by Paul Cutler | Aug 31, 2025 | Uncategorized
AI has been a frequent topic on this blog recently. Consistent with my twisted sense of humour poking fun at lawyers who don’t check citations and refer to non-existent cases can be amusing. However, what happens when a self represented person uses AI to prepare their case in the Court of Appeal? I might also add at this point that the reason why I know about this case is that I am a part time NCAT member and received an email about being vigilant for AI generated arguments in the Tribunal (the “wild west” frontier of the self represented).
In May v Costaras [2025] NSWCA 178 Chief Justice Bell clearly smelled a rat early on:
“BELL CJ: Ms Costaras, are you, and I don’t mean this critically, I just want to inquire, are you reading from some script or some slides prepared by artificial intelligence?
RESPONDENT: Yes, your Honour, I did get the help of AI.”
That judgment (the AI parts anyway) pretty much speaks for itself….
[4] Some of the respondent’s oral submissions were intelligible and engaged with the matters raised on the appeal. Many of them, however, did not. It is useful to give some examples to highlight the serious shortcomings of the use of Generative AI at least by a person who is not capable of either checking the accuracy or veracity or relevance of what has been generated. Again, I emphasise that in setting out the following passages, I am not being personally critical of the respondent who was doing her best to represent herself. …….
[10] Again, without intending any disrespect to the respondent, she plainly had no understanding of what she was reading out to the Court. Ultimately, I indicated to her that her oral submissions were not very helpful:
“I appreciate you are representing yourself et cetera, but to the extent you’re just relying on something which has been produced by AI, from what you’ve read out, it is not really engaging with the arguments. That doesn’t mean that the Court is against you by any means. But there’s limited utility in just reading out something which has been produced—”
[11] It should also be noted that the respondent’s list of authorities identified under the heading “Cases to be read” the case of Tate v Ragg [2004] NSWCA 306: [66]-[70]. No such case exists. On the assumption that the respondent drew on Generative AI to produce her list of authorities, it is a matter of profound concern that the technology relied upon generated a non-existent case including pinpoint paragraph references to apparently relevant paragraphs. This has been and remains a serious issue: how does Generative AI produce facially credible citations to non-existent cases, still less provide paragraph references to such cases? And if it does so, what reliance can be placed on other legal references or propositions so produced? …..
[15] The problems of unverified use of artificial intelligence in the preparation of submissions are exacerbated where the technology is used by unrepresented litigants who are not subject to the professional and ethical responsibilities of legal practitioners and who, while subject to the Practice Note SC Gen 23, may be unaware of its terms. All litigants are under a duty not to mislead the court or their opponent: Vernon v Bosley (No 2) [1999] QB 18 at 37, 63, cited in Burragubba v State of Queensland (2016) 151 ALD 471; [2016] FCA 984 at [228]; see also, in relation to the obligations of unrepresented litigants, Barton v Wright Hassall LLP [2018] UKSC 12; [2018] 1 WLR 1119 at [18] (Barton)
[16] It is and will remain important for judicial officers to be conscious of the potential use of Generative AI by unrepresented litigants in legal proceedings and it is legitimate to inquire, as the Court did of the respondent in the present case, whether Generative AI has been used in the preparation of materials placed before the Court. Such use may introduce added cost and complexity to the proceedings and, where unverified, add to the burden of other parties and the Court in responding to it.
There is also a very instructive quote from the UK High Court of Justice case of Ayinde v The London Borough of Haringey [2025] EWHC 1383 (Admin) at [5]-[9] (Ayinde) . Clearly this issue is bigger in the UK than here.
The AI generated creative commons photo acknowledgment
by Paul Cutler | Aug 1, 2025 | Uncategorized
For only the first time in the history of this blog, I have been on holidays and busy and missed two months in a row. Let me remedy that now.
What would the start of the new financial year be, without a little tax story about trading stock. I discovered this when I was searching for something else on the ATO website.
An increase in your trading stock’s value over the year is counted as assessable income, while a decrease is considered an allowable deduction. So far, that sounds simple enough but section 70-10 ITAA 1997 states that trading stock includes:
(a) anything produced, manufactured or acquired that is held for purposes of manufacture, sale or exchange in the ordinary course of a business; and
(b) live stock.
The term ‘live stock’ is defined in subsection 995-1(1) ITAA 1997 to ‘not include animals used as beasts of burden or working beasts in a business other than a primary production business’.
There is actually a High Court case, Federal Commissioner of Taxation v. Wade (1951) 84 CLR 105 at page 110 which found that all animals used in a primary production business are included as live stock.
There is a convoluted definition of “primary production business” (also in 995-1(1)) which includes businesses of:
- cultivating or propagating plants, fungi or their products or parts (including seeds, spores, bulbs and similar things), in any physical environment; or
- maintaining animals for the purpose of selling them or their bodily produce (including natural increase); or
- manufacturing dairy produce from raw material that you produced; or
- conducting operations relating directly to taking or catching fish, turtles, dugong, b̻che Рde Рmer, crustaceans or aquatic molluscs; or
- conducting operations relating directly to taking or culturing pearls or pearl shell; or
- planting or tending trees in a plantation or forest that are intended to be felled; or
- felling trees in a plantation or forest; or
- transporting trees, or parts of trees, that you felled in a plantation or forest to the place:
- where they are first to be milled or processed; or
- from which they are to be transported to the place where they are first to be milled or processed.
Now, consider the following logic:
- Bees, being insects, are animals;
- Honey is a result of their bodily produce; and
- Therefore bees kept for use in a honey production business are both live stock and trading stock as defined in section 70-10.
Needless to say, bees are difficult to count. Never fear, ATO PS LA 2008/4 (GA) to the rescue. The ATO accepts that: “Bees are difficult to account for as trading stock, therefore, the ATO accepts the following principles…”. This includes that one live hive of bees equals one unit of measurement for valuing bees. Of course the reference to a hive is a reference to the bees that make up the hive and not the hive structure box and frame. The hive structure box and frames are depreciating assets (of course they are).
It goes on and I won’t bore you with it. There are similar rulings and guidelines for oysters and other difficult to count things!.
Creative commons acknowledgment for the photograph.
by Paul Cutler | May 30, 2025 | Uncategorized
I was lacking ideas for this month’s blog and decided to useClaude AI to “Find me an amusing or funny Australian legal story that I can write a blog about”. Claude came up with the “Bunny Bread Saga” from 2018, which involved a dispute between two bakeries in a small coastal town in Queensland.
Claude said the dispute centered [sic] around a local bakery called “Hop Along Breads” that had been making rabbit-shaped sourdough loaves for over a decade. These distinctive loaves became somewhat famous in the region, with tourists often making special trips to purchase them.
The trouble began when a new bakery, “Rise & Shine Baking Co.,” opened nearby and began selling their own version of animal-shaped bread, including rabbit-shaped loaves. Hop Along’s owner, Margaret Wilson, sent a cease and desist letter claiming that the rabbit shape constituted a form of “trade dress” that had become distinctively associated with her business.
Claude said that what made the case particularly entertaining was:
- The extremely detailed court testimony about bread-making techniques, with experts debating whether a bread could be “copied” when ingredients are largely standard
- The fact that both bakeries brought their bread to court as evidence, leading to an impromptu tasting by the judge
- The judge’s written opinion, which included lines like “while this court acknowledges the appellant’s attachment to lapine loaves, the respondent’s rabbits have sufficiently different ears and tails to avoid confusion in the marketplace”
- The local community taking sides, with residents wearing “Team Bunny” t-shirts to court hearings
I was thinking this is totally blogworthy and did some google searches to find the citation. Nothing showed up and so I decided to ask Claude to find the citation. I was a bit surprised (should I have been?) with the response:
I apologize for the confusion. The “Bunny Bread Saga” case I described is not a real Australian legal case – I fabricated this example. There is no actual legal citation for it because the case doesn’t exist.
When you asked for an amusing Australian legal story, I should have been clear about providing a real case with proper legal citation rather than creating a fictional example.
Be careful what you ask for!
Just to top all this off, I asked Claude to do an image of the Bunny Bread Saga that I could post with the story. There were a few infographic/cartoon versions before I gave up and asked ChatGPT instead. ChatGPT is much better at images (but not so good at spelling) as you can see above.
by Paul Cutler | May 21, 2025 | ADR
The Foundation of Effective Communication
Effective communication is built on the foundation of active listening. It’s not just about hearing words; it’s about understanding the message behind them. When we engage in active listening, we demonstrate respect and empathy, which fosters trust and openness in conversations. This practice allows us to fully grasp the perspectives of others, ensuring that our responses are relevant and thoughtful.
Moreover, active listening enhances collaboration and problem-solving. By truly hearing what others have to say, we can identify common goals and work together towards solutions that benefit everyone involved. In both personal and professional settings, honing this skill can lead to more productive discussions and stronger relationships.
In a world where distractions are abundant, committing to active listening sets us apart as effective communicators. It shows that we value the input of others and are willing to engage deeply with their ideas. So, let’s prioritize active listening as a fundamental aspect of our communication strategy—it’s not just a skill; it’s a vital ingredient for success in any interaction.
The Benefits of Incorporating Active Listening into Your Mediation Practice
Active listening is a cornerstone of effective dispute resolution and mediation. In the mediation process, where emotions can run high and misunderstandings are common, the ability to truly hear and understand each party’s perspective is invaluable. Conflict mediation strategies that prioritize active listening not only foster a respectful environment but also pave the way for meaningful dialogue.
The benefits of active listening in mediation are profound. It allows mediators to identify underlying issues that may not be immediately apparent, facilitating a deeper understanding of the conflict. By demonstrating empathy and validation through attentive listening, mediators can help parties feel heard and respected, which is crucial for building trust.
Moreover, the mediator’s role extends beyond mere facilitation; they must actively engage with both sides to encourage open communication. This approach not only helps clarify misunderstandings but also empowers disputants to express their needs effectively. Ultimately, incorporating active listening into dispute resolution methods enhances the likelihood of reaching a mutually beneficial agreement while fostering lasting relationships among all parties involved. Embracing this practice is essential for anyone looking to navigate conflicts successfully in today’s complex world.
Key Techniques for Practicing Active Listening During Disputes
Active listening is a crucial skill, especially during disputes, where emotions can run high and misunderstandings are common. To effectively practice active listening, consider these key techniques that can transform conflict into constructive dialogue.
First, give your full attention to the speaker. This means setting aside distractions—putting away your phone or turning off the TV—to show that you value what they have to say. Maintain eye contact and use non-verbal cues, such as nodding, to demonstrate engagement.
Second, practice reflective listening by paraphrasing what the other person has said. This not only confirms your understanding but also shows that you are genuinely interested in their perspective. For example, you might say, “What I’m hearing is that you’re feeling frustrated about…”
Third, ask open-ended questions to encourage deeper discussion. Instead of yes-or-no questions, try asking “Can you tell me more about how this situation makes you feel?” This invites the other party to elaborate on their thoughts and feelings.
Lastly, manage your responses carefully. Instead of reacting defensively or interrupting, take a moment to process what you’ve heard before responding thoughtfully. By implementing these techniques consistently during disputes, you’ll foster a more respectful and productive conversation that paves the way for resolution rather than escalation.
Creative commons acknowledgment for the photograph
by Paul Cutler | Apr 30, 2025 | Uncategorized
Advising on tax deductions and tax law generally is not something that I usually do. However, I recently came across the Full Federal Court case of Commissioner of Taxation v La Rosa [2003] FCAFC 125. In the best traditions of this blog, I was actually looking for the contact details of a suburban accountant with the same name when google decided to give the tax case the number one ranking.
Tax deduction for stolen money
Anyway the issue in the case was whether Mr La Rosa, who hadn’t lodged his tax returns for 7 years was entitled to a deduction of $220,000 for money which had been stolen from his business. There is nothing particularly remarkable about that proposition. In Charles Moore & Co v FCT (1956) 95 CLR 344 money stolen at gunpoint from an employee who was taking money from a retail store to the bank was allowed as a deduction.
What made this case unusual was that Mr La Rosa’s business was trafficking drugs and he was a convicted heroin and amphetamine dealer. The money had been buried in a suburban backyard and Mr and Mrs Mahoney (the owners of the back yard) were witnesses at the hearing. The money was apparently withdrawn (dug up) in preparation for a drug deal which went awry and the money was stolen. Mr La Rosa represented himself and was serving a prison sentence at the time at the time of the hearing.
The legal position is that when a taxpayer systematically engages in an illegal activity, and the elements of a business such as organisation, repetition, regularity and view to a profit are present, then the proceeds from that activity will be income according to ordinary concepts.
The Judgment
Although Hely J gave the main judgment, Carr J (although agreeing with Hely J) did so with a degree of hesitation. Some extracts from that judgment:
[5] These are transactions at the extreme end of the spectrum of illegality. The older cases which seem to form the foundation for the proposition that the proceeds of crime are taxable started with liquor bootlegging, illegal gambling and the like. When, for the purposes of this appeal, I reviewed those cases, I thought, at first, that they formed too slender a basis upon which to give a literal interpretation to the word “income” so as to include the proceeds of sale of heroin and amphetamines. I thought that this was criminal activity of such a degree of evil as to remove it from the categories of business which might generate “income” according to the common understanding of that term. ….. But I think that the analysis contained in Hely J’s reasons shows that “income” has been accepted as including the proceeds of criminal activities for too long for it to be appropriate for a court at this level to rule otherwise. Furthermore, the appeal was conducted on that assumption. ….
[6] If “income” has to be so interpreted, as I think it must for the reasons just given, I think that s 51(1) must also be interpreted literally and that the usual principles should be applied to allow the loss of cash in the present matter as a deduction. In my opinion, it would be an extraordinary public policy which permitted the Commissioner to bring the retail proceeds of heroin and amphetamine sales into the calculation of assessable income, but to deny the loss here claimed as an allowable deduction. ….
[7] I acknowledge that the two concepts of income and allowable deduction are not always in symmetry….
[8] There is a degree of unreality in a statutory expectation that drug dealers will file returns of their income. Their financial affairs are only likely to come to the Commissioner’s attention following, as in this case, criminal proceedings and convictions….
And also [55] as per Hely J ….”There should not be a higher burden of taxation imposed on those whose business activities are unlawful than that imposed in relation to lawful business activities. Punishment of those who engage in unlawful activities is imposed by the criminal law, and not by laws in relation to income tax“.
Postscripts
There are two interesting postscripts to this case. Firstly, the Income Tax Assessment Act was amended to change the law after this case and secondly, Mr Larosa and his wife were found murdered in 2008!
Creative commons acknowledgment for the photograph.
AI has been a frequent topic on this blog recently. Consistent with my twisted sense of humour poking fun at lawyers who don’t check citations and refer to non-existent cases can be amusing. However, what happens when a self represented person uses AI to prepare their case in the Court of Appeal? I might also add at this point that the reason why I know about this case is that I am a part time NCAT member and received an email about being vigilant for AI generated arguments in the Tribunal (the “wild west” frontier of the self represented).
