxation [2009] FCAFC 181; 77 ATR 936; Rana v Repatriation Commission [2011] FCAFC 124; 126 ALD 1; Commissioner of Taxation v Crown Insurance Services Ltd [2012] FCAFC 153; 207 FCR 247; and Nelson v Commissioner of Taxation [2014] FCAFC 163; 144 ALD 512. The appellants also relied on Cyonara Snowfox Pty Ltd v Commissioner of Taxation [2012] FCAFC 177; 208 FCR 471. 68 Condell relevantly concerned whether the Commissioner should be permitted on an appeal to rely upon a ground advanced in a notice of contention claiming that the judgment of the primary judge should be affirmed on a ground additional to those relied upon in the court below. The grounds relied upon before the primary judge depended upon the application of s 44(1)(a) of the ITAA 1936 in combination with the definition of 'dividend' in s 6 and with s 21. The effect of the ground sought to be advanced in the Commissioner's notice of contention would have been to justify the amended assessment in question under s 6-5 of the ITAA 1997 based upon the then recent decision of the High Court in Commissioner of Taxation v McNeil [2007] HCA 5; 229 CLR 656. The Full Court ruled that the Commissioner should not be permitted to rely upon that ground. Justice Gyles, at [14], with whom Kenny and Allsop JJ agreed on this point at [2], held that the issue was not simply a new question of law arising out of the decision of the Tribunal appealed from - it was a totally new case. While accepting that there was power in the Court to permit amendment to the questions of law arising on an appeal where appropriate, there was no proper basis upon which the questions in the appeal could have been amended by the primary judge to permit the issue set out in the notice of contention to be raised. Even if there were a full appeal from the Tribunal to the Court, it would not have been appropriate to permit the new issue to be raised as to do so would involve the difficulties enunciated in Coulton v Holcombe. There were no findings of fact and no decision which could throw up the new question of law that the Commissioner sought to agitate. Justice Gyles also observed that the Full Court's task was to correct error on the part of the primary judge who, in that case, was not called upon to consider the issue involving s 6-5 of the ITAA 1997. 69 In our opinion, Condell does not stand for the broad and absolute position contended for by the Commissioner on this appeal that the Court may not permit amendment to the questions of law arising on appeal from a primary judge hearing an appeal under s 44 of the AAT Act. Indeed, in our view, it supports the proposition that in an appropriate case such an amendment may be permitted. The circumstances in which the new point is sought to be raised by the present appellants are wholly different from the circumstances in Condell. Here, a party does not seek to support or attack the decision of the Tribunal on an entirely different and discrete legal and factual basis but seeks to point to a legal error on the part of the Tribunal in applying a particular provision, s 109Y of the ITAA 1936, in its amended form when it did not take that form at the relevant time. 70 In Price Street, Edmonds J referred, at [61], to Condell in relation to the appellant's third ground of appeal in the Full Court identified by his Honour, at [51(3)], as follows: "The primary judge erred in not deciding that different purposes on acquisition could be held for different parts of the land, namely a purpose of subdivision and sale for part (in the present case, the bulk) of the land, which was ripe for such development, and a purpose of deriving rent from another part of the land." Senior Counsel for the appellant was recorded, at [53(4)], as having submitted that this was not a new point, but one which had been run before the Tribunal and the primary judge. Justice Edmonds remarked, at [59], that it was "notable that the identified error was said to be that of the primary judge and not that of the Tribunal"; and that that was not "surprising because the Tribunal did not approach or deal with the appellant's purpose in relation to its acquisition of the land by reference to a bifurcation of the land into two parts and a consideration of whether there was a different purpose in relation to each part". The transcript did not, Edmonds J said, disclose any such submission to it. Moreover, the ground of appeal was not raised as a ground of appeal before the primary judge (at [60]); and, as Edmonds J noted, this was also "not surprising because in the absence of any finding of such bifurcation …, there could be no error of law in the Tribunal's process of reasoning". Nor, so his Honour observed, was there any reference to the submission in the primary judge's reasons. His Honour continued, at [61]: In my view, it is a new point and having regard to the limited jurisdiction exercised by the primary judge - to decide "an appeal on a question of law" within the meaning of s 44 of the AAT Act - it cannot be raised in this court, on appeal from the primary judge, for the first time. In Condell, Gyles J with whom Kenny and Allsop JJ agreed on this point, considered the scope of an appeal to a Full Court from a s 44 appeal to a judge of this court and the possible application of s 44(7) of the AAT Act in determining "a totally new case". (Citation omitted.) His Honour then set out [14] of Condell. 71 In our opinion, the point being made by Edmonds J in Price Street was the same point as in Condell, and, again, does not stand for the broad and absolute position contended for by the respondent Commissioner that the Court may not permit amendment to the questions of law arising on appeal from a primary judge hearing an appeal under s 44 of the AAT Act. Both of these cases concerned whether or not it was permissible, consistently with s 44 of the AAT Act, to permit a party to put on appeal a ground raising "a totally new case". That is not the present case. 72 De Simone relevantly involved the self-represented appellants' fifth and sixth grounds of appeal identified at [19] and [20] of the reasons for judgment of the Full Court. The case before the Full Court concerned only Pt IVA of the ITAA 1936. The fifth ground of appeal was founded on the appellants' assertion that Mr Brereton, the promoter of the scheme, was not acting in accordance with his instructions and was in breach of his duties to the appellants as his clients. It was contended by the appellants that the primary judge therefore erred in law in finding that Mr Brereton could be the person, or one of the persons, who entered into or carried out the scheme or any part of the scheme and did so for the purpose of enabling the appellants to obtain a tax benefit in connection with the scheme. The Full Court held it was neither here nor there, if indeed it were the case, that Mr Brereton was not acting in accordance with his instructions or was in breach of his duties to the appellants. Section 177D asked simply whether it would be concluded that a person who entered into or carried out the scheme, did so for the specified purpose. That person need not be the taxpayer. The sixth ground of appeal was that the primary judge erred in law in determining that it was reasonably open to the Tribunal to find that "the promoter and the partners entered into the scheme purporting to borrow funds to increase the claim for expenditure beyond that actually incurred for the purpose of obtaining a tax benefit by inflating the amount sought to be deducted". The appellants submitted that the Tribunal had failed to take into account "all the relevant considerations and in particular the investigation of the Australian Crime Commission [the ACC] into the fraud committed by Brereton against the appellants". Whilst the appellants' several statements of facts, issues and contentions made reference to enquiries being made by the ACC, the Full Court was not in fact referred to any report of the ACC and found nothing in the extensive appeal volumes that threw any light on the matter. The Full Court concluded, at [20], that what it had said about the fifth ground also disposed of the sixth ground. 73 Against that background, the Full Court also said, at [21]: Although we have dealt with the fifth and sixth grounds of appeal on what might be called the merits, they are in fact not available to the appellants. In the notice of appeal they are described as "questions of law raised on appeal." They were not questions of law specified in the notice of appeal before the primary judge. The jurisdiction of the Federal Court with respect to an appeal under s 44(1) of the AAT Act is confined to the specific questions of law identified in the notice of appeal. New questions cannot be added on an appeal to the full court: Price Street at [60]-[61] per Edmonds J, with whom Greenwood J agreed. … (Citation omitted.) 74 We accept that, read literally, these observations indicate that a ground of appeal which did not form part of an appeal before the primary judge on appeal under s 44 of the AAT Act cannot be raised before a Full Court, but that would be to read the observations divorced from their context, that context being that there was no factual basis for the contended for grounds of appeal. Any application to amend by the appellants would face the difficulties enunciated in Coulton v Holcombe. 75 Rana involved another self-represented litigant. It did not concern a proposed new ground of appeal and is therefore not relevant to the present question. 76 Crown Insurance does not, in our opinion, take the matter further. It did not concern an application to amend to add a new ground of appeal. Although no question of an amendment arose, Jessup J, at [87], the paragraph relied on by the present respondent, referred to a line of jurisprudence making it clear that, a question of law having been identified, it formed the subject matter of the proceeding which was before the court, and said: "An appellant cannot identify a question and then rely on grounds or advance arguments which do not fall within the area marked out by that question." Justice Jessup was not addressing the question whether an appellate court may in an appropriate case permit an amendment so as to reformulate or indeed add a question of law arising on appeal from a primary judge in a proceeding under s 44 of the AAT Act. 77 As with De Simone, some of the observations made by the Full Court in Nelson, read literally, may be taken as stating that an application to amend to raise a new question of law may never be granted by a Full Court on appeal from a primary judge hearing an application under s 44 of the AAT Act. The Full Court said, at [21], that paragraph 4 of ground 2 raised a new point not raised below and "cannot be raised in this court, [o]n appeal from the primary judge, for the first time". At [23], the Full Court said ground 4, claiming a breach of s 39 of the AAT Act, was another point that was not raised before the primary judge and "therefore cannot be raised on appeal from the primary judge for the first time." In both instances the Full Court referred to Condell and to Price Street at [61] per Edmonds J. It should not be assumed that, by general language, the Full Court was intending to depart from earlier authority (referred to below particularly at [79] and [83]) by taking a narrower view of the powers and jurisdiction of the Court on appeal than earlier authority. As to paragraph 4 of ground 2, it sought to raise for the first time in the Full Court that the primary judge ought to have held that, because of Tweddle v Commissioner of Taxation [1942] HCA 40; 180 CLR 1, the Tribunal failed to identify and apply the correct conception of "carrying on a business" in s 8-1(1)(b) of the ITAA 1997. On analysis, this was held to raise no more than a question of fact in that all the Tribunal was saying was that the relationship between the activities carried on and the production of income at some future point was "too tenuous" to justify a finding that a business was being conducted in any of the income years in issue (at [21]). As to ground 4, the procedural fairness ground, clearly it would have involved contested questions of fact and therefore the application to rely on the ground would face the difficulties enunciated in Coulton v Holcombe. 78 Cyonara was referred to on this point but it did not involve a question of amendment to formulate or add a new ground in the Court's appellate jurisdiction. We also note Cyonara concerned an application (or "appeal", to use the statutory language) under s 44(1) of the AAT Act from a decision of a Deputy President to a Full Court sitting in the Court's original jurisdiction rather than to a primary judge and thus it was not apt to raise the question with which we are presently concerned. 79 We regard as correct and orthodox the approach taken by the Full Court in Summers v Repatriation Commission [2015] FCAFC 36; 145 ALD 30, an appeal to the Full Court from the decision of the primary judge on an appeal to the Court from the Tribunal under s 44 of the AAT Act, in which the Court stated as follows, at [93]-[95]: Almost self-evidently, proposed ground 4D(a) was not raised before the primary judge; and parties are of course bound by the way a case is conducted: see, for example, Siegwerk Australia Pty Ltd (in liq) v Nuplex Industries (Australia) Pty Ltd (2013) 305 ALR 412 at [97] per Robertson J and Hird v Chief Executive Officer of the Australian Sports Anti-Doping Authority [2015] FCAFC 7 per Kenny, Besanko and White JJ at [161]-[162]. Thus, a point cannot be raised for the first time on appeal when it could possibly have been met by calling evidence at trial. This is, however, not such a case; and, as reference to authorities such as Metwally v University of Wollongong (1985) 60 ALR 68 at 71, Water Board v Moustakas (1988) 180 CLR 491 at 497 ("Water Board v Moustakas") and Coulton and Others v Holcombe and Others (1986) 162 CLR 1 ("Coulton v Holcombe") at 7-8 show, an appellate court has a discretion to permit an appellant to argue an issue on appeal that was not argued below where it considers that it is expedient and in the interests of justice to entertain the issue: see Water Board v Moustakas at 497 and Coulton v Holcombe at 8, citing O'Brien and Others v Komesaroff (1982) 150 CLR 310 ("O'Brien v Komesaroff") at 319 per Mason J (with whom the other members of the Court concurred). The fact that an alleged error of law is not raised before the court at first instance does not preclude an appellate court from entertaining the point where it is in the interests of justice to do so: see, for example, Summers No 1 [(2012) 130 ALD 32] at [60]; Kuswardana v Minister for Immigration and Ethnic Affairs (1981) 35 ALR 186 at 194-195 per Bowen CJ, 199 per Fox J and 205 per Deane J, cited with approval in Grant v Repatriation Commission (1999) 57 ALD 1 ("Grant v Repatriation Commission") at [20] per Merkel, Goldberg and Weinberg JJ (also noting that the respondent must have an opportunity to be heard on the issue). The court must be satisfied that allowing a new point to be argued would work no injustice to the other party, recognising that it is not always an easy task to pinpoint whether the matter would have been approached differently had the point then been raised: Peacock v Human Rights and Equal Opportunity Commission and Another (2003) 73 ALD 341 at [28] per Kiefel and Allsop JJ. Generally speaking the court is more likely to permit a fresh issue to be raised on appeal where the new point turns only upon a question of construction or upon a point of law, or where the facts are not in controversy: O'Brien v Komesaroff at 319; Lansen and Others v Minister for Environment and Heritage and Another (2008) 174 FCR 14 at [3]-[6] per Moore and Lander JJ; Melbourne Stadiums Ltd v Sautner [2015] FCAFC 20 at [126]-[131] per Tracey, Gilmour, Jagot and Beach JJ. We consider it expedient and in the interests of justice for us to entertain the issue raised by the proposed ground 4D(a) and we grant leave to Mr Summers to further amend his Amended Notice of Appeal so as to include that ground. … 80 An analogous approach informs the decision of the Court in its original jurisdiction as to whether or not, in a s 44 appeal, it will entertain an issue that was not previously raised in the Tribunal. See, for example, Tefonu Pty Ltd v Insurance & Superannuation Commissioner [1993] FCA 588; 44 FCR 361 where, in an appeal under s 44 of the AAT Act, in the Court's original jurisdiction, Beazley J, as her Honour then was, rejected the submission that there was an absolute principle that a new issue may not be raised before the Federal Court on an appeal from the Tribunal. See also Repatriation Commission v Warren [2008] FCAFC 64; 167 FCR 511 where Lindgren and Bennett JJ observed, at [78], that the Court in its original jurisdiction will more readily permit a matter to be raised for the first time on an appeal from the Tribunal where: (a) the matter is a pure question of law, such as a question as to the validity of a regulation: see Kuswardana v Minister for Immigration and Ethnic Affairs [1981] FCA 64; 35 ALR 186 at 195; Tefonu at 367, or a question as to whether the Tribunal had applied the correct standard of proof on the true construction and application of legislation: Ferriday v Repatriation Commission [1996] FCA 827; 69 FCR 521 at 527-528 per Lee J; (b) the matter goes to a misapprehension that was shared by the parties before the Tribunal and therefore by the Tribunal itself: see Perpetual Trustee Co (Canberra) Ltd v Commissioner for Australian Capital Territory Revenue [1994] FCA 367; 50 FCR 405 at 418-419 per Wilcox J, such as a shared misapprehension as to the applicable law: cf Thomas v Repatriation Commission [1994] FCA 247; 50 FCR 112 at 120 per Beazley J; or (c) the matter goes to a condition precedent to the availability of a power, the exercise of which will have a serious impact on the individual: see Kuswardana. 81 These observations by Lindgren and Bennett JJ were approved by a subsequent Full Court in Hussain at [40]. 82 The matter was also considered, and Hussain followed, in Culley v Australian Securities and Investments Commission [2010] FCAFC 43; 183 FCR 279 at [16], where the Full Court (in its appellate jurisdiction but speaking of the exercise of original jurisdiction by the primary judge) said that where no submission on a factual issue had been made to the Tribunal, and where the fact to be found was not a precondition of jurisdiction, this Court's power to entertain a question of law not previously raised in the Tribunal was discretionary, citing Water Board v Moustakas [1988] HCA 12; 180 CLR 491. The dictum of Gummow J in Raptis at 4999, to the effect that there must be some difficulty in finding an "error of law" in the failure in the Tribunal to make a finding first urged in this Court, was cited at [15] and applied at [16]. 83 We would add a reference to Minister for Immigration and Ethnic Affairs v Teo [1995] FCA 246; 57 FCR 194 where, in relation to its exercise of appellate jurisdiction, a Full Court (Black CJ, Gummow and Beazley JJ) said, at 197: As we have indicated, the proceeding before the primary judge was on the narrow footing provided by s 138 of the [Migration] Act, namely an appeal on a question of law. If, for example, the further point involved an allegation by the respondent of the exercise of statutory power otherwise than bona fide, there might have been some substance in the complaint against consideration of the matter at this stage. That is not the case. The further point, as will appear, is a complaint directed to error of law on a question of construction. Accordingly, there is no reason why the ordinary principles considered in decisions such as Suttor v Gundowda Pty Ltd (1950) 81 CLR 418 and Coulton v Holcombe (1986) 162 CLR 1, do not apply and operate in favour of the respondent.

At what point does the Federal Court have jurisdiction in an appeal purportedly brought under s 44 of the AAT Act? 84 The next question is the jurisdiction of the Federal Court when hearing an appeal on a question of law under s 44 of the AAT Act. In our opinion, in Birdseye and the cases which have applied it there has been a focus on jurisdiction in circumstances where it would have been more appropriate to consider power and practice and procedure. In argument before us, one aspect of the question is the point at which the Court's jurisdiction is invoked or engaged. 85 There can be no doubt that if the jurisdiction invoked is that conferred by s 44 of the AAT Act then the subject-matter is limited to the question or questions of law: Brown v Repatriation Commission [1985] FCA 236; 7 FCR 302 at 304: The existence of a question of law is not merely a qualifying condition to ground an appeal from a decision of the Tribunal; rather, it and it alone is the subject matter of the appeal, and the ambit of the appeal is confined to it. Although it is necessary in some appeals pursuant to s 107VZZH for this Court to consider the evidence before the Tribunal (for example, where the alleged question of law is that there is no evidence upon which the Tribunal could reasonably support its finding) the court should be cautious before embarking on its own analysis of the evidence where the task of assessing facts has been placed by the legislature in the hands of specialist bodies such as the Tribunal and the Commission which are equipped to deal with them. The Tribunal there referred to was the Repatriation Review Tribunal. Section 107VZZH(1) of the Repatriation Act 1920 (Cth) provided: (1) An applicant in a proceeding before the Tribunal or the Commission may appeal to the Federal Court of Australia, on a question of law, from any decision of the Tribunal in that proceeding. 86 This approach has been consistently applied to the identical language in s 44(1) of the AAT Act: Commissioner of Taxation v Brixius [1987] FCA 612; 16 FCR 359 at 363-364 (Forster, Fisher and Sheppard JJ). 87 By s 44(3), the Federal Court has jurisdiction to hear and determine appeals instituted in that Court in accordance with s 44(1). 88 The contrast drawn in Brown between the position of the Taxation Boards of Review and the Tribunal was also made by Gummow J in TNT Skypak at 178. 89 In Commissioner of Taxation v Cooper [1991] FCA 190; 29 FCR 177, itself an appeal from the Supreme Court of New South Wales which had heard an appeal from a Board of Review under s 196(1) of the ITAA 1936, Hill J at 192-193 explained: From the Board's decision, the Commissioner appealed to the Supreme Court. For that Court to have jurisdiction, it was necessary, pursuant to the then s 196(1), that a question of law be involved in the appeal: cf s 44(1) of the Administrative Appeals Tribunal Act 1975 (Cth), which now confers a right of appeal from the Administrative Appeals Tribunal only "on a question of law". For relevant purposes, there are two essential distinctions between these provisions. The first is that it was necessary under s 196(1) merely that a question of law be involved. It was not material whether that question was decided correctly: see Commissioner of Taxation (Cth) v Sagar (1946) 71 CLR 421 at 423; Krew v Commissioner of Taxation (Cth) (1971) 45 ALJR 324 at 325. Secondly, once a question of law was identified as being involved, the appeal to the Supreme Court operated as a rehearing on both fact and law, rather than as now merely an appeal confined to the question of law on which the appeal is based: see Ruhamah Property Co Ltd v Commissioner of Taxation (Cth) (1928) 41 CLR 148 at 151; Commissioner of Taxation (Cth) v Miller (1946) 73 CLR 93 at 103-104; Krew v Commissioner of Taxation (Cth) (supra) (at 326) and cf Waterford v Commonwealth (1987) 163 CLR 54 at 77, per Brennan J. (Original emphasis.) 90 However, although the subject matter of the appeal, and the ambit of the appeal are confined to a question or questions of law it remains to identify when and by what means this Court has jurisdiction. 91 It is of great importance that the question or questions of law should be stated with precision. That is the point of r 33.12 of the Federal Court Rules, and of its predecessor, O 53 r 3(2). We have set out the present rule above at [3]. But the end sought to be achieved by the rule is to have the question of law stated with sufficient precision. 92 We agree with Ryan J in Lambroglou that merely to assert that the Tribunal erred in law in making a particular finding is not to state a question of law. We also agree with the later statement by Ryan J, at 527, that: "[I]t simply begs the question of law to commence it with the words 'whether the Tribunal erred in law'. If the question, properly analysed, is not a question of law no amount of formulary like 'erred in law' or 'was open as a matter of law' can make it into a question of law." (Emphasis added.) But this is not to say that it is impermissible to commence a question of law for the purposes of s 44 with the expression 'whether the Tribunal erred in law' if that is given sufficiently precise content by what follows. 93 We also agree that there would be a deficiency in a notice of appeal if the asserted questions of law did no more than invite the Court to embark on a broad and hypothetical enquiry as to the construction and operation of statutory provisions: Screen Australia v EME Productions No 1 Pty Ltd [2012] FCAFC 19; 200 FCR 282 at [24] per Keane CJ, Finn and Gilmour JJ. 94 In our opinion, the issue must be approached as one of substance. In cases of doubt, the Court should consider the notice of appeal, the alleged question or questions of law, the grounds raised, the statutory context, and the Tribunal's reasons for its decision, and having considered all those matters, satisfy itself that there is in fact a question of law. 95 In Osland, the relevant question of law was formulated as "Was the Judge correct in articulating the contents of the public interest for the purposes of s 50(4) of the Freedom of Information Act 1982 (Vic)?". At [21], French CJ, Gummow and Bell JJ criticised this formulation as being uninformative and said there was a need for better definition of the questions of law upon appeal to the Court of Appeal under s 148 of the Victorian Civil and Administrative Tribunal Act 1998 (Vic) (VCAT Act) than appeared in the present proceedings, and added that questions of law are not to be distilled from the grounds of appeal, but nevertheless dealt with the substance of the matter. 96 The Court has power to strike out a notice of appeal in reliance on s 44 of the AAT Act where the notice does not state a question of law: see Bittmann v Australian Securities and Investments Commission (No 2) [2006] FCA 1786 at [12] per Kenny J. A notice of appeal under s 44 of the AAT Act invokes the original jurisdiction of the Court. 97 However, this is not to say that the Court has no jurisdiction unless there are one or more questions of law set out in the notice of appeal. Neither is it to say that the great importance of the question or questions of law being stated with precision goes to the jurisdiction of the Court in the sense that absent a precise statement of the question the Court has no jurisdiction. The Court commonly will insist on the notice of appeal stating with sufficient precision, or being amended to state with sufficient precision, a question of law. But as an ordinary incident of its status as a superior court of record (see s 5 of the FCA Act), the Court has jurisdiction to decide whether or not it has jurisdiction. This carries with it authority to decide whether a notice of appeal states a question of law and does so with sufficient precision and, if it does not, whether an appellant should have leave to amend the notice of appeal to remedy the defect. These propositions are illustrated by the procedure adopted by Gummow J in Raptis at 4996-4997 where it became apparent, as the argument proceeded, that the objection by the taxpayer as to the competency of the proceedings as not raising a question of law could be determined satisfactorily only by a degree of examination of the materials approximating to the examination which would be required if the proceeding were treated as competent and to be finally determined. Accordingly, Gummow J proceeded to deal with the whole of the matter, found no error of law by the Tribunal had been demonstrated, and dismissed the Commissioner's appeal. 98 A further illustration of the nature of the Court's jurisdiction is supplied by Barghouthi v ING Custodians Pty Ltd [2003] FCA 1272, dealing with the similar terms of s 46 of the Superannuation (Resolution of Complaints) Act 1993 (Cth), where Allsop J (as his Honour then was) said, at [25]-[27]: I do not understand anything in Birdseye or Saxby Bridge to support any proposition that the requirements of s 44 of the AAT Act (here s 46 of the Act) or the procedural regime in O 53 (even if the latter, as a rule of Court, could) go to the existence of the jurisdiction of the Court, as opposed to the exercise of jurisdiction: cf Parisienne Basket Shoes Pty ltd v Whyte (1938) 59 CLR 369, 391 and Burgundy Royale Investments Pty Ltd v Westpac (1987) 18 FCR 212, 219. The present context in which I am dealing with this matter must be recalled. I am not being called upon to decide on a final basis whether or not an error of law was committed by the Tribunal. That question is for a final hearing (if any), the jurisdiction of the Court having been invoked, otherwise than colourably, by the assertion of the existence of questions of law: see, for example, Westpac Banking Corporation v Paterson (1995) 95 FCR 59, 61-2 [12] to [14]. What is before me is the question whether, as expressed in the notice of appeal and draft amended notice of appeal, an asserted error of law is sufficiently disclosed as to resist an application of the kind made by the respondents. I am asked by the respondents to strike out the notice of appeal and not to grant leave in respect of the amended document, in each case because of the absence of any sufficiently clearly expressed asserted error of law. In this context, one should not overlook the difficulty, at times, of distinguishing between errors of law and errors of fact and of understanding the place of what are sometimes called questions of mixed fact and law in the taxonomy mandated by the terms of the legislation. See generally Morris "Law and Fact" (1942) 55 Harv LR 1303, Brown "Fact and Law in Judicial Review" (1943) 56 Harv LR 899, Stern "Review of Findings of Administrators, Judges and Juries" (1944) 58 Harv LR 70, Jaffé "Judicial Review: Question of Law" (1955) 69 Harv LR 239, Jaffé "Judicial Review: Question of Fact" (1955) 69 Harv LR 1020 , Farnsworth "'Fact' or 'Law' in cases stated under the Income Tax Acts" (1946) 62 LQR 248, Wilson "A Note on Fact and Law" (1963) 26 Mod LR 609, Johnstone v Sutton (1786) 1 TR 510, 545; 99 ER 1225, 1244 (per Lord Mansfield), Hoddinott v Newton, Chambers & Co Ltd [1901] AC 49, 56, Felix v General Dental Council [1960] AC 704, 717, Australian Iron & Steel Pty Ltd v Luna (1969) 123 CLR 305, 319-322 (per Windeyer J), Lombardo v Federal Commission of Taxation (1979) 40 FLR 208, 210-12, Nizich v Commissioner of Taxation (1991) 91 ATC 4,747, 4752 and Commissioner of Taxation v Roberts (1992) 37 FCR 246, 251-52. None of the subtleties and difficulties discussed by the learned authors and judges in these articles and cases attend the resolution of the matter. In particular, the circumstances here do not throw up the conceptual difficulties that can attend analysis of the distinction between fact and law and the place of the distinction in logical reasoning in this area: see especially French J in Nizich at 210-212. These considerations assist in appreciating that the existence of what is called for by s 46(1) of the Act (and s 44(1) of the AAT Act) is part of the exercise of the jurisdiction of the Court, and not (in the sense discussed by Dixon J in Parisienne Basket) a precondition of the existence of jurisdiction. 99 The respondent accepted that the Court is not constrained by the four corners of the notice of appeal, but submitted that once that document was settled then it was the document that identified what were said to be the questions of law on which the Court's jurisdiction was based. 100 In our opinion, the correct approach is illustrated in Ergon Energy Corp Ltd v Commissioner of Taxation (Cth) [2006] FCAFC 125; 153 FCR 551, a diesel fuel rebate case, where Sundberg and Kenny JJ said, at [51]: The drafting of the first question in the Commissioner's notice of appeal was inelegant. It did not expressly state any question at all. Its purport was, however, tolerably clear, having regard to the rebate provisions themselves, the relevant authorities (which referred to "locational" and "purposive" tests), the language of the AAT's reasons, as well as the grounds as stated in the notice of appeal. The Commissioner plainly intended to raise the question of whether, on the facts as found by the AAT, the ("locational" and "purposive") criteria fixed by the relevant rebate provisions were satisfied. Justice Gyles was of a different opinion. The relevant question of law raised in the notice of appeal was said to be: "The application of the purposive and location tests set out in s 78A(1) of the Excise Act 1901 and s 164(1) of the Customs Act 1901 on the basis of the authorities…" In the opinion of Gyles J, the suggested question was not a question of law within the meaning of s 44 of the AAT Act (at [80]). The point having been taken and no application being made by the Commissioner to amend the notice of appeal, the appeal should have been dismissed absent any curing of the deficiency (at [81]). Nothing we have said should be taken to encourage such a statement of a question of law. 101 Kowalski v Military Rehabilitation and Compensation Commission [2010] FCAFC 10; 114 ALD 8 concerned a self-represented litigant. The Full Court was required to deal with a notice of appeal which contained 57 purported questions of law. The Full Court said, at [40], that "[t]he vast majority of the "questions of law", which were said to be raised in the appeal were prefaced by the words "Did the tribunal err in law and was it bias [sic] at law" or "Did the tribunal err in law and was it bias [sic] at law and did it pervert the course of justice". "In each case the question was completed [sic] at the utmost level of generality. The questions did no more than invite an inquiry into whether the Tribunal had committed some error of law in reaching its decision. Mr Kowalski sought to impugn the decision of the tribunal by pointing to particular factual findings and contrasting these with his view of the facts." In those circumstances, the Full Court nevertheless and with "some misgivings" decided to deal with two questions of law identified by the respondent (at [43]). 102 The approach of the majority in Ergon at [50]-[51] was approved in Rana, at [13]-[14]: The learned primary judge was plainly alive to the importance of the requirement that there be a question of law: see in particular para 41 of his Honour's reasons for judgment and the reference to Birdseye. At the time, O 53 r 3(2) of the (now former) Federal Court Rules 1979 (Cth) required that a notice of appeal separately specify the question of law raised by the appeal and the grounds relied upon in support of the order sought on the appeal. In Birdseye at [18] Branson and Stone JJ drew attention to this rule and to a resultant expectation that the grounds specified in a notice should form a link between the specified questions of law and the orders sought. In effect, the grounds should detail why it is that the nominated questions of law should be answered in a way which entitles the applicant to the orders sought. The learned primary judge scrutinised the grounds which Mr Rana had specified in his notice of appeal to the end of determining whether there was any such link and also to the end of determining whether, read as a whole, a question of law was in substance revealed by the notice. Though care must be taken, especially in the face of an objection to competency, not to visit on a respondent party a judicially attractive question of law which the notice does not fairly raise, there is authority which would support the reading as a whole and in context of a notice of appeal so as to give precision to an inelegantly specified question of law: Ergon at [50] [sc [51]] per Sundberg and Kenny JJ. (Citation omitted.) 103 As a matter of the jurisdiction of the Court, we agree with the summary by Wigney J in P v Child Support Registrar [2013] FCA 1312; 138 ALD 563 at [53], which takes account of the position of self-represented litigants: A question which is inelegantly drafted may nonetheless be a question of law which attracts the jurisdiction of this court if its purport is tolerably clear having regard to the context in which it appears: Ergon Energy Corp Ltd v Cmr of Taxation (2006) 153 FCR 551 at [51]. In an appropriate case the Court itself may be "prepared to frame questions in order to found its jurisdiction": Secretary, Department of Education, Employment and Workplace Relations v Ergin (2010) 54 AAR 60 at [11]; 119 ALD 155 at 159; Rana at [16]; Goodricke v Comcare (2011) 55 AAR 188 at [14]-[22]; 122 ALD 546 at 549-550. An appropriate case may arise where, as here, an applicant is unrepresented and where it is possible to discern a question which, if properly framed, could found the jurisdiction of the Court: Hoe v Manningham City Council [2011] VSC 37 at [6]-[7]; Kolya v Tax Practitioners Board (2012) 87 ATR 474 (Kolya) at [8]. 104 We agree with the approach of Mortimer J in Avetmiss Easy Pty Ltd v Australian Skills Qualifications Authority [2014] FCA 314 at [75]-[77], cited with approval in Cosmopolitan Hotel (Vic) Pty Ltd v Crown Melbourne Ltd [2014] VSCA 353, where her Honour said, at [165]: The similarity between appeals on a question of law and the supervisory jurisdiction of the courts at once highlights the importance of the clear expression of a question of law, but also the importance of reading notices of appeal fairly so that tribunals subject to such appeals on a question of law remain within the confines of their jurisdiction and act lawfully, and the Court's supervisory function is preserved. It is true that many lawyers never master the art of articulating a question of law, so to expect a person who is not legally trained to be able to do so is generally unrealistic. That is why, where a person is unrepresented (or, here, where a company is represented by its controlling mind who is not legally trained), in order to ensure that the interests of the administration of justice are fulfilled, the notice of appeal should be read as a whole, and read fairly. Recognising minds differ on such matters, in my opinion a requirement that a notice of appeal be read fairly, rather than generously or benevolently, is a preferable approach. It provides more consistency with the role of the Court. It involves neither overzealous scrutiny, nor technicality, nor the imposition of a standard which in the circumstances it would be unreasonable to expect a non-legally trained person to meet. Fairness allows for the reading of a notice of appeal in its context: that is, reading all of the notice rather than simply that nominated as the "question of law". 105 Thus, although questions of law are not to be distilled from the grounds of appeal (Osland at [21]), this is a matter of practice and procedure rather than jurisdiction, and of degree, and should not be reduced to semantics at the expense of substance. 106 The respondent submitted that where a primary judge was not satisfied there was a question of law raised by the notice of appeal and dealt with it in that way, it was not open on appeal for a Full Court to allow the appeal on the basis that the Full Court was able to satisfy itself that looking at the reasons and looking at the notice of appeal there was a question of law raised. The respondent submitted, as we understood it, that it was not open to the Full Court in those circumstances to order that the notice of appeal be amended. 107 We do not accept this submission. In our opinion, it confuses the substance of whether or not there is a question of law with the form, admittedly defective at first instance, which the question has taken to that point. As we have indicated, the form of the question is a matter of great importance but is one of procedure. Where as a matter of substance a question of law exists, then there is a procedural discretion, to be exercised judicially and where it is in the interests of justice to do so, to direct its formal identification in an amended notice of appeal even where the question of law has not been identified before the primary judge. 108 We regard our approach as consistent with Neal v Secretary, Department of Transport [1980] FCA 49; 29 ALR 350, and with what was said in Parker v State of Western Australia [2008] FCAFC 23; 167 FCR 340 at [12] per Moore J and at [31] per Branson J. 109 Our conclusion is also supported by the reasoning in R v JS [2007] NSWCCA 272; 230 FLR 276 where Spigelman CJ, with whom Mason P, McClellan CJ at CL, Hidden and Howie JJ agreed, said at [57]-[69]: A Notice of Appeal serves three functions. 1. It invests the appellate court with jurisdiction; 2. It identifies and, subject to permitted amendment, confines the issues which the appellate court must determine; and 3. It provides notice to the Respondent of the case he, she or it must meet. The formulation in the original notice of appeal was "appeal … against directed acquittals by her Honour Justice Fullerton" which, as I have explained above, properly understood invoked the formulation in s 107(2), save for its failure to identify a "ground that involves a question of law alone". … This leaves the function of conferring jurisdiction. That issue is whether it was sufficient to invest this Court with jurisdiction to assert that there was an error on a question of law, without more. Where, as here, the relevant section expressly provides for an extension of time to lodge an appeal beyond the time stipulated, it is plain the Parliament did not intend that a failure to comply with the time stipulation was such as to affect the validity of the notice as a document conferring jurisdiction on the Court. It cannot be said that the legislature intended that failure to comply with the stipulation as to time was such as to render invalid conduct done in breach of the stipulation: see Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 esp at 388-390 [91], [93].) Nothing turns on the slight difference in terminology between the two formulations in that case: see World Best Holdings supra at [105]-[109].) Where the Court can grant leave to appeal after the expiry of the time stipulated, there is no reason to conclude that Parliament intended that a purported notice of appeal should be regarded as invalid and, accordingly, incapable of effectively invoking the jurisdiction which it purported to invoke, by reason of a failure to identify matters that should have been identified. As long ago as 1880, at a time when such technical points were often successful, Field J said in R v Hutchins (1880) 5 QBD 353 at 357: I do not think that grounds of appeal ought be construed as pleadings. The books are full of the finest points with regard to the construction of grounds of removal and appeal, but I hope the days for such subtleties has gone by … [I]f an amendment was necessary, it ought be made. I think the power of amendment ought to be exercised, where the other party is not unjustly prejudiced by the amendment. Here the point having been taken before the magistrates, the respondents knew that it would be raised on the appeal. In the present case no rules or regulations have been made with respect to the requirements of an appeal under Pt 8 of the Act. The Criminal Appeal Rules 1952 (NSW) are directed to regulating appeals against conviction and sentence pursuant to the Criminal Appeal Act [1912 (NSW)]. There is no formal requirement as to the form and content of a document instituting an appeal under the Act presently under consideration. The issue before this Court does not involve any need to analyse the specific terminology of court rules. (Cf. Victoria v Bacon [1998] 4 VR 269 at 286-289.) The issue is whether it is sufficient, in order to invest this Court with jurisdiction, to assert that there is an error involving a question of law, or whether it is necessary to identify the question with some precision. In my opinion, the former is sufficient for purposes of investing the Court with jurisdiction. The latter is required, at some stage, to serve the other functions of a notice of appeal. If I had come to a different conclusion, I would have had no difficulty in granting leave to file out of time a notice which would rectify any failure to invoke the jurisdiction of the Court. Indeed, that would, if it were necessary, be the consequence of granting the leave sought to file an amended notice, to which I now turn.

What may be a question of law within the meaning of s 44 of the AAT Act? 110 Lastly, and most importantly, is the scope of s 44 of the AAT Act. We frame the issue in this way although the key controversy between the parties was whether a mixed question of fact and law necessarily stands outside s 44. An integer of that controversy was the proposition that "a mixed question of fact and law" always stood outside s 44 and the meaning of that expression, which is founded in the present context in the line of cases beginning with Birdseye. 111 It may be said at once that although the distinction between questions of fact and questions of law is a vital distinction in many fields of law, and notwithstanding attempts by many distinguished judges and jurists to formulate tests for finding the line between the two questions, no satisfactory test of universal application has yet been formulated: Collector of Customs v Agfa-Gevaert Ltd [1996] HCA 36; 186 CLR 389 at 394. In the present case, the term "on a question of law" delineates the scope of an appeal, but again there is no clear test: Da Costa v R [1968] HCA 51; 118 CLR 186 at 194-195 per Windeyer J who said the distinction is not capable of precise formulation and the difficulty is in the notion that every question which arises for lawyers can be called either a question of fact or a question of law. In that case, Windeyer J observed, at 195, that the Court was rescued from that dilemma of classification; for the distinction which s 47(1) of the Northern Territory Supreme Court Act 1961 (Cth) made was between "a question of law alone" (when there was an appeal as of right) and "a question of fact alone or a question of mixed law and fact" (when leave to appeal was required). 112 We also note the dictum of Spigelman CJ in Attorney-General (NSW) v X [2000] NSWCA 199; 49 NSWLR 653 at [28] that the determination of whether a particular alleged error in matters such as fact finding, the exercise of a discretion or a process of evaluation answers the description "question of law", will depend on the scope, nature and subject matter of the statute, including the nature of the body making the relevant decision. We also note as relevant to the comparison between s 44 and s 45 of the AAT Act his Honour's observation, at [37], that it is by no means apparent that a matter which would answer the description of "question of law" in the more common statutory context where an appeal, albeit limited in this way, is capable of having practical effect on the particular proceedings, will necessarily answer that description in a context where there is no such effect. In each case, the scope, purpose and subject matter of the statute may affect the construction of the words "question of law". 113 It is against that background that we seek to identify the scope of "appeal … on a question of law from any decision" in s 44 of the AAT Act and whether there were one or more such questions in the appellants' amended notice of appeal before the primary judge. We approach the general question by reference to the text and context of the statutory provision, the circumstances of the enactment of s 44, a consideration of the decided cases in the High Court of Australia, in this Court and in other jurisdictions, and of the development of judicial review since the enactment of s 44.

(i) Text and context of s 44 114 One consideration is the nature of the Tribunal from which an appeal on a question of law lies. As we have noted at [2] above, the AAT Act does not require that the majority of its members have legal qualifications or experience. Next, the word "only" or the word "pure" or the expression "excluding mixed questions of law and fact" are not found in s 44. We deal further below with whether the section should be so read but we observe, at the outset, consistently with Owners of Ship Shin Kobe Maru v Empire Shipping Co Inc [1994] HCA 54; 181 CLR 404 at 421, that it is not appropriate to read provisions conferring jurisdiction or granting powers to a court by making implications or imposing limitations which are not found in the express words. Another issue is whether the meaning of s 44 is illuminated by some similar language in s 45. As we indicate below at [149], we do not construe s 44 by reference to the different purpose of s 45 and the discretionary considerations relevant to whether or not such a question should be stated or answered pursuant to s 45. We also note that s 44(7) was enacted in 2005 by the Administrative Appeals Tribunal Amendment Act 2005 (Cth) (Act No. 38, 2005) s 173, following the Administrative Review Council's 1997 Report to the Attorney-General and Minister for Justice: Appeals from the Administrative Appeals Tribunal to the Federal Court, Report No. 41, Ch 6. Section 44(7) permits the Court to make findings of fact in certain limited circumstances. Again we do not see that provision as suggesting that questions of fact fall within ss 44(1) and (3): s 44(7) does not enlarge the jurisdiction so conferred: Osland at [19]. 115 As the Full Court stated in Ekinci v Civil Aviation Safety Authority [2014] FCAFC 180; 227 FCR 459 at [114]: As Basten JA observed in Director-General, Department of Ageing, Disability and Home Care v Lambert [2009] NSWCA 102; (2009) 74 NSWLR 523 at [59], an appeal "on a question of law, from a decision of the Tribunal" (i.e the language of s 44 of the AAT Act) is narrower than an appeal involving a question of law" (see also B & L Linings Pty Ltd v Chief Commissioner of State Revenue [2008] NSWCA 187; (2008) 74 NSWLR 481 at [41]-[46] per Allsop P (as his Honour then was); TNT Skypak International (Aust) Pty Ltd v Commissioner of Taxation (1998) 82 ALR 175 at 178 per Gummow J and Kostas v HIA Insurance Services Pty Ltd [2010] HCA 32; (2010) 241 CLR 390 at [89] per Hayne, Heydon, Crennan and Kiefel JJ).

(ii) History 116 The Report of the Committee on Administrative Review (Parl. Paper 144 of 1971, the "Kerr Committee"), the Committee on Administrative Discretions (Interim Report Parl. Paper 53 of 1973, Final Report Parl. Paper 316 of 1973, the "Bland Committee") and the Committee on Prerogative Writ Procedures (Report Parl. Paper 56 of 1973, the "Ellicott Committee"), spoke of judicial review of the Tribunal's decisions. For example, the Kerr Committee recommended, at [247], that the Court should be invested with supervisory jurisdiction over the proposed Administrative Review Tribunal and that that supervision would be on the basis of the clarified grounds of judicial review later proposed by that Committee, that is, what is now known as the Administrative Decisions (Judicial Review) Act 1977 (Cth) (AD(JR) Act). The second reading speech for the AAT Act takes the matter no further. The construction we give to s 44 of the AAT Act is consistent with this history. 117 The construction of "on a question of law" to exclude mixed questions would mean that between the commencement of the AAT Act on 1 July 1976 (see Gazette 1976, No. S94) and the commencement of the AD(JR) Act four years later, on 1 Oct 1980 (see Gazette 1980, No S210), and in the absence of s 39B of the Judiciary Act 1903 (Cth) introduced in its original form by the Statute Law (Miscellaneous Provisions) Act (No. 2) 1983 (Cth) Act No 91, 1983 which came into operation on 31 May 1985 (see Gazette 1985, No. S177), the only remedy available in federal courts in relation to an error of law which was not a "pure" question of law would have been in the High Court under s 75 of the Constitution. This result seems to us to be unlikely as a matter of the intention of the Parliament.

(iii) Full Court decisions preceding Birdseye 118 In Sullivan v Department of Transport [1978] FCA 48; 20 ALR 323, the Tribunal had affirmed the decision of the Delegate of the Secretary of the Department of Transport "refusing to grant the applicant a commercial pilot licence and a radiotelephone operator licence". Smithers J, at 333, was in general agreement with the views of Deane and Fisher JJ that, as a matter of reality, there was a failure "to penetrate the camouflage which tended to conceal the question whether restricted licences should be granted", language used by Deane J at 349. The Court conducted a detailed review of how the Tribunal had dealt with the medical evidence before it. At 341-342, Deane J said: I have set out the relevant background facts and circumstances in considerable detail for two reasons. The first is that the appellant's claim that the Tribunal was in breach of its duty to act judicially by reason of its failure either to adjourn the matter of its own motion or to alert the appellant of his right to apply for an adjournment, can only properly be considered in the context of the overall proceedings before the Tribunal. The second is that, unsatisfactory though the medical evidence was in many respects, it is, upon analysis, apparent that that evidence (in the state in which it was left) all but compelled the finding which the Tribunal made that the appellant had an established history of a psychosis. The result was that it was seen that an important aspect of the case was excluded from consideration and accordingly an error of law occurred (at 333). 119 In Drake v Minister for Immigration and Ethnic Affairs (1979) 46 FLR 409; 24 ALR 577, Bowen CJ and Deane J said of the Tribunal, at 589: … In its proceedings, it is obliged to act judicially, that is to say, with judicial fairness and detachment. In its review of an administrative decision, it is subject to the general constraints to which the administrative officer whose decision is under review was subject, namely, that the relevant power must not be exercised for a purpose other than that for which it exists (Water Conservation & Irrigation Commission v Browning (1947) 74 CLR 492, at 496, 498-500, 504), that regard must be had to the relevant considerations, and that matters "absolutely apart from the matters which by law ought to be taken into consideration" must be ignored: R v Cotham [1898] 1 QB 802 at 806; Randall v Northcote Corporation [1910] 11 CLR 100, at 109-110; Shrimpton v Commonwealth (1945) 69 CLR 613 at 620; R v Anderson; Ex parte Ipec-Air Pty Ltd (1965) 113 CLR 177 at 189 ; [1965] ALR 1067 at 1071. With this in mind, their Honours, who were clearly keenly cognisant of the effect of s 44 of the AAT Act, considered the substance of the challenge to the Tribunal's decision and gave close attention to the Tribunal's reasons, in identifying the questions of law that fell for decision. 120 In Peacock v Zyfert [1983] FCA 190; 48 ALR 549, a tariff classification matter, at 556, 560-1 and 564-5, the Full Court held that where all the material facts had been established, the question as to whether those facts brought the goods concerned within one particular item or another of the Schedule, was a question of law. Although this case was brought under the AD(JR) Act against a decision of the Minister, the principle has been established in appeals brought under s 44 of the AAT Act: see Baxter Healthcare Pty Limited v Comptroller-General of Customs [1997] FCA 131; 72 FCR 467 and Agfa-Gevaert Ltd v Collector of Customs [1994] FCA 664; 124 ALR 645 at 648 per Gummow J. 121 In Collector of Customs v Cliffs Robe River Iron Associates [1985] FCA 96; 7 FCR 271, a diesel fuel rebate case, the Full Court said there was much authority to the effect that where all the material facts are established, the question whether they fall within a statutory description is a question of fact (at 275). In such a case no question of law arose unless it was contended that the situation disclosed by the evidence was necessarily inside or outside the statutory description. The case for the Collector was argued upon the basis that the evidence necessarily showed that the generation of electricity for the township fell outside the definition of mining operations. That was a question of law. 122 In Times Consultants Pty Ltd v Collector of Customs (Qld) [1987] FCA 488; 16 FCR 449 at 454 Fox J said the sole matter debated before the Full Court was whether, if any error was made by the Tribunal, it was an error of law, so that an appeal (so-called) lay to the Federal Court. The appeal concerned the classification, for customs tariff purposes, of imported cassette tape recordings and printed magazines loosely attached to one another. The primary judge, Davies J, was of the opinion that there was an error of law. Morling and Wilcox JJ dismissed the appeal saying, at 462, that it was a question of fact whether one material or component gave to the goods their essential character under the interpretative rules and that, accordingly, in order to succeed on his appeal, it was necessary for the Collector to show that majority of the Tribunal misdirected themselves in deciding that question of fact, since an appeal to the Court from the Tribunal lay only on a question of law. At 463-464, Morling and Wilcox JJ said the analysis of the primary judge demonstrated: … that the majority arrived at their decision that the magazine gave to the goods their essential character by having regard to such matters as the reasons why the goods were put up in sets, the manufacturer's purposes in taking that course and the likely reactions of purchasers. His Honour was correct in his view that the majority misdirected themselves by turning their attention away from the goods themselves and deciding the question posed for their consideration by reference to such matters. The statement in the majority's reasons that one of the principal factors pointing to the dominant component in goods "will be the use or function which the consumer or end user of the set will make of the combination" is an indication of the approach which they adopted. It is true that they referred to the relevance of matters such as bulk, quantity, weight, value, utility, visual impact, visual character and ready usability of goods in determining their essential character, and that they observed that "essential character" did not mean "dominant character". However, the statement in their reasons that "the issue in each case is whether after considering all these factors the cumulation of these factors gives dominance to one component" leads us to conclude that they did, as his Honour found, adopt an incorrect approach to the resolution of the question under consideration. It was not the dominance of one component of the goods which was the critical issue, but their essential character. … In the present case, although the Tribunal was deciding a question of fact, the majority erred in law in deciding that question. The primary judge's decision was therefore correct. Fox J dissented, holding that a reading of the Tribunal's decision did not disclose a misunderstanding of the tasks set by a determination of "essential character" (at 457). 123 In Tuite v Administrative Appeals Tribunal [1993] FCA 113; 40 FCR 483 at 484 Davies J said: … The words "question of law" in s 44 encompass matters concerning not only the interpretation of a federal enactment or the enunciation of the principle of the common law or equity, but also the breach of any duty which the Tribunal was bound by law to perform and the failure of which to perform may lead to the setting aside of the decision. The words "question of law" encompass grounds enunciated in s 5 of the ADJR Act such as the failure to take into account a material consideration, the taking into account of an irrelevant consideration, the making of a decision that no reasonable decision-maker would have made, the exercise of a decision-making power for a purpose other than for the purpose for which the power was conferred and the failure to provide natural justice. 124 This statement by Davies J was approved by the Full Court in Australian Fisheries Management Authority v PW Adams Pty Ltd [1995] FCA 1026; 61 FCR 314 at 316. Sheppard J with whom Tamberlin J and Lehane J agreed, said, in determining an appeal from Sackville J who had determined an appeal from the Tribunal: The question to be determined in this appeal is whether his Honour was correct in reaching this conclusion. At this point, it is appropriate to mention that the ground upon which his Honour upheld the appeals to him is the ground provided for in s 5(1)(e) and (b) of the Administrative Decisions (Judicial Review) Act 1977 (Cth) (the Judicial Review Act). In short his Honour found that the making of the decisions was an improper exercise of the power conferred by the Act in pursuance of which it was purported to be made because the decision failed to take a relevant consideration into account. Reference may also be made to s 5(2)(f) which, when read in conjunction with s 5(1)(e), provides for the review of a decision in a case where there has been an exercise of a discretionary power in accordance with a rule or policy without regard to the merits of the particular case. That does not seem to be relevant here although, on the approach adopted by his Honour, there was involved the application of a policy and the omission from that policy of a relevant consideration. The significance of these matters is that his Honour has allowed the appeal on what may be described compendiously as administrative law grounds. But that does not mean that the proper course for the respondent to have taken was to make an application under the Judicial Review Act or pursuant to s 39B of the Judiciary Act 1903 (Cth). It is open to an applicant for relief who claims administrative error by the Tribunal to seek that relief under s 44 of the Administrative Appeals Tribunal Act 1975 (Cth) (the Administrative Appeals Act). Indeed, Davies J held in Tuite v Administrative Appeals Tribunal (1993) 40 FCR 483 that s 44 of the Administrative Appeals Act provides the appropriate course for a person aggrieved to follow even though the grounds of appeal may encompass grounds provided for in s 5 of the Judicial Review Act such as the failure to take into account a material consideration: see at 484. Davies J appeared to take the view that that was usually the only course which a person aggrieved in those circumstances had available to him. He referred to David Jones Finance & Investment Pty Ltd v Commissioner of Taxation (Cth) (1991) 28 FCR 484. I would not myself wish to state the position so inflexibly. It is not necessary to decide the matter in this case. It is enough to say that I respectfully agree with Davies J in his view that it is certainly open to an applicant for relief to pursue grounds of appeal based on administrative law grounds in an appeal under s 44 of the Administrative Appeals Act. 125 In Teo at 199-200, (Black CJ, Gummow and Beazley JJ) said in relation to an appeal on a question of law: … it is important to bear in mind that the jurisdiction conferred upon this Court by s 138 of the [Migration] Act, to consider error arising "on a question of law", differs in important respects from the jurisdiction exercised by the Court upon an application under the Administrative Decisions (Judicial Review) Act 1977 (Cth) (the ADJR Act) for an order of review in respect of a decision of an administrative character made under an enactment. Section 138 of the Act by confining the subject matter of the "appeal" to a question of law calls into play in a case such as the present the general common law principles of administrative law as to the treatment of fact finding as error of law. On the other hand, the various grounds of review under s 5(1) of the ADJR Act, particularly those in pars (e), (f) and (h), together with the requirement of a "decision", present a particular framework for review on "no evidence" grounds. The subject is discussed in Curragh Queensland Mining Ltd v Daniel (1992) 34 FCR 212 at 219-224. 126 In Sharp Corporation of Australia Pty Ltd v Collector of Customs [1995] FCA 707; 59 FCR 6 at 12-13 per Davies and Beazley JJ, with whom Hill J agreed, said: Thus, it is primarily a question of fact, not of law, as to what is the meaning of an ordinary English word or phrase as used in a statute in its ordinary sense and so also is the question whether, there being different conclusions reasonably open, a particular set of facts comes within the description of such a word or phrase. This principle was enunciated in detail and explained by Jordan CJ in Australian Gas Light Co v Valuer-General (1940) 40 SR (NSW) 126 at 137-138 and by Mason J in Hope v Bathurst City Council (1980) 144 CLR 1 at 7-8. The principle was followed by Beaumont and Burchett JJ in Jedko Game Co Pty Ltd v Collector of Customs (NSW) (unreported, Federal Court, 10 March 1987); noted 12 ALD 491. Even so, in any particular decision, although the decision may be a factual one, all the usual grounds of review will apply for they are regarded as being illustrative of questions of law. Thus a decision-maker may have failed to provide procedural fairness or may have failed to take into account a relevant fact, or may have had regard to an irrelevant matter or the decision may have been so unreasonable that no reasonable decision-maker could have come to it. Examples where Courts have inquired under these principles into the facts found by administrative decision-makers are Commissioner of Taxation (Cth) v McCabe (1990) 26 FCR 431; Bushell v Repatriation Commission (1992) 175 CLR 408. If the decision-maker adopts a wrong approach to the task, the decision may be set aside and the matter remitted for reconsideration. See Times Consultants Pty Ltd v Collector of Customs (Qld) (1987) 16 FCR 449 and Waterscheid Australia Pty Ltd v Collector of Customs [sc. Walterscheid Aust Pty Ltd v Collector of Customs (1988) 14 ALD 785; (1988) 7 AAR 555]. This may occur if the decision-maker has not applied the well-understood ordinary meaning of a term but has given to it a meaning or qualification of his or her own or if, in the application of terms such as "income", "capital" and "incurred" which appear in the Income Tax Assessment Act 1936 (Cth) and the term with which we are now concerned, "essential character", all of which have been the subject of exposition in reasons of courts, the decision-maker adopts a meaning contrary to that which has been established by legal decisions. In Commissioner of Taxation v Roberts (1992) 37 FCR 246, the issue fell within the fifth proposition enunciated in Pozzolanic. In Minister for Industry and Commerce v Zyfert (1983) 77 FLR 471, the words of the Tariff which were in question took on a meaning from the context in which they appeared and therefore the construction of the Tariff was in issue. In cases of the latter type, which may involve mixed questions of fact and law, it is necessary to identify whether the administrative decision-maker is alleged to have made an error of law or an error of fact. (Emphasis added.) 127 In Jedko Game Co Pty Ltd v Collector of Customs (NSW)[1987] FCA 74; noted 12 ALD 491, referred to in Sharp Corporation, Beaumont and Burchett JJ said, at [9]: The matter for determination by the Collector, and, on review, by the Tribunal, was whether the manuals ought to be classified as falling within Chapter 97. This is a mixed question of law and fact (see NSW Associated Blue-Metal Quarries Ltd v Federal Commissioner of Taxation (1956) 94 CLR 509, per Kitto J at pp 51l-512; Hope v Bathurst City Council (1980) 144 CLR 1 per Mason J at pp 7-8). First, it is necessary to decide as a matter of law whether the Act uses the expression "Equipment For Parlour, Table And Funfair Games for Adults Or Children (Including Billiards Tables, Pintables and Table-Tennis Requisites)" in any other sense than that which it has in ordinary speech. The expression is not defined in the Act and it is not suggested that it has any technical or legal signification. Moreover, there is not to be found in the Act any indication that the expression was intended to have any other meaning than that which the words ordinarily have. The common understanding of the words has therefore to be determined and, as Kitto J observed in NSW Associated Blue-Metal Quarries Ltd v Federal Commissioner of Taxation, supra, at p 512, that is a question of fact. The Collector, and on review the Tribunal, accepted, correctly we think, that the words in their ordinary understanding meant the provision of what is requisite for the subject activity. The next question is whether the material before the Collector, and, on review, before the Tribunal, reasonably admits of different conclusions as to whether the applicant's goods fall within the ordinary meaning of the words as so determined. This is a question of law. If different conclusions are reasonably possible, it is necessary to decide which is the correct conclusion and that is a question of fact (per Kitto J at p 512). Accepting for the purposes of the argument that the material before the Collector and, on review, before the Tribunal, reasonably admits of different conclusions as to whether the applicant's goods fall within the ordinary meaning of the words determined as aforesaid (and thus raising a question of law), it does not follow that any relevant question of law arises in the present appeal. As has been said, even if different conclusions are reasonably possible, it is still necessary to decide which is the correct conclusion and that is a question of fact. It would only be if it was not open to the Tribunal on the material before it to reach the decision it expressed that an error of law, rather than fact, could be shown. 128 Having found the Tribunal applied the ordinary meaning of the Act to the facts of the case and that, at best, different conclusions being open, a question of fact and not of law was involved, the Court dismissed the appeal. 129 In Repatriation Commission v Hill [2002] FCAFC 192; 69 ALD 581 the Full Court said, at [59]: … This decision cannot be the subject of an appeal under s 44(1) of the Administrative Appeals Tribunal Act 1975 ("AAT Act"), unless, in making it, the Tribunal has acted otherwise than in accordance with the law. If a tribunal falls into an error of law "which causes it to identify a wrong issue, to ask itself a wrong question, to ignore relevant material, to rely on irrelevant material or, at least in some circumstances, to make an erroneous finding or to reach a mistaken conclusion, and the tribunal's exercise or purported exercise of power is thereby affected, it exceeds its authority or powers": see Craig v State of South Australia (1995) 184 CLR 163 at 179. An error of law of this kind may support an appeal under s 44 of the AAT Act on a question of law: cf The Hospital Benefit Fund of Western Australia Inc v Minister for Health, Housing and Community Services (1992) 39 FCR 225 at 231-232 per Wilcox, Burchett and French JJ. 130 The decision last referred to in Repatriation Commission v Hill, The Hospital Benefit Fund of Western Australia Inc v Minister for Health, Housing and Community Services [1992] FCA 911; 39 FCR 225, was an appeal from the Tribunal where the Full Court held that the failure to deal with a point which was taken and which went to the central issue of the power of the Minister constituted an error of law, and was an error that went to the heart of the decision. 131 This well-established body of authority, of which we have referred only to examples, was not referred to in Birdseye or Etheridge. The former was decided on 21 October 2003 and the latter on 15 March 2006. In our opinion, to construe s 44 of the AAT Act as limited to "pure" questions of law and as excluding all "mixed questions of fact and law" is inconsistent with that body of authority.

(iv) High Court authority 132 In the High Court the recent and more directly relevant decisions are Roy Morgan Research Centre Pty Ltd v Commissioner of State Revenue (Vic) [2001] HCA 49; 207 CLR 72; Allan v Transurban City Link Ltd [2001] HCA 58; 208 CLR 167; Osland; and Kostas v HIA Insurance Services Pty Ltd [2010] HCA 32; 241 CLR 390. 133 First, however, we mention Repatriation Commission v Owens (1996) 70 ALJR 904; noted 187 CLR 704 where, in refusing an application for special leave to appeal, Brennan CJ, Gaudron and Gummow JJ said, at 904: The question whether, for the purposes of s 120(3) of the Veterans' Entitlements Act 1986, material raises a reasonable hypothesis is a question of fact for it involves no more than a determination whether an hypothesis of connection is reasonable. Here, the Administrative Appeals Tribunal, reviewing the decision of the Commission and exercising the powers conferred by s 120, found that "the circumstances and submissions put before us do not raise a reasonable hypothesis… connecting [the present respondent's] disease with the circumstances of his war service". The only appeal from the decision lay to the Federal Court but that appeal was limited to a question of law. The purpose of limiting an appeal to a question of law is to ensure that the merits of the case are dealt with not by the Federal Court but by the Administrative Appeals Tribunal. This distribution of function is critical to the correct operation of the administrative review process. 134 In Roy Morgan, the plurality, Gaudron, Gummow, Hayne and Callinan JJ, at [5], identified the central issue as whether the appellant was entitled (whether as of right, or by leave) to appeal to the Court of Appeal of Victoria against the primary judge's refusal of leave to institute proceedings under s 148 of the VCAT Act. That provision provided that a party to a proceeding may appeal, on a question of law, from an order of the Victorian Civil and Administrative Tribunal (the VCAT) in the proceeding if, relevantly, the Trial Division gave leave to appeal. The respondent's contention was that no appeal lay to the Court of Appeal against the refusal of leave under s 148(1). The plurality said, at [15]: Section 148 of the VCAT Act is concerned with the invocation of judicial power to examine for legal error what has been done in an administrative tribunal. Although s 148 uses the word "appeal", it is clear that the Supreme Court is asked to exercise original, not appellate, jurisdiction and to do so in proceedings which are in the nature of judicial review. … it is important to recognise that the essential character of s 148 is that it provides for the institution of proceedings in the Supreme Court, by leave, in which the legal correctness of what the Tribunal has done can be challenged. 135 In Allan v Transurban City Link Ltd [2001] HCA 58; 208 CLR 167, Gleeson CJ, Gaudron, Gummow, Hayne and Callinan JJ said, at [11]: Section 44 of the AAT Act provides for an "appeal" to the Federal Court "on a question of law" by a party to a proceeding before the AAT from any decision of the AAT in that proceeding. Section 44 is a law supported by ss 76(ii) and 77(i) of the Constitution. The regime established by s 44 may be contrasted with the jurisdiction respecting mandamus and prohibition for which provision is made in s 75(v) of the Constitution. The alleged error of law which founds an application under s 44 of the AAT Act may be non-jurisdictional error (and may not amount to a constructive failure to exercise jurisdiction) and thus will fall outside the reach of s 75(v). Thus, at least in this respect, the jurisdiction conferred upon the Federal Court by s 44 is broader than that enjoyed by this Court under s 75(v) of the Constitution. It follows that the judicial power of the Commonwealth is engaged in a different measure by the provisions referred to. In this case the legislation is not to be construed on the footing that, if a remedy in the AAT and the Federal Court were not available to Mr Allan, he necessarily would have a remedy under s 75(v). 136 In Osland, French CJ, Gummow and Bell JJ at [18] cited Roy Morgan and said, at [19]: The jurisdiction conferred by s 148(1) is confined to appeals on questions of law. Section 148(7) does not enlarge that jurisdiction. It confers powers on the court in aid of its exercise [49]. That feature of s 148 resembles s 44 of the Administrative Appeals Tribunal Act 1975 (Cth) (the Commonwealth AAT Act), which defines the analogous jurisdiction of the Federal Court to hear appeals on questions of law against decisions of the Administrative Appeals Tribunal (AAT). Under s 44(4) of the Commonwealth AAT Act, the Federal Court, in determining an appeal, may "make such order as it thinks appropriate by reason of its decision". But wide as that power may be, the Court "should not usurp the fact-finding function of the AAT" [50]. Those observations turn upon the text of s 44. They do not depend upon the separation of judicial and executive powers, which limits the functions that can be conferred upon federal courts. They have application to the jurisdiction conferred upon the Court of Appeal by s 148 of the VCAT Act, which is, in concept and in terms, modelled on, although not identical to, s 44. Footnote 49 stated that the distinction between jurisdiction and power had been made repeatedly in the High Court. Footnote 50, emphasising that the Court should not usurp the fact-finding function of the AAT, referred to Repatriation Commission v O'Brien [1985] HCA 10; 155 CLR 422 at 430 per Gibbs CJ, Wilson and Dawson JJ; to Harris v Director-General of Social Security [1985] HCA 1; 59 ALJR 194 at 198; 57 ALR 729 at 735-736 per Gibbs CJ, Brennan, Deane and Dawson JJ; and cf Roncevich v Repatriation Commission [2005] HCA 40; 222 CLR 115 at [28] per McHugh, Gummow, Callinan and Heydon JJ; at [101] per Kirby J. We have omitted footnote 51. Hayne and Kiefel JJ at [71], with whom Heydon J relevantly agreed at [92], also cited Roy Morgan, and, at [78], referred to the review of the Tribunal's decision for legal error. At [73]-[75], their Honours made the following pertinent distinction between permissible and impermissible fact-finding on the part of the Court on an appeal on a question of law: It is true that in examining the legal advices to ascertain whether there was a material difference, or inconsistency, between them, the Court of Appeal was to engage in something of a factual inquiry, but it was limited. It was necessary to ascertain whether the factual substratum for the opinion of Morris J existed and whether, as his Honour had implied, the differences were significant. The former was a necessary condition for his Honour's application of s 50(4). The latter was necessary to a proper understanding of his Honour's reasoning to that conclusion. But consistent with the VCAT Act, the Court of Appeal could not assume the function of the Tribunal and determine for itself whether the public interest required disclosure of the advices. … The task which the Court of Appeal set for itself on remitter may be seen from the first question it posed for determination following its findings that there were material differences in the advices: "Does the public interest require that access be given?" This was followed by a consideration of "The public interest in accountability". The Court concluded with an inquiry as to whether "the particular circumstances of the case require disclosure". By posing the question it did and undertaking the inquiries identified, the Court of Appeal did not review what the Tribunal had done, and had said in its reasons, for error of law. Rather, it impermissibly assumed the role of the Tribunal and substituted its own decision. (Citations omitted.) In the result, their Honours said, at [83], the Court of Appeal did not undertake the task required by s 148(1) and determine whether the conclusions reached by Morris J, and the reasons for it, were attended by error of law. 137 In Kostas, the High Court was concerned with the phrase "the Tribunal decides a question with respect to a matter of law" when used in s 67(1) of the Consumer, Trader and Tenancy Tribunal Act 2001 (NSW) (Tribunal Act). French CJ said, at [24]-[25], that the decisions the words "with respect to a matter of law" covered clearly included decisions of questions of law but not decisions of questions of fact. Nor did the appeal extend to all aspects of any decision involving a question of law. The parties differed on whether the jurisdiction conferred by s 67 extended to decisions of questions of mixed fact and law. The respondent contended that such decisions could only be the subject of appeal if the factual aspects of the question decided were not in dispute. French CJ held that the words "question with respect to a matter of law" were wide enough to encompass a question of mixed law and fact and, citing Maurici v Chief Commissioner of State Revenue [2003] HCA 8; 212 CLR 111 at [8], noted that" "Questions of fact and law are often closely intertwined (at [25]). Ultimately, at [60], his Honour decided the appeal on the basis that the primary judge had correctly held there was error of law informing that Tribunal's decision that Mr and Mrs Kostas had not validly terminated the contract. Thereafter, the primary judge was entitled on the factual material, which was largely uncontradicted, to make the findings he did. 138 At [68], Hayne, Hayden, Crennan and Kiefel JJ said it was not necessary to explore whether on such an appeal the Supreme Court may determine questions of law or fact, or of mixed fact and law, other than the particular question erroneously decided. The appellants contended that there was no material properly before the Tribunal which supported the finding that the disputed claims for extension of time had been served on the appellants (at [67]). Section 67(1) permitted the appellants to appeal to the Supreme Court against the Tribunal's decision that there was material properly before the Tribunal which supported the conclusion that the disputed claims for extension of time had been served on the appellants. Their Honours held that the conclusion that there was material of that kind, necessarily implicit in making the finding that the disputed claims had been served, was a decision with respect to a question of law (at [69]). The High Court disagreed with the Court of Appeal which had concluded that while a "no evidence" ground may support judicial review, it did not form a basis for a statutory appeal under s 67(1). Their Honours said, at [91]: … A tribunal that decides a question of fact when there is "no evidence" in support of the finding makes an error of law (134). What amounts to material that could support a factual finding is ultimately a question for judicial decision. It is a question of law. And in this case, for the reasons given by the primary judge, there was no evidence before the Tribunal, when it decided the separate question identified by the parties, upon which the Tribunal could find that the disputed notices had been served. (Original emphasis.) Footnote 134 referred to Lombardo v Commissioner of Taxation [1979] FCA 105; 10 ATR 310 at 313-314 Bowen CJ and to TNT Skypak at 187 per Gummow J.

(v) Full Court decisions following Birdseye 139 The decisions of Full Courts of this Court include Birdseye at [18]; Saxby Bridge; Etheridge at [16] per Branson J, Spender and Nicholson JJ agreeing; HBF Health Funds at [6]; Collins v Administrative Appeals Tribunal [2007] FCAFC 111; 163 FCR 35; Hussain at [32]; Culley at [18]; De Simone at [21]; Roy Morgan Research Pty Ltd v Commissioner of Taxation [2010] FCAFC 52; 184 FCR 448 at [26] and [33]; Commissioner of Taxation v Trail Bros Steel & Plastics Pty Ltd [2010] FCAFC 94; 186 FCR 410 at [12]; Board of Trustees of the State Public Sector Superannuation Scheme v Edington [2011] FCAFC 8; 119 ALD 472 at [39] (concerning the equivalent provision of the Superannuation (Resolution of Complaints) Act; Sullivan v Civil Aviation Safety Authority [2014] FCAFC 93; 226 FCR 555 at [117]; and Tarrant v Australian Securities and Investments Commission [2015] FCAFC 8; 317 ALR 328 at [100]. 140 In Brown v Repatriation Commission [2006] FCA 914 Branson J summarised the position as follows, at [7]: The limited nature of an appeal on a question of law has recently been considered by the Full Court in Birdseye v Australian Securities and Investment Commission (2003) 76 ALD 321; Comcare v Etheridge [2006] FCAFC 27; HBF Health Fund Inc v Minister for Health and Ageing [2006] FCAFC 34 and Purvis v Dairy Adjustment Authority (No 2) [2006] FCAFC 38. It is not necessary to repeat here everything said in those cases. It is sufficient to observe that they make clear that the subject matter of an appeal under s 44(1) of the AAT Act is the question (or questions) of law stated in the notice of appeal. The Court has no jurisdiction on such an appeal to evaluate the evidence before the Tribunal. Order 53 r 3(2) of the Federal Court Rules (and see also Form 55A) requires the notice of appeal to state separately the question or questions of law to be raised on the appeal, the order sought and the grounds relied upon in support of the order sought. This final requirement calls for a brief statement explaining why the answer to the question (or questions) of law will lead to the making of the order sought. 141 As will be seen, the proposition that the Court has no jurisdiction on such an appeal to evaluate the evidence before the Tribunal is open to misinterpretation. 142 We consider separately the importance of a clear statement of the question of law on the one hand, and, on the other hand, the content of that expression. 143 In TNT Skypak, the AAT had rejected the taxpayer's case that an amount of $95,200 had wrongly been included in its assessable income for a particular year. The Tribunal held that the amount in question was income according to ordinary concepts and that it was also brought into the assessable income of the taxpayer by the operation of s 26(j) of the ITAA 1936. The Commissioner took the preliminary point that the appeal was not brought "on a question of law" but on questions of fact, with the result that the appeal was incompetent. The taxpayer alleged that the amount was not assessable income because it was not income in accordance with the ordinary concepts and usages of mankind and was not otherwise rendered assessable income by s 26(j). At 178, Gummow J noted the difference between s 44 of the AAT Act and the old s 196 of the ITAA. Section 196 provided for appeals from the Board of Review which "involved" a question of law. The result under s 196 was that if some question of law was involved, the whole of the decision of the Board was open to review, not merely the question of law. Gummow J said, at 178, that this no longer would be the case with appeals brought under s 44 of the AAT Act. "The existence of a question of law is now not merely a qualifying condition to ground the appeal, but also the subject matter of the appeal itself", citing Brixius at 363. At 183, Gummow J held that the appeal was confined to questions of law. That was the content of the matter between the parties, in respect of which the court was invested with jurisdiction. The preliminary objection to competency of the proceedings failed. This was because, his Honour held, the meaning of the term "income", in the sense in issue in the case, was a question of law because the term "income" in the expression "assessable income" was not used in some non-technical sense; the question of what, on facts as found, was income for the purposes of the ITAA 1936 was a question of law. In the result, the appeal was upheld. Gummow J said, at 182, that ordinarily the process of finding the facts by the Tribunal will not present a question of law, but whether the facts, once found by the Tribunal, fell within the terms of a particular statute would frequently be a question of law. Gummow J did not say anything, at least expressly, about whether a mixed question of fact and law would or may fall within s 44 of the AAT Act. In our opinion, TNT Skypak does not support the additional proposition that s 44 does not extend to a question of mixed fact and law. 144 In Birdseye there was an assumption in the judgment of Branson and Stone JJ at [18] and [25] that s 44 did not extend to a question of mixed fact and law. Their Honours referred in this respect, at [11] and [13], to TNT Skypak and to Lambroglou. Their Honours then said, at [18]: In our view, O 53 r 3(2) [of the Federal Court Rules] discloses an intention that a question of law to be raised on an appeal from the tribunal should be stated with precision as a pure question of law. It is in the specification of the grounds relied upon in support of the orders sought that, in our view, one should expect to find the links between the question of law, the circumstances of the particular case and the orders sought on the appeal. … As to para 2.2 of the notice of appeal, which was in the following terms: Whether the Board's decision would remain in force and remain unchallengeable even if the respondent's decision were set aside. their Honours said at [25]: At best the question stated at para 2.2 of the notice of appeal would seem to be a question of mixed fact and law inviting: (a) consideration of whether the Board has power to revoke an order cancelling a person's registration as an auditor; and (b) assuming that the Board has that power, speculation as to how the Board might exercise the power in the circumstances of this case should the decision of the respondent be set aside. 145 The order of the Court was that the application be dismissed, with costs. Marshall J agreed with what Branson and Stone JJ had said concerning the deficiencies in the applicant's notice of appeal and his Honour also agreed that the notice of appeal did not, with precision, identify a question or questions of law (at [61]). 146 In Saxby Bridge, at [45] and following, Branson J repeated the observations her Honour had made in Birdseye at [17]-[18], and continued, at [46], that the questions of law, of which there were twenty, in the Saxby Bridge appeal were not stated with precision as pure questions of law. Question 1 was in the following terms: Whether, unless the Tribunal was satisfied that SBFP and ABS had not performed or would not perform their duties "efficiently, honestly and fairly", the Tribunal had no power under s 826(1) of the Corporations Law to revoke their securities dealers licences. Her Honour said, at [46], that this ground, amongst others, called for an identification of the case actually advanced by ASIC before the Tribunal and for an evaluation of the evidence called in support of that case. At [78], her Honour said the following: The issue which is presumably sought to be ventilated by Question 1 is whether the tribunal, in reviewing the decision of the applicant, was entitled on the evidence before it to exercise the power to revoke the licences of the respondent in reliance on any circumstance other than the circumstances identified in s 826(1)(j) and (k). Although, for the reasons given above in [41]-[47], I consider that this question is inappropriately formulated, it is convenient to give consideration to the issue presumably sought to be raised by the question. At [107], Jacobson and Bennett JJ agreed with Branson J, saying: We agree with Branson J that, in order to conform with s 44(1) of the Administrative Appeals Tribunal Act 1975 (Cth) (the AAT Act) and O 53 r 3(2) of the Federal Court Rules 1979 (Cth), it is necessary to state questions which are pure questions of law. We also agree that the questions should be stated with precision but the issue for consideration in an appeal under s 44(1) of the AAT Act must always be whether, on a proper analysis, the question is one of law rather than a question of fact or a question of mixed fact and law. In relation to Question 1, their Honours said, at [127], that although not stated with the degree of precision ordinarily required to conform with s 44(1) of the AAT Act and the Federal Court Rules, it raised questions of construction of s 826(1) of the Corporations Law and, as such, raised a question of law. 147 In Etheridge, Branson J, with whom Spender and Nicholson JJ agreed, restated her Honour's earlier conclusions as follows, at [11]-[17]. In particular, her Honour said at [13]-[17]: The nature of an appeal under s 44(1) of the AAT Act was considered in Birdseye v Australian Securities and Investments Commission (2003) 38 AAR 55 by Stone J and me particularly at [10]-[18]. We expressed our approval of the observation made by Gummow J in TNT Skypak International (Aust) Pty Ltd v Commissioner of Taxation (Cth) (1988) 19 ATR 1067 at 1069-1070 that an appeal "on a question of law" is narrower than an appeal that merely involves a question of law. As his Honour pointed out, where an appeal lies "on a question of law" the subject matter of the appeal is the question or questions of law. That is, the subject matter of the appeal is the question or questions of law stated as required by O 53, r 3(2)(b). The legislature, by creating a statutory right of appeal to a party to a proceeding before the Tribunal in the narrow terms of s 44(1), disclosed an intention to limit the capacity of the Court on an appeal under s 44(1) to review factual findings of the Tribunal. An appeal pursuant to s 44(1) is thus quite different from an appeal from a judicial body under s 24 of the Federal Court Act. An appeal under s 24 is an appeal by way of rehearing (see, Poulet Frais Pty Ltd v Silver Fox Company Pty Ltd (2005) 220 ALR 211 at [35]-[47]). The subject matter of an appeal under s 44(1) of the AAT Act is (shorn of the requirement to determine what, if any, entitlement to relief flows from the answer to the question or questions of law) of the same character as the subject matter of a reference of a question of law to the Court made under s 45 of the AAT Act. In Birdseye Stone J and I also expressed approval of the observation of Ryan J in Australian Telecommunications Corp v Lambroglou (1990) 12 AAR 515 at 527 that: If the question, properly analysed, is not a question of law no amount of formulary like "erred in law" or "was open as a matter of law" can make it into a question of law. A mixed question of fact and law is not a question of law within the meaning of s 44(1) of the AAT Act. Stone J and I observed in Birdseye (at [18]): In our view, O 53 r 3(2) discloses an intention that a question of law to be raised on an appeal from the Tribunal should be stated with precision as a pure question of law. It is in the specification of the grounds relied upon in support of the orders sought that, in our view, one should expect to find the links between the question of law, the circumstances of the particular case and the orders sought on the appeal. Although recent amendments to s 44 of the AAT Act have given the Federal Court limited powers to make findings of fact (see, s 44(7) to (10)), this is a power available to be exercised after the Court has given consideration to the questions of law which constitute the subject matter of the appeal. If the answers to those questions, or any of them, lead to relief being granted to the applicant, the limited power to find facts which is vested in the Court by s 44(7) may be exercised, where it is convenient to do so having regard to the factors identified in the subsection, to avoid the need for the matter to be remitted to the Tribunal for further consideration. As may be seen, this introduced a new strand of the reasoning: namely, that the subject matter of an appeal under s 44 is of the same character as the subject matter of the reference of a question of law to the Court made under s 45 of the AAT Act. 148 We note that in Committee of Direction of Fruit Marketing v Australian Postal Commission [1979] FCA 55; 37 FLR 457, Northrop J said that ss 44 and 45 of the AAT Act were complementary. His Honour said: In general, a question of law is raised after a Tribunal has determined all necessary facts. The nature of the question of law usually depends upon the facts so determined. The principles which should apply to the reception of evidence or of further evidence by this Court when exercising its original jurisdiction conferred by s. 44 of the Administrative Appeals Tribunal Act were not the subject of submissions and it would be unwise to attempt to formulate any general rule applicable to the admission of evidence on the hearing of an appeal from a decision of the Tribunal. Under s.45 of the Administrative Appeals Tribunal Act, the Tribunal may refer a question of law arising in a proceeding before the Tribunal to the Federal Court of Australia for decision and the Federal Court has jurisdiction to hear and determine a question of law so referred to it. The provisions of s. 44 and s. 45 are complementary and normally a question of law which is to be heard and determined by the Federal Court arises from facts found by the Tribunal either before or after the Tribunal has given a decision. Normally no evidence of other facts is to be given before the Federal Court. 149 We see no connection between ss 44 and 45 such as would throw light on the content of s 44. The terms of the sections are otherwise different, as are their purposes. We prefer the analysis of French CJ in Kostas at [21]-[23] in relation to sections of the Tribunal Act in the following form. Section 66(2) provided that: If, in any proceedings, a question arises with respect to a matter of law, the Tribunal may decide the question or may refer it to the Supreme Court for decision. Section 67 of the Tribunal Act, so far as relevant, provided: Appeal against decision of Tribunal with respect to matter of law (1) If, in respect of any proceedings, the Tribunal decides a question with respect to a matter of law, a party in the proceedings who is dissatisfied with the decision may, subject to this section, appeal to the Supreme Court against the decision. (2) An appeal is to be made in accordance with the rules of the Supreme Court. The rules of the Supreme Court may provide that an appeal (or such classes of appeal as may be specified in the rules) may be made only with the leave of the Court. (3) After deciding the question the subject of such an appeal, the Supreme Court may, unless it affirms the decision of the Tribunal on the question: (a) make such order in relation to the proceedings in which the question arose as, in its opinion, should have been made by the Tribunal, or (b) remit its decision on the question to the Tribunal and order a rehearing of the proceedings by the Tribunal. … (8) A reference in this section to a matter of law includes a reference to a matter relating to the jurisdiction of the Tribunal." Chief Justice French said, at [22]-[23]: While ss 66 and 67 are both concerned with questions with respect to matters of law, they serve different functions. A referral of a question to the Supreme Court under s 66 involves the exercise by that Court of a limited interlocutory function. The Court has no general power under s 66 to dispose completely of proceedings before the Tribunal or to make such order as the Tribunal might, or might be required to, make in light of the Court's determination. The jurisdiction and powers of the Court on an appeal under s 67, however, are not so confined. It is significant that s 66 not only provides for referral to the Supreme Court of a question which arises with respect to a matter of law but also empowers the Tribunal to decide such a question for itself. Referral logically requires formulation of a question. A decision of a question with respect to a matter of law by the Tribunal itself may be a decision of a question which it has expressly formulated, or it may be a decision implicit in a finding of the Tribunal. The right of appeal conferred by s 67 is therefore not limited to an appeal against explicit decisions of questions formulated in the proceedings. On its face it extends to decisions which were necessary steps in the Tribunal's reasoning, whether or not made explicit by the Tribunal. This construction of s 67 is compatible with the purpose, nature and composition of the Tribunal, which can be constituted by non-lawyer members. It is also compatible with a legislative scheme under which legal representation before the Tribunal will be the exception rather than the rule. The statutory objects of informality, expedition and inexpensiveness do not stop at the door of the Supreme Court. (Citation omitted.) In a joint judgment, Hayne, Heydon, Crennan and Kiefel JJ also stated, at [76]: It will be observed that s 67 referred to a question "with respect to a matter of law". Section 66(2) provided for the Tribunal to decide for itself, or to refer to the Supreme Court for decision, "a question [which] arises with respect to a matter of law". Section 67(1) provided for an appeal to the Supreme Court "[i]f, in respect of any proceedings, the Tribunal decides a question with respect to a matter of law". The parties advanced arguments about what followed from the use of similar language in provisions dealing in one case with reference for decision by the Supreme Court, and in the other with conferral of a right of appeal. But, as will later be explained, the determination of this case does not depend upon resolving whether any of those arguments are correct. We would add that discretionary reasons for not stating a mixed question under s 45, or indeed constitutional questions which may be involved in the premature stating of such a question (Bass v Permanent Trustee Co Ltd [1999] HCA 9; 198 CLR 334) where there are no findings of fact and the parties have not agreed upon the facts, do not arise in relation to s 44. 150 Returning to decisions of this Court, in HBF Health Funds, Spender, Branson and Siopis JJ said, at [5]-[6]: As pointed out in Birdseye at [10]-[18] and Etheridge at [13], the subject matter of an appeal pursuant to s 44(1) of the AAT Act is the question or questions of law specified in the notice of appeal. It is not necessary to repeat here what was said in those cases about the appropriate form of a question of law specified for the purposes of an appeal pursuant to s 44(1) of the AAT Act. The question of law specified in the applicant's amended notice of appeal is reformulated below to clarify the critical questions raised on this appeal. As Birdseye and Etheridge also make plain, the grounds required to be specified in the notice of appeal are not grounds of appeal; they are the grounds upon which the appellant will argue that the answers for which it contends to the questions of law entitle it to the relief which it seeks. It is not possible, as the applicant sought to do in this case, to extend the subject matter of the appeal beyond the specified questions of law by itemising, under the heading "Grounds", a series of alleged errors (some being errors of law, some being errors of fact and some being errors of mixed law and fact) in the reasons for decision of the Tribunal. 151 The other Full Court decisions which have referred to Etheridge are, as we have said, Collins; Hussain; De Simone at [21]; Culley at [18]; Roy Morgan (FCAFC) at [26] and [33]; Trail Bros at [12]; Edington at [39] (concerning the equivalent provision of the Superannuation (Resolution of Complaints) Act; Sullivan at [117]; and Tarrant at [100]. 152 We consider Collins more fully below at [179]ff. As will appear, in our opinion, it is inconsistent with the proposition most often associated with Etheridge that the jurisdiction of the Court under s 44 of the AAT Act extends only to "pure" questions of law and with the associated proposition that the jurisdiction of the Court does not extend to any questions of mixed fact and law. 153 In Hussain, in the course of deciding that the Attorney-General's decision to issue two security certificates was not amenable to review by the Court under s 44(1) of the AAT Act, the Full Court stated, at [32], with reference to the observations in Birdseye and Etheridge, that a mixed question of fact and law is not a question of law within the meaning of s 44. The real burden of that part of the decision, however, was whether the contention that the certificates were invalid could be raised under s 44 as being a decision anterior to that of the Tribunal and taken by another official. 154 We have considered De Simone above at [72]-[74]. On the present point, the fifth and sixth grounds of the appeal, to which the Full Court was adverting at [21], were dealt with on their merits and appear to have been issues of fact. That is what the Full Court had in mind in saying that these grounds "At best … may be mixed questions of fact and law". The reference to Birdseye must be read in that context. 155 In Culley, the question under consideration, question 6, was: "Whether the respondent failed to exercise its statutory power of disqualification contained in s 206F of the Corporations Act within a reasonable time." The Full Court said, at [19], that this was not a pure question of law of the type referred to in Birdseye. In substance, the Court said, it was a subsidiary question of fact flowing from an affirmative answer to question 5, which was whether the statutory power of disqualification contained in s 206F of the Corporations Act was subject to an implied requirement that it be exercised within a reasonable time. In form, question 6 was, at best, a question of mixed fact and law requiring the Court to apply its conclusion of a need for ASIC to act within a reasonable time to the circumstances of the case which had been before the Tribunal. The Full Court said it was no part of this Court's function under s 44 to resolve such a question. We would analyse question 6 as not being on a question of law but being on a question of fact. 156 In Roy Morgan (FCAFC) the Full Court cited Hussain in considering whether the questions (a) Are the interviewers employees of the Applicant within the meaning of s 12(1) of the Superannuation Guarantee (Administration) Act 1992, and (b) Are the interviewers employees of the Applicant within the meaning of s 12(3) of the Superannuation Guarantee (Administration) Act 1992, were questions of law within s 44 of the AAT Act. Applying Hope v Bathurst City Council [1980] HCA 16; 144 CLR 1, and Vetter v Lake Macquarie City Council [2001] HCA 12; 202 CLR 439 and the judgment of Mason JA in Williams v Bill Williams Pty Ltd [1971] 1 NSWLR 547 at 557, the Full Court held that these questions were questions of fact (at [29]-[30]). 157 The Court in Trail Bros followed Collins (see further below at [179]ff). The reference in Trail Bros to mixed questions and to Etheridge was obiter as the Court held, at [14], that the Commissioner's appeal raised questions within the following non-exhaustive classes of questions of law (identified at [13]):

(vi) Mixed question of fact and law 163 In our opinion, it is necessary to consider what a "mixed question of fact and law" may be. 164 The imprecision of the expression has been recognised for nearly two centuries. Aronson and Groves Judicial Review of Administrative Action (5th ed, Thomson Reuters, 2013) at p 203 footnote 113 note that in Thomas Starkie, A Practical Treatise of the Law of Evidence (Clark, 1824) vol 1 pp 421-423, the concept of a mixed question was condemned for its imprecision. Starkie said that cases "have been sometimes termed mixed questions of law and fact" "where the Jury was to find the special facts, and where the Court can decide upon the legal quality of those facts by the aid of established rules of law, independently of any general inference or conclusion to be drawn by a Jury". Thus Starkie noted that it had been held that the question of reasonable notice of the dishonour of a bill of exchange was a mixed question, citing Tindal v Brown (1786) 1 TR 167; 99 ER 1033. After some discussion, the author said, at 423: In strictness therefore, as the legal application of every technical expression recognized by the law is partly a matter of fact, and partly a matter of law, it may be doubted whether the terms 'mixed question of law and fact' serve accurately to distinguish any particular class of cases. In the third edition of A Practical Treatise of the Law of Evidence (Stevens and Norton, 1842) the author repeated the above statement at 521 but added in a footnote to the same proposition that it had been held that the question of reasonable notice of the dishonour of a bill of exchange was a mixed question, at pp 520-521: The terming any question a mixed question of law and fact, is chargeable with some degree of indistinctness. Questions of fact and of law are not in strictness ever mixed; it is always for the jury to decide the one, and the Court the other, however complicated the case may be. In some cases the main difficulty may consist in ascertaining the facts, where the application of the law to the ascertained facts admits of no doubt; in another the facts may be clear and simple, and their legal effect doubtful; but still in each case the provinces of the Court and jury are perfectly plain and distinct. It is true that in some instances the Court could not, without the aid of a conclusion of fact drawn by a jury, apply the law; but this consideration does not properly occasion any intermixture of or confusion of the respective functions of the court and jury; for the latter, in drawing their conclusion, still confine themselves to mere matter of fact. 165 Another early reference to the distinction is found in a case concerning whether a legal prosecution was carried on without a probable cause. In Johnstone v Sutton (1786) 1 TR 510 at 545; 99 ER 1225 at 1243-1244 the reasons of Lord Mansfield and Lord Loughborough included: The question of probable cause is a mixed proposition of law and fact. Whether the circumstances alleged to shew it probable, or not probable, are true and existed, is a matter of fact; but whether, supposing them true, they amount to a probable cause, is a question of law: and upon this distinction proceeded the case of Reynolds and Kennedy, 1 Wils. 232. As to this, however, see A v New South Wales [2007] HCA 10; 230 CLR 500 at [45] per Gleeson CJ, Gummow, Kirby, Hayne, Heydon and Crennan JJ who said: This division of functions between judge and jury was examined by Thayer and said to be "a peculiar doctrine". In Johnstone v Sutton, Lord Mansfield and Lord Loughborough described the question of reasonable and probable cause as "a mixed proposition of law and fact". But Thayer rightly said that "[b]aptizing the question of reasonable and probable cause with this name, as a 'mixed question of law and fact,' common and almost universal as it is, has only added to the confusion." Rather, Thayer preferred to describe the question as "a mixed question of fact; 'mixed' in the sense that the two tribunals [of judge and jury] are blended in deciding it, that the issue of fact is divided between them". (Citations omitted. Original emphasis.) 166 More recently, mixed questions of law and fact have been described as "one of the baffling gadgets in the judicial toolbox" (Endicott T "Questions of law" (1998) 114 LQR 292 at 300 and Sir John Laws, writing extra-judicially, has said "There is no such thing as a mixed question of law and fact - the concept is actually self-contradictory" (Laws J "Law and fact" (1999) British Tax Review 159). 167 Clearly a factual conclusion separate from any question of law is outside the scope of s 44. 168 Senior counsel for the respondent, when asked in argument what is a question of mixed fact and law, submitted that it was a question that required the court to determine not only a question of law, but also to determine a question of fact, that is, to find a fact. Senior counsel for the respondent accepted, however, that a contention put that the Tribunal's treatment of the evidence lacked a logical basis would be a question of law, even if that involved evaluating the evidence. He also accepted that the contention that the Tribunal wrongly applied the onus of proof was a question of law. He further accepted that question F was plainly a question of law. 169 If a mixed question of fact and law is accurately described as being one which can only be answered by both determining the facts of a case and determining what the relevant law means, Interfaith Community Org. v. Honeywell Intl., Inc., 399 F.3d 248, 269-70 (3d Cir. 2005) (Ambro J concurring), then we agree that such a question does not fall within s 44. However, the phrase is by no means always used in that sense. 170 In Williams v The Queen [1986] HCA 88; 161 CLR 278, s 401(2)(b) of the Criminal Code 1924 (Tas) enabled the Attorney-General to appeal to the Court of Criminal Appeal against an acquittal on a question of law alone. Certain records of interview said to contain confessions allegedly made to the police by the applicant which related to 26 of the counts were not admitted into evidence by the trial judge and the Crown Prosecutor offered no evidence on those counts. In consequence, the applicant was acquitted on 13 counts of burglary and 13 counts of stealing. The Attorney-General applied for leave to appeal. The Court of Criminal Appeal granted leave to appeal, allowed the appeal and ordered that the applicant be retried on the 26 counts. The Court of Criminal Appeal considered that there was at least one question of law alone which arose in the case, namely whether the trial judge misdirected himself as to the proper application of s 34A(1) of the Justices Act 1959 (Tas). On the applicant's application, the High Court granted the application for special leave to appeal and allowed the appeal. The grounds stated by the Attorney-General in the notice of appeal were: (1) that the trial judge erred in law in refusing to admit as evidence for the prosecution seven records of interview, and (2) that the trial judge erred in law in exercising a discretion in refusing to admit as evidence for the prosecution the seven records of interview. Gibbs CJ said, at 287, that ultimately the question was whether the confessions were rightly rejected and that depended on the making of a discretionary judgment which depended in part on the facts of the case. The two grounds raised one question the answer to which depended in part on the facts of the case; neither ground raised a question of law alone and the Court of Criminal Appeal had no power to grant leave to appeal. Mason and Brennan JJ said, at 302, that even if the trial judge was in error in his construction of s 34A(1) of the Justices Act, that error was not the only factor contributing to the decision which the Attorney-General attacked on the appeal as the decision to reject the evidence of the interviews depended also on the trial judge's appreciation of the facts of the case. The rejection of the evidence was not attributable to "a question of law alone". Wilson and Dawson JJ said, at 314, that the grounds of appeal raised a question of mixed fact and law which did not fall within s 401(2)(b) of the Criminal Code. They agreed with the view of Gibbs CJ on that aspect of the matter. 171 For recent decisions in a similar context see R v JS [2007] NSWCCA 272; 230 FLR 276; 175 A Crim R 108; Rasic v R [2009] NSWCCA 202 at [12] per Johnson J, with whom Basten JA and RS Hulme J agreed; and R v PL [2009] NSWCCA 256; 261 ALR 365 at [26] per Spigelman CJ, with whom McClellan CJ in CL and RA Hulme J agreed. In the first of those cases, Spigelman CJ, with whom Mason P, McClellan CJ at CL, Hidden and Howie JJ agreed, distinguished Williams, at [82]-[83], by concluding that the present appeal involved two separate steps: first a question of law and then a question of mixed law and fact. The first step, the interpretation of the provision, was the relevant, indeed determinative, step and that step did answer the description of a "question of law alone". 172 In New South Wales Associated Blue-Metal Quarries Ltd v Commissioner of Taxation [1956] HCA 80; 94 CLR 509, Kitto J, sitting at first instance in the original jurisdiction of the High Court, was concerned with s 122(1) of the Income Tax and Social Services Contribution Assessment Act 1936-1952 (Cth). The section provided that where a person, in connection with the carrying on by him of mining operations upon a mining property for the purpose of gaining or producing assessable income had incurred expenditure of a capital nature on the necessary plant, development of the mining property or housing and welfare, an amount ascertained in accordance with the section should be an allowable deduction in respect of the expenditure. Kitto J found, at 511, that the total sum of £75,813 was expenditure of a capital nature on necessary plant and development of the appellant's property, incurred by the appellant in connection with the carrying on by it of its operations on that property for the extraction of blue-metal for the purpose of gaining or producing assessable income. The only outstanding question was whether those operations filled the description "mining operations upon a mining property" within the meaning of s 122. Kitto J said that this was a mixed question of law and fact. His Honour continued, at 511-512, that, first, it was necessary to decide as a matter of law whether the Income Tax and Social Services Contribution Assessment Act used the expression "mining operations" and "mining property" in any other sense than that which they had in ordinary speech. Kitto J held that the Parliament intended no other meaning than that which the words ordinarily had in Australia at the relevant time. Next, the common understanding of the words had to be determined and that was a question of fact. The next question was whether the material before the Court reasonably admitted of different conclusions as to whether the appellant's operations fell within the ordinary meaning of the words as so determined and that was a question of law. If different conclusions were reasonably possible, it was necessary to decide which was the correct conclusion and that was a question of fact. An appeal was dismissed: 94 CLR 509 at 525. 173 In Hope, the New South Wales Court of Appeal had held, by majority, that the decision of the primary judge involved no error of law, the appellant having appealed under s 118(7) of the Local Government Act 1919 (NSW) against the decision of the Bathurst City Council that his land was not rural land. Section 118(7) provided for an appeal to the Land and Valuation Court and thereafter a case was stated for the decision of the Supreme Court pursuant to s 17 of the Land and Valuation Court Act 1921 (NSW). Section 17 provided that when any question of law arose in any proceeding before the court the court shall, if so required in writing by any of the parties within the prescribed time and subject to the prescribed conditions, state a case for the decision of the Supreme Court thereon. Section 118(1) defined "rural land" to mean, in part, a parcel of land wholly or mainly used for the time being by the occupier carrying on one or more of the businesses or industries of grazing. The High Court allowed the appeal, Gibbs and Stephen JJ agreeing, at 3, with Mason J that for the reasons given by him the primary judge erred in law in deciding that the appellant's use of the land was not significant enough to bring it within the scope of the common general meaning of the word "business". In a separate judgment, Aickin J also agreed with the judgment of Mason J (at 11). Describing, at 7, the judgment of Kitto J in New South Wales Associated Blue-Metal Quarries as illuminating, Mason J accepted that "business" had the ordinary or popular meaning which it would be given in the expression "carrying on the business of grazing" but said, at 9, the critical issue was whether the material before the Court reasonably admitted of different conclusions on the question whether the appellant's activities constituted a "business". On the facts as found, Mason J concluded that the appellant's activities amounted to a business and that no other conclusion was reasonably open. But for one circumstance, his Honour said, this would have established that the primary judge erred in point of law. The circumstance was that there were some indications that the primary judge erred in assigning to "business" a meaning which was not its popular meaning and, applying Kitto J, the determination of the common understanding of the word was a question of fact. Mason J concluded, at 10, that if the primary judge erred in arriving at the common understanding of the word "business" the error was associated with an omission to relate the word to the expression with which it was associated, this being an error in construction and, accordingly, of law. Mason J concluded this point by saying: Be this as it may, it is my opinion that the primary judge arrived at a conclusion which cannot reasonably be supported, having regard to the meaning which I ascribe to "business" in the statutory definition, for on the facts as found the appellant's activities manifested the essential characteristics required of a business. There was no suggestion that any mixed nature of the questions took the appeal outside s 118(7) of the Local Government Act. 174 The judgment of Mason J in Hope was approved in Vetter, at [27], per Gleeson CJ, Gummow and Callinan JJ. In that case the appeal was brought pursuant to s 32 of the Compensation Court Act 1984 (NSW) which conferred a right of appeal upon a party aggrieved by an award of the judge of the Compensation Court in point of law. The question concerned s 10 of the Workers Compensation Act 1987 (NSW) and in particular whether the appellant was on a journey between her place of employment and her place of abode when she was injured. At [24], Gleeson CJ, Gummow and Callinan JJ said: Whether facts as found answer a statutory description or satisfy statutory criteria will very frequently be exclusively a question of law. To put the matter another way, indeed, as it was put by Priestley JA in his judgment, whether the facts found by the trial court can support the legal description given to them by the trial court is a question of law [citation omitted]. However, not all questions involving mixed questions of law and fact are, or need to be susceptible of one correct answer only. Not infrequently, informed and experienced lawyers will apply different descriptions to a factual situation. That is why the test whether legal criteria have been met has been expressed in language of the kind used by Jordan CJ in Australian Gas Light Co v Valuer-General [(1940) 40 SR (NSW) 126 at 138]: "[I]f the facts inferred … from the evidence … are necessarily within the description of a word or phrase in a statute or necessarily outside that description, a contrary decision is wrong in law." See also Hayne J's concurring judgment at [108]. 175 In Maurici, the question was whether, in fixing the unimproved value of an improved parcel of land under the Land Tax Management Act 1956 (NSW) in accordance with s 6A of the Valuation of Land Act 1916 (NSW), it was right to have regard exclusively or virtually exclusively to sales of scarce unimproved parcels of land in the same locality as the relevant land. On objection, the Valuer General informed the appellant that the valuation would be reduced to $2,000,000. The appellant appealed to the Land and Environment Court where the Commissioner reduced the unimproved value of the land to $1,950,000. An appeal lay to a judge of the Land and Environment Court on a question of law pursuant to s 56A of the Land and Environment Court Act 1979 (NSW). The question argued was as to the relevance of scarcity, it being submitted that a deduction should be made from the land value because of the general scarcity of vacant land in the Hunters Hill Municipality. In a single judgment, the High Court said, at [8]: … We do not doubt that the question argued there, and again here, as to the relevance of scarcity, was a question of at least mixed law and fact. The making of a valuation will frequently involve an application of legal principle or principles. Questions of law, fact and opinion do not always readily and neatly divide themselves into discrete matters in valuation cases and practice [Boland v Yates Property Corporation Pty Ltd (1999) 74 ALJR 209 266 [276]; 167 ALR 575 at 651]. The Privy Council took this view, with which we respectfully agree, of what may constitute a point, or question of law in relation to a valuation of land, in Melwood Units Pty Ltd v Commissioner of Main Roads [[1979] AC 426 at 432, per Lord Russell of Killowen. See also The Commonwealth v Arklay (1952) 87 CLR 159 at 174-175, per Dixon CJ, Williams and Kitto JJ, citing Commissioner of Succession Duties (SA) v Executor Trustee and Agency Co of South Australia Ltd (1947) 74 CLR 358 at 367, per Latham CJ, Rich and Williams JJ.]: "If it should appear that the Land Appeal Court ignored a principle of assessment of compensation for compulsory acquisition (resumption), such as for example that commonly known as the Point Gourde principle, that in their Lordships' opinion would be an error in law. So also if the Land Appeal Court rejected as wholly irrelevant to assessment of compensation a transaction which prima facie afforded some evidence of value and rejected it for reasons which were not rational, that in their Lordships' opinion would be an error in law. And as will be seen, it is on those lines that the developer contends that the Land Appeal Court erred in this case." 176 We do not understand the observations of their Honours as to the difficulty of dividing questions of law, fact and opinion as being limited to valuation cases and practice. Neither do we understand the reasoning that a question of mixed fact and law may fall within the words "on a question of law" as confined to s 56A of the Land and Environment Court Act and similar provisions. The New South Wales Court of Appeal has not so understood the High Court's reasoning: see NSW Aboriginal Land Council v Minister Administering the Crown Lands Act [2007] NSWCA 281; 157 LGERA 18; and Minister Administering the Crown Lands Act v La Perouse Local Aboriginal Land Council [2012] NSWCA 359; 193 LGERA 276 at [62] per Sackville AJA. In the former case Mason P said, at [8]: Section 57 of the Land and Environment Court Act 1979 (NSW) confers a right of appeal to this Court against an order or decision of the Land and Environment Court in Class 3 proceedings "on a question of law". An appeal on a question of law is not confined to an error of law and it extends to questions of mixed law and fact (Maurici v Chief Commissioner of State Revenue (2003) 212 CLR 111 at [8], [2003] HCA 8; Mir Bros Unit Constructions Pty Ltd v Roads & Traffic Authority (NSW) [2006] NSWCA 314 at [27]). Tobias JA, at [79,] agreed with the reasons of Mason P. It does not appear that Giles JA addressed this question, although his Honour seems to have proceeded on the same basis. 177 In the earlier case of Mir Bros Unit Constructions Pty Ltd v Roads and Traffic Authority (NSW) [2006] NSWCA 314, Spigelman CJ said, at [27]: The jurisdiction of this Court is limited to an appeal on a question of law by s 57 of the Land and Environment Court Act 1979. (See most recently, Maurici v Chief Commissioner of State Revenue (2003) 212 CLR 111.) It is important to note that the jurisdiction is not confined to an error of law. It is not suggested that his Honour committed any error. The size issue was not put before his Honour in the manner in which it is put now. Handley JA agreed with Spigelman CJ (at [95]), as did Tobias JA with additional reasons (at [96]). 178 In Roads and Traffic Authority of New South Wales v Peak [2007] NSWCA 66, Basten JA, in dissent as to the legal characterisation of the trial judge's treatment of the competing evidence of the valuers, said, at [151]: The jurisdictional limits of a statutory court involve questions of law and fact. Whether or not a court has exceeded its jurisdiction and powers is at least a mixed question of law and fact and involves the identification of the legal limits of its powers. Accordingly, the error identified above is one which can be corrected by this Court on an appeal under s 57 of the Land and Environment Court Act. 179 Collins v Administrative Appeals Tribunal [2007] FCAFC 111; 163 FCR 35 concerned ss 120 and 120A of the Veterans' Entitlements Act 1986 (Cth). With respect to a submission that even if the Tribunal had gone beyond the process of assessment and had entered into the prohibited domain of fact finding under those sections, that was not a question capable of raising a question of law for the purposes of s 44 of the AAT Act, Allsop J (as his Honour then was) said, at [55]: [This argument] rests on a number of Full Court decisions including [Birdseye; Saxby Bridge; Etheridge; and HBF Health Funds]. These authorities, it was submitted, prevented an error of the kind asserted (that the Tribunal exceeded what was legally open to it to do in the formation of its opinion for s 120(3)) being capable of being a question of law for the purposes of s 44 of the AAT Act. This was so, it was submitted, because the Court would need to examine the handling of the facts by the Tribunal and also because at most the question would be a question of mixed fact and law and not a pure question of law. I reject this argument. Nothing in any of the cases referred to at the commencement of this paragraph gainsays the proposition that a properly framed question of law directing the Court's attention to the manner in which the Tribunal failed to discharge its obligations according to law under s 120(3) can be the subject of an "appeal" under the AAT Act. All those cases were directed at the necessity for there to be a proper and precise framing of a "question of law" to found the statutory authority of the Court under s 44 of the AAT Act to dispose of the appeal. Nothing in these cases limits the reach of s 44 to questions of law divorced from the need to look at facts. If, as here (on the hypothesis put forward on behalf of Mrs Collins), the Tribunal has begun a process of fact finding by preferring some evidence to other evidence or by rejecting conflicting material in the formation of its opinion as to reasonable hypothesis, it would have exceeded the statutory task required of it under s 120(3) of the Veterans Act. There can be no doubt that a properly framed question of law raising that legal error would be the legitimate subject of an "appeal" under s 44 of the AAT Act. All the cases relied upon were dealing with what has become an endemic problem in the failure of applicants in appeals under s 44 to frame the question as a question of law, including, but not limited to, the practice of raising of factual issues or simply expressing subject matter to set the outer limits of debate before the Court. (Citations omitted.) Justices Lindgren and Emmett agreed with Allsop J, each adding further observations of their own (at [1] and [10] respectively). 180 As the Full Court said in P v Child Support Registrar [2014] FCAFC 98; 225 FCR 378, at [27]: It is important to emphasise at the outset that the appeal, being instituted under s 44(1) of the AAT Act, is confined to a "question of law". This does not, of course, mean that the reach of s 44 is limited to questions of law divorced from the need to look at facts: Collins at [55] Allsop J (with whose reasons Lindgren and Emmett JJ agreed). However, the question or questions of law which found the Court's authority to review an administrative decision under s 44 of the AAT Act should be properly and precisely framed in the notice of appeal in line with the requirements of r 33.12(2)(b) of the Federal Court Rules 2011 (Cth) ("FCA Rules"): Etheridge at [14] (Branson J); Collins at [55]. So understood, s 44(1) can be seen to respect the proper boundaries of judicial review, being concerned with the legality of administrative decision-making, as opposed to a review of the merits of such decisions. (Citations omitted.) 181 Collins had earlier been followed in Trail Bros at [14] per Dowsett and Gordon JJ, Edmonds J agreeing at [62]. 182 The Full Court has also accepted that a determination of a question of fact by the Tribunal may give rise to "a question of law". Some examples are whether the Tribunal has identified the relevant legal test to be applied; whether the Tribunal has applied the correct test even if the reasons suggest that the correct test has been identified; whether there is evidence to support a finding of fact; whether facts found fall within the statutory provision; and whether the Tribunal has adopted a manner of decision-making which fails to discharge its "obligations according to law": see Cyonara at [113].

(vii) State and Territory jurisdictions in Australia 183 We have considered the position in New South Wales at [176]-[178] above. 184 In Victoria, in Cosmopolitan Hotel, the appellant sought leave to appeal pursuant to s 148 of the VCAT Act. Under s 148 a party may appeal an order of the VCAT on a question of law if given leave. The Court of Appeal noted that it had not yet decided whether questions of law under s 148 of the VCAT Act included questions of mixed law and fact. At [171], the Court of Appeal noted that two approaches had been adopted in the case law to date: Davies J in Nepean Country Club Ltd v Paterson & Roberts [2009] VSC 436 and Croft J in Spirovski v Univest Asset Merchants Syndicators Pty Ltd [2013] VSC 728 at [20], but found it unnecessary to decide the matter. See also Croft J in Epping Hotels Pty Ltd v Serene Hotels Pty Ltd [2015] VSC 104 at [67]. 185 In Queensland the issue does not directly arise because the Queensland Civil and Administrative Tribunal Act 2009 (Qld) deals specifically in s 149 with an appeal on a question of fact or a question of mixed law and fact which may be made only if the party has obtained the Court's leave to appeal. In the Supreme Court we note that in Virgin Blue Airlines Pty Ltd v Hopper [2007] QSC 75, which concerned an appeal "against a tribunal decision on a question of law" under s 217 of the Anti Discrimination Act 1991 (Qld), at [55], the Court used the judgment of Jordan CJ in Australian Gas Light Co v Valuer-General (1940) 40 SR (NSW) 126 as its starting point without adverting to the present issue of a mixed question of fact and law. 186 Under the South Australian Civil and Administrative Tribunal Act 2013 (SA), an appeal under s 71 is by way of rehearing with the result that the present issue does not directly arise. We note Straits Exploration (Australia) Pty Ltd v The Kokatha Uwankara Native Title Claimants [2011] SASCFC 9, where the Full Court of the Supreme Court considered s 30 of the Environment, Resources and Development Court Act 1993 (SA), which provided that an appeal lies against a decision of the Environment, Resources and Development Court to the Full Court of the Supreme Court. The appeal lay as of right on a question of law and with permission on a question of fact. At [9], the Full Court said it accepted that most of the grounds of appeal raised either a question of law or a mixed question of law and fact that, for the purposes of the provision, were to be treated as a question of law. At [10], however, the Court noted that certain other grounds of appeal raised issues that were simply questions of fact, and required a grant of permission. 187 In Western Australia, the position as to an appeal on a "question of law" has been considered by the Court of Appeal in Paridis v Settlement Agents Supervisory Board [2007] WASCA 97; 33 WAR 361 which was followed in, among other cases, Lourey v Legal Profession Complaints Committee [2012] WASCA 112 at [28] per Buss JA; and Commissioner for Consumer Protection v Carey [2014] WASCA 7 at [165] per McLure P (with whom Buss JA and Murphy JA agreed). In Paridis, at [53], the Court of Appeal applied Birdseye and Etheridge in stating that a question of mixed law and fact is not a question of law within s 105(2) of the State Administrative Tribunal Act 2004 (WA). It is to be noted, also, that although by s 105(2) an appeal can only be brought on a question of law, by s 105(13), despite subsection (2), in certain specified circumstances an appeal under s 105 may be brought on any ground whether it involves a question of law, a question of fact or a question of mixed law and fact. 188 In Tasmania, it appears that there are no relevant decisions. 189 For completeness, we should add that we do not agree with the analysis or conclusion in Eastman v Commissioner for Social Housing [2011] ACTCA 12; 252 FLR 278, where the Court of Appeal of the Australian Capital Territory held that s 125 of the Residential Tenancies Act 1997 (ACT), which provided: Appeals from tribunal to Supreme Court (1) A party to a proceeding before the Tribunal may appeal to the Supreme Court on a question of law from a decision of the tribunal in the proceeding. (2) The appeal may be brought only with the Supreme Court's leave. should be construed as meaning that s 125(1) did not extend to a mixed question of fact and law. The reasoning was that s 125(1) created the right to appeal which did not exist otherwise, so that the word "only" would be redundant (at [61]). The Court, at [64], relied on the decisions in this Court, such as Birdseye, that demanded a "pure" question of law. The Court in Eastman also relied on the judgment of Basten JA in B & L Linings Pty Ltd v Chief Commissioner of State Revenue [2008] NSWCA 187; 74 NSWLR 481 as drawing no distinction between the statutory expressions "on a question of law" and "on a question of law alone". It is correct, with respect, to say that Basten JA cited Williams in which the High Court held that, where an appeal lies on a question of law alone, it does not extend to a mixed question of fact and law. However, we do not read paragraphs [140]-[141] of the judgment of Basten JA as standing for the proposition that there is no distinction between the statutory expressions "on a question of law" and "on a question of law alone". Rather, we read those paragraphs (set out below) as part of a general survey: Other statutory provisions limiting appeals to questions of law may be found in statutes conferring appeals from criminal proceedings. It is common for such appeals to be allowed as of right, against a decision "on a question of law alone": see for example, Criminal Appeal Act 1912, s 5(1)(a) (referring to an appeal against conviction "on any ground which involves a question of law alone") and Crimes (Appeal and Review) Act 2001, s 56 (in relation to appeals from a Local Court to the Supreme Court, adopting similar language). In Williams v The Queen (1986) 161 CLR 278 at 287, Gibbs CJ stated: "In Reg v Jenkins [[1970] Tas SR 13 at 15], Crisp J correctly pointed out that a 'question of law alone' does not include a question of mixed fact and law and went on to say that 'there would seem to be great difficulties in the way of entertaining an appeal by the Crown against the exercise of a judicial discretion where the question involved is not so much the existence of a discretion but the question of its exercise in relation to the facts of a particular case'." Wilson J and Dawson J agreed with Gibbs CJ. Mason J and Brennan J stated (at 301-302): "An appeal lies on 'a question of law alone'. An appeal does not lie on a ground which involves a mixed question of fact and law … . An appeal on the ground of the wrongful rejection of evidence by a trial judge in the exercise of a discretion is not an appeal on a question of law alone. The manner in which a discretion is exercised depends upon the judge's appreciation of all the facts of the case, so that an error of law which leads the judge wrongly to hold that he has a discretion is not the only factor which contributes to his decision to reject the evidence …" 190 Further, in our opinion, any such elision could not stand with the later decision of the High Court in Kostas.

(viii) The United Kingdom 191 Neither, in our opinion would the approach of the United Kingdom Supreme Court in Jones v First-tier Tribunal [2013] UKSC 19; 2 AC 48 be consistent with the terms of s 44 or the decisions of the High Court of Australia to which we have referred. In Jones there was an emphasis on expediency or pragmatism in identifying the approach to be taken to the dividing line between law and fact so far as concerns that Tribunal ([16]-[17], [46]-[47], [48]). In that respect we note the earlier decision of the House of Lords in Fitzpatrick v Inland Revenue Commissioners [1994] 1 WLR 306, where the court had jurisdiction to "hear and determine any question or questions of law" under s 56(6) of the Taxes Management Act 1970. There were two appeals, one from Scotland and one from England, the question being whether expenditure incurred by journalists in buying newspapers was deductible because it was "in the performance of" their duties. The House of Lords held that the expenditure was not deductible. Of interest for present purposes is the reasoning that the issue was one of mixed fact and law which the court was entitled to review, either generally (per Lord Mustill at 327 and, it seems, Lord Jauncey of Tullichettle at 319), or having identified the question of law (per Lord Templeman at 317-318, with whom Lord Keith of Kinkel agreed at 309). Lord Browne-Wilkinson, dissenting in relation to the English appeal, at 319 took the view that the appeals raised questions of fact only.

(ix) Summary 192 In summary, the terms, the context (particularly s 7 of the AAT Act and noting what we have said especially at [149] above as to s 45 not providing an analogy), the history, authority and the purpose of s 44 each indicates that the right of appeal in s 44 should not be read as meaning that "may appeal to the Federal Court of Australia, on a question of law, from any decision of the Tribunal" may never extend to a mixed question of fact and law or as requiring that the question of law be a "pure" question. Rather, it may more accurately be said that the right of appeal does not extend to mere questions of fact. As French CJ, Gummow and Bell JJ emphasised in Osland, at [19], the Court "should not usurp the fact-finding function of the AAT", citing Repatriation Commission v O'Brien [1985] HCA 10; 155 CLR 422 at 430 per Gibbs CJ, Wilson and Dawson JJ. It follows that the right of appeal does not extend to mixed questions of fact and law where, in order to decide the question of law, the Court must positively determine a question of fact itself, rather than judicially review the Tribunal's fact-finding. As Brennan J said in Waterford v The Commonwealth [1987] HCA 25, 163 CLR 54 at 77: A finding by the A.A.T. on a matter of fact cannot be reviewed on appeal unless the finding is vitiated by an error of law. Section 44 of the A.A.T. Act confers on a party to a proceeding before the A.A.T. a right of appeal to the Federal Court of Australia "from any decision of the Tribunal in that proceeding" but only "on a question of law". The error of law which an appellant must rely on to succeed must arise on the facts as the A.A.T. has found them to be or it must vitiate the findings made or it must have led the A.A.T. to omit to make a finding it was legally required to make. There is no error of law simply in making a wrong finding of fact. … It follows that legally erroneous fact-finding may found an appeal on a question of law within s 44. Further, we do not read Brennan J in Waterford as addressing jurisdictional facts or such facts as it may be necessary for the Court to find when considering a claim of denial of procedural fairness: see further [202] below. 193 To the extent that the reasoning in Birdseye and Etheridge depended on the view that a question of law within s 44 is required to be a "pure" question of law which should be capable of being answered without reference to facts, we respectfully disagree. Collins establishes that this view of s 44 is not correct. That view is also inconsistent with what Brennan J said in Waterford. Neither do Birdseye and Etheridge sit comfortably with Maurici, Vetter and Hope. Nor is the extended meaning of a question of mixed fact and law consistent with earlier decisions of the Full Court in, for example, PW Adams and Sharp Corporation. The line of cases beginning with Birdseye and Etheridge should not be understood as intending to overrule those cases. 194 We restate that the subject matter of an appeal under s 44 is a question or questions of law. We also restate that the appeal is not by way of rehearing; it is the exercise of original jurisdiction. Neither is it sufficient that the appeal merely involves a question of law. The correct approach, in our opinion, is to ask directly the question whether the appeal is on a question of law, without being diverted by whether or not the appeal raises a mixed question of fact and law. As the High Court said in Owens, the purpose of limiting an appeal to a question of law is to ensure that the merits of the case are dealt with not by the Federal Court but by the Tribunal. This distribution of function is critical to the correct operation of the administrative review process. See also O'Brien at 430 where Gibbs CJ, Wilson and Dawson JJ said that on an appeal under s 44 the appellate body should not usurp the fact-finding function of the Tribunal. But such fact-finding is an entirely different exercise from the evaluation of the fact-finding process of the Tribunal (as fact-finder) to decide upon its legality. 195 Subject to one matter in relation to fact-finding, to which we return in [197] below, we would also adopt what Hill J said so clearly in Sharp Corporation at 16: … where the facts found are capable of falling within or without the description used in the statute, the decision which side of the line they fall on will be a decision of fact and not law. Such a decision will generally involve weight being given to one or other element of the facts and so involve matters of degree. See also Bell v Commissioner of Taxation [2013] FCAFC 32, 90 ATR 7 at [18]. 196 To return to the analysis of Gleeson CJ, Gummow and Callinan JJ in Vetter at [24], not all questions involving mixed questions of fact and law are, or need to be, susceptible of one correct answer only. This means that, as their Honours suggested by quoting Jordan CJ in Australian Gas Light Co at 138, if the facts inferred from the evidence are necessarily within the description of a word or phrase in a statute or necessarily outside that description, a contrary decision is wrong in law. 197 Further, a finding of fact may be vitiated by an error of law, such as where a finding of fact is based on a misdirection of law: Australian Gas Light Co at 138. 198 In Hope, at 8, Mason J said that when it is necessary to engage in a process of construction of the meaning of a word (or phrase) in a statute a question of law will be involved but that the question may be a mixed one of fact and law: Gleeson CJ, Gummow and Callinan JJ so observed in in Vetter at [27]. 199 These matters demonstrate the lack of utility in adopting the non-statutory criterion of "mixed question of law and fact" in respect of an appeal under s 44 of the AAT Act. 200 The correct approach, in our opinion, is that taken by the Full Court in Sharp Corporation at 12-13 which we have set out above at [126], that is, in cases involving mixed questions of fact and law, it is necessary to identify whether the administrative decision-maker is alleged to have made an error of law or an error of fact. 201 As Brennan J said in Attorney-General (NSW) v Quin [1990] HCA 21; 170 CLR 1 at 36: The merits of administrative action, to the extent that they can be distinguished from legality, are for the repository of the relevant power and, subject to political control, for the repository alone. The merits, in our view, are the zone of discretion to which Gleeson CJ, Gummow, Kirby and Hayne JJ referred in City of Enfield v Development Assessment Commission [2000] HCA 5; 199 CLR 135 at [43]. It may, however, be the case that in exercising its jurisdiction under s 44 of the AAT Act the Court has to consider how the Tribunal has gone about its fact-finding and the choices that it has made in order for the Court to assess, in deciding a question or questions of law, whether the Tribunal has stayed within the zone of discretion. For this purpose the Court does not consider whether the Tribunal should have made a particular finding of fact but whether it may lawfully have done so. 202 Although, as the High Court explained in Allan at [11], s 44 extends to non-jurisdictional error, one of the functions of s 44 is to ensure that the Tribunal stays within its jurisdiction. It follows that jurisdictional error would found a question of law under s 44. An appeal on the question whether the Tribunal made a jurisdictional error in a specified respect, such as denying a party procedural fairness (see Re Refugee Review Tribunal; Ex parte Aala [2000] HCA 57; 204 CLR 82) would be, in our opinion, an appeal on a question of law. We have referred above at [126], by way of example, to what was said on this subject in Sharp Corporation. A similar conclusion was reached in Clements v Independent Indigenous Advisory Committee [2003] FCAFC 143; 131 FCR 28 at [8] and [35], Gyles J at [68] contra; and in Ekinci the Full Court said, at [93]: Although different views have been expressed by some members of the court on the issue whether denial of procedural fairness by the AAT raises a question of law for the purposes of s 44 of the AAT Act (the relevant authorities were discussed by the Full Court in Clements v Independent Indigenous Advisory Committee [2003] FCAFC 143; (2003) 131 FCR 28 at [6]-[7] per Gray ACJ, North and Gyles JJ (Clements)), it is now established that "this court should accept the principle that a denial of procedural fairness is an error of law and that, therefore, an appeal from a decision of Tribunal on the ground of such a denial raises a question of law" (Clements at [8]). No textual aspect of s 44 denies the conclusion that, as a contextually understood judicial review provision, it encompasses the authority in this Court to undertake any relevant process to assess the answer to a question of law such as whether a person was denied procedural fairness by the Tribunal. Any answer to that legal question of jurisdiction may require factual evaluation and determination of what occurred before the Tribunal. Such is not to usurp the function of the Tribunal of fact finding, but to ensure that the Tribunal acts lawfully and with authority.

The amended notice of appeal before the primary judge 203 It remains to consider whether the amended notice of appeal before the primary judge did, so far as now relevant, raise one or more questions of law. As indicated above, we approach this issue as a matter of substance. The primary judge decided the matter at the level of competence, that is, as a matter of jurisdiction. At this threshold, we also consider this issue without regard to the merits of any questions of law so raised. 204 Question 2 posed whether the Tribunal misconstrued s 14ZZK(b)(i) of the Taxation Administration Act 1953 (Cth). Question 4 may be seen as having posed whether the Tribunal's reasoning process was illogical, irrational or lacking a basis in findings or inferences of fact supported on logical grounds and thus made a decision it was not authorised to make. Question 5 may be seen as having posed whether the Tribunal's decision was so unreasonable that no reasonable decision maker could have made it. Question 7 posed whether the Tribunal had misconstrued s 44(1) of the ITAA 1936 in particular respects. Question 8 posed whether the Tribunal had misconstrued Div 7A of the ITAA 1936 in particular respects. Question 9 posed whether the Tribunal had misconstrued s 6-5 of the ITAA 1997 in particular respects. In our opinion, each of these questions stated a question of law, although plainly the emphasis was on questions of fact and the Tribunal's conclusions on the evidence. We doubt whether the appellants' submissions before the primary judge emphasised the questions of law rather than the questions of fact. 205 In our opinion, the differences between how these matters were put before the primary judge and how they were put before the Full Court is not a matter of jurisdiction but a matter of discretion, including the discretion as to costs. 206 We next turn to the merits of these grounds and the matter of discretion to which we have just referred. 207 Contrary to the submission noted at [11] above, question F does not arise from question of law 7 before the primary judge as it incorporated sub-paragraph (h) or from question of law 8 as it incorporated sub-paragraph (f). Question of law 7(h) concerns ordinary dividends and question of law 8(f) concerns deemed dividends and not, in either case, the form of the legislative provision raised by question F, set out at [6] above. However, in our opinion the appellants should, as a matter of discretion, be permitted to raise question F before us. The relevant form of the statutory provision is fundamental and the respondent is not relevantly prejudiced by the appellants' reliance on this question. See further [256]-[257] and [260] below. In addition, we also consider that the appellants should be permitted to reframe the questions of law as they have sought to do, as those questions are sufficiently found in the questions in the amended notice of appeal before the primary judge. 208 We deal with the questions of law in the same order in which they were argued.

Question 4 209 The appellants submitted that the Tribunal's approach to the evidence given by Mr Dalla Costa, Mr Karlovsky and Mr Adrian was irrational and illogical, and that its approach, in turn, affected its assessment of Mr Haritos' evidence. The appellants made a similar submission in relation to the evidence contained in the report of Pitcher Partners. 210 The reasoning of the Tribunal which was said to be irrational and illogical was its conclusion that it could place no weight on the evidence said to be corroborative evidence because the corroborative evidence itself was based on Mr Haritos' evidence. That reasoning was said to be irrational or illogical because there was clearly an independent basis for the corroborative evidence. Although at one stage the appellants referred to the corroborative evidence as "compelling", they did not suggest that, on the correct approach, only one result was open on the evidence. They submitted that, as a matter of law, they did not need to go that far. They submitted that it is sufficient that they show an erroneous approach as a matter of logic and reason, to the significance of particular evidence. 211 The appellants identified the independent basis of the corroborative evidence as reliance on industry standards in terms of labour costs in the industry in which the company was engaged based on actual experience in the case of Mr Dalla Costa, or reliable records in the case of Mr Karlovsky, or records and more general experience in the case of Mr Adrian. In the case of the report of Pitcher Partners, it was based on more general experience and the trading results of the company whilst under administration. 212 It may be an error of law to make a decision which is irrational, illogical and not based upon findings or inferences of fact supported by logical grounds: Re Minister for Immigration and Multicultural Affairs; Ex parte Applicant S20/2002 [2003] HCA 30; 198 ALR 59; 77 ALJR 1165 and SZMDS at [40] per Gummow A-CJ and Kiefel J; at [130] per Crennan and Bell JJ. In this case, we are not concerned with whether the lack of reason or logic relates to a matter going to jurisdiction so as to amount to jurisdictional error. 213 A conclusion that a decision involves a lack of reason or logic sufficient to amount to an error of law is not to be lightly drawn (SZMDS at [45] per Gummow A-CJ and Kiefel J), and not every lapse in logic is sufficient to constitute an error of law (SZMDS at 647-648, [130] per Crennan and Bell JJ). Emphatic disagreement with the decision does not of itself amount to a lack of reason or logic in the relevant sense (SZMDS at [129] per Crennan and Bell JJ). At the same time, it is not a precondition for relief that it be established that the decision would have been different but for the lack of reason or logic in the relevant sense. What that means in this case is that, in order to make out the alleged error of law, it is not necessary for the appellants to establish that but for the lack of reason or logic Mr Haritos' evidence concerning the subcontractor expenses would have been accepted; it is sufficient that it may have been accepted. 214 The Tribunal reached the conclusion that it was not prepared to accept Mr Haritos' evidence without corroboration, and it gave detailed reasons in support of that conclusion. The Tribunal's reasons were cogent and, in fact, powerful. Furthermore, the Tribunal said that it would place little weight on what were said to be the company's books for reasons which included the fact that the MYOB records were created some considerable time after the events they purported to record, and by the fact that they could not be independently verified by reference to either invoices issued by subcontractors who were said to have been paid, or by reference to evidence of the subcontractors themselves. Again, the Tribunal's reasons for placing little weight on the MYOB records were cogent. 215 The appellants did not suggest that the Tribunal erred in first considering the reliability of Mr Haritos' evidence standing alone, and in reaching the conclusions it did about that evidence or, for the reasons it gave, placing little weight on the MYOB records. There was no error by the Tribunal in proceeding in that way (S20 at [12] per Gleeson CJ; at [49] per McHugh and Gummow JJ). On the other hand, this is not a case where the appellants' evidence is so implausible and the circumstances of the case are not such that the evidence said to be corroborative could not advance the matter (S20 at [12] per Gleeson CJ; at [49] per McHugh and Gummow JJ). Leaving aside the precise amount, there was nothing inherently implausible about the company incurring substantial expenses in relation to subcontractors. We note that the Tribunal itself said, at [614]: [Mr Haritos'] statement to the effect that, if the subcontractor payments had not in fact been made in the order of $19 million as he and [Mr Kyritsis] claim, who would have provided the services to [the company's] clients draws a measure of sympathy. It does so because common sense, upon which [Mr Haritos] relies, would suggest that contracts that draw receipts of some $33 million into the [company's] Westpac account, would incur costs significantly more than the some $5 million that Mr Yeo was able to identify. 216 The Tribunal did not place any weight on Mr Dalla Costa's evidence that by reference to his benchmarking figures the company's costs came within those figures, or at least were consistent with them. It took that approach because it said that that opinion was based on conclusions reached by Mr Adrian, and Mr Adrian's conclusions were, "to a significant extent", in turn based on the assertions of Mr Haritos and Mr Kyritsis, or on material which could not be verified. The Tribunal said that Mr Dalla Costa's conclusions did not take it "any further in the matter" (at [694]). An indication of the Tribunal's approach, albeit when it was considering Mr Adrian's evidence, may be seen in its reference as apposite to the following remarks of Barton J in Ridley v Whipp [1916] HCA 76; 22 CLR 381 at 389: Such a contention reminds one of the familiar simile of a man trying to lift himself off the ground by his bootstraps. If one part of a person's evidence is relied on for corroboration of the remainder, the answer instantly arises that the part relied on is as much under the original reservation as the part sought to be corroborated. 217 The approach by the Tribunal involved an error of law. The error was, as the appellants submitted, the drawing of a conclusion about the nature or character of Mr Dalla Costa's evidence that was irrational, illogical and not based on findings or inferences supported by logical grounds. The material, being the evidence of Mr Dalla Costa, simply did not admit of a conclusion rationally reached that it was based on assertions of Mr Haritos and Mr Kyritis or material that could not be verified. So to conclude was not merely a wrong finding of fact; it was to make a finding effectively without any material, such was the mischaracterisation of the evidence. If a witness (witness 1), whose reliability is such as to demand corroboration, says fact X occurred, and witness 2, whose reliability is not in question, says fact Y occurred and fact Y is corroborative of fact X occurring, and witness 2 gives a basis for stating that fact Y occurred independently of witness 1, for a Tribunal to reject witness 2 as corroborative because of an asserted source in witness 1's evidence that is not present in the evidence, is irrational or illogical in the sense referred to in SZMDS. It can be seen as equivalent to finding a fact with no evidence: Kostas; or to drawing a conclusion that it was reasonably open to make a finding, when it was not so open: TNT Skypak at 182. 218 So to conclude is not to enter into the field of merits review or fact finding. It is to supervise the legality of the fact finding process of the Tribunal. A Tribunal cannot, at least in relation to central and important evidence, say that material cannot be considered as of any weight because it derives from a tainted source, when an examination of that material (without the need for any weighing of evidence or choosing between available inferences or findings) reveals that it does not derive from the source said to be tainted. This is to fail to deal in the review process with possibly significant evidence for a reason that has no evidential foundation or for a reason that is sufficiently irrational or illogical as to be legally unreasonable. 219 The consequence of this legal error was two-fold. First, it meant that the review function was left incomplete insofar as the extent to which Mr Haritos' evidence could be accepted had yet to be assessed. His evidence was left as unreliable, subject to corroboration and available potential corroboration was not analysed for the purpose of completing an assessment of Mr Haritos' evidence. Secondly, and related thereto, the obligation upon the taxpayer to demonstrate the extent of any excessiveness of the assessment was not addressed using the material available in the review process. Not only might Mr Della Costa's evidence lead to the acceptance of parts of Mr Haritos' evidence, it might, in that respect, lead to a foundation for being able to find on the material the extent to which the assessment was excessive. 220 We reach these conclusions for the following reasons. 221 The Tribunal did not reject Mr Dalla Costa's evidence on the basis that he was not a witness of truth, or that he lacked the expertise to express an opinion on the ratio of average total direct labour cost to total direct cost, or of total direct labour cost to gross revenue in the relevant industry. It is true that Mr Dalla Costa's evidence related to Mr Adrian's calculations in the sense that he compared his benchmarking figures with Mr Adrian's calculations, and that the latter's calculations were substantially based on information provided by Mr Haritos. However, Mr Dalla Costa's evidence as to the benchmarking figures had an independent basis, and was unrelated to Mr Adrian's calculations for the reasons submitted by the appellants. Mr Dalla Costa's evidence was capable of corroborating Mr Haritos' evidence about the expenses of the company in relation to subcontractors. 222 The Tribunal put forward a further reason or reasons for placing no weight on Mr Dalla Costa's evidence. It said that his evidence did not point to information that could show the company's costs and assessment of its on-costs. In the next paragraph of its reasons under the heading, "Consistency with industry benchmarks", the Tribunal said that even if it was satisfied that the assessments were excessive, it would not be satisfied of the extent to which they were excessive because it had no factual foundation upon which it was able to come to a conclusion. The Tribunal said, at [696]: I have assessments as to whether they would seem to have come within industry benchmarks but I have no verification of whether they did or did not. It is not enough to reach a conclusion that the assessments might have been excessive. I need to know the extent to which it is excessive for, if I do not, I would become engaged in a guessing game as to the amount of [Mr Haritos'] and [Mr Kyritsis'] assessable income. 223 The precise meaning of this passage is not clear. Subject to the appellants' arguments in relation to question 2, they accepted that Federal Commissioner of Taxation v Dalco [1990] HCA 3; 168 CLR 614 at 626 and earlier cases (see, for example Trautwein v Federal Commissioner of Taxation [1936] HCA 77; 56 CLR 63 at 88, per Latham CJ) provide that, in order to succeed, a taxpayer must show not only that an assessment is excessive, but also the extent to which it is excessive. The benchmarking figures did not establish the precise figures for this particular company and, on the case advanced by the appellants before the Tribunal, only acceptance of Mr Haritos' evidence could establish, with the required degree of precision, the amount by which the assessments were excessive. All of this may be accepted, but it does not answer the point that Mr Dalla Costa's evidence was capable of corroborating Mr Haritos' evidence, and was not to be put to one side because it did not corroborate the precise figures put forward by Mr Haritos. The process of consideration of Mr Haritos' evidence, and the review itself, was incomplete without a consideration of the effect of the evidence of Mr Della Costa that was of a character which was capable of amounting to corroboration. 224 In his outline of submissions filed before the hearing, the respondent sought to meet the appellants' argument by reference to the principle that, in this case, the appellants were required to prove not only that the assessments were excessive, but also the extent to which they were excessive. We reject that argument for the reasons given in the previous paragraph. As it happened, during the course of the hearing of the application for leave to appeal, counsel for the respondent conceded (correctly in our view) that it was "not wrong" to say the Tribunal's reasoning was illogical to the extent that it said that Mr Dalla Costa relied on Mr Haritos' evidence. 225 Counsel for the respondent did not make the same concession in relation to the other witnesses identified in the appellants' submission, and it is to those witnesses that we now turn. 226 We think that, as a matter of principle, the same conclusions apply to the evidence of Mr Karlovsky and Mr Adrian. Both gave opinions by reference to industry standards and there was nothing to suggest that they were not witnesses of truth or lacked the relevant expertise. We say "as a matter of principle" because Mr Karlovsky's evidence might be accorded less weight than that accorded to the evidence of Mr Dalla Costa because he did not have the actual "hands on" industry experience of the latter, and Mr Adrian's evidence might be accorded even less weight again because his benchmarking was rather general and was done in a context where the exercise he undertook was closely related to figures provided by Mr Haritos and the company's MYOB records. The position is perhaps less clear as far as the report of Pitcher Partners is concerned. As far as we can see, the appellants did not call a witness from Pitcher Partners who could give evidence in support of the conclusions in the report. Furthermore, it is not clear reading the Tribunal's reasons precisely how the appellants sought to deploy the report. Nevertheless, as a matter of principle, aspects of the Pitcher Partners report, being the trading figures during the administration, and their evidence based on their experience of profitability models for a business of the relevant type, were capable of corroborating Mr Haritos' evidence. 227 The Tribunal erred in law in its approach to Mr Haritos' evidence in relation to the subcontractor expenses and the evidence which potentially corroborated that evidence. The error was not one which related to the preferring of one witness over another or the weight to be attached to the evidence. It involved a basic approach to the significance of relevant evidence. The respondent did not argue that the error was of no consequence as far as the Tribunal's conclusion in relation to subcontractor expenses was concerned and, in fact, he did not argue that the Tribunal's decision could be upheld insofar as it was based on the conclusion that the payments were dividends within s 44(1) of the ITAA 1936. Rather, the respondent argued that the Tribunal's decision ought to be upheld on the basis (found by the Tribunal) that the payments made to the appellants and their associates were ordinary income within s 6-5 of the ITAA 1997. We will consider the respondent's submissions to that effect as part of our consideration of question 9(c).

Question 5 228 In question 5 of the amended notice of appeal before the primary judge, the appellants relied on the same matters they relied on in question 4 to challenge the Tribunal's finding in relation to the subcontractor expenses. They contended that the Tribunal's conclusion was so unreasonable that no reasonable decision-maker could have made it. We have already held in connection with question 4 that the Tribunal's conclusion cannot stand. The appellants did not put forward any submissions in support of question 5 and, in the circumstances, it is unnecessary for us to consider it.

Question 2 229 The appellants submitted that the Tribunal misconstrued the burden of proof section in the Taxation Administration Act 1953 (Cth), s 14ZZK, in considering the issue of subcontractor expenses. There is an overlap between this alleged error and the alleged error raised by question 4, and in view of our conclusions in relation to question 4, it is not strictly necessary for us to consider this question. However, the matter was fully argued and we will deal with it. We do so on the assumption that we are wrong in holding that the Tribunal's decision in relation to subcontractor expenses was irrational and illogical. 230 There were a number of strands to the appellants' argument and to some degree they overlap. First, they submitted that the Tribunal used the burden of proof provision in an impermissible way in that it used it to constrain the review function of the Tribunal. In Copperart Pty Ltd v Commissioner of Taxation [1994] FCA 216; 50 FCR 345, Davies J (with whom Gummow and French JJ agreed) said (at 353): Although the onus is on the taxpayer to show that the assessment was excessive, an assessment is not, in a review, itself evidence of the facts on which it was found. It is the Tribunal's duty to come to its own conclusions of fact and to give effect to them. 231 As we understood the appellants' argument, it was that it was one thing to apply the burden of proof section to the facts as found, it was another (and impermissible) to use it as a reason for not accepting the appellants' evidence. In other words, the Tribunal (so the appellants argued) should have approached Mr Haritos' evidence in the normal way and decided whether to accept or reject it without regard to the burden of proof section. 232 In support of their argument that the Tribunal had indeed made this error, the appellants identified a passage in the Tribunal's reasons which we have referred to in our discussion of the issues relating to question 4, (see [222]). The Tribunal made an error in this part of its reasons which we have previously identified (at [217]-[221] and [223]). However, we do not think it made an error of the type we are now considering. If, contrary to our conclusions in connection with question 4, the Tribunal was entitled to consider Mr Haritos' evidence without regard to the evidence which potentially corroborated it, then we think it rejected his evidence for reasons which are unobjectionable and quite unrelated to the burden of proof. 233 The second way in which the appellants put their argument that the Tribunal had misconstrued or misapplied the burden of proof section was to contend that the section did not, contrary to the Tribunal's view, require exact proof of the amount by which the assessment was excessive. The appellants referred to Ma v Commissioner of Taxation [1992] FCA 530; 37 FCR 225 where Burchett J, after referring at length to the decision of the High Court in Commissioner of Taxation (Cth) v Dalco [1990] HCA 3; 168 CLR 614, said, at 233: Furthermore, the making of estimates upon inexact evidence, which is so much a feature of both judicial and administrative decision-making, cannot be uniquely excluded from appeals against betterment assessments. To refuse to consider the credit, not only of the applicant, but also of his independent and unchallenged witnesses, simply because the effect of the evidence was to support his accountant's generalisations about double-counting rather than to hit upon a precise figure, was to fall into an error of law. 234 The proposition which the appellants sought to derive from this passage was that in performing its review function, the Tribunal may be required to make an estimate upon inexact evidence, and it cannot avoid its responsibility to make findings by relying on the burden of proof section. This proposition may be accepted for present purposes. The difficulty for the appellants is that, subject to the third argument dealt with below, they are unable to identify the estimate they contend the Tribunal should have made and the evidence by reference to which the estimate should have been made. It is true that the Tribunal appears to have thought it likely that there were subcontractor expenses of a reasonably substantial amount, but the appellants have not identified any findings of the Tribunal, or evidence referred to by it, that could form the basis of even an estimate upon inexact evidence. At one point the appellants foreshadowed a challenge to the Tribunal's decision on the basis that it had not provided adequate reasons, but that line of attack was not pursued. The appellants did not suggest that the Tribunal erred in not selecting a figure advanced by one of the witnesses who gave evidence which potentially corroborated Mr Haritos' evidence and, of course, a rational basis for the selection would need to be identified. 235 The third way in which the appellants put their argument that the Tribunal had misused the burden of proof section is related to the second. The appellants submitted that even if Mr Haritos' evidence was correctly rejected, they had nevertheless established subcontractor expenses of at least a certain amount. The Tribunal was not entitled to adopt what the appellants described as an "all or nothing" approach. If an "at least" figure was established on the evidence, then the Tribunal should have made a finding in accordance with that evidence. 236 We think that proposition is correct. If a taxpayer claims his or her expenses were $10.00, but fails to prove that fact because their evidence is rejected, this does not prevent the Tribunal from finding that the expenses were $5.00 where there is other satisfactory evidence establishing expenses of at least that amount. In our opinion, the burden of proof section does not dictate a different conclusion. 237 In this case, the only "at least" figure clearly identified was the figure of $5,053,631 referred in the report of Pitcher Partners. Although it is not entirely clear, we think the Tribunal accepted that figure, and we think the Tribunal (assuming that it did not err in the manner indicated in our discussion of question 4) erred in law in not finding subcontractor expenses of that amount.

Question 9(c) 238 The appellants submitted that the Tribunal erred in law in concluding that payments from the company made to their associates were ordinary income within s 6(5) of the ITAA 1997 in circumstances where those payments, albeit made at the direction of a taxpayer company director (as the appellants put it), were not for the director's benefit. 239 The appellants submitted that the ordinary concept of income was what goes into the taxpayer's pocket. They referred to the High Court's decision in Commissioner of Taxation (Cth) v Sun Alliance Investments Pty Limited (In Liquidation) [2005] HCA 70; 225 CLR 488 where, after referring to the difference between a cash basis of accounting and an accruals basis, the Court said (at [43]; footnote references omitted): But "[f]or the most part, the law expresses an ordinary usage notion of derivation of a receipt". Thus the notion of income directs one's attention to "receipts" by a taxpayer - or, as Lord Macnaghten put it, "what goes into his pocket". 240 The appellants submitted that the case which the Tribunal relied on to find that they had received income according to ordinary concepts - ABB Australia Pty Ltd v Federal Commissioner of Taxation [2007] FCA 1063; 162 FCR 189 - was distinguishable because in that case, the amounts paid to a third party by a company discharged the company's obligation to the alleged recipient of the payment, and was credited to the alleged recipient in its dealings with the third party (at [172]). 241 We reject the appellants' submission. We think that the Tribunal was correct to conclude that the payments at the appellants' direction to the accounts of their wives and children, or to third parties to discharge loans, were income according to ordinary concepts. The Tribunal said that the appellants dealt with the funds as their own funds and that was enough to conclude that they had derived a benefit. The benefit was in the form of money and, therefore, income according to ordinary terms. 242 It is well-established that although according to ordinary concepts, items of income are to be money or to be reckoned as money, it is not necessary that they be paid over to the taxpayer. It is sufficient "according to ordinary concepts and usages" that it be dealt with on his behalf or as he directs (Federal Commissioner of Taxation v Cooke and Sherden [1980] FCA 46; 10 ATR 696 at 703. See also Federal Commissioner of Taxation v White [2010] FCA 730; 79 ATR 498 at [25] per Gordon J). 243 The position is confirmed by s 6-5(4) of the ITAA 1997 which provides as follows: In working out whether you have derived an amount of ordinary income, and (if so) when you derived it, you are taken to have received the amount as soon as it is applied or dealt with in any way on your behalf or as you direct. 244 As we have said, the respondent submitted that even if there was an error of law of the type we have identified in our consideration of question 4 that only related to the subcontractor expenses and the first basis of liability, and the Tribunal's decision could be upheld by reference to the conclusion that the payments to the appellants and their associates were ordinary income. 245 The appellants sought to meet the respondent's submission by making two submissions. 246 First, they submitted that the Tribunal's conclusion with respect to ordinary income does not include all of the assessable income in the assessments they challenged. They referred to a conclusion by Pitcher Partners and a table set out in the Tribunal's reasons in support of that proposition. We reject this submission. Although the position does not emerge as clearly as it might from the Tribunal's long reasons for decision, it does when regard is had to the respondent's reasons for decision on the appellants' objections to the assessments and a document entitled "Amended Annexure A" which was provided to the Court after the hearing. Amended Annexure A makes it clear that the assessments which were challenged were based on amounts received by the appellants or their associates. 247 Secondly, the appellants submitted that the error of law which we have identified in connection with question 4 also affected the Tribunal's conclusions that the amounts received by the appellants or their associates were ordinary income. That was because the Tribunal rejected their argument that the amounts paid to them or their associates were loans to them by the company and it did so, in part at least, on the basis that it did not accept that Mr Haritos was a creditable and reliable witness. Put simply, the appellants submitted that had the Tribunal adopted the correct approach to the evidence which potentially corroborated Mr Haritos' evidence in relation to the subcontractor expenses, it might have accepted Mr Haritos as a credible and reliable witness in relation not only to the subcontractor expenses, but also in relation to the appellants' case that the payments to them or their associates were loans by the company. This argument probably falls within question 9(d) in the amended notice of appeal before the primary judge. In any event, the respondent raised no objection to the appellants putting it. 248 The respondent's response to this argument was to submit that Mr Haritos' credit and reliability played no part, or no significant part, in the Tribunal's conclusion that the payments were not loans by the company. 249 The Tribunal reached the conclusion that the payments were not loans by the company to the appellants by reference to a number of matters. We now expand on the matters which we previously summarised. 250 First, the Tribunal said there have never been any formal loan agreements between the company on the one hand, and either Mr Haritos or Mr Kyritsis on the other. The appellants admitted that they had never paid interest on any such loan. 251 Secondly, the Tribunal said that had the payments from the Westpac account by cheques made out to "cash" been loans, then it would have expected to see some indication that that was so, either by way of a formal document recording the fact, or some form of recognition of the fact in the company's financial statements, or by arrangements to repay the amounts. The Tribunal said that one might also expect to see some form of security offered for repayment of the monies "and so on". The Tribunal examined the financial statements and information in the report of Pitcher Partners, and the financial statements of some of the associated companies, and reached the conclusion that the appellants had not established that the payments from the Westpac account were loans to the appellants or other entities. 252 In the context of an amount paid from the Westpac account in 2009 and an allegation that the unequal amounts paid to Mr Haritos and Mr Kyritsis could be explained by the fact that there was a loan from Mr Kyritsis to Mr Haritos, the Tribunal said that it accepted that there did not need to be a written agreement in order for there to be a loan. The Tribunal then said, at [712]: For the reasons I have given earlier, I need more than [Mr Haritos'] evidence. For reasons I come to later, [Mr Kyritsis] has gone along with what [Mr Haritos] has done and so I need more than his evidence. 253 The Tribunal then addressed a further issue that arose out of the appellants' case that the payments from the Westpac account were loans by the company and that concerned the purchase of substantial properties in the names of the appellants' associates by the use of such monies. The appellants' case was that these properties were purchased for asset preservation purposes. The Tribunal rejected that case saying that information filed in a proceeding in the Supreme Court seeking the lifting of freezing orders was inconsistent with an understanding by the registered proprietors of the properties that they held the properties on trust for the company. 254 As we have said, the Tribunal expressly said in the particular case of the alleged loan from Mr Kyritsis to Mr Haritos in 2009, that it needed more than Mr Haritos' evidence. We think that that indeed was the premise of the whole of the Tribunal's analysis of the appellants' case that the payments from the Westpac account were loans by the company. It follows that we think that the Tribunal's erroneous approach to the evidence which potentially corroborated Mr Haritos' evidence in relation to the subcontractor expenses and, therefore, Mr Haritos' credit and reliability, has also led to an error of law in the conclusion that the payments from the Westpac account were income according to ordinary concepts. The legally flawed failure to address the potential corroboration of Mr Haritos' evidence by the evidence of Mr Della Costa, Mr Karlovsky and Mr Adrian cannot be quarantined. It is not for this Court to consider how a Tribunal should view Mr Haritos' evidence once it is assessed by the Tribunal, including by reference to potentially corroborative evidence. Unless it be the case (which it is not) that the corroboration could not possibly affect the finding of fact that the payments were income according to ordinary concepts, that matter must be seen as affected by the error to which we have earlier referred. 255 We reach this conclusion with some reluctance because there was a good deal to be said against the appellants' case, particularly their case that the payments from the Westpac account were loans by the company, and significant aspects of the Tribunal's reasons are unexceptional. However, unless it is quite clear that the result would have been no different without the error of law (and it is not in this case), it is not for this Court to reach its own conclusions on the papers (Rosenberg v Percival [2001] HCA 18; 205 CLR 434; Minister for Immigration and Multicultural Affairs v Rajamanikkam [2002] HCA 32; 210 CLR 222).

Question F: the new question of law 256 The Tribunal applied Part III Division 7A as amended by the Tax Laws Amendment (2010 Measures No 2) Act 2010 (Cth) (the amending Act). As we have said, the transitional provision in the amendment provided that the amendments applied to payments made, loans made and debts forgiven on or after 1 July 2009. 257 The Tribunal should have applied the Division as it was before the amendments introduced by the amending Act. The respondent did not argue to the contrary. Nor did he argue the result would have been no different had the Tribunal applied Division 7A as it was before the amendments. The effect of this error of law is that the Tribunal's decision cannot be upheld on the basis that the payments were deemed dividends within Part III Division 7A of the ITAA 1997.

Other questions 258 We have set out above what were said to be the relevant questions of law in the amended notice of appeal before the primary judge (at [5]). 259 Questions 7(c) and 8(c) raise a similar point to that raised by Question 9(c) except that they do so in the context of dividends and deemed dividends respectively. We have dealt with Question 9(c) above (at [238]-[255]). The appellants did not suggest that the argument was any different in relation to Questions 7(c) and 8(c), and that would suggest that those questions suffer a similar fate to Question 9(c). However, for reasons already given, the Tribunal's decision cannot be upheld on the basis of dividends or deemed dividends, and as the arguments in relation to Questions 7(c) and 8(c) were not developed, we will refrain from expressing a concluded view. 260 Questions 7 (h) and 8(f) were said by the appellants to raise question F, but for the reasons we have given at [207] above we reject that contention. The appellants did not put any other arguments in support of questions 7(h) and 8(f).

Conclusions 261 Leave to appeal should be granted and the appeal allowed. The orders of the primary judge made on 20 February 2014 should be set aside and in lieu of those orders, there should be orders setting aside the decision of the Tribunal and requiring the Tribunal to hear and determine the appellants' applications for review according to law. We would leave to the President of the Tribunal the question of how the Tribunal should be constituted on the rehearing but we note that the Tribunal as constituted and which made the decision the subject of the present appeal made credit findings adverse to the appellants' case. 262 The parties should be heard as to the costs before the primary judge and before this Court. They should be granted a period of 14 days in which either to agree on the costs orders which should be made or, failing agreement, to file and serve their written submissions of no more than three pages. I certify that the preceding two hundred and sixty-two (262) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Chief Justice Allsop, Justice Kenny, Justice Besanko, Justice Robertson and Justice Mortimer.