The Distinction Between Questions of Fact and Questions of Law in Section 44 Appeals to the Federal Court

Tax Bar Association Seminar

Jennifer Batrouney QC 20 May 2014

RTF version RTF version

Appeal to the Federal Court – s 44 of the Administrative Appeals Tribunal Act 1975 (Cth) (AAT Act)

Section 44(1) of the AAT Act provides that:

A party to a proceeding before the Tribunal may appeal to the Federal Court of Australia, on a question of law, from any decision of the Tribunal in that proceeding. (Emphasis added).

Thus, as Gummow J observed in TNT[1] - the existence of a question of law is now not merely a qualifying condition to ground the appeal, but also the subject matter of the appeal itself.

The Federal Court does not undertake a "rehearing" de novo of questions of fact and law examined by the Tribunal in the discharge of its statutory review function. Nor does it undertake a general merits review of the Tribunal's decision.[2]

The scope of the appeal does not render amenable to challenge the Tribunal's findings of fact unless the manner of their finding raises a question of law.[3] It is not an error of law to make a wrong finding of fact.[4]

Because it is a question of the Court's jurisdiction, the Court needs to be satisfied that there is a question of law raised, even in the absence of a challenge by the respondent to the appeal.[5]

Finally, it is clear that the Court has power to strike out a notice of appeal in reliance upon s 44 where the notice does not state a question of law.[6]

My sense is that this court is alive to disguised merits review dressed up as purported questions of law and will give it short shrift.

The Federal Court rules prescribe the contents of the Notice of Appeal and I will deal with this towards the end of this paper. Suffice to note, at present, that the question of law must be stated with precision.[7]

Critical to identify the question of law with precision

The importance of the identification of the precise error of law said to arise was emphasised in Hoe v Manningham City Council:

The need to identify precisely an error of law is important also to identify and define the subject matter and ambit of any appeal to this Court and thus to ensure that the statutory appellate jurisdiction of this Court is lawfully engaged, defined and circumscribed.

The Court's jurisdiction to hear an appeal depends upon there being a question of law in issue but it is only the question of law which the Court is permitted by the statutory appeals jurisdiction to consider. The fact that a question of law may have been involved in a decision does not permit the whole of the decision to be agitated upon an appeal[8]]. The question of law is the trigger for an appeal but is also the entire subject matter of the appeal and for both purposes it is essential that the question of law said to have been erroneously decided is identified exactly. [9]

In this regard, a s 44 notice of appeal which frames a purported question of law as:

Whether, on the evidence before the Tribunal, the Tribunal erred in the construction and application [of a statutory provision]

will be struck down on the ground that questions such as that:

[A]re, at best, expressed as a broad inquiry about the construction of provisions which for that reason fail to identify questions of law to enliven the jurisdiction conferred by s 44 of the AAT Act; at worst they seek to engage in merits review under the guise of an unfocussed inquiry by a generalised contention that the facts could not have led to the decision which was reached.[10]

Classic formulation of what is an error of law

It is 'not easy' to discern whether an issue raised is a question of law, a mixed question of law and fact, or a question of fact. The difference can be subtle and the distinction vexed,[11] obscure[12] and elusive.[13] Justice French (as he then was) suggested that the distinction 'could well be included in the class of categories of meaningless reference'.[14]

In their work on Judicial Review of Administrative Action, the authors do not inspire confidence in undertaking this task. They state that:

Secondary literature abounds with derision and scorn for those who attempt to find objective criteria for distinguishing between errors of fact and law. The distinction certainly admits of a degree of manipulability. At the same time as saying that the distinction is "vital" in many legal contexts, the High Court has acknowledged that "no satisfactory test of universal application has yet been formulated".

It is not therefore surprising to find statements of despair or even cynicism littered through the law reports. Professor Endicott asserts that "Lord Denning … followed an unswerving rule of calling a question a 'question of law' when he wanted to." … the distinction between error of law and fact has been called slippery, elusive, too easily manipulated, "sterile and technical", and something which can generate "artificial, if not illusory" distinctions. Some have wondered whether it might not be meaningless. (citations omitted) [15]

Indeed, another author has stated that the terms 'law' and 'fact':

… readily accommodate themselves to any meaning we desire to give them. … What judge has not found refuge in them? The man who could succeed in defining them would be a public enemy. [16]

Having noted these cautions, the learned authors go on to attempt that very definition:

A question of fact involves an inquiry into whether something happened or will happen, and is quite separate from any assertion as to its legal effect. A question of law involves the identification and interpretation of a norm which is usually of general application. [17]

In the context of the AAT, the majority of the Full Court in Federal Commission of Taxation v Trail Brothers Steel & Plastics Pty Ltd stated that:

... what is "on a question of law" for the purposes of s 44 of the AAT Act has been analysed in many cases and includes:

(1) whether the AAT has identified the relevant legal test ... ;

(2) whether the AAT has applied the correct test ... ;

(3) whether there is any evidence to support a finding of a particular fact ... ; and

(4) whether facts found fall within a statute properly construed ... [18]

No evidence

It is not an easy thing to establish that the AAT made an error of law because there was "no evidence" to support the findings that it made. Often the taxpayer's case is, at best, that there must have been an error of law because it ought to have succeeded on the evidence.[19] This is insufficient – the taxpayer must establish that the relevant finding of the Tribunal was not open to it in the sense of there being no evidence to support the finding.[20]

Gordon J summarised the "no evidence" ground in Bell[21] as follows:

In relation to the "no-evidence" ground, a decision will be set aside where a decision maker has made a finding of fact without probative evidence to support it or drawn an inference which was not open on the primary facts: Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321 at 356; Bruce v Cole (1998) 45 NSWLR 163 at 188. Further, only jurisdictional facts are relevant: VWBF v Minister for Immigration and Multicultural and Indigenous Affairs (2006) 154 FCR 302 at [19]. The finding complained of must be identified accurately: VWBF at [18]. (Emphasis added)

Substance over form

In the Birdseye decision, one of the purported questions of law was stated to be:

Whether the finding of the Tribunal [in relation to a particular fact] …lacked any supporting evidence.

The plurality noted that this question was stated in the form of a question of law because the question of whether there is any evidence of a particular fact is a question of law.[22] However, they went on to say:

… in determining whether the jurisdiction of this Court has been properly invoked under s 44 of the AAT Act, form cannot prevail over substance. If the decision of the Tribunal is not based on a finding as to a particular fact, the appellant cannot found an appeal under s 44 on an assertion that there was no evidence to support that fact; no answer to the question of law could justify the grant of the relief sought, or any relief.[23]

The plurality held that the incorrect reference to the particular fact was "a mere slip" which lacked significance so far as the Tribunal's decision was concerned. The decision was not based on that particular fact. As such, even if there was an incorrect finding of fact, the decision of the Tribunal was not affected by that legal error.

This is perhaps another way of putting the point that it is only jurisdictional facts that are relevant to the "no evidence" ground.

Jurisdictional facts

In VWBF v Minister for Immigration and Multicultural and Indigenous Affairs Heerey J set out what is a "jurisdictional fact":

Further, to succeed on the "no evidence" ground, the fact of which there is said to be no evidence would need to be a jurisdictional fact, that is to say "an essential preliminary to the decision-making process" as distinct from "a fact to be adjudicated upon in the course of the inquiry": Colonial Bank of Australasia v Willan (1874) LR 5 PC 417 at 442-443, VXDC [2005] FCA 1388; (2005) 146 FCR 562 at [13]. [24]

What factors is an administrative decisionmaker BOUND to take into account?

As a matter of general principle, the factors that an administrative decisionmaker is bound to consider in making a decision are determined by a construction of the statute conferring the power. The statute might exhaustively state those matters or merely recite them in an inclusive way. If not expressly stated, they must be determined by implication from the subject matter, scope and purpose of the Act.[25]

Weight of evidence

Mason J discussed the weight to be accorded to a particular issue in Peko-Wallsend as follows:

It follows that, in the absence of any statutory indication of the weight to be given to various considerations, it is generally for the decisionmaker and not the court to determine the appropriate weight to be given to the matters which are required to be taken into account in exercising the statutory power. ... I say "generally" because both principle and authority indicate that in some circumstances a court may set aside an administrative decision which has failed to give adequate weight to a relevant factor of great importance, or has given excessive weight to a relevant factor of no great importance. The preferred ground on which this is done, however, is not the failure to take into account relevant considerations or the taking into account of irrelevant considerations, but that the decision is "manifestly unreasonable". [26]

Thus, the consideration of, and weight to be accorded to, the evidence adduced by the Applicant is a matter for the AAT.[27]

I suspect that a s 44 notice of appeal riddled with references to the decision maker failing to give "any weight", "due weight" or "sufficient weight" to a matter will not be received warmly by this court. Indeed, an assertion that a finding was "against the weight of the evidence" is not a question of law.[28]

While it might be stating the obvious, it has also been noted that no question of law arises in circumstances where the Tribunal did not resolve an issue and did not make findings of fact in relation to an issue which had not been the subject of any contention advanced before it for resolution.[29] As one Full Court put it:

It is difficult to see how this Court could conclude that the Tribunal erred in law in failing to make a finding of fact it was not invited to make.[30]

Drawing of inferences from facts found

As noted by the Full Court in Minister for Immigration & Multicultural Affairs v Al-Miahi:

The question whether there is any evidence of a particular fact is a question of law. Likewise, the question whether a particular inference can be drawn from facts found or agreed is a question of law. That is because, before the inference is drawn, there is a preliminary question as to whether the evidence reasonably admits a different conclusion. Accordingly, in the context of judicial review, the making of findings and the drawing of inferences in the absence of evidence is an error of law. On the other hand, there is no error of law simply in making a wrong finding of fact. ... A party does not establish an error of law by showing that the decisionmaker inferred the existence of a particular fact by a faulty process, for example by engaging in an illogical course of reasoning. Thus, at common law, want of logic is not synonymous with error of law. So long as the particular inference is reasonably open, even if that inference appears to have been drawn as a result of illogical reasoning, there is no place for judicial review because no error of law has taken place – Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321 at 356. [31]

Thus, as long as the drawing of an inference is reasonably open, the drawing of that inference cannot amount to an error of law, even if the inference was arrived at via a faulty process of reasoning.

Wednesbury unreasonableness

The concept of "unreasonableness" in the context of an inference that is not reasonably open so as to ground an error of law was summarised by Greenwood in Kirk v Australian Postal Corporation as follows:

In Associated Provincial Picture Houses Ltd v Wednesbury Corporation [1947] EWCA Civ 1; [1948] 1 KB 223 at 230 ("Wednesbury Corporation"), Lord Greene MR developed his wellknown and oftquoted formulation of unreasonableness concerning a decision that is so unreasonable that no reasonable person could have arrived at it. In Minister for Immigration and Citizenship v Li [2013] HCA 18; (2013) 87 ALJR 618 at 638 ("Li"), Hayne, Kiefel and Bell JJ at [68] observe that Lord Greene MR's formulation of unreasonableness should not be regarded as limited to a decision which "is in effect an irrational, if not bizarre, decision". Lord Greene MR in framing his "doctrine" recognised that the grounds upon which an exercise of power might be challenged could be brought within "a single head of unreasonableness". In Secretary of State for Education and Science v Tameside Metropolitan Borough Council [1976] UKHL 6; [1977] AC 1014 at 1064, Lord Diplock observed that unreasonableness would be made out where "no sensible authority acting with due appreciation of its responsibilities" would have reached the decision in question. Their Honours in Li at [71] recognise that such a formulation "reflects the requirement of the law that a decisionmaker understand his or her statutory powers and obligations" and "is evident in the more specific errors, going to jurisdiction, which the law recognises and to which Lord Greene MR referred in [Wednesbury Corporation], such as misdirecting oneself as to the operation of the statute, taking into account irrelevant considerations or failing to take into account relevant considerations". [32]

Their Honours also observe at [72] that these more specific errors in decisionmaking "may also be seen as encompassed by unreasonableness" and at [76] unreasonableness "is a conclusion which may be applied to a decision which lacks an evident and intelligible justification". An administrative decision must be supported by evidence and reflect intelligible reasons (grounded in rationality and the "rules of reason": see Li per French CJ at [26]).

In other words:

… there is usually no error of law where the decision-makers have understood or correctly stated the legal test, and the essence of the complaint is that they failed to apply it correctly. There will be legal error, however, if the complainant can show that the purported application of the test was either deliberately disingenuous (in other words, a dishonest sham), or that it was applied arbitrarily, capriciously or irrationally. Irrationality in this context must be of a high order. … there is legal error if the decision was not reasonably open.[33]

Hope v Bathurst City Council is an example of a court on appeal applying the unreasonable test:

… it is my opinion that the primary judge arrived at a conclusion which cannot reasonably be supported, having regard to the meaning which I ascribe to "business" in the statutory definition, for on the facts as found the appellant's activities manifested the essential characteristics required of a business.[34]

Failing to take into account a relevant consideration or taking into account irrelevant considerations

It has been said that the hurdle for an appellant is high when basing an appeal on these grounds:

A failure to consider something is not the same thing as its rejection after consideration. For something to be inadmissibly irrelevant it must fall outside the analytic scope of inquiry and must not bear probatively on the issue to be decided.[35]

It is not acceptable to dress up complaints about the facts under these grounds. As noted by Gordon J in Bell v Commissioner of Taxation:

The Applicant's grounds of appeal are framed in terms of relevant and irrelevant considerations, but the substance of his position amounts to a disagreement with the factual and legal basis of the AAT's decision: Commissioner of Taxation v Luxottica Retail Australia Pty Ltd (2011) 191 FCR 561 at [42]; Zizza v Commissioner of Taxation (1999) 41 ATR 96 at [51] and [90] and Abebe at [194]-[195]. To the extent that it is a factual disagreement, that is not a matter reviewable by the Court. Simply framing the grounds in terms of relevant and irrelevant considerations cannot transform them into questions of law enlivening the Court's jurisdiction. [36]

Questions of fact and law in the context of statutory interpretation

In Collector of Customs v Agfa-Gavaert Ltd (1996)[37] the High Court set out the 'five general propositions' in relation to the distinction between law and fact in a statutory context which were identified by the Full Federal Court in Collector of Customs v Pozzolanic Enterprises Pty Ltd.:[38]

(1) The question whether a word or phrase in a statute is to be given its ordinary meaning or some technical or other meaning is a question of law…

(2) The ordinary meaning of a word or its non-legal technical meaning is a question of fact …

(3) The meaning of a technical legal term is a question of law …

(4) The effect or construction of a term whose meaning or interpretation is established is a question of law …

(5) The question whether facts fully found fall within the provision of a statutory enactment properly construed is generally a question of law … [however] when a statute uses words according to their ordinary meaning and it is reasonably open to hold that the facts of the case fall within those words, the question whether they do or not is one of fact. (citations omitted).

It is this last proposition that has caused a fair bit of consternation over the years. Spigelman CJ has noted that the use of the word "reasonably" in this context is a "weasel word" and that it is no different from a claim that the decision was "not open".[39]

If facts fully found are within the spectrum of reasonableness, the question is a mixed question of fact and law

In relation to this principle, the Court in Pozzolanic referred to the situation where a statute uses words according to their ordinary meaning and the question is whether the facts as found fall within those words:

Where it is reasonably open to hold that they do, then the question whether they do or not is one of fact: Hope v Bathurst City Council at 8. Mason J there cited the observation of Kitto J in New South Wales Associated Blue-Metal Quarries Ltd v Commissioner of Taxation (Cth) at 512:

The next question must be whether the material before the Court reasonably admits of different conclusions as to whether the ... operations fall within the ordinary meaning of the words as so determined; and that is a question of law ... If different conclusions are reasonably possible, it is necessary to decide which is the correct conclusion; and that is a question of fact. [40]

In Hope, the Court referred to the decision in Brutus v Cozens[41] where the question was whether the appellant's behaviour was "insulting". As it was not unreasonable to hold that his behaviour was insulting, the question was one of fact.

It has been said that a mixed question of fact and law is not a question of law within s 44(1).[42] In other words, if the conclusion of the Tribunal was within the spectrum of what is reasonable, then that decision cannot be challenged on this ground. This has been referred to as "the either-way range" – if the decision maker could have answered the question either way, then that decision cannot be said to be wrong in law.[43]

Ordinary meaning of a word properly construed

In Agfa-Gavaert[44] the High Court took issue with the second and fourth of the principles in Pozzolanic:

The second proposition states that the ordinary or non-legal technical meaning of a word is a question of fact while the fourth proposition states that the effect or construction of a term whose meaning or interpretation is established is a question of law. ...

With respect this distinction seems artificial, if not illusory. …the approach that one adopts in determining the meaning of the individual words of that phrase is bound up in the syntactical construction of the phrase in question. .. (citations omitted.)

Perhaps an example of this approach can be found in Hope where Mason J held that the ordinary meaning of the word "business" had to be construed in the context of the phrase "carrying on business". It was necessary to engage in a process of construction in order to arrive at the meaning of the word "business" as used in the section.

Another example of the application of this formula can be seen in Hoe v Manningham City Council.[45] In that case one of the issues was whether the keeping of 8 to 10 vehicles on a motoring enthusiast's residential property was a lawful use of the land to be considered "ancillary" to the lawful use of the land for a dwelling. The Tribunal found that his use was not ancillary because his hobby had reached such an intensity that it had become a separate and additional use of the land. It was held that:

… the view that the use of the land for a hobby could reach such an intensity that the use could not be incidental to the use of the land as a dwelling is a construction of the terms of the Planning Scheme. It would be a different case if the Planning Scheme had itself provided that an intense use of land for a hobby (or certain hobbies) was not an ancillary use of the land as a dwelling. In such a case a complaint about the finding that the use had become so intense to trigger the qualification would have been a complaint about the facts and no appeal would be available, but here the Tribunal's conclusion depends first upon a construction of the relevant provision.[46]

The Court held that whether or not the Tribunal had correctly construed the word "ancillary" in the context of the section was a question of law.

Factum probandum v facta probantia

In Hayes v Federal Commissioner of Taxation[47] the Court considered whether certain shares which had been given to a business associate of the donor were "income" of the taxpayer. Fullagar J noted that it was important to:

… bear in mind the distinction … between the factum probandum (the ultimate fact in issue) and facta probantia (the facts adduced to prove or disprove that ultimate fact). … Where the factum probandum involves a term used in a statute, the question whether the accepted facta probantia establish that factum probandum will generally - so far as I can see, always - be a question of law.

In the case before him, the question of whether or not the shares were income of the taxpayer was the ultimate fact in issue (the factum probandum) and was thus a question of law. The facts that the taxpayer had been a long time business association and personal friend of the donor, the circumstances of their relationship and the occasion of the gift of the shares were all facts adduced (facta probantia) to prove the ultimate fact (whether or not the shares were income).

As Fullagar J put the matter:

It is true that the decision [of the Board of Taxation] was a decision on a question of fact in the sense that there was an ultimate factum probandum: the taxpayer had to prove that what he received was not income, and the board determined that he had failed in his proof. But that determination involved a consideration of what constitutes income, and that is a question of law.

It might well be that much of the confusion surrounding whether or not a question is a question of fact is caused by the fact that, in many cases, the issue is whether the facts adduced establish the ultimate fact (which is a question of law).

Distinction between "no evidence" and facts fully found.

The Supreme Court decision in Hoe[48] also provides a good example of the difference between the "no evidence" ground and the "facts fully found" ground. A second issue before the Tribunal is that case was whether the use by Mr Hoe of his premises to pursue his hobby as a motor enthusiast by keeping 8-10 motor cars of the land came within the definition of a "store" in the legislation. Mr Hoe was unrepresented and Pagone J noted that 'the way in which Mr Hoe advanced his argument before the Associate Justice, and before me, was essentially that the facts and evidence before the Tribunal did not justify the conclusion which it reached.' His Honour went on to note that:

The "no evidence" grounds of review may easily be mistaken as an impermissible complaint (for a statutory appeal on questions of law) about the evidence and the facts; as, perhaps, it may frequently be even when propounded by qualified lawyers. In this case, however, Mr Hoe appears to me to be complaining primarily that the facts found (and for present purposes he is to be assumed to be bound by the facts) do not fit the legal description required by the Planning Scheme. …the force of the principal complaint [is] that the provisions of the Planning Scheme do not apply to the facts found by the Tribunal. In this case the language used by Mr Hoe in his submissions frequently suggested complaints about the Tribunal having reached its decision without evidence or to have made findings without evidence. … However the form of the complaint in the originating motion in light of the task required of the Tribunal and undertaken by it, reveals that it necessarily embarked upon the construction of the relevant provisions of the Planning Scheme before an application of that meaning to the facts.

[H]is complaint is not a challenge to the facts or to the evidence but is a challenge to whether the facts or evidence justifies the conclusion reached by the Tribunal.

In other words, the Court construed the notice of appeal as a complaint that the facts as found necessarily fell outside the statutory description – rather than a complaint that there was no evidence upon which the requisite conclusion could be reached.

Crown Insurance Services – an exercise in semantics?

In Commissioner of Taxation v Crown Insurance Services Ltds[49] the Full Court split on the issue of whether or not the appellant had raised a question of law. The Commissioner purported to identify a question of law as follows:

Whether, on the facts found by the Tribunal … [certain income] was derived directly or indirectly from Australian sources, on the proper construction of the words of s. 6-5(3) "… derived directly or indirectly from all Australian sources…".[50]

It was accepted that the words in section 6-5(3)(a) bore their ordinary meaning.[51] Lander and Foster JJ held that the appeal was incompetent:

On this appeal there was no question of legal principle nor, as we have said, was there any question on the construction of the legislation. The sole question was whether, as a matter of fact, the respondent received its premium income directly or indirectly from Australia. It was not said that, as a matter of law, it could not be said that the respondent received its premium income directly or indirectly from Australia. It was merely argued that the better view of the facts, which had not appealed to the AAT, was that the respondent's income was sourced indirectly from Australia.

That, in our opinion, is a question of fact and this Court has no jurisdiction to hear the appeal. The respondent's claim that the appeal is incompetent should be upheld.[52]

By way of contrast, Jessup J reformulated the Commissioner's question to give rise to a question of law:

… it will be seen that the question of law as formulated on behalf of the Commissioner does … appear to be intended to invoke the fifth proposition in Pozzolanic and, albeit not without some hesitation, I would be prepared to treat the question as being, in substance, whether the facts found by the Tribunal in the present case necessarily fell within the terms of s 6-5(3)(a) of the 1997 Act.[53]

His Honour went on to find that there was only one conclusion reasonably open and that was not the conclusion that had been reached by the Tribunal:

The present is not an easy question, but, it being a question of law, there is only one correct answer… I take the view that the income …was indirectly derived from an Australian source. Further, I think that that is the only view of the matter reasonably open on the evidence. I have come to the conclusion that the facts of the present case necessarily fitted the terms of s 6-5(3)(a).

The Commissioner's application for special leave to appeal against the decision of the majority was dismissed.[54]

This decision is interesting in the context of a field of law where it is claimed that form cannot triumph over substance.[55]

Characterisation of common tax issues.

In Commissioner of Taxation v Roberts (& Smith), Hill J held that an appeal concerning whether interest was deductible is one on a question of law, either because the Tribunal's decision that it was not was not reasonably open to it or because the Tribunal had applied the wrong test (i.e. the purpose of the borrowing as distinct from use of funds).[56] In the same case he noted that the question whether outgoings were of capital or of a capital nature 'involved" a question of law.[57]

More recently, after dismissing a number of purported questions of law on the grounds that 'merely using the language of judicial review does not turn a question of fact or a question of mixed fact and law into a question of law'[58] Davies J held that where a statutory provision requires the Commissioner to "determine" a matter, it is a question of law as to whether the making of the determination is a criterion of tax liability.[59]

The question of whether an entity was established for charitable purposes only was characterised as:

Very largely one of fact, but so far as it is one of law I agree with [the Commissioner], and so far as it is one of fact, if it were for me, I should agree with [the Commissioners'] findings.[60]

The High Court has indicated that the question is one of fact or one which raises a mixed question of law and fact.[61] More recently, Nettle J held that the question of whether an entity was a "charitable body" involved a question of law because the legislation used the term "charitable" in the legal, as distinct from the popular, meaning of that term.[62] Perhaps the differences in approach can be explained by reference to the ultimate / intermediate fact dichotomy referred to in Hayes.[63]

Federal Court Rules 2011

Rule 33.12(2)(b)[64] of the Federal Court Rules 2011 provides that the notice of appeal must state:

The precise question or questions of law to be raised on the appeal. (Emphasis added)

Rule 33.12(2)(e) provides that the notice of appeal must also state:

Briefly but specifically, the grounds relied on in support of the relief or variation sought. (Emphasis added)

The grounds which must be specified in a notice of appeal from the AAT are different from those in a general notice of appeal – the latter requiring the Notice of Appeal to state "the grounds relied on in support of the appeal"[65]. This difference was commented upon by Ryan J in Australian Telecommunications Corporation v Lambroglou:

Because the appeal under s44 of the AAT Act is confined to a question of law, it would be inappropriate for the Rules to specify as part of the contents of a notice of appeal "grounds" which would be appropriate if the appeal could be brought against findings of fact as well as against what are said to be errors of law; cp O52, r13(2)(b) which requires a notice of appeal of that wider kind to state "briefly, but specifically, the grounds relied upon in support of that appeal". The distinction is recognised by O 53, r 3(2)(d) which requires the notice of appeal under the AAT Act to state only "the grounds relied upon in support of the order sought". In the present case the order sought is that "the Decision of the Tribunal be set aside". Grounds in support of that order would properly assume the resolution of the question of law in favour of the applicant and indicate in a summary way the reasons why that resolution requires the decision of the AAT to be set aside. Of necessity, properly drawn grounds of that kind could not elucidate the question of law. [66]

In other words, where the appeal is one from the AAT "on" a question of law, the grounds specified should be confined to the grounds why the orders sought should be made. As noted by the Full Court in Birdseye:

It is in the specification of the grounds relied upon in support of the orders sought that, in our view, one should expect to find the links between the question of law, the circumstances of the particular case and the orders sought on the appeal.[67]

Example of appropriate formulation of question of law / grounds

In Birdseye the applicant sought to appeal against a decision of the AAT refusing him an extension of time within which to apply for review an ASIC decision. His notice of appeal purported to identify a question of law as follows:

Whether the Tribunal has committed an error of law in determining not to extend the time within which the appellant might apply for review (on the merits by the Tribunal) of the respondent's decision.[68]

It was held that this formulation did not state a question of law; it merely invited enquiry into whether the Tribunal had committed any error of law in reaching its decision.

An amended notice of appeal was filed which purported to identify the question of law in terms of whether various considerations were relevant to the exercise of the Tribunal's discretion. The "grounds" were framed in terms that the Tribunal failed to take into account various matters.

The plurality suggested that the question of law be reframed so that the question of law was stated in terms of whether the Tribunal was BOUND to take into account various matters. Their honours continued:

Assuming the above question to have been the only question on the appeal, the ground relied upon in support of the claimed order quashing the decision of the Tribunal and remitting the matter to the Tribunal for determination according to law would appropriately have been expressed in terms such as:

The decision of the Tribunal should be set aside as the Tribunal exercised the discretion vested in it by s 29(7) of the AAT Act without taking into account considerations that it was bound to take into account.[69]

Having reframed the question of law in this way, the plurality went on to note that the applicant did not contend that the Tribunal was bound to take into account all or any of the considerations referred to in the amended notice of appeal. In other words, the factual issue complained of was not a jurisdictional fact.


This is a most unsatisfactory area of the law. However, it is important to craft a s 44 notice of appeal with an eye to the legislation, rules and authorities set out above. It may well be that 'any question is a question of law if you are a good enough lawyer'[70] – but if and to the extent to which such a notice of appeal does not, in substance, contain a question of law, it will be incompetent and the Court simply will not have jurisdiction to hear the matter.

[1] TNT Skypack International (Aust) Pty Ltd v FCT [1988] FCA 119.


[2] Kelk v Australian Postal Corporation [2014] FCA 147 at [171] per Greenwood J.

[3] Price Street Professional Centre Pty Ltd v Commissioner of Taxation (2008) 243 ALR 728 at [22].

[4] Minister for Immigration and Multicultural and Indigenous Affairs v Al-Miahi 65 ALD 141 [2001] FCA 744 [43]-[35].

[5] H P Mercantile Pty Ltd v Commissioner of Taxation (2005) 219 ALR 591 at 608; Haritos v Commissioner of Taxation [2014] FCA 96 at [6].

[6] Bittmann v ASIC (No 2) [2006] FCA at [12] per Kenny J.

[7] Commissioner of Taxation v Crown Insurance services Ltd [2012] FCAFC 153 at [13].

[8] Cf with the former s 196 of the Income Tax Assessment Act 1936 (Cth) which permitted an appeal of the

whole of a decision once a matter involved a question of law: Federal Commissioner of Taxation v Munro [1926] HCA 58; (1926) 38 CLR 153, 196 (Isaacs J); Ruhamah Property Co Ltd v Federal Commissioner of Taxation [1928] HCA 22; (1928) 41 CLR 148, 151 (Knox CJ, Gavan Duffy, Powers and Starke JJ); Krew v Federal Commissioner of Taxation (1971) 2 ATR 230, 235 (Walsh J).

[9] [2011] VSC 37 at [4] per Pagone, in relation to the similar statutory appellant jurisdiction of the Supreme Court on appeal from VCAT.

[10] Haritos v Commissioner of Taxation [2014] FCA 96, [29].

[11] Bell v Commissioner of Taxation [2012] FCA 1042 (19 September 2012).

[12] Commissioner of Taxation v Crown Insurance Services Ltd [2012] FCAFC 153, [20].

[13] Collector of Customs v Pozzolanic Enterprises Pty Ltd (1993) 43 FCR 280, 287-288.

[14] Nizich v Commissioner of Taxation (Cth) 91 ATC 4,747 at 4,752.

[15] Aronson, Dyer and Groves Judicial Review of Administrative Action 3rd Ed. Lawbook Co 2004, 184 (citations omitted).

[16] L Green Judge and Jury (Vernon Law Book Co, Kansas City Mo, USA, 1030 pp270-271 cited in Aronson et all ibid.

[17] Aronson et all ibid.

[18] (2010) 186 FCR 410 at [13] (citations omitted).

[19] See, for example, Haritos v Commissioner of Taxation [2014] FCA 96, [27].

[20] Ibid referring to MIMA v Al-Miahi 65 ALD 141 at 149 [34]-[35] and Tisdallv Webber (2011) 193 FCR 260, 270-271.

[21] Bell v Commissioner of Taxation [2012] FCA 1042 (19 September 2012), [84].

[22] Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321.

[23] Birdseye [29].

[24] (2006) 154 FCR 302, [19].

[25] Minister for Aboriginal Affairs v Peko-Wallsend Ltd [1986] HCA 40; (1986) 162 CLR 24 at pp 39-41 per Mason J.

[26] Ibid at 40-42 (emphasis added).

[27] Bell v Commissioner of Taxation [2012] FCA 1042 (19 September 2012) at [83] and Rawson Finances v Commissioner of Taxation [2013] FCAFC 26 at [119].

[28] Collins v Minister for Immigration and Ethnic Affairs (1981) 58 FLR 407 at 410-411.

[29] Comcare v Davies (2008) 173 IR 294 at [21], referred to in Palassis v Commissioner of Taxation [2011] FCA 1305.

[30] Roy Morgan Research Pty Ltd v Commissioner of Taxation [2010] FCAFC 52 [38], [61].

[31] [2001] FCA 744 per Sundberg, Emmett and Finkelstein JJ at [34].

[32] [2014] FCA 147 (28 February 2014).

[33] Aronson Op cit 187.

[34] (1980) 144 CLR 1, 10.

[35] Pagone G.T. Tax Effective Writing The Federation Press 2013, 79-80.

[36] [90].

[37] 186 CLR 389 at 396.

[38] (1993) 43 FCR 280 at 287.

[39] Attorney-General (NSW) v X (2009) 49 NSWLR 653 at 667 [63].

[40] At p 288.

[41] [1973] A.C. 854.

[42] Hussain v Minister for Foreign Affairs (2008) 169 FCR 241 at [32].

[43] Dennis v Watt (1942) 43 SR (NSW) 32, referred to in Aronson op cit 191.

[44] Op cit, 396.

[45] [2011] VSC 37.

[46] Hoe [16].

[47] (1956) 96 CLR 47, 51.

[48] Hoe v Manningham City Council [2011] VSC 37.

[49] [2012] FCAFC 153.

[50] Ibid [17].

[51] Ibid [22].

[52] Ibid [41]-[42].

[53] Ibid [84]. Note that the 5th proposition in Pozzolanic is that 'the question whether facts fully found fall within the provision of a statutory enactment properly construed is generally a question of law'. [78].

[54] Commissioner of Taxation v Crown Insurance Services Ltd [2013] HCA Trans 129 (6 June 2013).

[55] Birdseye [29].

[56] (1992) 37 FCR 246, 251-253.

[57] Ibid 251.4.

[58] Aston (Aust) Properties Pty Ltd v Commissioner of State Revenue 2012 ATC 14,228 [4].

[59] Ibid [20]-[22].

[60] Inland revenue Commissioners v Yorkshire Agricultural Society [1928] 1 KB 611, 634.

[61] Royal Australasian College of Surgeons v Federal Commissioner of Taxation (1943) 68 CLR 436, 448.

[62] Central Bayside v Commissioner of State Revenue (Vic)  2003 ATC 4835 [5] (overturned on a different point by the High Court).

[63] See above under the heading "Factum probandum / facta probantia".

[64] Similar provisions were included in the former Order 53 of the Federal Court Rules.

[65] Rule 36.01(2)(c).

[66] (1990) 12 AAR 515 at 524.

[67] Birdseye v Australian Securities and Investment Commission [2003] FCAFC 232 [18].

[68] Ibid [6].

[69] Birdseye op. cit. [22].

[70] James Batrouney.