Robert Bosch (Australia) Pty Ltd v Secretary, Department of Industry, Innovation, Science, Research and Tertiary Education

JUDGES: KENNY, EDMONDS AND ROBERTSON JJ DATE: 29 AUGUST 2012 PLACE: sydney (via video link to MELBOURNE)

Introduction 1 This appeal is from a judgment of a judge of this Court given on 4 October 2011, dismissing an appeal on questions of law from a decision of the Administrative Appeals Tribunal (the Tribunal) dated 8 December 2010. 2 The decision of the Tribunal was: The Tribunal: (i) sets aside the decision under review for the period 1 January 2001 to 3 May 2001 and substitutes a decision that the applicant is entitled to be allocated duty credits under the Automotive Competitiveness and Investment Scheme for that period in respect of the application; (ii) affirms that part of the decision that relates to the applicant's claim under the Scheme in so far as it relates to the Iveco-MUX project for the period 4 May 2001 to 30 June 2005; and, (iii) adjourns the balance of the application for a directions hearing before the Tribunal at a date and time to be notified, though not before Tuesday, 1 February 2011. 3 The part of the Tribunal's decision in contention before the Full Court, as before the primary judge, was paragraph (ii). 4 The background was described by the Tribunal as follows: The [appellant] is a diversified designer, manufacturer, importer and exporter of a range of products, relevantly including electronic control units (ECUs) for the Australian and international automotive markets. The [appellant] is a wholly owned subsidiary of Robert Bosch GmbH (RBG). The duty credits claimed by the [appellant] relate to R and D carried out by the staff of RBG in Germany or under contracts let by RBG to European contractors (together, the overseas R and D). There are different projects in respect of which the [appellant] has made claims. The project which is the subject of this application relates to the development of automotive units to be installed in an Italian manufactured truck, which is called the Iveco-MUX project. However, depending on the Tribunal's decision in this review, other pending applications may fall to be determined. 5 The significance of the date 4 May 2001 is that that was the date of commencement of Statutory Rule No. 82 of 2001, which amended the ACIS Administration Regulations 2000 (Cth) (the regulations). As reflected in paragraph (i) of the Tribunal's decision, the respondent conceded before the Tribunal that the present appellant was entitled to be allocated duty credits under the Automotive Competitiveness and Investment Scheme up to that date. 6 The appeal raises two broad questions. The first is as to the proper construction of reg 13G(5) of the regulations as in force from 4 May 2001, which dealt with kinds of allowable research and development. The second question is whether, if that first question of construction is resolved against the appellant, the appellant was not entitled to the credit by reason of s 94(1)(a) or (b) of the ACIS Administration Act 1999 (Cth) (the Act).

The legislative provisions 7 Relevant provisions of the Act were as follows: 3 Purpose of the Act The purpose of this Act is to provide transitional assistance to encourage competitive investment and innovation in the Australian automotive industry in order to achieve sustainable growth, both in the Australian market and internationally, in the context of trade liberalisation. 4 Overview of the Act (1) This Act sets up ACIS for the purpose set out in section 3. Under ACIS, participants receive duty credit which can be applied against customs duty payable, or paid, on certain eligible imports (item 41E of Schedule 4 to the Tariff and subsection 74A(1) of this Act). … There was no dispute that the appellant was registered as an automotive component producer under s 26 (ACP) and a "participant" (defined in s 6 of the Act relevantly to mean a person registered as an ACP), and that the appellant's investment was type E as also defined in s 6 of the Act: type E investment, in relation to a quarter and to an ACP, means investment undertaken by the ACP in that quarter (whether or not that quarter preceded, or in part preceded, the ACP's registration) in that part of the ACP's approved research and development that is directed: (a) at the production of the automotive components, automotive machine tools or automotive tooling; or (b) at facilitating the provision of automotive services. Note 1: See regulations made under subsection (5) for when particular investment undertaken by an ACP is treated as having occurred. Note 2: See section 6C for when investment undertaken by a person can be treated as investment undertaken by another person who is an ACP. Other relevant provisions of the Act were: 6A Approved plant and equipment and approved research and development Outline of what approved plant and equipment and approved research and development is (1) There are 2 aspects to approved plant and equipment or approved research and development: (a) firstly, the plant and equipment or research and development must be allowable plant and equipment or allowable research and development; and (b) secondly, the allowable plant and equipment or allowable research and development is only allowed to a given value - the maximum claimable value in respect of that plant and equipment or research and development. Meaning of defined terms relating to approved plant and equipment or approved research and development (2) In this Act: allowable, in relation to plant and equipment or research and development, means plant and equipment or research and development of a kind declared by the regulations to be allowable. … Regulations may provide for certain matters relating to research and development (4) The regulations may provide for: (a) the kinds of research and development that are allowable research and development under this Act; and (b) in respect of each kind of allowable research and development, either: (i) the method of calculating the maximum claimable value of that kind of allowable research and development for the purposes of this Act; or (ii) the amount that is to be the maximum claimable value in relation to that kind of allowable research and development for the purposes of this Act. There was no suggestion that the relevant regulations were ultra vires s 6A(4)(a). 8 The provision under which the second broad question arises was s 94 of the Act, as follows: 94 Person not entitled to certain duty credit (1) A person who has or had duty credit is not entitled to the credit if the person received the credit for any of the following reasons: (a) because of the making of an error in calculating the duty credit (including during the modulation process) or a mistake of fact; (b) because information given to the Minister, the Secretary or a delegate of the Secretary was inaccurate or incomplete; (c) because of a clerical error or mistake in the ledger; (d) because the credit: (i) was entered in respect of a transaction to which the person was a party that was not at arm's length within the meaning of section 9; and (ii) is referrable to a production value, sales value or investment to which the transaction relates that has not been determined as if the parties were at arm's length. 9 The relevant provisions of the regulations as originally made and as in force before and after 4 May 2001 were as follows. 10 The following definitions in reg 3: Australian-based research and development means research and development undertaken in Australia. offshore research and development means research and development that is not Australian-based research and development. 11 Regulation 5, which provided that for the definition of approved research and development in s 6(1) of the Act, research and development of a kind mentioned in reg 5(2) was, subject to reg 5(5), 5(6) and 5(7), approved research and development for the purposes of the Act, was omitted from 4 May 2001. 12 As substituted, with effect from 4 May 2001, the relevant regulations were as follows: 13G Allowable research and development (1) For paragraph 6A(4)(a) of the Act, the kind of research and development mentioned in subregulation (2) is allowable research and development under the Act. (2) For subregulation (1), the kind of research and development is research and development activities that are: (a) directly related to the design, development, engineering or production of motor vehicles, engines, engine components, automotive components, automotive machine tools or automotive tooling; and (b) undertaken for the purpose of: (i) acquiring new knowledge; or (ii) creating new or improved materials, products, devices, production processes or services. (3) Without limiting subregulation (2), research and development of the kind mentioned in that subregulation includes the following activities: (a) basic and strategic research; (b) industrial and engineering design; (c) production engineering; (d) development activities relating to the building and testing of prototypes; (e) re-engineering and modification of existing products and processes; (f) development and installation of purpose-designed systems for: (i) quality assurance and process control; or (ii) materials or movement control; (g) testing and modification of new production systems (either purpose-built or interchangeable) to achieve repeatability within specified tolerances; (h) obtaining industrial property rights, including: (i) the preparation and lodging of applications and other documents that are required to be lodged, in Australia or elsewhere, for the initial grant or registration of the rights; and (ii) the initial grant or registration of the rights, in Australia or elsewhere; (i) for a participant, activities conducted at the participant's own expense that are aimed at improving a product or process of an engine or component supplier to the participant. (4) However, research and development of the kind mentioned in subregulation (2) does not include the following activities: (a) design of buildings (whether or not the buildings are to be used to house a research and development activity); (b) design and installation of financial management systems; (c) market research, market testing, market development or sales promotion (including customer surveys); (d) routine quality control; (e) management studies or efficiency surveys; (f) routine collection of information (other than for the purpose of research and development); (g) the acquisition from another participant of technology or the rights to use technology; (h) the protection of industrial property rights by legal action. (5) Also, for a participant, research and development of the kind mentioned in subregulation (2): (a) includes research and development conducted by another person (other than a Co-operative Research Centre) on behalf of the participant under a contract with the participant only if: (i) the research and development is Australian-based research and development; and (ii) the participant contributes to the direction and management of the research and development; and (iii) the participant has a proportionate share in any intellectual property resulting from the research and development; and (iv) the participant is not required to conduct the research and development on behalf of: (A) another person under a contract with the other person; or (B) if the participant is an MVP - another participant under a contract with the other participant; and (b) includes research and development conducted by a Co-operative Research Centre under a contract with the participant only if: (i) the research and development is Australian-based research and development; and (ii) the participant contributes to the direction and management of the research and development; and (iii) the participant has the right to use any intellectual property resulting from the research and development; and (iv) the participant is not required to conduct the research and development on behalf of: (A) another person under a contract with the other person; or (B) if the participant is an MVP - another participant under a contract with the other participant; and (c) includes offshore research and development conducted by the participant only if: (i) the requirements mentioned in subregulation (6) are met; and (ii) the participant is not required to conduct the research and development on behalf of: (A) another person under a contract with the other person; or (B) if the participant is an MVP - another participant under a contract with the other participant; and (d) includes Australian-based research and development conducted by the participant only if the participant is not required to conduct the research and development on behalf of: (i) another person under a contract with the other person; or (ii) if the participant is an MVP - another participant under a contract with the other participant. (6) For subparagraph (5)(c)(i), the requirements are: (a) the offshore research and development is necessary to tailor the participant's Australian-based research and development to a particular market; or (b) all of the following: (i) the offshore research and development is necessary to lever the participant's Australian-based research and development off an offshore research and development program; (ii) the offshore research and development contributes directly to the offshore research and development program; (iii) the participant contributes to the direction and management of the offshore research and development program, and has a proportionate share in any intellectual property resulting from the program. (7) In this regulation: engine or component supplier means a supplier of: (a) engines, engine components, automotive components, automotive machine tools or automotive tooling; or (b) parts or materials for anything mentioned in paragraph (a). 13 In addition, reference was made in argument to regs 13C and 13H which also used the words "conducted by": 13C When investment is taken to have occurred (1) For paragraph 6(5)(a) of the Act, an investment in plant and equipment undertaken by a participant is taken to have occurred for the purposes of the Act: (a) if the investment is by way of acquiring the plant and equipment by purchase or under a finance lease (other than under a sale and leaseback arrangement): (i) at the time when the plant and equipment is recognised, in the participant's accounts, as an asset in accordance with normal accounting practices; or (ii) if at the time referred to in subparagraph (i) the plant and equipment is not in Australia - at the time when the plant and equipment is imported into Australia; or (b) if the investment is by way of acquiring the plant and equipment under an operating lease: (i) every time rent is paid under the lease; or (ii) if at a time referred to in subparagraph (i) the plant and equipment is not in Australia - at the time when the plant and equipment is imported into Australia and every time rent is paid under the lease after the plant and equipment has been so imported; or (c) if the investment is by way of building or making the plant and equipment: (i) at the time when the plant and equipment is recognised, in the participant's accounts, as an asset in accordance with normal accounting practices, or at the time when the plant or equipment is recorded in the participant's register of assets, whichever is the earlier; or (ii) if the plant and equipment (the new plant and equipment) is part of an existing plant and equipment - at the time when the building or making of the new plant and equipment is recognised, in the participant's accounts, as an increase in asset value in accordance with normal accounting practices, or at the time when the building or making of the new plant or equipment is recorded in the participant's register of assets, whichever is the earlier. (2) For paragraph 6(5)(a) of the Act, an investment in plant and equipment undertaken by a participant by way of acquiring the plant and equipment under a sale and leaseback arrangement is taken to have occurred at the time when the previous investment would, apart from section 6B of the Act, have been taken to have occurred under these Regulations and the Act. (3) An investment in research and development undertaken by a participant is taken to have occurred for the purposes of the Act: (a) if the investment is by way of research and development conducted by the participant - every time an expenditure incurred in relation to the research and development is recognised, in the participant's accounts, as an expense in accordance with normal accounting practices; or (b) if the investment is by way of research and development conducted by another person (other than a Co-operative Research Centre) on behalf of the participant under a contract with the participant - every time a claim, enforceable by the other person against the participant, arises for any work done in relation to the research and development; or (c) if the investment is by way of research and development conducted by a Co-operative Research Centre under a contract with the participant - every time the participant makes a contribution to the Centre in relation to the research and development. 13H Maximum claimable value for allowable research and development (1) For subparagraph 6A(4)(b)(i) of the Act, the method of calculating the maximum claimable value for allowable research and development of the kind mentioned in subregulation 13G (2) is set out in this regulation and regulation 13I. (2) If the research and development is Australian-based research and development conducted by the participant, the maximum claimable value, for a quarter, is: F × 1.2 where: F is the sum of each of the following amounts of expenditure that has been recognised, in that quarter in the participant's accounts, as an expense in accordance with normal accounting practices: (a) labour costs, within the meaning of subregulation 13I(1), in respect of employees carrying out, or directly supporting, the research and development; (b) the cost, within the meaning of subregulation 13I(2), of recruiting, training and developing employees referred to in paragraph (a); (c) if the research and development covers an activity that has been carried out by a person under a contract for services with the participant, the amount payable, under the contract, to the person for the activity; (d) the cost of purchasing, for the purposes of the research and development, any plant and equipment that is consumed or tested to destruction within 12 months after its purchase; (e) the cost of purchasing, for the purposes of the research and development, any work order materials. Examples for paragraph (a) of employees carrying out research and development Engineers, researchers and technical staff. Examples for paragraph (a) of employees directly supporting research and development Skilled or unskilled craftspersons, secretarial and clerical staff, and executive staff involved in the management of scientific or technical aspects of the research and development. Examples for paragraph (e) Materials used in manufacturing prototypes of automotive components. Note The acquisition of approved plant and equipment for research and development that is recognised, in the participant's accounts, as an asset in accordance with normal accounting practices is dealt with in regulation 13E. (3) If the research and development is Australian-based research and development conducted by another person (other than a Co-operative Research Centre) on behalf of the participant under a contract with the participant, the maximum claimable value, for a quarter, is the total amount of claims, enforceable by the other person against the participant, that arise, in that quarter, for any work done in relation to the research and development. (4) If the research and development is Australian-based research and development conducted by a Co-operative Research Centre under a contract with the participant, the maximum claimable value, for a quarter, is the total amount of contribution made, in that quarter, by the participant to the Centre in relation to the research and development. (5) If the research and development is offshore research and development conducted by the participant, the maximum claimable value, for a quarter, is the lesser of sum A and sum B worked out under subregulations (6) and (7). (6) For subregulation (5), sum A is the sum of each of the following amounts of expenditure that has been recognised, in that quarter in the participant's accounts, as an expense in accordance with normal accounting practices: (a) labour costs, within the meaning of subregulation 13I(1), in respect of employees carrying out, or directly supporting, the research and development; (b) the cost, within the meaning of subregulation 13I(2), of recruiting, training and developing of employees referred to in paragraph (a); (c) if the research and development covers an activity that has been carried out by a person under a contract for services with the participant, the amount payable, under the contract, to the person for the activity; (d) the cost of acquiring, for the purposes of the research and development, any plant and equipment that is consumed or tested to destruction within 12 months after its acquisition; (e) the cost of purchasing, for the purposes of the research and development, any work order materials. Examples for paragraph (a) of employees carrying out research and development Engineers, researchers and technical staff. Examples for paragraph (a) of employees directly supporting research and development Skilled or unskilled craftspersons, secretarial and clerical staff, and executive staff involved in the management of scientific or technical aspects of the research and development. Examples for paragraph (e) Materials used in manufacturing prototypes of automotive components. Note The acquisition of approved plant and equipment for research and development that is recognised, in the participant's accounts, as an asset in accordance with normal accounting practices is dealt with in regulation 13E. (7) For subregulation (5), sum B is: G × 0.2 where: G is the sum of the maximum claimable values for Australian-based research and development conducted by, or on behalf of the participant, worked out under subregulations (2), (3) and (4) for that quarter.

Facts found by the Tribunal 14 What follows is taken from the reasons of the Tribunal. We shall refer to the applicant before the Tribunal as the appellant. 15 The Tribunal found that after the introduction of the Automotive Competitiveness and Investment Scheme (the Scheme) in 2001, the appellant became a registered participant as an automotive component producer. Sometime in 1996, a decision was made that the appellant would develop ECUs for installation in motor vehicles. ECUs are "… custom designed computer systems that control certain functional aspects of the vehicle operation (for example, vehicle lighting, wipers, keyless entry, immobilisation, diagnostics, power distribution, sensor management) incorporated into a modern vehicle". The ECUs were designed so as to be compatible with the purchasers' vehicle design. The purchasers were the manufacturers of different brands of vehicles. The bulk of the orders were from car manufacturers from countries within the European Common Market (for example, Porsche, Volkswagen, Audi and Daimler Chrysler). ECUs are designed, developed and sold to the automotive industry as integrated units. 16 The Tribunal found the R and D process would be commenced by the manufacturers submitting detailed specifications for the ECUs to the appellant. There were 32 steps between the time the specifications were provided to the commencement of production, collectively referred to as the New Product Introduction Development and Release Process. A project manager, usually with a strong technical background and located in Victoria, would be appointed. The project manager's role was to administer all of the developmental aspects of a project. The project manager reported to a Project Steering Board, consisting of senior managers also located in Victoria. Regardless of the location of any particular R and D, all of the management and control of the projects, including the Iveco-MUX project, was undertaken in Australia. 17 The Tribunal found part of the budgetary process, associated with the projects, was to determine which component parts would not be the subject of R and D undertaken in Australia. In general, the type of activity which required customer interaction, and which could not be practically or economically carried out in Australia, was undertaken overseas. The following primarily fell into that category: (a) application engineering, which involves interacting with the customer in relation to the technical requirements for the vehicle and ECU, including the original requirements and further changes to those requirements; (b) obtaining specialist knowledge and information, including from the vehicle manufacturer itself, other component suppliers, other divisions in the Bosch Group and materials suppliers, that is necessary for the appellant's ECU Development program; (c) development of software that relates to the ECU and interacts with vehicle systems other than the ECU (for example, the particular application software module in an immobiliser that communicates with the engine management system), particularly functional or application software; (d) development of technologies for which there is no expertise available in Australia; (e) vehicle integration (or in-vehicle testing) to ensure that the ECU operates effectively in the vehicle; (f) customer liaison, meetings, transfer of documentation and knowledge, negotiation, first tier interaction between customer and Bosch project team; and (g) team coordination and line level support function. 18 The Tribunal found once it was determined which components could not be developed in Australia, it was then ascertained whether Robert Bosch GmbH (RBG) had staff capable of doing the required R and D in Germany or in other European cities. The responsibility for resourcing and training employees and the technical quality of their work, when it was carried out by RBG employees engaged in Europe, remained with the line managers in the country of their location. If RBG staff could carry out the R and D required, then an hourly rate was set, depending on the level paid to the particular staff member, and an estimate of the time needed made so that a figure could be budgeted. A monthly payment was made from the appellant to RBG, which was adjusted quarterly to reflect the actual expenditure. An annual review of the budget was also undertaken. If the R and D could not be carried out by the RBG staff, then an overseas contractor would be engaged by RBG and the costs included in the budget. 19 The Tribunal found the vast bulk of the claimed overseas R and D was carried out by RBG staff, including for the Iveco-MUX project. The R and D activities formed part of an integrated process, rather than a set of discrete tasks. In respect of the Iveco-MUX project, six RBG staff, each with a two or three year time commitment, and one overseas contractor unrelated to RBG, with a six months time commitment, were identified for the first stage of the project. The first stage of the project finished at about the time that production had commenced in 2002. Mr Evans, the project manager for the Iveco-MUX project between 1997 and January 2000, referred to his role as one of 'management' and listed, in respect of the Iveco-MUX project, 17 of the key RBG staff (including some from RB Hungary) and a contracting company, which undertook the overseas R and D for the project. About 10 engineers worked in Australia on that project. 20 The Tribunal found the offshore team involved with the Iveco-MUX project was subsequently expanded to 13 individuals and one business after the customer requested a redevelopment of the product. While the updated hardware design was largely carried out in Victoria, a hardware engineer in Hungary was engaged to support the technical interface to vehicle loads. In addition, while the software team coordination was located in Victoria, the software team was expanded in Hungary to develop the application software at a base closer to the customer and to carry out software verification testing on the customer's site. It was not altogether clear whether the date for the commencement of the redevelopment project, was 2003-2004 or whether October 2004 was more accurate. 21 The Tribunal found the RBG staff were directed in their R and D by staff of the appellant, but they at all times remained the staff of RBG and would be responsible to the line manager of their particular department for the technical quality of their work. The accounting records clearly distinguished between expenditure incurred on overseas R and D (including distinguishing between that carried out by RBG and that carried out by European contractors) and that undertaken within Australia. 22 The Tribunal found a broadly worded contract between the appellant and RBG, relating to the sale of the end product based on the R and D work, was entered into in 1996, and provided the framework governing the relationship between the two entities. 23 The Tribunal found there were two possible business models in use between the appellant and RBG in the period 2001-2005. An original 1996 agreement was stated to address the distribution in Europe of appellant manufactured goods and the provision of application and management services. The transfer price paid to the appellant was to be the price paid to RBG less any duty payable (imposed by the German Government). A commission, to cover imputed costs (along with a margin) was also payable from the appellant to RBG. Profits were reported in the appellant's results with RBG reporting a break-even result. There was no apparent separate agreement dealing with funding for the R and D activity carried out by RBG on behalf of the appellant. The appellant reimbursed RBG for actual expenditure incurred (including administrative costs, but not including any profit margin, and in the case of sales made from Germany, less tax), and the appellant billed the full (including profit margin) amount to the customer. Business changes introduced in 2003 had no impact on the appellant's claims. 24 The Tribunal found there was a clearly identifiable process between the appellant and RBG, which governed the management and budgetary relationship. The process was such that it amounted to a contract between the appellant and RBG: there was an offer to RBG to undertake R and D on behalf of the appellant; there was consideration, that is, an agreed price which the appellant would pay for the work carried out; and there was acceptance by RBG to undertake the work at the agreed price. The appellant reimbursed RBG for the work carried out by the latter's employees and contractors. The reimbursement costs were calculated pursuant to an agreement between the appellant and RBG dated 18 December 1996, which operated until it was replaced by a new agreement from 5 June 2005. 25 The Tribunal found that the appellant's project manager, based in Australia, was responsible for the overall management of the R and D, regardless of the geographical location of where the R and D was performed. RBG was responsible for the cost and management of those European contractors, which it engaged to undertake R and D on behalf of the appellant. Overall, the amount expended on the overseas R and D was claimed to be $74,681,070. The Tribunal accepted the evidence of the methodology adopted by the appellant in the performance of its R and D activities, and in respect of the Iveco-MUX project that that methodology was followed. The contractual arrangements between RBG and the appellant were commercial in nature. 26 The Tribunal found there was an audit by the Department of the appellant's activities between 1 December 2004 and 5 December 2004 and between 8 March 2005 and 10 March 2005. The audit was carried out by examining the appellant's expenditure in the first two quarters of the calendar year 2004. The results were then applied to all of the quarters in the relevant period. The departmental auditor told the Tribunal that her team had interpreted the Act and Regulations as meaning that the R and D carried out overseas was not allowable expenditure under the Scheme. There were no guidelines to which she could refer that clarified the extent of the operation of the Act.

The reasoning and conclusions of the Tribunal in relation to the regulations 27 The Tribunal noted there was no dispute that the appellant was entitled to claim R and D for qualifying activities carried out in Australia. That part of the appellant's claim was not challenged in the audit, and it was not part of the review before the Tribunal. The issue was whether the activities undertaken overseas by RBG (and its contractors) could, in the context of the Act and Regulations, be said to be "conducted by" the appellant. 28 The Tribunal said it was in no doubt that "conducted" was a word of broad ambit in ordinary usage. The meaning provided in the Oxford English Dictionary Online was "[t]he action or manner of conducting, directing, managing, or carrying on (any business, performance, process, course, etc.); direction, management". Similarly, in the Macquarie Dictionary (Revised Third Edition), this word was defined as, "to direct in action or course; manage; carry on…to direct as leader". The question, however, was whether this word was to be given its ordinary broad meaning or a textually constrained meaning when used in relation to reg 13G(5). 29 There was, in the Tribunal's view, a clear distinction between just directing or managing R and D and the wider concept of the carrying out or conducting of R and D. Directing the R and D, in the sense of determining what needs to be researched and developed and setting the terms and conditions pursuant to which that R and D was to be carried out, including the cost, was one part of the conduct of R and D. The conduct of R and D involved both direction and activity. It was a collaborative process, which can only be performed by a person directly engaged in doing the R and D. "Allowable research and development" in reg 13G(5) arises in three instances: when the Australian-based R and D is conducted by the participant, when the Australian-based R and D is conducted by another person on behalf of the participant and when the offshore R and D is conducted by the participant. While the conduct of (Australian-based) R and D can be performed by another person, reg 13G(5)(a)(ii) required the ACP to contribute to the "direction and management" of the R and D. This indicated that the other person both directed and performed the R and D, while the ACP contributed to that direction. This interpretation of reg 13G(5) was consistent with the intention of the Act: that is, to give credits for R and D carried out by Australian corporations regardless of whether the R and D was carried on within or outside Australia. 30 R and D, even when the overall direction or management may remain with an Australian company, was not "conducted by" that company when it was carried out by an overseas entity, regardless of any corporate relationship which may exist between them. The R and D in the Iveco-MUX project was carried out by the personnel of RBG, or those European contractors it engaged, and, as such, it could not be said to have been "conducted by" the appellant. 31 The intention of the Act was not to reward R and D conducted by non-Australian corporations, whether acting in their own right or under contract with Australian corporations. 32 Moreover, the Tribunal was of the opinion that the interpretation of reg 13G(5)(a) did not require reference to the definition of "Australian-based research and development" in reg 3 for it found this subregulation to be self-contained. The regulations provided that when an ACP conducted "Australian-based research and development", this was allowable provided the ACP was not required to do this pursuant to a contract with "another person". The criterion of where the R and D occurred in this regulation was self-evident, and there was no need to refer to reg 3. An ACP could also claim for R and D that was conducted by another person on its behalf pursuant to a contract, provided the conduct of the R and D and the content of the contract met certain requirements. By reg 13G(5)(a)(i) the conduct of the R and D was to be "Australian-based", and this term should be interpreted consistently with when an ACP conducted its own R and D. For the reasons stated, the Tribunal was not satisfied that the R and D carried out on behalf of the appellant by RBG, or by RBG's contractors, could be classified as Australian-based R and D. The Tribunal was not satisfied that reg 13G (5)(a) was able to be met by the appellant in respect of the Iveco-MUX project. 33 The criteria to be met in reg 13G(5)(c)(i) as to when an ACP claims for R and D conducted overseas were similar to the extent of that set for an ACP conducting R and D in Australia by regs 13G(5)(c) and 13G(6). There were additional criteria to be satisfied: either the R and D was necessary to tailor the ACP's Australian-based R and D to a particular market, or the ACP was involved in an offshore R and D program that satisfied certain criteria (such as, that the ACP contributed to its direction and management). The Tribunal was of the opinion that the phrase "conducted by" should be interpreted throughout reg 13G(5) in the same way, regardless of who conducted the R and D or where the R and D occurred. Thus, this phrase was to be interpreted as involving the twin elements of direction and activity. Based on this interpretation and its findings of fact, the Tribunal found that the appellant did not conduct the offshore R and D as required by reg 13G(5)(c). 34 The Tribunal did not interpret the term "conducted by" as representing a threshold question, but rather it was one criterion to satisfy along with those requirements specifically mentioned in the sub-regulation. It found that the evidence presented by the appellant in relation to the Iveco-MUX project did not bring its offshore R and D within the ambit of reg 13G(6).

The reasoning and conclusions of the primary judge in relation to the regulations 35 The primary judge found no error of law in these conclusions of the Tribunal. 36 At [39], the primary judge noted his agreement with the statement at [32] of the Tribunal's reasons that there is a clear distinction between just directing or managing R and D and the wider concept of the carrying out or conducting of R and D. Directing the R and D, in the sense of determining what needs to be researched and developed and setting the terms and conditions pursuant to which that R and D is to be carried out, including the cost, is one part of the conduct of R and D. His Honour said the narrow alternative meaning for the words "conducted by" proposed by the appellant does not meet both elements of the ordinary meaning. 37 Second, at [40], the primary judge said that to utilise the narrow meaning of "conducted by" proposed by the appellant gave rise to serious conflicts between, and inconsistencies within, the regulations - to a far greater extent than any inconsistencies arising from giving the words their broad ordinary meaning. 38 These conflicts or inconsistencies were, first, reg 13G(5)(a) expressly dealt with R and D which was "contracted out" by the participant to be "conducted by" another party under a contract with the participant - that is, a contractor. On the clear words of reg 13G(5)(a), R and D conducted by a contractor on behalf of the participant was allowable expenditure only if the R and D was Australian-based. Its effect was that R and D that was contracted by the participant to be carried out by a contractor was not allowable if it was undertaken outside Australia. 39 The primary judge said reg 13G(5)(a) and (b) dealt with R and D "conducted by" a contractor (or a Co-operative Research Centre) under a contract with the participant. Regulation 13G(5)(a) said that R and D that was contracted out to a contractor is only allowable if it is Australian-based. Regulations 13G(5)(c) and (d) related to R and D "conducted by" the participant. Regulation 13G(5)(c) related to offshore R and D, and required that the participant must meet the extra requirements of reg 13G(6). Regulation 13G(5)(d) related to Australian-based R and D. The scheme of reg 13G(5) was such that R and D that was contracted by the participant to another person fell to be dealt with under regs 13G5(a) or (b). Those subregulations expressly related to such a circumstance. The primary judge considered that reg 13G(5)(a) and not reg 13G(5)(c) covers R and D which is contracted out. 40 The primary judge said the relevant R and D had been found to have been undertaken overseas by RBG under a contract. Regulation 13G(5)(a) provided that it was only if contracted out R and D is Australian-based that it was allowable. It therefore contemplated and disallowed the appellant's expenditure on the overseas R and D. 41 Second, the primary judge said that reg 13G(5)(a) pointed up another error in the appellant's approach. Regulation 13G5(a) plainly contemplated that "conducted" was distinct from "directed and managed". It regulated R and D which was "conducted by" a contractor under a contract with the participant. Because it allowed that the participant could contribute to "direction and management" of the R and D even though the participant did not conduct it, it was clear that "conducted by" and "directed and managed" were not synonymous. In reg 13G(5)(a) "conducted by" could not be synonymous with sole "direction and management" as the appellant contended, and the words had to be given the same meaning in subreg (5)(c). If "conducted by" included an element of "carrying on" or "undertaking" - the appellant's claim of entitlement to duty credits must fail because it conceded that it did not "carry on" the overseas R and D. 42 Third, the primary judge said that if the meaning of "conducted" in reg 13G(5)(a) was "directed and managed", it led to circularity in its operation. Importantly, it was the contractor that must "conduct" the R and D for the participant to have an entitlement to duty credits under this provision. On the appellant's definition of "conducted" this required that the contractor must have "directed and managed" the R and D. However, reg 13G(5)(a)(ii) provided that the participant would only be able to claim for R and D conducted by the contractor if the participant itself "contributes to the direction and management" of it. If "conduct" and "manage and direct" had interchangeable meanings, then by virtue of reg 13G(5)(a)(ii), by contributing to direction and management the participant would be "conducting" the R and D alongside the contractor. Without further qualification - which was absent from the regulations - a participant claiming duty credits for R and D "conducted by" a contractor under reg 13G(5)(a) could claim it had "conducted" the same R and D itself, by way of its contribution to direction and management. 43 Fourth, the primary judge said the appellant's contention that "conducted by" in reg 13G(5)(c) meant only "directed or managed" was also inconsistent with reg 13C(3). Regulation 13C(3) set out when an investment in R and D "undertaken" by a participant is taken to have occurred for the purpose of making a claim under the Act. Significantly, reg 13C(3)(b) dealt with R and D "conducted by" another person on behalf of the participant under a contract. It provided that an investment in R and D was taken to have occurred at the time a claim was made by that other person for "work done in relation to" the R and D. The wording of reg 13C(3)(b) indicated that the drafters contemplated that "work done" in relation to R and D was part and parcel of "conducting" R and D. It did not sit well with the meaning of "conducted by" contended by the appellant which contained no element of "carrying out" or "doing" the R and D work. 44 Having regard to the overall scheme of the regulations as well as reg 13G, the primary judge considered that the words "conducted by" in reg 13G(5)(c) must be given their broad ordinary meaning, and not be read narrowly so as to be restricted to solely "directing or managing". 45 The primary judge also considered any legislative purpose apparent from the Act or from the regulations. 46 As to the regulations, his Honour said the former reg 5(7) did not require that offshore R and D be "conducted by" the participant for it to be allowable expenditure. The new reg 13G(5)(c) did impose a restriction on allowable expenditure on offshore R and D by providing that it is allowable R and D only if it is "conducted by" the participant. This restriction at least meant that offshore R and D that is not conducted by a participant is not allowable R and D under that subregulation. 47 The amending regulations also introduced the expression "contributes to direction and management" in the new reg 13G(5)(a). The introduction of this expression at the same time as the introduction of the expression "conducted by" supported the view that they were intended to mean different things. If this were so the meaning of "conducted by" included elements of both direction of and carrying out of the activity. "Direction and management" had a narrower meaning. 48 Another restriction arising from the insertion of reg 13G was the introduction of subregs (5)(a) and (b) which provided that R and D conducted by another person (or by a Co-operative Research Centre) under a contract with the participant is allowable R and D only if it was Australian-based R and D. These restrictions at least meant that overseas R and D that was "conducted by" a person under a contract with a participant was not allowable R and D. 49 The new reg 13G(5)(d) was another new restriction. Although not directly relevant, it provided that Australian-based R and D "conducted by" the participant was allowable R and D only if the participant was not required to conduct it on behalf of another person under a contract with that other person. 50 These restrictions assisted in discerning a legislative intent in the amended regulations to tighten the criteria for allowable R and D. Relevantly, the intent of the changes was to restrict the offshore R and D that was allowable expenditure. The interpretation of reg 13G(5)(c) proposed by the respondent was more in harmony with this intent than that contended for by the appellant. 51 His Honour also referred to the beneficial purpose of the legislative scheme. He accepted that the Act had a beneficial operation but said the Court must still read the language of the statute according to conventional rules of construction. Parliament was concerned to ensure that persons who were eligible to benefits were included, but also to ensure that those who were not eligible were excluded: Luttick Australia Pty Ltd v Export Development Grants Board (1985) 5 FCR 589 at 594; Rose v Secretary, Department of Social Security (1990) 21 FCR 241 at 243-244. Although the Act conferred a benefit, utilising the conventional rules of statutory construction the primary judge did not consider that the regulations should be interpreted to give the words "conducted by" the narrow meaning for which the appellant contended. 52 The primary judge concluded that on the proper interpretation and application of reg 13G(5)(c), the offshore R and D was not "conducted by" the appellant and it was not entitled to duty credits for it.

Submissions of the parties in relation to the regulations 53 The appellant submitted that the dictionary definition of "to direct, manage or carry on" was a definition of extension embracing no element of limitation to action by the actor itself or qualified by a performance requirement. 54 The appellant referred to a number of decisions of courts where the verb "to conduct" or the word "conducted" had been considered: Council of the Pharmaceutical Society of Great Britain v Fuller (1932) 96 JP 422; Pioneer Concrete Services Ltd v Galli [1985] VR 675; Biochem Pharma Inc v Commissioner of Patents (1988) 82 FCR 87; and Coles Supermarkets Pty Ltd v Westley Nominees Pty Ltd [2005] FCA 839; (2005) 60 ATR 52. 55 The appellant submitted that it conducted the offshore R and D in the primary sense of "to direct" and "to manage". The plain and natural meaning of "conduct" embraced the "direction" and/or "management" by the appellant and, indeed, the "carrying out" of such activities by the employees of related offshore companies, and others, as much as by employees of the appellant within and offshore Australia. 56 In light of the legislative purpose in s 3 of the Act, it sufficed that the participant satisfied the threshold criteria of direction and management and that it retained "control" of the R and D. 57 The most relevant contextual factor was reg 13H which directly defined the content of "offshore research and development conducted by the participant". It was submitted that "conducted by the participant" could not mean "carried out by the participant" if offshore R and D "conducted by" the participant was expressly defined to include activities "carried out" by a third party. 58 The correct approach, it was submitted, was to favour the dictionary definition of "to conduct", without the addition of a requirement that the participant itself perform the R and D. 59 It was submitted that the primary judge had incorrectly accepted two arguments made by the respondent, first that reg 13G(5)(a) and (b) covered the field of R and D that was contracted out; and secondly that "conducted by" could not be synonymous with "direction and management" because the two concepts were treated separately in reg 13G(5)(a) and (b). 60 The respondent submitted that the purpose and effect of the 2001 amendments to the regulations were a significant aspect of the context in which reg 13G(5)(c) fell to be construed. 61 Under the regulations as in force until 4 May 2001, there was no restriction on the types of externally-contracted R and D that qualified as "approved research and development"; and there was no requirement that offshore R and D be conducted by the participant in the scheme. The new reg 13G imposed two further restrictions on the type of offshore R and D that was allowable R and D under the Act. Under reg 13G(5)(a), R and D conducted by another person on behalf of a participant was allowable only if it was "Australian-based research and development". It followed that offshore R and D that was conducted on behalf of a participant was not allowable R and D. Under reg 13G(5)(c), offshore R and D was only allowable if it was conducted by the participant. 62 In the present case the offshore R and D that RBG conducted on behalf of the appellant fell to be considered exclusively under, and was expressly disallowed by, reg 13G(5)(a). 63 The respondents submitted that reg 13H(6) created no inconsistency. 64 The respondent submitted that the appellant gave excessive emphasis, in its use of dictionary definitions, to the sense of the verb it derived from those definitions, at the expense of the contextual and purposive dimensions of the construction question. 65 The Tribunal held that the expression "conducted by" in reg 13G(5)(c) involved both direction and activity and that it was insufficient that the appellant directed the R and D activities carried out by RBG. 66 In reply, the appellant emphasised the underlying purpose of the legislation as a whole, relating to the promotion of the competitiveness of the Australian automotive industry and submitted that the competitiveness of the industry was advanced if reg 13G was interpreted in a way that allowed participants to maximise the efficiency of R and D projects, as in the present case.

Consideration 67 Much of the debate before the Full Court was by reference to dictionary meanings of the word "conduct". 68 Although dictionaries give a number of meanings for the word "conduct", we agree with the observation of the Full Court in Polo/Lauren Company LP v Ziliani Holdings Pty Ltd (2008) 173 FCR 266: [24] It is convenient to pause to consider the assistance that dictionary definitions, if any, provide to such questions of statutory interpretation. The common law has long approved of dictionary definitions to assist in statutory interpretation (see eg R v Peters (1886) (1886) 16 QBD 636 at 641 per Lord Coleridge CJ), but while this is a useful reference point, and indeed the approach taken by the learned first instance judge and by counsel, a dictionary definition is not conclusive and must be used with caution. As Mason P in House of Peace Pty Ltd v Bankstown City Council (2000) 48 NSWLR 498 noted at [28]: "A dictionary may offer a reasonably authoritative source for describing the range of meanings of a word, including obsolete meanings. Dictionaries recognise that usage varies from time-to-time and place-to-place. However, they do not speak with one voice, even if published relatively concurrently. They can illustrate usage in context, but can never enter the particular interpretive task confronting a person required to construe a particular document for a particular purpose." See also Mahoney JA in Provincial Insurance Australia Pty Ltd v Consolidated Wood Products Pty Ltd (1991) 25 NSWLR 541 at 560. 69 In House of Peace Pty Ltd v Bankstown City Council (above) at [30], Mason P said, with reference to the word "church" in a development consent given in 1954 for "church and office": The task in hand is not a philosophical, linguistic or etymological exercise probing the inner or outer limits of "church" in 1954 Australian usage. In the end it is a search for the meaning of a particular document issued in a particular context. 70 We agree. Further, we do not accept that it is appropriate to apply to dictionary definitions principles of statutory construction, as contended for by the appellant. 71 Further, in relation to statutory language, because a term takes its meaning from its context, Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 at [69], the use of the same term in a different statutory context can be a distraction or worse. It is accepted that the meaning of a term in other legislation can be used where that other legislation is sufficiently analogous; see Pearce DC and Geddes RS, Statutory Interpretation in Australia (7th ed, LexisNexis Butterworths, 2011) [3.36]. But given the different and dissimilar statutory contexts considered in the cases cited by the appellant as to the words "conduct" or "conducted" (see [54] above), those cases are of no present assistance. 72 Turning to the statutory language, it was not suggested that the appellant could succeed merely by showing that the activities were activities within reg 13G(2) and (3), although it was not suggested by the respondent that the activities fell outside those provisions read alone. It was accepted that reg 13G(5) was the operative provision. 73 The claim is a claim by a participant, the appellant, being a person registered as an ACP: see the definition in s 6(1) of the Act. 74 Regulation 13G(5) then imposed qualifications. 75 The first, for a participant, is where research and development is conducted by another person on behalf of the participant under a contract with the participant. There is no question about R and D activities being done by RBG on behalf of the appellant under a contract with the appellant. Plainly the Tribunal found as a fact that they were. 76 In our opinion the research here was so conducted in that the R and D was carried on or carried out by RBG even though, on the facts found by the Tribunal, all of the management and control of the Iveco-MUX project was undertaken by the appellant. We reject the construction that R and D activity is not conducted by an entity where that entity carries out all the activity under contract with a participant. 77 Put differently, in our opinion, the fact that all of the management and control of the Iveco-MUX project was undertaken by the appellant does not mean that R and D activity was not conducted by RBG for the purposes of reg 13G(5)(a). 78 It is to be recalled that the issue is not the qualification under the scheme of the R and D activities by the appellant (in Australia). As the Tribunal said, there was no dispute that the appellant was entitled to claim R and D for qualifying activities carried out in Australia. That part of the appellant's claim was not challenged in the audit, and it was not part of the review before the Tribunal. 79 Having so concluded, the next qualification in reg 13G(5)(a) was whether the R and D is Australian-based R and D within reg 13G(5)(a)(i). It is clear that the part conducted by RBG was not since all of the relevant activity was done outside Australia. 80 Next, because for a participant R and D of the kind mentioned in reg 13G(2) included R and D conducted by another on behalf of the participant only if it was Australian-based R and D, the R and D in question is not included. 81 It follows, in our opinion, that the R and D is not included by reason of reg 13G(5)(a). 82 We should add that we do not read reg 13G(5)(a)(ii) as a limitation on the degree to which the participant is involved in the direction and management of the R and D. We read it as a minimum for R and D which is Australian-based and conducted by another person on behalf of the participant under a contract with the participant. That is, the participant must at least contribute to the direction and management of the R and D. 83 It is not necessary to consider the remaining qualifications in reg 13G(5)(a)(iii) and (iv). 84 We should add that although the statement by the Tribunal at [34] of its reasons was immaterial, we do not see a basis in the legislation for that statement which was that the intention of the Act was not to reward R and D conducted by non-Australian corporations, whether acting in their own right or under contract with Australian corporations. 85 The next issue is whether the R and D is included by reason of reg 13G(5)(c). If it is not, then the relationship between reg 13G(5)(a) and reg 13G(5)(c) in every case, whether they are mutually exclusive as a matter of construction, may be put to one side. 86 There can be no doubt that on the facts found by the Tribunal the R and D activity here is "offshore research and development" as defined. The question is whether it is conducted by the appellant on the facts as so found and on the proper construction of the provision. 87 In our opinion, the work done by RBG on behalf of the appellant was not conducted by the appellant by reason only that all of the management and control of the Iveco-MUX project was undertaken by the appellant. 88 There is, in our opinion, a distinction drawn in reg 13G(5) between R and D done on behalf of a participant and R and D done by it. Here the relevant part of the R and D was carried out or carried on by RBG and therefore was not conducted by the appellant. 89 We do not accept the appellant's submission that reg 13H(6)(c) militates against this construction. It does show that offshore research and development may be conducted by a participant where the R and D covered an activity that has been carried out by a person under a contract for services with the participant. However, in our view, that is not the same thing as conducting R and D activity on behalf of the participant. 90 The references in reg 13C to "conducted by" were, in our opinion, neutral on the present question. 91 In our opinion the appeal on this issue, the construction of the regulations, fails. 92 Although the appellant contended with some force that the amendments to the regulations should not be construed to disrupt its expectations, at least without a clear public statement by the executive government, and the absence of such a public statement meant that the regulations should not be given a broad construction, in the end we do not find that the language used in the regulation is sufficiently tractable for its meaning to be shaped by such considerations. On and from 4 May 2001 the relevant regulation was rewritten. One evident aim was to limit or further define the circumstances in which "for a participant" research and development conducted by another person on behalf of a participant would fall within the kind of research and development activities mentioned in reg 13G(2). This was done by paragraphs (a) and (b) of reg 13G(5). Two of the limitations were that the research and development was Australian-based research and development and the participant contributed to the direction and management of the research and development. More broadly, the regulation limited or further defined the circumstances in which a participant could claim for offshore R and D. This was done by paragraph (c) of reg 13G(5).

Section 94 93 In an appeal on a question of law, it is necessary to begin with the facts as found by the Tribunal. 94 The Tribunal said that, relevantly, the applicant answered the Type E Investment Claims questions in its Quarterly Return as follows for the quarter ending 31 December 2003: 15 What is the total claimable value of your Type E investment in approved research and development, excluding contracted and overseas R & D, in the specified quarter? 16 What is the total claimable value of your Type E investment in Australian based contracted Research and Development, in the specified quarter? 17 What is the total claimable value of your Type E investment in overseas Research and Development, in the specified quarter? The Tribunal said that inaccuracy can simply be found as matter of fact and, in the context of s 94 of the Act, the Tribunal was satisfied that this was how it ought to be approached in this review. Given how the claim should be characterised, the information conveyed in answer to question 17 of the Quarterly Return was inaccurate. It followed that s 94(1)(b) of the Act was engaged, and the appellant was not entitled to retain the benefit of the duty credits. 95 The Tribunal also said that s 94(1)(a) of the Act referred to the "making of an error in calculating the duty credit (including during the modulation process) or a mistake of fact", all of which indicated that it was the error of the Secretary based on the information supplied by the ACP. Thus, the Tribunal found that s 94(1)(a) of the Act was also satisfied. 96 Thus the Tribunal found that the total claimable value of the appellant's type E investment in overseas research and development in the specified quarter was not $5,355,860. It also found that the appellant received the credits because of the making of a mistake of fact by the Secretary in calculating the duty credit; that error being caused by that inaccurate information. 97 The Tribunal found that both s 94(1)(a) and s 94(1)(b) were satisfied. The primary judge held the Tribunal erred in relation to s 94(1)(a) but affirmed the Tribunal's decision in relation to s 94(1)(b). Of course only one of the paragraphs needs to be satisfied for the person not to be entitled to the credit it received. 98 The primary judge's reason for finding error in relation to s 94(1)(a) was, at [98], that his Honour was bound by Secretary, Department of Industry, Tourism and Resources v Spicer Axle Structural Components Australia Pty Ltd [2007] FCAFC 158; (2007) 164 FCR 301 (Spicer Axle) to find that credits issued because of an erroneous claim of legal entitlement by a participant were not issued because of a mistake of fact under s 94(1)(a). It was relevantly on all fours with this case. Again, at [102], the primary judge held that he was bound to follow the decision in Spicer Axle. In that case no mistake of fact was found against the factual backdrop that a participant made an incorrect claim for duty credits based on its erroneous view of its entitlement under the regulations. The primary judge found that on a proper interpretation and application of s 94(1)(a) the Secretary was not able to recoup the duty credits for the overseas R and D issued to the appellant. He set aside the Tribunal's finding in that regard. 99 In relation to s 94(1)(b), the appellant submitted that the provision did not permit the recovery of credits issued due to a mistake as to legal entitlement. The relevant information that the appellant gave to the respondent was a dollar amount contained in its quarterly returns. The information thereby conveyed to the respondent was: (a) the amount spent (which was not said to be inaccurate); (b) that the appellant believed and claimed that the expenditure was eligible (it was accepted that the appellant made the claim in good faith and believing it to be accurate: [93] of the Tribunal's reasons); and (c) subject to a declaration at the end of the quarterly return form that "to the best of my/the Participant's knowledge the information provided… in this form is true, correct and accurate in all material particulars". The "information given" to the respondent was accurate as far as it went, being a statement of the appellant's "claim" "to the best of my/the Participant's knowledge". If the appellant was wrong in its opinion (conveyed to the respondent) as to the operation of the legislation, it did not follow that "information conveyed to the Secretary" was inaccurate. The appellant could be said to have provided inaccurate information if the legislative scheme entitled the respondent to rely on the participant's claim or opinion of the claimable amount as being conclusive information as to the claimable amount. However the legislation did not establish a self-assessment regime. In the circumstances, the appellant's claim remained no more than a claim. The respondent's own assessment, not the appellant's assessment, was binding on the respondent and the respondent was obliged to make its own assessment at the time of issuing credits. The fact that it failed to do so could not change its obligations under the legislation. 100 In relation to the respondent's reliance on Federal Commissioner of Taxation v Levy (1961) 106 CLR 448 (Levy), the appellant submitted that in the last of the disputed assessments, the High Court held that the taxpayer satisfied his obligations to make "full and true disclosure of all the material facts" because although the taxpayer in that year had provided incorrect figures, he had satisfied his obligations by providing the Commissioner with sufficient information to show that the figures were attended by some doubt. Equally here, the appellant submitted, the figures were not put forward on an absolute basis but as a "claim". As such, the limitations of the figures were disclosed and the "information provider" was accurate. 101 In relation to s 94(1)(a) the appellant submitted that this ground, on all fours with the present appeal, was disposed of by the Full Court in Spicer Axle at [32]. The appellant submitted that decision was correct and should be neither overruled nor disturbed on this appeal. Further, the facts did not enliven s 94(1)(a). There was no evidence that the respondent's delegates made specific factual assumptions when issuing credits. It appeared that the respondent issued the credits without considering the accuracy of the information, on the assumption that any error could be remedied later. That constituted a disregard of the facts, not an error of fact. Further reference was made to Levy (above). 102 The respondent submitted in relation to s 94(1)(b) that Spicer Axle provided no authority on the construction and scope of this provision. The question was one of statutory construction: did the appellant receive duty credit because information that it gave to the respondent was "inaccurate or incomplete". The respondent submitted that the appellant's statutory obligation was to set out particulars of its expenditure on "eligible investments": relevantly, in its offshore R and D that qualified as "allowable research and development" under reg 13G(5)(c). It was beyond dispute that the particulars that the appellant provided did not accurately state its allowable R and D. The appellant's characterisation of the information it submitted - as a mere "claim" - ignored the true import of the s 37(1) obligation: namely, that a participant was obliged to ascertain and state correctly the value of its eligible investments. That characterisation also ignored the detailed direction given in the Customer Guidelines as to how a participant was required to determine the "claimable value" of its allowable R and D. 103 The respondent referred to the obligation in s 35 of the Act on each participant to provide a return to the respondent Secretary in respect of each quarter. Each quarterly return was required to be made in writing, in a manner prescribed by the regulations, and be in an approved form. Under s 37(1)(a), the obligation was to set out in that quarterly return particulars of the expenditure on eligible investments undertaken by the ACP in that quarter. By s 47, the Secretary must, as soon as practicable after an ACP provides a return in respect of a quarter, work out the unmodulated investment credit for the ACP for that quarter in relation to type E investment in accordance with the formula there set out. The respondent submitted that that task was to be carried out by reference to the return. The respondent then referred to s 59 by which, when the Secretary had worked out the unmodulated investment credit in relation to each ACP in respect of eligible investments, the Secretary must modulate each unmodulated investment credit to work out the modulated investment credit to be issued to each ACP. By s 60, the Secretary was required to conduct each modulation in the manner set out in guidelines made under s 55. By s 64(3), after working out the modulated investment credit (if any) to be issued to an ACP, the Secretary must enter the credit in the ledger in respect of the ACP concerned. By s 65, when the Secretary entered modulated credit in the ledger in respect of a participant, the credit was issued to the participant as a duty credit. 104 It was submitted that there was an obligation on the appellant to state correctly the value of its expenditure on eligible investments. If, objectively, that was not accurate then the circumstance identified in s 94(1)(b) arose. 105 In relation to s 94(1)(a) the respondent submitted that Spicer Axle concerned a mistake of law which the Tribunal in that case described as having arisen because of either a misunderstanding, or an inappropriate application, of the regulations to the facts that the participant had disclosed: Re Spicer Axle Structural Components Australia Pty Ltd and Secretary, Dept of Industry, Tourism and Resources [2006] AATA 1004; (2006) 94 ALD 634 at [165]. Here, the respondent submitted, when submitting its quarterly returns, the appellant did not disclose that the claimed offshore R and D was carried out by RBG under a contract with the appellant. Accordingly, the respondent submitted, the primary judge erred in rejecting the respondent's argument below that, so far as this provision was concerned, Spicer Axle was distinguishable. 106 The respondents submitted that it was also possible to treat the appellant's receipt of credit as being a receipt because of a mistake of fact on behalf of the Secretary. The quarterly returns did not disclose that the claimed offshore R and D had been carried out by RBG under a contract with the appellant. Spicer Axle was concerned only with an error of law. It was still open to the Secretary and the Tribunal to determine that the credits were received because of a mistake of fact on the part of the Secretary. It was on this basis that the respondent submitted that the primary judge erred in holding that the relevant facts in Spicer Axle were essentially the same as the facts before his Honour. The reason why the appellant failed to inform the Secretary about its contract with RBG was not relevant. The finding of fact was that it did not so inform the Secretary. The Secretary relied on the information in the quarterly return in the steps that led to entering a credit in the ledger and the Secretary thereby proceeded on a mistaken view of the facts. 107 The respondent abandoned its submission that the decision in Spicer Axle was clearly wrong and should not be followed. 108 In relation to both paragraphs in s 94, the respondent drew attention to the regime for the audit of the affairs of participants in Part 8 of the Act. 109 The respondent also submitted that to the extent that the appellant now said the factual circumstances in which duty credits came to be entered into the ledger were not relevant to the proper operation or application of s 94(1), that was a contention that was advanced before Ryan J and was disposed of in proceedings between the same parties and in the final judgment because the application for review was dismissed. The finding that there was no error on the part of the Tribunal at [64] of that judgment was a determination on the issue that was fundamental to the proceeding before Ryan J.

Consideration 110 As to what was decided in Spicer Axle, we note from paragraph 3 of the Tribunal's reasons in that case that the relevant issues were identified as being whether it was open to the Secretary to make a determination under ss 94 and 95 of the Act on the basis that quarterly returns contained ineligible plant and equipment claims without identifying or specifying the particular information said to be inaccurate or incomplete and, even if it was so open, whether the Secretary could make such a determination even if, in issuing a duty credit, he or his delegate was aware at the time that the quarterly returns did include or were likely to include ineligible plant and equipment claims. We also note from paragraph 5 of the Tribunal's reasons in that case that the Tribunal decided that Spicer Axle did not receive the duty credits because of an error in calculating them as an error in calculation in s 94(1)(a) referred to an error in the nature of an arithmetical error and not to an error in working out whether Spicer Axle had a type D investment for the purposes of the formula set out in s 46 of the Act. Therefore, the Tribunal held, Spicer Axle was not liable to pay the Commonwealth an unearned credit liability of 901,203 duty credits. 111 The Tribunal considered s 94(1)(c) at paragraphs 141 and following. It concluded at paragraph 149 that a "clerical error or mistake in the ledger" within the meaning of s 94(1)(c) was not a reference to a clerical error or mistake that happened outside the context of the ledger. Provided the ledger accurately recorded the modulated investment credit in the ledger in accordance with a decision under s 59, the ACP had not received a duty credit because of a clerical error or mistake in the ledger if it was later found that the decision under s 59 was incorrect. 112 The Tribunal then considered s 94(1)(a) at paragraphs 150 and following. The Tribunal held that Spicer Axle did not receive the credit "because of the making of an error in calculating the duty credit" within the meaning of s 94(1)(a). The Tribunal concluded that the errors to which reference was made in that provision were limited to errors of calculation in the sense of arithmetical errors. It could not be extended to errors in working out the unmodulated investment credit and so to errors in "working out" what, for example, was type D investment in the case of a particular ACP. The Tribunal then asked itself whether there had been a mistake, inaccuracy or misapprehension of an arithmetical nature so that there had been an error in calculating the duty credit in that case. The Tribunal found that in calculating the unmodulated investment credit in relation to Spicer Axle, there had necessarily either been a mistake made by those calculating the duty credits on behalf of the secretary or they had laboured under a misapprehension. That was an error but it was not an arithmetical error of the sort to which the provision referred. Nor was it a "mistake of fact" within that provision. The error that arose in the case arose in the calculation of the unmodulated investment credit and that error arose because of the error in determining the type D investment. The error arose because of a mistake of law, rather than a mistake of fact. It arose either because of a misunderstanding of the interpretation of reg 13C and/or because of an inappropriate application of reg 13C to the facts as had always been disclosed by Spicer Axle. In either case, the error arose because of a mistake of law and not a mistake of fact. 113 In the Full Court in Spicer Axle, the Court noted that the Tribunal had not been invited by the Secretary to find that the decision could be supported by reliance on s 94(1)(b). These submissions recorded at pages 304-305 related to s 94(1)(a). The Full Court preferred the approach to the construction of sections 94 and 95 adopted by the Tribunal and supported by the submissions of counsel for Spicer Axle. At [32] the Full Court said that the calculation of the duty was based on information given to the Department by Spicer Axle on the assumption of an entitlement to duty credits. There was no error in calculating the duty credits. There was no mistake of fact. With reference to s 94(1)(c), the Full Court said there was no mistake or clerical error in the Secretary's ledger. The ledger merely reflected information given by Spicer Axle to the Department. The only mistake (if there was one) was as to the legal entitlement of Spicer Axle to receive the credits. 114 In relation to s 94(1)(b) therefore, we first reject the submission that Spicer Axle concerned that provision. It did not, since the parties in that case did not rely on it and the Full Court did not consider it: see the report at, for example, [23] and [32]. We agree with the primary judge in this respect. 115 Also we do not accept the appellant's characterisation of the information it submitted as a mere "claim" in the sense of no more than an assertion. We note the use of the words "claimable value" in the statutory expression "maximum claimable value" in s 6A of the Act and in the guide to completing the quarterly return forms and in the form approved under s 8 of the Act. 116 In our view it would be a mistake to construe the provision as requiring first an enquiry as to whether the applicant misunderstood the legislative scheme and, secondly, if there were such a misunderstanding, to conclude that the information given could not be inaccurate or incomplete within the meaning of s 94(1)(b). 117 In our opinion, with respect, it is not useful to address the questions of construction under s 94 at the high level of whether or not the Act involves self-assessment: it is preferable, indeed necessary, to concentrate on the specific provisions and the particular rights and obligations those provisions create or impose. 118 We see no error of law in the conclusion to which the Tribunal came in respect of s 94(1)(b) and we see no error in the primary judge's conclusion that the information provided by the appellant as to the "total claimable value" was objectively incorrect and therefore inaccurate. 119 As to Levy, the relevant parts of the case concerned the expression "full and true disclosure" within s 170 of the Income Tax and Social Services Contribution Assessment Act 1936 (Cth) and in our view do not assist in construing the different words of s 94(1)(b); see also [71] above. As to the reasoning at 470 of the report in respect of the final year, the facts were unusual in that all the material facts had been disclosed to the Commissioner but the assessor was directed to assess the tax on the figures shown in the return, electing to treat those figures as correct knowing full well what the true facts were and in light of those facts that the figures might not be correct. In those circumstances the Commissioner could not rely on a mistake of fact. 120 In relation to s 94(1)(a), with respect we disagree with the primary judge's analysis at [98] and [102] of Spicer Axle. The Full Court was there dealing only with whether there was an error of law by the Tribunal in that case on the facts found by that Tribunal. But the facts of that case were different and do not foreclose other findings of fact by the present Tribunal. In the present case the question is whether the Tribunal erred in law in finding that there was a mistake of fact. 121 In our opinion, there was no error of law in the Tribunal finding that the appellant received the credits because of a mistake of fact, being the error of the respondent based on the information supplied by the appellant. That is, the respondent made an error in calculating the duty credits because he wrongly assumed that the appellant's answers accurately disclosed its allowable expenditure on type E investment. We apply here what we said above in relation to s 94(1)(b), that it would be a mistake to construe the provision as requiring first an enquiry as to whether the applicant misunderstood the legislative scheme and, secondly, if there were such a misunderstanding, to conclude that there was no mistake of fact within the meaning of s 94(1)(a). 122 For completeness we note that the respondent submitted that the primary judge misstated the submission put to him by the respondent in saying at [101] that it was not submitted that the appellant's failure to inform the Secretary about its contract with RBG was for any reason other than its erroneous view about the regulations. 123 In these circumstances it is unnecessary to consider the respondent's submissions in relation to issue estoppel or abuse of process based on the judgment of Ryan J in Robert Bosch (Australia) Pty Ltd v Fice (2009) 175 FCR 258.

Conclusion 124 We would dismiss the appeal, with costs. I certify that the preceding one hundred and twenty-four (124) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justices Kenny, Edmonds and Robertson.