Re Day

HIGH COURT OF AUSTRALIA

GORDON J

IN THE MATTER OF QUESTIONS REFERRED TO THE COURT OF DISPUTED RETURNS PURSUANT TO SECTION 376 OF THE COMMONWEALTH ELECTORAL ACT 1918 (CTH) CONCERNING MR ROBERT JOHN DAY AO

Re Day

[2017] HCA 2

27 January 2017

C14/2016

ORDER

1.The exhibits in the trial marked "1" and "2" are to be evidence on the hearing of the Reference before the Full Court on 7 February 2017.

2.Ms McEwen file 10 hard copies, together with an electronic copy, of Exhibit 1 (maintaining the current pagination and including a copy of Exhibit 2), for use by the Full Court on the hearing of the Reference.

Representation

A S Bell SC with D P Hume appearing on behalf of Mr Robert Day AO (instructed by Griffins Lawyers)

N J Williams SC with B K Lim appearing on behalf of the Attorney‑General of the Commonwealth (instructed by Australian Government Solicitor)

J K Kirk SC with S Gory appearing on behalf of Ms Anne McEwen (instructed by SBA Law)

Notice:  This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports.

INDEX

Content	Par
A	Introduction	[1]
B	Powers of the Court of Disputed Returns	[11]
C	Principles of proof	[14]
(1)    Nature of the allegation	[15]
(2)    Constitutional facts	[20]
D	Agreed Facts and Agreed Documents	[27]
E	Additional McEwen Facts Overview
(1)    Structure	[29]
(2)    Important preliminary observations	[32]
(3)    Issue 1 – Mr Day's interest in the lease	[39]
(4)    Issue 2 – Mr Day's Statement and Declaration	[46]
(5)    Issue 3 – Distortion of the vote	[53]
F	Issue 1 – Mr Day's interest in the lease	[56]
(1)    Overview of Ultimate Findings	[57]
(2)    Ultimate Finding 31 – Mr Day controls the affairs of B&B Day	[59]
(3)    Ultimate Finding 32 – At all times since its incorporation, Mr Day controlled the affairs of Fullarton Investments
(a)    Introduction	[69]
(b)    The arrangement	[72]
(i)         Applicable legal principles	[73]
(ii)        Position adopted by Attorney-General and Mr Day, but not Ms McEwen	[74]
(iii)       Arrangement Ms McEwen asked the Court to find	[77]
(iv)       Evidence and findings	[80]
·     Evidence of Mr and Mrs Smith	[81]
·     Events after conversations	[92]
·     An arrangement?	[96]
·     Implementation of the arrangement	[103]
·     Period after 23 September 2015	[109]
(v)        Inconsistencies, the Vendor Finance Acknowledgement and the payment of rent	[112]
(vi)       Other Evidentiary Facts that Ms McEwen asked to be found in relation to the "Arrangement" for which she contended	[125]
(c)    Fullarton Investments	[130]
(d)     The lease	[151]
(e)    Conclusion about Ultimate Finding 32	[162]
(4)    Ultimate Finding 33 – At all times since its incorporation, the shares in Fullarton Investments have been held on trust for B&B Day as trustee for the Day Family Trust	[163]
(5)    Ultimate Finding 34 – The Fullarton Road property is held by Fullarton Investments in its capacity as trustee for B&B Day as trustee for the Day Family Trust	[166]
(6)    Ultimate Finding 35 – Alternatively, the Fullarton Road property is held by Fullarton Investments as trustee for the Fullarton Road Trust	[167]
(7)    Ultimate Finding 36 – If it is found that Fullarton Investments holds the Fullarton Road property as trustee for the Fullarton Road Trust, it would deal with the Fullarton Road property for the benefit only of one of its beneficiaries, the Day Family Trust	[168]
(8)    Ultimate Finding 37 – Rent payable by Commonwealth under its lease of the Fullarton Road property was to be paid to B&B Day or to Mr Day	[169]
(9)    Evidentiary Facts not referred to or relied upon in relation to any Ultimate Finding under Issue 1	[172]
G	Issue 2 – Mr Day's statement and declaration in nominating for the Senate in 2016
(1)    Overview of Ultimate Findings	[190]
(2)    Ultimate Findings 51, 52, 54 and 55	[191]
(3)    Ultimate Finding 49 – Mr Day's knowledge prior to transfer of Fullarton Road Property to Fullarton Investments	[202]
(4)    Ultimate Finding 50 – Mr Day's knowledge of the effect of the Arrangement	[203]
(5) Ultimate Finding 53 – Mr Day not seek advice from appropriately qualified person on potential disqualification under s 44(v) based on a true and full disclosure.	[204]
(6)    Evidentiary Facts not referred to or relied upon in relation to any Ultimate Finding	[205]
H	Issue 3 – Distortion of the vote
(1)    Overview of findings sought	[234]
(2)    Fact 56 – Mr Day acted on behalf of Family First and within the scope of his authority with respect to Statement and Declaration	[236]
(3)    Fact 57 – In 2013 election, Mr Day was elected to the Senate ­– first preferences and quotas	[237]
(4)    Fact 58 – At 2016 election, Ms Gichuhi and Mr Day profiles	[238]
(5)    Fact 59 – In 2016 election, Ms Gichuhi and Mr Day – first preference	[239]
(6)    Fact 60 – Political parties, voters and advertising	[240]
(7)    Fact 61 – Minor party ticket, incumbent Senator, likely substantial identification between the Senator and the party, influence voters	[242]
(8)    Fact 62 – In 2016 election 91.5% of voters in South Australia (whose votes were formal) voted above the line	[243]
(9)    Fact 63 – Had Mr Day not been on the ballot paper in the 2016 election	[244]
(10)    Fact 64 – The presence of Mr Day and Family First group above the line distorted vote at 2016 election	[246]
I	Facts agreed between the Attorney-General and Mr Day – Agreed Facts 81 and 82	[247]
J	Facts agreed between Mr Day and Ms McEwen – Agreed Facts  83 to 92	[250]
K	Orders	[251]

GORDON J.

A.       Introduction

1. On 7 November 2016, the Senate resolved that certain questions about a vacancy in the representation of South Australia in the Senate, for the place for which Mr Robert John Day AO was returned, should be referred to the Court of Disputed Returns pursuant to s 376 of the Commonwealth Electoral Act 1918 (Cth) ("the Electoral Act")[1]. 

   [1]CB 1(6).

2. The questions referred to the Court relevantly were[2]:

   "(a)whether, by reason of s 44(v) of the Constitution, … there is a vacancy in the representation of South Australia in the Senate for the place for which Robert John Day was returned;

   (b)if the answer to Question (a) is 'yes', by what means and in what manner that vacancy should be filled;

   (c)whether, by reason of s 44(v) of the Constitution, … Mr Day was at any time incapable of sitting as a Senator prior to the dissolution of the 44th Parliament and, if so, on what date he became so incapable;

   (d)what directions and other orders, if any, should the Court make in order to hear and finally dispose of this reference …".

   [2]CB 1(7).

3. Substantial materials were attached to the letter referring the questions to the Court ("the Reference").

4. Section 44(v) of the Constitution relevantly provides that any person who:

   "has any direct or indirect pecuniary interest in any agreement with the Public Service of the Commonwealth otherwise than as a member and in common with the other members of an incorporated company consisting of more than twenty-five persons;

   shall be incapable of being chosen or of sitting as a senator …".

5. On 21 November 2016, French CJ ordered that each of Mr Day, the Attorney-General of the Commonwealth and Ms Anne McEwen would be heard on the hearing of the Reference and be deemed to be a party to the Reference pursuant to s 378 of the Electoral Act.

6. The parties agreed certain facts and documents.  Their agreement is recorded in a document entitled "Areas of factual agreement between the parties" ("Agreed Facts")[3] and in an "Agreed list of documents" ("Agreed Documents")[4], both filed on 23 December 2016.  On the basis of the parties' agreement of those facts and documents, the Reference was referred to the Full Court for hearing on 7 February 2017.

   [3]Referred to by "AF [XX]".

   [4]Referred to by "CB 1(XX)" or "CB 2(XX)".

7. The principal issue to be determined by the Full Court is whether, having regard to the Agreed Facts and the Agreed Documents, Mr Day had a direct or indirect pecuniary interest in a lease agreement between Fullarton Investments Pty Ltd ("Fullarton Investments") (the owner of his electorate office premises) and the Commonwealth (represented by a Division within the Department of Finance) as lessee and, if so, whether that interest was of a kind prohibited by s 44(v) of the Constitution. If the answer to that question is "yes", then Question (b) arises – "by what means and in what manner that vacancy should be filled".

8. Notwithstanding the parties' agreement as to facts and documents, Ms McEwen sought additional findings of fact.  The additional facts were listed in a document entitled "Findings of Fact Sought by Ms McEwen", an amended and revised version of which was filed on 24 January 2017 ("Additional McEwen Facts").  Ms McEwen also filed a revised tender bundle comprising 31 documents and 314 pages ("Revised Tender Bundle")[5].  The Additional McEwen Facts were, where applicable, cross‑referenced to the Agreed Facts, the Agreed Documents and the Revised Tender Bundle[6].

   [5]Referred to by "AM XX".

   [6]Ms McEwen did not seek to tender documents numbered 3, 27 and 31 and they were excised from the Revised Tender Bundle.  The balance of the Revised Tender Bundle, comprising 126 pages, was marked as Exhibit 1.

9. On 23 and 24 January 2017, a trial was conducted for the Court to consider whether it would make any of the findings set out in the Additional McEwen Facts.  All parties appeared and were represented.  Ms McEwen called two witnesses – Mr John Eric Smith and Mrs Debra Kim Smith.  Each witness gave evidence viva voce and was cross-examined by counsel for Mr Day.  Mrs Smith was asked some limited questions by counsel for the Attorney-General.

10. Before turning to address the Additional McEwen Facts and the viva voce and documentary evidence that was adduced to seek to prove those facts, it is necessary to say something, first, about the powers of the Court of Disputed Returns to the extent that these powers were relevant to the hearing and determination of the Additional McEwen Facts and, second, about the relevant principles of proof.

    B.       Powers of the Court of Disputed Returns

11. The powers of the Court of Disputed Returns are set out in Part XXII of the Electoral Act. Division 2 of that Part deals with references of questions as to the qualifications of a senator and as to a vacancy in the Senate[7].

    [7]In a proceeding on a reference to the Court under Part XXII, ss 364, 368, 370, 371, 373, 374 and 375 apply so far as applicable: s 381 of the Electoral Act.

12. In relation to the Reference, the Court has the powers conferred by s 360 of the Electoral Act so far as they are applicable, and, in addition, has the power to declare, relevantly, that any person was not qualified to be a senator, that any person was not capable of being chosen or of sitting as a senator, and that there is a vacancy in the Senate[8].

    [8]s 379 of the Electoral Act.

13. The Court sits as an open court[9] and has power, amongst others, to compel attendance of witnesses and the production of documents[10] and to examine witnesses on oath[11]. The Court may exercise all or any of the powers under s 360 on such grounds as it, in its discretion, thinks just and sufficient[12].  Further, the Court shall be guided by the substantial merits and good conscience of each case without regard to legal forms or technicalities, or whether the evidence before it is in accordance with the law of evidence or not[13].

    C.       Principles of proof

    [9]ss 360(1) and 379 of the Electoral Act.

    [10]ss 360(1)(ii) and 379 of the Electoral Act.

    [11]ss 360(1)(iv) and 379 of the Electoral Act.

    [12]ss 360(2) and 379 of the Electoral Act.

    [13]s 364 of the Electoral Act.

14. The ordinary standard of proof required of a party who bears the onus in civil proceedings is proof on the balance of probabilities[14].  This remains so even where the matter to be proved involves allegations of fraud[15].

    (1)      Nature of the allegation

    [14]   Neat Holdings Pty Ltd v Karajan Holdings Pty Ltd (1992) 67 ALJR 170 at 170; 110 ALR 449 at 449; [1992] HCA 66.

    [15]   Rejfek v McElroy (1965) 112 CLR 517 at 521-522; [1965] HCA 46; Neat Holdings (1992) 67 ALJR 170 at 170‑171; 110 ALR 449 at 449-450.

15. However, the seriousness of an allegation made, the inherent unlikelihood of an occurrence of a given description, or the gravity of the consequences flowing from a particular finding are considerations which must affect the answer to the question whether an issue has been proved to the reasonable satisfaction of the tribunal[16].  Where, as here, fraud is alleged, "reasonable satisfaction" is not produced by inexact proofs, indefinite testimony, or indirect inferences[17].  This does not mean that the standard of persuasion is any higher than the balance of probabilities[18].  It does mean that the nature of the issue necessarily affects the process by which the reasonable satisfaction is reached[19]. 

    [16]   Briginshawv Briginshaw (1938) 60 CLR 336 at 362; [1938] HCA 34; Helton v Allen (1940) 63 CLR 691 at 712; [1940] HCA 20.

    [17]See Helton (1940) 63 CLR 691 at 712 quoting Briginshaw (1938) 60 CLR 336 at 362.

    [18]Rejfek (1965) 112 CLR 517 at 521-522; Neat Holdings (1992) 67 ALJR 170 at 171; 110 ALR 449 at 450.

    [19]Briginshaw (1938) 60 CLR 336 at 363.

16. Why?  There is a conventional perception that members of society do not ordinarily engage in fraudulent conduct and a court should not lightly make a finding that, on the balance of probabilities, a party to civil litigation has been guilty of such conduct[20].

    [20]   Neat Holdings (1992) 67 ALJR 170 at 171; 110 ALR 449 at 450.

17. The nature of the allegation requires, as a matter of common sense, the careful weighing of testimony, the close examination of facts proved as a basis of inference and, on appeal, a comfortable satisfaction that the tribunal reached both a correct and just conclusion[21].

    [21]   Briginshaw (1938) 60 CLR 336 at 350.

18. The tribunal must feel an actual persuasion of the occurrence or existence of a fact before it can be found[22].  Where direct proof is not available and satisfaction of the civil standard depends on inference, "there must be something more than mere conjecture, guesswork or surmise"[23] – there must be more than "conflicting inferences of equal degrees of probability so that the choice between them is [a] mere matter of conjecture"[24].  An inference will be no more than conjecture unless some fact is found which positively suggests, or provides a reason in the circumstances particular to the case, that a specific event happened or a specific state of affairs existed[25].

    [22]   Briginshaw (1938) 60 CLR 336 at 361.

    [23]Cross on Evidence, 10th Aust ed (2015) at 356 [9055].

    [24]   Bradshaw v McEwans Pty Ltd (1951) 217 ALR 1 at 5 quoted in Luxton v Vines (1952) 85 CLR 352 at 358; [1952] HCA 19. See also Trustees of the Property of Cummins v Cummins (2006) 227 CLR 278 at 292 [34]; [2006] HCA 6.

    [25]See Jones v Dunkel (1959) 101 CLR 298 at 305; [1959] HCA 8.

19. These principles are relevant for present purposes because some of the facts which Ms McEwen alleges should be found amount to allegations of knowing misconduct by Mr Day.

    (2)      Constitutional facts

20. Ms McEwen contended that the Court has a wider latitude in determining "constitutional facts" than in determining facts in ordinary private litigation.  In particular, Ms McEwen contended that:

    "The usual rules of admissibly [sic] do not apply and the Court may inform itself however it sees fit:  Thomas v Mowbray (2007) 233 CLR 307, [620]ff. The only requirement is that the 'material be sufficiently convincing' to justify the Court's conclusions: Thomas, [649]."

21. That contention fails at a number of levels.  First, it fails to recognise the distinction between "adjudicative facts" and "legislative facts"[26].  Adjudicative facts are "ordinary questions of fact which arise between the parties"[27] and usually go to the jury – "[t]hey relate to the parties, their activities, their properties, their businesses"[28].  In contrast, legislative facts are "ordinarily general and do not concern the immediate parties"[29].  Constitutional facts are a species of legislative facts[30].  The problem for Ms McEwen is that many, if not most, of the facts she seeks to have found are adjudicative, not legislative, facts.

    [26]See Breen v Sneddon (1961) 106 CLR 406 at 411; [1961] HCA 67; Woods v Multi‑Sport Holdings Pty Ltd (2002) 208 CLR 460 at 478-479 [65]; [2002] HCA 9; Thomas v Mowbray (2007) 233 CLR 307 at 512 [614], 518-519 [632]; [2007] HCA 33; Maloney v The Queen (2013) 252 CLR 168 at 298-299 [351]; [2013] HCA 28; Davis, "An Approach to Problems of Evidence in the Administrative Process", (1942) 55 Harvard Law Review 364; Carter, "Judicial Notice:  Related and Unrelated Matters", in Campbell and Waller (eds), Well and Truly Tried:  Essays on Evidence in Honour of Sir Richard Eggleston (1982) at 93-94; Cross on Evidence, 10th Aust ed (2015) at 162-164 [3005].

    [27]Breen (1961) 106 CLR 406 at 411.

    [28]Davis, "Judicial Notice", (1955) 55 Columbia Law Review 945 at 952.

    [29]Davis, "Judicial Notice", (1955) 55 Columbia Law Review 945 at 952.

    [30]Maloney (2013) 252 CLR 168 at 299 [352].

22. Second, even if any one of the facts Ms McEwen asks the Court to find is a legislative fact, other considerations arise, including the nature of the material and the procedure adopted by the Court. 

23. In relation to the nature of the material that can be taken into account by a court for the purpose of ascertaining a legislative fact, any material would need "to tend logically to show the existence or non-existence of legislative facts relevant to the issue to be determined"[31].  In other words, it must have probative value[32].  And, of course, material ought not to be taken into account if its probative value is outweighed by other considerations bearing on the interests of justice[33].

    [31]Gageler, "Fact and Law", (2009) 11 Newcastle Law Review 1 at 25.

    [32]Maloney (2013) 252 CLR 168 at 299 [353].

    [33]Gageler, "Fact and Law", (2009) 11 Newcastle Law Review 1 at 25.

24. In relation to the procedure to be adopted by a court in ascertaining a legislative fact, the procedure will depend on the nature of the particular fact that might be said to bear upon the validity or content of a particular rule or statute[34]:

    "the centrality or marginality of those facts; whether they are specific or general; whether they are historical, contemporary or predictive; whether they are concrete or evaluative; how much they might be controversial; how much they might be known to or knowable by a party; whether and, if so, how they may be capable of proof or disproof by a party."

    [34]Gageler, "Fact and Law", (2009) 11 Newcastle Law Review 1 at 26.

25. In the present matter, the Court determined that, to the extent that the facts could not be agreed, a trial of those facts was the procedure to be adopted.  That that was the procedure adopted was unsurprising given the nature of the facts Ms McEwen asked the Court to find.  It was a procedure that permitted each fact that Ms McEwen asked to be found to be considered in context, so that any fact, whether legislative or adjudicative, was ascertained by judicial process.  Moreover, the trial afforded procedural fairness to the parties so that they were entitled to be heard on each question of fact[35]. 

    [35]Stead v State Government Insurance Commission (1986) 161 CLR 141 at 145; [1986] HCA 54. See, in the context of constitutional facts, Thomas (2007) 233 CLR 307 at 481 [523], 513 [618]; Maloney (2013) 252 CLR 168 at 299 [353].

26. That there was a trial, conducted by reference to statements of facts and contentions, the adducing of evidence and submissions, is relevant in considering each fact Ms McEwen asked the Court to find.

    D.       Agreed Facts and Agreed Documents

27. The Agreed Facts include, amongst others, that particular agreements were made and performed. The Attorney-General says that those transactions resulted in Mr Day having a direct or indirect pecuniary interest in an agreement contrary to s 44(v) of the Constitution. That is the subject of the Reference to the Full Court.

28. A number of critical dates and facts, which are agreed, should be stated at the outset, in short form:

Date	Event
19 August 1986	The Day Family Trust, a discretionary trust, was established by Deed.  At all material times, Mr Day, Mrs Bronwyn Day (Mr Day's wife), and Mr Smith have been (and still are) beneficiaries of the Day Family Trust, and the trustee has been (and still is) B&B Day Pty Ltd ("B&B Day")[36].
5 August 2013	The Governor of South Australia issued a writ for the election of senators for the State of South Australia[37].
7 September 2013	The election was held[38].
2 October 2013	The Australian Electoral Officer for the State of South Australia certified that Mr Day had been duly elected to serve as a senator for South Australia[39].
16 December 2013	Fullarton Investments was incorporated for the express purpose of purchasing the property at 77 Fullarton Road, Kent Town, South Australia, being the whole of the land comprised in Certificate of Title Vol 5091 Folio 217 ("the Fullarton Road Property") from B&B Day[40].
The Fullarton Road Trust, a discretionary trust, was established by Deed executed by Mrs Smith (as sole director and secretary of the trustee, Fullarton Investments)[41].
2 January 2014	National Australia Bank ("NAB") approved a loan facility in favour of B&B Day as trustee for the Day Family Trust to a limit of $1.6 million with interest for a term of five years.  The security for the loan included a registered mortgage over the Fullarton Road Property[42].  Since about September 2011, the Fullarton Road Property was subject to a mortgage in favour of NAB as part of the security for a loan by NAB to B&B Day[43]. In addition, Mr and Mrs Day gave a guarantee and indemnity for $2 million for the performance by B&B Day of its obligations under the loan agreement[44].
24 April 2014	An agreement for the sale and purchase of the Fullarton Road Property was executed whereby Fullarton Investments purchased the Fullarton Road Property from B&B Day for a recorded price of $2.1 million[45].
30 June 2014	Mrs Day replaced Mr Day as sole director and sole shareholder of B&B Day[46].
1 July 2014	Mr Day commenced his term as a senator for South Australia[47].
4 September 2014	Memorandum of transfer of the Fullarton Road Property to Fullarton Investments was executed with the consideration for the transfer recorded as $2.1 million[48].  Fullarton Investments held the Fullarton Road Property on trust for the Fullarton Road Trust[49].
11 November 2014	Memorandum of transfer of the Fullarton Road Property to Fullarton Investments was registered[50].
11 November 2014	NAB discharged the mortgage over the Fullarton Road Property granted by B&B Day and a new mortgage was registered over the Fullarton Road Property showing Fullarton Investments as the mortgagor[51].  Under the terms of the loan facility in favour of B&B Day[52], B&B Day remained liable to make payments to NAB[53].
12 June 2015	Fullarton Investments sent to the Commonwealth's leasing manager, DTZ, a completed "Vendor Information" form recording Mr Day as the relevant contact and nominating a bank account in the name of "Fullarton Nominees" for the receipt of rent.  The form was signed by Mr Day as "Representative" of Fullarton Investments, and Mr Day also signed the covering letter, which was on "Fullarton" letterhead[54].
1 December 2015	Memorandum of lease of part of the Fullarton Road Property, with commencement date of 1 July 2015, was executed by Fullarton Investments (as lessor) and the Commonwealth (as lessee)[55]. The lease provided for annual rent of $66,540 plus GST[56] to be paid in monthly instalments by the Commonwealth to "the account nominated by" Fullarton Investments[57].
2 June 2016	Mr Day nominated for election as a senator for South Australia[58].
4 August 2016	Mr Day was declared as elected to the Senate[59].

[36]AF [3]-[5]; CB 1(28-50).

[37]In the Matter of Questions Referred to the Court of Disputed Returns pursuant to section 376 of the Commonwealth Electoral Act 1918 (Cth) concerning Mr Robert John Day AO [2017] HCATrans 006 at 5666-5668, 7221-7233.

[38]Re Day [2017] HCATrans 006 at 5668-5669, 7221-7233.

[39]Re Day [2017] HCATrans 006 at 5669-5671, 7221-7233.

[40]AF [6], [65.1].

[41]CB 1(52-73).

[42]AF [8].

[43]AF [9].

[44]AF [8].

[45]AF [14]; CB 1(84-101).

[46]AF [5], [24].

[47]AF [2].

[48]AF [25], [29]; CB 1(103).

[49]Ms McEwen's Trial Submissions at [10] n 1; In the Matter of Questions Referred to the Court of Disputed Returns pursuant to section 376 of the Commonwealth Electoral Act 1918 (Cth) concerning Mr Robert John Day AO [2017] HCATrans 005 at 2845-2848.

[50]AF [19], [29]; CB 1(104).

[51]AF [9], [30]; CB 2(938); AM 73A (signed by Mrs Smith).

[52]AF [8]; CB 1(194-195).

[53]AF [31].

[54]AF [32], [37]; CB 2(796, 799-800).  It is agreed between the parties that Fullarton Nominees is a business name owned by Mr Day and that Mr Day has described Fullarton Nominees as the "owner" of the bank account into which Fullarton Investments had directed rental payments be made:  AF [37], [65.2], [65.3]; CB 1(243).  At trial, counsel for Mr Day did not dispute that Mr Day owned the bank account:  Re Day [2017] HCATrans 006 at 6506-6557.

[55]AF [40]-[41]; CB 1(123).

[56]AF [41]; CB 1(123 at 124).

[57]AF [46]; CB 1(123 at 124, 141-142, 174) (cl 9 and Item 10 of Schedule 1 in the lease).

[58]AF [71]; CB 1(319-322), CB 2(926).

[59]AF [77]; CB 1(11).

E.        Additional McEwen Facts Overview

(1)      Structure

29. The Additional McEwen Facts are divided into three issues:  "Mr Day's interest in the lease with the Commonwealth" (Issue 1); "Mr Day's statement and declaration in nominating for the Senate in 2016" (Issue 2); and "Distortion of the vote" (Issue 3). 

30. In relation to Issues 1 and 2, Ms McEwen divides the Additional McEwen Facts into two parts:  what are described as "Evidentiary facts" and then the "Ultimate" findings of fact to be found.  For each fact or finding, Ms McEwen identified the documentary or other inferential bases for that fact or finding.  Ms McEwen did not contend that the documentary or other inferential bases were themselves facts to be found.  Ms McEwen asked the Court to find only the facts in the numbered or lettered paragraphs of the Additional McEwen Facts document. 

31. Ms McEwen also asked the Court to make the findings agreed between Ms McEwen and Mr Day but not formally agreed to by the Attorney-General.  Those facts are recorded as Agreed Facts 83 to 92.  Those facts are addressed in Part J below.  In short, I make those findings.

    (2)      Important preliminary observations

32. These reasons will, of course, deal with the particular findings which Ms McEwen sought.  It is necessary, however, to make some important preliminary observations. 

33. First, only limited material was placed before the Court:  Agreed Facts, Agreed Documents, the Revised Tender Bundle and the oral evidence of Mr and Mrs Smith.  No other material was adduced to explore more fully what was to be made of those documents and that evidence.

34. Second, these reasons will show that various steps were taken and transactions were entered into for the purpose of removing the Fullarton Road Property from Day family members and any entity in which Mr Day had an interest and for the related purpose of "housing" the Fullarton Road Property in an entity that would receive the Commonwealth rental allowance.  Whether those steps and transactions had the legal effect that Mr Day no longer had a relevant interest in the Fullarton Road Property is a legal question that I am not required to and do not address.

35. Third, it will be observed from what later appears in these reasons that steps were taken in connection with carrying that purpose into effect that were not consistent with detailed planning or careful implementation.  The documentation was not always consistent one with the other and, in some cases, recorded aspects of the transactions said to have been made earlier.  Even taking account of those matters, I am not persuaded that I should conclude that Mr Day knew the steps and transactions were insufficient to achieve the stated purpose.  Rather, the preferable inference is that the steps were taken and the transactions were made in the manner they were in the belief that they would achieve the intended purpose and have the desired effect.  As I have said, whether they did is a question I do not address.

36. Fourth, the particular findings which Ms McEwen sought "evolved", as late as the last morning of the hearing. 

37. Fifth, and no less importantly, to the extent that there are findings of fact made and recorded in this judgment, the parties accept that the making of those findings does not indicate that any particular fact or facts found are relevant on the hearing of the Reference.

38. Before turning to consider the "Ultimate" findings of fact Ms McEwen asked the Court to find in relation to Issues 1 and 2 and the matters raised under Issue 3, it is appropriate to summarise the principal conclusions.

    (3)      Issue 1 – Mr Day's interest in the lease with the Commonwealth

39. Ms McEwen alleged that the Court should make "Ultimate Findings" as described in seven paragraphs.  Those Ultimate Findings included that:

    (1)Mr Day "controls" (presumably controls and has controlled at all material times) the affairs of B&B Day[60];

    (2)at all times since its incorporation, Mr Day "controlled" the affairs of Fullarton Investments[61]; and

    (3)at all times since its incorporation, the shares in Fullarton Investments have been held on trust (presumably by the registered shareholder) for B&B Day as trustee for the Day Family Trust[62].

    [60]Ultimate Finding 31 under Issue 1 in the Additional McEwen Facts.

    [61]Ultimate Finding 32 under Issue 1 in the Additional McEwen Facts.

    [62]Ultimate Finding 33 under Issue 1 in the Additional McEwen Facts.

40. It is to be accepted (and the parties have already accepted by the Agreed Facts and the Agreed Documents) that some of the "Evidentiary Facts" described under Issue 1 are established.  For example, in relation to the Agreed Documents, it is accepted by the parties that the several emails and letters that are relied upon by Ms McEwen in relation to Issue 1 were sent to and received by the intended recipient.  Next, some of the Evidentiary Facts are established by reference to the contents of the Agreed Documents.  For example, it is agreed that B&B Day acquired the Fullarton Road Property for $2.1 million plus GST of $210,000 by a transfer lodged for registration on 30 June 2011[63].

    [63]Evidentiary Fact 5 under Issue 1 in the Additional McEwen Facts by reference to the memorandum of transfer (AM 4A) and a historical search of the certificate of title (CB 2(938)).

41. Ms McEwen set out the Evidentiary Facts on which the Ultimate Findings were alleged to be founded.  For example, an allegation that Mr Day controls the affairs of B&B Day was founded on statements made by Mr Day during 2016 in which he said, in effect, that he had sold the property to Fullarton Investments and that he had retained the funding to secure the purchase of the Fullarton Road Property[64].  (Ms McEwen relied upon other statements to similar effect).

    [64]See Bullet point two under Evidentiary Fact 1 under Issue 1 in the Additional McEwen Facts.

42. Ms McEwen did not allege that any of the trust deeds or other transaction documents[65] agreed between the parties (part of the Agreed Documents) do not take effect according to their terms.  It follows that Mr Day's statements of what he had done were legally inaccurate.  But those statements do not establish that I should find (contrary to the terms of the relevant Agreed Documents) that Mr Day controls the affairs of B&B Day.  He may or may not believe that he has great influence on or effective control of the affairs of B&B Day but that does not support a finding of "control".  (He would not be the first person who established a discretionary family trust to hold an inaccurate belief of that kind).

    [65]Other than the Vendor Finance Acknowledgement signed by Mrs Smith at CB 1(107):  see Evidentiary Facts 15, 16 and 20 under Issue 1 in the Additional McEwen Facts.  See also AF [34]; CB 2(935-936).

43. By way of further example, Mr Day accepted that there was an arrangement with terms that a company (Fullarton Investments) would be incorporated, Mrs Smith would be the sole shareholder and sole director of the company, Fullarton Investments would acquire the Fullarton Road Property (and hold it on trust for the Fullarton Road Trust) and B&B Day would pay expenses in connection with the transfer of the property[66].  But that is not the "Arrangement" contended for by Ms McEwen[67].

    [66]Par [10] at pp 8-9 of Mr Day's Statement of Contentions of Fact and Law, filed 6 December 2016.

    [67]Evidentiary Fact 10 under Issue 1 in the Additional McEwen Facts.

44. As these reasons will show, it has not been established that Mr Day made an "Arrangement" with Mr Smith on behalf of and with the agreement of Mrs Smith[68] that:

    (1)Mrs Smith would deal with her shareholding in the new company (Fullarton Investments) in any manner that Mr Day might direct; and

    (2)notwithstanding that Mrs Smith was the director, Mr Day would control the affairs of the new company to the exclusion of Mrs Smith.

    [68]Originally Evidentiary Fact 10 sought a finding that Mr Day made an "Arrangement" with Mrs Smith or Mr Smith on behalf of Mrs Smith.  On the morning of the final day of the hearing, Ms McEwen amended the finding to read "Mr Smith on behalf of and with the agreement of Mrs Smith".

45. In addition to the lack of factual bases for the Ultimate Findings, these reasons will show that many of the findings sought under Issue 1 were unable to be made because they were imprecise or lacked content.

    (4)      Issue 2 – Mr Day's statement and declaration

46. Ms McEwen asked the Court to make Ultimate Findings as described in seven paragraphs. 

47. Those Ultimate Findings included that:

    (1)Mr Day knew that following the transfer of the Fullarton Road Property to Fullarton Investments[69]:

    (a)he retained a financial interest in the Fullarton Road Property;

    (b)he had a financial interest in the lease of the Fullarton Road Property to the Commonwealth;

    (2)Mr Day knew, that by reason of that interest in the lease, there was a serious risk that he might be disqualified to be chosen or sit as a senator by reason of s 44(v) of the Constitution[70];

    (3)Mr Day was recklessly indifferent as to whether his nomination and associated documents ("the Statement and Declaration") were true, had no real belief in the truth of them and knew that they were not true[71].

    [69]Ultimate Finding 51 under Issue 2 in the Additional McEwen Facts.

    [70]Ultimate Finding 52 under Issue 2 in the Additional McEwen Facts.

    [71]Ultimate Finding 54 under Issue 2 in the Additional McEwen Facts.

48. These reasons will show that, under Issue 2, I am not persuaded to find facts additional to those already agreed.  That is, I am not persuaded to find what were described as Ultimate Findings under Issue 2. 

49. Some of the Evidentiary Facts relied upon by Ms McEwen were predicated on my finding of the "Arrangement" to which reference has already been made:  namely, that in or about December 2013, Mr Day and Mr Smith on behalf of Mrs Smith and with the agreement of Mrs Smith entered into an arrangement that, among other things, Mrs Smith would deal with her shareholding in the new company that would hold the Fullarton Road Property (Fullarton Investments) in any manner that Mr Day might direct and that Mr Day would control the affairs of that company to her exclusion.  As indicated in relation to Issue 1, these reasons will show that it has not been established that Mr Day made an "Arrangement" with such "terms". 

50. Moreover, as these reasons will show, the Ultimate Findings under this Issue were all directed to an additional finding which Ms McEwen sought (though variously expressed) that Mr Day knew that despite, or perhaps because of, the transactions which had been made there was a serious risk that he might be disqualified under s 44(v) of the Constitution from being chosen or of sitting as a senator.

51. The evidence adduced does not persuade me that Mr Day:

    (1)knew, following the transfer of the Fullarton Road Property, that he retained a financial interest in the Fullarton Road Property and that he had a financial interest in the lease of the Fullarton Road Property to the Commonwealth;

    (2)knew, as a result of that asserted financial interest, that there was a serious risk that he might be disqualified under s 44(v) of the Constitution; or

    (3)was recklessly indifferent as to whether the Statement and Declaration were true, had no real belief in the truth of them and knew that they were not true. 

52. As stated earlier, other than a document dated 1 December 2014 ("the Vendor Finance Acknowledgement")[72], Ms McEwen did not allege that any of the trust deeds or other transaction documents agreed between the parties did not take effect according to their terms.  A readily available competing conclusion is that Mr Day thought that, as a result of those transactions, he was not disqualified. 

    (5)      Issue 3 – Distortion of the vote

    [72]See Evidentiary Facts 15, 16 and 20 under Issue 1 in the Additional McEwen Facts.  See also AF [34]; CB 1(107); CB 2(935‑936).

53. Ms McEwen asked the Court to make findings of fact as described in eight paragraphs. 

54. Under this issue, there was no division between "Evidentiary Facts" and "Ultimate Findings".  In general terms, the findings sought fell into three categories:  (1) findings as to the first preference votes obtained in the 2013 and 2016 election by Family First and its candidate or candidates; (2) findings concerned with the conduct and activities of one or more of Mr Day and Ms Gichuhi; and (3) findings about voting behaviour and the outcome of a hypothetical election.  Many of the facts sought to be found were admitted by Mr Day.  These reasons will show that I refuse to make the balance of the facts sought (which fall primarily in the third category).

55. Against that background, it is necessary to address the findings that Ms McEwen asked the Court to find in relation to each issue separately.

    F.Issue 1 – Mr Day's interest in the lease with the Commonwealth

56. The Evidentiary Facts sought in relation to this issue were divided into three sub-categories:  "The Day Family Trust", "The Fullarton Road [P]roperty" and "The lease". 

    (1)      Overview of Ultimate Findings

57. As stated earlier, seven Ultimate Findings were sought in relation to Issue 1.  They were as follows:

    "31.     Mr Day controls the affairs of B&B Day.

    32.At all times since its incorporation, Mr Day controlled the affairs of Fullarton Investments.

    33.At all times since its incorporation, the shares in Fullarton Investments have been held on trust for B&B Day as trustee for the Day Family Trust.

    34.The Fullarton Road [P]roperty is held by Fullarton Investments in its capacity as trustee for B&B Day as trustee for the Day Family Trust.

    35.Alternatively, the Fullarton Road [P]roperty is held by Fullarton Investments as trustee for the Fullarton Road Trust.

    36.If it is found that Fullarton Investments holds the Fullarton Road [P]roperty as trustee for the Fullarton Road Trust, it would deal with the Fullarton Road [P]roperty for the benefit only of one of its beneficiaries, the Day Family Trust.

    37.The rent payable by the Commonwealth under its lease of the Fullarton Road [P]roperty was to be paid to B&B Day or to Mr Day."

58. Ultimate Findings 31 and 32 are critical.  By reference to the documentary or other inferential bases listed below under each of the other proposed findings, it is apparent that Ultimate Finding 33 is dependent on Ultimate Findings 31 and 32 and Ultimate Findings 34 and 35 are dependent on Ultimate Findings 31 and 32 (and possibly Ultimate Finding 33).  Ultimate Finding 36, in its terms, is dependent on Ultimate Finding 35.  Ultimate Finding 37 stands alone and will be addressed separately.

    (2)      Ultimate Finding 31 – Mr Day controls the affairs of B&B Day

59. Evidentiary Fact 1, the single fact relied upon by Ms McEwen to support Ultimate Finding 31, was that:

    "Notwithstanding the change in directorship of B&B Day ... from Mr Day to his wife Mrs Day on 30 June 2014, Mr Day remained in effective control of B&B Day."  (emphasis added)

60. Ms McEwen identified specific documentary and other bases that were said to support that Evidentiary Fact. 

61. It is to be accepted that various documents were sent, created or record certain facts; the parties have agreed as much by their acceptance of those documents and facts.  Accordingly, it may be accepted that:

    (1)Mr Day signed the memorandum of transfer for the Fullarton Road Property on behalf of B&B Day on 4 September 2014, despite no longer being a director of B&B Day[73];

    (2)on 29 December 2015, Mr Day stated in writing that he "spent nearly $200,000 getting [the Fullarton Road Property] up to standard"[74] and, on 4 August 2016, he stated in writing that he "did the renovations [him]self" (referring to paying for the renovations to the Fullarton Road Property following the transfer)[75];

    (3)on 25 January 2016, Mr Day wrote to the Department of Finance stating that "[i]n 2014 [he] sold the property to Fullarton Investments ... on a vendor finance basis" but "[he] retained the NAB loan"[76];

    (4)a substantial portion of the approximately $200,000 for works carried out on the Fullarton Road Property was incurred after 4 September 2014 and this expenditure was met by B&B Day[77];

    (5)on 7 August 2016, Mr Day wrote to Senator Scott Ryan, then the Special Minister of State, saying that "I have an agreement with someone else who has an agreement with the Crown"[78];

    (6)B&B Day or Mr Day paid the stamp duty and other associated costs on the transfer of the Fullarton Road Property from B&B Day to Fullarton Investments[79]; and

    (7)after 30 June 2014, including in response to a letter addressed to "THE DIRECTORS" of B&B Day[80], Mr Day corresponded with NAB about a loan facility in favour of B&B Day[81].

    [73]AF [25]; CB 1(103).

    [74]AF [47]; CB 2(919). 

    [75]AF [64]; AM 164.

    [76]AF [50]; CB 1(191). 

    [77]AF [28]. See also CB 1(82).

    [78]CB 1(250).

    [79]AF [87]. Cf CB 2(696) where Mr Day stated that he paid the stamp duty on 5 September 2014.

    [80]CB 2(793-794).

    [81]AM 83, 96-101.

62. However, on the basis of those matters referred to and relied upon by Ms McEwen, I am not persuaded to find that Mr Day "remained in effective control of B&B Day" after 30 June 2014.  Some of the statements made by Mr Day arguably refer to events and conduct which took place prior to 30 June 2014, when Mr Day was a director of B&B Day.  And even if, after Mr Day had ceased to be a director of B&B Day, he did the various acts, or made all of the statements claiming personal responsibility for what had been done in connection with the Fullarton Road Property, there were at least three obstacles to making the finding sought by Ms McEwen. 

63. First, consistent with Ms McEwen's acceptance that the Agreed Facts and the Agreed Documents record certain facts, Mr Day had no legal power with respect to B&B Day from 30 June 2014, when he resigned as the sole director of B&B Day and ceased to be the sole shareholder, or a shareholder at all, of B&B Day.  From that date, Mrs Day was the sole director and the sole shareholder of B&B Day[82].  On the evidence, Mrs Day remained in those positions at least up to and including 28 September 2016[83] and, in her capacity as director of B&B Day, on 21 July 2014, signed a Guarantee and Indemnity in favour of NAB for up to $21.5 million to secure facilities provided to Nationwide Australian Investments Pty Ltd[84].

    [82]AF [5], [24]; CB 1(258-260). 

    [83]CB 1(258-260).

    [84]CB 2(674, 679).  The guarantee was also signed by Mr Day as "Director/Secretary" on that date, as well as by Mrs Smith as guarantor in her personal capacity.

64. Second, the phrase "remained in effective control" was not given any legal content in submissions.  It is imprecise.  During final submissions, counsel for Ms McEwen submitted that the phrase meant that "in practice [Mr Day] was the controlling mind of the company and thus the trust ... at all material times from 30 June 2014 onwards"[85].  That submission does not explain the legal content of the phrase.

    [85]Re Day [2017] HCATrans 005 at 2463-2465.

65. Third, even if the phrase "remained in effective control" had legal content (and, here, it does not), the evidence does not go so far as to show that Mr Day was and remained in effective control of B&B Day.  At its highest, what the evidence identified above establishes is that, after 30 June 2014, in respect of some of the activities of B&B Day:

    (1)Mr Day was a person who made, or participated in making, decisions that affected a substantial part of the business of B&B Day[86];

    (2)although Mr Day was not validly appointed as a director, he is shown to have done acts in the position of a director[87].

    [86]See par (b)(i) of the definition of "officer" in s 9 of the Corporations Act 2001 (Cth). See [61(1), (2), (3), (6), (7)] above.

    [87]See par (b)(i) of the definition of "director" in s 9 of the Corporations Act 2001 (Cth). See [61(1), (2), (3), (7)] above.

66. There were two other matters referred to by Ms McEwen in support of Evidentiary Fact 1.  They do not alter the conclusion just reached.  The first was that at all times since its incorporation, Mr Day controlled the affairs of Fullarton Investments and did so for the benefit of B&B Day as trustee for the Day Family Trust.  The underlying fact – that at all times since its incorporation, Mr Day controlled the affairs of Fullarton Investments – is the subject of Ultimate Finding 32.  That finding is addressed next and is not found. 

67. The second matter referred to by Ms McEwen was that Mr and Mrs Day were in the best position to give evidence on whether or not Mr Day remained in effective control of B&B Day after 30 June 2014 and that because they did not give evidence, an inference should be drawn that their evidence would not have assisted Mr Day's case[88].  However, as explained in Part C(1) above, an inference will be no more than conjecture unless some fact is found which positively suggests, or provides a reason in the circumstances particular to the case, that a specific event happened or a specific state of affairs existed[89].  Having regard to the facts and matters referred to by Ms McEwen, there are not facts found which positively suggest, or which provide a reason in the circumstances particular to this case to infer, that "Mr Day remained in effective control of B&B Day" after 30 June 2014.

    [88]Jones v Dunkel (1959) 101 CLR 298 at 308, 312, 320-321; Kuhl v Zurich Financial Services Australia Ltd (2011) 243 CLR 361 at 384-385 [63]-[64]; [2011] HCA 11.

    [89]See Jones v Dunkel (1959) 101 CLR 298 at 305.

68. I am not persuaded to find Evidentiary Fact 1.  It was the sole basis relied upon by Ms McEwen to support Ultimate Finding 31.  Ultimate Finding 31 is not found.

    (3)Ultimate Finding 32 – At all times since its incorporation, Mr Day controlled the affairs of Fullarton Investments

    (a)      Introduction

69. The specific documentary and other bases that Ms McEwen said supported Ultimate Finding 32 were:

    (1)the terms of an alleged "Arrangement" and its purpose[90];

    (2)Fullarton Investments had one asset – the Fullarton Road Property – and one activity – entering into the lease with the Commonwealth – and Mr Day was centrally involved in that activity[91];

    (3)Mr Day directed the preparation of the management accounts for Fullarton Investments[92];

    (4)Mr Day directed Mrs Smith to transfer her shares in Fullarton Investments to a Mr Colin Steinert[93];

    (5)B&B Day spent over $200,000 on improving the Fullarton Road Property[94] and it is to be inferred that Mr Day made the decision that the improvements were to be made to the property; and

    (6)the evidence of Mrs Smith.

    [90]Evidentiary Facts 8-11 under Issue 1 in the Additional McEwen Facts.

    [91]Evidentiary Facts 26-30 under Issue 1 in the Additional McEwen Facts; AF [37], [56]-[57], [59], [61], [68]; CB 2(796, 799-800, 929).

    [92]Evidentiary Fact 22 under Issue 1 in the Additional McEwen Facts.

    [93]Evidentiary Fact 24 under Issue 1 in the Additional McEwen Facts.

    [94]AF [28].

70. I am not persuaded that the evidence establishes that, at all times since its incorporation, Mr Day controlled the affairs of Fullarton Investments.  As these reasons will show, the specific documentary and other bases that were said by Ms McEwen to support Ultimate Finding 32 (including many of Evidentiary Facts 8 to 30) were not made out.  Moreover, the legal and factual issues that were identified in relation to Ultimate Finding 31[95] apply equally so as not to permit the making of Ultimate Finding 32.

    [95]See Part F(2) above.

71. I turn to consider each of the specific documentary and other bases that were said by Ms McEwen to support Ultimate Finding 32.  In the course of that analysis, it will be necessary to address a number of Evidentiary Facts that Ms McEwen asked the Court to find.

    (b)      The arrangement

72. This section of the judgment is structured as follows:

    (i)applicable legal principles of an arrangement;

    (ii)Position adopted by the Attorney-General and Mr Day, but not Ms McEwen – Agreed Fact 81;

    (iii)the Arrangement that Ms McEwen asked the Court to find;

    (iv)the evidence and findings;

    (v)inconsistencies, the Vendor Finance Acknowledgement and the payment of rent; and

    (vi)other Evidentiary Facts that Ms McEwen asked to be found in relation to the "Arrangement" for which she contended.

    I will deal with each in turn.

    (i)       Applicable legal principles of an arrangement

73. The applicable principles may be summarised as follows.  An arrangement is something less than a binding contract or agreement[96].  It may be informal as well as unenforceable and the parties may be free to withdraw from it or to act inconsistently with it, notwithstanding their adoption of it[97].  An arrangement should be consensual, and there should be some adoption of it.  But it is not essential that the parties are committed to it or are bound to support it[98]. 

    (ii)Position adopted by the Attorney-General and Mr Day, but not Ms McEwen – Agreed Fact 81

    [96]Newton v Federal Commissioner of Taxation (1958) 98 CLR 1 at 7-8; [1958] AC 450 at 465; Federal Commissioner of Taxation v Lutovi Investments Pty Ltd (1978) 140 CLR 434 at 444; [1978] HCA 55.

    [97]Lutovi Investments (1978) 140 CLR 434 at 444.

    [98]Lutovi Investments (1978) 140 CLR 434 at 444.

74. The Attorney-General and Mr Day agreed, and the Attorney‑General asked the Court to find, that there was an agreement or understanding[99] between B&B Day (as trustee for the Day Family Trust) and Fullarton Investments (as trustee for the Fullarton Road Trust), that Fullarton Investments (as trustee for the Fullarton Road Trust) would make repayments to B&B Day (as trustee for the Day Family Trust) from rent received from the Commonwealth.  The Attorney-General and Mr Day agreed, and the Attorney-General asked the Court to find, that the agreement or understanding was in place from no later than the date of the execution of the memorandum of transfer for the sale of the Fullarton Road Property on 4 September 2014.

    [99]Notwithstanding the reference to "agreement or understanding", neither the Attorney-General nor counsel for Mr Day contended that the principles set out in Part F(3)(b)(i) above were not applicable:  see Re Day [2017] HCATrans 006 at 4822-4835.

75. Ms McEwen contended that such an agreement or understanding did not exist for two reasons.  First, Ms McEwen submitted that there was no evidence establishing an agreement between Fullarton Investments and B&B Day if Mrs Smith was said to control Fullarton Investments[100].  As these reasons will demonstrate, I reject that contention[101].  The alternative contention – that if Mr Day controlled Fullarton Investments, then it was "possible that he reached an agreement with himself"[102] – does not arise because, as these reasons will demonstrate, I am not persuaded that Mr Day "controlled" Fullarton Investments[103]. 

    [100]Re Day [2017] HCATrans 006 at 4638-4641.

    [101]See Part F(3)(b), esp at [97].

    [102]Re Day [2017] HCATrans 006 at 4641-4642.

    [103]See Part F(3) below, esp at [162].

76. Second, Ms McEwen submitted that the word "repayments" presupposed some obligation to repay and she did not concede that there was such an obligation to repay; rather, the arrangement was that rent would go from the Commonwealth into an account controlled by Mr Day[104]. That contention is addressed at [123]-[124] below.

    (iii)     Arrangement that Ms McEwen asked the Court to find

    [104]Re Day [2017] HCATrans 006 at 4645-4649.

77. The Arrangement ultimately contended for by Ms McEwen seeks to build on an arrangement that Mr Day admitted, namely an arrangement that[105]:

    (1)a company, in the event, Fullarton Investments, would be incorporated;

    (2)Mrs Smith would be the director and shareholder in that company;

    (3)Fullarton Investments would acquire the Fullarton Road Property;

    (4)Fullarton Investments would own the Fullarton Road Property on trust for the Fullarton Road Trust[106];

    (5)B&B Day would pay expenses in connection with the transfer of the Fullarton Road Property.

    [105][10] at pp 8-9 of Mr Day's Statement of Contentions of Fact and Law, filed 6 December 2016, as amended:  see Re Day [2017] HCATrans 005 at 2845‑2848.

    [106]Mr Day conceded to this after filing his Statement of Contentions of Fact and Law:  see Re Day [2017] HCATrans 005 at 2845-2848.

78. Ms McEwen ultimately contended that in about December 2013, Mr Day and Mr Smith on behalf of, and with the agreement of, Mrs Smith entered into an Arrangement with the following additional terms[107]:

    "(a)Mrs Smith would deal with her shareholding in the company to be incorporated (in the event Fullarton Investments) in any manner that Mr Day might direct;

    (b)Notwithstanding that Mrs Smith was the director, Mr Day would control the affairs of the new company to the exclusion of Mrs Smith;

    (c)Mr Day or B&B Day would pay all expenses associated with the transfer of the Fullarton Road [P]roperty from B&B Day to Fullarton Investments, including stamp duty and registration fees, and in connection with the holding of the property;

    (d)Fullarton Investments would deal with the Fullarton Road [P]roperty (whether by way of lease, transfer or otherwise) in such manner as Mr Day would direct;

    (e)Any financial benefit (either income or an increase in value) derived from, or any losses incurred (including a decline in value) as a result of holding, the Fullarton Road [P]roperty would be for the benefit of or suffered by (as the case may be) B&B Day as trustee of the Day Family Trust;

    (f)Fullarton Investments would lease the Fullarton Road [P]roperty to the Commonwealth if terms could be agreed.  The terms were to be acceptable to Mr Day;

    (g)If the property was leased to the Commonwealth, the rent would be paid to B&B Day as trustee of the Day Family Trust."

    [107]Evidentiary Fact 10 under Issue 1 in the Additional McEwen Facts.

79. As these reasons will demonstrate, it has not been established that an Arrangement with those additional terms was made and, in particular, with terms that:

    (1)Mrs Smith would deal with her shareholding in the new company (Fullarton Investments) in any manner that Mr Day might direct; and

    (2)notwithstanding that Mrs Smith was the director, Mr Day would control the affairs of the new company to the exclusion of Mrs Smith.

    (iv)     Evidence and findings

80. The evidence comprises documentary and oral evidence.  It is appropriate to consider the evidence, so far as it permits, chronologically.  That also requires consideration of the sworn evidence, given viva voce, by Mr and Mrs Smith.  Although Mrs Smith gave evidence before her husband, it is necessary to consider the evidence of Mr Smith first.

    ·          Evidence of Mr and Mrs Smith

81. Ms McEwen called Mr Smith to give evidence.  The history between Mr Smith and Mr Day was not challenged.  Mr Smith met Mr Day in high school and went into partnership with him in a plumbing business in 1975.  Then, in the late 1970s, they started building homes together.  In 1983, they incorporated their first building company, Homestead Homes Pty Ltd.  They remained in business together until 2014, when Mr Smith resigned as a director of the Home Australia Group and transferred his shares to Mr Day.  The reason for that was not explained.

82. Mr Smith gave evidence about a conversation he had with Mr Day concerning the Fullarton Road Property.  Mr Day did not suggest that the conversation did not take place and Mr Smith's credibility was not challenged. 

83. However, counsel for Mr Day submitted that Mr Smith's evidence was "completely problematic" for four reasons and that, as a result, the Court could not reach a comfortable degree of satisfaction about what was said by Mr Day to Mr Smith.  The problems identified were: what was communicated; when it was communicated; whether what was communicated between Mr Day and Mr Smith was then communicated or relayed by Mr Smith to Mrs Smith; and finally, whether the conversation preceded an email sent by a Mr Vic Rasera to Mr and Mrs Smith on 2 December 2013, copied to Mr Day[108].  Those matters will be addressed in the course of the findings.

    [108]CB 2(503).

84. Mr Smith could not recall the length or the location of the conversation.  He could not recall if the conversation took place in Adelaide or Queensland. 

85. As counsel for Mr Day submitted, Mr Smith's recollection of when the conversation took place was inconsistent.  On a number of occasions, Mr Smith's evidence was that the conversation took place after 30 June 2014, being after Mr Day had resigned as a director of all the companies in the Home Australia Group.  Mr Smith also gave evidence that he thought it took place in September or October 2013.

86. Mr Smith accepted that he did not have a precise recollection of what Mr Day said to him "word for word" during the conversation[109].  Counsel for Mr Day also pointed to inconsistencies between the various versions of the conversation that he provided in the course of his evidence. 

    [109]Re Day [2017] HCA Trans 005 at 1973-1974, 2025-2027.

87. Notwithstanding those deficiencies, which I accept, Mr Smith's evidence was, and I find, that Mr Smith had a conversation with Mr Day in or about late 2013 (but prior to 2 December 2013) when Mr Day, in substance:

    (1)told Mr Smith that he (Mr Day) could not retain ownership of the Fullarton Road property in his own name or anything close to his own name;

    (2)told Mr Smith that he could not be paid any rent or receive any lease payments while the Fullarton Road Property was in his name or could be in any way associated with him dealing with it;

    (3)asked Mr Smith if he would oppose him, or Mr Smith, asking Mr Smith's wife to take ownership of the Fullarton Road Property "by way of shares in trust or something"[110];

    (4)told him that the person had to be someone removed from their partnership and business, the Fullarton Road Property and Mr Day's family.

    [110]See Re Day [2017] HCATrans 005 at 2048-2052; see also at 1710-1713, 1727‑1728.

88. Mr Smith's evidence was, and I find, that he replied by saying words to the effect that Mr Day's proposal was "fine" so long as he (Mr Smith) did not have to do anything and there were no costs or expenses that he (Mr Smith) would have to pay[111].  Mr Smith's further evidence was, and I find, that Mr Day responded by saying words to the effect that he would "take care of everything"[112]. 

    [111]Re Day [2017] HCATrans 005 at 1616-1617, 1734-1737.

    [112]Re Day [2017] HCATrans 005 at 1617-1618, 1741.

89. Mr Smith then gave evidence, which I accept, that he had a conversation with his wife, Mrs Smith.  It is necessary to say something about that conversation.  Mr Smith's evidence was that he told Mrs Smith he had had a discussion with Mr Day and that her response was "Okay, that's fine"[113].  When asked in evidence in chief how long the conversation was, his evidence was "[a]bout as long as that"[114].  He stated, and I accept, that it was not a long conversation and that he did not go into any real detail about the matter. 

    [113]Re Day [2017] HCATrans 005 at 1761-1763.

    [114]Re Day [2017] HCATrans 005 at 1765.

90. Mrs Smith's evidence was not inconsistent with Mr Smith's account.  Her evidence was that during a "very short" conversation at their home, she was told by Mr Smith that Mr Day wanted to put the Fullarton Road Property into her name and for her to "take over the property at Fullarton Road, as the owner of it"[115].  Mrs Smith's evidence was that there was no discussion about what taking over the property involved.

    [115]Re Day [2017] HCATrans 005 at 141-142, 145, 178-179.

91. What then happened is not clear.  There was no evidence adduced that Mr Smith told Mr Day that Mrs Smith had agreed. 

    ·          Events after conversations

92. In any event, on 2 December 2013, sometime after the conversation Mrs Smith had with Mr Smith, Mr Rasera of Wilson Colman & Co Pty Ltd, an accounting firm, sent an email to both of them (copied to Mr Day), which stated, relevantly, that[116]:

    "[Mr Day] has sought advice on establishing an entity in which the Senate Office on Fullarton Road can be housed so as to be able to avail himself of the rental allowance provided by the government.  I propose incorporating a new company with [Mrs Smith] as sole director and shareholder, to act as trustee for a discretionary trust.  This removes the property from Day family members and any entity in which [Mr Day] has an interest, and by having [Mrs Smith] as sole director, puts further distance between the Trust and [Mr Day's] business interests and partner of nearly 40 years.

    The trust will simply hold the property and collect rent on a regular basis.  That rent will then pass back to the Day Family Trust so there will be no profit nor loss in the new trust.

    Are you happy for me to proceed? I will have paper work for signing within a week."  (emphasis added)

    [116]CB 2(503).

93. There are a number of matters to note about this email.  It was sent by Mr Rasera, not Mr Day.  The evidence disclosed that he was the accountant for Mr Day, for Mr and Mrs Smith and for their joint and individual companies.  Next, it records the following facts and matters[117]:

    (1)Mr Day had sought advice on establishing an entity in which the Fullarton Road Property could be housed so that he could avail himself of the rental allowance provided by the government;

    (2)Mr Rasera proposed incorporating a new company with Mrs Smith as sole director and shareholder to act as trustee for a discretionary trust;

    (3)the purpose of (1) and (2) was to remove the Fullarton Road Property from Day family members and any entity in which Mr Day had an interest, and having Mrs Smith as sole director would put further distance between the Fullarton Road Property and Mr Day's business interests and his business partner of nearly 40 years, namely Mr Smith;

    (4)the new trust would simply hold the Fullarton Road Property and collect rent on a regular basis, and the rent would then pass back to the Day Family Trust so there would be no profit or loss in the new trust.

    [117]In relation to Evidentiary Fact 8, the findings are those set out in sub-pars (1)-(4) of this paragraph.

94. On the same day and without consulting Mr Smith, Mrs Smith responded by email to Mr Rasera and Mr Smith, but not to Mr Day, stating: "I'm happy [Mr Rasera], if everyone else is.  Boy, [Mr Day] will have to owe me big time for this … surely???"[118]. 

    [118]CB 2(503).

95. After Mrs Smith sent that response, she did not give any other instructions to any person about setting up a new company, about Fullarton Investments or about the Fullarton Road Property.  Mrs Smith also stated that she did not pay the incorporation costs for Fullarton Investments or any costs associated with running Fullarton Investments and does not know who paid those costs.

    ·          An arrangement?

96. There are three questions – what was the arrangement (if any), what were its terms and what was its stated purpose? 

97. In light of the evidence, I make the following findings and answer the first question – "what was the arrangement (if any)" – as follows:

    (1)from no later than 16 December 2013 (when Mrs Smith signed the Fullarton Road Trust Deed)[119], there was an arrangement in the terms set out in the 2 December 2013 email which was agreed to by Mr and Mrs Smith[120];

    (2)in relation to Fullarton Investments, Mrs Smith was to be its sole director and shareholder;

    (3)Mrs Smith, through Fullarton Investments, would be the "owner" of the Fullarton Road Property and Fullarton Investments would hold the property on trust for the Fullarton Road Trust;

    (4)the purpose of the arrangement was to remove the Fullarton Road Property from Day family members and any entity in which Mr Day had an interest;

    (5)another and related purpose of the arrangement was that the Fullarton Road Trust would hold the Fullarton Road Property, it would collect the rental allowance provided by the government and it would then pass the rent back to the Day Family Trust;

    (6)there would be no profit or loss in the Fullarton Road Trust[121].

    [119]CB 1(53, 73).  See Part D above.

    [120]See [92] above.

    [121]CB 2(503) and the evidence of Mr Smith referred to at [81]-[91].

98. As noted earlier, whether that arrangement was legally effective is not relevant to, or to be determined as part of, this aspect of the Reference[122]. 

    [122]See Part E(2) above, esp at [33]-[34].

99. As will become self-evident, I am not persuaded and do not find that the arrangement included any of the additional terms sought by Ms McEwen under Evidentiary Fact 10[123] and that fact is not found.  Subject to an aspect of par (c) of Evidentiary Fact 10, those additional terms were not established to the requisite standard by the evidence before the Court (whether as part of the arrangement I have found or at all).  In relation to pars (a), (b), (d) and (f) of Evidentiary Fact 10, there was no evidence before the Court that each of those matters might or would be done at the direction of Mr Day or under the control of Mr Day. 

    [123]See [78] above.

100. In relation to par (e) of Evidentiary Fact 10[124], I am not persuaded that the evidence supports a finding that that was a term of any arrangement.  What the evidence disclosed, and I find, is that the Fullarton Road Trust was to hold the Fullarton Road Property, it would collect the rental allowance provided by the government and it would then pass the rent back to the Day Family Trust with the result that there would be no profit or loss in the Fullarton Road Trust[125].

     [124]"Any financial benefit (either income or an increase in value) derived from, or any losses incurred (including a decline in value) as a result of holding, the Fullarton Road [P]roperty would be for the benefit of or suffered by (as the case may be) B&B Day as trustee of the Day Family Trust".

     [125]See [97] above.

101. Paragraph (g) of Evidentiary Fact 10 was not established by the evidence of Mr Smith and is not reflected in the final paragraph of the 2 December 2013 email sent by Mr Rasera.  That email records that the rent was to be paid to the Fullarton Road Trust. 

102. That leaves par (c) of Evidentiary Fact 10[126].  Mr Smith insisted that the arrangement was to come at no expense to him.  Moreover, it was a term of the arrangement that there was to be no profit or loss in the Fullarton Road Trust.  Consistent with those findings, the parties have agreed that B&B Day or Mr Day paid the stamp duty on the transfer of the Fullarton Road Property from B&B Day to Fullarton Investments (in the amount of $109,330), the fee on the registration of the transfer (in the amount of $15,319.50) and the conveyancers' professional fees, for a total of $125,549.19[127].  In addition, Mr Day admitted that since the transfer of the Fullarton Road Property to Fullarton Investments, all outgoings in relation to that property have been paid by the Home Australia Group, the Family First Party, B&B Day, Mr Day and the Bert Kelly Research Centre[128].

     ·          Implementation of the arrangement

     [126]"Mr Day or B&B Day would pay all expenses associated with the transfer of the Fullarton Road [P]roperty from B&B Day to Fullarton Investments, including stamp duty and registration fees, and in connection with the holding of the property."

     [127]AF [87].

     [128]In the Matter of Questions Referred to the Court of Disputed Returns pursuant to section 376 of the Commonwealth Electoral Act 1918 (Cth) concerning Mr Robert John Day AO [2017] HCATrans 003 at 1666-1670 and confirmed in an email to the Court sent on 18 January 2017.

103. Two issues remain: whether the arrangement set out at [97] above was implemented; and whether it continued to subsist (and be implemented) after 23 September 2015, when Mrs Smith resigned as sole director and ceased to be the sole shareholder of Fullarton Investments[129].  The answer to both questions is "yes".

     [129]AF [38]; AM 140, 142; CB 2(905).

104. As to implementation of the arrangement in [97] above, although Mrs Smith's evidence in chief was that she did not, from time to time, sign documents relating to Fullarton Investments, the evidence disclosed, and I find, that Mrs Smith in fact did so on a number of occasions after the 2 December 2013 email.  In particular, as director of Fullarton Investments, Mrs Smith signed the following eight documents[130]:

     [130]See Toll (FGCT) Pty Ltd v AlphapharmPty Ltd (2004) 219 CLR 165 at 180-182 [42]-[47]; [2004] HCA 52.

     (1)the Deed establishing the Fullarton Road Trust, dated 16 December 2013[131];

     (2)the Agreement for the Sale and Purchase of the Land between B&B Day and Fullarton Investments in relation to the Fullarton Road Property, dated 24 April 2014[132];

     (3)an Extract of Minutes of Declarations of Sole Director, dated 8 May 2014, recording declarations made by Mrs Smith as sole director of Fullarton Investments in relation to, amongst other documents, the Guarantee and Indemnity and the Memorandum of Mortgage referred to below[133];

     (4)a Guarantee and Indemnity in favour of the NAB dated 4 August 2014 (which she signed personally as personal guarantor and as a director of Fullarton Investments)[134];

     (5)the Memorandum of Transfer of the Fullarton Road Property from B&B Day to Fullarton Investments, dated 4 September 2014[135];

     (6)the Memorandum of Mortgage dated 11 September 2014[136];

     (7)a Heads of Agreement between Fullarton Investments and the Department of Finance signed by Mrs Smith as a director of Fullarton Investments on 24 November 2014[137].  Mrs Smith accepted in evidence that she wrote the word "Director" under her name; and

     (8)a document headed "Agreement" between B&B Day and Fullarton Investments, dated 1 December 2014, acknowledging the provision of vendor finance from B&B Day to Fullarton Investments to secure the purchase of the Fullarton Road Property referred to in these reasons as the Vendor Finance Acknowledgement[138].

     [131]CB 1(52 at 73).  Clause 2(c) defined the "Beneficiaries" of the trust.  

     [132]CB 1(84).  Mrs Smith, as director of Fullarton Investments, initialled each page of the agreement and signed it at CB 1(101).

     [133]CB 2(611).

     [134]CB 2(674 at 680, 683).

     [135]CB 1(103).

     [136]AM 73A, 73B.

     [137]CB 1(109 at 113).

     [138]CB 1(107).

105. Mr Smith gave evidence that he received documents concerning the Fullarton Road Property on more than two occasions and possibly four or five occasions.  Mr Smith's evidence was that the correspondence was always addressed to him, and that he read the covering letters, told his wife that they were the documents relating to the Fullarton Road Property that Mr Day wanted her to hold by way of "shares in trust"[139], told her to sign them where indicated and sent them back. 

     [139]Re Day [2017] HCATrans 005 at 1780-1784.

106. There are two important points to note.  First, the covering letters were not in evidence before the Court.  The Court does not know, and cannot find, who sent the documents to Mr Smith.  Second, there is no evidence before the Court that Mrs Smith executed any of those documents at the direction of Mr Day.

107. Mrs Smith gave evidence, which I accept, that she believes she is an honest person who would not sign a document that she thought was false or wrong.  She also accepted that if she did not understand something she was asked to sign, she could have asked her husband or Mr Rasera.  Mrs Smith's evidence was that she did not "pore[ ]" over the documents she signed but glanced at each so that she had the "gist" of what the document was about and where she had to sign[140]. 

     [140]Re Day [2017] HCATrans 005 at 1192, 1197, 1207-1208, 1213-1214, 1394-1395.

108. In addition to the various documents Mrs Smith executed as the sole director of Fullarton Investments, there are other later documents that support the finding that the arrangement was implemented, including the Memorandum of Lease between Fullarton Investments and the Commonwealth executed on 1 December 2015, with a commencement date of 1 July 2015[141].

     ·          Period from 23 September 2015

     [141]AF [40]; CB 1(123).

109. In relation to the period from 23 September 2015, it is sufficient to record that a Mr Colin Steinert replaced Mrs Smith as sole director and sole shareholder of Fullarton Investments[142].  The parties agreed that, at all relevant times, Mr Steinert was a principal of the Colin Steinert Group and had advised Mr Day on the transfer of the Fullarton Road Property from B&B Day to Fullarton Investments[143].

     [142]CB 1(264-265).

     [143]AF [89].

110. On the evidence of Mr Smith, which I accept, the transfer of the directorship and the ownership of Fullarton Investments from Mrs Smith to Mr Steinert became necessary because Mr Smith and Mr Day were no longer business partners and Mr Smith no longer wanted Mrs Smith to be involved with Fullarton Investments.  What occurred in and from January 2015 included the following facts and matters:

     (1)on 17 January 2015, Mr Day sent an email to Mr Smith stating "[Mr] Steinert has agreed to take over Fullarton Investments …  I've spoken to [Mr Rasera] re doing the paperwork"[144];

     [144]CB 2(704).

     (2)on 30 August 2015, Mr Day emailed Mr Rasera, stating that he wished to get the transfer to Mr Steinert "underway"[145];

     [145]CB 2(903).

     (3)on 3 September 2015, Mr Rasera responded stating that he would do the transfer as of that date, and asked: "If and when Fullarton Investments makes a profit who do you envisage that profit will be distributed to and who is going to pay the tax on it?"[146].  A short time later, Mr Day responded: "That will never happen"[147];

     [146]CB 2(903).

     [147]CB 2(903).

     (4)on 7 October 2015, Mr Steinert emailed his accountant attaching a copy of the balance sheet and profit and loss for Fullarton Investments[148].  Mr Steinert stated:  "[Mr] Day wants the shares transferred to me.  Please asses [sic] then phone me to discuss.  I am following up Stamp Duties Office as regards any stamp duty payable on the share transfer"[149];

     [148]AM 144.

     [149]See also AM 362.

     (5)on 8 October 2015, Mr Steinert emailed Mr Rasera stating that he would not agree to become director of Fullarton Investments until he had cleared it with his accountant[150].  Mr Steinert asked Mr Rasera to answer the following questions that had been raised by his accountant[151]:

     [150]AM 143.

     [151]AM 143.

     "Fullarton Investments ... is merely the trustee of the Fullarton Road Trust.

     We'll also need to see the Trust Deed for the trust.  Is it a discretionary trust or unit trust?

     The company is merely holding the asset in trust for the trust.

     If its [sic] a unit trust then you also need the units transferred to you and we need to check who the appointer of the trust is as that person/entity controls the trust at all times.  If its [sic] a discretionary trust then that makes even less sense in retaining the structure."

     (6)by a document dated 23 September 2015, Mrs Smith resigned as sole director of Fullarton Investments by signing a letter of resignation and transferred her shares in Fullarton Investments to Mr Steinert[152].  Mrs Smith did not receive the $2 consideration for the transfer[153].

     (7)on 1 December 2015, the Memorandum of Lease between Fullarton Investments and the Commonwealth, with a commencement date of 1 July 2015 was executed by Mr Steinert as a director, and on behalf, of Fullarton Investments[154];

     (8)on 18 December 2015, Mr Steinert sent an email to Mr Day attaching an invoice from the Australian Securities and Investments Commission and an invoice from Wilson Colman[155].  The invoice from Wilson Colman was directed to "Fullarton Investments Pty Ltd c/- Mr C Steinert".  The email stated that the invoices were for Mr Day to pay;

     (9)on 12 March 2016, Mr Steinert, as director of Fullarton Investments, signed a form that was sent to the property agent for Department of Finance nominating Ms Joy Montgomery (Mr Day's executive assistant whilst he was a senator[156]) as the accounts contact for the lease in the name of Fullarton Investments, and nominating a bank account in the name "Fullarton Nominees" (including the bank account details) as the account into which the rent was to be paid[157];

     (10)on 29 December 2015, Mr Day sent an email to Senator Mathias Cormann, then the Special Minister of State[158], attaching a letter which stated, in part: "I would like to request that the Department pay rent for the [Fullarton Road Property] starting 1.7.15 ie one year after my election".

     [152]AF [38]; AM 140, 142; CB 1(265).

     [153]Re Day [2017] HCA Trans 005 at 720-724.

     [154]AF [40], CB 1(123 at 186).

     [155]CB 2(914-916).

     [156]AF [60].

     [157]CB 2(922, 924).  cf AF [56] which records the date as 26 February 2016.  It is unnecessary for present purposes to resolve this discrepancy.

     [158]CB 2(918-919).

111. In light of that evidence, I find that the arrangement continued to subsist and be implemented after 23 September 2015.

     (v)Inconsistencies, the Vendor Finance Acknowledgement and the payment of rent

112. As stated earlier, the steps taken in connection with carrying the arrangement, and its intended purpose, into effect were not consistent with detailed planning or careful implementation.  The documents were not always consistent one with the other. 

113. Two documents, and the facts that they record, need to be considered separately. 

114. I have made a finding that another and related purpose of the arrangement was that the Fullarton Road Trust would hold the Fullarton Road Property, it would collect the rental allowance provided by the government and then pass the rent back to the Day Family Trust and there would be no profit or loss in the Fullarton Road Trust. 

192. In her contentions to the Full Court on the Reference, Ms McEwen submits, among other things, that by Mr Day's Statement and Declaration[242], he declared himself to be qualified to be elected[243].  Ms McEwen further submits that one consequence of the Statement and Declaration was that Mr Day induced the electoral officer to make provision for above the line voting for Family First (a group of which Mr Day was a member and the first-listed candidate)[244]. 

     [242]CB 1(319-324).

     [243]Ms McEwen's Statement of Contentions of Fact and Law, filed 28 November 2016 at [32]-[33].

     [244]Ms McEwen's Statement of Contentions of Fact and Law, filed 28 November 2016 at [37].

193. Ms McEwen says that Mr Day induced that result knowing that he "maintained a pecuniary interest in" the Fullarton Road Property and that the Commonwealth had entered into a lease over part of that property and "thus he was recklessly indifferent as to whether the [S]tatement and [D]eclaration were true" (emphasis added)[245].  Ms McEwen characterised the procurement of that result as a fraud for public law purposes[246].

     [245]Ms McEwen's Statement of Contentions of Fact and Law, filed 28 November 2016 at [36].

     [246]Ms McEwen's Statement of Contentions of Fact and Law, filed 28 November 2016 at [41(b)].

194. As developed in argument, the additional finding which McEwen sought (though variously expressed) was that Mr Day knew that he was incapable of being chosen or of sitting as a senator because Mr Day knew that despite, or perhaps because of, the transactions which had been made there was a serious risk that he might be disqualified under s 44(v) of the Constitution[247].  The references which Ms McEwen made to "reckless indifference" were all predicated on the premise that Mr Day knew that he maintained a pecuniary interest in the Fullarton Road Property. 

     [247]Ultimate Findings 51, 52, 54 and 55. 

195. The evidence adduced does not persuade me that Mr Day knew that there was a serious risk that he might be disqualified under s 44(v) of the Constitution. Nor am I persuaded that he was recklessly indifferent as to whether the Statement and Declaration were true, and that he had no real belief in the truth of them and knew that they were not true. 

196. A readily available competing conclusion (and the one more likely on the evidence before the Court) is that Mr Day thought that, as a result of the steps taken and the transactions entered into, he was not disqualified.  There is no direct evidence to the contrary of the competing conclusion and it is, in my view, the more probable view of the facts.

197. For those reasons, I am not persuaded to find Ultimate Findings 51, 52, 54 and 55.

198. For the same reasons, Evidentiary Fact 38 – Mr Day's purpose in entering the Arrangement was (a) to make it appear that he did not have a pecuniary interest in, and control of, the Fullarton Road [P]roperty, whilst in fact maintaining a pecuniary interest and control; and (b) to create that perception so that the Commonwealth would enter into a lease of part of the Fullarton Road property for his office as a senator (emphasis added) – is not found. 

199. During the final submissions at trial, Ms McEwen's counsel sought to amend the finding to insert "financial" instead of "pecuniary" in the proposed finding.  I refuse to make that amended finding.

200. As stated earlier, I am not persuaded that the evidence establishes that the Arrangement contended for by Ms McEwen was entered into[248].  In any event, even if the evidence did establish the Arrangement (and it does not), I am not persuaded that the evidence establishes that Mr Day's purpose in entering that Arrangement (or the arrangement I have found) was: (a) to make it appear that he did not have a pecuniary interest in, and control of, the Fullarton Road Property, whilst in fact maintaining a pecuniary interest and control; and (b) to create that perception so that the Commonwealth would enter into a lease of part of the Fullarton Road [P]roperty for his office as a senator. 

     [248]See Part F(3)(b)(iv) above.

201. As already stated, a readily available competing conclusion (and the one more likely on the evidence before the Court) is that Mr Day thought that as a result of the steps taken and the transactions entered into, he was not disqualified.  There is no direct evidence to the contrary of the competing conclusion and it is, in my view, the more probable view of the facts. 

     (3)Ultimate Finding 49 – Mr Day knew that prior to the transfer of the Fullarton Road [P]roperty to Fullarton Investments: (a) he had a financial interest in the Fullarton Road [P]roperty and (b) he would, unless he disposed of that interest, have a financial interest in any lease with the Commonwealth in respect of the Fullarton Road [P]roperty (emphasis added).

202. Given the view I have formed in relation to Ultimate Findings 51, 52, 54 and 55, it is unnecessary to make a finding in relation to Ultimate Finding 49 and I refuse to do so.  In any event, there was no finding that the Arrangement contended for by Ms McEwen was made[249].

     (4)Ultimate Finding 50 – Mr Day's knowledge of the effect of the Arrangement

     [249]See Part F(3)(b)(iv) above.

203. Given the view I have formed in relation to Ultimate Findings 51, 52, 54 and 55, it is unnecessary to make a finding in relation the Ultimate Finding 50 and I refuse to do so. 

     (5)Ultimate Finding 53 – Mr Day did not seek advice from an appropriately qualified person on his potential disqualification under s 44(v) based on a true and full disclosure of the arrangements between himself, Mr Smith, Mrs Smith, and Fullarton Investments regarding Fullarton Investments or the Fullarton Road Property

204. Given the view I have formed in relation to Ultimate Findings 51, 52, 54 and 55, it is unnecessary to make a finding in relation to Ultimate Finding 53 and I refuse to do so. 

     (6)Evidentiary Facts not referred to or relied upon in relation to any Ultimate Finding

205. Evidentiary Fact 39 – Sometime in the week before 20 March 2014, Mr Day informed the Special Minister of State that he had disposed of his or his company's interest in the Fullarton Road [P]roperty (emphasis added) – is not found. 

206. The finding sought is imprecise.  Agreed Fact 13 is in the following relevant terms[250]:

     "In a letter to Mr Day dated 20 March 2014, Senator Ronaldson noted that 'I confirm your advice to me that you have disposed of your interest in the [Fullarton Road Property]'.  The letter also noted that Senator Ronaldson was prepared to give further consideration to Mr Day's proposal to remain in the [Fullarton Road Property], but subject to certain conditions, including that rent on the [Fullarton Road Property] space would not be charged for the remaining period of the existing lease on 19 Gilles Street and that there will be no offset if the Commonwealth is successful in sub‑leasing the office at Gilles Street."  (emphasis added)

     The letter[251] contains the italicised statement.

     [250]AF [13]. See also CB 1(75); AM 17.

     [251]CB 1(75); AM 17.

207. Evidentiary Fact 40 – The statement recorded in Agreed Fact 13 was false (or, alternatively, misleading) – is not made. 

208. Ms McEwen submitted that the italicised statement in the letter referred to in Evidentiary Fact 39 was, at least, misleading in at least two respects[252].  First, she submitted that the phrase "had disposed of" was misleading because, as at 20 March 2014, there had been no disposal.  Second, she submitted that the statement was misleading because Mr Day "retained an ongoing financial interest" in the Fullarton Road Property. 

     [252]Re Day [2017] HCATrans 005 at 3864-3869.

209. The following evidence referred to and relied upon by Ms McEwen does not persuade me to make those findings and I do not make them:

     (1)on 25 March 2014, Mr Day sent an email to Mr Steinert[253] asking him to prepare a contract for sale of the Fullarton Road Property from B&B Day to Fullarton Investments for a sale that was "negotiated and agreed to in December" 2013 with settlement on 18 June 2014; and

     (2)on 24 April 2014, an agreement for the sale and purchase of the Fullarton Road Property was executed whereby Fullarton Investments purchased the property from B&B Day for a recorded price of $2.1 million[254].

     [253]AM 22; CB 2(579).

     [254]AF [14]; CB 1(84).

210. Moreover, given the view I have formed in relation to Ultimate Findings 51, 52, 54 and 55, it is unnecessary to make a finding in relation to Evidentiary Fact 40 and I refuse to do so. 

211. Evidentiary Fact 41 – At various other times in 2014, Mr Day also told the Commonwealth that he had disposed or would dispose of his or his company's interest in the property – is found.  Mr Day admits this fact.

212. Evidentiary Fact 42 – Each of the statements referred to in Evidentiary Fact 41 was false (or, alternatively, misleading) – is not found. 

213. Given the view I have formed in relation to Ultimate Findings 51, 52, 54 and 55, it is unnecessary to make a finding in relation to Evidentiary Fact 42 and I refuse to do so. 

214. Evidentiary Fact 43 – Mr Day told the Department of Finance on 25 January 2016 that B&B Day had provided vendor finance to Fullarton Investments.  This implied (and was intended to mean) that Fullarton Investments had borrowed money from B&B Day which it was required to repay.  This was false (or, alternatively, misleading) – is not found. 

215. Mr Day admits, and I find, that on 25 January 2016, Mr Day told the Department of Finance that[255]:

     "In 2014 I sold the [Fullarton Road Property] to Fullarton Investments … on a vendor finance basis.  I retained the NAB loan.  Fullarton Investments was to receive rent from the Commonwealth and then make vendor finance payments to me using those funds.  No rent, no vendor finance payments. …"

     [255]AF [50]; CB 1(191).

216. Given the view I have formed in relation to Ultimate Findings 51, 52, 54 and 55, it is unnecessary to make any other finding in relation to Evidentiary Fact 43 and I refuse to do so. 

217. Evidentiary Fact 44 – At various times after 25 January 2016, Mr Day repeated that vendor finance had been provided, including on 4 August 2016 (to the Special Minister of State) and 29 August 2016 (to the Special Minister of State).  This was false (or, alternatively, misleading) – is found, in part. 

218. The parties agreed, and I find, that at various times after 25 January 2016, Mr Day repeated that vendor finance had been provided, including on 4 August 2016 (to the Special Minister of State) and 29 August 2016 (to the Special Minister of State)[256].

     [256]AF [52]; CB 1(253-254); AM 164.

219. Given the view I have formed in relation to Ultimate Findings 51, 52, 54 and 55, it is unnecessary to make a finding in relation to the balance of Evidentiary Fact 44 and I refuse to do so.

220. Evidentiary Fact 45 – By at least 16 February 2016, Mr Day had become aware that, by reason of the lease between Fullarton Investments and the Commonwealth, he was potentially disqualified from being chosen or of sitting as a senator by means of s 44(v) of the Constitution – is not found. 

221. However, Mr Day admitted, and I find, that on or before 16 February 2016, Mr Day had become aware that a question had arisen as to whether the lease between Fullarton Investments and the Commonwealth engaged s 44(v) of the Constitution.

222. Mr Day referred and relied upon an email dated 16 February 2016 sent by Mr Day to a Mr David Fredericks[257] which read[258]: 

     "As discussed, I have researched the question as to whether I have a pecuniary interest in the (lease) agreement which the Commonwealth has with Fullarton Investments … and am satisfied that I do not. I base this on information I have obtained from the Parliamentary Library (see below) and my own assessment that any business arrangements I may have with Fullarton Investments does not create a pecuniary interest between me as a Senator and the Commonwealth. Applying the logic of the case cited below, if individual contracts awarded to a Senator's family company were found to be outside the scope of S44, then a property lease with a company which may have business contracts with a Senator's family company must surely be even more outside the scope of s44."

     [257]The parties agreed that, at the relevant time, Mr Fredericks was a senior official within the Department of Finance:  Re Day [2017] HCATrans 006 at 4581.

     [258]AM 154. See also AF [62].

223. The email then set out an extract that referred to the scope of s 44(v) and then quoted from the judgment of Barwick CJ in Re Webster[259]. 

     [259](1975) 132 CLR 270 at 280; [1975] HCA 22.

224. Given the view I have formed in relation to Ultimate Findings 51, 52, 54 and 55, it is unnecessary to make a finding in relation to Evidentiary Fact 45 and I refuse to do so.

225. Evidentiary Fact 46 – Mr Day had been told of his potential disqualification by the Department of Finance prior to 16 February 2016 – is not found.

226. Ms McEwen submitted that the finding should be inferred from the contents of the 16 February 2016 email sent by Mr Day to Mr Fredericks extracted in relation to Evidentiary Fact 45[260].  That email does not persuade me that I should find that Mr Day "had been told of his potential disqualification by the Department of Finance prior to 16 February 2016". The email records, as Mr Day accepts, that on or before 16 February 2016, Mr Day had become aware that a question had arisen as to whether the lease between Fullarton Investments and the Commonwealth engaged s 44(v) of the Constitution. Whether that question concerned "potential disqualification" and, further, he had been told of that possibility by the Department of Finance is not established.

     [260]AM 154 extracted at [222] above.

227. Moreover, given the view I have formed in relation to Ultimate Findings 51, 52, 54 and 55, it is unnecessary to make a finding in relation to Evidentiary Fact 46 and I refuse to do so.

228. Evidentiary Fact 47 – Sometime around 16 February 2016, Mr Day sought, and was provided with, information from the Parliamentary Library relating to his qualification to be chosen as or to sit as a Senator – is found.  It is agreed[261].

     [261]See AF [62], AM 154.

229. Evidentiary Fact 48 – Mr Day did not provide the Parliamentary Library with the details of the Arrangement or his (or his company's) interest in the Fullarton Road [P]roperty for the purposes of obtaining that information referred to in Evidentiary Fact 47 – is not found. 

230. There is no evidence before the Court of what Mr Day disclosed to, or asked, the Parliamentary Library.  As the heading indicates, this Evidentiary Fact was not referred to or relied upon by Ms McEwen in support of the Ultimate Findings 31 to 37.

231. Ms McEwen submitted that the finding was to be inferred from the contents of the email dated 16 February 2016 sent by Mr Day to Mr Fredericks which has been extracted in relation to Evidentiary Fact 45 above[262]. 

     [262]AM 154 extracted at [222] above.

232. Contrary to Ms McEwen's submissions[263], that document does not provide a sufficient foundation for inferring that Mr Day did not provide "full disclosure" (whatever that entailed) to the Parliamentary Library.  The email records that Mr Day researched the question whether he had a pecuniary interest in the lease by reference to "information" obtained from the Parliamentary Library and his "own assessment".  The email does not record what information he provided to the Parliamentary Library or whether the whole of the information provided by the Library has been extracted by Mr Day.

     [263]Re Day [2017] HCATrans 005 at 3993, 4166.

233. In any event, given the view I have formed in relation to Ultimate Findings 51, 52, 54 and 55, it is unnecessary to make a finding in relation to Evidentiary Fact 48 and I refuse to do so.

     H.       Issue 3 – Distortion of the vote

     (1)      Overview of findings sought

234. Nine findings were initially sought.  In general terms, the findings sought fell into three categories:  (1) findings as to the first preference votes obtained in the 2013 and 2016 elections by Family First and its candidate or candidates (Facts 57, 59 and 62); (2) findings concerned with the conduct and activities of one or both of Mr Day and Ms Gichuhi (Facts 56 and 58); and (3) findings about voting behaviour and the outcome of a hypothetical election (Facts 60, 61, 63 and 64).

235. Each will be considered in turn.

     (2)Fact 56 – Mr Day acted on behalf of Family First and within the scope of his authority (including as the relevant registered officer of Family First) in: (a) providing the Form CC to the Electoral Officer; (b) jointly requesting, with Ms Gichuhi, that their names be grouped together on the ballot with Mr Day's name appearing above Ms Gichuhi; and (c) endorsing himself and Ms Gichuhi as candidates representing Family First and requesting that Family First's registered abbreviation of the party name and the party logo appear next to their group square above the line

236. Mr Day has agreed this fact and I make that finding[264].  

     (3)Fact 57 – In 2013, Mr Day was elected to the Senate: (a) having obtained 2,757 first preferences below the line (0.27% of formal votes, being 0.0186 of a quota); (b) having obtained the benefit of 36,152 votes for Family First above the line (3.48% of formal votes, being 0.2437 of a quota); and (c) achieving the balance of his quota via preference allocations from the registered group tickets of 18 other parties, and from below the line preference allocations

     [264]See also AF [71]-[72], [73(d)-(e)].

237. Mr Day has agreed this fact[265] and I make that finding.

     (4)Fact 58 – At the time of the 2016 election: (a) Ms Gichuhi did not hold political office in South Australia, and had not previously stood for or held political office in South Australia; (b) in contrast to Mr Day, Ms Gichuhi did not feature prominently in Family First's election campaign, or in media coverage relating to Family First in South Australia

     [265]Subject to noting the operation of s 272(2) of the Electoral Act.

238. Mr Day has agreed this fact and I make that finding. 

     (5)Fact 59 – In the 2016 election, Ms Gichuhi received 152 or 0.01% first preference votes below the line.  Mr Day received 5,945 or 0.52% first preference votes below the line.  Family First received 24,817 or 2.34% first preference votes above the line 

239. Mr Day has agreed this fact and I make that finding.

     (6)Fact 60 – Political parties seek to influence voters to vote for them and their candidates by undertaking political advertising in various forms, and by communicating publicly through the media.  They would not do so if such advertising and communication did not have some such effect in influencing voters

240. Mr Day has agreed that "[p]olitical parties seek to influence voters to vote for them and their candidates by undertaking political advertising in various forms, and by communicating publicly through the media" and I make that finding.  

241. Ms McEwen submitted that the balance of the fact should be found based on "obvious facts"[266].  I refuse to make that further finding.  It is too imprecise to be useful.  Moreover, adopting what John Wanamaker, a department store merchant in the late 19th and early 20th century, is reputed to have said:  "I know half the money I spend on advertising is wasted, but I can never find out which half"[267].

     (7)Fact 61 – Where there is a minor party ticket comprising two candidates, the first of whom: (a) is an incumbent Senator; and (b) features prominently in the party's election campaign; then it is likely that there will [be] a substantial identification between the Senator and the party in the minds of a significant number of voters, which identification is likely to influence whether voters vote for that party

     [266]Bullet point under Fact 60 under Issue 3 in the Additional McEwen Facts.

     [267]See the entry under "John Wanamaker" in Shapiro (ed), The Yale Book of Quotations, (2006) at 796.  But, as the entry notes, it has been asserted that Lord Leverhulme voiced this complaint before Wanamaker.

242. The parties have agreed that "Mr Day featured prominently in Family First's election campaign"[268].  Ms McEwen submitted that the balance should be inferred in the same manner as Fact 60 and, in particular, from the knowledge of who was standing as a candidate.  There is no evidence of the other matters before the Court.  I refuse to make this finding. 

     (8)Fact 62 – In the 2016 election 91.5% of voters in South Australia (whose votes were formal) voted above the line

     [268]AF [92].

243. Mr Day agreed this fact and I make that finding.

     (9)Fact 63 – Had Mr Day not been on the ballot paper in the 2016 election it is likely that: (a) Family First would have received a significantly lower number of votes above the line in South Australia; (b) Ms Gichuhi would not have received enough votes to be elected as a Senator to represent South Australia

244. During the final submissions at trial, counsel for Ms McEwen described par (b) as "ambitious"[269].  That is not surprising.  It is, at best, hypothetical.  It is not made. 

     [269]Re Day [2017] HCATrans 005 at 4266.

245. I refuse to find Fact 63.  There is no evidence to support the finding.  Ms McEwen submitted that the fact was to be inferred from Facts 58, 60 and 61 and from Agreed Fact 92[270].  None of those facts and matters, alone or in any combination, provide any, or any sufficient, basis to draw the inference that Ms McEwen asks the Court to make.

     (10)Fact 64 – The presence of Mr Day and of the Family First group above the line distorted the vote at the 2016 election

     [270]"Mr Day featured prominently in Family First's election campaign."

246. During the final submissions at trial, counsel for Ms McEwen informed the Court that Ms McEwen no longer asked this Court to make this finding and I do not make it[271]. 

     I.Agreed Facts between the Attorney-General and Mr Day – Agreed Facts 81 and 82

     [271]Re Day [2017] HCATrans 005 at 4251-4257.

247. As the heading suggests, these facts were agreed between the Attorney-General and Mr Day, but not by Ms McEwen. 

248. Agreed Fact 81 – There was an agreement or understanding between B&B Day as trustee for the Day Family Trust and Fullarton Investments as trustee for the Fullarton Road Trust, that Fullarton Investments as trustee for the Fullarton Road Trust would make repayments to B&B Day as trustee for the Day Family Trust from rent received from the Commonwealth.  This agreement or understanding was in place from no later than the date of the execution of the memorandum of transfer for the sale of the property on 4 September 2014 – has been addressed and the findings are set out in Part F(3)(b) above.

249. Agreed Fact 82 – Counsel for Ms McEwen accepted that the income received by Fullarton Investments for the financial year ended 30 June 2015 was rent of $10,000 and I make that finding.

     J.Facts agreed between Mr Day and Ms McEwen – Agreed Facts 83 to 92

250. As the heading suggests, these facts were agreed between Mr Day and Ms McEwen, but not by the Attorney-General.  On 17 January 2017, the Attorney-General informed the Court that the Attorney-General did not object to these facts being found.  Accordingly, I make the following additional findings of fact:

     AF [83]As at late 2013, Mr Smith was a friend (and then business partner) of Mr Day.

     AF [84]The Day Family Trust derives income (including dividends, interest and rent) from its activities.

     AF [85]The Fullarton Road Trust was established by deed dated 16 December 2013[272].  The Day Family Trust is a beneficiary of the Fullarton Road Trust.

     AF [86]On 25 March 2014 Mr Day emailed Mr Steinert saying "The Government has given approval for me to locate my Senate office at Fullarton Road – subject to me disposing of my interest in the property"[273].

     AF [87]B&B Day or Mr Day paid the stamp duty on the transfer of the Fullarton Road Property from B&B Day to Fullarton Investments (in the amount of $109,330), the fee on the registration of the transfer (in the amount of $15,319.50) and the conveyancers' professional fees, for a total of $125,549.19[274].

     AF [88] The share transfer from Mrs Smith to Mr Steinert of the shares in Fullarton Investments dated 23 September 2015 records that Mrs Smith received $2.00 as consideration[275].

     AF [89]At the time of the share transfer from Mrs Smith to Mr Steinert dated 23 September 2015 (and at all material times since), Mr Steinert was a principal of the Colin Steinert Group and had advised Mr Day on the transfer of the Fullarton Road Property from B&B Day to Fullarton Investments.

     AF [90]When on 2 June 2016 Mr Day made his Statement and Declaration[276] and when he requested that his and Ms Gichuhi's names be grouped in the ballot paper, Mr Day knew that the Commonwealth had entered into a lease over part of the Fullarton Road Property.

     AF [91]Mr Day was at all material times the Federal Chairman of Family First.

     AF [92]Mr Day featured prominently in Family First's election campaign.

     K.       Orders

     [272]CB 1(52-73).

     [273]CB 2(579).

     [274]See also CB 2(672).

     [275]AM 142.  Mrs Smith's evidence was that she did not receive that consideration:  Re Day [2017] HCATrans 005 at 720-724.

     [276]CB 1(319-324).

251. The Revised Tender Bundle marked Exhibit 1, and the two page Settlement Statement, dated 11 April 2014, on the letterhead of "Eckermann Steinert Conveyancers" marked Exhibit 2, are to be evidence on the hearing of the Reference before the Full Court on 7 February 2017.

252. I direct Ms McEwen to provide the Court with a copy of the Revised Tender Bundle maintaining the current pagination, including Exhibit 2, for use by the Full Court on the hearing of the Reference.