Iredale, Ian --- "Transforming the Way we Record and Access the Law" [2002] MurdochUeJlLaw 23; (2002) 9(3) Murdoch University Electronic Journal of Law

Transforming the Way we Record and Access the Law

Author:	Ian Iredale M Com (Hons), LLB (UNSW) Senior Lecturer, University of Western Sydney School of Law
Issue:	Volume 9, Number 3 (September 2002)

Paper presented at the Australasian Law Teachers' Association annual conference hosted by Murdoch University School of Law, Perth, Western Australia September 29 - October 2 2002

Contents

• Introduction
• The role of computers
• Aim of the graphical approach
• Presenting the legal paradigm
• Illustrations of the transformation
• FCT v Whitfords Beach Pty Ltd
• FCT v The Myer Emporium Ltd
• FCT v Peabody
• Sun Newspapers Ltd and Associated Newspapers Ltd v FCT
• Scott v FCT
• Figure 1 Flowchart format for the Law of Contract
• Figure 2 Flowchart format for Intellectual Property Law
• Figure 3 Flowchart format for the Income Tax Equations
• Figure 4 Presentation of the legal paradigm
• Notes

Introduction

1. Books are the tools of trade of lawyers. Primary law materials, whether they are statutes or judgments are recorded, published and read in book format. Secondary materials, such as, text and case books are likewise published in book form. Architects, engineers, builders and mariners primarily work from plans, diagrams and charts. In recent times the law has made use of diagrams and flowcharts to enhance access to and understanding of the law. For example, diagrams and flowcharts can be found in statutes such as, the Income Tax Assessment Act 1997 (Cth), A New Tax System (Goods and Services Tax) Act 1999 (Cth) and Patents Act 1990 (Cth).[1] Flowcharts can also be found in textbooks, such as, Turner's, Australian Commercial Law and Woellner et als., 2001 Australian Taxation Law.[2]

2. It is possible to go further in transforming the way the law is recorded and read from the material literary book format to the diagrammatic plan, chart or broadsheet format. The way in which the law has evolved conveniently lends itself to these alternative formats. Examples can be drawn from Contract law, Intellectual Property law and Taxation Law. A tree diagram overview of each these areas of law is displayed in Figures 1 to 3.

   The role of computers

3. The advent of computers, coupled with the way the law has developed, provides us with an opportunity to re-evaluate or reformulate or transform the way we record, deliver and access the law and legal information and the way in which we teach, learn or study the law.

4. Books are essentially a linear medium where as 'computerised materials' are non-linear. Computers offer the following advantages:
   • electronic databases storing massive volumes of information.
   • compression of information, enhancing storage capacity.
   • storage of 'multimedia' materials.
   • dynamic databases with regular updating.
   • hyperlinking of materials.
   • downloading materials.
   • cut and paste, highlighting and re-organising the database materials.
   • user interaction with the database.
   • ability to create structures or networks for logical ordering of the information.

   It is appropriate to harness the advantages computers have to offer.

   Aim of the graphical approach

5. This presentation will illustrate the transformation in recording and accessing taxation law materials. In particular it will illustrate the way in which judgments could be "written" and delivered in a broadsheet format. Examples will be drawn from cases dealing with income, deductions and tax avoidance.[3]

   Presenting the legal paradigm

6. The legal paradigm in Figure 4 or a variation thereof, is the one generally employed to teach legal case analysis. Starting with the facts from which flow the issues to be decided, on the one hand and the law, on the other. The law is then applied to the facts in coming to a decision, opinion or holding. Judges, on occasions, make obiter statements that are included in their judgments. Students go on to become practitioners and judges and carry this case analysis technique with them and apply it in their legal advices and judgments.

7. Judges have been writing and delivering judgments for centuries in the traditional literary text format. There is no reason why, in the age of digital technology, judgments could not be prepared in diagrammatic, flowchart or broadsheet format and delivered on-line or on CD-ROM. Some of the advantages to flow from such a transformation include:[4]
   • There is an economy in reading and writing and storage space. It is said, " a picture is worth a thousand words".
   • In digital format it is possible to hyperlink the diagrammatic, flowchart or broadsheet judgment to:
   • authorities and precedents referred to in the judgment.
   • statutory provisions referred to in the judgment.
   • provide a more detailed account of the facts, issues and reasoning.
   • include graphics relevant to the case, such as sounds and images, both still and moving.
   • It would force judges to clearly articulate and extrapolate the logic underlying their reasoning.
   • The reader, whether student, practitioner or higher court judge could see at a glance the logic underlying the decision and judgment.

   Illustrations of the transformation

8. The transformation suggested above has been applied to well known cases dealing with income, deductions and tax avoidance. Each diagram or flowchart is basically a menu or electronic table of contents. The text or graphic details can be incorporated in a broadsheet or hyperlinked to the menu.

   FCT v Whitfords Beach Pty Ltd

9. In this case the High Court had to decide whether the proceeds from a one-off subdivision and sale of land were assessable income. This involved the Court considering the law and authorities on isolated transactions, on the one hand, and the law and authorities on mere realization, on the other. Coupled with the interaction between s25(1) and s26(a). This led the Court to establish a new principle of law, namely, the expansion of the normal proceeds of business concept to encompass isolated transactions and to apply it to the facts of the present case.

   FCT v The Myer Emporium Ltd

10. The High Court in this case was called upon to determine whether a lump sum received by Myer in substitution for a future stream of interest payments was assessable income. The High Court drew together the relevant authorities and precedents on s25(1) and s26(a). The Court held that the transaction in question could not be described as a mere realization and, although novel, was assessable under s25(1).

11. Other features of this format are:
    • a graphical portrayal of the Myer loan and assignment scheme.
    • a diagram showing where Myer fits into the scheme of things, that is cases leading up to Myer and cases following on from Myer, in two directions, land developments and lease incentive payments. This component is necessarily added later and can continue to be added to in electronic format.
    • a link to the Full Federal Court's detailed consideration of s260.

    FCT v Peabody

12. This was the first High Court case on Part IVA. It focused on an elaborate share value shifting scheme. The case proceeded through the Federal Court, the Full Federal Court and the High Court.

13. The advantages of a diagrammatic, flowchart or broadsheet format for this case are:
    • The share value shifting scheme can be more easily understood when it is portrayed in diagrammatic format.
      
    • The three court's judgments or relevant parts thereof can be more easily accessed by hyperlink.
      
    • The relevant sections in Part IVA can be more easily applied in this format.

    Sun Newspapers Ltd and Associated Newspapers Ltd v FCT

14. The issue for the High Court in this case was whether a restrictive covenant payment was of a revenue nature and deductible or of a capital nature and non-deductible. The case involved high profile people and resulted in an enduring legal principle that has been applied in a number of subsequent cases.

15. Because of the importance of this case as a leading case it is worth the effort of re-writing it in a flowchart format and highlighting its application in subsequent cases. It is also possible to provide a detailed historical background to add realism and interest to the case.

    Scott v FCT

16. In this case the High Court had to decide whether a payment to a solicitor, from a client, was income or a mere gift. The Court provided a judicial interpretation of s6 definition of income, s25(1) and s26(e) and, in particular, the function of s26(e) in relation to s25(1).

17. The flowchart format does show the structure and logic of the Court's reasoning in coming to the conclusion that the payment was a mere gift. However, there is more, as there is an interesting history to the client in the case. The client, Mrs Freestone, established a memorial in a park to her late husband who was a submariner in World War 1. Photos of the K13 memorial to submariners and historical text would help to add interest and realism to the case and to put it into perspective.

Figure 1 Flowchart format for the Law of Contract

CLICK HERE (RTF FILE)

Figure 2 Flowchart format for Intellectual Property Law

CLICK HERE (RTF FILE)

Figure 3 Flowchart format for the Income Tax Equations

CLICK HERE (RTF FILE)

Figure 4 Presentation of the legal paradigm

CLICK HERE (RTF FILE)

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Notes

[1] See for example: ITAA'97, s6- Diagram showing relationship among concepts in this Division. ITAA'97, s28-5 Map of this Division. ITAA'97, s100-15 Overview of steps and 2 ANTS, s5-5 The structure of this Chapter.

[2] See for example, flowchart for taxation of foreign exchange gains and losses in Woellner, R.H. etals., p472.

[3] Academics in the physical sciences, at science conferences, often present the results of their research by way of a poster rather than delivering a paper in the traditional manner. For those of us in the law we too could look at doing poster presentations.

[4] By way of analogy, to-day we have movies on DVD and not only do you get to see the movie you can also click to see how it was made and technical features involved in the production, the lives of those staring in the movie and many other bits and pieces of information.