Sham: questions of law 1, 2 and 3
90 At the core of these matters is the applicants' proposition that the AAT erred in not confining its assessment of whether or not the loan transaction was a sham to an inquiry into the subjective intentions of Mr and Mrs Millar, as parties to the transaction. It was submitted that only their intentions were relevant and that the AAT erred in taking into account Mr Gould's role in the transaction. The applicants submitted that the true legal position where one of the parties to a transaction is misled is as expressed in Snook at [528], namely that "no unexpressed intentions of a 'shammer' affect the rights of a party whom he deceived".
91 The applicants submitted that in assessing whether a transaction is a sham it is mandatory to take into account the subjective intention of the parties, citing inter alia Raftland at [47]-[48] and [57]. They submitted that the erroneous approach taken by the AAT is reflected in its observation at [59] that the Millars' subjective intentions were "probably not even relevant".
92 The applicants also submitted that Edmonds J's recent decision in Fitzroy Services Pty Ltd v Commissioner of Taxation [2013] FCA 471 (Fitzroy Services) supported their case.
93 In defending the AAT's decision, the Commissioner placed particular reliance on the Full Court's decision in Richard Walter, with heavy emphasis on the significance of the onus carried by the applicants under s 14ZZK of the TAA 1953.
94 In view of the parties' prominent reliance on these four authorities, it is appropriate to consider the relevance of each of them closely.
95 Snook: The applicants' reliance upon the passage from Diplock LJ's judgment in Snook is misplaced. As is invariably the case, it is important to evaluate any such passage in its context and not in isolation. (See generally the observations of Leeming JA in Mainteck Services Pty Ltd v Stein Hurtey SA [2014] NSWCA 184 at [73]).
96 In common with many cases involving claims of "sham" the facts in Snook were complicated. The plaintiff bought a car, which was financed in part by a genuine hire purchase agreement between the plaintiff and Totley Investments Ltd (Totley) (the first hire purchase agreement). Before the first hire purchase agreement terminated, the plaintiff refinanced with Auto Finance (Hallamshire) Ltd (Auto Finance) with the aim of obtaining extra credit. Auto Finance required the plaintiff to enter into a second hire purchase agreement with the defendants. Auto Finance paid to Totley the outstanding amount owing under the first hire purchase agreement. The plaintiff subsequently defaulted under the second hire purchase agreement. Auto Finance, acting as the defendant's agent, seized possession of the car and sold it, paying some of the proceeds to the defendants and retaining the balance of the sale amount for itself. The plaintiff sued the defendants in conversion and claimed that the refinancing transaction was a sham because the plaintiff had never sold his rights in the car to Auto Finance. He asserted that many of the statements in the documentation were untrue. He claimed that the transaction was a sham because it was nothing more than a loan of money on the security of goods and was illegal under the Bills of Sales Act, 1878 and 1882. The plaintiff's claims succeeded before the trial judge.
97 On appeal to the Court of Appeal, the plaintiff's claim in conversion failed (Lord Denning MR dissenting). The majority (Diplock and Russell LJJ) held that the defendants had established their title to the car, there was a transfer of value by the plaintiff and the refinancing transaction was enforceable. The majority held that the plaintiff was estopped by his conduct from denying the defendants' title to the car. They held that the defendants were entirely innocent and it was the plaintiff who intended the sham in order to mask what in substance was a loan on the security of the car.
98 After describing the word "sham" as "popular and pejorative", Diplock LJ said at 528-529 in a passage which is frequently cited (citations omitted):
I apprehend that, if it has any meaning in law, it means acts done or documents executed by the parties to the "sham" which are intended by them to give to third parties or to the court the appearance of creating between the parties legal rights and obligations different from the actual legal rights and obligations (if any) which the parties intend to create. One thing I think, however, is clear in legal principle, morality and the authorities, that for acts or documents to be a "sham", with whatever legal consequences follow from this, all the parties thereto must have a common intention that the acts or documents are not to create the legal rights and obligations which they give the appearance of creating. No unexpressed intentions of a "shammer" affect the rights of a party whom he deceived. There is an express finding in this case that the defendants were not parties to the alleged "sham". So this contention fails.
(Emphasis added).
99 In dissent in Snook, Lord Denning MR held that the defendants were affected by the sham transaction because, even though they were not parties to the sham, their agents (i.e. Auto Finance) were, and every "principal is answerable for the conduct of his agent in the course of his agency" (at 527). The majority disagreed. Russell LJ stated at 532 that it was not open to conclude that Auto Finance was the agent of the defendants because no such finding had been made by the trial judge (Diplock LJ agreed with Russell LJ's reasoning on this point).
100 Accordingly, unlike the position here, a majority of the Court of Appeal concluded that there was no proper evidentiary basis upon which to find that Auto Finance was the defendants' agent. The passage from Diplock LJ's judgment set out in [98] above, upon which the applicants relied, which referred to the necessity that the parties have "a common intention" to create a sham, does not accommodate the potential relevance, in an appropriate case, of the intention of an agent or third party. That is particularly so in a case such as the present where Mr Gould's role was so predominant. His failure to give evidence was critical to the AAT's conclusion that the applicants had failed to discharge their burden under s 14ZZK of the TAA 1953.
101 Raftland: In my view, the applicants' reliance on Raftland is also misplaced. It is notable that, unlike the circumstances here, the professional advisor there (Mr Tobin) gave evidence and was cross-examined. The High Court observed that the cross-examination was unsuccessful in establishing that Mr Tobin's intention cast any doubt on the subjective intentions of the parties to the transaction (see further below). Another significant feature of Raftland is that the relevant transaction there involved the creation of an express trust, which has important implications for the requisite intention (see further below).
102 I do not accept the applicants' submission that Raftland establishes an absolute proposition that, in a case where parties enter into a tax arrangement which is designed by a professional advisor which the parties are unlikely to have fully understood, the relevant intention in determining whether or not the transaction is a sham is limited to those of the parties and does not take into account the intention of their advisor.
103 In [43] of Raftland, the plurality identified the relevant intentions in establishing the Raftland Trust as those of the parties to the transaction, namely the Heran brothers on the one hand and Mr and Mrs Thomasz on the other hand (see [57]). The plurality also considered whether the intention of the settlor of the Raftland Trust (Ms Sommerville) had any legal relevance, but their Honours found that she had no intention independent of those of the Heran brothers, who were her employer's clients (see at [44]).
104 Consideration was also given at [45] of Raftland to the legal relevance of the intention of Mr Tobin, upon whose advice the Raftland Trust was established. In [45], the plurality commented that the legal relevance of Mr Tobin's intentions was a matter of dispute but, significantly, their Honours also found that an attempt at the trial to elicit clear evidence from Mr Tobin on this subject was unsuccessful. That is to be contrasted with the position here. Although Mr Gould did not give evidence before the AAT, the AAT found that the applicants did not understand the loan documentation or other relevant aspects of the arrangements they had entered into and, in effect, simply did what Mr Gould told them to do. It is in that context that the AAT made the findings that it did in [58] and [59] of its reasons, which culminated in its finding that the relevant intention was that of Mr Gould, whom the AAT described as "the puppet master" and the AAT had no idea what that intention was because he had not given evidence. This has significance for the burden carried by the applicants (see further below).
105 The comments of the plurality in Raftland concerning whose intention is relevant also have to be assessed in the context of the facts of that case. In particular, it is important to note that in [47] their Honours emphasised that the case involved the creation of an express trust. As the plurality stated there, the creation of such a trust depends "upon the intention of the person alleged to have created it": citing Commissioner of Stamp Duties (Qld) v Jolliffe [1920] HCA 45; (1920) 28 CLR 178 (Jolliffe).
106 In Jolliffe, Knox CJ and Gavan Duffy J stated the relevant principle at 181 as follows:
We know of no authority, and none was cited, which would justify us in deciding that by using any form of words a trust can be created contrary to the real intention of the person alleged to have created it. In our opinion the law is accurately stated in Lewin on Trusts, 11th ed., at p. 85: "It is obviously essential to the creation of a trust, that there should be the intention of creating a trust, that there should be the intention of creating a trust, and therefore if upon a consideration of all the circumstances the Court is of opinion that the settlor did not mean to create a trust, the Court will not impute a trust where none in fact was contemplated.
107 Necessarily, therefore, there was a focus upon the intention of the persons who created the Raftland Trust, who were identified in [47] as the Heran brothers (who were the directors of Raftland). The plurality observed in [47] that it "is the intention of the Heran brothers that is specifically relevant to a question whether the trusts apparently created by the Raftland trust deed were wholly or partly a pretence".
108 In the following paragraph, the plurality in Raftland observed that the Heran brothers were business people, not lawyers and that it was unlikely that they applied their minds with care to the detail of the documents that were prepared by their solicitor, Mr Tobin. It was in this context that the plurality then said: "That does not mean, however, that their intentions were irrelevant". Rather, their Honours added that it may give rise to a factual inference that the Heran brothers had no intentions which were inconsistent with the documents prepared by their solicitor, with the consequence that the documents were to be taken at their face value. If, however, the Heran brothers had a common intention that was inconsistent with the creation and enforcement of the entitlement of the E & M Unit Trust as a beneficiary of the Raftland Trust, that would be significant. The primary judge had held that it was the intention of the brothers, together with Mr and Mrs Thomasz, that the Thomasz interests were to receive only the $250,000 as the "price" for the accumulated tax losses of that Trust, and no more. This issue was at the heart of the issue whether aspects of the arrangements were a sham.
109 The plurality in Raftland returned to consider the issue of whose intentions were relevant in [56]. Reference was made to Edmonds J's leading judgment in the Full Court below, where his Honour found that the nomination of the E & M Unit Trust as a tertiary beneficiary of the Raftland Trust "was at the forefront of the intentions of those charged with responsibility for establishing the Raftland Trust". The plurality observed at [57] that Edmond J's reference to the intentions of those charged with responsibility for establishing the Raftland Trust appeared to be a reference to the intentions of the Heran brothers' solicitor, Mr Tobin, who drafted the relevant documents. The plurality repeated, however, that the relevant intentions were those of the Heran brothers, and Mr and Mrs Thomasz. Their Honours added at [57] that Edmond J's reasoning did not reflect "the complexity of Mr Tobin's position", as reflected in extracts from his cross-examination which indicated that Mr Tobin's intentions were "more subtle than those of his clients, but he was unable to give a direct answer to the suggestion that it was the intention of the parties that the Thomasz interests, and the E & M Unit Trust, were to receive $250,000 and nothing more".
110 The important point to note is that the reason why the plurality in the High Court focused on the intentions of the Heran brothers and Mr and Mrs Thomasz, as opposed to Mr Tobin, is because an express trust was involved and, in accordance with authority, the creation of such a trust depends upon the intention of the person who is alleged to have created it (and not any advisor).
111 In the present appeal, there is no issue of the creation of an express trust. Accordingly, the principle which was at the heart of Raftland has no direct application here. I see no reason why in the different circumstances here the AAT fell into error in concluding that the subjective intentions of the Millars (who plainly had little understanding of the relevant legal documentation or the arrangements generally) were not determinative. Moreover, considering Mr Gould's dominating involvement (possibly on both sides of the loan transaction) it was not incorrect of the AAT to highlight the legal relevance of his intentions, together with the difficulties created for the taxpayers (who carried the burden of establishing that the assessments were excessive) by Mr Gould's absence as a witness in their case.
112 I do not accept the applicants' submission that Mr Gould's knowledge or intention could not be imputed to the applicants who were his principal because of his fraud which was not disclosed to them. The applicants relied on the following statement of principle by Buckley J in Re David Payne & Co Ltd [1904] 2 Ch 608 at 611:
…if the agent has an interest which would lead him not to disclose to his principals the information which he has thus obtained, and in point of fact he does not communicate it, you are not to impute his principals knowledge by reason of the fact that their agent knew something which it was not his interest to disclose, and which he did not disclose.
113 This principle is relevant where a third party knows that an agent will not disclose particular information to the principal because it is not in the agent's interest to do so, such as where a third party makes a misrepresentation to the agent which both know to be fraudulent or otherwise not in the interests of the agent to disclose to his or her principal. The principle has no application to the circumstances here.
114 Fitzroy Services: The applicants also relied on Fitzroy Services. It will be recalled that in [79] of its reasons for decision, the AAT described that decision as "a distraction" and "a different case". The AAT added that, apart from what was revealed in the reasons for judgment there, the AAT knew nothing about the arrangements. I consider that these findings were open to be made by the AAT and no appellable error has been established.
115 From one viewpoint, the applicants' reliance on Fitzroy Services is perhaps understandable, not the least because that case also involved a series of transactions which were entered into on the advice of Mr Gould and which all also involved HWBB. In simple terms (and as best can be divined considering the significant deficiencies in the evidence in that case), the arrangements included the establishment of a superannuation fund (the Fund) in Western Samoa by the Heasman brothers; funds then being transmitted to that Fund by Australian companies which were owned and controlled by the Heasman brothers (including Heasman Sales and Fitzroy Services); those funds then finding their way to the HWBB in a manner which was not explained by the evidence; and the funds then being remitted back to a bank account in Australia by way of a "loan" from HWBB to Heasman Sales.
116 Various companies owned and controlled by the Heasman brothers (including Fitzroy Services) claimed tax deductions in respect of interest payments which were said to have been made in respect of the loan from HWBB, as well as bank fees and management fees which were also said to relate to the loan. The Commissioner disallowed all these deductions. He asserted that the loan was a sham.
117 The key findings made by Edmonds J may be summarised as follows:
(a) after commenting at [7] that the case "was notable for the lack of issue-specific evidence called on behalf of the applicant", his Honour concluded at [20] that the evidence specifically relating to the management fees was "unsatisfactory, generalised and unsupported by primary records", with the consequence that the appeal on that issue failed;
(b) the Commissioner did not contend that the apparent loan transactions were a disguise for some other transaction which was the real transaction and this was not a case where there was no transaction at all in the sense that the payments were not intended to be recoverable. There was some evidence to support the claim that the loan was genuine. Accordingly, the sham assertion was rejected (see [30]-[34]); and
(c) interest and bank fees for some taxation years were not allowable deductions under ss 8-1 or 25-25 of the ITAA 1997 for reasons given by his Honour which are unrelated to the unsuccessful allegation of sham (see [46] and [50]).
118 It is important to note that the proceeding before Edmonds J was in the nature of an appeal to the Court under s 14ZZ of the TAA 1953, as an alternative to review by the AAT. Accordingly, the Court was required to find the relevant facts in Fitzroy Services. This task was handicapped by the many deficiencies in the evidence, which were specifically commented on by Edmonds J.
119 The current appeal proceeding is of a fundamentally different nature. The Court has a more limited role under s 44 of the AAT Act. The AAT's role is to find the facts and the Court's jurisdiction in an "appeal" under that provision is confined to a review of questions of law. No reviewable error of law has been established in respect of the AAT's finding here that Fitzroy Services had no relevance to the different facts and circumstances presented by the evidence before it.
120 Richard Walter: Richard Walter involved a series of complex arrangements which were implemented on the advice of tax accountants and lawyers and were designed to minimise the liability to income tax of the proceeds of a large pathology practice, of which Dr Wenkart was the principal. The arrangements included a series of loans or trusts which the Commissioner claimed to be a sham. At first instance, Tamberlin J accepted the Commissioner's submission that the loan arrangements were a sham. His Honour pointed to various features of the arrangements which he considered supported his conclusion that the purported loans were simply a false label masking the real transaction intended by the parties, which was identified as the transfer of the beneficial ownership of proceeds from the pathology practice to the company, Richard Walter, free of any obligation to repay.
121 On appeal to the Full Court, Hill J acknowledged that some criticisms could be made in respect of various of the individual factors cited by the primary judge as supporting that conclusion. Hill J emphasised at 256-257, however, that there were two additional matters which were of greater significance to the primary judge's conclusion, namely:
(a) his Honour's finding that the only witness called to give evidence on behalf of the taxpayer (a Mr Holden, who was the financial controller of various companies in the group of which Richard Walter formed a part) was not a reliable witness, with the consequence that the primary judge's finding that there was no intention on the part of the relevant parties that the loans be repaid necessarily involved not accepting Mr Holden's evidence; and
(b) the failure of the taxpayer to call Dr Wenkart and the accounting advisors concerned with the arrangements, which enabled a Jones v Dunkel inference to be drawn that their evidence would not have assisted Richard Walter's case.
122 As Hill J explained, these matters were significant because of their relevance to the burden of proof carried by the taxpayer, a matter to which I will return below.
123 Justice Hill cited approvingly the passage from Diplock LJ's judgment in Snook (which is set out in [98] above), as well as Lockhart J's comments on the meaning of "sham" in Sharrment Pty Ltd v Official Trustee in Bankruptcy [1988] FCA 179; (1988) 18 FCR 449 (Sharrment) at 454. At 257-258, Hill J added a gloss to Lockhart J's definition of a sham transaction by describing such a transaction as one which involves:
A common intention between the parties to the apparent transaction that it be a disguise for some other and real transaction or for no transaction at all.
(Emphasis added).
124 Justice Hill described the relevant transactions in Richard Walter as not being a disguise for something which was not a transaction at all, but rather being a disguise for some real transaction largely because some payments had been made and recorded as loans in the relevant accounting books.
125 Justice Hill emphasised, however, the importance of approaching a case involving an allegation by the Commissioner of sham in the context of the wider legislative scheme of taxation legislation, which his Honour summarised as follows at 258-259:
the Commissioner is obliged to make an assessment of the taxable income of a taxpayer and the tax payable thereon, which notice of assessment must be given to the taxpayer;
the taxpayer may then lodge an objection to the assessment under Pt IVC of the TAA 1953;
the Commissioner then considers the objection and determines whether to disallow it or allow it in whole or in part;
a taxpayer who is dissatisfied with the Commissioner's objection decision may then appeal to either the AAT or to the Court;
the Commissioner will generally tender a copy of the assessment which, under s 177, effectively prevents a challenge to the validity of the assessment or its due making and the issue then becomes one of the excessiveness of the assessment; and
the taxpayer carries the burden of proving the assessment to be excessive, which requires the taxpayer to demonstrate not merely that the assessment is wrong.
126 Applied to the particular circumstances presented in Richard Walter itself, Hill J stated at 259:
The Commissioner alleges that the payments from Morlea to Richard Walter are income. In order to show that the assessment is excessive Richard Walter must thus show on the balance of probabilities that the payments are not income. It seeks to do that in the present case by making a case that the payments were loans. If this case is accepted, Richard Walter will, but subject to the s 260 issue, be entitled to succeed. In the present case it sought to show the amounts in question were loans through the evidence of Mr Holden who swore that they were and that the accounts reflecting them were correct. His Honour did not believe Mr Holden, finding that there was no intention that the loans would be repaid. This being the case, the payments in question were not loans. Whether they had some other character may have relevance to the question of sham, but that can for the moment be put to one side. It can not be correct to say that the onus lay upon the Commissioner to establish what the payments in question were. If they were not loans it will be for the taxpayer then to show that they are something else which does not have the character of income. If the taxpayer does not do this it will not have satisfied the onus of showing that the assessment is excessive.
127 Significantly for the present appeal, Hill J then emphasised that in a case in which the Commissioner alleged sham, the Commissioner did not carry an onus of persuading the Court that there was a sham; rather the taxpayer carried the burden of proving that the assessment was excessive. The Commissioner did not have the burden of establishing the sham, nor was he obliged to show what the genuine transaction was which was obscured by the sham. This meant that if Richard Walter wished to assert that the relevant amounts which were the subject of the assessments should not be treated as profits of the company, it carried the burden of demonstrating, on the balance of probabilities, that the payments to it were not assessable income with the consequence that the taxation assessment was excessive. Justice Hill acknowledged, however, at 259 that once the Commissioner alleges a sham, a factual obligation may arise for the Commissioner to identify the real transaction for which it is contended that the apparent transaction is but a disguise: citing Coppleson v Commissioner of Taxation (Cth) (1981) 52 FLR 95 (Coppleson).
128 In [12] of his written outline of submissions in the present appeal, after noting that there was "a real disparity between the terms of the documents and subsequent behaviour", the Commissioner made the following submission:
The Tribunal was entitled to consider that the disparities were consistent with the absence of any real transaction (Reasons [45]).
129 This might suggest that the Commissioner's position was that there was no real transaction at all. But that is not how the Commissioner's case was presented either in the AAT or in the appeal. Rather, the Commissioner contended (and the AAT accepted at [33] of its reasons for decision) that the true arrangement was different from that presented by the loan documentation between the applicants and HWBB. The real arrangement, as identified by the Commissioner and accepted by the AAT, was that the taxpayers impermissibly accessed their superannuation funds to purchase the Sunshine Coast apartment. In this respect, the Commissioner discharged the factual obligation to identify the real transaction as referred to by Hill J in Richard Walter at 259. This also puts this case into a different category from that in Coppleson, where Hunt J observed at 101 that the absence of identification of any specific motive or purpose of benefitting one or other of the parties by way of some other and different transaction makes it unlikely that a common intention existed to disguise the true nature of a transaction.
130 In Richard Walter, Lockhart J substantially agreed with Hill J's approach. After noting the importance of the burden carried by the taxpayer to prove that an assessment is excessive, Lockhart J agreed that Richard Walter failed to discharge that burden there, particularly in the light of the primary judge's rejection of Mr Holden as a credible witness and the taxpayer's failure to call other persons who could have given evidence regarding the true nature of the transactions.
131 The applicants relied on another aspect of Coppleson. In that case, the Commissioner argued that, even if the Court accepted the taxpayer's evidence that he intended to make a gift of shares to a hospital, the Court would nevertheless find at 102 that the transaction was a sham "because the taxpayer is to be identified with the motives and intentions" of his accountant and financial advisor (Mr Joye). Mr Joye implemented the taxpayer's desire to make a gift to the hospital by setting up a special company for that purpose and have it issue preference shares to the hospital which would earn a dividend. The evidence established that the taxpayer was totally reliant upon Mr Joye in relation to his financial affairs. The Commissioner effectively argued that the taxpayer did no more than instruct Mr Joye to obtain for him a taxation benefit in making the gift and that the taxpayer was prepared to ratify whatever Mr Joye did to achieve that result. In rejecting that contention, Hunt J emphasised at 103 that it was inconsistent with his core finding that the taxpayer genuinely intended to make a gift to the hospital but he left it to Mr Joye to work out the details of how the gift was to be made. His Honour held that this did not amount to the taxpayer "placing himself in the hands of Mr Joye so as to identify himself with whatever may have been Mr Joye's motives and intentions".
132 It is to be noted that the taxpayer and Mr Joye gave evidence in Coppleson and that the taxpayer's evidence was accepted in its entirety. Indeed, the taxpayer was described by his Honour at 101 as "a man of pellucid probity and sincerity". That is to be contrasted with the findings made by the AAT here regarding the evidence of the applicants, the significant gaps in the evidence generally and, most importantly, Mr Gould's role and his absence from the witness box.
133 It seems to me that the core of this appeal essentially relates to the applicants' burden under s 14ZZK of the TAA 1953. To discharge this burden the applicants had to defeat the Commissioner's claim that the loan was a sham. In the particular circumstances of this case it was insufficient for them simply to persuade the AAT (as they did) that they genuinely believed and intended that the transaction was a loan. The difficulty the applicants faced was that, as the AAT found, they placed their total trust and faith in Mr Gould ([83] of the AAT's reasons for decision), such that Mr Gould's actions were "properly imputed to the taxpayers" (at [84]). Once that point was reached, and given all the unanswered questions regarding the transaction which the AAT found Mr Gould could probably answer because of his prominent role in implementing and administering the arrangements (see [46]-[50]), it was a short and legitimate further step for the AAT to find that, because the evidence left unclear what Mr Gould's intention was, the applicants failed to discharge their burden of demonstrating that the assessments were excessive. It may well be that, in a different set of circumstances, the taxpayers' subjective intentions would carry more if not decisive weight. In my view, however, the applicants have failed to establish any legal error in the AAT's approach in the particular circumstances here.
134 For all these reasons, question of law 1 should be rejected.
135 Question of law 2 turns on the question whether the facts found by the AAT were necessarily outside the statutory criteria posed by s 26AFB of the ITAA 1936. The applicants contended that once the AAT had found that they intended the transactions to have ordinary effect this necessarily meant that the $600,000 transferred to them on 14 October 2000 was a loan from HWBB. Consequently, any benefit derived by them from the loan was not "out of, or attributable to assets of" the Australian fund within s 26AFB and that provision could not tax the benefit in their hands.
136 The applicants' contention should be rejected. It is predicated on the proposition which has already been rejected in relation to question of law 1, namely that the applicants' subjective intention is determinative on the issue of sham and that no account can be taken of the role played by Mr Gould and the knowledge which he apparently had (which was relevant to his intention), yet he was not called as a witness.
137 Question of law 3 should be rejected for similar reasons. In the particular circumstances of this case and having regard to the AAT's findings concerning the applicants' lack of knowledge of many aspects of the transaction and that they were passive and compliant participants in an arrangement presented to them by Mr Gould, it was open to the AAT to find at [59] that the applicants' intention was not determinative and was "probably not even relevant". It is significant to note the express reference by the AAT in [59] of its reasons for decision that these findings were made in the circumstances of the particular case.