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Federal Court Judgments

Every Issue

Cite as: Jan/Feb 2011 85(1/2) LIJ, p.58

Constitutional law

Interstate trade – racetrack betting – requirement in NSW Act that all wagering enterprises pay a fee for race track information – NSW operators compensated – whether trade of NT operator affected

In Racing NSW v Sportsbet Pty Ltd [2010] FCAFC 132 (17 November 2010) s49 of the Northern Territory (Self-Government) Act 1978 (Cth) provided that all trade between the Northern Territory and the states “shall be absolutely free”. From 2006 legislation in NSW permitted racing authorities in that state to grant approval for the use of race field information to wagering operators for a fee. The respondent (Sportsbet) was a NT wagering operator. It applied under protest for approval between 2008 and 2010 and this was granted. It brought proceedings in the Federal Court contending that other arrangements between the NSW racing authorities and wagering operators in that State effectively insulated NSW wagerers from the fee contrary to s49 of the NT(SG) Act within s109 of the Constitution. The primary judge accepted this and ordered the fee for the first approval be repaid. The appeal by the NSW authorities was allowed in a joint judgment. The Court concluded the challenged fee was payable by all operators and the operation of the compensation schemes did not affect this. A cross-appeal by Sportsbet as to the failure to declare the legislation invalid and failing to address other payments was dismissed. Appeal by Racing NSW allowed.

Constitutional law
Interstate trade – racetrack betting – requirement in NSW Act that all wagering enterprises pay a fee for race track information – scheme to compensate NSW operators – whether trade of Tasmanian operator affected

In Betfair Pty Ltd v Racing NSW [2010] FCAFC 133 (17 November 2010) the same Full Court reached a like result under the Constitution s92 in relation to a challenge to the NSW legislation made by a wagering enterprise from Tasmania. Appeal against decision of primary judge that the NSW legislation was invalid dismissed.

Contempt – criminal contempt – Jones v Dunkel

In Jones v ACCC [2010] FCAFC 136 (19 November 2010) a Full Court allowed an appeal against a finding of criminal contempt. Consideration of how far Jones v Dunkel inferences may go.

Income tax
Capital gains tax – scrip-for-scrip roll-over relief – “deal with each other at arm’s length”

In C of T v AXA Asia Pacific Holdings Pty Ltd [2010] FCAFC 134 (18 November 2010) a Full Court considered the operation of the phrase “did not deal with each other at arm’s length” as it appears in s124-780(4) of the Income Tax Assessment Act 1997 (Cth). The Full Court concluded, by majority, that the findings of the primary judge that a taxpayer company dealt at arm’s length with its financier in disposing of an interest in a subsidiary were correct. Appeal by Commissioner dismissed.

Income tax
Scheme for Part IVA ITAA – capital gains tax

In British American Tobacco Australia Services Ltd v C of T [2010] FCAFC 130 (10 November 2010) a Full Court in a joint judgment concluded the trial judge did not err in concluding that in structuring the Australian transactions in an international restructure of a tobacco business so as to exclude capital gains tax from the sale of certain brands the taxpayer had obtained a tax benefit under a scheme within Part IVA of the ITAA 1936 (Cth).

FBT – car parking

In Virgin Blue Airlines v C of T [2010] FCAFC 631 (30 November 2010) a Full Court considered when car parking facilities were provided “in the vicinity” of the workplace for FBT legislation.

“Residential premises”

In Sunchen Pty Ltd v C of T [2010] FCAFC 138 (8 December 2010) a Full Court considered how the question of whether premises were “to be used predominately for residential purposes” for s40-65 of the A New Tax System (Goods and Services Tax) Act 1999 (Cth) was to be answered.

Trade practices
Misleading conduct – “scientific” tests

In Dynamic Hearing Pty Ltd v Polaris Communications Pty Ltd [2010] FCAFC 135 (19 November 2010) a Full Court concluded the primary judge was not wrong in concluding claims that a test as to the effectiveness of hearing devices was the product of objective science were contrary to the Trade Practices Act.

THOMAS HURLEY is a Victorian barrister, ph 9225 7034, email The full version of these judgments can be found at


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