High Court of Australia Judgment Summary Notes

Gassy v The Queen [2008] HCA 18 (14 May 2008)

A direction to a deadlocked jury in Mr Gassy’s murder trial was not sufficiently balanced and resulted in a miscarriage of justice requiring a new trial, the High Court of Australia has held.

After an 11-week trial in the South Australian Supreme Court, Mr Gassy was convicted of murdering the State’s Director of Mental Health Dr Margaret Tobin as she left a lift to return to her office on the eighth floor of an Adelaide city building after lunch on 14 October 2002. She got into a lift with two men and another woman. One man and the woman alighted at the seventh floor. As Dr Tobin got out of the lift on the eighth floor and walked away she was shot four times. She died soon afterwards without identifying the shooter. Mr Gassy allegedly shot Dr Tobin due to resentment and anger from her part in initiating a process that led to his deregistration as both a medical practitioner and psychiatrist when Dr Tobin was in practice in Sydney. The case against Mr Gassy was circumstantial as other lift passengers could not identify him and no witness could say that he was left alone in the lift with Dr Tobin or that it was he who fired the shots.

The facts as alleged by the prosecution case at trial included the following. Six months before the murder, Mr Gassy, an experienced pistol shooter, booked into a Brisbane motel under a false name and acted suspiciously at a Royal Australian College of Psychiatrists’ conference where Dr Tobin was to speak. Just before the killing, he booked into an Adelaide motel under a false name. On each trip hire cars were booked in false names. Gunshot residue of the same brand of ammunition used to kill Dr Tobin was found in the hire car in which Mr Gassy drove to Adelaide. He owned pistols and ammunition of the kind used to kill Dr Tobin. In Brisbane, a man matching Mr Gassy’s description bought a part for a Glock 26 pistol at a gunshop, and gave the name Gassy or Gass, his firearms licence number and his sister’s mobile phone number as a contact number. A receipt for the purchase was found at his flat. Other receipts were found at the Renmark dump after a man was seen putting a plastic bag in a service station bin.

The SA Court of Criminal Appeal (CCA), by majority, dismissed Mr Gassy’s appeal. The High Court, hearing an application for special leave to appeal, dismissed nine grounds of appeal but referred the remaining two grounds (on which Justice Bruce Debelle would have allowed the appeal to the CCA) to the whole Court to be heard as an appeal. The two issues were Justice Ann Vanstone’s rejecting Mr Gassy’s request to have counsel represent him only at a pre-trial hearing into the admissibility of evidence while representing himself at the trial, and further directions by Justice Vanstone after the jury indicated they could not reach a verdict. Mr Gassy argued his own case before the High Court, having refused the offer of senior counsel to appear pro bono.

The Court unanimously granted the application and, by a 3-2 majority, allowed the appeal. It ordered a new trial and held that Justice Vanstone’s further directions lacked neutrality so causing a substantial miscarriage of justice. The majority held that the directions merely restated the essential elements of the prosecution case, with barely a reference to the defence case. The jury returned its guilty verdict just half an hour later. It had been deadlocked after a day and half’s deliberations. The Court unanimously held that Justice Vanstone erred in ruling that Mr Gassy was not entitled to counsel for the voir dire unless counsel was also retained for the trial. The majority held that, because the other ground was resolved in Mr Gassy’s favour, it did not need to decide whether a miscarriage of justice had occurred in respect of this ground.

Roads and Traffic Authority v Royal [2008] HCA 19 (14 May 2008)

The Roads and Traffic Authority (RTA) was not to blame for a car crash that occurred at an alleged highway black spot as the drivers themselves were at fault, the High Court of Australia has held.

Mr Smurthwaite was crossing the northbound lanes of a divided section of the Pacific Highway from Bago Road, just north of Herons Creek, south of Port Macquarie, on 12 March 2001 when his car was struck by a car driven by Mr Royal. Mr Smurthwaite had stopped at a Stop sign where Bago Road met the highway. George Hubbard drew up immediately behind him. Anthony Relf, driving a Telstra van, was behind Mr Royal’s car travelling north. Mr Hubbard and Mr Relf each gave evidence about the actions of the drivers they followed. Mr Royal said he did not expect Mr Smurthwaite to cross the highway in the face of oncoming vehicles. He had his cruise control set at 105kmh while the highway had a maximum speed of 100kmh with an 85kmh advisory sign 300 metres before the intersection. Bago Road crossed the highway’s northbound lanes during a long curve away from the straight southbound lanes. Mr Royal had just moved into the right lane, indicating as he did so, then appeared to cut the curve by driving through the intersection in the right turning lane, the point at which the collision occurred.

Mr Smurthwaite was seriously injured and remembered little of the lead-up to the crash. He sued Mr Royal and the RTA for negligence. Both Mr Royal and the RTA denied negligence, alleged contributory negligence by Mr Smurthwaite, and cross-claimed against each other. District Court Judge Joseph Phelan found that the primary cause of the collision was Mr Royal’s breach of his duty of care to Mr Smurthwaite, but reduced Mr Smurthwaite’s damages by one-third to $871,019.50 on account of his contributory negligence. Judge Phelan dismissed the claim and cross-claim against the RTA. The NSW Court of Appeal, by majority, allowed Mr Royal’s appeal against Judge Phelan’s dismissal of his cross-claim against the RTA. The Court held that the RTA knew the intersection was an accident black spot and should have taken steps to change the configuration. It held that the RTA should bear one-third of the damages judgment. The RTA was granted special leave to appeal to the High Court, limited to the question of whether a breach of its duty of care caused Mr Smurthwaite’s injury. Mr Smurthwaite was joined as a second respondent but he filed a submitting appearance as his interests were not affected either way.

The High Court, by a 4-1 majority, allowed the appeal. The majority held that any fault in the design of the intersection did not contribute to the particular accident. The cause was error by both drivers. Mr Smurthwaite failed to observe the approaching car. Both Mr Royal and Mr Relf said they had seen Mr Smurthwaite’s car and Mr Hubbard could see Mr Royal approaching, so there was no evidence that Mr Royal’s car was obscured by another vehicle. Mr Royal took no evasive action and his cutting the corner by driving through the right-hand turning lane may have misled Mr Smurthwaite into thinking he was slowing down to turn right off the highway, giving him enough time to cross. The Court held that both drivers were in a position to see each other in time to avoid the collision.

Griffiths v Minister for Lands, Planning and Environment [2008] HCA 20 (15 May 2008)

The Northern Territory Government had the power to acquire compulsorily land subject to native title, both when there were co-existing non-native title interests in the land and when there were not, provided the acquisition was not discriminatory, the High Court of Australia has held.

The Minister issued three notices in 2000 proposing acquisition of interests in land at the town of Timber Creek in the north-west of the NT. Section 43(1) of the NT’s Lands Acquisition Act (LAA) empowered the Minister to compulsorily acquire land “for any purpose whatsoever” by publishing a notice in the Gazette. (The section previously used the term “for public purposes”.) Under the LAA, “land” included native title rights and interests. In 1999, the Ngaliwurru and Nungali peoples began proceedings in the Federal Court of Australia for a determination of native title to vacant Crown land in Timber Creek. The Court made a determination of native title in 2006 and the Full Court of the Federal Court varied the determination in favour of the Ngaliwurru and Nungali peoples last November. No other title existed over the lots the Minister sought to acquire. Proposed uses were goat breeding, hay production and market gardening on one lot, cattle husbandry on a second, and tourism on five more lots. For the first two proposals, a Crown lease would be granted to Warren Pty Ltd, while lots in the third proposal would be offered at a public auction for Crown leases. Upon completion of each development the lease could be exchanged for freehold title.

Objections by Mr Griffiths and Mr Gulwin to the proposed acquisitions were heard by the Lands and Mining Tribunal. In 2002, the LMT recommended the compulsory acquisition of native title, subject to the NT’s paying compensation if native title were determined by the Federal Court to have existed prior to acquisition. The Minister accepted the recommendations. Mr Griffiths and Mr Gulwin commenced proceedings in the NT Supreme Court to set aside the recommendations and the decision of the Minister to act upon them. In 2003, Justice David Angel made such orders. The Minister successfully appealed to the NT Court of Appeal in 2004. Mr Griffiths and Mr Gulwin appealed to the High Court to seek reinstatement of Justice Angel’s orders. They argued that, despite the phrase “for any purpose whatsoever”, section 43(1) of the LAA did not confer power on the Minister to acquire land from one person solely to enable it to be sold or leased for private use to another person. They also argued that native title interests may be acquired only when there were co-existing non-native title interests that also were acquired.

The High Court, by a 5-2 majority, dismissed the appeal. Following amendments in 1998 to the Commonwealth Native Title Act (NTA) and a 1984 decision by the High Court limiting the meaning of “to acquire land for a public purpose” in earlier federal legislation for the territories, the LAA was amended to remove potential limitations on the NT’s statutory power to acquire land. The NTA provided for an entitlement to compensation when native title rights or interests were extinguished through compulsory acquisition of land. It provided for extinguishment of native title rights and interests where certain conditions designed to avoid racial discrimination were met, including that “all non-native title rights and interests” also be acquired. The majority held that “all” meant any non-native title rights and interests as may exist at the time of acquisition. There was no requirement that there be non-native title interests in the land for the compulsory acquisition of native title interests to be permitted under the NTA. The majority held that the Minister’s power under the LAA to acquire land “for any purpose whatsoever” included acquisition for the purpose of granting a freehold estate or Crown lease pursuant to other NT legislation.

Raftland Pty Ltd as trustee of the Raftland Trust v Commissioner of Taxation [2008] HCA 21 (22 May 2008)

The High Court of Australia has upheld the assessments of income tax on Raftland in its capacity as trustee of the Raftland Trust. The principal issue concerned entitlements to certain trust income.

The transactions giving rise to the assessments were aimed at securing a fiscal benefit by enabling accumulated tax losses, earlier incurred by a trust estate called the E&M Unit Trust (E&M), to be set off against the income of unrelated profitable businesses controlled by the Heran brothers, Brian, Martin and Stephen. The original trustee of E&M, established in 1986, was E&M Investments whose directors were Mark and Elizabeth Thomasz (formerly Carey). The business of the trust was the acquisition and sale of property. The business failed, with the 1991 tax return disclosing losses of more than $4 million. Mr and Mrs Thomasz became bankrupt but had been discharged by the time of the transactions in 1995. Mrs Thomasz’s son, Glen Carey, took over from E&M Investments as trustee of E&M. In May 1995, taxable profits for two Heran companies were forecast to be almost $3 million. Brian Heran contacted solicitor Peter Tobin about the possible acquisition of a trust with accumulated tax losses. Mr Tobin organised for Mr Heran to acquire control of E&M for $250,000. The Heran brothers, who controlled various building development and property rental companies, acquired Raftland, which became the trustee of the Raftland Trust on or before 30 June 1995. Beneficiaries were divided into three classes: primary (the Herans); secondary (Heran relatives, and various associated entities); and tertiary (the E&M trustee). Mr Carey removed himself as trustee of E&M and appointed Raftland as trustee. The Raftland Trust tax return for 1995 asserted the distribution of net income of $2,849,467 to E&M. Raftland did not pay that amount, apart from the $250,000, but applied it for the benefit of certain related parties.

In 2002, the Commissioner issues notices of amended assessment for the 1995, 1996 and 1997 tax years. Total taxable income for those years was stated to be $4,015,207 with total tax, including penalty tax and interest, assessed at $4,025,070.30. After Raftland’s objections were disallowed, it appealed unsuccessfully to the Federal Court of Australia. Justice Susan Kiefel found that the $250,000 paid to the Thomaszes was a one-off payment and nothing further was to take place between the Thomaszes and the Herans. She held that the Raftland Trust deed which purported to create an entitlement in E&M as tertiary beneficiary was a sham or façade and the Thomaszes had no entitlement to trust income. The Full Court of the Federal Court upheld Justice Kiefel’s decision, apart from $57,973 related to 1995-96 which was the subject of an application by the Commissioner for special leave to cross-appeal. On the basis of different reasoning, the Full Court agreed that the net income derived by Raftland fell to be assessed pursuant to section 99A of the Income Tax Assessment Act, which provides that in certain circumstances trust income in the hands of the trustee was to be taxed at a special rate. Raftland appealed to the High Court.

The High Court unanimously dismissed the appeal. It granted the Commissioner special leave to cross- appeal and allowed the cross-appeal. The Court held that for the tax scheme to succeed E&M had to have been entitled to the income of the Raftland Trust. It upheld Justice Kiefel’s conclusion that the intention of both the Herans and the Thomaszes was that $250,000 was all the beneficiaries of E&M were ever to receive or to seek, and that the entitlement under the Raftland Trust deed was not intended to have substantive, as opposed to apparent, legal effect. The Court also upheld her finding that E&M was not entitled to the Raftland Trust income within the meaning of section 100A of the Act, while the Heran brothers were entitled. Therefore the tax was correctly assessed under section 99A.

Commissioner of Taxation v Reliance Carpet Co Pty Limited [2008] HCA 22 (22 May 2008) 

Goods and services tax (GST) was payable on a deposit forfeited by a purchaser when a contract for the sale of commercial property was terminated for default by the purchaser, the High Court of Australia has held.

Reliance Carpet entered into a contract on 10 January 2002 to sell commercial premises in Camberwell in Melbourne for $2,975,000, with the purchaser paying a deposit of $297,500. Settlement was to take place 12 months later, but Reliance exercised its option to defer settlement for six months to allow time to relocate its business. The purchaser failed to complete on 10 July 2003. After giving 14 days’ notice to complete, Reliance rescinded the contract and forfeited the deposit. In 2004, the Commissioner assessed Reliance as liable to pay GST on the forfeited deposit. It disallowed Reliance’s objection.

The Commissioner funded the matter as a test case. The disallowance of the objection was affirmed by the Administrative Appeals Tribunal, but an appeal by Reliance to the Full Court of the Federal Court succeeded. The Full Court held that there was no taxable supply because the contract was rescinded. The deposit was not consideration for a taxable supply. The Commissioner appealed to the High Court, which unanimously allowed the appeal.

The Court held that the forfeited deposit was consideration for a taxable supply subject to GST. Under the A New Tax System (Goods and Services Tax) Act, there is an extended definition of supply and the issue was whether there was a “taxable supply”. The Court held that upon execution of the contract Reliance made a supply in that it entered into an obligation to do certain things under the contract, including maintaining the property, paying rates, taxes, insurance premiums and other outgoings. Upon its forfeiture for failure by the purchaser to perform its obligation under the contract, the deposit was to be treated as consideration for a taxable supply. Under the Act, if the contract had proceeded to completion then the deposit would have been counted towards payment of the purchase price and GST would have been payable on the purchase price. Where, as here, the contract was terminated for breach, the deposit, when forfeited, was treated by the Act as consideration for supply and this was a taxable supply.