IEL Finance Limited v. Commissioner of Taxation

[2006] FCA 267
62 ATR 165

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(Judgment by: Conti J) Court:

Judge:
Conti J

Subject References:
INCOME TAX
large corporate group
inter-group transactions undertaken over six consecutive fiscal years
transactions involving inter-group interest bearing borrowings principally by one group member and transfers of tax losses arising out of those borrowings to other group members
prior primary and appellate claims by proceedings in Federal Court made by borrowing member against the Commissioner for interest deductibility in respect of one fiscal year
decision at first instance and on appeal in relation to that fiscal year adverse to that single group member
findings made in context of those proceedings as to assessability to tax of that group member in respect of some transactions for differing fiscal years
after conclusion of single fiscal year further proceedings commenced by the same corporate group member together with other corporate group members in respect of transactions involving borrowings and transfers of tax losses in respect of antecedent as well as subsequent fiscal years to that resolved by Federal Court in favour of Commissioner
whether issue estoppel, Anshun estoppel and/or abuse of process should operate in favour of Commissioner in respect of deductions for losses of antecedent and subsequent fiscal years
meaning of privies
authority in Australian Courts of earlier decisions of Privy Council and House of Lords
summary judgment application of Commissioner granted

Legislative References:
Income Tax Assessment Act 1936 - 51(1); 79E; 80G; Part VII
Tax Administration Act 1953 - Part IVC
Federal Court Rules - O 20 r 2 subrule 2(1)(b) and (c) and Order 52B

Case References:
Arthur JS Hall & Co v Simons - [2002] 1 AC 615
Blair v Curran - (1939) 62 CLR 464
Broken Hill Proprietary Company Limited v The Municipal Council of Broken Hill - (1925) 37 CLR 284
Chamberlain v Commissioner of Taxation - (1991) 21 FCR 21
Chamberlain v Deputy Commissioner of Taxation - (1987-1988) 164 CLR 502
Cook v Cook - (1986) 162 CLR 376
Dey v Victorian Railways Commissioners - (1948-1949) 78 CLR 62
Effem Foods Pty Ltd v Trawl Industries of Australia Pty Limited - (1993) 43 FCR 510
Federal Commissioner of Taxation v A.N.Z. Savings Bank Ltd - (1994) 181 CLR 466
Falk v Haugh - (1935) 53 CLR 163
Federal Commissioner of Taxation v Cappid Pty Ltd - (1970) 127 CLR 140
Federal Commissioner v Wade - (1951) 84 CLR 105
General Steel Industries Inc v Commissioner for Railways (NSW) - (1964) 112 CLR 125
Hawkins v Clayton - (1986) 5 NSWLR 109
Henderson v Henderson - (1843) 3 Ha 100
Hoysted v Federal Commissioner of Taxation - (1921) 29 CLR 537
Hoysted v Federal Commissioner of Taxation - [1926] AC 155; (1925) 37 CLR 290
Jackson v Goldsmith - (1950) 81 CLR 446
Johnson v Gore Wood & Co - [2002] 2 AC 1
Mohamed Falil Abdul Caffoor, The Trustees of the Abdul Gaffoor Trust v Commissioner of Income Tax Colombo - [1961] AC 584
Murphy v Abi-Saab - (1995) 37 NSWLR 280
Orica Ltd v Federal Commissioner of Taxation - (2001) 182 ALR 77
Port of Melbourne Authority v Anshun Pty Limited - (1981) 147 CLR 589
Queensland Trustees Limited v Commissioner of Stamp Duties - (1956) 96 CLR 131
Commissioner of Taxation v Dulux Holdings Pty Ltd - (2001) 113 FCR 436
R v O'Halloran - (2000) 36 ACSR 315
re Sharpe - (1944) QSR 26
Rogers v The Queen - (1994) 181 CLR 251
Saffron v Federal Commissioner of Taxation - (1981) 30 FCR 578
Sea Culture International Pty Ltd v Scoles - [1991] 32 FCR 275
Skelton v Collins - (1966) 115 CLR 94
Society of Medical Officer of Health v Hope - [1960] AC 551
Spalla v St George Motor Finance Ltd (No 6) - [2004] FCA 1699
Spassked Pty Ltd v Commissioner of Taxation - (2003) 136 FCR 441
Spassked Pty Ltd v Commissioner of Taxation (No. 5) - (2003) 197 ALR 553
Taylor v Ansett Transport Industries Limited - [1987] 18 FCR 342
The Council of the Municipality of Broken Hill v The Broken Hill Proprietary Company - (1922) 30 CLR 400
Trawl Industries of Australia Pty Ltd (in liquidation) v Effem Foods Pty Limited - (1992) 36 FCR 406
Viro v The Queen - (1978) 141 CLR 88
Walton v Gardiner - (1993) 177 CLR 378

Judgment date: 21 March 2006

Sydney

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Judgment by:
Conti J

REASONS FOR SUMMARY JUDGMENT

Outline of the context to the principal proceedings and to the Commissioner's application for summary judgment

1 There is pending before the Court in its original jurisdiction four principal proceedings brought variously by the taxpayer applicants pursuant to Part IVC of the Taxation Administration Act 1953 (Cth) ('the Administration Act'), whereby there is sought to be set aside determinations by the respondent Commissioner of Taxation ('the Commissioner') of objections lodged by the taxpayer applicants against assessments to income tax for the years of income ended 30 June 1991, 1993 and 1994, being questions said by the taxpayer applicants as 'never previously... in issue'. The taxpayer applicants are respectively identified in these reasons as 'IEF' (for IEL Finance Limited), 'QTH' (for Queensland Trading & Holding Company Limited) and 'Spassked' (for Spassked Pty Limited). What was described by the taxpayer applicants as 'the underlying issue now in contest' was the deductibility of the interest expense incurred by Spassked under s 51(1) of the Income Tax Assessment Act 1936 (as amended) ('the Tax Act') in respect of the 1991, 1993 and 1994 fiscal years, being issues which they said 'could not previously have been decided'. I have referred to QTH, IEF and Spassked in these reasons together as 'taxpayer applicants' to avoid confusion, given that the Commissioner is the applicant in the present interlocutory proceedings for summary judgment. Each of QTH, IEF and Spassked was at all material times a wholly owned subsidiary of Industrial Equity Limited ('IEL'), a public company, and IEL in turn traced upwards corporately to the well known Adsteam, David Jones and Tooth & Co public companies.

2 The context to that so-called underlying issue was that between 1 December 1987 and 28 June 1990, Spassked borrowed funds from IEF at interest, and claimed that as a result of the interest incurred on those loans during the 1988 to 1994 years of income inclusively, it made losses for income tax purposes during those years of income. The losses so claimed were progressively transferred by Spassked under s 80G of the Tax Act to other members of the IEL group up to and including the 1998 fiscal year. The Commissioner issued assessments against Spassked and the transferees of the tax losses which disallowed the deductions for the interest originally claimed to have been incurred by it on those borrowings, and consequently reduced the amount of those losses to nil. A critical factor, from the Commissioner's perspective, was that the Federal Court, both at first instance ( Spassked Pty Ltd v Commissioner of Taxation (2003) 197 ALR 553) and on appeal ((2003) 136 FCR 441), has already determined the unavailability of those losses or outgoings sustained or undertaken for income tax purposes in the context of Spassked's challenge related to the fiscal year ended 30 June 1992. I will refer to those earlier proceedings at first instance and on appeal as the 'earlier concluded Spassked proceedings'. The presiding judge at first instance was Lindgren J, and those presiding judges on the Full Court appeal were Hill, Gyles and Lander JJ. The present proceedings were not commenced until after the conclusion of the appellate proceedings in favour of the Commissioner. The taxpayer applicants described that taxation issue thus resolved at the instance of Spassked in relation to the 1992 fiscal year as having involved 'a similar but essentially different question' to those raised by the present proceedings, and not having given rise to an estoppel, and not involving an abuse of process, contrary to the Commissioner's contentions.

3 In the context of each of the present four principal proceedings, framed by the applicant taxpayers by reference to the fiscal years 1991, 1993, 1994 and 1996 (see [5] below), the Commissioner seeks by amended notice of motion filed on 25 July 2005 in the present proceedings the following relief in summary:

(i)

orders that each of the four present proceedings be summarily dismissed by reason of, or

(ii)

orders that each of the proceedings be stayed generally in relation to, and

(iii)

in any event declarations that the applicant taxpayers are estopped from advancing or relying on,

the facts and matters asserted and the contentions advanced in specified paragraphs of the taxpayer applicants' amended statements of facts, issues and contentions filed in the present proceedings pursuant to Order 52B of the Federal Court Rules . Relief by way of the orders and declarations now sought by the Commissioner is purportedly based upon either one or both of Order 20 rule 2 and Order 29 of the Federal Court Rules , and/or the inherent jurisdiction of the Court. As to Order 20 rule 2, the Commissioner indicated reliance solely on sub-rules 2(1)(b) and (c), upon the footing that the proceedings are an abuse of the processes of the Court or are otherwise frivolous or vexatious. The Commissioner acknowledged that the present application for summary dismissal of the proceedings now brought by IEF, QTH and Spassked is not intended to preclude the taxpayer applicants from contesting the quantum of additional or penalty tax imposed by the disputed notices of assessment. So much is said to involve very substantial issues for later determination.

4 The Commissioner's case for the summary relief sought against each of the taxpayer applicants was advanced on the footing of issue estoppel, Anshun estoppel and/or abuse of process, by reason of the outcome of the earlier concluded Spassked proceedings in this Court arising out of the disallowance of objections to the income tax assessment issued to Spassked in respect of the year of income ended 30 June 1992. The Commissioner acknowledged that there has never existed any agreement to the effect that the outcome of those earlier concluded Spassked proceedings relating to the 1992 year of income would bind the taxpayer applicants to an outcome in favour of the Commissioner in relation for instance to the present appeals. The taxpayer applicants deny the availability of any such summary relief. They point to the circumstance that objections of the taxpayer applicants respectively involved in relation to those further fiscal years 1991, 1993, 1994 and 1996 had not been determined by the Commissioner at the time of conclusion of the Spassked 1992 fiscal year, and assert that 'the issue for determination in each year is essentially different'. That assertion was based upon, or at least largely upon, what the taxpayer applicants assert to have been 'repeatedly held by the Privy Council', and upon 'factual differences between the 1992 fiscal year and those fiscal years presently in dispute, and moreover that 'save as to Spassked, the present applicants were not and could not have been party to the earlier proceedings', and therefore it cannot be said that the taxpayer applicants' claims should have been raised in the earlier proceedings if they were to be raised at all.

5 The issues arising for present determination were summarised by the taxpayer applicants' so-called 'Amended Statement of Facts, Issues and Contentions' filed in the proceeding, involving in each case challenges to the correctness of assessments of the Commissioner to primary tax:

(i)

as to proceedings NSD94 of 2005 whereof Spassked is the applicant, whether interest incurred by Spassked in the 1994 fiscal year was lawfully deductible by Spassked.

(ii)

as to proceedings NSD539 of 2004 whereof IEF is the applicant, whether losses sustained by Spassked by way of interest expense and purportedly transferred to IEF in respect of the 1993 fiscal year were lawfully incurred for income tax purposes;

(iii)

as to proceedings NSD540 of 2004 whereof QTH is the applicant, whether losses sustained by Spassked by way of interest expense and purportedly transferred to QTH in respect of the 1991 fiscal year were lawfully incurred for income tax purposes;

(iv)

as to proceedings NSD543 of 2004 whereof IEF is the applicant, whether losses sustained by Spassked by way of interest expense and purportedly transferred to IEF in respect of the 1996 fiscal year were lawfully incurred for income tax purposes;

6 Put in terms of monetary significance, the findings sought by the respective taxpayer applicants are as follows:

(i)

QTH seeks a finding that Spassked was entitled to a deduction of $774,746,526 for interest incurred on IEF loans for the 1991 year of income pursuant to s 51(1) of the Tax Act;

(ii)

IEF seeks findings that:

•

first, Spassked incurred a loss available under s 79E of the Tax Act for the 1993 year of income of $465,626,785;

•

secondly, Spassked incurred a loss of $545,943,416 for the 1994 year of income;

(those findings sought by QTH and IEF turn on the issue as to whether Spassked was entitled to deductions pursuant to s 51(1) of the Tax Act for the interest it incurred on the IEF loans in prior years of income, including 1991, 1992, 1993 and 1994);

(iii)

Spassked seeks a finding that it was entitled to an allowable deduction pursuant to s 51(1) of the Tax Act of $79,284,023 for interest incurred on the IEF loan in respect of the 1994 year of income.

The issues arise from complex circumstances which will be later explained and have been debated widely and in terms which need to be largely recorded. For that reason I will set out the submissions in particular of the taxpayer applicants, in many instances by way of citation of the terminology actually used.

7 The Commissioner contended that it was 'clear', from the manner in which the earlier concluded Spassked proceedings (that is for the 1992 fiscal year) were conducted by and between the Commissioner and Spassked, that 'Spassked understood that the decision in those earlier proceedings would determine the question of deductibility of the interest in all the other years of income presently in issue'. In that regard, in each year of income involved, it was explained that interest was incurred in relation to the same set of loans by Spassked as borrower. Hence the present summary judgment applications were brought by the Commissioner upon the basis of abuse of process, and additionally or alternatively upon the basis of issue estoppel and Anshun estoppel. I have of course already identified the earlier concluded Spassked proceedings as related to the 1992 fiscal year, and which were resolved in favour of the Commissioner in the Federal Court, at first instance by Lindgren J on 14 February 2003, and on appeal by all members of a Full Federal Court comprising Hill, Gyles and Lander JJ on 8 December 2003. In the Full Court, the leading judgment was that of Hill and Lander JJ jointly, the outcome wherewith Gyles J agreed for relatively brief reasons of his own. A subsequent application by Spassked for leave to appeal to the High Court was dismissed.

8 Whether Spassked so 'understood' the significance of those earlier Spassked decisions to be that contended by the Commissioner was contested by the taxpayer applicants. So much would therefore need to be established by the Commissioner as a matter of inference arising in and from the events which happened in relation to the context to, the conduct of and the subsequent determination of the earlier concluded Spassked proceedings. The Commissioner drew attention, for one matter, to what appeared in the written submissions of Spassked's counsel to the Full Court, as follows ( inter alia ):

' At issue in this appeal is whether a deduction is allowable to Spassked under sec 51(1) of the Income Tax Assessment Act 1936 ... for interest incurred by it to IEF in the years of income ended 30 June 1988 to 1994' .

The Full Court at least implicitly acknowledged the significance of that description of the issue arising in the earlier concluded Spassked proceedings in the joint judgment of Hill and Lander JJ observing at [4] as follows:

' The total of deductions claimed in the years of income 1988 to 1994 inclusive, by the various companies in the IEL Group, which deductions were disallowed by the commissioner, totalled $ 6 , 527 , 082 , 709.00. The present appeals will resolve not only the issues of deductibility which they raise of amounts disallowed to the three taxpayers which are the appellants in them, but also the deductibility of losses claimed by the other companies in the IEL group.'

My description of the specific issues arising in the proceedings the subject of the present strike-out application relate to losses sustained by Spassked within those six years of income ended 30 June 1988 to 30 June 1994. The present case of the Commissioner was that deductibility of interest incurred by Spassked on its IEF borrowings for each of the fiscal years 1988 to 1994 was resolved and determined against Spassked and in favour of the Commissioner in the earlier concluded Spassked proceedings, and accordingly the taxpayer applicants were seeking impermissibly to relitigate that issue.

9 The foregoing observation of the joint judgment of the Full Court in Spassked accorded with that which elsewhere appeared in the Full Court's reasons, as well as the reasons at first instance to which I have elsewhere made reference. Although it was mutually accepted by the parties that there was no formal agreement that the outcome of the earlier concluded Spassked proceedings would operate or prevail as well in relation to other fiscal years of relevance in the present dispute, the Commissioner asserted that there existed at all material times a mutual understanding that so much would be the case. The Commissioner's contention, as I have foreshadowed to similar effect, was that '[i]t is clear from the manner in which it conducted the earlier proceedings that Spassked understood that the decision in those proceedings would determine the question of deductibility of the interest [commitment or liability] in all the years of income, including the years of income in these proceedings'. In that regard, in the Commissioner's Statement of Facts Issues and Contentions filed in the earlier concluded Spassked proceedings, the following appeared:

' 11. During the period of 1 December 1987 to 30 June 1992, interest expense was incurred by Spassked and accrued due to IEF on the borrowed amounts outstanding. These interest expenses were capitalised and debited in the books of IEF (and, conversely credited on the books Spassked) to the loan account, thereafter themselves, attracting further interest .

12. In the period from 1 July 1987 to 30 June 1994 , ( the " Period ") the following total amounts of interest were capitalised in the books of account :

Year Ended	Interest ($)
30 June 1998	113,184,428
30 June 1989	293,220,636
30 June 1990	658,487,229
30 June 1991	774,746,526
30 June 1992	888,165,526
30 June 1993	465,626,741
30 June 1994	79,284,023
TOTAL	3,272,715,109

13. The interest expenses incurred by Spassked during the Period were incurred for the purposes of furthering its present and prospect of income producing activities, being the acquisition and holding of shares in GIH in respect of which Spassked has received and anticipates receiving in the future, substantial assessable income in the form of dividends .

14. The interest expenses incurred by Spassked and claimed as an allowable deduction in each of the years of income during the Period returned by IEF as assessable income in the same years of income and treated as such by the respondent.'

10 It appears that the reason why the duration of the years of income deductibility of interest at the instance of Spassked in the first place was specified by the reasons for judgment in the earlier Spassked proceedings in relation to the 1988 to 1994 fiscal years was explained by the primary judge (at [27]-[28]) as follows:

'[ 27 ] In 1994 the Spassked structure as " wound up " when Spassked borrowed from GIH, and to a small extent from IEL, in both cases interest free, and used the borrowed funds to pay out its debt to IEF in full, that is to say, to pay both the capital sums it had borrowed from IEF and the capitalised interest on its borrowings. From that time, GIH was Spassked's creditor in place of IEF, but, unlike IEF, was not charging Spassked interest .

[ 28 ] The parties having an interest, in practical terms, in the outcome of the three proceedings are certain banks as creditors of the members of the Adsteam Group, and, of course, the commissioner.'

The reference above to 'GIH' is to Group Investment Holdings Pty Ltd, a member of the subject corporate group referred to in these reasons immediately below.

11 Further reasons for judgment of Lindgren J at first instance contained the following findings at [193]-[194]:

' SPASSKED'S GENERAL COURSE OF BORROWING FROM IEF

[ 193 ] ... the last of Spassked's borrowings from IEF occurred on 28 June 1990. It was on the total amount borrowed , $ 3,737,142,866 down to that date plus subsequently accrued and capitalised interest, that the 1992 interest of $ 888,165,526 must have been calculated. The parties proceeded on the basis that no distinction was to be drawn between Spassked's various borrowings from IEF and investments in GIH, or between the various investments by GIH in the Subcos, all over the years 1988-90, or between the seven annual amounts of capitalised interest for the years 1988-94 ... Accordingly, I need not distinguish between the various sums borrowed on which the interest accrued, or between the uses to which those sums were put .

[ 194 ] Nor is it suggested that there was any relevant change of circumstances, including a change in the motivation or the subjective purpose of the directors of Spassked, throughout the 3 years of income in which the borrowings were made and the borrowed amounts invested in GIH.'

The reference above to 'Subcos' was to an abbreviation adopted for the IEL group subsidiary companies in whose favour GIH in turn placed group funds for purported investment.

12 Those findings of the primary judge were made in the context of other findings on his part, which included the following:

'[ 184 ] The same individuals were the directors of IEF, Spassked, GIH and many of the Subcos. All those companies were members of the IEL Group. In the years of income 1988 to 1990 Spassked borrowed from IEF, on 10 occasions, amounts totalling $ 3,737,142,866 at interest, and invested in GIH without any return other than one unfranked dividend of $ 29,308,093 paid on 30 June 1990. Over the succeeding years of income 1991 to 1994 the amounts so borrowed were allowed to remain owing, accruing interest without any return other than one unfranked dividend of $ 14,654,046 paid on 8 October 1991. The interest for 1992 of $ 888,165,526 was one of seven annual amounts of capitalised interest totalling $ 3,272,715,111 which Spassked incurred to IEF over the years 1988 to 1994 ... on the borrowings of $ 3,737,142,866 ... Although it used nearly the whole of this amount ... in subscribing for shares in GIH, Spassked received two comparatively miniscule dividends totalling only $ 43,962,139 .

[ 185 ] I am not prepared, on the basis of these circumstances alone, to conclude that it is an adequate description of the interest totalling $ 3,272,715,111 and therefore of the interest of $ 888,165,526 incurred in the 1992 year, to say that it was incurred in gaining or producing dividend income from GIH, or that it was necessarily incurred in carrying on a business for the purpose of doing so. The disproportion in the present case is of the kind that their Honours had in mind in the passage from Fletcher ( his Honour referring thereby to Fletcher v Commissioner of Taxation ( 1991) 173 CLR 1 at [ 17 ]-[ 19 ])). '

13 Moreover in addition to what I have already extracted, the joint reasons for judgment of Hill and Lander JJ recorded the following observations at [77], [110]-[111] and [113]:

'[ 77 ] ... Income tax is an annual tax. Hence the question whether interest was incurred in gaining or producing assessable income or in carrying on a business the purpose of which was the gaining of assessable income is a question which is required to be determined from year to year. The present case was argued and determined by the learned primary judge on the basis that the relevant facts were those which existed at the time the Spassked proposal was implemented. It seems to have been common ground between the parties that there was no relevant factual change in any relevant year of income. We are content to adopt the same course while noting that had there been a relevant factual change so that Spassked would no longer be precluded from deriving assessable income indefinitely the outcome would then be different .

...

[ 110 ] The evidence of these two witnesses leads clearly to the conclusion that the interest incurred was not, in any year of income, incurred in gaining or producing assessable income, but rather that it was a part of the structure planned that in the foreseeable future Spassked would not, deliberately, derive assessable income. Further, it leads to the conclusion that any plan to wind up the structure and thus bring about the result that thereafter Spassked would derive assessable income was only fleetingly considered, if at all .

[ 111 ] It demonstrates, that far from being a case where interest was incurred on a loan to acquire shares which it was hoped would be dividend producing in the future (where the interest would be prima facie deductible ), this was a case on its own facts, those being that interest was incurred on a loan to acquire shares where, in all the years of income in question and for the foreseeable future from the time the structure was established steps would be taken to ensure that the shares acquired would not produce anything but a nominal amount of assessable income .

...

[ 113 ] ... the present was a case where the proposal was that Spassked should be deliberately non-income producing for the foreseeable future. Far from it being wrong in law to have regard to the evidence to which reference has already been made that evidence makes it clear that far from there being an " expectation " or even hope that the shares in Spassked would be income producing the proposal was designed to ensure and its implementation did ensure that at no relevant time could it be said that Spassked incurred in the years of income interest on moneys used by it to acquire shares in the course of any activity carried on by it in the course of gaining or producing assessable income. Rather the occasion of each outgoing of interest was to be found in those shares deliberately being non-income producing.'

The 'two witnesses' referred to in [110] extracted above were Mr Daniels and Mr Cottam, each being senior executives of IEL.

14 In his reasons for judgment for likewise dismissing the Spassked appeal, Gyles J expressed his agreement with the conclusion of Hill and Lander JJ that the findings by Lindgren J were ' open to him and ... not affected by any operative error' . His Honour continued at [127]-[128] as follows:

'[ 127 ] Some business decisions are good, some are bad. Indeed, with the benefit of hindsight some may be seen as negligent or even profligate. The point may be made by considering the arm's length external borrowing by the IEL Group to make the corporate acquisitions in question. Some of those acquisitions might have been successful and some might have failed. In hindsight, some may have been doomed to failure. However there would be little doubt as to the deductibility of interest on all of those borrowings .

[ 128 ] The same principle does not apply to purely intra-group arrangements with no external aspect. All of the relevant arrangements were between companies with the same beneficial ownership. Many of the companies involved, including Spassked, had no external role at all. The arrangements involving those companies were inherently variable at the will of the ultimate board of directors. They do not reflect the exercise of business judgment in the relevant sense. Thus, the requisite connection or relationship between the outgoing and the earning of assessable income is not to be inferred but must be positively established. The trial judge found that that had not been done. I agree. Further, the inherently variable nature of the arrangements explains why the one error by the trial judge was of no consequence in the result.'

15 As I have foreshadowed, each of the taxpayer applicants in the Part IVC proceedings the subject of the Commissioner's present application for summary judgment was at all material times a wholly owned subsidiary of IEL, as were a large number of other subsidiary companies, IEL being at one time a listed public company. If I may be repetitive by reason of the complexity of the context to the present strike-out proceedings, those earlier Spassked proceedings, which concluded in consequence of Spassked's unsuccessful application for special leave to appeal to the High Court, related solely to the fiscal year ended 30 June 1992, whereas the issues the subject of the present proceedings concern the other fiscal years prior and following 1992 which I have identified. Taking as a starting point my outline of the substance of the present proceedings earlier described, the implications of that outline may be further described in the following terms:

(i)

whether IEF and QTH are entitled to deductions under s 80G of the Income Tax Assessment Act 1936 (Cth) (as amended) ('the Tax Act') for losses transferred by Spassked in relation to the years of income ended 30 June 1991, 1993 and 1996;

(ii)

whether the Spassked is entitled to deductions under s 51(1) of the Tax Act for interest incurred by it in favour of IEF in relation to the years of income ended 30 June 1991, 1993 and 1994; and

(iii)

the liability of each of those three applicants to penalties by way of additional tax under Part VII of the Tax Act, in the context of the Commissioner's negative decision as to remission of those penalties.

16 From the outset of the present strike-out proceedings, the Commissioner emphasised that the test of deductibility in each year of income, at least of present relevance, turned on the purpose of the borrowings and the use to which the borrowed funds were put, the decisions in Spassked at first instance and on appeal being summarised by the Commissioner to the effect that the borrowings were not made at any time material to Spassked for the purpose of deriving assessable income, and further that in none of the successive fiscal years in which it incurred an interest expense did Spassked use the borrowed funds in any activity carried on in the course of gaining or producing assessable income.

17 In broad summary, the Commissioner described the complex bases for the present application for summary judgment as follows:

(i)

between 1 December 1987 and 28 June 1990, Spassked borrowed substantial funds from IEF at interest, and as a consequence of the interest thereby incurred during the fiscal years 1988 to 1994, Spassked incurred losses which it claimed as deductions for income tax purposes pursuant to s 51(1) of the Tax Act;

(ii)

the losses for taxation purposes so allegedly incurred by Spassked were progressively transferred by Spassked in particular to IEF and QTH (and also to further members of the IEL corporate group in circumstances not apparently here falling specifically for consideration);

(iii)

the Commissioner issued in due course assessments of income tax against Spassked, and correspondingly against the corporate group transferees of the losses, which involved the disallowance to Spassked of deductions for the interest incurred by Spassked on its relevant borrowings, and hence the reduction of such tax losses as were transferred to nil;

(iv)

the Federal Court at first instance and on appeal resolved in favour of the Commissioner the issue as to deductibility of interest in respect of the 1992 fiscal year sought by Spassked, on the basis that interest on the relevant loans made to Spassked was not incurred in gaining or producing assessable income or necessarily incurred in carrying on a business for the purpose of gaining or producing assessable income.

In that regard, it was emphasised that in the course of the earlier concluded Spassked proceedings, there was adduced extensive evidentiary material, both testamentary and documentary, in relation to the events and activities concerning the entirety of those fiscal years 1988 to 1994 inclusive, the relationship between the incurrence of the interest and the business activities of Spassked and its derivation of any assessable income, and the transfer of the tax losses by Spassked to other corporate group members between 1990 and 1998 including IEF and QTH, and that therefore the Commissioner should not be vexed with having to undertake the expense and effort, and suffer the loss of time, involved in what would be repetition of the conduct of the earlier concluded Spassked proceedings.

The contextual circumstances established in the earlier concluded Spassked proceedings and the Commissioner's response in outline to the present Part IVC proceedings of the applicant taxpayers

18 At first instance in the earlier Spassked proceedings relating to the 1992 fiscal year, Lindgren J made comprehensive findings which may be summarised as follows:

(i)

by late 1986, the shareholding and debt lines within the IEL Group were complex, partly because of a group policy adopted as from 1978 that any new investment should be acquired by a specific subsidiary dedicated to that purpose; this practice led to a proliferation of IEL subsidiaries which was exacerbated by the IEL takeover of other corporate groups having already complex structures;

(ii)

there was created so-called ' dividend traps' within the IEL Group, arising from the circumstances that intermediate holding companies within the Group had substantial interest commitments in relation to borrowings, against which dividends receivable had to be applied before the amount of any profit or loss for that subsidiary could be determined; one so-called ' potentially damaging' consequence for the IEL Group arising from the corporate structure thus in place was that the free flow of dividends from subsidiaries up to IEL (being then a listed public holding company) was adversely affected; hence if the taxable income otherwise of any such recipient subsidiary company would be less than the amount of the dividend receivable, the remaining part thereof otherwise available for rebate under s 46 of the Tax Act would be 'lost', and that amount of dividend would be 'trapped' within the recipient company and its qualification for a s 46 rebate in tax foregone;

(iii)

by late 1987, a new corporate structure was created within the IEL Group in which Spassked became centrally involved as a Group member; changes were made in order to obviate the fiscal disadvantage involved in the group corporate restructure whereby two IEL subsidiaries, one being Spassked and the other GIH, were interposed between IEL and IEF on the one hand, and the relevant investment subsidiaries (so-called Subcos) on the other; Spassked became the borrowing member of the Group, and GIH an intermediate parent company within the Group;

(iv)

IEL moreover became the owner of the issued shares in Spassked as well as in IEF, and IEL and Spassked became the owners of the following issued shares in GIH with the following consequences; Spassked held the A class shares, which entitled it to franked and unfranked dividends, full voting rights and participation in any surplus on a winding up; IEL held the B class shares, which entitled it to franked dividends only, limited voting rights and no right to participate in any surplus on a winding up;

(v)

between 30 December 1987 and 28 June 1990, Spassked borrowed principal moneys from IEF at interest, and claimed that as a result of the interest incurred by it on the IEF loans, at least during the 1988 to 1994 years of income inclusively, it sustained losses for tax purposes during those years of income; those losses were progressively transferred by Spassked to other members of the IEL Group, pursuant to s 80G of the Tax Act, up to and including the 1998 fiscal year;

(vi)

Spassked used the loan funds from IEF to capitalise GIH, and in the meantime deposited funds with IEF at interest; GIH in turn subscribed for shares in the Subcos which, in turn, acquired further investment group subsidiaries.

Those inter-company movements were diagrammatically represented in the reasons for judgment of the Full Court by annexure 'A' thereto (headed 'Pre-Spassked Structure') and annexure 'B' thereto (headed 'Post-Spassked Structure').

19 Lindgren J summarised the Spassked structure as ' tax neutral', because the interest claimed by Spassked as a deduction was shown as assessable income in the hands of IEF, and if that had not been so, IEF would have suffered losses which it, instead of Spassked, could have transferred to other members of the Industrial Equity Group. His Honour concluded however that the interest expense incurred by Spassked in respect of the year ended 30 June 1992 was not a loss or outgoing incurred in gaining or producing assessable income or necessarily incurred in carrying on a business for any such purpose, and was thus not deductible under s 51(1) of the Tax Act, and as I have already further recorded, Spassked's appeal to a Full Federal Court from his Honour's decision at first instance was dismissed, as was the subsequent application made by Spassked to the High Court for special leave to appeal. Following the resolution of the earlier Spassked proceedings by the Federal Court in 2003 in relation to the 1992 income year, the Commissioner determined, by way of disallowance, the objections to tax of the other IEL Group companies involved in the corporate restructure and other inter-company arrangements, being partly the present taxpayer applicants, and hence did so in relation to years of income additional to the 1992 income year. It is in the context of the present proceedings that the taxpayer companies IEF, QTH and Spassked have sought to propound distinctions from the concluded Spassked proceedings, and to do so by reference to the circumstance that the latter related to the determination of assessable income concerning Spassked in relation to the 1992 fiscal year, whereas the present proceedings relate to the determination of assessable income in relation to different fiscal years.

20 At the forefront of the Commissioner's present case is the proposition that there exists sufficient commonality between the issues raised and determined in the earlier Spassked proceedings and the issues arising for determination in the present proceedings. The Commissioner's contention is that in the case of each fiscal year presently in issue, as well as in the case of the 1992 fiscal year, interest was incurred on the same set of borrowings, and the Federal Court has determined, at first instance and on appeal in relation to the 1992 fiscal year, that those borrowings were not made in the course or for the purpose of derivation of assessable income, and further that in none of the subject fiscal years presently in dispute did Spassked use the borrowed funds in any activity undertaken in the course or for the purpose of gaining or producing assessable income. As a consequence, the Commissioner submitted that the taxpayer applicants (being of course respondents to the present strike-out proceedings brought at the instance of the Commissioner) cannot succeed unless they are able to persuade the Court that the conclusions of the Federal Court in the earlier concluded Spassked proceedings were incorrect.

21 I should also record that the Commissioner provided, by way of annexures to written submissions in chief, first an eight page summary setting out facts pleaded in the taxpayer applicants' amended statements of facts, issues and contentions that were asserted to be at least largely the subject of findings of the primary judge and of the Full Court in the context of the earlier Spassked proceedings, and secondly, a seven page summary comprising what was described as facts pleaded by each taxpayer applicant inconsistently with or contrary to facts already found by the Federal Court in the earlier Spassked proceedings. The taxpayer applicants have not exposed any material misstatement in respect of that restatement of facts and findings. The Commissioner pointed out that each taxpayer applicant has pleaded that it was the intention of the Adsteam Group (and thus of course the IEL Group) that GIH would pay dividends to Spassked at the earliest possible time after the dividend trap affecting Spassked would be removed, but the Commissioner emphasised that the contention that there was an intention and expectation that GIH would ever pay dividends to Spassked was rejected 'squarely' by both the primary judge and by the Full Federal Court. Instead it was found, as a fact, so the Commissioner emphasised, that there was no plan or intention to remove the dividend trap in relation to Spassked. The Commissioner emphasised moreover that the explanation provided by Mr Ryan, an executive of Bankers Trust, for the non-payment of dividends to Spassked, as to 'potential and threatened tax liabilities', was rejected by this Court in the earlier Spassked proceedings, and further that nowhere did Mr Ryan allege in his affidavit that the intentions and expectations of the controllers of the Adsteam Group should be attributed to IEL, Spassked and GIH. Nor did that allegation, so the Commissioner further pointed out, appear in the affidavits of Mr Daniels (whom I have earlier identified), filed in the earlier concluded Spassked proceedings. Moreover the Commissioner emphasised that the primary judge found that so long as Spassked was incurring an interest liability to IEF, or had undistributed profits attributable to it, Spassked would not receive dividends from GIH. Yet those losses, his Honour further found, continued to be utilized within the IEL group until 1998.

22 In the result, the taxpayer applicants as respondents to the present strike-out proceedings were required to address a number of findings at first instance, and confirmed by the Full Court on appeal, made in the context of resolution of the evidentiary issues the subject of the earlier concluded Spassked proceedings, being findings which bore directly as well as indirectly on the case raised and pleaded by the taxpayer applicants in the present proceedings. The taxpayer applicants were thus confronted with the present case for summary judgment framed on the basis of the doctrines as to issue estoppel, Anshun estoppel and abuse of process. To meet that case, the taxpayer applicants undertook extensive recourse in particular to authority of the Privy Council and the House of Lords for what was contended to constitute a long established exclusion of those doctrines operation in circumstances such as here involved. Unavoidably these reasons have rendered it to be expedient to extract a great deal of judicial dicta in order to adequately portray the thrust of the authorities respectively relied upon by both parties.

Some threshold principles submitted by the respective parties to be applicable to the Commissioner's present application for summary dismissal or permanent stay of proceedings

23 The taxpayer applicants drew attention to the principle that any summary dismissal or permanent stay of proceedings must be exercised with 'exceptional caution' and only in 'exceptional circumstances'. So much may be readily accepted. I was referred to the re-statement of principles appearing in General Steel Industries Inc v Commissioner for Railways (NSW ) (1964) 112 CLR 125, and in particular to what Barwick CJ emphasised at 129, as follows:

'... the plaintiff ought not to be denied access to the customary tribunal which deals with actions of the kind he brings, unless his lack of a cause of action - if that be the ground on which the court is invited ... to exercise its powers of summary dismissal - is clearly demonstrated . ... [ S ] ome of these expressions [of the test] occur in cases in which the inherent jurisdiction was invoked and others in cases founded on statutory rules of court but although the material available to the court in either type of case may be different the need for exceptional caution in exercising the power whether it be inherent or under statutory rules is the same.'

The taxpayer applicants emphasised the operation of those principles where the ultimate outcome turns upon the resolution of some disputed issue or issues of fact, thereby referring to the earlier authority of Dey v Victorian Railways Commissioners (1948-1949) 78 CLR 62 at 91, where Dixon J (as he then was) explained the operation of relevant principles in the following terms:

' A case must be very clear indeed to justify the summary intervention of the court to prevent a plaintiff submitting his case for determination in the appointed manner ... The fact that a transaction is intricate may not disentitle the court to examine a cause of action alleged to grow out of it for the purpose of seeing whether the proceeding amounts to an abuse of process or is vexatious. But once it appears that there is a real question to be determined whether of fact or law and that the rights of the parties depend upon it, then it is not competent for the court to dismiss the action as frivolous and vexatious and an abuse of process.'

24 The question here arises as to whether those long established principles are satisfied by the Commissioner's present application for summary judgment, where the Commissioner has already established in the earlier concluded Spassked litigation, both at first instance and on appeal to a Full Federal Court, that interest payable by Spassked on the IEF loans was not deductible, with adverse consequences as to transfer of purported tax losses, and where the High Court has refused the grant of special leave to appeal from the Full Federal Court's decision, thereby leaving intact the decisions of this Court below, but nevertheless where that outcome was established in context of an appeal related only to the 1992 fiscal year, whereas the present proceedings commenced by IEF, QTH and Spassked relate of course to the different, albeit proximate, fiscal years I have identified.

25 Upon that footing as to differing fiscal years presently in dispute, being fiscal years exclusive of the 1992 fiscal year the subject of the earlier concluded Spassked proceedings, the taxpayer applicants have sought in the context of the present Part IVC proceedings the resolution in their favour of what they describe as 'a question which has not, and could not have been resolved in any earlier proceedings', for the reason that:

(i)

the issues for determination raised in each of the present proceedings involve the correctness of the Commissioner's decisions to disallow the objections of the taxpayer applicants, in the case of QTH in relation to the years of income ended 30 June 1991, in the case of IEF in relation to the years of income ended 30 June 1993 and 1996, and in the case of Spassked in relation to the year of income ended 30 June 1994, involving thereby questions never previously in issue;

(ii)

when the previous Spassked proceedings were contested and resolved by this Court, both at first instance and on appeal, in relation to the year of income ended 30 June 1992, those decisions of the Commissioner here under challenge had not been made;

(iii)

the underlying issue presently in contest relates to the deductibility of the interest expense of Spassked incurred in respect of the 1991, 1993 and 1994 fiscal years, whereas the only previous contest as to deductibility of the interest had been that incurred by Spassked in the 1992 fiscal year;

(iv)

the deductibility by Spassked of interest incurred in respect of the 1991, 1993 and 1994 income years could not previously have been in issue or decided.

It may be seen, from that explanation of questions arising, that losses transferred from Spassked to IEF had implications extending forward to the year 1996 as well as backwards to 1991, but that what I might describe as the central focus of the present proceedings was upon Spassked in relation to the 1991, 1993 and 1994 fiscal years, whereas of course that fiscal year of central focus the subject of the earlier concluded Spassked proceedings was 1992. The Commissioner's case was however that the previous proceedings, contested 'all the way' by Spassked in relation to the 1992 year income year to the stage of its unsuccessful application for special leave to appeal to the High Court, were mutually understood to resolve all outstanding tax disputes such as the foregoing involving IEL subsidiaries, as evident from the context thereto, and hence the Commissioner's present strike-out application upon the footing of abuse of process.

26 The taxpayer applicants therefore asserted a 'right to have the issues tendered for resolution in the present proceedings determined by a hearing on the merits of their case', and that they were 'not to be denied that right on the basis of an estoppel in respect of a similar but essentially different question', and further that the pursuit of that right '... does not and cannot raise any question of abuse of process'. Implicitly, so the taxpayer applicants' case ran, such merits would or may well produce a different result to that sustained by Spassked (along with IEL and Stanley Park Pty Ltd as co-applicants), in the earlier Spassked proceedings in respect of the 1992 fiscal year. However, precisely what constituted such 'merits' was never seemingly identified in substance or at all, much less particularised in detail, by way of resistance to the Commissioner's present strike-out application, other than bottom line of the taxpayer applicants as to different fiscal years of income to the 1992 year of income.

27 At the outset of their submissions in opposition to the present strike-out application, the taxpayer applicants cited Coke upon Littleton , (at s 365(b)), for the threshold observation that estoppels may be characterised as 'odious', being an authority described by the Commissioner understandably as 'ancient'. The taxpayer applicants also cited Jackson v Goldsmith (1950) 81 CLR 446 at 458 (per McTiernan J) for the proposition that, estoppels are viewed ' unfavourably by the Courts, as having the effect of excluding the truth', though in a context where his Honour was seeking only to establish the need for an asserted estoppel to be based on very clear and precise evidentiary material. The taxpayer applicants asserted moreover that the Court's power to strike out is discretionary in its exercise, and is to be undertaken with 'great caution', citing Effem Foods Pty Ltd v Trawl Industries of Australia Pty Limited (1993) 43 FCR 510 at 532 (per Burchett J as a member of a Full Court), where his Honour was speaking of the exercise of 'discretion to stay proceedings as an abuse of the process of the Court, whether on the ground of [ res judicata ] or on any other ground'. Reference was also made to what Dixon J (as he then was) described as the distinction between res judicata and issue estoppel, in the context of his Honour's reasons for judgment in Blair v Curran (1939) 62 CLR 464, as follows (at 532):

' The distinction between res judicata and issue estoppel is that in the first the very right or cause of action claimed or put in suit has in the former proceedings passed into judgment, so that it is merged and has no longer an independent existence, while in the second, for the purpose of some other claim or cause of action, a state of fact or law is alleged or denied the existence of which is a matter necessarily decided by the prior judgment, decree or order' .

28 The applicant taxpayers explained, in a context involving purported reference to those authoritative statements, that in England, res judicata and estoppel per rem judicatam are used generically to include 'cause of action estoppel' and 'issue estoppel', whereas the use in Australia of the former does not encompass issue estoppel, but refers only to cause of action estoppel, being cases where a cause of action has merged in a judgment; that distinction is therefore to be borne in mind when considering the operation of English authorities. In the present strike-out application of the Commissioner, the Commissioner did not, to my understanding, place reliance on the operation of res judicata in the context of Australian general law.

29 Attention was further drawn by both parties to Rogers v The Queen (1994) 181 CLR 251 at 261, where Brennan J observed that:

' Although merger provides a distinction between res judicata and issue estoppel, both doctrines bind the parties and their privies to accept a final judicial decision of a question between the parties as correct' .

The juridical notion of 'privies', or more perhaps precisely, privity in interest, was examined in Effem at first instance by Gummow J ( Trawl Industries of Australia Pty Limited (in liquidation) v Effem Foods Pty Limited (1992) 36 FCR 406). At 413-414, his Honour made the threshold observation that '... the doctrine of privity in interest ... operates in the same way upon the doctrines of cause of action estoppel and issue estoppel ... [ t ] he basic requirement of a privy in interest [ being ] that the privy must claim " under or through " the person to whom he is said to be a privy ... [ t [ he necessary identity in interest may arise from a successive relationship in a temporal sense ..., when finding the necessary privity, in a succussive or mutual relationship, the courts have looked to legal rather than economic indicia as the criterion of operation of the privity doctrine'. One example to which his Honour referred (at 414) was of holders of successive interests in the same fund, notwithstanding that they had become members of the fund subsequent to dismissal of proceedings brought by other beneficiaries. His Honour found that the applicant for relief in Effem '... was not claiming under or in virtue of any legal right of the other applicants in the present proceedings'. The taxpayer applicants' contended that there was an absence of satisfaction in the circumstances of this case of the requirement of privity of interest in relation to the respective claims of IEF and QTH on the one hand and that of Spassked on the other, implicitly notwithstanding that each was a wholly owned subsidiary of IEL, and moreover traced their ultimate corporate membership to the Adsteam Group. In any event, the taxpayer applicants contended in written submissions in reply as 'not disputed' that '[i]f Spassked and IEL are not estopped from pursuing appeals in other years that their privies cannot be estopped', but whether the converse of that proposition is true may be another matter, depending upon the scope of the doctrinal notions of privy and privity of interest.

30 The Commissioner contended that for the taxpayer applicants to seek to have the Court redetermine the complex issues concerning the purpose of the subject borrowings, and as to whether the borrowed funds were used in an activity or activities carried on by the taxpayer applicants in the course of gaining or producing assessable income, being issues said by the Commissioner to be already resolved adversely to Spassked in the now concluded proceedings brought by Spassked against the Commissioner, albeit resolved specifically in the context of proceedings related to the 1992 fiscal year, exemplified an abuse of process. The Commissioner moreover 'demurred' to what was described as the taxpayer applicants '... seeking impermissibly to relitigate the issue' as to deductibility of the interest expenses incurred by Spassked on the IEF loans in relation to years of income additional to 1992, contending that issue as having been 'decided against Spassked and in favour of the [Commissioner] in the earlier Spassked proceedings ...', in the context specifically of the 1992 year of income.

31 Primary reliance was placed by the Commissioner, in support of the strike-out application, upon the broad basis of breach or abuse of process. I was referred to a number of well known authorities, in particular to what appears more recently from Spalla v St George Motor Finance Ltd (No 6 ) [2004] FCA 1699, especially at [66]-[67], where French J discussed that broader doctrinal basis for obviating attempts to re-litigate in the following terms:

' 66 The doctrines of res judicata, issue estoppel and Anshun do not exhaust the circumstances in which a proceeding may be regarded as amounting to an abuse of process by way of attempted relitigation of a dispute already judicially determined. As another Full Court said in Coffey v Secretary, Department of Social Security ( 1999) 86 FCR 434 (at 443 ): " An attempt to litigate in the Court a dispute or issue which has been resolved in earlier litigation in another court or tribunal may constitute an abuse of process even though the earlier proceeding did not give rise to a res judicata or issue estoppel ..."

67 The considerations of public policy which underline res judicata and issue estoppel help to define the scope of abuse of process by relitigation generally. As Lord Hoffman said in Arthur JS Hall & Co v Simons [ 2000 ] 3 WLR 543 at 572, the underlying policies are that a defendant should not be troubled twice for the same reason and that there is " a general public interest in the same issue not being litigated over again ". Lord Hoffman observed that the second rationale could be used to justify the extension of the rules of issue estoppel to cases in which the parties are not the same but the circumstances are such as to bring the parties within the spirit of the rule ...

...

69 The public interest considerations underlying the power of courts to stay or dismiss the proceedings for abuse of process extend to preventing the waste of judicial resources and their use for purposes unrelated to the determination of genuine disputes.'

Earlier in Walton v Gardiner (1993) 177 CLR 378, the doctrine was outlined by Mason CJ, Deane and Dawson JJ at 393 as follows:

'... proceedings before a court should be stayed as an abuse of process if, notwithstanding that the circumstances do not give rise to an estoppel, their continuance would be unjustifiably vexatious and oppressive for the reason that it is sought to litigate anew a case which has already been disposed of by earlier proceedings.'

Yet earlier still, French J in Sea Culture International Pty Ltd v Scoles (1991) 32 FCR 275 at 279 said:

' Underlying the power that the courts have assumed to stay or dismiss proceedings for abuse of process is a policy of preventing waste of judicial resources and their use for purposes unrelated to the determination of genuine disputes.'

32 On the footing of abuse of process, the Commissioner emphasised that in the earlier concluded Spassked proceedings, the circumstances surrounding and relating to the making of the IEF loans to Spassked, the incurrence of interest by Spassked on those loans between the fiscal years 1988 and 1994 inclusive, the relationship between that incurrence of interest and the business activities of Spassked and any derivation of assessable income by Spassked, and the transfer of the losses by Spassked to other members of the corporate group (including IEF and QTH) between 1990 and 1998, were each the subject of extensive evidence, cross-examination, submissions, and consideration, as well as the ultimate determinations by the Federal Court at first instance and on appeal. The Commissioner further asserted that Spassked had represented to the Full Federal Court, in the course of the Spassked appeal, that the issue there involved the subject of whether interest incurred by Spassked on its borrowings from IEF in the period of time between 1988 and 1994 was deductible.

33 Moreover in upholding the decision of Lindgren J in Spassked at first instance, the Commissioner also emphasised that the joint reasons for judgment of Hill and Lander JJ in the Full Court had concluded at [113] that the occasion of each outgoing of interest was to be found in those shares being deliberately non income producing. If I may be repetitive, their Honours there explained that '... the evidence ... makes it clear that far from there being an " expectation " or even hope that the shares in Spassked would be income producing, the proposal was designed to ensure and its implementation did ensure that at no relevant time could it be said that Spassked incurred in the years of income interest on moneys used by it to acquire shares in the course of any activity carried on by it in the course of gaining or producing assessable income'. In his brief reasons in the Full Court for reaching consistently the same conclusion as Hill and Lander JJ, Gyles J identified the absence, in the circumstances of the earlier concluded Spassked proceedings, of the existence there of ' a bona fide business expense having a connection with or relation to potential assessable income, even if the outcome is uncertain or even speculative ...'

34 It was asserted accordingly by the Commissioner that if the taxpayer applicants were to be permitted to raise for determination in the present proceedings what the Commissioner described as 'the same issues that were raised, considered and determined in the earlier Spassked proceedings (namely what was the purpose of the borrowings and whether the borrowed funds were used in an activity carried on in the course of gaining or producing assessable income) and the [taxpayer] applicants are successful, there will then be on record inconsistent judgments of the Federal Court.'

35 By way of demonstration of that broadly framed contention of the Commissioner, I was referred to the following findings made by the primary judge, being findings in essence or substance acknowledged by the Full Court:

(i)

Spassked was a dividend trap and a tax loss repository;

(ii)

whilst operating as a dividend trap and repository of tax losses, Spassked would not receive dividend income;

(iii)

it was not part of the plan, purpose or expectation of the Spassked structure that GIH would pay dividends to Spassked;

(iv)

there was no plan, mechanism or time-frame according to which Spassked would cease to be a 'dividend trap', and cease to be a repository of tax losses, and instead would begin to receive dividend income from GIH;

(v)

the receipt of dividend income by Spassked was inimical to the objectives and operation of the Spassked structure; GIH was committed instead to a course of not paying dividends to Spassked;

(vi)

the receipt by Spassked of dividends from GIH formed no part of the motivation, subjective purpose or impetus underpinning the Spassked structure;

(vii)

it was the intention of the directors of Spassked that the Spassked structure should remain in place indefinitely;

(viii)

the so-called miniscule dividends Spassked did receive were nominal or cosmetic, and whatever the precise reasons were for the payment of the two dividends declared, those payments arose spontaneously and may have been an attempt to create an appearance;

(ix)

at no relevant time between 1988 to 1994 did Spassked incur interest on moneys used by it to acquire shares in the course of any activity carried on by it in gaining or producing assessable income;

(x)

there was no expectation or even hope that the shares in GIH would be income producing;

(xi)

the occasion of each outgoing of interest (as I have already foreshadowed) was to be found in the shares acquired in GIH deliberately being non income producing.

Upon the footing of those outlined findings of the primary judge and explicitly or implicitly of the Full Court, the Commissioner's case was that the taxpayer applicants could not conceivably succeed in the present proceedings, and the strike-out application should therefore be granted.

The Commissioner's case for summary judgment in more detail

36 The Commissioner's case the subject of its present application for summary judgment, as I have foreshadowed, purportedly related to the Commissioner's disputed primary tax assessments, and not to the additional or penalty tax assessments which also issued to IEF and QTH, which involve issues falling to be resolved on a later occasion. Those primary tax assessments disallowed any entitlement of IEF and QTH to deductions under s 80G of the Tax Act for losses transferred to each of them by Spassked in relation to the years of income ended 30 June 1991, 1993 and 1996, and thereby disallowed any entitlement of Spassked to deductions under s 51(1) of the Tax Act in relation to the respective years of income ended 30 June 1991, 1993 and 1994, and in so doing imposed substantial penalties.

37 Notwithstanding the confinement of the earlier Spassked litigation at first instance and in the Full Court to the deductibility of interest on Spassked's borrowings from IEF in relation to the fiscal year ended 30 June 1992, the Commissioner advanced the present strike-out application related to the remaining fiscal years in dispute, as I have foreshadowed, upon the footing that such preceding litigation was resolved against Spassked, and thus of course in favour in favour of the Commissioner, in relation to the so-called broader issue as to deductibility of interest on Spassked's loans from IEF for the fiscal years 1988 to 1994 inclusively, and that as a consequence, the taxpayer applicants were by their amended statement of facts issues and contentions seeking impermissibly to relitigate that comprehensive issue. The basis for that case of the Commissioner was asserted to be, as I have foreshadowed, that '[i]n the earlier Spassked proceedings, Spassked, IEL and Stanley Park presented their case before the Full Court and before the primary judge on the basis that the resolution of the proceedings would determine the deductibility of the interest incurred by Spassked on the IEF loans for each of the 1988 to 1994 years of income', and further that in the context of those earlier proceedings 'Spassked sought findings that the interest was so deductible'.

38 The Commissioner laid emphasis at this juncture upon the following matters in particular established in the earlier concluded Spassked proceedings, which I have already identified, as follows:

(i)

the annual interest expense incurred by Spassked involved an aggregate sum of $3,272,751,109 in respect of each of the fiscal years ended 30 June 1988 to 30 June 1994;

(ii)

Spassked's written submissions provided to the Full Court asserted that what was in issue 'in this appeal' was 'whether a deduction is allowable to Spassked under section 51(1) of [the Tax Act] for interest incurred by it to IEF in the years of income ended 30 June 1988 to 1994', and that those fiscal years were '...each of the years in dispute';

(iii)

what otherwise appears in the reasons of the primary judge in the concluded Spassked litigation at first instance and of the Full Court on appeal, which I have earlier extracted or to which I have otherwise referred.

39 Lindgren J recorded in his reasons for judgment at [2] that

'... I was informed that similar circumstances also prevailed in each of the six years ended 30 June 1988, 1989, 1990, 1991, 1993 and 1994', and further at [ 193 ] that '[ t ] he parties proceeded on the basis that no distinction was to be drawn between Spassked's various borrowings from IEF and investments in GIH, or between the various investments by GIH in the Subcos, all over the years 1988-1990 or between the seven annual amounts of capitalised interest for the years 1988-1994 ... ' ,

and further that

'[ a ] ccordingly, I need not distinguish between the various sums borrowed on which the interest accrued, or between the uses to which those sums were put' .

The reference to 'Subcos' was to investment subsidiaries, as I have earlier indicated, the involvement of which is more conveniently illustrated in the diagram to the reasons for judgment of the Full Federal Court. To not dissimilar effect were the observations made in the course of the joint judgment of Hill and Lander JJ of the Full Court in Spassked, at [4] and subsequently at [77], each of which I have already extracted in these reasons. Those observations were reflected in the conclusions of the joint judgment in the Full Court which I have also earlier extracted, which may be seen to focus upon expressions such as ' in any year of income', and ' in all the years of income in question' , and further upon the theme for instance in [113], which I have also extracted but which bears repetition, that

' the proposal was designed to ensure and its implementation did ensure that at no relevant time could it be said that Spassked incurred in the years of income interest on moneys used by it to acquire shares in the course of any activity carried on by it in the course of gaining or producing assessable income [but that] [r]ather the occasion of each outgoing of interest was to be found in those shares deliberately being non income producing' .

40 What I have thus far recorded or addressed may be described as embracing the broadly asserted foundations for the Commissioner's strike-out application. Apart from abuse of process, and in relation to the further case of the Commissioner based on issue estoppel, I was referred (indeed by both parties) to the following additional passages in the reasons for judgment of Dixon J in Blair v Curran at 532-533:

' Nothing but what is legally indispensable to the conclusion is thus finally closed or precluded. In matters of fact the issue-estoppel is confined to those ultimate facts which form the ingredients in the cause of action, that is, the title to the right established. Where the conclusion is against the existence of a right or claim which in point of law depends upon a number of ingredients or ultimate facts the absence of any one of which would be enough to defeat the claim, the estoppel covers only the actual ground upon which the existence of the right was negatived. But in neither case is the estoppel confined to the final legal conclusion expressed in the judgment, decree or order ... the judicial determination concludes, not merely as to the point actually decided, but as to a matter which it was necessary to decide and which was actually decided as the groundwork of the decision itself, though not then directly the point at issue. Matters cardinal to the latter claim or contention cannot be raised if to raise them is necessarily to assert that the former decision was erroneous ...

In the phraseology of Lord Shaw (in the course of his Lordship's dictum in Hoysted in the Privy Council hereafter referred to and discussed ), " a fact fundamental to the decision arrived at " in the former proceedings and " the legal quality of the fact " must be taken as finally and conclusively established (Hoysted v Commissioner of Taxation [ 1926 ] AC 155 ). But matters of law or fact which are subsidiary or collateral are not covered by the estoppel. Findings, however deliberate and formal, which concern only evidentiary facts and not ultimate facts forming the very title to rights give rise to no preclusion. Decisions upon matters of law which amount to no more than steps in a process of reasoning tending to establish or support the proposition upon which the rights depend do not estop the parties if the same matters of law arise in subsequent litigation' .

41 It is difficult to conceive of room in principle for excluding the operation of the doctrine of issue estoppel in relation to findings upon the nature and purpose of business activity undertaken for a period of time by a corporation relevantly to the decision falling for resolution irrespective of a context as here of annual income tax assessment. In fiscal contexts such as those arising for resolution in the present principal proceedings, the facts the subject of those findings to my understanding were fundamental to the decision in the earlier concluded Spassked proceedings. Nevertheless the taxpayer applicants referred at length to authoritative dicta submitted to be inconsistent with that preliminary observation on my part, and which I will later review. I should record, at this threshold stage of examination of authority, that the theme of the doctrine of issue estoppel lies in the public interest in the finality of litigation, and the concern with injustice inherent in permitting a litigant to be twice vexed with the same claim. The present circumstances tend to reflect a factor of public interest here conceivably involved, given the considerable length of time and therefore the amount of cost as to what would eventuate by way of largely repetitive proceedings of similar length and factual complexity to that of the earlier concluded Spassked litigation, where the substance of the proceedings would be likely to be essentially the same. So much may be reasonably said of the IEF/QTH/Spassked proceedings presently on foot, in the light of the context of the earlier concluded Spassked proceedings, albeit in the present case in relation to different, though nevertheless closely proximate, fiscal years, and perhaps the additional factor of taxpayer applicants additional to Spassked. Moreover in the light of what I have already recorded from dictum of Lindgren J at first instance and subsequently from dicta of the Full Court joint judgment of Hill and Lander JJ, in the context of course of the earlier concluded Spassked litigation, the thrust of the Commissioner's strike-out case gains significant momentum.

42 The doctrine of issue estoppel has been applied in what has been described as a revenue context, as the Commissioner rightly contended. In Hoysted v Federal Commissioner of Taxation (1925) 37 CLR 290 (to which reference appears by way of the English authorised report in the dictum I have extracted above from Blair v Curran ), and upon which the Commissioner placed reliance here, the Commissioner was found by the Privy Council to be estopped from asserting that trustees of a deceased estate comprising mainly realty were disentitled to certain concessional deductions as joint owners of that realty under certain land tax legislation. The High Court had earlier held by majority (Knox CJ and Starke J, Higgins J dissenting) that the Commissioner was not estopped from contending that certain beneficiaries of that estate had not become joint owners of the realty for land tax purposes, thereby adding significantly to the land tax concessional entitlements of the deceased estate taxpayer. Prior to that finding, there had been several appellate proceedings which need not be recorded. Lord Shaw in Hoysted provided the following opinion of the Privy Council at 299 in relation to the operation of estoppel in that fiscal context:

' In the opinion of their Lordships it is settled, first, that the admission of a fact fundamental to the decision arrived at cannot be withdrawn and a fresh litigation started, with a view of obtaining another judgment upon a different assumption of fact ; secondly, the same principle applies not only to an erroneous admission of a fundamental fact, but to an erroneous assumption as to the legal quality of that fact. Parties are not permitted to begin fresh litigations because of new views they may entertain of the law of the case, or new versions which they present as to what should be a proper apprehension by the Court of the legal result either of the construction of the documents or the weight of certain circumstances. If this were permitted, litigation would have no end, except when legal ingenuity is exhausted. It is a principle of law that this cannot be permitted, and there is abundant authority reiterating that principle. Thirdly, the same principle, namely, that of setting to rest rights of litigants, applies to the case where a point, fundamental to the decision, taken or assumed by the plaintiff and traversable by the defendant, has not been traversed. In that case also a defendant is bound by the judgment, although it may be true enough that subsequent light or ingenuity might suggest some traverse which has not been taken. The same principle of setting parties' rights to rest applies, and estoppel occurs.'

43 In reaching that opinion, it was further stated that their Lordships were ' entirely in accord with the judgment of Higgins J', who had earlier expressed the following principle in the High Court ( Hoysted v Federal Commissioner of Taxation (1921) 29 CLR 537 at 562), being a principle appearing within the scope of the dictum of Dixon J in Blair v Curran at 532 (which I have already extracted at some length):

' My view is that the point as to joint ownership was, by virtue of the formal objections, and from the nature of the judgment thereon , " actually litigated and determined " in the former proceedings ; and that whether the judgment in its actual form was due to the Commissioner's consent or admission or to his neglect, he is bound by the finding of joint ownership which the judgment necessarily involves.'

That passage was subsequently cited with approval by the High Court in Rogers v The Queen by Brennan J at 263, in the following context:

' But a court, in ascertaining whether a finding has been made on which an estoppel is raised, is entitled to look not only at the record ... but also at any material that shows what issues were raised and decided.'

And further at 268, his Honour added:

' If a formal record is unnecessary to raise a plea of res judicata in the strict sense , a fortiori a record is not needed to raise an issue estoppel on a finding not expressed in the ultimate decision in the trial.'

At 283 in Rogers , McHugh J observed that issue estoppel relates to ' an ultimate issue in the litigation' , and further that '[ n ] o estoppel can arise in respect of evidentiary issues even when they are the building blocks in the proof of an ultimate issue' . The difficulty arising in the context of complex fiscal litigation such as the present is isolating what may be merely ' building blocks' .

44 It is appropriate to record for completeness, in relation at least to the operation of the principle of res judicata , that the Privy Council subsequently observed in Hoysted (at 303) that '... if in any Court of competent jurisdiction a decision is reached, a party is estopped from questioning it in a new legal proceeding' , and added that '... the principle also extends to any point, whether of assumption or admission, which was in substance the ratio of and fundamental to the decision ... ' . Translating to annual revenue assessments where an evidentiary finding is made in relation to conduct or events antecedent to a fiscal year the subject of an assessment in dispute, it may be asked when that finding would be considered fundamental to decision-making in relation to that fiscal year. The Privy Council described at 303 as ' settled law' the following rule concerning res judicata described in the leading case of Henderson v Henderson (1843) 3 Ha 100 at 114-115 by Wigram VC as follows:

' I believe I state the rule of the Court correctly, when I say that where a given matter becomes the subject of litigation in, and of adjudication by, a Court of competent jurisdiction, the Court requires the parties to that litigation to bring forward their whole case, and will not (except under special circumstances) permit the same parties to open the same subject of litigation in respect of matter which might have been brought forward as part of the subject in contest, but which was not brought forward, only because they have, from negligence, inadvertence, or even accident, omitted part of their case. The plea of res judicata applies, except in special cases, not only to points upon which the Court was actually required by the parties to form an opinion and pronounce a judgment, but to every point which properly belonged to the subject of litigation, and which the parties, exercising reasonable diligence, might have brought forward at the time.'

45 Those principles are conceivably open to be applied to the wider circumstances of the operation of the assessment scheme of the Tax Act, albeit in the context of the earlier concluded Spassked proceedings having fallen for decision-making in relation to the 1992 fiscal year alone. The difficulty is in defining in any particular case the notion of a ' whole case', and in identification of ' every point which properly belonged to the subject of litigation'. Henderson did not of course involve a fiscal issue arising in the administrative context of annual assessment. Furthermore the principle enunciated in Henderson was expressed in terms of res judicata , upon which doctrine the Commissioner has however withheld from reliance in the context of the present strike-out proceedings, though in that regard, the doctrine of res judicata is more broadly conceived and has received a broader application in United Kingdom contexts. Moreover in income tax contexts, traditional pleadings are not usually implemented; in that regard in Murphy v Abi-Saab (1995) 37 NSWLR 280 at 287, it was observed by Gleeson CJ (with whose reasons for judgment Kirby P and Rolfe AJA agreed) that '... an issue of fact or law may be easier to decide where there are pleadings than where ... there was simply a summons' . In any event, I think that in substance and in reality, IEL as the intermediate and in the present context the effectively controlling parent company did cause its subsidiary Spassked to bring forward the 'whole case' of IEL's relevant subsidiaries (ie Spassked, IEF and QTH).

46 More recently in Johnson v Gore Wood & Co [2002] 2 AC 1 at 31, Lord Bingham described in Henderson v Henderson abuse of process as having ' much in common' with cause of action estoppel and issue estoppel situations as follows:

' The underlying public interest is the same : that there should be finality in litigation and that a party should not be twice vexed in the same matter. This public interest is reinforced by the current emphasis on efficiency and economy in the conduct of litigation, in the interests of the parties and the public as a whole. The bringing of a claim or the raising of a defence in later proceedings may, without more, amount to abuse if the court is satisfied (the onus being on the party alleging abuse) that the claim or defence should have been raised in the earlier proceedings if it was to be raised at all ... It is, however, wrong to hold that because a matter could have been raised in earlier proceedings it should have been, so as to render the raising of it in later proceedings necessarily abusive. That is to adopt too dogmatic an approach to what should in my opinion be a broad, merits-based judgment which takes account of the public and private interests involved and also takes account of all the facts of the case, focusing attention on the crucial question whether, in all the circumstances, a party is misusing or abusing the process of the court by seeking to raise before it the issue which could have been raised before. As one cannot comprehensively list all possible forms of abuse, so one cannot formulate any hard and fast rule to determine whether, on given facts, abuse is to be found or not.'

47 A difficulty here confronting the taxpayer applicants, in the light of the principles enunciated in Hoysted as to the doctrine of issue estoppel having an operation in Australia, is that although Spassked and the Commissioner, being of course parties to this present litigation 'brought forward', for adjudication by the Federal Court in the context of the earlier concluded Spassked proceedings, issues arising in the context of a single fiscal year (ie 1992) for the purpose of resolution of those issues, they did so with an evident awareness of the events relevantly of the preceding and next following fiscal years. Nevertheless Spassked did not submit to the Federal Court that the events and circumstances of the fiscal years prior or subsequent to 1992, that is to say, extending from 1988 to 1994, were distinguishable in operation and significance from the intervening 1992 fiscal year. Instead the circumstances of those prior and subsequent fiscal years appear to have been regarded by Spassked, as well as the Commissioner, as throwing light relevantly and significantly upon the fiscal issues arising in the context of resolution of that earlier litigation, albeit that each had controversially different cases to present as to the implications of any such circumstances.

48 In any event as to the Commissioner's asserted reliance upon Anshun estoppel, additionally or alternatively to issue estoppel, and also to abuse of process, the Commissioner invoked the as the governing precepts what appears in the following well known passage in the joint judgment of Gibbs CJ, Mason and Aickin JJ in Port of Melbourne Authority v Anshun Pty Limited (1981) 147 CLR 589 at 602-603:

'... there will be no estoppel unless it appears that the matter relied upon as a defence in the second action was so relevant to the subject matter of the first action that it would have been unreasonable not to rely on it. Generally speaking, it would be unreasonable not to plead a defence if, having regard to the nature of the plaintiff's claim, and its subject matter it would be expected that the defendant would raise the defence and thereby enable the relevant issues to be determined in the one proceeding. In this respect, we need to recall that there are a variety of circumstances, some referred to in the earlier cases, why a party may justifiably refrain from litigating an issue in one proceeding yet wish to litigate the issue in other proceedings eg expense, importance of the particular issue, motives extraneous to the actual litigation, to mention but a few' .

Given the Commissioner's case as to the wider context in which the earlier concluded Spassked proceedings were litigated, the Commissioner demonstrated at least a persuasive basis for proposition that reliance also upon Anshun may be invoked in the present context relating to the taxpayer applicants' claims for income tax deductibility concerning the 1991, 1993, 1994 and 1996 fiscal years, given of course the juxtaposition of the text of the foregoing dictum to the situation of raising a claim instead of a defence.

49 The Commissioner concluded submissions in outline in chief as follows:

(i)

the deductibility of Spassked's interest outgoings in all of the applicable years was central to Spassked's case in the earlier concluded Spassked proceedings;

(ii)

Spassked was given a full opportunity to litigate its claim to deduct the interest incurred on its IEF borrowings in the earlier Spassked proceedings;

(iii)

the Full Court made explicit findings concerning the deductibility of Spassked's interest outgoings in all applicable years, and made orders consequential upon those findings; each of the taxpayer applicants have sought findings and orders contrary to findings and orders previously made by the Federal Court below and on appeal;

(iv)

there would be manifest oppression and unfairness to the Commissioner, if the present application for summary judgment was to be dismissed; in the dictum cited earlier in Murphy , the Commissioner would thereby '... be vexed twice with the same claim';

(v)

the balancing of justice overall favours the conclusion that it would be unduly oppressive to the Commissioner, and wasteful of the Federal Court's resources, for Spassked and the other taxpayer applicants to be given 'an opportunity to re-litigate' the earlier concluded Spassked proceedings.

I should add that the Commissioner also addressed in chief, in anticipation of the contrary view of the taxpayer applicants, that IEF and QTH were privies of Spassked for the purpose of the operation of the doctrines of issue estoppel and Anshun estoppel, since each acquired income tax losses from Spassked in their capacity as wholly owned subsidiaries of IEL, as was also Spassked. It is appropriate that I address that less relatively complex issue for the most part in my final segment of conclusions to these reasons for judgment.

The response in more detail of the taxpayer applicants IEL Finance Limited, Queensland Trading & Holding Limited and Spassked Pty Limited to the Commissioner's application for summary judgment - the asserted prevalence of English authority as to the operation of estoppels in fiscal contexts

50 The response of the taxpayer applicants' case to the Commissioner's application for summary judgment was very comprehensive and well researched. I will identify at least the majority of the submissions of the taxpayer applicants in the present segment of my reasons for judgment, but will not do so exhaustively, since certain of the submissions of the taxpayer applicants are conveniently addressed in the course of my lengthy segment of conclusions. The essence of response of the taxpayer applicants at the outset was to the effect that what was determined by the Federal Court in the earlier Spassked proceedings, at first instance and on the subsequent appeal to the Full Court, related solely to the 1992 fiscal year, and in the light of the weight of high authority of the United Kingdom invoked by the taxpayer applicants, and its subsequent recognition in Australia, did not and could not in law thereby create an estoppel. What was described as the cornerstone of the Commissioner's submissions in relation to issue estoppel was an assertion that the doctrine of issue estoppel applies to so-called 'revenue proceedings', being a description said to misstate the law, and to be contrary to 'a long line of authority'. I will later examine in detail authority related to or conceivably related to that question. I was referred to the material filed in Court in the context of those earlier concluded Spassked proceedings, and to matters stated to the Court in the same context by senior counsel for Spassked, at first instance and on appeal, to the effect that the central issue in those proceedings related to the 1992 fiscal year alone. Moreover in the course of Spassked's subsequent application for special leave to appeal to the High Court, the following appears in the transcript of the hearing of that application (as in the present proceedings, Mr Shaw QC being leading counsel for Spassked and Mr Davies SC being leading counsel for the Commissioner on that application), upon which the taxpayer applicants placed at least threshold reliance:

' McHugh J : ... is this case a test case for all the years between 1987 and 1994 ?

Shaw : No, your Honour, it only relates to 1992 .

...

Davies : My learned friend pointed out that the total capitalised interest was in the vicinity of 3.7 billion over years between 1989 [sic, 1988] through to 1994. This year concerns only the 1992 year. After the Full Court delivered its judgment, proceedings were commenced in the Federal Court by other members of the group raising the same issue in relation to other years. As I understand it, the 1991 year, the 1994 year and, I think, the 1997 year are presently before the Full Court. I say the 1997 year because Spassked continued to transfer out tax losses right through until 1998. In those proceedings, the taxpayers contend that the other years have factual differences which mean the result in this case is not applicable. Those matters, as I understand, have now been set down for a three week trial before Justice Conti next September on the basis that there are factual differences' .

51 Whether any such 'factual differences' are of ultimate significance remains for present consideration. As I have foreshadowed, the taxpayer applicants submitted that the issue the subject of the earlier concluded Spassked proceedings was limited to the deductibility of interest in respect of the 1992 fiscal year. Indeed that could only have been the case at that stage, so the taxpayer applicants pointed out, given that by the time of that application for special leave, '...the Commissioner had not determined any objections other than those made by the three taxpayers in the earlier Spassked proceedings against their assessments for 1992', and accordingly by then 'no other company in the IEL Group could have commenced proceedings under Part IVC of the Administration Act or become a party to the earlier Spassked proceedings' (those three taxpayers were of course Spassked, Stanley Park Pty Ltd and IEL, as I have earlier recorded).

52 The taxpayer applicants' case in the present proceedings therefore was that it is enough for the taxpayer applicants to point to the circumstance, and the implications thereof according to law, that any such perception that the earlier concluded Spassked proceedings was of the nature of a test case based on the 1992 fiscal year could not elevate the decision to cover matters which were not before the Court as part of the proceedings, referring thereby to any significance of the earlier proceedings in relation to the 1991, 1993, 1994 and 1996 fiscal years. There has not been distilled however by the taxpayer applicants any materially differentiating factor involved in relation to those other fiscal years, other than the per se factor they propound as to a different fiscal year (ie 1992). In making that observation, I do not overlook the observation of Hill and Lander JJ in the Spassked appeal (at [77]), which I have earlier extracted, that

'[ i ] ncome tax is an annual tax [ and ] [ h ] ence the question whether interest was incurred in gaining or producing assessable income or in carrying on a business the purpose of which was the gaining of assessable income is a question which is required to be determined from year to year'.

What is not to be also overlooked, in my opinion, are the findings of the Full Court on appeal, and the significance thereof, concerning the events and circumstances of what were the continuing business operations of the IEL corporate group both antecedent to and following upon the 1992 fiscal year, in line and consistently with those of the 1992 fiscal year, and concerning relevantly IEF and QTH as well as Spassked as members of the IEL corporate group.

53 The taxpayer applicants maintained nevertheless the contention that identification of the issue before the Federal Court in the earlier concluded Spassked proceedings, relating of course to the 1992 fiscal year, was 'fundamental' to determining the existence and scope of operation for instance of the operation of issue estoppel, since the ultimate issue before the Court for resolution in the earlier concluded Spassked proceedings was confined in law to deductibility of interest at the instance of Spassked alone, and in relation to the 1992 year of income alone. The taxpayer applicants maintained that issue estoppel may only be raised by or applied against parties who were in controversy at the time when an issue being subsequently pursued was first determined, whether in their favour or adversely to them (as the case may be), and further that if a moving party was not involved in any earlier litigation of that issue, either because it was not a matter the subject of issue between that moving party and the other party to the proceedings, or because the moving party had not been a party at all, then that moving party is not affected by an estoppel, and nor can an estoppel be raised against it. 'Likewise a party's presence [then] or subsequently cannot affect the right of other parties to raise or rely upon issue estoppel as between themselves', so the taxpayer applicants' submissions asserted, reference being made to this Court's decision in Taylor v Ansett Transport Industries Ltd (1987) 18 FCR 342 at 358, where Fisher J observed:

' It seems clear to me that issue estoppel can only be raised by or applied against parties who were in "controversy" at the time when the issue was first determined, either in their favour or adversely to them. If a party was not involved in the litigation of that issue, either because it was not an issue between him and another party to the proceedings, or because he was not a party at all to the proceedings at the time of resolution, then he is not affected by nor can he raise an estoppel. Likewise his presence initially or subsequently can not affect the right of other parties to raise or rely upon issue estoppel as between themselves. If the contrary was the case, the public interest in not having the same matters relitigated could with ease be bypassed.'

Those observations, in particular in relation to the scope of the notion of ' controversy' and ' party ... involved', need to be read and applied in the light of the more comprehensive exegesis in Blair v Curran earlier extracted in these reasons.

54 The taxpayer applicants' further case, and as matters evolved, their primary case, was that the Commissioner's proposition, to the effect that the doctrine of issue estoppel applies in relation to revenue proceedings, is contrary to 'a long line of authority', and therefore 'misstates the law', in so far as the revenue proceedings the subject of present focus relate to different fiscal years for assessment to that fiscal year to which issue estoppel is sought to be attributed by the Commissioner. In explanation or furtherance of that contention, it was said by the taxpayer applicants that the decisions on income tax, land tax and local government rating assessments constitute exceptions, in that a dispute which is determined by curial decision in respect of one year of taxation is limited to one subject only, being in the case for instance of income tax the amount of the taxable income and the tax payable by the taxpayer in respect of that fiscal year. The taxpayer applicants contended further that because what is decided in disputes about income tax, as well about land tax and other annual fiscal or rating assessments, is inherently limited in that way, even the determination of something essential to the conclusion reached as to the proper amount of assessment for a fiscal year in question is not to be regarded as creating an estoppel for the purposes of an assessment for a different proximate year, which would usually relate to a later year (though not always, as in the case of the 1991 year here in dispute). In support of those broadly framed submissions, reliance was placed by the taxpayer applicants upon several authorities of the Privy Council and the House of Lords, and which were said to stand inconsistently with earlier Privy Council authority, being that of course of Hoysted .

55 One of the later authorities principally relied on by the taxpayer applicants, which may be conveniently next addressed for reasons that will shortly emerge, was the decision of the Privy Council in Mohamed Falil Abdul Caffoor, The Trustees of the Abdul Gaffoor Trust v Commissioner of Income Tax, Colombo [1961] AC 584. The difference in spelling of the appellant's surname from that of the designation of the Trust appears incidentally in the report. The conclusion was there reached that the Commissioner of Income Tax of Ceylon was not estopped by a decision of the board of review constituted under the Income Tax Ordinance of Ceylon, being a decision made in respect of the fiscal year 1949-1950, from challenging the trustees' claim to exemption from income tax for subsequent fiscal years and in particular the 1950-1951 year, upon the footing that an issue of liability to income tax for one year was to be treated as inherently different from that of liability for another year, even though there might appear to be similarity or identity in the questions of law which they respectively yield. Hence the finding by the Privy Council in that income tax context was that the principle of res judicata did not apply, albeit that both the terms of the trust and the relevant law were precisely the same in relation to the two fiscal years addressed. The Privy Council expressed the following opinions upon which the taxpayer applicants here placed strong reliance (at 598):

' The critical thing is that the dispute which alone can be determined by any decision given in the course of these proceedings is limited to one subject only, the amount of the assessable income for the year in which the assessment is challenged. It is only the amount of that assessable income that is concluded by an assessment or by a decision on an appeal against it ... Although, of course, the process of arriving at the necessary decision is likely to involve the consideration of questions of law, turning upon the construction of the Ordinance or of other statutes or upon the general law, and the tribunal will have to form its view on those questions, all these questions have to be treated as collateral or incidental to what is the only issue that is truly submitted to determination ...

It is in this sense that in matters of a recurring annual tax a decision on appeal with regard to one year's assessment is said not to deal with "eadem quaestio" as that which arises in respect of an assessment for another year and, consequently, not to set up an estoppel.'

56 It may be however not without significance to bear in mind that prior to the first passage cited above from Caffoor , the Privy Council had been describing at 597-598 the purpose for which the board of review in Ceylon had been established and the nature of its functions. In the present circumstances, perhaps by way of contrast, the taxpayer's challenge to the previous litigation originated in the Federal Court, being of course a superior court of record with all the implications thereby entailed, for instance, as to prior interlocutory processes, and the admissibility and taking of evidence did not originate in an administrative or quasi-administrative tribunal exercising at least a more limited judicial function. That may be thought in my opinion to involve one distinction of relevance. Yet what followed in the Privy Council's further reasons in Caffoor described (at 597-598) the process of initial review as there involving '... in one sense a part of the process of assessment' , in the wider context reproduced below:

' In their Lordships' opinion the question of estoppel cannot be decided merely by inquiring to what extent the Board of Review exercises judicial functions. The critical test is not the bare issue whether or not such a board exercises judicial power ... What is important here is that the Board of Review is a tribunal set up under the Income Tax Ordinance for the purpose of deciding income tax appeals at a certain stage of their prosecution, and that decisions given with regard to such appeals are effective only within the limited jurisdiction that the Ordinance creates for all tribunals that deal with the matter of an appeal. All such appeals remain in one sense a part of the process of assessment since all the tribunals, including the Supreme Court, have independent power to increase or reduce the assessment under appeal. While, therefore, it is unexceptionable to say that the Board of Review when exercising its powers ... is acting in a sense judicially, that the dispute which it has to determine is at any rate somewhat analogous to a lis inter partes and that the assessor who made the assessment or some other representative of the Commissioner ... resembles a party hostile to the appellant, those considerations are not those that are critical to the issue of estoppel' .

The functions of that former Board of Review constituting 'a part of the process of assessment...' and having a ' limited jurisdiction' as above described, were not readily comparable to the exercise of the jurisdiction presently undertaken at first instance by a court of record, such as the Federal Court or a Supreme Court of a State or Territory in Australia, in at least an income tax appeal. Nor is readily comparable the limited jurisdiction exercisable by the present Administrative Appeals Tribunal. The process of review invoked by Spassked could have, but did not of course, involve in the first instance or at all recourse to that Tribunal, but rather to a single justice of the Federal Court as I have earlier indicated.

57 Further to the reasoning of the Privy Council in Caffoor , reference was made to the implications of the decision of the Privy Council in Broken Hill Proprietary Company Limited v The Municipal Council of Broken Hill (1925) 37 CLR 284 made on 10 November 1925 (about one month earlier than the Privy Council's decision in Hoysted , though Broken Hill was not referred to by the Privy Council in Hoysted ) on appeal from the Full Court of the Supreme Court of New South Wales. Broken Hill related to the assessment of the unimproved capital value of a producing mine for the purpose of annual assessment of municipal council rates pursuant to s 153(3) of the Local Government Act 1919 (NSW), the assessment having been made on an output basis equal to 20% of the average annual saleable value of ore produced from the land over the three years preceding the assessable year. In reversing the decision of the Supreme Court in Broken Hill , which had followed an earlier decision of the High Court in The Council of the Municipality of Broken Hill v The Broken Hill Proprietary Company Limited (1922) 30 CLR 400, the Privy Council in Broken Hill made the following observation (at 289):

' It was also contended before this Board on behalf of the respondents that, having regard to the said decision of the High Court of Australia, the question raised by this appeal is res judicata as between the appellants and the respondents, and the appellants are estopped from contending that such decision of the High Court of Australia is wrong ... The decision of the High Court related to a valuation and a liability to tax in a previous year, and no doubt as regards that year the decision could not be disputed. The present case relates to a new question, namely, the valuation for a different year and the liability for that year. It is not eadem quaestio, and therefore the principle of res judicata cannot apply.'

No other authority was cited by the Privy Council in Broken Hill for that thesis as to the implications of annual revenue or fiscal assessments. Given the inherently changing nature of a valuation of realty for rating purposes, even over one year or so and in particular in relation to a mine in production, the juridical basis for that approach may be perhaps more comprehensible. Once again, the reference to res judicata above, and not issue estoppel, may also be observed.

58 Returning to Caffoor , the Privy Council continued at 598-600 as follows:

' The Broken Hill decision is in itself a striking application of the principle involved, since the earlier judgment which it was sought to set up as an estoppel was one given by the High Court of Australia on a rating assessment referred to it by way of appeal under the tax procedure. It underlines the point that it is not the status of the tribunal itself, judicial or administrative, that forms the determining element for estoppel in cases of this kind but the limited nature of the question that is within the tribunal's jurisdiction. The judgment of the High Court that had been given in the earlier year was explicitly directed to the construction of a particular section of the rating Act and to the correct measurement of the liability in the light of that construction. Precisely the same point arose in the later year and was ultimately decided by this Board in a sense contrary to that which had previously been adopted .

So, on the present appeal, the earlier decision of the Board of Review governing the 1940-50 assessment was based upon a construction of section 7(1 )( c) of the Income Tax Ordinance as applied to the income of the Abdul Gaffoor Trust ; and the same point of construction now arises again but in respect of assessments of that income for other and later years. In their Lordships' opinion it is not possible to distinguish the principle of the Broken Hill decision from that which should prevail in the present case on any such ground as that here the earlier decision related to the taxpayer's " status " as an exempt person while in the Broken Hill case the decision " merely " related to the correct amount of the assessment ; for in truth, as has been explained, in all these cases which arise under income tax or rating appeal procedure the decision is essentially as to the correct amount (if any) of the assessment, and in the one case as much as in the other the decision was based upon a question of law, the proper interpretation of one of the provisions of the taxing Act .

To apply the principle of the Broken Hill decision to the case now before their Lordships is to bring it into line with what seems to be by now the regular course of authority with regard to appeals in successive years against income tax or rating assessments ... . It may be that the principles applied in these cases form a somewhat anomalous branch of the general law of estoppel per res judicatam and are not easily derived from or transferred to other branches of litigation in which such estoppels have to be considered ; but in their Lordships' opinion they are well established in their own field, and it is not by any means to be assumed that the result is one that should be regretted in the public interest' .

Reference to the irrelevance of the status of the tribunal undertaking administrative review may be observed.

59 Significantly to the taxpayer applicants' case, the Privy Council in Caffoor eschewed the approach taken in principle in the earlier decision of the Privy Council in Hoysted , which as in the case of Broken Hill , also originated in Australia. As I have also mentioned, the Privy Council decision in Broken Hill was given on 10 November 1925, yet no reference was made thereto in the Privy Council's reasons for decision in Hoysted published 37 days later. The following opinion was expressed by the Privy Council in Caffoor in relation to what was seen to be inconsistency between the Privy Council decisions in Hoysted and Broken Hill :

' Unfortunately, however, the argument that the determination of an assessment for one year could not set up an estoppel upon an assessment for another year, an argument that was accepted by the Board at almost the same time in the Broken Hill case, does not appear either to have been presented to the Board or to have been noticed or adjudicated upon in the opinion which was delivered by Lord Shaw [ in Hoysted ]. It is not possible to explain why the matter was dealt with in this way ; and it is fair to note that in the majority judgment of the High Court, which was reversed on the appeal, there is a reference, though a passing one, to the point of " eadem quaestio ". In the result, however, the attention of the Board in delivering its opinion was wholly occupied with a discussion of what is quite a different issue in connection with estoppel, whether there can in law be estoppel per rem judicatam in respect of an issue of law which, though fundamental to the issue, has been conceded and not argued in an earlier proceeding .

Their Lordships are of opinion that it is impossible for them to treat Hoysted's case as constituting a legal authority on the question of estoppels in respect of successive years of tax assessment. So to treat it would bring it into direct conflict with the contemporaneous decision in the Broken Hill case ; and to follow it would involve preferring a decision in which the particular point was either assumed without argument or not noticed to a decision, in itself consistent with much other authority, in which the point was explicitly raised and explicitly determined.'

60 The circumstances in Hoysted were that in respect of federal land tax assessable for a particular year upon land vested in trustees of a deceased estate, the trustees claimed seven equal deductions in respect of seven beneficiaries (effectively) upon the footing of the existence of statutory joint ownership for land tax purposes, and therefore as to deductibility depending upon the question as to how many joint owners held original shares for the purposes of the Land Tax Assessment Act 1916 (NSW) notwithstanding that their beneficial entitlement stemmed from the estate of a single deceased testator. The Commissioner of Taxation had disallowed the deductions and the trustees had lodged objections, which were treated as appeals and transmitted to the High Court. The trustees' objections were upheld by the High Court and the appeal allowed. Subsequently on an appeal by the trustees in respect of an adverse assessment which issued for the ensuing fiscal year, the Privy Council reversed what had been a majority decision of the High Court, and held that the Commissioner was estopped from contending that the beneficiaries were not joint owners of the land. Although as I have recorded already, no specific reference was made by the Privy Council in Hoysted to its earlier, albeit then very recent, decision in Broken Hill , the Privy Council having been differently constituted in relation to the two proximately resolved appeals, the reasoning of the Privy Council in Hoysted indicated the undertaking of a wide survey of authority having been nevertheless the subject of submissions. I have already extracted the dictum of Dixon J in Blair v Curran which cited with apparent approval two passages from what appears in the reasons for decision of the Privy Council in Hoysted . I have also already extracted the estoppel finding made by the Privy Council at 299.

61 I have encountered difficulty with the description of the issue in Hoysted , appearing in the Privy Council's reasons in Caffoor , as involving a ' question of estoppels in respect of successive years of tax assessment' , in contrast to the circumstances underpinning the issue in Broken Hill which might more readily bear that description, in that Hoysted was not concerned with realty valuations per se but the construction of fiscal legislation relating to concessional rates referrable to the extent of division of co-ownership by beneficiaries of a deceased estate. Broken Hill involved the ascertainment of the annual saleable value of a mining property to a mine owner based on iron ore product derived during the three year annual average last preceding the municipal rating year. By way of apparent contrast, the circumstance to which the passage in Hoysted was directed was the recommencement of litigation upon a different assumption of fact fundamental to an existing decision and the legal quality of that fact, and by reference to ' new views ... [entertained] of the law of the case' , or ' new versions ... as to what should be a proper apprehension ... of the legal result ... of the construction of the documents or the weight of certain circumstances ... ' , (to repeat the dicta of the Privy Council in Hoysted at 299), such fact not being in the nature of an annual recurring value requiring annual recalculation on change of value in the peculiar context I have earlier distilled. As I have foreshadowed, Hoysted related in particular to the circumstance whether or not the juridical status beneficiaries to a deceased estate, in the events which had evolved since the death of the former owner testator, were joint owners for the purpose of operation of land tax legislation. The circumstance merely that land tax was assessable annually was therefore not per se the critical factor to the ratio of the decision, as a matter of substance and reality.

62 The taxpayer applicants drew attention, next in sequence of their submissions, to Chamberlain v Deputy Commissioner of Taxation (1987) 164 CLR 502, in the context of their case seemingly to the effect that the doctrine of issue estoppel has no application in principle in relation to revenue proceedings, or referrable at least to periodic assessments or levies. The context to that litigation was that the Commissioner had brought an action for payment of income tax due by a taxpayer for specified years of income, but had caused judgment to be entered for an amount substantially less than that actually due, being an amount involving the same numerals per se , yet with one decimal point being placed out of sequence apparently by inadvertence, thereby purportedly seeking to enforce a substantially lesser impost in favour of the taxpayer. The Commissioner did not seek to have the judgment vacated, or to explain precisely how that evident mistake had occurred, but instead brought an action for recovery of the balance of the tax assessment the subject of the obvious shortfall. The High Court held that the second action was not maintainable by the Commissioner by reason that the cause of action had become merged in the earlier judgment, which the Commissioner had chosen not to impeach on account of mistake. It was observed in the joint judgment of Deane, Toohey and Gaudron JJ in Chamberlain at 510 that '... it may well be that no conduct on the part of the Commissioner can operate as an estoppel against the operation of the Act' , referring in that regard to the well known principle enunciated in Federal Commissioner v Wade (1951) 84 CLR 105 at 117, being a principle not here of course in dispute. Nevertheless the broad but brief proposition that '... the Commissioner is not bound by a determination made in respect of an assessment for one year, so far as other years are concerned ... ' was described in that joint judgment at 510 ' as equally true', Caffoor at 598-601 being cited generally in relation to that brief assertion. There was however no other discussion of that bare proposition, and in particular as to the reach thereof. There is something to be said for the view that such observation in Chamberlain was obiter, the circumstances giving rise to the issue in Chamberlain being conceptually distant from contexts at least such as here involved. Significant to that observation is the fact that no reference was made to Caffoor in the reasons for judgment in Chamberlain of both Brennan J and Dawson J. No reference was made in any of the Chamberlain judgments to Broken Hill or Hoysted or Hope .

63 The Commissioner's submission in relation to Chamberlain was to point out that in the earlier concluded Spassked proceedings, Spassked had sought and obtained a determination of facts and issues which necessarily resolved the liability of the taxpayer applicants to pay the primary tax assessed to them, and that the Federal Court's jurisdiction to prevent a re-litigation of those issues was confirmed by the Full Federal Court in its decision upon the initial appeal ( Chamberlain v Commissioner of Taxation (1991) 28 FCR 21), where Davies, Ryan and Foster JJ at [26] purportedly applied the doctrine of estoppel as exemplified in Hoysted , and thereby prevented the Commissioner of Taxation from seeking to re-litigate in the Federal Court upon the basis of a mistaken assumption upon which a consent judgment had been entered earlier in the Supreme Court. Incidentally, in the course of the reasons for judgment of Deane, Toohey and Gaudron in Chamberlain at 509, there was reproduced the first sentence of the dictum in Henderson I have earlier extracted, it being explained that ' Henderson was not concerned with res judicata in its strict sense but rather with its implications when an issue is sought to be raised which could and should have been litigated in the earlier proceedings', referring thereby to what was established by the High Court's decision in Anshun . I would add for completeness that the success of the taxpayer in the High Court in Chamberlain was seemingly treated in any event as based on res judicata : see the joint reasons for judgment of Deane, Toohey and Gaudron at 507, and also the reasons of Brennan J at 504 and of Dawson J at 512. However the subsequent proceedings brought by the Commissioner in the Federal Court, also resolved as above indicated in favour of the taxpayer, turned on Anshun estoppel, by reason of the omission of the Commissioner to raise the issue of mistake in the earlier High Court proceedings. In the result I do not think that Chamberlain provides the assistance, at any rate decisively, for which the taxpayer applicants' case for denial of the operation of an estoppel in the present circumstances was propounded. On the other hand and for what it may matter, I think that the taxpayer applicants were correct in their rejection of the characterisation of Chamberlain as 'revenue proceedings', in the sense of involving an issue as to liability to tax and/or as to the assessable quantification of that liability as such.

64 The applicant taxpayers next invoked as further applicable that part of the speech of Lord Radcliffe in the House of Lords in Society of Medical Officer of Health v Hope [1960] AC 551 at 562, in which the following appears in the context of discussion of the decision of a land valuation tribunal in England, arising out of a case stated by that tribunal upon an issue as to exemption from payment from payment of rates in favour of scientific societies:

' I do not think that it is possible to discuss the point raised by the present appeal simply in terms of these general phrases, or without giving full weight to the fact that what is in question is the conclusiveness for liability to one rate of a decision given with regard to another. The system of rating involves certain considerations that are special to itself. Its nearest analogy is with the system of annual personal taxation. With regard to both one has to begin by recognising that there is high and frequent authority for the proposition that it is not in the nature of a decision given on one rate or tax that it should settle anything more than the bare issue of that one liability and that, consequently, it cannot constitute an estoppel when a new issue of liability to a succeeding year's rate or tax comes up for adjudication. The question of this liability is a " new question ". It is not "eadem quaestio". The " cause of action is different ". " The subject-matter is a different year's tax and a different year's assessment and is not the same as the subject-matter of the previous ruling ". All these things have been said with reference to rates or taxes, and the list of decisions that recognise or enforce the principle is a long one ... ' .

The fiscal context to that restatement of principle bears remote resemblance to the fiscal context of the earlier concluded Spassked proceedings. The authorities cited thereafter by Lord Radcliffe at 562-563 included Broken Hill . At 563, his Lordship continued:

' It would not be at all easy for us to depart from this long line of authoritative opinion, even if we wanted to. Personally, I do not want to, because I think that, on the whole, it is more in the public interest that tax and rate assessments should not be artificially encumbered with estoppels (I am not speaking, of course, of the effect of legal decisions establishing the law, which is quite a different matter ), even though in the result some expectations may be frustrated and some time wasted.'

In relation to his Lordship's observation last made, I would not think that the implications of the present proceedings continuing to trial, in the light of the factual matrix to the earlier Spassked proceedings, recorded and addressed both at first instance and on appeal, and the nature and extent of the findings consequentially made, would readily reflect any notion as to the taxpayer applicants being here sought to be ' artificially encumbered by estoppels' at the instance of the Commissioner. What doubtless troubles the Commissioner in the present circumstances, at least for one matter, is the substantial cost and delay in resolution of protracted litigation, similar to that experienced in the earlier concluded Spassked proceedings, by what would necessarily involve a re-run and subsequent re-appraisal of much of the evidence tendered in those earlier concluded proceedings.

65 The revenue issue arising in Hope thus related to the Society's claim for a continued exemption from local government rates which the Society had earlier secured by the decision of a local valuation court, and it was that decision which the House of Lords held not to create an estoppel per res judicata . The unanimous findings of the Law Lords occurred in the context of a property valuation list which became the attention of the decision. That list had come to the end of its statutory life and a new 'quinquennial valuation' list was required to be brought into existence, even though it was apparently shown, or else mutually agreed, that there had been no change of circumstances. The jurisdiction of the local valuation court there involved was significantly limited, as in the case for instance in Caffoor , its function involving decision-making upon the assessment and liability of a ratepayer for a terminable period, being circumstances bearing insignificant analogy to that of the jurisdiction of the Federal Court exercisable on income tax appeals, as exemplified by the earlier concluded Spassked proceedings relating to the 1992 fiscal year.

66 Before moving to other observations and reasoning appearing in the advice of the Privy Council in Hope , it is material to take further into account the following additional observations of Lord Radcliffe at 563, which tend to be supportive of the view I have emphasised, by way of distinguishing the operation at least of Caffoor and Hope in terms of the nature of extent of the function undertaken by the initial review body or entity:

' To say that the issue of liability to one year's rate is not the same subject-matter as the issue of liability to another year's, or that the one cause of action is different from the other is, perhaps, rather an arbitrary way of disposing of the appellants' case. There are legal contexts, in trespass or recurring claims for rent, for example, in which much of the same might be said and yet it is not impossible for an estoppel to arise. The reason why, when you are dealing with rates and taxes, the difference of subject-matter is treated as being so important seems to lie in two considerations which, as I read the authorities, are peculiar to their particular field .

One consideration is that the jurisdiction of the tribunal to which the decision belongs by the administrative scheme is a limited one. It is limited in the sense that its function begins and ends with that of deciding what is to be the assessment or liability of a person for a defined and terminable period ... For that limited purpose it is a court with a jurisdiction competent to produce a final decision between the parties before it : but it is not a court of competent jurisdiction to decide general questions of law with that finality which is needed to set up the estoppel per rem judicatam that arises in certain contexts from legal judgments ... '

Moreover his Lordship continued at 565-566:

' The other main consideration which has influenced the courts in their treatment of these questions is the special position of the valuation officer, surveyor or equivalent official or committee ... It is no reflection upon the responsible work carried out by the local valuation courts if I say that they are not the natural repositories of the right to decide for good such legal issues as the interpretation of statutes or general legal questions affecting ratepayers : and to hold that, subject to appeal, such decisions are to be treated as conclusive for all time would be, in my opinion, to impose a needlessly heavy burden upon the administration of rating.'

The contextual background and issues prevailing in Hope are thus to be seen to be far removed from those of the earlier concluded Spassked proceedings. Lord Radcliffe then proceeded to contrast, if not wholly distinguish, the implications of the Privy Council's decision in Hoysted , pointing out (also at 566) that '[ t ] he estoppel related to a question as to the nature of legal rights in property and the interpretation of the taxing statute with regard to them' , and that Hoysted was therefore '... useless to illuminate the only point which is now before this House , [being] the effect on a succeeding valuation list of a decision given with regard to an earlier [decision]', and further (at 566) that '[ a ] t no stage of the proceedings, so far as appears, was the argument put forward on behalf of the commissioner of taxation that the assessment for 1920-21 was a new subject-matter in relation to the assessment for 1918-1919 : nor is the point noticed in the opinion of the Judicial Committee delivered by Lord Shaw' . His Lordship concluded, following further discussion as to insufficient information of relevance emerging from the decision of the Privy Council in Hoysted , more significantly as follows (at 566-567):

' We do not know for what reason the point of " new subject-matter " was not raised in Hoystead's (sic) case. It is to be noted, however, that the decision that was set up as an estoppel was a decision of the highest legal tribunal in Australia, the High Court, arrived at by the full court upon a case stated for their opinion by a single judge of the High Court to whom there lay an appeal from the decision of the commissioner of taxation. Any objection, therefore, which was based on difference of subject-matter between the taxes for the respective years, would have to meet the puzzling question whether for the purposes of estoppel the jurisdiction of the High Court in adjudicating upon points of law arising in tax proceedings is not wider and more comprehensive than the jurisdiction of the original assessing tribunal. It is true that that aspect does not seem to have had any weight attached to it in the other decision of the Judicial Committee of the same year, the Broken Hill case. But there the point did not call for, or receive, any full attention. I say nothing more about this. It is not the point before us and, if it ever arises, it will need separate consideration.'

The jurisdictional distinction thus drawn above between the exercise of the jurisdiction of an original assessing tribunal and that of the High Court in Australia may be observed.

67 Given therefore the jurisdiction of the forum to which the taxpayer in the Spassked proceedings undertook recourse in respect of the 1992 fiscal year, being of course the Federal Court as a superior court of record exercising jurisdiction pursuant to Part IVC of the Administration Act , whatever assistance might be obtainable by the taxpayer applicants from Hope is I think of insufficient significance to the resolution of the present proceedings. It cannot be said for instance of the Federal Court that '... it is not a court of competent jurisdiction to decide general questions of law with that finality which is needed to set up the estoppel ... that arises in certain contexts from legal judgments'. It is indeed a '... natural repositor [ y ] of the right to decide for good such legal issues as the interpretation of statutes or general legal questions affecting [taxpayers]', within the foregoing description appearing in Lord Radcliffe's speech in Hope at 563. Moreover it is the Commissioner's bureaucratic decision on a taxpayer's objection which is referred to the relevant court by a taxpayer for review, albeit that a taxpayer is dissatisfied with only part of that decision; once that reference takes place, the court is '... then seized of the decision in its entirety ...', in the sense that '... the court is concerned to determine whether the amounts assessed as taxable income are excessive' , in relation to which '... the Commissioner must be able to raise for the Court's determination the deductions properly to be allowed in the light of the Court's decision as to assessable income' (Federal Commissioner of Taxation v A.N.Z. Savings Bank Ltd (1994) 181 CLR 466 at 476 and 479).

68 Viscount Simonds agreed explicitly with Lord Radcliffe's comprehensive speech in Hope . Lord Cohen stated simply 'I concur', and Lord Jenkins similarly 'I agree', in both instances without distinguishing between the speech of Lord Radcliffe and that of Lord Keith who wrote the only other speech containing reasons. The speech of Lord Keith, which followed that of Lord Radcliffe, included the following process of reasoning (at 567):

' The proposition submitted ... for the appellants was that where a question has been decided by a court of competent jurisdiction in a lis inter partes, these parties are estopped from reopening the same question in a subsequent suit between themselves. This submission necessarily proceeded upon the assumption, which has not been challenged by the respondent, that the facts and circumstances relevant to the appellants' exemption from rating under section 1 of the Scientific Societies Act, 1943, remained unchanged from what they were when the local valuation court on October 24, 1951, decided that the appellants' hereditament was exempted from rating under the Act of 1843. Otherwise it would not be the same question that comes up for reconsideration .

The proposition advanced, which is impeccable in circumstances in which it is permitted to operate, is, in my opinion, inapplicable to the circumstances of this case. I find it difficult to equate the procedure followed out under the statute with a proper lis inter partes, though that, of itself, might not be conclusive. Nor do I find it easy to distinguish the functions performed by assessment committees before the coming into operation of the Act of 1948 from those now performed by a local valuation court, or to think, because the new body is differently constituted and called a court, that a greater importance and effect should be attached to its decisions. The introduction of a court into the proceedings instead of a committee played some importance, if I understood aright, in the submission for the appellants .

What we are faced with here is an administrative act of a public official, the valuation officer, against which the party affected has a right of appeal to the local valuation court, with further appeals to higher courts. The valuation officer has a public duty to perform by making periodically every five years a valuation list of all hereditaments, with certain exceptions, in his rating area. He must necessarily reconsider and revise the previous valuation list. He has no personal interest in any appeals taken against his valuations, and has a duty to hold the scales as fairly as he can among the ratepayers affected, the occupiers of the various hereditaments. The general body of ratepayers is constantly changing. With each quinquennium the revaluations will affect a new body of ratepayers. I doubt if the valuation officer owing such a duty to an ever-changing body of ratepayers can be regarded as always the same party in the sense in which that expression is used for the application of the rule of res judicata. What if the appellant society changes its habitat and moves into another rating area with a different valuation officer ?

I emphasise these aspects of the functions of a valuation officer under the statute, for they lead to what I regard as the true answer to the submission for the appellants, which is that a public officer in the position of the respondent cannot be estopped from carrying out his duties under the statute.'

The distinction drawn by Lord Keith between ' the procedure followed out under the statute with a proper lis inter partes' may be observed, the former being there carried out of course by ' an administrative act of a public official, the valuation officer' .

69 It may therefore be seen, for one matter, that the functions of the valuation officer the subject of the analysis undertaken by the House of Lords in Hope , for instance to 'reconsider and revise the previous valuation list', are not sufficiently comparable to the decision-making by a Federal Court judge in addressing an appeal from the disallowance by the Commissioner of a taxpayer's objection to an income tax assessment, as in the case of course of the earlier concluded Spassked proceedings. Particularly must that be so, as in the present case, of decision-making by a Federal Court judge upon a taxpayer's entitlement or disentitlement to income tax deductibility, in respect of outgoings or losses incurred in continuing business operations of subsequent or successive fiscal year or years, as this is necessarily or inherently ' not eadem quaestio as the issue decided in the later proceedings', to adopt Lord Radcliffe's description in Hope . Put another way, the judicial function of a Federal Court judge is hardly to be equated with the administrative function to '... reconsider and revise the previous valuation list' , and probably also of a quasi administrative function. Incidentally I have of course earlier referred to the English doctrine of res judicata having a wider connotations to that prevailing in Australia.

70 Further in the speech of Lord Keith in Hope , reference was made (at 569-570) to ' much reliance' by the appellant society upon the Privy Council's decision in Hoysted , his Lordship there observing that such '... authority is not binding on this House, and the point was never taken in the case that a decision on liability to assessment to tax for one year is not conclusive of liability to assessment in a later year' , and further that '[ t ] he judgment [of the Privy Council in Hoysted] would seem to conflict with what was said a month earlier in [Broken Hill] by a Board differently constituted, rejecting a plea of res judicata... ' . His Lordship concluded by adopting a similar conclusion, as in Broken Hill , as to there not being involved the '... eadem quaestio, and therefore the principle of res judicata...' not being applicable, and by further observing the absence of what was essential to a successful plea of res judicata . For completeness I record also that Hoysted was of course decided by the Privy Council on an appeal from Australia, unlike Caffoor, and moreover Hope was a decision of the House of Lords, and that those circumstances have implications in terms of the present principles of juridical authority in operation in Australia, to which I have of course made reference. True it is of course that Broken Hill was determined by the Privy Council on appeal from Australia, but as earlier mentioned, about five weeks prior to the Privy Council's decision in Hoysted , also on appeal from Australia, yet without being apparently referred to by counsel appearing in Hoysted and nor by the Privy Council in the course of its reasons.

71 Purportedly on the basis of authority thus cited, which I have sought to record at some length in deference to and appreciation of the industry inherent in the submissions of counsel for the taxpayer applicants (as well as of counsel for the Commissioner), it was next contended on behalf of the taxpayer applicants that 'whilst Hoysted remains good law in relation to the application of issue estoppel other than to tax cases, it is clear that the decision of the Privy Council in Broken Hill is to be preferred where the issue is the effect of a decision on one year of [taxable] income on litigation over a different year'. The taxpayer applicants further asserted that '[t]he Commissioner cannot put forward any decision in which Hoysted has been cited as authority for the proposition that a decision involving the same or a similar subject matter in one year of assessment of an annual rate or tax creates an estoppel against the taxpayer in respect of another year of assessment'. Yet as I have earlier recorded, the taxpayer applicants as well as the Commissioner appeared to rely on the generality of the phraseology of Lord Shaw in Hoysted to the extent adopted by Dixon J in Blair v Curran at 532 earlier extracted in these reasons, being that ' a fact fundamental to the decision arrived at' in former proceedings and 'the legal quality of the fact', must be taken as finally and conclusively established, so long as any such fact is not subsidiary or collateral. The Commissioner would characterise as a fact fundamental to the earlier concluded Spassked proceedings the findings there made, which I have earlier recorded concerning critical circumstances and features involved in relation to the fiscal years 1988 to 1994, and the inherently consequential implications thereof to deductibility for income tax purposes in respect of the year of income 1992 the subject of resolution by the earlier concluded Spassked proceedings.

72 The taxpayer applicants asserted further that none of the authorities relied on by the Commissioner addressed what the taxpayer applicants described as the divergence of views between Hoysted and Broken Hill in relation to tax matters, save briefly in Falk v Haugh (1935) 53 CLR 163. That litigation was concerned with relief against forfeiture, in the context of emergency legislation enacted in the depression years to address hardship arising from the consequences of default in payment of mortgage indebtedness, in circumstances where such payments as had been made by a mortgagor to a mortgagee had been received and applied by the mortgagee on account of the mortgage debt generally and thus without distinction as to principal or interest, thereby resulting in default as to payment of interest, and further where the mortgagee had entered possession and received rents and profits pursuant to a default which appeared to have differing statutory consequences, depending on whether the same relating to principal or interest. In the joint reasons for judgment of Rich, Dixon, Evatt and McTiernan JJ in Falk at 171, the following appeared:

'... The reasons of the Full Court for refusing to determine the questions reserved may be taken to be the basis of the decision by the County Court that interest had not been paid. The decision in the County Court was that interest had not at that time been paid up to a given date. The question at issue here is whether it has now been paid up to another and later date. An affirmative answer to that question involves no necessary contradiction of the County Court decision. The issues are not the same ; but the decision of each issue involves a common question, namely, what, in the case of a mortgagee in possession, amounts to payment. It is this question with which the reasons of the Full Court deal. It may, therefore, be right to regard those reasons as forming only a subsidiary ground leading to the decision of the issue between the parties, and not as constituting the decision of an issue. An estoppel of this kind arises from the decision inter partes of an ultimate issue identical with one of the ultimate issues that are again raised. But it does not arise from the adoption of a process of reasoning in the decision of the issue, although the same process may be applicable in the decision of a second and different issue. It is upon this ground, if at all, that the decision of the Privy Council in [Broken Hill] is to be reconciled with its decision in [Hoysted].'

The Commissioner had contended that the foregoing dicta in Falk was to the effect that 'the advices of the Privy council in Broken Hill and in Hoysted were capable of being reconciled upon the basis that an estoppel does not arise merely by reliance upon the process of reasoning in an earlier decision', and further, that 'the High Court did not decide that Hoysted was wrong, and that Broken Hill was to be applied in Australia instead of Hoysted' , and that therefore so much is the law in Australia, notwithstanding that the Privy Council itself did not treat the two decisions as consistent with each other and disavowed the authority of Hoysted'. The Commissioner's analysis in relation to Falk , so far as it goes, must be correct, and is not sufficiently answered by the circumstances that the Privy Council decided in Caffoor at 599-601 to follow Broken Hill instead of Hoysted by reason of the latter's inconsistency with the line of English authority there identified in Caffoor . Moreover there is much to be said for the view that the critical findings of the primary judge and of the Full Court in Spassked referrable to the period of time from 1988 to 1994 (both of course inclusive) which I have earlier cited, cannot aptly be described (to adopt parts of the Falk dicta ) as ' only a subsidiary ground leading to the decision of the issue between the parties.' Moreover it would be at least more realistic to say that on true analysis, such findings comprised or formed part of ' the decision ... of an ultimate issue identical with one of the ultimate issues that are ... raised' , to cite from the above passage in Falk .

73 Be all that as it may, the taxpayer applicants submitted that the reasons for judgment of the Privy Council in Caffoor at 599-601, though not binding on the Federal Court, should be afforded ' the highest respect' ( Viro v The Queen (1978) 141 CLR 88 at 135 per Mason J (as he then was)). I will later refer to Viro and other authority relating to Privy Council decisions. The taxpayer applicants submitted in any event that 'while Hoysted has not been specifically overruled by the High Court in relation to its application to tax matters, the High Court has referred with approval to the decision of the Privy Council in Caffoor , where the decision in Broken Hill was followed and Hoysted rejected', and I was referred again Chamberlain at 510, where the brief reference thereto was made by Deane, Toohey and Gaudron JJ and which I have earlier discussed as being at least arguably not sufficiently on point arising for present examination. The taxpayer applicants further submitted 'that whilst Hoysted remains good law in relation to the application of issue estoppel other than to tax cases, it is clear that the decision of the Privy Council in Broken Hill is to be preferred where the issue is the effect of a decision on one year of income on litigation over a different year'. In my opinion, so much is far from 'clear'. Indeed the framework of the taxpayer applicants' case was assembled by reference to authorities concerned not with particular situations involving the kind or scope of that the subject of the earlier concluded Spassked proceedings, which involved a factually comprehensive and complex enquiry as to the purpose and the objectives of application of the proceeds of borrowings in a substantial commercial context and moreover which also involved corporately related borrowers and corporately related lenders operating otherwise than at arms length, in order to determine the deductibility or otherwise for income tax purposes in relation to the years of income the subject of dispute which were immediately proximate to that year of income the subject of resolution by the earlier concluded Spassked proceedings. Of course, the purpose of application of the proceeds of borrowings by a taxpayer from a third party in one fiscal year for an income producing purpose may subsequently transpose to a non-income producing purpose to that of the proceeds of the original borrowing or of an ongoing borrowing, in either case from the same lender, whether in the course of the same or a subsequent fiscal year.

74 More recently in Orica Ltd v Federal Commissioner of Taxation (2001) 182 ALR 77, Merkel J, as a Federal Court judge at first instance, said as follows (at 87), in the context of a capital gains tax dispute, upon which the taxpayer applicants sought to place additional reliance in support of the same major theme of their present case:

' Issue estoppel has been held not to apply to a taxpayer where the previous decision relied upon as founding the issue estoppel related to a different year of income. Although there was some support for the contrary view in [Hoysted], that decision was not followed in [Caffoor]. In Caffoor the Privy Council determined that a taxpayer is not estopped from contending it was entitled to an exemption in respect of a year of income by a decision in respect of a different year of income. More recently, in [Chamberlain] Deane, Toohey and Gaudron JJ cited Caffoor as authority for the proposition that " the Commissioner is not bound by a determination made in respect of an assessment for one year, so far as other years are concerned ". It must follow that the Commissioner's issue estoppel argument also fails.'

The estoppel issue raised in Orica was in the nature of an alternative contention, and arose in the context of the 'relation back' provisions of s 160U of the capital gains tax provisions of the Tax Act and did not occupy the principal focus of attention of those proceedings. It appears that Merkel J was not provided with the substantial scope of juridical references to and analysis of authority that has been presently afforded to the Court by the parties in contest, including that analysis and debate referrable to the High Court's later decision in Queensland Trustees Limited v Commissioner of Stamp Duties (1956) 96 CLR 131, which I will shortly next discuss, or for that matter to Falk . The decision in Orica did not survive appeal (see Commissioner of Taxation v Dulux Holdings Pty Ltd (2001) 113 FCR 436), though the issues of the scope here arising did not feature in the reasons for judgment on that appeal. I will later return to Orica .

75 The Commissioner submitted that Queensland Trustees was indeed 'directly in point'. The case involved an initial assessment of stamp duty made under the Stamp Acts 1884-1940 (Qld) by the Commissioner of Stamp Duties on a transfer of real property from a company controlled by a deceased person as transferor to the trustees of a trust estate as transferees, being an assessment later upheld by the High Court (in re Sharpe (1944) QSR 26). Subsequently the trustees transferred the land to the surviving beneficiary of the trust in accordance with terms directed by testamentary provision, and the Commissioner of Stamp Duties assessed that subsequent transfer to succession duty under the The Succession and Probate Duties Acts 1892-1952 (Qld). The High Court held by majority that the claim by the Commissioner of Stamp Duties should fail on the ground of issue estoppel. It was asserted by the Commissioner of Stamp Duties that it was fundamental to the High Court's decision, which upheld the assessment of stamp duty, that the transferee beneficiary's title derived from the terms of the settlement and not from the will of the testator, the High Court having accepted the Commissioner of Stamp Duties' contention 'that the testator at his death had no interest in the land and no power to compel its transfer to his trustees.'

76 The taxpayer applicants submitted conversely that Queensland Trustees was of no assistance, being '... simply not a tax of one year... and tax under the same Act in another year', but was instead 'tax under two different statutes', one relating to stamp duty in relation to a settlement and the other in relation to death duty, albeit statutes involving the same revenue commissioner; I do not think that so much is of any decisive significance. The taxpayer applicants contended further that Queensland Trustees stands outside the 'directly relevant authorities', being authorities to which I have referred earlier in these reasons and which dealt with annual assessments of income tax, land tax and other duties. Rather Queensland Trustees was said by the taxpayer applicants to have been decided upon the basis that the existence of an issue estoppel had been determined by the Privy Council decision in Hoysted , without reference to the 'contrary decision in Broken Hill', and further that after the decision in Queensland Trustees , ' Caffoor decisively rejected Hoysted and adopted Broken Hill' . It was acknowledged by the taxpayer applicants that Queensland Trustees was not referred to in Caffoor or Hope , though neither case had of course originated in Australia. The taxpayer applicants further argued on that footing that the decision in Queensland Trustees was not directly in point, and could only 'stand with the line of authority running from Broken Hill to Chamberlain' on the basis that, unlike those cases, it was not concerned with annual assessments of tax, and further that '[i]n the light of the other decisions, ... including the adoption of Caffoor by the High Court in Chamberlain', Queensland Trustees should not be regarded as persuasive in the context of a Part IVC appeal on annual income tax assessment. I have of course emphasised the context involved in relation to Chamberlain and the relative briefness of reference made therein to Queensland Trustees .

77 The Commissioner rejoined that although neither Dixon CJ nor McTiernan J made reference in Queensland Trustees for instance either to Hoysted or to Broken Hill in particular, Webb J held that '... the Crown is estopped from questioning the decision in these proceedings between the same parties' , citing at 144 in that regard Hoysted generally. Moreover in the remaining judgment, being that of Kitto and Taylor JJ jointly, the Commissioner asserted that a similar finding was made at 151 as to the operation of estoppel, in the following terms:

' The principle of law which is relied upon is that for which [Hoysted] is the leading authority in the Privy Council. If the Crown is so estopped, the assessment of succession duty cannot stand, for the nomination and schedule was an instrument which operated inter vivos, and the trusts which it stated in favour of the sons were expressed without reference to the death of any person .

The case therefore turns upon a question of issue-estoppel.'

The conclusion of Kitto and Taylor JJ at 152 was as follows:

' For this reason it must be held that the Crown is estopped by the judgment it obtained in the former proceedings from asserting that the absolute vesting ... was the taking effect of a succession conferred by the testator's will. The claim for succession duly must therefore fail.'

The Commissioner submitted that the principles of estoppel apply not only to the administration by the Crown of one species of taxation, but to the administration by the Crown generally of all taxes imposed by it. The Commissioner further submitted that the doctrine 'can certainly apply to attempts to re-litigate issues arising under one species of taxation, and in particular, a revenue enactment concerned with annual assessments of tax', and emphasised in that latter context that the Crown in Queensland Trustees was held estopped, in respect of its administration of both the Queensland stamp duty legislation and the Queensland probate legislation.

78 The taxpayer applicants responded by pointing principally to what may be described as the distinction between the single or confined revenue circumstances involved in Queensland Trustees , being revenue in the form of ad valorem stamp duty or instruments or transactions, from those of successive annual (or other periodic) revenue circumstances involving the incidence of income tax or analogous revenues addressed for instance in Broken Hill, Caffoor and Hope . The critical issue presented by the taxpayer applicants consequently was whether or not taxing or rating systems of annual (or other periodic) assessments or exactions allowed room for the operation of issue or similar estoppels in the determination of successive years of income tax.

79 At this point of my review of submissions on authorities it is appropriate to address more closely the taxpayer applicants' contentions upon the theme generally as to the binding authoritative operation of decisions of the House of Lords and the Privy Council in Australia, irrespective of the Commissioner's contentions to the effect that the taxpayer applicants' reliance upon the leading English decisions of Broken Hill, Caffoor and Hope were in any event misplaced. Additionally however to what I have earlier cited in relation to Viro , my attention was drawn by the taxpayer applicants to the later decision of the High Court in Cook v Cook (1986) 162 CLR 376 at 390, where Mason, Wilson, Deane and Dawson JJ jointly discussed the implications of the circumstance that the Judicial Committee of the Privy Council was no longer the ultimate court of appeal or one of the ultimate courts of appeal in Australia, and said as follows:

' The history of this country and of the common law makes it inevitable and desirable that the courts of this country will continue to obtain assistance and guidance from the learning and reasoning of United Kingdom courts just as Australian courts will benefit from the learning and reasoning of other great common law courts. Subject, perhaps, to the special position of the House of Lords given in the period in which appeals lay from this country to the Privy Council, the precedents of other legal systems are not binding and are useful only to the degree of the persuasiveness of their reasoning.'

The dicta would seem to have marginally modified the earlier authority of Skelton v Collins (1966) 115 CLR 94, where Kitto J said at 104 as follows:

' The position of this Court in relation to decisions of the House of Lords does not seem to me to need clarification. The Court is not, in a strict sense, bound by such decisions, but it has always recognized and must necessarily recognize their peculiarly high persuasive value' .

The taxpayer applicants for their part also cited at 135 (per Mason J as he then was) and Hawkins v Clayton (1986) 5 NSWLR 109 at 136-137 (per McHugh JA as he then was). The taxpayer applicants asserted that the decision of the House of Lords in Hope was one of those cases referred to in Cook as being in a 'special position'. Whether in any event of course, the speeches in Hope provide the applicant taxpayers with the extent of assistance sought to be invoked is a further matter for their concern.

80 Faced in any event with the hurdle presented by the Commissioner that contrary to the earlier concluded Spassked proceedings, Caffoor and Hope did not purport in any event to deal with a year or years of income that was or were the subject of subsequent proceedings, whereas the earlier Spassked proceedings did so, in the light in particular as to the findings relevantly prevailing in relation to the six fiscal years 1988 to 1994, the taxpayer applicants asserted that for reasons already explained (and which I have sought to summarise in these reasons), '... the earlier Spassked proceedings did not, and could not determine the tax payable in any year other than the 1992 year'. In further pursuit of that theme, the taxpayer applicants pointed out, in reliance upon Hope in particular, that 'what is under review is the Commissioner's decision on the taxpayers' objections', referring thereby to ss 14ZY and 14ZZ of the Administration Act. I was referred by the taxpayer applicants again to ANZ Savings Bank (at 476 and 479), where discussion occurred concerning an appeal relating to an objection decision, 'albeit that a taxpayer may be dissatisfied with only of that decision' , and to the Court's task to determine whether the amount assessed as taxable income is excessive.

81 The taxpayer applicants asserted in context that despite the width of the powers in s 199 of the Tax Act and s 14ZZP of the Administration Act, the same can only be exercised in relation to the objection decision and the assessment before the court. Consequently it was said that the objection decision and the excessiveness of the assessment to which it relates define the Court's jurisdiction in a Part IVC appeal, and reference was made in that context of the taxpayer applicants' submissions to what appears in the course of Lord Radcliffe's speech in Hope at 563, which I have earlier extracted. As I there indicated, so much tended however on close analysis to be supportive of the commissioner's case rather than the case of the taxpayer applicants; I am unable to comprehend why the same can sensibly be said to exclude in principle or otherwise the imputation of an estoppel otherwise appropriate according to law.

Other issues raised by the taxpayer applicants in opposition to the summary relief sought

82 The taxpayer applicants raised a number of other contentions in opposition to the Commissioner's case for summary relief which fall to be addressed. The first was that inherent in the Commissioner's present summary application was that '... the Commissioner invites the Court to assume that the evidence to be led in the current proceedings will be the same as that in the earlier Spassked proceedings', yet '[i]t is simply not possible for the Court to make that assumption'. The submission tends to misconceive the juridical basis of the present summary judgment application of the Commissioner, which is primarily to the effect that in the light of the estoppel or estoppels arising from the evidence led by the Commissioner and established by the Federal Court at first instance and on appeal, no case in substance remains open to the applicant taxpayers to pursue in relation to the fiscal issues purportedly raised by the taxpayer applicants' present proceedings.

83 The next further issue raised by the taxpayer applicants concerns the status of IEL and QTH as privies of Spassked in relation to the assessments in contest as to the fiscal years 1991, 1993 and 1996 whereof IEF and QTH respectively are applicants. I have earlier referred to authority generally regarding the notion of privies in so far as concerns the operation of the doctrines of res judicata and estoppel. There does not appear to be any juridical dicta as to privies bearing upon the doctrine of abuse of process, at any rate to which the taxpayer applicants were able to refer. In any event, the submission of the taxpayer applicants on the controversial subject of privies was that since IEF and QTH were not parties to the earlier Spassked proceedings, '... they cannot be subject to any claim of issue estoppel'. Though not so expressed in terms, I will assume that the contention is intended to relate also to Anshun estoppel.

84 The taxpayer applicants repudiated the Commissioner's case as to satisfaction of the notion of privy, as espoused in the joint judgment of Northrop and Lee JJ in Effem , on account of IEF and QTH being effectively successors to the relevant losses of Spassked within the scope of s 80G. That contention of the Commissioner was said to be misstated in the following ways.

(i)

any so-called right which Spassked may have to an interest deduction is one which arises under s 51(1) of the Tax Act, being a right which, when taken in combination with any other deductions and any income received, will determine Spassked's income or loss position for a particular year;

(ii)

the election to transfer all or part of any available loss within a wholly-owned corporate group gives rise to a completely different and independent so-called right from Spassked's right to claim an interest deduction, being a new statutory right available to the transferee under s 80G of the Tax Act conferred in circumstances where the provisions of the Tax Act are satisfied; and

(iii)

even if it could be shown that all the losses transferred under s 80G of the Tax Act the subject of the present proceedings arose because of Spassked's claim for interest, that could not mean that Spassked and the transferee were privies, and the Commissioner's attempt to equate the two rights constituted an inflation of a claimed economic equivalence into an identity of legal rights.

85 The taxpayer applicants therefore contended that the rights presently asserted by IEF and QTH constitute those arising under Part IVC of the Administration Act by reason of an appeal against the objection decision made by the Commissioner, being rights independent from, and not derived from, any right or cause of action 'which Spassked had or has', it being clear that QTH and IEF did not act as agents for the parties to the earlier concluded Spassked proceedings; moreover it was asserted that 'the mere fact that [QTH and IEF] are wholly owned subsidiaries of IEL is not a basis for [QTH and IEF] being privies for the purpose of issue estoppel'. It would be however at least surprising that in the circumstances postulated, any such conclusion should follow.

86 In my opinion, the foregoing basis for purportedly excluding the operation of at least issue estoppel should be rejected, given that the same should otherwise be imputed as an adjunct or an aid otherwise to the operation in appropriate circumstances of the enabling beneficial loss transfer provisions of the Tax Act. The contention of those provisions is implicitly apparent that a transferee of loss provisions cannot obtain or gain any superior entitlement per se than that of the transferor, being per se in the sense of deductibility not available by reason of circumstances outside the beneficial purview of the transfer of loss provisions in the first place. It is one matter for the transferor's related company to gain the benefit of transferred losses for income tax purposes within the explicit parameters of the statutory transfer of loss provisions, but quite another to gain the windfall of exclusion of an estoppel otherwise destructive of any entitlement in law to deductibility of the transferor. The taxpayer applicants' submission is to my mind foreign to the 'under or through' notion of the right the subject of the doctrine of privity. The legal right here involved must be burdened with derogation from that right in the hands of the transferor in the first place to any fiscal entitlement otherwise available, such as to give effect to the operation of an estoppel existing against the transferor.

87 I am therefore unable to accept the proposition in principle that an estoppel cannot operate so as to deny the so-called independent rights of IEF and QTH to an appeal under Part IVC. To assert, as did the taxpayer applicants, that the question whether the conditions for transfer under s 80G have been satisfied does not depend upon whether Spassked itself can challenge an assessment in any given year, is to state the issue conceivably arising too widely. The question is I think not susceptible to governance by the approach taken, otherwise than by way of estoppel, in Federal Commissioner of Taxation v Cappid Pty Ltd (1970) 127 CLR 140. In that case, Menzies J rejected the submission of the Commissioner that the taxpayer company was precluded from arguing that it was a public company in respect of a so-called Division 7 assessment, because it had withdrawn an objection to an assessment of income tax issued in respect of the same year on the basis that it was a private company. Here the asserted estoppel is claimed to have been established by curial decision binding in relation to losses for tax purposes purportedly transferred by a transferor corporation to a relevantly owned and controlled transferee corporation, and further in a context where the extent of shareholding ownership is critical to derivation of a fiscal benefit, and further where the Commissioner already enjoys the benefit relevantly of an estoppel against the transferor. It would be foreign to the operation of the tax losses provisions of the Tax Act that a transferee could gain a fiscal benefit beyond what is explicitly spelt out by those provisions. So much would bring about a windfall beyond what could conceivably, much less reasonably, fall within the contemplation of the enabling scheme of Subdivision A of Part III of the Tax Act.

88 Moving specifically to the Commissioner's invocation of an operation relevantly of Anshun estoppel, the taxpayer applicants contended that '[f]or the same policy reasons that taxation and rating cases are an exception to the doctrine of res judicata' (thereby referring implicitly to res judicata in the English sense of inclusivity of the Australian notion of issue estoppel per se ), 'they must also fall outside the ambit of a claim for Anshun estoppel', the asserted reason being that '[i]f a party is not estopped in relation to a matter it has raised in proceedings relating to another year, it surely cannot be estopped in relation to a matter it did not raise in those earlier proceedings', referring thereby further to the doctrine as to privies described in Effem . Upon those purported footings, it was therefore emphasised by the taxpayer applicants once more that 'QTH and IEF were not parties to the earlier Spassked proceedings and so cannot fall within the principle of so-called Anshun estoppel... even if... QTH and IEF could be regarded as privies of the parties to the earlier proceedings'. The theme of those submissions of the taxpayer applicants is sought to be answered by the Commissioner in the first place by joinder of issue upon the proposition for which Broken Hill, Caffoor and Hope are said by the taxpayer applicants to espouse. If that proposition be not sustainable in circumstances such as the present, the case for the operation of Anshun estoppel upon the basis of the findings of the Federal Court in the earlier Spassked proceedings referrable to the six fiscal years 1988 to 1994 presents at least prima facie as a viable proposition. In this further context the applicant taxpayers once more placed emphasis on the circumstances that 'issues as to liability to income tax in respect of years other than 1992 could not have been litigated in the earlier proceedings, even by the parties to those proceedings', by reason of course of the apparent absence of determination of those objections by the Commissioner until after the conclusion of the earlier Spassked proceedings, a proposition which I think cannot survive juridical analysis as I have earlier opined. It is true that '... [i]t can hardly be said that at the time of the earlier Spassked proceedings the [taxpayer applicants] were delinquent in not prosecuting an appeal against a decision which had not then been made, or that the opportunity to contest that decision was available, and should have been pursued in the earlier proceedings'. However as I have consistently emphasised, the parties mutually contested critical issues, in the context of the earlier concluded Spassked proceedings, which involved and related entirely to the circumstances relevantly prevailing throughout those critical six fiscal years. Moreover it can scarcely be said reasonably that IEF and QTH were not privies of Spassked, each being wholly owned subsidiaries of IEL (and thus having threshold qualification for Part IVC purposes) and being subject at all material times together to the same at least ultimate controlling and governing parent corporate mind.

89 Moving finally to the issue raised by the Commissioner as to abuse of process, in relation to which doctrine I have earlier cited Walton and Spalla , the taxpayer applicants advanced the further proposition that 'for the same policy reasons which make annual taxation and rating cases an exception to the doctrine of res judicata , those cases are generally not amenable to a claim of abuse of process', upon the footing that '[t]he question of liability is different in each year'. It was contended by the taxpayer applicants that '[i]t is inconceivable that the High Court, the Privy Court and the House of Lords left it open to contend that in circumstances in which they held that a party was not estopped (from presenting its case in relation to another year), that party, if it raised the matter in respect of which it was found not to be estopped, was or might be guilty of abuse of process', and I was referred once more to what was said in Hope by Lord Radcliffe as to '... the public interest that tax and rate assessments should not be artificially encumbered and estoppels ... even though in the result some expectations may be frustrated and some time wasted' . I have of course already made observations at length in relation to the implications or otherwise of Broken Hill, Caffoor and Hope to such distant contexts as the present, and also what was observed briefly in Chamberlain in as yet a further different but once again distant context to the present, and will not repeat those observations. It was submitted broadly in that context by the taxpayer applicants that a different outcome in respect of a different year is not to be regarded as a matter which would bring the administration of justice into disrepute. The force of that proposition conceivably gives way to circumstances illustrated for instance by the present context, where a litigation was undertaken at obviously very considerable expense over a lengthy period of time in order to determine the existence of financial circumstances and relationship attending a public company taxpayer over a period of six fiscal years, and as a consequence the fiscal implications to one of those fiscal years which arose for specific determination, and apparently without objection by the taxpayers applicants to the absence of inclusion as to the issues arising in relation to the proximate years of income.

90 Thereafter I was referred to the ratio decidendi of the Full Federal Court in Saffron v Commissioner of Taxation (1991) 30 FCR 578, and what was said in the joint judgment of Hill and Lander JJ in the Full Federal Court in the Spassked proceedings, those decisions being said by the taxpayer applicants to indicate that '... a different outcome in respect of a different year is not to be regarded as a matter which would bring the administration of justice into disrepute'. It is unnecessary to refer in detail to the ratio in Saffron , which is somewhat removed from the issues presently arising. The issue there arising related to whether evidence of the conviction of a taxpayer of conspiracy to defraud the Commonwealth carried the consequence that the convicted taxpayer was estopped from challenging the Commissioner's decisions on objections to that person's income tax assessments. No such principle was acknowledged by the Full Federal Court, it being held in effect that a conviction is conclusive evidence merely of that which it established, being the fact of conviction for the offence, but not of the facts lying behind the conviction. Consequently the orders of the Full Court including the following:

' The applicant may conduct his case in the income tax appeal presently before this Court for the purpose of enabling the court to determine the true liability of the applicant to income tax in each of the relevant years of income involved in the appeal ; and for this purpose the applicant may present a case denying that he and James McCartney Anderson agreed that not all the cash received from the conduct of businesses in which they were involved, including the nightclub businesses known as the Venus Room and the Carousel, would be declared for income tax purposes. But the applicant shall not conduct his case for the purpose of challenging the propriety of his conviction for the criminal offence of conspiring with Mr Anderson to defraud the Commissioner or the fairness of the trial.'

91 I think that there is something to be said for the view that in the present context to the present proceedings, for the taxpayer applicants to be permitted to contest the issues the subject of the critical findings of the primary judge and the members of the Full Court, to which I have earlier referred as to Spassked's circumstances relevantly from 1988 to 1994, would bring the administration of justice into dispute, given the nature and extent of those findings which the Commissioner would presently invoke as the basis for the Commissioner's contention as to abuse of process, as well as for issue estoppel and Anshun estoppel. The particular context involved in Saffron was of course distant to that involved in the earlier concluded Spassked proceedings and presently involved, but nevertheless not to the extent of entirely excluding a useful illustration as to the operation of the doctrine of abuse of process here invoked by the Commissioner.

92 The taxpayer applicants drew further attention, in the present context of discussion, to the following opinions of Lord Hobhouse in Arthur S Hall & Co v Simons [2002] 1 AC 615 at 743 as to the operation of the principle of abuse of process:

' The " collateral attack " point is a species (or " sub-set ") of abuse of process. There is no general rule preventing a party inviting a court to arrive at a decision inconsistent with that arrived at in another case. The law of estoppel per rem judicatam ( and issue estoppel) define when a party is entitled to do this. Generally there must be an identification of the parties in the instant case with those in the previous case and there are exceptions. So far as questions of law are concerned, absent a decision specifically binding upon the relevant litigant, the doctrine of precedent governs when an earlier legal decision may be challenged in a later case .

A party is not in general bound by a previous decision unless he has been a party or privy to it or has been expressly or implicitly covered by some order for the marshalling of litigation (Ashmore v British Coal Corpn [ 1990 ] 2 QB 338 ). This overlaps with the concept of vexation where the same person is faced with successive actions making the same allegations which have already been fully investigated in a previous case in which the later claimant had an opportunity to take part. This reasoning does not apply to an action against a lawyer alleging that he has mishandled a previous case.'

I have earlier made reference to dictum of Lord Hoffman appearing in Arthur S Hall , in the context of my earlier citation from Spalla of the public policy element which assists to define the scope of the doctrine of abuse of process, and I have of course already discussed the judicial notion of 'privy'. The taxpayer applicants contended that it could not be said that they had an ' opportunity to take part' in what was described by them as '... a contest over the liability to tax in respect of other years and in respect of other taxpayers'. That contention was contextually related to the further proposition of the taxpayer applicants that '... the Commissioner's submission that the present taxpayers and Spassked are controlled by the same entity, is in the present circumstances, irrelevant to the question of abuse of process'. I have difficulty in understanding why that should be so. Control by the same corporate entity, for instance the control of a holding company over its wholly owned subsidiaries, may surely be a factor of potential relevance to the resolution of an issue as to abuse of process which focuses upon the conduct of the controlled entity and a relevantly related company, especially in circumstances of entire (ie wholly owned) shareholding control. As exemplified in passages I have earlier extracted from the judgments in Spassked at first instance and appeal, evidence was led as to the operations, activities and decision making of and in relation to IEL wholly owned and controlled subsidiaries comprising the taxpayer applicants in particular, in relation to periods of time both prior and subsequent to the 1992 fiscal years. A similar observation is seemingly apposite to the purported reliance by the taxpayer applicants upon the following dictum of Heydon JA (as he then was and with whom Spigelman CJ and Mason P agreed), in R v O'Halloran (2000) 36 ACSR 315 at 342-344, in the course of which his Honour observed that '[ t ] he law prevents Mrs Fenwick relitigating in civil proceedings issues decided in earlier civil proceedings ; it does not necessarily prevent a non-party, namely the director, litigating issues for the first time in criminal proceedings' . What of course is here relevantly involved are civil proceedings alone.

93 I have of course already addressed the circumstances as to related objections having been for the time being left unresolved by the Commissioner pending the outcome of what I have identified for convenience as the earlier concluded Spassked proceedings. In this regard, by way of repetition for emphasis, each of IEF, QTH and Spassked was at all material times of course a wholly owned subsidiary of IEL, upon the footing whereof IEF and QTH have claimed deductibility for income tax purposes consequential upon the transfer of Spassked's purported income tax losses sustained in the 1991, 1993 and 1994 fiscal years, being losses transferred respectively to IEF and QTH by Spassked under the auspices of s 80G of the Tax Act, headed Transfer Of Loss Within Company Group . Thus each of IEF and QTH made claims for allowable deductions 'under or through' Spassked's entitlement to claim as an allowable deduction the interest expense incurred by Spassked as borrower pursuant to the interest bearing loans made to Spassked by IEF. The subsequent claims made by IEF and QTH as transferees of losses for income tax purposes necessarily involved of course as an essential component (and in the earlier concluded Spassked proceedings being the only matter at least in substantial dispute) the supervening contention by Spassked that it was entitled to income tax deductibility in respect of interest incurred on those inter-group borrowings; I refer in that regard to the definitions of 'loss' and ' non-loss deductions' respectively in ss 79E(1), 79E(12) and 80G(6)(a) of the Tax Act.

94 The taxpayer applicants concluded their submissions in the following terms by way of summary:

(i)

the issues presently sought to be agitated, being the liability of IEF QTH and Spassked respectively to tax in relation to the 1991, 1993, 1996 and 1994 fiscal years, could not have been raised in the earlier proceedings, since the objections of the taxpayer applicants had not been by then determined, and accordingly the taxpayer applicants 'were not and could not have been party to the earlier concluded Spassked proceedings';

(ii)

the issue arising for determination in respect of each of those further fiscal years in controversy was 'essentially different, as the Privy Council has repeatedly held';

(iii)

the taxpayer applicants are entitled to rely on what was described as 'factual differences between the 1992 year and those presently in dispute'; and

(iv)

it cannot be said that the claims of the applicant taxpayers should have been raised in the earlier proceedings, if they were to be raised at all; moreover as to QTH and IEF respectively as transferees of losses for income tax purposes, since they were not parties to the earlier Spassked proceedings, they could not be subject to any claim as to issue estoppel since there were not privies of the parties to the earlier proceedings in any event; that was because '[t]he election to transfer all or part of any available loss within a wholly-owned corporate group gives rise to a completely different and independent so-called 'right' from Spassked's right to claim an interest deduction, [being] a new statutory right available to the transferee under s 80G... conferred where the provisions of that section are satisfied'; even if it could be shown that all losses transferred under s 80G in these proceedings arose because of Spassked's claim for interest, that would not mean that Spassked and the transferee were privies, particularly since the commissioner's attempt to equate the two rights constituted an attempt to inflate a claimed economic equivalence into an identity of legal rights, and economic equivalence is not a criterion for the imposition of tax under Australian law'.

Hence the taxpayer applicants submitted in conclusion that the authorities relied upon by the Commissioner were not relevant to challenges under Part IVC of the Administration Act.

Conclusions

95 The principal issue the subject of the earlier Spassked proceedings concluded in favour of the Commissioner related to income tax deductibility or otherwise in respect of interest on funds advanced by IEF to Spassked and for the time being accrued due and owing in relation to the 1992 fiscal year. That issue was of course resolved by the Federal Court, both at first instance and on appeal, in favour of the Commissioner, and Spassked's application to the High Court for leave to appeal was refused. The principal issue arising for resolution in the present proceedings relates to the deductibility or otherwise of interest on such borrowed funds in relation to the 1991, 1993 and 1994 fiscal years. The substantive purpose for which funds had been so advanced to and applied by Spassked remained unaltered in respect of the six fiscal years 1988 to 1994 inclusive, and continued beyond that period of time to the extent of the amount for the time being remaining unpaid by Spassked to IEF. In respect of the 1991 fiscal year, entitlement to utilise at least a segment of that tax deductibility was acquired by QTH in whole or in part, and in respect of the 1993 and 1996 fiscal years, entitlement to utilise at least a further segment of that tax deductibility was acquired by IEF, in each such case pursuant to the transfer of tax loss provisions of s 80G of the Tax Act between relevantly related corporate taxpayers. The funds so borrowed by Spassked from IEF were applied by way of subscription for shareholdings in a further wholly related corporate group subsidiary GIH, and in turn by GIH in wholly owned shareholdings taken up by GIH in so-called Subcos. An outline of those arrangements is illustrated diagrammatically at the conclusion of the Full Court's reasons for judgment in the earlier concluded Spassked proceedings.

96 It was further established by the Federal Court in the earlier concluded Spassked proceedings that the income derived by Spassked, from that application of proceeds of Spassked's borrowings from IEF over at least the fiscal years 1988 to 1994, comprised what the Federal Court described as ' two comparatively miniscule dividends' received from GIH, and further that such was the disproportion of financial return thereby derived by Spassked from those shareholdings, and the circumstances otherwise in which and the purposes for which Spassked undertook those borrowings, that it could not be postulated that the borrowings were made for the purpose of gaining or producing assessable income, or were necessarily incurred in carrying on business for the purpose of gaining or producing assessable income, within s 51(1) of the Tax Act. That finding was made of course in the litigated context of proceedings originated in relation to the 1992 fiscal year alone.

97 The present case of the Commissioner emphasised the circumstance that in order to resolve the issue arising in the context of and by reference to the 1992 fiscal year, evidence was adduced in the earlier concluded Spassked proceedings, and necessarily as well as appropriately so, in respect of the borrowing activities of Spassked, and the purposes thereof undertaken, in respect of at least that duration of six fiscal years stemming from and including the 1988 fiscal year until and including the 1994 fiscal year, and accordingly that the reasons for decision in favour of the Commissioner in respect of the 1992 fiscal year were founded upon and related to that scope of evidentiary material and decision-making, such as to create the estoppel propounded by the Commissioner in the context of the present proceedings. Moreover it is apparent that those inter-company arrangements and transactions remained in place beyond the 1994 fiscal year, for what that may decisively matter. The arrangements implemented in relation to the transfer of tax losses to IEF and QTH, being losses incurred during those fiscal years for income tax purposes, did not derogate relevantly from the continuation in law of the borrowing arrangements originally put in place between IEF as lender and Spassked as borrower.

98 There is identity of significance between the circumstances raised for determination in the present proceedings and those already determined in the context of the earlier concluded Spassked proceedings, notwithstanding that the precise fiscal issue arising for determination thereby related specifically to the 1992 fiscal year, whereas those fiscal issues arising for determination in the present proceedings relate specifically to deductibility in respect of the 1991, 1993 and 1994 fiscal years. The subject nature and scope of the evidence tendered in the earlier concluded Spassked proceedings was such that irrespective of the absence of agreement between the taxpayer applicants and the Commissioner as to any test case precedent to operate in respect of findings of the Federal Court upon the issues arising necessarily for resolution in those previous proceedings, those findings so operate as to deny entitlement in law to the taxpayer applicants to re-litigate those issues in further proceedings falling at least within the evidentiary band of the six fiscal years of income deductibility from 1988 to 1994, upon the footing of abuse of process and also of estoppel.

99 The case of the taxpayer applicants, propounded to the Court in the context of the present proceedings, was at least largely to the effect that there is an inherently different and distinguishable justiciable issue falling for determination concerning the revenue character or otherwise of whatever expense is outlaid or cost is incurred by a given taxpayer in relation to one fiscal year from that which the same taxpayer has outlaid or incurred in relation to any other fiscal year or years, whether antecedent or subsequent to that former single fiscal year and whether consecutively or otherwise. That thesis was maintained by the taxpayer applicants in the context of the present proceedings, notwithstanding that any income so derived by Spassked as borrower in the respective fiscal years here in issue might or would have emanated from the same source and crystallised in the same context, and moreover that the relevant outgoings, being interest on moneys lent, might have been outlaid or incurred in respect of moneys lent for similar purposes and in similar circumstances. Put emphatically by the taxpayer applicants, each fiscal year of a taxpayer was said to produce a discrete fiscal issue or issues for determination for income tax purposes, whether as to assessability or deductibility. Juridical support for those propositions was invoked by the taxpayer applicants principally from the Privy Council authorities of Broken Hill and Caffoor , and from the House of Lords authority of Hope . I have earlier sought to summarise the operation as judicial precedents of Privy Council and House of Lords decisions generally, in terms of binding authority in Australian courts, particularly in the present times. In the course of my review of those English authorities invoked by the taxpayer applicants, I have made certain qualifying observations concerning the context and the scope of operation of those decisions, and have done so not only by reference to subsequent Australian judicial dicta but also to distinguishable factors conceivably attending those English cases.

100 If the IEL corporate group, whereof the taxpayer applicants were wholly owned subsidiaries at all material times, had not originated and thereafter pursued to conclusion the earlier concluded Spassked proceedings (related of course specifically to the 1992 fiscal year), implicitly in order to obtain judicial precedent for corporate group member exposure to income tax liability in relation to the remaining proximate fiscal years in dispute with the Commissioner, it may be conceivably inferred that related proceedings would have been contemporaneously put in place by the Commissioner in relation to the other fiscal years in controversy at the instance of Spassked, and correspondingly of the relevant IEL related companies involved in the transfer of Spassked's tax losses, subject of course to the Commissioner having first responded formally to the objections lodged in respect of those other fiscal years. However it is unnecessary for me to draw that inference, at least in the light of the conclusions I have otherwise reached. For some unexplained reason, any such further steps did not eventuate until at least some later time prior to the commencement of the present proceedings. However the apparently unexplained delay of the Commissioner in responding to those outstanding objections does not in my opinion produce any adverse significance to the operation of issue estoppel, Anshun estoppel or abuse of process, if otherwise established upon the footing of findings of the Federal Court in the context of the earlier concluded Spassked proceedings, whether at first instance or on appeal. In that regard there was no finding of the Full Court inconsistently with any finding at first instance, at least of significance. The taxpayer applicants have not distilled the existence of any distinguishing factor, relevant to the resolution of the proceedings presently on foot in relation to the 1991, 1993, 1994 and 1996 fiscal years, that was not material or would not have been material to the circumstances falling for resolution in the context of the earlier concluded Spassked proceedings. Of course as I have foreshadowed, the taxpayer applicants contended that the critical and pervading circumstance, said to answer the present summary application of the Commissioner, is that each of those fiscal years other than 1992 involved a distinct and discrete issue to that the subject of the earlier concluded Spassked proceedings, in that an income tax assessment is conclusive and final only for and in relation to the fiscal period for which it is made, given the reasoning of the Privy Council and House of Lords authorities in particular of Broken Hill, Caffoor and Hope . Yet as I have indicated already, the earlier concluded Spassked proceedings were determined in the context of, and in explicit reliance upon evidentiary material covering relevantly the commercial activities of Spassked and other members of the wider corporate IEL group undertaken in respect of at least the six fiscal years 1988 to 1994 inclusively, and thus inclusive of the 1992 fiscal year, being evidentiary material upon which the Commissioner placed specific reliance in support of its application for summary judgment in each of the subject four proceedings falling for present resolution.

101 If the intention attributable objectively to the taxpayer applicants, as well as to the Commissioner, had been otherwise than that the outcome of the earlier concluded 1992 Spassked litigation would effectively resolve the fiscal issues appertaining to the other proximate years of relevance I have identified, it may be though to be perhaps beyond comprehension why both parties would not have sought to ensure that the earlier concluded Spassked proceedings would have consensually embraced all fiscal years in dispute. It may be thought to be implicitly apparent that each party chose to treat the earlier concluded Spassked proceedings as being in the nature of a test case, though given the standing of each of the parties, it would be unlikely that any such mutual objective would not have been documented. There is no reason that I have been able to identify or discern as to why the evidentiary factors relating to and bearing upon that 1992 fiscal year could have been adjudged to be materially or significantly different in scope or in principle to those evidentiary factors relating to and bearing upon any of the preceding and following fiscal years the subject of the present proceedings. No such reason has been seemingly articulated by the taxpayer applicants in the context of the present summary proceedings for strike-out, other than the per se circumstance of differing fiscal years in dispute arising for resolution. It would surely have been unthinkable, again objectively speaking, to either party to the earlier concluded Spassked proceedings that the other party could have rationally contemplated a virtually repetitive contest, at substantial cost, of the substantive evidentiary issues arising from the large body of material adduced concerning the IEL group and its inter-group transactions, over such an extended period of time, being an extended period of time covering at least the six fiscal years 1988 to 1994 both inclusive. Yet that is what the taxpayer applicants must inevitably intend to do, at very substantial further expense to both litigating parties, if the present application at the instance of the Commissioner for summary relief should be dismissed.

102 Having regard to the complexity and consequently the length and likely cost of the earlier concluded Spassked proceedings involved in litigating the 1992 fiscal issues, which would have been readily apparent from the outset to IEL group interests and to the Commissioner alike, and to the absence of any evident distinction of material significance here between the issues arising in relation to the 1992 fiscal year from those arising in relation at least to each of the 1991, 1993 and 1994 fiscal years (the 1996 fiscal year seemingly involving a varied situation), it is seemingly unlikely that either party would have entered upon such a lengthy and expensive process involving the resolution of the 1992 fiscal year alone, without an appreciation that a similar curial process would fall to be undertaken and pursued in relation to those further fiscal years, in the absence of an effective estoppel. Both parties must reasonably be taken to have had an appreciation of the principles as to abuse of process, and of issue estoppel and Anshun estoppel, such as to have rendered the need objectively to have drawn the other's attention to the existence of an intention not to be bound by the Federal Court's decision-making upon the 1992 fiscal year assessment in relation to any subsequent assessments in respect of the remaining fiscal years the subject of the then unresolved taxpayer objections. In any event, no such intention was apparently communicated.

103 From the findings I have sought to extract or summarise concerning the context to those six fiscal years, as established by the Federal Court in the earlier concluded Spassked proceedings, I am of the opinion that aside from the case raised by the Commissioner as to the operation of the doctrines of issue estoppel and Anshun estoppel which I will later address, the principal proceedings presently in train at the instance of the taxpayer applicants, in relation to the 1991, 1993 and 1994 fiscal years, and inclusive also of the significance of losses subsequently transferred in respect of the 1996 fiscal year, constitute or involve an abuse of process on the part of the taxpayer applicants within the principles enunciated in Walton , and more recently restated comprehensively in Spalla , being principles which are susceptible to application in my opinion to circumstances beyond the scope of operation of the doctrines of issue estopped and Anshun estoppel. From what I have identified from the context of the events and circumstances attending the earlier Spassked proceedings as determined by this Court in relation to the 1992 fiscal year, it would have been inferentially or implicitly apparent to the decision-makers of the respective parties to those proceedings (of course Spassked and the Commissioner), objectively speaking, that the outcome of that Federal Court litigation would serve to resolve the remaining fiscal years additionally in dispute, and to do so irrespective of the collateral interests of the Spassked wholly related companies IEF and QTH as transferees from Spassked of losses for income tax purposes. In that latter regard, each of IEF, QTH and Spassked have had of course at all material times the same corporator, both immediately (IEL) and ultimately (Adsteam), and hence inferentially the same respective ultimate corporate group decision-makers. The basis for the inter group transfers of tax losses pursuant to s 80G of the Tax Act reflected of course the wholly owned subsidiary status of each of Spassked as transferor and of QTH and IEF as transferees of the benefit of certain of the tax losses in relation to their immediate public company parent IEL.

104 In drawing inferences appropriate to those conclusions, I have paid regard (as I have foreshadowed) to the circumstance that the taxpayer parties did not enter into any explicit agreement with the Commissioner to the effect that the outcome of the 1992 fiscal year proceedings should so operate as to produce a corresponding or consequential resolution of the remaining fiscal years in dispute. Bearing in mind however the subject matter and scope of the evidence adduced and addressed by the parties in the context of the earlier concluded Spassked proceedings (of course Spassked and the Commissioner), and of the reasons for decision at first instance in relation thereto, and consistently therewith the reasons for dismissal by the Full Court on the subsequent appeal by Spassked, being reasons substantially and also essentially in line with those of the primary judge, the mutual intent of each of the litigating parties, as a matter of reasonable as well as necessary implication, was I think objectively to cover the evidentiary field required to resolve the matters in fiscal dispute between the Commissioner and Spassked, and as a consequence between the Commissioner and the transferees or assignees of Spassked's tax losses falling within the scope of Subdivision A of Division 3 of Part III of the Tax Act (the latter containing of course ss 79E and 80G to which I have earlier referred), being of course IEF and QTH. As I have already mentioned, no substantive basis has been articulated by the taxpayer applicants for resistance to the Commissioner's application for summary judgment, other than that fiscal years, apart from that of 1992 the subject of the earlier concluded Spassked proceedings are now sought to be put in issue pursuant to the formal disallowance of objections of the taxpayer applicants, and all that, notwithstanding the evidentiary scope, as well as the reasoning and the outcome of those proceedings.

105 I have borne in mind, as I have already indicated, that the observations and findings of the primary judge, and subsequently of the members of the Full Court, made in the earlier concluded Spassked proceedings, occurred in the context that the objections to income tax assessments lodged by the taxpayer applicants in relation to the present fiscal years in dispute had not been resolved by the time of the Commissioner's adverse determination of Spassked's 1992 fiscal year objections. Nevertheless it would defy reality to postulate that the objections to income tax assessments for the time being unresolved by the Commissioner related to circumstances different in material respects to those falling for resolution by the earlier concluded Spassked. The Commissioner has established that the taxpayer applicants are seeking, by the present principal proceedings brought of course at the instance of IEF and QTH as well as of Spassked as taxpayers, to achieve a re-determination of the same evidentiary issues substantially resolved in favour of the Commissioner already by the earlier concluded Spassked litigation, and relating for instance, and importantly, to the purpose of borrowing, and to the use and application of proceeds of borrowing, and otherwise to matters relevant to the scope of operation of s 51(1) of the Tax Act.

106 Moreover it is further appropriate to point out that the context and circumstances of the present proceedings are I think significantly distant and removed from those of the authorities relied upon by the taxpayer applicants, being principally of course Broken Hill, Caffoor and Hope , such as to render those authorities of no sufficient assistance here to the taxpayer applicants as judicial precedents. I have drawn attention to those contexts and circumstances in the course of my review of those cases. Moreover as I have earlier discussed in the context of the reasons in the joint judgment I have extracted from the High Court's decision in Falk , there is at least something plausible to be said for the view that Broken Hill and Hoysted are susceptible to reconciliation and thus distinction in operation, and in any event, that Hoysted should be preferred to the extent of any inconsistency. So much would be in line with the observations of the three members of the High Court in Queensland Trustees who reviewed the United Kingdom authorities. Moreover I do not think that the taxpayer applicants gain assistance of sufficient significance here from the relatively brief citation of Caffoor appearing in the joint judgment of three members of the High Court in Chamberlain , for the reasons I have earlier mentioned, which included reference to the proposition that ' the Commissioner is not bound by a determination ... ' , and thus not contextually to a process of reasoning leading to a substantive determination by a superior court of record. In none of those English authorities moreover was the doctrine of abuse of process, additionally to estoppel, apparently invoked.

107 The prospect for the taxpayer applicants of successful resistance to the Commissioner's case for summary strike out of their present proceedings is further eroded, at least on the basis of abuse of process if not also of estoppel, when regard is paid to the further factors raised by the Commissioner which I have earlier recounted in these reasons, being factors which are not mutually exclusive, and which are summarised below for completeness:

(i)

the absence of distillation on the part of the taxpayer applicants of circumstances demonstrative of a prima facie viable basis for the entitlement of Spassked to deductibility in respect of the subject inter-company interest liabilities incurred in relation in particular to the 1991, 1993 and 1994 fiscal years;

(ii)

the adverse implications of that shortcoming in relation to the existence of any viable basis for an entitlement consequentially of IEF and QTH to income tax deductibility in respect of transferred losses for income tax purposes in relation to the 1991, 1993 and/or 1996 fiscal years;

(iii)

the scope of evidentiary material, particularly of a documentary nature, presented by the Commissioner to the Federal Court in the context of the earlier concluded Spassked proceedings in relation to the six fiscal years 1988 to 1994, being the subject of subsequent material findings of the Federal Court at first instance and on appeal in favour of course of the Commissioner;

(iv)

what was recorded by Lindgren J at first instance, in the context of course of his resolution of the earlier concluded Spassked proceedings at first instance, as to the similarity of fiscal significance of the circumstances relevantly of the 1992 fiscal year to those of the remaining six fiscal years 1988 to 1994 addressed by his Honour's reasoning and findings;

(v)

what was recorded by the Full Court on the appeal to similar effect in the earlier concluded Spassked proceedings, in the context of the Full Court's findings as to the financial results, and the implications thereof, in relation to those six fiscal years, being of course years preceding and following, as well as including, the 1992 fiscal year; moreover it is apparent, or otherwise open to be inferred, for what it may ultimately matter, from the findings and reasoning in Spassked at first instance and on appeal, that what characterised Spassked's objectives, operations and activity relevantly over that period of six years did not cease on the culmination of that period.

108 An area of further complexity entered however the resolution of the issues arising as to the Commissioner's reliance upon estoppels, as well as upon abuse of process, once more by reference to the issues (including evidentiary issues) resolved by and in the context of the earlier concluded Spassked proceedings. That area of complexity related to the scope of operation of the doctrine as to privies, in so far as the same may apply in relation at least to the general law of estoppel, the taxpayer applicants asserting that IEF and QTH were not privies of Spassked according to the established precepts of that doctrine. Of course Spassked is one of the three taxpayer applicants, along with IEF and QTH, and Spassked was the applicant in relation to the earlier concluded Spassked proceedings, the findings and contextual implications whereof are sought by the Commissioner to be imputed to each of the three taxpayer applicants in relation to in the present context of fiscal years. The issue raised by the taxpayer applicants concerning privies would not relate to the issues arising in respect of the 1994 fiscal year, neither IEF and QTH having apparently taken any assignment of losses incurred by Spassked in relation to that year. I am unable to accept the contention of the applicant taxpayers that the operation of abuse of process and estoppel doctrines, as postulated here by the Commissioner, should be denied in relation to what was found and determined in the earlier concluded Spassked proceedings in any explicit or implicit context involving any issue as to the qualification of IEL and QTH as privies. Each of IEF and QTH, as well of course as Spassked, are wholly owned and controlled by the same parent company, and thus by the same corporate mind, being most proximately of course IEL in the first instance. It may be readily inferred or also imputed objectively that each of the three applicant companies Spassked IEF and QTH held the same corporate purpose and intention, as a matter of commercial reality and otherwise of corporate control and governance, at least in relation to the circumstantial scope of the issues here falling for resolution. I see no good reason why the doctrine as to privity, variously articulated for instance in Rogers, Effem and Arthur JS Hall , should not respond in principle to the Commissioner's present invocation, bearing in mind the substance and reality of the subject commercial context, and the factor of corporate governance within what is here involved by way of primarily an IEL wholly owned corporate group. That conclusion alone would operate in principle adversely to IEF and QTH in relation to any issue by way of denial of privity, given at least the implications of their status as wholly owned subsidiaries equally with Spassked, stemming from the same wholly owning parent IEL. Of course the critical estoppel arising in any event is in favour of Spassked, and I am unable to perceive therefore a sufficiently viable basis for any subsequent imputation by way of reliance upon the doctrine of privity, in circumstances where IEF and QTH derived their title by transfer from Spassked in the first place.

109 The conclusion should in my opinion to be drawn, in the context of the events which have happened, that the mutual intention to be rightly attributable, inferentially as an objective finding in relation to the corporately related taxpayer applicants, is that each was subject at all material times to the same controlling and decision-making corporate mind. For one matter, the earlier concluded Spassked proceedings concerning the 1992 fiscal year were undertaken implicitly to resolve, as I have already foreshadowed, the subject fiscal issues arising between Spassked as taxpayer, and also as between Spassked and the other wholly owned subsidiaries of IEL (being IEF and QTH) on the one hand, and the Commissioner on the other, not merely concerning that fiscal year in relation to Spassked, but also in relation to the remaining fiscal years which fell within the scope of the circumstances the subject of the evidence adduced in those earlier concluded Spassked proceedings. Moreover the taxpayer applicants have been unable to demonstrate in any event a viable footing for distinguishing the fiscal circumstances of Spassked concerning the 1992 fiscal year from those of Spassked concerning any one or more of the 1991, 1993 and 1994 fiscal years, and as a consequence also those of IEF and QTH respectively in relation to those fiscal years. To that conclusion I would add reference to the 1996 fiscal year, so far as the same might be relevant to the estoppel issue arising, which would not in any event seem to be the case, since the losses transferred during the 1996 fiscal year appear to have been incurred by Spassked originally in the context of the critically relevant six year period from fiscal years 1988 to 1994.

110 In that latter regard, in the Full Court in the earlier concluded Spassked proceedings, Hill and Lander JJ recorded (additionally of course to what I have earlier extracted of similar relevance), that '... interest was incurred on a loan to acquire shares where, in all the years of income in question and for the foreseeable future, from the time [that Spassked] structure was established, steps would be taken to ensure that the shares acquired would not produce anything but a nominal amount of assessable income' . Those 'years of income in question' so addressed were of course the six fiscal years from and including 1988 to 1994. Furthermore, as their Honours' joint judgment recorded further, '... at no relevant time could it be said that Spassked incurred in the years of income interest on moneys used by it to acquire shares in the course of any activity carried on by it in the course of gaining or producing assessable income' , but that ' [r]ather, the occasion of each outgoing of interest was to be found in those shares deliberately being non-income producing' . Similar findings in relation to those themes may be identified from the generality of the observations of Gyles J, in the context of his Honour's reference to '... all the years of income in question'. Those findings could not be rightly characterised merely as ' building blocks' leading to the ratio or ratios for decision in Spassked, being the description used by McHugh J in Rogers at 283 ( supra ). I should add that in any assessment of the circumstances here prevailing concerning the Commissioner's case for abuse of process, issue estoppel and Anshun estoppel, the principal focus must be upon those circumstances affecting or relating to Spassked at least in the first instance, those relating to IEF and QTH being derived from Spassked and apparently incurred in relation to the fiscal years 1991, 1993 and 1996, and in any event incurred during the six year fiscal year period from 1988 to 1994 inclusive.

111 As I have further foreshadowed, the taxpayer applicants' principal contentions were in any event to the effect that there is a per se entitlement to curial disputation of the Commissioner's determinations in respect of each fiscal year beyond that of 1992 in controversy, since those disputed determinations, relating apparently to the 1991, 1993, 1994 and 1996 fiscal years (in the case of 1996 involving merely transferred losses originally incurred during the critical 1988-1992 fiscal years), constitute inherently different and discrete matters falling for curial resolution, in conformity with the ratio of the decisions of the Privy Council in Broken Hill and Caffoor and of the House of Lords in Hope . As I have sought to explain earlier in the context of discussion of those English decisions, the same were made in contexts significantly removed from the present, the latter involving of course complex and substantial inter IEL group commercial transactions. The circumstances in Broken Hill, Caffoor and Hope occurred in contexts involving the imposition of yearly taxing or rating assessments, based on criteria inherently susceptible to annual variation by way of change in valuations upon the basis of which rating or taxing would fall for assessment or determination by specialist administrative tribunals exercising functions not juridically comparable to the functions and authority exercised by superior courts of record.

112 The taxpayer applicants contended of course for the operation of a per se entitlement to litigate, discretely or cumulatively, in relation to each of the 1991, 1993 and 1994, and apparently also the 1996, fiscal year revenue objections, and the consequential disputes the subject of disallowed objections, in line with those English decisions of high authority. Bearing in mind those distinguishing jurisdictional features, and as the Commissioner moreover rightly observed, if the taxpayer applicants were to be permitted to raise for redetermination each and all of the same substantive issues, or virtually so, that were raised, considered and determined in the earlier Spassked proceedings, albeit that the latter proceedings were geared and related to a different fiscal year (ie 1992), being issues principally as to the purpose of relevant borrowings, and as to the use or otherwise of borrowed funds in activities carried on for the purpose, or otherwise in the course of gaining or producing assessable income, and if the taxpayer applicants were to be successful in any such further proceedings against the Commissioner, there would be on record, as I have already mentioned, what would be inconsistent or substantially inconsistent reasons for judgment of the Federal Court. All that would constitute situations well removed, conceptually as well as contextually, from that involved for instance in Saffron . Moreover there was reversed by the Privy Council's decision in Broken Hill what had been an earlier decision of a Full Bench (by majority) of the High Court of Australia, and there was inconsistency between that decision of the Privy Council and the almost contemporaneous Privy Council decision in Hoysted , involving an appeal which also emanated from Australia. Moreover as has been further mentioned, Hoysted was applied by the Full Court in Chamberlain (though the principal judgment of the High Court in Chamberlain cited Caffoor though briefly and not in any controversial context), and Caffoor and Hope did not involve appeals from Australia. Furthermore Dixon J (as he then was) in Blair v Curran cited Hoysted , not irrelevantly in terms of the scope of principle here the subject of scrutiny. The High Court in Falk , without expressing any preference, pointed to the dilemma in reconciling Broken Hill with Hoysted . More directly of assistance to the Commissioner's case moreover was the favourable approach taken to Hoysted adopted by those three members of the High Court in Queensland Trustees who made reference to Hoysted . In all those circumstances, the emphatic approach adopted by the taxpayer applicants in the present proceedings as to the operation authoritatively of the Privy Council decisions in Broken Hill, Caffoor and Hope might be thought to have at best debateable viability, particularly if account be also taken of the nature and extent of the jurisdiction and functions exercised by the tribunals etc from where at least the litigation in Caffoor and Hope originated.

113 To the extent that it is necessary or appropriate to characterise the juridical basis for the conclusions which I have reached, I would primarily invoke the operation of the overreaching doctrine of abuse of process illustrated from the dictum I have cited from Spalla . The Commissioner acknowledged that the taxpayer applicants did not commit at least to any explicit agreement to the effect that the outcome of the earlier Spassked proceedings, relating as those proceedings did of course to the 1992 fiscal year, would govern the resolution of the income tax issues arising in relation to the fiscal years presently in issue. If I may be repetitive in the light of the complexity of the circumstances the subject of the proceedings, those fiscal years were as to Spassked as taxpayer, the fiscal year 1994, and as to each of IEF and QTH the fiscal years 1991, 1993 and 1996. In relation to those three latter fiscal years, for what it may matter, it is unclear whether Spassked transferred to IEF and QTH respectively, pursuant of course to the tax loss provisions in favour of wholly owned subsidiaries pursuant to Subdivision A of Division 3 of Part III to the Tax Act, the whole or part only of the tax losses for the time being prevailing in respect of those three fiscal years. In any event, there is much to be said for the view that although the issue arising in the earlier Spassked proceedings concerned in a jurisdictional sense the 1992 fiscal year, the resolution of that issue by the finding of the Federal Court at first instance and on appeal occurred in the context of the Federal Court's findings in relation to the critical six fiscal year period from 1988 to 1992. Moreover as I have also already indicated, and for what it may ultimately matter, there is something to be said to the effect, again from the context of the reasons for judgment of that earlier 1992 fiscal year litigation, that the outcome thereof would implicitly govern the resolution of the issues arising in relation to the five remaining fiscal years as were by then also in dispute with the Commissioner at the instance of Spassked, IEF and QTH. Be that last observation as it may, any such wider implication is not essential to the Commissioner's present case for summary judgment. What the taxpayer applicants presently seek to do, by their pursuit of the present proceedings, is to litigate issues of a dimension that have been resolved, in substance and reality, in and by the earlier concluded Spassked proceedings, with the consequence that the Commissioner would be therefore ' troubled twice for the same reason', to adopt Lord Hoffman's description in Arthur JS Hall , should the present summary judgment application brought at the instance of the Commissioner not be upheld. So much attracts the adverse operation of the doctrine of abuse of process.

114 As to the further operation of the doctrine of estoppel generally, the earlier concluded Spassked litigation, albeit litigated in the immediate context of the 1992 fiscal year alone, extended in at least legitimate evidentiary scope to circumstances falling within relevant periods of time both preceding and following that fiscal year, such as to encompass each of the six fiscal years the subject of present critical disputation. I use that expression to describe when the operation here of s 51(1) took effect, and not when the losses sustained were transferred by Spassked to IEF or QTH (as the case may be). The Commissioner has a viable basis for the case articulated to the effect that at issue in the earlier concluded Spassked proceedings, both at first instance and on appeal, was whether '... the occasion of each outgoing of interest was to be found in those shares being deliberately non-income producing for the foreseeable future', that articulation being related to the six fiscal years from 1988 to 1994. Once that finding is open and should be made, so much operates to impute relevantly at least an Anshun estoppel in favour of the Commissioner, and I think also an issue estoppel. I have already extracted material reflective of the implementation, on Spassked's part, of that vitiating objective or purpose on Spassked's part in terms of s 51`(1) of the Tax Act. The Spassked decision at first instance and on appeal has finally and conclusively established the basis for upholding the Commissioner's strike-out application, to paraphrase to the extent in particular italicized the description of Dixon J in Blair v Curran at 532-533, albeit articulated in the context of discussion of issue estoppel. That juridical expression may be contrasted with what was described by the Privy Council in Hoysted at 304 as '... a matter ... only incidentally or collaterally related to the point actually discussed and litigated' .

115 As to whether the estoppel which here took effect, strictly speaking as an Anshun estoppel or an issue estoppel, to the exclusion of one from the other, raises the initial appearance of a somewhat moot point. Consistently however with the reasoning I have thus far sought to articulate generally in my approach to the taxpayer applicants' case, I think that the preferred analysis should perhaps be that of issue estoppel rather than Anshun estoppel, if a choice between the two is mandatory. That is because what arose as the central issue in the earlier concluded Spassked proceedings, and in relation to which the general body of evidentiary material was directed, was the nature and extent of Spassked's business operations and activities for the six fiscal years 1988 to 1994, albeit in order to determine the implications of those operations and activities to the 1992 fiscal year. The business operations of Spassked from 1 July 1991 to 30 June 1992 did not of course occur in a business vacuum in any operational sense, but in the wider context of continuing business activities undertaken over at least those six fiscal years inclusive of the 1992 fiscal year. In those circumstances I would characterise as the issue in substance and reality arising, in relation to which the earlier Spassked proceedings were conducted, as related to and bearing upon the scope of those fiscal years inclusive at least of the 1992 fiscal year. The description of Dixon J in Blair v Curran accommodates the resolution of that issue in favour of the Commissioner, for the reasons I have already outlined.

116 Additionally or alternatively, the Commissioner contended that the requirements of Anshun estoppel have been satisfied. They are not requirements which must necessarily operate in a mutually exclusive way or to a mutually exclusive extent in relation to any other juridical notion of estoppel or for that matter to abuse of process. The conclusion of the Federal Court in the earlier Spassked proceedings, ultimately in relation to the 1992 fiscal year, was formulated in a context of findings wherein it would have been unreasonable not to rely on (to adopt the Anshun expression) the evidence related to the six yearly period of time measured by the evidence adduced in the context of those proceedings, and duly accepted by the primary judge and the Full Court. Although the incidence of income tax is normally geared to a particular fiscal year, the evidence as to a taxpayer's conduct of business operations of a longer period of time may well throw critical and decisive light upon the fiscal nature or fiscal consequences of that taxpayer's dealings or conduct related to that fiscal year. So much reflects the ultimate findings of the earlier concluded Spassked proceedings, framed as the same were by reference to the 1992 fiscal year, and based upon the evidentiary findings related to the six fiscal years from 1988 to 1994.

117 The Commissioner's case for summary judgment is required in principle to be ' clearly demonstrated', and ' very clear indeed', and is inhibited by the need for ' exceptional caution' by the Court ( General Steel and Dey ). As I have earlier recorded, the Commissioner's case is not sought to be established on the footing of the doctrine of res judicata as applied in the common law of Australia, and which normally involves the merger of causes of action into judgments (compare Henderson at 114-115). Apart from abuse of process, the Commissioner's case is founded upon the doctrine of issue estoppel as well as Anshun estoppel, as those doctrines have been formulated and applied in Australia by judicial dicta . In the case of issue estoppel, I have earlier cited the well known dictum of Dixon J in Blair v Curran to the effect that it is necessary to expose ' a state of fact or law ... alleged or denied the existence of which is a matter necessarily decided by the prior judgment' , being a matter ' fundamental to the decision arrived at' , and not merely matters of fact or law which are ' subsidiary or collateral', or ' concern only evidentiary facts and not ultimate facts ...'.

118 Further as to the operation in Australia of both issue and Anshun estoppels, the latter having been described by Gleeson CJ in Murphy at 286 as ' a wider form of estoppel' , the Commissioner contended that the critical findings of the earlier concluded Spassked proceedings I have extracted also related to or involved ' ultimate facts which form ingredients in the cause of action' (Blair v Curran at 532), and which were so closely connected with the subject matter of the earlier concluded Spassked proceedings that it was to be expected that the same would be subsequently relied on by the Commissioner in relation to fiscal years additional to 1992 (see again the full context of the dicta I have earlier cited from Anshun and Henderson ). I further bear in mind that issue estoppel operates in relation not just to the prior litigating parties but also to their respective privies ( Rogers ), and hence persons or entities claiming under or through or by virtue of the legal rights of such parties ( Effem ). I think that it should be concluded that each of the taxpayer applicants qualify as privies of each other, and of their common wholly owning parent IEL, for the purposes of the operation of doctrines as to issue estoppel and Anshun estoppel, being a qualification in any event not seemingly required to be fulfilled in the case of the wider and more comprehensive notion of abuse of process. Each of IEL and its wholly owned subsidiaries here involved, being of course each of the taxpayer applicants, was subjected to the evident decision-making corporate mind of IEL as parent company.

119 At least the primary case of the taxpayer applicants, in relation to the principal income tax issue raised by them, was as I have recounted, to the effect that the earlier concluded Spassked proceedings involved an 'essentially different question' for instance to the issues falling for resolution at the instance of the Commissioner, because the issue there falling for determination concerned a different fiscal year, that being of course 1992, and further that what occurred in those earlier proceedings could not 'elevate the decision to cover matters that were not before the Court as part of the proceedings'. The matters so referred to as 'not before the Court' in the earlier concluded Spassked proceedings were submitted by the taxpayer applicants to be the matters concerning income tax deductibility related to losses sustained by Spassked in respect of the 1991, 1993 and 1994 fiscal years (and subsequently as to the 1991 and 1993 years as to losses transferred to IEF and QTH), and the 1996 fiscal year to the extent that the same related to losses also sustained earlier by Spassked and transferred to IEF. In that context, the taxpayer applicants submitted that judicial findings made in the context of income tax or other annual revenue disputes could not lawfully create estoppels in relation to the resolution of fiscal disputes arising between the same revenue authority and the same taxpayer(s), or its or their privies, in respect of any fiscal year subsequent to that earlier fiscal year in relation to which any such prior resolution originally occurred. No distinction was drawn by the taxpayer applicants between a dispute involving an earlier fiscal year falling for resolution and a dispute involving a subsequent fiscal year falling for resolution. Both of those situations were here involved by reason of the estoppel relied upon arising in respect of the 1992 fiscal year by reference on the one hand to the 1991 fiscal year and on the other hand by reference to the 1993 and 1994 fiscal years (and also the varying circumstance of the 1996 fiscal year). The taxpayer applicants sought to invoke reliance for those propositions primarily of course upon the ratio of the Privy Council decisions in Broken Hill and Caffoor and of the House of Lords decision in Hope , and what it contended to be the limits of the doctrine as to privity in relation to estoppels.

120 As I have earlier pointed out, the controversy the subject of each of those three English decisions had its origin in the findings of an administrative tribunal, or otherwise relatively speaking inferior forum, in either case which exercised a decision-making function not comparable here with that of a superior court of record, such as the Federal Court of Australian in the case of the earlier concluded Spassked proceedings at first instance as well as on appeal, or such as a Supreme Court of any of the States of Australia. There would be moreover a measure of unreality and illogicality in any juridical contrast being made (as the taxpayers sought to do), in the context of disputed income tax proceedings such as was involved in relation to Spassked for the 1992 fiscal year, by reference to the resolution of a fiscal dispute related to a prior fiscal year in contrast to a subsequent fiscal year, in circumstances where the dispute is litigated in respect of fiscal years both prior and subsequent to that of the fiscal year of precedent relied upon as reflective of the conduct the subject of alleged estoppel. I should refer in that regard additionally to the finding appearing in the joint reasons for judgment of Hill and Lander JJ in the Full Federal Court in Spassked at [113] that '... the proposal was designed to ensure, and its implementation did ensure, that at no relevant time could it be said that Spassked incurred in the years of income interest on moneys used by it to acquire shares in the course of any activity carried on ... in the course of gaining or producing assessable income ... ' .

121 Other considerations and findings of the Full Court in Spassked, referrable implicitly and explicitly to circumstances prevailing both prior, during and subsequent to the circumstantial scope of the 1992 fiscal year, serve to demonstrate the unreality, as well as the misconception, inherent in the taxpayer applicants' case for the exclusion in principle of the operation of the doctrines of issue estoppel and Anshun estoppel (additionally of course to abuse of process) from consideration in relation to the Commissioner's present application for summary judgment. The complex processes of judicial consideration and findings, undertaken by Lindgren J in his reasons for judgment in Spassked at first instance, and subsequently by the Full Court on the appeal upholding his Honour's decision, demonstrate the inherent inapplicability, in relation to circumstances such as here present, of the reasoning in, and the ratios of, Broken Hill, Caffoor and Hope in the Privy Council and House of Lords respectively, based as each decision was of course on the principle there enunciated as to each new or successive fiscal year of rating or taxing in dispute constituting an inherently new or different question or issue from that the subject of any preceding (or for that matter following) fiscal year. If I may be repetitious, the rating authority in Broken Hill failed in the Privy Council upon the footing that the prior majority decision of the High Court made in its favour had related '... to a new question, namely, the valuation for a different year and the liability for that year' .

122 The incidence of assessments to income tax, in contrast at least to some other revenues, is referable to activity or activities which may occur or extend over an entire fiscal year, but the life of such business activity would normally extend over more than one fiscal year, that is to say, for the duration of the conduct of relevant business operations. More frequently than not would that in fact be the case. In those contexts, an estoppel may be seen to crystallise by reference to fiscal consequences flowing from the nature or incidences of the operation or conduct of a business over the life thereof or over the life of aspects thereof. Hence the conceptual difficulty in equating the circumstances, for instance, of a valuation of property having an operation for the ensuing annual period of time with the circumstances of business activity or activities in operation over a period of time which embraces a particular fiscal year. A valuation of a property for annual rating purposes, whatever be the criteria therefore, understandably would obviously tend to involve distinguishable or different implications for the exaction of revenue then the conduct of business operations for the gaining immediately or ultimately for the derivation of assessable income. Those factors further tend to demonstrate the inherent validity in reasoning pursued by the Commissioner in support of the case for estoppel in circumstances such as here postulated, being circumstances of six fiscal years of continued operation of business activity.

123 The predication of the taxpayer applicants' case boiled down to or at least involved the proposition that although the circumstances of business operations of the 1992 fiscal year, in relation to which the previous Spassked proceedings were determined, remained essentially unchanged in scope in the course of the subsequent fiscal year or years the subject of ongoing dispute, and moreover remained unchanged from the circumstances of the prior fiscal year or years, any purported findings in line with such subsequent or prior circumstances cannot govern or control that taxpayer's entitlement to fiscal determination de novo in respect of the later fiscal year, freed from the constraints of estoppel. The reasoning of Lord Keith in Hope at 567, which appears within the context of what was one of the only two speeches of the House of Lords on that appeal in relation to which reasons were also provided, reflects the following unresolved dilemma of significance appearing after his Lordship's reference to Hoysted :

'... Any objection, therefore, which was based on difference of subject-matter between the taxes for the respective years, would have to meet the puzzling question whether for the purposes of estoppel the jurisdiction of the High Court in adjudicating upon points of law arising in tax proceedings is not wider and more comprehensive than the jurisdiction of the original assessing tribunal. It is true that that aspect does not seem to have had any weight attached to it in the other decision of the Judicial Committee of the same year, the Broken Hill case. But there the point did not call for, or receive, any full attention. I say nothing more about this. It is not the point before us and, if it even arises, it will need separate consideration.'

124 As I have foreshadowed, the taxpayer applicants' case seemingly boils down to an entitlement per se to a full hearing in respect of each of the fiscal years asserted by the taxpayer applicants to remain in dispute, following upon, and notwithstanding the basis, nature and scope of resolution of, the earlier concluded Spassked proceedings, yet without the need for the taxpayer applicants to demonstrate the existence any material distinction from the circumstances the subject of the ratio decidendi of the earlier concluded Spassked proceedings. The factor merely as to the existence of different fiscal years of income in contest to that of 1992 is said by the taxpayer applicants to be enough to constitute in law a new issue or dispute required to be determined, freed from the restraints of operation of the doctrine of estoppel, and by reason of the ratios of the Privy Council and House of Lords decisions respectively in Broken Hill, Caffoor and Hope . The consequences of that proposition of the taxpayer applicants being correct in principle for the purposes of the law of income tax have radical implications in relation to issues arising in litigious circumstances such as the present, involving as they would the further hearing and determination of the same substantial scope of evidence, or virtually so, as was adduced in the context of the earlier concluded Spassked proceedings.

125 I have reached the conclusion that the Commissioner has established a viable case for summary judgment upon the basis of estoppel arising upon or out of the circumstances falling within the scope of the findings of this Court made at first instance, and subsequently by way of confirmation on appeal, in the context of resolution of the earlier concluded Spassked proceedings, that is to say of course, the circumstances the subject of the Federal Court's findings at first instance and on appeal relevantly to the period of six fiscal years from 1988 to 1994, and the fiscal implications and consequences of those circumstances. Unlike fiscal litigation involving or relating for instance merely to quantifications of value of realty or personalty, or of losses and outgoings otherwise uncontroversial in character, the resolution of the earlier concluded Spassked proceedings required the Federal Court's consideration of a spectrum of circumstances relating to the business operations of Spassked which had taken place in substantial commercial contexts, being circumstances which extended in scope beyond the duration of the 1992 fiscal year, antecedently as well as subsequently. It makes no sense, nor is there justification moreover for the consequential requirement, that the Commissioner submit to what doubtless would be a further lengthy and costly Federal Court hearing, and further curial decision-making, in relation to what would require and involve the tender and judicial consideration once more of a significant amount of viva voce and documentary evidence based on, or arising out of, events which occurred and matters which were undertaken in relation to fiscal years both prior and subsequent to 1992, when that scope of evidentiary material has been already afforded the Court's extensive scrutiny and findings both at first instance and subsequently on appeal. I refer of course in that regard to the entire six fiscal years from 1988 to 1994 (inclusive). Further would that be so in the present context of events, if the inference reasonably open to be drawn is that the previously concluded Spassked proceedings in relation to the 1992 fiscal year were in substance and reality in the nature of a test case implicitly intended to resolve all of the outstanding objections to assessments lodged by the applicant taxpayers with the Commissioner, being an issue strictly speaking unnecessary for me to resolve.

126 My primary juridical basis for granting or upholding the Commissioner's application for summary judgment is that of abuse of process. The principles for the operation of that doctrine, outlined in the dicta I have earlier cited from Walton and Spalla , are in my opinion satisfied in relation to the complexity of circumstances I have earlier recorded in these conclusions and which are based upon the findings of the Federal Court at first instance and appeal in the earlier concluded Spassked litigation. If I may be repetitive, the case which the taxpayer applicants would seek to pursue by their amended statement of claim constitutes and involves in substance and reality an endeavour to re-litigate issues and disputes which have been already addressed and resolved by this Court in and by the findings made in the earlier concluded Spassked proceedings, at first instance and on appeal. Yet the taxpayer applicants would seek by the presently structured proceedings, once again of course in the Federal Court, to trouble the Commissioner twice, and to do so for essentially the same reasons and on essentially the same evidentiary structure, albeit involving differing fiscal years to 1992. Those issues or disputes would boil down to the deductibility or otherwise of interest payable on the borrowings of Spassked obtained from a corporately related entity or entities, being borrowings undertaken during the period of time from 1 July 1988 to 30 June 1994, and aggregating (as I have earlier detailed) the sum of $6,527,082,709.00. Those issues and disputes were indeed raised and resolved in the context of the earlier concluded Spassked proceedings, which ultimately boiled down to the issue whether or not interest on such borrowings were deductible within the scope of operation of s 51(1) of the Tax Act in relation to the fiscal year 1992.

127 If I may be once more repetitive, the Federal Court has already addressed essentially the same circumstances in the context of the earlier concluded Spassked proceedings, being circumstances which prevailed throughout the six fiscal years embracing 1991, 1993 and 1994, as well as of course the critical fiscal year 1992. Those circumstances were resolved at first instance and on appeal, being the circumstances falling within the further scope of the six consecutive fiscal years addressed by the comprehensive evidence tendered and findings made in those proceedings. Hence as the Commissioner has emphasised and as I have earlier recorded, if the present summary proceedings at the instance of the Commissioner were to be dismissed, the Commissioner would thereafter be vexed twice by a continued involvement in the further lengthy proceedings in this Court which the taxpayer applicants have set in train, and there could conceivably occur outcomes involving inconsistent judgments.

128 Apart from what I would conclude in favour of the Commissioner to have been an abuse of process, I would further find that at least the ground of Anshun estoppel has been additionally established by the Commissioner in the circumstances I have already recorded and established in these reasons. The inference is rightly open to be drawn, from the conduct and events of the earlier concluded Spassked proceedings, that it was necessary or at least appropriate for the Commissioner to require the Federal Court to decide, and indeed the Federal Court did decide, the issue as to deductibility sought by Spassked in respect of the fiscal year 1992. To paraphrase the language of Anshun , for the present proceedings to be allowed to proceed to trial would necessarily and inherently involve, as well as require, the raising once more for consideration and determination by this Court of issues and related matters cardinal to the claims and contentions which attended the earlier concluded Spassked proceedings, and in particular the claim at least inherently that the decisions the subject of those proceedings made at first instance and on appeal were erroneous. What was so resolved and determined by the earlier concluded Spassked proceedings, in relation to the context specifically of at least the six fiscal years I have identified and discussed, did not relate merely to ultimate facts. To determine and resolve income tax deductibility in respect of a single fiscal year, such as previously occurred in relation to the 1992 fiscal year in respect of Spassked, in the context of continuing business operations and activities of a given taxpayer, particularly business operations and activities conducted on a substantial scale, would normally require, necessarily as well as expediently, a broad analytical sweep of those operations and activities, and in the case of continuing businesses in particular, such as were here apparently involved, of operations and activities undertaken both prior and subsequent to that fiscal year. In the circumstances of modern business and commercial undertakings involving corporate groups which conduct continuing or repetitive business transactions inter se , that sphere of curial considerations may necessarily well require the consideration of transactions, not just of individual corporate taxpayer's activities, but also the transactions of its wholly related group companies or so-called privies.

129 It follows further of course from the foregoing conclusions I have reached in these reasons adversely, in the first place, to Spassked in relation to the fiscal years I have considered and addressed, being fiscal years apart from but placed both prior and subsequently to that of 1992, that IEF and QTH would not be entitled to deductions pursuant to s 80G of the Tax Act in respect of losses transferred to each of them respectively from Spassked in respect of any of those fiscal years the subject of my review.

130 In the result in my opinion, the Commissioner's application for summary judgment should be granted with costs. I will direct that the Commissioner bring in draft short minutes of order so framed as to give effect to these reasons, and to do so on a date to be fixed by arrangement with the parties and the Court. The Commissioner must have the costs of the proceedings to date, inclusive of the costs related to the present summary application.