Repatriation Commission v Kimpton

19 KPS's liquidator was Gregory Kimpton's wife, Susanne. Her receipts and payments in the liquidation were as follows: Names Receivables as at 31 October 2002 Liquidator's Receipts Liquidator's Payments Mr PL Kimpton $ 8,191.06 $ 8,191.06 Mrs BJ Kimpton $ 8,191.06 $ 8,191.06 Mr PL and Mrs BJ Kimpton $ 17,055 $ 8,191.06 $ 8,191.06 Mr GJ and Mrs SV Kimpton $ 18,250 $ 8,191.06 $ 8,191.06 Mr GL Kimpton $ 2,540.76 Page Kirk & Jennings $ 2,540.76 $ 35,305 $ 35,305 $ 35,305

The liquidations were completed on 30 April 2003. 20 The Kimptons wrote to the delegate requesting that the amount of their service pensions be reviewed in light of the liquidations. On 30 May 2003 they were sent a reassessment reducing their service pensions from 15 May 2003. Their interests in KS and KPS were removed from the record of their financial assets but the deprived assets mentioned earlier were retained. The applicants' motor car was assigned a net market value of $15,500. This decision was referred to in the Commission's Facts and Contentions before the Tribunal as 'the liquidation decision'. 21 The Kimptons applied, on 11 July 2003, for a review of the pension assessment of 30 May 2003 on the ground that the value of the deprived assets in KPS and KS, on the basis of the distributions made by the liquidators, were $6,500 and $2 respectively and that the market value of the car was only $5,000. The decision of 30 May 2003 was affirmed by a Senior Review Officer on 18 September 2003 save for a reduction in the value of the car, which was accepted, with effect from 10 July 2003. The applicants then applied, on 23 October 2003, to the Tribunal for review of the decision of 18 September 2003 so far as it related to their interests in KS & KPS. 22 There was a Tribunal pre-hearing conference on 16 May 2004 at which the Commission agreed to reassess the service pensions. A delegate of the Commission determined on 4 August 2004, that the 'deprived asset' amounts relating to KS and KPS had been correctly included in the calculation of the Kimptons' service pensions from 18 March 2002. In his letter to the Kimptons of 4 August 2004 the delegate referred to four points made by the Kimptons' accountant, Mr Byrnes, on their behalf:

1. At no time did they receive a determination dated 24 September 2002.
2. No control existed over the companies. 3. There was no diminishing of the income or assets of the companies upon which to apply the disposal of asset rule; and 4. Both companies had not traded since at least 1997 and the only movement in financial statements were for administrative costs. 23 The delegate addressed the four points. He referred first to the attribution rules and to the attribution decision. He noted that the attribution decision had considered the level of control that the Kimptons had over the companies. He referred then to the decision of 24 September 2002 and the removal of the loans from the balance sheets of the companies. He said: 'These loans had both been removed from the balance sheets of the companies. As such, pursuant to s 52E of the VEA the delegate decided that you had given each of these loans as a gift and recorded the date given as 18 March 2002.' 24 The delegate then applied what he called the 'deprived asset rules' in relation to the loans which they had given as a gift. He said: 'As you were 40% attributable stakeholders of Kimpton & Sons Pty Ltd, 40% of the $252,910 loan was considered to be your own personal gift. This amounted to a deprived asset value of $91,164. As you were 100% attributable stakeholders of Kununurra Poll Shorthorns Stud Pty Ltd, 100% of the $23,955 loan was considered to be your own personal gift. This amounted to a deprived asset value of $23,955.' He then stated that as the loans had been gifted before 1 July 2002 they became subject to a disposal preclusion period of five years pursuant to s 45UT of the Act. This meant that the value of the deprived assets would be deemed to remain in their pension assessment from 18 March 2002 for a five year period until 18 March 2007. He pointed out that a letter notifying them of the decision of 24 September 2002 was sent by the Department. No application for review of that decision was received. 25 The delegate went on to refer to the effect of the attribution and disposal of asset provisions of the legislation. He discussed the liquidation process. He referred to the decision of 30 May 2003. He then said: 'I have examined the information provided and I have decided not to change the deprived asset value in regard to Kimpton & Sons Pty Ltd and Kununurra Poll Shorthorn Studs Pty Ltd because the original decision made in accordance with the VEA was correct. The information contained in the Memorandum and Articles of Association for Kimpton & Sons Pty Ltd and Kununurra Poll Shorthorn Studs Pty Ltd confirms the decisions to attribute 40% and 100% of the income and assets of the two companies to you. As such, the deprived asset value remains as $91,164 in relation to Kimpton & Sons Pty Ltd and $23,955 in relation to Kununurra Poll Shorthorn Studs Pty Ltd. These values will be removed from your pension assessment on 18 March 2007, when the disposal preclusion period ceases to apply.' 26 On 1 December 2004 the delegate's decision was affirmed by a Senior Review Officer under s 57A of the Act. After setting out the relevant provisions of the Act concerned with the disposition of assets he made the following brief findings: 'Under the Private Trust & Companies legislation effective from 01 January 2002, if you diminish the income or assets of a private company, disposal of income and assets rules apply if adequate consideration is not received. The value of the disposed income or assets will remain assessable for 5 years. The 2002 Balance sheets for Kimpton & Sons Pty Ltd and Kununurra Poll Shorthorn Studs Pty Ltd showed that assets held by the company previously had been wiped out. Based on this information, A Delegate of the Repatriation Commission determined on 4 August 2002 that Disposal of Assets rules should continue to apply as no supportive evidence had been provided to indicate that the disposed assets were irrecoverable.' 27 There is no record of any new review application having been filed in the Tribunal following this decision. The hearing of the 2003 application proceeded as though it were an application for review of the decision made by the Senior Review Officer on 1 December 2004. 28 The Tribunal said that the hearing before it was conducted on the basis that the loan receivables of KS and KPS were 'doubtful' rather than 'forgiven' when Mr Byrnes told the Commission that the companies had a 'nil asset' position as at 18 March 2002. The liquidation of the companies reflected the collection of the loan receivables. 29 The Tribunal heard the application for review on 30 March 2005. The Kimptons were represented by their accountant, Mr Byrnes. The Commission was represented by Ms Maharaj, who has since been appointed Queens Counsel. On 20 September 2005 it set aside the decision under review and remitted the matter to the Commission for reconsideration. On 14 October 2005 the Commission filed a notice of appeal to the Court in the exercise of the Court's original jurisdiction under the provisions of the Administrative Appeals Tribunal Act 1975 (Cth). Statutory framework 30 The provisions of the Act under which the assets and income of private trusts and companies can be attributed, for the purpose of means testing, to persons claiming service pensions came into effect on 1 January 2002. They were introduced by the Social Security and Veterans Entitlements Legislative Amendments (Private Trusts and Private Companies - Integrity of Means Testing) Act 2000 (Cth) (the amending Act). The amending Act affected both the Social Security Act and the Act. The amendments to the Act were contained in Schedule 2 of the amending Act. It created a new Division 11A of Part IIIB. The new Division is entitled 'Means test treatment of private companies and private trusts'. 31 Section 52ZN provides a simplified outline of the new Division thus: '. This Division sets up a system for the attribution to individuals of the assets and income of private companies and private trusts (sections 52ZZKand 52ZZR). . Attribution starts on 1 January 2002. . For an asset or income to be attributed to an individual: (a) the company must be a designated private company or the trust must be a designated private trust (sections 52ZZA and 52ZZB);and (b) the company must be a controlled private company in relation to the individual or the trust must be a controlled private trust in relation to the individual (sections 52ZZC and 52ZZH); and (c) the individual must be an attributable stakeholder of the company or trust (section 52ZZJ). . A company or trust will be a controlled private trust or a controlled private company if the individual passes a control test or a source test. . An individual will not be an attributable stakeholder of a trust if the trust is a concessional primary production trust in relation to the individual. . The asset deprivation rules and the income deprivation rules are modified if attribution happens.' 32 Having regard to that outline and to undisputed findings by the Tribunal, it is not necessary for present purposes to set out all of the provisions of Div 11A which bear upon the present case. It is sufficient to refer to s 52ZZR, which provides: 'Attribution of assets (1) For the purposes of this Act, if: (a) an individual is an attributable stakeholder of a company or trust at a particular time on or after 1 January 2002; and (b) at that time, the company or trust owns a particular asset (whether alone or jointly or in common with another entity or entities); and (c) if, at that time, that asset had been owned by the individual instead of by the company or trust, the value of the asset would not be required to be disregarded by any express provision of this Act; and (d) at that time, the asset is not an excluded asset (see subsection (2)): there is to be included in the value of the individual's assets an amount equal to the individual's asset attribution percentage of the value of the asset referred to in paragraph (b). Excluded assets (2) The Commission may, by writing, determine that, for the purposes of the application of subsection (1) to a specified individual and a particular company or trust, a specified asset is an excluded asset. (3) A determination under subsection (2) has effect accordingly. (4) In making a determination under subsection (2), the Commission must comply with any relevant decision-making principles.' 33 Section 52ZZZQ authorises the Commission to formulate principles known as 'decision-making principles' to be complied with by it in making decisions under various provisions of the Act which include s 52ZZR. There were principles made on 20 December 2001 entitled 'The Veterans' Entitlements (Attribution of Assets) Principles 2001'. They are said to 'set out decision-making principles with which the Commission must comply for the purposes of making a determination under subsection 52ZZR(2), 52ZZT(6) or 52ZZU(1) of the Act'. Only ss 5 and 6 of the Principles relate to determinations of excluded assets under s 52ZZR(2). Those sections are concerned only with capital transferred to a company by a genuine investor who is not an attributable stakeholder of the company. They set out the conditions under which such a transfer of capital is to be regarded as 'a genuine transfer of capital'. They require the Commission to consider the extent to which capital transferred in accordance with those conditions should be determined to be an excluded asset in relation to an attributable stakeholder of the company or trust. 34 Also relied upon on the appeal against the Tribunal's decision was s 52E which is an anti-avoidance provision directed to disposal of assets for the purpose of attracting or increasing benefits under the Act. Section 52E provides: 'Disposal of assets (1) For the purposes of this Act, a person disposes of assets of the person if the person engages in a course of conduct that diminishes, directly or indirectly, the value of the person's assets and: (a) the person receives no consideration in money or money's worth for the diminution in the value of the person's assets; (b) the person receives inadequate consideration in money or money's worth for the diminution in the value of the person's assets; or (c) the Commission is satisfied that the purpose, or the dominant purpose, of the person in engaging in that course of conduct was: (i) to obtain or enable the person's partner to obtain a service pension, income support supplement or a social security pension or benefit; or (ii) to obtain or enable the person's partner to obtain a service pension, income support supplement or a social security pension or benefit at a higher rate than that which would otherwise have been payable; or (iii) to ensure that the person or the person's partner would be eligible for benefits under Division 12 of this Part or fringe benefits under the Social Security Act.' The Tribunal's reasons for decision 35 The Tribunal set out the factual background referred to earlier. It made a number of findings which are not in dispute:
   1. KS and KPS satisfied the conditions set out in s 52ZZA to be designated private companies from 1 January 2002 until they were deregistered in April 2003.
   2. At all material times the Kimptons and their three sons were the shareholders in KS and the Kimptons and their son, Gregory, were the shareholders in KPS.
   3. The Kimptons' sons were 'associates' as defined in ss 52ZQ and 52ZP so that, the Kimptons, met the 'control test' defined in s 52ZZC in respect of each of the companies from 1 January 2002 until their deregistration in April 2003.
   4. KS and KPS were controlled private companies in relation to the Kimptons during the period from 1 January 2002 until April 2003 for the purposes of s 52ZZJ.
   5. The Kimptons were 'attributable stakeholders' in KS and KPS for the purposes of s 52ZZR(1)(a) from 1 January 2002 until the companies were deregistered in April 2003.
   6. The loan receivables of KS and KPS were assets owned by those companies for the purposes of s 52ZZR(1)(b) from 1 January 2002 until 11 April 2003 when the companies were divested of their assets in the course of the winding up.
   7. Had the disputed loan receivables been owned by the applicants instead of by KS and KPS, their value would not be required to be disregarded by any express provisions of the Act. No question of the application of financial hardship rules on the ground that the loan receivables were unrealisable was raised. 36 The Tribunal said (at [50]): 'By 30 June 2002 the applicants were debtors as to $23,964 of the KPS loan balances, see para 20 of these reasons. The effect of the notional exercise prescribed by s 52ZZR(1)(c) is that the loan balance owed by the applicants is eliminated because they are both debtors and creditors of that amount. The Tribunal finds this fact relevant to the making of any written determination pursuant to s 52ZZR(2) of the Act.' 37 The Tribunal then referred to the Explanatory Memorandum for the amending Act and to statements which it considered relevant to the operation of Div 11A and, in particular, s 52ZZR(1)(d) and (2). The statements relied upon from the Explanatory Memorandum were as follows: 'A test based on identifying control of a structure is justified on the grounds that the controller of a structure can be considered the de facto 'owner' of the structure's assets when he or she can use the assets for his or her own purposes or benefit. In assessing whether an individual passes the control test, the interests of that individual and of the individual's 'associates' (as defined in the legislation) will be taken into account. This prevents a person in relation to whom a trust or company is a controlled private trust or company from diluting his or her interest in a structure (for example, by issuing non-voting shares in a company). … To ensure that people are not treated unfairly or affected unintentionally as a result of this measure, there are provisions in the attribution process for assets and/or income to be disregarded, if appropriate. Legislative asset hardship provisions will also apply, as a protection for those asset-rich/income-poor people who genuinely require taxpayer support.' 38 The next four paragraphs of the reasons for decision were crucial to the outcome. It is helpful to set them out in full: '52. By s 52ZZR(1)(d) an individual's asset attribution percentage of the value of excluded assets is not included in the value of the individual's assets for the purpose of the Act.
3. By s 52ZZR(2) the respondent has the discretion to make a written determination, for the purposes of application of s 52ZZR(1) to the applicants and KS and KPS, that the disputed loan receivables were excluded assets. The Tribunal finds that the applicants would be treated unfairly as a result of Division IIA of the Act if the respondent were not to make such a determination.
4. The evidence of the formation and use of KS and KPS and of the nature of the shares held by the applicants and their sons in them, does not show an intention on the part of the applicants to use the disputed loan receivables for their own purposes or benefit or to dilute their interest in them. They were unrealisable assets in the hands of KS and KPS as, on the evidence, they would not reasonably be expected to sell them or use them as security for borrowing, s 5L(12). In any event Division 11A looks through KS and KPS and extinguishes the disputed loan receivables to the extent that it attributes amounts to the applicants which they owe to KPS, c/f Repatriation Commission v Harrison 148 ALR 590 (sic).
5. In light of the above findings it is not necessary for the Tribunal to consider the applicants' asset attribution percentage in relation to KPS and KS pursuant to s 52ZZJ or whether the liquidation of KS and KPS amounted to a disposal of assets pursuant to s 52E of the Act.' 39 For the preceding reasons the Tribunal set aside the decision under review and remitted the matter to the Commission in accordance with a direction that the Commission determine that the loan of KS receivable from Mr Guy Kimpton and the loans of KPS receivable from the Kimptonsand Mr and Mrs Gregory Kimpton were excluded assets for the purposes of s 52ZZR(1)(d) and that the Commission reassess the rate of service pensions with effect from 18 March 2002. The Tribunal's order 40 The formal decision made by the Tribunal was in the following terms: 'The Tribunal sets aside the decision under review and remits this matter to the respondent for reconsideration in accordance with the following direction: that the respondent determine, in accordance with s 52ZZR(2) of the Veterans' Entitlements Act 1986, ('the Act') that the loan of Kimpton & Sons Pty Ltd, that was receivable from Mr Guy Kimpton, and the loans of Kununurra Poll Shorthorn Pty Ltd, that were receivable from the applicants and Mr and Mrs Gregory Kimpton, are excluded assets for the purposes of s 52ZZR(1)(d) of the Act and that the respondent re-assess the applicants' rate of service pensions, with effect from 18 March 2002, in accordance with that determination.' The grounds of appeal 41 The grounds of appeal set out in the Commission's notice were as follows: '4.1 The Tribunal erred in law in that it asked itself the wrong question regarding the exercise of the discretion under s52ZZR(2) of the VE Act. 4.2 The Tribunal failed to consider the Principles made pursuant to s52ZZZQ that it was bound to consider regarding the exercise of the discretion under s52ZZR(2) as required by s52ZZR(4) of the VE Act. 4.3 The Tribunal misconceived the nature of the issues that it had to consider and the evidence before it on the issue of the exercise of the discretion under s52ZZR(2) of the VE Act. 4.4 The Tribunal erred in law in considering that this was a proper matter for the exercise of the discretion under s52ZZR(2) of the VE Act. 4.5 The Tribunal erred in law in that it denied the Applicant procedural fairness by exercising the discretion under s52ZZR(2) in favour of the Respondents.' 42 The first, third and fourth grounds were uninformative. The Commission's written submissions reduced to the following propositions:
   1. The Tribunal failed to have regard to decision-making principles which had been made by the Commission under s 52ZZQ and which were applicable to the exercise of the discretion under s 52ZZR(2) to treat the relevant assets as excluded assets.
   2. The Tribunal failed to accord the Commission procedural fairness in that it decided the matter by exercising the discretion under s 52ZZR(2), an option of which the Commission had no notice as it was neither advanced by the Kimptons nor raised by the Tribunal before the Tribunal made its decision. Whether the Tribunal failed to comply with relevant decision-making principles 43 Section 52ZZR(1) provides for the attribution to attributable stakeholders of assets owned by a controlled private company or controlled private trust. The attribution involves the inclusion in the value of the individual's assets of an amount equal to the individual's asset attribution percentage of the value of the attributable asset. It is a necessary condition of the attribution for which s 52ZZR(1) provides that '… the asset is not an excluded asset …'. An asset becomes an excluded asset by the making of a determination to that effect under s 52ZZR(2). 44 The discretion conferred upon the Commission by s 52ZZR(2) has the following elements and constraints:
6. It must be in writing.
7. It must identify a specified asset and determine that it is an excluded asset. 3. The determination is to be made for the purposes of the application of subs (1) to a specified individual and a particular company or trust. 4. The Commission, in making the determination, must comply with any relevant decision-making principles. 45 The discretion, not otherwise confined, is nevertheless to be exercised for the purposes of the legislative scheme of which it forms part. That scheme, which provides for the means testing of benefits payable under the Act, is located in a statute described in its long title as: 'An Act to provide for the payment of pensions and other benefits to, and to provide medical and other treatment for, veterans and certain other persons, and for other purposes.' It is ultimately a beneficial statute. 46 The novelty and generality of the provisions of Div 11A raise the possibility of unfair and unintended consequences in the application of its provisions to people claiming or in receipt of service pensions. The power under s 52ZZR(2) to determine that assets, otherwise attributable to an individual, should be excluded assets is provided to avoid such cases. Its generality makes that purpose apparent. That purpose is also reflected in the passage quoted by the Tribunal from the Explanatory Memorandum which refers to the object of the relieving provisions in the amending Act as '… to ensure that people are not treated unfairly or affected unintentionally as a result of this measure'. 47 The power conferred by s 52ZZR(2) allows for flexibility of response to the great variety of circumstances that may present for decision by the Commission. At the same time the exercise of the power should be consistent across similar cases. The ability of the Commission to promulgate decision-making principles with which it must comply in the exercise of its discretion enables the development of consistent approaches to like cases. As the experience of the Commission in the application of s 52ZZR grows, classes of similar cases requiring similar treatment will no doubt emerge. Efficient and consistent decision-making in such cases will be assisted by the promulgation of decision-making principles. It cannot however, by making such principles, fetter its discretion so as to limit it to a particular class of case. That would amount to a confinement of the broad power which the Parliament has conferred. The authority to make decision-making principles, which are a species of delegated legislation, does not sanction limitation by the Commission of the range of cases which it may consider for the purpose of determining whether otherwise attributable assets are to be excluded. 48 Decision-making principles have been made by the Commission. They are the Veterans' Entitlements (Attribution of Assets) Principles 2001. Section 6 of those principles deals with determinations under s 52ZZR(2). That section applies '… if an individual (the Investor) who is not an attributable stakeholder of a company, makes a genuine transfer of capital to the company for shares in the company'. It goes on to set out the conditions under which a transfer of capital will be regarded as a genuine transfer of capital. It is not in dispute that this principle has no application to the treatment of the loans receivable by KS and KPS as excluded assets. 49 The argument advanced by the Commission seemed to amount to the proposition that the existing decision-making principles exhaustively define the circumstances in which an asset could be determined to be an excluded asset. If the principles had that effect they would, in my opinion, be unlawful. 50 The Commission is required in making a determination under s 52ZZR(2) to 'comply with any relevant decision-making principles'. There were no decision-making principles relevant to this case in existence at the time the Tribunal made its decision. Standing as it did in the shoes of the Commission, it was free to exercise the discretion under s 52ZZR(2) in favour of the Kimptons subject to that exercise falling within the purposes of the legislative scheme of which it formed part. The Tribunal did not err by not referring to the decision-making principles relied upon by the Commission. Whether the Tribunal failed to accord procedural fairness to the Commission 51 On the face of the grounds of appeal, it would seem that the Commission's complaint was that the Tribunal had resorted to the discretion under s 52ZZR(2) in making its decision when the possibility of the exercise of that discretion had never been advanced in the proceedings before it and never been flagged as a possibility by the Tribunal. 52 In its Statement of Facts and Contentions in the Tribunal, the Commission acknowledged that at the pre-hearing conference on 16 May 2004 '… the [Commission] agreed to consider the entire matter again'. It said: 'On 4 August 2004 a delegate made a new decision.' The Facts and Contentions filed by the Commission in the Tribunal were filed on 11 October 2004 and challenged the jurisdiction of the Tribunal to review the decision of 4 August 2004 until it had been subject to internal review. That subsequently occurred on 1 December 2004. In par 23 of its Statement of Facts and Contentions in the Tribunal the Commission said: 'The respondent contends that internal review by the respondent of the decision dated 4 August 2004 would enable the Tribunal to reconsider the disposal of the companies' assets and the value assigned to the deprived assets.' In par 25 it identified, as the relevant disposal of assets, '… the removal of the loans from the balance sheets'. Nothing in the Statement of Facts and Contentions raised an argument that the liquidation process involved a diminution in the value of the applicants' shares in the companies for the purposes of s 52E. 53 In its written submissions to the Tribunal in March 2005, the Commission submitted that there had been a disposal of assets by the Kimptons within the meaning of s 52E of the Act. They had, it was said, allowed the distribution in the liquidation of the companies to occur in a manner which reduced the value of their shares in the companies in order to obtain pensions at higher rates than would otherwise be payable. This submission, it may be noted immediately, did not depend upon the application of any of the provisions of Div 11A relating to attribution of assets. For if the Commission's position in the Tribunal relied upon an imputed disposal of the Kimptons' shares for the purposes of s 52E by diminution of their value, there was absolutely no need to refer to any provisions relating to attribution of assets. Counsel for the Commission acknowledged at the hearing of the appeal that '… the Commission shifted its position before the Tribunal, based on the expert's report and admitted that there was no gifting. The contention of the Commission was through the winding up process there was a diminution of the shares by the respondents.' 54 Notwithstanding this 'shifting of position', the Commission's submissions in the Tribunal under the heading 'Relevant Statutory Scheme' set out the provisions of Div 11A including s 52ZZR. Although s 52ZZS was expressly said not to be relevant, that disclaimer was not offered in respect of ss 52ZZA, 52ZZC, 52ZZJ and 52ZZR which were all reproduced. This was a recipe for confusion of the Commission's own making. 55 The Commission advanced the contention in its written submissions to the Tribunal that the purpose of the Kimptons in diminishing the value of their shares through the way in which the liquidations of the two companies were effected was to obtain a pension at a higher rate than would otherwise be payable. The Commission submitted that there had been a disposal of assets within the meaning of s 52E. The submission, reflecting as it did a 'shifting of position', was strikingly at odds with the Facts and Contentions filed earlier on behalf of the Commission and the entire course of decision making which the Commission had taken up to that point. The decision of 4 August 2004 depended upon the application of the attribution provisions to the company loans. The removal of those loans from the balance sheet was treated as a gifting of an attributed asset. There was no mention of the diminution in the value of the shares. The decision of 1 December 2004, which was that under review by the Tribunal, affirmed the decision of 4 August 2004 and patently upon the same basis. 56 In her oral submissions to this Court, senior counsel for the Commission referred to a report from Mr Langridge of Deloitte Touche Tomatsu which was before the Tribunal and which the Commission had relied upon. That report said, inter alia, that the effect of the way in which the companies had been wound up and distributions made was to diminish the value of the Kimptons' shares. Whether that is properly based in law is a question which it is not necessary, for present purposes, to decide. 57 There was no finding of fact from the Tribunal about that aspect of the evidence. The grounds of appeal do not raise any complaint that the Tribunal failed to deal with the alleged diminution in the value of the shares and the effect upon that of s 52E. That failure does not raise a question of natural justice even though I accept that the transcript of proceedings in the Tribunal disclose that the issue was before it. 58 On this limb of the challenge to the exercise of the Tribunal's discretion under s 52ZZR(2) the Court is concerned simply with the question whether the Tribunal failed to accord procedural fairness. No separate complaint is made about the exercise of its discretion apart from its alleged failure to comply with relevant decision making principles. 59 It is a necessary condition of attribution of assets under s 52ZZR(1) that at the relevant time the asset is not an excluded asset (s 52ZZR(1)(d)). This requires positive consideration of the satisfaction of that condition by the relevant decision maker. That requires a positive consideration by the relevant decision maker whether it should make a determination under s 52ZZR(2). It is to be noted that the nature of the determination under s 52ZZR(2) is not generic or applicable to a class of assets. It relates to the application of subs (1) '… to a specified individual and a particular company or trust'. It also relates to 'a specified asset'. 60 The matter was properly before the Tribunal albeit in a somewhat confusing context. It was invited, in light of the Commission's own written submissions, to consider the application of s 52ZZR(1)(d) and therefore s 52ZZR(2). It was open to the Commission to put submissions to the Tribunal touching that question. It had set out the relevant provisions, including s 52ZZR(2) as relevant to the Tribunal's decision making. The principal consequence of which the Commission complained was that it did not have the opportunity to address the Tribunal about the relevant decision making principles. As I have already observed, there were no relevant decision-making principles with which the Tribunal was required to comply. 61 In my opinion, for the preceding reasons, the ground based on breach of procedural fairness has not been made out. The Tribunal erred in law 62 Despite my findings adverse to the Commission, it is clear that the Tribunal process has miscarried. The Tribunal failed to consider a significant question put to it, namely whether there was an imputed disposal of the assets being the company shares held by the Kimptons by reason of the way in which the winding up process was conducted. If the Tribunal decision and order is left as it is, it is at least arguable that it will still be open to the Commission to make a finding adverse to the Kimptons on that basis. That may lead to another Tribunal review and further protraction of this already prolonged process. 63 In my opinion the Kimptons have succeeded on the appeal in relation to the grounds advanced by the Commission and they should have the costs of the appeal. I am concerned, however, to ensure that they are exposed to as little further litigation as possible. I will therefore give leave to the Commission to amend its notice of appeal by raising as a new ground the Tribunal's failure to deal with the question which was put before it, namely the application of s 52E to the alleged diminution in the value of the shares held by the Kimptons. The remitter to the Tribunal will be dependent upon that amendment being made. Otherwise the application will stand dismissed and the matter will have to be reconsidered by the Commission. 64 It is my hope that the parties may be able to reach an accommodation without any further hearing. However these orders should provide a formal framework within which any such accommodation can be discussed. I certify that the preceding sixty four (64) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice French.

Solicitor for the Applicant: Australian Government Solicitor

Counsel for the Respondent: Mr RJL McCormack (Pro bono)