Orica Limited v Commissioner of Taxation of the Commonwealth of Australia

REASONS FOR JUDGMENT Introduction 1 The present matters concern the date upon which a capital gain, made as a result of the disposal, under a contract, of a chose in action, is to be treated as assessable under Pt IIIA of the Income Tax Assessment Act 1936 (Cth) ("the Act"). 2 The matters involve appeals to the Court by the applicants, Orica Limited ("Orica") and Dulux Holdings Pty Ltd ("Dulux"), against the Commissioner's disallowance of objections by Orica to amended assessments of income tax of the Commissioner in respect of its years of income ending 30 September 1988, 1989, 1990, 1994 and 1995 and his disallowance of an objection to an amended assessment of Dulux in respect of its year of income ending 30 September 1987. 3 The appeals were heard together on the basis of agreed statements of facts. Background (a) Orica 4 In 1966 and 1970, pursuant to two debenture trust deeds ("the Orica debentures") entered into with Trustees Executors & Agency Company Limited (subsequently called ANZ Executor & Trustee Company Limited) ("the trustee"), Orica issued debentures to members of the public. 5 By 1986 the borrowing restrictions imposed under the Orica debentures were seen by Orica as a burden. On 6 June 1986, in order to obtain a release from the restrictions, Orica, the Melbourne Metropolitan Board of Works ("MMBW") and the trustee entered into an agreement known as "the Principal Assumption Agreement" ("the Orica assumption agreement"). Pursuant to the Orica assumption agreement: · in consideration of Orica paying the trustee on 6 June 1986 (on account of the MMBW), the assumption payment of $62,309,546, MMBW agreed to assume, in the manner provided for in the Orica assumption agreement, the obligations of Orica to members of the public to pay all of the principal amounts outstanding under the Orica debentures as and when they fell due for payment on various dates between 30 November 1986 and 31 January 2000; · the trustee agreed that payments made by MMBW to its nominated bank account would be in pro tanto satisfaction of the obligations of Orica to repay the principal amounts outstanding under the Orica debentures. 6 The assumption payment of $62,309,546 was calculated as being equal to the aggregate of the present values of the respective principal amounts owing to members of the public under the Orica debentures. The present values of the principal amounts were calculated by applying a discount rate from the maturity of the debentures to 1 July 1986, such rate being in effect a rate equal to the yield rate for Commonwealth Government Bonds maturing commensurately with the debentures, less 0.03 percent per annum. As at 6 June 1986, the aggregate of the outstanding principal amounts owing under the Orica debentures was $98,662,800, payable between 1986 and 2000. 7 On 6 June 1986 Orica paid $62,309,546 to the trustee and on 1 July 1986 the trustee paid that sum to MMBW. Pursuant to the Orica assumption agreement, MMBW made the required payments to the trustee. The payments made by MMBW, and their respective present values as at the date of the Orica assumption agreement, were as follows: Year of Income Payment made Present value 1988 $20,000,000 $16,253,551 1989 $17,403,500 $12,478,712 1990 $11,930,350 $7,291,447 1994 $1,199,850 $446,056 1995 $22,200,900 $7,583,305 8 A dispute arose between Orica and the Commissioner in relation to the application of ss 25(1), 25A and Pt IIIA of the Act to the payments made by MMBW. The dispute, which related to the 1986 and 1987 years of income, was resolved by the decision of the High Court in The Commissioner of Taxation v Orica Limited (1998) 194 CLR 500 ("FCT v Orica"). The High Court's decision in relation to Pt IIIA concerned the payment made by MMBW in the 1987 year of income that discharged Orica's liability to members of the public under the Orica debentures for payments of principal required to be made during that year. 9 Relevantly, for present purposes, the High Court decided that the difference between the amounts payable in the 1987 year of income by Orica to discharge its liability to members of the public under the Orica debentures and the lesser amount Orica had paid to MMBW to assume Orica's liability in respect of those amounts, constituted a capital gain for the purposes of Pt IIIA of the Act. 10 Gaudron, McHugh, Kirby and Hayne JJ (at 530) explained the legal effect of the payments made by MMBW: "…when MMBW made its first payment of the trustee under the [Orica assumption agreement], it made a payment that was applied in satisfaction of an obligation of [Orica]. Thus, each time MMBW made a payment under the [Orica assumption agreement] received a benefit, being the discharge of the obligation which [Orica] owed its debenture holders." 11 The High Court held, by a majority, that the discharge of the obligation Orica owed its debenture holders was a disposal of part of an asset for the purposes of Pt IIIA of the Act. The basis for that conclusion was explained in the joint judgment (at 540): "…for the purposes of Pt IIIA performance by MMBW of its obligations under the [Orica assumption agreement], and discharge pro tanto of those obligations by performance, is a disposal of part of [Orica's] asset (being its rights against MMBW under the [Orica assumption agreement])." 12 Accordingly, by a majority, the High Court held that the difference between the amount payable by Orica under the debenture and the amount paid by Orica to MMBW to discharge that liability was to be treated as an assessable capital gain under Pt IIIA of the Act. The joint judgment did not deal with the issue of whether the cost base for the acquisition of the asset was to be indexed. 13 Relying upon the decision in FCT v Orica, the Commissioner amended Orica's assessments to include Orica's net capital gains in respect of the years of income ending 30 September 1988, 1989, 1990, 1994 and 1995 after applying indexation to the cost base in the manner provided for in s 160ZJ of the Act. Orica's amended assessments were issued on the footing that the disposals which gave rise to the capital gains in each of the years of income took place when Orica's obligations were discharged during each of those years of income. The amounts included were: · $1,302,225 for the 1988 year of income; · $1,962,209 for the 1989 year of income; · $2,017,317 for the 1990 year of income; · $543,652 for the 1994 year of income; and · $10,545,360 for the 1995 year of income. 14 Orica objected to the amended assessments claiming that, under s 160U(3) of the Act, the disposals were deemed to have taken place on 6 June 1986, the date of the Orica assumption agreement, and not when the assumption payments were made by MMBW during each of the relevant years of income. Orica contended that FCT v Orica only determined that, for the purposes of Pt IIIA, Orica's asset, namely its chose in action against MMBW, was disposed of in part by each of the payments made by MMBW pursuant to its obligations under the Orica assumption agreement. 15 Orica accepted that each time a payment was made by MMBW under the Orica assumption agreement, Orica's obligation to make the payment was discharged or satisfied, and that the time each disposal of a part of its chose in action against MMBW actually occurred was when each payment was made by MMBW. However, Orica contends that as the asset was "disposed of under a contract" s 160U(3) applied, with the consequence that the date of the disposal was deemed to be "the time of the making of the contract". 16 The Commissioner disputes Orica's contention which he claims is inconsistent with the decision in FCT v Orica. The Commissioner contends that the present case is concerned with a disposal otherwise than under a contract, with the consequence that under s 160U(4) the disposal occurs on each occasion, during the relevant years of income, when Orica's debt under the debentures is satisfied or discharged by reason of a payment made by MMBW. (b) Dulux 17 Dulux also entered into a transaction with MMBW in respect of its liability to members of the public under debentures issued by it pursuant to a debenture trust deed dated 16 March 1965, and amended in April 1968 ("the Dulux debentures"). Dulux's Principal Assumption Agreement with MMBW was also entered into on 6 June 1986 ("the Dulux assumption agreement"). Under the Dulux assumption agreement MMBW was required to pay the amounts payable by Dulux under the Dulux debentures in consideration of Dulux paying the present value of those sums to MMBW. 18 The present dispute relates to Dulux's 1987 year of income in which the amount payable by it under the Dulux debentures was $2,000,000. The amount paid by Dulux to MMBW under the Dulux assumption agreement to discharge that liability, being the then present value, was $1,818,675. Following the decision in FCT v Orica the Commissioner issued Dulux with an amended assessment for the 1987 income year which, inter alia, included a net capital gain of $181,325 in Dulux's taxable income for that year. Dulux objected to the amended assessment on the same grounds as Orica. The Operation of Pt IIIA 19 Generally, a capital gain exists when the consideration in respect of the disposal of an asset exceeds the indexed cost base to the taxpayer in respect of the asset. Division 2 of Pt IIIA is concerned with the circumstances which will constitute the acquision or disposal of an asset for the purposes of the capital gains tax provisions of Pt IIIA. 20 A number of sections in Pt IIIA have been amended from time to time but the parties accept that, subject to one exception (s 160U(10)), the sections applicable to the various years of income with which the present matters are concerned are in the form they were in as at 30 June 1988. 21 The liability to capital gains tax in the present matters arises as there has been a disposal of an asset acquired after 20 September 1985. In that regard s 160L provides: (1) Subject to this section, this Part applies in respect of every disposal on or after 20 September 1985 of an asset, whether situated in Australia or elsewhere, that - (a) … (b) was acquired by that person on or after 20 September 1985." 22 Section 160M, which defines what constitutes a disposal or acquisition, provides: "(1) Subject to this Part, where a change has occurred in the ownership of an asset, the change shall be deemed, for the purposes of this Part, to have effected a disposal of the asset by the person who owned it immediately before the change and an acquisition of the asset by the person who owned it immediately after the change. (2) A reference in sub-section (1) to a change in the ownership of an asset is a reference to a change that has occurred in any way, including any of the following ways: … (3) Without limiting the generality of sub-section (2), a change shall be taken to have occurred in the ownership of an asset by: (a) … (b) in the case of an asset being a debt, a chose in action or any other right, or an interest or right in or over property - the cancellation, release, discharge, satisfaction, surrender, forfeiture, expiry or abandonment, at law or in equity, of the asset; (c) … (d) … 23 In FCT v Orica the court determined that the payments by MMBW under the Orica assumption agreement resulted in the disposal of an asset under s 160M. The court, by a majority, decided that Orica was to be deemed to have disposed of its asset, namely its chose in action against MMBW under s 160M(3)(b). The chose in action related to MMBW's obligation to Orica to assume liability for the payments in the 1987 year of income. When MMBW made the payment required to be made in that year of income it discharged the liability of Orica to the public in respect of the principal amounts required to be paid during that year under the Orica debentures. Thus, for the purposes of s 160M(1) a change in the ownership of an asset was deemed to have occurred as a result of a deemed disposal under s 160M(3)(b). 24 FCT v Orica was concerned with the existence of the capital gain under s 160M(3)(b), rather than the time at which the disposal that resulted in the capital gain is deemed to have been made. The latter issue arises under s 160U, which was not referred to in argument, or in any of the various judgments, in FCT v Orica. 25 Section 160U provides: "(1) Subject to the provisions of this Part other than this section, where an asset has been acquired or disposed of, the time of acquisition or disposal for the purposes of this Part shall be ascertained in accordance with this section. (2) If the time of the acquisition or disposal as ascertained under a sub-section of this section is different from the time of acquisition or disposal as ascertained under a subsequent sub-section of this section, the time of acquisition or disposal shall be taken to have been the time of acquisition or disposal as ascertained under that subsequent sub-section. (3) Where the asset was acquired or disposed of under a contract, the time of the acquisition or disposal shall be taken to have been the time of the making of the contract. (4) Where the asset was acquired or disposed of otherwise than under a contract, the time of acquisition or disposal shall be taken to have been the time when the change in the ownership of the asset that constituted or gave rise to the acquision or disposal occurred. (5) …" 26 Because of the provisions of ss 160U(3) and (8), which relate a disposal back to an earlier date, a question arose as to the Commissioner's power to issue amended assessments under s 170 of the Act. As a consequence, s 160U(10) was inserted by Act No 82 of 1994. The sub-section provided: "Section 170 does not prevent the amendment of an assessment at any time to give effect to subsection (3) or (8) where the time of an acquisition or disposal is taken to have been before the making of the assessment." 27 The issue in the present matters is whether Orica's and Dulux's asset, being their chose in action against MMBW, which arises under the Orica and Dulux assumption agreements, "was disposed of under a contract" and therefore falls within s 160U(3). If s 160U(3) applies the time of disposal of the asset is taken to be the date of the making of the contract, which in each case was 6 June 1986. If s 160U(3) does not apply it is common ground that s 160U(4) will apply to make the gains assessable at the time the MMBW payments were made during the relevant years of income. Reasoning 28 In Federal Commissioner of Taxation v Sara Lee Household & Body Care (Australia) Pty Ltd 2000 ATC 4378 Gleeson CJ, Gaudron, McHugh and Hayne JJ (at 4385) ("FCT v Sara Lee") considered the operation of s 160U(3). Their Honours said: "The words 'under a contract', in s 160U(3), direct attention to the source of the obligation which was performed by the transfer of assets which constituted the relevant disposal." 29 One of the questions in that case was whether the relevant year of income in which the capital gain arose was the year in which the original contract to sell a business was made, or the year in which, pursuant to the original contract, a deed of assignment was executed which actually effected the disposal of the assets by the respondent and an acquisition of assets by the buyer. The time of the disposal was held to be the date on which the original purchase agreement was executed. The majority stated at [4,385]: "From 31 May 1991, until completion on 30 August 1991, there was a contractual obligation upon the respondent to dispose of its assets to Roche, or to an entity of the kind referred to in s 12.3 of the purchase and sale agreement. The content of that obligation did not change. The price was varied, as were certain other terms and conditions of the sale, but the agreement of 31 May 1991 was the source of the obligation which the respondent discharged by performance on 30 August 1991." 30 In the present case the "source of the obligation" of MMBW to make the payments to the debenture holders through the trustee, which discharged and brought to an end the obligations of MMBW to Orica and Dulux in respect of those payments, was the Orica assumption agreement and the Dulux assumption agreement respectively. 31 The performance by MMBW of its obligations in respect of the payments simultaneously resulted in "the disposal" of an asset of Orica and Dulux for the purposes of Pt IIIA. As was stated in the joint judgment of the majority in FCT v Orica (at 540): "…for the purposes of Pt IIIA performance by MMBW of its obligations under the Principal Assumption Agreement, and discharge pro tanto of those obligations by performance, is a disposal of part of the taxpayer's asset (being its rights against MMBW under the Principal Assumption Agreement)." 32 The performance by MMBW of its obligations represented due and punctual payment by Orica and Dulux under the assumption agreements in each of the relevant years of income. The source of MMBW's obligation to make the payments was the Orica and the Dulux assumption agreements respectively. Thus, it appears to follow that the disposal of Orica's and Dulux's rights against MMBW was "under a contract" for the purposes of section 160U(3). 33 The Commissioner contended that there was no disposal of the relevant asset under a contract because upon entering into the assumption agreements Orica and Dulux did not lose dispositive power over the asset. Rather, so it is contended, they continued to hold an unfettered ability to deal with that asset. Even if that contention were to be accepted it does not lead to the conclusion that there was no disposal of the chose in action when payments were made by MMBW pursuant to the assumption agreements. To the contrary, on the basis of the reasoning in FCT v Orica and FCT v Sara Lee the only source of the obligation that resulted in the relevant "disposals" were the assumption agreements. 34 The Commissioner also contended that s 160U(3) must be construed in context. The particular context relied upon was that s 160M, which defines what constitutes a disposal or acquisition for the purposes of the assessability of a capital gain, does so primarily on the basis that the event which triggers the capital gain is "where a change has occurred in the ownership of an asset" (see s 160M(1)). The Commissioner argues that: · the change of ownership of an asset is the essential element which triggers a liability for capital gains tax under Pt IIIA; · as a change of ownership usually occurs where there is a disposition of an asset after its acquisition, it was necessary for the legislature to provide indexation for determining the indexed cost base of the asset acquired; · indexation of the cost base under s 160ZJ ensured that, in calculating the amount of the capital gain, regard was to be had to the consideration received on disposal compared to the indexed cost base, rather than the nominal cost base, in respect of the acquisition of that asset; · it is fundamentally inconsistent with the statutory scheme to construe s 160U in a manner that treats the change of ownership which occurs in a later year as having occurred simultaneously with the acquisition at an earlier time, when there was, in fact, no disposal. 35 In some circumstances it may seem anomalous to treat a disposition as having occurred at a date when, in fact, there was no disposition and therefore no capital gain. However, that is precisely the situation with which s 160U(3) is concerned. The sub-section expressly provides for a relation back to the date of the contract where the asset was disposed of "under a contract". Thus, where there is a disposition of a chose in action under a contract and a capital gain is realised on that disposition after the date of the contract, the reason why the indexation provisions do not operate where the asset was also acquired under the same contract is that s 160U(3) deems that the disposal occurred at the date of the contract and not at the date of the disposition. 36 In any event it is not easy to rely upon supposedly anomalous outcomes when it comes to s 160U. As the Full Court observed in Kiwi Brands Pty Ltd v Commissioner of Taxation (1998) 90 FCR 67 (at 73): "Where there is a disposition it is irrelevant not only that there is no acquisition of the same asset, but also whether if there is an acquisition it occurs at the same time. No doubt normally a disposition and acquisition will be coextensive. But there is no reason in principle and certainly no reason apparent from the language of s 160U to conclude that the same transaction could not give rise to a disposal at one time and an acquisition at a later time." 37 The relation back that can arise under s 160U(3) is also supported by the legislature's acknowledgment in s 160U(10) that it was necessary to ensure that express provision is made for s 170 not to operate to prevent the amendment of an assessment. Section 160U(10) was a legislative recognition that the relation back provided for in ss 160U(3) and 160U(8) can result in amended assessments having to be raised in relation to years of income prior to the occurrence of the disposition that attracted capital gains tax. 38 There is an additional difficulty with the Commissioner's contentions concerning the construction of s 160U(3). The Commissioner's submissions assume that Pt IIIA is a coherent set of provisions, each in harmony with the other. In my view it is not appropriate to approach Pt IIIA in that manner. Part IIIA is drawn in terms that are intended to catch a wide range of transactions, many of which were expected to be structured to avoid the incidence of capital gains tax. Thus, Pt IIIA contains a complex set of provisions which concern both actual and deemed transactions. In part because of the complexity of the provisions, s 160U was required in order to determine the time of disposals and acquisitions in respect of the many and varied transactions with which Pt IIIA is concerned. The drafting of s 160U itself suggests the legislature also had some difficulty in treating Pt IIIA as a coherent and harmonious scheme. For example, s 160U(2) provided that where the time of acquisition or disposal as ascertained under any of the sub-sections of s 160U is different from the time ascertained under a subsequent sub-section, the time of acquisition or disposal shall be taken to have been the time of acquisition or disposal as ascertained under the subsequent sub-section. 39 Finally, the Commissioner's reliance on change of ownership rather than date of disposition is not of assistance to his case, as it is plain that s 160M is concerned with what constitutes a change of ownership or a disposition and acquisition, while s 160U is concerned with the separate question of when an acquisition or disposition is deemed to have occurred. 40 For the above reasons I am satisfied that the natural and ordinary meaning of s 160U(3) requires the conclusion that, for the purposes of Pt IIIA, the disposal of Orica's and Dulux's choses in action against MMBW did not occur when the relevant payments were made by MMBW but, rather, occurred when the assumption agreements were made, being 6 June 1986. 41 The Commissioner, however, contended that the Court is required by the decision in FCT v Orica to determine that the time of the disposal is the date upon which each of the relevant MMBW payments were made, being the dates on which Orica's and Dulux's liability to members of the public under the Orica and the Dulux debentures was discharged. 42 Orica and Dulux dispute the Commissioner's contention. They claim that the time of the relevant disposals was not determined by the High Court in FCT v Orica; the issue was not a ground of appeal; was not argued by any of the parties and was not referred to in any of the reasons of the judgment as an issue to be determined. 43 The grounds of the Commissioner's appeal to the High Court in Orica concerned whether MMBW's promise under the Orica assumption agreement was an asset of Orica as defined in s 160A of the Act and whether MMBW's performance of that promise was a "discharge" or "satisfaction" of a chose in action and thus constituted the disposal of an asset within the meaning of s 160M(3)(b) of the Act. 44 The Commissioner relied upon the reasons for judgment of Brennan CJ (at 522) where His Honour, who also allowed the appeal of the Commissioner in respect of the 1987 income year, noted that s 160ZI requires apportionment of the cost base to any part of an asset disposed of. His Honour observed (at 522) that there is "no problem in dissecting the aggregate of the Present Values paid by [Orica] under [the Orica assumption agreement] in order to ascertain the cost base attributable to the payments made by MMBW during the 1987 income year". Brennan CJ concluded (at 522): "The indexing of the cost base and the calculation of the net capital gain to be included in [Orica's] assessable income for the 1987 year should be made by the Commissioner." 45 Of course, indexation is only applicable if the disposition of the asset is made after its acquisition. Thus, his Honour can be taken to have assumed that the date of the disposition for the purposes of Orica's 1987 assessment was the date of the payment and not the date of contract. 46 However, the analysis of Brennan CJ finds no counterpart in the joint judgment. Other than concluding (at 541) that the payment made by MMBW in the 1987 income year did result in an assessable capital gain to Orica their Honours did not consider the time at which the capital gain is deemed to have been made. Their Honours stated (at 541) that, as MMBW made payments in the 1987 year, "the appeal before this Court in respect of that year of income should be allowed" and that the Commissioner must "amend the assessment concerned". Although that decision provided the foundation for the current dispute between the Commissioner and Orica and Dulux it did not provide the solution to it. Under the orders of the court the ultimate tax consequences of the decision were to be determined by the Commissioner in accordance with law. 47 Senior counsel for the Commissioner also sought to gain some support from the observation in the joint judgment (at 541) that "MMBW having made no payment under the [Orica] assumption agreement during the 1986 year, the Commissioner's appeal in respect of that year should be dismissed with costs". Senior counsel contended that that conclusion was inconsistent with the position being advanced by Orica and Dulux that the assessability of the entirety of the capital gains was in the 1986 year of income. 48 While it would have been open to the High Court to determine that the capital gain realised in the 1987 income year was assessable in the 1986 income year, there are two fairly obvious reasons why the court did not do so. The first was that it did not form any part of the Commissioner's grounds of appeal or arguments to the High Court that the capital gain in question was assessable in the 1986 income year. The second was that, as the joint judgment noted (at 530), the Commissioner "acknowledged in argument that if his contentions were accepted, his appeal to this Court in relation to the 1986 year would fail". Consequently, s 160U and the issues raised by it were not the subject of any argument and were not relied upon or referred to in the joint judgment. In these circumstances, the court cannot be taken to have determined that under Pt IIIA the capital gains realised in the 1987 year of income were assessable in that year and not in the 1986 year of income. 49 There is an additional reason why the Commissioner's contentions in respect of FCT v Orica should not be accepted. The Commissioner submitted that FCT v Orica determined as a matter of principle that, where, under a contract, there was a satisfaction or discharge of a debt or a chose in action which was an asset of the taxpayer, the time at which the disposition deemed under s 160M(3)(b) to have taken place for capital gains tax purposes is to be determined by s 160U(4) and not s 160U(3) of the Act. The practical consequence of the submission is that the High Court, without considering s 160U, has rendered s 160U(3) nugatory in such circumstances. A court is not bound to follow a decision that it would otherwise be bound to follow if it is satisfied that the decision was given per incuriam. One example of a per incurriam decision is where a statutory provision, which would have affected the decision, was not brought to the attention of the court: see Young v Bristol Aeroplane Co Ltd (1944) 1 KB 718 at 728-730 per Lord Greene MR. That is precisely what occurred in respect of s 160U in FCT v Orica. 50 The Commissioner also contended that there was an issue estoppel against Orica as a result of the decision in FCT v Orica. I accept that the issues raised by s 160U in Orica's present appeals were issues that could have been determined in FCT v Orica in respect of the 1986 and 1987 income years. The issue has particular relevance to the 1986 income year as, under s 160U(3), that is the year of income in respect of which the capital gains the subject of the present appeals are assessable. However, the present appeals by Orica relate to amended assessments for the 1988, 1989, 1990, 1994 and 1995 income years. 51 Issue estoppel has been held not to apply to a taxpayer where the previous decision relied upon as founding the issue estoppel related to a different year of income. Although there was some support for the contrary view in Hoystead v Commissioner of Taxation [1926] AC 155, that decision was not followed in Mohamed Falil Abdul Caffoor v Commissioner of Income Tax Colombo [1961] AC 584 at 600-601. In Caffoor the Privy Council determined that a taxpayer is not estopped from contending it was entitled to an exemption in respect of a year of income by a decision in respect of a different year of income. More recently, in Chamberlain v Deputy Commissioner of Taxation (1988) 164 CLR 502 at 510, Deane, Toohey and Gaudron JJ cited Caffoor as authority for the proposition that "the Commission is not bound by the determination made in respect of an assessment for one year, so far as other years are concerned". It must follow that the Commissioner's issue estoppel argument also fails. Conclusion 52 For the above reasons the appeals of Orica and Dulux in the present matters are to be allowed and that the decisions of the Commissioner disallowing the objections of Orica and Dulux to the amended assessments are to be set aside. It is appropriate to remit the amended assessments to the Commissioner to be determined in accordance with these reasons for judgment. I certify that the preceding fifty-two (52) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Merkel.